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HomeMy WebLinkAboutMinutes - 19850525 00 )08`7 MINUTES ORANGE COUNTY BOARD OF COMMISSIONERS SPECIAL MEETING MAY 24, 1985 The Orange County Board of Commissioners met in Special Session on May 24, 1985 at 3:00 p.m. in the Commissioners' Room of the Orange County Courthouse, Hillsborough, North Carolina to discuss several items pertaining to the Efland Sewer Project. COMMISSIONERS PRESENT: Chair Willhoit, and Commissioners Shirley Marshall, Moses Carey and Ben Lloyd. COMMISSIONER ABSENT: Commissioner Norman Walker. ATTORNEY PRESENT: Geoffrey Gledhill. STAFF PRESENT: County Manager Kenneth R. Thompson, Assistant County Managers Albert Kittrell and William Laws, and Clerk to the Board Beverly A. Blythe. 1. INFORMATION FROM FARMERS HOME ADMINISTRATION Don Kordell, Hazen and Sawyer, took the two options for the 191 people in Efland who had signed customer agreements back to FHA and explained the intention of the County to either scale back the original phase one project because of the limitation of funds or cancel the original project and start a new project with construction of the same sewers. FHA is in agreement that the County may scale back the project and suggested that the Board adopt an overall long-range plan, build what can be built at this time and then adopt a loosely defined schedule for construction of the remainder of the sewers. If the project was considered a new one, the present loans and grants would be lost. Kordell suggested adopting the modified plan, scale back the project to build what funds would allow and develop an implementation plan for construction of the remainder of phase one. He further suggested that a fee schedule be designed to generate additional revenue to help finance the growth to the system. 2. REPORT ON THE ENGINEERING PLAN PRESENTED BY DON CORDEL.L. Kordell reiterated the portion of the plan that could be built within the budget (Base + A + part of C) . He noted the importance of the interceptor at McGowan Creek which would give the County the flexibility needed for servicing future industrial growth in the I-85 corridor. If the bids come in higher than the amount of money available, the plan would need to be scaled back accordingly. As funds are available, additional sections could be constructed one at a time or in several sections at a time. 3. ORANGE HEIGHTS (See the map in the permanent agenda file.) Kordell presented a map of Orange Heights showing a total of 78 houses. Fourteen (14) or fifteen (15) could readily be served by the lines constructed under the base bid. In order to pick up all 78 houses it would require an additional investment of $130,000. 4. OPTIONS FOR GENERATING CAPITAL Kordell presented a comparison of rates for several sewer providers in the area. He mentioned five (5) ways of producing capital to finance the system: (a) establishing rates for the users that would generate excess revenue which excess revenue would accumulate until enough money is available to construct a portion of the system, (b) increase the tap fee, (c) charge an acreage availability charge, (d) future grants or loans, and (e) future County contributions. 0 088 It would take approximately $700,000 to build the remainder of phase 1 to serve the 191 people who signed customer agreements. It would take 800 to 1,000 new customers to generate the $700,000 by resident equivalent with the proposed rate structure. One way to reduce the amount of time would be to charge an acreage fee ($300 or $400 an acre) or a front foot fee. This would reduce the amount of new customers needed to raise the money by one half. Commissioner Marshall asked if in the $750,000 the payback of the loan for phase one was included. Rordell suggested the loan be repaid with the user fee that would be charged the customer. Geoffrey Gledhill explained there is an amount of money that is being borrowed from FmHA that will be paid back by the sale of net debt reduction bonds; the County is lending an additional $136,000 to the project which will be repaid by tap fees. Chair Willhoit suggested that if the fixed amount of the monthly payment set in an amount necessary to repay the bond indebtedness were kept constant, the fixed amount would generate new funds to expand the system. Tap fees could then be used to pay the $136,000 which is the second loan from the County. Attorney Gledhill pointed out that the initial 191 customers would not be subject to the acreage fee or the tap fee. In summary, Chair Willhoit noted the mechanism is available to proceed with the modified plan with a commitment to provide the service to the 191 but the timetable beyond the base area would depend upon revenues and adoption of a fee schedule that would include a monthly charge, a fixed monthly charge for retirement of the debt service and some combination of availability fee, front frontage or acreage fee. The tap fee is more appropriately called availability fee-. 5 MODIFICATIONS IN THE WASTEWATER COLLECTION AND PURCHASE CONTRACT (A copy of the original list of modifications and suggested changes is in the permanent agenda file.) After extensive discussion and comments from Mayor Frank Sheffield and Commissioner Lynwood Brown, several changes were made to the modifications presented by the Town of Hillsborough to the Wastewater Collection and Purchase Contract. Mayor Sheffield agreed to take the changes back to the Town Board for their approval. There was a general consensus of the Board on four points: 1. Go with the modified plan. 2. Commit to the 191 to satisfy the agreement, subject to point 3. 3. Adopt a timetable for extension to the 191 customers subject to the availability of revenues. 4. Adopt a fee schedule to generate additional revenues. Motion was made by Commissioner Marshall, seconded by Commissioner Carey to adopt the modified plan presented by Hazen and Sawyer and authorize Hazen and Sawyer to prepare whatever is necessary to submit the base bid plus alternates A and C if money is available. VOTE: UNANIMOUS. ADJOURNMENT Chair Willhoit adjourned the meeting at 4:20 p.m. The next regular 0O .A89 meeting will be held on May 28, 1985 at 7:30 p.m. in Superior Courtroom, Hillsborough, NC. Chair:Don Willhoit Beverly A. Blythe, Clerk