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Commission Minutes
GREENWOOD
METROPOLITAN DISTRICT
MINUTES OF THE
october 24, 2007
Public Hearing
The public hearing of the
Greenwood Metropolitan District Commission was held
Wednesday, October 24, 2007 at 5:00 p.m., in the Board Room
of CPW - Greenwood Metropolitan District Administrative
Office, 121 West Court Avenue.
In attendance:
Commissioner Bob Haynie,
Chairman Richard Coleman
Commissioner Byron Smith,
Vice Chairman George Martin
Commissioner Gene Hancock,
Secretary Gayle Grogan
Commissioner Michael G.
Monaghan
Roy Hemphill
Commissioner Henry
Watts Paige Holley
Commissioner Tim
Burke Daryll Parker
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Chairman Haynie called
the meeting to order.
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Chairman Haynie read the
Statement of Compliance with the notification provision
of the Freedom of Information Act.
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Chairman Haynie stated
the notice was advertised three times (Sunday, October
14th, Saturday, October 20th and
Wednesday, October 24th) in the Index
Journal.
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Chairman Haynie opened
the public hearing to receive comments concerning the
proposed rate increases as printed in the newspaper.
There were no comments from
the public.
Chairman Haynie closed the
public hearing.
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Commissioner Monaghan
said he has no problem with anything except the base
meter charge. He handed out copies of his comments to
the Board. Commissioner Monaghan said Metro went a long
way last year trying to make the rate structure more
equitable. He noted that Mr. Parker said in his report
that this would be a test year. Commissioner Monaghan
is referencing the Wastewater Rate Study Book provided
by Mr. Parker. Commissioner Monaghan proposed the
creation of a new class of residential users; 1 inch
meter single family residential user to be charged the
same rate as the 5/8 inch meter single family
residential user. There are 13,000 residential homes
and only 607 have a 1 inch meter. Commissioner Monaghan
said he does not think it would have a great impact on
the revenue. Commissioner Hancock said some of the
single family residents will still need the 1 inch
meter. Commissioner Burke said he understands
Commissioner Monaghan as saying 5/8 or 1 meter to be
the same rate. Commissioner Monaghan said commercial is
a different class. Commissioner Burke said it is
arbitrary in terms of the amount of water flow that
comes from a 5/8 or 1 dependent upon where they are.
Commissioner Monaghan said 607 users are paying 2 ½
times more money on the base meter rate. Commissioner
Monaghan noted at this point Metro is ahead of the
budget by $73,000. He would like to know what Metro can
do to change this trend and why does Metro need the
additional $51,000 from single family residential
customers. Commissioner Monaghan said Metro just
constructed the multi-family and a bigger meter size to
be more equal. He did not understand until now that the
8% increase would also affect the single family
residential customer. Commissioner Monaghan thinks this
is a regressive rate. The lower your income the bigger
is the base meter rate percentage. Commissioner
Monaghan said he would like to see the base meter rate
increase like the Capacity Fee by a certain dollar
amount not percentage. Commissioner Monaghan said he
thought the impact on a single family, especially lower
income, is a regressive rate. He would like to keep the
single family residential rate the same and review that
rate in a year. Commissioner Hancock inquired if
Commissioner Monaghan looked at the amount of water that
is used from the 5/8 meters. Commissioner Monaghan
said he was told the only additional income would be
$51,000. He would like to challenge the Board and
Administration to continue and save this $51,000 and not
increase the base rate. Commissioner Monaghan noted the
residential cap is at 2300 cubic feet and that is around
17,000 gallons. He said that would take a lot of effort
to put 17,000 gallons into the sewer system.
Commissioner Monaghan would like for the Board to look
into reducing the cap amount. He said the cap amount of
2300 cubic feet is almost three times the average
usage. Commissioner Monaghan said he was not sure of
how many customers exceed the cap amount. Mr. Parker
said the number can be determined from the billing
data. Manager Coleman said the amount of customers is
not even 1%. Commissioner Monaghan said that is because
the number is so high. Commissioner Monaghan said the
Board and staff should look into these areas. One is to
create a new class single family residential versus
multi-family residential. Commissioner Monaghan said
multi-family residential is more than likely handled by
the new base meter charge. Commissioner Hancock asked
how would single family be classified. Mr. Parker said
duplexes should be classified as multi-family. Mr.
