Minutes: June 16, 2016

Call to Order

The regular meeting of the Vernon Township Municipal Utilities Authority (VTMUA) of the Township of Vernon was convened at 7:00 p.m. on Thursday, May 19, 2016 in the Vernon Municipal Center, 21 Church Street, Vernon, New Jersey.

Statement of Compliance

Adequate notice of this meeting had been provided to the public and the press on February 18, 2016 and was posted on the bulletin board in the municipal building in accordance with the Open Public Meetings Act, N.J.S.A. 10:4-6.

Roll Call

Thomas BuchneyA
Gloria GalloP
Thomas McClachrieP
Edward SnookP
Joseph TadrickP
Edward SegerP
Vincent ZinnoP

Roll Call of Professionals

Attorney Richard Wenner, Engineer Ceren Aralp, Auditor Charles Ferraioli, and Executive Director John Scerbo were present.

1. Open Meeting for Public Comment

Vincent Zinno moved to open the meeting to the public.
Edward Seger seconded the motion.
All were in favor.
The meeting was opened to the public.

Robert Constantine, quartermaster of the VFW Post 8441, came forward and invited the VTMUA commissioners to go to the VFW post to check the water meter they installed. He wants the VTMUA to reclassify the use of the VFW post and lower the EDU count, he said.

Christa Gerry of Vernon read a prepared statement in which she cited biblical principles and allegiance to God. She said she has been accused of having a political agenda but her only purpose is to be an advocate for the veterans. She said her intention represents a moral act to promote the welfare of the veterans. She said the veterans do a wonderful service for the Vernon community and asked the VTMUA to exempt the VFW from the requirement of sewer connection fees.

2. Close the Meeting for Public Comment

Edward Seger moved to close the meeting to the public.
Gloria Gallo seconded the motion.
All were in favor.
The public portion of the meeting was closed.

3. Consent Agenda

Resolution 16-39: Payment of June Bills

Vincent Zinno moved to pay the May 2016 bills.
Edward Seger seconded the motion.

Discussion: None

Roll Call Vote:
Ayes: Gloria Gallo, Edward Seger, Vincent Zinno, Joseph Tadrick, and Edward Snook
Nays: Thomas McClachrie

4. Approval of Minutes

May 19, 2016 Regular Meeting

Edward Seger moved to approve the May 19, 2016 regular meeting minutes.
Vincent Zinno seconded the motion.

Discussion: Thomas McClachrie said some comments he made at the May 19 meeting were not included in the minutes. Recording Secretary Jessi Paladini reiterated that VTMUA attorney Richard Wenner advised the minutes need only include official actions taken. Mr. McClachrie also questioned the accuracy of the VFW stating at the May meeting they felt the assessment of two EDUs was a fair amount. The recording secretary confirmed it was accurate.

Roll Call Vote:
Ayes: Gloria Gallo, Thomas McClachrie, Edward Seger, Joseph Tadrick, Vincent Zinno, and Edward Snook
Nays: None

5. Receipt and Filing of Correspondence

No Correspondence

6. Other Resolutions

There were no other resolutions.

7. Attorney’s Report

Attorney Richard Wenner discussed the research concerning the VFW. He said in 2013, the VFW applied for its sewer service allocation and identified the banquet facility as having 90 seats and the lounge area having 20 seats. Based on the regulations promulgated by the DEP, it was considered a banquet facility. Since then the VFW has stated that the EDUs being assessed by the VTMUA are disproportionate to the actual usage. Mr. Wenner said the problem is the VTMUA has to be uniform in how it classifies its users. There was discussion at the last meeting about exemptions, he said, but under 14B:22.2 they can consider two classes for exemptions. The VTMUA cannot create a class other than those in the regulations. Installing a meter on the well and suggesting a lower EDU cannot be the basis of the VTMUA considering such a request, as other users could then request the same thing and it could open a “Pandora’s Box” in terms of keeping uniformity, the attorney advised. He said the VFW has not requested a change in classification but has requested the lowering of the EDU count. Mr. Wenner advised that the VFW request a change in classification to something that more closely fits the usage other than a banquet hall. The regulations would permit a change in classification, but the VFW would have to initiate that request and resubmit an application and come back with a new proposed use that better fits the facility and also submit documentation to support that. The VTMUA would then have to approve the new classification.

