City Council: Public hearing held on issuing $18 million in bonds

Rochelle Municipal Utilities Superintendent Adam Lanning speaks at Monday's city council meeting.

Money would fund improvements to city’s electrical system

ROCHELLE ⏤ The Rochelle City Council held a public hearing Monday concerning its intent to issue $18 million in general obligation bonds for the purpose of paying the costs of improving the city’s electric system. 

At the July 12 city council meeting, staff discussed several infrastructure projects (transformer, substation, solar, 5kV, etc.) that will be necessary in the next few years in the electric department. Rather than deplete cash reserves, staff recommended taking advantage of the “low interest rate environment” and issuing bonds. The debt service payments will be paid out of operating revenues and a rate increase to Rochelle Municipal Utility customers is not anticipated, city officials said. 

An additional fourth electrical substation is anticipated in the future for the city’s western side, City Manager Jeff Fiegenschuh said. 

“This western substation will help with reliability not only in the western part but other areas where we can free up feeders that are tied up now,” Fiegenschuh said. This really is a reliability issue and where interest rates are at or below two percent, it seems to make sense to look at issuing these bonds long-term.”

Fiegenschuh said the potential bond issuance is also tied to the Prairie State coal plant, which could potentially close early in 2035 due to a state energy bill that hasn’t yet been approved. The city has a $150 million stake in the plant until 2042 and receives a large portion of its power from it. 

“If this debt is issued, it's a 15-year debt service,” Fiegenschuh said. “If Prairie State is closed prematurely, we wanted to make sure the debt was paid off by the time Prairie State closes in 2035 if that happens. There's a lot of different things going on here.”

Mayor John Bearrows said the city recently had a business that didn’t make an expansion because of a lack of additional power on the west side of town. 

“This is all part of the city being prepared for tomorrow today,” Bearrows said. 

Electric cars

The city unanimously approved a resolution establishing a utility rate structure for electric vehicle charging stations. The city recently put in two charging stations downtown. 

“We don’t anticipate an initial high load factor for the charging stations, however as electric vehicle growth is expected to accelerate in the future, we expect utilization of charging stations to increase,” the meeting’s agenda packet said. 

The resolution only applies to commercial charging stations and not home-charging for electric vehicle owners. 

“I think this is a step towards the future,” Bearrows said. “If we want people to stop in Rochelle that happen to have electric cars, we need some place to charge them. I look at it as a quality of life issue and getting folks to come to our town.”

Water reclamation rates

The council unanimously approved a gradual five percent increase a year for the next five years in water reclamation rates that will take effect Aug. 1 to pay for its water reclamation plant phase two improvements and major sanitary rehabilitation projects including new equipment to maintain the system. 

A $7 million phase one treatment plant upgrade was recently completed. Phase two improvements are in the design stage and work will begin in early 2022 with an estimated cost of another $7 million. 

Transformer purchase

The council unanimously approved a $628,500 purchase for a new power plant transformer. The bid was the lowest of four and has a 41-week lead time. 

“Quite honestly, this transformer probably should have been replaced 10 plus years ago,” Fiegenschuh said. “We're just trying to keep up with our infrastructure and make sure that outdated transformers and outdated infrastructure is being replaced because when people pay their rates they expect the reliability that goes along with that.”

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