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HomeMy WebLinkAbout10-24-16 UtilitiesOFFICE OF THE CITY CLERK KAREEMAH FOWLER, CITY CLERK UTILITIES Committee Members Present: Other Council Present: Others Present: Agenda: OCTOBER 24, 2016 5:05 P.M. Dr. David Varner, Oliver Davis, Randy Kelly, Regina Williams- Preston Tim Scott, Jo M. Broden, Gavin Ferlic, Karen White, John Voorde Kareemah Fowler, Joseph Molnar, Kathleen Cekanski- Farrand, Adriana Rodriguez Substitute Bill No. 48 -16: Regarding Compact Fees & Assessments Bill No. 66 -16: Preliminary overview of proposed new water rates Committee Chair Dr. David Varner called the meeting order with two (2) items on the agenda. Substitute Bill No. 48 -16: Regarding Compact Fees & Assessments Eric Horvath, Director of Public Works with offices on the 13th Floor of the County -City Building, served as the presenter and petitioner of this bill. This is an ordinance that we had in place for many years that had compact fees and assessment fees that were inconsistently applied over the years. There is some clarification language that hopefully will help explain some of the changes to the ordinance. From the previous meeting, the two (2) major changes made include taking the surcharge and distributing it out over two (2) years. That is phasing in the outside surcharge on sewer. Committeemember Dr. David Varner stated he believed the distribution of the increase in surcharge was supposed to be over three (3) years not two (2). Mr. Horvath responded he would be comfortable with spreading it over three (3) years. He stated it also has a provision which provides for a credit for Indiana Municipalities or Special Districts that have a sale for resale provision that is defined by the Indiana Code. The only two (2) cases like this in the City of South Bend are the St. Joseph County Regional Sewer District and the Town of New Carlisle. The discount will be similar to what the surcharge will be. That was based on the administrative costs that we have and it turns out that our average administrative costs are fourteen percent (14 %). So that worked out really well to balance the surcharge and the 455 County-City Building • 227 W. Jefferson Boulevard • South Bend, Indiana 46601 Phone 574- 235 -9221 • Fax 574- 235 -9173 • TDD 574- 235 -5567 • www.SouthBendIN.gov JENNIFER M. COFFMAN ALKEYNA M. ALDRIDGE JOSEPH MOLNAR CHIEF DEPUTY/ CHIEF OF STAFF DEPUTY/ DIRECTOR OF POLICY ORDINANCE VIOLATION CLERK discount. It makes sense to give that discount to those two (2) entities because we don't have as many administrative costs related to them. Councilmember Davis asked if the numbers Councilmember Dr. Varner spoke about can be added to this ordinance now. Mr. Horvath stated this is up for reading tonight, so it would be fine to do so tonight. If the Council wants to change it to a five percent (5 %), five percent (5 %), and four percent (4 %) that is fine. Mr. Horvath passed out a handout which contained comparisons of projects for South Bend, Mishawaka, and Elkhart. The handout is on file with the City Clerk's Office. Councilmember Dr. Varner stated the attempt to standardize this is a good idea and making the City competitive with our competitors has also been a good idea. The Department of Public Works has done a good job working with the Council on those issues. He asked if we have a special rate contract, and a surcharge which will not be charged, is it possible as part of the ordinance to require that no entity will be the recipient of a double discount. Mr. Horvath responded the surcharge exemption is specific to only customers that will be sale for resale customers. The entity with the special rate would not qualify as a sale for resale customer. The County has an area around Auten Road where there is a small sewer district. The County is also working on a sewer district for Carriage Hills. The way that works is the district does their own billing and administrative work for that sewer. The County does this in areas where sewers are failing. Right now they receive the regular rate. For anyone with a current special rate this would not affect them but once their term is up, the provisions in this ordinance would not allow them to get the double discount. Councilmember Dr. Varner stated his concern is that we could have an entity that would somehow accrue a thirty percent (30 %) discount. There is an equity issue that we need to look at without being too difficult. This is certainly a complicated issue. Councilmember Dr. Varner opened the floor to public comment. Bill Schalliol, St. Joseph County Economic Development Director, stated he appreciates the changes that the City has made over this process. He stated he does have a concern about the language regarding special contracts with the Board of Public Works. It seems like the City could at some arbitrary point could come back and raise the water costs. Councilmember Dr. Varner stated only if the usage of a site far exceeds the usage of the original permit and the burden of proof would be on the Board of Public Works. Mr. Horvath stated we provided clarification in the ordinance. We just wanted to make sure a developer could not come in with the original permit and claim they will only use one hundred (100) gallons of waste water but then a year in are using ten (10) times that. This allows us to receive additional buy -in from the developer if they far exceed their initial permit. We state that a permanent increase shall be incurred when a site exceeds its permit for six (6) consecutive months by three hundred and ten (3 10) gallons a day. It has to exceed that for a period of six (6) consecutive months. Only then would we initiate this process. 2 Councilmember Dr. Varner asked if Mr. Schalliol had an objection to that. Mr. Schalliol responded we are already paying an increased rate and the permit process is pretty extraneous so it just adds another layer of difficulties. We are just worried about the City coming back and raising rates at a later date after development. Mr. Horvath stated this is just supposed to catch any substantial increase in use because the point of this ordinance is to have developers pay for the capacity they are buying in for that has already been paid for by current users. It is only for when a consecutive six (6) months passes that we would use this option. Mr. Schalliol stated the problem is the uncertainty, because developers hate uncertainty. Committeemember Randy Kelly asked if the problem with the developers is the philosophy that with increased capacity the developer should be charged more. Mr. Schalliol responded that they would probably say they are already paying an increased rate. It is a brand new model which is part of the issue. It is just a different way of looking at this issue. Committee Chair Dr. Varner stated it is important to realize across the board this is less expensive than the previous option. This is something that won't be changed arbitrarily because it is calculated by state statute. Mr. Horvath stated we want things to be as formulaic as possible because it is easier for all parties involved, both the City and developers. Committeemember Davis asked if there is a discount for recycling water. Mr. Horvath stated there would be because the sewer rate is based on how much water that is used. If a property is recycling a lot of water it is not going back through the meter so they could save a lot of money recycling. Committee Chair Dr. Varner stated his only concern would be making the official motion that we spread the rate change over three (3) years instead of two (2). Committeemember Oliver Davis made a motion to change the percentage increase language to five percent (5 %), five percent (5 %), and four percent (4 %). Committeemember Regina Williams- Preston seconded the motion which carried by a voice vote four (4) ayes. Committeemember Randy Kelly made a motion to send Substitute Bill 48 -16 to the full Council with a favorable recommendation. Committeemember Regina Williams- Preston seconded the motion which carried by a voice vote of four (4) ayes. 3 Bill No. 66 -16: Preliminary overview of proposed new water rates Mr. Horvath presented an accounting report on the water rate and a presentation. Both documents are on file with the City Clerk's Office. He also stated he would be setting up tours for the Councilmembers to see where the capital improvements are needed. Committeemember Oliver Davis made a motion to continue Bill 66 -16 until November 28tH 2016. Councilmember Regina Williams- Preston seconded the motion which carried by a voice vote of four (4) ayes. With no further business before the Committee, Committee Chair Dr. David Varner adjourned the meeting at 5:35 p.m. Respectfully Submitted, Dr. David Varner, Committee Chair El