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HomeMy WebLinkAbout05-30-2002 Called Meeting CALLED MEETING COMMISSION CHAMBER May 30, 2002 Augusta Richmond County Commission convened at 3:00 p.m., Thursday, May 30, 2002, the Honorable Richard Colclough, Mayor Pro Tem, presiding. Present: Hons. Hankerson, Boyles, Mays, Kuhlke, Beard, Cheek and Bridges, members of Augusta Richmond County Commission. Absent: Hon. Bob Young, Mayor; Shepard and Williams, members of Augusta Richmond County Commission. Also present: Jim Wall, Attorney; George Kolb, Administration; and Lena Bonner, Clerk of Commission. The Invocation was given by the Reverend Hicks. The Pledge of Allegiance was recited. 1. A Resolution to provide for the issuance of Water and Sewerage Revenue Bonds, Series 2002, pursuant to and in conformity with a bond resolution adopted October 21, 1996, as supplemented December 3 and 17, 1996, and as ratified, reaffirmed, broadened and extended by a resolution adopted August 22, 2000, as supplemented September 15, 2000, to provide funds to finance, in whole or in part, the cost of adding to, extending, improving and equipping the water and sewerage system of Augusta, Georgia, and to pay expenses necessary to accomplish the foregoing; to ratify, reaffirm and adopt all applicable terms, provisions, covenants and conditions of the bond resolution of October 21, 1996, as supplemented December 3 and 17, 1996, and the bond resolution of August 22, 2000, as supplemented September 15, 2000; to provide for the adoption of rates and the collection of fees and charges for the services, facilities and commodities to be furnished by the water and sewerage system; to provide for the issuance under certain terms and conditions of additional parity bonds; to provide for the creation and maintenance of certain funds; to provide remedies in the event of default for the owners of said bonds; to ratify and authorize the preparation, use and distribution of a preliminary official statement and a final official statement in connection with the offer and sale of the Series 2002 bonds; to provide for the annual submission of certain financial information and operating data pursuant to Rule 15c2-12 of the Securities and Exchange Commission; to provide for the adoption of a supplemental resolution finalizing the terms of the Series 2002 bonds; and for other purposes. Mr. Wall: Mr. Mayor Pro Tem, Commissioners, I appreciate this called meeting for the purpose of consideration of the parity bond resolution and adopted that, and let me explain the purpose of this meeting. Next week, we are scheduled to go to New York for the purpose on making a presentation for the bond rating. As a part of that, there will be an engineering package that will be delivered to the rating agencies, explaining the projects that are being proposed to be funded by the use of the bond proceeds, how the financing package has been put together by the government, and how we intend to pay for the various projects. This parity bond resolution is the first of two resolutions that you will consider. This has a maximum amount of bonds that will be issued, as well as the maximum amount of the interest rate. Later, after the bonds are actually sold, you will come back and adopt a supplemental resolution that will specify the exact amount of the bonds and the exact amount of the interest rates, after the bonds have been priced and sold in the market. This will allow us to proceed with the support of the Commission when we go to New York next week with the ratings. We want to be sure that the projects that we have identified, that being the Utilities Department, with the assistance of CH2MHill, has identified to be included in this second phase of the bond program, and be sure that you are on board as to the method of financing that is being proposed for this. Mr. Cheek: Mr. Mayor? Mr. Mayor Pro Tem: Go ahead, Mr. Cheek. Mr. Cheek: Thank you, Mr. Mayor. In light of the excellent performance of our Utilities Department in bringing these projects that we’ve funded for them on line, on time, and on budget, and in light of the tremendous effort that A. G. Edwards has done I move that we adopt this resolution and send forth a letter of our own for this city, recommendation with them to New York. Mr. Mayor Pro Tem: That’s in a form of a motion? Mr. Cheek: Yes, Sir. Mr. Kuhlke: Second. Mr. Mayor Pro Tem: We have a motion and a second on the floor. Any discussion? Mr. Wall: Would the Commission desire to hear from the Utilities Department as to the exact amount of the funding, as well as from Mr. Widner, as to the financing? This is a significant issuance, and you’re talking about $130 million worth of projects, and I know that, I know you’ve been involved in the master planning and seen that, and -- Mr. Cheek: I think the public needs to hear that in this forum. That’s part of the nearly quarter of a billion dollars’ worth of work this city has ongoing, and for a group of guy that aren’t getting much done, that’s a lot of money, a lot of work. But a lot of this same message is going to be heard, and I’m going to put in an advertisement on Monday on Connect Live. We’re going to have the State of the Water message coming up. But, yes, I’d like to here from our bonding agency and our Utilities Department so that the public may also hear what’s planned and what’s being done, and so forth. Mr. Mayor Pro Tem: Mr. Beard, you have a question? Mr. Beard: I was going to just suggest, I think we need to go through this because we have a lot here at stake, and I think we ought to hear it from A. G. Edwards, and everybody else who need to be heard from at this particular time, and it need to be explained, you know, the carryover, if there’s a carryover, or whatever it is. I think to the general public, that it needs to be on the record. Mr. Hicks: Do each of the members of the Commission have a copy of the engineering report? It’s for the Water and Sewerage Revenue Bonds Series 2002. I’ll refer to pages and exhibits within that document, as we go. If you’d look first at page 2- 7. The pages are numbered in the lower right-hand corner, and except for that page, of course, which is a figure, it’s figure 2-3. If you’ll remember, we had, after experiencing a series of difficulties in getting water where we needed it and having water that was -- a water supply that was reliable, we had CH2MHill prepare a master plan. That master plan was completed and presented in February of 2000. One thing that was pointed out in that master plan that we were all aware of, who had been here, was that the growth areas within Augusta was to the south of the area. And if you’ll look at that figure, 2-3, it shows that through 2010 the region along Tobacco Road and the region south of Tobacco Road would be the areas where 57% of the growth in Augusta Richmond County would occur. Now, the problem lay in getting the