we are wellcome it is february third two thousand and fifteen at five thirty four pm time for the five thirty start of the town of richmond water or sewer commissioners meeting our agenda five thirty blocking the public comment shortly after that we go into executive session for a discussion of riverview commons which is related to the west made extension we expect to come back out of executive session at about six o'clock with the west mean expend extension update superintendent report and review the budget then close with discussion for next  welcome members of the public any comments from the members of the public this evening all right having heard none we do have a quorum of three out of five members we have the possibility of entering into executive session two i motion to that effect also  second any further discussion if we move directly to a vote in favor say aye aye we are now in executive session so members of the public including the cameras off and  the west mean extension update  revenues just based on a sort of facts that we've taken that we're actively negotiating with the owner of riverview commons mobile home park to be able to see if we can but also that would allow potential economic development in other areas along the line we have a two point five million dollar question on for town meeting that people are going to vote on that on question we can even apply for it there is a crucial point jeff because i know some people have asked why we would float a bond before we had the grant and the question is there the answer is because we have to right because the federal government like the state they have a requirement before you qualify you have to have the authority in place to be able to show that you can do that because these are all green loans so what we've been to talking about is a forty five percent grant fifty five percent loan so they all want to see that you have one hundred percent of that authority before they approve you for anything one other comment just to with this sort of on the record at least for a video  then why the whole focus the whole town votes on this kind of bond even though the whole town isn't responsible for paying back the bond right so the all all of richmond's debt is general off the cation debt which means that it's the general obligation of the taxpayers to pay all the debt since the terror of the village emerged twenty five years ago the policy has been that the water sewer system is paid for its share of the debt through user fees and not taxation so it wouldn't be any different in this case and in fact we've said all along that this project would be paid for by fees from those  connect to it it wouldn't be subsidized by either the current users or the taxpayers so that's where we're going with this so even though it's a general obligation that we've taken it upon ourselves to say it would be made by the water sewer system for directly by new connections on the new line and that's why we want to we're negotiating with the mobile home park we want to be able to take to the voters to say we have an agreement that will add a minimum pay for the debt service with new connections without having to go to each individual landowner between here  so to clarify the purpose of executive session is to it's covered in statute about when we go into executive session it's based on negotiations of contracts and real estate acquisitions  if discussed in a public venue would potentially conflict with the interest of that commission and so without without  releasing any information that's subject to the executive session and i'll reiterate some comments that were made in previous public meetings that the economic model of the line extensions does not work well through phases one and two of the scoping study area it works when we get all the way food through phase three which is underneath the highway and over to the mobile home park because of the number of users so there are one hundred forty eight current mobile homes at the end and the weight of these systems work best is when you have a combination of use volume and or number of residential users if you think one hundred forty eight users out at the end how many properties in between jeff and phase one into phase one two thirteen or fourteen with currently a very modest number of developed properties or you know the volume of use which is described in the green mountain engineering report you look at the volume of use it's a very small percentage of the mobile home park a month it would be somewhere in the neighborhood of twenty percent of the current flow substantial percentage so illustrates that it's a large volume way out at the end so are they interested at this point i can't speak for them i would only observe that if they were entirely an interested we wouldn't be an executive at this session and have a negotiating committee meeting with them so there is no contract in place the negotiating committee which is subset of this group and taylor from the select board meeting with a representative of riverview commons to explore contract and when those have concluded it would be the result in a successful contract and adding them in or not and at this point i can't speak to what i think the likelihood is but those are the two potential outcomes we either come to an agreement where we ok so we move on to superintendents report kendall i'd like to see that life is good but actually the last month we've had a fair number of failures we've got a meaningful pump that needs to be rebuilt we've got a mixer that's failed we're looking for a replacement for that the impellers on the remaining mixers of which there are three are worn down quite a bit so we're going to need to replace those we had a generator service the other day we had a coolant problem which we fixed but they found a fuel leak in it so we're looking at a new fuel pump heater at the water house failed yesterday we got it going again but now when it starts it ignites gas in it so we get a our reserves now so i expect that most of these i can take rate out of the operating budget and the expense of something else from peter pay paul but this just showcases that you really need normal merge and see things like you would use a reserve for but typically it hasn't been funded for the level that it needs to be funded to so what you i think you're describing kendo some of it's occurred over some period of time yes yes so do you off the top of your head have a sense of where we were like ten years ago five years ago last year in two thousand and six we had three hundred fifty some odd thousand dollars in our sewer reserves so there's been a fair number of line we get a major line project would be a are a project we use some reserve funds for that we've done a lot of engineering we've done a lot of upgrades the system itself is in excellent shape but the plan and the plan is in excellent shape as well but it has been ten years since you did your phosphorous upgrade time flies fast and once in reserve my understand is about twenty three thousand so if you said in roughly ten years  conference three fifty to twenty three that would illustrate your point of substantial decrease over time and really all that shows is that that's the level of spending that you've had to keep up to do the things that you do but you've kept your these sterile loans and stuff now e p a started to put rate in the requirement that you fund the reserves and if you don't fund reserves and you don't show it in your budget they will not give you money we have reserves we are what we have reserve line item in our water budget because we