Water & Sewer Committee

Sammy Rich, City Manager John Boyd, Director WATER AND SEWER DIVISION Customer Service Department Bryan Parris, Director Operations Department Brandon M. Cook, Director Water Reclamation Facilities Jeff Hill, Director Water Treatment Facilities Wayne Stanley, Director WATER AND SEWER COMMITTEE MEETING City Hall, 601 Broad Street, Sam King Room Thursday, May 2, 2024 9:00 AM PRESENT: Chairperson Mayor Pro Tem Jim Bojo Commissioner Bill Collins Commissioner Randy Quick Mayor Craig McDaniel Commissioner Wayne Robinson Mr. Sammy Rich, City Manager Mrs. Meredith Ulmer, Assistant City Manager Mrs. Toni Rhinehart, Finance Director Mr. Doug Walker, Public Information Officer Mr. John Boyd, Division Director Mr. Bryan Parris, Customer Service Director Mr. Wayne Stanely, Water Treatment Facilities Director Mrs. Jeff Pope, Assistant Water Treatment Facilities Director VISITORS: Bryan Pate, InSite Engineering David Crowder, WRGA News Multiple citizens CALL TO ORDER Chairperson Jim Bojo welcomed everyone and called the meeting to order. He also asked to be reminded next year to change the start time for the May meeting to allow everyone time to attend the National Day of Prayer events. REVIEW OF THE MINUTES No changes to the April 4, 2024, minutes were suggested, and minutes were approved by common consent. Minutes prepared by: Bryan Parris, Customer Service Director Water and Sewer Committee/ Commission Minutes, May 2, 2024 Page 1 of 5 FINANCIAL REPORT Mrs. Rhinehart reported Total Operating Revenues were down $629,492.00 as expected due to the rate decrease but also as expected Non-Operating Revenues were up due to the current interest rates. Total Revenues and Transfers in are up $1,537,058.00. She reported on expenses, most all departments were under budget YTD for the first quarter and all departments have done a good job in preparing their budgets this year. Bond coverage is very strong at fifty, mostly because of the lack of debt. She also noted the current Cash Balance is $184,515,000.00. OLD BUSINESS None NEW BUSINESS Mr. Boyd stated at the January commission retreat it was requested we pause and reevaluate our plans for PFAS remediation. He stated since we met last, EPA has come out with a Maximum Contaminate Level (MCL) for PFAS and as expected those numbers are low. We are in compliance, based on the criteria. The MCL EPA set is 4 and we are at 3.59. That said, there are factors that can change at any time which could affect our numbers. Right now, we are on the Etowah which has lower PFAS levels, we are using GAC, which is due to be changed out right now, and we are producing water out of the plant at a very low rate of 6 ½ to 7 ½ MGD. When these numbers go up all the others go up with it. What we are doing is working but it is not the long-term solution. Mr. Boyd then asked Mr. Bryan Pate with InSite Engineering to explain to the committee the plans and recommendations InSite has developed. Mr. Pate noted we talked last time about other sources of exposure to PFAS and Time Magazine had come out with a good slide that talks about different things just in our homes that contain PFAS such as pizza boxes, non-stick cookware, and glide dental floss. But a couple of new studies have come out showing 65% of band aids tested contain PFAS. Toilet paper has 80 parts per billion (PPB), which is 80,000 parts per trillion (PPT), drinking water is now set at 4 PPT. Studies also show some contact lenses with 20,000 parts per million (PPM). Mr. Pate noted the EPA is backtracking on statements that up to 20% of our exposure to PFAS is from drinking water. The new statement is “there are a range of variables, including the level of PFAS present in drinking water as well as other environmental factors like proximity to industrial sites that might release PFAS into the air and soil. The types of products people use in their daily lives that may contain PFAS such as non-stick cookware, waterproof clothing, stain-resistant fabrics, and certain water-or sweat proof cosmetics. Some people may also have higher levels of exposure through their work, like fire fighters who may use firefighting foam that contains PFAS. All these factors make it difficult to determine exactly how much of a person’s exposure comes through any single source. Mr. Pate showed data for the Maximum Contaminate Level (MCLs) with PFOA and PFOS set at 4 PPT, the lowest testable level, and the MCL general requirements: 3 years to complete initial monitoring (2027). 