Village Council Special Public Meeting Minutes 20180514

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 MAY 14, 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 7:05 P.M. and read the Statement of Compliance with the Open Public Meetings Act.  At roll call the following were present: Deputy Mayor Sedon, Councilman Voigt, and Mayor Knudsen.  Also present were Heather Mailander, Village Manager/Village Clerk; and Matthew Rogers, Village Attorney.  Councilman Hache and Councilwoman Walsh were absent.

Mayor Knudsen led those in attendance in the Pledge of Allegiance to the flag and held a Moment of Silence for all the men and women serving our Nation, our first responders, and all those who are victims of 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.COMMENTS FROM THE PUBLIC

There were no public comments.

4.ORDINANCES – CONTINUED PUBLIC HEARING

a.Ordinance #3636 – Re-establish Water Rates and Fees – 2010-2017

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

Roll Call Vote

AYES:   Councilmembers Sedon, Voigt, and Mayor Knudsen
NAYS:   None
ABSENT: Councilmembers Hache and Walsh
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 was continued.

Mark Braunius, 35 Plane Street, Midland Park, stated that before he started, he wanted to recap how we got here, adding that in 2011 a lawsuit was filed to vacate ordinance 3236 which was a 21% water rate increase, ordinance 3272 which was a 5% rate increase, and ordinance 3319 another 5% water rate increase, for a total water rate increase of 31%.  He stated that this litigation has not only been lengthy and time-consuming but very expensive to all of their taxpayers.  Mr. Braunius stated that when reading Judge Lisa Friscia’s Order for Judgement, Opinion, and Legal Conclusion it seems that every stone was overturned and much thought was given to her judgement.  To address ordinance 3636 point by point and separate some facts from fiction, he and others agree with some of Judge Friscia’s opinions, and disagree with others.

Mr. Braunius stated that when Judge Friscia made her initial ruling stating that the judgement was entered in the favor of the plaintiffs: Township of Wyckoff, Borough of Glen Rock, and Borough of Midland Park, invalidating the Village of Ridgewood’s ordinances 3236, 3272, and 3319 because adoption of these ordinances was arbitrary, capricious and unreasonable.  He pointed out that Judge Friscia invalidated the ordinances to make them no longer legally effective. Looking at the words arbitrary and capricious, the definitions include: a clear error of judgement, an action not based upon consideration of relevant factors which is an abuse of discretion or otherwise not in accordance with the law or without observance of procedure required by law.  Unreasonable, beyond what can be accepted, clearly inappropriate, excessive, harmful in a degree of kind, lacking justification in fact or circumstance, this is what Judge Friscia indicated the previous water rate ordinances were.

Mr. Braunius stated that the Judge stated in her order that the matter would be remanded to the Village of Ridgewood’s governing body for a hearing to establish and recalculate the rates within 120 days.  Mr. Braunius added that one of the problems that he has is that Mr. Woods’ report came in on November 17, 2017, exactly 120 days from when the Judge ordered it, but the Judge ordered the report to be done 2010-2017, not 2010-2012.  Therefore, Mr. Woods’ report was incomplete and didn’t follow the Judge’s Order.  The Village went against the Court Ruling on this, and he added that it also said in the Judge’s ruling that the rates should be recalculated, which was not done.

Mr. Rogers stated that Mr. Braunius should only speak about ordinance 3636, and pointed out that Mr. Braunius had said that he wasn’t going to rehash the Judge’s opinion, but that was exactly what he was doing.  He added that the initial challenge on the first three ordinances that Mr. Braunius talked about were from the years that were just spoken of, the first three years.  Mr. Rogers added that the Judge’s Opinion speaks for itself, and the Public Hearing was to comment on ordinance 3636.

Mr. Braunius stated that in ordinance 3636, the first paragraph talks about a 14-day trial in the Court with Judge Friscia, so in the ordinance, the Village is referencing the Judge’s decision.  Mr. Rogers stated that was correct, the Village Council is stating that the ordinance was directed as a matter of the opinion of the Court.  There is no discussion of what the Judge decided, there is just discussion that the Village Council of the Village of Ridgewood was ordered to do this and that was why it was coming about. 

Mr. Braunius stated that if Mr. Rogers looked on page one of the ordinance, it says 2013-2017.  Mr. Rogers stated that the Plaintiffs have had six months from the time of Judge Friscia’s ruling to get an expert report, so he doesn’t know what the delay is in getting their report.  Mr. Braunius stated that if the report wasn’t received by the Village until December 29th, they haven’t had six months.  Mr. Rogers responded that the first report was received by the Plaintiffs on December 18th, then the other one was after that.  This issue was already addressed to the court, subsequent to the receipt of the reports, and the Judge decided not to stay it or find that the Village was in violation.