had to do that to get the funding for the tank we had not done for the wastewater budget so remember this cannot be this is a great image because it cannot be  and so i mean this is kind of getting into the budget discussion that the big thing the understand is that when you run your reserves your pain yourself first and you're saving yourself money from interest because if you put a dollar to stay in sewage again we've had expenses and stuff so it's a good point where this goes merge into the budget discussion so this saturday revenues have been going into reserve but what percentage of the septic revenues basically go back and well let me let me correct that up until a short period of time ago all of the separate revenue was put into the budget the only amounts that went into the reserve was the little amount that was funded in the budget in the reserve last year we reduced our septic receipts with the expectation an extra step to drive a new would be put into the reserves but we had a pretty lively discussion that i don't believe it's quite been resolved for sure yet and whether that extra money should go to rate reduction or reserve funding the new budget cycle here i have a way to take care of that so th i mean shelburne had a major press failure costing them a quarter million dollars plus they had no reserves they had to go out and bore the money milton just had another major press problem and they're looking at well over one hundred thousand dollars and they have reserves so i mean this is this is a regular thing is a lot of high quitman at the wastewater through that can just fail and they expect you to have the money prepared for that to replace it no and actuall is doing yeah a lot of businesses you expect to fund balance as a percentage of your annual expenses very soon follow and of course then if you have a bad year you draw down your reserves you have reserves and bang and businesses that don't fund their reserves like the state of vermont run into is ignitor can fiscal difficulties when all the sudden they need to find a bunch of money and there's no money in those reserves so it's just it's not a good thing to get into the cycle  been in and i take full responsibility for a lot of that because i haven't pushed really hard to fund the reserves i've always come to the board and said let's fund a reserve put a few thousand in do it but i just took a utility management e p a sponsored class and it gives you the tools to show you in your budget how you can presented and that's actually my job is to present to the commissioners the proper budget would you reserve fines and of course you have the choice to fund it so you did just make a nice preparation for the reserve conversation in the sixteen budget conversation here there are other elements in the superintendent's report that you want to share that's pretty much it any update timeline breaks a go one thing that i was asked and i don't know if we properly should deal with it today but perhaps a future meeting is an update on the water tank replacement budget and the other was a with an expansion to the west me the only one that i could know for in my office was the baseline budget but it's actually very straightforward it's it fully we used to do that many years ago we had been down this is in in the town report we had just one account and then everything kind of get combined and i would actually suggest that maybe we go back to having specific accounts if possible so i think there was some confusion as to how it was reported many years ago and then how it changed with legend and how every continue to do it i think is properly explained it to me that it appeared to me that a long time ago they just reported the checkbook balance as a proportion of water to sewer and there was never  the cruel based accounting of those balances but they allocated to one or the other so there was a split so you had several hundred thousand dollars in the sewer accounts that were several hundred thousand in the water account but then tried to reallocate it in a different way on an accrual basis and a lot of those balances that people used to see really work there on a pool basis so look like it disappeared so draft yes and again this year we were i don't have a copy of the printed but the baseline budget was was unchanged except for salary a couple items the operating for both the water and waste water level funded but they did substantially increased and point out where the money should go in the water capital budget and in the wastewater capital budget so more for you folks up here looking out if the base number was that now the water recedes and the waste water sheets are separate so when the water ended you now have a fire service fee so that's an additional revenue  water we always sell some water so that the water feed is that where we get that extra four percent on receipt of the four percent increase yeah that you're looking at the  we tried to save some money for the reserves because the septics could dry up or go away any time but you kind of have to show it in the budget and really would your step digit that's where you can get a lot of reserve funding  have the extra to put in year if we got it and so now you're saying we're going to get it yet no no plan saying that i'm saying that you should show it in the budget and you should fund your reserves based on that yes you could get pretty close based on the numbers this isn't the best option because you're not having anybody in the system contribute to the reserve accounts and you can see when you go when you jump to the gateway budget  and they gave weeks tension at current rates will generate revenue sufficient to cover the cost of the extension so yes yes and that and that does that but i'm talking about going beyond that you're looking at just today funding just today's expenses that doesn't generate any revenue to build your reserves up ok well i understand what you're saying thin and that's why the baseline budget shows no increase to the rate just approval of the pain that we would have debt retire i agree notes typically one to year where they bill you for principal and interest all at once for the larger volumes like jericho road you typically have two interest payments a year and one principal pavement so it's every six months show up as expenses right so it looks like the last brilliant court payment will be in august july or august of two thousand and seventeen which is fiscal year eighteen the very beginning writing so it also appears that if we complete the project in december whatever it is of this year to complete the water take project two years after that will be december of two thousand and seventy are really close to what they should be even with any addition that we do in stuff you could meet your debt you can plan your reserves fully plus you've got one hundred thousand in your water reserve so the water system is in a good good position you should look at you know a reasonable i'm looking for the same category of reserve has the short term capital fund collection system capital fund and wastewater capital reserves there is no east me sewer reserve because the into why you should have a specific funds because with these funds you have a capital expansion fine you have a line replacement fund usually served you could get your capital line extension monies to pay off the tank which is a line extension they haven't been squandered do you know richmond of the last ten years is the tremendous amount of work and you're probably eighty percent ahead of a lot of places i mean a ton of places have terrible lines and problem altho