These minutes are for informational purposes only. For official minutes contact either the Town Clerk's office or the First Selectman's office.

Regular Meeting

March 13, 2000

1. CALL TO ORDER

The meeting was called to order at 7:30 p.m. Present were First Selectman Anita Mielert, Deputy First Selectman Joel Mandell, William Garrity, John Romano, Madeleine Gilkey and Thomas Vincent. Also present were: Mike Wrabel, Public Works Director, Kevin Kane, Finance Director, Bob DeCrescenzo, Town Attorney, and other interested parties.

2. PUBLIC AUDIENCE

Patricia Carroll, 31 Terry's Plain Road, stated that wood chips and logs are for sale on her neighboring property which is owned by the Town. She discussed the noise and traffic due to the sale of wood and requested that the Town address the problem and clean up the mess.

Joan Coe, 26 Whitcomb Drive, suggested that the taxpayers should vote on a referendum in which they would choose whether they want a new high school or to renovate the existing high school. She expressed her concern with the process which will not reveal the proposed site for a new high school. Ms. Coe questioned the EDC's budget of $78,772 and the allocation of $40,000 to the Main Street Partnership. She requested that the $40,000 be eliminated and she questioned what the EDC has accomplished to justify this large of a budget. She questioned the $29,000 being carried over for a marketing consultant. Ms. Coe questioned why the Simsbury Farms golf club grill and septic system are included in the budget when they are not needed at this time. She stated that a small local golf lobby supports this project and she suggested that the project should be brought to referendum. Ms. Coe urged citizens to attend the BOF Public Hearing on capital projects March 15th. Ms. Coe questioned why Dr. Townsley and his staff are not signing the conflict of interest forms.

Dan Crowley expressed his frustration that when the Town learned that the Village Water Company was selling the company the administration did not tell the public. He stated that few residents attended this morning's DPUC Public Hearing and Ms. Mielert did not speak at this Public Hearing. Mr. Crowley questioned what secrets the BOS doesn't want revealed by Chief Shull such that his retirement agreement does not allow him to speak poorly about the Town.

Jane Heitman Green, 32 Old Stone Crossing, stated that there are still a lot of unanswered questions regarding the Village Water Company purchase. She questioned where Simsbury would get the funds to purchase the water company and whether a bond issue for the purchase which reduce the Town's ability to purchase other bonds. Ms. Heitman Green questioned whether the Fire District has the knowledge to run the water company and why they think they can deliver water at a lower price than a water company with expertise. She expressed her concern with Simsbury's bonding status and financial status in the event that there is a problem with the towns' water supply.

Malcom Cheney, 54 Westpoint Terrace, President of the Tariffville Fire District, stated that a municipal water company must adhere to DPUC, DEP and fire regulations. He stated that the Tariffville Fire District has 1,450 customers, a budget of $95,000, and last increased water rates in 1983. Dr. Cheney stated that the Tariffville Fire District supports the BOS' effort to vacate the sale of the Village Water Company to a private company, to the extent that it is legally possible. He stated that the Fire District can fund and amortize the purchase over 10 years. He noted that the Fire District would use certified water operators to run the water company.

Kathy Loomis, 500 Firetown Road, Vice President of the North Simsbury Coalition, stated that at the DPUC Public Hearing at Eno Memorial Hall the residents spoke resoundingly against the purchase of the Village Water Company by BHC. She stated that the Village Water Company has $19,000 in the bank and it is obvious that Kelda has big plans for the water down the road since they have an obligation to their shareholders. Ms. Loomis suggested that Kevin North's proposal is financially sound and the Town Attorney stated that torturous interference is not an issue. She stated that state statute allows the Fire District to own a water company and she can't imagine why the Town would not want local control over the quantity and quality of their water. She urged the BOS to protect the town's interests.

George Smallwood, 219 Stratton Brook Road, stated that he had to pull up his fuel tank due to an aquifer. He stated that he would rather protect a Town asset than that of a private company.

