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2002-03-25 Water & Sewer Distri NEW HANOVER COUNTY WATER AND SEWER DISTRICT BOARD BOOK 2 MINUTES OF REGULAR MEETING, MARCH 25, 2002PAGE 708 ASSEMBLY The District Board of Commissioners of the New Hanover County Water and Sewer District met in Regular Session on Monday, March 25, 2002, at 11:56 A.M. in the Assembly Room of the New Hanover County Courthouse, 24 North Third Street, Wilmington, North Carolina. Members present were: Chairman Robert G. Greer; Vice-Chairman Nancy H. Pritchett; District Commissioner Julia Boseman; District Commissioner William A. Caster; District Commissioner Ted Davis, Jr.; County Manager, Allen O’Neal; County Attorney, Wanda M. Copley; and Clerk to the Board, Lucie F. Harrell. Chairman Greer called the meeting to order. He announced that Items 4 and 5 had been removed from the Water and Sewer District Agenda and placed on the Regular Agenda because the ordinances are part of the New Hanover County Code and must be adopted by the Board of County Commissioners. NON-AGENDA ITEMS Chairman Greer announced that time had been reserved for anyone from the public to present an item that was not listed on the Regular Agenda. He requested all persons to limit their remarks to three minutes. No items were presented. Approval of Minutes Chairman Greer called for a motion to approve the minutes of March 11, 2002. Vice-Chairman Pritchett requested a correction to reflect that County Manager O’Neal did not attend the meeting. Motion: Vice-Chairman Pritchett MOVED, SECONDED by District Commissioner Boseman, to approve the corrected minutes for the March 11, 2002, meeting. Upon vote, the MOTION CARRIED UNANIMOUSLY. ACTION DEFERRED ON ACCEPTANCE OF PUBLIC DEDICATION OF RIGHTS- OF-WAY IN GREENVIEW RANCHES, AREA A AND MIDDLE SOUND AREA B County Engineer Wyatt Blanchard reported that in Area A, the County is working with a private developer who would like to run a sewer line within one or more of the platted rights-of-way shown on a recorded map for the Greenview Ranches Subdivision. The rights-of-way were not originally deeded to the District and have been offered only for water and sewer purposes. District Commissioner Boseman asked if any easements were retained for bicycle paths. County Engineer Blanchard advised that he did not accept easements for bicycle paths; NEW HANOVER COUNTY WATER AND SEWER DISTRICT BOARD BOOK 2 MINUTES OF REGULAR MEETING, MARCH 25, 2002PAGE 709 however, the District can go back and accept rights-of-way for bicycle easements. District Commissioner Caster spoke in favor of including bicycle paths but stated that some of the property owners may not want a bicycle path going across their front yards. County Attorney Copley suggested changing the wording in the resolution to accept the rights-of-way for water and sewer easements and other public purposes. Motion: District Commissioner Boseman MOVED to adopt a revised resolution to accept the rights-of-way in Area A in Greenview Ranches and Area B in Middle Sound for water and sewer easements and other public purposes. Substitute Motion: After discussion on the importance of the language being properly added to the resolution, Vice-Chairman Pritchett MOVED, SECONDED by District Commissioner Caster, to table this issue until April 15, 2002, for the additional wording to be added to the resolution. Upon vote the MOTION CARRIED UNANIMOUSLY. CONSIDERATION OF AUTHORIZATION TO REQUEST QUALIFICATIONS FROM CONSULTANTS FOR UPDATE OF SEWER SYSTEM CONSTRUCTION SCHEDULE County Engineer Blanchard reported that the existing sewer system construction schedule was originally developed in 1989 by the engineering firm of Espey Huston and Associates. This plan was updated in the early 1990s by a committee appointed to provide recommendations on future sewer construction. The update included financial considerations and phasing. Considering the amount of sewer construction that has taken place in areas out of schedule, it is unlikely that the financial model is completely accurate; therefore, it is felt that a consultant should be hired to update the Sewer Construction Schedule. Once this study is completed, the Board may wish to consider forming another Citizens Committee to analyze and prepare recommendations concerning prioritization of areas to receive sewer service and possibly expansion of the water system. A lengthy discussion was held on staff performing the study. County Engineer Blanchard explained that staff could perform the study; however, with a limited staff it would require approximately nine months to complete because it would have to be worked in with the regular operations of the Water and Sewer Department. District Commissioner Davis asked how much the study would cost. County Engineer Blanchard responded that a consultant would probably charge between $50,000 to $60,000 for the work. He explained that the scope of the study and the information already gathered will help to reduce the cost. The scope can be written to allow staff to perform some portions of the study with the consultant performing the remaining work. NEW HANOVER COUNTY WATER AND SEWER DISTRICT BOARD BOOK 2 MINUTES OF REGULAR MEETING, MARCH 25, 2002PAGE 710 County Manager O’Neal advised that data collected over the last ten years is recorded and valid, which means the consultant will not