Town of Waldoboro

Board of Selectmen

Meeting Minutes

Tuesday, October 12, 2004

1. Call to Order

The Board of Selectmen met at the Municipal Building on Tuesday, October 12 2004 at 7:00 p.m. to conduct town affairs.

Members present were Chairman Kathleen Blodgett, Gordon Webster, Rebecca Maxwell, Theodore Wooster, and Ellen Winchenbach.  Staff present was Town Manager Lee Smith, and Administrative Assistant Michael Ducharme.

Others present were Water Committee Chairman Carleton Johnson, Aqua Maine Representative Rick Knowlton, Attorney Alan Stone, Rate Consultant Gordon LaBay, Lincoln County News Representative Michael Colbert, and Courier Publications Representative Art Mayer.  Also present were the following residents:  Barbara Kane, Sandra Whitehill, Martha Boggs, Lois Graffam, Carl D. Waterman, David L. Welker, Nancy Boothby, Lincoln Davis, Charles M. Begley, Andrew Benore, Gary B. Rundle, Carol E. Rundle, Delia W. Mohlie, Janice Cellana, Anne R. LaVergne, William J. Branigan, Roberta D. Branigan, Arnold Wm. Benson, Denis E. Beaudoin, Mary Ann Beinecke, and Eliza Sweet.

2. Public Hearing

The Board held public hearings for the following items:

A.      Water Department Rate Case

Alan Stone stated that a public hearing and notice to consumers is to come before a filing with the Public Utilities Commission (PUC).  This public hearing is to let the townspeople decide if they feel that this is an acceptable rate increase.  Stone also mentioned that a petition of 15% of the customers (or about 60 people) will trigger a review by the PUC.   Aqua has also involved the public advocate, who reviewed the case in the interest of the people (a statute determines what is allowed to be added into a rate increase ex. retiring debt, pay ordinary expenses, or replacement of water mains.  There is no profit margin allowed). 

Q:  Dennis Bowden asked if it is safe to say, that if the customers are in disagreement with the rate case, would they only have impact if they are part of a petition. 

A:  Stone - Yes.  The tariff (terms and conditions of the rate case) would be sent to the PUC anyways.  You would have to organize a petition, in order to have the rate case reviewed by the PUC.  Knowlton - However, if there is a marvelous idea, the water committee does do a final review and reconsideration before the tariff is sent to PUC, and those ideas will be addressed then.

Knowlton mentioned that he was at the last Selectmen meeting and was asked to come to this meeting, to explain the rate case.   The Waldoboro water utility has borrowed $1,341,900 ($90,498 yearly for the next 25 years beginning next month).  The new 500,000 gallon water tank to replace 100,000 tank that wasn’t sealed well (and leaking), and new water mains (Jefferson, Friendship, main Sts., etc.) are reasons for the additional expense.  The requested increase is 76,916 annually.  Debt service and depreciation expense going up to $112,000.  Purchased water and other expenses are going down almost $35,000 to help offset a portion of the increases.  The last time the water rates were set was March 1999.  There will be different impacts for each of the customer classes:

·         Residential customers will increase an average of 44.3%

·         Commercial customers will increase an average of 47.9%

·         Industrial customers will increase an average of 51.8%

·         Public authority (schools, library, town office) will increase an average of 36.0%

·         Private fire protection will increase an average of 44.9%

·         Public fire protection will increase an average of 27.2%

Overall revenue increase will be 39.4%.  Public fire protection is set by PUC rules (chapter 690) that caps the Public Fire Protection charges at 30% of total utility revenue. Public Fire Protection has been paying 32.9% and will be adjusted to the PUC cap of 30%.

Residential customers with an 1800 cf average usage, could see a 41.8% increase based on their 2003 actual bill.  Residential customer impact on the average quarterly bill:

Final requests with any adjustments must be filed in 30 days of this meeting.  Absent a PUC full review, rates will be effective late November, early December.  Additional water system improvements are forthcoming and ongoing.  A final rate adjustment is estimated to be an increase of 10-12% in late 2005 or early 2006.  Reasons for this increase include $2,800,000 financing ($2,100,000 is forgiven (due to Waldoboro’s status as a disadvantaged community), 700,000 will be financed at 0%), and additional depreciation expense.   Below is a comparison of some area water rates:

Q:  David Welker - Why are Aqua Maine Camden & Rockport bills so much lower?

