HomeMy Public PortalAbout2009_tcmin0811COUNCIL MEETING
August 11, 2009
Council Chambers, 25 West Market Street, 7:30 p.m. Mayor Umstattd presiding.
Council Members Present: Thomas S. Dunn, II, Katie Sheldon Hammier, David
Butler, Marty Martinez, Kenneth "Ken" Reid, Kevin Wright and Mayor Kristen
Umstattd.
Council Members Absent: Council Member Martinez arrived at 7:38 p.m.
Staff Present: Town Manager )ohn Wells, Deputy Town Manager Kaj Dentler, Town
Attorney Jeanette Irby, Director of Public Works Tom Mason, Director of Utilities
Randolph Shoemaker, Director of Finance Norm Butts and Clerk of Council Lee Ann
Green
1. Call to Order
2. Salute to the Flag Vice Mayor Hammier
3. Invocation was lead by Council Member Butler
4. Roll Cail showing all present
5. Minutes
a. Work Session Minutes of July 27, 2009
On a motion by Council Member Butler, seconded by Council
Member Wright, the minutes were passed 7-0.
b. Regular Session Minutes of July 28, 2009
On a motion by Council Member Butler, seconded by Vice Mayor
Hammier, the minutes were passed 7-0.
6. Adopting the Meeting Agenda (Amendments and Deletions)
Mayor Umstattd made a motion to adopt the meeting agenda with an
amendment to allow for a motion to readvertise the utility rates. The motion
was seconded by Council Member Dunn.
Council Member Reid questioned adding this to the agenda.
Council Member Dunn stated he supports allowing Mayor Umstattd to
make a motion to readvertise the utility rates.
Vice Mayor Hammier stated she also supports allowing Mayor Umstattd
to make her motion so Council can have the opportunity to respond to that
motion.
The motion to adopt the meeting agenda as amended passed by the
following vote:
Aye: Butler, Dunn, Hammier, Reid, Wright and Mayor Umstattd
Nay: None
Vote: 6-0-1 (Martinez absent)
Town Council Meeting of August 11, 2009 Page 2
7. PRESENTATIONS
a. Certificate of Appreciation -Sandy Delhez
On a motion by Vice Mayor Hammier, seconded by Council Member
Dunn, a Certificate of Appreciation was presented to Ms, Delhez in recognition
of her generous contribution to the R.O.C.K. program benefiting the youth of
Leesburg.
8. PETITIONERS
The Petitioners section was opened at 7:39 p. m,
There were no petitioners present. The Petitioners section was closed at 7:40
p. m.
9. ADOPTION OF THE CONSENT AGENDA
On a motion by Counci) Member Martinez, seconded by Vice Mayor Hammier,
the following consent agenda was proposed:
a. Authorizing an Agreement and Approving a Performance Guarantee and
Water and Sewer Extension Permits for Kincaid Forest -Section 3
RESOLUTION 2009-89
Authorizing an Agreement and Approving a Performance Guarantee and
Water and Sewer Extension Permits for Kincaid Forest -Section 3
b. License Agreement for AT&T Water Line Connection to the W&OD Trail
RESOLUTION 2009-090
Authorizing the Town Manager to Execute a License Agreement
Between Northern Virginia Regional Park Authority for Maintenance of a
Water Service Line Installed by AT&T for the Proposed Expansion of the
AT&T`s POP Facility off Depot Court South of the W&OD Bike Trail
Facilities
Right of Way Sign Enforcement
MOTION
Authorizing the Mayor to sign the letter to the Loudoun County Board of
Supervisors regarding removal of signs under the VDOT Right of Way
Pilot Program
The Consent Agenda was approved by the following vote:
Aye: Butler, Dunn, Hammier, Martinez, Reid, Wright
and Mayor Umstattd
Nay: None
Vote: 7-0
10. PUBLIC HEARINGS
a. Enforcement of Animal Code Sections
The public hearing was opened at 7;45 p.m.
Jeanette Irby discussed the public hearing item. She stated in 1995,
the Town signed an agreement with the County for enforcement of the animal
Town Council Meetinq of August it 2009 Page 3
control sections of the Code, but the enforcement has never been applied.
She stated this ordinance will further define the types of animals.
Council Member Wright verified that chickens are allowed in residential
areas, but roosters are not.
Council Member Reid verified the County is still responsible for enforcement.
Ms. Irby stated language has been included that will allow the County
to enforce the Leesburg Code. She stated the Animal Control Officer's
comments have been included in the ordinance.
it was noted that clean up of dead animals on public streets in the
Town is the responsibility of Public Works, but this does not include dead
animals on private streets.
Two petitioners signed up for comment, but both mistakenly belong in
the Utility Rate Public Hearing.
There were no petitioners to address the animal regulations issue.
The public hearing was closed at 7:55 p. m.
On the motion of Council Member Reld, seconded by Council Member
Butler, the following was proposed:
ORDINANCE 2009-0-011
Amending Chapter 4, Articles I and II, Section 4.1 et. Seq. of the
Leesburg Town Code, Regulations and Penalties for Animals Kept in Town
Council Member Reid stated this is an important amendment. He noted
there have been problems with roosters in neighborhoods in Town and he is
very glad that the County will now be able to enforce our Code.
Vice Mayor Hammier requested that citizens who have petitioned
Council regarding these regulations in the past be informed of the passage of
this ordinance.
The motion was approved by the following vote:
Aye: Butler, Dunn, Hammier, Martinez, Reid, Wright and Mayor
Umstattd
Nay: None
Vote: 7-0
b. Setting Utility Rates
The public hearing was opened at 8:03 p.m.
Mr. Wells stated the purpose of this public hearing is the need to
update the utility rates for the public utility system and the direction of the
court order. He discussed the utility rate service area, which is the
responsibility of the Town of Leesburg, the numbers of customers in the
service area. He stated 80% of the customers are in town and 20% are out-
of-town customers. He stated the Utility Fund operates as an enterprise fund,
Town Council Meeting of August 11 2009 Page 4
which is operated like a business. He stated this means it is separate from the
Town's General Fund and does not use tax dollars to support its operation or
capital improvements. He stated revenue from utility fees, connection fees,
and in some occasions, grant funds, are used for this fund. He stated that
debt can be issued as a revenue bond by the Utility Fund or it can be backed
by the full faith and credit of the Town through what is referred to as double
barrel bonds, which are a form of General Obligation Debt.
He stated the utility rates need to change because the Circuit Court
deemed the current rates to be unlawful or unreasonable. He stated the
Circuit Court has given the Town until September 1, 2009 to change the rates.
He noted a study is normally done every five years and the next study was
due within nine months. He stated doing the rate study now was the
responsible thing to do given the court order. He stated the Town engaged
consultants who could address the court ordered utility rate method and the
cash needs method in order to meet the Town's bond requirements. He stated
at the present time the Town's utility system is operating at a deficit and will
continue to do so if nothing is done. He stated if the Town elects to do
nothing, the court may find the Town in contempt and institute the rate which
the court finds to be fair which would increase the deficit. He discussed
possible actions which the court could take if the Town does not address the
utility rates.
Mr. Wells highlighted the rate study that has been performed. He
described the proposed water and sewer rates including the proposed
differentials. He noted the Town would be able to meet the 125% revenue
above debt requirement. He described the other changes including an
increase in fixed fees for water and sewer. He added changes in billing sewer
charges on water usage will not begin until January 1, 2010.
He showed examples of the impact on actual utility bills for a variety of
both residential and commercial customers. He noted this proposal, along with
the proposed cost reductions, allow for compliance with current permits,
address immediate system needs, ensure the quality of drinking water, and
not push off immediately needed rate increases. He stated this proposal
shows a positive cumulative balance at the end of the six year model. He
reviewed cost saving measures that have or will be implemented.
Council Member Dunn questioned whether the in-town rates need to be
adjusted now since a new rate study had been scheduled within nine months
prior to the court order. He questioned why the Town of Leesburg is
responsible for areas outside the Town limits.
Mr. Wells stated based on the performance of the Utility Fund over the
past several years, the concern was that action needed to be taken prior to the
next scheduled rate study.