John Loomis, 500 Firetown Road, noted the importance of the water supply and urged the BOS to support the purchase of Village Water Company by the Fire District.

Mr. Jansari stated that a large company will not necessary supply better services because their primary interest is money. He noted that it would be difficult to deal with an overseas company. Mr. Jansari stated that it is the shareholders right to sell

the company, but this is not an ordinary product and they are the only supplier. He stated that he hopes the Town can maintain control of the Village Water Company.

3. FINANCE

a. Fiscal Year 1999/2000 Budget Transfers

Ms. Mielert pointed out that funding for the Farmington Valley Student Union was not included in this year's budget and she is requesting a transfer to provide funds for the Farmington Valley Student Union. Mr. Mandell moved to transfer to the Farmington Valley Student Union the amount of $4,468.00. The motion was seconded by Mr. Romano and carried unanimously.

4. PUBLIC WORKS

a. Authorize First Selectman to Execute Agreement Between The Metropolitan District and the Town of Simsbury for Hazardous Waste Collection Day

Ms. Mielert stated that they need to advertise this event in case other vendors are interested in bidding. Mr. Mandell questioned the cost for the event. Mr. Wrabel stated that the cost is approximately $20,000, and they have budgeted $25,000 which also covers residents attending other days in other towns. Mr. Romano noted that Michael Reardon is not longer with the MDC. Mr. Mandell suggested that this item be postponed to the next agenda after they have had an opportunity to advertise.

5. RECREATION

a. Review and Possible Approval of License Agreement Between Simsbury Fish and Game Club, Inc. and Town of Simsbury for Stoddard Reservoir Pond Fishing Program Ms. Mielert requested that this item be postponed until some minor details are resolved.

b. Referral of Proposed Simsbury Farms Clubhouse Capital Improvement Project to Public Building Committee

Ms. Mielert stated that Mr. Toner requested that this proposal be forwarded to the Public Building Committee. She pointed out that no funds can be spent until the project is approved by residents.

Mr. Mandell moved to forward the capital improvement project known as the golf course renovation project to the Public Building Committee for review and action, with the understanding that no funds will be expended until final approval of the project. The motion was seconded by Mr. Vincent and carried unanimously.

6. APPOINTMENTS AND RESIGNATIONS

a. Appointment of Richard A. Derr to Zoning Board of Appeals (Alternate - George Vacancy) for Term to Expire December 3, 2001

Mr. Mandell moved to appoint Richard A. Derr to the Zoning Board of Appeals (Alternate - George vacancy) for a term to expire December 3, 2001. The motion was seconded by Ms. Gilkey and carried unanimously. The meeting recessed at 8:16 p.m. and reconvened at 8:24 p.m.

7. DISCUSSION REGARDING DOCKET NO. 00-01-14 / JOINT APPLICATION OF BHC COMPANY AND VILLAGE WATER COMPANY FOR APPROVAL OF A CHANGE OF CONTROL

Ms. Mielert stated that the DPUC is holding the Public Hearing open until March 20th. She stated that there was a lack of information at the DPUC Public Hearing at Eno Memorial Hall and it was apparent that Simsbury wants to be in charge of their own destiny. Ms. Mielert stated that John Kramer, Blum Shapiro, Town Auditors is present to make a presentation regarding the potential purchase of the Village Water Company by the Fire District. She noted that Jeanette Marco and Dennis Dix, of Fleet Securities, are also present as bond counsel for the Town.

Ms. Mielert stated that there were 6 main concerns voiced at the Public Hearing: (1) loss of local control of a natural resource, (2) increased water rates, (3) fear that customer service will suffer, (4) fear that open land would be sold off, (5) fear that the $5 million purchase price would be paid by the users, and (6) the transfer of water to other districts. Ms. Mielert read her 14 questions regarding Docket No. 00-01-14 (Addendum 1) and Mr. DeCrescenzo read the responses from BHC and the Village Water Company (Addendum 2).

