UTILITY COMMITTEE
The Utility Committee meeting was held on September 24, 2007 at 5:00 p.m. with Chairman Ruane presiding. Members present were Mr. Carey, Mr. McGiffin, Mr. Cregar, and Mr. Snaman. Members of Council present were Mr. McGlumphy (arrived at 5:50 p.m.), Mr. Hogan, and Council President Salters (arrived at 5:50 p.m.).
AGENDA ADDITIONS/DELETIONS
Mr. Carey moved for approval of the agenda, seconded by Mr. Snaman and unanimously carried.
Proposed Amendments to the City of Dover Electric Service Handbook - Proposed Increases for Residential and Commercial Underground Extension Fee
Mr. Lunt, Public Utilities Director, advised members that in September 2006, the Electrical Engineering Division conducted a study and developed a material list for the equipment needed to supply electrical service to developments. From that study, a “per lot” fee was developed to recover all the City supplied material costs and included in the City of Dover Electric Service Handbook (Division III, Rules and Regulations, Section 3-36), which currently requires an $850 residential underground extension fee (per lot) for new developments and/or extension requests. Mr. Lunt stated that although the $850 fee recovered the material and transformer costs of the new electric distribution extension, it did not include labor. The fees in the Handbook also applied the same rate to Commercial and Industrial extensions where more than one (1) customer was served.
Due to the rising cost of material, staff felt that it was necessary to re-evaluate the fees associated with providing the infrastructure for underground electric service extensions. Mr. Lunt advised members that the result of this re-evaluation, which used the same material lists as the 2006 study, is that the average cost for providing residential electric service is approximately $1,200 per service. Staff provided members with details regarding the estimated material costs for three (3) developments to reflect the pre-2007 and 2007 average cost per lot.
Staff recommended increasing the Residential Underground Extension Fee from $850 per service to $1,200 per service and increasing the Commercial and Industrial Underground Extensions from $850 per electrical service to total material cost recovery.
Mr. Carey moved to recommend approval of staff’s recommendation, seconded by Mr. McGiffin and unanimously carried.
Revised CIP’s for 69KV Feeders 3 and 4 and St. Jones Substation
During their meeting of July 23, 2007, members were briefed on the changes to the scope of the 69 Kv Feeder Project, which included constructing it as a design/build versus an EPC and reducing it to a two (2) phase project rather than a three (3) phase project. Members also were advised that the St. Jones Substation Project would need to be accelerated to coincide with the 69 Kv Feeders 3 and 4 - Phase II Construction.
Members were provided revised CIP’s for the 69 Kv Feeders 3 and 4 and St. Jones Substation. Mr. Lunt, Public Utilities Director, advised members that staff has been preparing a detailed budget for both projects in an effort to update the CIP’s with reliable cost estimates. In addition, he advised members that the bond sale mandates that all funds be spent within three (3) years of the bond sale and that the acceleration of the St. Jones Substation Project will assist in complying with this requirement.
Mr. Lunt indicated that the change in scope to the 69 Kv Feeder Project will result in a savings of approximately $2,525,410. The St. Jones Substation Project costs have increased due to the increases in the price of metals, switchgear, and related equipment. He reminded members that in fiscal year 2006, the project was estimated at $5.1M; however, it was reduced to $3.6M in fiscal year 2007 based on a temporary reduction in actual bid costs. Mr. Lunt stated that the current estimates for the Substation are approximately $5.3M and the total costs related to both projects are projected to be $17,598,158, which is a net reduction in the amount of $749,342 over the previous fiscal year 2007 estimates. He stated that the budget amendments will be prepared and presented for approval to reflect these changes during the first scheduled budget amendments.
Responding to Mr. Ruane, Mrs. Mitchell, Finance Director/Treasurer, advised members that a presentation of the Revenue Bond Issue will be conducted at the next committee meeting. She explained that the Bond Issue Resolution will be written in such a way so that the City will be reimbursed any money spent on this project prior to the bond issue.
