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JANUARY 26, 2009
5:00 P.M.



Board Members Present: Fitzgerald A. Barnes, Dan W. Byers, Willie L. Gentry, Jr., Willie L. Harper, Richard A. Havasy, P.T. Spencer, Jr. and Jack T. Wright

Others Present: Dale Mullen, Interim County Administrator/County Attorney; Ernie McLeod, Deputy County Administrator; Jeremy Camp, Director of Community Development; Kevin Linhares, Director of Facilities Management; Bob Hardy, Director of Information Technology; Robert Dubé, Fire Chief; Jane Shelhorse, Director of Parks and Recreation; Sherry Vena, Director of Human Resources; Amanda Reidelbach, Office Manager, Administration; Zuwana Morgan, Deputy Clerk; April Lowe, Revenue Recovery Administrator and Brittany Shupe, Records Clerk
FLUVANNA  COUNTY CALL TO ORDER

Chairman Moss called the January 26, 2009 Joint Meeting to order for the Fluvanna County Board of Supervisors at 2:00 p.m.

LOUISA COUNTY CALL TO ORDER


Chairman Harper called the January 26, 2009 Joint Meeting to order for the Louisa County Board of Supervisors at 200 p.m.  

Mr. Harper said he would like to thank all the citizens for coming out and especially would like thank the Fluvanna Board of Supervisors for agreeing to have the meeting.  Mr. Harper said the Louisa Board was looking forward to the progress that would take place at the meeting.  Mr. Harper said he was hoping the two Boards would be able to move forward with this project.

Mr. Moss thanked the Louisa County Board for asking him the Chair the Joint Meeting.  Mr. Moss welcomed the Press and the citizens.  Mr. Moss had the Board Members introduce themselves.

*Mr. Allbaugh arrived at 2:04 p.m.

Mr. Moss said the purpose the meeting was for the two Boards to reach a mutual  agreement on a tentative and suggested course of action to get the project started.  Mr. Moss said hopefully at the end of the meeting there would be a consensus on the establishment of a Joint Authority to run the program and the make up of the Authority.  Mr. Moss stated at that point each Board would go back to their county and hold a public hearing and take official action.

* Ms. Booker arrived at 2:06
* Mr. Gentry arrived at 2:06

Mr. Moss state
d Fluvanna County had sent a letter to their Congressional Delegation listing the James River project as one of their highest stimulus package priorities.  Mr. Moss said he understood Louisa had done the same.

Mr. Moss said Louisa and Fluvanna signed a Memo
randum of Understanding to share the cost of this project in 2003.  Mr. Moss stated only one of the current Fluvanna County Supervisors was on the Board at the adoption of the MOU.   Mr. Moss said Louisa County only had three current Supervisors that were on the Board at the time.  Mr. Moss said the majority of both Boards still continued to support the MOU.

BACKGROUND TIMMONS GROUP

Mr. Hines gave a background and an overview. Mr. Hines said the Timmons Group was hired to evaluate the most feasible & cost effective way to provide water from the James River to supply the Zion Crossroads Area, DOC and FUSD,  the size of the system was to deliver 3 million gallons day (MGD) initially and up to 6 MGD for the system, to minimize initial costs of infrastructure, to best utilize project partners, to respect the current and proposed Comprehensive Plan within Fluvanna County, and he said the MOU between Fluvanna & Louisa Counties was dated March 2003.

*Mr. Barnes arrived at 2:09 p.m.
*Mr. Spencer arrived at 2:10 p.m.

Mr. Hines went over the steps of the formation of
an Authority; there needed to be authorization of public hearings by both Board of Supervisors, the public hearing must be advertised and held.  Mr. Hines said the public hearing must be advertised at least once, advertised not less than 30 days prior and the public hearing could be joint or separate.  Mr. Hines said at the public hearing each Board must adopt: a resolution or ordinance that created the Authority, Articles of Incorporation and each Board would appoint Authority Board Members.  Then the Articles of Incorporation would be forwarded to SCC for approval and the Authority could be established 60 90 days after authorization of public hearing.

Mr. Hines said according to Virginia Code Requirements - § 15.2-5113

for a Joint Authority Board the number of Board Members to be specified in Articles of Incorporation, not less than one member for each participating locality, not less than a total of five members, terms not to exceed four years and Board members can succeed themselves (can serve more than one term).

