January 15, 2008

Meeting No. 219

The 219th meeting of the Chadds Ford Township Sewer Authority was held on this date in the Chadds Ford Township building.

Present: Chairman Vincent Del Rossi, Treasurer Keith C. Klaver, Paul Koch, Roland Martin. Not present: Secretary Marc S. Altman; Mr. Martin replaces Anthony Cutrona, whose term expired December 31, 2007.

Also in attendance were J. Michael Sheridan, Esq.; Authority solicitor; Garry Paul, Board of Supervisors representative to the Sewer Authority; and Mary J. Walter, asst. secretary/asst. treasurer.

Chairman Del Rossi called the meeting to order at 7:05 p.m.

The first order of business was the reorganization of the Board.

Mr. Del Rossi requested nominations for the office of Chairman for 2008. Mr. Klaver nominated Mr. Del Rossi for chairman; Mr. Koch seconded the nomination. Mr. Del Rossi was elected chairman.

Mr. Del Rossi nominated Marc S. Altman as vice chairman; Mr. Koch seconded the nomination. Mr. Altman was elected vice chair.

Mr. Del Rossi nominated Paul Koch as secretary; Mr. Klaver seconded the nomination. Mr. Koch was elected secretary.

Mr. Del Rossi nominated Keith Klaver for treasurer; Mr. Koch seconded the nomination. Mr. Klaver was elected treasurer.

The following appointees were approved by vote of the Board:

Solicitor - J. Michael Sheridan, Esq.; (Del Rossi/Koch)

Engineer – Pennoni and Associates Engineering at the rates specified in the request for proposal submitted to the Board; (Del Rossi/Koch)

Depository for funds - Sovereign Bank (Del Rossi/Klaver); the signature cards at the bank will be changed to reflect the changes in the membership of the Board.

Auditor - Merves, Amon and Barsz at a rate not to exceed $7500.00 for the 2007 audit (Del Rossi/Klaver); Mr. Klaver suggested that the Board may request proposals for the 2008 audit.

Asst. Secretary/Asst. Treasurer – Mary J. Walter (Del Rossi/Koch)

CFTSA Minutes-page 2

January 15, 2008

The Board approved the third Tuesday of each month as the meeting date for 2008, unless a holiday falls on that date. (Klaver/Koch)

ANNOUNCEMENTS:

Representatives of the Board met with Mr. Sheridan, Delcora representatives, and members of the Chadds Ford Township Board of Supervisors in preparation for a meeting with the Department of Environmental Protection on January 16 to discuss the draft consent order and agreement.

MINUTES:

Mr. Klaver requested that item 1 under Old Business on page 6 be changed to the following: Mr. Del Rossi indicated adverse financial consequences as his primary concern. Mr. Klaver further suggested that a full rate review should be considered after a full year of operations of the Turners Mill plant. The rate review might consider a two-tier approach.

The minutes of the December 18, 2007 meeting were approved as revised with Mr. Klaver’s changes, with one abstention, on a motion made and seconded (Koch/Klaver).

DELCORA/RIDINGS WASTEWATER TREATMENT PLANT:

Mr. DiMatteo reviewed his written report.

1. In December 2007, there were two violations for total suspended solids.

2. The sand filter continues to be blocked and lose sand; the sand cannot flow down the labyrinth and overflows back over the top. Mr. DiMatteo noted that sand is being replaced as minimally as possible to achieve solids stripping in the sand filter. The sand replacement will continue as necessary until the new disc filter is installed. If the sand is consistently replenished, the filter functions as well as it can; however, the monitoring of the sand filter is labor-intensive. In response to a question from Mr. Paul, Mr. DiMatteo noted that the disc filter is expected to curtail the solids violations; the filter is “guaranteed” by the manufacturer’s specifications to do so as long as the influent into the filter meets pre-established criteria. The sand filter will not be taken out of service and/or removed until the disc filter installation and testing is completed. The area where the sand filter now is located will be used for storage.

3. The new disc filter is expected to be shipped the second week of February. A letter will be sent to Ridings and other residents about any possible traffic or other disruptions caused by the disc filter installation. Mr. Koch expressed concern about pick-up and drop-off of children at bus stops or at their homes.

4. Use of chemicals is down due to colder air temperatures and less concern about the regeneration of pathogenic bacteria.

5. 11,600 pounds of sludge was hauled in December; the hauling was the first time in three months.

