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Home My Public Portal About2014_tcwsmin0623 Council Work Session June 23, 2014 Council Chambers, 25 West Market Street, 7:30 p.m. Mayor Kristen C. Umstattd presiding. Council Members Present: Kelly Burk, David Butler, Thomas Dunn, Katie Sheldon Hammier, Marty Martinez, Kevin Wright and Mayor Umstattd. Council Members Absent: None. Staff Present; Town Manager John Wells, Deputy Town Manager Kaj Dentler, Deputy Town Attorney Barbara Notar, Director of Parks and Recreation Rich Williams, Deputy Director of Parks and Recreation Kate Trask, Parks and Public Space Planner Bill Ference, former Director of Finance Norm Butts and Clerk of Council Lee Ann Green AGENDA ITEMS 1. Work Session Items for Discussion a. Christmas and Holiday Parade Kate Trask presented a brief overview of the history of the Christmas and Holiday Parade and the results of a survey conducted after last year's event. Key Points: • Started in 1994 • Up until 2008, was held at 7 p.m. and included the tree lighting and some festival activities that required a street closure of about 5 1/2 hours. • LDBA had concerns over the length of the street closure • Moved to morning in 2008 • In 2011, festival activities were reduced which reduced the street closure from 5 1/2 hours to 2 hours • There was still demand for an evening parade • Several surveys were performed • Business surveys showed 46% in favor of an evening parade and 32% in favor of a morning parade • LDBA expressed preference for the morning parade • EDC expressed preference for the morning parade • Parks and Recreation Commission expressed preference for the evening parade • Staff recommends the evening parade choice without the festival activities Council Comments/Questions: • Did the survey specify what day of the week the parade would be held? Staff answer: The general comments before the survey listed the parade as a Saturday parade. 1 Page Council Work Session June 23, 2014 • Would the Christmas Tree and Menorah lighting be held the same night? Staff answer: Preference would be to continue to hold it as part of the First Friday activities. • Like the tree lighting as part of First Friday • How many people participate in the parade? Staff answer: Average is around 30, but varies from year to year. • Distance is needed between the tree lighting and the parade from a logistical standpoint • What time in the evening? Staff answer: 6 p.m. • Predominant response to Council member requests for preferences was evening • Evening parades are too late, too dark and too cold for small children • Possibly start earlier in the evening • What is the breakdown of business preferences? Staff answer: There is not a breakdown of different business groups. The LDBA conducted their own survey and there could be some crossover. It was decided that Council will vote on their preference at Tuesday's business meeting. b. Water and Sewer Rate Study John Wells stated this was an effort to develop a long term plan and stability while still keeping rates reasonably competitive. Dan Connolly, Chair, Utility Rate Advisory Committee clarified that their recommendation does not address the miscellaneous fees included in the draft study. He stated that the URAC has worked to identify problems with the current rate structure including the 1:1 water/sewer ratio, the high usage surcharge being retroactive back to the first gallon, and fixed rates representing a small percentage revenue generated resulting in the potential for a highly variable revenue stream and higher usage fees for users. He stated that the committee recommends adoption of the proposed rate structure as presented. Mr. Wells introduced Rob Ori and Thierry Bovari, from Public Resources Management Group who have developed the Utility Rate Study. Key Points: • Objectives: o Maintain financial strength and credit worthiness of the town/utility fund o Continue capital reinvestment o Address rate design issues o Avoid future rate shock to customers 2IPage Council Work Session June 23, 2014 • Results derived from: o Multiple meetings with town staff who provided direction and reviewed assumptions and findings throughout the process o Town's financial advisors' recommendations o Town's consulting engineers recommendations to identify adequate capital reinvestment o Utility Rate Advisory Committee discussion and direction • Utility rates are competitive for the region • Favorable credit rating due to strong management and political leadership, operating costs being held in check, and the availability of low cost debt to spread the cost of financing infrastructure over time • The town has experienced significant growth in the past, but is approaching build out • Town has invested over $240 million in infrastructure that is currently worth$354 million (adjusted for inflation) • 2010 Six-year rate implementation plan did not include an increase in fixed charges since the initial year of the plan • Town's financial advisor recommended a rate study be performed