UTILITY COMMITTEE
The Utility Committee meeting was held on May 26, 2009 at 5:00 p.m. with Chairman Ruane presiding. Members present were Council President Williams (arrived at 5:09 p.m.), Mr. McGiffin, and Mr. Snaman. Members of Council present were Mr. Leary, Mr. Hogan, and Mayor Carey.
AGENDA ADDITIONS/DELETIONS
At the request of Mrs. Townshend, Item #3 - Proposed HS1 for HB 70 - An Act to Amend Title 29 of the Delaware Code Relating to Wind Energy Systems, was moved to the second Agenda item. Mr. Snaman moved for approval of the agenda as amended, seconded by Mr. McGiffin and unanimously carried.
Annexation Request - 924 Artis Drive, Consisting of 39.1193+/- Acres, Owned by J. Richard Jones and Joan Mead Jones
Members were provided with the Petition to Annex and Zone Property located at 924 Artis Drive, owned by J. Richard Jones and Joan Mead Jones. The property is currently used as a golf course and driving range.
Mrs. Townsend, Director of Planning, Inspections and Community Development, reminded the Committee that the annexation of this area was originally considered in conjunction with a proposed amendment to the City’s Comprehensive Plan during the City Council meeting of March 24, 2008. At that time, Council discussed a letter received from State Planning Coordination, Office of Management and Budget for the State of Delaware, dated March 17, 2008, in which the State requested that the City delay consideration of the annexation plan amendment until the regularly scheduled plan update (due September 2008). The State expressed concern regarding a piecemeal approach to annexation plan amendments and stated they preferred to review such amendments by considering the entirety of the area in the Comprehensive Plan. It was City Council’s decision at that time to defer the amendment until the completion of the Comprehensive Plan.
Mrs. Townshend explained that since the Comprehensive Plan has now been finalized, the application to rezone the property is being presented to the Committee. The request is to rezone 39.1193+/- acres from AC (Agricultural Conservation District) to R-8 (One Family Residence Zone), which would allow for one-family, detached houses. She indicated that water service currently extends to the Calvary Baptist Church property that is adjacent to the proposed annexation. The applicant would be responsible for the cost of extending the connection to their property. Electric services are currently provided by Delmarva Power, and the appropriate documentation must be provided to switch the property to City of Dover Electric Services once a new service or customer is present. Sanitary Sewer services are not currently available to the property. The cost to extend those services along Route 8 to the property would be the responsibility of the property owner. The property is contiguous to the Calvary Baptist Church.
Mrs. Townshend stated that the standard protocol is to notify other property owners in the area that annexation is pending and to allow them the opportunity to annex as well. However, she explained that when the Comprehensive Plan was being developed, it was very clear that Artis Drive property owners did not wish to be annexed into the City. For this reason she did not send out a letter to avoid causing property owners concern that they would be annexed against their wishes.
Mrs. Townsend indicated that the cost revenue model which has been used to evaluate annexations was not used in this instance. She stated that Mrs. Mitchell, Controller/Treasurer, had requested suspending use of the model until she could better evaluate its effectiveness. She explained that Mrs. Mitchell expressed concerns about the validity of the model due to its use of assumptions that are more related to development applications than annexation.
Mr. Ruane reminded members that the Committee’s purview regarding annexation is essentially related to concerns regarding utilities.
Mr. DePrima cautioned that the clubhouse on the property to be annexed is currently receiving electric service from Delmarva Power & Light (DP&L) and that it would be necessary to resolve issues regarding the provision of electric service in advance of final annexation in order to avoid franchise issues with DP&L. He felt that this issue should be brought to the attention of the Development Advisory Committee. It was his opinion that the DP&L lines might have to be abandoned and the property revert to the unserved farm category before the City could provide service.
Responding to Mr. DePrima, Mr. Paul Jones, the owner’s brother and representative, stated that it is the owners’ plan to continue to operate the property as a golf course. At some point, they plan to pursue development; however, there are no immediate plans in that regard.
