Special Called Meeting Minutes: Tap Fee Allocation Policy September 20, 2016

For your consideration, please review the minutes for the Special Called Meeting from September 20, 2016:

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To read the minutes, please open or download the pdf from the link above or you may see more below:

PRESENT:                             

Thomas Boland, Chairman

Donald M. Elliott, Commissioner

John A. Cason, III, City Commissioner

Ronald Perry, Commissioner

ALSO PRESENT:                 

Jimmy Junkin, Executive Director

Charlie Dorminy, Legal Counsel

Commissioner Boland called the meeting to order at 2:00 PM. He welcomed everyone and expressed appreciation for those that are in attendance and any input the public has. He stated that this policy has been worked on to be as trying to be as fair as possible to those involved.   Chairman Boland stated that if there are any questions, suggestions or ideas please bring them forward.

Mr. Junkin explained that the feedback that was provided at the last meeting have been considered. He stated that JWSC has a better understanding of the needs for developers, builders, and individual homeowners and what we are trying to accomplish.  He stated JWSC has received a lot of support by community stake holders who have an invested interest and who have offered to give a hand in certain situations that makes good sense to make a financial commitment.  Doing this would help to support and allocate what their needs are in regards to sewer taps.  It was suggested that those who are interested to provide their email in order for then to be notified.  Mr. Junkin discussed and read the policy portion:

            ‘With the exception of cases where interested parties execute Unsolicited Proposals (UP) with the JWSC for capacity upgrades/schedule enhancements, capacity will be allocated as it is created from asset upgrades and verified through drawdown testing. The exceptions will be described below… discussing Unsolicited Proposals, etc.’

Mr. Junkin continued with stating what JWSC is facing preponderance of our assets that don’t have adequate capacity for the service they are required to perform right now. Our efforts are to incrementally make changes to each and every one of those shortfalls and to bring capacity into the good and to exceed that where we can with those modifications.  As JWSC exceeds the required capacity it’s not going to be eminent capacity.  We are making small changes while we ultimately work towards more permanent long term upgrade.  With the demands that we see and number of undeveloped platted lots and the desire to develop and create more opportunities out there we saw the need to basically set up an allocation through a lottery.  One of the strong feedbacks from several people expressed that we don’t need to throw everyone into a box and draw out one tap fee at a time.  Mr. Junkin expressed the two basic categories for builders and developers. There are those who deal with very small capacity needs with one or two houses a year.  There are those that develop on a larger scale and these will be separated.  There will be approx. 85% going to the larger builders and 15% of whatever is freed up to the smaller builders.  The desire is, as we confirm the freed up tap fees, to set up a date and time to allow these categories to come in and request allocations.  For the larger builder or developer (5 or more tap fees).  A lottery number will be provided and a drawing will be held.  If the capacity is above what these contractors or builders or smaller builders need than the lottery does not matter.  The other issue is the need to tie down the property with the sewer allocations.  It is known that with the lottery allocation there is uncertainty.   There was also an interest in being a financial supporter and will be worked through the Unsolicited Proposal process.  Funding was also discussed and stated the JWSC is doing all it can with the funds available.  If individuals are presenting UP it will lock down the allocation of tap fees within that project that come through as a result of work done.  This will be up to the maximum of what the work will provide and will be dependent on drawdown testing.

PUBLIC COMMENT PERIOD

It was questioned about the lottery and the qualifications for people signing up – will anyone be allowed to sign up, do you have to own a property and is it required to pay and build immediately?

It was explained that a person has to own the property and taps will be held for 10 years after purchase.
Is there a total number from which JWSC is going to work from? On the dead 400 are they coming back as an available tap fee?

The answer is no. The total number and will be on a case by case discussion. JWSC has discussed and the answer is no on the 400 being available again.  The way they were issued and the wording on the receipts are such that they are open ended.

Was it common to have the tap fees open-ended at that time.

Yes, but it wasn’t spelt out that is was never to end. It was not clearly defined. And the taps are considered not available.

Is a tap fee typically issued to a property and specific to that property?

Yes, that is correct. If you received a tap fee for that property and you decide not to build on the property there will an opportunity to transfer the tap fee to another address or another owner within that basin.

If someone wins the lottery do they need to pay the tap fee?

If you win you pay the tap fee. You are obligated to buy if you want it.

How does this apply to the ordinance that JWSC established on raw land when you required payment. It was previously required for the builder to pay.  Is JWSC going to amend that?

Yes, that is correct. JWSC will be amending..

For example you have a builder about to build a home – does the homeowner need to get the permit or can the builder get if for them?