in 2013 due to an identified need for additional rate adjustments beginning in 2015 and existing debt payments projected to increase by$2.5 million • Study assumes marginal growth in customers • Study assumes operating expense growth and increased capital needs as well as restructuring of debt • Rate drivers in the next five years include inflation of primary expenses (personnel, energy, and chemicals), existing and new debt service, and pay-go transfers for capital needs. • Largest amount of revenues come from user fees, which are recurring. • Capital needs for the next 10 years average $4 million per year • If the town does not follow through with the planned debt restructuring, the debt service will increase by$1.2 million and affect the ability to reinvest in the system • Costs and revenues have been allocated between the water and sewer system—so increases have been allocated accordingly • Proposed rate adjustments are about$5 per month increases to the average water and sewer bill • Winter Quarter use issue o Exceeding 135% of the winter quarter use triggers a high rate charge being applied to all usage o Only four billing cycles per year can result in a significant change in bill o Not all customers share the same winter quarter o Customers who use less in the winter have a lower winter quarter margin 3IPage Council Work Session June 23, 2014 o Recommend elimination of the normal use/high use charge structure o Recommend a four tiered inclining water conservation rate structure for single family residential customers o Recommend a two tiered conservation rate for irrigation users • Recommend elimination of the 1:1 water/sewer rate o Recommend a cap of 30,000 per quarter for wastewater charges • Existing quarterly fixed charges are low which increases dependency on flow changes and increases overall financial risk o Recommend a phase-in of higher fixed-cost recovery from 6.5% to 20% over a five year period • Miscellaneous fees o Account for only 2.5% of total revenues o Common industry practice o Serve to reduce user fees o Equitable because they charge the benefitting customer o Will provide a list of these fees during the public hearing process Council Comments/Questions: • Will you be charging irrigation customers excessive use rates? Consultant answer: It is priced at the higher rate because it is discretionary use • Do irrigation users get more than one bill? Staff answer: They get a bill for each meter. • Why are the biggest increases at the start of the five year program? Consultant answer: The main objective was to get rid of the high use surcharge, but that affected the low flow commercial values. • Like the idea of going to a monthly payment idea—allows residents to budget • Would like to have a way to average out the bills • Is 30,000 gallons for wastewater flat fee the correct number of gallons? • How much water treated at the wastewater plant is due to infiltration from outside? • What is the industry standard for debt load? Consultant answer: There are other localities with higher debt loads • Public input and outreach will be an important feature of this progam • Fine line between getting new customers and triggering capacity upgrades Consultant answer: Need to do a cost/benefit analysis when considering the addition of new customers • Does it make sense to try to separate the fixed charges for water and sewer? Consultant answer: There was a higher percentage of fixed costs associated with water production, so the two were combined. • How does the town's staffing level compare with other jurisdictions? 4IPage Council Work Session June 23, 2014 Consultant answer: The town has held the line on staff costs for several years. Staff answer: Since 2005, the department staff has been reduced by 10%. • What is the plan for public input going forward? Staff answer: Council will have a public hearing at whatever point Council is ready to advertise the proposed rates. Possible January implementation. • Concern that the rate increases may not be enough to cover needs. • Did rate structure take into consideration elasticity of usage based on rate increase? Consultant answer: Yes. • Rate structure should include increases that will cover needed infrastructure replacements • Percentage increase is higher for lower users • Would like to consider a flat rate for everyone • How many additional customers would be needed to absorb the needed increase? • Will this be a hardship on some less wealthy customers? Consultant answer: Discounted rate for lower users but everyone will be impacted by a higher fixed fee. Spreading increases out over 10 years will help lessen the effect • What is the logic for increasing the fixed charge other than billing expenses? Consultant answer: Cost of meter amortization, personnel, debt service, capital reinvestment and depreciation. • Is the 30,000 gallon sewer cap fair? Consultant answer: Yes, because they are paying for actual gallons of water used at a premium over 30,000. Most households that use over 30,000, the