HENDERSON COUNTY CANE CREEK WATER & SEWER DISTRICT
STATE OF NORTH CAROLINA JULY 26, 2000
The Cane Creek Water and Sewer District met for a regularly scheduled meeting in the Commissioners= meeting room of the County Office Building.
Present were: Chairman Grady Hawkins, V ice-Chair Bill Moyer, Commissioner Renee Kumor, Commissioner Don Ward, Commissioner Marilyn Gordon, Acting County Manager J. Carey McLelland, County Attorney Angela S. Beeker and Clerk to the Board Elizabeth W. Corn.
Also present were: Assistant County Attorney Jennifer O. Jackson, Planning Director Karen C. Smith, County Engineer Gary Tweed, and Public Information Officer Chris S. Coulson.
Absent was County Manager David E. Nicholson.
Cane Creek Annual Report
Commissioner Gordon is a member of the Cane Creek Water & Sewer District Advisory Board. She presented their annual report.
The purpose of the report is threefold:
1. Present the annual report of the work that has been done in the past year as required by their charter.
2. Specifically to address the review of the rate structure which the committee completed in June.
3. To present the work plan for the coming year.
Annual Report for past year & Rate Structure review
The first part of the report addressed the structure of the committee, staff assisting the committee, and the meetings which are held the last Tuesday of every month, 4:00 p.m. at Fletcher Town Hall.
Progress on specific charges to the committee:
1. Monitor developments in pending grant applications.
Grant applications pending at the time of the charter were not successful. Both the Hwy. 25 project and the original Mills River proposal for a treatment plant were not funded. The Town of Fletcher has developed the Hwy. 25 project without grant funding and that is currently under construction. Another grant application to the Clean Water Trust Fund has been made by the Cane Creek Water and Sewer District. This new application includes a gravity interceptor that would provide for both existing and future needs in that area. A determination on this application is expected by the end of the year.
Commissioner Gordon explained that at this time there is a grant application pending on a new application for Mills River, more comprehensive and determination on that is expected momentarily but for certain by the end of this year (2000).
2. Examine current boundaries.
Expansion of the District into the Mills River area was reviewed and recommended by the Committee. The Cane Creek Board approved this and it became effective July 1, 2000. This corresponds to the proposed sewer line extension to serve this expanded area along with the new regional water treatment facility start-up. The Committee has done preliminary review of a proposed expansion of the District in the Hooper=s Creek area and anticipates that this will be the next area for annexation into the District. Further work on this will be included in review of the Master Plan as also directed in the charter.
3. Develop a Master Water & Sewer Plan including phases and costs.
Preliminary review of existing studies and plans has been part of both the boundary and rate discussions. An updated overall plan is anticipated as the next step in addressing our charge. The Committee expects that this plan will pull existing plans together and update them in coordination with both Henderson County and Town of Fletcher Planning Departments. The Committee expects to make recommendations on phases with the realization that accurate costs can be determined as these phases are implemented.
4. Develop a strategy for integration into the MSD and Regional Water Authority=s systems, including co-ordination of expansions by MSD and RWA and representation on MSD=s board.
No specific work on this charge has been done to date, but the Committee recognizes the importance of both the extension of the District into Mills River and construction of the interceptor to this effort. The increased customer base and revenue from this expansion will enhance our position in fulfilling this charge. It is anticipated that once these plans are finalized, efforts will be specifically directed at these goals.
5. Review system maintenance, replacement schedules, and plan for new customers.
This charge has been addressed during the orientation period and as a part of the rate study. Additional review will be done as work on the Master Plan takes place and another review of the rate, including allocation for ongoing maintenance and small capital projects, takes place.
6. Examine level of services and develop uniform rate structures.
The Committee recommended the purchase of specialized software designed for use in establishing rates for water and sewer systems and contracting with Crisp, Hughes, Evans, LLP, to set up the software and use it for a full evaluation of the rate structure. The Cane Creek Water and Sewer Board authorized this expenditure and contract that was completed in late April, with final review in late May and June by the Committee.
The results of the rate study, as initially implemented, showed a need to increase the current rate in order to fully meet both debt and deficit repayment, increased charges from MSD for processing, capital project needs, maintenance reserve funding, and implementation of accounting procedures for allocation of indirect costs incurred by the County in operating the system. An example used showed a sample bill going from $39.07 to $41.50 per month.
Subsequent to this recommendation, notice was reviewed of an additional increase in processing fees from MSD, effective July of 2000, to $3.70 per thousand gallons, up 15 cents. This is in addition to an increase last year of 15 cents that had already been absorbed by our system.
