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HomeMy WebLinkAbout2015/03/23 - Briefing BOARD OF MASON COUNTY COMMISSIONERS'BRIEFING MINUTES Mason County Commission Chambers,411 forth 5th Street,Shelton,WA Weep of March 23,2015 Monday,March 23,2015 9:00 A.M. Belfair Sewer Finance Proposal—Frank Pinter Commissioners Neatherlin,Jeffreys and Sheldon were in attendance. • Frank Pinter provided follow up information to the previous briefing on the Belfair Sewer Financial proposal. There is an outstanding balance of$60,486 for not paying the monthly sewer bill(27 out of 195 customers);Unpaid Capital Facility Charges(CFC)are$89,760;22 out of 53 County Hookup Program Loans(CHP)are unpaid/delinquent for a total balance owed of$16,768; All customers that have not paid the CFC have a Failure to Connect to Sewer System lien recorded on their property and unpaid monthly sewer customers are also having liens filed on their property. • Cmmr. Sheldon asked if sewer hookup increases property values. Frank answered that the sewer is included in the property assessment. The assessment reflects market value and the market value has not yet increased due to sewer. • Funding Options: • Continue to add .09 and REET 2 Funding. • Form a Utility Local Improvement District(ULID)at$195/year for 400 ERU's Would take 66%voter approval and reduces hook up fees Adds$416K to revenue over 10 years Utilizing new hookup schedule costs $2,973,000 in revenue due to lower hook-up fee • Add Phases 2, 3,4 with$1,362,500 financing @ 1.5%for 25 years Estimated construction cost at around$1OM. Would need$IAM seed money Necessary to improve financial feasibility of utility Adds$281,474 in interest costs,hookup and rate revenue increases, O&M expenses increase Allows Utility to hold rates at$99 for ten years if.09 and REET 2 funding is added Cmmr. Sheldon interjected that it would be impossible to forecast that the rates would stay the same for 10 years. Cmmr.Neatherlin stated holding the rates would allow this system to become more competitive with surrounding areas. • Boss Settlement financing of$2,000,000 at 1.5%interest over 25 years. Costs Utility$2M in principle and$413,173 in interest expense. All interest is future Treasurer's interest revenue • Refinance Loan 17 of$2,445,000 at 1.5%interest over 25 years • Current Status: Fund balance runs to$0 in 2018 Fund balance never turns positive from there ($5.8M)fund balance by 2040 Annual operating cash flow turns positive after 2032 This reflects no Phase 2,3,4;no BOSS settlement, fees increase according to code • Adding Phases 2, 3, 4 Add$1,362,500 to seed an 85%grant from DOE for$9,083,333 Interest cost is$281,474 funding Treasurer's interest revenue Allowing ERU Rate to increase @ 2%annual creates positive cash flow Holding ERU rate to $99 for 10 years and adding$325K from .09 and$150K from REET 2 creates positive cash flow • Belfair Sewer Advisory Task Force Financial Plan @ 1/26/15 Add Phases 2,3,4 with internal bond financing of$1,362,500 Add$275K from .09 and$150K from REET 2 Hold rate @$99 for 10 years Add ULID or alternative prepayment program or SB5795 "Assessment Reimbursement Area" Add revised hook-up fee schedule costing$2,973,000 in revenue to entice early hookup Refinance Loan 17 with internal bond financing Add$2,000,000 BOSS settlement payment to internally funded bond financing Board of Mason County Commissioners' Briefing Meeting Minutes March 23,2015 ® Alternatives ERU Growth from 2%to 2.5% Hold ERU rate at$99 for 10 years Use current hookup rates$10K/$13K/$16.3K Finance Phases 2,3,4 and BOSS settlement with internal bond funding O&M cost/ERU reduced from$900 to $850 O&M cost increases educed from 3%to 2.75% ® Discussion of delinquent accounts. Question was asked if the customers who haven't paid hook- up fees are the same customers who have difficulty making the monthly payments Frank's Recommendations: ® Utilize an Internally Funded Bond(IFB) @ 50 Bps below 10 Year Treasury Note re-priced in five year intervals, amortized over 25 years ® Add Phases 2,3 and 4 with$1.4M seed funding financed by IFB and by an 85%Grant from the Department of Ecology. Best way out is to increase hook ups ® Maintain ERU Rates and Capital Facilities Charge(CFC—Hookup Fees)at current North Bay Rates,for ten years to allow comparables to"Catch Up ® Utilize ,09 for$450K and REET 2 for$150K for 12 years ® Fund the Boss Settlement with the IFB,paid for by rate payers not General Fund. ® Establish a"CFC Prepayment Program"for a ten year period instead of