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UTILITIES COMMITTEE MINUTES
FEBRUARY 25, 2008
Municipal Council of the City of Vermilion
Municipal Complex, 685 Decatur Street, Vermilion, Ohio 44089
In Attendance: S. Holovacs, F. Ostrander, B. Brady, D. Roth, M. Rossini, J. Gabriel, Gwen Fisher, Mayor Anderson, D. Squires, C. Schmidt, C. Howard. Absent: H. Strickler, W. Hamilton
Call to Order: B. Brady, Vice Chairperson, RESOLVED THAT this Utilities Committee consisting of Member S. Holovacs, and Ex Officio Member, F. Ostrander does now come to order.
TOPIC ONE: Sewer Rate Analysis – Review of Ordinance 2006-25
G. Fisher noted that pursuant to Ordinance 2006-25, City Council is to review the rate structure in February of each year.
J. Gabriel provided council with a brief sewer rate analysis after polling other communities currently listed in the sewer rate analysis. He said that the city’s sewer rate is based on 800cf (6,000 gallons) and out of all the communities listed, Vermilion is second highest. The only reason Huron is higher than Vermilion in sewer rates is because they do not have their own sewer plant. They get the outside rate from Erie County. He feels this ordinance should be reviewed because it is slated for a 9.5% rate increase and feels it should be brought more inline. B. Brady said the downside of this is that the sewer fund budget has $430,000 toward debt service out of a $1.8 million dollar budget. She feels this is grossly affecting the sewer rates. She said if they would have increased rates years ago then maybe they would be paying cash for some of these projects instead of borrowing. She said she is hesitant in lowering the percentage because they will put the city in a bigger debt hole.
F. Ostrander asked if council would be getting an updated rate analysis as to what these rates should be rather than messing around with old numbers. B. Sasala said that council has had three rate analyses within the last five years. He said when you compare sewer rates amongst other communities you also have to look at what you need to fix in your own community. He said that some communities may be ignoring things they need to take care of which gives them a lower rate. Other communities may have a higher rate because they are taking care of things or have gotten rid of some debt. He said in the city’s sewer rate analysis it shows that we are still paying for our 1988 sewer plant operations. He said in looking at this year’s budget he is not sure where they can cut. He said that D. Squires does have RFQ’s from several engineering firms that will give him a price on performing a sewer/water rate analysis. He said in the Benza analysis from 2005 they recommended a 7.5% increase but council only approved a one percent increase which didn’t even go forward, so really there was a zero percent increase in 2005. He said if they look at the interest payment for both the water and sewer in the last four years the city is approaching a million dollars.
J. Gabriel thought this was only partially true because the truth is that the city has had two very big water and sewer increases and if you look at the money that the city was supposed to make on those increases then they haven’t made it. He said they are in an economy that is soft and people are conserving water because of the rate increases. He thinks it’s unfair to say that if rates were raised earlier then there would be an “x” number of dollars, when they have seen with the last big increases that it never materialized. B. Sasala said this wasn’t true because they did get an increase last year that is kicking in now. He said the city went three years where they didn’t have any increases at all but there were wage and material increases. He said council needs to take a look at the budget and see where they can cut. He said the sludge disposal has gone from $75,000 three years ago to $137,000 this year, and if they put in a sludge press it will go to $250,000 a year. He said the city only has a year and a half to meet this mandate.
B. Brady said in reviewing the Benza rate analysis she noticed there was $45,000 being transferred to the general fund from both the water and sewer funds. She said through previous discussions through the administration it was found justifiable to transfer $70,000 plus out of both the water and sewer funds into the general fund to help subsidize. She said it seems to her that Benza’s estimate of the transfers were very similar to what D. Flak worked out in his rate analysis. She said that the city’s rates would be higher if they had followed Benza’s program. She said they also underestimated the sludge presses in what it will cost the city.
F. Ostrander asked if the city was going to get a professional evaluation of what the water and sewer plants need. D. Squires said he is getting proposal on what engineering firms would charge to do studies in both plants.
