The Board of Directors of the Albemarle County Service Authority (ACSA) met in regular session on March 15, 2007 at 9:00 a.m. at the Administration and Operations Center at 168 Spotnap Road in Charlottesville, Virginia.
Members Present: Mr. Wagner, Chairman, Mr. Larsen, Vice-Chairman; Messrs. Humphris, Roberts; Dr. Palmer
Members Absent: Mr. Lumpkin
Staff Present: Messrs. Bowling, Fern, Gorham; Ms. Breeden, Mrs. Thraves, Mrs. Herr
Public Present: Mr. Alouf, Mr. Caldwell, Mr. Colbaugh, Mr. Martin; Ms. Manson
1. Call to Order
The Chairman called the meeting to order and a quorum was established.
The Chairman asked if there were any additions or corrections to the minutes of the February 15, 2007 Board of Directors meeting. Mr. Humphris stated that on Page 3, where it reads “… the ACSA may wish to consult with this area’s CVT member ...” it should read “CTB.”
Dr. Palmer moved that the minutes be approved with the above-mentioned correction, seconded by Mr. Roberts. All members voted aye.
3. Matters from the Public
Mr. Martin asked to comment on the Proposed Budget for FY 2008. He stated that he feels the proposed water and sewer rates are too low. Mr. Martin referred to the $2.0 million to be taken from the Repair, Replacement and Rehabilitation (3R) Fund to support the water and wastewater rates and felt this should not be done. He suggested the ACSA would be taking on future debt by using 3R Funds to reduce the rates. Mr. Martin stated that the FY 2008 Proposed Budget shows a difference of 389 million gallons between the projected Total Water Flows and Wastewater Flows. This difference includes irrigation and water-only customers. He stated that if all water-only customers paid for sewer or paid a higher rate for water, by his calculations about $2.0 million in additional revenue would be generated. Mr. Martin suggested that perhaps water only customers should pay a higher rate for their water service, particularly those irrigating.
Mr. Martin stated that additional revenue could be obtained by implementing a higher rate structure for irrigators. Mr. Martin noted that he had a discussion with Lisa Breeden prior to today’s meeting regarding how much water is used by irrigators. He stated that Ms. Breeden informed him that the average irrigation use during June, July and August equates to a monthly average water use throughout the entire year of 7,700 gallons, resulting in a very large volume of water. Additionally, Mr. Martin suggested that apartment buildings, especially those with low-income residents, have a tiered rate structure separate from commercial enterprises which should pay a higher water rate.
Mr. Martin asked that the Board not act on the Proposed FY 2008 Budget and hold a special meeting.
The Chairman reminded Mr. Martin that the ACSA has a number of customers, who by regulation of the County Board of Supervisors, are water-only customers and are not charged for sewer use since they do not receive the service.
Mr. Roberts asked Mr. Martin why he felt that the commercial rate should be higher. Mr. Martin replied because commercial enterprises can pass the additional cost onto its customers and that they realize a profit from receiving the water.
The Chairman thanked Mr. Martin for his comments.
4. Consent Agenda
a. Monthly Financial Reports - Mr. Fern stated that Total Revenues to date were less than Total Expenses. He explained this was due to Customer Contributions and Buck Mountain Surcharges being less than anticipated. Mr. Fern referred to the Repair, Replacement and Rehabilitation (3R) Fund, noting the new tandem-axle dump truck the ACSA had purchased five months ago was received last month. The new dump truck cost approximately $91,600 and replaced the dump truck totaled in last July’s accident. Mr. Larsen asked if insurance covered any portion of that cost. Mr. Fern stated that the ACSA received approximately $22,000. Mr. Humphris asked the age of the totaled dump truck. Mrs. Thraves replied 11 years old.
b. Monthly Capital Improvement Program (CIP) Report – Mr. Fern stated there were a number of changes to the CIP Schedule as a result of developing the FY 2008 CIP. The FY 2008 forecasted amount of $5,384,700 does not match what is being proposed in the FY 2008 CIP. The reason for the discrepancy includes $100,000 for developer participation, and $357,730 for In-House projects.
