Minutes of the Special Meeting
of the Board of Supervisors and the
September 17, 2009, 1:00 p.m.
Attendees:
a)
b) DELCORA – John Pileggi, Controller; Joseph Salvucci, Executive Director; Michael DiSantis, Director of Operations and Maintenance; Robert Powell, Business Development and Strategic Planning Manager; Adam Matlawski, Esquire, Solicitor.
Conary called the meeting to order at 1:00 p.m. followed by introductions. Discussion ensued regarding review of the draft Management Agreement Regarding Sewer Facilities and the draft Asset Purchase Agreement for Acquisition of Sanitary Sewer System.
Unruh and Kologie provided historical background on the Riverside Wastewater Treatment Facilities (Facilities) and reviewed the Lenape/Pocopson Sewer Service Area Map. Except for Pileggi, DELCORA representatives in attendance previously inspected the Facilities. Unruh noted that the draft documents distributed today outline all tasks required for completion in order to transfer ownership of the Facilities and acknowledged Toll Brothers preliminary agreement with the text of the drafts. Conary noted that identified warranties not referenced in the drafts will be included in the transfer of ownership.
DELCORA Executive
Director: Salvucci commented that he and Matlawski did not have the benefit of thoroughly reviewing
the draft agreements. He expressed concern about a number of requirements in
the draft Management Agreement. In addition, he noted that DELCORA’s
proposal was written based on the particulars of the Request for Proposal
(RFP). Salvucci was clear in identifying the ability
of the Authority to maintain an adequate capital improvement fund and to manage
a facility the size of Lenape/Pocopson on a
day-to-day basis. He presented a number of examples of the types of rate and
debt service and financial reporting they are accustomed to maintaining. He
noted the Authority’s experience in operating the Rose Valley Facility in
Discussion/Management
Agreement Regarding Sewer Facilities (Agreement): Powell noted that there
are a number of items in the Agreement that DELCORA did not anticipate based on
the RFP. Discussion ensured regarding each section of the draft Agreement as
numbered below and attached herewith as Exhibit “A”:
1. Agreement reached that the facilities shall be maintained and owned by DELCORA.
2.
DELCORA does not have a mechanism to collect the stormwater management (swm) fee
and requested further information regarding the swm
facilities. Conary explained the maintenance requirement for cleaning the
inlets connected to the underground infiltration system. He also noted that as
soon as the
3. The initial user rate will be determined by DELCORA and notice of proposed rate increases shall be given at least thirty (30) days prior to the increase. Pileggi noted that the budget is prepared by November following review of all expenses, i.e., fuel, electricity, etc. The budget is not mailed to the users – users learn of the annual rate when they receive their first statement, approximately the second week of January. DELCORA can submit an annual report to the Township documenting revenues and expenses but it may not be an itemized report. The capital fund currently held by Artesian will be turned over to DELCORA.
4. DeSantis clarified that DELCORA will be the permit holder once the transfer of ownership is complete. Violations will be the responsibility of DELCORA who can provide the Township with copies of the inspection reports and highlights of maintenance activities. DELCORA agrees that the Township can inspect the facility on a periodic basis. Township retains control over connections under Act 537 Sewage Facilities Plan for the Lenape-Pocopson Study Area (Act 537 Plan). Kologie noted that the provisions of Section 4 of the Agreement are written to provide an opportunity for the Township to take a second look at monthly reports. Unruh noted that transfer of the permit should be a provision of the purchase agreement.
5. Review of Section 5 included a description of the pretreatment of industrial discharge by Lenape Forged Products and verification that the sewer connection is for household type waste only. Unruh requested and DELCORA provided an explanation of their pretreatment requirements for industrial discharge and their monitoring process including sampling of laterals and testing for pollutants. Issue was raised that the connection to the Simon Pearce Restaurant will require equal amount of attention due to the required installation of a grease trap. Ordinance amendment will be required to the provisions of Chapter 170.
6. Agreement reached on Section 6 as written regarding copying Township on all correspondence with the Pennsylvania Department of Environmental Protection.
7. DELCORA reiterated that they automatically include capital reserve for all facilities they own. For the purpose of financial reporting, they will develop a breakout report of the capital reserve for Pocopson/Riverside.
8. DELCORA will identify the limits of the general liability insurance policies.
9.
Agreement reached that the Township shall retain full
responsibility for the Act 537 Sewage Facilities Plan and any revisions or
amendments thereto. However, DELCORA noted that this may be an unenforceable
provisions if state law changes. DeSantis raised
questions regarding accommodating requests for changes to the sewer extensions
as described in the Act 537 Plan, particularly regarding construction of the
line for Simon Pearce and the reimbursement component. Question: is the extension an extension of a line or a lateral tap in
fee? Powell noted recent discussions with the Township regarding the Becker
Project situated on
10. Section 10 of the Agreement is removed.
11. Section 11 is adequately addressed in Section 9 above.
12. Section 12 of the Agreement is removed.
13. On the issue of sale of the Facilities, DELCORA responded that the DEP would have a dim view of DELCORA abandoning the Facilities. Township concern is transfer to a third party. The Agreement, once finalized, should survive any transfer.