the ULID proposal Establish a County Wide Sewer&Utility District and a Community Utility Advisory Committee ® Utilize a LAMBRID to expand sewer services to Sand Hill/Lynch and Beards Cove regions ® Review reclaimed water utilization to be used as an revenue stream ® Conduct an annual review of the plan's actual results and adjust rates accordingly to meet the established goals. Cmmr. Sheldon asked who is responsible for the CHP loan program,if loans are not paid. Frank believes the county is, we still have to pay Ecology and we can lien the property. Creating a county wide sewer&utility district would allow the County to eventually sale the utilities to an outside operator. Each system would need a separate capital improvement fund. Reviewed spreadsheet of various scenarios. Discussion of how to incentivize getting the delinquent fees paid and getting hook ups paid. If an Internally Funded Bond is established, it reduces available cash for other county needs. Frank assessed the cost to borrow$2.5M,if necessary, and determined the cost could be quite high. Decisions Needed: Construction of additional phases and how to fund;BOSS settlement and how to fund;what to do with ERU rates and hookup fees for Belfair Sewer;does the County establish an Internally Funded Bond. Cmmr.Neatherlin supports keeping the rate at$99;carrot the hook-up fee now;look at financing the BOSS settlement and construction as needed by an IFB. For a$1.4M IFB, funds would to into Belfair Sewer Fund;unused funds would be invested. Bond could be set up on a draw down basis. Would still need to commit the total from investments. Cmmr. Sheldon read from the City of Shelton's sewer coalition paper. Cmmr. Jeffreys supports adding phases 2, 3, and 4. North Bay rates do have built-in increase. She asked if the county is waiting for rates to catch up with surrounding areas; would we not do the same for the North Bay utility. Board of Mason County Commissioners'Briefing Meeting Minutes March 23,2015 Frank responded he can look at that but attempting to hold North Bay rates could have an adverse impact to that utility. Cmmr.Jeffreys likes the carrot approach for hook up fees. Frank pointed out that reduced revenue would have to be off-set by other revenue over the 25 year period. Cmmr. Sheldon pointed out that we need to consider delinquent accounts into cost analysis. BOSS settlement could be paid from Current Expense or financed. Cmmr. Sheldon noted that in the costs analysis we need to keep in mind the actual numbers are small; delinquency rates have to be factored and need to explore who was exempted. It is unrealistic to keep rates at$99 for 10 years. Is Phase 1 operating as efficiently as possible? Widening of Highway 3 will be complete soon making the area more attractive to businesses. The only funds that are growing are sales tax_and BEET,we have been using those funds and it is appropriate to continue. He noted that as the economy improves, construction costs will increase. He is afraid of getting too big before being able to pay for what we have.He understands Olympic Panel is closing affecting workforce(Cminr. Jeffreys stated she was told that only 15%of the employees live in Mason County). In conclusion, Cmmr. Sheldon stated there are a lot of unknowns and doesn't want to make any long-term commitments right now. Treasurer Lisa Frazier expressed concern for the SAO finding,the proposed ULID and proposed prepayment plans. She feels prepayment funds will have to be held in trust and cannot be used for operating funds and may not be invested. Frank interjected that none of the analysis except for the ULID consider these funds for O&M or construction. Ms.Frazier is opposed to refinancing Loan 17. For the internal funded bond, $4M is a lot of money to tie up for 25 years. Current portfolio is a little over$7M for long term which is 3 to 5 years,is laddered and being reinvested. State Pool investments change every day. She noted that the Treasurer's daily cash includes all taxing districts and is not all County money. The Current Expense would be around the ending fund balance amount. She reminded the group that the Board's decisions would need to come before Finance Committee. Tom Davis believes the solution is to grow the way out and a strategic plan is needed. S I AM is a good investment for expansion. BOSS settlement is unfortunate. Need to deal with delinquent accounts. Need a stick along with the carrot and keep accounts current. Tie enforcement to additional permitting. No refinancing