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HomeMy Public PortalAbout07-25-2005 Workshop Session Minutes July 25, 2005 Monthly Workshop Page 1 of 16 Minutes Approved: September 12, 2005 MINUTES HILLSBOROUGH TOWN BOARD July 25, 2005 7:30 PM, Town Barn The Hillsborough Town Board held a Monthly Workshop on July 25, 2005 at 7:30 PM in the Hillsborough Town Barn. Present for the Monthly Workshop were Mayor Joe Phelps and Commissioners Brian Lowen, Frances Dancy, Eric Hallman, Michael Gering, and Evelyn Lloyd. Staff present were Town Manager Eric Peterson, Assistant Town Manager/Public Works Director Demetric Potts, Town Engineer Kenny Keel, Finance Director Greg Siler and Management Intern Christina Riordan 1. Open the Workshop 6:32:11 PM Mayor Phelps called the meeting to order at 7:32 PM. 2. Agenda Changes & Agenda Approval 6:32:21 PM Mayor Phelps added a closed session to discuss the potential litigation regarding the water plant, a discussion of the meeting with Orange Rural Fire Department as item 9a and an update from the Town Engineer Kenny Keel on the Cates Creek Outfall as item 9b. 6:33:35 PM By consensus, the Board approved the agenda. 3. Committee Reports and Updates from the Town Board 6:33:42 PM There were no committee reports or updates. 4. Presentation of the Water/Sewer Rate Study, Rate Recommendations, and Rate Model from Raftelis Financial Consulting (Jon Davis) 6:34:04 PM By consensus, the Board agreed to listen to the presentation from Raftelis in its entirety and ask questions after its conclusion. 6:34:53 PM The Town Manager Eric Peterson introduced Jon Davis, Project Manager, with Raftelis Financial Consultants who proceeded to give a presentation of recommendations. A copy of the presentation is hereby incorporated by reference and made a part of these official Minutes as an Attachment. 6:35:26 PM Mr. Davis reviewed the project objectives and rate setting objectives for the rate study. He also provided an overview of the model developed by Raftelis. He Minutes July 25, 2005 Monthly Workshop Page 2 of 16 Minutes Approved: September 12, 2005 noted that the Board’s decision to maintain the minimum charge rate structure over a base and volume charge was made for the following reasons: 1. Minimize customer impacts for in-town and out-of town customers; 2. Potential rate increases with base charge outweigh marginal increase in equity; and 3. Customers comfortable/familiar with existing rate structure. Mr. Davis explained and demonstrated the capabilities of the model developed by Raftelis. The capabilities include: ?? Easy input for expenses and revenues of each budget year. ?? Ten-year forecast of cash flow and rates. ?? Customer impacts year-over-year for various usage levels. ?? Ability to change out-of-town differential. ?? Graphic interpretation of results. Mr. Davis also presented the rate results from the study for FY06, FY07 and FY08. Raftelis recommended that in-town and out-of town customer water rates remain at their current level for FY06 and FY07, with an increase in FY08. For sewer rates, Raftelis recommended that in-town and out-of town rates increase in FY06, FY07 and FY08. This increase in sewer rates would help to make the sewer system more self-supportive over the coming years. The recommendations if implemented would result in a 4.3% combined increase in water/sewer rates for FY06. This represents a 0% increase in water rates and 9.1% increase in sewer rates. The recommendations also included a .6% combined sewer/water rate increase in FY07 and 9.5% combined sewer/water rate increase in FY08. Mr. Davis stated that the increase in water/sewer rates for FY08 was due to the cost of several large capital projects. The rates for FY08 may change in the future as the Town finalizes decisions about these capital projects. The FY06 recommendations assume that rates are in place for a full 12 months. If the rates are put into place by October 1 Raftelis estimates that the Town will have lost $60,000 in revenue. The Town has two options to correct this situation: 1. It could recalculate the rates to include $60,0000, or 2. It could take $60,000 out of fund balance and replace it during the next fiscal year. The next steps for the project include: ?? Adoption of new rates for FY06. ?? Model Training for Town Staff. This training will include how to do annual updates and how to use the model to address “what if” type questions. ?? Continuous updating of the model for future implementation. 