CITY OF FROSTBURG

FEBRUARY 2007 COUNCIL MEETING

Meeting called to order by Mayor Bond, who then led the Pledge of Allegiance. 

The invocation was rendered by Commissioner John Ralston.

Roll Call.  Present: Commissioner John Ralston, Commissioner Richard Weimer, Commissioner Doug Lemmert, Commissioner Susan Keller, and Mayor Arthur Bond.

Motion by Commissioner Ralston, seconded by Commissioner Weimer, that the Minutes of the December 14, 2006 Work Session be accepted.  Motion carried unanimously.

Mayor Bond introduced Mr. Thomas Simmons, of the Woda Development Group, who discussed a proposal for the Braddock Green Senior Housing Project.  Mr. Simmons introduced David Cooper, one of the principals of the company.  He reported that this is a family business, and we have completed over 60 housing communities with a mixture of single family, multi-family, senior rehab facilities, and historic rehab in five states from Ohio, West Virginia, Pennsylvania, Michigan and Kentucky. The Braddock Green Senior Housing Project would be a fifty unit senior community for those 55 and older.  The site is located on Braddock and Midlothian Road, and is a 9.2 acre site on the corner.  It would be one story with a mixture of one bedroom units, two bedroom units, and two bedrooms with a den. We intend to finance the property with two primary sources. One source is a federal tax credit.  We have submitted an application to the State of Maryland, and they are all due March 21st.  The second source would be a conventional bank loan on the property. The tax credit allows us to build a much nicer unit than if we used all conventional financing.  In exchange for the tax credit, we agree to rent the apartments to those who have incomes at or below 60% of the area median income.  For this county, we would expect to rent to senior individuals and couples with incomes between $18,000 to $30,000.  We are working with a market analyst to establish the rent, but we expect it to be in the $400 to $500 per month range.  This is very competitive and we will find out in July whether or not we got the tax credits. We would then work through all the processes, and hope to start construction in early spring 2008.  In order to apply for the tax credit in Maryland, one requirement is that we must have local support that takes the form of some kind of local contribution to the proposed development.  We are asking for some concessions in the form of tap fees and other fees that would be payable to you if we are able to move forward.
Mayor Bond stated he is impressed with the fact that the Woda Group has been in business for 35 years and have never sold a property.  Mr. Cooper stated they build them, manage them, and stay indefinitely. We don’t like to develop where we can’t support the property in terms of nearby resources for management. From the construction standpoint, we would be the general contractor and would have a superintendent who is on our payroll.  We then try to sub-contract all the work and most of the materials locally.  We get most lumber packages from 84 Lumber, and the only trade that we actually perform ourselves is the plumbing.  The carpenters and painters we try to bid out locally and work under our superintendent. Mr. Cooper noted that they are very sensitive to the single family neighborhoods to the south of the property.  We leave as many trees as possible and add additional trees as a buffer. 
Motion by Commissioner Weimer, seconded by Commissioner Ralston, to adopt Resolution2007-07, which Authorizes a Letter in Support of the Braddock’s Green Senior Housing Project and Providing for Waived or Reduced Permitting Fees. There being no public comment, the Motion was then carried unanimously. 

Mr. Kirby then opened a Public Hearing on the Water Rate Proposals.  He reminded those wishing to speak to please come to the microphones.  The benchmarks the Mayor and Council used to develop new rates were goals that they provided to staff. The rates must address all the losses and increased costs forced on the city residents by the PSC order.  He reported that the PSC has the authority over the rates between the city and the county under state law.  Every effort will be made to create new rates that protect the average homeowner and small business as much as possible.  The new rates will eliminate subsidies to the Water Fund from the Corporate Fund and no other city programs or service will be affected.  The city will not close playgrounds, reduce police patrols, or snowplowing to transfer funds from these programs to the Water Fund.  The other funds are self-sustaining, and now the Water Fund will be also.  Last week, the Mayor and Council selected two proposals to present to the citizens for comment.  The first is a three tiered schedule. In this, you will note 0-30,000 would be at $3.35 per 1,000 gallons; 30,000 to 300,000 would be $5.80 per 1,000, and over 300,000 would be $8.00 per 1,000. We also have a number of homes that we serve that are not county customers, and they would also be at $8.00. We looked at advantages and disadvantages, and customers are more familiar with these levels.  It is an ascending scale and roughly the same structure as the current rate. If you use 31,000 gallons of water you are charged for the higher rate which today is $3.55 for all 31,000 gallons.  In the ascending scale, the first 30,000 would be at the lower rate and only the 1,000 would be at the higher rate.  In some cases, it may reduce the sewer cost over the current rate schedule.  The disadvantage is that it compared to the two tiered schedule it comes at a higher cost to the majority of customers at $3.55 per 1,000. 

