4 May 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: Liz Morris, Alan Goodman and Tim Doll, County Council, and Jim Thatcher and Rick Probst, Commissioners, [NOTE: CAN THE MAJORITY OF THE COMMISSIONERS ATTEND A MEETING WITHOUT PUBLIC NOTICE?] and Andy Baudendistel, County Attorney, Hrezo Engineering, Mike Hankins, Health Board, Robert Lischgke, former DCRSD Board member.
Marc Emral Register Publications and Tamara Taylor Bright Beacon were also present
Minutes- April 20th- hold for later
Treasurers Report- none
Renihan read the Public Access Statement as legally required.
Mr Meister- Cost is $34,000 on SR 350 and $23,000 on North Hogan sewer main, He will give the easement. He wants to make it a main and not a bunch of laterals. Stenger said they will have to go back to Aurora to work on the interlocal agreement changes. DCRSD would be turning the line over to Aurora. They would get the tap on fees. The Board wants to table the discussion and talk to Aurora etc. Several board members liked the proposal if the others down the road wold also hook on- and it makes a lot of sense for the future where people further down would not have to repeat all the steps he had to go through. Meister thanked Kramer and the board for all they did to help them solve their problem.
PUBLIC COMMENT:
Envirolink Presentation - Mike Myers- 919-971-3469- presented a powerpoint. He introduced:
Chris Lagally their rep in Indiana [NOTE: Operations Manager of Indiana Envirolink Inc Jan 2020 - Present 3 years 5 months
Lawrenceburg Indiana Superintendent SDRSD. Previously he was Pretreat Coordinator at SDRSD from Jul 2003-Jan 2020 16 years and 7 months]
and Nikki last name ??, their Attorney.[NOTE: They later mentioned that she worked with Barnes and Thornburg, a firm the county uses also as lobbyists and who will be preparing the interlocal agreement, etc.]
Mike Myers said they offer a full range of public private partnerships.They also do management (like with SDRSD in Lawrenceburg), and others where they own and operate- (like with LMH in Bright.) Shift of risk from public over to private operation. The only thing they do is water and sewer. They promote regionally. They want their goals and objectives to look as good on the back side as the front.
Envirolink founded in 1997 and moved to Raleigh NC in 2016. Started in Indiana in 2018 with SDRSD and 2021 with regulated business and went under contract to acquire LMH in 2021.
Infrastructure focus. Green or sustainable projects, reclaimed plant projects, AMI meter projects, Nad, SCADA projects. Rehab of undercapitalized and poorly managed facilities.
SC and NC have the most projects. Started there. Oklahoma has a couple Greenfield projects.
They reclaim water by using it for non-tap items like golf courses and laundry etc. They also contribute to third world nation projects.
Couple of ARPA projects here and they can bring in engineers and contractors to get it across the line, and consolidating the sewers
Crossroads (the new name for LMH?) Metrics- evidentiary hearing- 5,000 gal average bill - at $47 per month.
$636,000 subsidized the sewer district over the past years. $83.57 is average monthly bill for the county’s regional sewer district sewers. [NOTE: It his much higher than LMH’S so combining and getting the larger rate might be part of the allure??]
Key issues- 1. Mandatory connections- the county would have to have those ordinances in place. 2. Customer Complaints- if they can’t work it out with Crossroads- they have to file complaint with IURC. They would need a lot of steps to take over the DCRSD.
They could also do design build process
New board member Steward Cline asks a lot of questions- [NOTE: Did he bring this group on?]
Crossroads is a For- Profit private entity (with investors.)
Stenger said that the vast majority of the board has not seen much of this material before tonight. They need more time to review this.
Baudendistel said the three cities of SDRSD did not want to be bought. That’s why they are a managed district.
$26 million paint improvement that Envirolink is managing. Baudendistel said Chris Lagally worked for DCRSD and THEN went to work with Envirolink, which is how they ended up being consulted for the management. SDRSD did NOT want to be owned by Envirolink.
Thatcher has said that the county has money set aside to have Barnes and Thornburg- same office as Nikki to help with this. [Note: This is where the connection is made between the county hired lobbyists/attorneys and Envirolink’s Nikki.]
Interlocal agreement would be between the commissioners on behalf of the DCRSD. The interlocal allows the county to pay for outside council to explore this. You have the authority to …. [NOTE: So are Commissioners driving this arrangement or is DCRSD?]
Question about why they would want to commit to fix Guilford as it is a loser of a situation.
