UTILITY COMMITTEE
The Utility Committee Meeting was held on March 26, 2007 at 5:44 p.m. with Chairman Carey presiding. Members present were Mr. Ruane, Mr. Slavin, Mr. Cregar, and Mr. Snaman. Members of Council present were Mr. McGlumphy, Mr. McGiffin, and Mr. Hogan. Mayor Speed was also present.
AGENDA ADDITIONS/DELETIONS
Mr. Slavin moved for approval of the agenda, seconded by Mr. Snaman and unanimously carried.
Discussion - Options to Address Regulation 1146 Emission Control Requirements at McKee Run 3 Electric Generation Stations
During their meeting of January 22, 2007, Mr. DePrima, City Manager, reviewed the requirements of Regulation 1146, Emissions Control Requirements. Having several concerns, members authorized the City Manager to instruct staff to have before this committee within one (1) month, the refining of the costs, results of the scenarios, and additional information on other options that were discussed by members. During their meeting of February 26, 2007, members were advised that a few weeks ago, staff met with representatives from the Department of Natural Resources and Environmental Control (DNREC) to further discuss and understand some of the requirements of Regulation 1146, and how the City may proceed to meet these requirements. In the meeting, one (1) of the options discussed was fuel switching and use of different types of fuel. Another option suggested was the low Nox burners, which is refitting our plant with burners that have low Nox emissions. Because of this suggestion, along with the requests of members, Mr. DePrima stated that staff would be making a presentation to members during their second meeting in March, which will include alternatives to comply with Regulation 1146.
Mr. Carey noted that there was an executive session held immediately preceding this meeting to discuss strategy options and questioned whether there was a need for further discussion at this time.
Mr. Slavin moved to recommend that Council proceed with the actions noted in the executive session pertaining to the City’s appeal of Regulation 1146, seconded by Mr. Snaman.
Mr. Ruane felt that the motion was inappropriate, explaining that such a generalized motion is not in order. More importantly, he suggested that staff provide a summary of the executive session since, in his opinion, the options discussed are not restricted to any executive privilege.
Mr. Primos, City Solicitor’s Office, presented a summary of the purpose of the appeal, explaining that although the appeal has been filed by the City, it is hoped that a resolution could be reached that would be satisfactory to both the City and DNREC. It is the City Solicitor’s opinion that it is important to preserve and continue with the appeal in order for the City to have the ability to reach an agreement with DNREC. It was his belief that the initial concern with the Regulation was that it could mean significant increases in both operating and capital costs (City’s resources and funds), which was previously explained to members.
Mr. Ruane reminded members that the committee had previously authorized the City Manager to instruct staff to have before this committee the refining of the costs, results of the scenarios, and additional information on other options that were discussed by members (during their meeting of January 22, 2007), one of which was the request to find an alternative power source. He felt that the information requested by members was separate and apart from or in addition to the on-going negotiations with DNREC.
Responding, Mr. DePrima stated that there is no added information regarding other options, which he felt had been provided, and that this matter was extended to this meeting for the purpose of having the executive session and providing the results. He explained that there is no new information other than what was presented to members during their meeting of February 26, 2007. As was explained at that time, Mr. DePrima reminded members that building new generation is not an option for meeting Regulation 1146 simply because of the time that it would take to permit and build such generation.
In response to Mr. Ruane, Mr. DePrima stated that new generation is absolutely a matter that will continue to be reviewed by staff, reminding members that a new committee (2030 Committee) has been formed to study new generation. However, he reiterated that new generation is not an option for meeting Regulation 1146.
Disagreeing, Mr. Ruane suggested that the committee reiterate its interest in and need for the requested reports, including the action that has been taken by the new 2030 Committee. He explained his concern is with the sense of secrecy regarding the ideas that are germane and in the public record. Responding, Mr. DePrima stated that the options have been discussed in open session and made a part of the public record, explaining that there are no new options to present at this time.
