CFIERTFORD  TOWN OF HERTFORD BUDGET PUBLIC HEARING UTILITIES MONDAY,JUNE7@ 6:00 P.M.  The Town Council of Hertford held their budget public hearing for utilities on Monday, June 7, 2021 at 6:00 p.m. The meeting was called to order by Mayor Earnell Brown. The invocation was  offered by Manager Pamela Hurdle. COUNCIL PRESENT  Mayor Earnell Brown, Councilman Frank Norman (Zoom), Councilman Mimlitsch, Mayor Pro-  Tem Hodges, and Councilman Jackson (Zoom arrived late). Manager Pamela Hurdle and Clerk Olga Simpson.  STAFF PRESENT OTHERS PRESENT QUORUM  Mathew Cyr, Murrielle Harmon, Zoom, and Facebook Viewers  A quorum of(5) was present and established. PURPOSE OF THE MEETING  The purpose oft the meeting is to discuss water and sewer rates. Town manager Hurdle sent the rate information on the 26th of May for Council to review. Last year the state recommended a five-year proposed rate to help the town refund over general fund balance and consider depreciation, which had not been done ini the past. Ifwe want to pursue loans or grants ini the future, then why did we take the state's recommendations. The town of Hertford is also attempting to avoid a takeover by the state. Council was noti meeting to make any decisions but to discuss options ofh how toj proceed. The State ofNC gave recommendations ofhow to handle the rate. They suggested the town maintain and 11.6% increase. By the time we get to. FY2025, Councilman Mimlitsch: Council needs to stick to the five-year plan. Businesses should pay according to usage. Once they go over a certain number of gallons, they should pay more. It should not be a set rate for them. Ity would be smart to implement an extra rate hike based on Question: Councilman Jackson-How is it possible toi raise rates to increase the general fund balance. The Last time he checked He has never heard of anything being said about the state taking over Hertford over. Hertford is not on any list about being to take over. Mayor Brown cleared up the misunderstanding about the state taking over the Town ofHertford ifthe town did not follow the states recommendation. She meant in the future that may occur. In  those increases will be reduced to 2%.  gallon usage.  1  Budget Public Hearing (Utilities)    regard to water and sewer the town was given options. The cost toi include depreciation and Mayor Pro-Tem Hodges-He is not in favor of raising electric. Water and sewer are doing better. The town chose to implement the 36% increase instead of the recommended 50%. The town rates need to go up 11% for the next four years to cover the cost ofwater and sewer. The reason the town isi in this situation is because oft the $8 million dollar in loans taken out in 2008. The town needed money for something or for building something and borrowed the money to doit. The town has not budgeted for unforeseen occurrences, but just for operations. It has no capital reserves just in case something occurred. Since then, we have continued that same practice. If we do not go up on the rates, ifsomething happens, the town will have to go back to the: state, borrow the money, or find a grant. It needs to be done for the town to have a safe and reliable water and sewer system. It will hurt us, if we have aj power failure, if we ignore their recommendations. Tfwe put a tier system in place, that will be a good idea.  maintain an 11.6% increase annually through 2024-2025.  Mayor Brown-After reviewing the rate pay study, the connection fee for the residents ofHertford iso currently at a base rate is $32.58. For residents outside ofHertford, the current base rate $59.41. Ift the town follows the state recommendation FY2l/ofmaintaining 11.6% increase, the residents' rate would increase to $36.36 per gal for water. 1-4500 gallons will go from $5.57 to $6.22 per 1,000 gallons. For residents outside the town of Hertford, from I-4500 gallons would be $11.14. The recommendation would bring it up to $12.43. Those over 4,500 gallons would pay $12.91. Mayor Brown is looking for recommendations before the budget is finalized. Councilman Norman-The background information that was supposed to be sent to him so that he could do rescarch on thc mattcr was not provided to him timc cnough for him to do it. Hc had asked for the information multiple times and did not receive it. The information regarding Winfall was also requested and was sent to him too Iate for him to utilize it even though LGC stated his point was well taken. There is not a problem with the electric fund. In fact, it has been supporting other town spending. Itis not justifiable to do another rate hike on electric. Heis totally against raising the utility and water rates. Ifthe rates are tol be raised, it should be on commercial, industrial, institutions, and