THE CITY OF FREDERICK
101 NORTH COURT STREET
FREDERICK, MARYLAND 21701
UTILITY COMMITTEE
Minutes
9:00 a.m.
Wednesday, August 10, 2005, City Hall - Room 214
Aldermen Present: Alderman Bill Hall (Chairman), Alderwoman Donna Kuzemchak-Ramsburg.
City Staff Present: Saundra Nickols, City Attorney; John Leisenring, Chief Financial Officer; Paul Lee, Director of Engineering; Thomas Davis, Manager – Utilities Planning-Engineering Department; Chuck Boyd, Planning Director; Randy Connatser, Deputy Director of Public Works; Sarah Stamper, Engineering Department Secretary.
Citizens/Representatives Present: Roy Whitehouse, Kenneth Parker, and Robin Thompson of First Baptist Church of Frederick; Steven Metzler, SAIC; Dr. Mary Miller, Fredericktowne Labs; and Anne-Herbert Rollins of Miles & Stockbridge for the First Baptist Church Project.
The Minutes were unanimously approved.
Item 2: Continued discussion regarding First Baptist Church and Municipal Water Source in Exchange for Access to City Sewer System.
Ms. Rollins reminded
everyone present that as legal counsel for First Baptist Church, she is to be
copied on all correspondence between the City and the church regarding this
project.
Mr. Whitehouse handed out
copies of his “talking paper” which he used for his presentation. He feels the project will provide water, a
valuable asset to the City. Mr.
Whitehouse stated in Item 7 of his paper that he feels that the information
contained in the August 9, 2005 memorandum from City staff contains
“unquantifiable” information.
Mr. Lee stated that a
decision on this project needs to be made.
He feels this is a “policy” issue—not quantifiable data. The City’s infrastructure does not include
small wells. He indicated that he had a
conference call with Mr. Eisenhart (who is vacationing in Illinois) regarding
the matter. Irrigation was not
discussed, although the numbers will not dramatically change.
Mr. Whitehouse disagreed
and stated that 50,000 a year is a big difference.
Mr. Lee continued by
stating that the project in question is outside the City limits, annexation is
an issue, and that the City would be setting a precedent by accepting small
wells.
Alderman Hall asked if
the project is located in an area of the City slated for annexation.
Mr. Boyd responded that
the project is not located in an area designated for future annexation. He does not feel that approving this project
is in the best interest of the City.
From a policy perspective, the downside created by the precedent that
will be set by accepting this project for 62 units is not outweighed by the
benefits. As a result of approving the
project, the City would no longer have control over annexations and
utilities. This is a huge policy change
that is only marginally beneficial in exchange for a HUGE policy change.
Alderman Hall asked why
the property is not located in an annexation area.
Mr. Boyd stated that this
property was not considered for annexation due to geography—it was decided not
to continue up the mountainside where this property is located.
Alderwoman Ramsburg noted
that she remembers making the decision, along with her fellow aldermen
(including Alderman Hall) not to include the area around this location in the
annexation zone.
Ms. Rollins clarified
that Item 7 in the memorandum dated August 9, 2005 from City staff stated that
the church does not desire to annex into the City. She stated that the church would be happy to annex into the City. In addition she pointed out a
contradiction-- she stated that the church is giving the City water, but Item 6
of the same City memorandum cited above indicates that the project would be
“reducing” the development capacity within the City.
Alderwoman Ramsburg
referred to Item 5 of the memorandum from City staff dated August 9, 2005 which
states that there will be a loss of $413,628.49 to the Water and Sewer Fund
over the next 25 years, and expressed her concern.
Mr. Whitehouse stated
that the $413,000 would be immediately offset by the 233,460 winfall shown in
the Executive Summary Statement.
Mr. Metzler stated that
the 233 number was derived from the current worth number provided by Fred.
Alderwoman Ramsburg
stated that the figures are still in the negative.
Mr. Boyd asked the
applicant if they had received a statement from Maryland Department of
Environment indicating that the private well will be treated differently than
wells in the City.
Mr. Whitehouse stated
that last November he received an information packet from MDE that included the
very statements Mr. Boyd questioned. A
private well cuts the flowrate of the well by ½.
Alderwoman Ramsburg asked
the First Baptist Church representatives if they dispute that they are in the
negative in the final column of the information chart.
Mr. Metzler stated that
he does not dispute he is in the negative, but he feels the number is not
correct.
Alderwoman Ramsburg
stated that if the number is in the negative, other water users are paying for
services to the church, which does set a precedent.
Alderman Hall asked what
the church plans to do with its current church building.
Mr. Whitehouse stated
that the church will be leasing the building to the Montessori School. The building is currently up for sale. In response to Alderman Hall’s next
question, Mr. Whitehouse also stated that the school is not a tax base.
Mr. Boyd stated that the
building is zoned for institutional use and that he is not aware of any
institutional use that pays taxes.
Mr. Whitehouse restated his
belief that the 413,00 is overcome by the 200,000 winfall in the Executive
Summary.
Alderwoman Ramsburg asked
why the applicant considers the 200,000 a winfall.
Mr. Whitehouse responded
that what they are providing to the City saves the City 204,000 from
maintaining the system. That is aside
from the 183,000 per year increased tax revenue. The 413,000 will be overcome in 2 ½ years even with only figuring
the 183,000 per year.