amount above that is going to outside uses and not into the sanitary sewer. c. Mervin Jackson Park Bill Ference presented several options for the Mervin Jackson Park to be located on Loudoun Street in front of the parking garage. Key Points: • Input was solicited from several Boards and Commissions —Economic Development, Public Art, and Parks and Recreation • Broad range of interests were included in the public input • Most respondents favored development of the entire site, not just one side or the other • Most requested elements included: o Renovation of the museum garden and integration with the rose garden 5IPage Council Work Session June 23, 2014 o New features along Loudoun Street o Outdoor seating and dining spaces o Trees and other landscaping o Water features —particularly interactive o Public restrooms • Conceptual sketches were developed along with ballpark cost estimates • Some sketches show removing one of the parking garage egress lanes • All options include space for the mural • Bridging the parking garage ingress/egress is more expensive but allows for more usable open space. • A building on the easternmost parcel would increase opportunities for dining/retail uses • Architectural style should reflect the surrounding buildings and be environmentally compatible • Phasing should have each portion be viable as an amenity on its own Council Comments/Questions: • Motion to approve the park included an option for a park related building • Mr. Jackson would not have appreciated anything fancy. He would want a simple park. • Agree that removal of one of the parking garage egress lanes would allow for more usable open space • Agree that design needs to be incorporated with rose garden and log cabin area • Option 4 would be viable if there was a partnership because of cost • What are the options for funding amenities? Staff answer: Some individuals have expressed an interest in funding certain pieces and some donations have come in. Smaller options could receive public support • Active park would become an attractor for visitors to the downtown • Suggest closing off the entire Loudoun Street entrance to the parking garage • Does the interactivity of the fountain account for the much higher price tag? Staff answer: Yes, it is computer controlled. • Would favor a regular fountain • Need two points of ingress/egress for the parking garage • Unhappy about a proposed building—back to the old argument • Don't want the town in the landlord business It was Council consensus to have this item back on a future agenda. d. Legislative Wrap-up and Potential Amendments to the Town Code 6IPage Council Work Session June 23, 2014 Betsy Fields distributed the line item vetoes from the budget. She stated that the General Assembly is still in session. Key Points: • SB518/HB1048 should increase road maintenance funding • Land development amendments will require case law to see how it ends up affecting the land development process • Necessary town code amendments have been advertised and a public hearing will be held tomorrow night • Permissive items need Council consensus—can be instituted now or later, if needed. Council Comments/Questions: • HB733 prohibiting parking in front of mailboxes —enacting this would eliminate street parking in some more dense neighborhoods • HB617 would be interesting from an economic development standpoint. • HB44—would be curious how many people in Leesburg this applies to. Staff answer: Could not determine if any Virginia Defense Force members are Leesburg residents. It is like an exemption that is possible for police and firefighters, which Leesburg does not do. Staff recommends not implementing this. • HB1099 —what is the fiscal impact? Staff answer: Town Code has a broader exemption— staff recommends against this. 2. Additions to Future Council Meetings Council Member Burk requested an update on the letter to the editor concerning the Union Cemetery incident. Would like to recognize AH&T on the recent achievement as one of the Top Ten Work Places. Council Member Wright requested a process to review, amend and/or reconsider permit parking zones. Council Member Hammier noted that online registration at Ida Lee is not included in the online bill pay project. Vice Mayor Butler stated he would like to have a discussion on the parking items he circulated. He questioned the online bill pay project's next steps. He questioned when the Tech Comm will return with specific transparency recommendations. Council Member Hammier noted they are working on it and including it in the overall strategic plan. Council Member Dunn stated there are still limitations on the registration program used at Ida Lee. There were four in favor of taking this to a work session after Parks and Recreation commission has reviewed. 7IPage Council Work Session June 23, 2014 I 3. Closed Session a. None. 4. Adjournment On a m. ion by Council Member Wright, seconded by Vice Mayor Butler, the meeting ,,412:•00 a.m. tA61L,,°!. .. . Clerk of o %11.,. - 2014 tcwsmin062 81Page