CHADDS FORD TOWNSHIP SEWER AUTHORITY

MINUTES

January 16, 2007

The 207th 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. Not present: Secretary Marc S. Altman, Anthony J. Cutrona. Mr. Koch replaces Paul G. Linsen, who term expired Dec. 31, 2006.

Also in attendance were J. Michael Sheridan, Esquire; Thomas R. Smith, PE; and Mary J. Walter, asst. secretary/treasurer.

Chairman Del Rossi called the meeting to order at 7:00 p.m.

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

Mr. Del Rossi requested nominations for the office of Chairman for 2007. Mr. Koch nominated Mr. Del Rossi for chairman; Mr. Klaver seconded the nomination. Mr. Del Rossi was elected chairman by unanimous vote.

Mr. Del Rossi nominated for Anthony J. Cutrona vice chairman; Mr. Koch seconded the nomination. Mr. Cutrona was elected vice chair by unanimous vote.

Mr. Del Rossi nominated Marc S. Altman for secretary; Mr. Koch seconded the nomination. Mr. Altman was elected secretary by unanimous vote.

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

The following appointees were retained by unanimous vote:

Solicitor - J. Michael Sheridan, Esq. at a retainer of $2,000 per quarter

Engineer - Thomas R. Smith, P.E. of Spotts, Stevens and McCoy and stated 2007 SSM Municipal Rate Schedule

Depository for funds - Sovereign Bank

Auditor - Merves, Amon and Barsz at a rate not to exceed $6000.00 for the 2006 audit

            Asst./Secretary Treasurer - M. J. Walter at a rate of $25.00 per hour

Mr. Koch moved to change the signature cards at Sovereign Bank to reflect the changes in the leadership of the Board; Mr. Del Rossi seconded the motion, which passed unanimously.

MINUTES:

The minutes of the December 19, 2006 meeting of the Chadds Ford Township Sewer Authority meeting were approved as presented with one abstention, on a motion duly made and seconded (Klaver/DelRossi). 

ENGINEER’S REPORT:

Based on recent discussions with DELCORA, as a result of their 24/7 flow monitoring, Mr. Smith reported there is a lot of storm water finding its way into the Ridings treatment plant. SSM has begun to re-visit plans for monitoring of storm-water inflow and infiltration into the Ridings collection system. This is a major problem with plants throughout the state. A few years ago, SSM did preliminary investigations into the collection system inflow, and potential sources were identified at the pumping stations and on a few home laterals.  These will have to be revisited with corrective measures taken, and the program expanded to keep the Ridings plant from becoming overloaded and the treatment process within satisfactory operations parameters.

SSM has been reviewing the electric generator description and the corresponding requirements for emergency power at the Ridings WWTP. SSM will prepare a brief specification to develop more current pricing, and if favorable, move to have the equipment installed.  With DELCORA, SSM also has been discussing the need for a debris basket at the influent pumping station to protect the process and sand filter piping from damage due to floatables and other materials in the incoming wastewater.  Both the generator and the debris basket can be part of an improvements plan for the Ridings Plant.  Both are part of the recommended DEP guidelines for WWTP design.

At Mr. Smith’s invitation, Dominic Pileggi of The Parkside Associates presented to the board his plans for the expansion of the Olde Ridge Village and the property adjacent to the Village on the northwest side of Route 202 and Ridge Road. The expansion includes more retail space, a restaurant and a large Ethan Allen furniture store. SSM has reviewed the planning modules and recommended that a developers Agreement and Escrow be established with the CFTSA. Mr. Smith recommended that an escrow account be established to include the costs for the new sewer line running from the back of the property towards Route 202, inspections, plus 10%.

Brief discussion was held on whether or not additional EDUs would be available for purchase for the restaurant (7500 gallons per day). The Board gave Mr. Pileggi several options to consider. Mr. Sheridan advised that additional gallons might be available based on the re-rate of the Ridings treatment plant.

On a motion from Mr. Klaver and seconded by Mr. Koch, the Board authorized Mr. Del Rossi to execute a developer’s agreement based on recommendations by Mr. Smith and Mr. Sheridan.

TREASURER’S REPORT:

1. The financial statements are unaudited.
2. The Authority’s accounts receivables were a bit high primarily due to non-payment of several RRE2 tapping fees; Mr. Klaver and Mr. Del Rossi are working with individual RRE2 property owners to help secure funding and/or determine appropriate payment schedules for those who have not paid. An option will include loans repayable to the CFTSA.
3. Discussions are being held with the CFT Board of Supervisors on a financial re-structuring.
4. Expenses are online on the administrative side; plant operations expenses are much higher than originally budgeted due to increased maintenance at the treatment plant and pump stations. Finished 2006 with negative cash flow of $45,000.00 in 2006; a loss of $20,000.00 was budgeted due to incremental interest cost on new financing.
5. The proceeds from tapping fees, while viewed as income, should be used to pay down debt rather than to fund operating expenses.

