WEST WARWICK TOWN COUNCIL ACTING AS

SEWER COMMISSION

 

PUBLIC HEARING FOR FY21 WWTF PROPOSED BUDGET

 

MEETING MINUTES

 

DATE:  TUESDAY, APRIL 12, 2022     TIME:  6:00 P.M.

 

LOCATION:  TOWN COUNCIL CHAMBERS

1170 MAIN STREET

WEST WARWICK, RI  02893

 

 

A. Meeting called to order at 6:03 p.m. by Town Council President Gosselin

 

B.   Roll Call

 

Members present:

Council President Gosselin

Council Vice President Williamson

Councilman Messier (Arrived late)

Councilman Licciardi

Councilman Bourget (Arrived late)

 

Participating communities:

Town of Coventry

Town of Scituate

City of Cranston

City of Warwick

Town of West Greenwich

 

C.   Quorum on record declared

 

D.    Proposed WWTF FY23 Budget AND

 

·   Mr. Chapdelaine stated for FY23 is $9,674,558 which is a 1.9% increase from FY22.  We are proposing a rate increase from $3.55 for 100 cf to $4.25 per 100 cf.  The minimum user is charged for 4,000 cf.  The increase for the minimum user will go from $142 to $170 or an increase of $28 per year.  The average annual ratepayer will see an increase from $213 to $255 which will be an increase of $42 per year.

·   Mr. Chapdelaine stated we are also proposing a decrease in our debt service charges from $135 to $120 per unit which is a savings of $15 per year.  So, the annual minimum user will see a net increase on their yearly bill of $13 and a ratepayer using 6,000 cf, which is the average for the Town, will see an increase of $27 per year.

·   Mr. Chapdelaine said the increase is due to the times and the cost of doing business going up.  One of our chemicals is going up 60% for the year and sludge removal is going up 10% for the year.  Also, contributions to the pension, property and liability insurance, severance, buybacks and petroleum are all going up.  

·   Mr. Chapdelaine stated some of the items we will save on are capital expenses, odor control, health insurance, our UV systems and KCWA costs.

·   Council President Gosselin said that’s a 19.7% increase to the taxpayer, why almost 20% increase.  Mr. Corrente replied the last actual rate increase from $3.15 to $3.55 was in 2015 and the following year in 2016 a minimum use charge of 4,000 cf was established. 

·   Council President Gosselin asked if the minimum consumption is $213.  Mr. Corrente replied the average user is $142 and it will go to $170.

 

·   Council President Gosselin stated that multi-families, Royal Mills, Clyde Towers all saw increases of a 1,000% or more because it was one feed and they were billed by units.  So, a two-family saw a 100% increase, a three-family saw a 200% increase and a six-family saw a 600% increase because they’re based off the number of users, not water consumption. Ultimately, there was a significant increase in 2016.  So, a 20% increase per unit is pretty high.

·   Mr. Knott asked if the reduction in the debt service was included in the figures.  Mr. Corrente replied the net increase for the ratepayer using 6,000 cf would be $27 per year because we are looking to reduce the debt service charges.  Some of our bond payments are close to being retired so our payments are going down and we can lower those fees.  The AWT bond will be retired in FY24.  Council President Gosselin said so we’re down to a 13% increase.     

·   Councilman Licciardi said he missed some of the meeting this winter.  He asked about our savings using Fusion chemicals because the head of the company said there would be a $30,000-$50,000 savings.  Mr. Chapdelaine and Council Vice President Williamson said they don’t recall those amounts being given.  Council Vice President Williamson said calculations were provided prior to Mr. Corrente being here and there were some savings but it wasn’t anywhere near that amount since the cost itself is around $48,000 per year.  She referred to the decrease in the odor control line item in the budget.  Mr. Corrente said they are projecting coming in under budget for odor control. 

·   A representative from Fusion stated they projected a savings of about $26,000 compared to other previous odor control systems.  They also projected a little savings in sludge removal, polymer reduction and energy costs.  Plus, the sprayers aren’t being used as much and the chemical use for the scrubbers has been reduced so the system is paying for itself. 

·   Councilman Licciardi stated he is not for a rate increase because of the ARPA money being used for capital improvements.  He asked if we have an inventory yet.  Mr. Chapdelaine replied we do and he will present it at the next meeting. 

·   Councilman Licciardi said he doesn’t think we can keep hitting people.  He knows we haven’t raised rates in a while but he can’t get past the Admin. fees.  We have the Manager, the Finance Director and the HR Director spending 30% of their time on your department so what are you guys doing.  He asked Mr. Chapdelaine if he feels he needs them to spend the amount of time they’re spending.  Mr. Chapdelaine replied we do pay for their services.  Councilman Licciardi replied do you need the Manager’s assistance for 11 of his 35 hours a week on the sewer plant.  Mr. Chapdelaine replied aside from paying them for however many hours per week, they provide a service for us.  I don’t need the manager for that many hours per week but if there is an emergency I need those services.  Councilman Licciardi said there isn’t any other department that pays $361,000 in Admin. fees and now you’re asking for a rate increase for the people to pay.  We can find a way to cut other places.