Mr. Shoemaker noted the out-of-town service area was included in a
study performed in the late 1970s and the area was adopted as a service area
in a Utilities Master Plan in 1986. He stated the majority of the area that is
not within the Town limits was within the Urban Growth Area and utilities
service to that area was agreed to by the County and the Town.
Town Council Meeting of August it 2009 Page 5
Council Member Dunn discussed the need for cutting costs. He stated
Council can only raise rates because that has been the only option presented
to Council. He suggested holding off on changing in-town rates and only
change out-of-town rates per the court order. He stated the Council needs to
look at a long-term solution that will meet the needs of the Town. He stated
he will vote against the utility rate proposal that has been put before Council
because he feels this is not being done in the correct order.
Vice Mayor Hammier asked for clarification for the public's benefit of
the change in sewer rate calculation that will take place on January 1, 2010, if
the proposed utility rate ordinance is passed this evening.
Mr. Wells stated that change in methodology would have sewer rates
calculated on water usage. He stated this component will be implemented in
January to give the Council time to investigate some sort of method, such as
deduct meters, that will allow customers not to be unfairly impacted by this
change.
Vice Mayor Hammler discussed misinformation that had been given to
the public. She asked Mr. Wells to reaffirm why staff is recommending the
most current proposal which would effectively lower out-of-town rates and
raise in-town rates.
Mr. Wells stated the initial July presentation by the consultants
identified different rate methods and variables that are in place around the
country. He stated the Utility Rate Method has a variety of components to it
and is implemented in a number of different ways. He stated these methods
were identified to Council as background information on how each model works
and what they do and do not allow to be included as part of the differential.
He stated these were not intended to be recommendations of the consultants
in terms of addressing the court order. He stated the specific set of rates
presented to Council at the second meeting in July which Identified a modified
court ordered method that applied both cash needs and a utility rate method
with the utility rate method identifying the amount of differential and applying
that to the cash needs method. He stated this represents the consultant's and
staff's recommendation that this best meets the needs of the court order. He
stated the court order was not a black and white order and in interpreting the
judge`s decision, the best legal and professional advice is the proposal before
Council tonight provides the least risk to the Town and the Council in terms of
a rate setting approach.
Vice Mayor Hammler stated if you go the extra step to do the research,
you can see why you can't take a theoretical set of parameters to come up
with an arbitrary differential. She questioned what will happen if the Council
does not act on this proposal since the Council was not a party to the lawsuit.
Mr. Wells stated if the Council does not act on rates, the Town may be
held in contempt, He stated this may have an effect on the Town's ability to
qualify for appropriate bond financing. He stated the Town Council is the
appropriate body to set the rates for Utilities. He stated when setting a bond
rating, the ability to pay and the willingness to pay is what the rating agencies
are looking at. He stated a negative rating can cost the Town significant
money in the long term.
Town Council Meeting of August 11 2009 Page 6
Ms. Irby stated if the Council does nothing with respect to the out-of-
town rates, the complainants will most likely not hesitate to take the next step
with the court and seek to find the Town in contempt. She stated another
party could enjoin the Town from setting any rate other than what the court
found fair and reasonable.
Vice Mayor Hammier discussed the legal costs of defending the Town
against further suits. She stated there is no 97-227% option that conforms to
the court order. She stated this presents unacceptable legal risks with real
costs to in-town taxpayers and incalculable costs in terms of the tone the
Town is setting with out-of-town customers. She stated the Council
unanimously sent this to the State Supreme Court because it is
unconstitutional for a court to legislate utility rates. She stated In her
estimation, municipalities must retain certain rights as municipalities, including
setting utility rates.
Council Member Martinez stated the cost cutting measures are very
small in comparison with the rest of the rate study and the fact is the Town
has a great utilities department. He stated the Town utilities department has
been proactive in cost cutting measures including cutting staff. He noted
under )ohn Wells, the Town has become a very effective and efficient
government. He stated it is unfair to castigate one department when decisions
are made by Council. He stated Council will not base their decision tonight on
whether they want to °stick it to someone", but rather because they have
looked at all the information and are trying to minimize liability, litigation and
cost to the citizens. He stated the Town has already had to spend too much
money trying to resolve this issue. He stated ignoring Judge Horne's decision
will put the Town at risk and spend more General Fund/taxpayer money. He
stated staff has worked hard to find a proposal that is as fair to everyone as
possible. He stated there is no way to make everyone happy and if he based
his decisions as a Council Member on whether he was going to get votes, he
has no right to sit on the dais. He asked the public to understand that the
Council cares about the Town and whether or not they disagree, it won't stop
them from trying to make Leesburg the best town in the state of Virginia.
Council Member Dunn stated he did not say there is anything wrong or
right with the Utilities Department because he has not had a chance to analyze
it.
Council Member Wright pointed out the timing of this is driven by the
court order and the reason for doing more than what the court order directed
is to address revenue shortfalls and minimize the impact on the in-town
customers. He noted just reducing the out-of-town rates to a 9% differential
for water and 43% for sewer would significantly increase the deficit to about
$3.2 million and thus would significantly impact the bond rating. He stated he
investigated Certified Annual Financial Reports (CAFR) from as far back as
1970 and found the Utilities Fund has operated as an enterprise fund for that
period of time. He stated this fund has built the water plant and the
expansions to the sewer plant. He asked Mr. Wells to discuss expenses as per
the budget process.
Town Council Meeting of August 11 2009 Page 7
Mr. Wells stated initially staff looked at the recommendations that came
in from the outside consultant for energy costs to determine if there were any
opportunities for savings in chemical or energy costs, which were the two
largest line items with the addition of staffing. He stated some low cost
measures have been implemented by staff over the past few years. He stated
after looking at staffing, it was determined based on the permits and state
requirements, the department was operating at the minimum staffing levels
for both the water and wastewater treatment plant. He stated they then
looked at administrative and maintenance functions and were able to identify
one position that will become vacant and will not be filled for the next two
years. He stated they will ascertain in two years whether workload will allow
this position to remain vacant. He stated some near-term maintenance costs
in the operational budget were most likely become capital expenditures and
were thus moved. He stated in the operating budget, $530,000 in cuts were
identified and in the capital budget, approximately $SO million in savings were
identified by reanalyzing the needs for the Lower Sycolin Sewer Conveyance
System, deferral of recoating of one of the water tanks, changes in how some
of the maintenance services will be performed, and Identification of a
redundant system along Edwards Ferry Road.
Council Member Wright stated during the budget review in April,
Council performed a similar exercise identifying further savings opportunities
of about $250,000-300,000 in addition to what had already been identified.
He noted a portion of the revenue needed is a portion of what will be lost
complying with the court order. He stated doing the rate study allows the
Town to adopt a rate differential that is higher than what was directed by the
court. He stated there would be about a negative $280,000 impact in revenue
due to the implementation of the lower rates for the out-of-town customers,
but the revenue shortfall that exists in the Utility Fund is approximately $1.7
million. Further, he stated the only way the Utility Fund can hurt the General
Fund is by failing to be self-sufficient, which will affect bond ratings and the
interest rate by which the Town is able to finance debt.
Council Member Reid thanked Council Member Martinez for his
statesmanship stating that regardless of where individual members of Council
stand on this issue, they are all looking out for the taxpayers of the Town of
Leesburg. He discussed the methodology used to arrive at the proposed rates
and noted the out-of-town users will still be paying more than in-town users
for their utilities. He discussed the issue of lawn watering and noted that more
irrigation systems are located within the Town limits than in the out-of-town
service area. He questioned the issue of annexing the out-of-town service
area.
Ms. Irby stated the Annexation Area Development Policies have
expired. She stated this area could be included in the Town in a Boundary
Line Adjustment; however, she felt the residents of the out-of-town service
area do not want to be part of the Town.
Council Member Wright stated there would be benefits and costs to
bringing areas into the Town. He stated if there are no out-of-town
customers, the in-town rate would need to be raised.
Town Council Meeting of August 11 2009 Page 8
Council Member Reid discussed what would happen if only the out-of-
town rate is adjusted tonight.
Ms. Irby stated it would be possible to do this, but the system would
still be running at a deficit. She noted the further the Council deviates from
the consultant's recommendation, the higher the risk of being found in
contempt of court.
