15oct01 by chrstphr


                                           BOARD OF SUPERVISORS
                                               OCTOBER 15, 2001

1. Call to Order Board of Supervisors

2. Call to Order Bedford County Public Service Authority

3. Presentation and Discussion by the Public Service Authority

            a. Review Of Proposed Rate Hikes

            b. Discussion Of Options To Fund Projects

4. Questions and Comments

Board of Supervisors:

            Lucille H. Boggess, Chair - Dist. 7, Kirby E. Richardson, Vice-Chair - Dist. 2, Dale C. Wheeler -
Dist. 1 (arrived at 7:43 p.m.), Roger W. Cheek - Dist. 3, Robert L. Bashore - Dist. 4, and Bobby G. Pollard
- Dist. 6
                                                     : Absent :
            E. Anthony Ware, II - Dist 5
            Staff Present: William C. Rolfe, Kathleen D. Guzi, and Tabatha Atkinson
Public Service Authority:
            Roger Hessenius, Chairman - Dist. 4, Bob Flynn, Vice-Chairman - Dist. 2, Gerald Foutz - Dist. 1,
Melvin E. Templeton - Dist. 5, Roy E. Dooley, Jr. - Dist. 6, and Richard M. Anderson - Dist. 7
                                                     : Absent :
            Gordon L. Russell - Dist. 3
            Staff Present: Willie Jones, Gary Underwood, Brian Key, Sam Darby (PSA Attorney) and Karen
(1)         Chair Boggess called the Board of Supervisors to order.
(2)         Chairman Hessenius called the Public Service Authority Board of Directors to order.
(3)         Willie Jones, PSA Administrator, welcomed everyone to the meeting.
            Mr. Jones provided a Power Point slide presentation which included a review of proposed rate
hikes and a discussion of options to fund projects.
            The slide presentation included the following:
            ?? Facts – As of June 30, 2001, the PSA has 10 consecutive water systems – 4,782 customers;
                11 well systems – 714 customers; 1 surface water system – 94 customers; 10 permitted
                wastewater treatment plants operated for others; 5,590 water customers; 658 sewer
                customers; annual water production – 417,876,000 gallons; and annual sewer productions –
                70,000,000 gallons.
            ?? Investment in Infrastructure - $25,000,000 worth of capital assets in service – 130 miles of
                water line and 20 miles of sewer line.
            ?? How did we obtain these assets? Debt; Direct Contribution; Reinvestment.
       ?? Debt – Due VRA - $4,570,000; Due Bedford County - $432,196; Due City of Lynchburg -
           $2,723,657. Since 1989, over $6,016,200 has been paid on PSA debt (Principal - $2,305,800;
           Interest - $3,710,400).
       ?? Direct Contributions – Federal Government - $1,933,750; Bedford County Board of
           Supervisors - $4,300,404; and Developer contributions - $7,023,544.
       ?? Reinvestment of Availability Fees – Since 1989, $5,730,000 received; $4,208,000 reinvested
           in projects and $1,522,000 applied to debt service.
       ?? Where On The Curve? – Behind: Fragmented and underutilized systems – not efficient;
           Operational problems – long lines; and Less ability to control costs – contractual impacts.
       ?? Getting ahead in the short term – A look at our proposed rate hikes – why? – Legal, costs of
           operation, and recurring capital expenditures.
       ?? Legal – Virginia Law Section 15.2-5136(A) Rates = Bills + Margin. PSA bond covenants –
           15% debt service margin; $114,405 required for current budget; In current budget projected
           margin is $17,000. Estimated shortfall for FY02 is $97,000.
       ?? Cost of Operation – Growth in expenses greater than growth in revenues. - $61,000
           unexpected water cost increase and $108,000 unexpected debt service increase.
       ?? Recurring Capital Expenditures – Replacement and renovation - $215,000 annually; System
           expansion requests greater than $200,000 annually due to neighborhoods with dry wells and
           new developments.
       ?? Overview of Proposed Rates – Total additional revenue $565,000; 18% increase over current
       ?? Additional Income – User Charges – Water commodity charges - $79,000; Eliminate two
           tiered rates - $65,000; Raise minimum service charge - $38,000; Raise service charges for
           larger meters - $21,000; Raise sewer commodity charges - $63,000; Total of $266,000.
       ?? Additional Income – Connection Charges – Water availability fees - $247,000; Sewer
           availability fees - $43,000; Administrative charges - $9,200; Total of $299,000.
       ?? Why don’t we cut costs? No control over 54% of operating costs – Purchased water – 25% of
           total budget; Principal and interest – 25% of total budget; Other Fees and Charges – 4%.
       ?? Gaining Control for the Long Term - To – Eliminate cost uncertainties and create economic
           opportunities; WE MUST - develop our source and treatment capability and install the water
           mains and sewer interceptors.
       ?? A Payment Concept – PSA invests savings from costs of water purchases in debt service; the
           County commits to contributing a defined amount through the CIP to assist with the annual
           debt service; and these amounts change yearly.
       ?? Listing of Projects for the Short Water List and Longer Water & Sewer List.
       ?? Water Projects Debt Service for 2004-2027.
       ?? Water and Sewer Projects Debt Service for 2004-2031.
       ?? Shall We Proceed With This Long Term Concept?
(4) Questions and Comment Period:
       There followed a question/comment period among members of both boards, Mr. Jones and the
County Administrator.
       Supervisor Pollard stated that he objected to the west end of the County being left out of the 30-
year water and sewer plan. Supervisor Wheeler concurred.
       Mr. Jones said that the west end of the County could certainly be included.
       Supervisor Richardson made a motion to formally endorse the concept of the PSA
pursuing the items listed on the Short Water List with the addition of waterline projects for Route
24 and 460 West.
       Voting yes:      Mr. Wheeler, Mr. Richardson, Mr. Cheek, Mr. Bashore, Mr. Pollard and Mrs.
        Voting no:       None
        Absent:          Mr. Ware
        Adopted Unanimously.

        Supervisor Pollard asked the County Administrator and Deputy County Administrator to look into
the possibility relieving the PSA of its debt owed to the County.
        Supervisor Richardson made a motion to adjourn the meeting at 8:31 p.m.
        Voting yes:      Mr. Wheeler, Mr. Richardson, Mr. Cheek, Mr. Bashore,
                         Mr. Pollard and Mrs. Boggess
        Voting no:       None
        Absent:          Mr. Ware
        Adopted Unanimously.
        Chairman Hessenius recessed the PSA Board of Directors for a 10 minute recess.


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