BY NEAL A. Johnson

UD Editor

thor65018@yahoo.com

Freeburg trustees at their meeting last Monday agreed to an exclusive five-year contract with RadioWire at a payment of $250 per month for use of the village’s tower, prepaid annually at $3,000, beginning Oct. 1.

Last month, a figure of $500 per month was determined to be too high, but $200 per month was a little too low. As such, a rental cost of $300 was floated at last week’s meeting.

“What’s your counter on that?” Mayor Darryl Haller asked.

“Well, that’s higher than what you might call the industry standard,” Ryan Herzing of Radio Wire replied. “That’s quite a bit higher than we pay for a lot of them around here. After five years, that’s not going to be our best avenue, long term.”

“What are you suggesting?” Haller asked.

Herzing said he was still looking at $200 per month, but a longer term would make a higher rent more feasible.

A suggestion of seven years at $300 per month was declined by Herzing, who said it was too high at this time.

Trustee Dale Struemph said he would like the agreement to be five years. “So much can happen in 10 years,” he said.

Herzing was asked if he would entertain $250 per month.

“Yeah, can we do seven years on that?” Herzing replied.

“Will it be non-exclusive then for seven years?” Haller asked. “It’s tying our hands for seven years. I understand what you’re saying, but what happens if another company comes in? I’d like to keep it at five.”

Herzing offered $225 per month, but trustees agreed the driving factor was whether the agreement was exclusive.

Whether the agreement was exclusive raised questions for Haller.

“What would we do that would mess you up?” Haller asked. “Bring in another company that does internet service like you?”

“Yeah, you could bring in another company, somebody could put something up there,” Herzing said. “There’s all kinds of things that could be done.”

Haller asked if an exclusive agreement would make a difference in the rental terms.

“As far as the price, that’s mainly going to come down to the term,” Herzing replied. “If you don’t want to do an exclusive agreement, it’s going to affect it. We don’t really operate any towers with a non-exclusive except for commercial towers.”

Trustee Shane Zimmer said the village would be cutting RadioWire short with a non-exclusive contract. “I don’t mind giving them an exclusive contract,” he added.

Freeburg will not allow any other agency to use the same frequency as RadioWire, and in the event of a issue that cannot be resolved, the village must give RadioWire four months to find a suitable place to move its equipment in the event Freeburg terminates the contract.

“I think if we do five years, I think I’d be okay with the exclusive deal,” said Struemph.

Haller agreed but said the rent would need to be $250. “That’s about as far as I ‘m going to budge,” he added.

With only one free internet service, Herzing agreed to the terms of the deal.

Other highlights of the agreement:

— Haller said cost rises for everything each year, and by the end of the contract, those increases will need to be evaluated before a new contract is signed. As such, a provision allowing a renewal of the contract includes the caveat, “subject to revision of the rental amount at the renewal date.”

Herzing agreed, but said the starting rental price needed to be lower. “Everybody at the end of five years wants it raised up,” he said.

“We wouldn’t go below market rate right now just to be at market rate in five years,” said Struemph. “Five years is a good time frame.”

“You can budget your numbers,” Haller added.

— The village will have advance notice of any after-hours access to the tower.

— The contract will require Radio Wire to provide annually a financial statement. The Certificate of Liability Insurance does not provide liability insurance, but reflects the company has insurance coverage for workers’ compensation and employer’s liability, which would only protect Radio Wire’s employees.

— Freeburg and Radio Wire agree that neither can transfer the contract to another entity without written consent.

— Termination of the agreement will require 30 days written notice.

In other business, trustees got some good financial news.

Matt Robertson, representing Bank of St. Elizabeth at Freeburg, noted an agreement made 12 years ago regarding the village’s interest rate on deposits will be amended moving forward.

“At that time, the board wanted to have a variable rate off of prime, which was kind of odd,” said Robertson, noting the practice is not really an industry standard. “When that started, the prime rate did not change for seven or eight years in a row, so the rate remained stagnant at the bank with your deposits.”

However, during that time frame, the bank’s software underwent a conversion, and did not catch when the prime interest rate started changing.

“It was not observed by us or by the city,” Robertson said. “When we did catch it, to be fair to the city and the deposits kept with us, we’re going to make an interest adjustment on next month’s statement.”

Robertson said he could not provide an exact figure as to the adjustment, but said the bank would review the rates paid to the highest institutional investor and provide the village that rate until the next evaluation.

Moving forward, Robertson suggested changing the index used for deposits, recommending the village of Freeburg use the Missouri Securities Investment Program (MoSIP), which is used by schools and institutional investors.

Robertson explained that MoSIP is a quasi-government agency that sets rates, which as of last week was 2.13%. He proposed reviewing the rate on a semi-annual basis because the rate changes weekly, but keeping up with adjustments at that frequency would be difficult.

That would give Freeburg a fixed rate from Jan. 1 through June 30, and then the rate would be adjusted for July 1 through Dec. 31.

“That way we’re not trying to keep up with a bouncing ball throughout the year,” said Robertson.

Haller confirmed that email communication would be established between the bank, the city clerk and the chairman of the board to ensure the situation is monitored.

“I think that’s a fair rate,” said Haller.

Trustees approved making the change per Robertson’s proposal.

Remaining business from this meeting will be presented next week.