TOWN OF SOUTH WINDSOR
JOINT WORK SESSION WITH WATER POLLUTION CONTROL AUTHORITY
TOWN COUNCIL THURSDAY, March 24, 2011
MADDEN ROOM TIME: 7:00 P.M.
1. Call Meeting to Order
Mayor Pelkey called the meeting to order at 7:01 p.m.
2. Roll Call
Members Present: Mayor John Pelkey
Deputy Mayor Edwards Havens
Councill M. Saud Anwar (arrived at 7:03 p.m.)
Councillor Kevin McCann (arrived at 7:06 p.m.)
Councillor Cary Prague
Councillor Keith Yagaloff
Members Absent: Councillor Gary Bazzano
Councillor Thomas Delnicki
Councillor Janice Favreau
Also Present: Matthew Galligan, Town Manager
WPCA Members Present: Richard Aries, Chairman
Joseph Carino
Robert Dickinson
Carol Fletterick
Edward Havens, Jr., Vice Chairman
William Vees
Members Absent: Frank Ferrero
Nancy Mulroy, alternate
Richard Siedman, alternate
Also Present: Fred Shaw, Superintendent of Pollution Control
Michael Gantick, Director of Public Works
3. Public Participation
Mr. Don Gonsalves, 40 Bayberry Trail stated that he has lived in Town for five budgets and the Water Pollution Control budget has never been reviewed like it should by the Council. This budget has had large increases over the past six year and probably no other department in the Town has increased this much, nor has the Board of Education. Mr. Gonsalves felt that with the significant financial problems in the upcoming budget, this Council should review this budget very closely.
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March 24, 2011
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3. Public Participation (Continued)
Town Manager, Matthew Galligan informed the Council that a memo will be going out to the Council tomorrow explaining that the proposed Magnet School Facility on Chapel Road has been withdrawn. There are some flood plain issues on the property that would require additional work which would be very costly. This project will be looking further at other properties in South Windsor.
4. Items for Discussion
Update regarding the Sewer Line Break on Chapel Road
Mr. Michael Gantick, Director of Public Works came before the Town Council to give an update on the sewer line break that had occurred on Thursday, March 17, 2011. Mr. Gantick explained that there was a large sink hole on Chapel Road in Manchester, but it was due to the Town of South Windsor’s sanitary sewer where the force main dumps into the gravity section of the sewer. As the Town Council may be aware, the Clark Street pump station is the Town’s largest pump station and handles about 60% of the wastewater in South Windsor. With the storms in the last couple of weeks there has been approximately twice the flows through the pump station then normal. There has been about two million gallons per day. The Town contacted a contractor and was able to have the company come out that
actually has standby emergency pumps. The contractor put their pumps in the manhole and made a temporary stoppage of water that was getting through the broken pipe to try to determine the extent of damage. It was not until Friday that the problem was found. It was then determined what would be necessary to replace that full section of pipe in that manhole. The concrete pipe which is approximately 40 years old and had a life expectancy of 50 to 100 years was replaced with pvc pipe which has a life expectancy of 1,000 years. This was an extensive process and was complete by Monday morning. Other pipes were looked at and there is damage. This is something the Town will have to investigate further. The other concern is infrastructure. The Town has eleven pump stations and each one is fed by a force main. This force main from Clark Street is over 1 mile long, is approximately 40 years old and is concrete. If that line
breaks the Town will have big problems.
Update on the Pump Station Bidding Process
Mr. Fred Shaw, Superintendent of Pollution Control came forward and explained that the Town received five bids. There was quite a size of margin in difference between the low and high bidder. The low bid came in at $1,468,000 and the high bid came in at $2,300,240. Our engineer has done his due diligence and evaluated the bids and made a recommendation to award the contract to Kovacs Construction Corporation who was the low bidder.
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March 24, 2011
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4. Items for Discussion
Answering questions from the Council, Mr. Gantick stated that the cost does not include engineering or administrative costs. Mr. Shaw felt that the cost would be under the $1.9 million that was bonded for this project.
Mr. Gantick stated that the Town’s engineer is in the process of evaluating other pipes that are made of concrete. The long term plan will have to be to line the pipes or replace them. Some of the broken pipe was saved in order to try to analyze the failed pipe to try to get an indication of the integrity of the rest of the pipes. The extraordinary weather that has been taking place has produced a large amount of water that the Town is putting through the Clark Street Pump Station. The weakness may have been there and growing; and the extra flow could have helped it break earlier. Every system is not 100% water tight but is not necessarily cost effective to go out and try to plug all of these leaks. The engineer will determine what the best method is if problems are found. The
preliminary cost for this repair to the sewer line is approximately $250,000.
