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COMMISSIONERS MEETING
September 23, 2008
The Board of County Commissioners for Cecil County met in special session at the County Administrative Building, 200 Chesapeake Blvd., Elkton, MD. The following members of the Board were present:
William C. Manlove, President Mark H. Guns, Vice President Rebecca J. Demmler, Commissioner Brian Lockhart, Commissioner Wayne L. Tome, Sr., Commissioner
Constituting a full Board.
The meeting opened with the Pledge of Allegiance.
The Board held a public hearing for the purpose of hearing public input and opinion relative to the Proposed Sale and Transfer of Meadowview, Highlands, Pine Hills, Harbourview and Route 7 Water Systems and the Proposed Sale and Transfer of Cherry Hill, Meadowview, Highlands and Harbourview Wastewater Systems.
Larry Haislip, special counsel to the Board, presented the proposed Amendment to Asset Purchase Agreements for Water and Wastewater Services Agreement with Artesian Wastewater Maryland, Inc., dated August 19, 2008 and to the Franchise for Wastewater Services and Water Service Agreement with Artesian Water Maryland, Inc., dated August 19, 2008 for the purpose of amending Section 6.2 of each agreement to provide that conforming amendments to the County Master Water and Sewer agreement plan shall not be made automatically by the County and relevant Franchisee at the time of expansion of the Franchise Area to include the expansion area described in Exhibit A, Part II of each Franchise Agreement; but that instead any amendments to the County Master Water and Sewer Plan, in the area described in Exhibit A, Part II of each Franchise of each Franchise Agreement, shall be made only upon application, and otherwise in accordance with the procedures for amendment as set forth in the Master Water and Sewer Plan and other applicable County law.
Mr. Haislip, presented the Asset Purchase Agreements for the proposed sale and transfer of the Meadowview, Pine Hills, Harbourview and Route 7 Water Systems and the proposed sale and transfer of the Cherry Hill, Meadowview, Highlands and Harbourview Wastewater systems definitive agreement with Artesian Water Maryland, Inc., and Artesian Wastewater Maryland, Inc.
The asset purchase agreements contemplate the sale and conveyance of the defined Purchased Assets to the relevant Buyer, for a value equal to the County's Net Asset Value with respect to those assets, calculated as of the Closing Date. The purchase agreements contemplate that closing for the sale and conveyance of the Purchased Assets will occur on or before June 30, 2009.
The Purchased Assets with respect to the Meadowview Wastewater Treatment Plant are presently subject to agreements restricting transferability, pursuant to the tax-exempt Cecil County Sanitary District Bond, Series 2004B (the "Meadowview Bond"), as payable under the loan Agreement dated October 12, 2004B by and between the Maryland Water Qualify Financing Administration and the County and the related note. The Meadowview - Highlands Asset Purchase Agreement contemplates several alternative solutions to this issue, and ultimately provides that, if necessary, the Meadowview Bond will be defeased and refinanced in order to eliminate the restriction upon transferability. The County's costs and expenses in connection with such defeasance and refinance are to be borne by the Buyer as provided in detail in the asset Purchase Agreement. The Purchased Assets with respect to the Cherry Hill Wastewater Treatment Plant are also presently subject to agreements restricting transferability, pursuant to the tax-exempt Cecil County Sanitary District Bond, Series 2003A (collectively, the "Cherry Hill Bonds"), and the related loan agreements. The Cherry Hill - Harbourview Asset Purchase Agreement contemplates that the Net Asset Value for the Purchased Assets under this agreement will exceed the balance due with respect to these financings as of the Closing Date, so that, accordingly, the proceeds of sale shall be used to repay and discharge in full the indebtedness due with respect to the Cherry Hill Bonds.
The Purchased Assets referenced in the Asset Purchase Agreement with Artesian Water Maryland, Inc., are presently unencumbered and not subject to restriction respecting transferability.
A second public hearing will be held on Tuesday, September 30, 2008 at 7:00 p.m., in the County Administration Building for the purpose of public comment and a resolution will be presented to the Board at their October 7, 2008 Board meeting for consideration.
The Board opened the floor to questions from the public.
Tom McWilliams, 245 Plum Point Road, Elkton, MD - inquired as to how the value of the assets will be determined.
Mr. Haislip responded and stated that the approved asset value is regulated by the Public Service Commission; and the asset value will be determined based upon a valuation based upon their criteria as well as the valuation of the net asset value based upon the adjusted rate base.