Responding to Mr. Snaman, Mr. Primos stated that many of the legal issues that all three (3) appellants are concerned with are the same. The most significant aspect is that the Environmental Appeals Board itself desires that the appeals be consolidated, explaining that this is a public Board that consists of public members who have limited time to devote to an appeal; therefore, they prefer that the matters be consolidated to save time and resources that would otherwise have to be devoted to consider the appeals separately.
On a call for the question, the motion recommending that Council proceed with the actions noted in the executive session pertaining to the City’s appeal of Regulation 1146 was carried with Mr. Ruane voting no.
Dedication of Rights-of-Way and Public Infrastructure - Fox Hall West Phases II and III
The developer of the Fox Hall West Addition Subdivision (Phases II and III), Tony Ashburn, Inc., has requested that all rights-of-way, public open space, and public infrastructure improvements related to this subdivision be dedicated to the City of Dover for permanent ownership and maintenance. Tony Ashburn, Inc. has constructed all of the improvements in accordance with City standards and specifications. 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 has been completed by the developer. A one (1) year Maintenance Agreement, Maintenance Bond, and a Release of Liabilities have been submitted by the developer. In addition, as-built drawings have been submitted to the Department of Public Works for their permanent records.
Staff recommended acceptance of the dedication of rights-of-way and public infrastructure in Phases II and III of the Fox Hall West Addition Subdivision, with the dedication to include all of the referenced public improvements, as follows:
Sewer Utility Infrastructure (estimated construction value = $ 158,852.00):
8" PVC Sanitary Sewer Main - 2,670 l.f.
4" PVC Sanitary Sewer Laterals - 1,222 l.f. (38 laterals)
4' Diameter Sanitary Sewer Manholes - 13 ea. (68 v.f.)
Water Utility Infrastructure (estimated construction value = $ 142,160.00):
4" Ductile Iron Water Main - 165 l.f.
6" Ductile Iron Water Main - 65 l.f.
8" Ductile Iron Water Main - 2,452 l.f.
3/4" Type "K" Copper Water Service Line - 1,120 l.f. (38 services)
8" Gate Valves - 6 ea.
6" Hydrant Valves - 4 ea.
Fire Hydrants - 4 ea.
2" Blow Off Assembly - 1 ea.
Storm Water Infrastructure (estimated construction value = $ 109,525.00):
Yard Basins - 1 ea.
Single Catch Basins - 21 ea.
4' Storm Water Manholes - 1 ea.
15" Type III Reinforced Concrete Pipe - 789 l.f.
36" Type III Reinforced Concrete Pipe - 381 l.f.
15" N-12 Plastic Pipe - 772 l.f.
30" N-12 Plastic Pipe - 565 l.f.
36" N-12 Plastic Pipe - 125 l.f.
Street Infrastructure: (0.483 miles) (estimated construction value = $ 275,313.00)
Pebble Valley DriveStation 7+40 to Station 20+90 l.f.
Pebble Valley PlaceStation 0+00 to Station 12+00 l.f.
Total = 2,550 l.f.
Public Open Space: 2.7022 +/- acres
Mr. Slavin moved to recommend approval of staff’s recommendation for the acceptance of the dedication of rights-of-way and public infrastructure in Phases II and III of the Fox Hall West Addition Subdivision to include all of the referenced public improvements. The motion was seconded by Mr. Cregar and unanimously carried.
Proposed Energy Conservation Plan for Dover - Update - Items Implemented by the City
During their meeting of February 26, 2007, members were provided a detailed report entitled the Energy Plan for the City of Dover, offering suggestions in an effort to reduce emissions, lower energy bills, save taxpayer dollars, protect our environment, and protect our health. Members reviewed a Resolution endorsing the U.S. Mayors Climate Protection Agreement for their consideration. Members requested that this item be placed on the next agenda and that the packet material include a brief update on the items the City is already doing and if there is any reluctance on the part of management regarding any of the language in the proposed resolution, members should be alerted in order to develop a modification.
In reviewing the proposed resolution, Mr. DePrima advised members that Sections A and B of the Agreement are recommendations for federal and state governments, while Section C is for cities. He provided members with a list of those efforts under Section C that the City has already taken.
