Minutes 02/25/2014 - Laserfiche WebLink

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February 25, 2014 WHEREAS, in particular, under the hybrid proposal, Portsmouth will still own, maintain, and operate its sewer system, while HRSD will provide compliance with the consent order and assume liability for any future wet weather capacity-related overflows; and WHEREAS, under the hybrid proposal, HRSD will also pay for all necessary capital improvements related to wet weather capacity, allowing Portsmouth and the other localities to avoid this significant expense; and WHEREAS, the hybrid proposal allows for the possibility of future regionalization of the sewer system should circumstances change; and WHEREAS, if the hybrid proposal is adopted by the region's localities, the consent orders will be modified to reflect these changes in responsibilities, and Portsmouth will be relieved of liability for wet weather sanitary sewer overflows and for construction of wet weather capacity related improvements. NOW THEREFORE BE IT RESOLVED by the Council of the City of Portsmouth, Virginia that the City Manager is hereby authorized to enter into an agreement between the City of Portsmouth and the Hampton Roads Sanitation District whereby HRSD assumes all capital improvement financing and construction responsibilities and liability related to wet weather sanitary sewer overflows governed by consent orders with the U.S. Environmental Protection Agency and the Virginia Department of Environmental Quality under such terms and conditions as he shall deem in the best interests of the City. BE IT FURTHER RESOLVED that the City Manager is further authorized to execute such other instruments and provide such other assurances as may be required in furtherance of the purposes set forth in this resolution." Ayes: Cherry, Edmonds, Meeks, Moody, Psimas, Randall, Wright Nays: None 14 - 77 -Adoption of a resolution authorizing the City Manager to execute an amendment to Hampton Roads Regional Jail Authority Service Agreement to permit a reduction in the Authority's Operating Budget Reserves. Vision Principle: Efficient, Responsive Government. Background: • The Hampton Roads Regional Jail Authority is considering several cost-saving strategies to relieve projected per diem increases for its member localities for the FY15 budget year. One of these strategies is the reduction of the required Operating Reserve from 25% of budget to 16.67% of budget. • The Authority's Finance Committee, Financial Advisor and Bond Counsel have reviewed and approved of the proposed policy change. • The Operating Reserve Policy requires approval by resolution of the governing body of each member locality (Portsmouth, Norfolk, Hampton, Newport News). Discussion: • The Authority has not yet adopted its FY15 Budget. There is currently a large gap between revenues and expenditures as a result of revenue loss from the removal of Immigration and Customs Enforcement (ICE) detainees and the correlated depletion of the Rate Stabilization Fund. If this gap is covered entirely by the four members' per diems, the per diems will increase by $18.00 to $25.00. At these increased rates, the FY15 impact on Portsmouth would be $1.64 million to $2.3 million. • By decreasing the operating reserve requirement from the equivalent of three months' expenditures (25%) to two months' expenditures (16.67%), the members' respective per diems will be offset by $9.00 for FY15 (equivalent to $821,250 for Portsmouth). • The Authority has historically managed its operations without ever dropping below the 90-day reserve.