Council Member Reid stated he would like to reduce the rate of increase
to under five percent and decrease costs by a quarter of a million dollars. He
stated the Town needs to look for new revenue. He stated the idea of
supporting growth through plant expansions only works if the Council supports
growth through approval of rezoning applications. He noted that the proposed
increases will put Leesburg's per gallon price higher than surrounding
jurisdictions and possibly deter businesses from locating in Leesburg.
Council Member Wright stated the winter quarter will remain the low
quarter for billing purposes. He stated the sewer change will cause 100% of
water flowing through the meter to be charged as sewer as well. He stated
this will be delayed until January 1, 2010 to give the Town time to look into
ways to fairly bill for sewer usage and assess the change. He discussed deduct
meters, which allow deduction for water used for irrigation, etc., and the
possibility those might be of use in capturing true sewer use.
Council Member Dunn questioned whether risk is associated with rates
or the difference between income and expenses.
Mr. Wells stated the risk is associated with the perception of whether
the governing body has the willingness to establish a rate structure that makes
the enterprise fund self sustaining.
Council Member Butler gave a presentation to explain the water rate
issues in layman's terms. He stated there are two issues that are separate,
but inseparable. One is the out-of-town differential that was declared
unconstitutional and has to be addressed by September 1, 2009. The other is
the utility fund balance. He stated there is a projected loss of $1.76 million in
FY2010 if nothing is done. He discussed what was driving the need for rate
increases for both the in-town and out-of-town customers.
Mayor Umstattd thanked the residents for their emails. She stated
because of the unprecedented number of emails, staff was instructed to lower
the in-town increases. She stated some of the anger expressed helped to get
Council to direct staff to look more at cost savings.
She quoted the April 17`h court ruling: "this ruling applies to the out-of-
town water and sewer rates which were litigated in this case", which she
added does not address the rates being discussed at this meeting. Further,
she quoted from the court ruling, "this ruling does not preclude the Town from
establishing differing rates that are objectively reasonable, lawful and
consistent with the findings of the court in this case". She noted that in Judge
Horne's opinion letter dated March 6 (page 5), which was attached to the final
order, Judge Horne stated, "Rates charged by a municipality are not rendered
unreasonable merely by reason of the amount of the rate being twice for out-
Town Council Meeting of August 11, 2009 Page 9
of-town customers as those being charged in-town customers". She stated to
her mind, Judge Horne is saying the 100% surcharge is not necessarily
unreasonably, he just could not find the evidence during the debate in 2005 to
justify it. She stated Judge Horne quoted the out-of-town water rate expert in
his ruling, °Mr. Watkins identified the methodology using and making his
opinions, the Utility Rate method. The Utility Rate method is the most
accurate indicator of what are the limits of fairness and reasonableness. The
issue of in-town rates is not an issue before the court." She stated the Utility
Rate method was presented to the Town Council on July 13 and the
consultants were fully aware of the court ruling and developed their briefing
based on their knowledge of the Judge's ruling. She stated one of their
presentation slides talks about compensating the owners of the system using
the Utility Rate method by saying, 'the residents of Leesburg are the owners
of this system. The method to recover owner's risk from out of town
customers suggested by both the American Waterworks Association Water
Rate Manual and the Water Environment Federation's Rate Manual of Practice
involves the Utility Rate method. Under the Utility Method, out-of-town rates
are established to also recover interest costs, depreciation costs, and return on
rate base. The resulting out-of-town rates would be the following differential
above in-town rates." She noted the averages are anywhere from a low of
96.8% as an out-of-town surcharge to a high of 228%. She stated the Judge
has endorsed this method and if the Council adopts an out-of-town differential
in this range, the Town would meet its bond covenants and the financial needs
of the town's utility system.
She stated she hopes that if and when the Town wins the appeal to the
Virginia State Supreme Court, the Council will go back and adjust the out-of-
town differential higher. She stated she would be bringing forward a proposal
to re-advertise rates and return later in the month with a rate structure that
keeps the in-town rates at a rate increase of no more than 2% this year. She
stated this scenario was produced by one type of utility rate method and would
be sufficient to meet the bond coverage requirements.
Vice Mayor Hammier stated the Council has done a lot of research and
sought advice from utility rate and legal experts. She questioned why Mayor
Umstattd did not bring this proposal forward earlier.
Mayor Umstattd stated it was clear that there was no support on
Council for her position.
Council Member Dunn stated he brings forth a lot of proposals that he
knows will not have any support on Council, but brings them forth anyway
because he stands by his convictions. He stressed that during this process, he
still has heard no support for serious spending decreases.
Mayor Umstattd pointed out that Council supposed the management
study for the Utilities Department, but unfortunately it will not be completed
until after the court ordered deadline has passed.
Council Member Wright stated it is important for the public to
understand the numbers proposed by Mayor Umstattd were calculated before
systems savings had been identified.
Town Council Meeting of August it 2009 Page 10
Rodolfo LeMaestra, 43242 Parker's Ridge Drive, stated he has lived
here for three years. He stated it is the same size as his house in Fairfax,
same size family, same irrigation system and he used to pay $1,300 for water
there. He stated his bill here is almost $4,000. He stated there have been no
changes in his family's lifestyle. He stated he is only paying this bill because
otherwise his water will be cut off. He stated a combination of the proposed
changes will make no difference in his bill next year. He stated the rate will
not actually go down for out-of-town customers. He stated his interpretation
of the court order is that out-of-town customers will pay less, but by
increasing other parts of the bill causes him to have a higher bill. He stated
the system is not efficient enough. He stated the out-of-town customers
should be offered the choice of another provider. He stated he was not told
when he purchased the house that the water would come with a 100%
differential.
Ken Melchiorre, 316 Daniels Street, N.W., stated he commends Council
Member Wright for the information on his website informing him about the
rate structure. He stated as an engineer, he does not agree with the way the
sewage rates are being calculated.
Chuck Shotton, thanked Council Member Butler for his presentation.
He stated there have not been sufficient rate increases since 1992. He stated
politicians made self-serving decisions to keep the rates artificially low and to
discourage growth. He stated there was a surplus in the early 90's, He stated
as a member of the Utility Rate Advisory Committee, he had the opportunity to
learn about the history of the utility issue, which is actually a ~~Cadillac" of
water systems. He noted Leesburg customers actually pay less than most of
the towns in Loudoun County. He noted the artificially low rate paid by LCSA
customers does not reflect the cost to own and operate a water supply or
treatment facility. He stated the Utility Rate Advisory Committee produced a
rate recommendation for Council. He stated this was prior to ruling by Judge
Horne, but several of the recommendations are relevant now, He stated it
would provide a mechanism to incentivize certain sectors of the economy by
reducing outrageously high water hook up fees. He stated the report also
included reductions in cost and alternative revenue sources. He stated the
current 50% excess capacity could be used to sell water to more water
constrained communities. He suggested selling the River Creek system to the
County and allow them to run it. He stated there are ways to offset the rate
increase. He suggested the Town return to the URAC for recommendations on
setting a fair and equitable rate.
Rod Ellis, Foxridge, stated the information that was sent out early on
about the rate increase were incorrect, He stated he has concerns about the
consultant. He suggested reactivating and listening to the URAC. He stated in
Leesburg and Loudoun County there has been a trending down of rainfall
amounts over the past few years, He suggested using the Utility Rate
Advisory Committee to cut down on politics. Further, he questioned whether
the Town needs the out-of-town customers for economy of scale.
David Shearer stated he and his wife have lived on Teabury Drive since
1997. He stated the Town boundary runs through the Potomac Station
swimming pool. He gave some figures on the number of homes in the
community and the number of townhomes. He stated Potomac Station does
Town Council Meeting of Auaust 11, 2009 Page 11
not consist of "McMansions". He stated he and his wife are retired, live on a
fixed income and the proposed rate structure does not grant them any relief.
He stated the impact of the rate structure has an impact on their limited
discretionary impact and quality of life. He pointed out the townhome
residents are working families of modest means or retired Individuals just like
the in-town residents. He questioned why Virginia Power can provide the
same service for the same price to both sides of Market Street, why the Town
utilities cannot be provided to the entire service area at the same price?