Mr. Kirby stated that they looked at a flat rate for everybody regardless of the amount of water used.  That would have meant that residents would pay substantially more.  The two tier schedule and the most equitable is 0-50,000 gallons at $2.95 per 1,000.  The rate for over 50,000 gallons would be $7.50 per 1,000.  If you use 51,000 gallons, the first 50,000 would be charged at the lower rate and the 1,000 gallons would be charged at the higher rate.  The customers that are not county customers would remain at $8.00.  The current average residential rate is $2.29 and it would go to $2.95.  The advantages and disadvantages compared to the three tiers, the two tiers provides a lower cost to 97% of our customers, who would fall in the 50,000 gallon range or below. It minimizes the financial impact on those who can least afford the increased cost.

At Tuesday’s Public Hearing, two letters were submitted for the record. One was from a disabled resident on a fixed income, and he was concerned about managing the increased cost.  For customers using between 30,000 and 50,000 gallons you actually have a lower rate, and in some cases, it reduces sewer cost over the current rate.  The disadvantages are that it has a negative impact on customers using between 150,000 and 500,000 gallons of water compared to the 3 tier schedule, and customers are not familiar with the 2 tier rate schedule.  Mr. Kirby provided examples of family consumption and also that of a customer in Eckhart.  The sewer rates will be changed strictly to the usage of your water.  They Mayor and Council want a true ascending scale on sewer rates.  Therefore, if you use over the benchmark you pay the lower rate and only the portion above the benchmark would be the higher rate. In the three tiers, our revenue requirement for sewer is $1,223,000. The projected rates at 0-30,000 gallons would be $5.00; 30,000 to 300,000 would be $7.75, over 300,000 gallons would be $11.25.  On the two tier 0-50,000 gallons $4.60 per 1,000, and over 50,000 $9.75 per 1,000. 

The PSC set the rate for county customers at $2.71 retroactive to July 1, 2006.  The order was based upon our fiscal year 2005 expenses, so all increased costs for the two fiscal years since then have to be paid only by city residents.  The city may re-evaluate only the portion of water cost to be paid by the county once every three years.  Implementing the PSC order has three impacts on the Water Fund.  1) direct loss of revenue; 2) increased costs from fiscal year 2005 to this fiscal year comes to $101,538.00;  3) the Corporate Fund has been subsidizing the Water Fund for several years, the current subsidy for this year is expected to be $104,445. The Mayor and Council wish to make the Water Fund self sufficient; however this is not related to the PSC Order.  Mr. Kirby then pointed out various things being done by the city.  The water Department has been operating with one less position since December, and it is not our intention to fill that position.  All city employees are paid less than their peers with Allegany County or the Cumberland.  The contract of MES for operation of the Filtration Plant underwent review and as a result of meeting with MES they offered a $10,000 savings that is underway now and beginning July 1, 2007.  Workers from all departments are supporting each other in times of emergency.  Mayor Bond then asked for public comment.  There being none, he asked for a show of hands in favor of the two-tier proposal and those in favor of the three-tier.   
There being no further discussion, the Public Hearing was closed.

Motion by Commissioner Ralston, seconded by Commissioner Weimer, to accept the Police and Fire Department Reports for the month of January. Motion carried unanimously.

Commissioner Weimer presented the Financial Report for the month of January, and moved that it be accepted. Motion seconded by Commissioner Ralston and carried unanimously.  He stated that the Mayor and Council will vote this evening on the new water and sewer rates, and we take input on citizen’s request for fiscal year 2008 budget.  The following schedule has been set for city department budget reviews:
Both meetings are scheduled from 1:00-3:00 p.m. and are open to the public.

Motion by Commissioner Lemmert, seconded by Commissioner Keller, to accept the Water and Recreation Departments Reports for the month of January. Motion carried unanimously.

Motion by Commissioner Keller, seconded by Commissioner Weimer, to accept the Street Department Report for the month of January.  Motion carried unanimously.

Motion by Commissioner Weimer, seconded by Commissioner Lemmert, to adopt Resolution 2007-08:  Approval of the Two-Tier Water Rate Schedule for the New Water Rates, Sewer Rates, and Other Related Policies.  Motion carried unanimously.
Mayor Bond recognized Commissioner Weimer for his hard work on the water rates.