After reviewing the options available in setting rate structure, the Committee agreed at its June meeting to recommend the following:
C That the current rate be held until the deficit is eliminated. It is estimated that this will happen in early 2001, at the current rate of reduction and with absorption of increased charges from MSD.
C That a new rate structure be established at that time, with a goal of a reasonable rate reduction.
C That this new rate structure should include establishment of both a capital reserve fund for small projects and a fund for future maintenance needs. It should also establish indirect cost allocation for County services provided in the operation of the district.
C That it include a provision for some rate of return on investment to the system. This rate of return would be used for reinvestment in the system. The Advisory Board is currently reviewing proposed projects in the Cane Creek Industrial Park and the Westfeld-Hudson area and expects to make recommendations on these prior to implementation of a new rate structure early next year.
C That the current billing process through the Hendersonville Water Dept. (at a cost of $2.50 per monthly bill) be discontinued as soon as the number of users reaches the point that it would be cost effective to do it in-house. This is viewed as important in terms of both cost reduction and public perception of the Cane Creek system. Separate billing by Cane Creek would provide separate identity not currently perceived by many users. This is important as we develop better communication with the users.
C That this rate review be considered a part of a continuing process of evaluation and revision of rates for the system, with a goal of ongoing reductions as the number of users and the volume increases, the system expands both in Fletcher and Mills River, water services becomes a reality, and system structure changes.
C That a proactive public information plan be enacted to inform the users of the system about the basis for the recommendations and the goals for the system.
The decision to recommend holding the rate structure was based on a number of considerations. Some of the most important were:
The operating deficit can be eliminated quickly under the current rate and accounting system. Elimination of this deficit will put the system in a much better position to address capital needs, especially financing for large projects.
The Mills River expansion project is still pending and is being considered for grant funding. There was concern that no rate changes be made until the financial needs for this expansion are known. It is anticipated that if grant funding can be secured for the cost of the installation, the increased revenue generated in Mills River could enable the system to offset enough expenses to make a rate reduction possible when that goes online.
Some relief to users of the Cane Creek system has been provided through the use of separate meters for outside water outlets. County staff has worked out a system that makes it possible to rebate sewage charges to the customers who install these meters and monitor them. This was a major concern for many users and has helped to diffuse some of the pressure for immediate rate reduction.
Work Plan for coming year
1. Implement public information effort relating to rate structure and system goals.
2. Evaluate capital projects prior to rate review in early 2001.
3. Initiate that rate review based on elimination of the deficit.
4. Evaluate and revise Master Plan for system based on addition of Mills River line and changes taking place in Mud Creek system.
5. Develop strategy for improved integration with MSD.
The Committee requests that the Board of Commissioners, sitting as the Cane Creek Water & Sewer Board, review this report and make recommendations to the Committee for its continued activity in the coming year.
The Committee also requests that after review of this report by the Cane Creek Water and Sewer Board, this report be made available to the Town of Fletcher for its review.
Respectfully submitted on behalf of the Committee by Commissioner Marilyn Gordon, Chairman, on July 26, 2000. The Chair recognized the assistance of Committee member Robert DiDiego in the preparation of this report.
Chairman Hawkins commended the Advisory Board on what they have accomplished this year and what they continue to be doing. He asked for any comments from the Board.
Commissioner Ward stated that he would like to see the rates lowered. He has had numerous calls from people who have large water and sewer bills. He felt that the users need some relief.
Commissioner Kumor felt that the Advisory Committee had done a good job and had set a good basis and recommendation.
Commissioner Moyer supported the recommendations in the report, stating that he was very sympathetic to Commissioner Ward=s comments but the Committee has looked at the rate schedule exhaustively and have done the best they can.
Commissioner Moyer made the motion to adopt the recommendations in the report as given by Commissioner Gordon. Chairman Hawkins added that the Advisory Committee is headed in the direction that there is some realistic hope for some relief in the rates in the not too distant future. A vote was taken and the motion carried four to one with Commissioner Ward voting nay.
Minutes were presented for the Boards= review and approval of the following Cane Creek meetings:
November 17, 1999 and March 15, 2000.
Commissioner Kumor made the motion to approve the minutes as presented. All voted in favor and the motion carried.
Commissioner Kumor made the motion for the Board to adjourn as Cane Creek Water & Sewer District Board and reconvene as the Henderson County Board of Commissioners. All voted in favor and the motion carried.
Elizabeth W. Corn, Clerk to the Board Grady Hawkins, Chairman