Mr. Hines stated from the feedback they had received from each county the Joint Authority Board should be at least six members, three from each county, each Board would appoint members from their localities.  Mr. Hines said Virginia Code allows for a Tiebreaker, if desired.

Mr. Hines said a potential schedule of events would be Boards Authorize Advertisement for public hearings in January 2009, advertise for public hearing in February 2009, public hearings & approval of Articles of Incorporation  in March 2009, Articles to SCC March 2009, SCC Approval in April or May 2009, surveying completion in Spring 2009, engineering design & easement acquisition in Summer 2009, start bidding
on pipeline work in Fall 2009, and project completion in two to three years.

Mr. Hines showed a map of the proposed routing.  Mr. Hines stated that the advantages for the recommended alternatives were; Fluvanna County owned the property, central to Fluvanna County, preserves “Rural Preservation” zones, drinking water pipeline runs through designated growth areas (Current & Proposed Comp Plans), maintains integrity of the Rte 15 corridor as a gateway to Palmyra, potential reservoir site on Pleasant Grove which could become a recreational asset/amenity for County residents & storage for the system and lowest capital costs per gallon of systems evaluated.

ROUTING

Mr. Moss said the recommended routing runs through Fluvanna County. Mr. Moss said there was a consensus on the Fluvanna Board that the connector  should be ran from the Pleasant Grove Water Treatment Plant and connect it to the Fork Union Sanitary District.  Mr. Moss said that would not be a shared expense but an expense of Fluvanna County.

Mr. Allbaugh said he thought because what was stated in number nine of the MOU
the expense should be shared.

Mr. Moss asked if  any of the Louisa Board Members had any thoughts on the recommended routing.

Mr. Harper asked what was the original route when the MOU was done.  Mr. Hines said a study
was done and if it came off of Route 649 property would have to be acquired with a reservoir or creek and that would run over Route 15 to the Zion Crossroads area.

Mr. Harper asked when MOU was done were lines going through Fork Union.  Mr. Hines said they were very close.

Mr. Allbaugh said they could certainly go back to that one but it would cost both counties a lot of money.  Mr. Allbaugh said he didnt know the exact figures but the recommended routing was a more cost effective way to reduce the entire cost.  Mr. Allbaugh said by Fluvanna changing the route to save both counties money they were now having to b
ear the cost for Fork Union.  

Mr. Moss said by
going straight up Route 15 Fluvanna would be paying the installation of  the pipe for the entire project, instead of sharing the ECTI for about 8 miles.

Mr. Hines said the ECTI line was close to 10 miles.

Mr. Harper asked Mr. Hines if he had a trade off number.  

Mr. Ott said it would be $58 million if the Plant was built down and around Fork Union.  Mr. Ott said it was little more complicated than that and as he understood there wasnt a current analysis to run it straight up Route 15.  Mr. Ott said it was $10 million more if it went through Fork Union and about $48 million total to put the line at Pleasant Grove and run the line down.  Mr. Ott said the Northeast/South west Corridor study that was done recommended not coming straight up Route 15.  Mr. Ott said Fluvanna would like to have Fork Union include in the plan but that would be about $10 million
more and $5 million each.  

Mr. Moss asked Mr. Hines how much would
FUSD connection cost.  Mr. Hines said to come through Fork Union was $3.8 million total, which would be $1.9 each.

Mr. Harper
asked what was the saving going to be with the recommended plan.  Mr. Hines approximately $10 million.  Mr. Hines stated if the plant was put in Fork Union Sanitary District there would be some engineering challenges with the water and pipes, the water would have to be cleaned up more which would bring the plant cost up.  Mr. Hines said some treatment would need to be done along the way and then a forth pressure zone would have to introduced into the system.

Mr. Harper said this was an interesting item
to put on the table and he didnt think this had ever been discussed.  Mr. Harper said number eight of the MOU stated “The counties will split the cost of the work equally, except for those lines that serve only one county.”

Mr. Spencer said he ha
d been involved since 1998 and there was no reason for Louisa to pay for anything going to Fork Union and he could not support that.  Mr. Spencer said the goal was to get the water up and what Fluvanna did with the water in their county was up to them.

Mr. Allbaugh said the water was coming through their county.  Mr. Allbaugh said he saw this a joint effect for economic development.

