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HomeMy Public PortalAbout06-07-2018 Minutes WSAC Regular Meeting MEETING MINUTES WATER SEWER ADVISORY COMMITTEE Thursday, June 7, 2018 7:00 PM Town Barn 101 East Orange Street · P O Box 429 · Hillsborough, NC 27278 · 919 732 1270 MEMBERS PRESENT: Daniel Rawlins, Jenn Sykes, Arthur Sprinczeles, Dan Barker, Aaron Butner, Saru Salvi, Jim Parker MEMBERS ABSENT: Volker Mittendorf, unexcused GUESTS PRESET: Evelyn Lloyd, Kathleen Ferguson, Mark Bell, Jenn Weaver, Matt Hughes, 4 citizens STAFF PRESENT: Jeff Mahagan, Joel Lashley, Daphna Schwartz, Al Robertson, Nathan Cates, Catherine Wright, Cheryl Sadgrove, Jen Della Valle, Eric Peterson, Josh Fernandez, Julie Laws 1.1 Call Meeting to Order & Welcome to Guests Meeting called to order by Dan Barker at 7:00 PM 1.2 Consideration of Additions/Changes to Agenda Tom Stevens recommended moving item 2.1 to follow item 3.4, and this was accepted. 1.3 Consideration, Discussion and Approval of Past Minutes Motion to accept as written by Aaron seconded by Daniel approved by all. 2.1 Reports from Committee Assignments for Previous Months • April 9 – Regular Board Meeting – Jenn Sykes, nothing to report • April 19 – Joint Meeting with Planning Board – Dan Barker, nothing to report. • April 23 – Board Work Session – Saru Salvi, nothing water related to report. • May 14 – Regular Board Meeting – Jenn Sykes attended. Fairview Alive Festival was discussed at this meeting. Jenn suggested promoting information about water assistance fund at this event. • May 29 – Board Work Session – Jim Parker, meeting was cancelled. 2.2 Utilities Status Report Highlights Joel Lashley discussed status report highlights, adding that we have also started repainting hydrants around town. We will be moving forward with Forest Ridge pump station soon and are continuing to take care of point repairs. Outfall mowing will start tomorrow and will be completed in 5-6 weeks. 3.1 Blank Agenda Item None. 101 East Orange Street • P. O. Box 429 • Hillsborough, NC 27278 • 919 732-1270 x85 3.2 Update on Utilities Director Position Eric Peterson shared that an offer had been made, and we should have an answer within a week. 3.3 Interim Water Fund Balance & Projection Eric Peterson stated that this information is all on the draft budget. Emily stated there are no major changes. 3.4 Rate Increase Discussion with Commissioners Tom Stevens shared his appreciation for the work done from the WSAC committee and stated that the one topic to look at tonight is what the rate increase needs to be. He and the Town Board have an enormous concern about affordability, and they have looked at other ways of increasing revenue and studied in-town rates vs out of town rates. Dan says various studies are forthcoming to look at how to increase revenue, but tonight’s topic of discussion should be limited to the rate increase for this year. The past two years we had other problems with our billing, i.e. Fathom, but we need to determine the amount of the increase now because we’ve waited almost too long. We need a 9.5% increase for the next 3 years on water, and a 7.5 increase on sewer for the next 3 years to keep us at break-even. At this point, Dan asked for Jim and Artie’s thoughts as they were absent at our last meeting. Jim suggested 7% (water) and 9% (sewer) increase for years 1 and 2, and then see if year 3 still needed an increase. Dan stated that the numbers could be slightly different as time progresses, but this year would be the least increase, with people probably getting even more angry when they go up even more over years 2 and 3. Emily stated that the bond analysis discussions with Eric had an impact with coming up with these numbers. Saru thinks having different increases between water and sewer might not be such a shock to customers. Artie looks at this increase as being really high and shared that he had seen a Wall St Journal article that shows most people in the country are paying about $1,000 a year for water and sewer. He then stated that he pays about $2400 a year. Dan and Jenn stated the intent of the committee is to start meeting every month to spend more time on this subject. Kathleen says we need to consider interlocal transfers, etc. Tom summarized that there was a lot of discussion on May 24 about affordability and that the overarching theme was fiscal responsibility to avoid continuing to make up our running deficit from savings and by deferring costs. Aaron talked about affordability, and how we can’t preach about it if people looking at moving to Hillsborough can’t afford their water bills. We need to start talking about mitigating the costs of water and sewer by other things in Hillsborough. We need to find other ways to help, i.e. OCIM, but don’t want people to have to rely on these things due to the psychological effects of receiving handouts. Dan pulled the conversation back to the topic at hand and suggested discussing