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					                                          BETHLEHEM AUTHORITY
                                             BETHLEHEM, PA

                                     MINUTES OF REGULAR MEETING

                                             NOVEMBER 8, 2007


The regular meeting of the Board of Directors of the Bethlehem Authority was held on November 8,
2007, in Room B504 of the City Administration Building, 10 E. Church Street, Bethlehem, PA. The
meeting was called to order at 3:00 PM by Vice Chairman John Tallarico, with the following in
attendance:

         John Tallarico, Vice Chairman
         Mark Jobes, Secretary
         Michael Keyock, Treasurer
         Stephen Repasch, Executive Director
         Sandra Reppert, Administrative Assistant
         Daniel Meixell, Special Police Officer
         James Broughal, Solicitor
         John Filipos, Controller

It is noted that Chairman Richard Master is participating in the meeting via telephone.


APPROVAL OF MINUTES

Mr. Jobes moved to approve the minutes from the regular meeting held October 11, 2007.
Mr. Keyock seconded. Motion passed unanimously.

Mr. Repasch noted for the record that Vaughn Gower encountered some work-related issues and will
not be able to attend today’s meeting.


RECOGNITION OF VISITORS/COURTESY OF THE FLOOR

Mr. Tallarico recognized:

        Mr. Bud Cook from The Nature Conservancy
        Dr. David McGuire, Lehigh Valley Sierra Club
        Mr. Alan Blair, City of Bethlehem Controller
        Mr. Neal Kern, Consulting Engineer for the Bethlehem Authority
        Members of the Press




G/Shared/Bethlehem Authority/Regular Meetings/110807
At 3:03 PM, Mr. Tallarico moved and Mr. Jobes seconded for the Board to convene into an Executive
Session for the purpose of contract negotiations concerning real estate matters. Motion passed
unanimously.

At 3:12 PM, Mr. Keyock moved and Mr. Jobes seconded to adjourn the Executive Session. Motion
passed unanimously.

Mr. Tallarico called the regular meeting back to order.


COURTESY OF THE FLOOR

Dr. David McGuire from the Lehigh Valley Sierra Club queried if there was going to be a presentation
today by the Monroe County Planning Commission. Mr. Repasch responded there will be no
presentation, as Ms. Dettore could not attend today and the Tunkhannock Township Official Map has
been put on hold until the new township supervisors are seated in office. He is hoping a presentation
can be coordinated for the December meeting. Dr. McGuire indicated there are several people from
Monroe whom he’d like to invite so he’d appreciate a confirmation of the date of the presentation.


CHAIRMAN’S REPORT

Easton Suburban Water Authority Negotiations. Mr. Master reported that negotiations with Easton
Suburban Water Authority continue to be positive. There have been proposals passed back and forth
between the parties and there are areas of strong agreement. However, the details of these
negotiations cannot be divulged because of their significance. The Authority is encouraged and
hopeful that there will be an announcement by the end of this year. Mr. Repasch added that
substantial progress was made this past month.


Maple Tract Property. Mr. Master reported that there have been discussions with City Council
members and there is a consensus with Council for the Authority to offer the Maple Tract property for
sale as a part of the Authority’s financial plan to assist the City’s capital expenses for the water system
in 2008. As everyone knows, there are major expenditures next year to complete the work on the
Water Treatment Plant (WTP). The reserves in the Bond Redemption and Improvement Fund (BRIF)
will not be sufficient enough to pay for these expenses, as they will drop below the Trust Indenture
minimum requirement of $2 million. The sale of the Maple Tract property will bring a substantial
amount of money.

Mr. Master announced the issuance of a Request for Proposal (RFP) for the sale of the Maple Tract to
interested parties. The RFP’s are due by December 4 th and will be opened on December 5th. The
Maple Tract is 522 acres of land located in Tunkhannock and Tobyhanna Townships in Monroe
County. This land is adjacent to the watershed area. There is a small portion of the property that is in
the western section of the watershed but it is not significant to the watershed. Our Consulting Engineer
has analyzed the property and his opinion is that this land is not integral or necessary for the operation
of the watershed. The appraisal amount totals $1.925 million.



