REGULAR COUNCIL MEETING
The Regular Council Meeting was held on February 12, 2007 at 7:30 p.m. with Council President Williams presiding. Council members present were Mr. Carey, Mrs. Russell, Mr. McGlumphy, Mr. Slavin, Mr. McGiffin, Mr. Hogan, Mr. Salters, and Mr. Ruane.
Council staff members present were Police Chief Horvath, Mrs. Mitchell, Mrs. Townshend, Deputy Fire Chief Carey, Mr. DePrima, City Solicitor Rodriguez, Mrs. McDowell, and Mayor Speed.
OPEN FORUM
The Open Forum was held at 7:15 p.m., prior to commencement of the Official Council Meeting. Council President Williams declared the Open Forum in session and reminded those present that Council is not in official session and cannot take formal action.
Mr. Robert Hollingsworth, Mallard Pond, expressed his opinion regarding the need to build a new bus station in the City of Dover. He advised members of a recent situation where people were waiting for the bus at the old bus station, and because the bus station has been moved so many times, he was not sure of its current location to provide them direction. Mr. Hollingsworth stated that the proposal for a new bus station has occurred for the last several years and fears that if substantial action is not taken, it may never come to fruition. He felt that the City must first determine the location for the bus station and suggested that it be located on Route 13, south of Delaware State University and north of the Agricultural Museum. The next step would be to determine how it would be paid for and suggested that this could be accomplished through taxes.
The invocation was given by Councilwoman Russell, followed by the Pledge of Allegiance, led by members of Boy Scout Troop 903, sponsored by the Dover Elks Lodge.
AGENDA ADDITIONS/DELETIONS
Mr. Carey moved for approval of the agenda, seconded by Mr. Salters and unanimously carried.
Mr. Ruane requested that the following items be removed from the consent agenda:
#8B (b-2) -Appendix B - Zoning Ordinance, Article 6 – Off-Street Parking, Driveways and Loading Facilities, Section 1- Permitted Accessory Parking
#8B (b-3) -Chapter 106, Article I, Section 106-123 – Vehicle Parking Time Limited Where Carrying Capacity Is In Excess Of One Ton, And Trailer And Motor Home Parking
#8B (b-4) -Article 12 - Definitions
Mr. McGlumphy requested that the following items be removed from the consent agenda:
#5B -Brown Water financial Update/Water Quality Expense Report
#5C -Discussion - Options to Address Regulation 1146 Emission Control Requirements at McKee Run 3 Electric Generation Station
#5D -PACE/NAES Monthly Report, and #6B - Discussion - Moratorium on Hiring
#6B -Discussion - Moratorium on Hiring
Mr. Carey moved for approval of the Consent Agenda, as amended, seconded by Mr. Salters and carried by a unanimous roll call vote.
ADOPTION OF MINUTES - REGULAR COUNCIL MEETING OF JANUARY 22, 2007
The Minutes of the Regular Council Meeting of January 22, 2007 were unanimously approved by motion of Mr. Carey, seconded by Mr. Salters and bore the written approval of Mayor Speed.
PRESENTATION - SUCCESSES IN COOPERATIVE BIDDING
Mr. Pete Gregg, Procurement Manager for the City of Dover, provided a Power Point Presentation on Cooperative Bidding (Exhibit #1) and explained its success. He advised members that this past year, the City had its first opportunity to engage in cooperative bidding with other agencies, including the City of Milford, Delaware Electric Cooperative, Choptank Electric Cooperative, and Community Electric Cooperative. Due to its success, Mr. Gregg stated that it is the City’s intent to expand this type of bidding in order to continue to save money for materials.
Members commended Mr. Gregg on his efforts with this project.
TAX APPEALS COMMITTEE REPORT - JANUARY 17, 2007
The Tax Appeals Committee met on January 17, 2007 with Chairman Ruane presiding.
Informational Meeting to Review USPAP (Uniformed Standards of Professional Appraisal Practice) and IAAO (International Association of Assessing Officers) Appeal Process
City Clerk’s Office Note: Although this item was listed on the agenda, it was not discussed during the Tax Appeals Committee Meeting and therefore, not included in their report.
Tax Appeal/Public Hearing - Robino-Bay Court Plaza-Withdrawal
Mr. Ruane advised members that the committee reviewed a request to withdraw the tax appeal from Robino-Bay Court Plaza for property located at 650 Bay Road (ED-05-077.00-01-16.00).
The committee recommended acceptance of the withdrawal of Robino-Bay Court Plaza appeal, based on an e-mail dated January 16, 2007 received from Stephen Director.
In response to Council President Williams, there was no one present wishing to speak regarding the tax appeal for Robino-Bay Court Plaza.
Mr. Ruane moved for approval of the committee’s recommendation, seconded by Mr. Hogan and carried by a unanimous roll call vote.
Tax Appeal/Public Hearing - JC Penney
Mr. Ruane advised members that the committee reviewed a tax appeal from JC Penney for property located at 1365 N Dupont Highway (ED-05-057.00-01-13.05). The City Assessor, Mr. Capuano, submitted the following evidence for their consideration: A) E-Mail to/from City Solicitor Rodriguez dated January 17, 2007; B) Tax Policy No. 3; and C) documentation from the State of Delaware Council on Real Estate Appraisers (pertaining to the expiration of temporary practice permit on appraiser for JC Penney’s Department Store, Al Benton).