A:  They are serving 8000 customers, and there is also a different source of water supply.  They are getting their water from two lakes at a high elevation.  Their basic service charges are comparable, but the cost of water is substantially lower.

Q:  Welker - Why do I get my bill from Aqua Maine, when it is really the Waldoboro Water Utility?

A:  Knowlton - 100% of your payments go to the Waldoboro Water Department.  Waldoboro then hires a contractor (in this case Aqua Maine) to provide services (advice, council and guidance) to the town and pay the bills.

Q:  Welker - Feels that the water rate is high in cost.  Feel that too few people on the town sewer.  The people on town water have to carry the burden of paying the debt of town water.

A:  Smith - 1250 people are on the utility, the balance of the 5000 +/- people in the town are on private wells.  Knowlton - water rates are going up across the state, mostly because of the changes to the Maine State Safe Drinking Act and higher public health standards.  It has been hard to find good water in the town and has been very expensive.  There are currently 30 or so average residential rates across the state over $100/quarter.  We have tried to keep the rates under this, and it looks like we will end up less then $100/quarter when all is done.

Q:  Unidentified Speaker - Are the rates in the above chart just water, or water and sewer? 

A:  Knowlton – Just water.

Q:  Unidentified Speaker - How can we be sure that the next rate increase will only be 10-12% because the letter we received earlier said that increase would be 35 – 40 % and we have 44.9%. 

A:  Knowlton – the average is under 40%.  It all depends where you fall on the class chart above.  There is less volatility to the rate case next year because the expenses are set as to what we are going to owe. 

Q:  Eliza Sweet - Was the town notified before the decision to purchase the water company?

A:  Smith – There were actually several town meetings regarding this.  The first was in 1995 town report, going into the 1996 town meeting when we first discussed purchasing the water company, and there was a several page insert describing what the issues were, what the projected cost would be, and what the rates would be.  In 1995 we had projected the rate would be $346/yr, and we are at $349/yr with this rate increase, which means we are within $3 of a projection we made 8 years ago, and we have accomplished more water main replacement than we had projected back then.  After that town meeting, we had to back to another town meeting and ask to borrow more monies to complete the system.

Q:  Sweet - So what you are saying is the debt service that we are now asked to pay back was fully anticipated by the town.

A:  Smith - Yes.

Q:  Sweet - It seems to me that a 50% increase is a big nut to swallow all at once.  Maybe you could have done gradual increases over a period of time to make it easier.  Knowing that this kind of increase was coming, was there no way to spread it over more people, or over a longer period of time?

A:  Smith – If you could pick up more customers, yes.  Right now that isn’t likely that there will be a significant increase of the customer base.  We have tried to keep the town informed, in terms of the town report, of the progress, and have informed the press (which there have been numerous articles about it).  We projected that there would be a 56% increase at this stage of the game.

Q:  Sweet - Am I obligated to take service, or can I disconnect and put in a well? 

A:  Knowlton - There is no obligation to use town water. 

Q:  Sweet - What about the people that feel that they cannot pay the increase? 

A:  Knowlton - There are some community assistance programs that are made for that.  Under the new rates, you can get an average of 150 gallons of water a day, for less than a dollar.  Stone – The debt that has been acquired has been approved by the PUC, and feels that they are reasonable.

Q:  Unidentified Speaker - Will the note ever be paid for? Can we pay it off early to avoid some finance charges?

A:  Knowlton - The loans will be paid for in 25 years (25 equal payments).  There may be penalties for early payment. 

Q:  William J. Branigan - Is there treatment facility now?

A:  Knowlton - No.  There is chlorination for disinfection. 

Q:  Branigan - Will the treatment plant be at the location of the new wells?

A:  Knowlton – Yes.  Here is why we need a treatment facility.  Three rules are changing with the Maine State Safe Drinking Act. 