water to that growing area, especially in light of the fact that the Georgia EPD had said we need to reduce our dependence on groundwater and increase the use of surface water. Of course, the Savannah River bound the eastern portion of Augusta Richmond County, but only the water upstream of a certain area, that is, upstream of the industries on the eastern part of the city, would be suitable to use for a water supply. So, as far as water supply, the problem was to get the water from the eastern and northeastern section of Augusta down to the southern portion. That was the basic thrust of the water supply, to increase the flow, and also to make what we had more reliable. So far as wastewater was concerned, we needed to improve the reliability and performance of our wastewater treatment facility. We had a number of sewer lines that were getting old and were beginning to give problems, and then we had new areas of growth in which we needed to extend sewer lines, and then we had pockets that, heretofore, had been caught up in whatever difficulties and had not been served with sanitary sewer service. So we wanted to pick those up. So the 2000 Master Plan presented all of that. One of the first projects to actually be completed on the water side, to get water into the growing area, was that 20-inch water line and the five million gallon ground storage and booster pump station near the intersection of Tobacco Road and Morgan Road. That was a good day. After that, things really began to level out with our water supply. But we need to keep that impetus going. We need to continue to provide the water down into that growing area. Now, if you will look on over in the book. I’m going to skip all the way over to the proposed capital improvement program. It begins on page 5-1, the proposed system capital improvement program begins on page 5-1. This is the area where the description of the capital improvement project is contained. And if you look on page 5-2, under Section 5.3, there is the summary of capital improvements. That will show you what facilities and what elements go to make up the $130 million bond issue. If you’ll notice, water treatment facilities, $57,829,000. Water distribution -- now that water treatment facilities include reworking the filter plant at Highland Avenue to increase its reliability and function at 60 million gallons a day. It also includes constructing a new raw water pumping station, extending a new raw water line, and constructing a new water treatment facility at the intersection or near the intersection of Tobacco Road and Highway 56. If you will look at page 5-6, there is a map. It shows the location of these projects as we talk about them. If you want to see where they’re located geographically within the area, you’ll see that the thrust is to move water from the river down into the growing area. Hence, you’ve got a central connector, which extends from Highland Avenue down into the area formerly served entirely by groundwater. You’ve got the new raw water pumping station and the raw water line bringing the water supply down to Tobacco Road, then the treatment facility, and that will put a major treatment facility right in the vicinity of the major growth area in our service area. And then you’ll see other projects deal with distributing that water down along and south of the Tobacco Road area as we bring the lines from the areas of supply into the areas of need. But that map demonstrates that. And then the summary of costs show the water treatment facilities and the water distribution at $14,739,000. Now so far as the wastewater portion is concerned, you’ll see that the wastewater treatment plant, $8,867,000. And then the bulk of the funds on wastewater will be the wastewater conveyance system, $41,219,000. If you’ll look on over in your report at page 5-10, you’ll see figure 5-2, and it shows the wastewater projects, the sewerage projects. You’ll see that they’re clustered pretty well south of Butler Creek. The main work is going to be on the Butler Creek area, extending on up into the Bel Air Hills area, and then improving Butler Creek, which right now is plagued with sewer overflows and backups when we have time of a lot of rain, so the improvements are there. And then you’ll look south of there, you’ll see the pockets, the [inaudible] Phase II, Jamestown Phase II, Fairington Drive system, Ridge Forest Drive system, Meadowbrook -- a lot of those -- a lot of the ones north of that area were picked up in the 2000 bond issue. There were about ten or 12 sewer pockets picked up there. They aren’t shown on this map. These are the ones that will now concentrate in this area south of Butler Creek. Now in addition, you do have the Olive Road line. You do have the Rae’s Creek relief interceptor sewer. We’ve got Rae’s Creek in good shape all the way down to the beginning of the Augusta National, to the eastern side of Berckman Road. And then we need to now start from Berckman Road and take that new sewer line on down to the new pumping station that when the -- that’s the reason we went in service, the mid-city interceptor, which is now doing a great job at relieving the load on our mid-city line. But that Rae’s Creek interceptor. But then if you’ll look over on the eastern portion of Augusta service area, you’ll see there is an industrial pump station force main. All of our heavy or most of our heavy water users, I’ll put it that way, most of our heavy water users are located over in that area. And this will give us a 30” diameter force main that will bring the water down Columbia Nitrogen Drive and across into the wastewater treatment facility and will relieve the load on the second street lift station and also relieve the load on the main interceptor. It will help our performance in our sewer collection system tremendously. And the other one is an extension of the main interceptor upgrade. Our main interceptor line going to the wastewater treatment facility. It’s in dire need of being upgraded. And you’ll notice those two costs. And then finally you’ve got system wide projects. Those are projects that are described a little further over. If you’ll look at page 5-12, you’ll have a summary of the system wide costs. You’ve got the new utility administration/maintenance facility. That’s the facility that will be constructed on the same campus with the Public Works project that will be built. You’ll be receiving a report on that at a later date, but that’s being investigated, and the site’s being assessed. And then, legal advertisement, other professional, part of that includes a study in the Phinizy Swamp area, in conjunction with the management of that swamp and of the wetlands. You know, interesting enough, just an aside, with the wetlands, you can’t just build them and let them work. If you do, then, 25 or 30 years from now, they will have worked real well, and you’ll have a bog. And you won’t have