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HomeMy WebLinkAbout2/7/2012 - RegularOIL MEMBERS PRESENT: Bradley E. Grose, Mayor Carolyn D. Fidler, Vice Mayor Robert R. Altice Matthew S. Hare William W. Nance STAFF PRESENT: Christopher S. Lawrence, Town Manager Elizabeth Dillon, Town Attorney Susan N. Johnson, Town Clerk Consuella Caudill, Assistant Town Manager/Economic Development Manager Stephanie Dearing, Human Resources Director Lijah Robinson, Accounting Manager Chris Linkous, Fire/EMS Captain Joey Hiner, Assistant Public Works Director The Mayor called the work session to order at 5:30 P.M. The Town Manager briefed Council on the Cost of Service Study on Water and Wastewater Rates which was prepared by Mike Kennedy, the former Public Works Director, He first summarized the first 24 slides of a Power Point presentation relating to the need for the study; the methodology; reference sources, principles of rate setting; customer classes; process steps; identifying revenue requirements; cost allocation to customer i classes and cost categories and rate structure design. These slides were presented to Council at their September strategic planning session. Vice Mayor Fidler asked about our Gain Sharing Agreement with Roanoke County, The Town Manager said that in 2019 our Gain Sharing Agreement expires, but the Water and Sewer Agreement is a 50 year agreement. That Agreement includes all of the East County area. The Town Manager continued by stating that any final figures will have to be refined based on current information. The rate structure suggested in the study is the same as the current structure which has fixed and volumetric charges by customer class. The next slide related to determining the revenue requirements. It projects over the next five years from FY1 2 to FY1 6 the total operating and maintenance costs, the existing debt and how to fund a reserve account. The current rate structure is not designed to fund a reserve. The reserve was basically created with a surplus at the end of the year, but the last several years there has been a deficit and the reserve has been used up. The study also provides for a rate funded capital for small projects rather than having to incur debt. Of course, to take on much larger projects we will have to take on new debt in the future which is shown beginning in FY14. The Town Manager commented that the reserve is cumulative and does not have to be funded every year, but once we get to a certain amount we need to try to keep it at that level. The Town Manager then commented on the William Byrd High School subsidy and indicated that when a new rate structure is designed we need to factor in that subsidy. Also, the credits listed are those given to customers for excess water usage due to a broken water line, leaking toilet, etc. The next slide showed the revenue requirements based on water and wastewater administration and operation and maintenance. The next three slides showed revenue requirement estimates by account codes. Mr. Altice commented that the regulations that are handed down for wastewater really cost. The Town Manager commented that we have two big expenses from the Water Authority which are regulation driven in the amount of $1,380,000. The next slide showed all the current debt the Town has for five projects, Mr. Hare commented on operating and maintenance costs. By doing nothing but increasing it assumes that we are not going to find a better way to do what we do. That is not sustainable. Showing a 25 percent increase in operating and maintenance costs of which 23 percent is salary increases is going to be a hard sale. The Town Manager agreed, but the projections assume a salary increase each year which probably is not going to be a reality. It is true that the more lines we can replace, the less maintenance will be required, but it is difficult to determine what the cost savings will be at this point, Mr. Hare asked if it would be better to take out bonds to replace lines and the Town Manager said we cannot afford it, but ultimately it would help. Mr. Hare said if we spend a certain amount of money each year to maintain an old system, is it not cheaper to take out bonds, fix the system to begin with and save N money on the maintenance side which may cover the interest expense you would pay. The Town Manager indicated that our system is very defined and we will not be taking on a lot of new customers in the future. The only direction we could possibly go is into Bedford. The next slide showed the possible build-up of a reserve account over the next five years to cumulate to a total of $700,000. The proposed rate increase does not assume that we will have a surplus at the end of the year. All of the projects were identified for FY12 through FY17 with cost estimates. This included the $472,500 for the improvements to the WVWA Tinker Creek Inceptor project and $907,500 for improvements to WVWA WPCP disinfection and solids project. The payments Will be made according to the Water Authority's bond schedule. Some of the capital improvements will be paid for out of rate -funded capital and some will incur debt. Mr. Kennedy indicated that you always want to pay for your design work with cash and not have to include that cost in the debt you incur. The next slide gave a description of the projects that are currently being paid for with bonds. The Mayor commented that the last DEQ consent order to the Town was in 2006 for wastewater. Vice Mayor Fidler asked if it would save us any money at the current low rates to refinance the $10 million. The Town Manager indicated that we already have good rates. The next slides gave a revenue comparison by customer class for water and wastewater for the present rates and the cost of service rates. The next two slides related to proof test for water and wastewater. There were two approaches that the committee looked at —one is to lower the service charge and shift that cost to water usage. Both scenarios have pros and cons. A higher service charge is more of a guaranteed based rate — based on number of customers not how much water is used. The other approach lowers the service charge rate but those who use a lot of water