G/Shared/Bethlehem Authority/Regular Meetings/110807
Mr. Repasch indicated that the Maple Tract actually consists of two tracts of land. The tract of land
below Interstate 80 is appraised at $1.55 million and the tract of land above Interstate 80 is appraised
at $375,000.

Mr. Broughal indicated a motion is necessary to approve the RFP as presented by the Executive and to
authorize the sending of the RFP’s to interested parties.

Mr. Tallarico mentioned that three years ago, the sale of property outside of the watershed boundaries
was part of the Authority’s strategic plan. The Maple Tract is an environmentally sensitive area, and
the Authority will look closely at any and all offers to make sure they are in the realm of the Authority’s
philosophy. Mr. Master added that the sale of this land is subject to development restrictions.

Mr. Keyock moved to accept the RFP for the sale of the Maple Tract as presented and to authorize
sending same to interested parties. Mr. Jobes seconded. Motion passed unanimously.


EXECUTIVE DIRECTOR’S REPORT

Forest Management Program – Stand 40 Bid Acceptance. Mr. Repasch reported that there is a
small area in Tunkhannock Township referred to as Stand 40. RFP’s were mailed out to four entities to
have this stand timbered. This stand is not significant in size or value. It is an improvement cut to
remove the undesirable species and promote the growth of more desirable, hearty species. Our
Forestry Consultant, Mr. Don Oaks, estimated the value of the timber to be between $1,000 and
$4,200, depending on market conditions. The Authority received one proposal from Backenstoes
Lumber Co. in the amount of $2,800. (Backenstoes Lumber Co. is the firm that did the recent Hypsy
Gap timber sale.)

Mr. Jobes queried why the other entities did not submit a proposal. Mr. Repasch responded they were
just not interested and it was of no value to them.

Mr. Repasch added this stand is along Long Pond Road near Stoney Hollow Road and not far from the
racetrack.

Mr. Repasch is asking the Board to accept the proposal of $2,800 from Backenstoes Lumber Co. and
the approval of the Timber Sale Permit, conditioned on Backenstoes obtaining the necessary PA DOT
roadway access and Township erosion and sedimentation permits.

Mr. Tallarico moved to accept Backenstoes Lumber Co.’s bid of $2,800 for the sale of Stand 40,
providing that the company obtains the necessary permits from PA DOT and Tunkhannock Township.
Mr. Keyock seconded. Motion passed unanimously.

Forest Management Program – Stand 50 Update. Mr. Repasch reported that the Stand 50/Starkey
Swamp Timber Sale RFP’s were sent four weeks ago. The bids are due and scheduled to be opened
next Monday, November 12th. It is hoped there will interest in this timber sale.




G/Shared/Bethlehem Authority/Regular Meetings/110807
Dr. McGuire queried if this is the stand with two different options of timbering that was discussed last
month.      Mr. Repasch responded that yes, Stand 50 was bid with two options. One is to take the
marketable timber now for (at least) $60,000. The other is to bid for the future value of the timber once
the first cut is made, and then the Authority would dictate when the second and more valuable cut
would take place in five to seven years. The Authority will get $60,000 now, but the future value is
estimated to be between $300,000 and $500,000.

PA Municipal Retirement Fund Excess Interest Award Distribution. Mr. Repasch reported that
Board action is required for the disbursement of the PA Municipal Retirement Fund (PMRF) Excess
Interest Award.