Mr. Fern informed the Board that the ACSA is currently working with Michael E. Baker Engineering on the Woodbrook Water Replacement Project. The project was originally planned to be constructed in two separate phases. The ACSA Staff has decided to combine the two phases due to favorable bids received for the Colthurst Water Replacement Project. Mr. Fern stated that the ACSA asked Michael E. Baker Engineering to provide a cost for combining the design of the two phases. The ACSA has reviewed the hourly breakdown of costs and find them acceptable (Attached as Page 7078). Mr. Fern asked that the Board authorize and appropriate $8,585.00 from the Repair, Replacement and Rehabilitation (3R) Fund for the additional Engineering Services for the Woodbrook Water Replacement Project.
Mr. Humphris moved to appropriate $8,585.00 from the Repair, Replacement and Rehabilitation (3R) Fund for the additional engineering services to be provided by Michael E. Baker for the Woodbrook Water Replacement Project, seconded by Dr. Palmer.
Mr. Fern asked if the Board had any questions regarding the FY 2007 CIP. Mr. Roberts noted that the Proffit Road - 84 Lumber Water Connection Project shows a completion date two months into the FY 2008 Budget. He asked if the materials for that project had already been purchased. Mr. Fern stated that the project amount was appropriated in FY 2007 and that an additional appropriation is not anticipated in FY 2008 Budget.
c. Rivanna Water and Sewer Authority Minutes of January 22, 2007 Meeting – The Chairman asked if the board had any questions regarding the minutes.
Dr. Palmer referred to Page 3, asking how much of the $35 million would be eligible for the 60% grant. Mr. Fern replied that currently it is believed that $30 million would be grant eligible. Dr. Palmer asked if this included the $5.7 for tertiary filtration facilities. Mr. Fern replied yes.
5. Owensville Road Water Main Project
Mr. Fern noted that at last month’s meeting, the Board of Directors authorized the ACSA Staff to survey affected property owners in the Owensville Road area. He stated that four of the seven surveys distributed were received from residents asking for the ACSA to move forward with the project.
Mr. Fern explained that the project would extend water services to Owensville Road and Neves Lane. At last month’s Board meeting, it was believed that the area of Ivy Commons, including Duner’s Restaurant, was not in the jurisdictional area. Since then, the ACSA has requested that the County further investigate the jurisdictional area. Mr. Fern stated that the County did find that the Ivy Commons area including Duner’s Restaurant was included in the jurisdictional area, which would allow for the project to be extended further. Mr. Fern stated the original intent of the project was not to include the commercial development of Ivy Commons and Duner’s Restaurant. He added that if the commercial businesses along Rt. 250 would like to be included in the project, they would need to request this of the ACSA and contribute towards the project.
Mr. Humphris asked if the ACSA had received any comments from Ivy Commons regarding their water quality. Mr. Gorham replied there had not been any contact between the ACSA and commercial sites along Rt. 250. The Chairman noted that since it was believed that Ivy Commons was not included in the jurisdictional area, no one had contacted them.
Mr. Fern noted that several members from the public were in attendance today.
Mr. Jim Alouf stated that he has resided at 752 Neves Lane for 20 years and has been fighting the worst rust in his water supply that he has ever seen. He noted that he refers to his on-site well water system as “3 Mile Island” and does not drink the tap water. Mr. Alouf added that his neighbors have similar problems and realizes this project will be expensive, but that it is critical for health reasons.
Mr. Humphris asked Mr. Alouf if his water had been tested. Mr. Alouf replied many times. Mr. Humphris asked Mr. Alouf if those reports have been consistent regarding the water quality. Mr. Alouf replied yes, consistently bad.
Dr. Palmer asked Mr. Alouf if other wells have been drilled. Mr. Alouf replied no due to cost.
Ms. Valerie Manson stated that she has resided at 860 Owensville Road for the past 30 years and is also representing her neighbors, the Bears. She has also experienced problems with the water. The wells were all drilled about the same time and are not very deep. During periods of drought, there is no water available. She noted that she has not been able to pass various water tests.
Mr. Bob Caldwell stated that he resides at 772 Neves Lane and is also the owner of Duner’s Restaurant. He stated his well is 50 feet deep and during the drought of 2002, it almost went dry. He noted that he will either have to drill a new well or connect to the water system. He added that he does not drink the water in his home.
Mr. Roberts asked Mr. Caldwell if the Health Department has expressed any concerns regarding the water at Duner’s Restaurant. Mr. Caldwell replied they have not. He stated he has the water tested quarterly and has only had one failure in the last 15 years. The well at the restaurant is 200 feet deep.
