Electric rate increases discussed

ROCHELLE — At its Monday meeting, the Rochelle City Council recognized the retirement of Rochelle Police Chief Eric Higby and saw new Interim Chief Pete Pavia sworn in.

Higby retired officially Tuesday after 27 years with RPD. He was chief since 2009. Pavia was most recently RPD's school resource officer at Rochelle Township High School and has over 25 years of law enforcement experience at various levels of leadership. 

City Manager Jeff Fiegenschuh thanked Higby for his service.

"Eric was one of the first people to welcome me when I came on staff and I think he's been a great member of the team and he really showed a lot of leadership and dedication during the pandemic," Fiegenschuh said. "He kept the ship going forward. Eric, I really appreciate everything you've done. I wish you the best in your retirement. We want to celebrate your 27 years. Not very many people work in law enforcement that long anymore, so you're a dedicated individual and the profession is losing a great person."

Higby thanked his parents, friends and family for their support of him over the years. 

"They see me every day and have to put up with me and the texts and phone calls and all that stuff," Higby said. "Thank you very much. I'd like to thank the community for all of its support of the police department. I'd like to thank Mr. Fiegenschuh and the council and mayor. You guys have been very good to us. I know I'm leaving it in good hands."

Mayor John Bearrows thanked Higby on behalf of the council and said his 27 years of experience will be missed at RPD. He also thanked Pavia for accepting the interim chief position. 

"Thanks for taking a chance on me," Pavia said. "I know this is not the norm and that's not lost on me. I'm going to be working very hard for you guys. I'm going to be out there getting it for you guys and making us look great. We have a fantastic police department and they're outstanding. I'm so excited and can't wait to get to work."

RMU

The council heard and discussed details of an electric rate study on Rochelle Municipal Utilities from Utility Power Solutions President Mark Beauchamp.

Beauchamp presented the council with a rate plan that would see the city increase electric rates by a one percent average over all rate classes for each of the next three years and increase set service charges from $9 by $1 per year in the coming years. The highest rate increase any class would see would be two percent and the lowest adjustment would be no increase. The increases were suggested due to RMU's need for more funds on hand for emergencies, planned upgrades to its infrastructure and rising power costs.

Beauchamp said the one percent increase represents roughly a $1 a month increase in the average residential customer's bill.

"We're really trying hard to balance impacts on customers," Beauchamp said. "What we don't want to do is not adjust rates and then in three or four years have our cash reserves down and have to have a large rate adjustment. We're trying to minimize the impacts on customers as much as possible."

Beauchamp said increased rate structures will be designed and brought back to the city council for future approval.

"We've seen other utilities make 20-30 percent rate increases to maintain their capital outlay," RMU Superintendent of Electric Operations Blake Toliver said. "We're talking about three percent over three years. I think that's pretty respectful. No one likes a rate increase. I understand that. But on the same token, the cost of everything is going up and in my opinion it's better to do it now than later and have a 10 percent increase because we're behind the ball."

The council also held a public hearing for and unanimously approved the issuance of electric revenue bonds not to exceed $5.2 million to help pay for improvements to its electric system including a new substation on Centerpoint Drive, diesel plant feeder exits and several residential underground projects that will be necessary in the next few years. 

Rather than depleting cash reserves, city staff recommended taking advantage of the “low interest rate environment” and issuing bonds. The debt service payments will be paid out of operating revenues. The meeting’s agenda packet said the bond issuance will reduce the percentage of rate increases for customers. 

The city’s financial advisors anticipate rates in the 3.60 percent range and the debt service term will be 15 years. The anticipated debt service payments will be approximately $450,000 annually.

The council also unanimously approved an ordinance waiving competitive bidding for a power purchase agreement for RMU. Based on discussion and recommendations from its power marketing firm, the city had a need for power in June 2023 and chose to utilize a short term contract. The expenditure will be $162,000.

Incentive

The council unanimously approved an early separation incentive for city employees. Since 2017, the city has offered early separation incentives as a cost-saving measure and has had 14 eligible employees participate since the last plan was approved. 

Of the 14 open positions, five have been replaced at new pay rates and insurance tiers. When the insurance subsidy for the last employee to separate ends, the city/RMU will notice a savings of over $1.7 million dollars.

The program approved Monday will be available to employees who are either age 50 or over with 15 years of service or age 60 or over and vested in their respective pension fund and will receive two years of paid insurance from the city at their current level of coverage. Employees must enter into the agreement between March 14 and October 1, 2023, with a separation date of no later than Dec. 31, 2024. The approximate savings for the first year could be more than $225,000, depending upon who participates and when.

Rain barrels

Rain barrels will be available for residents to purchase to capture roof runoff and later used for landscaping purposes to reduce stormwater pollution and conserve water. The city will partner with UpCycle Products Inc. for residents to purchase rain barrels from Upcycle-products.com starting in mid-March at a reduced cost of between $40 and $70 per barrel, and will include home delivery.

The reduced cost rate will apply to residents who are up to date on their city utility bills, with a limit of one subsidized rain barrel per calendar year per household. The city will subsidize up to 100 rain barrels on a first-come, first-served basis. The total estimated cost for the city is approximately $5,000 and will be provided by the storm water fund.

Good News

Fiegenschuh presented a Good News award to Toliver and the electric department along with the city's public works and safety employees on their work during a recent ice storm. The city manager also recognized the city's electric and advanced communications departments for their work on a recent fiber outage. Finally, a Good News award was presented to City Sustainability Coordinator Molly Sedig for her work on obtaining a Tree City USA designation for Rochelle.

Irish-American Month

Bearrows read a proclamation designating this month in the city Irish American Heritage Month. A lighted parade will be held Friday (St. Patrick's Day) at 6:30 p.m. Lineup will begin at city hall.