Dottie Shearer stated she leaves the legal aspects of this to her
neighbors and fellow colleagues. She stated Potomac Station is an average
neighborhood, not wealthy. She stated they work very hard to maintain the
value of their home. She stated the lawn used to be their pride and joy, but
unfortunately they cannot afford to water it. She stated she keeps buckets in
the shower to catch the cold water before the hot water comes into the
shower. She added there is a bucket in the kitchen to catch the cold water
before it warms up in the dishwasher. She stated when rain is forecasted,
they put the buckets on the deck to catch the rainwater. She stated there is
no place else for them to go as they use very little water and are very careful.
She stated the proposed new rates will increase her water bill within a year.
She asked that the Town make a concerted effort to cut costs. She asked the
Council to understand that they are not poor people or eligible for senior
assistance and expect to pay their fair share of whatever they use. She stated
the high water rates are a burden to those on fixed incomes and those raising
children and living on a budget.
Stephen Axeman, 221 Rosemeade Place, SW, stated he studied this
issue as much as he could but found it very confusing. He stated the rate
structure as proposed is unfair. He discussed the court order. He stated the
in-town residents have an investment and a risk which should be mitigated.
He added he was unsure of what the cost of the risk would be, but it should be
fair. He stated the rate structure should consider all the citizens in the Town,
adding that the elderly provision does not help those that don't qualify. He
suggested a structure that allowed families to keep their costs down if they
keep water usage below a certain level. He stated the increases could be
progressive, not linear, He stated this would encourage conservation. He
noted there are a lot of people out-of-town that are not in a gated community;
however, the majority of low income residents are in the Town of Leesburg.
He questioned how this would affect renters, who are usually on the lower end
of the income scale. He stated he is in favor of raising the rates to keep a
good bond rating, but feels the currently proposed rate schedule is not fair to
everyone. He stated he is concerned about the uncivility of the dialogue
between Council Members.
Richard Loucks, 18963 Rocky Creek Drive (Lansdowne), stated a lot of
good information has been given which has enlightened him. He suggested
voting down this proposition tonight and rethink other proposals before
September 1. He stated a lot of good can be done for both in-town and out-
of-town customers. He stated three years ago Council voted on something
that has become a problem. He stated the discord that decision created has
resulted in litigation, which was foreseeable and to continue on that trend
would continue with the disharmony. He questioned whether one could blame
the out-of-town residents for not wanting to be annexed after being treated
Town Council Meeting of August 11, 2009 Paae 12
thusly by the Town. He encouraged Council to step back and reflect, consider
ways to draw the two communities together. He stated a fiduciary
responsibility to the Town includes the responsibility to ensure neighborly
contact with the communities that surround you. He stated to disenfranchise
them is to cut off assistance in the future.
David Anderson, stated he is a resident of Leesburg for the past 15
years, He stated there has been very little quantification of sewer usage. He
stated the current method of using winter quarter to establish sewer bills is an
attempt to quantify actual usage. He stated outdoor activities such as
watering, car washing, and sprinklers for children can significantly increase
water usage, but not the workload on the sewer system. He discouraged
going away from using the winter quarter for measuring sewer usage. He
questioned whether the commercial tankers would be charged sewer rates for
water consumption that is used for road washing, filling swimming pools, etc.
He stated his trees and shrubs have suffered from not watering due to
drought. He noted in addition to the cost of having those trees removed, his
property values have been affected, which is not reflected in his tax
statement. He asked Council not to penalize those trying to protect their
investment in their property by changing the billing process. He stated by
doing such, they would be billing them for services not provided, which is not
logical or fair.
Stewart Curlev, President of the River Creek Homeowners Association
and a plaintiff in the water rate lawsuit stated he would be making some
comments on behalf of the HOA and on behalf of the plaintiff's group. He
stated the Mayor's flyer has disappointed him as he feels it was engaging in
class warfare, using false and misleading statements. He apologized to the
residents of the Lakes of Red Rocks, Spring Lakes, Potomac Station, and
Lansdowne, which were overlooked in the Mayor's flyer. He noted River Creek
only represents a third of the homes in the out-of-town service area. He
stated the lot sizes average only a third of an acre. He stated in 2007, Town
staff looked at the average real estate value of in and out-of-town customers
and found no discernable difference. He stated they currently pay 2.5 times
what other Loudoun County residents pay.
He stated he feels it is great that savings have been found, but he is
puzzled how those savings caused the out-of-town rates to go up in the
proposal. He stated a few speakers did a great job talking about the sewer
rate billing issue. He noted the rate will be lowered for out-of-town customers,
but the sewer rate changes add up to another surcharge. He stated the
average out-of-town user will see their water bills go up by SO%, which he
does not feel is the relief required in the court order. He stated they are not
sure this is a fair, equitable or reasonable structure and urged Council to
further try to find a solution that is in compliance with the court order.
He commented that the URAC and Council Member Butler did a fine job.
He stated initially Loudoun Water was going to serve the area, but the Town
brought legal action and in the settlement, the Town got the right to serve the
area. He stated at the time, there was no surcharge. He stated it was only
after the fish was hooked, the surcharge was added.
Town Council Meeting of August 11, 2009 Page 13
Ron Rust, 7 Wirt Street, N.W., 3 Wirt Street, 109 Loudoun Street, S.W.,
stated most of the points he would like to make have been covered. He stated
the Thomas Birkby House is a large non-restaurant water user with a high of
200,000 gallons per quarter to keep the gardens alive during droughts. He
stated maintaining the gardens is important for the wedding business because
people want a green spot. He stated the majority of water usage is not related
to sewer usage. He stated when they use the model that Council Member
Wright put together, his water bills would go from $924 to $1910 per quarter
during the heavy usage quarter. He recommended Council vote in favor of the
proposed plan. He stated in a previous hfe, he had a litigation support firm
and one thing he learned is that no one ever gained an advantage by sticking
their finger in the judge's eye.
Frank Hinkle, stated he supports the proposed rate structure 100%. He
stated his grass and his neighbor's grass is beige, but in River Creek the lawns
are green. He stated he worked at the Army Corps of Engineer's water plant
in DC in the Chemical and Filtration division. He stated all jurisdictions charge
different amounts for the same water. He stated he thought Council was
elected to serve him and the other residents of Leesburg. He stated it costs
more to get water from an open source, rather than water from a well. He
stated seasons, weather and pollution affect the need for chemicals. He stated
it costs a lot to run a water plant.
Raymond Baldwin, stated he is a senior citizen living on social security
and what is left of his IRA living in the Lakes of Red Rocks. He stated most of
the homes there are townhomes and certainly not the wealthy folks with
estate sized lawns portrayed in the Mayor's flyer. He noted during the trial, it
was related there is no difference in cost to service the out-of-town service
area over the in-town service area; however, the owners of the system have a
right to earn a profit. He stated the Council seems bound to try to keep in-
town rates very, very low. He noted the new technique for sewer charges
would have cost him $95 more for the past quarter. He questioned how the
Council is exempt from the court order. He stated the court order is not a
general guideline and you can't pick and chose what parts of the judge's
decision to use.
Dan Baker, retired from the school system. Stated he has been a
resident since 1968 and have seen the water system expand greatly. He
stated the Town is now being forced with a court order and if the out-of-town
customers wanted to pay less for water and sewer, they should have taken
that into consideration when purchasing a home outside the Town limits. He
stated Council's first allegiance should be to the Town residents. He stated he
hopes Council is not influenced by outside legislators and politicians.
Ann Robinson. 125 Clubhouse Drive, stated she has been a resident of
Leesburg for 18 years. She stated she was disturbed by the Leesburg Today
editorial written by Norm Styer. She read °town real estate and personal
property tax revenue is used to pay the salaries of policemen, operate the
parks department and pay for the collection of trash among the dozens of
other services the town government provides to in-town residents". She noted
that out-of-town customers drive through town quite often, use Ida Lee and
the water park, park in the town garage. She stated she does not feel bad
about paying for the policeman to watch the cars of out-of-town residents.