S. Holovacs reminded council that they need to make a decision on what they want to do with the sewer rates because effective March 15, 2008, the new rate of 9.5% will go into effect. He asked the administration if they made a decision about a water rate increase. Mayor Anderson said that they will follow the current rate until they have a capital improvement plan in place. She said they will move forward with a rate adjustment. S. Holovacs said that the finance director was looking at a possible 2 ½ to 3 percent in 2008 to cover debt. Mayor Anderson said the 10% rate increase will be put into place as it is scheduled and they will look at this in the future.
F. Ostrander asked if council was going to get something from the administration to justify the sewer rate increase.
Skip Griffith of Timberview Drive said in 2006 the city extended the sanitary sewer line out to the eastern corporate limits which didn’t get finished until early 2007, and now it is 2008 and not a single party has tapped in. He said there is a facility ready to go with no users online to bring revenues into the city. He asked what the problem was. B. Brady asked who was supposed to be tapped into the line. C. Howard said that obviously Coley’s will be tying into it but noted that the costs have to be finalized for the assessments. He said the final numbers are needed so that the residents know what their tax assessment is. Skip Griffith said, “It’s taken a year to get the numbers on a project that was finished a year ago. There is something drastically wrong with the system!” He asked who dropped the ball on East Liberty. He said there is no excuse for it! He said the city is talking about revenue stream and there it sits doing nothing, but the city wants to raise his rates! B. Brady asked the administration to explain to Skip where the procedure is currently as far as assessing the residents. C. Howard said that he needs to get the final numbers from the finance director on what the costs are from bond counsel and what the soft costs are that were incurred. He said he can’t send an assessment out until he gets final numbers from everybody. B. Brady asked the clerk if she also is involved in the assessment procedure. G. Fisher replied that she is involved, but again they are waiting for the numbers from Wayne before they can prepare the final ordinance to levy the assessments. B. Brady asked, “Can we look to Wayne’s boss to make sure that happens?” Mayor Anderson said yes. She said that Coley’s will be tapping in and will be tapping into the waterline when it is complete. She said it is a question of having this line there for people to tap into it for the growth to happen. She said they can’t wait until somebody wants to move into the property and establish their development before they put the line in because they are waiting another year for the growth. Skip Griffith told the Mayor that nothing she just said is pertinent because the line has been in place and it’s not holding anybody up. Mayor Anderson said it is pertinent to a degree because you can’t wait until somebody is need of it before you begin forward to put it in. Skip Griffith said they didn’t wait. Mayor Anderson said they put it in and now they have a company that is soon going to tap in. She said the lines had to be there in order for them to put their development there. S. Griffith asked the Mayor how many homes are immediately adjacent to Lake Road that can tap in tomorrow. Mayor Anderson wasn’t sure of the number. F. Ostrander said there are apartments, an auto body shop, Herk Excavating, and other places that should have been tapped in. B. Brady asked if the committee needed to make a motion to request this information from the administration for the next council meeting. S. Holovacs didn’t think a motion would do them any good because the finance director was out of office the entire week. B. Brady asked about having the information available for the next utilities meeting. G. Fisher noted that Mike Sharb from Squires would have to prepare the ordinance to levy the assessments. F. Ostrander said that the city was at a standstill until the finance director does his part. Mayor Anderson said it is clear that they need the numbers and that it needs to move forward as quickly as possible.
S. Holovacs asked the committee if they wanted to schedule a Special Finance meeting next week to discuss the sewer rates. F. Ostrander said he would put the sewer rates under Old Business at the next council meeting. B. Brady asked the administration to provide good numbers on how much money they will have to generate to keep the fund in the black. Mayor Anderson believed this was part of what the Auditor’s were looking at when they were in town for the fiscal watch review. She said they are waiting word from them as well.
B. Brady said she noticed in the Benza study they had quite a bit of money in for replacing the city’s four inch lines, which would go along with Carl’s concern about the fire hydrants.
TOPIC TWO: Storm Water Ordinance – 2007-102
C. Howard reviewed the revised changes made to the storm water ordinance. F. Ostrander questioned the revision on page 13 (b) where a 15’ wide concrete or asphalt drive to support maintenance vehicles shall be installed to provide access at the Developers expense. He asked why it had to be anything over 12’. C. Howard said his thinking on this is that if they have to use a backhoe or some other larger vehicle. F. Ostrander asked what was wrong with stone. C. Howard said the stone over time will break apart. C. Howard said they can consider this case by case. B. Brady and S. Holovacs were fine with the way it was revised and didn’t feel it should change.