Mr. Braunius stated that he would go through the ordinance, because the Village Council has concluded there will be no rate increase, yet the Judge specifically in her ruling says a refund is to be distributed to the Plaintiffs.  In the Village’s ordinance it says any refund that may be calculated, so one is contrary to the other.  Mayor Knudsen stated she was present at almost all of the hearings during this litigation in Judge Friscia’s Courtroom, the Judge’s interpretation was that in the process of adopting an ordinance, the Village Council didn’t go through the appropriate process.  It was a procedural issue, because the Village Council didn’t have the information that actually is now being provided by Mr. Woods.  She stated that what the Village Council really wanted to do was stay focused on the ordinance in front of them, as this is a Public Hearing on the ordinance.  The Village Council will determine whether or not there is appropriateness to the rates that are going to be established, and they are going to take public input during this Public Hearing.  If there is any issue beyond this Public Hearing, then that will be something to be determined at a later time.  Mayor Knudsen stated that she wanted to make certain that the Village Council will adhere to the Judge’s opinion and that they have the appropriate information to get to the end result.

Mr. Braunius read the first paragraph of the ordinance, again reiterating the study years of 2010-2017 and the calculation of any refund that may be due to the ratepayers as a result of the analysis.  Mayor Knudsen stated that she heard what Mr. Braunius was saying, pointing out that the wording was any refund that may be due, not is due.  Mr. Rogers stated that Mr. Braunius could speak to it, but what they were hoping is that he would speak to the substance of ordinance 3636.  It appears Mr. Braunius wants to argue about the opinion, which he is free to go ahead.  Mr. Braunius stated that the Judge’s words of, “a refund is to be distributed” is the slight difference.  Mr. Rogers stated that during the trial, the Judge did not decide that a refund is present or warranted.  In fact, the only person who argued that there was a refund at that trial was the Plaintiff’s expert and they were found not to be competent to lend an opinion.  He added that the Judge’s opinion was that if, after the calculations and the rate study were done and the consideration of the revenues and the expenses and what the appropriate rates are, if there is a refund, that is to be calculated as well.  Mr. Braunius again chose to reiterate the wording that, “a refund is to be distributed,” to which Mr. Rogers stated that if there is one, it will be distributed.

Mr. Braunius stated that going forward with the ordinance, one of the big sticking points is the 5% that Ridgewood has taken from the Water Utility’s budget, which is in the ordinance, on page four.  Judge Friscia stated in her legal opinion that retroactively taking a bulk or surplus amount is not statutorily permitted, and it was not legislatively intended to replace appropriate governance over the Water Utility by the Village governing body.  He continued reading the Judge’s opinion, that states that the Court finds no precedent for such an interpretation.  Despite that fact, in establishing 2010-2017 water rates, the governing body has taken 5% from the Water Utility.  Mr. Rogers stated that the 5% has not yet been taken, but it is being considered in the ordinance.  Mr. Braunius stated that the court is saying that’s not the case.  Mr. Rogers stated that the court is saying that during the trial, the court opines that it is not established.

Mr. Braunius stated that going through how the Village has established and taken the 5% over the years, it comes out to a large amount of money and he thinks through reviewing all of this, one of the problems that the Plaintiffs have is information going out there.  Looking at the ordinance in 2010, 2011, and 2012, in 2011 there is a deficit of $9,270, yet he looks at a press release from the Community News from December 2018, where it states that Mr. Woods acknowledged that slightly more revenue than was needed, was received by the utility in 2012, which still led to an overall shortfall of $400,000 in the span of three years.  Mr. Braunius stated that did not happen.  Mayor Knudsen stated that Mr. Braunius’ time had run out, and if he had a specific question for Mr. Woods they would allow it.