Town Council Meeting of August it 2009 Page 14
She stated she does not feel bad that this safe, clean, beautiful town is being
used by thousands of people. She stated the safety of this Town is not to be
taken for granted. She stated she is now bothered that out-of-town customers
are not being generous by getting an attorney because they have to pay a
little more for water. She stated she is retired and her air conditioner and her
car broke, so she fixed her car and now doesn't have air conditioning. She
stated in-town and out-of-town customers can have dueling sad stories. She
pointed out that the 25% reduction for senior citizens does not help seniors
living in condominiums that pay their water because when the price for water
goes up, the condominium passes the increase on in the form of higher HOA
fees. She stated that water is a precious resource. She stated she is for
higher rates because everyone needs to conserve. She stated a certain
amount of water should be given for free because water is a basic right, like
air and then make progressive rates as someone uses more.
Caron.
Henry Twentier, 19001 Panther Court, turned his time over to Mr.
John Caron, 18999 Rocky Creek Drive, distributed a calculation of the
total effect of the high water use surcharge on out-of-town customers. He
pointed out this shows a winter usage of 10,000 gallons, which is on the low
side. He stated the summer usage shows a 5,000 gallon increase. He stated
the effective surcharge for the 5,000 gallons is 279% of the base out-of-town
water rate. He stated this demonstrates that the changes will significantly
increase the effective cost of buying 5,000 gallons of water. He stated slightly
less use of 12,000 gallons in the summer, costs a 144% effective surcharge on
the additional 2,000 gallons. He stated there is a similar corresponding profile
for in-town rates. He noted one inch of water on a quarter acre lot is 2,000
gallons.
He addressed the out-of-town profile with roughly 2900 residences in
the out-of-town area, of which 49% are attached homes, He noted River
Creek is not the majority of out-of-town residences, but only about 1/3 of the
homes and 55% of River Creek homes are attached. He stated Spring lakes
and Lakes of Red Rocks have more town homes than single family homes. He
stated Potomac Station has 1400 homes, half of which are in-town and the
other half are out-of-town. He stated there are only 10 plaintiffs in the lawsuit
and only two of them relate to River Creek. He stated the availability and pro
rata fees paid by this area equal over $30 million dollars which did not come
from Town taxpayers, He noted the out-of-town area heavily supports the in-
town businesses.
He stated he is aware the Council's responsibility is to the in-town
residents, but does not give Council an excuse to treat out-of-town customers
unfairly. He read the following statement, "any business owner struggles to
balance the interests of their customers, employees, investors and suppliers.
The Town of Leesburg is no exception when operating its water and sewer
utility. In recent years, the Town of Leesburg has been unable to strike a
balance in meeting the needs of its two main customer classes. The Town
Council has and always will pursue the greatest value and opportunity for its
in-town customers who they consider the owners of the utility. Their pursuit
of the lowest possible rates for them will always be at the expense of the out-
of-town customers who have no representation on the Town Council. Can any
Town Council Meeting of August 11 2009 Page 15
of the Town Council members honestly say that they, as a governing body,
would not keep the 100% surcharge in place had the Town prevailed in the
trial earlier this year. Do some of you believe the Town Council would have
increased the surcharge, as the Mayor desires, in order to keep in-town rates
flat had the Town prevailed in that. I believe the Town Council will never be
able to fairly represent and respect the interests of the out-of-town customers
and should therefore begin consideration of a long term plan to divest itself of
the customers who are adjacent to the Loudoun Water's centralized service
area. Loudoun Water is planning to build facilities through the River Creek
Parkway corridor to connect to their Potomac River intake facility. When that
infrastructure is installed, that will be the opportune time to lay water mains
and sewer conveyance systems that would facilitate the physical divesture of
the out-of-town service area along the River Creek Parkway corridor. Don't
wait until that opportunity passes by. Make it your policy to divest us and task
the engineers to figure out how to do it efficiently".
Scott Smith, 18466 Lanier Island Square, stated in his view, there is a
legitimate and good faith difference of opinion about how water rates were set
between in-town and out-of-town customers. He stated that debate was
settled through the courts. He stated the Mayor's letter undid a lot of the good
and forward progress made by the court case. He stated the Leesburg water
system was built through capital funding and bonds. He stated the investors
and buyers of the bonds get the return on the investment. He stated calling
the lots "estate sized" stirs up unnecessary class warfare which is
unproductive. He stated he does not know anyone in River Creek who is more
concerned about their lawn than their water rates. He stated if Town residents
went to Lansdowne eating establishments and were charged double because
they live in Leesburg, it would be entirely unfair.
Anita Dalton, 123 Nottaway Street, S.E., stated everyone needs to be
treated fairly and has faith the Council will make the right decision.
John Drurv, 621 eeauregard Drive, stated he has been involved in this
issue for over two years. He stated he was a member of the URAC and agrees
with the surcharge. He stated he hopes the judge's ruling is overturned on
appeal. He stated he has a master's degree in international business. He
stated you are taught you are responsible, as an officer of a company, to
maximize shareholder value. He stated there are a number of stakeholders.
He stated the voters, property owners, and business owners of Leesburg are
the shareholders the Council must focus their attention on. He stated the
stakeholders are important and include the out-of-town customers, people who
drive through Town, employees in the Town but they take a secondary role to
the importance of the shareholders. He commended the out-of-town
customers for their laser-like focus on reducing their out of pocket expenses.
He stated seven years ago, a number of people in the same area said they did
not want to be annexed. He stated their focus on keeping as much of their
money in their pockets is their objective, which he cannot blame because he
would do it himself. He stated because the out-of-town residents have been
so active for the past several years, they are the ones who have controlled
everything. He stated Leesburg residents have been sitting back because their
interests have been protected until now. He stated he initially had high hopes
when he started on the URAC, but then they threw Leesburg shareholders
under the bus with their recommendation. He stated he was quite proud to
Town Council Meeting of August 11, 2009 Page 16
stand alone in opposition to that recommendation. He stated the URAC needs
to be dissolved as it has been nothing but a political fig leaf. He stated the
Council needs to take responsibility by forming a subcommittee of Mr. Wright,
Mr. Dunn and Mr. Butler. He stated he is officially resigning from the URAC.
He stated he is upset with the Board of Supervisors and the delegates to
Richmond for taking the side of one set of constituents over another. He
stated the Leesburg citizens need to contact their representatives and let their
voices be heard. He stated he feels the Mayor's letter was important to let
Leesburg citizens know what was happening to them and that they need to
fight for what they need. He stated this is not the end of the story, but an
ongoing process. He stated the Town needs to look for ways to cut expenses
and bring in new revenue. He said there were some good points in the URAC
report. He asked that Council work as hard as possible to fight for the
shareholders on this and other issues.
Andrew Danilovich, Lakes of Red Rocks, stated he had no prepared
statement. He stated he does not have a large yard and he does not water it.
He noted he had no say in whether he was part of the Town or not part of the
Town. He stated a gallon of water should cost the same regardless of where
you live. He asked to be annexed so he could have the same rate as in-town
residents, or cut his water off so he could be served by Loudoun County.
Melanie Fondaco. 18896 Goose Bluff Court, stated water is a life
sustaining need. She stated this is all about what is fair, whether the process
is fair and how the rates are set. She stated the utility is a business separate
from tax dollars. She stated the fact that taxpayer dollars do not subsidize the
utility fund means there is no owners risk. She stated that all costs are kept
within the utility system. She stated there is no additional risk to in-town
residents. She stated the Council's decision to issue double barreled bonds
was the Council's decision when normal bonds could have been issued. She
stated Council has to make decisions to ensure the viability of the fund adding
that political rate setting consistently has put the utility system at risk. She
stated it no surprise that there is still a deficit because in-town rates have not
been raised as much as they need to be. She questioned what would happen
if out-of-town customers were allowed to seek service elsewhere. She stated
out-of-town customers would be thrilled to go somewhere else. She stated
Leesburg has not been true to the original agreement to provide water at
reasonable rates and will not be true to the judge's order if they adopt these
proposed rates. She stated the rate design is manipulative so it works out
that out-of-town users who water their lawn will have bills that go up, not
down.
Giai Robinson, stated she is concerned about the differences in
numbers between the attachment and the presentation. She stated Section 34
of the Town Code needs to be updated. She requested Council pass the rates
for one year to give the URAC time to review and then listen to the
recommendations.