The committee recommended denying the appeal based on the fact that the appraiser did not possess a current State of Delaware Temporary Practice Permit.
In response to Council President Williams, there was no one present wishing to speak regarding the tax appeal for JC Penney.
Mr. Ruane moved for approval of the committee’s recommendation, seconded by Mr. Salters and carried by a unanimous roll call vote.
Mr. Ruane moved for acceptance of the Tax Appeals Committee Report, seconded by Mr. Salters and unanimously carried.
SPECIAL SAFETY ADVISORY AND TRANSPORTATION COMMITTEE REPORT - JANUARY 11, 2007
A Special Safety Advisory and Transportation Committee meeting was held on January 11, 2007 with Chairman Hogan presiding.
Discussion/Public Hearing - August 25, 2006 Reichhold Chemical Incident
During their meeting of October 24, 2006, members decided that a public hearing should be held to discuss the August 25, 2006 Reichhold Chemical incident with an invitation being sent to those involved in the incident for further discussion.
Mr. Hogan stated that the purpose of the public hearing was to discuss what was learned from the August 25, 2006 incident, how procedures can be improved, to relay concerns, and ask questions of those who were involved in the incident. He also indicated that Mr. Scott Muir, representative of Norfolk Southern Corporation, was invited; however, he was unable to attend the meeting.
Mr. DePrima, City Manager, briefly reviewed the Reichhold Chemical Incident Report that was presented during the October 10, 2006 Special Safety Advisory and Transportation Committee Meeting. He indicated that his report was based on a detailed report provided by Dover Police Lt. Paul Bernat, who also serves as the Emergency Management Coordinator, and a time line of events provided by Dover Fire Chief Brian Bashista.
Mr. DePrima indicated that, in accordance with Delaware procedure, all public notices were handled through the Incident Command System (ICS); not by the City of Dover. He stated that DNREC took over command of the ICS from the Cheswold Fire Department Chief at approximately 3:28 a.m. on Saturday, August 26, 2006.
Mr. DePrima stated that Congressman Castle has introduced House of Representatives Bill 4106, Railroad Security and Public Awareness Act, which would increase funding for security on subway systems, commuter lines, freight rail cars, and Amtrak trains. This legislation would authorize funding for more canine units, communications systems, security technology, and more police officers. It would also authorize mandatory rail worker security training programs to prepare front-line employees for potential threat conditions. Mr. DePrima indicated that the committee may want to support this bill and suggested that it be reviewed by members. Mr. DePrima noted that the City of Wilmington has also developed a resolution expressing their concerns regarding hazardous materials being transported through the City.
Mr. Hogan declared the Public Hearing open.
Mr. James D. Werner, Director of DNREC Division of Air and Waste Management, stated that the Air and Waste Management Division is responsible for hazardous waste cleanup, air pollution monitoring, accident release prevention program, environmental enforcement, and emergency response for the State of Delaware. Mr. Werner noted that his Division would generally provide hazmat technical assistance, such as air monitoring, data and communications support to emergency responders, as well as environmental enforcement. He indicated that once he was made aware of the incident, he questioned who had been informed in order to properly establish the command post.
Mr. Werner stated that styrene is a flammable chemical but does not have a high toxicity level and that it had solidified once it had reached the outside of the railcar.
Mr. Werner indicated that there are three (3) on-going enforcement actions with this incident. The first enforcement action is an on-going criminal enforcement investigation which cannot be publicly discussed. The second is an accident release prevention program that focuses on what steps or corrections should be taken to help prevent this type of incident from happening again. He noted that Dow Reichhold is cooperating in this effort. Mr. Werner stated that, with this step, they will focus on such items as extended storage procedures and the monitoring of railcars. The third is an on-going air pollution investigation for the site, noting that air pollution violations have been submitted to the State Department of Justice. Responding to Mr. Ruane, Mr. Werner indicated that regulations regarding the storage of railcars falls under Federal jurisdiction.
Mr. James Turner, Director of the Delaware Emergency Management Agency (DEMA), stated that the State of Emergency Response Team (SERT) consists of the local Fire Officer in charge, Division of Air and Waste Management’s Environmental Response Branch and Enforcement Section, DEMA, Delaware State Fire School, Delaware State Police, and Division of Public Health.
Mr. Turner indicated that there are three (3) levels of SERT responses to any occurrence involving a hazardous material which causes the use of emergency resources and that the person in charge of managing the site is responsible for determining which SERT response is called. Mr. Turner stated that a Level 1 response would consist of the local fire department and Fire Officer in charge, with DNREC managing the site for the Fire Officer in charge, and the Delaware State Fire School. A Level 2 response would consist of all the persons listed in Level 1 as well as on-call representatives from the Delaware State Fire School and the Environmental Health Section of the Department of Public Health. Selected resources as determined by the Fire Officer in charge may also be called to respond to the incident. Mr. Turner stated that in a declared Level 3 hazmat incident on-call representatives that were listed above are required to report to the incident and DEMA would assume the role of on-scene coordinator. Mr. Turner stated that, during the August 25, 2006 incident, the styrene air levels had a low odor threshold of approximately .09, meaning that it was very easily detectable but not necessarily harmful. He indicated that the air level threshold of possible harm would have to be about 1300 parts per million.