Ms. Reppert explained to the Board that the members in the Authority’s pension plan are guaranteed a
certain percentage rate of interest per year on their contributions. However, sometimes the plan earns
more than the guaranteed rate, and the PMRF provides the plan with a calculation of the excess
interest. It can be awarded three different ways - to the employees, to the retirees, or to the municipal
account. Past precedent and action by the Board awarded the excess interest to the active employees.
She noted that this award has no affect one way or another on the Authority’s obligation to the plan.
The amount of this year’s excess interest is $7,788. This is not a cash award. This money is
deposited into the employees’ retirement accounts in the plan.

Mr. Master is in favor of the proposal to distribute this award into the retirement accounts of the
Authority’s active employees. Mr. Keyock moved to award the excess interest in the Authority’s PMRF
account equally to the active employees of the Authority. Mr. Jobes seconded. Motion passed
unanimously.

Income and Expense Projection and Budget Comparative. Mr. Repasch reported the following:

Cash Projection for the 4th Quarter, 2007:
    Cash on Hand at October 31, 2007 - $436,470 ($124,785 in checking; $102,515 in a 60-Day
       CD; $209,170.00 in a 180-Day CD)
    Revenues Receivable of $62,300 and Projected Cash on Hand Before Expenses - $498,770
    Projected Professional Expenses through December 31, 2007 - $48,930
    Projected Administrative Expenses through December 31, 2007 - $50,000
    Projected Police Expenses through December 31, 2007 - $6,000
    Total Projected Cash on Hand at December 31, 2007 - $393,840

Expense Budget Comparative for the month ended October 31, 2007:
    Professional Services – 86% of budget
    Police Expenses – 42% of budget
    Administrative Expenses – 78% of budget
    Overall – 79% of budget



2008 Authority Operating Budget Adoption. Mr. Repasch presented the proposed 2008 Authority
Operating Budget. He first reviewed his memo highlighting what he feels are important items worth
noting:

G/Shared/Bethlehem Authority/Regular Meetings/110807
        The 2008 budget is 5.7% higher than 2007 and 6.2% higher than 2007 projected actual, due to
         a projected 20% increase in healthcare costs, the purchase of a replacement patrol vehicle,
         audit services of $4,000 are budgeted for the first time (needed for the City’s audit), a 4%
         salary increase which is consistent with the City, and a $2,000 increase in Controller charges
         due to expanded services.

        The City’s contribution to fund the Authority’s budget will decrease by approximately $47,000
         due to the Authority’s income from hunting and cell tower leases and investment income. In
         the past, there was never a revenue side to the Authority’s budget to reduce the City’s
         contribution.

         Mr. Master would like to know what has been budgeted for our Financial Advisor and what kind
         of work the Authority is expecting them to do. Mr. Repasch said $35,000 has been budgeted
         and indicated that they will be monitoring the market and providing reports, reviewing arbitrage
         issues, and advising on restructuring or refinancing debt.

        The forestry program will continue as planned, with three active sales in 2008 (Stand 40, Stand
         50 and Stand 62). Mr. Jobes queried Forestry expenses of $50,000. Revenue is anticipated to
         be approximately $29,000, which is less than what the forester is being paid, but the long
         range impact on the program is significant, where it’s estimated $400,000 of timbering revenue
         could be realized. Mr. Repasch noted that timbering revenue goes directly to the City’s Water
         Fund to help in the operations of the water system. The $60,000 for Stand 50 was anticipated
         for 2007 and still could come this year.

Mr. Repasch discussed the actual budget and reported the breakdown as follows:
     Professional Services - $167,750
     Administrative Expenses - $238,050
     Security and Property Expenses - $26,000 (formerly Police Expenses)
     Budget detail for each line item can be found on the last page

The preliminary budget was sent out two months ago and it has not changed much from the proposed
budget being presented today. Mr. Repasch indicated he had not heard any comments from the Board
prior to now, so if there are any questions he will answer them. Mr. Jobes queried if there are any
ideas on how to reduce the health care costs. Mr. Repasch responded that last year, the plan was
changed from a zero deductible to a $1,000 deductible. The Authority saved a considerable amount in
premiums, even while self-funding the deductible for each covered employee.

