WATER/WASTEWATER TASK FORCE MEETING

MINUTES

July 13, 2000

11:30 a.m. - 1:37 p.m.

Salem Civic Center - Room 325

1) CALL TO ORDER

The meeting was called to order by Councilor Paul Wulf.

2) INTRODUCTIONS

Introductions were made. Members, staff, and citizens were in attendance as noted below.

Staff present included Frank Mauldin (Public Works Director), Tim Gerling (Assistant Public Works Director), Jack Merritt (Finance Director), Mark Siegel (Financial Management Analyst), Karl Goertzen (City Engineer), Steve Downs (Utilities Planning Engineer), Paul Eckley (Chief Utilities Engineer), Pat Dodge (Management Analyst II), Keith Garlinghouse (Utilities Engineer), John Russell (Redevelopment Program Supervisor) , Jim Long (Housing Rehab Project Coordinator).

Mark Fields, Ed Gerding (sitting in for Steve Travis of Oregon Cherry Growers), Rick Stucky, and Chris Kenning (Statesman Journal) were also present.

3) CITIZEN INPUT

Rick Stucky voiced a concern that equity be looked at in a global sense, the same way as was done with the Food Processors.

At this time, JB Summers was given the floor to present his version of an option for funding replacement sewer laterals. Using several diagrams and a written handout (file copies attached) he stated a simple issue: Equitable/fair distribution coupled with best use of sewer funds and equity for all users. Payments should be incentive based, provision should be made for homeowner hardship, home equity question should be addressed and City should be given options on how aggressive they will pursue I&I. The City should not be responsible for work on private property.

There was discussion of the option presented by Mr. Summers at this time. Councilor Scott stated that some of this discussion was to find some alternatives so that the ratepayer wouldn't be subsidizing someone else's programs. We were looking at some ways to take some of the savings from not financing 100 percent of all the lateral work associated with R&R projects and use some of that money to replace more laterals.

At this time, Agenda Item 6 (OTHER) was brought forward and Jack Merritt was introduced to present the proposed August and September Task Force meeting schedule for water and sewer COSA discussions. The feasibility study has been finished. It was agreed that there will be two meetings in both August and September--August 17 and 31, and September 14 and 28. October 12 will be the final meeting before going to Council with the COSA. Eric Rothstein from CH2M-Hill will be present at the August 17 meeting and presentation at that time will bring the Task Force up to date from beginning to current COSA status. At the meeting on August 31, we would actually be getting into the details of the COSA work, the rate design work and discussing all the alternatives to continue in the meetings of September 14 and 28.

4) MINUTES

Draft minutes of May 11, 2000, were approved unanimously.

5) SEWER LATERAL REPLACEMENTS

The meeting at this time turned to presentation and discussion of the Sewer Lateral Replacement Funding Policy.

Frank Mauldin stated that this meeting will be last opportunity for quite a long time to deal with subjects like this - it is staff's intention to complete this discussion on the sewer laterals today. The report has been structured so that you can systematically go through all the options that have been discussed in the past and make your decision on each one of them. He stated that staff believes the existing program is the option most feasible - to continue with the existing program with 100 percent grant instead of 75 percent. If this option is the recommendation chosen, a sum of money ($300,000) would be made available for people who are outside project areas. Chairperson Councilor Paul Wulf asked if there are any cities that replace laterals with grants. Frank said no, that Salem is the only city in the state using this program.

At this time, Mark Siegel, Finance Management Analyst, was introduced to present a brief overview of considerations in financing a sewer lateral loan program.

The discussion turned to the decision tree (an attachment to the memo directed to Task Force members prior to this meeting) and Wendy Kroger made a motion to recommend staying with the existing policy - seconded by Councilor Gavin Sample. Chairperson Councilor Wulf called for discussion. It was stated that Salem has tried something different (current policy) and it is working.

Councilor Scott is opposed to the motion. Thinks it makes sense to look at what other cities do. It is important to find fair and equitable ways to finance.

Steven Anderson agrees with Councilor Scott's proposal - joint responsibility which allows low income as well, but can't support existing policy.

Marion County Commissioner Patti Milne also opposes. Councilor Gavin Sample is concerned with the core areas. If the City picks up the cost of the lateral and homeowners pick up roof drains, she is comfortable with the existing policy. Councilor Bennett cannot support the motion for existing funding policy. He feels it is not equitable. He is more supportive of Councilor Scott's proposal. Frank Mauldin stated that with joint responsibility, there is higher cost. Steven Anderson agrees with Councilor Scott's proposal--joint responsibility which allows low income as well, can't support recommendation for existing policy. Councilor Wulf opposes the motion. Ed Davis thinks joint responsibility needs to be spread equally.

Chairperson Councilor Wulf called for a vote at this time. The motion to follow the path of the existing policy failed by a vote of 8 opposed and 3 for the motion.