pay more and those who do not pay less. Mr. Kennedy ran two scenarios one with $7.55 service charge and one with a $10.00 service charge and then changed the volumetric rate, 1 Mr. Nance commented that he thought the cost was more for the system than the water running through the system. The Town Manager agreed that the cost to run the system is more expensive. The Mayor commented that as far as this type of rate structure, is it going to be more of a burden for the Finance Department to do it this way. We really do not have a water supply problem. Vice Mayor Fidler asked why the purchased water base rate is more and the meter charge is less. The Town Manager explained because we do not provide any service for the purchased water. Their charge is simply a pass -through expense. Ms. Caudill stated that part is the cost of the water we get from the Water Authority and a $2.00 administrative fee. The Town Manager also commented that we have an agreement with the County that we will charge the out-of- town residents and the in -town residents the same. In most utility systems that are owned by a municipality, the town residents pay one rate and the out-of-town residents pay more. That philosophy could be applied to Bedford County. The Town Manager commented that he had furnished Council sample bills using several different calculations, The next slide showed the projected 5-year revenue forecast. No increase is proposed in the budget for FY13. Mr. Hare asked when would the proposed rate increase need to go into effect to get the revenue that is projected. The Town Manager said the year before it is needed and there is a possibility of implementing in July, Mr. Nance asked what our timeline would be from here forward and the Town Manager indicated there are some questions that need to be answered and some clarifications to bring back to Council for further consideration. The Mayor called the regular meeting to order at 7:00 Roll Call p.m. The Town Clerk called the roll with Council Member Altice, Council Member Hare, Council Member Nance, Vice Mayor Fidler, and Mayor Grose present. The Mayor welcomed those in attendance. After a Moment of Silence, Vice Mayor Fidler led the Pledge of Allegiance to the U.S. Flag. 51 Mr. Hare made a motion to approve the consent agenda Approved minutes of January 17, as presented; the motion was seconded by Vice Mayor 2012 Fidler and carried by the following vote, with all members voting: Vote 5-0; Yeas (5) - Altice, Hare, Nance, Fidler, Grose; Nays (0) - None, The Mayor introduced Billy Wayne Martin to make a Jefferson High School Class of 1961. Mr. Martin started his presentation by recognizing classmates who were present along with Vice Mayor Fidler, who was a member of this class. Donna Gray Boyd, one of their classmates, created a document called "Rainbow Wishes". This document is shipped in troop care boxes, displayed in public buildings, military buildings, National Guard Headquarters, July 4 1h Parades, ROTC classes, Memorial and Veterans Day events and is used by Veterans Administration staff. After reciting the language on the document, he then presented a framed copy of the document to the Mayor for placement at a location that the Town deems most appropriate. The Mayor thanked Mr. Martin and the classmates for their presentation. Vice Mayor Fidler also commented that she was very proud to have been a member of this class. The Mayor recognized Boy Scout Troop 235 and their leaders who were in attendance. The next item on the agenda was a presentation by Beth Doughty of the Roanoke Regional Partnership. Ms. Doughty then gave a Power Point presentation of the 2011 annual report. She indicated that overall their activity level has increased 14%. While inquiries were way up, the conversion to projects and prospects suffered and she thinks it is due to a lack of real estate product such as existing buildings and large sites in the area. The information assistance category was up 46% which she feels is important and they are providing a great community resource. They also strive to continue a relationship with the VEDP and site selection consultants and the activity there has also increased. She then commented on business development activities and a list of job creations in 2011, It amounted to 863 jobs and $52 million in investments of which $23 million was in foreign investments. The second category, outdoor asset development, involves activities which help to promote the area such as the Blue Ridge Marathon. Image building was the next category which includes media resources such as 19 Facebook, Twitter, four websites, two newsletters and articles in publications. Ms. Doughty commented that times have changed and you cannot do economic development the way it was done 20 years ago, They are always trying to find new ways to create jobs, investment, attract people, money and ideas to this region. A new initiative for 2011 is the Roanoke Entrepreneur Hub website which has had 8,000 visitors since April. Some new initiatives were an outdoor benchmark study to compare Roanoke to four other communities relating to outdoor amenities. The number of outdoor amenities and the varieties were competitive, but our area is lacking in businesses associated with this sector. The Roanoke Outdoor Circus was held which attracted 5,000 people. They now have a kiosk which is rotating throughout the region and would like to locate it in the Vinton area if there is a good space. Another initiative is GET2KNOWNOKE on Facebook which is a forum for people to find out what is going on in the region and they hope to expand to its own website, Mr. Doughty ended her presentation by saying that the old concept of economic development was that silver bullet, the one thing that made all the difference. Now economic development is like spinning plates, a lot of different ways to practice economic development and a lot of different ways to attract things to your community. The Mayor thanked Ms. Doughty for her presentation and all the work she and her staff are doing to promote the Roanoke area. The Town Manager next introduced Gary Woodson, the new Public Works Director, who will start with the Town on March 