A. Sewer User Fees
Mr. Galligan began discussions explaining that the handout (Exhibit A) basically talks about capital reserve fund. The original budget or appropriation for capital reserve was $1,721,273 and available today is $952,000. The 1/20th payment that is necessary because of the improvements to the Sewer Treatment Plant consists of approximately $1,706,722 is due September of 2013 when the Plant improvements are complete and thereafter $142,000 a month will be due for all of the following months going forward for the next 20 years. If the reserve is used to pay for the 1/20th payment, the Town will still have to come up with another $754,000 and if that was done over two years, $377,000 would have to be put into the budget for over two years. The handout behind that is basically giving
the current fund balance (Exhibit B). The current fund balance is $400,000, but will change from month to month depending upon expense and revenue. The next handout (Exhibit C) is the Town’s debt schedule under the general fund which includes every debt that the Town has to date except for the pump station which is under a note and will be paid for by the sewer user fee.
Mr. Galligan stated that it was his understanding that if the sewer fund did pay for the 1/20th payment and if the referendum for the pump stations passed, there was a commitment that the debt service would be paid for out of the general fund. A resolution was written so the Council would have the ability to look at two mechanisms of payment for the debt, either by bonding it or by using Clean Water Fund Obligations. If after the first year the Water Pollution Control Authority saw the fees going up, there is the ability to allocate from the general fund to reduce the fees of the water fund. Every year the WPCA and Town Council should figure out how to balance the fees so there are no spikes and spread out the payments between the sewer users and taxpayers who are not sewer users in Town.
Another issue that
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March 24, 2011
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4. A. (Continued)
was discussed during this process was using meters on Town owned buildings to try to calculate flows. The cost should be paid for by the full faith and credit of the Town or charged to the Town side and the rest should go to user fees.
Answering questions from the Council, Mr. Galligan explained that the Town will not pay anything towards the loan until the project is complete. The State then says the Town is gong to give a 1/20th payment of what is being borrowed which is $1,706,922 and that is the amount of money that the Council wanted the WPCA to use the reserve funds towards.
Discussing the balance sheet, Mr. Galligan explained to the Council that the Auditor told the Town that the Town can not take a loan as a revenue that it has to be a liability until the project is complete and then the Town can apply it again for the expense.
Then discussing capital projects, Mr. Galligan stated that the Town has one capital projects fund for the entire Town. In that capital project fund is the sewer capital projects and the general fund capital projects. At the end of the year when the Auditors come in the Town takes those out and puts them in the appropriate account. A long discussion ensued regarding the encumbered capital projects that are not listed on the sheets. Councillor Yagaloff requested that a list of all capital projects that are encumbered with the total balance and a description of the project be provided to the Council so the Council will get a time frame of when any extra funds may be available. Councillor Yagaloff felt without that information he would not be able to make an informed decision on the budget
that is asking WPCA to turn over $952,000. Mr. Galligan stated that he would get a list to the Town Council of those projects, but the Town Council can not touch any of the funds because they are restricted. Mr. Shaw explained that it would not be known if there are any additional dollars available in these accounts until the project is completed and closed out.
Councillor McCann wanted clarification regarding the 1/20th payment, he questioned if the Town were to allocate $375,000 from the general fund this year and next year and then add $952,000 that is left from capital projects, that would provide the amount needed for the 1/20th payment? Mr. Galligan said yes. Councillor McCann then questioned if the Town uses the capital project fund from WPCA that would deplete that fund except for anything coming in through the user fees going forward? Mr. Shaw stated that he was correct and answered further questions explaining that the current sewer user fee of $288.00 per year which generates $588,000 as long as the revenues come in as expected. If anything goes wrong the WPCA uses reserves to offset any costs that may arise. When the
Town had the fee for sewer users at $304.00 per year and went down to $288.00 it prevented the Town from putting aside money in other reserve funds for unforeseen problems.
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4. A. (Continued)
Council members then discussed in length the different reserve accounts and how each account is used. Mr. Shaw explained that these accounts have money pulled out for smaller items that arise also. Mr. Galligan explained that part of the establishment of these accounts was to ensure that the sewer user fees did not spike from year to year. The Town Council and WPCA has to come up with an appropriate business plan for the next ten to fifteen years that will take care of the sewers. Mr. Galligan stated that the fist issue he would like to resolve is the 1/20th payment and how that is going to be handled. The other issue of what is an appropriate reserve that the WPCA and the Council can agree upon which is gong to take care of future issues can be discussed after the 1/20th
payment.