Mr. Spencer said there was already millions tied up at the sewage plant at Zion Crossroads and
Louisa was getting ready to spend another $8 million for sewage up there.  Mr. Spencer asked were they building a sewer plant or were they going to use Louisas. Mr. Allbaugh said they hadnt gotten that far yet.

Mr. Weaver said he thought the Boards needed to look into AquaVirginia.  Mr. Weaver said they had their own treatment plant and it might make it cheaper for everyone.  Mr. Weaver said the Boards needed to look
at alternatives.

Mr. Barnes said both counties need the water and there were some things that  could be traded off.  Mr. Barnes said the water tower could be share
d.  Mr. Barnes stated he would not be any part of a deal with Aqua Source.  Mr. Barnes said he was afraid of a private company failing in these economic times.  

Ms. Booker asked Mr. Barnes to explain the sharing the water tower.

Mr. Barnes said in the original agreement there was discussion about splitting the cost of the water tank at Zion Crossroads. Mr. Barnes said there may be some way to credit each other.  

Mr. Ott asked what was the cost of the water tower.  Mr. Bar Delk from the Louisa County Water Authority said $627,000.

Mr. Ott asked would the water tower become part of the wholesale system.  Mr. Ott said if the cost was going to shared that meant it was an wholesale asset.  Mr. Ott said if there was an authority that
it should be done that way and it should be put into the Joint Authority.  

Mr. Mullen said the water tank for pressure was something you had to own not get to own as part of the system.  Mr. Mullen said if they wanted it to be brought in as part of the Joint Authority, that could be considered.  Mr. Mullen said the $627,000 was for the tank alone not the piping.

Mr. Ott asked Mr. Hines would the tank in Louisa be part of the system.  Mr. Hines said it could be included.

Mr. Ott said was it including in the price given.  Mr. Hines said no it was not.
Mr. Ott asked was the system pressurized without the use of
the tank.  Mr. Hines said a situation could be created where that tank was used to pressurize the system or another tank could be put up.

Mr. Gooch asked could this tank take place of another tank. Mr. Hines said they would have to get more into it but it did have the elevation to provide pressure to the system.  Mr. Hines said it could work initially but given the demands you would probably want to put the other tank up as well.    

Mr. Moss asked what was the overall investment that the L
ouisa County Water Authority had put into the Zion Crossroads area.

Mr. Mullen said since FY 1999 Louisa spent approximately $9 million  and collected approximately $11 million in revenue.

Mr. Barnes said the
y thought it was prudent to make sure both localities wanted to work together to make this happen.  Mr. Barnes said to leave the details be worked out in a smaller group.  Mr. Moss agreed.

Mr. Harper said what was said today and going forward was what the two Boards were working with and the MOU was probably past its usefulness.

Mr. Wright said he thought the more things the counties could own jointly the less problems there would be.

ORGANIZATION

Mr. Hines said they evaluated several options; Sanitary District, Service District, Community Development Authority (CDA), Retail Service Authority and Joint Wholesale Authority.  Mr. Hines said the Joint Wholesale was the recommended authority.

*Mr. Barnes left meeting at 2:35

Mr. Hines stated the advantages of Joint Wholesale Authority were; each County would maintain control of where connections occur
ed in their respective counties, each County would own and operate their own retail water distribution systems and each County would establish user rates and fees in their service areas.  Mr. Hines said the Joint Authority would only have two customers Louisa and Fluvanna Counties.

Mr. Moss said he believe
d there was a consensus on the Fluvanna County Board to go with the Joint Authority.

Mr. Harper said Louisa County was very much in favor of the Joint Authority.

Mr. Moss asked was the Authority that was laid out by the Timmons Group the kind of Authority they were in favor of.  Mr. Harper said yes to the point it would be a six member Authority.  Mr. Harper said Louisas Board felt if they chose the right six people they would be able to work out the details and the tie issue should go away because they should make the best decision for the system.

Mr. Moss said Fluvanna had never actually taken a vote of the Fluvanna Supervisors in favor of going with the Joint Authority.  Mr. Moss asked each Fluvanna Supervisor whether or not they were in favor of the Joint Water Authority.

Mr. Allbaugh said he was in favor of the Authority.

