Village Council Public Meeting Minutes 20180418

A SPECIAL PUBLIC MEETING OF THE VILLAGE COUNCIL OF THE VILLAGE OF RIDGEWOOD HELD IN THE SYDNEY V. STOLDT, JR. COURT ROOM OF THE RIDGEWOOD VILLAGE HALL, 131 NORTH MAPLE AVENUE, RIDGEWOD, NEW JERSEY ON APRIL 18, 2018 AT 7:00 P.M.

1.CALL TO ORDER – OPEN PUBLIC MEETINGS ACT – ROLL CALL – FLAG SALUTE

Mayor Knudsen called the meeting to order at 7:00 P.M. and read the Statement of Compliance with the Open Public Meetings Act.  At roll call the following were present: Councilman Hache, Deputy Mayor Sedon, Councilman Voigt, Councilwoman Walsh, and Mayor Knudsen.  Also present were Heather Mailander, Village Manager/Village Clerk; Matthew Rogers, Village Attorney; and Howard Woods, Water Rate Study Author.  Councilman Voigt left the meeting at the conclusion of the Public Hearing for Ordinance #3636.

Mayor Knudsen led those in attendance in the Pledge of Allegiance to the flag as well as in a Moment of Silence to honor the men and women serving our Nation, our first responders and all those who suffer from senseless violence.

2.MAYOR’S COMMENTS

Mayor Knudsen stated that as the meeting begins, if anyone is present to comment on the Water Rate ordinance, to please hold their comments until the Public Hearings for those ordinances.

3.PUBLIC COMMENTS

There were no public comments.

4.ORDINANCES

a. Ordinance #3636 – Re-establish Water Rates and Fees – 201-2017

Mayor Knudsen moved the Clerk read ordinance 3636 by title on third reading and that the public hearing thereon be opened.   Deputy Mayor Sedon seconded the motion.

Roll Call Vote

AYES:   Councilmembers Hache, Sedon, Voigt, Walsh, and Mayor Knudsen
NAYS:   None
ABSENT: None
ABSTAIN:  None

The Village Clerk read ordinance 3636 by title:

AN ORDINANCE OF THE VILLAGE OF RIDGEWOOD, IN THE COUNTY OF BERGEN, NEW JERSEY, AMENDING CHAPTER 269 OF THE RIDGEWOOD VILLAGE CODE, WATER, AND CODE CHAPTER 145, FEES, TO RE-ESTABLISH THE WATER RATES AND FEES FOR THE 2010 THROUGH 2017 CALENDAR YEARS.

Mayor Knudsen stated that the hearing on ordinance 3636 was continued to this evening’s meeting due to the fact that the Village Council wanted to allow additional time for the public to ask questions and make comments about the water rate study prepared by Howard Woods.  Each speaker will be limited to five minutes.  The Public Hearing is now continued.

Mr. Rogers stated that this was a public hearing on the ordinance, not the litigation that preceded this meeting tonight.  It is for the establishment of the water rates for the years in question, it will not be about the trial or the litigation.  Mr. Rogers encouraged individuals to proceed in an orderly fashion and stated that the presentation is being taped and recorded in case the Judge needs to see or hear it, to be reviewed by the court.  He encouraged everyone to adhere to the rules of not interrupting witnesses or anyone making statements or comments.  There should be no yelling out from the audience.  If anyone would like to make a statement, they can add their name to the list.  Mr. Rogers reiterated that there is a limitation of five minutes per person, however in this case, there is one exception which is the attorneys in regard to the litigation.  There had been discussion last time of this being a court hearing, and the attorneys in the lawsuit will be able to conduct whatever cross examination is necessary not only of Mr. Woods, but also the expert that may come before the Village, that is hired by the plaintiffs in the litigation. 

Mr. Rogers stated that the record is going to encompass a letter that he sent on April 16, 2018 to Joseph Fiorenzo who is the lead attorney for the plaintiffs and in that letter, he explained the same thing he explained here, that the Public Hearing was being continued on April 18th, and would go from 7:00 P.M. to no later than 10:00 P.M.  A request was also made to find out by May 1st who the expert was that was going to be hired by the plaintiffs to be presented to the Village Council for testimony, and then the Village would work together with the plaintiffs to try to set up a date when that particular witness could come before the Village Council.  Mr. Rogers stated that the Village needed that information and also needed by May 1st information as to whether or not there was going to be a report and dates when the witness would be available, so the plan is to continue tonight for that purpose so the Public Hearing won’t end tonight, it will be continued to at least one more hearing after this. 