of Loan 17 and no ULID. Bob Harris agrees with most of Tom Davis' recommendations. Invest in ourselves,way out is to build out with smart dollars. This is a complicated issue and need to work together. Need to collect on outstanding debts. With expansion of Phases 2,3,and 4 in conjunction with Belfair Bypass,would spur development. The UGA is not too big and is there to grow. The longer we wait,the worse it gets. Connolly supports modifying hookup fees and agrees that construction fees will increase. Jack Johnson stated it is important to keep rates at around$99. He hopes that is a priority and something is resolved. This affects anyone of investing in Belfair due to uncertainty. Discussion of SB5795,modifies latecomers agreement and would allow expansion of Phase 3 and 4 as well.as funding of phase 3 and 4 at a later period of time and would not require funding today. Could separate Phase 2 so would require less seed money. Ciranr. Jeffreys has concerns with SB5795 and questions the application to existing development. RECESS from 11:10 a.m,to 11:25 a.m. Board of Mason County Commissioners' Briefing Meeting Minutes March 23,2015 ��.11:25 a.m. Public Works-Brian Matthews&Melissa McFadden Utilities&Waste Management-Brian Matthews/Erika Schwender Commissioners Neatherlin and Jeffreys were in attendance. Commissioner Sheldon was absent. ® Board agreed to place the Adopt-a-Road agreement with Timberlake on the agenda. Will be bringing an agreement for Shelton-Matlock Road soon. Sand Hill Road speed limit. Staff investigated with the school district,parks and sheriff office and the consensus was to not raise the speed limit so it's safe for children. Staff has also researched the law for school zones. The area is congested year around due to children's activities. Melissa's recommendation is to take public comment. Discussion of various options,including reduced speed during daylight hours. ® First TIP CAP meeting is this Wednesday. 11�4.-11:45 A.M. Juvenile Services Update—Ji n Madsen Commissioners Neatherlin and Jeffreys were in attendance. Commissioner Sheldon was absent. ® Jim Madsen provided an update on the Juvenile Detention Alternatives Initiative(JDAI)grant detention programs. Mason County has been a part of the program since 2009. Program effectiveness is being tracked. 11:3O A. M. 12:05 P.M. Public Health&Human Services—Vicki Kirkpatrick Commissioners Neatherlin and Jeffreys were in attendance. Commissioner Sheldon was absent. ® New Environmental Protection Agency funding model that were circulated at the March 17 Alliance for a Healthy South Sound meeting. There may be funding going straight to LIOs(local implementing organizations)for planning and nnplementation including staff support. ® Integration of Medicaid Mental Health &Chemical Dependency into a Behavioral Health Organization. Ms.Kirkpatrick requested support of the Board to continue to explore the concept of a shared governance structure for the Thurston-Mason Behavioral Health Organization and the joint development of options/recommendations. Cmmr. Jeffreys asked this be brought forward for an additional briefing to allow time for additional review. She wants to know where we are being underserved and how to resolve that. Vicki has a concern with governance. Cmmr.Neatherlin wants to know impacts to staff time. ® Governor's budget request for Communicable Disease funding for state and local Public Health System. Asking for Commissioners to support this additional funding. ® State Department of Health proposed reallocation of Public Health Preparedness and Response Funding, annual loss to Mason County of$32,000. The State Department of Health gas decided to develop three tiers of response capabilities and that there must be a Regional Lead organization,who will receive increased funding. Commissioner Discussion—there was no discussion. The Board recessed from 12:30 P.M.to 2:00 P.M. 2:00 P.M. Facilities,Parks&Trails—John Keates Commissioners Neatherlin and Jeffreys were in attendance. Commissioner Sheldon was absent. ® Travis Olsen reported on courthouse cameras and the various options. The Commissioners agreed to move forward at a cost not to exceed $6,000. ® Travis has requested bids for window ballistic film. ® Real estate offer on property located at 330 E Panorama Drive, Shelton. The Board approved moving forward with selling of the property. • Hunter Park restroom. Cmmr.Neatherlin suggested donating the park to the Port of Allyn and not pursuing restrooms at this time, Cmmr.Neatherlin would