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HomeMy WebLinkAbout09-29-03 Study SessionDublin City Council Study Session Monday, September 29, 2003 Mayor McCash called the Monday, September 29, 2003 work session of Dublin City Council to order at 7:10 p.m. in Council Chambers at the Dublin Municipal Building. He noted that this study session was rescheduled from September 8. The topic is discussion of a policy for water and sewer extensions to unserved areas within the City. Roll Call Council members present were: Mayor McCash, Vice Mayor Boring, Mr. Lecklider, Mr. Kranstuber, and Ms. Chinnici-Zuercher. Mr. Reiner and Ms. Salay were absent. Staff members present were: Ms. Brautigam, Ms. Grigsby, Mr. Hammersmith, Ms. Crandall, Ms. Hoyle, Ms. B. Clarke and Mr. Herskowitz, Staff Presentation Ms. Grigsby noted that a packet was sent to Council on Friday in preparation for tonight's discussion. A memo provided background on the topic, along with information submitted last year to the Community Services Advisory Commission regarding how the water and sewer systems were funded and constructed to date. A map shows the areas currently without access to water and sewer lines. In addition, the notebook provided information on different financial scenarios for the water and sewer funding, including 100 percent funding of main lines by the property owner, 50 percent funding by the property owner and 50 percent by the City, and 100 percent funding by the City. From the early 1990's forward, the system improvements were paid for from those funds — the revenues generated from the users of the system, via user fees or capacity charges. In Study Session Monday, September 29, 2003 Page 2 the year 2000, due to some health and safety concerns identified by certain area residents, some lines were extended and paid for from the water and sewer funds. Areas of the City remain without access to the main water and sewer lines, and this is the topic of tonight's meeting. She noted that from a financial standpoint, there are several funding scenarios. A map in the packet identifies the areas without water and/or sewer services and assigns a number to each area. Some are without access to water and sewer, and some are without access to sewer, although they do have water. Staff has projected costs to serve the areas withoul water and/or sewer, total cost of installation of lines, the total number of parcels in the areas, and a projected cost per parcel for installing main water lines and main sewer lines. She noted that the majority of the areas are already developed, and there is one area with potential for land development. Therefore, it may be necessary to consider a per acre assessment or charge back or front footage costs versus per parcel costs. As an example, in Area 1 in the far northeast corner, there are some significantly larger lots. (She then delineated the 10 areas on the display map.) She noted that the last time the user fees and capacity charges were increased was January 1, 1996. Currently, user fees are $4.55 per MCF for water and $8.35 per MCF for sewer. The sewer is significantly higher due to Dublin's portion of the cost of the construction of the West Branch. There is currently outstanding debt through the year of 2018, and the debt is approximately $1.5 million per year in debt service for that project. For capacity charges, a normal household tap of 1/4 inch is $1,500 for water and $1,600 for sewer. For user fees, the equivalent residential unit is defined as a user who uses 1,000 cubic feet of water per month or 280 gallons per day. For water, the Dublin surcharge on average is $15 and for sewer it is $27. These figures are dependent upon consumption and are quarterly charges. In regard to water and sewer fund balances, it has been a policy to maintain a healthy balance in the funds so that they can be self supporting. A target is to maintain a fund balance that is approximately 25 percent of the total value of the system assets. This provides flexibility to pay for repairs and replacements without implementation of fee increases. As of the end of 2002, the water fund had an unencumbered balance of $10.8 million or 28.7 percent of the total system value. For sewer, it was mon or 22.4 percent of the total system value. Mrs. Boring noted that when Council endorsed maintaining a 25 percent balance, the system was much smaller. Has analysis been done of whether a reduced ratio is needed with a larger system? Ms, Grigsby responded that there are more assets to be replaced with a larger system. In addition, an older system will more likely require replacement and repair. Keeping a 25 percent balance is to avoid the necessity of having large user fee increases in the future. She has reviewed policies of other cities through ICMA, and 25 percent is a benchmark used by many cities for the fund balance. Study Session Monday, September 29, 2003 Page 3 With funding of 100 percent of the cost of extending lines by the property owner, the projections show no need to increase the existing user fees and capacity charges in the water system based on projections through 2014. The notebook information contains detailed information of the calculations of the revenues and expenses for the system projected through the year 2018. Scenario 2 — Water With the costs to extend lines funded 50 percent by the property owner and 50 percent by the City, the projections show target balances less than what is recommended. Based on this, staff would recommend an increase in capacity charges for a 3/4" tap by $150 each year for the next five years. Staff would not recommend at this time increases to the larger taps which serve the commercial businesses, as the additional costs for the system are being incurred to benefit the residential portion. In addition, a significant portion of the fund balances in both water and sewer is a result of the significant commercial activity that occurred in the mid to late 1990's. Based upon the recommendation to increase tap fees, the fund balance percentages would be 20 percent at the end of 2008 and 21 percent at the end of 2014. Scenario 3 - Water With funding of the lines at 100 percent by the City, the projections show the percentage balances at 14 and 10 percent for 2008 and 2014 respectively. Based upon this, staff would recommend capacity charges being increased as well as user fees. If the user fees were to increase by $.45, it would result in annual surcharge fee increasing from $60 to $66 per year for the equivalent residential unit. The implementation of the recommendation would result in fund balance percentages of 16.5 percent at 2008 and 21 percent at 2014. After 2014, the existing debt will be retired unless more debt is issued for additional towers. At this time, the projections show those fund balances increasing again based on operating • versus revenues, ��Uftgg Us NUO-1 - R4 9 UJA IWO 0 M mmm 111- M Scenario 1 - Sewer With 100 percent funding by the property owner, it appears that an increase of fees would be needed on the sewer side. The balance has ranged from 22-23 percent, so at some point there would be a need to increase either sewer user or capacity charges prior to 2014 when the debt is retired. Also, in 2018, the operating revenues and expenditures do not balance, based on projections. The sewer fund would likely need increases in the future in ?ny case. Scenario 2 — Sewer With a 50/50 split of funding by the City and the property owners, the fund balance becomes significantly smaller at the end of 2008 with a percentage of 7.6 percent of the value of the system; at the end of 2014 and 2018, there are fairly significant deficits. Staff Study Session Monday, September 29, 2003 Page 4 would therefore