UTILITY
FEES REVIEW COMMITTEE
CITY HALL, 100 LOCKVILLE ROAD
MONDAY, OCTOBER 17, 2005
6:30 P.M.
1. ROLL CALL. Mr. Walburn called the meeting to order at 6:30 P.M., with roll call as follows: Mr. Hackworth, Mr. Walburn, Mr. Sauer, and Mr. Snyder were present. Mr. Wright was absent. Others present were: Judy Gilleland, Lynda Yartin, Ed Drobina, Linda Fersch, and others.
2. APPROVAL OF MINUTES of September 19, 2005, Regular Meeting. Mr. Hackworth moved to approve; Mr. Snyder seconded the motion. Mr. Snyder, Mr. Sauer, Mr. Walburn, and Mr. Hackworth voted “Aye.” Motion carried, 4-0.
3. SCHEDULED MATTERS:
A. Review Circuit Rider Report. Mr. Walburn stated the report was in everyone’s packet. Mr. Walburn requested Mr. Drobina review the changes that had been made to the original report, and Mr. Drobina stated he did not have the report the Committee had originally received. Mr. Hackworth stated the original report had sewer capacity fees at about $3,800 and the revised report has the sewer capacity fees at $5,224. Mrs. Fersch stated our sewer capacity fees right now are $3,819.24 for a 3/4 –inch line. Mr. Hackworth stated the recommended water capacity fee was $2,700 and is in the range of $3,815 in the revised report. Mrs. Fersch stated the current water capacity fee is $3,025.14. Mrs. Fersch stated the fees increase three percent each year and that is why we have the amounts we do. She stated when we do anything, it might be nice to include language that the fees will be rounded off to the whole dollar, anything over $.50 will go to the next whole dollar. Mr. Hackworth stated currently we have a Water Capital Fund and a Sewer Capital Fund and that is where the capacities fees go. Mr. Hackworth clarified those two funds are used to pay the majority of the debt for water and sewer and to pay for any capital projects. Mrs. Fersch stated, for example, right now out of the Sewer Capital Fund we are paying for the D-Line III project. She stated out of the Water Capital Fund we paid for the connection for Pearl Lane, and the water line in RaMar. She stated, however, debt is the majority of the money that comes out of those funds. Mr. Hackworth stated the operating budgets for the water and the sewer is covered by user fees. Mr. Walburn inquired if the money received for capacity fees is invested, and Mrs. Fersch stated it is earning interest annually. Mrs. Fersch stated she may invest in federal agencies, Star Ohio, Certificates of Deposit, etc., based on when the funds are needed. Mr. Walburn clarified further we withdraw from those funds twice a year for debt payments, unless we have notes that have scattered payment dates. Mrs. Fersch stated other withdrawals would depend on the capital improvement projects and when we do them. Mr. Walburn stated it was his concern that this Committee must look at how to subsidize these funds when making a recommendation for any increase.
Mr. Hackworth stated if we become successful in slowing down growth, the tap fees will drop off. Ms Gilleland stated we hoped to end this year with a $496,000 balance in the water operating fund, and these are user fees, not capacity fees. Ms Gilleland stated she does not feel comfortable taking the balances in the operating funds down below $300,000 to $500,000, and if we continue with our normal operating we will be cutting into the balance. She continued we are at the point where we are cutting back on our operations and maintenance to maintain those balances. Ms Gilleland stated we are beginning to see the effect of the budget shortfall. Mr. Snyder clarified the capacity fees have an automatic three percent increase the first of January of each year, and sewer is the only one that has had an additional increase and that was done a couple of years ago when we were going to build the sewer plant.