Mr. Master commented that the Authority’s operating budget becomes a part of the City’s Water Fund
budget and he feels it’s a good and reasonable budget. He indicated that there has not been much
discussion about the budget and admits there should have been a session devoted to discussing the
budget in more detail. He asked if this can be approved at the next Board meeting. Mr. Repasch
indicated that the Board needs to approve the Authority’s budget for submittal to the City for their
approval. The next Authority Board meeting is December 13 th, which is after the Water Fund budget
hearing before Council on December 11th. The Board needs to act sooner.




G/Shared/Bethlehem Authority/Regular Meetings/110807
Mr. Master queried the Solicitor if the Board can approve this budget subject to ensuing Board
discussions. Mr. Broughal responded that the City needs to know their budget prior to the budget
hearings. Mr. Repasch indicated that the Authority’s budget “number” is already plugged into the City’s
preliminary budget “number.” The Authority needs to give this budget its stamp of approval to formally
submit to the City. Mr. Master again indicated he has no issues with the budget, but some of the other
Board members do. Mr. Tallarico agreed with Mr. Jobes on investigating the health care costs issue.

The option for Authority employees to get on the City’s insurance plan is not possible. Mr. Repasch
suggests approving the budget with the amount that is included for health insurance conditioned upon
getting a better rate by February 1st, which is the plan’s anniversary date. If the Authority can’t get a
better rate, at least the cost is covered.

Mr. Master suggested moving the next Board meeting up one week to December 6 th. This will allow
the Board to review the budget more carefully. The date is also immediately following the Maple Tract
RFP opening and to be able to approve it for submittal to the City. All Board members are in favor of a
December 6th meeting date.

Mr. Tallarico queried the new patrol vehicle and asked Officer Meixell for more detail. Officer Meixell
explained the current vehicle was purchased in 2003 prior to his hiring. It is a half-ton pickup, which
was not the appropriate type of vehicle for the type of off-road patrolling he performs. A three-quarter
ton truck with a tighter, heavier suspension and higher ground clearance would be more suitable and
would last longer. Mr. Repasch added that he budgeted $28,000 for the vehicle and $2,000 for the
transfer of equipment. The vehicle will be paid for from Authority reserves and it will be amortized over
five years. The Authority will receive $6,000 per year from the City over those five years, instead of the
City paying for this outright in their budget. The bottom line is if the Authority wants a security force
present in the watershed, this is something that has to be done.

Mr. Master indicated the Board needs these next few weeks to review the 2008 proposed operating
budget more carefully and have discussion, as necessary. It will not be approved at this time, but will
be at the December 6th Board meeting to submit to the City.


CONTROLLER’S REPORT

Mr. Filipos’ Summary Report for the month ended October 31, 2007, as filed, was accepted without
comment. He indicated the principal and interest payment for the Hirko bond was made and the rest of
the activity for the month was standard.

Mr. Repasch indicated that the Authority received the invoice for the audit performed by Maher
Duessel. This service was not to exceed $6,000 (the accounting of their work totaled $6,800).

Mr. Filipos scanned the audit, which consists of an opinion letter and work papers, to a PDF file, so it is
available for any Board member who would like to view them. The auditor’s opinion is clean. Our
records are on a cash basis, and more specifically our investments. For audit purposes, one of the
investments was adjusted to market value. This was never done in the past, and so beginning this
year and beyond, he will adjust the same accordingly. In his opinion, it’s always good to have a second
set of eyes. This audit was a good report of the Authority’s finances.


G/Shared/Bethlehem Authority/Regular Meetings/110807
Mr. Repasch added that regarding the BRIF in the Controller’s report, the entire amount of the City’s
loan proceeds ($812,000) have been spent for their intended purpose of helping to pay for the WTP
improvements and various other water capital expenses.