·   Council Vice President Williamson said the rate increases that are being projected don’t even get us to the average uses.  We have not had a rate increase in six years but we’ve taken out of surplus for those six years and that’s not something that can continue.  This is the minimal way with the understanding there will be some further reduction when the bonds fall off in September of 2023.  She referred to the list of rates of other facilities which shows we are way at the bottom and said to continue to take out of surplus is a very slippery road to go down.  Councilman Licciardi asked if the money taken out of surplus was for Capital.  Council Vice President Williamson replied only in some cases but no.  We’ve been very fortunate to address some of the major needs with ARPA funds.

·   Council Vice President Williamson brought up the Town Manager spending 20% or 7 hours.  She said the weekly meeting is good practice.  We know for a long time there wasn’t enough oversight at the facility and we ended up spending money to correct issues. 

·   Councilman Bourget referred to the list of other facilities and said it’s a little misleading because we have four other communities that pay in as well and places like East Providence or Barrington don’t.  He feels that’s why our rates are lower than some of these other communities.  Mr. Geremia replied it’s based on the population for each community and their operating costs.  East Providence has a treatment plant and a collection system similar to ours.  West Warwick has been lowest for a number of years and it has nothing to do with us being a regional facility, it’s the population that’s being serviced and 85% of the population is West Warwick.  He said in Narragansett users pay a minimum of $400 regardless of what they use and their treatment plant is 1/10 the size of West Warwick’s. 

·   Council President Gosselin explained that our regional users have their own rates, we don’t set them.  We bill them and they bill the taxpayers.  Mr. Geremia stated all the users which includes the regional partners should be paying equally for the Admin. services.  Councilman Bourget agreed and said every community does the same thing.  His issue is the amount that’s being paid for Admin. fees.  He doesn’t think it’s fair for the sewer department to be paying the Town’s bills. 

 

·   Mr. Geremia stated when we looked at the budget we tried to identify some of the expenses that we weren’t being compensated for.  In the proposed budget we increased two of these items.  One was inspection fees which were $2 per linear foot.  It’s costing way more than that so we’re proposing $12 per linear foot.  This will cover the Town’s cost to hire an engineer to go out and do the inspections.  The second item is plan reviews.  They’re not being paid for in their entirety by the developers of the subdivisions that are coming in.  The fee was $200 and it costs far more than that so we’re proposing an increase to $2,000.  We also did our checks and balances for those that do not impact the users.

·   There was discussion about how a multi-family home with one water meter is billed for usage and if they are billed by edus.

·   Council President Gosselin said he is not disputing that we need an increase but a 20% or 13% increase is pretty high.  Council Vice President Williamson said the average net increase will be $27 for the year or you could do $9 per year for three years but she doesn’t recommend it.

·   There was a brief discussion regarding ARPA funds and how they’re being used.

·   Mr. Knott stated on face value the increase is high which is why the debt service was reduced.  We want to set the plant up for success.  The three ways of doing that is more revenue, replenishing the diminishing savings account and to use ARPA or infrastructure money and keep some capital funds flowing into the plant.  We spent a significant amount of money in 2010 refurbishing after the floods.  It’s now 12 years later and the life expectancy of a lot of those things is diminishing so we need to be prepared and take care of ourselves over the next few years.  The ARPA funds are going to dissipate in a few years and we don’t want to rely on that.  Putting ourselves in a position to replenish our savings is a responsible proposal.  We can debate the total amount but the combination of all these factors make this the right thing to do.

·   Councilman Bourget said everyone right now is experiencing huge increases in everything and he is not comfortable hitting them with 13% in the sewer bill.  He feels it’s best to avoid going all the way to 13% because gas is through the roof and inflation is 8.1%.

·   Mr. Geremia said a multi-family will ultimately save money because they’ll be a reduction in the edus.  Councilman Messier asked how much of an increase the average user will see.  Mr. Corrente replied their overall net increase will be $27 per year. 

·   Mr. Geremia stated there was a 60% increase in chemical costs.  We are experiencing the same costs that the homeowners are experiencing.  Councilman Bourget said he understands that but where can we make sure we’re not spending where we don’t need to spend and that we’re pulling in revenue where we should be pulling in revenue.  He is not saying there should be no increase at all because obviously the chemical prices are going up.

·   Mr. Geremia said the goal is not to use the reserves.  Council Vice President Williamson said and we have for the last six years.  Mr. Geremia stated we get assessment money that goes into reserves.  Over the years we’ve used that money and the reserves money.  There’s only $3,000,000 in reserves and that’s not a lot when you have $50,000 or $60,000 in capital equipment.  The bottom line is not to touch the reserves or the assessments.