1st. Under citizens' comments, the Mayor recognize,:�, Dr. William Joness of 1021 Halliahurst Avenue. Dr. Joness handed Council photos of the property locateI at 123 Gus Nicks Boulevard. After his comments, he asked Council to put the money in their budget to have the property condemned and tore down. The Mayor �rritatwt- tahrat-&#w arr* th-" this is not the kind of impression that the Town wants to make. Vice Mayor Fidler asked is someone was living there now and Dr. Joness responded "no". N. The next agenda item was to consider adoption of a Approved Resolution No. 191 Resolution allowing the removal of personal allowing the Town Treasur property delinquent taxes over five years old from the Finance Director to remo active records. The Town Manager commented that outstanding personal prope we do this annually. Mr. Hare made a motion to approve delinquent taxes for 2006 from t the Resolution as presented; the motion was seconded active records by Vice Mayor Fidler and carried by the following roll call vote, with all members voting: Vote 5-0; Yeas (5) - Altice, Hare, Nance, Fidler, Grose; Nays (0) - None. Chris Linkous, Fire/EMS Captain, explained to Council the necessity of entering into a Mutual Aid Agreement between Bedford County, Roanoke County, and the Town • Vinton. The Town has already been providing service, but this agreement puts it in writing and makes it legal. The Town Manager indicated that the item will be put under the Consent Agenda for the next meeting. The Town Attorney indicated she has reviewed the agreement and it is fine. Vice Mayor Fidler made a motion to authorize the Town Manager to sign the agreement and the motion was seconded by Mr. Nance. The Town Attorney indicated that the agreement requires a resolution by Council, so Vice Mayor Fidler withdrew her motion and Mr. Nance withdrew his second. The item will be considered at the February 21st meeting. Lijah Robinson next gave a Power Point presentation of a general update on revenues and expenditures for FY12 as of December 31, 2011. The report focused on the current percentages of the General Fund and Utility Fund and he indicated they are where they are expected to be at this time. Mr. Robinson then commented on several revenue categories that the percentages are a little off such as fines and forfeitures, use of money/property and miscellaneous revenue. Mr. Hare asked which category did pari-mutual betting come under and Mr. Nance indicated under taxes. The only category under expenditures that is off percentage wise relates to community development due to the fact that our payment for the library of $100,000 came up after the budget was adopted. The $50,000 was already in the budget. Under utility fund revenues, the recovered cost percentage of 118 percent is due to the increase in reconnection fees and in collection of delinquent account. Under expenditures, the purchased water is waiting to receive the payment and the wastewater system maintenance percentage is based on the two 7 breaks in front of McDonalds and on Tinker Creek in • of PFG. A The Town Manager mentioned the timeline for the CDBG grant application and that the briefing to Council will be at the Council in the Neighborhood meeting on February Arbor Day will be on April 27 1h this year and we will be planting over 200 trees along with the Breakfast Lions Club at the Wolf Creek Greenway off Hardy Road. There is also an eagle scout working on a project there as well. The Mayor briefed Council that our website has attracted national attention and a program called Today in America, a show hosted by Terry Bradshaw. They have made a proposal to do a five-minute program on the Town, but the cost is $19,800. As exciting at it is to be asked, he cannot support the cost of doing the Program and Council agreed. Mr. Hare made brief comments about the two Financial Reports for November and December 2011 A new summary report has been prepared and furnished to Council. As Mr. Robinson said revenues are up and expenditures are down as we expected. He also commented that the Police Department is spending an enormous amount of money on repairing old vehicles as we consider the new budget. Mr. Hare moved that the Financial Reports for November and December 2011 be approved, the motion was seconded by Vice Mayor Fidler and carried by the following vote, with all members voting: Vote 5-0, Altice, Hare, Nance, Fidler, Grose; Nays (0) - None. Mr. Hare also indicated that the Finance Committee is looking into updating their current deposit policy fund to help offset the recovery of any uncollected amounts. He also indicated that the Investment Committee approved allowing the Finance Director to invest the money received from AEP for the sale of the easements with Valley Bank, a six month investment. Comments from other Council Members: Mr. Nance welcomed Gary Woodson to the Town as the new Public Works Director; Mr. Altice indicated that we need to address the eyesore on Gus Nicks and asked the Town Manager to give an update to Council on what has been done and what the next steps might be. The Town Manager indicated that the taxes are paid up to date and the water has been turned off and no one is living there that we know • Mr. Hare asked if it was Approved Financial Reports for November 2011 and December 2011 1 in the grant zone and the Town Manager responded in the affirmative. Vice Mayor Fidler thanked Dr. Joness and the presentation by the Class of '61. She also thanked Chris for furnishing a list of the Town vehicles to Council. The Town Clerk briefed Council on the upcoming Council in the Neighborhood meeting at Cundiff Elementary and the advertisements that we have done to get the word out. She also encouraged Council members to ride through the neighborhood prior to the meeting since we will not be taking a tour. Mr. Nance moved that the meeting be adjourned, the Regular meeting adjourned at motion was seconded by Vice Mayor Fidler and carried 8:56 p.m. by the following vote, with all members voting: Vote 5-0; Altice, Hare, Nance, Fidler, Grose; Nays (0) - None. The regular meeting was adjourned at 8:56 p.m. APPROVED:, ,6 Wadley E. Grose, Mayor-41 '67 Susan N. Johnson own Clerk ino