B. Review capacity fee rates of surrounding communities. Mr. Hackworth stated Mr. Plunkett, in his report, recommended a water capacity of $3,815 for a ¾-inch line, which would put us at the top of the surrounding communities, and if we were to do that, it might have a negative effect on our growth. Ms Gilleland stated she felt we should use the surrounding area data, so we can make sure we are in the ballpark of the other communities. Ms Gilleland stated a survey of the fees for the surrounding community was distributed to the Committee. Mr. Sauer stated his question would be what we intend to do with this money, and then try to determine how well that money gets to what we want to do with it. Mrs. Fersch stated we have a Capital Improvements Project Plan that lists projects that need to be done. Mr. Sauer stated he would like to have an idea of what kind of money we were looking at spending so he would have something to go on in recommending an increase in tap fees. Ms Gilleland stated the Committee had received a copy of the Capital Improvements Plan and she would be happy to review it with them if they wished. She stated this is a five year plan where we anticipate our major projects, and, in addition, we have annual maintenance projects.
Mr. Snyder stated we anticipate housing to slow down, and we have this five year plan, but he isn’t sure what the projected dollar amount is that we will need over the next five years for these improvements. He continued that by doing just quick math, we do not have, nor will we get enough money in tap fees to do these projects. Ms Gilleland stated the Capital Improvement Plan (CIP) will be adjusted accordingly. Mr. Snyder stated there are certain non-negotiables that have to be done, and Ms Gilleland stated that was correct, however, some maintenance items can be adjusted. Mr. Hackworth stated our CIP has an additional water tower, and if our growth drops off, then the need for that water tower may be moved several years out. He stated further, we cannot determine accurately what our growth will be until we have a few years to see what the trend will be.
Ms Gilleland stated should this Committee recommend an increase in capacity fees, you should have a basis for the charge to justify the increase. Mr. Sauer stated according to the comparison survey, even if we decided to recommend what this report recommends, we would still be below Groveport, Fairfield County, and Canal Winchester. Mrs. Fersch stated Fairfield County automatically increases their fee three percent each year, and that will occur in January. Mr. Hackworth stated he felt we could justify the rates recommended by Mr. Plunkett. Mr. Snyder stated he felt the recommendations in the report was the right way to go, and adding anything to that was a bad idea. Ms Gilleland stated her concern was if we start to randomly try to figure out where we want capacity fees to be, there would be no scientific basis for them, and that would be a problem. She stated further the three percent annual increase has been our saving grace, but if we do not stay on top of things we would be right back trying to play catch up. Mr. Snyder stated we will have the three percent increase in January, and then whatever this Committee recommends would be on top of that.
Ms Gilleland stated for the next meeting she will provide a new spread sheet that includes different scenarios to see where we fall. Mr. Snyder stated he would like to see some flexibility, because the growth may slow down or whatever. He stated if we should decide to increase our fees five percent, we would move up the list in the comparison with other communities, but we would not outpace them. Mr. Hackworth stated perhaps we could go for a three year period of a six percent increase and then go back to the three percent. Ms Gilleland stated the advantage to the three percent is that it is already in place, and we should meet every year and evaluate things to see if there should be an increase, a decrease, or whatever. Mr. Hackworth stated if in December we pass legislation saying we will raise the rates in July, then that would give the builders five months notice and they can figure that into their costs. He stated if we also indicate we are going to do the same thing for 2007 and 2008, then they have advance warning that it is coming. Ms Gilleland stated we should also indicate that we will meet annually to evaluate and reaffirm the need for that increase. Mr. Hackworth stated then after the three year period, we could go back to the annual three percent increase.
Ms Gilleland stated staff would work through some of the logistics and bring something back to the Committee for the next meeting.
4. ADJOURNMENT: There being nothing further, Mr. Walburn moved to adjourn; Mr. Sauer seconded the motion. Mr. Hackworth, Mr. Snyder, Mr. Sauer, and Mr. Walburn voted “Aye.” Motion carried, 4-0. The meeting adjourned at 8:00 P.M., October 17, 2005.
RESPECTFULLY SUBMITTED:
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Lynda D. Yartin, Municipal Clerk