a wetlands system that’s working, you’ll have a bog. And so you’ve got to make it work, you’ve got to maintain it, you’ve got to clean it, you got to make it work in conjunction with the Phinizy Swamp area. There are no free lunches. The wetlands system works well in removing nutrients, but you do have to operate it, and so we’re going to have to have a report that will bring up that, and it’ll show us exactly what we need to do to keep it functioning at its peak performance, which it is now. And then finally, the watershed assessment implementation -- for those of you who have been involved with that watershed effort and have kept up with it, that is, the watershed assessment, Parsons Engineering has done a good job in studying all the watersheds, that is, Spirit Creek, Butler Creek, Rocky Creek, Rae’s Creek, Rock Creek, Crane Creek, all of those that contribute to the Savannah River basin in our area. And this assessment implementation has to do with, how do we protect those streams. And you say, well, why is that a function of the Utilities Department? Well, when we extend our water lines and sewer lines, we contribute to the growth in those areas. We want to. But with growth, there must come a responsible care of the environment. And the watershed assessment implementation will bring up those issues and will bring up those methods of implementing protection and preservation, as well as maybe improving some of our streams. So you’ll see that the summary of capital of improvements -- the bulk of the money, of course, goes to the major water treatment supply and the improvement of our wastewater conveyance systems, some extensions into new areas, and some care of the environment in our area. So with that brief overview, if there’s questions you’d like to ask about individual projects, why -- Mr. Beard: Max, I have just one question and make a comment. [inaudible] on the sewerage hookup, and maybe that would be good for you to explain that to us so that the public would be aware of what the costs is, that type thing. Because I see you’re doing some work in the southern part already and off of Tobacco Road there. I have not seen any work out in the Bel Air area. Mr. Hicks: It’s in this year’s. They’ll get on out there. Mr. Beard: Okay. But if you would kind of explain that, because I think a lot of people -- since you are working there and you’re ready for those hookups, it would be good for the public to learn. Mr. Hicks: The sewer tap fee is $350. And then, and most people who will be hooking on already have an account with us, so there wouldn’t be that $25 account fee. But the sewer tap fee is $350. Now that covers part of the cost. A fair amount of the cost to the homeowner over and above that is going to be constructing the line from their septic tank to the new sewer line. That is, actually intercepting the line and going to their septic tank. Now this has been discussed in the past as to how to handle that, and it’s been determined that our best involvement -- and we met with some of the folks in Ridge Forest in anticipation of that and with some others -- some of the meetings that were held out with those joint Commission Districts -- and explained to them that we could assist them in that we could put out a request for qualifications and a request for prices from local plumbers and local folks who could do that type work, and then compile that list so that you wouldn’t have all of these people needing to hook on and they would be at the mercy of the local plumbers to decide the price they wanted to. We could then give those prices, and we feel that in doing that we would assist the homeowners in getting the very best price that they could. Because if a plumber knew that he could have say 50 or 60 taps instead of just one or two, why they could reduce their cost. And the homeowner then would be the beneficiary of that reduced cost. So that’s what is involved there. Mr. Beard: I’d like a clarification. If a person pays the $350 hook-up fee, and I know that’s on the right-of-way, can that be maintained until they are able to do the others or do they have to, whenever that hook-up is made, it has to go on to the person’s home? Do you understand what I’m saying? Mr. Hicks: Yes, sir. The way we have been assessing that sewer hook-up fee in the past has been that when they would pay for and have the tap installed, then it’s either 30 or 60 days after that we’ll begin to add at least a minimum, we’ll begin to add the sewer service charge to their bill. Now I realize that when we have -- and the reason we do that is that if you don’t, then you have to go back and check every one and keep up with it to try to make sure who connects when, and when to start their sewer service fee. I could easily see how there maybe needs to be a consideration when you’ve got so many being hooked on at one time, but we could maybe present something to the Commission in consideration of that. But right now, they begin to have to pay a sewer service charge either 30 or 60 days after they have the tap put in. Mr. Beard: Thank you, Mr. Hicks. Mr. Hankerson: Question. Mr. Mayor Pro Tem: Rev. Hankerson and then Mr. Cheek. Mr. Hankerson: My question is also concerning what Mr. Beard asked about the hook-up cost. Cause I have been getting calls also. But you mentioned about getting together, the community getting together and having something like a bid out or job out for plumbers to give a price on. Cause someone asked me just this morning about that. How can we make that work, the community, and responsibility doing that? How can we get that to work? Mr. Hicks: What we’ve done with other groups -- I don’t know if Commissioner Colclough or Commissioner Cheek would want to address that -- I’ve attended meetings in their areas. They do -- Mr. Mayor Pro Tem: You go ahead and address [inaudible]. Mr. Hicks: What they did, they called the meeting of those interested homeowner groups, and we would go out and talk with them and explain to them what we were doing, and they would talk about where their houses were or where the line would be and try to get an idea of how much it was going to cost them to actually run their line from their home to the tap, but once we know the size of the group that’s involved and then we know the area that’s going to be involved, then as we put out a request for proposals, we can say -- like in your District, if you have a couple of homeowner areas that wanted to go together, then we could say okay, within this group, within this District, we’re going to have this many sewer connections that will need to be made. And they’ll need to be made, you know, in conformance with county code, plumbing code, and there will be bona fide connections that will need to be made and so they will know they will have the work to do, and then we would receive -- we would put out the documents and receive those prices on behalf of