TOWN OF SOUTH WINDSOR
WORK SESSION MINUTES
TOWN COUNCIL MONDAY, May 21, 2012
COUNCIL CHAMBERS TIME: 7:00 P.M.
1. Call Meeting to Order
Mayor Delnicki called the meeting to order at 7:04 p.m.
2. Roll Call
Members Present: Mayor Thomas Delnicki
Deputy Mayor Gary Bazzano
Councillor M. Saud Anwar
Councillor Cindy Beaulieu
Councillor Ed Havens
Councillor Kevin McCann
Councillor Cary Prague
Councillor Janice Snyder
Councillor Keith Yagaloff
Also Present: Matthew B. Galligan, Town Manager
Dwight Johnson, Town Attorney
3. Public Participation
None
4. Communications
None
5. Town Manager’s Report
Mr. Galligan thanked the Council for the hard work on the budget. The Town will be starting a project shortly on the Main Street Bridge. The bridge needs to be complete before the Hartford Marathon because this will be part of the route that will be taken. South Windsor has received a GIS award for the second time. Scott Roberts will be going out to San Diego to accept this award on behalf of South Windsor. Mr. Galligan stated he would be on vacation beginning May 25th and returning June 4th. Vanessa Perry will be in charge while he is away.
Councillor Yagaloff requested that the Town Manager give the Council information on the level of training Vanessa has received so the Council can feel comfortable if there is an emergency. Mayor Delnicki requested that the Council also receive the chain of command if there is an emergency.
Councillor McCann stated that the chain of command worked well during the snow storm in October of 2011. The memorandum that Scott Roberts received from the SRI stated that the Town of South Windsor stood out from more than 100,000 others.
ITEM:
5. Town Manager’s Report
Mr. Galligan explained that the Town had three bridges on the watch list to be done and received from the State of Connecticut a grant. A bid was done for the bridges and the Main Street bridge will be totally closed while the bridge improvements are done. The bridge was built in 1939 so there are some issues because as you take the bridge down you want to make sure nothing falls into the streams. The bridge will be designed to look exactly how it does presently. The necessary date that this bridge needs to be complete is September 29th. If materials are going to take longer to get, this bridge may have to be done in the next fiscal year.
6. Items for Discussion
A. Water Pollution Control Authority Advisory Committee Report
Mr. Galligan reported the findings and recommendations of the Sewer User Fee and Budget by the WPCA Advisory Committee, as shown in attached Exhibit A.
Councillor Yagaloff questioned what the legal opinion is of who controls decision making and capital projects for WPCA? Town Attorney Dwight Johnson explained that with limited exceptions, WPCA has the power to determine rates and charges to be imposed on properties using or benefitting from the sewer system including user fees, connection charges and benefit assessments. User fees established by WPCA need to be sufficient to recover all operating and maintenance costs of the Town system. The WPCA annual budget is subject to review and approval of the Town Council.
Councillor Yagaloff asked if WPCA has the right to appropriate and fund expenses related to capital projects, capital reserves and capital improvements? Attorney Johnson stated it would have the power to include within its rates and assessments the cost of capital improvements, it does not have the power to require the Town to pick up those costs that is a decision the Town Council would make with the appropriate referendum as necessary.
Councillor Yagaloff questioned, in the current budget how much is set for reserves, capital projects and the debt service? Mr. Galligan explained that equipment replacement is $882,000 and the replacement reserve is $750,000. The $750,000 is set aside for the 1/20th payment. What happens is there is some debt service which is the pump stations that were done and any other type of item they have financed in the past.
Councillor Yagalloff asked what is the budget for operation maintenance for that year? Mr. Galligan explained that the internal service budget is $4,000,000 (revenue) and there are permit fees of $3,000, septic fees of $7,900, connection fees of $60,000, assessments at $3,600, interest and liens at $65,000.
ITEM:
6. A. (Continued)
Councillor Yagaloff questioned what if you go to the expense side? Mr. Galligan explained that on the operations it is $2,819,000 is the operation portion of the budget. There is debt service of $195,360; equipment replacement of $882,000; and replacement reserve $750,000.
