FINANCE COMMITTEE
MEETING
FEBRUARY 13,
2006
The meeting was called to
order by Mr. Fogt at 6:00 p.m.
MEMBERS PRESENT: Dan Fogt, John Gore, David
Burke
OTHERS PRESENT: Kathy House, Phil Roush, John Morehart,
Bill Kelley, Susan Ehlers, Roberta Ewers, Ryan Horns, Jim Wing
AGENDA:
1)
Organization (elect
Chairman)
Mr. Gore nominated David
Burke, seconded by Dan Fogt.
Affirmative voice vote was unanimous.
2)
Water Master Plan
implementation (specifically rates & tap fees)
Water Master Plan was
completed late last year, but nothing was done with the rates until everyone had
a chance to review the Master Plan.
Ms. House distributed 3 pages from the financial section of the Master
Plan. Would like
to hold off on discussing rates until we know where we’re going with the
reservoir and until after this evening when capacity fees had been
discussed.
Ms. House referred to Pg.
7-11. Recommendation of the Plan
was to raise the water capacity fees from $1,450 to a total $4,450. In comparison to neighboring
communities, Marysville would be on the high side. Mr. Gore asked if this increase was
justified. Mr. Roush referred to
Table 7-3 which explains how they arrived at that figure. Mr. Fogt asked if Administration
supported this increase. Ms. House
stated Administration was very confident in the work done by Malcolm Pirnie for
the Master Study and stated they would probably not have a reason not to
recommend it at this point. Mr.
Burke confirmed that this was derived off this calculation of sharing the burden
with the plant per tap. Estimating an additional capacity of taps of 9,380. What is the duration of those taps? Mr. Roush responded approximately 20
years. Mr. Morehart noted the new
ERU’s started a five-year period for the fiscal years 2006 through 2010. Ms. House stated those fees can be
re-evaluated on a regular basis instead of waiting 10-15 or 20 years down the
road.
Mr. Burke mentioned the
original idea was to build in a certain percent increase on an index but had
trouble defining what an accurate tap fee present value would be. Rather than tag an increase into an
incorrect number, they were trying to wait to define an accurate number and then
adjust that on an inflationary index.
That would save going back every 4-5 years to rejustify
it.
Mr. Roush stated some
people use the Engineering News Record, as well as the Consumer Price
Index.
Mr. Fogt supports the
increase as called for in the Study.
That fits in with current fee structure. Mr. Fogt asked if just the 5/8’ and ¾”
meter could be changed without changing all of them. Mr. Roush believes all sizes would need
to change because the changes are incremental from the 5/8” meter size. Mr. Morehart asked for a legal opinion
on this issue. Mr. Fogt noted
the money brought in with tap-in fees will allow the City to not raise the
monthly bills as much.
Mr. Wing stated the
builders don’t know what the City’s costs are, so they have to trust that the
costs are fair. He understands that
costs to go up.
Mr. Burke will check with
Mr. Aslaner to see about a dual rate.
Also check with Malcolm Pirne to see if they intended to extrapolate that
data, and if it is truly expressed all the way across
the board, or if there is an economy of scale and someone gets to a larger line.
Uncertain what the percentages are.
Mr. Morehart explained how
the tap-in fees are figured. The
analysis determined what the estimated ERU’s are during the next five years,
divide that into the cost to recover, and come up with the increase. Assumed Malcolm Pirnie took the net cost
divided by the estimated number of ERU’s, 9,380, to come up with the $4,450,
which means the estimated growth is paying for the infrastructure anticipated
for the next five years that needs to be financed by the City. There is additional infrastructure
expected to be financed by the developers for their projects over and above
this.
Administration would like
Finance Committee to recommend to Council that the fees be increased to $4,450
per ERU.
Mr. Gore proposed that the
Committee support and endorse this rate increase contingent upon getting answers
about numbers of taps and actual formulas used for this. Committee will pass this recommendation
on to Council.
Mr. Fogt asked to continue
to look at tying this to an inflation index if at all possible. Mr. Roush will assist in getting some
index information.
Mr. Wing asked for a
comparison of Marysville’s rates to neighboring cities. Administration will provide a fact sheet
to area builders for tap fees.
3)
Multiple users on a single
tap
This has to do with
apartments and condos where one tap fee is granted, but yet there are multiple
dwellings on that tap. This causes
loss of tap revenue.
Mr. Fogt said research
shows that City of
Mr. Fogt’s thinking is that
someone in a condo creates as much water/sewage as someone in a single-family
dwelling, yet they are not charged near as much.
Ms. House did not recommend
putting individual meters on each unit.
She said the trailer park used to be metered individually and the service
men spent three-fourths of their time in the trailer park.
Mr. Burke suggested
possibly the first tap would be at the regular rate, second tap one-half of
that, third tap one-third of that, fourth tap is one quarter.
Mr. Fogt stated a tap is
the same as a system capacity charge, which is money used for capital
improvements.
Ms. House does not feel the
City wants to go into having the multiple complexes become public beyond the
street. We’d have the same
situation as with the trailer park.
There are other expenses if the City becomes owners beyond the
street.
Mr. Fogt proposed a 50%
additional charge on top of the tap fee. Mr. Gore commented that there have
been additional charges in the past.
Mr. Fogt asked how it had been handled in the past. Mr. Morehart stated there had been some
multiple billings with one tap, and one tap with multiple billings. Finance has been trying to streamline
the process where one tap equates to one bill. It simplifies it for Finance and the
resident or apartment owner.
Mr. Fogt is not proposing
individual meters for each unit.
He’s proposing a master meter, but an additional per unit charge. Mr. Morehart believes the size of meter
attempts to do that. The larger the meter, the higher the rate for the tap
fee. Mr. Roush stated from a
department who issues permits, it would be easier to
have a consistent number like 50%.
Mr. Gore will work with Mr.
Fogt and bring a proposal back to the next Finance Committee
meeting.
Mr. Wing said in some
instances, it’s not a fair system.
Some condos are 4-bedroom condos.
4)
Impact
Fees
Ms. House stated the Mayor
has some concerns with impact fees as it relates to the legality or challenge
ability of them. Need to be very
careful how we proceed with these fees.
Public Service Committee is
currently working on this project.
5)
Developments outside
corporate boundaries but within our water/sewer service
areas.
Ms. House distributed a
flow chart. Since the City has
taken over sewer and water outside the City and have to sign off on plans for
development, County and City staff have been working on how to make this happen
so that nothing gets missed in the process. As a part of this review, have found the
code is a little deficient in defining what our fees should be as a part of that
process. She handed out the section
of the code addressing water and sewer and the fees that go with the review and
permitting for all of the City’s development. Mr. Aslaner feels the code will need to
be adjusted to be more specific to incorporate outside the City’s
boundaries.
Mr. Roush noted that the
City currently has the ability to get only one sewer permit, so it costs the
same for the permit for a Wal-mart as it does for a single-family dwelling, as
far as the inspection. Would like to incorporate language changes to cover
that. That language has not
been drafted yet. Administration
will bring it back to Finance Committee once drafted and reviewed by the law
director.
6)
Third Frontier Grant
Program and possible project.
Ms. House handed out
initial guidelines for this program from the Ohio Department of
Development. Issue 1 passed last
year and incorporated the Ohio Public Works Commission Funding with the Third
Frontier initiative. This is the
resulting program. There will be a
limited number of grants available to all counties in
Mr. Burke thanked Mr. Fogt
for his service as Chairman of the Finance Committee the past year and is happy
to be a part of this committee.
Meeting
adjourned.