Mr. Turner indicated that the main concern was the possibility of the railcar exploding and discussions took place with other technical representatives regarding stabilizing the railcar. It was decided to monitor the pressure inside the tank and allow the product to go through its processes since stabilizing the railcar was not possible. Mr. Turner stated that, due to the risks involved, the residents within 1500 feet of the railcar were asked to leave their homes for the day as a safety precaution.
Mr. Michael Galbus, Plant Manager for Dow Reichhold, stated that, since the incident, Dow Reichhold has been fully cooperating with DNREC and is making progress on a number of safety and processing improvements such as enhanced railcar and tank monitoring.
Mr. Galbus indicated that Dow Reichhold held a meeting with residents and business owners approximately ten (10) days after the incident to discuss the steps taken and how procedures could be improved. It was determined that residents felt information regarding the incident was not publicized as quickly as they would have liked and that a better effort of going door-to-door should have been made. He also stated that residents commented favorably on their ability to access medical personal and toxicologists by dialing a toll free phone number to have their health related questions answered. Mr. Galbus indicated that an evaluation of the emergency response personnel determined that they responded promptly, were well trained, and that a high level of cooperation while handling the situation was witnessed.
Responding to Mr. Hogan, Mr. Galbus stated that Dow Reichhold railcars are stored at the New Burton Road site and indicated that he would provide information on whether or not the railcar involved in the incident was ever stored at the New Burton Road site.
Mr. Jerry Llewellyn, Division of Public Health, stated that his Division was a part of the SERT Level 3 response. He indicated that, according to OSHA, health effects from styrene exposure are not generally felt until air levels reach approximately 50 - 100 parts per million. Mr. Llewellyn stated that due to the swirling winds the night of the incident, a true reading of styrene air levels could not be determined; however, a reading was taken the following day with the highest number reaching 12 parts per million. Mr. Llewellyn stated that tests taken of area wells came back clean.
Mr. Llewellyn indicated that there was one (1) exposure case reported at Wilmington College and another involving an automobile which drove through the styrene plume. Once through the plume, the driver kept the windows up which trapped the collected material in the automobile. He stated that the driver took the passengers (children) to Bayhealth Hospital for treatment and then, during the following two (2) weeks, to hospitals located in Philadelphia, PA, Baltimore, MD, and Washington, D.C. Mr. Llewellyn indicated that it was determined that the symptoms were not those of styrene exposure.
Mr. Llewellyn indicated that it would have been helpful to know what the adjacent railcars were carrying just in case the ruptured railcar had exploded.
Mr. Al Angel, Third (3rd) District Levy Court, suggested that the responders to the incident be commended. He also suggested that the evacuation center at Dover High School was too close to the incident.
Mr. Angel noted that parts per million refers to exposure to an adult; not a child or animal, and he felt that more research must be done. He also indicated that not everyone responds to medicines or chemicals the same way and the hospitals should be aware of how to treat individual cases and that follow-ups should be completed on each case.
Mr. Angel stated that Reichhold is a member of the Local Emergency Plan Committee (LEPC) which requires all companies to provide them with information on the types of chemicals that are handled. He indicated that Reichhold should have someone in house who knows how to manage or deal with chemical spills instead of having to fly someone in from out of state.
Ms. Ann Rider, 124 Blue Beach Drive, stated that she was disappointed in the overall response by the State and the City of Dover to the Reichhold Chemical incident and that warnings did not come soon enough. She also indicated that, in the future, rather than utilizing the Reverse 911 System, media resources should be contacted and a special siren should be used to prompt residents to turn on their radios or televisions for a special announcement. Ms. Rider recommended that the City of Dover act upon the June 1978 Resolution and that dangerous chemicals should be prohibited from being stored along New Burton Road.
Mr. Harry Fillman, 1203 Walker Road, stated that there was poor communication in relaying information to residents and he felt that an education program, such as the bomb shelter type programs during World War II, should be considered. He also suggested that a shelter could be built to house the stored chemical railcars and monitoring of the air inside the shelter could be done as a warning system.
Mr. Charles Miriella, 316 Frear Drive, stated that he, too, felt there was poor communication in relaying information to residents and originally thought the Reverse 911 System phone call was a prank.
Mrs. Frances Boyles, 89 Birdsong Lane, stated that she, along with the children riding in her car, encountered the styrene plume while driving to Delaware Technical and Community College to play tennis. She indicated that once she and the children became exposed to the chemical she immediately dialed 911 and informed them of the situation. Mrs. Boyles noted that information was not provided to her regarding this incident and that her children have been ill ever since the exposure. She felt that there should be follow-up done on each individual exposure case.
Representative Nancy Wagner, 31st District, indicated that there were a lot of recommendations made on how to improve communication efforts during a public hearing that was held at Legislative Hall approximately two (2) weeks after the event. She stated that she is anxious to hear how the State agencies that were in attendance are going to implement the changes in their plans and operations.
