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Utility Board - Minutes     
Tuesday, July 14, 2009

Call To Order:


Robert Sexton, Chairman, called to order the regular meeting of the Utility Board at 7:05 p.m. in the Council Chambers at City Hall, 9611 S.E. 36th St., Mercer Island, WA.




Board Members Robert Sexton, Chairman, David Laub, Vice Chairman, John Ewald, Joel Massmann, Callie Ridolfi, and Glynda Steiner were present.  Council Liaison Bruce Bassett was present.  Board Member Ben Levie was absent.


Staff Members Glenn Boettcher, Chip Corder, Katie Knight, Francie Lake, Anne Tonella-Howe and Suzanne Riddell were present.




The Minutes of the June 9, 2009 meeting were approved.           



Angie Sanchez, FGS Group

Jeffrey Borgida, Allied Waste

Don Frey, Allied Waste

Nels Johnson, Allied Waste

Jason King, Consultant to Allied Waste


Regular Business:


Sewer Connection Charges

Upon request from the Utility Board, Francie Lake and Angie Sanchez with FGS Group resubmitted their report and spreadsheet based on two different methods of calculating the one-time charge for Sewer Connections.  The first methodology is based on adjustments to sewer connection charges based on current and future costs.  The second methodology is based on projected historical costs of the utility as of 12/31/2009. Review Exhibit #1 for details.  Discussion followed. 


The Board’s consensus was to base the Sewer Connection Charge on 2010 Historical rates due to the low future growth rate projected for the Island; to be reviewed by the Board thereafter on a bi-annual basis in connection with the budget process.   


David Laub made a motion to reduce the proposed future rate for Sewer Connection Charges from $4,223 to $2,329 to the final rate of $1,804 per residential customer equivalent (RCE).  Joel Massmann seconded the motion.  The motion passed unanimously. 


Fire Protection Cost Analysis

Angie Sanchez presented an overview of the Lane vs. Seattle case in which, the Washington State Supreme Court ruled that “providing fire hydrants is a government responsibility for which the general government of the area must pay.”   She reviewed how FCS Group had calculated fire costs.  Seattle’s cost of service adjustment (COSA) includes hydrants, reservoirs, pumping, and water mains and applied a composite allocator.  FCS Group has used AWWS guidelines in determining fire protection costs.  Chip Corder explained that the exact percentage of fire protection cost has not been determined yet.  There needs to be further discussion with various staff members to refine methology.  The City’s potential fire protection costs are estimated to be between 1.5% to 5% of the revenue requirements.  This amount would be removed from the water rates fund and paid through the general fund.  The method of collection would most likely be through a Utility Tax on the bi-monthly water billing. 


City Attorney Katie Knight explained to the Board that the City is following a proactive course of action to determine cost of fire protection and will continue with a policy to pay for fire protection through the general fund instead of waiting to see what the other Cities do.  City staff plans to implement the change to billing for fire protection costs on January 1, 2010. Chip will keep the Board advised of any decision.  See Exhibit #2 for more detailed information.


Allied Waste Contract

During the City Council meeting on July 6, 2009 Glenn Boettcher presented the proposed new contract with Allied Waste.  After discussion, the Council directed Glenn to review the following questions and concerns with the Utility Board.


1.  Clarify the purchase of Hybrid Truck

2.  Post Storm Pick-up

3.  Additional winter pick-up for yard waste

4.  Unbundling of yard waste carts


1.  The Board learned that the contract presented to the Council does call for the purchase of a new truck for hard-to-service areas, but the truck is a regular gas- propelled vehicle.  However, Allied would like to begin testing garbage pick-up and other more efficient technologies when they become widely available.    


2.  The current contract states if Allied Waste cancels pick-up due to bad weather, they will pick up double the amount of garbage on the following regularly scheduled pick-up day.  The new proposal for post storm pick-up would allow Allied customers who were missed, due to bad weather (up to two days), the option of a special pick-up the following Saturday at an additional cost.  If the bad weather continues for three or more days, Allied could arrange for large disposal bins to be placed around the Island to allow the customer to do their own drop-off. 


3.  The additional winter pick-up for yard waste allows for non-protein or vegetative food items to be placed in the yard waste bins.  The King County Health Department requires that if customers place non-protein food items in the yard waste, it needs to be picked up on a bi-weekly basis.  The Board felt this additional enhanced service would help eliminate food waste from going into the landfill. 


4.  The Board discussed the Council’s interest in “unbundling” yard waste carts and allowing the customer to have one cart only as part of the basic rate.  The Board discussed a variety of the ways in which the rates could be structured to satisfy as many of the Council’s interests as possible while at the same time not discouraging a possible higher recycling rate and more waste reduction.  Board members expressed concern that making it more costly to dispose of yard waste could lead to illegal dumping in ravines and other improper disposal.     


After further discussion the Board asked Glenn to continue working with Allied Waste in negotiating the future contract. 




Anne advised the Board that the Sewer Lake Line Project is on schedule. 


Next Meeting:  


The next regularly scheduled meeting is Tuesday, September 8, 2009.    


Adjournment:          10.22 p.m.


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