recommend an increase in capacity charges for a3/, " tap by $200 each year for the next five years, and increasing the user fees by $.65/MCF. At that rate, the user fee would increase from $110 per year to $118.80 a year for an Equivalent Residential Unit. With the implementation of both of these increases, the percentage would increase to 10.5 percent at the end of 2008, a deficit of $130,481 at the end of 2014, and a $3.3 million deficit at the end of 2018. Annual evaluations would be completed to determine future increases needed beyond 2008. There is much less flexibility on the sewer side and there will be a need for higher increases for sewer. Scenario 3 - Sewer With funding the lines at 100 percent by the City, once the projected fund balances were obtained, it was determined that this should not even be considered. Funding this out of the sewer fund revenues would require increasing capacity and user fees considerably in ,#rder to absorb the additional costs. The next slide shows a recap of the existing rates and the impact of the three scenarios on the rates. The last slide shows some current water and sewer rates for some surrounding municipalities in Central Ohio. Currently, Dublin is higher than some and lower than others, so there is some flexibility. She cautioned against raising fees for larger taps that serve commercial development, as these could affect the City's competitiveness in terms of business development and expansion, Mrs. Boring asked if the entire packet of information was presented to the Community Services Advisory Commission for their review. Ms. Grigsby stated that the different funding scenarios were not provided to them. At that time, there was concern about the need for further direction from Council. Mrs. Boring noted that she did not have information from the CSAC review of water and sewer related matters. Is that because Council is considering only the funding issues and not the other policy issues? Ms. Grigsby responded that based upon the study session held in March with CSAC, an the impact the various funding alternatives would have on the water and sewer funds. Ms. Crandall is present and can review the other items reviewed by CSAC. Ms. Crandall stated that CSAC's recommendation to Council was that Council review the financial aspects and give them further direction. CSAC did come back with recommendations for education and well inspection. Mr. Kranstuber asked if staff's projections are based on the assumption that all 10 areas would be done next year. Ms. Grigsby responded that she programmed the sewer projects over the next 10 years and the water projects over the next 9 years, This programming could be considered and twaluated, based on priorities of some areas, Perhaps some areas would not be completed until after the current debt is retired in 2018. Study Session Monday, September 29, 2003 Page 5 Mr. Kranstuber asked if these ten areas are all ones where there is little likelihood of development bringing utility lines to them. Ms. Grigsby responded that only one area — the far northeastern corner — has the potential for a developer bringing lines. The others are all located in areas where development around them is complete. Mr. Kranstuber asked - of these nine areas, has staff confirmed that all of these residents want the utility services? Ms. Grigsby stated that Cara Road and Cara Court have requested water service. Indian Run has requested water and sewer services. In the far northeast quadrant, there have been some requests for sewer service. Mr. Parkhill surveyed some residents along the river, and many •# not want to switch to a public system unless the City funds it at 100 percent. Mr. Kranstuber summarized that these projections are then based on the worst-case scenario — some areas may have future development and some areas may not want services. So in fact, there may be 5-6 areas over a period of years. Ms. Grigsby stated that staff's assumption is that if one area is done, all will be done under the same arrangement. It is a matter of timing. ILGIal Ms. Brautigam agreed that input would be needed from the affected residents. What is being discussed tonight is extension of the main lines, and each resident would have to pay the costs of bringing the line to their houses as well as capacity charges. So prior to a decision being made, there will need to be a policy regarding a required percentage of residents who have interest in the services. Ms. Chinnici-Zuercher asked about the percentage required for the four areas where the City previously extended water and/or sewer lines. although some were granted waive�s by Council based upon individual situations, For the four areas, there is a 90 percent rate of connection to service. Ms. Chinnici-Zuercher added that the approach was taken that connection would be required due to the City's large investment in extending the lines. Mr. Kranstuber noted that those were done at 100 percent City cost compared to some of these scenarios. Mr. Lecklider asked for clarification about the Cara Court area — he had understood that there was potential for a private developer to extend services. Mr. Hammersmith agreed that there is potential for this service based upon future residential development south of Rings Road. An additional request for water service has been received from Joe Ryan on Riverside Drive. Mayor McCash stated that there are some discrepancies on the maps. On the south side of Rings between Avery and Wilcox, it appears that a water line is available. However, the Study Session Monday, September 29, 2003 Page 6 map indicates that everything south of Rings Road is designated as having household sewer and water systems. They do have the ability to tap into water at this time. Mr. Hammersmith clarified that for Area #8, they have access to a water main, but are not served with a sewage system. Ms. Grigsby stated that if they do have access to water, they should actually be identified as brown on the maps. Mr. Hammersmith stated that more detailed maps are available, but were not included in the packet. Mayor McCash noted that these projects have been programmed over 9-10 years, but in some areas, there is potential for development with expansion of lines through commercial development; other areas are obviously landlocked from a development standpoint. For purposes of prioritization, has staff considered the health and safety concerns of the different areas in terms of quality of well water, any contamination issues, and development pressures? The report indicates that an application is expected to be filed which may bring the lines closer to the far northeast area, reducing the City's cost to extend lines. The savings for one area could free up the funds for another. Ms. Grigsby stated that for water, Egan & Associates completed a report regarding the susceptibility of wells, The areas along the river are the ones of most concern, and in terms of programming for the first three years, she has shown those as being funded earli than some of the others. Mrs. Boring stated that one report mentioned potential development along Sawmill Road. Mayor McCash noted that some information highlighted an application to be submitted October Mrs. Boring commented that this proposal is for development south of the church, and she is not certain that they will bring the utility lines all the way to Summitview. Mr. Hammersmith stated that a 1 0 -inch sewer line is located at Wyandotte Woods along the south side of Summitview and there is the potential that an additional line will come through the multi -family portion currently under review by P&Z. The line will be taken through the Sawmill Partners proposed development, up the western property