Responding to Mr. Ruane, Mr. DePrima stated that the only suggestion that gave him pause was item C-1 of the proposed resolution; however, he has been advised that the Coolcities Program offers programs and provides assistance to cities in calculating benchmarks and setting reduction targets. He indicated his support of items C-2 through C-12 as specified in the proposed resolution, and as long as there is a program to provide assistance in calculating benchmarks and establishing reduction targets, he would not oppose the first suggestion included in the proposed resolution.
Mr. Ruane moved to recommend adoption of the Resolution Agreement, with the understanding that it will be revised to reflect where appropriate, references to the “City of Dover” in place of “U.S. Conference of Mayors”, and deletion of item C-1. The motion was seconded by Mr. Slavin.
Relaying his objections with including items A and B, it was Mayor Speed’s opinion that the focus should be on what the City can do as a city and not try to tell others what to do because of the known impact that the requirements may have without an analysis. However, he relayed his full support of the contents of items C-2 through C-12.
Mr. Slavin moved to amend the motion to exclude items A and B (and C-1), seconded by Mr. Snaman and carried with Mr. Ruane voting no.
The motion, as amended, to recommend adoption of the Resolution Agreement, with the understanding that it will be revised to reflect, where appropriate, references to the “City of Dover” in place of “U.S. Conference of Mayors”, and the deletion of items A, B, and C-1 (Attachment #1), was unanimously carried.
Franchise Agreement Comprehensive Strategy - Video Services - Parameters for the Negotiations with Verizon for the Franchise Agreement
Members were reminded that Verizon Delaware has requested a franchise and that the City will enter into negotiations for a franchise agreement. As a result, staff provided an analysis of telephone company cable franchises, issued by The National Association of Telecommunications Officers and Advisors (NATOA).
Mrs. Mitchell, Treasurer/Finance Director, reviewed the information provided by NATOA and questioned if there were any other parameters that members would like to have addressed and/or included in such an agreement.
Mr. Ruane suggested that, minimally, the franchise agreement to be negotiated should be required to include all items, by topic. In addition, he felt that there should be reporting requirements as well as target dates in order to allow for measuring their fulfilling the obligation. He also felt that in the area of streets, there is a need to include right-of-way construction standards as a part of the agreement so that the City’s expectation is understood. There should be consideration of the possibility of a no-charge parental control, allowing parents the opportunity to control the service. Additionally, there should be a locally triggered emergency alert system, in addition to the national system, so that when the City has an emergency, the system can be used to alert the people through the Verizon service. Mr. Ruane suggested that there be enforcement provisions included, such as liquidated damages and that a franchise bond should be considered.
Responding to Mr. Slavin, Mrs. Mitchell stated that the proposal received from Verizon Delaware has not been made available for public inspection since it contains proprietary and confidential information. The City Solicitor suggested that it not be made public unless approval was granted by Verizon. Mr. Slavin suggested that a discussion draft proposal be made available for the public and that staff work with Verizon to “scrub” the document to assure that any proprietary information is not released.
Mrs. Mitchell stated that when this issue is brought back to the committee, it will be a model agreement that is presented (for public purposes) and will not be the actual negotiated agreement. It was Mr. Slavin’s opinion that there should not be much difference between the model and negotiated agreement.
Mr. Ruane suggested that the City obtain professional, outside counsel for this negotiation and suggested that the City consider seeking reimbursement for such service from the applicant. Responding, Mrs. Mitchell stated that she has received a list of legal counsel firms specializing in this type of negotiation to provide guidance to the City. She has sent a request for estimated costs.
Mr. Ruane moved to recommend that the Treasurer/Finance Director be authorized to seek and engage, through the proper protocols, legal counsel specializing in this area to protect the City’s interest in the final outcome, seconded by Mr. Slavin and unanimously carried.
Mr. Ruane moved to recommend that the Treasurer/Finance Director be authorized to investigate both the legality and methodology for getting reimbursement for the legal counsel costs from the applicant, seconded by Mr. Slavin and unanimously carried.