Responding to Mr. Hogan, Representative Wagner stated that she will provide him with a copy of the public hearing minutes.
Mr. Hogan declared the public hearing closed.
Mr. Hogan stated that, based on the comments, it was obvious that the communication process needs to be improved and that utilizing the Reverse 911 System is a long process. He felt that public announcements during a similar situation could be provided to citizens by utilizing the City website and by utilizing local radio and television stations.
Mr. Hogan indicated that there was a lot of discussion regarding railcars being stored within city limits and noted that there are also trucks with tankers driving through the City on a regular basis that need to be monitored as well.
Responding to Mr. Ruane, Mr. Galbus indicated that Reichhold Chemical does store railcars along New Burton Road and that the location is set and controlled by the Federal Railroad Administration. Mr. Galbus stated that Reichhold is currently investigating the possibility of using an onsite location as a storage facility instead of the New Burton Road site. Mr. Galbus noted that he would provide a list of chemicals that are stored at the New Burton Road site.
Responding to Mr. Link, Mr. Galbus stated that Reichhold follows a purchase order process that would indicate the time frame of delivery for a railcar. He also noted that he has been in contact with Mrs. Boyles regarding information on the chemical that was stored inside the ruptured railcar and is assisting in setting up a meeting with Mrs. Boyles and Reichhold’s contracted toxicologist.
Responding to Mr. Hogan, Mr. Llewellyn stated that every call taken was documented by Reichhold Chemical and that emergency room physicians do have material regarding the treatment of chemical exposures.
Mr. Werner stated that DNREC publishes an annual report, which is available to the public, called the Delaware Toxics Release Inventory Report. The report provides information on the types of toxic chemicals processed, manufactured, and/or released by Delaware facilities.
Mr. Hogan stated that he would send a letter to Mr. Muir of the Norfolk Southern Corporation inviting him or a representative to attend a Safety Advisory and Transportation Committee meeting to discuss this incident further and to see what suggestions he may offer regarding the handling of any such future incidents.
By Consent Agenda, Mr. Carey moved for acceptance of the Safety Advisory and Transportation Committee Report, seconded by Mr. Salters and carried by a unanimous roll call vote.
UTILITY COMMITTEE REPORT - JANUARY 22, 2007
The Utility Committee met on January 22, 2007 with Chairman Carey presiding.
Proposed Energy Conservation Plan for Dover
Mr. Ron Zink, Sierra Club, presented members with information regarding an environmental program sponsored by the City of Seattle and endorsed by City Governments throughout the United States. The goal of the program is to reduce greenhouse gases by 7% below 1990 levels by the year 2012. Mr. Zink advised members that he represents the 500 cities and 50 million people in this country whose city government has signed on to insisting that they begin looking at how they spend their utilities. Some of the common strategies are reviewing energy efficiencies and power reduction, green vehicle and transportation solutions, and renewable energy.
Mr. Zink indicated that the American Lung Association has given Delaware an F grade for quality of air. There are very high cancer, asthma, and infant mortality rates in Delaware which are related to the environment. A contributor to the harmful environment is the Indian River Power Plant, which is one of the worst in the country. He advised members that Sussex County is in the top 20% of polluted counties. Delaware residents that reside within 30 miles of a power plant are at five (5) times greater risk for heart disease and premature mortality.
Mr. Zink applauded Dover leaders for their willingness to address the problems. He stated that over 500 people have signed a petition requesting that Dover now take some vigorous steps as quickly as possible. Although there are substantial costs involved to address the issues, Mr. Zink stated that the statistics from other cities indicate that there has been a good rate of return for their expenses. In addition, he stated that there has been a reduction in the amount of carbon dioxide polluting the air. Mr. Zink indicated that there are many different means in which the pollutants can be eliminated.
Mr. Slavin requested that members be provided the complete details of the plan prior to further review. Concurring, Mr. Carey suggested that Mr. Zink meet with the City Clerk, Mrs. McDowell, to distribute detailed information regarding the plans and schedule a meeting for members to further consider this matter.
Brown Water Financial Update/Water Quality Expense Report
During their meeting of January 8, 2007, Mrs. Duca, Assistant City Engineer, distributed and reviewed the Brown Water Financial Update/Water Quality Expense Report. The report represents a consolidation of expenses incurred during the past six (6) years related to water quality concerns and brown water issues. The committee tabled the issue in order to allow members the opportunity to analyze the material and present questions. Members of the committee removed the matter from the table.
Responding to Mr. Carey, Mrs. Duca confirmed that, to date, the City has expended $2,721,915.98 to address brown water issues, inclusive of flushing, engineering firms, capital projects, etc.
With regards to the labor expenses, which includes overtime and shift-differential pay, Mrs. Duca advised members that as staff begins to move into the unit directional flushing, the intent is to conduct the flushing operations during the day, which would result in most of the labor costs occurring during the regular working hours.
The committee recommended acceptance of the Brown Water Financial Update/Water Quality Expense Report.
