The months-long debate among members of the Star Valley Town Council over its Rainy Day Fund may finally reach a conclusion at its next meeting.
The council directed staff at its July 17 meeting to draft a resolution to change the policy regarding the Rainy Day Fund, setting its maximum amount at $600,000 and waiving repayment of the $600,000 taken from it to buy the water company.
The council has been wrangling over the fund since deciding to use half of it to buy the Payson Water Company from Robert Hardcastle and Brooke Utilities earlier this year.
The council opted to use some of its $1.2 million reserve fund to purchase the $775,000 water company instead of trying to get a loan from the Water Infrastructure Finance Authority in mid-December.
The town would have had to pay $15,000 to set up the loan, plus between $239,000 and $573,000 in interest depending on whether it was for 10 or 20 years.
The town needed to have the company’s Certificate of Convenience and Necessity and water rights to deliver water to residents from wells purchased from Payson or claim a share of the Blue Ridge Reservoir water.
The council has since decided not to get Blue Ridge water. However, owning the rights and the ability to distribute water makes it possible for the town to expand the utility in the future.
The debate over repaying the Rainy Day Fund started in early May when the council was advised that the water company revenues would not generate enough money to repay the $600,000 in the required five years. At that time, Tim Grier, the town’s manager and attorney, suggested rewriting the law to waive repayment of the $600,000.
Several councilors disagreed with that suggestion. Vern Leis said he only voted to use the money because the council was required to repay it. George Binney said since the town “borrowed” the money he felt it owed it. Gary Coon said it was moving money from one pocket to the other, but he still wanted to see the Rainy Day Fund repaid. Vice Mayor Del Newland said he didn’t see the point of a town having a reserve fund and Binney said if the town was going to take money from it at will, then the council might as well eliminate the reserve fund. Barbara Hartwell said when town councils eliminate restrictions on reserve funds they end up in the red. Coon then suggested reducing the size of the fund, but not eliminating it.
With no resolution at hand in early May and the budget yet to be seen at that point, the matter was pushed back to the July 17 meeting.
Leis, Coon and Binney spoke in favor of not repaying the $600,000 from the fund used to buy the water company. Hartwell said the money ought to be returned. Councilor Paty Henderson suggested splitting the difference and have only $300,000 paid back from water revenues over the next five years.
In the end Leis, Coon, Binney and Newland voted for the change in the Rainy Day Fund ordinance through a resolution, while Hartwell and Henderson were opposed. Mayor Bill Rappaport said he could only vote to break a tie.