7 December 2023- DCRSD Board Meeting Notes
Steve Renihan - President, Brett Fehrman - Vice President, Russell Beiersdorfer, Bill Shelton , Doug Baer, Jeff Stenger, and Steward Cline
Board Attorney - Frank Kramer
Also present: Rick Probst, Commissioner, Jim Thatcher, Commissioner, Liz Morris, Council President, and Andy Baudendistel, County Attorney, Barnes and Thornburg had 2 attorneys present Jake German and Chris Greisel (sp?)
Bob Hrezo, Engineer, Tamara Taylor, The Beacon and 2 citizens
Renihan read the Public Access Statement as legally required.
Barnes and Thornburg Presentation - Jake German with Chris Greisel - appreciated the questions the board sent in. Included a map with their research and discussion with IDEM. What does the state look like with regional sewer districts . There are 103 regional sewer districts in IN. DC is uniquely positioned as we have 3 regional sewer districts. Only 3 counties have 3 or more. Turns out this is an error- we only have 2. The mistake was Rockfield in SE Dearborn county ???? B and T apologized as this was in data they collected from state site. (So we are not as unique)
What level of accountability would remain in the county?
Chris Geisel- grants available- big issue was forced connections and highlighted that as something that is required for most grants.
Jake G said they looked thru a lot of funding options and available resources and who is the conduit for the grant. There are stipulations that you would be signing up for.
Chris G - Regional sewer districts have the option of a LOIT ( Local Option Income Tax) to supplement some of their capital ventures. [NOTE: This would keep control in the county non profit versus for profit private owners]
There are recommended levels of capacity that you have to have for bonds - debt service has several thresholds. They fall back to rates. Great that you are going thru a rate study.That has to be there to support all the endeavors. Only 140 connections exist in our sewer district.
Jake G- there are a handful of districts that have low number of customers. We have some other districts that we could help set up relationship that you could talk to them. There is info with IDEM and coordinates show where they are and where they accept mail. They are regional waste and water districts.
Options to sell the district and accountability- there are options that the board can look at. Some private entity can come in and operate with the board still here. That is different from selling the district. If you sell- your oversight is dissolved.
It has been done before- open example where the regional district has been dissolved- but went to another governmental entity. They came across 2-3 others that are thinking about this same possibility. Eastern Bartholomew and Allen County.
Stenger- This is not the same as selling to a for profit. Agreed. And forced connections are not available to a for profit.
Jake- 100% correct. But a for profit is not going to buy without that ability. While the law is lacking on a formal procurement process, you …
Cline- As a regional sewer district -we have to show that the revenue supports that debt.If I go buy additional capacity, they have to show income to support that debt. If a private entity acquires it - they can carry that debt however they want to. Isn’t that the primary difference?
Jake G -They might bring a customer pool that can spread out the debt any way they want- not the same as public . [NOTE: Like adding LMH customers to the DCRSD pool.]
Stenger - If we cannot get people to connect now- how can they get connection. If political will has not been there for forced connections, why would they do it for a private company so the for- profit can make money?
Baer- what happens if we merge with or acquire another private entity. Still an evaluation of assets and liabilities. [NOTE- Talking about LMH again]
Fehrman- we originally were formed to fix High Ridge Estates.
Jake G -we know there is an entity that has expressed interest in acquiring DCRSD. We wanted you to know what a procurement process is first without seeing the options. We believe there are other options out there in addition to them one we know of here. There would be economies of scale here ( because of LMH) that could make them more interested. [NOTE: So LMH was attractive because of size of customer base, but DCRSD is attractive because of the size of the territory they can expand in. Plus if our rates are higher, can they combine districts to get higher rates for LMH too???]
If the board decides the regional sewer district- it could be private or public sale or lease. One thing he urges them to consider- allow for a broad notice process to drum up a ground swell of interest. Not knocking the one interested, but it will be more transparent and competition will get the best price.