Dr. Palmer confirmed that Mr. Caldwell’s personal well was 50 foot deep. Mr. Caldwell noted during his discussions with Mr. Benish, that all septic systems located on commercial properties have very limited lands and if these properties had access to public water, this would provide more on-site wastewater system options.
Mr. Roberts asked how many more feet would be needed to service Ivy Commons and Duner’s Restaurant. Mr. Fern estimated that another 700 feet would be needed to serve Duner’s Restaurant and Ivy Commons. Mr. Humphris commented that it would be more economical to include the additional footage now, instead of undertaking a completely separate project in the future.
Mr. Fern stated that the ACSA could request the engineer to provide estimates for both segments of the project, which could be presented to the Board.
Mr. Caldwell noted that he felt the current project for Owensville Road and Neves Lane was more important, but felt that the ACSA at some point may want to consider extending the project to Ivy Commons and Duner’s Restaurant. Mr. Alouf agreed with Mr. Caldwell.
Dr. Palmer stated she would like to get the currently proposed project approved and then revisit the commercial properties at a later time when there is more information available. Mr. Humphris asked if there would be any oversizing involved. Mr. Fern replied no, that the ACSA intends to install a 12 inch diameter water main.
Dr. Palmer moved to authorize the ACSA Staff to move forward with the Owensville Road Water Main Project, by developing a Scope of Services and negotiating a fee with an engineering consultant currently under a term contract, seconded by Mr. Roberts. All members voted aye.
The Chairman stated that the Board would like to direct the ACSA Staff to move forward with surveying commercial property owners and at next month’s meeting, responses and engineering costs, including both designs, could be reviewed.
Mr. Humphris stated he was reluctant in requesting interest from the commercial property owners. Mr. Bowling commented that the Board’s responsibility is to provide services to customers in the jurisdictional area who request service.
Dr. Palmer asked about a potential water main extension across Rt. 250. Mr. Gorham replied that to serve customers on Morgantown Road the water main would have to be extended under Rt. 250.
Mr. Humphris asked if the ACSA had received anything in writing stating the commercial properties were now part of the jurisdictional area. Mr. Fern replied that an email was received from the County on March 14, 2007.
Mr. Roberts moved to authorize ACSA Staff to request Ivy Commons and Duner’s Restaurant be included in the engineering design, seconded by Dr. Palmer. All members voted aye.
6. Project Close-Out – Northfields Phase 3 Sewer Project
Mr. Fern stated that the Northfields Phase 3 Sewer Project was completed in June of 2005, and is now ready for close-out. He noted that the Board had previously authorized $282,610.00 for the project. The total cost of the project, including engineering, construction and legal expenses was $281,680.66, leaving a remaining balance of $1,929.34.
Mr. Fern requested that the Board of Directors close-out the Northfields Phase 3 Sewer Project and return a balance of $1,929.34 to the Repair, Replacement and Rehabilitation (3R) Fund.
Dr. Palmer moved to close-out the Northfields Sewer Project Phase 3 and return a balance of $1,929.34 to the Repair, Replacement and Rehabilitation (3R) Fund, seconded by Mr. Larsen. All members voted aye.
7. Red Hill Community Water System
Mr. Fern stated that the ACSA had anticipated receiving a proposal from the Oakey’s for purchase of property for the well site. He noted as of this date, the proposal has not been received. Mr. Fern hopes the proposal will be received shortly, such that the RWSA could respond to the proposal. The ACSA could then move forward with an engineering proposal for the design of the project.
8. Work Session – FY08 Budget
a. Proposed FY08 Budget – Mr. Fern complimented the admirable work done by ACSA Staff in putting together the FY 2008 Budget and FY 2008 CIP Budget. He noted that it was a pleasure getting to work with all ACSA Staff over the past year and especially on the preparation of the FY 2008 Budget.
Mr. Fern referred to the document titled “Proposed Operating and Capital Improvement Budget Fiscal Year 2008”. On Page 1, he noted that Total Volume and Service Charges are the greatest revenue generator for the ACSA representing about ¾ of monies received. Mr. Fern stated the purchase of water and wastewater services from RWSA accounts for approximately 43% of the ACSA’s overall expenses.
Mr. Fern referred to graphs titled “Total Volume and Service Charge Revenue by Fiscal Year” and “Purchase of Water/Wastewater on a Fiscal Year” (Attached as Page 7078). He noted since 2002, projections and actual Volume of Service Charges have tracked closely. Mr. Fern referred to the Purchase of Water/Wastewater graph which showed that actual costs were slightly higher than projected (Attached as Page 7078). He noted that actual calculated percentages over the last five years were 98% for Total Volume and Service Charges and 96% for the Purchase of Water/Wastewater.
