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PUM20000626PUBLIC UTILITIES COMMITTEE MEETING - CITY OF MUSKEGO Approved
• Minutes of Meeting Held Monday, June 26, 2000
The meeting was called to order at 10:03 AM by Acting Chairman Mark Slocomb.
Present were Committee Member Le Doux, Mayor De Angelis, Finance Director
Gunderson, Utilities Supt. Kloskowski, Engineering/Building Inspection Director
McMullen, Clerk -Treasurer Marenda, City Attorney Molter, Auditor Vilione, and Ruekert
- Mielke representatives Ward and Fiacco. Aid. Sanders was absent.
Aid. Slocomb stated that the meeting was noticed in accordance with the Open Meeting
Law.
Further review of revisions to Chapter 21/discussion on policy on
connections/sewer rate study revisions
Aid. Slocomb stated the committee had certain concerns about numbers in the sewer
study relating to the amount of revenue to the sewer utility and what would be a
realistic figure for the amount of reserves the sewer utility should have. Finance
Director Gunderson reviewed her memo to the committee dated June 23, 2000 which
addressed these issues, adding that she felt the $3.5 million in reserves is adequate.
MMSD future payments are projected by MMSD to peak at $1.4 million a year Aid.
Slocomb asked when sewer usage rates would have to be adjusted if the reserve is
continued to be depleted at the rate of $500,000 per year Mr Vilione responded that
doalso
is made at the time of the annual review of the projected budget. Mr Vilione
also stated that Moodys had given the sewer utility an A-1 rating, which is the smallest
sewer utility in the country with an A-1 rating. This was based on the strength of our
reserves. Reducing reserves might have Moodys take a look at our rating. Mr Ward
commented that a separate reserve fund will also be budgeted for replacement of
infrastructure.
Aid. Slocomb felt that his question as to what the threshold was had not been
answered. Mr Vilione said that due to the uncertainty of MMSD payments, reserves
could be gone in seven years, but that is not to say it will happen. It's a management
decision as to the amount of reserves desired. He also referred to Ms. Gunderson's
memo of June 23`' regarding the requirement with the issuance of sewer mortgage
revenue bonds that net operating revenues shall not be less than 115% of the annual
debt service requirement, which automatically adds to reserves. Ms. Gunderson
reiterated the amount of reserves for 2001 could be determined at budget time.
Discussion followed on the rate of interest charged for forced sewer hook-ups, with a
9% interest rate currently called for in Chapter 21, and interest rates on special
assessments at 8%. Ms. Gunderson felt there was much added administrative work
over and above the cost of other deferred payments. Mayor noted charge could be
based on time and material, but would probably result in a higher charge. Other issues
such as not have the facilities to serve as a lending institution were reviewed. Aid.
• Slocomb felt the City should do everything it can to serve its customers. He also felt
the special assessment interest rate should be researched for the possibility of
changing from a flat 8% to a certain % over the cost of borrowing. It would have to be
researched to determine the affect on the utility if the majority went on the payment
Public Utilities Committee
June 26, 2000
Page 2
plan due to low interest rates rather than paying in full up front. It was noted these
rates are determined by the Final Assessment Resolutions. The committee made no
recommended changes at this time to the 9% interest rate for forced hook-ups.
Atty. Molter discussed possible changes to Section 21.21 Muskego Sewer Extension
Permit in MMSD Contract Area. He cautioned against making any changes that could
affect the prior agreement with Scott Krause, and recommended that bond counsel be
contacted for an opinion letter
Mr Ward stated he was in the process of writing a definition of "residential" and
"commercial" and will e-mail it to Ald. Slocomb and Ms. Marenda.
The matter of the City purchasing water meters for re -sale to property owners as a way
of assuring meters that will work with the City's new meter -reading system was
discussed. Atty. Molter expressed some concern relative to the City's liability.
Further Review of COMM 83
The Committee reviewed the Plan Commission recommendation regarding the
implementation of COMM 83. After discussion, Ald. Slocomb moved to recommend
Ordinance #1034 read as follows:
• SECTION 1. The Plan Commission adopted Resolution #P.C. 098-2000 on June 6,
2000, making a recommendation to the Common Council of the City of Muskego
regarding the implementation of COMM 83 and the Common Council hereby by this
ordinance wishes to implement said recommendation as follows:
(a) The implementation of Wisconsin Administrative Code COMM 83 is
hereby limited as allowed by COMM 83.04(2)(a) and COMM 83.04(3)(a)
as further set forth in Resolution #P.C. 098-2000, with the following
exceptions:
(1) New COMM 83 systems to serve existing parcels of record, or to
serve new land divisions which are exempt from Muskego Municipal
Code Chapter 18, Land Division Ordinance, for construction of a
single family residence not within the 208 Sewer Service Area,
and, where public sanitary sewer is not considered to be available
by the Public Utilities Committee of the City of Muskego.
Ald. Le Doux seconded. Motion carried 2-0.
ADJOURNMENT - Ald. Le Doux moved to adjourn at 11:50 AM. Aid. Slocomb
seconded, motion carried.
Respectfully submitted,
• n K. Mare; da, CIVICJerk-Treasurer