Beiersdorfer- What is the risk if they go belly up?
Jake G- There is not an easy answer to that - Require a bond. There is a dissolution and a process for re-establishing the body. Go back to the market place. At that point they are probably going to bankruptcy. [NOTE: Who pays for all that?]
Jake G- You have IDEM to oversee that - public utility. IURC is what oversees the private ones. Sometimes you see quasi governmental entities.
Renihan- We started when a private developer that went bankrupt had left High Ridge Estates stranded. The other organizations in our county would not take it over- so we had to do it. The organization that has approached us has bought another private company- LMH- which was a family owned construction business and had a lot more customers. And to date you have not approached them yet.
Next steps-
1.If there is a procurement process.
2.Need the rate study.
3.We could start dialogue with the company interested.
4.We would need an evaluation of DCRSD- and that is out of our wheelhouse- so there is a company that can find a comparable value with a range of districts.
5.They recommend a REAL process for procurement.(EXPENSIVE?)
Stenger- Looking at $9 million of our infrastructure being put in the ground. This would make sense to value after this? If we sell now we don’t get a portion of that money back.
Fehrman- The territory is probably our most valuable asset.
Chris G- IURC will require an appraisal on this. So he does not think the cart is before the horse. Can run parallel paths and not just sequential.
Baer- how about contracting with them for operations? Like they do for SDRSD. (South Dearborn Regional Sewer District- 3 cities plus the distillery)
Jake G- In that case you still have 100% ownership- do not share ownership.
Cline- Ts and Cs (Terms and Conditions) are different if operating vs owning.
Renihan- You have verified that a regional sewer district can sell. The rate study will be done in January- and it should be double. The Guilford plant has 16 in Guilford and 20 some in Lake Dildear. These are lower income areas.
Stenger- struggles with turning over control to others where the people have no vote or representation with the city or the company they put out there. We are changing them to where they would have no representation. We have been without county money for awhile. We have been forced to turn our customers over just about every time. Now we are going to double our customer base in the next 2 years.Why bail out and jump ship after doing this for 20 years? If you are like sewers in the cities you have a vote. (The politicians can be held accountable.) Really worried about county residents not being represented or having a say.
Cline- A bond- What about control of service- We have other areas that are at a tipping point. And not viable. What is the plan to expand service and control rates/
Fehrman- How do we get a private entity to carry on our mission? That was why we were formed. How do we pass on that responsibility.
[NOTE: Apparently there are more areas that are in trouble with septic that are not where there are economies of scale and/or the residents are not economically stable enough to finance the sewer prices.]
Jake G- There is a lot we can do in contract terms. At the end of the day- they buy it- and it is theirs. But if they are operating in this community- you have to HOPE they will be good operators. They will NOT want to answer to board if they buy it- even if contracted.
If you called us tomorrow and told us to start the procurement process- it will take about 6 months. And then other things running in parallel.
Chris- G- You are not in statutory requirement to have 2 appraisals?
Fehrman- Concerned about people in Bright- paying into a system for 20 years and now they are buying in again and paying again.
Stenger- Can we sell a portion and not all? It would give some protection for the citizens.
Jake-G- you could but not sure it would interest the company.
Cline- wants to have a draft of the procurement process. And list of possible companies.
Stenger- said that he had received this email at 5:10 PM and only 3 members had this info to look thru it. Wants to give them more informed direction as a board- not just sending them out to spend more money.
Baer- what if we acquire another utility company- would like to see it. We’d get it the same way the private company could fund it.
Renihan- We have no funding source and the county would have to secure the bonds if we did that. He went on about all the problems he’s had and he wants to get this company’s information. He does not have the time to do all this. He sees them cancelling Dec next meeting and one in December. They could have Jan 4 th meeting.
Cline - how much effort to get a draft RFP.- agrees with Jeff - we need time to look at the documents. For Jan- Have RFP draft and potential companies and asset eval companies.