Mr. Weaver said he was not in favor for it

Mr. Ott said he had gone on public record that he was not for the Joint Authority.  Mr. Ott said he felt that they were moving to quick on the Authority and there was some move routing issue
s that needed to be done.  Mr. Ott said there were a lot of things to be looked at.  

Ms. Booker said she agreed on the Joint Authority.  Ms. Booker said she didnt think there was need to delay and it needed to move forward.  Ms. Booker said the water was very vital.

Mr. Gooch said he was very much
in favor of the Joint Authority.  Mr. Gooch said it was time for the second step.  

Mr. Moss asked when the Boards had their public hearing did they have to define the make up of the Joint Authority.  Mr. Payne, Fluvanna County Attorney said yes.

Mr. Hines said the members had to be included in the Articles of Incorporation.

Mr. Gooch said he thought you had to have the persons name that would be serving.

Mr. Hines said if
members were indentified by position, that position would have to serve for the life of the Authority, but if member were indentified by name you wouldnt be restricted to the position.

Mr. Moss said there was a consensus of both Board
s to establish a Joint Authority. Mr. Moss said there would have to be a formal vote in both bodies in order for it to be implemented.

Joint Authority Structure (number of members, etc.) Board Discussion

Mr. Harper said the Louisa Board discussed the members consisting of Board Chair, County Administrator and a citizen but there hadnt been any vote.

Mr. Moss asked was there a consensus for three members.  Mr. Harper said yes the Louisa Board agreed on three members.

Mr. Moss asked each Louisa County Board Member if they agreed on the three members.

Mr. Spencer said Louisa County has had a Water Authority for 30 years or more.  Mr. Spencer said the idea behind a Water Authority was that
the Authority would stand on their own and neither Boards would have the ability to influence it. Mr. Spencer stated the job of the Authority Board was to make sure the Authority made money.  Mr. Spencer said yes he was for the Joint Authority only if the Board of Supervisors were only involved in the appointing of the members.  

Mr. Barnes said he could live with three/three.  Mr. Barnes said the current Louisa County Water Authority Board had a Board Member on it.  Mr. Barnes said he would caution both Boards before appointments were made
to diversify and the Board be encompassed by the entire community.

Mr. Byers said he could support the three/three Board.

Mr. Havasy said  he could support the three/three Board.

Mr. Gentry said he could support the three/three Board.

Mr. Harper said he could support the three/three Board.

Mr. Moss asked
the Fluvanna Board of Supervisors if they agreed to a three/three Board.

Mr. Allbaugh
said yes he did.

Mr. Weaver said no he thought it should be four Fluvanna and two Louisa.

Mr. Ott asked would the Authority decide who the users would be.  Mr. Spencer said no the Authority would just determine how the water was and how to collect the money.

Mr. Ott asked what were the other responsibilities of the Joint Authority.
Mr. Ott asked would the Authority be pressuring the Boards to force people to apart of the Authority.

M
r. Hines said the Authority Board would only have two customers Louisa County and Fluvanna County.  Mr. Hines said the Authority Board would have to come back to the each county with whatever part of the system they needed to underwrite.  Mr. Hines stated the pressure to get customers would be on each county.  Mr. Hines said Fluvanna would be responsible for their retail customers and so would Louisa County.  

Mr. Ott asked what was the general cost of the Louisa County Water Authority.
Mr. Delk said $1.3
million for water and sewer.

Mr. Ott asked what were the administrative cost.  Ms. Pam Baughman of the Louisa County Water Authority said the $ 1.3 included the administrative cost

Mr. Ott said if had to say a number it would be three/three.

Mr. Spencer said the Water Authority does
nt cost the county anything, they have their own budget and their money come from their fees.

Mr. Ott said that was assuming the counties wouldnt have to increase taxes, which they were probably going to have to do.  Mr. Ott said it was going to costing their citizens three cents or more.

Mr. Allbaugh said with financing they may be able to be creative.

M
s. Booker agreed with the three/three Board.

Mr. Gooch agreed with the three/three Board.

Mr. Moss said the consensus of both Boards was for the Joint Water Authority to consist of three/three.  Mr. Moss said the Boards would proceed with a public hearing.

Mr
. Byers asked would they have to be more specific than naming titles for their members

Mr. Pribble said the name of the person was suppose to be in the Articles of Incorporation.