Parker said it would depend on if the units share the
same water meter. Commissioner Monaghan said Metro may
need to look into raising the Capacity Fee to pay for
things. He thinks the single family residential rate is
very touchy: that is where Metro is impacting the low
income people the most. Commissioner Monaghan would
like for the Board to look at the cap amount to see if
it could be lower. Manager Coleman said the 2300 cubic
feet was chosen because not too many used that amount
and if they did it was due to excessive usage or a
leak. The lower the cap amount, the more people that
will not be paying for sewer. Manger Coleman said the
Board at that time chose a number that was high enough
not to eliminate very much of the legitimate usage. He
said if Metro moved the cap amount to 1600 cubic feet (2
times the average) Metro may have a good number of users
that exceed the cap each month. Commissioner Monaghan
commented maybe the cap amount should be 10,000 or
12,000 gallons, something more reasonable. Manager
Coleman said 1600 cubic feet which would be about 12,000
gallons. He said lowering the cap amount might mean
that Metro is not charging the users that should be
charged. Commissioner Hancock said there are some
people that use that amount with no leaks. Manager
Coleman said there are a number of single family
residents that go over that amount every month.
Commissioner Monaghan asked if Manager Coleman was
talking about the 1600 cubic feet. Manager Coleman said
yes. Commissioner Monaghan asked what cap amount does
Metro want. Commissioner Hancock said Metro will need
to analyze the customers to do that. He said that
Commissioner Monaghan is right on the fact that people
who do not have the money should not have to pay more.
Commissioner Hancock said he did analyze the customers
at some point and there is no set amount of water that
is used based on the income. He recommended having the
cap amount analyzed before the next rate increase.
Commissioner Watts stated he liked the idea of the
single family being charged one rate regardless of the
5/8 or 1 meter size. Manager Coleman asked about a
single family residence with a 1 ½ meter. Commissioner
Hancock said they would not be affected by this.
Chairman Haynie asked how will this impact Metro. Mr.
Parker responded this has not been looked at. He said
Metro does not have that many single family customers
that have 1 meters. Mr. Parker said Metro may find
that some of the accounts are duplexes and would not be
affected by this. He said setting the single family
residential class does not necessarily have a severe
equity impact on Metro and it does not have a severe
revenue impact either. Mr. Parker recommended that if
Metro does this they need to make sure those customers
are paying the same base rate that the commercial 5/8
meter would have to pay.
Commissioner Monaghan made a
motion to create a single family residence with the same
rate for 5/8 and 1 meter size; Commissioner Watts
seconded, and the motion was unanimously approved.
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Commissioner Watts
inquired on what Metro will need to do next.
Commissioner Hancock said Metro will have to analyze the
users. Mr. Parker said it will not change the budget.
There will need to be an adjustment to the projections
of revenue for the upcoming bond issue. Commissioner
Hancock said Metro will need to look at how the billing
comes out. Chairman Haynie asked if the motion would
take affect with the new rates. Commissioner Monaghan
said yes. Mr. Hemphill said he wants to make sure the
motion does not change the rates where they might
increase for any particular class. From what Mr.
Hemphill understood, the 1 meters presently pay $20 and
the proposed rate is $21.60. For the 600 single family
residential 1 meter size customers, they would pay the
new rate of $8.64 if approved. Commissioner Monaghan
said if the 1 meter is commercial they will pay
$21.60. Chairman Haynie stated it is not an increase in
the published rate. Commissioner Monaghan said he was
told the increase on single family residential of 8% is
only worth $51,000. He thinks it is a regressive
increase. Commissioner Monaghan thinks Metro can save
$51,000. Chairman Haynie referenced #2 of the hand-out
from Commissioner Monaghan. In the hand-out
Commissioner Monaghan said Metro has favorable $73,000
revenue versus expense, but in year-to-date sewer
service charges Metro is lower than year-to-date of last
fiscal year. The sewer service income is static after
an 8% increase. Commissioner Monaghan said it is only
8% of half of the year. Manager Coleman said this
compares this year to date to last year to date and
there should be an 8% difference. Chairman Haynie said
actually the amount is less; it is a negative $140,000
variance. Commissioner Monaghan said Metro is raising
these rates not only to rehab the old system, but for a
real aggressive expansion. Commissioner Monaghan does
not think the revenue for expansion should come from a
current rate payer. Manager Coleman said this is not an
expansion at all. Commissioner Monaghan responded sure
it is; $40 million on a waste treatment plant. Manager
Coleman stated Wilson Creek will still be a 12 million
gallon a day plant after the expansion. He said the
expansion is to meet new regulations. Commissioner
Monaghan said the $40 million for the plant should come
from the base rate on low income customers. Chairman
Haynie said it will come from all customers.
Commissioner Monaghan said he thinks Metro could make up
the differences and keep the low income households at
$8. Commissioner Hancock said Mr. Parker said if Metro
did not raise the rates at 8% across the board; the
volumetric rate would have to increase to 11%.
Commissioner Monaghan said no that is if Metro did not
increase the base meter rate for the other meter sizes.
Commissioner Monaghan is just talking about single
family residential meter size. Mr. Parker said that
goes back to his original concern. He said whatever
happens to the 5/8 meter charge affects all of the
charges. Metro cannot just pick and choose which ones
they want to increase. Commissioner Monaghan wanted to
know why. Mr. Parker said Metro set-up in the rate
structure was an equitable incrementing of the base
charges by water meter size based on standards from AWWA.
