Phelps County PWDS #4
Board Meeting Minutes
July 12, 2010
Call to Order
Board members in attendance were John Staples, Ken Matthew and Jack Lansberry. Bob Laney was absent. Also present were Jodie Branson and Linda Loughridge from MRPC; Donna Martin and Terry Luetkemeyer from USDA Rural Development; and Scott Robbins from Kennedy, Kennedy, Robbins, & Yarbro LC. The President of the Board, John Staples, called the meeting to order at 6:02.
Recognition of Visitors
Scott Robbins made a presentation based on prepared questions from the board. Is the current late fee structure of 10% legal? Scott Robbins’ answer: RSMo 247.110 of the state statutes states that the board may assess penalties in a reasonable amount. Donna Martin believes that the wording the district uses currently comes from a DNR model, because there are other cities and districts that have the same penalty structure. Scott Robbins advised that the late penalty should be coupled with a disconnect policy or it becomes unreasonable. Scott recommended that the board adopt a policy of 10% of the monthly fee amount, rather than compounding the penalty.
Can we disconnect and not incur liability?
Scott Robbins’ answer:RSMo 247.050.17 gives the board the authority to make general rules and regulations in relation to the management of the affairs of the district; which includes disconnecting service to enforce collection of bills. The ordinance for disconnection should include a late notice at 15 days; a registered letter at 30 days past due that states cutoff procedure; and informing them in person 5 days prior to disconnect. If they are not home or do not answer the door, a door tag with the disconnect date should be used. Scott Robbins recommends taking a picture of the door tag on the door as evidence. District needs to establish that they are willing to disconnect. Once people understand that you have the authority and are willing to disconnect service, the district will not have the problems that they have now. The disconnect policy is fair to customers who are paying their monthly bill and shouldering the cost of continued operation.
Scott Robbins stated that under state statute tampering with water or sewer lines is a Class A Misdemeanor and can be referred to the State’s Attorney.
Ken Matthews expressed concern about going on to private property to shut off service. It was determined that the shut off should occur within the right of way. In order to contain costs, it would be easier to cut the electricity at the panel, and lock the panel.
Donna Martin pointed out that the ordinance already contained a disconnect clause. Scott Robbins preferred his policy because it contained more detail. Scott Robbins will forward his draft of a disconnect policy for the board’s consideration.
How do we enforce the mandatory connection policy?
Scott Robbins’ answer:RSMo 644.027authorizes the district to have a mandatory connection policy. If someone refuses to connect after receiving notification of the mandatory connection policy, the district files an injunction with the court. If the district can show the judge clear and convincing evidence that the district has the legal right to force them to do so; the judge will rule in the districts favor. Clear and convincing evidence is a copy of the mandatory connection policy and testimony of the operator that he has measured and the structure is within the distance required to connect per the policy. Scott Robbins and Donna Martin recommend that the mandatory connection agreement be changed to read an appropriate distance from the structure-not the property line as the current policy states, in order to save the district money. Prior to making the change, they suggested finding out what currently exists in the district and set the ordinance measurement accordingly. They suggested 500-600 feet. Linda Loughridge suggested that Triple D could provide that information to the board. John Staples stated that the project engineers determined that a couple of structures were too far away; and therefore too expensive to connect.
What can be done legally to collect the current past due accounts?
Scott Robbins stated that the placing of liens has not been effective. Scott suggested drafting a strong disconnect ordinance. And communicating the new policy in a newsletter to the customers. Designate some sort of amnesty period for those who have a balance. Use the same methodology used with Fleshman to settle accounts and start with a clean slate. Then use the disconnect policy for those who choose to not take advantage of the amnesty period. Scott Robbins has drafted an ordinance that this board could adopt.
Jack Lansberry wanted to know if we will have a problem with those who have paid fees under the old policy. Linda Loughridge said no, because we have an ordinance that supports that action and in all cases we have negotiated penalties.
Linda Loughridge asked about reporting a homeowner who is running sewage on their property. Scott Robbins replied that we should report to the county health department and the district should file an injunction for mandatory hook up.
What are the board’s obligation and responsibilities to the district and to each other?
Scott Robbins stated that board members are obligated to attend board meetings; obligated to be loyal to the district and make decisions and take actions that are to the district’s good. Board members have a duty to enforce the district’s rules and regulations and stay in compliance with the state statutes. Board members should not make exceptions or show favoritism. As long as a member is not grossly negligent, they’re probably ok. Gross negligence is not following rules and regulations. There is official immunity for elected officials to make decisions without concern for personal liability; if, enforcing rules and regulations. There is an argument that if you don’t enforce your rules & regulations, the immunity does not apply. This is a good reason to know and enforce your rules and regulations.
What happens to the district if they can’t pay their bills?
Scott Robbins stated that he hopes we never have to find out what happens. Scott Robbins encouraged the board to tighten their budget and live within their means. Scott Robbins stated that if the district couldn’t pay the bills, the court would appoint a receiver at the request of USDA, DNR or whoever; the costs would be greater and the district customers would pay higher rates. John Staples stated that he would prefer to make it work and not go that route. Donna Martin stated that this is not a small district. Terry Luetkemeyer stated that there are other districts that are struggling, but none are failing.