line. One area will require an easement — through the City parkland. Mayor McCash noted that in order to have any of these programmed within the budget, it seems that there is a need to look at the bigger picture with a different prioritization. He can understand increasing tap fees, but user fees is another matter. Ms. Grigsby stated that in assembling this information, there was recognition that the programming period may be over 20 years instead of 10. However, as lines are installed, the assumption is that there will be increasing pressure for services from the areas unserved. For this reason, staff projected the programming over a period of nine to ten years. Ms. Chinnici-Zuercher agreed that once the programming begins, there could be more pressure from those areas not served, If Council formalized a plan and demonstrated by action its implementation, it would constitute a good faith effort to follow the plan, The problem now is that a plan does not exist. Study Session Monday, September 29, 2003 Page 7 Mr. Lecklider asked how most municipalities address this funding. Ms. Brautigam responded that most municipalities have the developer pay for main lines and if not, the property owner pays. The only funds used from the City would be capacity fees to improve the general physical plant. A water main on a street would be paid for by the property owners on that street, and many times a special assessment district is created to extend the water mains. The City could probably bond or advance the money and the property owners would then pay the assessment over a period of 20 years, Ms. Grigsby stated that the city did 7 or 8 special assessments for water and sewer back in the late 70's and early 80's. T is 77are DT any municipality in Uentral V'hlo who has borne • of extending the water and sewer lines, Ms. Grigsby stated that she is not aware that any cities have •• this in Central Ohio — any case, certainly not to extend main lines in significant portions of the system. Perhap some small section or gap may have been funded by a City. I Mr. Lecklider asked if Council were to opt for Scenario 2 or 3, with the prospect of future deficits — how would that impact the City's bond ratings overall? Ms. Grigsby responded that for general obligation bonds issued for roadways, it wouldn't have as much of an impact as one would think, as rating agencies look at income tax and general obligations separately from enterprise operations and utility funds. However, if there were significant future deficits, it would place more pressure on the City and could be a deciding factor between an W or AA2 rating, If the City were to issue revenue bonds for the water and sewer system itself, it would have significant impacts on those ratings. The City has been fortunate that adequate debt capacity has been available to issue general obligation bonds that result in generally a lower interest rate than revenue bonds. Mr. Kranstuber asked if there is any reason to consider any one neighborhood differently from others — •! one have a different set of circumstances for a different financial scenario than the • Ms. Grigsby responded no — that each would be treated in the same manner, whatever the decision is for funding. Mr. Kranstuber stated that he assumes that tonight's goal is to adopt a policy with criteria that would exclude areas where development is imminent, areas where extending the line is not feasible, e.g., to serve one house at a great distance from the existing line. The policy would not specifically identify neighborhoods. He would prefer that to be a staff function, a non-political function to prioritize these over 12-15 years. Some of the areas may not request services during that time period, Obviously, all of the numbers will have--tt be revised — based on the comments regarding the northeast quad service lines and the area which already has water service. The timeframe should be revised to perhaps 15 years versus ten. Everyone would then be subject to the same policy. Ms. Grigsby stated that once the policy is established, it will determine whether or not •_ want to • having the services in their area. Study Session Monday, September 29, 2003 Page 8 Mr. Kranstuber agreed, noting that if a high percentage is not in favor, it will impact the calculations. Based on these revisions, some of the sewer projections may not include such big deficits. The next question is how the City can justify having a different policy for these areas versus the four areas where the City extended water and sewer lines in recent years at 100 percent City cost. Ms. Grigsby stated that in that case, the policy was different from what had been done in previous years. In that motion, Council recognized that the circumstances of health and safety concerns as well as the City's very healthy financial position at that time were factors cited as a basis for the action. Mr. Kranstuber stated that he does not yet want to abandon the concept of 100 percent City funding before seeing how many areas will drop off — how many are not feasible to serve, how many may be served with future development, and how many are not interested in services, Some may not be willing to pay the costs to bring the line from the main line to their homes. Mrs, Boring stated she generally agrees with the direction he is heading. However, in regard to development, it is carried out as far as it can go for these. The one area where development will occur can be computed based upon the portion that will come with the development. This group was in the last round of consideration for funding at 100 percent by the City, and they were told to wait until the housing development brought the line closer. These people assumed they would be funded at 100 percent when the development did occur. Ms. Brautigam suggested that the City not create a policy based upon the assumption that people will drop off the list, She believes that all of these properties may one day want water and sewer. The future property • in these areas may in fact want the services that the present owners do not. She suggests that when the policy is drafted, that it is based upon serving all properties with water and sewer lines in the future. For policy purposes, the assumption should be that all would be served within some time period, This may `• a timeframe •: 15 —20 years versus 10 years. In the two areas where there is the possibility of a developer bringing lines in, they are areas where the development would be so small that it may not add a lot. One is the area north of Summitview where only a few lots are not built on. The other area is Cara Court, and thost properties already exist. A developer may bring lines in, but they will not bring a line down 2. street such as Cara Court. Mr. • stated that if those not interested in services are slated for the end of a 1 20 year process, the City has gained by stretching out the funding period, i Ms. Chinnici-Zuercher added that it is hard to predict the finances and economic environment in 20 years. Mr. Lecklider noted that personally, he does not feel bound by previous decisions. They may have been appropriate at the time and under the circumstances, but it was a deviation from the previous •i of the City. Mr. Kranstuber stated that there was never a policy in place in previous years. Study Session Monday, September 29, 2003 Page 9 Ms. Grigsby clarified that the Code specifies that water lines are extended by development as it occurs or by the applicants requesting the extension. For sewer, there was no formal written policy, but it has always been the practice to extend lines by means of development or assessment. Mr. Lecklider stated that perhaps he misunderstood Mr. Kranstuber's question