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HomeMy WebLinkAboutMinutes-10-10-74-Adjourned Regular MeetingMINUTES OF THE CITY COUNCIL OF THE CITY OF DOWNEY ADJOURNED REGULAR MEETING OCTOBER 10, 1974 The City Council of the City of Downey held a regular adjourned meeting at 5:30 p.m., October 10, 1974, in the Council Chambers of the Downey City Hall, Mayor Richard M. Jennings presiding. - PRESENT: Councilmen: Walter S. Temple, Donald H. Winton, Hazel N. Scotto, Richard M. Jennings ABSENT: Councilmen: Joseph E. DiLoreto (arrived at 5:45 p.m.) ALSO PRESENT: Charles W. Thompson, City Manager Ervin Spindel, Director of Community Development Richard D. Patton, Director of Finance Robert L. Shand, City Clerk -Treasurer WATER BOARD Scott Temple, Chairman MEMBERS Joseph Davis PRESENT: Mike Huggins Irving Rosen ABSENT: Warren Heer (arrived at 5:40 p.m.) Mayor Jennings introduced the consultants from the firm of Wilsey & Ham, Mr. Ray Heidrick and Mr. Peter VanRiper. He explained this is an adjourned regular meeting and said the study session would be conducted as a question and answer program because the consultants have already made a water systems study presentation to the Water Board. The study session commenced by reviewing the Wilsey & Ham Preliminary Appraisal of Water Systems report dated April, 1974. Each of the fourteen chapters was perused by the City Council and Water Board members. Mr. Ray Heidrick explained the report subjects and answered questions from the group Mayor Jennings pointed out that paragraph 2 on page 1 of the Report is not pertinent to this report because the indicated 5% annual rate increase was not used in any of the projected tables, including Table 19. Mr. Heidrick explained Tables 1, 2, and 3 as being indications of the "Market Place" and a measure of premiums paid for water systems during the past year. He also explained the various regulatory agencies for water systems as well as the Home Rule concept. Mr. Warren Heer arrived at the meeting at 5:40 p.m. Mr. Hedrick outlined various methods for negotiating the purchase of water systems, including information on financing. Councilman DiLoreto arrived at the meeting at 5:45 p.m. Councilman DiLoreto inquired regarding condemnation costs and the projec- tion of various attorney fees. Mr. Hedrick referred to page 84 in reply to Councilman DiLoreto's questions. Community Development Director Spindel explained Table 19 and said based on present rates, no rate increase would be required until 1980-81 for the newly - acquired systems; that no rate increase would be required until 1982-83 for the combined systems. Discussion followed on benefits to be realized by acquiring systems within Downey. Councilman Winton raised questions relative to $5,340,800 preliminary esti- mates and the feasibility of the acquisitions to be considered. Consideration was also given to inventory of assets above and below ground. Council Minutes 10/10/74 -1- Councilman DiLoreto asked one of the consultants to outline the procedure used for physically examining the water systems under consideration for acquisi- tion, as well as the estimated costs for upgrading the systems to the anticipated level of service for the Downey water consumers. Mr. Heidrick discussed the value of the system and what the court would require for valuation information. Mr. Heidrick stated that their preliminary report did not call for evaluating the system. Mayor Jennings inquired about "age -of -pipe" consideration. Mr. Heidrick said age -of -pipe does not necessarily indicate extent of rotted pipe. City Manager Thompson commented on a Phase II study that would be compre- hensive and detailed analysis of the system which may or may not be necessary, depending on the outcome of the feasibility study. Councilman Winton said the report, so far, has indications that the water system program is feasible, assuming a cost of $5,340,800. However, he stated, if additional expenses might raise the cost to $8,000,000, then the program is no longer feasible. Discussion followed regarding the cost of a Phase II study, including operating expenses, and the assets that would be acquired in the expansion program. Inner -connections between the systems were mentioned. Community Development Director Spindel was asked to review Phase I and Phasell as to costs. Mayor Jennings commented that the Preliminary Appraisal Report fairly well covers Phase I. Methods of depreciation for water systems and the services of actuaries for evaluating utility properties were discussed. Mr. Heidrick said the acquisition program would include Park Water Company water rights within Downey. He added that no major problems existed in the water systems except with two shallow -main situations in the southwest and northeast portions of the City. Discussion followed regarding a water main loop completely around the City to assure constant water supply for all areas within Downey. It was noted the Phase I report calls for three additional water wells. Mayor Jennings inquired if the City's computer system will be able to accommodate the increased water consumer load for invoicing and accounting pur- poses. Finance Director Patton said the system has the capacity for the additional load. Water Board Chairman Temple mentioned there would possibly be a requirement for having additional shift hours for water billing purposes. Mayor Jennings asked if the City would have to purchase real property (land) within Downey now owned by the other water companies. Mr. Heidrick said no real property or building acquisition is included in the feasibility study. Councilwoman Scotto inquired about the cost basis used for establishing the water rates. City Manager Thompson explained that the water program is a separate enter- prise fund and includes costs for buildings, office space, and administration, and the office/administration costs are prorated on a percentage basis. Mr. Heidrick recommended Procedure G as the next step toward acquisition (page 83 of the Report). Council Minutes 10/10/74 -2- Mayor Jennings inquired when election would be held for the bonds. Mr. Heidxick said paragraph 5 would apply, the election would be Citywide, and the timing of the election would depend upon the negotiation proceedings. Councilwoman Scotto raised questions regarding source of water supply. Mr. Spindel explained existing wells and the MWD supply. He also explained replenishing of underground water supply by MWD and the effect of MWD water upon the quality of the City's well water. Mr. Rosen of the Water Board summarized the efficiency of the Downey City Water Company operation and that it has not sought a water rate increase at all in the past year. He said one of the other water companies has already had a rate increase and is applying for another. Mayor Jennings thanked the firm of Wilsey & Ham for the hearing and also thanked the Water Board for appearing. Mayor Jennings said this is an adjourned regular Council Meeting, and he asked the Council to recess into an Executive Session. Department Heads were excused and the City Manager was asked to join the Council in a few minutes. At the end of the Executive Session, the Mayor adjourned the Council Meeting at 8:45 p.m. Ro ert L. Shand, City Jerk -Treasurer Council Minutes 10/10/74 -3- X Ri is M. Jenningsplayor