UTILITY COMMITTEE
The Utility Committee Meeting was held on December 14, 2009 at 5:00 p.m. with Chairman Ruane presiding. Members present were Mr. Hogan, Mr. McGiffin, Major Kosior, and Mr. Snaman. Members of Council present were Mrs. Williams and Mr. Salters.
AGENDA ADDITIONS/DELETIONS
Mr. Hogan moved for approval of the agenda, seconded by Mr. Snaman and unanimously carried.
Dedication of Rights-of-Way and Infrastructure - Seskinore
Mr. Scott Koenig, Public Services Director, stated that the developer of the Seskinore Subdivision, Fox Hall Plantation Company, has requested that all public infrastructure improvements related to this subdivision be dedicated to the City of Dover for permanent ownership and maintenance. Mr. Koenig noted that the total construction value of the public improvements is $406,645 and that all the improvements have been constructed in accordance with City standards and specifications. He noted that after construction was completed, City staff inspected the public improvements and provided the developer with a list of repairs to be made to meet the City of Dover Standards and Specifications for Public Works Construction. As of this date, all work related to the public infrastructure has been completed by the developer. Mr. Koenig noted that a one (1) year Maintenance Agreement, Letter of Credit, and a Release of Liabilities have been submitted by the developer as part of the dedication process and as-built drawings of the infrastructure have also been submitted to the City. He explained that Seskinore is located off McKee Road, adjacent to The Meadows, and will consist of 18 units, four (4) of which have been constructed.
Staff recommended that the subdivision and infrastructure be dedicated so that routine maintenance services, such as street sweeping and snow plowing, can be performed.
Mr. Hogan moved to recommend approval of the dedication of the rights-of-way and infrastructure for the Seskinore Development, seconded by Mr. McGiffin and unanimously carried.
Review of Utility Related CIP’s (Electric and Water/Wastewater)
Members were provided with the Capital Investment Plan Project Tracking Report (as of October 31, 2009) and Major CIP Project Reports for the General Fund, Community Transportation and General Fund Street Funds, Water/Wastewater Improvement and Extension Fund, and Electric Improvement and Extension Fund. Mrs. Donna Mitchell, Controller/Treasurer, explained that the format of the CIP report was revised to create uniformity with other reports used by the Finance Department and that a cover sheet was added to reflect project funding sources. She noted that carry forward balances from last year were included in the report and that a budget amendment will be submitted to Council in January to make these carry forward balances official.
Mr. Anthony DePrima, City Manager, stated that, in the future, the Committee would receive only the Water/Wastewater and Electric CIP reports, as these pertain to the Utility Committee. He noted that “Status” and “Comments” columns have been added to the report, stating that, typically, the “Status” of a project will be listed as “started”, “completed”, or “delayed”, and the “Comment” column will give details on the phase of the project. Mr. DePrima mentioned that occasionally reports will state that a project has begun; however, there will be no indication that funds have been expended. He explained that this occurs when a project is in the design phase or when bid specifications are being developed.
At the request of Mr. Ruane, Mr. DePrima agreed to provide members with the Community Transportation and General Fund Street Funds CIP report in the future, in addition to utility reports.
Responding to Mr. Ruane, Mr. DePrima explained that several CIP projects have experienced delays. He noted that projects that require the City to negotiate for property or obtain easements or permits take additional time, citing the Route 13 East Sanitary Sewer Interceptor Project, which required obtaining multiple easements, as an example. Similarly, he stated that the Piney Point Well and Elevated Water Storage Tank projects have experienced delays while sites are being sought and tested to determine whether they are appropriate. He noted that design and land acquisition processes can be time consuming. In addition, Mr. DePrima indicated that several projects have been put on hold pending delays in receiving State funding.
Mr. Ron Lunt, Public Utilities Director, noted that the State Office of Drinking Water is awaiting a funding commitment from the federal government for revolving loans for planned water projects. He noted that he was told funding would be available this fall; however, this was subsequently extended to sometime in December. Mrs. Mitchell stated that she received a recent email stating that loan commitment papers for the water projects should be received by the week of December 21, 2009, and that these documents would be presented to City Council in January.
In response to Mr. Ruane, Mr. DePrima noted that a number of pump stations worked overtime to process rainwater that entered the sewer system during recent storms, and a tanker truck was needed to pump effluent and sewage and transport it to the McKee station. He was concerned that recent precipitation could cause the groundwater level to rise, stating that when the water level is higher than pipes, there is constant infiltration into the system.
Mr. Ruane requested that the Committee be kept informed of unanticipated wastewater costs related to this issue.
Mr. McGiffin moved to recommend acceptance of the report, seconded by Mr. Hogan and unanimously carried.
PACE/NAES Monthly Report (October)
Members were provided the PACE/NAES Monthly Report for October. The report was provided to allow members the opportunity to monitor what is being sold in electric and the revenues received, which will give members a better understanding of any fluctuations and make improvements if deemed necessary. Although it was not staff’s intention to make a presentation of the report, they welcomed any questions.
Mr. Anthony DePrima, City Manager, stated that the City budgeted for emissions sales based on last year’s low numbers. However, since emissions sales prices on the market were nearly twice the amount budgeted, it was decided to sell the amount of credits needed to meet the budget and to hold the remaining credits in the hope that the emissions market will continue to rise. As a result, the City had to sell only half the credits anticipated to be sold and still managed to exceed the budget.
Responding to Mr. Ruane, Mr. DePrima noted that (as indicated on Page 39 of the report) approximately $250,000 per year will be saved by switching from #6 fuel (which requires heat to maintain its liquid state) to #2 fuel(which is a more liquid type of petroleum base). As a result, heating equipment is no longer necessary and has been removed.
Mr. Ron Lunt, Public Utilities Director, added that installing an atomizer, which uses compressed air to send the fuel into the burners rather than using natural gas to start with, allowed the fixed gas reservation on the pipeline to be dropped, resulting in a reduction of fuel costs.
In response to Mr. Ruane, Mr. Lunt stated that the $2,789,442.40 (listed on Page 37 of the report) for the cost of the McKee Run Pollution Remediation Project is an ongoing expense since there is work that remains, primarily removal of the Cyclone Separators.
Mr. DePrima noted that the City and the State Department of Natural Resources and Environmental Control are satisfied with the operating goals for the McKee Run Plant and the progress made toward benchmarks established for the remediation project. He noted that final testing and permitting has been resolved and that the plant is fully operational and is burning #2 fuel.
Mr. Ruane requested that rate payers be informed of the status of this project.
In response to Mr. Ruane, Mr. McGiffin explained that the term “contango” (page 4 of the report) refers to “ a condition in which distant delivery prices for futures exceed spot prices, often due to the cost of storing and insuring the underlying commodity. It is the opposite of backwardation.”
Mr. Snaman moved to recommend acceptance of the report, seconded by Mr. Hogan and unanimously carried.
Mr. Hogan moved for adjournment, seconded by Major Kosior and unanimously carried.
Meeting Adjourned at 5:31 P.M.
Respectfully submitted,
Eugene B. Ruane
Chairman
EBR/JS/rr/tm
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