Mr. Fern stated the graphs for Comparison by Fiscal Year for Revenue and Expense Ratios show a trend for 2002 through 2008 (Attached as Page 7079). The Comparison by Fiscal Year – Expense Ratios Graph shows Total Purchase of Water/Wastewater, Departmental and Existing Debt Service Expenses declining, with Reserves and the 800 Code Equipment Expenses increasing.
On Page 1, the Proposed Revenues and Expenses FY 2008 Pie Chart shows the proposed 800 Code Equipment at 1.7% of Total Expenses. This amount is due to requests for additional equipment and vehicles for FY 2008. The Capital Improvement Program (CIP) accounts for a large portion (24.8%) of revenues required. Mr. Fern noted an 11% increase in RWSA charges for water and wastewater services for FY 2008. Mr. Larsen asked if RWSA offered a guarantee charge for FY 2008 and if they could ask for a mid-year increase. Mr. Fern stated that in reviewing RWSA CIP and Budget documents this has not previously occurred, but could be requested.
On Page 2, the Revenue and Expense Summary shows a decline for System Connection Charges from FY 2007 to FY 2008 due to an anticipated decrease in new housing. The Transfer for Capital Expenses shows $2,432,403 from the (3R) Fund for the CIP. Mr. Fern stated that although the Board approved $2 million for FY 2007, it is unlikely any will be taken from reserves. Ms. Breeden added that unless the ACSA exceeds $1.4 million for Capital Expenses this year, we will not use any of the $2 million. Mr. Roberts asked if any trend information was available which would substantiate the reduction in connection fees. Mr. Fern replied that the County Building Activity reports show a downward trend in construction, but he could not recall an exact percentage. Increases in 800 Code Equipment Expenses and CIP will be discussed later.
On Page 3, RWSA Expenses, Mr. Fern noted an increase from FY 2007 for the purchase of water and wastewater services of 6% and 17%, respectively.
On Page 4, Departmental Staffing, Mr. Fern noted that currently there are 58.6 positions within the ACSA. In the Administration Department, a GIS Analyst Programmer has been transferred to the Information Technology (IT) Section of the Administration Department and renamed Applications Programmer. He stated an applicant from Fairfax County has accepted the position as of last week. Mr. Humphris asked about the experience of the new employee who will be filling the position of Applications Programmer. Mr. Fern stated the employee has worked in the transportation sector, but that most of her experience is in database and IT. Also, an Administrative Associate, once in the Engineering Department, has been transferred to the Administration Department. In addition, the ACSA is consolidating administrative functions for all departments and implementing a centralized filing system within the Administration Department. Within the Engineering Department, one position has been requested, an Engineering Technician. For the Maintenance Department, two equipment operators and two utility workers have been requested through supplemental requests. These positions would be for a newly created Fire Hydrant and Valve Operation and Maintenance Section. The Operations Manager position will not be filled this year. The ACSA is going to continue to work with two Operations Supervisors, one for the Wastewater Section and one for the Water Section.
On Page 5, Administration Department Budget, Mr. Fern noted that a 4.7% Merit Increase is being proposed. This proposed increase is in line with what the County of Albemarle and RWSA are using in their projections for FY 2008. The increase in Salaries and Wages is due to the transfer of the Administrative Associate and the addition of an Applications Programmer into the department.
Mr. Larsen asked if the ACSA has given any thought in having ACSA employees pay a portion of health and dental premiums. Mrs. Thraves stated that in working with Carolyn Fowler on salary surveys, it was found that 92% of employee health care is paid by the employer. Mrs. Thraves noted that there had been discussion regarding a cafeteria plan, but felt that it was too much to bring forth with the FY 2008 Budget. Further consideration will be given to the plan for the FY 2009 Budget.
The proposed budget includes a new line item for Meals which will allow for the tracking of overtime and business meeting meals. The increase for Employee Incentives is for activities conducted by the ACSA, as well as bonuses and salary increases throughout the year. Dr. Palmer asked about the salary increases throughout the year in addition to the 4.7% merit increase. Mr. Fern explained that when an employee is promoted, they are given a 10% increase in pay.
Mr. Fern noted that under Operating Supplies there is a significant increase for office supplies due to the consolidation of this item among the departments.