of distinguishing these properties from the ones in which water and sewer lines were extended at 100 percent City cost. policy. Ms. Grigsby clarified that in 1999, when discussion took place, staff recommended that th4 lines be extended by assessment. Mr. Kranstuber asked if there was ever a case where a neighborhood, such as Waterford Village, requested water and the City responded that assessment would be necessary. Ms. Grigsby stated that for water, the Code specifically calls for developer extension or property owner assessment. Again, the sewer extension practice has been the same, although the policy is not written, Mr. Kranstuber asked how lines were extended to River Forest. Ms. Grigsby responded that they were done with a property owner assessment. -Zuercher stated that the bases for this policy is that a government may not Ms. Chinnici have funding available to extend the lines, and that extension of such services increases the value of the property and the homeowner in essence has the ability to receive a return on their investment. Ms. Grigsby stated that this is a part of the bases. In addition, similar to the cost of services study, when there is a defined beneficiary or user of a service, they should pay for the service. Tax dollars should be used for general purposes such as road maintenance, safety, etc. 9.905MBIOWAR-FrATI M-1 MM-THITHM MIEF �92- HENT-TAT&I �-M 1110 I -INN lam M --- Perhaps a closer review would indicate that the percentage is too high. The City's system is not a maintenance burden and is fairly new. Mayor McCash stated that the bigger the system grows, the more maintenance dollars are. needed. If the analysis calls for a 25 percent reserve, it would be an unwise decision to reduce this reserve. Ms. Grigsby stated that for both water and sewer, the systems are fairly new — the majority of lines are less than 20 years old. There have been few needs for replacement or maintenance up until this time, The City began cleaning and repairs for the Dublin Road sewer interceptor two years ago and has programmed repairs to the line in the 5 -year CIP. Study Session Monday, September 29, 2003 Page 10 For water lines, beginning with this year's capital program, there is $200,000 budgeted every third year for repair and maintenance. Mr. Kranstuber noted that there is a certain "disincentive" because some do not want to pay the cost of connecting from the main line to their homes. Has the City done analysis of what impact this will have on the decisions for services? Ms. Grigsby stated that if the main lines were extended at 100 percent City cost, it would impact the decision. She would expect that the demand would be much higher if the City is paying the entire costs of the main line. The policy will drive the demand. Mrs. Boring stated that there would be costs in any case, as tap -in will cost upwards of $6,000 for the property owner. For some, the $6,000 cost alone is a large sum of money. Mr. Kranstuber agreed that the $6,000 costs for connection are a huge disincentive to residents, Mrs. Boring stated that in terms of policy and funding, currently, residents pay user fees and the maintenance fee is being built up. But for building new water towers, such as those to serve the new development in the northwest, why doesn't the City assess those developers whose development is prompting the need for the new towers? Ms. Grigsby responded that for the northwest area, a portion has been identified as development costs of that development as well as the portion that relates to the overall system. The capacity charges pay for water towers and booster stations. Mrs. Boring stated that the capacity charges are used to fund future water towers to serve future development. Mayor McCash clarified that existing customers do not pay capacity charges — only user charges. Ms. Grigsby stated that the capacity charges collected currently and deposited into the water fund are used to pay the existing debt for the Blazer water tower. The other two water towers are funded through income tax revenue. Mrs. Boring stated that if future water towers were financed in a different manner, i.e., assessed to the developer, that would free up monies. Mayor McCash stated that this would constitute adding another fee on top of the capacity fees they are already assessed for. The capacity fee from each developed lot pays for future water tower needs in the system. Perhaps the capacity fee is not sufficient compared to what other cities are charging. Study Session Monday, September 29, 2003 Page 11 Ms. Chinn ici-Zuercher stated that the water fund, by definition, is presumed to fund water towers. But other funds could be used as well to make more monies available for water associated needs. Mrs. Boring stated that, personally, she believes that at a minimum, the City should provide water to its residents for health and safety reasons. Most of these residents have lived in the City a long time. Philosophically, she would support funding water lines for all of these existing residents. The new residents brought in with the new development are the ones putting the strain on the existing system. I #i^ Mayor McCash stated that he is trying to determine how to provide and address a health and safety issue. So it must be looked at in terms of prioritization for areas where there ar", specific health and safety concerns versus those who simply desire City services and were annexed recently. In determining funding priority, health and safety issues must be a key factor. Study Session Monday, September 29, 2003 Page 12 Mr. Kranstuber asked for an estimate of the average cost of construction per parcel for the main line. Ms. Grigsby stated that the summary of costs to extend the main lines breaks these down per parcel. This information was on the slides. Mr. Kranstuber stated that it ranges from $18,000 to $50,000. Ms. Grigsby stated that for a 100 -foot water line plus tap fees, the costs would be approximately $4,400 and for area 10 an additional $6,000. For sewer, with a 100 -foot service line and taps, it is $5,350 plus the per parcel costs. Mayor McCash asked if there is a way to compute the average cost per parcel for water and sanitary for all of the developed areas of Dublin? For example, the water costs per parcel may be $15,000 — so some areas would be above and some below that. Mr. Hammersmith stated this calculation was done for certain areas where recent development has taken place. Ms. Grigsby stated that in terms of citywide, this calculation has not been done. There are too many variables to compute this. Mr. Hammersmith stated that the Llewellyn Farms South and Wyandotte Woods cost estimates were used as a benchmark cost of these services. Ms. Chinnici-Zuercher asked if Council needs additional information or if they would like give policy direction at this time. I Mr. Kranstuber stated that the residents would then know of this policy requiring tap -in and would have to convince a certain percentage of residents to request services. He believes that the staff is underestimating the disincentive of the costs of connection. He believes that perhaps the services could be phased in over 15 to 20 years, placing at the end the properties where there is little interest in services, Those calculations would be needed prior to making any decision. He emphasized that he does not want to abandon the concept of the City funding the extension of main lines for water and sewer at 100 percent. The residents are already sharing in the costs on connecting to their property and tapping in. Mayor McCash stated that it is a balance issue. Even if the City pays 100 percent of the main line costs, the homeowner must pay the capacity, tap -in and connection