The treasurer’s report and the accounts payable report including ACH payments for the Verizon and PECO accounts, debit card expenses, and bill payment list submitted for approval in the amount of $15537.96 were approved on a motion duly made and seconded (Koch/Del Rossi).

SOLICITOR’S REPORT:

Mr. Sheridan has been contacted by the attorney for Tremonte Builders regarding the deed of dedication of the Tremonte collection system.

Mr. Sheridan prepared general collection letters that may be sent by the Authority to those customers who are in arrears. The “most severe” letter will be sent only with Board approval. Mr. Sheridan informed the Board that by statute the Authority might require that the water supply be shut off to any residence whose owner is 30 days in arrears. As long as notice and due process is given to the homeowner, the water company has no discretion to refuse the request to shut off the water. This option would not apply to those property owners whose properties are serviced by well water. The Board agreed that this would an extreme measure taken only as a last resort.

Mr. Klaver requested that the asst. secretary/treasurer phone customers who are more than two quarters in arrears. The objective is to help the Authority determine if there may be a hardship situation.

The Board discussed the placing of liens on the homes of those who have not yet paid either the entire tapping fee or the amounts due on the tapping fee.  On a motion from Mr. Klaver and seconded by Mr. Koch, the Board authorized Mr. Sheridan to place liens on the homes of those who have not paid the entire tapping fee. Motion carried.

RIDINGS WASTEWATER TREATMENT PLANT:

Mr. Del Rossi reported that DELCORA believes the waste being transported to the Ridings plant under the Toll Bros. pump and haul agreement is affecting flow and performance at the plant. DELCORA has recommended not receiving the Toll Bros. pump and haul waste at the Ridings plant. Mr. Sheridan reported that the Municipal Authorities Act has language regarding the maintenance of the facility in a service area that gives the Authority broad-based power to insure the “general welfare of the authority.” Although the Toll Bros. pump and haul agreement appears to be specific to the Ridings Plant and as to the amount of waste that may be transported to the facility (8000 gallons in any 24 hours), Mr. Sheridan believes an argument can be made that if the pump and haul waste is overloading and/or damaging the Ridings facility, these issues could be addressed on an interim basis by transferring to another facility. There may be some concern that Toll Bros. is transporting more than the amount allowed under the agreement.

Mr. Klaver moved, Mr. Koch seconded, to delegate Mr. Del Rossi as the CFTSA representative to discuss with Toll Bros., McGovern and DELCORA regarding the resolution of this issue, including having Toll Bros. having a direct transaction with McGovern for the hauling of the waste. Motion carried.

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OLD BUSINESS:

1. Mr. Del Rossi and Mr. Klaver met with representatives of BPI and the CFTSA’s current carrier, HA Thomson, to discuss the Authority’s insurance needs. Proposals from both parties have been requested and a decision on the possible changing of insurance carriers must be made before April.

NEW BUSINESS:

1. Mr. Klaver discussed the Authority’s applications to the Delaware Valley Regional Finance Authority and to PennVest for funding related to the future dedication of the Turner’s Mill plant to the Authority. The Township has an agreement with Toll Bros. to build the plant, and build a collection system from the Chadds Ford Estates property east to Route 1 and then west down to the Turners Mill plant. (This collection line is completed but not operational; and the properties currently connected to that non-operational system are the Estates at Chadds Ford.) Toll Bros. is paying approximately 23% of the $2.5 million cost while the Township will pay 77% (roughly $2 million). The debt to Toll Bros. will be due at completion, which is defined as when the plant takes on sufficient wastewater to run for six months; at that time the Township engineer and the CFTSA engineer must certify that the plant is operating effectively. In addition there is an agreement between the Township and Toll Bros. to build a collection system from the Turner’s Mill plant to Chadds Ford Village at an extended cost of approximately $1.2 million. An additional approximate $600,000.00 has been incurred by the Township for engineering services, legal services, land and other associated costs. The total cost of the project is approximately $3.7 million.

The CFTSA will have to incur the debt when the Turner’s Mill plant is dedicated from the Township to the CFTSA. The Township has agreed to provide equity of $700,000.00 and the CFTSA will finance $3 million.

The CFTSA’s application to PennVest for $1.6 million should be considered by the PennVest Board meeting in April. The CFTSA has discussed several financing options with various lenders: The first option is borrowing $1.4 million in addition to the $1.6 million applied for from PennVest; the second option is borrowing $1.4 million and the additional $1.6 million should the PennVest application be denied; and the third option is borrowing an additional $200,000.00 to finance a force main for the Painter’s Crossing Condominium Association. The Painters Crossing Condo Association would repay the CFTSA the interest and the other direct costs and other CFTSA costs on the $200,000.00 loan.

