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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