those homeowners groups and turn that information over to the homeowners groups and they would be the ones going and contracting to get the work done, but they would see the list and they would see the prices. And some said well, would it be just one or two? Well, depending on what price they did -- I mean an individual homeowner can always do whatever they want to do. But if you’ve already got a price list set up and you’re going to get a better price, if you go as a group, then most of them would probably choose to go as a group and probably go with the lower maybe two or three. One thing that will come into it will be amount of time. For instance, how long would it take it if everybody went to just one plumber? How long would it take to get them all tied in? They would be an issue, Rev. Hankerson, but we’ll be glad to meet with homeowners groups and set it up when we go out like that. That’s what we’ve done in these other areas. Mr. Hankerson: All right. Mr. Mayor Pro Tem: Mr. Cheek? Mr. Cheek: This is an area that’s been brought up a couple of times. I’ve got the largest total number of houses that will be brought up to the sewer system in my District. Many of these people are on fixed incomes or just plain lower incomes, and the tie-in from the home to the street is a $600-1500 chunk out of their budget. We have got to come up with a way. As the city is here to serve the people, not the other way around, we have got to come up with something on behalf of this city to help these people reduce the total cost to them to tie into our sewer system, which they do want, but at the same time reduce the cost. And perhaps with some of these many millions of dollars find some financing mechanism for those poorer folks or people that qualify to allow them to tie on and pay for it over time. I don’t think any of these people are asking for a free ride, but if you’re living on social security or a military retirement, for instance, and are too old to work or disabled, for instance, $700 is a big chunk of money, plus the $300 tap-in fee. But those are things -- and what I’m hearing, Max, from a lot of people is I guess we have five or six town hall meetings on this on the Tobacco Road corridor alone, plus the rest in the city, in spite of what excellent coverage we’ve got from local media on what we’ve been trying to do, both print and radio and television, still people aren’t getting the messages and perhaps -- I know most people are on the water system. We can send and have a series of public information meetings about this, put it on the water bill, schedule it for later this summer, to get the word out about this type of thing, what can be expected. Because we are faced with, in District 6 alone, a situation of perpetual digging, road repairs and everything else for tie-ins over the next year or so, next to mention the major sewer lines going in the roads. We’ve got to come up with a mechanism to help these people out. They’re not asking for a free ride. I know this is done in other places, and I think it could be done here. But that’s my only -- my major concern is that we’re mandating something to the people that they may not be able to afford, and I think that is an unreasonable hardship. They do want the service, but we’ve got to help them find ways to finance it. Mr. Mayor Pro Tem: Mr. Boyles? Mr. Boyles: Mr. Hicks, I don’t know if this is included or not, but what -- who maintains the channels of the creeks that we’ve got mentioned in here [inaudible]? Especially I’m concerned about Rae’s. Mr. Hicks: That would be a Public Works issue to address. Mr. Boyles: What about the Lake Olmstead area? The silt, the dredging of Lake Olmstead. It’s quite a collection basin. Mr. Hicks: That would be Public Works. Mr. Boyles: Public Works? Not included in this? Mr. Hicks: Correct. Mr. Boyles: All right. Thank you. Mr. Mayor Pro Tem: Mr. Wall? Mr. Wall: Just like to point out for the benefit of everyone, this is a five-year capital improvement plan as opposed to a three-year capital improvement plan. There are a large number of projects and you’ll note the discussion on page five there is one -- the bonds have been issued to qualify for a five-year spending period under the Treasury regulations. Generally monies have to be spent within a three-year period. And so I wanted to alert you to that, so that you would not expect all these projects to be done within three years. Mr. Speaker: [inaudible] get them done [inaudible]. Mr. Mayor Pro Tem: Mr. [inaudible] ? Mr. Speaker: I wanted to tell you how much we appreciate the opportunity to help y’all out with this. I heard a number of things that I agree with. I agree with what Commissioner Cheek said, a tremendous amount of work has gone into this, from the engineering side and CH2Mhill. And I [inaudible], we are going next, and the idea next week is to be Augusta’s best foot forward in order to get as good a rating on the bond as possible, and if there is an upgrade possibility -- we hope that there might be but don’t want to say anything yet -- it’s extremely important for them to know the Commission is completely behind the plan. Thanks for the opportunity to be here. On the page that sits in front of you, you heard all the projects that are really important from Max, but I wanted to explain to you how that translates into the financing. On the upper left hand corner, you see the uses of fund section. This explains why a $130 million project [inaudible] $152 million on the bond issue. The bulk of that money, 82%, is going into what we call project fund which will be used over the next five years to fund all the various projects that Max indicated to you. The next one is the 8% number -- it’s green, if you’re not colorblind -- it’s capitalized interest, a fancy name basically for interest that we’re borrowing up front. And what that allows you to do -- if you look in the box in the lower right hand corner, you’ll see the green lines. Those are the revenues of the system that are projected. They’re really only projected out about 11 years because that’s what really makes sense to project out. Beyond that, they’re [inaudible] . Obviously we expect revenues to continue to increase, but for the purposes of what we’re doing it, we didn’t know what they’re going to do for the next ten years. As they’re building up from these rate increases that you all are agreeing to adopt, we capitalized the interest so that when you take this debt off the system, you have the ability to ease into those rate increases so that you don’t have to try to afford them all right at once. So capitalized interest allows you essentially to not to have to pay on these bonds for about a year-and- a-half. It’s a very common technique to use when you’re borrowing for new projects that will have additional revenues that will be on the system down the road. The third and yellow box, the six percent, that’s a Georgia