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HomeMy WebLinkAbout01/23/1990 COW minutes MINUTES COMMITI~EE OF THE WHOLE JANUARY 23, 1990 I ROLL CALL The meeting was called to order at 7:40 p.m. Present at the m~eting were: · ~ Mayor Gerald L Farley; Trustees Ralph Arthur, Mark Busse, T~mothy Corcoran, and George Van Geem Absent from the meetang were: Trustee Leo Floros and Theodore Wattenberg - Also present at the meeting were: Village Manager John Fulton Dixon, Assistant Village Manager M~chael Janouls, Finance Director Davad Jepson, Director of Pubhc Works Herbert Weeks and Water Superintendent Jerry McIntosh. Also present were three persons from the pnnt media II. MINUTES The Minutes of the Committee of the Whole meetang of January 9, 1990 were accepted and fried. III. CITIZENS TO BE HEARD ~ Mr. Joe Rohde; 317 North Wille Street, appeared before Committee members to voice his displeasure vath the manner in which a single-family home was being constructed in a lot located at 315 North Wille. Mr. Rohde alleged that mistakes were made in the pounng of the foundation which caused the foundation to s~t abnormally high compared to his residence. Mr. Rohde was fearful that with the severe grades on this adjacent lot would cause flooding on his property and that the height of the foundation would .have an adverse aesthetic impact on his property. Mr. Rohde requested that the Mayor and Board of Trustees stop any further construction on the building until these issues were resolved After extensive discussion among Committee members, there was a determination made to issue a Stop Work Order for a period of seven days so that the issues raised by Mr. Rohde could be resolved. The Village Manager was instructed to meet with Mr. Rohde and his engineers as soon as possible to resolve this matter. IV. DISCUSSION OF PRELIMINARY ACOUISITION FEASIBILITY FOR CHICAGO SUBURBAN WATER AND SEWER SYSTEM OF CITIZENS UTILITIES COMPANY Village Manager John Fulton Dixon reviewed with Committee members past efforts by the V~llage to purchase the Citizens Utilities water and sewer system in the northeast section of the Vdlage. Mr. D~xon reviewed the attempt by the Village to acquire the system in the mad '70s and specifically, the 1975 Study which placed a value on the system at that time Between the 1975 and 1990 studies, the cost of the system had increased by approximately $1.6 million Th~s seemingly small increase was due in large part to the fact that the cost of construction had kept pace with depreciation Mr. D~xon indicated that the Greeley and Hansen Study focused on the purchase of the C~tizens' system from a number of options including the purchase of the ,entire system or individual parts thereof. Other factors which may come into play when deciding the feasibility of acquisition included the impending arrangements between Citizens Utilities ~and the Vdlage of G16nwew for the purchase of Lake Michigan water, the status of the Prospect He:ghts system if it were disconnected from the Mount Prospect system and the effect of acquisition on the Village's own water system. Mr. Terry Hodnik, Engineer wath the firm of Greeley and Hansen, reviewed v~th Committee members the results of his report enmled, "Prehminary Acqmsition Feasibihty Study for Chicago Suburban Water and Sewer Systems of C~tizens Utilities Company." Mr. Hodnik indicated that the Greeley and Hansen report was modeled after, and relied on the basic data supphed in the 1975 report The Feasibility Study looked at several options for acqms~t~on including purchase of the ~ ' entire system or the purchase of any one or combination of three d~stinct sections ~ of the C~tizens' service area .... Mr. Hodrdk informed the Board'that the C~tizens' serwce area had an estimated annual average water use of, 1,897,000 gallons per day. In arrMng at a value for the system, Greeley and Hansen used the traditional "reproduction cost less depreciation" formula. This formula assumes all facilities being reconstructed at today's dollars with a depreciation factor based on the estimated remmmng life for each component part of the current system. Based upon this formula, Mr. Hodulk explained the following acquisition costs for each of the areas and the combined total. Reproduction Cost Less Acquisition Depreciation Option Water and Sewer Systems Area 1 $ 582,000 Areas l&2 $ 4,275,000 Areas 1,2&3 $12,695,000 A factor that the Board will have to consider in proceeding with acquisition is what deficiencies will be created to the remaining Citizens' system if the Mount Prospect portion is removed from it. These deficiencies, such as loss of storage facilities, pumping capacity, water sources, would have to be factored into the overall acquisition cost. The remaining portion of the Citizens' system would need to be made whole again so that it could operate as a stand-alone system Therefore, Mr. Hodnik indicated that it was prudent for the Village to acquire only essential aspects of the Citizens' system. For example, if the Village did not require the wells, storage or pumping stations in order to provide adequate service, then those components should not be acquired. Additionally, issues regarchng the handling of sanitary sewage from Prospect Heights would have to be resolved. Currently, samtary sewage from Prospect Heights is handled by lift stations located within Mount Prospect Another factor involved is the cost to bring the Citizens' facilities up to Mount Prospect standards Again, Mr. Hodnik presented reformation regarding the cost to each area and the combined total: Water System Improvement Costs Acquisition Ontion Imvrovement Cost , Area 1 $ 15,000 Areas l&2 $ 925,000 Areas 1,2,&3 $2,382,000 · Mr. Hodnik also indicated that approximately $350,000 would be required to rehabilitate two lift stations in the service area. Finally, Mr. Hodmk indicated that acquisition of all three sections of the Citizens Utilities' service area would create defioencies within the Mount Prospect system The Village's current system does not have the flow capacities or the pressure capabihtleS to deliver adequate supplies of water to the northern most reaches of the Village. Therefore, some internal system improvements may be necessary or, in the alternative, the Village would have to rely on the antaopated Lake Michigan water source through the Village of Glenview. In conclusion, Mr. Hodnik