B. Brady MOVED; S. Holovacs seconded to recommend to council to put Ordinance 2007-102 back on the agenda for a third reading. Roll Call Vote 3 YEAS. MOTION CARRIED.
TOPIC THREE: Ditch Cleaning
M. Rossini stated that he brought this issue up due to the flooding the city experienced last month. He said particularly in Ward Five and Ward Four (Hazelwood) pertains to ditches. He said every ditch goes to the front and drains to the north. He said these ditches are filled with leaves and debris and the city needs something that institutes either the fact that they are going to have a ditch cleaning crew assign somebody to look at the ditches and keep them open, or some sort of prompter action.
B. Brady said the way the ordinance is worded makes it sound that the residents should pull backhoes out of their garages and begin digging ditches, but this isn’t in the spirit of the ordinance. She said they want people to clean out their leaves and brush and then the city would be involved with the backhoe work and replacing the pipes. M. Rossini said from the owner’s position he doesn’t see that they’re doing anything. He noted an area on Brownhelm Station that has never been maintained or touched. He said that the city either needs a schedule or somebody with teeth citing these cases.
D. Squires said to successfully implement a driveway culvert replacement, ditch cleaning, and ditch enclosure program they need to establish good legislation. He said Chapter 1026.01 – 1026.99 of the code addresses permits, blocking or obstructing ditches, inspection of connection fees, penalties, etc. He said in the ordinance the city requires the residents to keep their culvert pipe clean. He isn’t aware of any resident that can actually do this so he thinks the city needs to take this language out of the current ordinance because it should be the city’s responsibility to maintain the culvert pipe. However, the resident will be required to maintain their ditch so there isn’t loose debris. He said there are areas of the city that have much larger ditches that need to be addressed. B. Brady said the storm water ordinance addresses maintenance. D. Squires said they provide expenditures to council so they approve the transfer of funds.
S. Griffith said that when the ordinance says the property owner is responsible it doesn’t necessarily mean that the property owner himself has to go out and clean his ditch or culvert. He said there are private contractors available to do this work. He said it is the property owner’s responsibility to make sure the work is done.
S. Holovacs said the city will look at undersized or damaged culverts for replacement. D. Squires said the city has replaced a couple of culverts that were undersized and damaged. The residents did pay for the material and the city provided the labor. He felt the language needed to be tightened up in the codified ordinances. He said some areas in culvert replacement, ditch cleaning, and ditch enclosures falls to the side of policy and he thinks it should be in ordinance form so that it is cut and dry.
S. Holovacs felt this should be addressed at the legislative meeting. He said they also need to clarify who would be responsible for a culvert pipe and cutting into an asphalt or concrete driveway. He said the city could replace the culvert pipe but they shouldn’t be responsible for repairing the strip of driveway. J. Gabriel asked why the city would provide the labor. D. Squires said it was in the codified ordinances and there is also a policy that states that the residents are responsible for paying for the materials and the city will provide the labor.
D. Squires reported that on April 23 of last year he distributed a draft of a driveway culvert replacement and ditch cleaning program that the administration put together. He said he would copy the new council members. S. Holovacs asked him to provide a copy to the clerk so that she could distribute this again to all the members.
B. Brady said she doesn’t want them to do spot repairs. D. Squires said they would like to do the entire street by replacing any undersized or damaged culverts. However, they have several locations within the city that need repaired.