costs. It may actually create a financial burden for a resident, when the City is seeking to address the health and safety issues. On the other hand, if they seek a five-year waiver of tap -in requirement, the City doesn't receive any user fees during that period. Mrs. Boring stated that charging for the main lines in addition to the other costs would certainly be a tremendous burden to the homeowners, Study Session Monday, September 29, 2003 Page 13 Ms. Chinnici-Zuercher added that Council should be specific in their requests for revised figures. Mr. Hammersmith commented that the average main line per lot costs for areas with rock excavation is $13,000 per lot for both water and sewer. For areas without rock, the costs are $4,000 per lot. This is in addition to the costs of connecting to the house, and the tap and capacity charges. This assumes running water and sewer lines in a farm field for new development, and does not consider restoration costs where areas have already been developed. Ms. Chinnici-Zuercher stated that it would be important to know all of the restoration costs related to extending the lines when the policy direction is being given. Mrs. Boring stated that in area 3, the costs would run $34,000 for the main line alone compared to the average for other areas of $4,000-13,000. Mayor McCash stated that this assumes a 100 percent assessment. Mr. Lecklider pointed out that the average figure of $13,000 should be adjusted for the various areas where restoration costs apply. Mr. Hammersmith stated that staff could provide the costs for Hanna Hills and MacBeth for comparison. Discussion continued. Mayor McCash summarized that the intent of the study session is for discussion of all of the issues, looking at different scenarios. This policy decision will have major financial implications for the City into the future. He noted that staff has identified 10 areas in need • water and/or sewer services. In reviewing the Community Plan, and areas that are exclusive Dublin annexation areas that have develo ertrA: within them are thAr;,attiy areas in the Dublin exclusive annexation area • negotiated expansion areas where they will be asking for water/sewer services? Council needs to understand the big picture issues versus being reactionary to the 10 areas being examined tonight. Mr. Hammersmith stated that these areas have not been considered at this time. A couple come to mind, such as Holida�4r Lane or Shier Rin4is Road where this could be the situation. Most likely, a main will go by their street but not be extended within their street. Mayor McCash stated that if the residents of Holiday Lane petition for annexation next week, it will have to be added as an 11 th scenario under this plan, making the deficits even worse. In such a case, the City may not indicate in a statement of services that it can provide water and sewer for the annexation area. Perhaps such areas will not be annexed for another five years until they can be addressed in the projections. Ms. Grigsby stated that the policy as proposed would then specify those properties annexed to the City as • a certain date. Study Session Monday, September 29, 2003 Page 14 w w w V 14 a LOM 11*14 1 Lips Ogim sr. -KV -6 RI&MOSIR MRSIL in # Joe Ryan, Riverside Drive stated that he has well problems during rainfalls that impact hi drinking water. He recently read the City's stormwater master plan that mentions his groundwater concerns, noting that more detailed analysis of the groundwater hydrology needs to be conducted. Further, it states that even this may not clearly define all of the additional water sources — fissures, sinkholes, and other subsurface water sources - contributing subsurface flow to his springhouse. It notes that if individual wells are shown to be directly connected to surface water as a result of any of these investigations, the Board of Health will require that these wells be removed from service and potable water lines will need to be extended to the affected areas, Can the Board of Health order his w not to be used? His well is fine most of the time until it rains, and water comes in from fissures. He drilled a new well and now the second well is contaminated. Engineering st has recommended drilling another well, double casing the well and grouting it up to the surface at a cost of $8,000. He will do so if Dublin will guarantee that he will have good water and no surface contamination. The well driller will not guarantee this. The existing waterlines are .3 miles down the road from his property, and he has lived in Dublin for 49 years. Former City Engineer Kindra had indicated that this was a civil matter and should resolved with the developer. The developer did pay a portion of the costs of the second well. At that time, Mrs. Boring said that this is not a civil matter and that the City should come to the table and work it out. Nothing has been done since 1996. Study Session Monday, September 29, 2003 Page 15 Mr. Kranstuber noted that Mr. Ryan had spoken before Council back in 1992 regarding proposed development and its impact on his well. Mr. Kranstuber asked Mr. Ryan for his position regarding tonight's topic. Mr. Ryan stated that he desires both water and sewer services. He lives along the river, and after rainstorms, he cleans up the island areas behind his house. He believes that people do not take proper care of septic systems and all of this impacts the environment. Many of the septic systems along Riverside Drive are contaminating the river. He is pleading for water service, noting that a .3 -mile extension is not a major project. All of Viw stormwater from Campden Lakes and Wedgewood is routed into one northern ravine and this has caused many problems for him in terms of silt and mud filtering through fissures into his system. John Ferrara, Tamarisk Court noted that in 1992, Dublin approved the largest PUD ever proposed, known as the Schottenstein development. Since 1992, Riverside Drive has been excavated three times for sewer lines. There is a lot of new development around him, much of it very close to Tonti Drive. He has heard many promises about future services, but nothing has been delivered, He lives in area #3 and the spreadsheet indicates that the cost of water for the area is $1 million plus; this is not correct, as area #3 already has water service, Someone else has indicated that an area along Rings Road already has service, so the numbers need to be reworked. Ms. Grigsby clarified that area #3 includes other areas as well which do not have service. Mr. Ferrara continued, noting that he does not believe there are 84 houses along Riverside between Tonti and Hard Road. The point is that the numbers need to be revisited. There are not many lots, and it is important to have correct numbers in making the policy decisions. If Franklin County is paying for services for reasons of health and sanitation, he does not want Dublin to view the northeast quadrant and make it exclusionary. Council needs to make it inclusive. The City very efficiently and quickly ran waterlines to Hanna Hills and with minimal obstruction on Riverside Drive. In addition, there was 90 percent compliance in connection that indicates the character of those living in the northeast quadrant. There are many not present tonight who want the same kind of treatment. He believes that the City must treat all resii- • - e ontinue to do so until it is built, They are now tearing down houses on their street, but a positive outcome is that a leaking system at one house will be removed and no longer will constitute a health hazard. Their area is very nice and they enjoy living there. It has been estimated in the figures that the value of a house will increase by $60,000 with