14. Agreement reached regarding Section 14 wherein DELCORA will not enter into any agreement with any municipality or developer related to the Facilities without prior approval of Township.
15. Solicitors for the Township and DELCORA will prepare language regarding indemnification to provide for brief ownership period by the Township.
Agreement reached that text of Sections 16 through 20 approved as written.
The parties assembled did not review the Asset Purchase Agreement for Acquisition of Sanitary Sewer System. Township Supervisors indicated that they are working with Artesian and Toll to complete ownership and dedication issues by November 1, 2009. Conary briefly reviewed status of accounts receivable and Township’s efforts to facilitate collection process. He noted at least one account seriously delinquent. Account delinquencies will be discussed at another time, but the assumption is that DELCORA will be assuming account collection from Artesian. Werkley will research tax parcel identification for the facilities to assure that they are not part of the community open space.
Meeting adjourned at 2:45 p.m.
___________________________________ _____________________________
Susan E. Simone, Administrative Secretary Stephen R. Conary, Chair
EXHIBIT “A”
MANAGEMENT AGREEMENT
REGARDING SEWER FACILITIES
This Management
Agreement is dated as of the
day of
, 2009, between POCOPSON TOWNSHIP, a Township of the Second Class
located in Chester County, Pennsylvania (hereinafter “Township”) and Delaware County Regional Water Quality Control
AUTHORITY, a Pennsylvania Corporation (hereinafter “DELCORA”).
BACKGROUND
The parties wish to
clarify the relationship between the Township and DELCORA with respect to the
ownership, use, operation and maintenance of those sanitary sewage facilities
described on Exhibit “A” hereto (collectively the “Facilities”). The purpose of this Management Agreement is
to set forth this relationship.
NOW THEREFORE, in
consideration of the mutual promises and covenants contained herein and
intending to be legally bound hereby, the Township and DELCORA hereby agree as
follows:
1.
From and after the date of this Agreement, all Facilities
operated and maintained by DELCORA shall be owned by DELCORA.
2.
The Township recognizes that DELCORA has the right to
collect user fees, connection fees, tapping fees and any other fees authorized
by law. Subject to the provisions of
Section 3, DELCORA shall impose upon customers of the Facilities whatever user
fees, connection fees, tapping fees and other fees permitted by law, which it
deems necessary and appropriate. DELCORA
shall in its sole discretion file municipal liens and claims for the collection
of same in the event the said fees are not paid in accordance with the
resolutions, rules and regulations of DELCORA.
Township reserves the right to require DELCORA to charge a stormwater management fee as part of DELCORA’s
rate structure, which fee shall be collected by DELCORA and paid to Township
quarterly.
3.
The initial user rate shall be $ per EDU per month, which fee shall not
increase for a minimum period of five (5) years from the effective date of this
Agreement. Thereafter, at least ninety
(90) days prior to any proposed increase, DELCORA shall submit notice of the
proposed increase to Township in writing along with evidence supporting the
need for such increase. Additionally,
DELCORA shall submit an annual report to the Township documenting revenues and
expenses related to the operation of the Facilities.
4.
Township or its consultants or agents shall be permitted at
all times upon reasonable prior notice to inspect the Facilities. It is anticipated that periodic inspections
will be conducted quarterly for the first two (2) years after the effective
date of this Agreement, and annually thereafter. In order to offset the cost of
such inspections and other costs incurred by the Township related to the
Facilities, within thirty (30) days after the end of each calendar quarter,
DELCORA shall pay to Township three percent (3%) of all user fees, connection
fees, tapping fees or other fees collected by DELCORA related to the
Facilities. DELCORA shall also be
responsible to reimburse Township for any costs incurred by Township to respond
to emergencies or to investigate and respond to any Pennsylvania Department of
Environmental Protection compliance issues; such costs to be in addition to the
three percent (3%) described above.
5.
At the beginning of each calendar year DELCORA shall provide
to the Township a maintenance plan consistent with sound engineering practices
for the Facilities. At a minimum,
DELCORA shall annually (but at varying times each year) monitor for industrial
waste and other discharges prohibited by local, state or federal governmental
agencies, with particular attention to monitoring for discharges from Lenape Forged Products.
In addition, DELCORA shall annually sample the Facilities for irrigation
where the sewage enters the sanitary waste plant and where the treated liquid
discharges from the sanitary waste plant.
6.
Township shall be copied on all correspondence with the
Pennsylvania Department of Environmental Protection, including but not limited to
the Chapter 94 report, monthly Discharge Monitoring Reports, and quarterly
groundwater monitoring data.
7.
A capital reserve
fund shall be maintained by DELCORA in a separate and segregated account from
its general operating funds for use only for capital replacement or improvement
of the Facilities. DELCORA hereby
acknowledges receipt of the capital reserve fund from Toll Bros., Inc. and
Artesian, the owner and operator of the Facilities prior to DELCORA’s
ownership.