As discussed at the December 2006 CFTSA Board meeting, DVRFA’s rates for financing were lower than many lenders by at least a point and a half and their initial financing costs were less than half. DVRFA has agreed to a three-tier loan system: 1. an initial loan of $200,000.00 to pay for the Painters Crossing force main in March 2007; 2. an additional $1.4 million taken when needed for the transaction with Toll Bros., perhaps in late summer; and 3. an additional $1.6 if the PennVest application is denied. Finance costs are paid only upon drawdowns from the loan. The interest is 3.7% plus currently an annual 40 basis increase for DVRFA costs. Although the CFTSA would prefer the more favorable interest rate loan from PennVest, Mr. Klaver believes that the Authority needs the “safety net” of the DVRFA loan. The DVRFA closing costs are paid only on the amounts borrowed, so there are minimal costs of obtaining the loan arrangement.

On a recommendation from Mr. Sheridan, Mr. Klaver moved and Mr. Koch seconded that the Board approve a resolution of the CFTSA and the documents provided by DVRFA authorizing the issuance of up to $3.2 guaranteed sewer revenue notes with DVRFA, upon condition of review by Mr. Sheridan by Friday, Jan. 19, and distribution of any comments Mr. Sheridan may have via e-mail to the CFTSA Board. Motion carried.

On a recommendation from Mr. Sheridan, Mr. Klaver moved and Mr. DelRossi seconded that the Board approve the January 16, 2007, letter of intent with DVRFA, upon condition of review by Mr. Sheridan by Friday, Jan. 19, and distribution of any comments Mr. Sheridan may have via e-mail to the CFTSA Board. Motion carried.

Since the Township must guarantee the debt and since there are certain timing issues involved in the processing of the loan application, Mr. Sheridan was asked to contact the Township secretary to insure the approval is on the Township’s Board of Supervisors’ meeting agenda for February.

2. Mr. Del Rossi and Mr. Smith met with representatives of DELCORA on January12. Mr. DelRossi reported that he approved expenses in the amount  $2477.64 for a chemical form control drum, a new mixer dechlorination tank, a flight 1.7 horsepower sandfilter feed pump, and a contract with DELCORA for the Woodland pump station generator maintenance. The expenses will be billed to the Authority by DELCORA.

Mr. Del Rossi reported to the Board on several safety, maintenance and operations issues that DELCORA has identified at the pump stations and the Ridings plant, particularly the possible need for a second sand filter and debris basket. The sand filter cannot handle a large flow, particularly if there is infiltration of rainwater in the plant; the DEP may require another sand filter. Large debris such as soda bottles is making their way through the plant and into the sand filter. Although the debris basket is recommended, someone would have to empty it every day.

Although DELCORA has agreed to absorb some of the costs to resolve some of these issues at the plant and pump stations, implementing all DELCORA’s recommendations will have a profound effect on the Authority’s financial position.

Mr. Klaver is concerned what impact the DELCORA recommendations will have on the 2007 budget and on the Authority’s overall finances since the CFTSA is operating with a negative cash flow. Mr. Klaver noted that the Board should re-visit the amount the Township is paying in subsidy each month to the Authority; the amount of the residential user fee; and the possibility of charging new non-residential users for costs already incurred by the Authority.

Garry Paul, CFTBOS liaison to the Authority, commented that the Board perhaps consider a collection charge on new users to fund the unfunded capital charges the Authority is incurring.

Because of the increased activity at the Ridings plant from pump and vacuum trucks, the Board requested the asst. secretary/treasurer write a letter to the surrounding residents informing them of the new operator.

3. Mr. DelRossi reported that there was sedimentation from the plant in the stream behind the Ridings plant. The PA DEP investigated and allowed DELCORA to clean the silt in the streambed area with vacuum trucks. The DEP will send a follow-up letter.

4. Mr. Paul reported that the Turner’s Mill plant configuration was changed and the “muffin muncher” was eliminated from the plant. As a result, now the dumpster and the separator are at the front of the plant near the Township Building rather than at the back of the plant. Although he was assured that the reconfiguration will not affect the performance of the plant, he expressed concerns about odors and the aesthetics of having a dumpster and the separator near the front of the plant. He questioned why from an engineering standpoint, why was the change made? Mr. Klaver commented that he believes something must be done to screen the dumpster either with a structure consistent with the Township Building motif or fast-growing trees.

Mr. Koch asked if the cost for the “muffin muncher” was removed from the overall cost of the plant since the plant was reconfigured? Can the cost of the “muffin muncher” now be used to find a way to screen the dumpster? Mr. Paul reported that in the Township’s agreement with Toll Bros., the Township has the right to audit the charges. The issue is that some changes were made during construction that will raise the overall cost of the plant. Mr. Paul also noted the Township is trying to determine the cost of the Village collection system as Toll Bros. has not provided an estimate.

Mr. Koch, who is a member of the Historical Society Board, commented that there is some anxiety on the behalf of the Historical Society as to the timing of when the Village will go online at the Turner’s Mill plant. Mr. Koch is concerned because the Society will need to account for tapping fee and other charges in their 2007 budget. Mr. Paul said that he believes the Society should expect to be prepared to pay around September 2007.

PUBLIC COMMENT:

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

Respectfully submitted,

Mary J. Walter

Asst. Secretary/Treasurer