Thomas McClachrie asked how the VTMUA could justify waiving the connection fees for the township and for Mountain Creek. The Mountain Creek fees would amount to $3.7 million, he said.

Mr. Wenner said in looking at exemptions, other than for those aged 65 years or older, veterans, or the disabled, the only other allowable exemption would be for the municipality itself and its political subdivisions. He said the Vernon Township Council crafted and agreed to the Mountain Creek exemption. He said the VMUA had no choice because the governing body contracted it with Mountain Creek. He said the VTMUA has to abide by whatever contract the council has with Mountain Creek.

Executive Director John Scerbo stated that the VFW already applied for and received a hardship payment plan from both the VTMUA and from the SCMUA. He said he is still waiting for VFW Post Commander Jim Davis to come in to fill out the paperwork to complete the hardship plan, which the VTMUA had approved last year. He said he was expecting the VFW to come in by June 1 to complete the paperwork for the hardship plan.

Mr. Wenner also stated letters have been sent to all unit owners in a specific section of Great Gorge Village alerting them there may be an illegal unauthorized connection to the sewer system from one of the condos and has requested it be disconnected by the unit owner that made the illegal connection.

8. Auditor’s Report

No report

9. Engineer’s Report

Engineer Ceren Aralp reported the VTMUA received an application from one new business—Taco Bell Restaurant. There will be 40 seats in the facility and using the 15 gallons per day, per seat formula for a fast food establishment, she recommends 2.5 EDUs for Taco Bell. She does not recommend issuing a building permit yet, as she is still discussing the drawing and connection plans with the applicant’s engineer.

Vincent Zinno moved to approve the Taco Bell application for 2.5 EDUs.
Edward Seger seconded the motion.

Discussion: Thomas McClachrie said the EDU count seemed light. Ceren Aralp and Attorney Richard Wenner said the EDU count is based on the regulations for fast food restaurants, which are different from full-service restaurants.

Roll Call Vote:
Ayes: Gloria Gallo, Edward Seger, Joseph Tadrick, Vincent Zinno, and Edward Snook
Nays: Thomas McClachrie

10. Executive Director’s Report

Executive Director John Scerbo reported he receiving a check from Comet Management for remediation of a clogged sewer pipe.

He also reported that all of the facilities currently connected to the sewer system that have grease traps have been registered and most have already been inspected.

He also reported receiving an invitation from the Department of Community Affairs for a June 29 seminar for the SCB Grants. He and Ceren Aralp will be attending this grant seminar.

11. Commissioners’ Comments

Vincent Zinno said without the study of the expansion of the sewer system moving forward at this time he would like to authorize the auditor to do a financial analysis of where the EDU rate is going to be over the next five years if no action is taken. It would be better to prepare the public with a five-year plan if there is no change to the VTMUA’s financial status, he said. Chairman Edward Snook said such a financial analysis would be beneficial with the planning of next year’s budget coming up. Vincent Zinno said he would like to amend his request to look further to the 2023 date when the SCMUA payment increases.

Edward Seger thanked the professional staff for working with the VFW. He also asked what is the timeframe for expansion if it were started right away. How long would a study take?

Ceren Aralp said it is a process of a minimum of three years. The first step would be to go to the county and then to the DEP to get the expanded area approved. That process itself takes a minimum of 6-12 months. Once the DEP gives approval, the VTMUA would have to analyze exactly where the sewer service area would be expanded. The next step would be funding, and the VTMUA or the township council would have to go to state funding sources. When they are ready to go to the funding sources, they will need to have a preliminary design and environmental studies.

Gloria Gallo asked if it wouldn’t be prudent to get started now. Ceren Aralp said the VTMUA cannot go to the county or to the DEP without council approval.

John Scerbo said part of the application for expansion requires a resolution from the township council.

Joseph Tadrick asked for clarification that the approximate two-year timeframe estimation would not even begin until the council gives its approval by resolution. Ceren Aralp sad that is correct.

Thomas McClachrie said at any point the VTMUA could go ahead and do a point expansion, not a service area expansion, and apply to the DEP to do a certain neighborhood. If the VTMUA does a wastewater management plan amendment, however, it would take another three years.