Mr. Gooch said that was just for the first time.  Mr. Gooch said when they sent the renewal they could change the names.

Mr. Pribble said the Boards would have more flexibility if they named names.

M
r. Moss asked was the Timmons Group going to give the information needed advertise.  Mr. Hines said they had given draft copies of the Articles of Incorporation to both County Attorneys.  

FINANCIAL ANALYSIS

Mr. Hines said total estimated project costs was $45 million for 3 MGD System Capacity and the FUSD Connector would be estimated at $3.8 million bringing the total project $48.8 million.

Mr. Ott said the 3 MGD wasnt true because only 1.5 MGD could get up through the pipe.  

Mr. Hines said the ECTI reduction or use to reduce the line would be pretty significant and with that they could evaporate further.  Mr. Hines said they anticipated there would be efficient capacity in the line, even though it hadnt been said.  Mr. Hines said the Power Plant wouldnt use the system 100% of the time and then the counties would have the ability to bring in as much water as could bring into their system.  Mr. Hines said when you looked at storage and when you looked at a treatment plant and optimizing the system once its under operation, then potentially bringing in a reservoir there may never be a need to build a pipeline.  Mr. Hines said although they had contractually said they would offer the counties 1.5 MGD he did felt there would more additional capacity available once they worked through all their operational issues.

Mr. Ott said he felt Mr. Hines had changed everything that was said initially.  Mr. Ott said they only said they would give 1.5 MGD, he said they did say there was a possibility for more but if they pumped 3 MGD where were they going to it.  Mr. Ott said they didnt have any storage or a reservoir to put the water.  Mr. Ott said he had a problem with only 750,000 gallons, he said Fluvanna County could not even break even with that amount.  Mr. Ott said this made him feel like they werent getting a professional job out of Mr. Hines and the Timmons Group.
Mr. Hines said he respectfully disagreed because they were a qualified consulting firm.  

Mr. Hines said the construction market was good at this point and this project maybe something that could be under the stimulus package.


Mr. Hines stated a preliminary rate study was done and approximately
$3.50 per thousand gallons would be the potential wholesale rate.  Mr. Hines said there would be a capital recovery fund and operational and maintenance budget.  Mr. Hines said as the usage goes up the operational cost would drop.

Mr. Hines said utility investments do increase property values, which would help pay for the utility.  

Mr. Hines said he was asked to look at the impact it would have on Economic Development.  Mr. Hines stated Economic Development generates tax revenues & job opportunities which;  increase in Real Estate investments & real estate tax, increase in Machinery & Tools (M&T) tax, increase in Personal Property tax dollars (both companies and individuals) and increase in jobs & ability to keep tax dollars local (disposable income, housing, etc.).

Mr. Hines stated utilities were critical to Economic Development because if they werent available in site selection there was a process of elimination
.

Mr. Hines said they also looked at the effect the utility would have on Real Estate.  Mr. Hines stated they did the following charts to show Louisa and Fluvanna Counties potential tax revenue;

Mr. Hines said Louisa Countys 2008 taxable Real Estate Assessments = $5.2 billion and their 2008 Real Estate Tax Rate = $0.62 per $100

Potential
Real Estate Investment &
Appreciation
% Increase
2008 Real Estate
Assessments
Louisa Increase
Tax Revenue
($0.62 per $100)

$100M

1.9%$620,000

$200M

3.8%$1,240,000

$300M

5.7%$1,860,000

$400M

7.7%$2,480,000

$500M

9.6%$3,100,000

$600M

11.5%$3,720,000

$700M

13.4%$4,340,000

Mr. Hines said Fluvanna Countys 2008 taxable Real Estate Assessments = $3.35 billion and their 2008 Real Estate Tax Rate = $0.48 per $100

Potential
Real Estate Investment &
Appreciation
% Increase
2008 Real Estate
Assessments
Fluvanna Increase
Tax Revenue
($0.48 per $100)

$150M

2.9%$720,000

$200M

3.8%$960,000

$250M

4.8%$1,200,000

$300M

5.7%$1,440,000

$350M

6.7%$1,680,000

$400M

7.7%$1,920,000

$450M

8.6%$2,160,000

$500M

9.6%$2,400,000


Mr. Byers asked what was the size of the pipeline.  Mr. Hines said the pipeline would be six MGD.