Mr. McGlumphy again thanked Mrs. Duca for the report. He noted that this is a six (6) year on-going problem, and that to date, it has cost the City $2.7M in attempts to rectify this problem. However, he noted that $1.3M of these funds has been for the Division Street Water Main Upgrade, leaving approximately $1.4M spent specifically for Brown Water. It was his opinion that the City has not done a very good job at attacking the brown water problem other than flushing and a few studies. He relayed hope that, in the future, the City will become more aggressive in attacking this problem and then Mrs. Duca can present more applicable expenditures that shows the City making a better faith effort in resolving this problem. Mr. McGlumphy requested that another report, similar to the one presented to members, be presented at the end of the next quarter in order to determine what kind of progress has been made this fiscal year.
Mr. McGlumphy moved for approval of the committee’s recommendation for acceptance of the Brown Water Financial Update/Water Quality Expense Report. The motion was seconded by Mr. Hogan and unanimously carried.
Discussion - Options to Address Regulation 1146 Emission Control Requirements at McKee Run 3 Electric Generation Station
Mr. DePrima, City Manager, advised members that staff met with PACE/NAES on January 8, 2007 and discussed how the City should move forward to address Regulation 1146, Emissions Control Requirements. He explained that this is a new Regulation enacted by the State of Delaware to comply with Federal Regulations to control NOx (nitrogen oxide) and SO2 (sulfur dioxide). He advised members that the Regulation also involves mercury control; however, the McKee Run Plant does not put out enough mercury to require attention.
Mr. DePrima reviewed the requirements of Regulation 1146, including the dates which the emission reductions must first be met (by January 1, 2009, with further reductions by May 1, 2009 and more by January 1, 2012). He also reviewed the historic emissions performance for the McKee Run Plant. He advised members that the plant currently burns #6 oil, although it is not the primary source of fuel since natural gas, which is not regulated by these requirements, has been used during the past couple of years. Mr. DePrima reviewed the options for addressing Regulation 1146.
Mr. DePrima stated that in order to be able to burn #4 fuel oil, some of the operations of the plant would require retrofitting, in addition, #4 fuel oil is more expensive. Staff is currently reviewing the economic impact of such a change. The other options would consist of different forms of scrubbers that actually would reduce the amount of pollution emitted, assuming that #6 fuel oil would continue to be burned. The SCR on the back end option is more expensive, estimated at $12M to $15M. The SNCR would be less expensive, estimated at $3M to $4M; however, according to some preliminary testing, staff is not confident that the installation of these scrubbers would achieve the necessary reduction.
Mr. DePrima advised members that another option, which was not presented, would be to eliminate burning fuel oil altogether and operate it only as a natural gas plant. For each of the options, he stressed the importance of studying the costs, economics, and financing to determine which option is most beneficial. Staff is currently conducting this study and refining some of the associated costs. Once this has been completed, he indicated that staff will then begin running models under different scenarios in order to help determine which option would be most feasible.
Mr. DePrima reminded members to keep in mind that the McKee Run 3 Plant does not burn coal, and is not a base plant, it only operates as a shoulder plant, operating only a few thousand hours per year. Therefore, when considering one of the scrubbing alternatives, the City would need to consider if it is feasible to put such an expense into a plant that is not in operation all of the time, explaining that it would be a 24 hour/7 day a week solution for a plant that does not operate at that capacity, which is why staff is currently leaning towards the fuel switching option in order to meet the regulations.
Responding to Mr. Ruane, Mr. DePrima concurred that the decommissioning of the plant would be another option to consider if it is determined that none of the options are cost effective. The idea of converting to another source of fuel would not be an option since it could not be accomplished by 2009. What the City may be forced to do is, for an interim period, energy would have to be purchased off the grid. By doing this; however, he stated that there would be the chance that it would be purchased from a power plant that would be operating under less strict regulations than Delaware has passed, explaining that the regulations may be forcing the purchase of power from plants that would not even come close to these regulations.
Mr. Ruane questioned if a gas turbine, that would have the capacity that the current unit has and if it were comparable, would satisfy the capacity necessary. Responding, Mr. DePrima stated that, although it could meet the capacity obligation, it would not run very often. Further explaining, Mr. Lunt, Public Utilities Director, stated the heat rate for Unit 3 is better than the combustion turbine (CT). The problem with Unit 3 is that it takes 8 to 12 hours to bring up to speed to provide generation, whereas the CT can be on line in 30 minutes, sometimes in 10 minutes. Therefore, although Unit 3 would not run often, it would have to run more often than the CT. He explained that the heat rate is the conversion of fuel into energy and that a lower heat rate equates to more efficiency. Mr. Lunt explained that in some respects, Unit 3 is better than the CT when considering energy but less when it comes to responsiveness.
Mr. Ruane explained that the alternatives to be considered should be for both long-term and short-term options and requested that staff provide all options when this matter is presented for further consideration. As a reminder, he stated that Council previous directed staff to go forth and find replacements for these old units. Mr. Ruane also felt that if the State was assured that there was a definitive plan, as well as a commitment of monies for that purpose, they would provide a temporary variance until the new capacity is on line. He noted that the statement provided for Regulation 1146 includes providing a petition for relief from the regulation and a relief mechanism in a variance. Mr. Ruane requested that staff determine the meaning of this statement and if new capacity is possible, prices are comparable, and the time frame is such that the City could meet this regulation with that option, then it should be presented so that consideration is not just of retrofitting an old plant that still would not satisfying the Council’s mandate for new capacity. It was his opinion that there has not been sufficient information brought forth that indicates that this option would not be feasible.