In response to Mr. Ruane, Mrs. Townshend explained that the property shares a common boundary line with Calvary Baptist Church which is in city limits. She stated that the annexation will leave a rather large enclave area along Artis Drive; however, she felt comfortable that the property meets the requirements of Delaware Law with regard to sufficient adjacency for annexation.
Mr. McGiffin moved to recommend the adoption of Resolution No. 2009-14 (Attachment #1) setting the date of the annexation referendum to be held on July 16, 2009 for property located at 924 Artis Drive consisting of 39.1193 +/- acres, owned by J. Richard Jones and Joan Mead Jones, to Council with the proviso that City staff resolve the question about the proper documentation required to switch the property from Delmarva Power to City of Dover electric services once a new service or customer is present and provide this information to Council. The motion was seconded by Mr. Snaman and carried, with Mr. Ruane voting no.
It was Mr. Ruane’s feeling that there was no guaranteed benefit to the City from the annexation as provision of City water and electric services are not assured at this time.
Proposed HS1 for HB 70 - An Act to Amend Title 29 of the Delaware Code Relating to Wind Energy Systems
Mrs. Townshend provided the Committee with an update on the status of HS 1 for HB 70 - An Act to Amend Title 29 of the Delaware Code Relating to Wind Energy Systems, which legislates placement of windmills on residential property. She noted that the bill had moved out of the House Energy Committee on May 13, 2009, and is moving forward to the full body and presumably to the Senate. She explained that the Act stipulates that windmills would require a property setback at least one (1) time the height of the unit and also contains a noise restriction. After reviewing the legislation with Deputy City Solicitor Pepper, Mrs. Townsend stated that the proposed bill would likely not cause problems related to intrusiveness. She felt, however, that the Act did raise philosophical issues in that municipalities and counties have been granted authority to determine land use regulations, and passage of this bill by the State General Assembly would be eclipsing this authority. It was her belief that this legislation would eliminate the ability of municipalities or homeowners’ associations to restrict placement of windmills on residential properties and would inhibit the authority of municipalities to address potential problems that could emerge.
Though supportive of the principles of green energy, Mr. Ruane objected to the proposed Act, stating that it was not comprehensive enough and failed to address many important considerations, including decommissioning of windmills, noise levels, design safety certification, and uniform construction. He requested staff to dialog with sponsors of the bill, especially Representative Brad Bennett who is a local sponsor, and encourage the State to form a consensus among jurisdictions to develop a more comprehensive ordinance. He requested staff to research models in other states, encourage the idea of a model ordinance, and report back to the Committee.
Mr. Leary felt that this was an issue that should also be brought to the attention of Mr. George Wright, Executive Director of the Delaware League of Local Governments.
Annual Engineering Consultant’s Report on the Operation and Maintenance of the Electric System - Fiscal Year 2008
Mrs. Teal, Assistant Finance Director, presented the Annual Engineering Consultant Report. Mrs. Teal stated that the City of Dover Electric Bond Resolution requires that the City retain an independent engineering consultant to assess the City’s electric system and to review the electric budgets and insurance programs. She noted that, in compliance with the requirements of Section 705 and Section 504 of the City of Dover, Delaware Resolution Authorizing and Securing Electric Revenue Bonds, adopted December 23, 1985, Burns & McDonnell submitted an Annual Engineering Consultant’s Report for the fiscal year ended June 30, 2008. This report summarizes their review and assessment of the City of Dover’s Electric System, its existing retail electric rates, its insurance coverage in effect, and its reserve funds. Financial, statistical, and operational data used in preparing the report were taken from the City’s annual financial statements and accounting records, as well as additional information furnished by City staff.
In response to Mr. Ruane, Mrs. Teal explained that the City of Dover must maintain a debt service coverage ratio of at least 1.25, and she indicated that the debt service coverage ratios for FY 2006, FY 2007, and FY 2008 were 5.50, 1.74, and 3.96 respectively.
Responding to Mr. Ruane, Mr. Lunt indicated that the report reflects performance during the previous fiscal year and that projects for the current fiscal year have not been reviewed or reported. He expressed concurrence with the findings of the report, stating that he believed that all systems were operating in accordance with prudent utility practice.