Alderwoman Kuzemchak
stated that the Potomac project will provide the City with water. She feels he is assuming the houses/water
won’t be built otherwise.
Mr. Whitehouse replied
that water is a limited resource. If
the City turns its back on the 62 homes now, it will be turning its back on the
homes forever. This is an added
resource. At some point in time, the
Potomac water agreement will not meet the City’s needs-- Plus 183, 000 a year
will be added to the City’s tax bases due to homes. This is allocable water.
Alderwoman Ramsburg
stated that Mr. Whitehouse assumes that the property taxes pay for nothing
other than water. Taxes provide many
services such as roads, parks, etc for all residents.
Mr. Leisenring noted that
property tax loses cannot be used to offset water and sewer funds. The taxes would be used for other services,
as well.
Mr. Whitehouse noted that
there are ways to transfer money from one fund to another.
Mr. Leisenring
disagreed. He stated that it costs
money to provide services to residents.
The City has regulatory agencies regarding how money is listed in the
funds. The City cannot arbitrarily take
money from one fund to another. There
must be a basis for the transfer. He
feels this proposal is asking 62 homes to subsidize the water and sewer fund.
Alderwoman Ramsburg
stated that tax money pays for services.
Tax generated is not “extra” money.
Mr. Whitehouse stated
that the City is getting additional tax money.
Mr. Metzler used play
money to explain his money computations.
He stated that the applicant is building its own booster station which
is an asset. The project will use water
for which the City will send a water bill.
Water billing will receive 620,000 in water billing which is incoming
revenue. The project will pay 1,000,000
in impact fees. It will pay 230,000
(70%) to water system improvement. This
is all income. Expenses include
chemicals, replacements, and 5% City overhead which adds up to 6,000,000 with
maintenance. When the water revenue is
gone the 90,000 must come from somewhere.
On paper it is losing money.
However, he noted that the booster station will be a NEW facility with
little maintenance, therefore being a profit.
He believes money will be saved by having the income with no maintenance
cost for the first years. In addition,
the station will have produced 200 million gallons of water per year. Then, the City could shutoff the station
when it is beginning to need repairs and utilize the water produced from the
Potomac agreement. He also noted that
the numbers listed in the formula/chart is worst case scenario.
Alderwoman Ramsburg
stated that plans must be made for worst case scenarios.
Mr. Whitehouse stated
that this proposal can make the City thousands of dollars.
Alderwoman Ramsburg still
feels that this project asks the rest of the taxpayers to foot the bill.
Mr. Parker does not think
that having taxpayers fund other projects is a precedent.
Alderman Hall stated that
the precedent is not that this project can’t be done, merely that the next
project requesting the same thing will have to provide the same things to the
City as this project will be required to provide. The project must be justified.
He feels the applicant has justified that they are paying for their
costs. The next applicant would have to
do the same thing.
Mr. Whitehouse asked if everyone
was in agreement that money would come into the City as a result of this
project, and that the question is how that money is used.
Alderman Hall stated that
he felt that money wouldn’t be lost at the present church as it is a potential
revenue source. He does not agree it is
a win/win situation, and he cannot quantify the information as there are
variables.
Alderwoman Ramsburg
indicated that taxes are used for other services as well as water. Tax revenue cannot just be considered as a
winfall. She stated that she was not
willing to move forward with this case.
Mr. Whitehouse questioned
why Alderwoman Ramsburg does not consider the tax revenue as added revenue to
the City. Alderwoman Ramsburg stated
that the project is also an expense to the City due to added services needed.
Alderwoman Ramsburg
stated that at this point in time, she does not feel that approving the project
is in the City’s best interest.
Mr. Whitehouse asked for
a clarification of the ability of the City to transfer funds.
Alderwoman Ramsburg
stated that taxes from properties are spent in other services for those
specific properties from which the taxes were received as well as for services
for other properties of the City.
Mr. Whitehouse stated
that the project will bring additional revenue to the City.
Alderwoman Ramsburg
stated that the project will also bring additional costs.
Mr. Whitehouse stated
that the benefits outweigh the deficits.
Mr. Lee stated that a
fundamental assumption is that MDE will permit the gallons per day.
Alderwoman Ramsburg moved
to end the discussion.
Mr. Boyd asked if this
application/project would move to the Mayor & Board workshop, or end at
this committee.
Alderman Hall recommended
that this application/project be placed on the next Mayor & Board workshop
to receive input from the public.
Alderwoman Ramsburg
stated that she is not in favor of approving the application, or moving it to a
Mayor and Board workshop.
Mr. Boyd asked if a third
utility committee member was needed to break the tie.
Alderwoman Ramsburg
responded that as an alderman, Alderman Hall can make the request to place the
item on a Mayor and Board workshop. It
does not need a motion and second.
Mr. Lee asked Alderman
Hall to be sure to copy Sarah Stamper, Engineering Secretary, on all
correspondence and information regarding the Utility Committee as she is now
doing the minutes and agendas for the committee.
Alderwoman Ramsburg moved
to add the VFW to the agenda. She
indicated that she had received the information from MDE indicating their
consent for the pool to use well water for the pool and to discharge the well
water into the ground. Therefore, she
moved to permit the VFW to use nonpotable water in the pool and to water the
golf course as per the information received from MDE.
There being no further
business, the meeting adjourned at 10:20 p.m.