Fehrman- And also want a management type option.
Board voted for Chris and Jake to do Cline and Brett’s requests.
Beiersdorfer- Who would maintain that bond for this? That’s been an issue for Plan Commission with subdivisions.
Barnes and Thornburg- will have the requested information in to you by End of Dec. for Jan 4 meeting.
6:25 PM End the Barnes and Thornburg presentation. All guests above left except for Rick Probst Commissioner.
Minutes: November 2nd minutes- approved and also the Oct 19th minutes- approved
Treasurers Report: board had the one from end of October. Cline asked about Boggs and Race budget - to see where they were with it. Wanted them to add the revenue into it. Wants Hrezo in project budget and not operating budget. Maybe get the accountant to meet with them to get the statements the way he wants them organized.
Public Comment:Nick Bailey -didn’t have business card- 812- 363 -3636— Manager of Crossroads utility. To talk about interlocal agreements with DCRSD and Crossroads about a couple projects that overlap. Larry Boyd is one of them- Customer agreement - Logan Township is the one they want to use and they pay DCRSD $1500 which DCRSD keeps and the DCRSD pays Crossroads- $1,172 system development fee.
They also have the Madden Group needing along Stateline and another for Holmes?? Much discussion for who is doing what there and how the payments go. Justin Rd where it ties to Stateline and goes down to the school. They want to tie into it by the manhole to Seldom Seen. Talking about first depositor rights.
Frank Kramer is to get with Bailey to work out agreement that includes Justin Rd. Kramer said Justis Rd- Madden. Bailey- Madden is building 5-6 homes on 260 acres - he’s building a home- family area. They had 14 lines for previous landowner and they were tapping into that. Bailey did not know what Madden plans were. He thinks this was a deal maybe with him and Tuckers. Previous owner had 14 taps on the line there. There is a territorial issue here that needs to amend it to accommodate that. The payments to the DCRSD is quarterly from LMH and now Crossroads. CTA map - need to find out if it’s ours or not. $18 charge per home per month until the infrastructure is paid off. This is like Serenity Ridge agreement. If its our territory we want to keep the customers.
Crossroads - who own LMH now- switching from chlorine to UV disinfection soon. Bailey-wants to know exactly where the sewer offices are- Down by Highridge Estates. Will keep in touch.
Project Updates:
Guilford- Hrezo- updated the plans and easements to commissioners thru County Park there are being submitted to IDEM and Army Corps for the creek crossings.
High Ridge WWTP- Hrezo- Wilks pressure is being measured. The pumps have not been maintained properly and pumping air to our system. The pumps wore out. Standard head pump will pump well with this pressure. Do not need a high head pump. Clearly pump failure.
High Ridge West Expansion - Texas Gas Rd
Wilson Creek Project
Huesman Rd and Cole Lane
Harrison TIF/Stone Project
Scenic Ridge/148 Sewers /Outer Drive
Stateline Rd
Serenity Ridge Tranquility Court
Moores Hill
Dillsboro- Lake Dildear-
New Business: Doug to see what Christy and Bob Hrezo think about the UV system
Bonds for 2024 needed to be signed to be turned in per Renihan.
Office Update:
Claims: Approved paying the claims.
Going have to get Wilks to pay their bills and want to review bills for accuracy.
Discretion of the Chairman: Renihan- Please review the info from Barnes and Thornburg. He apologized as he got them around 11 this morning and it didn’t get around to everyone earlier today.
Kramer had Fox easement- and access easement from Pella Crossing. Glitch with RR signature that will be resolved by Friday. No further action by board. Cline keeps pressing to have separated claims from Hrezo and Kramer so they can have accurate appraisals, when they want to get as much back as possible. Guilford - Bids will go out around end of Feb and we want to know what we need.
Adjourned: 7:30 PM.
Christine Brauer Mueller
Lawrenceburg Township
