Gas Purchase

Well, the vote on buying the Gas franchise back from ONG is tomorrow, August 9th.

I will more than likely vote yes for the purchase.

We have finally seen some numbers on the purchase price. They range from 1.5 million (city) to 3.342 million (ONG). We've also seen some figures on expected profit.

Even with the difference in the purchase price, the city should be able to pull a nice profit.

	City of Collinsville	ONG
Purchase Price	$1,500,00	$2,975,655
Salaries & Benefits expense	$106,000	$106,000
Capital Improvements expense	$200,000	$200,000
dept repayment expense	$181,109	$ 91,203
Profit after Expense	$281,797	$191,891

The above numbers are the first year projected numbers with the recent $5.75 ONG rate increase included in revenue; an inflation rate of 2%; and 30 year funding at 4.5%

There is a $400,000 seperation cost not included in the ONG purchase price in the above table. As you can guess, this will be highly contested. My understanding of what the contract states says that the city can purchase the system back at the depreciated cost of the meters, pipe, and infrastructure. If it is truely written like that, I would guess that $400,000 would not stand up as the process continues (if the vote passes).

You can find more information on this vote at the cvilleok.com site.