Mr. Rogers stated that there is another date scheduled, May 14th, which will be announced later this evening, so it is part of the public record.  Hopefully this is a date that can be utilized by the plaintiffs with their expert, but if it isn’t, there will be discussion with regard to that to try and accommodate the needs of the expert hired by the Plaintiffs.

Mayor Brian Scanlan, from Wyckoff, stated that he was not going to give an opinion in particular on the rate study but would give a layman’s opinion of someone who has been following this issue and has been on the Wyckoff Council since January 1, 2009, before the litigation started.  He gets the sense that at the time the Village raised the rates, they created a cash cow which folks object to in the surrounding towns and over the years the Village has tried to launder money from its cash cow through various Village Departments and real estate purchases.  Mr. Scanlan stated that he feels with regard to the rate study, it’s almost like someone was hired and was told that there was a problem he needed to solve and was told that the rates should not be decreased or that there should be any kind of a rebate to rate payers in all of the towns, on the basis of the rates that were established in 2010.

Mr. Scanlan stated that to him, the fact that Ordinance #3636 was introduced before the entire time period was examined by the rate study, is indicative of how quickly the Village is trying to force this process.  He apologized if his comments were insulting, he was just trying to give the plaintiffs view as it were, and his view.  The litigation here is over a million dollars and keeps going up as more experts will be hired and there will be on-going appeals. His own plea to the Council, which the plaintiff’s attorneys have made repeatedly, which the Judge has requested, is that the Village consider entering into settlement negotiations. 

There is the determination, perhaps because the money to pay for the Village’s litigation is coming from the rate payers of Ridgewood Water, not out of the Village Council budget, to just keep going and fighting this thing as long as possible.  Mr. Scanlan thinks it would behoove everybody to enter into settlement negotiations and bring this matter to a close.  He thinks there is the possibility for there to be the creation of a win-win situation and he would really encourage the Village Council to think about that, particularly as the legal bills for all sides continue to mount.

Mr. Rogers responded to Mr. Scanlan’s comments stating that the Village certainly dislikes the comment that they have laundered money, and he thinks it should be pointed out that the only person who has said that there should be a rebate was the expert that the plaintiffs hired, which was rejected by the court. So, the effort here was to get what the Village thought was the best person to do a full rate study after the court decision, and that is why the Village went to Mr. Woods. His report is his report, and Mr. Rogers will await the plaintiff’s expert’s testimony. 

Mr. Rogers stated that he would like that any further comments be kept to the ordinance itself and not about the litigation, because looking for settlement discussions pertains to the litigation.  The Village has already gone through several rounds of mediation with the plaintiffs and found them very useless.  The Village gave a good faith effort and did not get anywhere with regard to mediation.  This was a general impression shared by both the Village and the mediator.

Mr. Scanlan stated that it was impossible to talk about Ordinance #3636 without talking about the litigation, because the only reason that the Village has this introduced this ordinance is because of the litigation, and the two are inextricably intertwined.  Mr. Rogers stated that he would agree that they are intertwined, but the basis for Ordinance #3636 and Ordinance #3637 being presented tonight is the rate study that was performed by Mr. Woods and this is what must be the focus of the Public Hearings.

Mark Braunius, Midland Park, stated that he would like to defer to the Plaintiff’s expert.

Paul Mensing, Midland Park, stated that he would like to defer, as he is a resident who would like to see what’s going on.

Mayor Harry Shortway, Midland Park, chose not to speak.

Mayor Bruce Packer of Glen Rock, stated that he was going to discuss some of the things that he talked about at the last meeting concerning the rate study.  Since the Plaintiffs are hiring an expert, Mayor Packer stated he would defer some of his questions.  Mayer Packer sent an email to the Village Council because it was important to him that the Village Council saw that he was not just poking holes at this because they are in a litigation, and he believes that there are real reasons to question the study, which he will leave to the expert.  He thinks it’s really important to stress that typically, a governing body adopts an ordinance for their own town, village or borough, and this is a situation where the Village Council’s decision will also impact other constituents.  Therefore, Mayor Packer hopes as Mr. Rogers is telling the Plaintiffs to do, the Village Council will also forget about the lawsuit while they consider the rate study and take an objective look at it, based on the questions that Mr. Packer raised and those that the plaintiff’s expert may raise. 

