City Council - Finance Committee

CHICOPEE CITY COUNCIL FINANCE COMMITTEE ACCEPTED MEMBERS George Moreau, Chairman Dino Brunetti, Vice Chairman Fred Krampits Frank Laflamme James Tillotson Timothy McLellan John Vieau MINUTES June 3, 2013 The following are the minutes of a public hearing held Monday, June 3, 2013 at 6:30 PM in the City Council Chambers, Fourth Floor, City Hall Annex, 274 Front Street, Chicopee, MA 01013. Members Present Moreau, Brunetti, Krampits, Laflamme, Tillotson, McLellan Members Absent Vieau Also Present Councilor Roy, Councilor Swider, Daniel Garvey (Associate City Solicitor) Mayor Bissonnette, Councilor Zygarowski, Stan Kulig (Superintendent DPW), Thomas Hamel (Chief Operator Water Pollution) The meeting was called to order at 6:30 PM. ITEM #1 ORDERED THAT THE SUM OF THREE HUNDRED SIXTY THOUSAND TWO HUNDRED AND 00/100 DOLLARS ($360,200.00) BE AND HEREBY APPROPRIATED TO THE FOLLOWING ACCOUNT: WASTEWATER SPECIAL ACCOUNT FOR SYPHON CLEANING (ACCT #60004414-644027) SAID AMOUNT IS TO BE TAKEN FROM AVAILABLE FUNDS IN THE SEWER SURPLUS ACCOUNT. Tom Hamel gave an overview of a series of present and future projects starting throughout the city. Councilor Tillotson stated taking a loan for twenty years at 2 percent doesn’t make sense to me. Tom Hamel added we have a grant that will give us some of that money back which is off the principle loan on the first payment. Councilor Roy stated I know the Chicopee Electric Light has trended down because of the efficiency of things is that the case for the water usage. Tom Hamel stated yes Committee vote 6 – 0 favorable. 1 ITEM #2 SRF BOND AUTHORIZATION FOR THE INTEGRATED MUNICIPAL STORMWATER AND WASTEWATER RESOURCE MANAGEMENT PLAN. ORDERED THAT ONE MILLION AND 00/100 DOLLARS ($1,000,000.00) IS APPROPRIATED FOR THE PURPOSE OF FINANCING THE INTERGRATED PLAN TO PROVIDE AN OPPORTUNITY TO EXPLORE ALTERNATIVE MEANS TO SATISFY THE CSO ABATEMENT OUTLINED IN ITS CONSENT DECREE AND TO ASSIST IN PRIORITIZING RESOURCES TO COMPLY WITH MULTIPLE CLEAN WATER ACT REQUIREMENTS, THE PLAN WILL SERVE AS A BASIS FOR THE PLANNING FOR FUTURE CSO ABATEMENT AND INFRASTRUCTURE WORK, INCLUDING WITHOUT LIMITATION ALL COSTS INCIDENTAL OR RELATED THRETO AND THAT TO MEET THIS APPROPRIATION THE TREASURER WITH THE APPROVAL OF THE MAYOR IS AUTHORIZED TO BORROW $1000,000.00 AND TO ISSUE BONDS OR NOTES THREFORE UNDER CHAPTER 44 OF THE GENERAL LAWS AND/OR CHAPTER 29C OF THE GENERAL LAWS, AS AMENDED OR ANY OTHER ENABLING AUTHORITY; THAT SUCH BONDS OR NOTES SHALL BE GENERAL OBLIGATIONS OF THE CITY UNLESS THE TREASURER WITH THE APPROVAL OF THE MAYOR DETERMEINES THAT THEY SHOULD BE ISSUED AS LIMITED OBLIGATIONS AND MAY BE SECURED BY LOCAL SYSTEM REVENUES AS DEFINED IN SECTION 1 OF SAID CHAPTER 29C, AND THAT THE TREASURER WITH THE APPROVAL OF THE MAYOR IS AUTHORIZED TO BORROW ALL OR A PORTION OF SUCH AMOUNT FROM THE MASSACHUSETTS WATER POLLUTION ABATEMENT TRUST ESTABLISHED PURSUANT TO SAID CHAPTER 29C, AND IN CONNECTION THEREWITH TO ENTER INTO FINANCING AGREEMENT(S) AND/OR SECURITY AGREEMENT(S) WITH THE TRUST AND OTHERWISE TO CONTRACT WITH THE TRUST AND THE DEPARTMENT OF ENVIRONMENTAL PROTECTION WITH RESPECT TO SUCH LOAN(S) AND FOR ANY FEDERAL OR STATED AID AVAILABLE FOR THE PROJECT OR FOR THE FINANCING THEREEOF; THAT THE MAYOR IS AUTHORIZED TO ENTER INTO PROJECT REGULATORY AGREEMENT(S) WITH THE DEPARTMENT OF ENVIRONMENTAL PROTECTION, TO EXPEND ALL FUNDS AVAILABLE FOR THE PROJECT AND TO TAKE ANY OTHER ACTION NECESSARY TO CARRY OUT THE PROJECT. Councilor Tillotson stated I would like to look at other options; short term borrowing and