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HomeMy WebLinkAbout980305 March 5, 1998 Hagerstown, Maryland A Special Meeting of the Board of County Commissioners of Washington County, Maryland, was called to order at 9:00 a.m. by the President Gregory I. Snook with the following members present: Vice President, John S. Shank and Commissioners Ronald L. Bowers, R. Lee Downey, and James R. Wade BUDGET WORKSHOP - FISCAL YEAR 1999 The Commissioners, along with Rodney Shoop, County Administrator; Debra Bastian, Director of Finance; and Kim Edlund, Assistant Director of Finance, held a budget workshop session to review the fiscal year 1999 budget requests and make reductions to balance the budget.  The Commissioners agreed to use $469,000 from this years surplus for the  following CIP projects: $65,000 - States Attorney case management system;  $165,000 - Detention Center management system; $206,000 - Sheriffs  Department purchase of 10 cruisers; and $15,600 - Sheriffs Department, purchase of lights and sirens package for cruisers. RECESS The Commissioners recessed at 11:00 a.m. (Commissioner Bowers was excused from the meeting at this time.) JOINT MEETING WITH WATER & SEWER ADVISORY COMMISSION The Commissioners met with the members of the Water & Sewer Advisory Commission to discuss several issues. In attendance were Clarence Scheer, Chairperson, along with Commission members Christopher Diehl, Gordon Crabb, Glenn Fishack, Bonnie Parks, and Michael Armel. Opening comments were provided by Commissioner Snook and Clarence Scheer. Presentation by Government Finance Group (GFG) John Peterson and Frank Starr, representing the Government Finance Group (GFG), met with the group to provide an overview of the Water and Sewer Fund Analysis Project. Mr. Scheer stated that the Advisory Commission has sought to limit growth in consumer rates for water and sewer so that any growth  bears a reasonable relationship to the customers ability to pay. The Commission also seeks to limit growth in the County contributions used to fund the shortfall. Mr. Peterson stated that the two components considered were debt service and operations and maintenance. Mr. Starr provided an overview of the utility financial analysis project and its goals and objectives. He stated that the analysis provides a series of scenarios for payment of debt service and operations and maintenance costs. Mr. Starr indicated that the model assumes a four percent growth rate. He  then reviewed three scenarios for restructuring the Countys Maryland Water Quality loans. He stated that it is not clear whether the County has the right to advance refund these loans. The refinancing could produce a savings if the 20-year bonds were replaced with 30-year bond, although it would cost an additional $11 million for the additional 10 years. He stated that he feels the State can authorize the County to refinance these bonds. Mr. Starr then evaluated other refinancing options which GFG reviewed for restructuring the general debt. He noted that, under the tax law, if the assets are formally transferred to an independent authority, it would have the opportunity to refund using tax-exempt bonds. MARCH 5, 1998 PAGE TWO Mr. Starr reviewed six models for managing the water and sewer debt. Each scenario was ranked for the subsidy term, subsidy amount, additional deficit and total dollar cost. The models reviewed were as follows: A) base case, B) increase rates, C) increase rates/manage operations and maintenance, D) restructure/increase rates, E) restructure/manage operations and maintenance, and F) restructure, manage operations and maintenance and increase rates. Mr. Starr stated that Option F was ranked first and is estimated to cost $35,940,415. Mr. Starr stated that the options assume four percent growth and a County commitment of $1.7 million from the general fund each year. He indicated that the Water & Sewer Department alone cannot  manage its way out of the box. The Commissioners discussed the options presented and noted that there is not a great deal of difference between the Option F and the second-highest ranked scenario, Option C, which does not include restructuring. Debra Bastian, Director of Finance, pointed out that these models do not include the savings projected for this fiscal year. The Commissioners expressed their concerns that this analysis could be misinterpreted by the public and emphasized that the models are planning tools and the assumptions used were not budgeted numbers. The Commissioners thanked GFG for the presentation and took the information under consideration. Pretreatment Update Greg Larsen, Marketing Manager for the pretreatment plant, presented an update on the pretreatment plant. He informed the Commissioners that the Water and Sewer Department now has an Internet web site and presented slides showing the information which is available in this medium. He reported on the groups that he has met with to market the plant. He asked that the Commissioners give Greg Murray the authority to negotiate rates within the existing rate structure when working with clients interested in using the pretreatment facility. Motion made by Commissioner Wade, seconded by Downey, to authorize negotiation of rates within the framework of the existing rate structure for pretreatment customers which average 100,000 gallons billed per month or provide a return service to the Conococheague Industrial Pretreatment facility. This would not apply toleachate customers. Unanimously approved. Capital Improvement Program (CIP) Projects Greg Murray stated that the initial sequence for the construction of sewer projects was as follows: Pangborn East, Beaverbrook, and Holiday Acres. He provided a history of the projects. He stated that funding is available to the construction of the Pangborn East project with existing CIP funds. He recommended that this project be completed and that they wait until grant funding is available to begin the other two projects. Mr. Murray also stated that the Pangborn East project would be a grinder pump system rather than a gravity system. Dave Barnhart, Washington County Health Department, provided information on studies done in the Rolling Hills and Pangborn East areas. He stated that the geographic structure in the Pangborn East area shows that the septic systems are failing downward and could impact the groundwater. Mr. Barnhart stated that the biggest problem in the Holiday Acres subdivision is the small lot size and the density of the houses which has caused the failure of septic systems in the area. Mr. Murray stated residents of the area would have to be notified if the sequence of projects is changed from the original schedule. He indicated that additional upgrades would have to be made to the Village Square pump station if the Commissioners choose to change the sequence of projects. After discussion of the three projects, the Commissioners took this under consideration. MARCH 5, 1998 PAGE THREE General Comments Joe Robeson stated that he feels there will be problems if grinder pumps are used for the Pangborn East sewer system. David Collins stated that he takes exception to the use of grinder pumps. ADJOURNMENT Motion made by Commissioner Downey, seconded by Wade, to adjourn at 2:50 p.m. Unanimously approved. County Administrator County Attorney , Clerk