have to start from scratch. It is hoped that through utilization of staff and the use of information gathered, the cost of the study will not be $50,000. Vice-Chairman Pritchett noted that County Engineer Blanchard is requesting the District Board to allow staff to prepare a Request for Qualifications to determine the cost of the study. If the cost is too high, the District Board does not have to move forward with the update. After hearing no further comments, Chairman Greer requested direction from the District Board. Motion: After further discussion, District Commissioner Caster MOVED, SECONDED by Vice- Chairman Pritchett, to authorize staff to proceed with preparing a Request for Qualifications to develop a new sewer construction schedule and to advertise and receive qualifications from interested firms. Upon vote the MOTION CARRIED 3 to 2. District Commissioner Boseman and District Commissioner Davis voted in opposition. CONSIDERATION OF EMERGENCY OPERATION OF GREENVIEW RANCHES WATER SYSTEM County Engineer Wyatt Blanchard reported that a call has been received from the North Carolina Utilities Commission requesting the District to consider assuming the Greenview Ranches water system under an emergency status. He stated that Mr. Jay Lucas and Mr. Andy Lee, representatives of the N. C. Utilities Commission, were present as well as Mr. Ralph Harper from the State Regulatory Commission and Mr. Allie Moore, owner of Coastal Plains Utilities. District Commissioner Davis asked if there would be a cost to taking over the operation of the system on an emergency status. Mr. Jay Lucas, a member of the Public Staff with the N. C. Utilities Commission, advised that costs would be involved with the District assuming the operations, maintenance, repairs, reporting, and billing and collection for the water system. The District can recover its costs immediately by charging the same rates as currently being charged by Coastal Plains Utilities. The District can also request the Utilities Commission to increase the rate to cover the costs incurred, or petition the Commission to grant a one-time assessment to cover some of the costs. District Commissioner Davis asked Mr. Lucas if the current customers of Coastal Plains Utilities in Greenview Ranches had been notified of a possible rate increase or assessment. Mr. Lucas responded that a majority of the customers signed a petition in July 2001 requesting the District to become the emergency operator. A meeting was held with a group of customers on February 27, 2002, and a majority agreed to incur an additional charge for better water. The customers have also been notified that if water is provided permanently by the District, NEW HANOVER COUNTY WATER AND SEWER DISTRICT BOARD BOOK 2 MINUTES OF REGULAR MEETING, MARCH 25, 2002PAGE 711 there will be a capacity fee of $720. No complaints have been received on paying additional costs to have better quality water. Chairman Greer requested Mr. Lucas to comment on the potential for the Utilities Commission to deny a rate increase. Mr. Lucas responded that he felt there would be a small chance of the rate increase being denied. He explained that the same rate charged by Coastal Plains Utilities would be in place until the Utilities Commission approved an increased rate. District Commissioner Davis asked if the District operates the system, who will own the equipment, and who will be responsible for repairing the equipment. Mr. Lucas responded that Mr. Moore would retain ownership of the equipment with the District being authorized by the Utilities Commission to operate water system. The District would be obligated to repair the equipment; however, the District could request the Utilities Commission to charge an assessment to cover any costly repairs. Chairman Greer asked what would happen if the District becomes the emergency operator and takes over the system and the previous owner wants to come back and operate the system. Mr. Andy Lee, Director of the Public Staff Water and Sewer Division, responded that in his 22 years of service, there have only been two or three occasions when the system has been returned to the original owner. The normal procedure is for the owner to agree to transfer the system to another entity, either a municipality or county not regulated by the Utilities Commission, or to another company regulated by the Utilities Commission. Further discussion was held on the District’s responsibility for the equipment. Mr. Lee explained that if the District agrees to be an emergency operator, the District will operate on the premise that it will be made whole, which means any costs incurred can be recovered through assessments or rate increases. The Public Staff would work judiciously on behalf of the District to obtain approval of these requests by the Utilities Commission. As an emergency operator, the District is working as an agent for the Utilities Commission to resolve a problem. Mr. Lee noted that the New Hanover County Water and Sewer District is the most viable entity to approach about becoming the emergency operator. The existing well in Greenview Ranches will require improvements. The District will have to request the Utilities Commission to approve installing an infiltration system and backwash disposal to meet N. C. Division of Environmental Health standards. The District will also have to