6:52:43 PM Mr. Davis concluded his presentation. 5. Questions from the Town Board, Water & Sewer Advisory Committee, Public and Staff for Raftelis about the Presentation, Rate Study, Recommendations and Rate Model. Minutes July 25, 2005 Monthly Workshop Page 3 of 16 Minutes Approved: September 12, 2005 6:52:55 PM Mayor welcomed members of Water/Sewer Advisory Committee to the meeting. 6:53:28 PM Mr. Davis fielded questions from the Water and Sewer Advisory Committee, The Town Board and a citizen. 7:12:18 PM Town Manager Eric Peterson commended Raftelis on the outstanding work they did on the rate study. He stated that staff will need time to get use to the model and learn how to use it. 7:13:33 PM Town Manager Eric Peterson offered to email scenarios from the model to the Water/Sewer Advisory Committee for their next meeting. 6. Comments to the Town Board from the Water Sewer Advisory Committee and Public about the Water & Sewer Rate Presentation and Related Items. 7:14:35 PM Mayor Phelps asked for comments from the Water Sewer Advisory Committee and the public. There were no comments. 7. Discussion by the Town Board on the Water and Sewer Rate Presentation and Consideration of Direction to Staff 7:14:58 PM Mayor Phelps asked Board Members to provide direction to the staff for the September meeting. 7:15:55 PM Mayor Phelps suggested providing information to the Water Sewer Advisory Committee by their August meeting so that they will be able to make a recommendation for the Town Board’s September meeting. 7:16:45 PM Water Sewer Advisory Committee Members stated that they had two scenarios that they would like information on. Town Manager Eric Peterson offered to provide the information to them by their August meeting. 7:18:55 PM Commissioner Gering suggested that the Board consider a reserve fund for low-income customers and would like a recommendation from Water Sewer Advisory Committee about that. 7:19:34 PM Water Sewer Advisory Committee Members stated that they had researched the issue and found that PSNC has a program called Helping Hand which is administered by the County Social Services Department. Money for the program comes from rounding customer’s bills up to the nearest dollar. Orange County Social Services has agreed to administer the program for the Town of Hillsborough. However, the Town would need to obtain accounting software to process the bills. Minutes July 25, 2005 Monthly Workshop Page 4 of 16 Minutes Approved: September 12, 2005 7:21:14 PM Commissioner Gering commended the Water Sewer Advisory Committee for obtaining this information and asked staff to get more information about implementing the program in Hillsborough. 7:22:06 PM Mayor Phelps expressed concern about the accounting requirements. Finance Director Greg Siler stated that the Town’s current accounting software does not have the capability to round up. Town Manager Eric Peterson suggested that the Town modify the program used by PSNC. It may be more cost effective to create a fund that earmarks money for the same purpose instead. 7:24:21 PM Mr. Davis from Raftelis suggested that the Town consult legal counsel. There may be legal restrictions to setting up a program that provides financial assistance to some customers and not others. 7:24:46 PM Commissioner Gering suggested that the Town add a voluntary check off or contribution option to the water/sewer bill. 7:25:09 PM Town Manager Eric Peterson stated that staff will check out different options and report back to the Town Board. 7:26:08 PM Mayor Phelps asked the Town Board if there were any scenarios they would like to the Town Manager to run on the model before the next meeting. Commissioner Eric Hallman suggested showing how the rates will impact the water/sewer fund balance. 7:30:00 PM Commissioner Lowen suggest that he would like to see an scenario presented where the whole $60,000 shortfall was not taken out of fund balance this year. 7:31:09 PM Water Sewer Advisory Board Members asked the Town Manager to look at a 1.9, 1.75 and the current in-town and out-of town customer differential. 7:32:32 PM Mayor thanked the Water/Sewer Board Advisory Committee and Raftelis for coming. 