Kevin Shea, 18486 Orchid Drive (Spring Lakes), noted the lawsuit costs
are being paid out of the Utility Fund. He noted the Town is using the same
water rate consultant as used during the trial who was unable to convince the
court that his method was fair and equitable. He went over the history of the
water rate discussion. He suggested everyone sit down and talk to each other.
Town Council Meeting of August 11 2009 Page 17
The public hearing was closed at 11;08 p.m.
Mayor Umstattd made a motion to readvertise a new set of rates
showing a maximum 2% increase each year for in-town residents, and a
maximum 112% differential for out-of-town water customers and a maximum
differential of 344% for out-of-town sewer customers and to schedule a public
hearing for Tuesday, August 28.
Council Member Dunn seconded the motion for discussion purposes.
Mayor Umstattd stated she believes the court has authorized this and
the consultants initially provided this as their interpretation of what the court
authorized the Town to do. She stated this is the best way for the Council to
be faithful, on a fiduciary level, to the residents and business owners of
Leesburg.
Council Member Dunn stated the fiduciary responsibility started when
Council voted for a utility plant upgrade and then voted against allowing those
rezoning applications that would have provided customers to use the utility
plant capacity. He stated this last minute political fodder amendment is
inappropriate. He stated he seconded the motion so the Mayor would have an
opportunity to explain how this system will work positively for the people of
Leesburg and the customers in and outside of Town.
Vice Mayor Hammier thanked everyone for their attendance this
evening and their civil tone despite the uncivil tone of the flyer that has been
circulated. She stated she appreciates all the incredible work of her council
member colleagues, staff, and the consultants. She stated this has been a
calm, transparent and open process seeking to move forward in choosing
justifiable rates. She stated every member of Council had a right to bring
forth a motion on July 14. She stated no motion was brought forth by the M
Mayor at that time, but rather a tactic was chosen to focus on emotion with
uncivil language. She stated on principal she will not support this tactic
because financial impacts that have been discussed at length and are in
opposition to the Council's fiduciary responsibility, She stated the Council is
following the process.
Council Member Wright stated while Mayor Umstattd has the opinion
this option is allowed under the court order, she is the only one who holds this
opinion. He stated this proposal makes great newspaper headlines, but does
not reflect a complete analysis that gets the Town where it needs to be and
puts the other Council Members in the unfortunate position of having Leesburg
constituents not feel they, the Council Members, are standing up for them.
Council Member Butler stated his highest allegiance is not to his
fiduciary duty to the Town, but to the law. He stated his oath was to uphold
the law. He stated the Mayor's resolution, while being an interesting spin on
the utility rate method, would not pass muster with the court. He stated the
Town could end up spending a lot more money and possibly far more money
and have rates that are far less attractive than what is included in the current
proposal. He stated he cannot support this motion.
Town Council Meeting of August il. 2009 Page 18
Council Member Reid stated he would not support this motion and was
disappointed that it was even seconded. He stated the Mayor is trying to say
she knows more than the Town Attorney and the outside Counsel. He stated
he appreciates her zeal in supporting the higher out-of-town surcharge, which
he has supported even when he was not on Council at the time the higher
surcharge was instituted. He stated he supports the Town Attorney and the
consultants. He stated the Council's highest responsibility is to the law, not
trying to get brownie points with the voters in the next election. He stated all
the Council Members are working for the residents of Leesburg, first and
foremost, and by voting against this motion that is what they are doing.
Mayor Umstattd stated she believes this is entirely within the judge's
order and letter of opinion. She stated it is within the boundaries the
consultant laid out based on the utility rate method.
The motion failed by the following vote:
Aye: Mayor Umstattd
Nay: Butler, Dunn, Hammier, Martinez, Reid, and Wright
Vote: 1-6
Council Member Wright made a motion to approve the following as
presented:
ORDINANCE
To Amend (in Part) and Reordain Chapter 34, Article I (Reserved),
Article II (Water System), and Article III (Sewers and Sewage
Disposal), Formerly Chapter 19 (Water) and Chapter 15 (Sewers and
Sewage Disposal) and the Fees, Rates, and Charges as Referenced in
Chapter 34 of the Code of the Town of Leesburg
The motion was seconded by Council Member Reid,
Council Member Wright stated the fee schedule shown on the website is
the correct schedule. He clarified the winter quarter will not change and the
change in the way sewer rates will be calculated will not take place until
January 1, 2010 to give Council time to look at other options.
Mr. Wells stated staff will be analyzing deduct meters or other types of
technology that can avoid having people be treated unfairly by the change in
the way sewer rates are calculated. He stated he anticipated a report to
Council in late September/early October.
Council Member Wright clarified that at the work session he claimed his
plants are dead, but his wife's plants are not dead. He stated he appreciated
the people who have come out and those that have emailed Council with their
concerns. He stated the main themes he has heard are protect my interests
as a Leesburg taxpayer, adopt a rate structure that is fair and complies with
the court order, don't adversely impact one group to benefit another group,
cut costs, find new revenues, don't raise rates, Town residents are entitled to a
lower cost, make sewer billings fair. He stated a lot of the misperceptions on
how the utility system and fund work have been addressed. He stated the
proposed changes will not be benefitting those who use a lot of water. He
Town Council Meeting of August 11 2009 Page 19
stated this will affect everyone in and out-of-town. He discussed the high use
surcharge, which will be assessed to everyone who uses a lot of water.
He stated at the start of this process that he would work to ensure that
rates were adopted that would comply with the Virginia State Code to be fair,
reasonable, practicable, and equitable; have a clear understanding of the rate
structure and the components of the rate, and make those components have a
clear justification; make sure that the rates that are adopted make sense for
Leesburg, the Utility Fund, our customers, and Town residents for the long
term, not the short term; minimize the impact of any increases that are
ultimately determined to be required. He stated when he looks at the facts
before this Council regarding the water rate issue, the requirements of the
court order, the revenue requirements of bonded debt, operational costs of the
system, he finds the current proposal that has been vetted by staff, legal
counsel, the public and this Town Council to be a responsible path forward that
will protect the interests of the Town and the residents going forward and not
place our residents at a greater risk for adverse financial impacts or penalties
by not taking this action. He stated this addresses the themes he has heard
during this debate by protecting the interests of Leesburg taxpayers by
implementing a new rate study that complies with the court order, but updates
those numbers to ensure that out-of-town customers are paying a fair,
reasonable and practicable rate as ordered by the court based upon the
realities of today as failure to do this would have generated rates with a
differential of approximately 26% and further deficits. He added that the
Town has to continue to look for cost reductions as this rate structure is based
on conservative estimates going forward and learns from the adverse impacts
of the last rate study that did not come to fruition. He stated they are looking
at adopting new physical guidelines that will ensure continued focused
oversight and performance metrics. He stated this vote does not mark a
return to business as usual, but doing business better for the Leesburg utility.
He stated he took an oath to serve this community. He stated the oath talked
about complying with the law and what he needed to do. He stated when he
went door to door and asked for this job, he said he would make responsible
decisions based on the facts, based on what was necessary. He stated it
would be easy to just stick it to the out-of-towners, but he would not be
meeting the oath. He stated he feels he is protecting the interests of the Town
of Leesburg by this vote.
Council Member Reid stated he would like to offer a friendly
amendment to restore the 36% to section 34-60 which would basically keep
the winter discount as it is. He asked what the impact of this change would be
dollarwise.
Ms. Irby stated that is based on peaking factor and the revenue
shortfall would have to be made up somewhere else. Ms. Irby clarified this is
related to peaking factor for excess water not related to sewer charges. She
directed Council Member Reid to Section 34-155, which is the 100% sewer
charge that has been deferred until January 1, 2010.
Council Member Reid stated he would like to strike this amendment and
questioned what the monetary effect would be.
Town Council Meeting of August 11 2009 Page 20
Ms. Irby stated according to the study, it would be between $1.3-$1,7
million annually. She stated if one component is removed from the rate study,
the shortfall will need to be accounted for somewhere else in the system.
Council Member Wright did not accept this amendment as friendly.