Mayor Pelkey stated that the new awareness of a major break and the cost of fixing 15 miles of concrete piping are some things that the Council needs to look at to set the sewer user fee.
Councillor McCann requested that Mr. Shaw provide him with how much the reserve would build for every ten dollars that is added to the sewer bill. Councillor McCann also questioned how much is used out of the unrestricted reserves every year? Mr. Shaw explained that that number will vary depending upon different circumstances that may arise. Councillor McCann requested that Mr. Shaw go back five years to get an idea of what has been spent and where it came from.
Mr. Gantick felt that Council wants to know how much is going to be left out of those restricted reserves after the projects are closed out and nobody will know that number until the final payments are made. Mr Galligan added that some of the projects may have retainers on them, so the project will not be paid until after the one year warranty is complete.
Answering further questions from the Council, Mr. Galligan explained that the three pump stations that went to referendum would be paid for out of the sewer user fees which is $147,000 per year and will increase the sewer user fee by $14.00.
Councillor Prague felt that the Council and WPCA need to determine the total dollars necessary; and then determine how much will come from sewer users and how much will come from taxpayers. Mayor Pelkey stated that the vote last year was regarding the sewer plant and Council voted that taxes would be used to pay for that. Then the referendum was held and passed and those upgrades will be paid for by the sewer user fees. Mayor Pelkey felt that it should be determined how much should be in reserves to take care of anything that may arise.
Council member then discussed the billing of companies that are hooked up to the sewers stating it would have to be analyzed to use best practices on how to charge them either through the user fees or taxes.
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4. A. (Continued)
Councillor Yagaloff felt that using the sewer fund to pay the 1/20th payment would mitigate increases to sewer users or taxpayers. These reserve funds were built up specifically for the purpose of the sewer plant.
Councillor Prague stated that whether a resident is a sewer user or a non-sewer user, everyone is going to be paying something toward this.
Councillor McCann felt that it is bad policy to plan to use all of the reserves. Councillor Yagaloff responded that it is his feeling that the concept of building reserves in a no growth economy is counter productive. Councillor McCann said it would be very dangerous not to have reserves to help offset any costs due to unforeseen circumstances. Councilllor Prague stated that for the next two or three years the Town should not try to build up anything in reserves or strip the reserves. The Town needs to establish how to pay the first payment.
Mr. Galligan suggested that the Town Council and WPCA establish a policy that establishes economic factors in it and structure payment amounts from the reserves based on those economic conditions.
Mr. Aries, Chair of the WPCA stated that WPCA has been working on establishing a policy to operate under. The whole goal of having the reserve fund it to be ready for all economic factors. A long term policy of building up the reserves is to be able to change the reserves according to economic times. The WPCA will be very careful about setting rates and how much would be set for reserves, but WPCA has to have reserves to ensure that there are no problems with the sewer system. WPCA would like to know the commitment of the Town Council of providing contributions toward the initial payment of the 1/20th payment because WPCA can not handle this burden alone.
Mayor Pelkey responded that the Council would like to understand the whole monetary picture of WPCA. This would include the amount in any reserve accounts, projections of what WPCA will need in the future, potential upgrades of the system, and any catastrophic things that could go wrong and the costs.
Deputy Mayor Havens stated that this has been a good meeting because it has brought more understanding to both sides and should probably happen more often.
Mayor Pelkey then reiterated the plan to pay for the plant through the taxpayers; the pump stations went to referendum, passed and would be paid for by the sewer users. The funds that were to be used to do the pump stations were to be put toward the 1/20th payment as voted on by in a Council resolution.
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March 24, 2011
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4. A. (Continued)
Mr. Bob Dickinson suggested that usage be metered and billed by the usage. Mayor Pelkey stated that the Town does not have a method to measure usage. Mr. Dickinson stated that individuals who are interested in putting a meter on their well could purchase one for probably a couple hundred dollars. Councillor Yagalof felt that basing the cost on the size of the home may be more equitable. Councillor McCann stated that if you have five people in a house, it doesn’t matter if you have one bathroom or six, there is still gong to be the same number of showers and use of the toilet. Councillor McCann then stated he does not feel the Town is equipped to meter usage.
Mayor Pelkey ended the meeting by saying another meeting will be scheduled to review all the information requested by Council and to try to come up with a method of payment for sewer user fees.
5. Executive Session
None
6. Adjournment
At 9:13 p.m. Deputy Mayor Havens made a motion to adjourn the Work Session. Councillor McCann seconded the motion; and it was approved, unanimously.
Respectfully submitted,
Deborah W. Reid
Clerk of the Council
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