Mr. Fern noted the line item for Other Contractual Services includes baseline medical testing required for the asbestos work by the Maintenance Department. Mr. Humphris asked what medical testing is being conducted. Mrs. Thraves explained that the ACSA’s Asbestos Cement Pipe Program requires a Medical Surveillance Program. Every new Maintenance Department employee hired receives a baseline x-ray and medical evaluation. Other Contractual Services also includes $25,000 for right-of-way clearing.
Mr. Fern noted to Other Services and Charges shows significant increases in Education and Training, and Travel. Mr. Fern stated that the ACSA is working with Piedmont Virginia Community College (PVCC) to implement six leadership seminars during FY 2008 for Personnel Management. In addition, there is also the Skills Builder Program which allows employees to take relevant classes either at PVCC or the Charlottesville-Albemarle Technical Education Center (CATEC) with the ACSA paying for these classes if a certain grade is attained. Mr. Humphris asked if available classes are posted. Mrs. Thraves replied they are. The Chairman commented that the Education and Training is money very well spent.
Capital Outlays includes $19,700 for computer equipment and $13,350 for furniture due to the office renovations as well as ergonomic improvements. Mr. Larsen asked if furniture was being purchased due to the ergonomics training. Mrs. Thraves stated that the ergonomic assessment identified chairs relating to posture and the layout of desks. Mr. Fern added that in the Finance Department, Ms. Breeden has proposed $2,900 for furniture and fixtures for Customer Service.
On Page 6, Finance Department Budget, Mr. Fern noted an increase for water meter materials and postage. Mr. Humphris referred to Operating Supplies, noting the increase for fuel, oil and grease. Ms. Breeden stated that an additional meter reader and vehicle had been added during FY 2007. Mr. Humphris asked how what was budgeted compared to actual usage for fuel. Ms. Breeden replied that the actual usage was lower than what was budgeted, which was primarily due to the ACSA planning for the increase. Mr. Fern stated that the Proposed FY 2008 Budget is calculated on the purchase of unleaded fuel at $2.30 per gallon and diesel at $2.52 per gallon.
On Page 7, Mr. Fern stated that the proposed Engineering Department Budget showed a reduction in Personal Services due to the move of two employees to the Administration Department. In addition, the promotion of Mr. Peter Gorham to Director of Engineering and the hiring of a new employee to replace Mr. Gorham as Senior Civil Engineer resulted in an overall decrease in salaries. Mr. Fern stated the new employee replacing Mr. Gorham, is Tom Garrison. Mr. Garrison was previously employed at the ACSA and is currently employed at the County of Albemarle as Project Manager. Mr. Larsen asked how long ago Mr. Garrison worked for the ACSA. Mr. Gorham stated that Mr. Garrison was a Construction Inspector for the ACSA almost 30 years ago.
Mr. Fern stated that the most significant item within the Engineering Department under Capital Outlays is Machinery and Equipment, showing $53,500 for the purchase of 6 wastewater flow meters, rain gauges, and data loggers needed to develop an Infiltration/Inflow Program. He stated the program would allow the ACSA to monitor throughout the wastewater collection system and calculate the infiltration/inflow. This program would identify and prioritize areas with excess infiltration/inflow. After rehabilitation and replacement efforts are conducted, the ACSA can return and install flow meters to assess the effectiveness of the improvements. Mr. Humphris asked if it was known where the flow meters would be installed first. Mr. Fern replied that the ACSA has a priority list and the relining projects in the CIP would be the first area. Mr. Fern stated the data could also be used in working with both the County and RWSA in establishing the comprehensive wastewater modeling plan. Dr. Palmer stated she heard the city is possibly reducing their relining program. Mr. Fern commented that he was told by Judy Mueller, that the City plans on increasing Infiltration/Inflow Program funding.
The proposed Engineering Department Budget includes a Supplemental Budget Request for an Engineering Technician. Mr. Fern noted the Engineering Technician position will assist the Regulatory Compliance Specialist and GIS/Modeling Specialist.
On Page 8, Maintenance Department Budget, Mr. Fern noted under Personal Services the addition of a line item to track overtime meals. The increase in Operating Supplies for Fuel, Oil & Grease is due to rising gasoline and diesel fuel prices.
