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Home My Public Portal About01-02-2020 Minutes WSAC Regular Meeting Utilities Analyst Julie Laws 105 E. Corbin St., PO Box 429, Hillsborough, NC 27278 919-296-9630 | julie.laws@hillsboroughnc.gov www.hillsboroughnc.gov | @HillsboroughGov Water and Sewer Advisory Committee Minutes | 1 of 3 Minutes Water and Sewer Advisory Committee 7 p.m. Jan. 2, 2020 Town Hall Annex Board Meeting Room, 105 E. Corbin St. MEMBERS PRESENT: Chair Dan Barker, Paul Cough, Barry Hupp, Daniel Rawlins and Jenn Sykes MEMBERS ABSENT: Saru Salvi and Barry Weston (both excused) and Arthur Sprinzceles (unexcused) STAFF PRESENT: Utilities Analyst Julie Laws, Utilities Director Marie Strandwitz and Public Information Officer Catherine Wright GUEST(S) PRESENT: Mayor Jenn Weaver 1. Call to order and welcome of guests The meeting was called to order at 7:05 p.m. by Chair Dan Barker. 2. Agenda changes and approval None. 3. Minutes review and approval: Dec. 5, 2019, meeting Member Jenn Sykes moved to accept minutes as written, seconded by Member Paul Cough. All members approved, and the minutes were adopted. 4. Reports from Board of Commissioners meetings Meeting Dec. 9: Member Saru Salvi relayed the following message via email to Julie Laws: “It was full of proclamations, words of gratitude toward the outgoing mayor and congratulations to the incoming mayor. When the meeting started, the only WSAC topic of interest was the assignment of commissioners to cover our meetings through the year.” 5. Updates A. Utilities Status Report highlights Utilities Director Marie Strandwitz asked if there were any questions about the highlights report that was emailed earlier. Barker asked for explanation on the flow control and gates at the West Fork Eno Reservoir. Strandwitz described how the seal around the gate will be repaired and how a bulkhead (barrier) will be put in place until the gate returns from repairs. B. Drought Policy and Capacity Chart Strandwitz asked what the committee specifically wants to know about this topic. Barker asked to put this on the June agenda so Strandwitz can better focus on the budget work that is ongoing at this time. 6. New and schedule-based business A. Discussion of UNC Rate Model Cough stated he would like to discuss affordability, business-friendly and conservation objectives, level of priority, and what type of rate structure hits the mark in terms of meeting those objectives. Water and Sewer Advisory Committee Minutes | 2 of 3 B. Presentation of possible alternate rate structures Sykes discussed structures that offer a break-even plan at Year 3, which is the overall goal. She proposed more volumetric blocks (four total), with a $1 increase annually for each block above the initial block. For out-of-town customers, she lowered the initial starting rate. She indicated her out-of-town rate differential was slightly decreased from 1.95 times the in-town rate to 1.7 times. Barker asked if it is better for the town to sell water to other systems and increase capacity or if it is more cost-effective to buy water from another system. Member Daniel Rawlins asked if any of these structures will even work in four years. Does the town want to change rate structures for a short period of time, or should the committee and staff wait to look at possible structures after the town has gone through the current growth pattern, such as the buildout of the Collins Ridge development? Rawlins stated that any changes may be marginal and might not make a difference for now. Cough asked for a timeframe for closure on this subject. Barker said the upcoming fiscal year’s budget is moving forward, so the goal now is to recommend changes for the FY22 budget. Possible rate structures could potentially be discussed for the next six months. Barker said the rate scenario he has been working on, in short, reverses the current rate process. A base fee would cover consistent costs, such as administrative costs and billing staff, bond costs, and the cost to produce. A commercial class would count as two connections for the base fee (double the base fee). The structure then would take the rest of the “out of norm” costs, like capital projects that are not recurring, and divide it for a volume rate. This plan would provide an added 10% safety net. The out-of-town rate differential would be 1.5 times the in-town rate. Barker said having a larger base fee would make up for the lower differential. The residential tier would be a flat rate, with no difference for amount of usage. This structure would provide for a decline of 10% in charges for usage if usage is over 10,000 gallons. There was discussion that the UNC rate model may not be functioning correctly. Barker is still working on this proposal and will present again at the next meeting when he gets issues worked out. The committee recognized that examining alternate rate structures may show the current structure is the best at this time. Strandwitz said any rate structure recommendation from the committee would be fully vetted by staff and likely outside consultants. It was noted that distributing public information will be key if changes are implemented. Cough said the committee should look at how all the criteria stacks against affordability. Member Barry Huff, a small business owner, added that businesses are often surprised by the rates when they receive their first bill and could plan better if there was more information about the rates. 7. Public comments Will Johnson, a resident, asked about the primary reason to change the rate structure from what the town is currently using. Barker said the purpose of evaluating different options is to try to help everyone in some way. Affordability, the out-of-town rate differential, and types of customers are being considered. Johnson would like to see out-of-town rates reduced and a discount for heavy users. 8. Future agenda items A. Presentations of alternate rate structures (February) B. Customer skip rates: Daphna Schwartz (March) C. Water-Sewer Assistance Review Fund: Daphna Schwartz (March) D. Emergency preparedness update: Marie Strandwitz (March) E. Budget retreat topics: Group (potentially March) Water and Sewer Advisory Committee Minutes | 3 of 3 9. Upcoming assignments for Board of Commissioners meetings A. Meeting Jan. 13: Jenn Sykes (Paul Cough, substitute) B. Joint public hearing with Planning Board Jan. 16: Dan Barker (Barry Hupp, substitute) C. Work session Jan. 27: Saru Salvi will substitute for Barry Weston 10. Adjournment Sykes moved to adjourn the meeting at 8:24 p.m.