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HomeMy WebLinkAbout960307 March 7, 1996 Hagerstown, Maryland A Special Meeting of the Board of County Commissioners of Washington County was called to order at 9:05 a.m. by the President, Gregory I. Snook, with the following members present: Vice President John S. Shank, and Commissioners R. Lee Downey, and James R. Wade. WORKSHOP SESSION ON PRELIMINARY FINANCIAL PLAN & RATE REVIEW - WATER & SEWER Gary Rohrer, Director of Public Works, met with the Commissioners to review the Preliminary Financial Plan and Rate Review for the Water & Sewer Department as presented by the County's consultants, Black & Veatch. Also present were Water & Sewer Advisory Committee members Joseph Robeson, Russell Weaver, and Peggy Bushey. Mr. Rohrer reviewed the study's objectives which were to provide the following: subdistrict consolidation, revenue self-sufficient operations, equitable cost of service rates, and adequate structures for other rates and charges. He stated that Alternative One, as provided by the consultants, would take the Water & Sewer Department to financial self-sufficiency as of July 1, 1996, but the rates would rise so rapidly that the staff had no intention of recommending implementation of this proposal to the Commissioners. Alternative Two would allow the Water & Sewer Department to phase in rates over a three- year period. Debra Bastian, Director of Finance, informed the Commissioners that she spoke to the County's Financial Advisor, Paul Heid, who recommended that the County take a "three-pronged" approach which would increase rates, restructure debt requirements, and provide a General Fund contribution, which will help to alleviate the sharp increase in water and sewer rates. Ms. Bastian stated that this would help rates to increase on a more gradual basis rather than in one large increase. She advised the Commissioners that this will also require meeting with the bond rating agencies in New York to explain the County's position. The Commissioners and Water & Sewer Advisory Committee members reviewed the alternative funding options and discussed each of them. Ms. Bastian indicated that she needs to know which direction the Commissioners want to take before she can determine the numbers involved for each option. Mr. Larochelle, a City resident, stated that he is opposed to the increase in the rates. The Commissioners discussed whether to consolidate all subdistricts into one district at this time or to phase in the consolidation. Also discussed were ways to deal with the residents whose water is treated by the City of Hagerstown although they are hooked onto the County's system. After an informal poll, the Commissioners agreed to consolidate into one district and to consider funding Options #3 and #4 at this time. They also asked Ms. Bastian to calculate how General Fund contributions of $500,000 and $1,000,000 would impact the rates charged to the customers. The Commissioners also considered front-loading the increase in the first year and gradually reduce the percentage of increase in the following years. Ms. Bastian stated that she will try to get the numbers as soon as possible from Black & Veatch. MENTAL HEALTH AUTHORITY & MENTAL HEALTH CENTER - Members of the Mental Health Authority and Mental Health Center met with the Commissioners to try to resolve their differences concerning an agreement on payments advanced to the Mental Health Center. Donald Ardinger, Mental Health Authority Board Member, stated that the major problem is the provision included in the security agreement that the Mental Health Authority could assume management of the operations at the Mental Health Center if it does not comply with the agreement. Mr. Bayless explained that the Authority distributes the State funding to the Mental Health Center (MHC) which has asked for an additional $76,000 advance to meet payroll. The Authority is requiring them to sign the agreement before they will advance the money. Ronald Pike and Mark Lannon, representing the Mental Health Center, provided a brief history of the problems they have experienced by billing clients through the Mental Health Authority's system. They are in the process of obtaining software to enable them to provide their own billing. They object to the language and wish to have their attorney review the agreement before they agree to sign it. (Commissioner Wade was excused from the meeting at 12:00 p.m.) Commissioner Shank proposed a compromise to include language in the security agreement that the Mental Health Center be given 30 days to find alternative financing if needed and to include a provision that if default occurs that the MARCH 7, 1996 PAGE TWO Authority would have six months to one year to dissolve the Center or find another entity to provide services. Commissioner Snook directed the Mental Health Authority to advance the money needed by the Mental Health Center to pay its staff and asked Richard Douglas, County Attorney, to work with the groups to help them resolve the legal issues with the security agreement within one week's time. ADJOURNMENT Motion made by Commissioner Downey, seconded by Shank, to adjourn at 12:30 p.m. Unanimously approved. County Administrator County Attorney , Clerk