MINUTES OF DIMONDALE/WINDSOR SEWER BOARD REGULAR MEETING
May 17, 2007

7:00 p.m. Meeting called to order by Chairperson Chappell
Roll Call
Present:  Blair, Chappell, Marsh, Reznick, Slucter
Absent: none
Also Present: Denise Parisian, Village Manager; Art St. Clair, Township Supervisor; Tom Traciak, ACI Finance; Richard Robinson, Township Attorney; Mike Spitler, WWTP Operator; Betsy Kelly, Recording Secretary
Treasurer’s Report/Bills
Motion by Blair, second Reznick, to accept the treasurer’s report for May 17, 2007 as presented.  Motion carried.  Motion by Slucter, second Marsh, to approve payment of $21,854.15 for May 17, 2007 bills.  Motion carried.
Minutes
Motion by Reznick, second Marsh, to approve the minutes of the April 19, 2007 regular meeting as written.  Motion carried.
Open to the Public
No comments were received.
Superintendent’s Report
Spitler reported on the following:  Wolverine Engineers has begun the engineering for upgrading the U.V. system which will include installation of one full bank of lights and wiring for a second bank; and all previously reported pump repairs have been completed. 
Old Business
1.  Chappell provided copies of a letter he had previously written to sewer board members for their consideration regarding the Sewer Board’s role in representing the best interest of the system.                             
New Business    
1.  Chappell introduced Tom Traciak of ACI Finance to address the group regarding funding options.  Traciak explained that expansions can be financed either through millages, rates and charges, connection fees or special assessments noting that special assessments are the most secure and also the manner in which the Township has chosen to fund expansions to date.  He went on to state that the current relationship reflects the following conditions: the Village as the owner of the WWTP; the Township as the responsible party for the special assessment debt should defaults occur; and no contractual ability to set a higher rate for Township customers for recovering costs associated with overbuilt infrastructure.  Traciak advised against charging a ready-to-serve charge to anyone who is not currently physically connected to the system due to a potential “Bolt -v- Lansing” challenge and also stated that reassessing current districts would not be wise.  The group proceeded to discuss the definition of an REU.  Traciak expressed his understanding that the assessment, which is based on REUs for design purposes, confers a benefit to the property which is a right to service.  He continued that he does not believe that right must be preserved by “holding” the specific infrastructure improvement until such time as the property desires to connect as long as capacity is available when that time arrives.  Traciak also stated that the best way to get revenue into the plant is through new customers which in this case means treating the existing REUs as a transferrable commodity and capturing new development if given the opportunity.  Discussion turned toward utilizing the existing unused capacity for new development if REUs are not available for purchase from the assessment districts.  Slucter noted that calculating the future value of money can be difficult with many unknowns.  Traciak responded that future expansions would probably be funded through bonds not by building a savings account and paying for improvements up-front.  Traciak also stated that the Township should act as the broker for any REU transfers to prevent a black market situation.  Discussion followed regarding the value of an REU and establishing a set charge for connection to the system even in the case of a transfer.  Traciak stated that the jurisdiction can retain the difference between the purchase and sale prices.  Reznick questioned how other communities invest for the future value of money and Traciak provided the following formulas: current asset value ÷ current number of customers = current rate or potential replacement cost÷future customers X annual CPI increase = current rate.   Traciak surmised that future expansion would be funded by the unit needing the capacity.  He explained that tap fees will continue to go to the individual jurisdictions without a legal requirement to secure them for a specific purpose.  Parisian explained her misunderstanding that the sale of new REUs could possibly divert capital monies back into the plant because tap fees went into that fund prior to the relationship with the Township.  Traciak stated that it might be possible to place a charge on the transfer of REUs that would go to the waste water plant.  He explained that a debt surcharge could be added to user rates to finance larger capital improvements or repairs.  Parisian questioned what would happen if a failure occurred that exceeded available funds and Traciak responded that the cost would need to be incurred by the municipalities or the users.  Chappell questioned the advantage of establishing a sewer authority and Traciak noted that there would be very little usefulness in that type of change given the current sewer district formations and the agreement between the jurisdictions.  Traciak offered to email some information regarding authorities for the Board to consider.  The discussion returned to service for new developments.  Blair stated that there are only three ways for a new development to obtain REUs: from the Township, the Village or another property owner with REUs for sale because there is no “extra” capacity at the plant.  Slucter questioned why the Board was having this discussion when there is a proposal on the table from the Township for a transfer process to which the Village has not responded.  Reznick stated that the Village has met with their attorney and is still considering the issues.  

Motion by Reznick, second Marsh, to adjourn.  Motion carried at 9:12 p.m.