HOLDEN BOARD OF SELECTMEN
MEETING MINUTES
MARCH 29, 2010
6:35PM Senior Center
Present: Chairman Kimberly Ferguson, James Jumonville, Anthony Renzoni, David White, Kenneth O’Brien
Others Present: Nancy Galkowski, Town Manager, Jacquie Kelly, Assistant Town Manager, Jim Shuris, Director, DPW, Jim Zingarelli, Water Superintendent, Scott Carlson, Chairman, Water/Sewer Advisory Board, Brian Forts, Water/Sewer Advisory Board, John Michalak, Water/Sewer Advisory Board, Joe Pridotkas, Water/Sewer Advisory Board, Kenneth Lipka, Water/Sewer Advisory Board, Al Berg, Chairman, Finance Committee, Andy Miller, Camp, Dresser, McKee, Tom Morgan, Camp, Dresser, McKee, Elizabeth Helder, Recording Secretary
Chairman Ferguson said she was not feeling well and asked Vice-Chairman White to run the meeting. Vice-Chairman White opened the meeting at 6:35PM.
Water Sewer Rate Policy Discussion
Town Manager Galkowski said she had arranged the joint meeting between the Selectmen, Water/Sewer Advisory Board, and the Town’s Engineering Firm Camp, Dresser & McKee to discuss the Town’s water and sewer services, rates, where the Town is and where the Town wants to go regarding its Water Sewer Enterprise Fund. If the Town does not make any changes, the Fund will be in debt after FY2012.
Sel. O’Brien requested that the Selectmen invite Finance Committee Chairman Al Berg to sit at the table and participate in discussions. Town Manager Galkowski said that he was welcome to participate in the discussions but must understand that ultimately, the Selectmen will make final decisions.
The Manager initiated discussion on the billing discount policy. Currently, water/sewer/electric customers receive a 10% discount if their bill is paid by a certain period. 80% of HMLD customers participate in the discount program. Scott Carlson, Chairman of the Water/Sewer Committee said that the monthly cash flow created by customers far outweighs the small discount the HMLD provides its customers. He said the WSAB was in favor of leaving the program as it exists. The entire Board of Selectmen expressed support in the discount program agreeing that it is important for customers to receive the discount and goes along way toward providing good will.
The group discussed implementing changes to the block rate billing structure. Andy Miller with CDM suggested that the Town conduct a comprehensive billing and usage analysis to reevaluate and potentially change the size of billing blocks to strengthen incentives for water conservation. The last analysis was conducted in 2004. Water conservation largely depends on the community; if 80% of households are taking advantage of the monthly billing discount, they may also watch their water consumption.
Mr. Shuris commented that the town is not recovering all of the fixed costs associated with delivering water/sewer services to residents. These fixed costs run approximately $50+ per household. Right now, the Town only recovers 28% of W/S fixed costs and needs to increase the flat fixed rate costs per customer. Middle and high end users subsidize the low-end W/S users. Sel. White suggested phasing in any proposed increases to cover fixed costs. The Town Manager suggested implementing new fixed rates to W/S bills to help recover expenses then implementing adjustments to the block rate structure. A System Operating Charge should be assessed to each customer; pay for what you use and pay for what it costs. Charges to recover the fixed costs should be assessed even before water is “turned
on.”
Sel. Renzoni said he could not make any rate/fixed costs increases/decisions until he saw actual numbers.
Assistant Town Manager Jacquie Kelly asked Selectmen to keep in mind those consumers who fall into the “Small Block” and show them some consideration.
The group discussed passing capital expenses onto builders? Mr. Shuris said that he would look into what it would take to increase some of these costs. Sel. Renzoni asked for a breakdown on current costs assessed to builders. Scott Carlson cautioned that there is not much sewer capacity left in town. Many homes built after capacity ends will not be assessed connection fees because they will use septic systems.
Mr. Carlson inquired from the Administration what happened to money from Anna Maria College that was meant to help offset costs associated with the Anna-Maria connection on the trunk line.
Andy Miller with CDM initiated discussion on Capital and O&M. The Town’s O&M reserve balance has been depleted. He asked if there was interest in building the balance back up? The general rule is the balance should be equivalent to 180-days of expenses. Mr. Carlson said the WSAB has concerns that 180-day balance does not currently exist. Mr. Miller said that how to rebuild the account would depend on how/what rate increases the town chooses to undertake. He said that CDM would run several funding scenarios and include them in the final report. The turn around for the final report is several months.
Sel. Ferguson said whatever changes are ultimately made need to be phased in, and carefully explained and managed to the public.
Mr. Shuris referenced a list of capital expenditures on the horizon. Many miles of pipe need to be repaired/replaced; as well as redevelopment and pump repair. Two water storage tanks are currently being repaired: two additional tanks are in need of rehabilitation. In a 2006 report, CDM outlined 12.5 million in capital expenditures to be undertaken over the next 20 years.
Sel. White suggested taking a percentage of connection fees to new customers and allocating the money to a stabilization/free cash account at the DPW. There have been many rate increases over past three years and none of them have done the job. The time of 30% annual rate increases is over. The Town has one shot at planning out the next 5–10 years for the Water/Sewer Enterprise Fund.
Mr. Carlson commented that the past five years have been like the “Perfect Storm”. Many things have come together to put the Water/Sewer Enterprise Accounts where they are. He asked that the Town make a point not to burden lower rate paying customers.
Mr. Shuris assured the Board that the W/S Enterprise Fund would end the fiscal year positively with a balance of approximately $34,000.
The group discussed increasing block rates for commercial customers. The Board requested a breakdown of commercial users billing analysis.
Mr. Shuris updated the group on recent DPW activities. Large water meter testing began last week. The pool has been over billed. Schools will be inspected during school vacation week. There are approximately 102 large meter customers in town. Mr. Shuris will continue to update the Board. The broken water meter on West Mountain Street will be replaced in May. Back billing to the City of Worcester for the broken meter will start from July 2009. The Administration will copy the Board on the letter to the City of Worcester regarding the back billing.
Tom Morgan from CDM commented that the current W/S bills do not reflect measurement in gallons or cubic feet. The Town Manager commented that she would look into correcting the omission.
Sel. White inquired if taking the Highland Street water tank off line during its rehabilitation would increase the Town’s dependency on Worcester Water? Sel. White said that no budget adjustment has been made to account for the tank being off-line. Andy Miller said that the bulk of the rehabilitation work would occur in April/May, not during the height/peak of the summer months. He added that the tank is not a source of water – just a storage tank. Two 20,000-gallon in-ground storage tanks exist next to Highland Street tank. These tanks will be used to help offset the loss of the tank.
Other Business
Chairman Ferguson said that the Selectmen have been posted for an April 1, 2010 joint meeting with the Business and Finance Committee of the School Committee. The meeting is scheduled for 7PM. The Board has been posted for 6PM if some of the regional towns want to meet prior to the joint meeting.
Town Clerk Kathy Peterson’s Retirement Party will be held from 3-6PM on March 30th.
A swearing in ceremony will be held for incoming Town Clerk Cheryl Jenkins on April 1, 2010 at 8:30AM.
Adjournment
Motion by Sel. Ferguson, seconded by Sel. Renzoni, it was UNANIMOUJSLY VOTED TO ADJOURN THE MARCH 29, 2010 MEETING AT 8:21PM.
Approved: April 5, 2010
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