Motion by Commissioner Ralston, seconded by Commissioner Keller, that Susan Eisel be re-appointed to the Frostburg Housing Authority Board for a five year term.  Motion carried unanimously.

Motion by Commissioner Ralston, seconded by Commissioner Lemmert to approve the request of Allegany County to provide water for a forty (40) home extension in Clarysville.  Mayor Bond felt that due to some uncertainties in the information we received from Allegany County, we should take some time to review it and discuss it with them. 
Motion by Commissioner Weimer to table this issue to give the city the opportunity to review the agreement with Allegany County as it pertains to expanding our water system.  He stated that he would like to be informed of the county’s plan of development in the Clarysville area, the location of the homes, and their planned extension of water to adjacent areas such as the Burton Trailer Park.  The motion was then seconded by Commissioner Lemmert.  There being no public comment, the motion was carried unanimously to table the request.  Commissioner Ralston agreed with Commissioner Weimer, and questioned the consumption per the agreement.  Mr. Kirby stated there have been a number of months that they have gone over the consumption.  He noted that he would prepare a letter to the county in the morning.

Mr. Kirby reported on the Lyric Project, and stated that Michael Joy signed the option to purchase on February 5, 2007, and Mayor Bond signed it the next day.  We are optimistically awaiting their study period and hopefully an action that will result in a title transfer and closing. 

Mr. Kirby stated that we have recently heard about the Wal-Mart Project and we wanted to reiterate the Mayor and Council’s support for traditional Main Street business development.  In the Mayor and Council’s binders this evening is a listing of all the efforts that the city has been involved with in supporting Main Street business development. 

Candace Sandvick, Director of Finance, stated that budget requests will be taken at this meeting and at next month’s meeting.  She noted that requests have been received from two organizations.   Hearing no budget requests, she then explained Resolution 2007-06.  Motion by Commissioner Weimer, seconded by Commissioner Ralston, to adopt Resolution 2007-06: Authorize a Property Tax Credit for Property Owned by the Frostburg Lion’s Club.  Motion carried unanimously.

Chris Hovatter, Director of Public Works, reported that the Broadway Combined Sewer Overflow Project is about 20% complete.  The North Water Street CSO Project went out to bid. It was advertised on February 12, 2007. A pre-bid is slated for February 27th, with a bid opening scheduled for March 13, 2007 at 10:00 a.m.

Richard Harris, Community Development Director, presented the Community Development Office’s report for the month of January.  He reported there is an RFP for the Rental Housing Inspection Program.  A pre-proposal meeting will be held tomorrow and the bids are due on the February 26, 2007.  A review committee will meet on March 5th and a recommendation should be presented to the Mayor and Council at the next meeting. 

Bob Flanigan, 27 Teaberry Lane, commended the officers of the Frostburg Police Department for their quick response to his residence on Tuesday.  The quick action of Chief William Evans, Lieutenant Kevin Grove, Sergeant George Kroll, were responsible for catching the burglar.  He requested that a letter thanking them for the quick action  be placed in their personnel files, and he also requested that the City send letters to the Maryland State Police, the Department of Natural Resources, and the State Fire Marshal’s Office thanking them for their response. 
Motion by Commissioner Ralston, seconded by Commissioner Weimer, that letters thanking Chief Evans, Lt. Gove, and Sergeant Kroll for their quick action and diligence be drafted with a copy placed in their personnel files, along with letters thanking the Maryland State Police, Frostburg State University Police, Department of Natural Resources, and the Maryland State Fire Marshal’s Office.  Motion carried unanimously.

Julie Crist, 1 University Drive, stated she currently manages Edgewood Commons, and she has a business background and her MBA from Drexel University.  She stated he is interested in starting a hotdog vending business on Main Street; however City Code, Article 6, Section 1 prevents her from doing so.  She presented a proposal for the business for the Mayor and Council’s review, and requested that the code be amended.  In her proposal, Ms. Crist made two valid points.  The Farmer’s Market currently sells fruits and vegetables on the sidewalk of Main Street, and during the annual Block Party for Frostburg State University, there are many venders that sell things as well. 
Mayor Bond thanked Ms. Crist and asked her to give her proposal to the City Administrator for review.  Somebody will get back to you as soon as possible.

Motion by Commissioner Ralston, seconded by Commissioner Weimer, that the meeting be adjourned.  Motion carried unanimously.


Arthur T. Bond, Mayor

John R. Kirby, Jr., City Administrator
 
 

City Seal
Take Me Home To Frostburg.