Charles Ferraioli said if the VTMUA has council and DEP approval, the financing could be obtained within a couple of months, but they would not get funding with the DEP’s approval.

John Scerbo said at a meeting he and Ceren Aralp attended last year for the trust fund, they indicated there was an excellent opportunity for monies to be available because there was an influx of funds from the FEMA monies for Hurricane Sandy. As a result, in order to get those funds producing end-result products, they now have a rolling application process and they also indicated there was an opportunity for forgiveness of a portion of the funding. Instead of having to pay back 100%, the interest rate is going to be against a lower percentage, with approximately 25% of the funding forgiven. He said they should take advantage of those funds as early as they possibly could because eventually everyone is going to get on line for funding.

Charles Ferraioli said he is doing an application this week for one of his clients, who will likely get the funding within one month.

Chairman Edward Snook stated the DEP would not necessarily approve entire lots and blocks for expansion but would scale back. Ceren Aralp agreed.

Joseph Tadrick asked if individuals not wanting to be in the sewer service area could argue to the DEP that they want those lots removed from the expansion area. Ms. Aralp said such opposition could be voiced during the public hearing. Ms. Aralp said the DEP has the authority to modify and change the proposed expansion areas.

Thomas McClachrie asked when the 2013 expansion the VTMUA had asked for would be approved. Ms. Aralp said the VTMUA had not asked for a sewer expansion but was waiting for the finalization of the wastewater management plan that has been going on between the township, county, and DEP for about ten years. She said they are aiming to complete it this year.

Vincent Zinno said the VTMUA has an obligation to the SCMUA for 465,000 gallons. The expansion has to cover at least that portion of it for a break-even point in gallonage, he said. Full capacity in the system is 645,000 gallons. He said it would be better to include a larger expansion area because the DEP will inevitably scale down whatever area the VTMUA requests. Rate stabilization will occur for the VTMUA at about 645,00 gallons daily he said. Without that there would be a significant increase for users. A five-year plan trying to get all approvals for an expansion, starting this year, would be a very aggressive plan he added. He said it is important to educate current VTMUA users on what is happening and why they will see increases. Thomas McClachrie agreed the users need to know what increases to expect.

Joseph Tadrick asked if the VTMUA goes ahead with the first step and gets DEP approval for an area of expansion and they do further research before putting a shovel into the ground and find out it would be too expensive, can they stop the project at that time? Ceren Aralp said they could. If the council does not approve the expense, the project would not go forward. Mr. Tadrick said he does not understand the logic of some council members who say they cannot go forward with the study for expansion until someone is ready to put a shovel into the ground and they cannot go forward to even decide if the shovel is ever going to get into the ground without seeing the results of the expansion study. He said the users come to the VTMUA and rightfully so complain, but maybe they should be going to the council meetings instead.

Thomas McClachrie said Joseph Tadrick makes a good point. They have to have some sort of report that gives them the numbers and they need the scenarios that could occur if they increase the debt and the impact it has on users of the system. They need a basic outline of what they are currently indebted for and what they are proposing to pay.

Gloria Gallo said they know that if they do not expand, the rates are just going to continue to rise for the users, and that is the bottom line. She said it is also important to know what the future would look like without the expansion.

Auditor Charles Ferraioli said he would do a ten-year projection and he would run it with the debt service and the 60% contribution from Mountain Creek. In doing the two projections, he will keep the EDU count exactly as it is currently and they can see the yearly deficit. Once that is done and they see the results, they can do other projections. He said, for example, it is most beneficial to the VTMUA to have a connection such as Taco Bell because it is not costing the VTMUA anything, as they do not have to do anything for the infrastructure and they have no additional costs to the SCMUA because it is within their capacity. When they start talking about the cost of expansion, at some point they have to come up with a number and divide that number of new EDUs they get. If it does not seem feasible, that would be when they would decide against expansion.

Vincent Zinno said without water, they are not going to have anyone come to put a business on Main Street or Church Street because they cannot get the fire suppression in. No franchise would come in and drill a well, he said.

John Scerbo said that if the numbers stay the way they are today, given the number of EDUs and the debt they have, they are looking at the need to double the EDUs to break even.