8.
DELCORA shall carry general liability and property damage
insurance policies on the Facilities in amounts approved by the Township and
with the Township listed as a named insured.
9.
DELCORA may not, without the prior approval of the Township,
make an extension to or increase the capacity of the Facilities, or add users
outside of the special study area described in the Act 537 Sewage Facilities
Plan for the Lenape-Pocopson Study Area prepared for
Pocopson Township dated May 2009 and shown on the map attached hereto as
Exhibit “B” (the “Study Area”), whether such extension, increase or
addition is by applying to the Pennsylvania Department of Environmental
Protection for a re-rate, by physical improvements to the Facilities or
otherwise. Prior to acting on a request
for approval, the Township shall obtain the recommendation of the Township
Engineer, at DELCORA’s expense, as to whether the
item is feasible and in particular whether there is sufficient capacity in the
Facilities (including the supply and treatment components) to accommodate the
requested change. The Township shall
retain full responsibility for the Act 537 Sewage Facilities Plan and any
revisions or amendments to the Plan.
10.
The general specifications for the design, operation, maintenance
and repair of extensions of the Facilities shall be established by DELCORA but
subject to prior approval by the Township.
The specific design of an extension to the Facilities, whether by the
Township, DELCORA, or developers, shall be reviewed and approved by Township
and Township’s engineers. To the extent
that third parties in the Study Area finance any extensions of the Facilities,
DELCORA will require additional parties who connect to the extension to be
charged a reimbursement portion as part of the tapping fees paid for such
connection. Such reimbursement will be
paid to the party at whose expense the extension of the Facilities was
constructed pursuant to an agreement between DELCORA and such party.
11.
Public sewage service areas in the Township shall be
established by and be the sole responsibility and jurisdiction of the Township.
DELCORA shall only accept sanitary waste from customers in the Township.
12.
DELCORA shall have the sole responsibility and authority to hire
and direct its employees. DELCORA shall
have the authority to engage the services of a consulting engineer and other
consultants.
13.
Except as set forth in this Agreement, DELCORA shall have
all rights and authority provided by law including, but not limited to, the
right to borrow money and to enter into contracts not otherwise prohibited
herein. However, DELCORA shall not sell,
lease or convey any other interest in any part or all of the Facilities without
prior approval of the Township, provided however that if DELCORA should decide
to sell the Facilities, the Township shall have a right of first refusal to
purchase the Facilities for the sum of $ . A memorandum referring specifically to this
requirement shall be recorded at the Office of the Recorder of Deeds for
14.
DELCORA shall not enter into any agreement with any
municipality or developer related to the Facilities without prior approval of
Township.
15.
DELCORA will reimburse, indemnify and hold harmless Township
and its officials and employees from and against any and all liabilities,
obligations, damages, losses, actions, audits, deficiencies, claims, fines,
costs and expenses, resulting from, relating to, or arising out of the
ownership and operation of the Facilities and the provision of sewage service
by DELCORA, the failure of DELCORA to perform its obligations hereunder, or the
failure of DELCORA to operate and maintain the Facilities in compliance with
applicable laws and regulations, including attorney’s fees, fines, and costs of
employees or consultants investigating or responding to such items.
16.
The covenants and agreements contained herein are for the
sole benefit of the parties hereto, their legal representatives and successors in
interest, and they shall not be construed as conferring any rights on any other
person or entity.
17.
This Agreement sets forth the entire understanding of the
parties hereto with respect to the provisions contained herein. It shall not be amended or modified except by
written instrument duly executed by each of the parties hereto. Any and all previous agreements and
understandings between and among the parties regarding the subject matter
hereof, whether written or oral, are superseded by this Agreement.
18.
Any notice, request, demand, waiver, consent, approval or
other communication which is required or permitted hereunder shall be in
writing shall be deemed given only if delivered personally or sent by telegram
or by registered or certified mail, postage prepaid, return receipt requested
as follows:
If to Township:
with a copy to: Ross A. Unruh, Esquire
Unruh, Turner, Burke & Frees
If to
Delcora:
19.
Should any one or more of the provisions of this Agreement
for any reason be held illegal, invalid or unenforceable, such illegality,
invalidity or unenforceability shall not affect any other provision of this
Agreement and the remainder of this Agreement shall, in such circumstances, be
construed and enforced as if such illegal, invalid or unenforceable provision
had not been contained herein.
20.
This Agreement shall be effective commencing as of
__________________.
IN WITNESS WHEREOF,
the parties hereto have caused these presents to be executed and their
respective corporate seals affixed the day and year first above written.
ATTEST:
_____________________________ By:_________________________________
Secretary
ATTEST:
__________________________________ By:______________________________________
(Assistant)
Secretary (Vice) President
EXHIBIT “A”
FACILITIES DESCRIPTION
EXHIBIT “B”
STUDY AREA MAP