At this time there was more discussion of Councilor Scott's proposal. After much detailed discussion, Councilor Scott moved that a recommendation be taken to Council which included joint responsibility with a fixed City grant of $2,500 for sewer replacements in a public street or $1,000 for sewer replacements in a public alley; Partial Funding Option 4 with zero percent interest deferred loan for low income seniors or disable senior property owners; low interest amortized loan for property owners with income 80 percent or below the City median income; market rate interest amortized loan for property owners that do not qualify for the other programs limited to the amount of funds that are budgeted; use City savings to pay for additional lateral replacements. Councilor Bennett seconded the motion.

Frank Mauldin asked for clarification - Subcommittee has identified about $655,000, roughly, of additional funds available for this joint responsibility option. Are you trying to direct all that to a loan program? Councilor Scott stated that what he would like to see the options come back that give the choices between loans and expanded programs. We don't know how much it would cost to provide either deferred interest zero loans or amortized seven-year loans.

Councilor Scott stated that this financing option includes zero loans for the disabled and low-income and "there should be 2 options for Option 4 by providing loan options that we can look at with that $655,000. "

Frank Mauldin said the intent is to go to Council with a report on August 28. Wendy Kroger stated that we need to decide what kind of loan program we need. Councilor Wulf stated that he assumes Councilor Wulf's motion talks about not necessarily the core area - it's anyplace. Councilor Scott stated that beyond that, you would have the zero interest deferred payment for those that presently qualify for water/sewer rate reductions, which he understands to be low income elderly and the disabled with some sort of qualifications. Then we are talking about favorable financing terms for those under 80 percent in household income (homeowners), and try to offer some kind of amortized financing to others who are above 80 percent median income.

Jim Long clarified 80 percent of median income for a family of four is $35,000 per year. So, roughly, median income for a family of four is about $43,000 per year.

Frank Mauldin stated that the low income senior - 62 years old and makes less than $12, 063 per year. Disabled, there is no age limitation, but they have to be disabled and making less than $12,063 per year. There are 464 low income and 49 disabled customers participating (water/sewer billing)at this time.

Councilor Wulf noted that Councilor Scott should work with staff to make sure that the motion is clear for the task force to understand as to be presented to the Task Force meeting in August.

There was more discussion and the motion was voted upon and passed by a vote of 9 for and 2 opposed.

At this time, the discussion turned to an enforcement policy. The current ordinance is enforced by first sending a demand letter to the property owner requiring them to replace their lateral within a certain period of time. If they did not comply, the City attorney would be notified and a court order would be issued. After more discussion of current policy and information on the decision tree, Chairperson Wulf called for a motion on a recommendation to forward to Council.

Councilor Scott's motion, to enforce the sewer lateral replacement with a $50 penalty fee, was seconded by Commissioner Milne.

Frank stated that there is a problem with that in that when it is a rental property and the homeowner refuses to pay. Then what do we do? Cut the water off? Or what? Councilor Bennett stated that there will not be a solution for every single case, but this one seems to be an equitable one. Bob Newton stated that legal advice might be needed, but also a lien could be put on the property so that the work could be done now and paid for later.

After more discussion, Chairperson Wulf called for a vote. The motion passed 6 to 5.

It was pointed out at this time that by approving this motion, the other options for enforcement currently in place by ordinance would no longer be in effect. The enforcement would be limited by one option - $50 monthly penalty fee. Why not use all four options so that there are choices for varying situations? Frank Mauldin stated that staff thinks the enforcement policy is going to be pretty controversial, so the code needs to give clear authority to enforce. Don Scott made a motion for reconsideration of his original motion to include all four enforcement options: cite violators into Municipal Court; City does required work and liens property; monthly penalty fee; turn off water. He also moved that staff be instructed to come back with a fair and efficient, effective enforcement policy. Councilor Bennett seconded the motion. Chairperson Wulf called for a vote - motion passed unanimously.

Wendy Kroger requested that she would like to have staff take a look at the certification program after a year. Frank Mauldin stated that staff assumed that the Task Force has already approved that - this next year will be used to flesh out the certification process and bring it back for status update in detail.

7) OTHER

No other business.

8) ADJOURN

Meeting adjourned at 1:35 p.m.

These minutes are transcribed from notes and the tape recording of the Task Force meeting on July 13, 2000, as an overview of the meeting. They are not verbatim. The attachments are to the file copy only. Copies of the attachments were distributed at the meeting.

Linda Nelson, Staff Assistant II
August 11, 2000

Attachments:
Attendance Sheet (file copy only)
Materials presented by JB Summers (file copy)
Financial Considerations Memorandum from Mark Siegel (file copy)

These minutes were adopted at the September 21, 2000, Task Force Meeting.