If Metro all of a sudden says they are going to hold the
5/8 meter at a certain amount and increase everyone
else then they are getting away from the ERU factoring
that has been set-up based on the AWWA. That is where
Metro can start getting into areas where Metro is
equitable now, but severely moving away from that equity
to try and support (subsidize) low income. Mr. Parker
said utilities should not do that; the utilities should
have an equitable rate and it should not be a social
program. Commissioner Monaghan said he does not get
where Mr. Parker gets subsidizing low income. Mr.
Parker responded Metro cannot hold the 5/8 meters at $8
and increase the other meter sizes. Commissioner
Monaghan said the other meter sizes are arbitrary. Mr.
Parker responded the other sizes are not arbitrary; they
are based on AWWA meter equivalency factors.
Commissioner Monaghan said he knows. Mr. Parker said
they are tied to the $8; whatever that 5/8 is, all of
the other meter sizes are adjusted base on that.
Commissioner Burke asked for an explanation on how the
$51,000 was reached. Commissioner Monaghan responded
that is the 8% on the single family residential. He
said it is $.64 times per year. Commissioner Burke said
13,000 (number of customers) times $.64 (amount of
increase) equals $8,320 times 6 months equals $49,920.
Commissioner Monaghan inquired if there are any legal
resistances. Mr. Hemphill said that is what he thought
Mr. Parker was leading to. Mr. Parker said he is trying
to make sure Metros rate structure is set-up in a
manner so if they are challenged they would have plenty
of documented support. Commissioner Watts asked if the
base rate is something that Metro can vote on yearly.
Chairman Haynie said the intent and discussion has been
that Metro will have to vote on the rates every year.
Commissioner Monaghan said mathematically the amounts
are right, but wanted to know if Metro could round off
to the nearest dollar. Chairman Haynie said Metro can
do that. Mr. Parker said it would also depend on
whether Metro rounds; down or up. He said Metro will
still need to make up the amount. Mr. Parker used the
analogy of a balloon. If Metro was to shrink it at one
end; it expands at the other end. Metro will have to
make up the money somewhere else. Metro has assumed 8%
across the board, because they need 8% more in total
revenue. Mr. Parker said if Metro is going to change
one component differently than the other, if one is less
than an 8% increase the other one will have to be more;
to generate the total 8% more revenue. Commissioner
Monaghan said Metro could not spend as much. He said
Metro could increase the Transmission Fee by $50.
Chairman Haynie said Commissioner Monaghan is still
getting away from the argument about equity among the
rate payer. Commissioner Monaghan said there are
utilities that have low income recognized. Mr. Parker
said correct, but it is not typically the utility that
supports that; it is the general fund that has a social
program to help the low income customers pay their
utility bill. He said the low income customers do not
get a lesser utility bill; they get support from the
general fund to pay their utility bill. Commissioner
Monaghan wanted to know from whose general fund.
Commissioner Hancock responded the City. Commissioner
Monaghan asked if it is for a City owned utility. Mr.
Parker responded yes. Chairman Haynie said as opposed
to a stand alone and Metro is a stand alone utility.
Commissioner Monaghan asked if Metro only charged $8 for
the single family residential and Metro increases all
other by 8% would that be illegal. Mr. Parker responded
it is not illegal; it becomes more of a situation where
Metro is getting away from the equity structure that
Metro adopted in the rate study. Manager Coleman noted
it would be less defensible if Metro was challenged by a
lawyer, an industry or any group of users.
Commissioner Monaghan made a
motion to keep the single family residential rate at $8;
Commissioner Watts seconded. Commissioners Monaghan and
Watts voted in favor of the motion. Commissioners Hancock,
Smith, Burke and Haynie opposed the motion. The motion was
not passed.
Commissioner Monaghan made a
motion to reconsider the cap amount; Commissioner Smith
seconded; and the motion was unanimously approved.
Commissioner Hancock made a
motion to adopt the proposed rates as published in the
newspaper except for Metro combining the 5/8 and 1 single
family residential users in the same class of $8.64;
Commissioner Watts seconded, the motion was approved.
Commissioner Monaghan voted no.
VII.
Commissioner Hancock asked if Mr. Parker had
additional information on the proposed decrease of 4 REUs to
3 REUs. Mr. Martin said from 400 gallons per REU which is
what Metro presently has to 300 gallons. Mr. Parker said
the Capacity Fees are too low based on capital cost.
Commissioner Hancock said if Metro went to 3 REUs they could
end up with more capacity at the plants. Mr. Parker said
the way Metro would want to structure the Capacity Fee is so
they are recovering the actual cost per gallon to reserve
that capacity. He said however the Capacity Fee is
structure it still needs to result in an equitable structure
based on the level of service standard. Commissioner Burke
said it is DHEC mandated on whether Metro uses 3 or 4 REUs.
VIII.
With no further business, the meeting was adjourned.
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