1)      The maximum level for uranium in water is now regulated to 30 micro grams per liter.  Prior to 2003 there was no standard for uranium.  The new wells have lower uranium levels than the old water supply.

2)      Additionally, there is a radon rule.  Both ingredients predominate in Waldoboro.  Radon levels will have to be below 4,000 pico Curie per liter.  The new facility will have treatment for radon. 

3)      Finally, there is the groundwater rule expected 2008, with a new set of rules for systems that use ground water. 

The engineers that are working with the water committee are putting together a design to accommodate all these rules.  The well supply we are using today, in a short period of time, will no longer be useful. 

Q:  Branigan - Can the existing water be treated?

A:  Knowlton – Yes, it could be treated, but weighing land acquisition, well head protection and treatment, it is actually cheaper to move across the river to the new site. 

Q:  Branigan - Are we going to be removing uranium at the new treatment facility?

A:  Knowlton – Only if necessary, but the new water supply will meet the new standards.

Q:  Branigan - When will meet the new standards? 

A:  Knowlton – Within the next year (late next summer or early fall), the new plant will be operational and the standards met.  The 2 bedrock wells are under contract to be installed in the next 30 days (to avoid drilling in the spring), but they wont be hooked up until spring.

Q:  Sandra Whitehill - Is there anyone in the system who does not have to pay the water bills? 

A:  Knowlton – No.  Every connection pays off the same tariff including the town, post office, etc. 

Q:  Whitehill - What if you don’t use the minimum. 

A:  Knowlton – The committee is continually discussing the options of lowering the minimum charge.  Some utilities have lowered the minimum charge to 50 gallons per day.  Most are between 100 and 150 gallons per day.  The town has control over the design of the rates. 

Q:  Mayer - Have you projected how AD Gray and Osram Sylvania could affect rates?

A:  Knowlton - No. 

Q:  Dennis Beaudoin - Does the public utility pay less that the regular consumer?

A:  Knowlton - No.  All water customers are treated the same using the proposed rate sheet.  It is based on your meter time, consumption, and billing frequency.

Q:  Wooster - Explain the impact of the increased fire hydrant pressure on insurance rates. 

A:  Knowlton – The storage tank and water main replacement project provided a big benefit.  It increased ISO rate (on a scale of 1 to 10) from 6/9 to a 5/9 which will lower insurance rates within 1000 ft from the water hydrant system.

Q:  Unidentified Speaker - Do we have to inform our insurance companies for the better rate?

A:  No.  It will roll through their system, through the ISO.

Q:  Mary Ann Beinecke - How much do the Selectman make. 

A:  Smith - $1019 / yr.  They do not get additional compensation to be trustees of the water department.  This is their total salary.

Q:  Beinecke - The Selectmen are voted in by the townspeople.  Most of the townspeople and Selectmen are not customers of the water department.  As taxpayers, they pay only 30% of water department in the form of hydrant fees.  Do the residents (non rate paying citizens) have a disproportionate amount of decision making power over decisions about management of the water department?

A:  Stone – That is a decision as the town as a whole, as to how they want their utility run.  Smith – The utility district, which is charter approved at the time of legislature, allows anyone in town to run for that office.  This town has taken the perspective that we are all one community, and govern accordingly.

Q:  Beinecke – The Selectmen, who are the Trustees of the water department, have created a water committee, and their role is to provide the Selectmen with recommendations about the management of the water department.  Because the decisions about the management of the water department affect the rate payers directly, shouldn’t the water committee be composed of citizens who are ratepayers?  Who are the members of the water committee that the Trustees have entrusted to advise them in the management of the water department?

A:  Water Committee Chairman Carleton Johnson – They are appointed on an annual basis by the Board of Selectmen.  The water committee consists of Carleton Johnson as chair, Lee Smith, Rick Knowlton, George Peters, Stephen Cohen, and Jeff McNelly.  There is one open seat of the total seven.  9 – I would feel more comfortable if there were not people on the committee that are affiliated with Aqua Maine.