5 years to implement solution (2029). Public notification for violation begins in 2029. Mr. Pate then moved on to the technologies, locations, and cost considerations evaluated in their work. Pate noted, included in this were the top three Best Available Technologies (BATs); Reverse Osmosis (RO), Granular Activated Carbon (GAC), Ion Exchange (IX) and three others which were not scalable to our needs. He reported the 2021 cost estimates and listed the four sites considered, the current water treatment plant on Blossom Hill, Riverside Parkway, current Public Works and Water Operations, and the Water Operations pipe yard. Pate stated based on all the research, pilot testing that had been done, and the chemical makeup of our water sources RO was the best option for a permanent long-term solution. GAC, our current method, requires contact time to work, higher demand means shorter contact time. For the location Pate reviewed each site and explained why the Riverside Parkway site was the best location. Blossom Hill would not allow for any future growth. All available acreage would be needed to construct the new plant as it is designed, which is for current demand and near future growth in the next few decades, and we would have to do this while still operating the existing plant. There were also concerns that the ground under the existing building could not support the new plant and would require excavation in addition to the time and cost. Public Works and Water Operations location would mean finding a new location for both those facilities Minutes prepared by: Bryan Parris, Customer Service Director Water and Sewer Committee/ Commission Minutes, May 2, 2024 Page 2 of 5 again, adding to time and cost. The Water pipe yard is on the site of a former landfill and there was a major concern for the possibility of contaminate leaching along with issues with foundation support of the plant. Commissioner Robinson commented, as you know I am against putting it on Riverside because we are taking a valuable piece of property that has a lot of potential for revenue for the City. We are continuing to put non-producing buildings on good properties. Mr. Rich responded saying what we are setting out to do is going to separate us from anywhere near Rome. This facility will garner a lot of attention and will also generate a lot of revenue in a different way. Mr. Pate continued; this brings us to the two decisions that must be made. One, remediate on Blossom Hill or move offsite and second do we want to continue with Construction Manager at Risk (CMAR) or go with the competitive bid process. CMAR is a little quicker but with competitive bid we find out the right price. Under the CMAR process they work through the plans and establish a guaranteed max price then they work on cost plus basis, but you know the price was capped. What you don’t know is was that guaranteed max price is established at the right number or not. Our opinion is that we think because of the financial situation the competitive bid process is the way to go. You have engaged Archer Western for phase 1 on the CMAR which was to help us get to a certain point of design at some cost, you have done that, you’ve met your obligation there, you are not under any obligation to move forward with them beyond this point. We feel there are significant savings to be made in the competitive bid process. I don’t want to get off into any weeds, but we asked them to evaluate some things and they gave us a credit of what we felt was abut 15% of the credit we should have been given back so they gave us back $4 million on something we felt like was about a $25 million cost savings. There is no way to really evaluate that without the competitive bid process. Mr. Rich then explained, so what we’re doing today is a progress update, back on February 23 rd we kind of laid all this out to give full disclosure of what we are up against. Now this is really a big decision, we think it’s expensive but until we do a competitive bid we are not going to know. If you all are okay with the bid process then I think we move to procurement and then at some point that would be procuring, reviewing, interviewing, and going through all the motion and then coming back here with a recommendation that company X appears to check all the boxes and we are ready to go, that would be voted on and taken to the full commission. That’s one piece, the other is I know we didn’t want to be on Riverside, but I’ve got to count on the professional engineer’s recommendation and like I said earlier we can put this wherever you all decide to do it, it’s just time and money. Chairperson Bojo commented but we’ve got to have a place to put it. Mr. Pate replied, right and from an engineering perspective Riverside is the best site if we are going to move it off Blossom Hill. If we are going to do it on Blossom Hill, we are going to spend a lot of money to make it viable for the next two decades whereas Riverside would be viable for the next 80 to 100 years. Therefore, our recommendation from an engineering standpoint of view would be the Riverside Parkway site, as well as going with competitive bid. Commissioner Quick asked if expansion on Blossom Hill pretty much impossible? Mr. Pate replied if we build this building on Blossom Hill we will be tapped out on Blossom. Mayor McDaniel commented, we’ve got the settlement money and I think it’s pretty much understood we are above $200 million. Mr. Rich responded, based on where we are with the CMAR, and that’s why I say until we bid this, we are sitting on $154 million in the bank with another $30 million on the way for a total of $184 million and gaining $5 million in interest, but with a loss of revenue from the rate reduction, so $200 million is probably a guess right now. Mayor McDaniel, I saw a number earlier around $250 million. Mr. Pate, $250 million is where the CMAR got to with no competition and no incentives. Mayor