Resolution 285 – Approval of Professional and Administrative Expenses. Ms. Reppert presented
Resolution 285 to the Board for approval. The resolution totals $414,452.30 and consists of the
following:
      Requisition 274 for the water capital expense invoice from the City totaling $379,673.17 (which
         entirely depletes the City’s monies in BRIF which Mr. Repasch just mentioned)
      Professional and administrative expenses totaling $34,779.13

Mr. Keyock moved to approve Resolution 285. Mr. Jobes seconded. Motion passed unanimously.


SOLICITOR’S REPORT

Mr. Broughal had no report.


CONSULTING ENGINEER’S REPORT

Mr. Neal Kern was present and reviewed his report, which was circulated to the Board. He spent two
separate days working on inspections – one at the WTP, and the other touring the remaining facilities
in and around the City. He has developed a good understanding of the Water System, as well as good
rapport with City representatives. He is working on the Annual Report of the Water System for the
Authority and there should be no problems in completing it on time. He has produced several reports
in letter form. One deals with the impact of the Maple Tract on the watershed for water generation,
which in his opinion it has no impact. The other deals with his review of the appraisal for the Maple
Tract, which in his opinion was done in a professional manner. He has reviewed the Malcolm Pirnie
report on the recommended improvements to the WTP.

Mr. Tallarico queried Mr. Kern on his opinion of the improvements at the WTP. Mr. Kern indicated the
WTP is maintained in good condition and the operators are dedicated. The filter replacements are
going well and the efficiency of the contractor grows with each replacement. It appears that all ten
filters will be replaced by next summer. The roofs at the WTP were inspected. There are no more
leaks in the main roof, but there are two or three other smaller roofs that need to be replaced in the
future.


SPECIAL POLICE OFFICER’S REPORT

Officer Meixell’s report, as filed, was accepted without comment.

Mr. Tallarico pointed out that illegal activities have dropped dramatically since Officer Meixell has been
patrolling the watershed.




G/Shared/Bethlehem Authority/Regular Meetings/110807
WATER REPORT

The Water Report for the month of October, 2007, was filed. Mr. Tallarico noted that the reservoirs are
at 81% capacity. The City is very fortunate when compared to other parts of the country where water
supplies are suffering.


CITY OF BETHLEHEM DIRECTOR OF WATER AND SEWER RESOURCES

In Mr. Brong’s absence, Mr. Repasch updated the Board on the filter replacement project at the WTP.
The fourth filter is complete and being commissioned to be on line this week; the fifth filter will be
finished before Christmas; the replacement of the remaining five filters will begin soon after January 1 st
and expected to be complete in five to six months. Presently, the design work is being conducted on
the new backwash system. The entire project is anticipated to be complete by the end of 2008 (the
new filters require this new backwash system). The summary of the water capital budget being
submitted for approval by Council totals $4.598 million. This includes the filters ($1.2+ million),
backwash system ($1.9 million), security enhancements, and other normal capital expenses. The BRIF
pays for these expenses, and it needs to be replenished. That is why the sale of the Maple Tract was
discussed today.


COURTESY OF THE FLOOR

Dr. McGuire queried if the Tunkhannock Township Official Map ordinance is postponed until 2008, is
the Authority still planning on having the Monroe County representative at the December 6 th meeting.
Mr. Repasch responded he will try to schedule them to be present at the December meeting. He feels
it’s important for the Authority to have as much information as possible prior to Tunkhannock Township
adopting the ordinance.

Dr. McGuire queried if the RFP for the Maple Tract is available now for him to have a copy and are the
clauses regarding the development restrictions included. Mr. Repasch responded yes to both
questions.


ADJOURNMENT

Mr. Keyock moved to adjourn the meeting. Mr. Jobes seconded. Motion passed unanimously and the
meeting adjourned at 4:10 PM.



                                                           ____________________________________
                                                           Mark P. Jobes, Secretary




G/Shared/Bethlehem Authority/Regular Meetings/110807

				
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