Environmental Facilities Authority loan that Augusta has right now. They have three loans. This is one of those three. It was a loan that was done back in the ’94 to ’96 time frame. The reason that we’re taking those out of this bond issue is that we can go from an average rate on that issue of about 5.5% down to a little under four percent. So you’re doing it strictly from the standpoint of interest rate savings. It turns out to be $550,000 to $600,000 of savings, after cost and present value back into today’s dollars, about $50,000 a year. So we tossed out a bunch of stuff to figure out what to put into this particular bond issue. GEFA, as they are known, is one of the things we talked about. It was hard for us to turn our back on about seven percent savings. Normally, there’s about a three to five percent threshold of savings. You’re getting seven percent on this issue, so we figured it was probably a pretty good thing to do. The next one in the red box, this is a somewhat arbitrary number at this point, but it’s a thing called original issue discount, or OID. The way to think of this is, this is almost like paying points when you get a mortgage. You can buy your rate down. This number will be determined the day we go to pricing. This is a number that is a marketing technique. As we go to sell bonds to ultimate bondholders, some of them want to buy your bonds at a discount. They want to pay 95 cents and get a dollar’s worth of bonds. And for that, they’re willing to give you a slightly better interest rate, or yield. So it’s simply a marketing technique, and it gets you a potentially lower rate. If that’s not what is advantageous in the market the day we go to pricing, we wouldn’t do it. It’s essentially borrowing to buy your rate down a little bit. The next little, blue line -- one percent of issuance, that’s legal fees, underwriting fees, printing, publication, anything and everything associated with this particular bond issue. And the last, in the black, another little, small box, one percent, is the bond insurance and surety bond premium. Those are what we take to take the current A rating of the county and bring it up to a triple-A rating with bond insurance. We get a better rate on the bonds. That bond insurance pays for itself two or three times over. The surety bond prevents you from having to go out and fund another ten or twelve million and put aside into a debt service reserve fund. You simply go out today and you pay somebody, one of these triple-A bond insurance providers, to cover that requirement for you so that you don’t have to borrow any ten, twelve million dollars to cover that. In the lower right-hand corner, again, what you see is, this is called a stacked-bar chart. It shows you your outstanding debt plus the new debt that we’re laying on top of it. We’re doing what’s called, what’s commonly called in our business a wrap structure. We’re wrapping the new debt around the existing debt. Again, the reason for that is to ease you into the debt service payments as your revenues grow. Again, you see the green line -- that buffer between the green line and the debt is what we call coverage. It is a certain required coverage legally that you have to have, and obviously you have an eye on that, but then, above and beyond that, there is a whole other comfort level of coverage you got to have in order to get the ratings up to a certain level with the ratings in New York. So we’re keeping an eye on that. I will say that in 2000, the engineers did a ten-year projection, much as we’re doing today on what these revenues that were going to be available over the next ten years were going to be. Going back today and looking at the projections that were made in 2000 and 2001, we can see those projections. We’ve actually done better than the projections, which will help us when we go next week. It gives us a little bit of clout when we go to the rating agencies and say, we told you we were going to do this, and we exceeded that, so you can pretty much believe that what we’re telling you is going to happen in the next ten years, we’re going to see that, as well. We’re trying to be extremely conservative. On the left-hand side is an idea of where rates are today. I put in anticipated yields. The reality is, this where bond rates are today. We expect an average interest rate on the issue, if rates stay stable, of about 5.1 right now, a great interest rate. It’s pretty similar to what we got back in 2000. The market has continued to confound a lot of people, and it hangs in here. Everybody expects rates are going to go up, and they are. But right now, they’ve been hanging in here. We anticipate, if all goes well, according to plan, that we will be in front of the rating agencies next week. We will print the preliminary official statement and begin marketing the issue the following week, sell it to the general public the following week after that, and then be back here to close with you all, say, five or six weeks from now, after we’ve validated the bonds. At the time which we price, which again anticipated roughly three weeks from today, that’s when the rates will actually get locked in. So we’re crossing our fingers and hope that rates will hold in here pretty stable for us for the next three weeks. One other important point I wanted to make, as a result of this, is something that Jim alluded to. This is a five-year borrowing. It’s a little larger than what we originally anticipated. Back in 2000, we anticipated borrowing in 2000, 2002, 2004, and 2006. That was four bond issues that were designed to fund all the same projects that you all agreed to back in 2000. None of that has changed in terms of the projects, but what we’ve simply done is consolidate two of the issues. So, instead of going back in ’04 and ’06, we’re now only contemplating one more bond issue in ’05 to fund the remainder of the need that you have as part of the 2000 capital plan. So you’re really not doing anything different than what you anticipated before, except you’re consolidating one. It’s going to save you some costs of issuance, and having to do this all over again in two years. And it’s also going to allow you to go into the market right now, when you know interest rates are low, and not have to take interest rate risk in ’04 and ’06. Any questions? Mr. Beard: I have one for Jim. Mr. Wall: Go ahead, Commissioner. Mr. Beard: Jim, we did one in 2000, what was it? $90 million? Mr. Wall: Roughly, $97 million. Mr. Beard: We used the same agency, right? Mr. Wall: Correct. Mr. Beard: Why are we doing the wrap-around here with the same agency now, instead of why didn’t we go out? What was the rationale for that? Mr. Wall: Well, when you say wrap-around, this is debt on top of additional debt. And, at the time, since you could only [inaudible] for a three-year capital improvement plan, the $97 million was to fund projects that we could