Council President Williams questioned if staff would consider membership in a Cooperative. Responding, Mr. DePrima stated that this and the matter of obtaining additional capacity are options being reviewed by staff; however, he felt that they are not relevant to the issue regarding Regulation 1146. He explained that these are alternatives for new capacity required as a result of growth and not for meeting the requirements of Regulation 1146.
Council President Williams suggested that one of the difficulties is that until the requested information is received, members would not be able to truly consider all the options available.
Responding to Mr. Ruane, Mr. DePrima indicated that although staff is currently working on this project, he does not know when they will be prepared to bring this matter to members for their consideration.
The committee to recommended that the City Manager instruct staff to have before this committee within one (1) month, the refining of the costs, results of the scenarios, and additional information on other options discussed by members.
In reviewing the various options available, Mr. McGlumphy requested that the City Manager further explain the options regarding the fuel and the power plant. He noted that there has been concern, according the NAES Report for November, that $350,000 has been lost as a direct result of the 69Kv Tie. In addition, he stated that in December, an additional $400,000 was lost; therefore, the City has lost a total of $750,000 due to the problem the City is faced with concerning the power plant. Mr. McGlumphy explained his concern is that if the City continues to lose $300,000 to $400,000 each month, the rate payers will be in a more difficult situation when July comes, realizing that Council will again consider raising rates at that time. He stated that the City is facing several monetary issues, and although he realizes that staff is fully aware of these issues, it is his hope that they will develop some solutions, including bonds, to assist the City in meeting these needs.
Responding, Mr. DePrima reminded members that during the committee meeting, this issue was discussed and staff was directed to review the CIP to determine if any projects would cause the plant to run out of merit (the $300,000 to $400,000 monthly losses). He advised members that there are no more projects that would cause the City to shut down the plant (run out of merit).
Mr. McGlumphy moved for approval of the committee’s recommendation, seconded by Mr. Hogan.
Mr. Ruane requested confirmation that staff will be presenting the results of the scenarios to members of the committee at their next meeting. Responding, Mr. DePrima requested that staff be provided additional time to present their findings as requested by the committee, and that the matter be presented during their second meeting of March.
The motion to approve the committee’s recommendation that the City Manager instruct staff to have before the Utility Committee, within one (1) month, the refining of the costs, results of the scenarios, and additional information on other options as discussed by members was unanimously carried.
PACE/NAES Monthly Report (December)
Mr. DePrima provided the PACE/NAES Monthly Report for December 2006. He reminded members that this report is being provided each month to provide members the opportunity to monitor what is being sold in electric and the revenues received, which will allow members to have a better understanding of any fluctuations and make improvements, if deemed necessary. It is not his intent to make a presentation of the report; however, he welcomed any questions.
Mr. Ruane noted that the executive summary references a budget and requested that members be provided the document referenced. In addition, he noted that the summary references a negative gross margin in the amount of $406,092 because the units ran out of merit order, and requested an explanation.
Responding, Mr. DePrima reiterated that, as explained during their meeting of January 8, 2007 with regards to the November 2006 Report, the plant was running out of merit in November in support of the 69kV project and that the same occurred during the month of December. He indicated that there were a few days that this also occurred during the month of January; therefore, this will also be reflected in the January 2007 Report. In response to Mr. Ruane’s question regarding the cost recovery for this expenditure, Mr. DePrima stated that unfortunately the costs are recovered through the rate payers.
Mr. Carey reminded members that, in the future, this type of expense will be included in the City’s budget. Mr. Lunt had previously explained that this item was included in the Duke Contract, which is why it was not included as an expense to the City in the Budget.
In order to better read the report, Council President Williams requested that, in the future, the figures in the columns be right justified rather than centered.
City Clerk’s Office Note: Mr. McGlumphy’s request to remove this item from the Consent Agenda was discussed during the previous item.
Mr. McGlumphy moved for acceptance of the Utility Committee Report, seconded by Mr. Hogan and unanimously carried.
LEGISLATIVE, FINANCE, AND ADMINISTRATION COMMITTEE REPORT - JANUARY 22, 2007
The Legislative, Finance, and Administration Committee met on January 22, 2007 with Chairman Salters presiding.
Expansion of Voluntary Curbside Recycling Supported by Dover
During their meeting of January 8, 2007, members reviewed a proposal to expand voluntary curbside recycling and tabled action to allow further review. Members of the committee removed the matter from the table.
Mrs. Tieman, Senior City Administrator, reminded members that the proposed expansion would allow any citizen who wished to participate in the recycling program the opportunity to do so at no cost. The Delaware Solid Waste Authority (DSWA) would provide curbside pickup two (2) times per month and charge the City $1 for each pickup ($2 per month, per participating resident). The annual expenditure would be approximately $36,000 for 1,500 participants. However, she stated that the program would mainly be subsidized by landfill savings resulting from the tonnage of trash that is diverted from the landfill by recycling, which is estimated at $26,110. In addition, she stated that there would be other savings such as reduced expenses associated with gasoline and maintenance, estimated at $1,236, and manpower, estimated at $1,604. Therefore, utilizing an estimated 1,500 participants, the actual cost to the City would be approximately $7,000 per year for a City supported recycling program.