The proposed budget includes increased funding for Machinery and Equipment. Mr. Fern stated that the ACSA plans to develop a Fire Hydrant and Valve Maintenance Section. The section is needed to increase frequency of providing routine maintenance on each of the fire hydrants within the ACSA system. Recently, during a water main break, nine valves needed to be closed before that leak could be stopped. The section would be dedicated to identifying problem areas and perform regular maintenance and valve replacement within the system. Mr. Fern noted that additional equipment is also necessary; including a 1-ton Utility Truck; a 15,000 pound dump truck; an additional backhoe; a trailer mounted valve exerciser and cleaner; a portable sweeper and a rock hammer. The valve exerciser and cleaner will allow ACSA crews to clean out valve boxes on a periodic basis. Dr. Palmer asked if there had been any issues with fire hydrants failing. Mr. Fern stated that he is not aware of any, but that is one of his worst fears as Executive Director. Mr. Larsen stated that he is only aware of one time within the last six years that a fire hydrant had failed, which was in Crozet. Mr. Fern stated in addition to this equipment being used for the Fire Hydrant and Valve Maintenance Section, there will also be additional uses within the Maintenance Department.
Mr. Fern referenced Supplemental Budget Requests Nos. 1 & 2, stating the requests are for two additional equipment operators and two utility workers. The four new positions will be dedicated to the Hydrant and Valve Maintenance Section.
Page 9 of the Proposed FY 2008 Capital and Operating Budget addresses the CIP. Mr. Fern noted that the ACSA is proposing an approximately $5.8 million plan for the CIP, which is roughly $2.0 million more than what was proposed last year. He added that the breakdown is $3.2 million in water projects and $2.6 million in wastewater projects. Currently, projects totaling $2.2 million are under design and construction and will continue through or finish in FY 2008. As mentioned previously, $2.0 million will be transferred into the CIP from the 3R Fund to cover the cost of these projects.
Mr. Roberts asked why the Ragged Mountain Phase 3 Project will be constructed before Phase 2. Mr. Gorham stated that Phase 3 will eliminate nine times the length of the existing deteriorated pipe and would target residents who have water quality issues; Phase 2 would not be as extensive.
Mr. Larsen asked how much of the $2.2 million in CIP projects would be transferred from FY 2007 to FY 2008. Mr. Fern stated a substantial amount. Mr. Larsen asked if there was any indication if that amount would be more or less than what may transfer from FY 2008 to FY 2009. Mr. Fern stated that it was likely some projects may shift to FY 2009. Mr. Larsen questioned what the likelihood that the $2.0 million in reserves would not be used. Mr. Fern stated that it is likely the $2.0 million will be used in FY 2008.
On Page 10, Rate Projections, Mr. Fern noted that total water consumption for FY 2008 is estimated at 1.7 billion gallons. The proposed rates and their percentage increase from FY 2007 were presented as follows:
FY 2008 Percent Increase
Rate from FY 2007
Fixed Charge $5.11 6%
Residential Water Rates
Level 1: 0 – 3,000 gallons/month $3.55 5%
Level 2: 3,000 – 6,000 gallons/month $5.43 34%
Level 3: Over 6,000 gallons/month $9.21 28%
Non-single family Residential Water Rate $5.33 24%
Sewer Rate $5.41 32%
Dr. Palmer asked why there was a much larger increase for Level 2 than Level 3. Mr. Fern stated that customers who are in Level 3 tend to conserve less than those in Level 2. The ACSA feels there is a better chance of getting customers who are in Level 2 to conserve more in hopes of dropping into Level 1. Dr. Palmer asked if the demographics for Level 3 are mostly irrigation or low-income families with multiple children. Ms. Breeden replied there are low-income families within Level 3 as well as multi-family and single-family residences with a large number of children who may be forced to live in homes that may not be as water efficient. During the Rate Study of 2004, calculations showed that 42% of ACSA customers were in Level 1 and used 18% of the water; 40% were in Level 2 and used 45%, and 17% were in Level 3 and used 39%. Level 3 includes larger families and customers who irrigate.
Mr. Larsen asked if delinquent payments can be tracked by rate level. Ms. Breeden stated that delinquent payments are usually found in the 2nd and 3rd level and account for less than 1% of total accounts. Ms. Breeden stated that 25 to 30 accounts are disconnected per month for nonpayment and most are repeat customers. Dr. Palmer asked if the ACSA refers those customers to Social Services. Ms. Breeden stated that the ACSA does, as well as to other charitable organizations, one of which is “Love, Inc.”