Mr. Hogan explained his understanding that the City cannot require more of Verizon than what is currently required from Comcast, nor can we require less. He relayed concern that the City does not allow Verizon to “cherry pick”, understanding that not everyone will be brought in at one time; however, there should be a clear schedule, including deadlines for when they will bring in service to the entire City, not just parts of the City. He also indicated his support that this matter be opened to the public as much as possible.
Concurring, Mr. Ruane stated his belief that part of the strategy should include opening a dialogue with Comcast on those issues that will come up during the negotiation with Verizon. Mrs. Mitchell advised members that the plan is to request the legal counsel to provide direction in the comparability of both agreements.
Consideration of Letter of Support - Transmission Project
Mr. McCullar, President and CEO of Delaware Municipal Electric Corporation, Inc., submitted a request for the City of Dover to send a letter of support of the Mid-Atlantic Power Pathway (MAPP) Transmission Project, as proposed by Pepco Holdings, Inc. (PHI). This project represents the first significant transmission expansion in the region in over two decades and would tie existing economic transmission and generation assets in the west to load centers on the Delmarva Peninsula. The project would also provide much needed power supply and reliability to the region at the lowest cost and with the least environmental impact.
Staff recommended approval of the letter to the Governor and Local Legislators in support of the MAPP Transmission Project.
Mr. Ruane suggested that the letter be written to reflect Dover specifically. Responding, Mr. Lunt, Public Utilities Director, assured members that the letter could be revised accordingly prior to the committee’s recommendation being considered by Council.
Mr. Ruane moved to recommend that a letter of support to the Governor and Local Legislators regarding the support of the Mid-Atlantic Power Pathway Transmission Project be approved and that staff be authorized to compose and bring it to Council for their consideration during their meeting on April 9, 2006 (Attachment #2). The motion was seconded by Mr. Snaman and unanimously carried.
PACE/NAES Monthly Reports (February)
Mr. DePrima provided the PACE/NAES Monthly Reports for February 2007. He reminded members that these reports are provided each month to give members the opportunity to monitor what is being sold in electric and the revenues received to gain a better understanding of any fluctuations and to make improvements, if deemed necessary. It is not his intent to make a presentation of the reports; however, he welcomed any questions.
In response to Mr. Ruane, Mrs. Mitchell, Treasurer/Finance Director, stated that the City’s power supply is coming in below budget and generation fuel is a little above budget. The reduction of power supply is covering the fuel; therefore, she assured members that the City is on track. She stated that the power supply favor-ability is covering the generation losses and that, although there are still some losses, they have been substantially reduced due to the plant not being run as much. These small losses are for heat, oil, and certain ancillary costs.
Mr. McGlumphy reminded members that last July, the plant became a problem for the City. He does not know how to fund the small losses without numerical details. It was his hope that the small losses do not become a larger issue when Council is presented with the budget. He understands that the budget will recommend to the public a potential 14% increase in electric rates. This proposed increase is based on everything remaining static; therefore, his fear is that the 14% may increase. If one were to add the numerics from the last 14 months, with the 14% increase, there would be a total increase of 40%-44% increase in the City’s electric rates for residential customers.
Responding, Mr. DePrima stated that the total increase, considering the previous 22% increase for residential (16% and 6%) and an additional 14%, would be a total of 36%.
Mr. McGlumphy felt that the public should be made aware so that they can be prepared for the increase in electric rates.
Mr. Slavin moved to recommend acceptance of the PACE/NAES Monthly Report for February 2007, as presented. The motion was seconded by Mr. Snaman and unanimously carried.
Mr. Snaman moved for adjournment, seconded by Mr. Slavin and unanimously carried.
Meeting Adjourned at 6:37 P.M.
Respectfully submitted,
Carleton E. Carey, Sr.
Chairman
CEC/TM/jg
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Attachments
Attachment #1 - Proposed Resolution: Energy Conservation Plan for Dover
Attachment #2 - Letter of Support to the Governor and Local Legislators for Support of the Mid-Atlantic Power Pathway Transmission Project