Staff recommended approval of the changes in the scope, schedule, and expense related to the CIP’s for St. Jones Substation and 69 Kv Feeders 3 and 4.
Mr. Snaman moved to recommend approval of staff’s recommendation, seconded by Mr. McGiffin and unanimously carried.
Bid Evaluation - Two (2) Substation Transformers
Bids were solicited for Request for Proposals (RFP) for two (2) Substation Transformers; one to be installed at the Horsepond Substation and the other at the St. Jones Substation. Both are existing substations that will be undergoing upgrades due to the age and condition of the existing transformers.
Staff recommended awarding the proposal to the lowest responsive bidder, Kuhlman Electric Corporation, in the amount of $1,615,481 which includes two (2) transformers ($1,566,466), one (1) set of spare parts ($4,905), and transformer field assembly ($44,110). (City Clerk’s Office Note: The Committee Action Form indicated a cost of $1,566,446 for the transformers; however, the Shaw Bid Evaluation Summary indicated a cost of $1,566,466 - a difference of $20. This correction does not change the total expenditure requested in the amount of $1,615,481).
Mr. Lunt, Public Utilities Director, advised members that staff included the expense of the spare parts which includes a gasket set, one (1) high and low voltage bushing, and one (1) cooling fan with motor. In addition, he advised members that staff recommended including the turnkey installation for both transformers which includes unloading, assembly, oil filling/processing, field testing, and da five (5) year warranty. Although the Kuhlman proposal is a firm price, it does contain the following payment requirements: 1) 20% down payment; 2) 30% 15-weeks prior to scheduled shipment; 3) 30% 35-days prior to scheduled shipment; and 4) 20% upon shipment (due net 15 days after receipt of transformers).
Mr. McGlumphy moved for approval of staff’s recommendation, seconded by Mr. Snaman and unanimously carried.
FY 2007/08 Water/Wastewater Capital Improvement Project (CIP) Briefing
During their meeting of September 10, 2007, members began review of the FY 2007/08 Water/Wastewater Capital Improvement Projects. Due to time constraints, it was necessary to continue the review for this time. It was noted that the committee stopped their review at the South Governors Avenue Sewer Main Upgrade Project.
Responding to Mr. Ruane with regards to the South Governors Avenue Sewer Main Upgrade Project, Mr. Lunt, Public Utilities Director, advised members that the State has issued a Notice to Proceed and that the City has began to order materials. He explained that the Sewer Main Upgrade is less of an issue since it will be installed by the State in its entirety and that the City will be billed for the upgrade and changes in the sewer pipe. Mr. DePrima stated that although this will be accomplished by the State, the City will assure that residents will be notified of closures, etc. as a result of this project.
Mr. Lunt continued the review of the remainder of the projects in detail, as follows:
Lafferty Lane Package Pump Station Replacement and Upgrade
White Oak Farms Pumping Station VFDs
US Route 13 East Sanitary Sewer Interceptor
Dover East Pumping Station and Force Main (project has been cancelled since Rojan Meadows is planned for development; once the land is developed, the pumping station will no longer be needed, it will be converted to a gravity flow. Upon evaluation, staff determined that the pumping station should be sufficient for the next two (2) years until the development of Rojan Meadows is completed)
Wellhead Redevelopment Program
Wellhead VFD Upgrades
Water Quality Improvements
Miscellaneous Distribution System Improvements
Remote Control and Monitor Wells
Emergency Generators (Wells)
1.0 MG Elevated Water Storage Tower
Piney Point Well
Scarborough Road Interconnection (Tidewater Utilities)
South Governors Avenue Water Main Upgrade
Modification of Maintenance Agreement - Persimmon Park Place Islands
Members were reminded that in September of 2004, the City of Dover accepted the dedication of streets in Persimmon Park Place. This project had been developed with private streets and over time, they began to deteriorate and the Condominium Association was not able to care for them in the long term. Mr. DePrima, City Manager, advised members that the City agreed to take over ownership and responsibility once funding of their repair was secured through Community Transfer Fund provided principally by Representative Bruce Ennis.