Scott Robbins stated that he would prefer we use the disconnect policy and tighten the budget. Scott Robbins recommends that we get a sewer deposit when we reconnect; and a signed sewer user agreement. Scott Robbins would like to review our current sewer user agreement. Scott Robbins suggested that the user ordinance be distributed to the customers.
Donna Martin asked if the people not paying are renters. Jodie Branson responded that it is primarily property owners.
Jack Lansberry wanted to know if the renter or the landlord is responsible for the sewer fee. Scott Robbins stated the statute says they are both responsible. But if the agreement is not with the landlord, the district can only go back 90 days and collect from the landlord. Renter or landlord won’t be a problem once the district enforces the disconnect policy.
Donna Martin recommended that we take a look at the larger users and adjust the billing as needed. Terry Luetkemeyer says that he felt that Scott has pretty well covered the situation. Terry Luetkemeyer stated that there are not any opportunities to borrow additional operation funds or to defer repayment. Terry Luetkemeyer suggested that rates be adjusted on an annual basis. He stated that if we had increased the fee at 3% each year, the rates would be $47.37 in 2009 and $49.74 in 2010; not much higher than where it is now. Terry Luetkemeyer stated that users would accept smaller annual increases. Scott Robbins suggested annual automatic cost inflator takes the sting out of the increase and suggested making an annual increase a part of the ordinance. Scott Robbins will provide the language for the ordinance change. Scott Robbins says that our rates are not out of line from his experience. Linda Loughridge suggested that we communicate to the users: “If we had been using an inflationary factor, the current rate would be $49.75. While this rate doesn’t entirely meet our needs; we will look at reducing expenses to meet the shortfall.”
John Staples stated that many of our customers are on fixed income and the board fears that an increase will increase the non pays. The board would like to direct mail information to the customers and allow the customers the opportunity to attend a meeting.
John Staples stated that he feels better about the district after talking with Scott Robbins and USDA. John Staples feels that $55 a month would be ok; and a reasonable annual inflator would be acceptable.
The meeting adjourned briefly in order to excuse Scott Robbins, Terry Luetkemeyer, Donna Martin and Linda Loughridge at 7:30.
The meeting resumed at 7:40.
Approval of Agenda and Minutes
The Board reviewed the agenda. Jack Lansberry made a motion to accept the agenda as presented and Ken Matthews seconded the motion. The motion carried. The minutes of the June 7, 2010 meeting were reviewed. Ken Matthews made a motion to accept the minutes as presented. Jack Lansberry seconded the motion. The motion carried.
Financial Statements
Jodie Branson presented the financials for the period ending May 31, 2010 and preliminary June 30, 2010 financials. YTD Revenue over expenses from operating for May is $90,352. Billed fees were $10,501 for the month and monthly late fees totaled $20,952. YTD Revenue over expenses from operating for June is $38,268. Billed fees were $10,501 for the month. Available cash is $3,437. The outstanding MRPC balance is $25,634. The outstanding USDA loan balance is $735,604. Jodie Branson reviewed the current cash flow statement. Cash receipts for June were $11,219, including the $2,686 settlement from Fleshman’s. Outgoing cash for the month of June was $10,362. An aged accounts receivable report was included in the packet for the board to review.
Jack Lansberry made a motion to accept the financials as presented. Ken Matthews seconded the motion and the motion carried unanimously.
Maintenance and Operations Report
Jodie Branson presented the maintenance activities report from Triple D Construction for the month of June:
Ken Matthews made a motion to approve $480 payment to Triple D for services calls in June. Jack Lansberry seconded the motion. The motion carried.
John Staples stated that he approved Triple D purchasing a portable holding tank that would cost under $150 to be used on sites where the grinder pump is not working.
Old Business
Jodie Branson reported that Ruth Jones was not eligible to serve at this time per a phone conversation with Ms. Jones. Ms. Jones stated that she was willing to serve as soon as she is eligible. John Staples asked the board to continue to search for candidates.
The board tabled the discussion of inventory at Mid-State Pipeline due to Bob Laney’s absence. Jack Lansberry made a motion to continue to hold the payments to Mid-State until the inventory is recovered. Ken Matthews seconded the motion. The motion carried.
The board tabled the discussion regarding the auto-dialers at the lift station until a future meeting.
New Business
Jodie Branson reported that we received the annual renewal for the district insurance effective 7/15/10. The total premium for the year dropped $50. The decrease was in the liability portion of the premium. The board would like to purchase the terrorism insurance if the premium is only $3 per year as stated on the renewal.
The board discussed the agenda for the next meeting. They would like to see a proposal for fee increase, a proposed disconnect policy, a proposal for annual fee increases and newsletter to customers. They would like Flo-Systems to attend the August meeting to discuss the warranty work and future repairs.
Next Meeting
Monday, August 2, 2010.
Adjournment
Ken Matthews made a motion to adjourn the meeting at 8:20. Jack Lansberry seconded the motion. The motion passed unanimously.
I, John Staples, the duly elected President of Public Water Supply District #4 of Phelps County, do herby certify that the foregoing is a true and correct copy of the minutes of the regular board meeting of the Board of Directors held at Meramec Regional Planning Commission in St. James, Missouri on July 12, 2010.
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President: John Staples