Mayor Packer stated that this was a bizarre situation where the Village Council is retroactively recreating rates that happen to be exactly the same as those that were struck down.  He doesn’t think that anyone has seen anything like this, including Mr. Woods, who acknowledged that.  Mayor Packer stated that he really hopes that the Village Council can look at this with that weight, realizing that they are making a decision that is going to impact all of the ratepayers, in all of their towns.  When the plaintiff’s rate study is discussed, he hopes that it won’t be looked at as the plaintiff’s rate study and the defendants rate study, as opposed to two alternate rate studies that the Village Council could objectively look at, to see which rate study is correct.  He hopes that if there is a rate study that justifies the Village’s legal position, they won’t pay attention to that, because the litigation should not be considered.  Mayor Packer stated that he hopes that the Village Council will choose to follow the rate study that best explains what the rate should have been, at that time.

Ken Kruis, Midland Park, stated that he is a Councilperson and chose to defer.

Tim Shanley, Wyckoff, stated that he was going to defer most of his comments until later.  He just wanted to bring up one thing that his Mayor brought up and he brought up the last time as well, which is an offer to try and sit down and settle this matter, because if the plaintiffs are successful in their appeal, the Village is going to have the biggest exposure.  If the plaintiffs are successful in their appeal and they strike down Judge Friscia’s ability to send it back to do a retroactive rate study and set rates which shouldn’t happen, as there should be no retroactive rates, then the remedy would be the current rates which are in place.  This would cause the Village to be required to issue a full refund of the difference between the current rates and the new 2017 and 2018 rates set by Ordinance #3636 and Ordinance #3637 would be involved.  Mr. Shanley stated that he was going to suggest again that the Village and the plaintiffs sit down and go through mediation.

Mr. Shanley stated that he had a question regarding the rate ordinance that the Village is going to have for the 2018 rates.  He wondered if a rate study has been done on those rates or if it is going to be another public hearing, and this is just for 2010-2017.  Mr. Rogers stated that it was all part of today’s public hearing because it is related in the sense that the 2018 rates depends on the rates from 2010-2017.  Mr. Shanley stated that he hadn’t seen any rate studies for 2018 and it looked like the 2018 rates are a significant increase from 2017, in the 20% range.  Mr. Rogers stated that there was not a separate rate study done for 2018.
Mr. Shanley directed his question to Mr. Woods and asked whether he had looked at the 2018 rates.  Mr. Woods stated that the two studies that he has done cover the period up to 2016.  Mr. Shanley stated that then Mr. Woods hasn’t had any involvement in the 2018 rates that are being proposed in Ordinance #3637.  Mayor Knudsen stated that at this point, she was going to stop Mr. Shanley, because this is a public hearing on Ordinance #3636 (2010-2017 rates), not Ordinance #3637 (2018 rates).  Mr. Rogers stated that both ordinances were carried for tonight, but that a separate public hearing would be opened for Ordinance #3637 (2018 rates), later this evening. 

Mr. Woods stated that at the time that the rate studies were done, all of the support documents for 2018 were not yet available.

Tom Madigan, Wyckoff Committeeman, stated that his concern is that these hearings are nothing more than a continuation of Ridgewood Water being arbitrary and capricious and he is here with a similar question that he had previously asked, and was never answered.  Therefore, he would like to ask the question again in a different way, and perhaps it would be answered this time.  Mr. Madigan stated that he was still perplexed as to how Ridgewood Water was able to achieve millions of dollars in surplus from 2010 forward.  His question is with all of these millions of dollars in surplus that are being generated, how does Mr. Woods propose the same rates that generated all of this surplus. 

Mr. Woods stated that in performing the rate study, he asked the Village to provide him with all of the detailed budget and actual expense items for 2009, and ultimately through 2016.  He looked at each year individually to determine what the revenue requirement or the cost for providing water utility service was for each of those years.  He looked at it on a budget basis and he looked at it on an actual basis and compared that to the revenues that were generated, with the rates in effect for each one of those years.  What he found in doing the study is that after making some changes to the allocations, as can be seen in the reports that he issued, that there were some differences as to what should be allocated from the Village budget to the water utility.  Mr. Woods stated that he made those adjustments, both the Budget and the actual expenses, compared them to the rates and concluded that the rates that were in effect for those years were adequate.