B. Sasala provided council with spreadsheets on the storm water fund balance. According to the ordinance, each year the funds come in and $100,000 is available for capital projects and the rest of the money goes toward maintenance. He said over the last nine years the city brought in $1,561,595.73 worth of revenue. The city spent $849,597.12 on capital and $173,263.75 on maintenance. He said in accordance to the ordinance in those nine years the city could only spend $900,000 for capital. He said at this point they have very little left for capital, so council would have to decide whether they need to rewrite the ordinance to transfer some of that sum to be used for capital projects. He said the city is bringing in around $165,000 to $170,000 a year in revenues. F. Ostrander thought that whatever the city brought in per year they couldn’t encumber $50,000. He didn’t think it broke it out to capital and maintenance. G. Fisher pulled the ordinance for council and J. Gabriel said that in Chapter 1045.08 it states that a maximum of the first one hundred thousand dollars ($100.00) collected each year will be directed to debt reduction for capital projects for storm water drainage improvements. F. Ostrander said they can spend it anyway they want to. J. Gabriel said the wording is strange but it says you have to for sure spend a maximum. F. Ostrander said $100,000 can be encumbered but they don’t have to break this down to capital and maintenance because it’s two separate things. B. Sasala asked him how you would know which is which. F. Ostrander said it’s not encumbered so it doesn’t matter. B. Sasala asked how much money they have for ditch cleaning. F. Ostrander said the whole amount until they get some type of loan against it. He said for example if the city’s share for Elberta Beach is $500,000 and they pay it over 20 years and it is $60,000 a year, then $60,000 a year is encumbered but there is still $40,000 plus whatever the difference is for the available collections to do whatever you want with it. He said if they pay cash for the projects then it’s not a debt reduction. B. Sasala asked if this means they can spend all of this money for capital projects and then not have any for maintenance. F. Ostrander said they can spend the whole thing, but there will always be money available each year for small projects. J. Gabriel said council can always modify this ordinance to be clear.
D. Squires addressed manpower which is an important component of the overall culvert replacement, ditch enclosure, and ditch cleaning program. He said they will need part time help through the summer months to get this done. If not, they will not be able to implement an affective program. B. Brady asked if the union tells them how much they are to pay an hour. D. Squires said he isn’t sure what the exact dollar amount per hour will be, but they know they are allowed 571 hours. He said he will get this information to council. B. Brady asked him to provide council with a proposal on how many people he needs and how much they will pay per hour. D. Squires said they are looking at two individuals and will share with council how they will utilize them. He said one would be involved in the culvert program.
J. Gabriel said he would like to do a comprehensive program because he doesn’t want to take so much money out of the storm water fund and then turn around and have to do Elberta. He said they need to balance both the maintenance and capital projects. He said he would like to know what areas the service director has in mind for culvert replacements, ditch cleaning, and ditch enclosures. D. Squires said the April 23 document he had handed out in 2007 identified those areas. He said some of the immediate projects they would focus on would be Hazelwood, Elberta, Edgewater Drive at Elberta Beach, Adams Street, Fairfax, Essex, Hollyview ditch. He said they did the Brownhelm ditch already. F. Ostrander said if some of these are ditch cleaning then he should take the larger ones and see how much it would cost to hire an outside contractor. D. Squires said it is $7.00 to $10.00 a linear foot depending how deep they go. He said he would get this information for council and noted that it is very expensive to farm the work out. F. Ostrander said it is but it’s also the contractor’s equipment that is used.
B. Brady said she was kicking herself last week on the vote for Elberta storm improvements. She said council voted to authorize Chris Howard to prepare the assessments for two projects, but they don’t set up priorities. She said this is kind of what Heidi started saying, “They need to set up a list of priorities and then look at how much money they have to see how far down that list they can get every year.” She said just by being driven that Morton Road got flooded they made this a high priority. She said she’s not saying it shouldn’t be but they pick. . . J. Gabriel said they are walking on rough ground because Morton Road got more than just flooded. He said it has been flooded four years in a row. B. Brady said she wasn’t picking on Morton Road but was saying they don’t have a list of priorities rather than being driven by things that happen. She said council let the Lagoons come and say they want roads and council went to them. She said they may not have been the worse ones in the city, but it was driven by a situation. She said it would be nice if council could decide ahead of time what the worse situations were and then see what monies are available and stick to a procedure. S. Holovacs corrected her by saying that the Lagoons petitioned the city to have their streets done and by law the city was obligated to do the streets. B. Brady said the city was obligated to do them but not help pay for them. She said the city doesn’t know how much money the city has in the storm water fund to put toward Morton Road and they don’t know how much money there is for Edson Street. She said if they have priorities and look at the money each year then they could do it a little more reasonably and avoid some of the debt the city has been incurring over time. She said that Heidi started this line of thinking at the last Utilities meeting and she too feels that it’s a good thing.