There was no second for this amendment.
Council Member Reid questioned if the rate increase could be cut to 3%
by directing the Town Manager and Utilities Department to eliminate $252,000
from the budget either through additional staff reductions or cancellation of
the Lower Sycolin Creek Conveyance system until such time as the system is
deemed necessary and/or bill the General Fund for utilities administrative staff
time devoted to plan review. He stated this is a motion to amend. There was
no second for this motion.
Council Member Butler reminded everyone that no one likes this
proposal because it raises rates, which Council hates to do. He stated neither
the in-town users or the out-of-town users like it. He stated the suggestion
has been made to defer this for two weeks in order to come up with another
solution. He stated no other solutions come to mind that everyone will like.
He stated the main problem is a $1.8 million deficit in FY2010 stemming from
decisions made 20 years ago that have compounded to this date. He stated
we have to bite the bullet, pass this, and get past the legal and financial
barriers before we can determine how to make this better. The other option,
he noted, is "kicking the can down the road" as has been done in the past. He
stated he does not want to cause even worse problems than we have today.
He stated the impact of the double barreled bonds is 0.04% of the differential
between in-town and out-of-town rates.
Council Member Martinez stated he would like to address the question
of whether the Council would have done anything if the lawsuit had not
prompted action. He stated he knows of three council members were doing
what they could to come up with a fair and equitable plan to deal with the
Utility Fund deficit, but work on those proposals had to stop because of the
lawsuit. He added the Town asked for more time to research more options
and opportunities, but the plaintiffs did not want to allow extra time. He
stated he did not attack anyone on the Council because everyone has the right
to say what they want to say in whatever form they want to say it. He stated
some awful emails have been sent. He stated he will never attack anyone for
what they say even if he does not like it. He stated Freedom of Speech is
something that is a right in this country.
Vice Mayor Hammier stated it is imperative that everyone has the right
to say what he or she feels and deems fit; but as a Council Member, learning
about a flyer distributed by Mayor Kristen Umstattd makes it seem like she
represents the entire Council. She stated the sentiments and tone of the flyer
do not represent the entire Council. She stated Council has worked very hard
to do the research and take all the suggestions into consideration. She stated
the Town will continue to seek ways to lower costs. She thanked Mayor
Umstattd for the flyer, not because she was taking credit for further cost
cutting or for representing Town residents, but because she has had an
amazing week as a Council Member because of the flyer. She stated she and
Council Member Reid wrote to the Washington Post and they printed the letter
Town Council Meeting of August il, 2009 Page 21
and she answered many emails from constituents setting the record straight.
She added she also sent out a tweet that she would be at the dog park and
could discuss utility rates with anyone that wanted to meet her there. She
stated Council Member Butler came and they were able to talk to some
residents. She stated the central issue of trust and reputation brought up in
the context of the impact to continuing the kind of sentiment, discord in the
community, that will impact in-town residents relative to the bond rating. She
stated the Town Manager specifically mentioned that negative action and
reputation can impact the bond rating. She stated on a positive note because
the Town is not falling into it, it will be a new day allowing in-town and out-of-
town customers to move forward. She stated she appreciates everything that
Council Member Dunn has done to focus in on costs, but she pointed out this
system is not in a crisis. She stated translating the type of cost cuts that have
been discussed, which she estimated at $630,000 annually, would bring the
system down which is why she could not support them. Rather, she stated,
this boils down to about $0.06 per day for her family or $0.02 adjusted for
inflation. She stated she felt that for $0.02 per day we have sunk to polarizing
language when the Town has so much to gain from pulling together to seek
ways to find additional revenue and ways to cut expenses. She stated the
flyer was polarizing politically, but has done a great deal of good to bring the
Council together.
Council Member Dunn stated he has heard a lot of people speak tonight
and he comes from simple beginnings. He stated this community has so much
and it is a shame to create a feeling of the haves and have Hots. He stated he
hopes everyone can move forward in a healing process as everyone in this
community is here together. He stated he will not support the proposed water
rates, not because of the class issue, but because the Town has not fully
reviewed the proposal. He stated he hopes the Town does not repeat history
of what went into the rates that caused the problems, He stated there is an
attitude on Council that certain things are off-limits Tike Town staff. He stated
the budget process would not touch staff, but the Town could go to the "well"
which is the taxpayer's pockets. He stated this is not the way to manage
government or business. He stated if there are shortfalls, everything is on the
table. He stated he feels this should get more of a review. He stated John
Kennedy said "presidents get yelled at", and that is what Council is for. He
stated elected officials throughout the years have been the problem, not the
citizens. He stated residents can change that on May 4.
Council Member Reid stated he tried to cut the rate of increase down to
2% and vote on expense cuts. He stated he will not support this because it is
unfair to impose another 22% increase on Town residents when they have
already paid a 21% increase on water and 35% increase in sewer for the past
five years. He stated we are in this pickle because the councils from 1992 to
2005 have deferred rate increases and dipped into the Utility Fund and
approved a waste water treatment plant expansion and said Mayor Umstattd
was on Council during this period. He stated he cannot believe that out of a
$22 million utility department budget, a quarter of a million cannot be found to
cut. He stated the Lower Sycolin capital project is not necessary at this time.
He stated he is disappointed his amendments were not seconded for debate.
He stated everyone here is working for the in-town residents.
Town Council Meeting of August li 2009 Page 22
Mayor Umstattd stated one of the advantages of going door to door
between four and six hours a day, is you get to talk to people who will be
affected by your actions. She stated in the Town of Leesburg, we have a
population that, in general, is not as wealthy as the population outside. She
stated people are stretched thin. They cannot afford even the lower rate
increases that will be passed tonight. She stated there are retired citizens on
fixed incomes who have to pay Town taxes. She stated those in-town are
really suffering and are trying to make ends meet. She stated that is the
human face we have an obligation to when the Council votes.
Council Member Wright clarified the Utility department's operational
costs are $12.8 million, not $22 million and capital costs are not 1:1 to rates
because they are paid for in a different manner. He stated this highlights that
this is a complex system. He stated he invested the time to understand the
issue and the past history. He stated he made the commitment to understand
it and that is the same commitment he has going forward to address the sewer
impacts to make sure they are fair. He stated there is a lot of work still to do
reviewing the third party results of the management audit to further mitigate
the impacts of the higher rates. He stated this structure deals with the
situation as we have it now, but it is Council's job to continue to improve the
situation so it improves the situation for the customers.
The motion passed by the following vote;
Aye: Butler, Wright, Martinez, and Hammier
Nay: Reid, Dunn and Mayor Umstattd
Vote; 4-3
S1. ORDINANCES
a. None.
12. RESOLUTIONS
a. Annual Street Resurfacing
Tom Mason stated staff revised the list of streets to cut approximately
$165,000 in paving costs at Council's request. He stated two sections of
Kincaid Boulevard, a section of Sycolin Road, and a section of Woodbury Road
have been removed at a total of a little more than $178,000. He stated those
four sections of road have been put on standby. He noted when Town staff
put the budget together, they looked at information from the Pavement
Management System, which indicated approximately $1 million in resurfacing
that needed to be done. He stated because of the tough economic times, the
resurfacing amount was kept at FY09 levels of $961,000. He stated during the
budget process, that amount was further reduced by $100,000. He stated
tonight's proposed reduction is on top of reductions previously made. He
stated these streets are not eliminated, but deferred. He stated, to date,
about $378,000 in street resurfacing is being deferred for FY2010. He stated
his recommendation is for the originally proposed resolution, but Council has
the option of approving the proposal that defers resurfacing of the four
previously mentioned streets.
Council Member Wright made a motion to approve the originally
proposed street resurfacing plan. The motion was seconded by Council
Member Martinez.
Town Council Meeting of August S1, 2009 Page 23
Council Member Wright stated he appreciates the information on the
impact of doing what Council has suggested. He noted there are seven streets
that did qualify for repaving, but did not even make the original list. He stated
this is a short term gain, but sooner or later we will have a problem. He
stated we need to live up to the standards that we have set.
Council Member Martinez agreed and stated he has not seen any
evidence that we should deviate from our standard. He stated the Public
Works department continually looks for ways to be cost effective.