other options that may be cheaper. Mayor Bissonnette stated that I suggest you make a recommendation; approve with the recommendation that the Treasurer explore other shorter term financing. Tom Hamel stated the language that’s in there satisfies both requirements. If you want to exclude something I would have to send this back to the Bond Council. Approved with the recommendation that the Treasurer and Mayor secure the best possible rates. Committee vote 6 – 0 favorable. ITEM #3 SRF BOND AUTHORIZATION FOR JAMES STREET DRAINAGE, LOWER INGHAM AND BRAY STREET SLOPE STABILIZATION, EMPRIRE & CLARENDON STREET SEWER SEPARATION, HEARTHSTONE TERRACE SEWER SEPARATION. ORDERED THAT THREE MILLION TWO HUNDRED TEN THOUSAND AND 00/100 DOLLARS ($3,210,000.00) IS APPROPRIATED FOR THE PURPOSE OF FINANCING THE SEWER PROJECTS, 2 STORM DRAIN AND SLOPE STABILIZATION IMPROVEMENTS AS FOLLOWS; BRAY STREET SEWER SEPARATION AND SLOPE STABILIZATION, EMPRIE AND CLARENDON STREETS SEWER SEPARATION, JAMES AND OLD JAMES STREET DRAIN AND SLOPE STABILIZATION, LOWER INGHAM STREET DRAIN AND SLOPE STABILIZATION, INCLUDING WITHOUT LIMITATION ALL COSTS INCIDENTAL OR RELATED THERETO AND THAT TO MEET THIS APPROPRIATION THE TREASURER WITH THE APPROVAL OF THE MAYOR IS AUTHORIZED TO BORROW $3,210,000.00 AND TO ISSUE BONDS OR NOTES THERFORE UNDER CHAPTER 44 OF THE GENERAL LAWS AND/OR CHAPTER 29C OF THE GENERAL LAWS, AS AMMENDED OR ANY OTHER ENABLING AUTHORITY; THAT SUCH BONDS OR NOTES SHALL BE GENERAL OBLIGATIONS OF THE CITY UNLESS THE TREASURER WITH THE APPROVAL OF THE MAYOR DETERMINES THAT THEY SHOULD BE ISSUED AS LIMITED OBLIGATIONS AND MAY BE SECURED BY LOCAL SYSTEM REVENUES AS DEFINED IN SECTION 1 OF SAID CHAPTER 29C, AND THAT THE TREASURER WITH THE APPROVAL OF THE MAYOR IS AUTHORIZED TO BORROW ALL OR A PORTIOIN OF SUCH AMOUNT FROM THE MASSACHUSETTS WATER POLLUTION ABATEMENT TRUST ESTABLISHED PURSUANT TO SAID CHAPTER 29C, AND IN CONNECTION THEREWITH TO ENTER INTO FINANCING AGREEMENT(S) AND/OR SECURITY AGREEMENT(S) WITH THE TRUST AND OTHERWISE TO CONTRACT WITH THE TRUST AND THE DEPARTMENT OF ENVIRONMENTAL PROTECTION WITH RESPECT TO SUCH LOAN(S) AND FOR ANY FEDERAL OR STATE AID AVAILABLE FOR THE PROJECT OR FOR THE FINANCING THEREOF; THAT THE MAYOR IS AUTHORIZED TO ENTER INTO PROJECT REGULATORY AGREEMENT(S) WITH THE DEPARTMENT OF ENVIRONMENTAL PROTECTION, TO EXPEND ALL FUNDS AVAILABLE FOR THE PROJECT AND TO TAKE ANY OTHER ACTION NECESSARY OR CONVENIENT TO CARRY OUT THIS PROJECT. Approved with the recommendation that the Treasurer and Mayor secure the best possible rates. Committee Vote 6 – 0 favorable. ITEM #4 ORDERED THAT $850,000.00 IS APPROPRIATED TO PAY COSTS OF PURCHASING TRASH TOTTERS FOR THE USE OF THE DEPARTMENT OF PUBLIC WORKS, INCLUDING THE PAYMENT OF ALL COSTS INCIDENTAL AND RELATED THERETO; THAT TO MEET THIS APPROPRIATION THE TREASURER WITH THE APROVAL OF THE MAYOR IS AUTHORIZED TO BORROW $850,000.00 UNDER AND PURSUANT TO CHAPTER 44, SECTION 7 (9) OF THE GENERAL LAWS OR PURSUANT TO ANY OTHER ENABLING AUTHORITY, AND THAT THE MAYOR IS AUTHORIZED TO TAKE ANY OTHER ACTION NECESSARY OR CONVENIENCE TO CARRY OUT THIS PROJECT. Steve Fredericks stated that the landfill only has a handful of years left and every month we’re getting closer to that closure. There are some options out there to reduce waste, re-use and recycle. This is Country wide trying to reduce the cost in the cities and towns on their solid waste collection. One of the options that we’re looking at is coming up with a totters system that would allow us a little better collection in terms of service to the community, cleanliness