construct and build within that three-year period. So that $97 million has gone for projects that are underway. We’re now talking about continuation of some of those projects, phase two of many of those projects that there is a five-year construction projects, so this debt is on top of that debt. Mr. Beard: No, you didn’t quite answer, because I’m asking, why did we use the same agents? Mr. Wall: The same agency, as far as A. G. Edwards? Mr. Beard: Yes. Mr. Wall: I believe the Commission made that decision. Y’all took a vote and approved doing that. We went through a process of looking at -- Mr. Beard: I want to know, what was the rationale? I’ve forgotten the rationale. Mr. Wall: The rationale was that they had done a good job the first time, and stick with a good horse. Mr. Hicks: There’s a second part to that, too, and it’s that the momentum that we’ve achieved on the project schedule that we’re working right now was something that would have been lost by several months if we’d gone out for requests or proposals and so forth, so it was not only performance of A. G. Edwards, but to continue the pressure on getting our water system up to speed. Mr. Beard: I think this needs -- the reason I ask -- I think we need an explanation of why we’re still using the same agents for this. I think that’s a question that the general public would want to know, when you’ve gone into two different bonds, at that time. And, are bond council, who are we using? Mr. Wall: Bond council is the same bond council. It’s special council, the same bond council that we used last time, and we’re proposing the same fee arrangement as we used the last time, insofar as that. And that’s the discussion I’ve had with them, underwriter’s council is the same as last time. All the members of the team are the same as they were the original 2000 issue. Mr. Mayor Pro Tem: Mr. Bridges? Mr. Bridges: Jim, what do we need to do today? Approve the resolution? Mr. Wall: Approve the resolution. The resolution has attached to it, although it’s not attached to your copy, but the exhibit B is the engineering report, which is being funded, approved, excused me, which is being approved, which incorporates the project list, as well as the method of funding for it. There is and exhibit A, which is a letter from Cherry, Becker, and Holland that says we meet the test, so we could move forward with this. So what we need to do is approve the motion that Mr. Cheek has already made, which is to approve this parity bond resolution. Mr. Mayor Pro Tem: Before we carry out the vote, I have a community leader over here I’m going to let speak for about three minutes. Let’s see what he has to say. Mr. Sykes, give us your name and address for the record, please. Mr. Sias: Sammy Sias, 3839 Crest Drive. I’m the president of the Sand Ridge Community Association, and I want to speak on sewage for just a moment, sir and Commissioners. In Sand Ridge, we represent approximately 800 to 900 taps. And sewage has been a long time coming, and we are very pleased that sewage is coming. However, we have addressed some concerns in the community meetings, and Mr. Hicks has touched on some of those concerns, but we don’t think the answer is quite there yet. One of the things we’re worried about is predatory practices. And when a homeowner is paying the $350 tap, approximately anywhere from $600 to $1800 for the connection fee, we see this as millions of dollars that homeowners now have to pay, and we don’t know who’s going do this. So we are asking, and have been asking, is that the County Commissioners assist us in that responsibility. Number one, as Mr. Hicks said, compiling a list of plumbers. Could we also ask that [inaudible] also consider hiring these plumbers, and then we pay the city back? Because one of the issues is 100% participation. If a person cannot afford the connection fee, you have some homeowners who go ahead and connect up, some who won’t. Now why not take it with one shot, one kill? When they come in doing the primary construction, let’s go ahead then. We got to have the right-of-way and the easement then anyway. Now, once those homeowners who come on late, you’re now redoing that easement again. Why couldn’t we, when that initial construction is done, then those homeowners get connected, not only from their tap but [inaudible] get their home connected? And then we pay the city. We’re not saying that what the city must do, but we’re asking that you consider this. Then we will have 100% participation, we’ll have one-time construction in the neighborhood. So, if we get the tap and connects, and we get support from our Commissioners, our city, that protect us, and we pay and we may pay the city or we may pay the plumbers. But let’s have it so that homeowners, all homeowners can’t afford it, and we are not running behind like that trying to get our homes built. Tennessee builders, Kentucky builders, once your home is built, these people went back where they came from. We don’t want to see the plumbers going back to Indiana. Mr. Mayor Pro Tem: Okay, Mr. Sias, one thing we can do is Max can come out and meet with your homeowners association, and I think that that’s something that can be worked out between the homeowners association and the Water Department. Now is there any other questions? Mr. Cheek: I just say, you and I are fellow soldiers in this same fight, and I can tell you almost verbatim what you stated today has been brought up twice in past years. Engineering Services, and we were unable to get six folks to do it. We have a bad case of the can’t-dos, rather than to find solutions. I’m hoping that in the very near future that we come up with a way to offset this cost, because some people do not view $2000 as a chunk out of their budget, but to people on fixed incomes, people that are barely making it on Social Security, they cannot afford it, and this city needs to serve the people and help them, not mandate things that they cannot afford without any assistance. Mr. Mayor Pro Tem: Mr. Beard? Mr. Beard: Mr. Mayor Pro Tem, this is the reason is brought this up earlier. And I think that we keep talking about meeting back with the homeowners, but it’s no need of meeting back with the homeowners if we don’t have plans to offer them. And I don’t think we have those plans at this particular time, and I think, at some point, you know, the Administrator and the Director of -- Max, and staff, they should be bringing us alternative plans that we could deal with here on Council, because we’re not talking about three or four weeks. Work is presently going on, and they’re doing this connections, and I think the gentleman there had a good point about some going to be doing it and some are not going to be doing it, and it’s going to create a burden for us. So I would think at some point, and I know we have a motion on the floor, but we ought to issue a motion to that effect, that the