Having paid off bonds for Whelan Energy Center No. 1, staff members from Hastings Utilities and the city of Hastings are looking at how to take advantage of that beneficial situation.
City Administrator Dave Ptak said during the Hastings Utility Board meeting on Thursday that he, along with HU Manager Kevin Johnson and City Finance Director Roger Nash, have been looking at possibly refinancing or paying off combined services bonds issued in 2006 and 2012.
“We’re in a position where we can do that and take a lower interest rate,” Ptak said. “That’s something we are looking at. We also will have the opportunity, if our rates stay low, to do the same thing with the 2012 issue, but not until 2021.”
Both bonds have a reserve fund attached. Calling the 2006 bond would release the reserve fund and free up additional cash.
Nash said the reserve on the 2006 bond is around $450,000. The reserve on the 2012 bond is about $1.3 million.
“That’s an opportunity to put some more cash into the utilities,” Ptak said. “I know there are some needs going forward. We have an ancient water-distribution system.”
The bonds for Whelan Energy Center No. 1, which came online in 1981, were paid off in 2019.
“The Whelan 1 bonds have been paid off, so that just improves the financial performance of the electric system,” HU assistant manager Al Meyer said. “The Whelan 2 bond is totally financed by (Public Power Generation Agency). So our payments are under a purchase power agreement with PPGA, so that’s where the payments go for Whelan 2.”
Hastings Utilities was paying about $4.5 million a year for WEC 1.
How those extra funds would be used will be a discussion topic when the Hastings City Council reviews the 2020-21 budget.
Meyer said one immediate expenditure is phase 3 of the Aquifer Storage and Restoration Project, which includes four injection wells and insulation of water mains.
He anticipates the utility board will see a recommendation for the expenditure at the February meeting. The item is budgeted at $2.3 million.
Also during the meeting Brian Strom, HU manager of customer accounts, informed the board that architects are finalizing designs for the North Denver Station security and customer service area remodel.
Keith Leonhardt, HU director of engineering, said he expects bids to be let on Jan. 24 and to award the contract March 23 with construction to be completed Nov. 1.