Thomas McClachrie said the administrative order agreement between the township and the NJDEP, dated 2005, consisted at that point of an assignment of 105,000 gallons per day from United Water, Black Creek, and the Appalachian Hotel. He said the township has not collected any money on that and asked if it should have. Commissioners questioned whether Mr. McClachrie’s information was correct. Edward Snook said the structures have not yet been built or have not been occupied. Mr. McClachrie said they should be billing them for unused and reserved capacities.

Thomas McClachrie said he would like the VTMUA to adopt two resolutions. He said he would like a resolution drafted for the next meting to switch to a meter-based system. The second resolution should stipulate that they are going to follow the NJDEP regulations pursuant to hardship cases such as in the event of bedrock, wetlands, railroads, super highways, and the like. Those hardship cases should not be required to connect or pay any fees, he said. He cited the example of the Brookside Florist property owners being charged for sewers where bedrock prevents them from connecting. Executive Director John Scerbo said Brookside is not being charged and never has been charged anything. Mr. Scerbo said Brookside had paid the connection fee, but when they found out about the existing situation of bedrock, the VTMUA gave them a waiver.

Mr. McClachrie also said he would like users to have a choice of installing a $200 meter on their system or paying by EDU. Auditor Charles Ferraioli said that would be a billing nightmare and additional personnel would need to be hired to do the billing. Meters would have to be read quarterly, and that would require additional personnel. Mr. McClachrie agreed it would be more work, but the VTMUA would then be able to justify the charge for what is being used and billed.

Edward Snook said there is not enough time to put a resolution for meters on the next agenda because they need to research all of the facts and costs involved before considering such a resolution. Attorney Richard Wenner said he could do some research and prepare some draft language for a resolution.

Chairman Snook summarized Thomas McClachrie’s requests for the two resolutions. He said the VTMUA has to request the resolutions by vote. He asked Attorney Wenner for the language of the resolutions.

Mr. Wenner said Mr. McClachrie’s first motion was to request a resolution be drafted for split billing for users. Commissioners said the resolution was premature without first researching it. Mr. Wenner suggested the VTMUA then authorize researching the matter. Mr. McClachrie would not agree to researching first and said he wants the resolution regardless. Joseph Tadrick said the VTMUA needs to first research what the meters would cost, who is going to pay for them, and who is going to install them. Charles Ferraioli said they would also have to obtain water meter data from United Water, now known as Suez.

Mr. Wenner said the second resolution is to incorporate the language from the NJDEP regarding hardship waivers from the requirement to connect to the sewers. Edward Snook said that language is already in the VTMUA’s rules and regulations. Mr. Wenner said it is not expressly spelled out like the NJDEP regulation.

Gloria Gallo moved to table the resolution regarding the meters and split billing until the attorney does further research.
Edward Seger seconded the motion.

Roll Call Vote:
Ayes: Gloria Gallo, Edward Seger, Joseph Tadrick, and Edward Snook
Nays: Thomas McClachrie and Vincent Zinno

Thomas McClachrie moved to provide a resolution at the next meeting to incorporate into the rules and regulations of the VTMUA the NJDEP language regarding hardship cases that would exempt connection to the sewers.
Edward Seger seconded the motion.

Roll Call Vote:
Ayes: Gloria Gallo, Tom McClachrie, Edward Seger, and Edward Snook
Nays: Vincent Zinno

Thomas McClachrie also stated that the VTMUA should amend its regulations to permit users at their own volition if they choose to meter their connections so they can come up with the actual amount of usage on which to base their connection fees. Vincent Zinno said they should first wait until the attorney researches the use of meters and a split or dual billing system before considering such an amendment and the VTMUA first considers that resolution before acting on Mr. McClachrie’s suggestion.

12. Chairman’s Comments

Chairman Edward Snook said the VTMUA would work with the VFW and their professional staff the best they can to come to a conclusion.

John Scerbo asked which commissioners would be attending the July meeting so they will know if they are going to have a quorum since some people might be on vacation during the month. He asked the commissioners to let him know as soon as possible.

Adjournment

Chairman Snook called for a motion to adjourn.
Vincent Zinno moved to adjourn the meeting at 8:26 p.m.
Gloria Gallo seconded the motion.
All were in favor.
The meeting was adjourned at 8:26 p.m.

The next meeting of the VTMUA will be on July 21, 2016 at 7 p.m.

Transcribed and submitted by Jessica Paladini
Vernon Township MUA Secretary