Q:  Beinecke - Presently, in March, the water department files an annual report with the PUC, in which it provides details about its revenues and expenses.  The information in those PUC reports is not otherwise available.  Would it be possible for the water department to publish that report, along with a summary of its activities and plans, such as an annual budget, in the Town of Waldoboro Annual Report?

A:  Smith – That is a very good point, and yes, it will be taken care of.

Q:  Carl Waterman – First I was told that Rick Knowlton was confronted with poor pressure on upper Main St. and replied that in 10 years we could build another tank to serve that area.  Was that ever discussed?

A:  Knowlton – In the planning of the improvements there were discussions about tanks up above Moody’s instead of up on reservoir hill.  A number of scenarios were laid out and discussed prior to selecting reservoir hill.

Q:  Waterman – If the tank had been located there, it would have opened up service to miles of roadway, which it is not presently possible to serve.

A:  Smith – In order to be in a pressure range of 90 psi, there were certain areas where the tank would likely have to go.  That location was in that range, but we didn’t own property there.  Where we did own property was also in that range.  If we would have put it on the top of the hill in the other location, we would have had in excess of 110 psi along the river, up to Hannaford, down Rt. 32, a big stretch of Mill St., etc. leaving a good portion of our customers over pressurized for the age and condition of the system. 

Q:  Waterman – This might cause your toilet and sink valves to wear out very fast and you water heater might burst, and this might cause a serious problem.  In water utilities where this is unavoidable, I believe it not uncommon to have pressure reducers installed, and they are quite expensive.

A:  Knowlton - It could have been possible to do this and spend extra money on purchasing land, running lines further, pumping the water to a higher elevation, etc. to accommodate 20% of the customers, and leave the other 80% of the customers with over pressurization problems, but it was not decided to go that route.

Q:  So when we start using the new tank, will upper Main St. have 90 psi of water pressure?

A:  Knowlton – No.  But they will have increased pressure compared to what they have now.  You will get about 10 more pounds.  The PUC only requires 20 psi.

Q:  Waterman – Another rumor:  A very productive well was drilled for the new Baptist Church.  The town was informed of this and took no action.  Did you ever hear anything about that?

A:  Knowlton – Yes.  Quite often what you’ll find is the drillers’ logs of a productive well fall short of a physical pump test.  I think that is what you’ll find there.  Trying to find a well that will sustain a community, we were looking for a site with the hydrogeology behind it as a foundation, and the Baptist Church site doesn’t have that.  However, the reservoir hill site does.

Q:  Waterman – Another rumor:  The town didn’t even consult with the local well drillers.

A:  Knowlton – That’s not true.  I won’t say we talked to all of them.  When we first found the local well drillers inconsistencies on reservoir hill, we thought where else could we go.  That’s when we decided to look out of town for a driller with more advanced equipment, which was needed for the job.  We actually went through the Maine Geological Survey which keeps a record of all the licensed well drillers, and the well that they’ve drilled.  We went through that service, rather than try to call and track them down which we all know is difficult because they are always on site.

Q:  Waterman – So you did put a lot of effort into that.

A:  Knowlton – Yes, we did.

Q:  Waterman – Another rumor:  The town extended a new main partially through ledge, where they had to blast, from the existing service area around Medomak Terrace, to the existing service area at Kalers Corner.  There is now a new hydrant protecting an empty field.  This costs a lot of money.  Was any thought given to crossing Mill St. instead, like they did everywhere else, using the existing trench, replacing the old main, and hanging the new main from the bridge, rather than laying it in the river where the old main is?  This would have increased the fire flow to the school, the trailer park, and the supermarket.

A:  Knowlton – Yes, to all of the above.  The route across Mill St. Was not selected as the best route for a couple of reasons:  1) The Committee looked at, with Wright Pierce, the grid from Route One to Main St. (and Mill St. is right in the middle).  The long term goal of the facilities plan is to complete the loop up Route One, so that from Route One, to Jefferson St., to Main St., to Route 32, that becomes the primary grid of the water system.  And, it’s absolutely true that lower Main St. doesn’t have a lot going on right now in regards to water demand, but it is that route, that grid, and the ability to feed that grid from more than one direction, with more than one crossing of the river, that will make the service more reliable.  2)  Mill St., even rebuilt only gives one crossing of the Medomak River.  Should that pipe fail, all of the customers on the West side of the river are out of water.