McDaniel, so in some people’s mind that may be the top threshold. Mr. Pate, yes, I would think the very top, we thought we had what was at least $25 million savings and they came back with an offer of $4 million. Mayor McDaniel commented, “I want to say I’m only here for my own benefit not to sway anything. I would like to go into this thinking that the money we’ve got that we could do this without having to go into debt. Is that a possibility?” Minutes prepared by: Bryan Parris, Customer Service Director Water and Sewer Committee/ Commission Minutes, May 2, 2024 Page 3 of 5 Mr. Rich replied, “I would like to say that also but until we get bids, I can’t say that and with full disclosure we might be back here talking about having to borrow money for this project.” McDaniel asked Mr. Rich to explain that process. Mr. Rich stated it would be just like any time we have ever done a project such as this, we just had to issue the debt and make payments on it, and he reminded as Mrs. Rhinehart said earlier, we have almost no debt right now so it wouldn’t be out of the question. Mr. Boyd added that we are far enough ahead that this would not be a problem with the timeline and there might be some grant money, which we are looking into to see what might be available. Mayor McDaniel commented, as he recalled, as part of the settlement was a rate rollback. Mr. Rich replied that was correct. McDaniel asked, so if we borrow money is there an understanding that we are not going to do a rate increase due to that loan. Mr. Rich and Boyd stated that we cannot have any rate increases relating to PFAS. Mr. Boyd did go on to say, we did forgo the planned rate increase for 2024 and will begin a planned rate study in the third quarter of this year, but that has nothing to do with this project or PFAS and there will be a rate increase. Because in the rate rollback we lost all our operating increases that were included in those prior year rate increases not just the increases due to PFAS. McDaniel commented we just need to be very clear in every communication that we have in this settlement, and we are not putting this back on the backs of our customers. Chairperson Bojo, so we are looking for a motion to approve the site on Riverside Parkway and to put it out for competitive bids, can we do that in one motion or do we need two separate motions. Mr. Rich replied if you all are good with the recommendation made by the engineers to me that’s one recommendation which includes both. Chairperson Bojo, so the recommendation was to use that site and competitive bids. Mr. Rich replied yes. Chairperson Bojo, so I need a motion for that. Commissioner Quick responded, Wayne, I have complete appreciation for your concerns, I totally do, that is a prime site. I do also believe fully that this particular situation is going to be a point of notoriety for the City of Rome for many years to come because we were able to get ahead of the problem, we were able to win, we were able to do something that was a David and Goliath scenario and I think it is going to involve a great deal of interest across Northwest Georgia and Southeast to see how we did that, so I think when they realize this has happened I think having that building there as a focal point is not a bad thing so I am going to make the motion that we approve the recommendation. Commissioner Collins seconded the motion. Commissioner Robinson asked if this vote went to the full Commission. Chairperson Bojo replied yes, the motion was made and seconded so we are all in favor, correct. Mr. Rich replied yes. Chairperson Bojo, Commissioners Quick and Collins and Mr. Rich all thank Mr. Pate for all the hard work he and InSite did on behalf of the City of Rome. Mr. Rich stated as everyone knows this site has been the home of the field events as part of the Barron Stadium agreement with Rome City Schools and they are aware we were looking into using this site. I will officially notify the City Schools and we will work with them to come up with a new location for the field events. Chairperson Bojo asked if there were any questions. Citizen Tom Couch stated he thought this decision was made at an earlier meeting he attended several months ago. Chairperson Bojo and Commissioner Quick responded that the site had been discussed several times in the past two years, but it was not confirmed and was never voted on. Commissioner Collins asked if there would be any opportunity for local companies and businesses to do some of this work? Mr. Pate commented that we see a lot of local subs for fencing, landscaping, drywall, concrete finishing, and the like in projects like this. He said they like to use their contractors for the big stuff, but it’s not cost effective to bring people in from other areas for things like these. OTHER None Minutes prepared by: Bryan Parris, Customer Service Director Water and Sewer Committee/ Commission Minutes, May 2, 2024 Page 4 of 5 Adjourn There being no further business to discuss the meeting was adjourned. Respectfully submitted. John Boyd, Director Rome Water and Sewer Division Minutes prepared by: Bryan Parris, Customer Service Director Water and Sewer Committee/ Commission Minutes, May 2, 2024 Page 5 of 5