COUNCIL COMMITTEES

The Council Committees Meeting was held on March 10, 2003, at 6:15 p.m., with Council President Carey presiding. Members of Council present were Mr. Ritter, Mr. Pitts, Mrs. Williams, Mr. Truitt, Mr. McGlumphy, Mr. Speed, and Mr. Ruane. Mr. Salters and Mayor Hutchison were absent.

AGENDA ADDITIONS/DELETIONS

Mr. Speed moved for approval of the agenda, seconded by Mr. McGlumphy and unanimously carried.

UTILITY COMMITTEE

The Utility Committee met with Mr. Ruane presiding. Members present were Mr. Ritter, Mr. Speed, Mr. Lambert, and Mr. Snaman.

Revenue Requirement Options - Electric Rate Study

In conjunction with the revenue requirement determination phase of the Electric Rate Study, Burns & McDonnell provided a financial plan based on the City’s historical trends. During the Special Utility Committee Meeting of February 6, 2003, a preferred case for the consultant to follow for the remainder of the project was determined. After further analysis of the Preferred Case, staff found certain Operating Expenses to be understated and interest earnings to be overstated.

The Preferred Case has since been updated to reflect the FY03 Operating Budget with a reduction of approximately $550,000 in Transmission & Distribution (T&D) and Engineering expenses as presented in the Mid-Year Review. The Plant & Equipment additions have been revised to reflect the FY04 Draft CIP, as presented to Council a few weeks ago. The net result is still a recommendation to use reserves to finance projects, with the goal of replenishing the reserves based on the availability of funds.

The changes to the Comparative Cases are as follows:

Cash from Operations decreased $9,995,016, which lengthened the timing for the replenishment of the reserves.

The final results are as follows:

      1.   We exceed our required debt coverage ratio of 1.25%, see page 1, line 12.

      2.   We maintain a positive cash flow, and our operating reserve requirement of 5%.

      3.   We maintain a reserve as a percentage of Operating Revenues of no less than 38% and by Year 5 (2007) we are at 45%.

      4.   We will still be using reserves to finance projects as in the February 6, 2003 presentation, and not issuing additional debt.

Mr. McGlumphy asked what constituted the $550,000 reduction in T & D and Engineering. Mrs. Mitchell, Finance Director/Treasurer, responded that it was comprised of savings in material and supplies and a reduction in head count due to unfilled positions.

Responding to Mrs. Williams, Mr. Lambert noted that the Duke contract specified a fixed price for fuel to offset the possibility of fluctuations in fuel prices.

Staff recommended approval of the preferred case that includes the concept of using reserves to finance capital projects with the goal of replenishing the reserves based on the availability of funds.

Mr. Speed moved to recommend approval of staff’s recommendation, seconded by Mr. Lambert and unanimously carried.

Evaluation of Bid - Dover High School Drainage Ditch Storm Drain Junction Box

The Department of Public Works solicited bids for the construction of a 60-foot length by 20-foot width by 10-foot height concrete junction box to direct storm water flows through the Dover High School drainage ditch. Staff secured the services of a structural engineer to assist with the preparation of specifications for the junction box and foundation slab. In addition, a Nationwide 39 Permit was secured to allow the construction of the ditch improvements to move forward under the Nationwide 39 Permit process approved by the U.S. Army Corps of Engineers. Once the channel box and miscellaneous entrance pipes to the box are constructed, the construction crew will complete the installation of the storm water pipes along with the approved conservation environmental mitigation area identified in the approved permits.

The total funding for the project has been secured in the amount of $260,139. The State of Delaware Division of Soil and Water Conservation has provided $155,139 through an agreement between the Division of Soil and Water Conservation and the City of Dover per Senate Bill No. 250 of the 141^st General Assembly and House Bill No. 384 for Pat Lynn Drive/Dover High School Drain Pipe Installation. In addition, the City of Dover has secured $105,000 in Community Transportation Funds for the referenced project. To date, the Department of Public Works has spent $70,863.72 for the preparation of permits, engineering services, and purchase of pipe and related material for the project.

Staff evaluated the bids and recommended approval of the low bid submitted by Mumford & Miller, Inc. in the amount of $105,750 for the construction of the Dover High School Drainage Ditch Storm Drain Junction Box.

Responding to Mr. Ritter, Mr. DePrima stated that the project is expected to be completed this summer. He also noted that the project, due to several funding sources, is cost neutral to the City.

Mr. Speed moved to recommend approval of staff’s recommendation, seconded by Mr. Snaman and unanimously carried.

Mr. Speed moved for adjournment, seconded by Mr. McGlumphy and unanimously carried.

Meeting Adjourned at 6:40 P.M.

Respectfully submitted,

Carleton E. Carey, Sr.

Council President

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