add another well because there are 54 current customers which exceeds the 49 customer limit. If Mr. Moore remains in business and brings the system up to standards, the rates and/or assessments will be greater than making an arrangement with the New Hanover County Water and Sewer District to provide water permanently to the area. NEW HANOVER COUNTY WATER AND SEWER DISTRICT BOARD BOOK 2 MINUTES OF REGULAR MEETING, MARCH 25, 2002PAGE 712 Discussion was held on potential lawsuits. Mr. Lee explained that if an emergency operator is appointed, it would eliminate the opportunity for Mr. Moore to file a lawsuit. Under North Carolina General Statutes, an emergency operator can be appointed under two options: (1) the owner can consent in writing for an emergency operator to be appointed; and (2) if the owner will not consent and the Public Staff persuades the Utilities Commission that an emergency operator has to be appointed, the Utilities Commission can request the Superior Court to issue an order to appoint the emergency operator. This order clearly defines the responsibilities of the emergency operator. District Commissioner Davis requested the County Attorney to comment on any potential liability to the District. County Attorney Copley advised that a Consent Order agreed upon by Mr. Moore would be needed. Any orders that would be of assistance to the District should be received from the Utilities Commission. If the District becomes the emergency operator, the term of serving in this capacity should be known because it may not be a short-term arrangement. Mr. Lee advised that the emergency operator may petition the Utilities Commission to be relieved of emergency operator duties at any time. The Commission would issue an order upon the new emergency operator discharging the current emergency operator. The Commission would prefer a permanent solution whereby Mr. Moore would transfer the system to the District upon terms agreeable with the District to provide a permanent connection to the District’s water system. Mr. Allie Moore, owner of Coastal Plains Utilities, advised that he would give the District a water distribution system with rights-of-way, water mains, service laterals, water meters, meter boxes and a list of water customers. He requested the transfer to occur after April 1, 2002, to accommodate the billing staff. County Attorney Copley noted that if Mr. Moore is going to give the water system to the District, the role of the District must be defined. The item on the agenda was for the District to consider becoming an emergency operator. The District Board must decide if the District should become an emergency operator or become the permanent provider of the water system. District Commissioner Caster suggested moving forward with becoming the emergency operator and working out the details of Mr. Moore transferring the system to the County at a later date. County Engineer Blanchard stressed the importance of having time to examine the system and determine costs involved with becoming an emergency operator. Mr. Lee explained that since Mr. Moore has offered to give the system to the District, there would be no need to pursue the emergency operator route if a written agreement can be negotiated to transfer the water system from Mr. Moore to the District, which still requires approval by the NEW HANOVER COUNTY WATER AND SEWER DISTRICT BOARD BOOK 2 MINUTES OF REGULAR MEETING, MARCH 25, 2002PAGE 713 Utilities Commission. The Public Staff will need to meet with the customers to hold a public hearing to inform the customers about the costs involved with the transfer. Part of the system will have to be replaced to bring the water mains up to District standards. This means that a temporary connection with a pressure reducing valve will have to be used to allow the customers to exit the existing well until the District can make a permanent connection once improvements have been made to the system. This will require the customers to pay a capacity fee and an assessment for improvements to the water mains. Mr. Lee suggested allowing Mr. Moore to continue to operate his system until the end of April or into May depending upon the time needed for the paper work to be completed and approved by the Utilities Commission. Chairman Greer asked Mr. Lee if the date of June 1, 2002, would be a realistic date for completing the transaction. Mr. Lee responded that June 1, 2002, should provide enough time to complete the paper work and hold the public hearing. With so many customers in favor of the District operating the system, it is felt that a public hearing may not be needed. After hearing no further comments, Chairman Greer called for a motion. Motion: District Commissioner Caster MOVED, SECONDED by Vice-Chairman Pritchett, to proceed with acceptance of the Coastal Plains Distribution Water System in Greenveiw Ranches through negotiation with Mr. Allie Moore and the N. C. Utilities Commission subject to approval by the County Engineer and County Attorney. Upon vote, the MOTION CARRIED UNANIMOUSLY. ADJOURNMENT Chairman Greer called for a motion to adjourn. Motion: District Commissioner Caster MOVED, SECONDED by District Commissioner Boseman, to adjourn. Upon vote, the MOTION CARRIED UNANIMOUSLY. Chairman Greer adjourned the meeting at 12:15 P.M. Respectfully submitted, Lucie F. Harrell Clerk to the Board