Sometimes you have to spend money to make money.
The North Little Rock City Council Friday approved two ordinances to authorize $582,573 in funding to implement repairs to the Murray Hydroelectric Plant Unit 2 and to waive competitive bidding to hire a firm to implement them.
In a special meeting, the council followed the recommendation of Interim North Little Rock Electric Jason Carter who urged aldermen to pass the legislation immediately so Unit 2 could be repaired, get back online, and start generating revenue for the city.
“What we are asking for are repairs,” Carter said. “We had it reviewed by an independent hydroelectric engineer.”
Carter said North Little Rock Electric wants to get Unit 2 back to working by March 1.
“We can reallocate funds within our budget to cause these repairs without incurring any debt,” Carter said.
Mayor Joe Smith agreed with Carter’s proposal, saying getting Unit 2 operational again will help the city earn $1 million in electric sales.
Smith added if the city doesn’t repair the unit by the spring it would not be worth getting it fixed this year because the plant would not generate enough revenue in 2013 to warrant the investment.
While funds are being invested in repairs in 2013, the city is expecting to spend a considerable amount more in 2014 to implement its next 25-year maintenance repairs.
Carter showed aldermen some of the mechanical parts that are aging and some of the dark sludge the department’s hydroelectric plant is producing because it is time to implement some major repairs.
Alderman Debi Ross asked Carter how much the major repair costs would amount to in 2014.
Carter said he did not want to make a guess at the present time until he receives some bid amounts back from prospective contractors.
Smith said he doesn’t want to see the city get caught short of funding for maintenance any time in the future.
“My intention in next year’s budget is that we resolve maintenance issues,” Carter said. “We know 25 years from now we will have to do it again. If over 25 years you take a couple hundred thousand dollars a year and put it into a maintenance fund and then you have a maintenance fund.”
Alderman Steve Baxter asked if the electric department is properly maintaining its mechanical apparatus.
Carter said there are differing opinions. The city’s hydroelectric consultant, Hydro Consulting and Maintenance Inc. of Florida expressed the opinion that North Little Rock has done a good job. However, others who have looked at the department’s equipment have expressed the opinion that warning signs of its deteriorating condition were not heeded as quickly as they should have been.
The council agreed to waive competitive bidding and hire HCMS Inc. to implement the repairs because the firm is currently on site doing other construction work.
HCMS currently has a significant amount of scaffolding erected at the plant. To hire the firm now that the scaffolding is already in place will save the city about $70,000 in setup costs, Carter said.
Carter said North Little Rock has a good working relationship with HCMS and the firm had designed some the hydroelectric plant’s electrical generating equipment.
Carter said there are not a lot of hydroelectric engineers in the marketplace.