Mr. Woods stated that if he looked at 2010, for example, on a budget basis the revenues generated were slightly under the revenue requirement.  In other words, if he was to go back to 2009 to look at the revenues generated and the level of expense incurred, he would find that the rates for 2010 probably should have been higher.  Instead of a 21% increase, the increase should have been closer to 22% in order to cover the revenue requirement.  Mr. Woods stated that as time goes on, it can be seen that in 2010-2012 all of the numbers are fairly close together, the budget number, the actual number, and the revenues generated with actual rates, all line up reasonably well.  After that time, looking at the budget level of expense relative to the actual level of expense, there starts to be a departure because the water utility was more aggressive at controlling its expenses relative to budget and the actual cost of providing service was lower.  The rates were set based on a fixed percentage increase of the prior year’s rates, and a revenue requirement analysis was not done to determine the rates for those years. 

Mr. Woods stated that for example, in 2013 there was a 5% rate increase, tacked onto the rates that were in effect for the prior year.  Mr. Woods stated that he didn’t do the study that way, as he looked at exactly what the budget was, line by line, and what the expenses were, line by line, and compared the result of that to the revenues that were collected during that year.  If there is a utility that is able to control expenses, but there is a disconnect between the rates that are established and the revenues generated by those rates and what the actual performance of the utility is, if the utility saved money, it will create a surplus.  Mr. Woods stated that the other issue is that in later years, it really is apparent that the Ridgewood Water utility, like most utilities, generates most of its revenue through volumetric sales.  Miscellaneous revenues are a small percentage of the total revenues that are collected, only about 2%.  The fixed service charges, that vary by meter size, represent only about 18% of the revenues, so what is left is 80% of the revenues that are tied to the volumetric rate and the volume that customers purchase. 

Mr. Woods stated that there were a few years in the study where the differences from one year to the next in the volume of water consumed by customers, had gone up by over 6%-7% which generated an excess of an additional million dollars in revenues over the base level from the prior years.  This additional revenue was simply because customers used more water and they were billed according to the rates that were in effect.  Mr. Woods stated that those two things explained the surplus, budget control and weather-related changes in demand.

Committeeman Madigan stated that he knew Mr. Woods mentioned last week that it was very volume sensitive, but Wyckoff has been on water restrictions for years, which means the Village of Ridgewood is preventing people from using water and is curbing how much water is being used, yet Mr. Woods just told him that it is very volume sensitive.  The water restrictions would limit the amount of water being used, and despite that, Ridgewood Water is picking up surpluses.  Mr. Woods stated that if customers pay attention to the restrictions that are imposed, sales should go down and revenues should go down, however that’s not always the case.  In his experience with water use restrictions, primarily drought related restrictions, it is a fact that people don’t necessarily follow those guidelines. 

Mr. Woods stated that one of his favorite restrictions is odd/even water restrictions where he has seen community after community impose odd/even restrictions on watering and the idea there is an even numbered house gets to water on an even numbered day.  While that may help to reduce the peak day demand or the instantaneous one-day demand that the water utility experiences, it also does a great job of reminding people that they need to water their lawn so that the average consumption actually goes up when those kinds of restrictions are in place, even though the peak day might be lower.  He has not looked into the restrictions that the Village has imposed, when they were in place and when they weren’t, so he can’t really comment on that.  However, he can tell Mr. Madigan that asking people not to use water, is the type of restriction that is largely ineffective, especially if this restriction is in effect all the time.

Committeeman Madigan stated that he was still a little perplexed and confused, and asked Mr. Woods in talking about the surplus, what his reports show the surplus is during the period 2010-2017.  Mr. Woods stated that he never totaled it up, but in the last three years, it exceeded a million dollars per year.  Mr. Madigan stated that over seven or eight years it would then be fair to say it was in excess of $7-$8 million.  Mr. Woods stated that this was not the case because there was a shortfall in 2010, 2011 broke even, and 2012 was a slight surplus.  The surplus started to grow after 2012. Mr. Madigan stated that he must have misunderstood, because he thought earlier Mr. Woods had said specifically after 2010 Ridgewood Water started generating a million-dollar surplus.  Mr. Woods stated that was not correct, as it was after 2012 and he thinks most of that was a result of budget control as opposed to anything else.  Mr. Madigan stated that he will wait for further information from the plaintiff’s expert, and he was just trying to ask questions from a common sense, logical perspective.