Responding to Mr. Salters, Mrs. Tieman stated that although there would be additional costs to the City with more participants, there would also be corresponding savings realized.
Mr. Rich Von Stetten, Senior Manager - Recycling for DSWA, stated that there are several different programs throughout the State of Delaware utilizing bags, bins, or carts on wheels. The DSWA would accommodate the preference of the participant, realizing that there may be individuals that would have difficulty carrying bags or bins and would need to use the carts.
Staff recommended that the City Manager be authorized to sign a contract with the Delaware Solid Waste Authority (DSWA) to provide the City of Dover supported voluntary curbside recycling at a cost of $24 per year per participating resident for every other week pickup.
With reference to the contract, if approved, Mr. Hogan urged staff to assure that the program is voluntary for the residents of Dover. He reminded members that there have recently been financial issues presented to the City and relayed concern with the timing for expanding this program. He relayed concern that the City is having difficulty obtaining the necessary funds to cover electric and other expenses and, although there are savings, there will not be enough to cover the costs; therefore, approval to expand this program will be a commitment to add an expenditure for the City. He suggested that the expansion be delayed until July 1, 2007 when a new budget year begins.
Concurring, Mr. Carey noted that participants are currently charged $4 per month and questioned if it would be beneficial for both the City and the participants if the fee was reduced to $2, which would offset costs to the City. Once there are enough participants that would reduce the expense to the City, then consideration could be given to providing the service at no cost.
Responding, Mrs. Tieman stated that there would always be costs associated to recycling. She explained that one of the main reasons staff would like to subsidize this program is because there are many residents that cannot afford to participate and it would also encourage more residents to participate. She also noted that the City recently lost three (3) voluntary recycle sites due to a change in ownership, which makes this program more convenient.
Mr. DePrima advised members that the contract for the proposed expansion has been offered by the DSWA. He is not sure if they would be in agreement with instituting a charge to each participant rather than the fee being paid by the City.
Mr. Slavin explained that staff’s $7,000 estimate is for a full year cost, with an estimated 1,500 participants. There are only five (5) months remaining in the fiscal year for implementing the expanded program and he felt sure that it would take time before there are 1,500 participants. Taking this into consideration, it was his opinion that there would only be a third of the costs required from the City if the expanded program were implemented at this time. Mr. Slavin also stressed his opinion that if the City could extend this service city-wide to anyone who wished to participate, it would be a great incentive and felt that the City should do so.
Concurring, Mr. Ruane reminded members that instituting a trash fee was one of the most controversial issues that has ever come before the City. He also stated that several participants feel that because they recycle, they should be refunded in some way and suggested that the proposed expanded program would provide them a return for their efforts.
Mayor Speed also relayed his support for the expanded program as presented. It was his opinion that regardless of the amount of the fee charged, it is the idea of having to pay for the service that prevents people from participating. By reducing the fee to $2, he estimated that there would be an additional 200 participants, which would not allow the City to reach the goal of having 1,500 participants. Mayor Speed advised members that the only way to have this accomplished would be to have the service provided at no charge to participants.
The committee recommended that the City Manager be authorized to sign a contract with the Delaware Solid Waste Authority (DSWA) to provide the City of Dover supported voluntary curbside recycling at a cost of $24 per year per participating resident for every other week pickup, with the understanding that the contract will state very clearly that it is a voluntary program with assistance.
By consent agenda, Mr. Carey moved for approval of the committee’s recommendation, seconded by Mr. Salters and carried by a unanimous roll call vote.
Discussion - Moratorium on Hiring
During their Regular Meeting of December 11, 2006, City Council approved a recommendation of the Joint Legislative, Finance, and Administration and Utility Committees, when considering the need for electric rate increases, that the Budget Team be directed to prepare a list of positions that are currently vacant and a hiring plan for the remainder of the fiscal year for presentation to the Legislative, Finance, and Administration Committee for consideration.
As directed, Mr. DePrima provided a current list of positions that are vacant as well as a hiring plan for the remainder of the fiscal year. He noted that since December 11th, there have been ten (10) positions added, explaining that in an organization as large as the City, the list is always changing. Mr. DePrima stated his opposition to a hiring freeze, feeling that it is not a good budget management tool due to the chance nature of vacancies. The randomness of vacancies gives no assurance of any savings; therefore, its value to the bond rating agency is questionable. He stated that there is no evidence of advice being received from the bond rating agencies or financial advisors that a hiring freeze would help satisfy their concerns.
In addition, Mr. DePrima stated that the randomness of vacancies could impact operations and services, particularly for small departments, and critical positions, such as the Library Director. He presented the following hiring plan for the remaining fiscal year:
1. Continue using the Hiring Justification Outline (provided to members in their packet) as a tool to determine the level of need for filling a position. I will categorize new vacancies as follows: 1) Critical; 2) Hold until off the Moody’s watch list; and 3) Permanent hold while reevaluating the position.