and automated pickup. We have various options to get the word out to the public. I think the public has done a fantastic job with the recycling barrels and after the initial phase there are very few issues. Mayor Bissonnette stated the idea is to reduce how much solid waste is going into the landfills. Everything cannot go to the dump anymore. People have increased recycling by forty percent and we are getting refunded for the recycling items which will help pay off the cost of borrowing this money to do the trash totters. We’re in a good position but every little bit is going to help prolong the life of the dump and save us money. 3 Councilor Laflamme stated I still see people out there with four or five trash barrels and that if the residents want a second barrel they should be able to pay for it themselves. Stan Kulig stated I think if a family has to pay more for a trash barrel they will find a way to recycle more. Let’s start the process of education through this program so when the landfill closes and prices go up you won’t have that shock. Councilor Brunnetti stated we need more information on this; we need to put our heads together and resolve this issue. Stan Kulig stated that for the vast majority this is going to incentivize people to reduce their trash and recycle more. Councilor Krampits stated I think in general most of us agree with the idea of doing the totters. I think there are concerns about policy, procedure and is the timing right to go out and purchase them now. My thought is to do this as a collective issue would be to consider tabling it. I could talk with Steve and the folks at DPW and come up with a template on what would be a starting point. Councilor Tillotson stated we need to have the rules in place before we put the totters out there. We need to educate people on what can and can’t go in these totters. Councilor Roy stated I like the concept of the totters. We could start out with larger barrels and through the rotation downsize them. We should also look into a transfer station. Krampits motion to table – Moreau 2nd the motion - motion passed. ITEM #5 WATER METER MODERNAZATION PROGRAM LOAN AUTHORIZATION ORDERED THAT EIGHT MILLION ONE HUNDRED SIXTY ONE THOUSAND AND 00/100 DOLLARS ($8,161,000.00) IS APPROPRIATED FOR THE PURPOSE OF FINANCING THE WATER METER REPLACEMENT AND INSTALLATION OF ADVANCED METER INFRASTRUCTURE (AMI) SYSTEM-WIDE IN THE CITY OF CHICOPEE. (APPROXIMATELY 16,000 WATER CUSTOMERS AT VARIOUS LOCATIONS THROUGHOUT THE CITY WILL HAVE AMI IMPLAMENTATION TO ALLOW FOR QUICK AND ACCURATE MEASURING OF WATER USAGE AT THE POINT OF SERVICE TO THE CUSTOMER, INCLUDING WITHOUTH LIMITATION ALL COSTS INCLUDING OR RELATED TO THERETO AND TO MEET THIS APPROPRIATION THE TREASURER WITH THE APPROVAL OF THE MAYOR IS AUTHORIZED TO BORROW $8,161,000.00 AND TO ISSUE BONDS OR NOTES THEREFORE UNDER CHAPTER 44 OF THE GENERAL LAWS AND/OR CHAPTER 29C OF THE GENERAL LAWS, AS AMENDED OR ANY OTHER ENABLING AUTHORITY; THAT SUCH BONDS OR NOTES SHALL BE GENERAL OBLIGATIONS OF THE CITY UNLESS THE TREASURER WITH THE APPROVAL OF THE MAYOR DETERMINES THAT THEY SHOULD BE ISSUED AS LIMITED OBLIGATIONS AND MAY BE SECURED BY LOCAL SYSTEM REVENUES AS DEFINED IN SECTION 1 OF SAID CHAPTER 29C, AND THAT THE TREASURER WITH THE APPROVAL OF THE MAYOR IS BORROW ALL OR A PORTION OF SUCH AMOUNT FROM THE MASSACHUSETTS WATER POLLUTION ABATEMENT TRUST ESTABLISHED PURSUANT TO SAID CHAPTER 29C, AND IN CONNECTION THEREWITH TO ENTER INTO FINANCING AGREEMENT(S) AND/OR SECURITY AGREEMENTS(S) WITH THE TRUST AND OTHERWISE TO CONTRACT WITH THE TRUST AND THE DEPARTMENT OF ENVIRONMENTAL PROTECTION WITH RESPECT TO SUCH LOAN(S) AND FOR ANY FEDERAL OR STATE AID AVAILABLE FOR THE PROJECT OR FOR THE FINANCING THEREOF; THAT THE MAYOR IS AUTHORIZED TO ENTER INTO PROJECT REGUALATORY AGREEMENT(S) WITH THE DEPARTMENT OF ENVIRONMENTAL PROTECTION, TO EXPEND ALL FUNDS AVAILABLE FOR THE PROJECT AND TO TAKE ANY OTHER ACTION NECESSARY OR CONVENIENT TO CARRY OUT THE PROJECT. 