Mrs. Williams moved to recommend acceptance of the Annual Engineering Consultant’s Report on the Operation and Maintenance of the Electric System - Fiscal Year 2008. The motion was seconded by Mr. Snaman and unanimously carried.
Update - Green Energy Funding and Programming
During the Utility Committee meeting of April 27, 2009, Mr. Ruane requested that there be a standing agenda item for “Green Energy Funding and Programming” and that staff provide a monthly report in an effort to keep the committee abreast of these issues.
In accordance with this request, Mr. DePrima presented an update on the City’s application for the “green energy stimulus money” under the Energy Efficiency and Conservation Block Grant Program. He stated that during their Regular Meeting of May 11, 2009, City Council accepted the recommendation of the Committee to apply for Energy Efficiency and Conservation Block Grant funds, with an application deadline of June 25, 2009. He indicated that the application is being prepared and should be completed for submission to the federal government within the next two (2) weeks.
Mr. DePrima also provided an explanation of the City’s Green Energy Fund, which is financed through a very small fee (usually a few cents) attached to electric bills issued by municipalities, the Delaware Electric Cooperative, and DP&L. To date, the City has raised approximately $350,000 and $215,000 has been expended on green energy projects, including four (4) residential and one (1) commercial geothermal projects; four (4) solar residential and five (5) solar commercial photovoltaic (PV) commercial projects; and one (1) solar hot water project, for a total of fifteen (15) projects totaling $215, 582. He explained that all projects are partially funded, with the applicant providing a 50% match. The applicant applies for the project and, if approved, the project is reserved. The applicant must front the cost of the project, and when the project is certified as complete and all criteria are met, the money is issued. He stated there are currently three (3) geothermal projects reserved, two (2) PV projects, and one (1) commercial geothermal project (a $60,000 geothermal project reserved for the proposed Dover Public Library), and these projects total $134,795.
Mr. DePrima indicated that if all current reserve projects are funded and combined with projects that have been funded, a small deficit of $6,000 would remain. This creates a waiting list for payouts to applicants until money accrues in the account. Applicants are aware of this waiting period for reimbursement. Mr. DePrima explained that the entire process is managed through the Delaware Municipal Electric Corporation (DEMEC) through the State Energy Office, and the State has considered changing the funding ratio. DEMEC handles grant applications and funds on the City’s behalf and all DEMEC members try to keep programs consistent to aid in administration.
Mr. DePrima indicated that the City of Dover pays approximately $1700 each month out of this fund for the Energy Depot service on the City of Dover website where residents can perform a home energy audit to realize cost savings. The Energy Depot software used on the website is also used by auditors who are performing onsite home energy audits. In addition, a thermal gun was purchased for $5,000 out of this fund for use during the audits.
Mr. DePrima stated that he plans to provide a quarterly report to update the Committee on projects funded to date and an overall balance of the Green Energy Fund. Mr. Ruane requested that this information be presented to the full Council in writing (Attachment #2).
In response to Mr. Snaman, Mr. DePrima explained that the City of Dover collects the fees for the Green Energy Fund and they are held in a dedicated City of Dover account by DEMEC.
Mr. Ruane encouraged Committee and Council members to attend several upcoming meetings related to utilities, as follows:
• A Special Utility Committee Meeting scheduled for June 1, 2009, at 5:00 p.m. including a presentation by Mrs. Mitchell, Controller/Treasurer, on future financial projections for electric and water/wastewater funds.
• A Public Hearing to discuss the electric revenue fund budget at the City Council Meeting scheduled for June 8, 2009 at 7:30 p.m.
• A presentation by the 2030 Committee to update Committee and Council members on the status of solar and other energy projects at the Utility Meeting scheduled for June 22, 2009 at 5:00 p.m.
Mr. Ruane moved for adjournment, seconded by Mrs. Williams and unanimously carried.
Meeting Adjourned at 5:53 P.M.
Respectfully submitted,
Eugene B. Ruane
Chairman
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Attachments
Attachment #1 - Resolution No. 2009-14 for Annexation of 924 Artis Drive
Attachment #2 - Green Energy Fund Status Report