Mr. Fern noted that proposed connection fees are based on the rate model. Last year, the increase in connections fees was fixed at 10%. Mr. Larsen asked what the percentage increase was for the Non-Single Family Residential Water Rate. Mr. Fern replied 24% and the Sewer Rate increased by 32%. Mr. Fern stated that based on the average monthly water use for a single-family residence (4,800 gallons) and the proposed rates, the resulting increase in the water and sewer bill will be approximately $9.57. Dr. Palmer asked if the projections for 2009 and 2010 are based on the same percentage as 2008. Ms. Breeden replied they are the same based upon the 12% increase in cost from RWSA.
Mr. Bowling asked what the total estimated cost for RWSA’s Community Water Improvement Project would be. Mr. Fern replied $140 million. Dr. Palmer stated that Mr. Frederick expected the Community Water Improvement Project alone to cause a 5% increase in wholesale rates per year. Mr. Humphris feels the ACSA should plan ahead and start reserving funds for this increase, that will be passed on to the ACSA. Mr. Humphris asked if the ACSA could look and see what this would do to the rate structure. Mr. Fern stated that the ACSA could prepare projections for the Board to review. Dr. Palmer stated that Level 3 Water Rates should be increased and an additional level should be added for irrigation meters. Mr. Larsen stated that other revenue sources should be investigated, noting perhaps commercial accounts.
Dr. Palmer asked if most apartment complexes have participated in the Toilet Rebate Program. Mr. Fern replied a good number have, as seen by what has been spent on the Toilet Rebate Program. Dr. Palmer asked how most apartment complexes are metered. Mr. Gorham stated that all are generally master metered. Dr. Palmer asked if the ACSA could require apartment complexes to be individually metered. Mr. Gorham explained it would be difficult to individually meter each unit, especially in a building of a large size with multiple stories. In addition, it would also be difficult to fit individual meters along the road, leaving no room for sidewalks, driveways or landscaping. Dr. Palmer asked if research could be done on apartment complexes to see if they would fall within the 3rd tier. Mr. Fern stated that for practicality purposes and to reduce administrative time, the ACSA would prefer to keep master meters at apartment complexes. Dr. Palmer suggested that the Board may want to consider tier pricing for multi-family dwellings.
Mr. Roberts asked if these same issues had been addressed in the 2004 Rate Study. Ms. Breeden stated the study addressed equivalent residential connections (ERC’s), which are listed in the ACSA Rules and Regulations. Mr. Roberts asked if commercial accounts could be putting more of the strain on the water and wastewater system and costing the ACSA more money. Mr. Fern noted that with the proposed rates, commercial, industrial, and institutional accounts will be paying more on a percentage basis than single-family residential. Mr. Larsen stated that a tiered water rate for commercial, industrial and institutional accounts could be implemented in the future. Mr. Larsen asked if the ACSA could require any new construction for multi-family dwellings to be individually metered. Mr. Fern stated that the ACSA would have to work with the County on implementing such a program.
Mr. Fern noted that sewer rate changes require advertisement 60 days prior to a public hearing. Dr. Palmer asked how long the Board had to make a decision on a separate rate structure to be implemented in the FY 2008 Budget. Mr. Fern replied three weeks to allow for advertising of a June meeting. Ms. Breeden added by proposing a separate rate structure, she would need to calculate additional cost to the Finance Department due to programming changes, coding, etc. Implementation of such a program could take several months.
Dr. Palmer asked if revised rate calculations could be available by the next Board meeting. Mr. Fern stated that if the Board could define what they wish to have for information in order to make decisions, the ACSA Staff would prepare the necessary documentation. He suggested that any revised rate structure be implemented in FY 2009 to allow for advertisement of the proposed FY 2008 Rates this month. The Chairman added that if the rate structure would not be implemented until FY 2009, he would rather give Ms. Breeden more than three weeks time to calculate the projections. Dr. Palmer stated that she agreed, but that the Board may make different decisions relative to the FY 2008 rates, based on the information provided. Ms. Breeden stated that the information could be provided to the Board for comparison purposes. The Board agreed to have the ACSA Staff calculate the anticipated income generated through the following revisions to the proposed rate structure:
· Increase Level 1 Water Rates to 7% from current rates.
· Increase Level 3 Water Rates to 34% from current rates.
· Establish an irrigation meter rate equal to the revised Level 3 Water Rate.
· Multi-Family Units placed on a tiered rate system.