also like to expand the park to the adjacent property for a skateboard park but have the Port of Allyn run it. • River Haven property review. John will do some more checking. ® Heating/cooling unit for Building 4 had a compressor go out. Board of Mason County Commissioners' Briefing Meeting Minutes March 23,2015 2:15 P.M. Department of Community Development—Barbara Adkins Commissioners Neatherlin and Jeffreys were in attendance. Commissioner Sheldon was absent. ® Memorandum of Understanding between City of Shelton and Mason County for an exchange of services throughout the Comprehensive Plan update process. The Board approved moving the MOU forward. ® Discussion of staffing. The Building Inspector IV staff person is retiring and they have not had qualified people apply to fill the vacancy. Barbara is requesting the Building Official position be reinstated and add an entry level inspection position. The hope is that the Building Official position could also obtain the necessary fire inspector certifications to provide the Fire Marshal duties. Currently they have to outsource commercial permit review and fire code review. The Board approved moving forward with the Building Official and entry level Building Inspector position. The Commissioners asked staff to review what permits are absolutely necessary. ® Discussion of Title 17 to allow motorized commercial outdoor recreation(e.g.race tracks)as an allowed use in Rural Tourist Campground(RTC). Cmmr. Jeffreys believes RTC is becoming a catch all and suggested creating a different type of zone. It was pointed out that in the Code there are restrictions for a rezone to a more intensive land use and the total acreage can't exceed 50 acres. Cmmr. Jeffreys supports Ridge Motor Sports and requested additional legal review. If Tim Whitehead is good with the change,Barbara will move this forward. 2 6' P—.M. 3:05 P.M. Support Services-Bill Kenny Commissioners Neatherlin and Jeffreys were in attendance. Commissioner Sheldon was absent. • Review of Lodging Tax Advisory Board membership. Members were appointed in May 2014 for two- year terms and the law requires an annual review. Two spender positions need to be replaced. ® Resolution rescinding resolution for lunch closure of Assessor,Auditor&Treasurer offices enclosed. Cmmr. Jeffreys confirmed those elected officials have reviewed the resolution. ® March 31 Belfair meeting agenda was reviewed. ® Civil Service Vacancy News Release will be issued. Commissioner Discussion Commissioners Neatherlin and Jeffreys were in attendance. Commissioner Sheldon was absent. Frank Pinter was also in attendance. ® Discussion of what is needed to get the State Auditor's Office to rescind the finding on the Belfair Sewer. ® Curran Neatherlin supports keeping the monthly rate at$99 for ten years and can review the North Bay utility. ® Cmmr.Jeffreys wants to align the North Bay rates so Belfair Sewer is not receiving special treatment. She suggested aligning to the North Bay rate now(North Bay is at$101.95 per ERU and$10,179 per CFC;Belfair is at$96 and$10,000 per CFC). ® A long term analysis is needed on the North Bay rate structure. ® Discussion of enforcement-can lien the property, cannot disconnect service. Additional permitting is not allowed if not hooked up to sewer. Request to see if the Code can be amended to include delinquent accounts to permitting restriction. ® Cmmr.Neatherlin stated we need something in place for Ecology to lift moratorium and supports a prepayment plan for hook up. ® Internal Bond Funding, Cmmr.Neatherlin supports using for construction and BOSS. ® Latecomers fees were discussed and the proposed Senate Bill. • Can we break up the additional phases into 2 parts-construct Phase 2 now and Phases 3 and 4 to come later and satisfy Ecology requirements. ® Cmmr. Jeffreys is ok with bonding$2.5M for BOSS, construction&shortfall and keep ERU rates at $99. • CFC rates, Cmmr.Neatherlin would like to go with advisory board's recommendations and set at$5K now and it has increases in the future. Board of Mason County Commissioners' Briefing Meeting Minutes March 23,2015 • O&M is$900 per ERU. Discussion of creating priorities of what to do with additional hookup funding,if it occurs. Debt repayment would be the#1 priority. • Frank will rework the spreadsheet,talk to Ecology to check on financing. Respectfully submitted, Diane Zoren,Administrative Services Manager BOARD OF MASON COUNTY COMMISSIONERS L -ss:U� - Ra dy Neatherlin Tim Sheldon Terri Je Chair Commissioner Commission