Owen Thorne speaking based upon his position in the Comprehensive Plan Commission, questioned the maps being altered by ERM and whether or not this represents the Commissioners position to alter the growth area. What happened to change, as it is contrary to the Urban Growth Boundary Plan.
Eric Sennstrom, Director stated that the Suburban District, under the 1990 Comprehensive Plan is within the growth district and water and sewage is encouraged to be developed in those areas. Mr. Sennstrom read excerpts from the 1990 Comprehensive Plan supporting this statement. The consultant was advised what county was anticipating with the franchise agreements and the expansion of the initial franchise areas and the terms of the agreements and that once the Commissioners execute the agreements and that the area in questions will be encompassed by the new service area and the prudent planning land use planning dictates that in the next plan that succeeds this one will reflect the expanded use area.
Eva Walker on behalf of Ed Cairns, who can request to amend the Master Water & Sewer Plan?
Eric Sennstrom - stated that the process that has been followed by the Commissioners is that a landowner can request inclusion in the Master Water & Sewer Plan after the approval of a concept plat.
Eva Walker - why is it necessary for the franchise area to be extended beyond the present Meadowview and Highland area.
Eric Sennstrom - this portion north of the CSX rail line has been targeted for growth since 1962 and is recommended in the current Comprehensive Plan.
Eva Walker - are there any restrictions on how often or how many times a Master Water & Sewer Plan can be amended?
Eric Sennstrom - three years, other than piece meal, there are no time limitations.
Eva Walker - do the proposed amendments change that?
Larry Haislip - they split up the requirements regarding the original service area and the upper service area; the original service area, the franchise has acknowledged that none of these areas is presently included in the Master Water & Sewer, the franchise agreement contemplates that these areas will be amended to incorporate those areas for immediate service. With regard to the extended area; that process will not happen the same way, there will be an amendment to acknowledge that Artesian will own and operate those physical plants as a franchise; however it will not automatically be total service area. Those areas that are S-1 & W-1 & S-2 & W-2, will remain those designations.
Ron Hartman - why do we have to increase the franchise area and expanding beyond the original areas?
Eric Sennstrom - consistency of the Cecil County Comprehensive Plan.
Robert Hodge - where is the Route 7 water system?
Scott Flanigan - it is located at the intersection of Route 40, Route 7 and Route 279. This system was created as a result of failed private wells in the area, consisting of 18 customers.
Doug Kyger - asked several questions, relating to staff and counsel involved in this matter and budgetary questions relating to this project. Additionally, he requested that a cost analysis be conducted and this matter be voted on by a referendum.
Name not provided, resident of Harbourview, asked why Harbourview is included in the agreement.
Administrator Wein, provided background information regarding the transfer of the wastewater facilities and of the County's desire to obtain nutrient credits. He also addressed the large capital expenses involved with the Harbourview facility.
Christopher Diebold - asked if Artesian was interested in properties further west in the growth corridor.
Joe Dinunzio responded about the ownership of the Mountain Hill Water Co., and the Carpenter's Point Water Company.
Carl Roberts - discussed the financial advantage of this project and asked about some of the capital that may be now available for other projects.
Administrator Wein advised that upon finalization of this agreement; the County will be relieved of $9 Million of debt, between the Meadowview and Cherry Hill facilities, additionally approximately $27 Million in future capital projects to the facilities. Another fiscal benefit will be the expansion of the Seneca Point Wastewater Treatment facility as a result of realized nutrient credits.
Mr. Whiteford described other economic benefits to the county as a result of the franchise agreement.
Mr. Haislip explained the benefits of the nutrient credits gained by the sale and transfer of these facilities.
Sharon Weygand - how many nutrient credits will we be gained?.
Larry Haislip responded that the number is not known.
Owen Thorne - questioned the nutrient credits that will now be discharged in the Christiana Watershed, whether authority has been obtained and what effect will it have on future nutrient credits.
Mr. Haislip stated that authority has not been obtained at this time; and nutrient credits will not be taken away, it will free them up.
Commissioner Guns commented about the capacity given at the Meadowview Treatment plant.
Mr. Haislip distinguished between the nutrient cap credits and the discharges.
Joe Dinunzio, commented about the original proposal that included the Cherry Hill Facility and the option to use the Meadowview facility. Tom McWilliams - asked if an economic analysis has been conducted and what the impact would be to the rate payers.
Joe Dinunzio stated that the rates will remain the same throughout December 2010 and any future rate hikes will be reviewed and approved by the Public Service Commission.
A motion to adjourn was made by Vice President Guns, seconded by Commissioner Tome.
The meeting concluded at approximately 8:35 p.m. > |