Council Member Reid stated it is a shame that Council Member Wright
moved the original. He stated Kincaid Boulevard, Sycolin Road and Woodberry
will not have potholes. He stated there are other streets with higher PCI
ratings. He requested the savings be put into curb and gutter and sidewalks.
He moved the amended list.
The motion to approve the amended list was seconded by Council
Member Dunn.
Council Member Butler stated he favors the amended list. He stated in
this case it is not a bad thing to save some money until the economy gets
better. He stated the roads are not in bad shape and this is not our biggest
problem.
Council Member Wright questioned whether the other streets on the
standby list will be cut.
Council Member Reid stated he likes the amended resolution. He stated
he believes that milling and paving are not the biggest concerns in this budget.
He stated saving the money will allow it to be spent on sidewalk, curb and
gutter and other things VDOT doesn't allow. He stated those savings also
could be spent on more police officers.
Vice Mayor Hammier questioned whether the amended list could be
approved and Council could have a quarterly report on the impact on the
streets that have been deferred. She stated, if need be, allocation could be
made for those streets.
Council Member Reid stated he would accept a friendly amendment to
his amendment,
Council Member Dunn stated the updates will always suggest the
streets need paved. He offered a friendly amendment to use the funds for
police officers.
Council Member Reid stated he does not feel it needs to be further
complicated.
The motion to amend the motion to approve street resurfacing plan was
approved by the following vote:
Aye: Reid, Dunn, Butler, and Mayor Umstattd
Nay: Hammier, Martinez, and Wright
Vote: 4-3
Town Council Meeting of August 11 2009 Page 24
It was clarified that the $175,000 be put back into the General Fund
Council Member Martinez questioned whether the speed of degradation
of road surface continues at a steady rate.
Mr. Mason stated the degradation picks up as the road degrades.
Council Member Wright stated he feels we are setting ourselves up for
trouble in the future.
Council Member Martinez stated he does not want to see a backlog of
capital improvement and maintenance projects.
Council Member Wright suggested not only tracking the PCI, but the
cost of delaying action.
Council Member Dunn questioned whether the road designations could
just be removed and a dollar amount to be spent set.
Mr. Mason stated that staff recommends the roads as presented.
The amended motion was approved by the following vote:
Aye: Reid, Dunn, Hammier, Butler, and Mayor Umstattd
Nay: Martinez, and Wright
Vote: 5-2
b. Fiscal Policy Change
Mr. Butts distributed a resolution based on the comments made by
Council at the work session. He described the changes that have been made
including identifying availability fees in a fund balance category that can only
be taken out for growth/capital improvements expenditures,
Council Member Wright made a motion to propose the following:
RESOLUTION
Amending the Fiscal Policy for the Town of Leesburg
The motion was seconded by Council Member Butler.
Council Member Wright stated this resolution holds Council responsible
and will keep the Town from going off track in the future.
Council Member Butler stated he likes the additions that have been
made as they will help Council keep better track.
Council Member Reid concurred and added this will put the Council on
record as looking for new revenue sources and cutting costs.
Vice Mayor Hammier stated seeking new revenue sources is important
and the tone and process the Town abides by for setting fair and reasonable
rates for all customers will help to achieve that goal.
Town Council Meeting of August it 2009 Page 25
Council Member Dunn stated he is looking forward to putting this to use
when the management report comes out.
Mayor Umstattd stated she can support this, but her interpretation of
what a new revenue source is may differ from her colleagues. She stated she
will not support finding users outside the current service area.
The motion was approved by the following vote:
Aye: Butler, Dunn, Hammier, Martinez, Reid, Wright and Mayor
Umstattd
Nay; None
Vote: 7-0
13. OLD BUSINESS
a. Public Safety Funding
There was no discussion related to this item.
14. NEW BUSINESS FOR ACTION
None
15. COUNCIL COMMENTS
Council Member Reid stated at his synagogue they celebrated the observance of
Tishah B'av, which is not a very well known observance. He stated on that day, both
temples were destroyed and it is customary to read Isaiah 40, which begins "comfort
o' comfort my people". He stated there is still some comforting that will be needed in
this community as many people will be unhappy with this decision. Referring to the
Mayor's flyer,_ he stated Council can cajol, but should not commit commotion. He
invited the Mayor to talk to Council Members off line. He stated )ohn F. Kennedy
commended compromise and conciliation, which is not evil but is part of the process,
He stated he is looking forward to the September 3 opening of Battlefield
Parkway from Kincaid Boulevard to Rt. 7. He stated it will open before the school year
and will help the buses and school traffic for Harper Park. He wished everyone a
happy summer.
Council Member Butler stated there was a clear juxtaposition of legal, financial,
and political issues. He stated he was glad Council collectively tried to keep the Town
out of legal issues, but does not feel this is the last the Town will hear about this. He
thanked staff, particularly Ms. Irby, for their work on the lawsuit. He stated he is
happy about Battlefield Parkway.
Council Member Wriaht disclosed a meeting with Lowe's regarding their
proposal at the old Auto Park site. He stated the Planning Commission is working
tirelessly with back to back public hearings that went until 1;30 a.m. He stated they
will not be taking an August break and will be looking at the shared parking agreement
for the fire station, the traditional development option for R-1 zoning and Oakiawn. He
stated the August break is a good opportunity for everyone to think about something
other than water rates and move forward. He stated there is still a lot of ongoing work
that needs done, but he hopes the tone will be reset and everyone will be able to
move forward in a positive and cooperative manner.
Council Member Martinez stated all of staff who worked on the water rate issue
deserve a pat on the back. He stated he is not happy with the behavior of Council
Town CounciP Meeting of August 11 2609 rage 26
where they have regressed to shouting out, sldebac conversations and hot paying
respect and professionalism that the Council should have, He stated Council is lasing
sEght of the process. He skated sidebar conversations snould be held elsewhere. lie
stated 1f Council does not respect one another, na one else will. He stated the motion
makae gets to make the last statement ar7d if a Couitcii Member has rrot made their
comments before then, they should not oe made. FIe stated this is a process that nos
Been put into place by Council, He encouraged Council to have a renewed
commitment to professionalism when they came back from break, He offered tas
condolences to the family of the young man. who was killed recently;
Vice Mayor Hammier stated she attended khe meeting with Council Member
LVright and the representatives df McGuire Woods and Gowe`s Corporation regarding.
their desire to put big ESOx retail on Route 1, She stated there vdill be a doggy
fundraiser at the pool on 5epternber 12 after the pawl doses to the public, Stie stated
she was happy to hear at the Parks and Recreation Commissdh meeting that Twitter
will be ready to gd for the next summer season, She noted Council Member Dunn and
herself have initiated Gaffes with Counci! by the Exeter pool on September 25. She
welcomed .the .public to .come out and discuss whatever was on their minds. Elie
:stated she volunteered far Acoustics on the Green oh Saturday and it was woiiderfui.
She stated she appreciates the incredible effort of staff with regards to the t~vater rate
issue.
Council Member Dunn stated he received a phone call firam the representatives
of Bowes. He thanked staff for all the work put iii on the utility issue, He stated he
does not always agree with khe approach, but he cannot fault the effort.
d ~a iMAY~R'e~ bV B°1 A`IE19 i~
Mayor Umstattd stated she also met with Lowe`s an their proposal. to put a
Lowe's store betweenthe wastewater treatment plant and Int. 7. She commended
staff and the consultants on all their hard work on the utility rate issue, She
expressed her condolences ko Mr, Markinez, his family and the family of the young man
that was killed.
17: NBANAC~R'~ ~4MM~N7'~
Mr, Wells thanked staff that worked ott the utility rate issue. He stated he
hopes the work that was produoed was helpful in providing ail the information that
Counc[I needed to make their decision.
x~, c~a~a s~~z~N
None
1 ACJ,~ClRIVF4Et~T
On a motion by Council Member Martinez, seconded. by council Member
WrigE}t, the meeting was adjourned at 12:54 a.m., August 12, 2fl09.
~,` r .. i ~
{ .~ # t t ..e~e...~
}Kristen'C Ut stand, Mayor
~~. Town of Leesburg
~~-~? ~ i
Clerk of GoG cil'