Williams Sosas, Midland Park, stated that he wanted to start off with a quick question because what he has to say after that are just comments.  He wanted to make sure that tonight’s meeting was in compliance with the Open Public Meetings Act (OPMA).  He stated that his first comment was that limiting this meeting to just the rate increase is really putting people in a situation where there is no transparency, so that just runs afoul of the spirit of OPMA.  However, it is expedient, so he could understand why the Village would want to try to do it that way.  Mr. Sosas stated that he found out about this meeting yesterday, but he has been reading what is available to most ratepayers which is newspaper articles, and none of it passes the smell test, especially coming up with the rate increase that is now being proposed in this ordinance.  He stated that it doesn’t pass the smell test for several reasons, with the primary reason being that when the court remanded the rates back to the Village Council, the court was indicating that what was done previously, was unreasonable and the Village should look at the rates and get it right, but the Village didn’t get it right. 

Mr. Sosas stated that it seemed to him that the Village hired an expert who is a very smart guy but anybody with the basic knowledge in reverse engineering can make the study come out the way the Village wants it to come out, which is deplorable and widening the gap between the Village and the plaintiffs.  Mr. Sosas stated that there was a poor history with Ridgewood Water dating back to 1957.  More recently, there were things with the new meters that were put into customers’ homes that were supposed to be more accurate.  Instead, people ended up paying more money and they were railroaded and now the Village Council was railroading this 31% rate hike.

Mr. Rogers stated that there is an allegation by Mr. Sosas that this is violative or at least not in the spirit of OPMA, and he thinks that this hearing has gone far beyond that, as he has asked everybody to comment on Ordinance #3636, and not get into the litigation, but obviously comments have been made on the litigation and they haven’t been shut down, but been allowed.  The Village is asking everyone to comment on Ordinance #3636.  Mr. Rogers stated that he also suggested that Mr. Sosas read the opinion so that he understands why the Judge sent the rates back for recalculation or at least a rate study to be done, because that would clue him in as to the Judge’s reasoning.

Gregory Reid, of Sills, Cummis, and Gross, the attorneys representing the plaintiff class of rate payers in the ongoing litigation, stated that as he already communicated to the Village attorneys, he would not be cross examining Mr. Woods tonight, as there would be another time for that once their expert has had a chance to present his findings.  They will go through their expert’s report in detail, at that time.  He stated that he just wanted to reiterate some of the comments that have been made tonight, because the fact is that litigation is involved, and it can’t be stated that it doesn’t exist.  He stated that the litigation will determine the remedy for what has happened in the past.  Mr. Reid stated that for current purposes, he would remind the Village Council to really think about trying to get it right, going forward, so that they don’t end up in litigation again.  He also asked the Village Council give them the time that they need to have their expert really go through this and figure out how it should be done on a going forward basis.  This report will look at how the allocations were done, and then be objective about it on the full record and make a fully informed decision. 

Mr. Reid stated that the plaintiffs have retained an expert, which has been communicated to the Village lawyers, which is Exeter Associates out of Maryland.  He stated that as Mr. Woods has acknowledged, there aren’t many people in this field and they are all very busy right now, in part because of the new Federal tax laws.  The May 14th date for the continued public hearing on these water rate ordinances and the presentation by their expert will not work for them; however, they have no interest in delaying and want to get this done as much as the Village does.  They want to make sure that it gets done correctly.  Mr. Reid stated that he wanted to ask that the Village Council work with the plaintiffs on setting a reasonable date in the near future.  He also asked that the Village work with the other municipalities in Ridgewood Water to make sure they don’t have other commitments, because the dates set in this process have just been chosen by the Village and he asked that the dates be chosen in a more collaborative way, going forward.

Mr. Rogers questioned whether Mr. Reid saw the letter that he sent to Joe Fiorenzo from Mr. Reid’s office.  Mr. Reid stated that he saw the letter.  Mr. Rogers questioned if there was a problem being able to get back to the Village with dates from their expert by May 1st so that the Village could start scheduling.  Mr. Reid stated that would not be a problem at all, and they could certainly get dates to the Village by May 1st.  Mr. Rogers asked if he would provide the name of the expert, as there are a number of employees at Exeter.  Mr. Reid stated that it was two individuals primarily, Jerry Mierzwa and Lafayette Morgan.  Mr. Rogers asked if they would be issuing a report, that Mr. Reid let the Village know by May 1st.  Mr. Reid stated that certainly by May 1st they would let the Village know.  In full disclosure, Mr. Reid stated that they may ultimately decide that it is more efficient to prepare written testimony as opposed to having their experts appear, but they would let the Village know.