Mr. Larsen asked if this information would be generated for apartment complexes only, or for all commercial users. Ms. Breeden stated it was her understanding this would be for all commercial users. The Chairman asked if the ACSA might know how many units are behind each master meter for apartment complexes. Ms. Breeden stated yes.
Mr. Roberts suggested perhaps the Board should have a workshop prior to the next meeting.
Mr. Humphris felt the Board should adopt the rate structure being proposed for FY 2008 and schedule a number of workshop meetings to discuss a different rate structure for FY 2009.
The Chairman stated that one of the items Mr. Martin discussed earlier was that the Board should raise the proposed rates more and not take $2.0 million out of the 3R Fund for capital projects. The Chairman asked if there was anyone on the Board that supports increasing the proposed rates. The Board decided to leave the rates as proposed. Mr. Fern asked that the Board authorize the ACSA Staff to advertise the proposed water and sewer rate increases, and to hold a public hearing on Thursday, May 24, 2007 at 9:00 am. In addition, he would like to move the Board’s original May meeting on May 17th to May 24, 2007, to be held at the Albemarle County Office Building.
Mr. Humphris moved that the Board authorize ACSA Staff to advertise for a public hearing to address the water and sewer rate increases for FY 2008 on Thursday, May 24, 2007 at 9:00 at the Albemarle County Office Building, seconded by Mr. Roberts. All members voted aye.
b. Proposed FY08 Capital Improvement Program (CIP) – Mr. Fern referred to the memo addressed to the Board outlining the Proposed FY 2008 CIP. He asked that the Board authorize ACSA staff to advertise for a public hearing on April 19, 2007, to address the Proposed FY 2008 CIP. The public hearing would take place at the Board’s regularly scheduled meeting for April.
Mr. Larsen moved to authorize the advertisement for a public hearing to address the Fiscal Year 2008 CIP at 9:00 a.m. on Thursday, April 19, 2007, seconded by Mr. Roberts. All members voted aye.
9. Items Not on the Agenda
The Chairman stated he received a call from a developer trying to get approval for a shopping center. The caller asked if the estimated wastewater generated by the center is greater than a specified amount, would a certification for downstream capacity be required. The Chairman asked if this is new or has this been a requirement. Mr. Fern replied that this requirement is a state regulation and applies to developments generating 40,000 gallons per day or greater of wastewater. The Chairman stated the basis for the complaint was that the ACSA was using a standard that differs from the American Water Works Association. Mr. Fern stated the ACSA just recently developed standard wastewater generation flow values to be used by all developers when submitting to the ACSA. Mr. Fern added that the ACSA has the authority to review projects up to a certain size. This reviewing authority is granted by the Department of Environmental Quality (DEQ) and the Virginia Department of Health (VDH). Mr. Gorham stated that the ACSA is in the process of having the ACSA specifications recertified by both DEQ and the VDH in order to continue the local review program.
Mr. Fern explained that since the Interior Building Renovations will be starting shortly he intentionally did not put a location down for the public hearing notice for the CIP. This was due to the fact that the Board may not be able to meet in the Board Room due to the contractor’s schedule. He stated that ACSA staff will be notifying the Board where the meeting will be held prior to next month’s meeting.
10. Executive Session – Personnel Matter - The Board went into an Executive Session to discuss a personnel matter in accordance with Section 2.2-3711.A1 of the Virginia Code.
Mr. Larsen moved to enter into an Executive Session, seconded by Dr. Palmer. All members voted aye.
The Board of Directors came back into regular session. Mrs. Deborah Herr read into the record a resolution stating that only matters so previously stated and exempted from open discussion in regular session were discussed in Executive Session (Attached as Page 7080).
Mr. Larsen moved to adopt the resolution, seconded by Mr. Roberts. The Chairman asked for a roll-call vote: Dr. Palmer, aye; Mr. HumphrisWagner, aye; Mr. Wagner, aye; Mr. Roberts, aye; Mr. Larsen, aye.
Mr. Roberts stated that Ms. Lisa Breeden, Director of Finance, has exceeded expectations in her performance at the ACSA since being promoted to Finance Director.
Mr. Roberts moved to increase Ms. Lisa Breeden’s salary 10%, seconded by Dr. Palmer. All members voted aye.
There being no further business, Mr. Humphris moved that the meeting be adjourned, seconded by Dr. Palmer. All members voted aye.
Return to consent agenda
Return to regular agenda