Mr. Braunius asked Mr. Woods if he said in those three years that there was a $400,000 shortfall, to which Mr. Woods responded yes.  Mr. Braunius asked which year that was in.  Mr. Woods stated that it was in 2010 and 2011.  Mr. Braunius stated that in 2010, there is a revenue of $11,642,000 and an actual expense of $8,850,000, there is a net operating income of $2,792,000, and the debt service totaling $2,560,000 which produces a surplus of $232,076.  Mr. Woods stated that what he did in his report for each year, 2010, 2011, and 2012, he calculated the revenue requirement based on the budget that was adopted by the Village, and then he went back and recalculated again, based on the actual expenses that were recorded for the Water Utility.  He compared both of those numbers to the actual numbers that were generated by the Water Utility, with the rates that were in effect for those years.  When Mr. Woods compared the budgeted revenue requirement to the revenues that were actually collected on a cumulative basis for the three years, there is a $424,000 shortfall. 

Mr. Woods stated that looking at the actual expenses that were recorded for the Utility, and recalculating using the proper allocation factors, there is a $313,000 surplus for those three years.  He stated that the revenues that were generated by the rates are actually bracketed by the Budget and the actual performance.  Mr. Braunius questioned whether a 5% revenue was taken out of the budget, to which Mr. Woods stated it wasn’t in 2010, and he wasn’t sure about 2011 and 2012.  Mr. Braunius stated that in the ordinance, it specifically states that the 5% was taken in those years.  Mr. Woods stated that in recalculating both the budget and the actual expenses, using the proper method, he included the 5% transfer to the General Fund in each of those years, both in budget and in actual.  Mr. Braunius stated that the deficit was caused partially by the 5%, to which Mr. Woods stated that the 5% was part of the revenue requirement, and the Village is entitled to it. Mr. Braunius stated that was subject to interpretation, to which Mr. Woods stated that it is part of the revenue requirement.  Mr. Braunius stated that according to the Judge it wasn’t, to which Mr. Woods stated that wasn’t what the Judge said, at least not in what he read in the resolution.  When Mr. Woods looks at the statute that exists in New Jersey and the Board of Public Utilities practice in respect to municipal systems that they regulate, that 5% is allowed to be taken into the General Fund. 

Mr. Braunius stated that he could only tell Mr. Woods what the Superior Court Judge says when she states that retroactively taking an automatic bulk surplus amount is not statutorily permitted. Mr. Woods stated that he agreed with that, going back and adjusting the rates retroactively and putting a new rate in effect to capture something that’s retroactive is not appropriate, but that’s not what the Judge’s Order directed the Village to do.  The Judge directed the Village to go back and recalculate the rates that should have been adopted at that point in time, and the 5% transfer to the General Fund is part of the revenue requirement that should be included in that calculation. Mr. Braunius stated that he didn’t agree that’s what the Judge was ordering.  Mayor Knudsen stated that Mr. Braunius’ time was up.

Mr. Rogers pointed out at this time that Mr. Woods and Mr. Calbi as witnesses had been sworn in previously and remained under oath for any testimony that they give at this meeting.

Bob Sansone, 29 Aqueduct Avenue, Midland Park, stated that he was deferring to Mr. Braunius.

Lorraine Deluca, 16 Franklin Avenue, Midland Park, stated that she was deferring to Mr. Braunius.

Nancy Peet, 171 Hill Street, Midland Park, stated that she was deferring to Mr. Braunius.

Harry Shortway Jr., 102 Erie Avenue, Midland Park, stated that he was deferring to Mr. Braunius.

Tom Madigan, 265 John Street, Wyckoff, stated that he was deferring to the end.

Rudy Boonstra, 633 Lawlins Road, Wyckoff, stated that he was deferring.

Mayor Brian Scanlan, 51 Ravine Avenue, Wyckoff, congratulated the Mayor and Deputy Mayor on their re-election.  He stated that he wanted to note the optics of Mr. Woods sitting on the dais.  Mayor Knudsen stated that Mr. Woods is sitting on the dais so that he is not turning around to face the audience, making it difficult for the Council to hear and understand.  She indicated if the audience was not comfortable with where Mr. Woods was sitting he would move.  Ms. Mailander added that Mr. Woods sitting on the dais is better for the recording. 

Mr. Scanlan stated that his interpretation of the Judge’s ruling is that there would be some change in the water rates, but that miraculously, for the period that has been studied, the rates turned out to be the same or too low.  He found this conclusion very strange, and he would encourage the Council not to vote on any water rate ordinances until the litigation is completed, because it will add to the expense of the litigation for the ratepayers in Wyckoff, Midland Park and Glen Rock, as well as the ratepayers in Ridgewood.  Mr. Scanlan stated that he would note that while the towns outside of Ridgewood have to carry the cost of their water rate expert and the litigation themselves, the Council can basically finance the litigation expenses out of the water utility, which he thinks is driving up the cost.  He added that the last time he was at a Public Hearing on the water rates he made a plea that the Council consider entering into negotiation or mediation, so that they could try to resolve this matter.  Although the expectation of the Council is that the Plaintiffs would demand a refund, that might not be what they demand.  He thinks it is necessary to establish a methodology going forward, about what is going to be charged against the water utility and that everybody agrees that the allocations to the Water Utility, from the Village of Ridgewood, are fair.