Administrator and the staff come up with a plan immediately that we can deal with here on Council, and then take those to the homeowners so that the next time those people meet, we will have something to offer them Mr. Mayor Pro Tem: Mr. Mays, and then Mr. Bridges. Mr. Mays: Thank you, Mr. Mayor. I agree totally with Andy, even before Engineering Services Committee [inaudible] last year’s Engineering Services Committee, even though I was not on there then, but sat in on these committee meetings. We’re echo this same feeling of trying to do this, and I think in fairness to Mr. Hicks, I think the director over there is receptive in terms of trying to work any form of financing that this city wants to do. I think probably, this is the best time, I mean, we may be a few folks short here, but to deal with the resolution about this much money. I’m going to vote for the resolution, but I think the question ought to be answered at this time to a point because, when we talked about this in the beginning, there were a few legal quirks in this things about what we could do and what we couldn’t do. I had some differences of opinion to a point that I felt there was a workable way to do it, and the comparison that I used at that time was the fact that, you know, we were getting over into the sanitation business. And we were dealing with garbage. On the other hand, we were spending millions of dollars to deal with sewage. We’re spending far more money to deal with sewage than we are dealing with trash. And if we could make dictates, and deal with [inaudible] and keeping them in a flow that kept them down and out where folk were able to do that and for the government and on a prorated basis to do it, that we should still be able to apply the same [inaudible] as it deals with sewage. So it’s not a new issue. I’m just maybe asking the question, if a formula or a mindset [inaudible] changed in this thing, Jim, because I think it can develop and does not cross any lines in terms of violating any decisions. It just has to get to the will to do it and the language to work it out and to get it done. Because, I think, if we let it go too long, this will be rolling, and yet there will not be a formula to deal with this, and we will miss a golden opportunity because there are hundreds and hundreds of folk, particularly on that southern end that will provide enough monthly income for this city, or however we deal with that payback on it. It’s a utility, just like we dealt with sanitation in terms of being there for taxpayers. Utility. If something is there and you know that you -- you cut the water on and it’s not going to necessarily be there, because you got to pay that prorated amount and weigh if you can have this. That is going to be much more receptive to the average homeowner, resident, or even people who rent property and have passed that cost on. So I think somewhere we need to get to putting that one to bed. We can put together this type of formula package to deal with this much money. And I think it’s a good thing. I think it’s a good team we’ve got together, in terms of working that. And that’s not necessarily their part of this to have to deal with [inaudible], but I think for the people we serving, we need to go ahead and find a way early to start getting this in place, because it will be there. There’s no need to have a dogfight down the road. It’s something positive, and this is one, George, that we’ve even, probably even before you came on board, you know, discussing how we do when we got to this point. Because if you lose 35 to 40 percent of the potential customers, because there’s no formula, I would much rather have a way to probably get 90 percent to 95 percent and then be able to get that revenue back in there. I think you’d have a much greater method of participation if there’s a formula weight that’s affordable and that you can get homeowners on it and do it. So it’s [inaudible] of where we’ve been on this thing over the course of more than a year there, and I think we can do that without getting into where we dictate anybody with it, but I think that can be done, and I think it needs to be done, because Sand Ridge, I think what you’re going to see, is that you may be here today. But you going to have a domino effect to a point of when you start looking at what else the government has passed on, and to deal with this, and they say, okay, now you want me to do it, you putting this out here, we’re still obligated to pay. Give us a way to pay for it, and do it. And I think if we do that, people be receptive to it. And I think we ought to be able to find a legal method in order to get that done. Mr. Cheek: Mr. Mayor Pro Tem, just a point of parliamentary procedure here. Would it be germane to the discussion to pass the initial motion and then have a following motion made to request the staff to develop a plan of what we’re discussing? Mr. Wall: I don’t think it’s germane to the [inaudible]. I think -- we got the directive -- Mr. Cheek: But we talked about this, and Jim, we talked about this. And I understand what you’re saying, but it would in fact be appropriate to have this as an amendment to the motion. Mr. Wall: I don’t think it would be. I don’t think it’s germane to it, and I think that, my suggestion is that we put this on the Engineering Services Committee on Monday and deal with it then. We got a called meeting for a limited purpose, and I don’t think it’s germane to it, and I would, frankly, suggest that you not do it as a part of this adoption of the bond resolution. Mr. Cheek: I don’t want to cloud the issue. But Boyton Road, for instance, one of the projects on Tobacco Road, is ahead of schedule. This is coming home to roost, and it’s not yesterday, it’s coming home to roost now. And we’ve got to come up with something, and it can’t take months. Mr. Mayor Pro Tem: Mr. Bridges? Mr. Bridges: Thank you, Mr. Chairman. That was one suggestion I was going to make that this should follow the proper procedure, and that would be to go through Engineering Services, probably with some input from Finance, at some point. But I want, I’m going to support the motion, I think we need to do that today, but I’m just, I think we need to be very cautious. We’re talking about a couple of thousand dollars per house to run it from the tap to the home. And I think we need to be very cautious about getting the city further involved in financing or the banking business. And that’s how I viewed it. I’m not saying I won’t support something that will assist people in something in that regard, but I think we need to look over this very carefully and I hope the, as the committee takes it up, they’ll take into account the really being in the banking business by the city. I know, initially, you had a year from the time a water line or sewage was put in to tap on to the system. And the purpose of that was because it did take money, a lot