J. Gabriel said that especially from an area where Barb knows starts from the outfalls, they have a situation and not only is it Morton Road, but it’s bigger than Morton. It is Morton and Niagara, and Dewey Furniture is getting flooded. He said it is the outfalls and Barb of all people should appreciate that they start at the outfalls and work their way back. B. Brady said she does. J. Gabriel said granted they might not have the exact numbers, but they won’t know, until they get the assessment calculations. He said they have the numbers for the project. He said sometimes they have to break some eggs to make an omelet. He said they need this information before they can even make a decision. He said he doesn’t regret a penny they’re spending in Elberta. S. Holovacs said this is why he asked to get the assessments because the project was $800,000 plus. He said they need to know how much money will be the city’s responsibility. He said homeowners will be assessed on their taxes over a 20 year period. He said the city will need to borrow $800,000 plus and eventually the residents will pay their share over a long period of time.
D. Squires responded to F. Ostrander’s question as to how much it would cost the city to farm out ditch cleaning and to install culvert pipes. It would cost $12.70 per linear foot which is strictly the labor only. F. Ostrander felt there were advantages both ways because the contractor supplies the equipment.
TOPIC FOUR: Downtown Sanitary Sewers
C. Howard reported that the sanitary sewer was videotaped and they looked from Decatur to Sandusky Street and from Main to the railroad tracks. He said obviously with streetscape and urban paving if there is any issue with the sanitary sewer now is the time to fix it. He said they located nine areas that need point repair. He said there is pipe that is actually cracked. He said they located the nine areas that need repair and broke it down as to what is under the streetscape and what is outside of the streetscape. He said there are four sections within streetscape that need repairs. He said this is the time to repair the pipe so it doesn’t collapse and then they have to fix it later. He said there are sections that could be relined later. He said that he gave prints to Underground Utilities, Inc. showing the areas that need repaired. He said just under the streetscape area their price is $16,280. He said this involves open cutting and replacing 10 ft. of PVC pipe and backfilling. He said they have to do bypass pumping because there is a lot of sanitary in the pipe. He said it makes sense to use the same contractor that is working on the downtown waterline because the city gets a cheaper price because they are already mobilized. He said the five sections outside of streetscape totals $16,430.
S. Holovacs said to do the areas within streetscape would be under the $25,000 threshold and they would not have to go to bid. However, if they combine the other section it goes over the $25,000. C. Howard said obviously they will want the base area to be done but they could also take two other sections outside of streetscape which keeps it under $25,000. He recommended the sections west of streetscape which includes Decatur and Grand. These additional sections bring the total cost to $23,638.
B. Brady asked how they would differentiate between a sanitary assessment project and the businesses responsibility. She said they are talking about assessing VOL and Elberta Beach for lining their sanitary, so where do they draw the limit to what is city money they just spend and what is the resident’s responsibility. D. Squires said the point repairs are a maintenance issue which is the city’s responsibility. He said relining is a different scope so council would need to discuss this.
C. Howard said that some of the sections that need point repaired have an actual lateral connection for a business, so the cost includes fixing that lateral connection. He noted they used another company to video the laterals but they couldn’t finish because of the flow in the sanitary sewer. He said there was a section in the downtown area across from city hall that looks like somebody poured something in the pipe that adhered to the bottom which actually blocks some of the flow. He said there was a lot of grease filmed from Grand to Main Street.
D. Squires said with timing being of the essence, streetscape is going to commence the end of March or early April, and Urban Paving is not coming until August.
B. Brady asked the administration to ask D. Zaleski if all the sanitary sewer repairs can be done on an emergency basis without going to bid. D. Squires said he would speak with D. Zaleski on this.
B. Brady MOVED; S. Holovacs seconded to recommend to Council to authorize Underground Utilities, Inc. to perform the sanitary sewer spot repairs in the amount of $16,638. Vote 3 YEAS. MOTION CARRIED.
Adjournment: No further business was presented and Vice Chair B. Brady adjourned the meeting.
The next meeting is scheduled for March 24, 2008 at 7:00 p.m.
Note: Unofficial meeting minutes. Changes may be pending.
2/29/08
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