·   Councilman Bourget asked about the inspection fees.  Mr. Geremia explained that new developments have to put in sewer lines or extensions which require inspections.  The staff cannot spend full time out there so a company is hired to do the inspections but the contractors are taking so long to the work that the current rate of $2 per linear foot isn’t covering the costs which is why we’re proposing $12 per linear foot for inspections.  Council Vice President Williamson explained we were only charging the developers $2 and we were paying the difference for the engineering out of our budget which is why we increased the fee to the developers from $2 per linear foot to $12 per linear foot. 

·   We experienced technical difficulties at this point in the meeting.

·   Mr. Geremia stated we also had to look at plan review fees because once the developers get their approval they don’t pay the review fee. 

·   There was additional discussion about the inspection fees line item and how it’s budgeted based on anticipated subdivisions and certain linear footage. 

·   Councilman Bourget said it doesn’t make sense to him that the budgeted amount for inspection fees for the last three years has been $35,000 and this year it’s dropped down to $12,500.  Mr. Corrente stated we haven’t realized that revenue over the last few years so we more conservative and we tried to more accurately project the revenue instead of over project it.  Finance Director Benoit said the actual amount in FY21 was $7,438.

·   Councilman Bourget asked about the jump in overtime from $110,000 to $144,000.  Mr. Chapdelaine replied we always anticipate so much for overtime plus with Covid still going on we might have to fill in shifts.  We had one big storm in January that required a lot of staffing so that was a big payout in overtime.  Mr. Corrente said we’re a 24/7 operation so shift coverages for vacations or sick time have to be covered with overtime.  We have seen an increase in overtime over the last three years and we’re hopeful we can get that down but we wanted to give an accurate amount of what we think we could spend next year.  Councilman Bourget said so the same as with the inspection fees, you’re trying to give a more realistic amount.  Mr. Corrente replied we are trying to give the Council the full picture.  Mr. Chapdelaine said we’re trying to be as transparent as possible.

·   Council Vice President Williamson said she doesn’t believe the plant was fully staffed the whole year though we are fully staffed now.  Councilman Bourget stated they are fully staffed now so that’s why he questioned the $30,000 jump in overtime.  Council Vice President Williamson and Council President Gosselin said the year-end projection is actually $157,000 so we’re actually lower than what we’re spending from this year.

·   Councilman Bourget asked why health insurance went down from $410,000 to $392,000 when everyone else went up.  Finance Director Benoit stated that’s based on what the new hires chose for a plan.  There’s a huge savings if someone has an individual plan as opposed to a family plan.

·   Councilman Bourget asked about the big increase in retiree health from $72,000 to 146,000.  Finance Director Benoit replied we’re projecting a higher increase for the retirees and she found some retirees that were being charged to a different area so she compiled all of their retirees and gave them a number based on the actual census from blue cross.  Councilman Bourget said it more than doubled.  Finance Director Benoit replied it’s going up quite a bit, just for the Town it’s gone up $600,000.

·   Councilman Bourget asked why the severance buyback went from $20,000 to $70,000.  We’re anticipating two retirements coming up this fiscal year.

·   Councilman Bourget asked about the combined reserves section.  Mr. Corrente said the approximately $5,000,000 is what we would bill out this fiscal year at the proposed rate increase and the $379,000 is past due sewer usage amounts from prior years that we need to collect.  Finance Director Benoit said it’s called combined reserves because the past due amount is from all prior years not just last year.

·   Councilman Bourget asked what the silver user fee is.  Mr. Geremia stated they are commercial users who use silver in their process like dental, medical and photo finishers.

·   Councilman Bourget asked what the unrestricted funds are.  They went to zero from $466,667.  Mr. Corrente replied that is our savings account.  We have been taking out of it every year to balance the budget.  Council Vice President Williamson said that’s the trend we need to reverse. 

·   Councilman Bourget said the interest from the savings accounts dropped off significantly as well.  Mr. Corrente stated it’s zero because the interest was also being used to balance the budget.

·   Mr. Geremia stated when the debt service comes due in two years the last payment is already paid.  There is approximately $800,000 in a bank in New York.  Council Vice President Williamson said that will go right into the unrestricted funds.

·   There was a brief discussion about the projected lower fees in debt service being temporary because eventually we’ll need to go out for more bonds to do other improvements.

 

E.   Public Comment

      None

     

F.   Adjourn

 

A motion to adjourn was made by Councilman Messier and seconded by Councilman Licciardi.  All in favor, none opposed and unanimously voted to accept.

 

 

 

 

 

To view this meeting go to:

https://www.youtube.com/channel/UC6a5AKkU_XWQPoV26Xmc0qA