8. Discussion of How the Town Board Sees the Economic Development District By Waterstone Developing (Commissioner Hallman) 7:33:33 PM Commissioner Hallman introduced a discussion about potential development in the Economic Development District by Waterstone. Commissioner Hallman stated that he would like the Board to be proactive and discuss what type of development they would like to see in that area. Commissioner Hallman expressed a desire to hear from other Board Members about the issue. 7:36:33 PM Commissioner Dancy stated a concern about water capacity. Minutes July 25, 2005 Monthly Workshop Page 5 of 16 Minutes Approved: September 12, 2005 7:36:41 PM Commissioner Gering stated that he would like to see the development dedicated toward the highest revenue producer for Hillsborough. He also noted that he preferred to see a whole plan for the area at once as opposed to many smaller individual projects. 7:39:07 PM Commissioner Hallman requested that the Economic Development District by Waterstone be a part of the strategic growth plan. 9. Other 9a. Added Item. Discussion of Meeting with Orange Rural Fire Department 7:42:31 PM Town Manager Eric Peterson explained that the Orange Rural Fire Board cannot meet during the September Workshop. The Board has proposed the alternative dates of September 19, October 3 and October 17 for the meeting. 7:44:32 PM By Consensus, the Board agreed to hold a meeting with the Orange Rural th Fire Board on Monday, October 17 at 6:30 PM. The meeting will begin with a tour of the fire station and then move at 7:30 PM to the Holiday Inn Express. 7:45:14 PM Town Manager Eric Peterson agreed to provide food for the meeting. 9b. Added Item. Update from Town Engineer on the Cates Creek Outfall. 7:46:16 PM Mayor Phelps asked Town Engineer Kenny to provide an update on the Cates Creek Outfall. Town Engineer Kenny Keel reported that the real estate agent in charge of the project had sent out notice to property owners. A full report of the number of easements obtained will be provided by the real estate agent to the Town by August st 1. 9c. Added Item. Closed Session A closed session as authorized by North Carolina General Statue Section 143-318.11.(3) to meet regarding potential litigation involving the water plant. 7:47:53 PM Upon a motion by Commissioner Gering, seconded by Commissioner Dancy, the Board Moved to go into Closed Session as authorized by North Carolina General Statue Section 143-318.11.(3) to meet regarding potential litigation involving the water plant by a vote of 5-0. The motion was declared passed. 8:05:01 PM Upon returning to Open session Mayor Phelps informed the Board that the Postal Service is considering plans to require curbside mailboxes in the downtown historic district. Mayor Phelps and Planning Director Margaret Hauth will attend a Postal Service meeting in Raleigh to request that an exception be made for the historic district. Minutes July 25, 2005 Monthly Workshop Page 6 of 16 Minutes Approved: September 12, 2005 8:05:13 PM By consensus, the Board agreed to have Mayor Phelps request the Postal Service exempt the historic district from the requirement for curbside mailboxes in the historic district. 8:08:18 PM Town Manager Eric Peterson informed the Board that he will not be at the September Board meeting but will have material ready for the Board’s review before that meeting. 10. Adjourn. 8:09:26 PM Upon a motion by Commissioner Gering, seconded by Commissioner Dancy, the Board moved to adjourn at 9:09 PM by a vote of 5-0. The motion was declared passed. Respectfully submitted, Christina Riordan, Management Intern Minutes July 25, 2005 Monthly Workshop Page 7 of 16 Minutes Approved: September 12, 2005 Minutes July 25, 2005 Monthly Workshop Page 8 of 16 Minutes Approved: September 12, 2005 Minutes July 25, 2005 Monthly Workshop Page 9 of 16 Minutes Approved: September 12, 2005 Minutes July 25, 2005 Monthly Workshop Page 10 of 16 Minutes Approved: September 12, 2005 Minutes July 25, 2005 Monthly Workshop Page 11 of 16 Minutes Approved: September 12, 2005 Minutes July 25, 2005 Monthly Workshop Page 12 of 16 Minutes Approved: September 12, 2005 Minutes July 25, 2005 Monthly Workshop Page 13 of 16 Minutes Approved: September 12, 2005 Minutes July 25, 2005 Monthly Workshop Page 14 of 16 Minutes Approved: September 12, 2005 Minutes July 25, 2005 Monthly Workshop Page 15 of 16 Minutes Approved: September 12, 2005 Minutes July 25, 2005 Monthly Workshop Page 16 of 16 Minutes Approved: September 12, 2005