Mayor Knudsen moved the Public Hearing on ordinance 3636 be continued to May 14, 2018 at 7:00 P.M.  Deputy Mayor Sedon seconded the motion.

Roll Call Vote

AYES:   Councilmembers Hache, Sedon, Walsh, and Mayor Knudsen
NAYS:   None
ABSENT: Councilman Voigt
ABSTAIN:  None

b. INTRODUCTION - #3637 – Amend Water Rates and Fees - 2018

Mayor Knudsen moved the Clerk read ordinance 3637 by title on third reading and that the public hearing thereon be opened.  Councilwoman Walsh seconded the motion.

 

Roll Call Vote

AYES:   Councilmembers Hache, Sedon, Walsh, and Mayor Knudsen
NAYS:   None
ABSENT: Councilman Voigt
ABSTAIN:  None

The Village Clerk read ordinance 3637 by title:

AN ORDINANCE TO AMEND CHAPTER 145 OF THE CODE OF THE VILLAGE OF RIDGEWOOD, FEES, AT SECTION 145-6, “ENUMERATION OF FEES RELATING TO CODE CHAPTERS.” 

Mayor Knudsen stated that the hearing on ordinance 3637 was continued to this evening’s meeting due to the fact that the Village Council wanted to allow additional time for the public to ask questions and make comments about the water rate study prepared by Howard Woods.  Each speaker will be limited to five minutes.  The Public Hearing is now continued.

Mr. Rogers stated that this was the ordinance that deals with the 2018 rates.

Timothy Shanley, Wyckoff, stated that it was the plaintiffs understanding that this ordinance, which is the 2018 rate increase, was going to be carried just like Ordinance #3636, so he was surprised to see it on the agenda for tonight.  He stated that he would respectfully request that the Village Council also carry this ordinance because the 2018 rates are based on the 2010-2017 rates.  Mayor Knudsen stated that the Village Council was going to continue the Public Hearing on Ordinance #3637 to May 14, 2018.

Mr. Shanley asked what the rate increase from 2017 to 2018 was on this particular ordinance, because it looked like it might be in the 27% range.  Mr. Rogers stated that it was a change from what has been done in the past, so there isn’t just one increase.  Instead, there are increases with regard to the charges for metered services, and for different sized meters, the increases are going to be different.  This is a prescribed type of increase that is favored by rate studies that are going on before the BPU at this time which is why Ridgewood Water has decided to utilize rate methodology, based upon the meter sizes that are in each individual house.

Mr. Shanley asked who conducted the rate study that is being utilized for 2018.  Mr. Rogers stated that he believed that the rate study itself, in terms of making that determination, was done by the water utility.  Mr. Shanley questioned whether he could serve an OPRA request for any documents that were utilized regarding this increase.  Mr. Rogers responded that Mr. Shanley could submit an OPRA request for those documents.

Thomas Madigan, Wyckoff Committeeman, stated that he wanted to advise the Village Council that they could not hear or understand what the Village Councilmembers are saying.  Although they could get the drift of where the Village Council was going when addressing the audience, they couldn’t tell what the Village Council was saying as they speak quietly and quickly.  Committeeman Madigan advised the Village Council that he has excellent hearing.
To assist in the audience understanding anything they may have missed, Mr. Rogers provided a description of Mr. Shanley’s comments and questions as well as his responses. 

Mayor Knudsen moved the Public Hearing on ordinance 3637 be continued to May 14, 2018 at 7:00 P.M.  Councilwoman Walsh seconded the motion.

Roll Call Vote

AYES:   Councilmembers Hache, Sedon, Walsh, and Mayor Knudsen
NAYS:   None
ABSENT: Councilman Voigt
ABSTAIN:  None

5.COMMENTS FROM THE PUBLIC

Patricia Hagedorn, Midland Park Board of Health, reiterated Committeeman Madigan’s comments that it was difficult to hear the Village Council during the meeting.  Mayor Knudsen stated that for the record, the Village has really bad audio and is looking at an audio expert to fix this, so she apologizes for the bad audio.  Ms. Hagedorn stated that she wanted Mayor Knudsen to know that she wasn’t hearing the details of what was being discussed and it wasn’t a helpful meeting.

