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Council careful in hiring help for bonds
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The city of Ceres plans to issue bonds this fall to help pay for improvements to the water and sewer system. While professional expertise is needed to manage the financial details, councilmen stopped short of giving the green light to a firm last week.

Councilmen had questions about cost but nobody from Northcross, Hill & Arch, Inc., was on hand at the Aug. 24 City Council meeting. The panel tabled the matter until the meeting on Sept. 14.

The city expects to issue bonds for between $4 million and $5 million for water capital projects and $7.5 million for sewer capital projects.

City Engineer Glenn Gebhardt said the "financial advisor's expertise to coordinate the bond consultants is not available with current staff."

Mayor Anthony Cannella was concerned about the $90,000 cost of a proposed contract with NHA. The contract breaks down to $45,000 in work to oversee the water bonds and $45,000 to oversee the sewer bonding process. Cannella was alarmed that the city of Corcoran spent $20,000 for a similar contract to oversee a $20 million bond issue and that San Juan Bautista paid $30,000 for an $11 million bond. The mayor wants to see how many hours the firm plans to work at those costs.

Councilman Ken Lane said with the bad economy that the city might seek out other firms for less expense. Gebhardt said seeking additional proposals would set back the whole process of issuing bonds for an estimated four months.

The city raised water and sewer rates in February to help pay for improvements to the aging systems. The rate adjustment was also for rising costs, including the cost of installing water meters, treating water to quality standards. Rates were also raised because the city wasn't charging enough to cover expenses by about $2 million annually. The rates jumped from $15.30 per month per single-family home to $22.30; it's also expected to raise to $26.85 by 2009, $28.20 by 2010 and $31.40 by 2012-13.

To accomplish the bonds, the city must hire bond counsel, an underwriter, trustee, disclosure counsel, rating agencies and bond insurance company.

Earlier this year the City Council hired the law firm of Jones Hall as the bond counsel at a cost of $112,500.

The cost to retrofit city residences for state-mandates water meters is expected to cost $3.2 million. The city also plans to replace some of their wells.

As far as sewer improvements go, the city will be spending $3.9 million to rebuild its headworks. That's the mechanism where the sewer pipelines join at the receiving end of the sewer plant. Public Works Director said the sewer headworks has to be rebuilt at a lower elevation to match a new pipeline installed a while back on Service Road.