2. Consider the following positions critical and continue hiring process: 1) Assistant City Clerk; 2) Payroll Specialist; 3) Library Director; and 4) Administrative Assistant - Tax Office.
3. Continue filling the following positions because they have been vacant for some time, and we have completed the process and are ready to offer the position or have already offered the position: 1) MEO II – Construction; and 2) T&D Engineering Coordinator.
4. Hold on hiring the following positions until the City is off of the Moody’s watch list: 1) Groundworker; 2) Inspector I; 3) MEO I – Streets; 4) Account Clerk I; and 5) MEO I –Water/Wastewater.
5. The following positions have been in a virtual freeze due to our inability to fill the positions; therefore, I want to continue advertising to ensure that good candidates surface: 1) Electrical Engineer; 2) Civil Engineer; and 4) Programmer Analyst. While these positions are vacant, we are fulfilling the critical needs of the departments through consultants.
6. I may, from time to time, move positions from a category depending on the duration, season, or other circumstances.
The committee recommended acceptance of the City Manager’s plan for the remainder of the fiscal year and recommended that this process be continued in the future.
Mr. McGlumphy complimented the City Manager, Mr. DePrima, for establishing such a plan. He felt that members of Council need to be very cognizant of the fact that this City has taken on an additional 19½ positions, which equates to a tremendous increase in fixed expenses. He reminded members that the City will soon be opening the John W. Pitts Recreation Center and suggested that there may be a need to do more with less in terms of personnel issues.
Mr. Carey moved for approval of the committee’s recommendation for acceptance of the City Manager’s plan for the remainder of the fiscal year and that this process be continued in the future. The motion was seconded by Mr. Hogan and unanimously carried.
Debt Management Policy Review
Mrs. Mitchell, Treasurer/Finance Director, presented members with a draft Debt Management Policy for their review. She explained that the policy was developed to provide City officials with a set of guidelines to follow for planning and execution of the Capital Investment Plan (CIP) along with guidance for managing the City’s current debt. In summary, the policy provides debt management objectives, permitted types of debt, guidance for refinancing current debt, debt planning and oversight.
Mrs. Mitchell advised members that one of the key concepts is for the development of a financial model in conjunction with the budget and CIP process in order to determine debt affordability prior to presenting the budget to Council for approval. She stated that the model will include a five (5) year forecast, which will provide Council with a better understanding of the impact of new debt on future years. Although this process would include an additional step to the current budget process, the effort is justified as it will assist in providing members with an understanding of current and future costs of service. Mrs. Mitchell assured members that the policy takes into consideration State law and Charter restrictions.
Referring to Section V, Restrictions on Debt Issuance, Mrs. Mitchell explained that since these are recommendations being considered by the Charter Review Committee and have not been approved by Council, they will be eliminated from the policy at this time (page 4 of 14) . This information was provided for informational purposes only. Also, she advised members that the amounts provided in the Debt Service Limitations, debt service payments (principal and interest) not to exceed 8% of recurring General Fund revenues for all general obligation bonds, and the General Obligation direct debt not to exceed $700 per capita, are based on research of other municipalities and GFOA recommended practices. Currently, the City’s rate per capita is approximately $100, which is well below the recommended $700 per capita. She stated that the debt service payments not to exceed 8% would currently equate to approximately $2.5M.
Mr. Slavin reminded members of previous discussions regarding overlapping debt, involving the per capita debt from state, county, as well as the City and questioned if the $700 per capita is based on an aggregate amount or if it would be representative of the City’s debt only. Responding, Mrs. Mitchell stated that she would look into this matter further and be sure to clarify it in the policy. Mr. Slavin requested that she also provide information regarding the amounts of the capita per debt for a citizen of Dover from the State, County, and School Districts.
For clarification, Mr. DePrima suggested that the policy indicate a specific means of acquiring the population and recommended that the Delaware Population Consortium be utilized when determining populations.
Mr. Ruane requested that staff also review the possibility of the policy being more restrictive than the current Charter and report back the findings.
Responding to Mayor Speed’s concern of obligating future Council members, Mrs. Mitchell stated that the current practice is 20 years for G.O. Bonds. She stated that she would consult with the City’s financial advisor regarding this matter and report back to members.
Responding to Mr. Ruane, Mrs. Mitchell stated that guidance for achieving and maintaining a certain rating is not included in any City policies; however, when an agency reviews the City for rating, they take into consideration that the City has a formalized policy on debt management. Therefore, she explained that having a debt management policy will help with the City’s rating.
As a suggestion, Mr. Hogan felt that another bullet could be added under Section II, Debt Management Objectives, that would indicate that the City’s goal is to maintain or improve its current financial rating. Responding to Mr. Hogan’s question regarding Section IV, B, Short-Term Debt, Mrs. Mitchell stated that this Section addresses situations when there is a need to get quick cash to run operations. As an example, she stated that if there was a hurricane or some other disaster that had taken its toll on the City, this Section would permit the City to quickly obtain the necessary funds to continue to run operations.
The committee recommended tabling the matter to allow staff the opportunity to obtain the additional information requested and that the matter be brought back to the committee in two (2) weeks.
By conse