water and sewer service. This is not correct — it is not marketable at that price. The value that the City is asking the residents to pay compared to the value given to MacBeth and MacDuff is not fair. Why should his house be charged $60,000 while others were given the improvements at City expense? Everyone in their situation should be treated the same way. The houses in their area are aging and the systems will break down at some point in the future. He wants to be treated fairly as others were treated. Study Session Monday, September 29, 2003 Page 16 2111•—&ILWalp Bob McKnight, 7775 Riverside Drive stated that all of the residents he spoke with, from hi home and south, are well acquainted with their wells and septic systems, They are satisfied with their septic systems and take proper care of them. Most indicate their water has an iron odor. The single common thread through the conversations was a fear of wh might be done to them by Council. He asked that Council consider this when drafting a policy. While this may be considered a policy "for peopleit will be perceived as somethi being done "to them." He lives in area #3 and the costs of connecting to the main line would be very expensive, In addition to Franklin County, Shawnee Hills has provided wat and sewer connections to homes at no costs — no hook-up cost, no trenching cost, no plumbing costs. He does not believe the City should provide all of this, but some fairness should be considered in relation to what other areas were given. Karen Royce, 195 Indian Run Drive stated that their neighborhood was annexed to Dublin in 2001, and they met with Council about a year ago regarding water and sewer service. They have seen a lot of development occur around them, but they were not offered an opportunity to connect to water and sewer lines near their area. They have been directly impacted by development. She surveyed the neighbors, and 14 responded. Eight have Study Session Monday, September 29, 2003 Page 17 experienced sift/sand in wells after rain; five have bacteria in wells documented; four do not know; and five have not been tested recently. There has been a direct impact on their water quality, They are requesting that Dublin provide water and sewer service to them at City cost. The cost estimated in area #3 per parcel is $49,000 for the main line and an additional $8-9,000 for tap fees and bringing the line to the house. The value of the home will not increase proportionately with these services. They are respectfully requesting that Dublin seriously consider providing water and sewer services to their neighborhood in light of the health and safety impacts that development has had on their wells. Ms. Chinnici-Zuercher asked for clarification — are they requesting that Dublin pay for the main lines, or the main lines plus the connection fees and tap costs? Ms. Royce responded that they would like these services at no cost, but understand that they would still be responsible for paying the costs for tap fees and bringing the lines to their homes. The total costs of water and sewer lines as outlined are prohibitive to property owners. Mayor McCash invited Council discussion. He noted that from his standpoint, in reviewing different scenarios, the policy issue he is dealing with is not whether the City funds 100 percent, 50 percent, or 0 percent — this is something that the City needs to do in terms of mainlines at 100 percent for reasons of health and safety — but instead how to prioritize them from health and safety concerns versus desire. While all 10 areas might desire water and sewer services, it is not possible to do all of these immediately. Somehow, they must be prioritized over 5, 10 or 15 years. Mr. Kranstuber noted that the testimony from Mr. Parkhill and Mr. McKnight has given support to his position that there may be some areas that do not want services. Who has the City heard from other than Mr. Liddell, Riverside Drive residents and Indian Run residents? Ms. Brautigam responded that the other one is Cara Court. Mr. Kranstuber stated that the system of those who want services might address some of the concerns. If these four — Cara Court, Indian Run, Mr. Liddell and Riverside Drive — are those who are requesting services at this time, there may not be issues of prioritization. Mayor McCash stated that from a policy standpoint, there are 10 areas, and of those, some residents have expressed concerns. After the prioritization issues are determined, the next matter is a policy issue: if only two houses have a health/safety concern, what becomes the priority? Are there a percentage of problem properties needed in an area before service is extended? ffir. r\ranstuber stated that these three to four areas are all under consideration, and sta7f could move forward at once. not have come forward. Some may not have known of the need to be present tonight. Study Session Monday, September 29, 2003 Page 18 individually and independent from each other, a decision was made without knowing all the components to it. Now, two years later, these residents are testifying that service was provided for the others and they should be treated the same. However, the world is not the same today as it was two years ago, and four years from now it will be different as well, That is her concern with a piecemeal decision. It is preferable to make a decision and include in the policy that there is review of certain components to the decision at benchmark points — perhaps every two to four years — generally driven by finances. The prioritization portion occurs after the policy is made. Mr. Kranstuber stated that he believes that half will not want services, He is not supportin,�#,, this because other areas received services previously — the 100 percent subsidy for water and sewer main lines is the right thing to do • and was the right thing to do when the previous decision was made, The City has the financial resources to do this, and there must be a way to make it work. The $16 million estimate may greatly exceed the actual numbers. 11 1 Mr. Kranstuber stated that the remaining areas other than the four mentioned could be programmed in later years. For areas with significant health problems, they should proceed. In this City, with its resources, it is the right thing to do. Ms. Chinnici-Zuercher stated that the policy as Council has described is the first matter to address; after that will come the prioritization of areas. Mr. Kranstuber added that the prioritization is an administrative matter — it may include obtaining a certain percentage of residents seeking connection, filling out forms, etc. Ms. Brautigam stated that the only time priority may become an issue is when two neighborhoods •• extensions in the same year. Council would then have to determine the greater health, safety and welfare need. In general, over a period of five years, with standards set of 80 percent of signatures and full disclosure of costs to connect, some may not be '♦. So the policy could •' the City paying 100 percent • the main line, the property owners paying 100 percent of the service line and tap fee, and in order to obtain service, 80 percent of the residents would have to petition for services. Ms. Crandall stated that the Community Services Advisory Commission devised a flow chart that sets up guidelines for a petition by the residents and calls for a system inspection to see what the needs are based on the number of failing systems percentages, chance of development, the distance to lines, number of homes, etc. Ms. Brautigam stated that the question then becomes: if a neighborhood such as Indian Run petitions the City and an analysis shows that all their existing systems are fine, yet they still desire services, and