6. The creek was cleaned in mid-December on both sides of the bridge.

CFTSA Minutes-page 3

January 15, 2008

7. The storage shed for the chemicals is completed. Some chemicals froze during the cold spell in early January.

8. Mr. DiMatteo advised the Board that he is seeking a change in the laboratory that completes testing. The current lab is not returning sample results in a timely fashion, which does not allow the plant operator to adjust chemicals in a corresponding timely fashion. Mr. DiMatteo will further investigate the matter.

9. Mr. Del Rossi requested that Delcora investigate what types of inserts could be installed within the chain link fence to obscure the view of the plant from the neighboring home.

TREASURER’S REPORT:

The balance sheet indicates total cash and money market investments of $736,000.00. The total includes the tapping fees accumulated over the last year-and-a-half and $350,000.00 proceeds from the Township, less repayment of an approximate $95,000.00 prior loan from the Township.
Accounts receivable of $139,000.00 is primarily tapping fees from the Ridge Road Extension II project. Interest is being charged on all unpaid tapping fees.
The balance sheet does not include 2007 depreciation. Mr. Klaver noted that the CFTSA investment in the plant can be recovered only through future operating cash flows.
Accounts payable are higher than normal due to the accrual of the purchase cost for the disc filter.
Mr. Klaver termed the profit and loss statement a “success story.” The operating cash loss for 2007 of $15,200.00 is much lower than the expected operating cash loss of $30,000.00 to $40,000.00. Mr. Klaver cited three reasons: 1) interest income was earned in the amount of $39,000.00 due to higher interest rates from Sovereign and the net proceeds from the Township; 2) about $16,000.00 was incurred for I&I rather than the budgeted $32,000.00; certain maintenance costs decreased by nearly half due primarily to Delcora’s efforts in maintaining equipment. However, incremental costs were incurred for the sand filter operating problems. Mr. Klaver noted that the Authority still spent more money than it brought in. Also, the profit and loss statement does not include depreciation for 2007. [Note that certain amounts for 2007 were corrected at the February 2008 meeting.]
Mr. Klaver reviewed the Authority’s liquidity. The Authority at present has net funds of approximately $571,000.00. Assuming no future operating cash flow, the Authority will need to make up $379,000.00 in cash to pay off the Sovereign debt in April 2016. Additional funds could be received from the payment of future tapping fees, if any, or the payment of outstanding receivables for prior tapping fees. Mr. Klaver noted that unless rates are increased or expenses are reduced significantly, the CFTSA needs to identify other sources of cash, such as grants or the Township.
Mr. Klaver stated that the Authority must begin to build a capital replacement fund for the Turners Mill and the Ridings Plants. Mr. Martin asked what the status was of the Turners Mill Plant. Mr. Paul stated that Dutchland will operate Turners Mill on behalf of Toll Bros. for six months when the plant is completed. The Township will collect the revenue from the users’ fees for Turners Mill while Toll Bros. operates the plant.

CFTSA Minutes-page 4

January 15, 2008

After the Township acquires the plant from Toll Bros. the Township will dedicate the plant to the CFTSA. The Township Engineer is monitoring the plant startup. The dedication of the plant to CFTSA may happen as early as June.

The treasurer’s report and the accounts payable report including monthly bills of $13595.03, Quickbooks costs of $49.29, debit card purchases of $264.87, ACH payments for Verizon and PECO of $1805.75, payroll of $1254.85 were approved on a motion duly made and seconded (Klaver/Koch). Klaver requested that future ACH payments include the monthly withdrawal for repayment of the Sovereign Bank and DVRFA loans.

SOLICITOR’S REPORT:

Mr. Sheridan reported that Pennvest is expected to consider the Authority’s $1.6 million loan request at its January meeting. The application has been updated. Previously funding was not available.
Mr. Sheridan reported that liens have been placed on three properties for non-payment of user fees.
Mr. Sheridan reviewed the steps that have been taken regarding the three RREII property owners who have not responded to the Authority’s attempts to collect tapping fees and user fees. He and the Board discussed further actions that could be taken, including initiating the sheriff sale process. After further discussion, the Board agreed to table the matter until the next meeting. The Board directed the asst. secretary/asst. treasurer to provide a copy of the collection process for the next meeting.

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OLD BUSINESS:

Letters have been sent to the property owners whose properties are believed to still have septic/holding tanks.

NEW BUSINESS:

Mr. Del Rossi reported that the Authority’s insurance broker will contact carriers to bid on the CFTSA insurance renewal.

PUBLIC COMMENT: None

ADJOURNMENT The meeting was adjourned at 9:45 p.m. (Del Rossi/Klaver)

Respectfully submitted,

Mary J. Walter, Asst. Secretary/Asst. Treasurer