There should be no problem for contractor to make the payment with showing proof of ownership and it is reflective. The tap fee will be in the name of the owner.

If the developer is abolished from paying all the fees and only a few taps are available in the large division of homes, for example, there is nothing marketable for the developer.

There will not be a dribble of taps as stated. As the capacity is freed up JWSC will execute sale of all available taps. Unless, in the case of an UP, it must cover what the developer needs and be in the plans that JWSC has for upgrades for those assets.

 In an UP, for example, 50 taps are needed, those taps would be available as priority for the party involved with the UP.

That invested party would have priority and a lottery would not be necessary once the tap fees are paid.

Is this a 6 month premise where tap fees will be available at each time?

Each basin is a case by case situation.

 Communication concerns that JWSC is not sharing information.

The JWSC staff is creating a summary of each of the basins that will include: what the work is, incremental changes, what the schedule is at the present, and should provide what is allocated and how much more we expect to see generated above and beyond.

JWSC has quite a few hurdles to overcome but will there be a wall to work against showing a final line list to the end? To end the lottery period?  SSI is easier to identify the number.

As mentioned earlier the summary that staff is working on will include incremental changes to each basin, what it will cost, and how much time we expect the allocations to be freed up based on that information. Some of the things to fix are clearly in front of us.  This information should be available in 30 days or less.

 Can JWSC develop an agreement with a date and variables to bring the ratio back and let the market start back up again. Maybe not wait until a project is done but begin earlier so developer can prepare.

We can agree to allocate and take a risk if we know we have a project and know what it will free up. JWSC will look into and believe it can be done but will require a hold harmless agreement. It’s possible the theory may not meet the results.

Say there are 4 builders in the room that all will need 10 tap fees – How will JWSC allocate or handle it?

Unless there is a growth project or capacity enhancement project to allow the capacity you need. There will be scenarios that we may not have the funds but it could be the group of builders that develop a UP to meet the needs of the group.

For developers and UP fix, JWSC will need to have a keeper of the players. It could be sewer specific or basin specific meetings.

JWSC agrees to look into possibly having location specific meetings as each basin is unique with specific problems.

Does everyone know what basins relates to your specific address or locations? Could it include downstream and what other basins or lift stations it effects?

Staff has begun a detailed map and assets report and will be provided developers and builders.

 The theoretical vs empirical data?

One of the things we are finding in a system this old and discoveries found are that a lot of times the conditions underground aren’t what JWSC has in the drawings and documentations. There are some replacements being done. Not in every case are the whole elements of the assets being completely changed out.  There are still variables that we don’t have a handle on.  There are still some risks and unknowns/uncertainties.

 Are all of the flow meters installed?

JWSC is still work through the flow meters. They have been purchased and JWSC is having discussions on ways to expedite the process so that better data can be obtained.

In the large picture map it’s not just a matter of LS 4110 that my property sits in but is also related to 4005 downtown that it leads into, is that correct?

That is correct. There is an interdependency on other lift stations. This area discussed is part of a SPLOST project and would greatly change if it goes through.

Shared cost and how it is funded is a concern as the developer gets funds. It is still very constraining.

The financial situation is not such that there are big dollars to allocate what everyone needs. We are struggling through it and this is our best effort to make things happen quickly enough.

It appears that anyone who owns a lot on SSI can get in on the lottery can get in on the 15% and that won’t go very far. It was first stated that the building plans need to be approved by the building inspector

Staff has worked diligently on this subject and tried to work through every scenario. Almost every rule set up there will be areas where people can gain the system. If someone does not actually need it but buys anyways it will require JWSC to monitor.  There will always be someone who tries to finagle the system.

 You can’t buy a building permit without a tap fee. But you can buy a conditional tap with a letter from the building inspector. 

This is something JWSC will look into and could have building permit ready criteria

Mr. Junkin apologized for the serious issues that the builders, developers and single home buyers are having to deal with. The plan is to share the information by October 31, 2016.

COMMISSION UPDATE

A Finance Committee will be meeting today at 2:00 PM and Project Funding will be discussed.

Project 2032 project is moving along and a meeting was held at Sea Palms to discuss how it will affect that area. It was voted by the Commission to purchase 10 pumps for various lift stations to add capacity and will be installed soon.  Lift Station 4039 basin is currently under study by an engineer.  The Commission understands development and the need for it but must be done with safety.  There was recently a spill with a cracked pipe.  JWSC is doing as much work as possible and as quickly as we can within our ability.

Chairman Boland thank you those who came to the meeting and provided comments.

There being no additional citizens who wish to address the Commission, the Chairman closed the public comment period.