Mr. Kramer made a presentation reviewing the proposal of the Fire District to purchase the Village Water Company from a financial standpoint (Addendum 3). He noted the discrepancy between Proposal #1 and Proposal #2, Late File No. 9. He expressed his concern that the Fire District is estimating an annual capital expenditure of $63,000 and BHC is estimating $375,000 in annual capital expenditures. He noted that annually $340,000 is spent by the Fire District on capital expenditures. Mr. Kramer pointed out that changing the capital numbers in the proposal considerably changes the debt service and decreases the cash for debt service to $391,000 which is not sufficient to meet the $600,000 debt service.

Mr. Kramer noted that the Town would lose $104,000 in property taxes because the Fire District would not be required to pay property tax. He stated that he did not have enough information to address the anticipated reduction in operating expenses. He noted that the proposal is to decrease operating expenses to $65,000 from $160,000. He suggested that the Town should know where the $95,000 reduction is coming from.

Mr. Kramer addressed the potential income tax impact to the Village Water Company if it is sold to a tax exempt organization such as the Fire District. He pointed out that the tax on this sale would be more than $2,000,000 which could likely increase the purchase price for the Fire District to make up the difference. Mr. Kramer stated that it is his opinion that the Fire District's proposal doesn't work because the debt service is deficient and the original cash flow proposed is deficient. He pointed out that his figures are based on a 5.25% interest rate and if the rate were 5.75% the debt service would be increased by $30,000-$40,000 annually.

Kevin North, President of the Fire District, stated that the line items listed under Late File No. 9 are incorrect, although the debt service figure is correct. He stated that Mr. Kramer's analysis assumes that capital expenditures will be funded from cash flow and not from rate increases. He pointed out that if the BHC wanted approval for a 9.6% rate increase they would be authorized for a 14% rate increase to cover the taxes. Mr. North stated that they will have enough cash flow to support $2,000,000 in capital improvements without a rate increase. He suggested that after that point they would increase rates. Mr. North stated that Camp, Dresser and McKey have done a preliminary analysis of the water company and have noted that there is a significant rate differential between public versus private ownership. He discussed the rate increases which would occur with a privately owned versus a publicly owned water company. He stated that they acknowledge that there will be ongoing capital expenditures.

Mr. North addressed the projected operating expense decrease and stated that Mr. Balboni and the President's position would be eliminated. He pointed out that they have not included the savings from benefits. He noted that the $15,000 reduction in operating expenses is 1.5% of the operating cost, which is regularly used in business, and could be as high as $50,000. Mr. North stated that a municipality is not subject to DPUC regulations so they do not need to include a cost for the DPUC. He acknowledged the $104,000 savings in property tax and suggested that the benefit to residents will far outweigh the loss in property tax.

Mr. North stated that today was the first time he heard anything about the income tax issue. He distributed a letter from Shipman & Goodwin which expresses some confidence that they can minimize this issue. He offered to meet with the Auditors to reconcile any differences.

Ms. Gilkey questioned whether the Fire District could deed over property to the Town due to the loss of property taxes. Mr. North stated that the Tuller Reservoir is currently a Class 1 asset of the Village Water Company and deemed by regulators to be an integral part of the water supply. He stated that in fact all of the water is delivered from deep wells and if there is an opportunity to reclassify the reservoir the Fire District would be willing to deed it to the Town. He pointed out that the Town paid $40,000 an acre for the Stoddard Reservoir and he noted that BHC has no intention of reclassifying this parcel.

Mr. Garrity expressed his concern with the income tax issue and questioned whether the Village Water Company would entertain an offer from the Fire District. He stated that BHC is a well qualified company which services 40 towns in the area with no major rate increases. He stated that he feels BHC has the expertise and the experience to run the water company and they don't know if the Fire District has the wherewithal to handle a water company. Mr. Garrity suggested that there will be water rate increases no matter who owns the company. He stated that if BHC plans to diverge water then they will need to go through the regulatory process and citizens can voice their concerns at that time.