Beth Sosas, Midland Park, stated that she had a question about the actual percentage rate increase from 2017 to 2018.  Mr. Rogers stated that it was not done by percentages, but rather the types of meters that are in the household.  Mayor Knudsen stated that it was actually based on meter sizes, so looking at 2014-2017 a 5/8th inch meter was $25.57 and in 2018, it will be $32.98.  She asked Richard Calbi, Director of Ridgewood Water, to speak to this question. 

Mr. Calbi stated that as indicated, for 2018 there is no increase proposed in the volume rate.  He added that the question was asked if there was a study completed for the 2018 water rates and stated that it depends on what is defined as a study.  Mr. Calbi stated that they look at each budget year as an independent audit review of the utility and calculate what the projected expense for that year is and what they anticipate in terms of revenue for that year, which results in a revenue requirement.  Ridgewood Water found in 2018 the revenue requirement justified the need for a rate increase, after expense was projected for 2018 and was also projected over five years, in terms of future revenue and anticipated expenses.  Mr. Calbi stated that Ridgewood Water then took that information and on the basis of reviewing Mr. Woods’ report, and based on what he testified at the last meeting, found that the fixed charges which are those that are charged based on the meter size that is in the customer locations, were not distributed properly in accordance with standards produced by the American Water Works Association, the same manual M-1 that Mr. Woods referenced in testimony last week.

Mr. Calbi stated that in that manual there is a distribution based on meter size that has to be followed, and what was happening over time with Ridgewood Water, in each year that a rate increase was applied to the fixed charges, it was applied flat across the board on every meter size and didn’t follow the distribution in the AWWA manual.  For example, if a 5/8th meter was $30 and ¾ inch meter was $40, instead of applying proper percentage distribution based on meter size, they were all multiplied by 3% for that given year.  Mr. Calbi stated that from 2010, and even prior to that, the rate payers actually benefitted from this process.  He added that in 2018, Ridgewood Water adjusted those fixed charges on the basis of that true calculation, so the 5/8th meter is the smallest and is the basis for that calculation, thereafter each meter size is adjusted on the ratios that are in the AWWA manual.  Looking at the changes, the rates for certain meter sizes definitely look like a very large increase, but it is the fixed charge only.  Looking at the 5/8th meter customer, which is about 92% of Ridgewood Water customers, the average bill is actually going to go up 6% for the year, not the percentage change in the fixed charge because this is not a volume charge, but a fixed charge based on meter size.  Mr. Calbi reiterated that the average user with a 5/8th meter would see a 6% increase in their annual bill, based on this change.

Mayor Knudsen stated that she thinks that everyone should have a copy of this ordinance as it is readily available and was discussed about a month ago at a Work Session.  Mr. Calbi stated that there was a Budget meeting where the whole methodology was produced, as well as the justification for expense and revenue anticipation for 2018.  At the introduction of the Budget, Mr. Calbi came up and produced a similar presentation relative to the projected increase.

Beth Sosas, Midland Park, stated that she had a follow-up question as she heard Mr. Woods say something on the order of a million-dollar surplus and she understands that there is no increase in water volume, which seems to her to be an increase.  Now there would be a 6% increase in her actual water bill.  Mayor Knudsen stated that this question should have been part of the Public Hearing for Ordinance #3637.  Mr. Rogers stated that if Mr. Calbi could answer it now, he should do so.

Mr. Calbi stated that the amount of payment that Ms. Sosas would make in a given year will increase 6% on the basis of this change, but the surplus that keeps coming up is considered in every annual projection.  He added that in 2018, the five-year projection included what Ridgewood Water believes will be the expenses based on capital investment and other changes in processes of their operation and what they anticipate in terms of revenue.  There is no separate pot of money that is set aside.  The surplus is considered in every year and they try to maintain a certain percentage in surplus to allow for at least three months of budget projection, in addition to maintaining their AAA bond rating.  This is all considered in the projection calculation.  Mr. Calbi stated that if the documents are requested through an OPRA request, the truth will be in the numbers.

William Sosas, Midland Park, stated that he wanted to follow up on the meters as Mr. Rogers knows about his case with the replacement of the meters.  He stated that what it all comes down to is money, because Ridgewood Water wants it from the ratepayers and the ratepayers want to keep it, which is really the bottom line.  He stated that these new radiation-emitting meters that allow Ridgewood Water to no longer have to go into the house, which were purported to be more accurate, which he believes they are.  However, Mr. Sosas stated that he knows from reading the reports, especially from Midland Park’s former Mayor, who sent a letter saying that hundreds of Midland Park residents were complaining about these backcharges for the new meters, which amounted to thousands of dollars in backcharges. 