Mr. DePrima stated the maintenance, mostly consisting of grass cutting of traffic islands, were specifically reserved by the Condominium Association as their responsibility. Members were provided a copy of the deed from the transfer of the land which, in paragraph 3, addresses this reservation. He stated that there have been several occasions when the new Homeowners Association and/or the Condominium Council has requested that the City mow the traffic islands in an effort to reduce their grass cutting expense. Mr. DePrima indicated that the City has maintained that the Homeowners Association and/or Condominium Council is responsible for the traffic islands and that they are not the responsibility of the City.
Recently, the City has been advised that Representative Ennis has agreed to fund “bricking” the islands which will significantly reduce the cost of the maintenance. Considering this, he questioned if the City should modify the deed and take over responsibility of the islands. Although the expense for maintaining the islands will be reduced to a cost of occasionally spraying for weeds, staff felt that the Condominium Association could more than handle this responsibility and that the City should not stretch the City’s landscape crews any further.
Mr. Slavin advised members that he has been working with Mr. Tolbert, President of the Persimmon Park Place Homeowners Association and Condominium Council, on this issue and relayed appreciation to Representative Ennis for his dedication and the funding provided for this project. He explained that the traffic islands serve a public safety purpose and felt that the City should assume the responsibility, noting that required maintenance would be minimal.
Mr. Tolbert thanked members for their time in consideration of this request. He explained that the previous President of the Condominium Council agreed to retain responsibility of the traffic islands. He advised members that the previous President was also the developer of the development and that this requirement was included in the deed without the residents knowledge.
Mr. Ruane suggested that it would be helpful for members to be provided information with regards to any increase in property taxes for the residents of Persimmon Park Place.
Mr. Carey moved to recommend that as the traffic islands are upgraded in Persimmon Park Place, the City would assume responsibility.
Mr. McGiffin stated that the argument with regards to the costs would be as much in favor of the City taking over responsibility of the traffic islands as it does in allowing the Condominium Council to maintain the islands. If it is not too costly, he felt that by the City assuming responsibility, it would be a demonstration of good faith on the part of the City to a community that has had its share of troubles.
Responding to Mr. Cregar, Mr. DePrima stated that at this time, he does not have the cost details associated with the assumption of ownership.
Mr. Ruane relayed concern with the precedent that would be made if Council were to take over responsibility, noting that there are several traffic islands within developments that are the responsibility of the homeowners associations.
Mr. McGiffin reminded members of the uniqueness of Persimmon Park Place and as a result, any precedential value is negligible.
Mr. McGlumphy suggested that members be provided a cost factor analysis and suggested that all developments could prove to be unique; therefore, he cautioned members to consider the potential costs for providing the consideration for other developments.
Mr. Cregar suggested that the lawn care service provider for Persimmon Park Place be contacted to determine the costs for extending service to maintain the islands.
Mr. Slavin stated that although he appreciates the focus on costs, there is an assumption that the costs would be minimal and explained that there is a responsibility issue to consider. With reference to the concern of a precedence, he was not aware of any other developments within the City that have these types of traffic islands on such narrow streets that have been dedicated to the City. Therefore, it was his opinion that since Council approved the sub-standards streets, the private streets, lesser standards for safety in public streets, traffic islands, etc., the City should provide assistance in making the situation better. Mr. Slavin felt that the City should put forward a good faith effort as has been done by Representative Ennis.
The motion to recommend that as the traffic islands are upgraded in Persimmon Park Place, the City would assume responsibility failed with Mr. Snaman, Mr. Cregar, and Mr. Ruane voting no.
Update - Verizon Franchise Agreement Negotiations
With regards to the Verizon Franchise Agreement negotiations, Mr. Ruane advised members that there has been an additional telephone conference call with the City’s attorney for the purpose of reviewing the most recent draft agreement and that discussions regarding this issue are continuing.
Mr. Snaman moved for adjournment, seconded by Mr. McGiffin and unanimously carried.
Meeting Adjourned at 6:02 P.M.
Respectfully submitted,
Eugene B. Ruane
Chairman
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