affordability and ways to help others at future meetings. Aaron mentioned “deficit” again and said after 3 years, we may still be facing this problem. We can hope that new projects will help, but we can’t count on that growth materializing. And if the rate increase is too high, people will just cut back on usage, so we’ll still have deficit. Dan shared the following 3 points: 1. One item that was discussed is cut other items or defer them. The Utilities Department didn’t find anything to cut or defer, as they already have a tight budget. Deferred spending is going to hurt the department in the long term. 2. Jenn suggested looking at tiering into the ETJ. Dan said our role is to advise and bring advice to the Town Board, who makes the final decision. 3. Third point, Durham has lower rates, and when looked at, their water and sewer expenses are covered by property taxes. We have lower taxes, but our hands are tied because can’t raise taxes on out-of-town customers. 101 East Orange Street • P. O. Box 429 • Hillsborough, NC 27278 • 919 732-1270 x85 Jenn Weaver appreciates all the thought and work the committee has put into this issue so far. Water is a human right, and every person has the right to safe, clean, available water. We do have a great water system, and it costs a lot to keep this up. Dan asked should we push forward with a higher increase this year, and then reduce the increase over the next 2 years. Daniel asked about unforeseen expenses, bonds, loans. Eric discussed bond renewals, bond rating, how we’re had revolving loans (such as the elevated Waterstone tank). Everything is already on the CIP and 3-year budget, as well as on the 5-year plan. Tom said Hillsborough has a rolling plan, which is 3 years out. Eric applauded both boards for reading the information and studying plans. We have a lot of cap fees in the bank, as well as savings. Collins Ridge, etc. is going to help with even more cap fees. We could stretch out the increase to 5 years, but this is not a sure thing. We really need to plan with what we know right now. Usually things look better after FY is done. But last year we didn’t know the cost of the reservoir expansion was going up, nor did we know about the Exchange Park Lane project. Dan stated that the economy could always slow down, and we can’t predict future. Aaron stated that we need to look at “what ifs” like hurricanes, etc. Eric shared that part of the bond council’s decision was based on our deficit rating, and we need to be careful that we don’t lose our rating due to a higher deficit. Kathleen stated that increasing rates 7% each of the next 3 years would allow our rating to stay the same. Jenn asked what is the minimum increase that the bond agency asks us to do. Eric said we’re also going through a cap fee study and financial analysis. WilBan suggested 5% for each year for both water and sewer. They then changed it to 7.5 overall. Keeping the bond agency happy is to have a floor of 5% for this year, and then figure out the next two years based on how we’re doing. Eric discussed benchmarking and using stoplight-type of report, and stated that we’re in good shape right now, and are not in any danger of crashing below less than a year of savings. Jenn wants to poll everyone. Dan asked Matt to share his thoughts. Matt said he agrees with Aaron about people having their water turned off if bills are too high. However, if we don’t go higher now (first year) then next year could be an even greater sticker shock. Water shouldn’t be based on their income, but we should check out other municipalities, not just in NC, to maintain solvency of the system while helping keep rates down. Dan says we’re a closed system, with some paying less, some paying more. Matt asked about Durham’s in- and out-of-town rates. Dan says we don’t want to do MUD (Municipal Utility) to include town and county. Aaron says it’s progressive rather than regressive taxes. Kat says property tax cap will be on November ballot, and need to be aware of this as we’re making these decisions. Tom summarized by saying the Board would support a rate for this year being higher than what the manager is recommending. Daniel votes to go 8.5% during the first year for both water and sewer. Jenn votes to go 10.5% water and 8.5% sewer because we’re going to face bigger problems later if we don’t. Jim heard Emily say 9.25 and 7.5, and wants to go with what’s needed as she presented it. Artie said if the numbers need to be that high, then that’s what he’ll vote. We need to be at the break-even point. Aaron voted to go with 10% for both, faced with problems we need to fix at I-40, etc. We can’t afford the publicity of something closing the highway, etc. Saru votes with Jenn and Daniel, and recommended revisiting next year. Saru voted to go with break-even amount and revisit next year. Every year break-even will change, and we’ll revisit at that time, especially since growth could make things