Councillor Yagaloff stated that he is concerned on how the escalation in the sewer fees will be addressed when they are not even paying for the sewer treatment plant. Mr. Galligan stated that there is a 1/20th payment at $750,000 that has to be put into the budget. There was close to $900,000 of ineligible cost which was going to be used for design and getting the plant where it was supposed to be. Mr. Shaw explained that the $500,000 was taken out of the budget when the pump stations were approved by referendum.
Mr. Galligan felt that the charge of the Committee was to look at whether the rehabilitation of the plant should be paid from general fund taxes. The issues of fees was never an issue other than looking for a fair and equitable way to charge of user fees. Councillor Yagaloff stated that he would like to see a plan from WPCA as how to address the escalation in the fees and how to manage the escalation in the fees to bring them back to some level that is affordable for people. Mr. Galligan explained that the Committee would like to continue so the fee schedule can be reviewed. This Committee has no power to tell the WPCA what they should be charging but the WPCA is working with the Committee.
Deputy Mayor Bazzano stated that the main objective of the Committee is to figure out how to pay for the upgrades to the sewer plant. Working with the WPCA the subject of the reduction of user fees can be discussed. $750,000 has been taken from this year’s budget and $700,000 from next years budget to pay for the 1/20th payment of the debt service?
Mr. Shaw concurred with that statement. WPCA is looking at the benefits of a reserve fund policy with the intent to stabilize the user fee in the future and still be able to provide for other future needs. The fee goes up because there are short term responsibilities as well as long term responsibilities. In the past there have been grants that have helped with certain items but WPCA has had to go to referendum also.
Answering questions from the Council, Attorney Johnson explained that the existing agreements have been reviewed and there is nothing in those agreements that would entitle the Town to look to Manchester or any other Town to pay for a capital improvement items. The agreements are out of date and would have to be renegotiated to the issue of the plant.
ITEM:
6. A. (Continued)
Chairperson Richard Aries from Water Pollution Control Authority came forward and stated that the Water Pollution Control Authority values the Town Council’s input and does listen and take action based upon the Town Council’s input. The fact that the fees were lowered two years ago was a direct result of Town Council’s request. The current rates that have been established have been below the statewide averages. The need to go up on the fees this year is a direct need to establish the reserves for the future needs of the community. Having the reserves is a sound policy.
Mayor Delnicki recess the Work Session at 8:00 p.m. in order to call the Regular Meeting to order. The Work Session reconvened at 8:42 p.m.
Councillor McCann felt that going forward with putting any policies in place with respect to who pays for the sewer plant, the following need to be kept in mind. First, there are certain users of the system that do not live in Town yet they use the system and they only pay for it with sewer use fees, not taxes. There needs to be established a fair way to charge these individuals for the upgrade of the plant. Two, there are residents who are not connected to the system and some that can not be connected to the sewer line. These individuals do benefit from the system because of the different buildings that are connected such as schools, Town Hall, Fire Houses, Police Department and Library. They are users of these facilities and there needs to be a way to charge for this benefit.
Councillor Havens felt that the WPCA does a great job and does not see how the Council can request them to cut the user fee any more.
Answering questions from the Council, Mr. Galligan explained that the capital reserve fund is presently approximately $916,000 as of March 21, 2012 and this number does change week to week. Will get the most up to date information from the Finance Department.
Mr. Fred Shaw explained that after the study was complete the Town is looking at about $42,400 in Engineering fees for the replacement of the concrete pipe and a section of the Clark Street Force Main. The design is $42,400 and the construction is over $800,000. In the reserve fund, those funds are all designated for a particular purpose. Sewer user fees are a flat fee that is charged across the board for all residential units.
Council members discussed the way that would be used to calculate water usage and how to charge. Mr. Galligan explained that the sub-committee will be reviewing this item and come up with a formula that is fair to the whole community. It is expected that in 2013 this new way of charging will be implemented. Councillor Anwar felt that some relief needs to be given to residents this year.
ITEM:
6. A. (Continued)
Councillor Yagaloff stated that rate stabilization should not be done in this economy and felt that the WPCA should not be making these user sewer fees higher at this time.