no other neighborhood is requesting services that year, would • say "no" if others are not requesting services that year? If Council wants to respond favorably, the question about systems failing is not one of concern to Council, where priority is not an issue if they are the only ones Study Session Monday, September 29, 2003 Page 19 Ms. Chin nici-Zuercher noted that she doesn't want to discuss further tonight the priority issue and how the policy is implemented and for whom. That is the next phase of the debate and discussion. She moved that Council approve paying 100 percent of the main line costs for water lines. Mrs. Boring seconded the motion. Ms. Chin nici-Zuercher clarified that she is not specifying over what period of time — that portion relates to implementation. Mr. Lecklider stated that his concern is that staff projects multi-million dollar deficits in year 2014. Mr. Kranstuber stated that he believes the deficits are not realistic, based on determining • really wants the services. Perhaps the tap costs will have to be increased, and perhaps other funding sources will be needed. Ms. Chinnici-Zuercher emphasized again that these issues relate to implementation. The motion does not address implementation. Mr. Lecklider stated that, philosophically, he does not have a concern with increasing tap fees in general. But to the extent that this would include increasing user fees across the • he is not ready to support this. Mayor McCash clarified that the motion is to provide water service where the main line extension is paid for 100 percent by the City. Mr. Lecklider stated that this does not include a timeframe or the question of how this will be funded. Mayor McCash and Ms. Chinnici-Zuercher agreed. Mr. Lecklider added that he is not binding himself to any course of action to carry out this policy. Ms. Chinn ici-Zuercher stated that staff will return with multiple scenarios, different than what has been reviewed tonight, as a result of the policy adopted by this motion. Ms. Chinnici­Zuercher clarified that the motion on the floor is that the City would pay 100 percent of the costs of the water main lines. Her expectation is that with approval of the motion, Council would come back with a variety of methodologies for implementation. Council would at that time vote on the implementation method, Mrs, Boring suggested limiting the motion to the identified areas under discussion tonight. Ms. Chinnici­Zuercher accepted this amendment to her motion. Vote on the motion: Mr. Kranstuber, yes; Mr. Lecklider, yes; Mayor McCash, yes; Mrs. Boring, yes; Ms. Chinnici-Zuercher, yes. Ms. Chinnici-Zuercher moved that the City pay 100 percent of the sanitary sewer main lines as identified for the 10 areas. Mayor McCash seconded the motion. Vote on the motion- Mrs. Boring, yes; Mr. Lecklider, yes; Mayor McCash, yes; Mr. Kranstuber, yes; Ms. Chin nici-Zuercher, yes. Study Session Monday, September 29, 2003 Page 20 Mayor McCash asked if there are other motions to bring to the floor or additional direction to staff in terms of what to bring back to Council. Staff may need to consider a longer period of time for implementation, suggest prioritization, tap fees, user fees, etc. Ms. Chinnici-Zuercher stated that she is not certain that staff can provide more accurate information. The more important issue is the narrowing of this which will require a survey similar to that done by Mr. Parkhill - that if the City •. 100 percent • the main line, and if the resident has to pay for the line to his property and the current tap -in fees per the existing policy, then how many would want the services? Only a couple of residents testified tonight that they absolutely want services. To the extent possible, given the current owners, staff • provide the best data to be used in prioritization and financial programming. Mrs. Boring stated that to her, 80 percent participation seems too low in this case. Sh,4 suggested devising some kind of plan that 85 to 95 percent of the residents need to physically sign after disclosure of the costs they are required to pay. She believes that some will not be interested in services after such disclosure of costs. Mr. Kranstuber stated that over the next few weeks, staff could contact these residents to gauge their interest, Ms. Brautigam stated that she agrees with a survey, but it will take longer than a couple of weeks. She will work with Community Relations to communicate with those who have not been involved in this process and to give them accurate information of their true costs. Staff will obtain this information, which Council will need in order to make decisions of priority and programming. Ms. Chinnici-Zuercher offered that it is important to work with the three to four areas that have come to Council with these requests as the top priority. They have been previously told to wait for Council to review this issue holistically. After the survey is developed, she encourages staff to enlist the help of the homeowner association presidents about their residents' preferences for a survey - in person, e-mail, mail, etc. There are large age spans of residents in these homes, and they may have individual preferences for this communication. Ms. Brautigam stated that Council is aware that Indian Run has provided petitions in the past with signatures and that a study has been done, Does Council want a subcommittee • work on the Indian Run area specifically or should they wait until the other work is completed? Mrs. Boring stated that Mr. Liddell had also circulated petitions previously and they hav-V been waiting • two years as well. Staff has also provided detailed information on this 2,rea. Perhaps both of these areas should be moved forward in the process. Mayor McCash stated that nearly half of the ten areas have been waiting - Mr. Ferrara] t area falls in that category as well. While they have not formally presented petitions. h have come to Council previously on this matter. Study Session Monday, September 29, 2003 Page 21 Ms. Brautigam summarized that Council's suggestion then is for staff to continue to work on the underlying policy implementation without moving forward on any individual area. Ms. Chinnici-Zuercher asked for an estimate on a timeframe for staff to bring the survey information back. Ms. Brautigam estimated that it would require about six months in view of the number of residents to be contacted. Mayor McCash stated that, hopefully, staff could engage some of the neighborhood associations to facilitate this process, Ms. Brautigam agreed that this would be done. Mr. Kranstuber stated that perhaps staff has a different concept of what the assignment is if they are estimating a six-month timeframe, Ms. Brautigam responded that staff will contact every property owner in areas I through 10 to determine their interest in connecting to water and/or sewer lines if available to them at a cost (to connect from the main line to their property) that staff will calculate. Based upon the interest level, the priority can be established for bringing the lines to that particular area. However, if 90 percent desire services, the priority becomes greater. Mr. Kranstuber stated that staff could assume there is no interest for some areas if they have not contacted the City previously, Ms. Brautigam responded that in view of Council's policy of paying 100 percent of the costs for the main lines, these areas might now in fact have an interest in services. Mr. Lecklider agreed, stating that he does not want to go forward under an assumption that some are not interested. With 100 percent City funding, the number of residents who want services will likely increase. Mayor McCash stated that it is important to know the percentage