better than expected. Dan votes to increase rates at least to the break-even amount and feels like he would rather see 10 and 8% to help in the future of not having 9 in future years. He suggested taking the pain now and hoping for the best next year. Go ahead and do the big increase now and let everyone stabilize. Question from Tom about changing budget according to increase, but Eric thinks we won’t need to change anything on revenue projection, can update later. Emily confirmed. Mark appreciates the seriousness and work everyone brought to the board to make an informed decision. Kathleen appreciates all the work and concerns raised by WSAC, and they this information answers her own concerns. Evelyn says, as a customer, she’s okay with rates going up because it’s necessary and it’s something we all need. Matt thanked committee for informing and being true partners. Jenn W thanked the WSAC for their commitment to finding ways to affordability in future meetings. We don’t presently have the tools available to bring deep relief to 101 East Orange Street • P. O. Box 429 • Hillsborough, NC 27278 • 919 732-1270 x85 those who can’t afford their bills. Tom wrapped up by saying he hears the message and votes to go above the 7.5. One of the things he brought up is that this board takes the time and energy to work on this issue and spending time to represent community, and extreme gratitude to WSAC and expert staff. 3.5 Recurring Items • WWTP Utilization and Improvement for the Year – Jeff Mahagan shared that the WWTP is doing well, continue to have very good effluent, always getting better/improving. Several projects in FY19. Risk assessment follows J100 standards, covers things like liability for injuries, even if break-in where someone is electrocuted, etc. Was in budget for FY18, but finished assessment later than expected, and need UD to be involved in this. Building constructed in 70’s or 80’s with metal floor deteriorated, staff will rebuild building. Pumps (intermediate pumps) due to lay of the land, purchasing spare in case one goes out at a critical time. Design flaw in FY14 upgrade, when crew cleans lines, trash is found and goes directly to plant instead of removal system to go to dumpster. Staff has to scoop with pool dippers. Project for $7K to fix. Requested crane truck to increase safety and efficiency, lots of money, plan to utilize new backhoe. Bought what they needed, not what they wanted. Has hook/wench, works well. Preparing for next upgrade, for FY19 design stage, minimum 30M project. Doing well, so extending as far as possible. FY20 doing wholistic master plan to figure out best options for following Falls Lake rules. Might be cheaper to just pay fines instead of upgrade. River pump station is the largest one in Town, built in 1975. Same pipes and pumps. Motor went out and decide we need to fix for now and get new pumps. Cannot buy these motors anymore. Getting 6M amount lower all the time. • Unaccounted for Water Progress – Lashley, past 6 months have been lower. January had a lot of breaks due to freezing. Will run numbers to see comparison from FY17 and FY18. Diffuser boxes have gauges, so they can calculate better now. Dan said Durham loses about 40% of their product. • Inflow and Infiltration Progress Summary – Lashley, lots of camera and jetting, point repairs. Could have contractor come in and do some clearing. Joel has new employee to help dedicate one crew to doing point repairs and saving contractor money. Looking into the savings and efficiency. Crew is still doing a lot of camera-ing. Dan asked about peaks Jeff sees after rain. Jeff says significant improvement from 12 years ago. Doing really well compared to other utilities. Have to stay on top of it. Jeff will send to Julie to distribute latest calculations for I&I. Eric talking with engineering firms about reducing pump stations. Hydrogen sulfide eating up parts of our system. Part of the problem is topography and part is the system itself. 4.1 Suggested Future Agenda Items for Upcoming Months • Rates – Dan asked when Eric could give data analysis. Eric suggested new UD partner up with Daphna and get an agency, through RFQ, to do this. Wilban and Raftalis are two of the better firms. Dan suggests subcommittee to go to interviews for an agency. • Daphna will update about the new software system when information is available. 101 East Orange Street • P. O. Box 429 • Hillsborough, NC 27278 • 919 732-1270 x85 • Recurring items – GIS Mapping Show and Tell (move to December), Planned Upgrades of Equipment and Lines in new FY (Done) 4.2 Upcoming Board Assignments • June 11 – Regular Board Meeting – Aaron Butner (sub, Jenn Sykes) • June 25 – Work session – Volker Mittendorf (Dan Barker, sub) • July 18 - Joint Meeting with Planning Board – Dan Barker • July 19 – Joint Public Hearing with Planning Board – Dan Barker 5.1 Adjourn Aaron moved to adjourn at 8:55 PM, approved by all. Next Meeting: August 2, 2018