September 2009

Minutes

Webb Creek Utility District (WCUD)

Friday, September 4, 2009

Commissioners Present

Robert Vick, President

G.H. Conner, Vice President

Delmar Ball, Secretary

In Attendance

Ron Seagle, Outdoor Resorts of America (ORA)

Dean Lewis, ORA

Gary McGill, McGill and Associates

Jim Gass, Ogle Gass & Richardson (Attorney)

Donald Wallace, Utility Customer

Donald Rohde, Cobbly Nob Property Owners Association

James Sunstein, District Manager (Staff)

Janice Carver, Office Manager (Staff)

Mr. Vick called the September Board of Commissioners meeting of WCUD to order at 10:05 a.m. at the district office 3625 Lindsey Mill Road, Gatlinburg.

Motion to approve agenda made by Mr. Ball seconded by Mr. Conner and passed.

Motion to approve August 2009 Board of Commissioners meeting minutes and July 2009 financial report made by Mr. Ball, seconded by Mr. Conner and passed.

Mr. Seagle stated that he appreciated Alvin Ford locating a water leak at ORA.

Mr. Seagle informed the Board of Commissioners that a meeting was held August 28, 2009 at the district office with Mr. Vick, Mr. McGill, Mr. Bob Paine, Mr. Lewis and Mr. Seagle.  ORA presented a list of (5) findings and questions to Mr. McGill and Mr. Vick, copy is attached.  ORA proposed the district change their rate to $21.86 x 400 unit’s flat fee (per former agreement) and refund them $113,664.00.

Mr. Vick briefed the other two commissioners on the meeting held August 28, 2009.

Mr. Vick stated that Item 3 D. of their proposal he does not feel the district could return to the former rate and be able to operate the district in the black as required by the State of Tennessee.

Mr. Lewis stated the thing that ORA is questioning is the readings used in the cost of service study are different that the readings the meter is producing now and the volumetric charges.

Mr. McGill stated the readings after October 2008 were not used in the cost of service study.  The first nine months flow data was consistent then around November 2008 the readings became inconsistent.  The district staff hadn’t recognized this being any problem due to the seasonal occupancy of ORA.  In March 2009 when Mr. Seagle questioned the accuracy of the meter Mr. McGill and Mr. Sunstein answered the meter was reading accurately because that’s what they felt at the time.  On May 21, 2009 the meter was cleaned, copy of report attached.  Mr. McGill doesn’t have any reason to believe the readings are inaccurate.  ORA has requested a rate reduction.

Mr. Vick questioned if ORA’s engineer has reviewed the cost of service study?  Mr. Lewis stated he had but he hasn’t given them a report.  Mr. Vick questioned if ORA had a problem with flow based billing? There was no answer from ORA.

Mr. McGill stated the meter that is currently installed will not give accurate readings when the sensor has a milky film over it; the current meter needs to be replaced.  The current meter was purchased by the district this meter is used for temporary use not for volumetric billing.  The new meter will be a metering manhole and the meter will not be submerged.

Mr. Conner made a motion to leave everything as it is currently at $45.54 flat fee per unit until the district has the metering manhole installed and (12) months of data received, seconded by Mr. Ball.  Mr. Vick opposed the motion.

Mr. Vick stated the cost of service study rate is $37.13/1650 gallons, volumetric charge of $8.84/1000.

Mr. Seagle questioned item #5 A&B from the ORA proposal of August 28,2009.  Mr. Gass stated that the Utility Management Review Board (UMRB) suggested that ORA and the district find a resolution on their own.  Mr. Gass questioned whether the depositions are necessary as requested by ORA.  The persons they are requesting to be deposed are Mr. McGill, Mr. Bart Kreps of Raftelis Financial, Inc. and Ms. Carver.

Mr. Conner questioned why ORA was requesting depositions?  Mr. Gass stated they are questioning how the information was put together for the cost of service study.

Mr. Vick stated he had been to every UMRB meeting and he understands the ORA situation.  He feels the district is being pushed into a legal process by ORA.  Mr. Vick had told Mr. Bob Paine that depositions will only be done with the full utility Board of Commissioners agreement.

Mr. McGill stated that at the last UMRB meeting we were told to work this situation out between the district and ORA.  Mr. McGill agreed with Mr. Vick, depositions are expensive and time consuming.  Everyone has had a copy of the cost of service study for over 6 weeks.  It is very important the district and ORA work this situation out before the October 1, 2009 UMRB meeting.  This may require the board of commissioners hold several meetings between now and the UMRB meeting.  Mr. McGill stated that the cost of service study has a rate that the district can defend we cannot defend the current sewer fees being charged.

Mr. Vick stated the Board of Commissioners has tried to be open to every request from ORA.  ORA was given information at the time it was provided to Raftelis Financial, Inc.

Mr. McGill stated the district cannot give a rate of $21.86 as requested by ORA; this will not make the district solvent.  The only way the district can become solvent over the next (12) twelve months is an interim rate of $37.13 flat fee until the district can obtain (12) months of sewer flow data from a permanent meter.

Mr. Conner amended his motion to give ORA a rate of $37.13 interim while the meter is being installed and (12) months of data is received and then adjust accordingly after data is received, seconded by Mr. Vick and passed.

Mr. McGill stated the Board of Commissioners may be required to raise district rates in accordance with the rate study; this will make the district solvent.  If the district didn’t charge ORA the amount as prescribed in the cost of service study other sewer customers would have to pay the difference.

Mr. Seagle questioned the $113,664.00 credit they would use this to repair their infrastructure.

Mr. Conner made a motion to table any credit which may be due to ORA until after the (12) twelve months of sewer data is received, 2nd by Mr. Vick and passed.

Mr. McGill stated there are still a few weeks before the UMRB meeting and the Board of commissioners is willing to meet to answer any questions.

Mr. Vick stated he does not feel the district needs to get into depositions, the Board of Commissioners concurred.

Mr. Vick recommended Mr. McGill bring the cost estimate of purchasing the metering manhole to the October 2009 Board of Commissioners meeting.  Mr. McGill stated the package is being put together and will be presented at the October 2009 meeting.

Mr. Vick stated the UMRB meeting is October 1, 2009 the Board of Commissioners meeting will be October 2, 2009.  The board is willing to meet with ORA anytime between now and October 1, 2009

Mr. McGill had no official report.

Mr. Gass had no official report.

Mr. Sunstein stated the district has a 12% water loss for the month of August; one leak was located and repaired.

THM and Acid testing has been done, the results were lower than normal 3rd quarter results.

Ms. Carver is obtained information on online bill paying; this was tabled until the October 1, 2009 meeting.

Motion by Mr. Ball to make an exemption to Resolution 1996-3 to 4175 Old Webb Creek Road because water service is not available at this property, seconded by Mr. Conner and passed.

Motion to discard old office equipment (Lexmark Optra 614 printer and HP Computer) made by Mr. Ball, seconded by Mr. Conner and passed.

Mr. Vick stated that the UMRB requires the district operate in the black and they will enforce it.

Mr. Conner had no official report.

Mr. Ball had no official report.

Under new business Mr. Wallace stated that Mr. Rohde had requested he informed the board that Cobbly Nob Property Owners had installed their new siren to alert property owners if there is a fire in the area.

Motion to adjourn meeting by Mr. Ball, seconded by Mr. Conner and passed at 12:01 p.m.

Respectfully Submitted,

Janice Carver
Office Manager