Mayor Delnicki Delnicki explained that he works for the Metropolitan District Commission and septic users that are not tied into the infrastructure, once every three years receive reimbursement for septic tank pump out. There is an infrastructure surcharge on rates. These are things that should be considered by the sub-committee.
Deputy Mayor Bazzano stated that at this time the sub-committee is not working on the sewer user fees but will be working on that in the future. Deputy Mayor Bazzano questioned what the sub-committee should be taking out of this meeting as a charge?
Mr. Galligan stated that sewer user fees should be restructured for the most fair and equitable way to charge those fees. Then budgets should be reviewed to figure out what portion of the general fund should be paying for the sewer. Septic system users should also be reviewed. All of this information can then be put into one package.
Mayor Delnicki requested that based on the sewer user charge as it stands now, what is the impact on every taxpayer.
B. Water Pollution Control Authority Budget
Mr. Richard Aries, Chairman of the WPCA came before the Town Council. The Water Pollution Control Authority is extremely focused on fairness. It is our charge and our duty just like it is to maintain the sewer systems in Town. Mr. Aries indicated that Mr. Fred Shaw would be addressing the budget to the Council. If the Town Council wants to talk about not doing any of the projects that are proposed, then that member of the Town Council should speak up about the issue that they feel should not be spent on. This is the only way to save funds and lower the rates.
Mr. Fred Shaw explained that reserves are not for future use, they are funds that were appropriated in previous fiscal years and are reserved for projects that are to be completed. The funds have been paid for by previous user fees that have been collected over the last 10 years or more. The operating budget for fiscal year 2012/2013 is increased by 3.4%. Much of this is for the new treatment plant upgrade itself. This budget was put together not knowing what the full impact of those new tanks, pumps, systems would cost. In addition to the operating budget there is a debt service portion of the budget which has not increased which involves money that we have been paying for years for different projects. The budget also includes capital improvements. There is $882,000 in this budget
that will be used to implement the recommendations of a consulting engineers report concerning why
ITEM:
6. B. (Continued)
the pipe on Chapel Road collapsed, where the Town might face significant risk elsewhere of other pipes collapsing and also involves two recommendations concerning replacing a portion of the Clark Street Force Main. That project has also identified things that will be faced down the road which also includes funds that will be necessary at those times. The report still has other issues to review which will be identified in the future. These expenses need to be reviewed for the future budgets. The increase of 3.4% in the operating budget include increases in wages of $17,000; decrease in overtime hours over $17,000; increase in employee benefits of $41,573; decrease in use of chemicals of $33,000; increase in fuel costs for vehicles of $2,400; decrease costs for plan and pump station repair equipment
repair of $23,000; increase in insurance premiums of $7,838; increase in phone service of $4,600; increase costs of electricity and fuel of over $83,000; decrease in service calls of $3,625; decrease in training conference calls of $2,750; transferred funds from one account to another based upon operation now of transporting liquid sludge for final disposal and an increase in cost for some equipment of $17,000.
Answering questions from the Council, Mr. Shaw stated that the anticipated sewer user fee for next year will be $374.00. The only thing being taken out of this budget are the $50,000 for manhole rehabilitation, the $882,000 for the concrete repair and force main repair and the $700,000 for the 1/20th payment which will be put in reserves to be paid for in the future.
Councillor Yagaloff stated that in addition to operation and maintenance, the WPCA is running right now at $1,600,000 above operation and maintenance in this current year. Now with the proposed increase it will be $2,000,000 per year above operation and maintenance.
Mr. Shaw reiterated that the $1,600,000 reserve funds are funds that were collected in the past and set aside for projects which are being completed at this time.
Councillor Yagaloff stated he would like to hear discussions of how the sewer user fees could be kept stable.
Answering further questions, Mr. Shaw explained that the manhole rehabilitation I & I removal is a reserve for unanticipated expenditures which has $268,000 in it. With the $34.00 sewer user rate, the fund would increase by $50,000.
7. Executive Session
None
ITEM:
8. Adjournment
At 10:00 p.m. Councillor Snyder made a motion to adjourn the Work Session. Councillor Prague seconded the motion and it was approved, unanimously.
Respectfully submitted,
Deborah W. Reid
Recording Secretary
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