of money, to run that line. And I think, Max, is that still the same thing? Is it still a year, or is it six month now? Mr. Hicks: 90 days. Mr. Bridges: Okay. Well maybe we want to consider something in that regard, and that would keep the city out of it, but allow the homeowner to be able to save up the money for a year’s time. And we might want to consider something like that, as well. And particularly in regards to, as far as getting into the financial side for private purpose in regards to the Utilities Department, this is a department that makes money, in and of itself. And that’s how we’re able to extend the lines. I certainly would not want to get into a position where we’re in financial straits through some of the financial programs we may have through extending the lines, and I think we all remember, basically, financing some of the water bills, is what we were doing when we had over a million dollars sitting out there that we couldn’t collect. I don’t think any of us want to get in that position again. So those are just some concerns of mine in regards to the discussion in the city financing private debt for these lines. But I support the motion. I think it’s a good one, and I think we need to move on with the bonding. Mr. Mayor Pro Tem: Okay, gentlemen, do you want to put this second issue on Engineering Services for Monday? Mr. Bridges: I would think that would be the Chairman’s call, Mr. Mayor Pro Tem. Mr. Cheek: Absolutely. Mr. Mayor Pro Tem: All right. Ms. Bonner, could you do that for us? Being able to put something together that assists the homeowners with the tap-ins. We have a motion and a second on the floor. Mr. Mays: Mr. Chairman, I’d just like to say this publicly. I see where this is going, and I was not clouding this issue in terms of what’s there in the resolution. But I think, and I’m saying this a little bit sarcastically, I’m bringing it back up because I think the same folk who fought it before and going to fight it again, and then we’ll deal with that on another day. I also don’t think that it really has the total issue to deal with all the revenue projections in it, because if you plan a different plan that has nothing to do with this altogether, it can be dealt with out of savings. It can be dealt with [inaudible] to do it. But I think to get into the thing about financing something and paying private water bills, I think the elected officials, quite frankly, have a heck of a nerve, when you start mandating certain things, and you get to a point where you think folk will pay six figures on their homes would not be receptive to coming on and to do it. And what I just say to my old friend out here at Sand Ridge is that you take the other neighborhood owners and I’m going to vote for the motion as it is and I’m going to support what we have to do and put together a plan, Mr. Mayor, when it comes before Engineering Services. But I’m going to say this, I think what y’all need to do, you need to talk a little deeper cause I can say this non-politically, a lame duck position and ain’t running for nothing, you need to work on some of these fellows that represent you way out there on the deep south side, where a lot of those neighborhoods that are going to have to pay it, and I think you need to call them and campaign to them. And I think not only Sand Ridge needs to do it, the others need to line up and get ready to do it. Because I think that will be getting the attention of some folk who feel that this is an issue of some type of bail-out of some sort. This is a way in terms of working this out in an equitable manner that will be able to do something that’s both affordable and take advantage of the numbers that are in the system and be able to get to this point of almost being able to having something there in the reach of folk that they have waited on and that have built nice homes for years there that have been on septic tanks, then all of a sudden you say I’m going to mandate something to you one way but I’m not going to help you deal with it in another way. And it’s the same adage [inaudible] water lines how we do any other utilities. And I know what the ruling is going to be. I don’t want to hear any more lame weak excuse about gratuities and what we giving away, cause that’s what is going to come when it’s shifted to a committee meeting, Mr. Mayor. With the [inaudible] get to it, the more it clouds the [inaudible] up, but I just had to say that but I think what you’re going to need to do is to line up your forces, deal with your neighborhoods and work on these folk who don’t have a clue, to want to help anybody that’s the [inaudible] that they want to deal with. Because we are a Commission, we are conservative when we want to be, and yet we are liberal when we want to be. We’ll give away millions if it’s to the right source and the right folk backing it. So that’s the message you take back to the rest of your homeowners, there in Sand Ridge and to the other neighbors that are out there I’m sure that will link up with you, that are represented by some of these Commissioners who can’t see any way out of the dark with it . Mr. Speaker: [inaudible] Mr. Mayor Pro Tem: Go ahead, Mr. [inaudible]. Mr. Speaker: Thank you very much for y’all hearing me, but I want to leave with this comment. Gentlemen, sewerage is very important. I’ll tell you. Living with a septic tank overflowing, in Sand Ridge and in many areas out in south Augusta, we are sandy and we got clay. So once it rains [inaudible] saturates the ground, it comes back up. So sewerage is something we need and something we want and something we must have. But I also wanted to ask you and make it clear you understand that we don’t want to destroy our own area out there to get this sewerage installed. We really need to do it at once, and also I truly understand and believe that you all can support this. The garbage thing worked fine. Whether you wanted it or not, you had garbage. We all want it. So when I say do you have 100% that want it, no, a couple of people didn’t, but they got it, and now we all happy. So we asking you to do basically the same thing with sewerage. And gentleman, we need ten votes. I would want to think that all our Commissioners support us, as this is one city. So thank you. Mr. Mayor Pro Tem: You’re very welcome. Gentlemen, are you ready to carry the vote? There is a motion and second on the floor. All in favor of the motion, please signify with the sign of voting. Motion carries 8-0. Mr. Mayor Pro Tem: That concludes the bond hearing meeting, and we can now return to the work shop. We’ll now adjourn the special called meeting. [MEETING ADJOURNED] Lena J. Bonner Clerk of Commission CERTIFICATION: I, Lena J. Bonner, Clerk of Commission, hereby certify that the above is a true and correct copy of the minutes of the Called Meeting of Augusta Richmond County Commission held on May 30, 2002. Clerk of Commission