Mike Myers said it was because they would have a bigger base ultimately. [NOTE: Perhaps draw is the large amount of territory that DCRSD controls in the county, including areas outside the cities and towns]
Bernhardt Capital out of Baton Rouge LA- these are institutional investors with a low risk reasonable return on their money and some with with some higher risk things that Myers does not want to be involved in. [NOTE:Bernhard Capital Partners is a services and infrastructure-focused private equity management firm established in 2013. Bernhard Capital Partners has deployed capital in three funds across five strategies, has approximately $2.5 billion of gross assets under management, and is ranked as one of Private Equity International’s 300 largest private equity firms worldwide. Bernhard Capital seeks to create sustainable value by leveraging its experience in acquiring, operating, and growing services and infrastructure businesses.
Website
Industries
Financial Services
Company size
11-50 employees
Type
Partnership
Address: 400 Convention St
Baton Rouge, Louisiana 70802]
DCRSD meets on the 3rd Thursday of May next. The interlocal could be considered by Commissioners on the 16th, DCRSD on the 18th and Council on the 23rd. [NOTE: They are on a time limit due to the ARPA money they are using for something in this process.]
Weighted average cost of capital. Investors look at it from IRR perspective- a 6-8% rate of return.
If a private company fails then who does it fall back on?? Answer- They get another utility company to be appointed as a receiver by IURC. They don’t turn the finger to the county and say- it’s your problem.
The protections when you have an outside company- Answer- IURC has Consumer Affairs Division. First layer of protection. Second layer is rates. OURCC handles this.
Myers- Private utilities are eligible for public funding. EPA has the WET funding??? They have a $100million project in Louisiana.
Have to work with OURCC and thinking they will have a 5% rate increase. They have not asked for recovery of the purchase price.- but will go back to look for that after done.
Board wants to do project with Moores Hill.How would you handle that way out there?
County tax dollars are being put into a private utility’s hands…
Debt that you showed that the district has. How does that work if it’s being paid back over 40 years? Does that go to the new owner? Unclear on the answer to this.
Closed Public Comment
Steward Cline doesn’t see any reason to not start the process- to request the commissioners access the money for outside legal counsel (from Barnes and Thornburg) to see what the next steps are in this process.
Renihan spoke several times about we should at least explore our future options.
Steward Cline motioned to take the first step to have the county provide money to for Barnes and Thornburg to explore this option. Russell Beiersdorfer 2nded it so they could discuss it. Because they are different entities they need an interlocal agreement. This would still mean that 3 entities have to approve this once they draft the agreement. It would be an engagement letter with a NTE. (not to exceed amount) It is not ARPA funds. ???
Steward Cline said we need a list of 6-10 of these unique problems so that Envirolink and others who might want be involved know what they are looking at.
Stenger said this is to see if we are for sale.
Renihan- Is it even possible to sell these assets. [NOTE: ARE THEY ABLE TO BUY THE ENTIRE DISTRICT???]
Fehrman. - How are they going to do forced connections and unpaid sewer bills?
Beiersdorfer- Just to see our projects get done.
Approved to start step one of the process to look into selling DCRSD:- with 2 nays- Brett Fehrman and Jeff Stenger
PROJECT UPDATES- no major updates on any of these per Christy from Hero
Guilford
High Ridge WWTP
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 Dilldeer- Kramer said Watson said they are thinking about $80-90,000 for capacity fee. Based on 50 edu?
New Business
Office Update
Claims-agreed to pay.
Comments:
Brett Fehrman said this was the most interesting meeting we’ve had in many years- To see our assets up there on the screen. And it said we lost $500,000 last year. These rate assets ion the ground- that we have not recouped yet.
Steward Cline- They need to know a lot of things to figure out if buying us is a viable option.
Doug Baer- Do they think they are going to offset some of our problem spots with Bright sewers.
Kramer- Until they can show that they, as a private company, can force people on- then all of this is off the table. [NOTE: They plan on using teh Health Dept to inspect septic tanks and force people on that way. Remember this is a For Profit Private Company.]
Stenger- Both of our projects at Guilford and to win PNS as a customer then that is a lot of money. [NOTE: PNS is a current customer of Lawrenceburg for SDRSD.]
Steward Cline- Ask Envirolink- how are they going to homogenize the rates?
Doug Baer- Meisters and Peters paper- concerned about putting up more money. $58,000. When we come back- we need a counter on this with what we agreed to. There is a benefit to the main. If Aurora won’t maintain. But if they do agree to maintain that would be better to have the main. The $58,000 for us to spend is off the table.
Adjourned 7:15 PM
Christine Brauer Mueller
Lawrenceburg Township