Mr. Sosas stated that all of a sudden, Ridgewood Water is saying that they found a new technology that is more accurate, which means more money, not a changed rate.  He wondered how much extra money Ridgewood Water gets from the backcharges due to the new meters.  He also stated that Ridgewood Water never went and did the readings that they were supposed to and then they got away with a lot of people who didn’t get meter readings and were backcharged anyway.  He stated this was a new math, where Ridgewood Water finds out new ways to make money because they control the water supply and everyone needs water.  That to him is what’s wrong, and that to him is a rate increase in disguise.  Mr. Sosas stated that was fraud, malicious and bad.  Mayor Knudsen stated that Mr. Sosas was entitled to his opinion and the Village Council appreciated his comment.

Thomas Madigan, Wyckoff, stated that talking about the 2018 rate, he was just curious if the $1.6 million purchase of the Ridgewood Elks building, which was recently purchased, is part of the 2017-2018 rate.  Mr. Rogers stated that the Village has not purchased any building.  Mayor Knudsen stated that this was public comment, and it was not a question and answer period as there were two ordinance Public Hearings where individuals had opportunity to ask questions during those Public Hearings specific to each ordinance, and this was public comment.

Mr. Madigan stated that with all due respect, how would he know that sitting in the audience.  Mayor Knudsen stated that she closed the Public Hearing.  Mr. Madigan stated that he cannot hear the Village Council or understand what they are saying.  Mayor Knudsen stated that this was public comment and if he had a comment he was welcome to make it.  Mr. Madigan stated that he was perplexed and didn’t understand the 2018 rate increase, and if it reflects $1.6 million in the purchasing of the new building, it is very disappointing.

Russ Kamp, Councilman from Midland Park, thanked Mr. Calbi for his explanation and stated it was very helpful.  He commented that it was difficult to believe that a 6% increase was justified in a 2.4% consumer price index.  He stated that he thought Mr. Calbi mentioned that a lot of that increase was due to capital improvements.  He asked if there was a place where he could see how much is being allocated to capital improvements, who determines that, and if there is a cap.  He pointed out that Ridgewood Water could allocate as much as it wanted to capital on an annual basis, and the only people that get hit are the ratepayers.  Mr. Kamp questioned what limitations there are for capital improvements in any given year and if there is a relationship on an annual basis between the rate of inflation and increases within the budget.

Mark Braunius, Midland Park Councilman, stated that he wanted to thank the Village Council for taking the time to hold this meeting and for extending the Public Hearings to May 14th.  He stated that following up on Councilman Kamp’s look at capital, Councilman Sansone last week brought the agenda for the Village Council’s Regular Public Meeting for him to look at and what he finds disappointing when looking at the consent agenda is Resolution #18-116 and Resolution #18-117.  Councilman Braunius stated that he has been in construction his entire life and he wracked his brain to figure out why the Water Department needs a tub grinder for $365,580.00.

Mr. Rogers explained that the tub grinder is being purchased by the Village of Ridgewood and not the Water Department.  Mayor Knudsen stated that the Village’s consent agendas are split, with Ridgewood Water resolutions being considered separately from the Village of Ridgewood’s resolutions.

Councilman Braunius read the titles for Resolutions #18-116 and #18-117.  Mr. Rogers stated that what Mr. Braunius read was referencing was that the specifications for the tub grinder were prepared by the Water Department, but it was a Village purchase.  Councilman Braunius asked if the Water Department is preparing specifications for the Village, whether the Village is paying the Water Department for those specifications.  Mr. Rogers stated that he would find out and let Mr. Braunius know.  Mr. Braunius stated that looking at the reports and all of the direct and indirect costs, that have been the bone of contention throughout this whole process, and then to pick up a consent agenda and see it still happening, he cautioned the Village Council to watch how Ridgewood Water interacts with the Village of Ridgewood on a budgetary basis.  Mayor Knudsen stated Councilman Braunius’ comments were appreciated.

There were no additional public comments.

6.ADJOURNMENT

There being no further business to come before the Village Council, on a motion by Deputy Mayor Sedon, seconded by Councilwoman Walsh, and carried unanimously by voice vote, the Village Council’s Special Public Meeting was adjourned at 8:00 P.M.

 

 

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              Susan Knudsen                        
                  Mayor    

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            Heather A. Mailander
       Village Manager/Village Clerk