Q:  Waterman – Another rumor:  The new main, from the new production well, is going to be 8” main.

A:  Knowlton – I haven’t seen the details on that yet.  Waterman – The rumor is that it is going to be 8” main, which will feed the fire hydrants less, rather than take advantage of 12” main.

Q:  Waterman – The water main that serves Pine St. and The Medomak Terrace area, a lot of it is on Harry Cabot’s land that the town just didn’t want to buy.  But there are steel pipes that go up across the hillside and under the street.  In fact, one of those mains actually goes through the basement of a house.  Is there any reason why that wasn’t addressed, rather than working on the loop?

A:  Knowlton - Yes, we talked about that, and a couple of other areas.  And those areas are on the list of future projects, but there was just no more in the budget.

Q:  Waterman - I believe there is an extensive amount of asbestos cement pipe still in use.  I had heard that the Safe Water Drinking Act would require the removal of that, and I had also heard otherwise.  Can you say either way?

A:  Knowlton – No, I have no prediction, but so far there is absolutely no requirement for those pipes to come out of the ground.  However, because we know it’s there, we test the water for asbestos yearly.

Q:  William J. Branigan – There is a tremendous amount of erosion and sediment coming from the storage tank site, and are we going to have to pay for the damage that ahs been done to the road, because adequate drainage was not provided?  You don’t have to look into it now, but I would appreciate it if you could check into it.

Q:  Branigan – I am still confused as to what is paid for by which loan.

A:  Smith – The SRF funds, from the drinking water program, will be used to explore and develop a source of supply and the transmission main to get it to the system.  The RD (rural development) money was used to construct the 500 gallon storage tank and replace the transmission main on Main St, Friendship St., and Jefferson St.

Q:  Branigan - Were there any other funds expended for the exploration of a water source besides the several wells you have already dug.

A:  Smith – At the Town Office, you can view books of well studies that have been paid for by the SRF program.

Q:  Delia W. Mohlie – I just anted to personally say thank you to Rick for coming tonight, and to Carleton and the Committee for the work that you’ve done.  This project is really complicated.  I see that anyone who didn’t come tonight has reams of material, and plenty of people to answer their questions.  Knowing what I know now, I’m really glad that we had the water committee to help the Selectmen.  To have a group of people with knowledge, time and the willingness to do the homework that was needed is really incredible, and we’re lucky to have them.

Q:  Nancy Boothby – There has been a lot of drainage and erosion problems.  Is this going to continue or get worse?

A:  Knowlton – Now that we have a good sealed water tank, when we fill in the other water storage sites, the biggest part of the erosion should stop.

3. Consent Calendar

On the motion of Webster / Winchenbach, the Board VOTED:  To approve the consent calendar as follows:  (Vote 5-0)

A.   Regular meeting minutes - September 28, 2004.

B.   Warrants & Financial Reports:

1.   General Fund Warrants 13 and 14.

2.   Payroll Warrants 13 and 14.

3.   Water Department Operating Warrant #46.

4.   Water Department Capital Warrant - None.

C.  Departmental Reports.

4.      Communications

On the motion of Maxwell / Wooster, the Board VOTED: To accept and place on file the following correspondence:  (Vote 5-0)

A.   Adelphia Communications Corporation re: Administrative Hearing

B.   Waldoboro Utility District re: Operations Contract.

C.  SAD#40 re: Conceptual Design Presentation for Middle School

      The Board feels we should have a presentation here, at a future date.

D.  Municipal Review Committee re: Candidate Nominations

5.      Official Action.

A.   Conduct Water Department Rate Case Public Hearing.

B.   Act on Discharge of Mortgage. 

      On the motion of Wooster / Maxwell, the Board VOTED: To discharge the mortgage of Charles N. & Virginia V Light.  (Vote 5-0)

6. Adjourn.

On the motion of Wooster / Maxwell, the Board VOTED:  To adjourn at 9:55 p.m.  (Vote 5-0)