willing to connect to services before prioritizing the areas. Residents cannot make a decision on connection until they have the costs identified. It is a timing issue of installing the lines for the areas where they desire connection immediately versus installing lines and then having residents seeking waivers from connection for five years, as has happened in some other areas. Mrs. Boring stated that for several areas of the City, the City has already paid 100 percent of extending main lines. Most of the other areas without service did not then come to Council requesting the services. Mr. Kranstuber noted that residents are aware of the City's recent actions regarding water and sewer line extensions. The issues have been well covered in local newspapers. Perhaps they are content with their existing systems. Study Session Monday, September 29, 2003 Page 22 Sherm Liddell, 3838 Summitview Road stated that he believes the City will find in each of the areas people with minor to severe problems. He is unable to finish his basement due to the previous flooding problems caused by the county not reconnecting downspout lines properly after the Sawmill Road widening. In his situation, he is in limbo, and at 70 years of age, five years is a long time to wait. There is a wide range of perceived needs in every area. Mr. Kranstuber stated he would suggest either shortening the six-month turnaround time for the staff to report back, or start working on areas where there are existing problems with qystems, These would include Riverside Drive, Summitview and Indian Run. Ms. Brautigam stated that staff would certainly start with these areas, but they do not want to ignore the other areas. Staff's role is to provide the most conservative, worst case scenario estimate, If Council makes a decision based on incomplete information, the repercussions will be with staff for not providing adequate information. Staff would obviously be with the areas that have come to Council already and where there are existing problems. Staff will try to have this information earlier than six months, especially for the specific areas mentioned. Mr. Kranstuber asked that the information be provided within four months. Ms. Brautigam responded that staff would provide all the information possible to obta within that timeframe and report back to Council. Ms. Chinnici-Zuercher added that the estimate of costs to tap in for each resident must be provided to the property owner, and that work may take time. Ms. Grigsby noted that the capacity fees would be driven by the number of areas that will be served. Staff can provide the current cost and an estimate for the future, assuming that other areas come on line. If everyone along Riverside Drive does not want sewer, it will have a large impact on what the capacity charge may be. Some of that information, then, will drive the fees. one area at a time. Ms. Grigsby responded that previously, it was a matter of reviewing only four areas. But now with a broad policy set by Council for the City to pay 100 percent for 10 areas, it is a different matter completely. Mayor McCash asked how the capacity fees are affected by the fact that some areas ar not interested in services. Ms. Grigsby responded that if they all want services within 5 to 10 years, it would result one rate. But if half want service in the next 10 to 15 years and the other five don't want services at any point, it will result in a different capacity charge. Mayor McCash suggested that the conservative approach would be to assume that all te areas would be served one way or another, whether it is over 15 or 20 years. a] Study Session Monday, September 29, 2003 Page 23 projected deficits. This will be compounded if only capacity charges will be raised and not userfees. Ms. Chin nici-Zuercher stated that the implementation might take 30 years in order to have the connection at a reasonable capacity charge. Mayor McCash stated that this is based strictly upon using the water and sewer • P of the projected deficit can be addressed by the prioritization of spending citywide. Perhaps the operating budget can allocate monies toward the deficits projected in the water/sewer funds versus purchasing landscaping and other items, It is a balance of addressing health and safety issues versus some of the other budget items. Mr. Kranstuber stated that he agrees with a more comprehensive approach, but he is confident that the people who have not previously requested services are likely not interested. This will make the process of revising the numbers much easier. Ms. Brautigam confirmed that staff would do their best to provide a report within four • Mr. Kranstuber asked to what extent work could proceed for Indian Run and the two areas in east Dublin. Mr. Hammersmith stated that the next step would be design and implementation. Mrs. Boring stated that in order to proceed with design, she believes that updated information must be provided to each resident about the specific costs. Because the City pays the cost of the main line, they will be required to connect — that is the existing policy. Mr. Lecklider asked if Council is now dismissing entirely the concept of prioritization, given the suggestion to move forward with Indian Run and some other areas, Ms. Chinnici-Zuercher stated that Council is presuming because these areas came in and have petitioned for services that the residents of these areas do want services. Mr. Lecklider asked a hypothetical question: if someone else comes forward and demonstrates to Council a legitimate health and safety reason for providing them with services now, what is to be done? Ms. Chinnici-Zuercher stated that the driving factor for government and any business is the financial resources to provide the services, Mr. Lecklider stated that if Council were to employ some criteria that lead to prioritization and a fourth group meets more of the criteria than the three discussed tonight, then what? Mr. Kranstuber stated that perhaps a criterion could be the date they first petitioned for services. Mr. Lecklider responded that much of what he has heard are health and safety issues, and for him, that would be an overriding factor. Study Session Monday, September 29, 2003 Page 24 Mayor McCash stated that if there are ten petitions from all of the areas with health and safety issues, how will they prioritize them? Is it first come, first served? Ms. Chinnici-Zuercher that they must be prioritized due to limited financial resources and manpower. It is important to "marry" the degree of the health and safety issue with the financial capabilities and management resource capability, both internal and external. Mayor McCash stated that from that standpoint, in reviewing the two petitions in hand at present, are they prioritized because of the timing of their petition submission? Now the policy becomes based upon the timing of turning in a petition and he would expect all ten to turn in petitions. The question then becomes how will the City fund these and which areas will receive services first? RMON. 11 Mayor cCash clarified that in the example of Holiday Lane off of Shier Rings, he would not expect a developer running lines up Shier Rings to have to extend them into an existing neighborhood. Mrs. Boring clarified that in the area of the northeast quad where there is a potential for development, the City should have a system set up to recoup monies from future 4.evelopers that were advanced by the City for water and sewer line extensions. Mr. Lecklider stated that the other area where development may occur is Cara Court. Ms. Brautigam noted that staff understands this additional policy direction and will incorporate it into the information brought back to Council.