municipals. The town can make up the points it needs by raising the rates on these entities. He believes it is unfair and unjustifiable to make it sO that Mayor Brown-Clarified the purpose of the meeting being to discuss water and water sewer. Councilman Norman-Point of Clarification: He asked for the contract for Winfall, which had nothing to do with the rate study. Manager Hurdle was waiting for the contract information to come from the Winfall. When she received it, she sent it to Councilman Norman on Friday, June 4,2021. Councilman Norman could do nothing with the information because when he received it, there was no one to speak with over the weekend in time to prepare for today's meeting. He thought she could have sent whatever contracts she had SO that he could have started his  citizens will not be able to afford their utility bills. Council is not proposing to raise electric rates.  research.  2  Budget Public Hearing (Utilities)    Mayor Pro-Tem Hodges agrees on going up on larger scale usage. We have some businesses that use less that some residents. Itis about looking at who is our biggest consumers. We should charge by usage and not by whether they are resident or business or thel kind of facility. We cannot get all the way there without levying some sort ofincrease. We should consider doing 11.6% on users using less than 12,000 per month. Above that go up 50% then a tier above that 100% on the rate. Everyone must pay something, an escalating amount. Ifwe implement a tiered system, our smaller users and small or medium business may only have to up 30% instead of 58% overai five- year period. Council should not vote to increase rates without having more significant tiering system inj place. Is Council in favor ofi implementing a tiered system by usage? A tiered system would help with the distribution of costs and residents will: not have to Councilman Mimlitsch agrees with the tiered system and starting with 4,500 and go up. He does not want to hurt the citizens. Ifthat could be minimized with the tier system, he thinks its Councilman Norman is totally against a tiered system based on usage because residents will have the most usage. It should be based on type and not usage. Most municipalities base thej pay rates on type because the business or institution has a better ability to pay the rates. Food Lion, the school system, the courthouse can pay better than any resident. Institutions should pay a higher rate because they can afford to pay more than the residents can. The town's financial struggles are being placed on the backs of the citizens. Businesses can write off what they pay as  pay as much.  excellent.  expenses. Citizens cannot write offa a water bill. Councilman Jackson has no additional comments.  Mayor Pro-Tem Hodges motioned to adjourn the meeting. Councilman Mimlitsch Seconded. Mayor Brown-This matter was brought to the governing board to gather the position ofe each Council member regarding the state recommendation and how Council would handle the increase ofrates. Mayor Brown is also concerned about raising rates on citizens and believes businesses should pay higher rates, but not to the point it will deter them from coming to Hertford. Mayor Brown stated citizens could write off the water expenses on their income taxes. Councilman Norman: Point of Clarification: Businesses can write off expenses such as water Mayor Pro-Tem Hodges: He motioned to adjourn because in the next meeting, they need something to approve. No one wants to raise rates on the citizens. This meeting was just to gather ideas on how toi implement the state recommendations for the 5-year plan to raise rates, how the town can generate the $90,000 in needed revenue, and what type of system to use to accomplish the task. Mayor Pro-Tem Hodges volunteered to have everyone send their ideas to  Councilman Norman asked what was the outcome oft this meeting?  bills, but citizens cannot.  him.  3  Budget Public Hearing (Utilities)    Point ofClarification: Councilman Norman-Why does everything have to be sent to Mayor Pro-Tem Hodges? He has been working on the numbers involving the matter too. Mayor Brown asked, if he would like the information to be sent to him? Councilman Norman Council agreed to send all ideas formulated by Council members to address this issue to Councilman Norman by Friday June 11 so that he can report back to Council on what is the  said, yes.  best option for implementing and resolving the matter.  Roll Call Vote: Councilman Mimlitsch (Yay) Councilman Norman (Yay) Councilman Jackson (Yay) Mayor Pro-Tem Hodges (Yay) Mayor Brown (Yay)  The Motion to. adjourn passed unanimously (5-0). The meeting was adjourned at 6:49 p.m.  4  Budget Public Hearing (Utilities)