indicated that the total cost options for purchase of the water and sewer system vath necessary improvements to the Citizens' system and leaving out unnecessary facilities would cost in the area of: SUMMARY COSTS Total Cost Opinion Acquisition Water and Sewer Option ' -. , ~Option ~ Area 1 ~' $ 496,000 Areas 1&2 , . $ 4,314,000 Areas 1,2&3 $14,745,000 There was extensive discussion among Board members. ~ ~ Mayor Gerald Farley was concerned about the status of the Citizens' system in Prospect Heights and how Mount Prospect's purchase might affect serwce in Prospect Heights. Th~s issue would have to be determined through further discussions with Prospect Heights and further studies on the system. Mayor Farley also indicated that the value established by Greeley and Hansen should in no way be considered the final purchase price. The final purchase price would be established through negotiations and/or Court action. Trustee Ralph Arthur inchcated that he was pleased with the report overall. He also expressed concerns about the status of the Prospect Heights' system should the Village pursue acquisition. It was his feeling that the entire system should be acquired and not be approached in a piecemeal fashion. Finally, Trustee Arthur indicated that the Village should get firm cost figures and then go to residents in the area with a Referendum to determine their level of support. Trustee Timothy Coreoran asked Mr. Hodnik if he had any experience before the Illinois Commerce Commission. Mr. Hodmk said that he had not. 'Trustee Corcoran was also concerned about the ability of the Prospect Heights' system to function as a stand-along system. Finally, Trustee Corcoran inquired as to whether there were other ways to value the property and whether values had been assigned for such items as business good-will, legal, engineenng costs and other costs associated with an ongoing business -4- Trustee George Van Geem posed several questions regarding the methodology for establishing the value for the system. Trustee Van Geem inquired as to whether the $14,745,000 cost for the Citizens' system would be the same if the Village laid parallel lines. After some discussion, it was determined that it would cost approximately two and one-half times as much to lay parallel lines in an establish' residential area. The additaonal costs would be associated with restoration and the problems that would be encountered in dealing with the myriad of existing utilities already in the ground. Trustee Van Geem also indicated he felt there were two major issues at play here. One was water quality and the other was the cost of the water. If, in fact, a Lake Michigan water source was developed for Citizens, it appears that a large part of the problem would be resolved Trustee Van Geem felt that the more important issue was what the future rate trend would be for the Village and the Citizens' system. Finally, Trustee Van Geem inquired as to whether acquisition of the Citizens' service area would affect the Village's Class II fire rating. Mr. Dixon indicated that it would not. Trustee Mark Busse posed several questions regarding the affect such acquisition would have on the ability of the Mount Prospect system to provide adequate water to the balance of the Village. He also inquired as to what overall benefit the Village would receive if the system were purchased. Mr. D~xon indicated that benefits might include a larger customer base, the ability to expand Special Service Area #5 over a wider population; thus, lowering the cost to each resident and finally, there would be less complaints and follow-up on service calls and Citizens Utilities' rate cases. Several residents appeared before Committee members indicating their support for continued examination of this issue. All agreed that to be successful, residents would have to be fully informed about costs. ~ After further discussion, the Committee members directed the staff to: 1. _ Contact the City of Prospect Heights to determine the status of their preliminary efforts to acquire the Citizens' water system. 2. Contact the Village of Glenview and the City of Wflmette regarding their position on supplying Lake Michigan water to the Citizens' serwce area and what conditions, if any, would change should the Village step into Citizens' place. 3. To make contact with a law firm with the requisite expertise to handle these types of matters for the purposes of deterrmning what legal issues, if any, the Village might encounter. V. MANAGER'S REPORT 1. Mr. Dixon reviewed with Committee members a proposal to reduce the cost to residents for rehabilitation of the Prospect Meadows Samtary Sewer System. Because of the Build Illinois Grant the Village received as part of this project, the ~cost share for the Village and residents was reduced. By changing the formula, it was possible for some people to receive actual refunds while those on a payment plan have their overall obhgat~on reduced by several years. ~ The Vxllage Board approved this change 2. Mr. Dixon indicated that staff would be meeting with representatives from the Metropolitan Water Reclamation District on further discussions for development of Melas Park. 3. Mr. D~xon indicated that a meeting had been set for January 30 between members of the Village Board and Trustees for the Elk Grove Township Rural , Fire Protection D~strict. VI. ANY OTHER BUSINESS Trustee George Van Geem asked for a status report regarding Busse School. Mr. Dixon indicated that no substantive action has been taken yet and that Village staff was waiting for the Park D~strict to establish a new meeting date. Trustee Corcoran requested that the Board consider the~ adoption of a Recall Prows~on to the Village Code Trustee Corcoran indicated he felt this was a mechanism which was lacking m the current Code and would provide for more responsive representation of citizens. Trustee Corcoran indicated that this was a good t~me to consider such an xtem because there were no controversial issues pending before the Board Mayor Farley indicated that he would review the matter and seek legal counsel before deciding when to place this item on a future Committee of the Whole meeting Agenda VII ADJOURNMENT There being no other business to come before the Committee of the Whole, the meeting was adjourned at 10 08 p.m. Respectfully subnutted, MICHAEL E JANONIS Assistant Village Manager ME J/row -5-