Ms. Gilkey stated that she feels the Fire District's proposal is well thought out and researched. She noted that the Fire District would hire experts to manage the water company. She discussed the savings for New Haven when their Water Pollution Control privatized and hired experts to run their facility. Ms. Gilkey suggested that there may be a solution to the tax information which was recently released and she stated her support for discouraging the application from BHC.

Mr. Mandell RESOLVED, that the Simsbury Board of Selectmen is opposed to the Joint Application of BHC Company and Village Water Company for Approval of Change of Control (Docket No. 00-01-14) for the reason that the Application is not in the public interest of the citizens of the Town of Simsbury and the customers of the Village Water Company. The resolution was seconded by Mr. Romano.

Mr. Mandell stated that citizens have been saying that they want the leadership of the Town to keep control of the Village Water Company in Simsbury. He suggested that the resolution be forwarded to the DPUC to send a message that the residents have a consensus to deny the application.

Mr. Romano stated that he supports the Fire District's interest in acquiring the Village Water Company. He expressed his concern that after 2 years the BHC could do whatever they want with the water company. Mr. Vincent stated that he is not passing judgment on the potential Fire District purchase of the Village Water Company, but he supports the resolution.

Ms. Mielert expressed her concern that if the water supply became polluted the Town could be liable. She noted that homeowners with wells would become legally liable for general obligation bonds and they don't share in the water service. Ms. Mielert stated that she is comfortable with the BHC because they are a good water company and by borrowing through tax exempt bonds they can pass the savings onto the customers. She stated that she sympathizes with the desire for local control, but what is most important is clean and pure water.

The vote was 4 to 2, with Ms. Mielert and Mr. Garrity voting nay. The motion carried.

8. SUBCOMMITTEE REPORTS

a. Public Safety:

Mr. Romano questioned the status of a proposed No Right Turn on Red sign at Climax Road. Mr. Garrity stated that he doesn't think the DOT will approve the sign, but they will discuss it at the next Public Safety Subcommittee meeting.

b. Finance: No report.

c. Welfare: No report.

d. Personnel

Mr. Mandell requested that the BOS review the revised Personnel Rules for possible action at their June meeting. He discussed the 3 proposed job descriptions for approval (Addendum 4, 5 and 6). He stated that the Assessor's Part Time Clerk and the Police Department Part Time Clerk have been agreed upon with the union. He noted the minor revisions.

Mr. Mandell moved to adopt the Part Time Clerk, Assessor's Office, T4 job description. The motion was seconded by Mr. Garrity and carried unanimously.

Mr. Mandell moved to adopt the Police Clerk, Police Department, T4 job description. The motion was seconded by Ms. Gilkey and carried unanimously.

Mr. Mandell moved to adopt the Seasonal Laborer, Public Works Department, job description as written. The motion was seconded by Mr. Garrity and carried unanimously. Mr. Mandell noted that the Affirmative Action Plan report was submitted to the BOS.

9. LIAISON REPORTS

None.

10. APPROVAL OF MINUTES

a. February 28, 2000 Regular Meeting

Mr. Romano moved to accept the amended minutes of the February 28, 2000 Regular Meeting. The motion was seconded by Mr. Vincent and carried unanimously, with Mr. Mandell and Mr. Garrity abstaining.

b. March 1, 2000 Budget Workshop

Mr. Mandell moved to accept the minutes of the March 1, 2000 Budget Workshop. The motion was seconded by Mr. Garrity and carried unanimously.

11. ADJOURNMENT

Mr. Mandell moved to adjourn the meeting at 10:02 p.m. The motion was seconded by Mr. Garrity and carried unanimously.

Approved March 27, 2000