4 Stan Kulig stated we’re here tonight to talk about the program and advocate for it. The meters have a fifteen year life span and we will be in the SRF program borrowing twenty years. There’s a warranty of fifteen to twenty years on the meters. This benefits both the utilities; Water and Waste Water. This is a budgetary item in the meter replacement renewal revolving account so we can replace the meters over twenty years and you won’t spend millions of dollars. Once we get this in place we’ll have a regular meter replacement schedule that can be funded regularly budgetary by the Water and Waste Water Departments. Councilor Tillotson stated if you’re going to get a return each year with more accurate meters, wouldn’t it be just as cheap to borrow short term for one half a percent and then pay it off from the savings that you’re going to generate from the more accuracy of the meters. Stan Kulig stated we will be paying this off through the additional revenue and we’re not going to have a meter reading program so there’s going to be savings on the labor. Jessica Hebert stated you can only borrow up to five years short term and after three years you have to make a principal payment of twenty percent. Councilor Tillotson stated if we borrowed one million dollars at one half percent it should pay itself with the extra money that’s coming in from the more accurate meters. Jessica Hebert stated you’re also assuming the interest rate will stay at one half percent. Stan Kulig stated we’re replacing sixteen thousand meters in a year and if you’re going to spread this out over four to five years you’re not going to see that million dollar increase. Tom Hamel stated that if you try to have that in five years at twenty percent principal payment that’s really tight. Councilor Laflamme asked are the residents going to be responsible for the difference from the new meter readings. Stan Kulig answered we are putting a program into place that will not hurt the customer and will not hurt our revenue stream as well. Councilor Krampits stated his concerns about how the billing cycle would be after the new meters were installed. Stan Kulig stated we are not going to penalize the customer. If we go to monthly billing people will see their usage on a regular basis and people will be notified a lot quicker if they are using too much water and those plumbing leaks can be addressed a lot sooner and eliminate the high bills and water loss. Councilor Roy stated at sixteen thousand bills a month do you think you’ll need additional staff. Tom Hamel answered we’re looking into something called a “smart register” that might optimize the staff. We may or may not need additional staff. Stan Kulig added the outside meter system that is out there now is obsolete; it is no longer made and no longer supported, so as they break or malfunction we can’t fix or replace them. Councilor Roy stated it sounds like you’re expecting these new meters to be at one hundred percent. Stan Kulig stated the accuracy of the new meters is going to approach one hundred percent. Committee vote 5 – 0 favorable. ITEM #6 Minutes – April 3, 2013. Motion made to approve. Motion passed. Meeting adjourned at 8:45 PM. 5