Mr. Weaver said no one ever brings up the composite index.  Mr. Weaver asked how much money would each county lose on this project.  Mr. Weaver asked how much less would the State be giving them because of this project.

Mr. Barnes said revenue was good for both localities.  Mr. Barnes said if this project was going to bring jobs they shouldnt wait for the State.

Mr. Spencer said Louisa County doesnt go heavy by the composite index because they have Dominion Power.

NEXT STEP ITEMS

Each Board to Agree to Set-up the Joint Authority

Mr. Lawton, County Administrator, Fluvanna County said it was his understanding that staff would work on the potential Articles of Incorporation and bring it back to the Board for consideration, then the Board would decide when to have a public hearing.

Mr. Payne suggested the two Boards allow the County Attorneys to work together and they would then get back with each of their Boards.

Mr. Gentry asked was the public hearing suppose to be scheduled for February.  Mr. Hines said it would more likely be March.  

Mr. Payne said there had to be a 30 day advertisement.  

Mr. Moss asked would it possible to have something by the 1st meeting in February.  Mr. Lawton said they would work towards having something.

Mr. Moss asked would Louisa County be ready by their first meeting February.  M
r. Harper said he believed Mr. Mullen had already drafted a resolution so action could be taken on February 3rd.

Mr. Gentry said
it was insinuated that Fluvanna was waiting on Louisa and he was Vice Chairman when the MOU was signed and since then there hasnt been any hesitation on Louisa County Board of Supervisors part.

Mr. Moss said his four years on Fluvannas Board he had never seen any hesitation on Louisas part.

Mr. Harper said Louisa has tried to keep a low profile because as it has been said most of the project would be in Fluvanna County and they didnt want tell Fluvanna how to do their business.  Mr. Harper said Louisa has been standing ready and they already had a resolution drafted.  

Mr. Ott said Fluvanna had to get permission to do things so no on
e was dragging their feet and he wasnt trying to insinuate that.

Mr. Moss said in the letter
Fluvanna wrote to the Congressional Delegation said the second most important project was the James River Water Line.  Mr. Moss said he thought both localities should be very proud of what has been accomplished in the past five years.

PUBLIC COMMENT

David Hordyke Rivanna District/Fluvanna County stated he thought this was historic moment.  Mr. Hordyke said he commended Louisa County on their foresight.  Mr. Hordyke said he lived at Lake Monticello and he wondered how they would be effected.  Mr. Hordyke said they used Aqua Source and thought if they were going to use Aqua Source it should be two completely different water and sewage systems.

Ray Signoretti Rivanna District/Fluvanna County stated he was concerned about the organization.  Mr. Signoretti asked was the possibility of privatization discussed.  Mr. Signoretti asked was a joint structure with Aqua Source discussed.

Mr. Moss said Fluvanna County Board had been in touch with Aqua Source throughout the process.

Henry Taylor Green Springs District/Louisa County stated how could $50 million be spent on this project and taxes not be increased.  Mr. Taylor said there would not be any real income to the Joint Water Authority for about three years.  Mr. Taylor asked the Board to be careful and consider the impact on citizens.

Wayne Schmidt Rivanna District/Fluvanna County stated he was concerned with Aqua Source.  Mr. Schmidt said Lake Monticello was paying over half the taxes in Fluvanna County and it was mostly populated by the elderly.  

With no one else wishing to speak, Chairman Moss closed the public comment section.

Mr. Harper said water would be a high commodity in the future and a lot people would be getting in line to get the water from the River.  Mr. Harper said right now it was on a first come first serve basis.  Mr. Harper said if there was failure in the system at Lake Monticello there would be a line right outside the gate that would be available to those residents.

Mr. Harper said he was grateful that Fluvanna agreed to hold the meeting and looked forward to going forward with the project.

Mr. Moss said
he appreciated Louisa County and the spirit around the table was one of cooperation.  Mr. Moss said they could leave the meeting with an agreement that would beneficial to both localities.  

ADJOURNMENT

The joint meeting between Louisa County and Fluvanna County was adjourned at 3:34 p.m.

BY ORDER OF


________________________________
WILLIE L. HARPER, CHAIRMAN
LOUISA COUNTY BOARD OF SUPERVISORS
LOUISA COUNTY, LOUISA, VIRGINIA