Mr. Scanlan stated that the problem for him as a ratepayer and the Mayor of Wyckoff is that the Village Council is not really under anyone’s control, they as ratepayers don’t vote for the Village Council and there is no one else controlling the water utility.  He added that none of the people in Glen Rock, Midland Park, or Wyckoff have the opportunity to vote for the Village Council and he doesn’t think that is a very fair situation because they are not under the control of any Public Utility Commission either.  Mr. Scanlan thinks that the fair way to deal with this dispute is to enter into negotiation and he would encourage the Village Council to not vote on any water rates, whether retroactive or future, leave things as they are until the litigation is resolved.

Mr. Rogers stated that he appreciated Mayor Scanlan’s comments and they would be taken into consideration.  The issue of the Village Council acting as a Board, that’s the way that regional utilities work in the State of New Jersey.  He added that if they were to not take any action, that would be a direct defiance of what the Judge ordered them to do.  The Judge has decided that the Village Council should proceed, so that was why they were going ahead at this time.  Mr. Scanlan stated that he thought that the attorneys for the water utility and the plaintiffs should go to the Judge and say that they agree that nothing should happen with the water rates, because they would like to enter into negotiations and would like a time out period.  He thinks the Judge would probably find that a perfectly acceptable thing to do.  Mr. Rogers stated that was something they would take into consideration.

Mayor Knudsen added that the only reason they were in court was because they did try negotiations and they were not successful.  Although this is something to take into consideration, today is for the Public Hearing on the findings of Howard Woods, and she encouraged everyone to pick his brain and ask him questions and truly understand how he established the rates in his report.  Mr. Scanlan stated that they would have an expert do that, someone who was qualified.  He added that having sat on the Wyckoff Council since January 1, 2009, he was there before the litigation started, and he received full reports on the negotiation which involved the Council basically saying they were not changing anything.  Mayor Knudsen stated that she was going to take exception with that because it was not true, as the Council came to good faith negotiations and she would suggest that if they want to share their reports to feel free to share them with her.  Mr. Scanlan stated that he wasn’t sure that Mayor Knudsen was on the Village Council at that point, to which Mayor Knudsen replied that she was certainly in the room.  Mr. Rogers added that Mayor Knudsen was present for the mediation sessions.

Bud O’Hagan, 44 Meda Place, Midland Park, stated that he was the former Mayor of Midland Park, and excluding Attorney Rogers, all of the Village Councilmembers have inherited a big problem and he was addressing just the ordinance.  He was there at the beginning when the previous Village Council refused to sit with Judge Toskos, who was assigned to discuss the litigation and to see where they were going.  At this point, the Village Council is trying to make a decision further down the road, not knowing what will happen from the time the litigation began through its adjudication, and he felt the Village Council was rushing it.  Mr. O’Hagan added that the Village of Ridgewood would not be going broke and neither would the water utility.  He pleaded with the Village Council to not vote on this tonight or any other night, until the Judge assigned to the case hears both sides, and looks at it and determines if these numbers are correct.  If there was anything in the ordinance that absolutely must be purchased, for example a pump, he could understand the Village Council authorizing it.  He added that the whole ordinance was improper and the Village Council is not going to look good to its own residents, never mind the residents of the other three communities.  He asked that the Village Council please postpone the vote.

Tom Madigan, 265 John Street, Wyckoff, questioned whether the Attorney’s fees for all of this litigation, was that paid by the Village of Ridgewood or was it paid specifically by the Water Department.  Mayor Knudsen stated that the Public Hearing was on the ordinance, and if there were questions for Mr. Woods about his methodology, to direct questions exclusively to the ordinance.  Mr. Madigan then asked Mr. Woods if his fee was paid for by the Village of Ridgewood or from Ridgewood Water.  Mr. Woods stated that his fee wasn’t part of the consideration of any of the work that he did in reviewing the past ordinances.  He added that he looked at 2010-2016 and he wasn’t brought on the payroll until last year.  Mr. Madigan questioned whether any of his fees were submitted or paid by either the Village of Ridgewood or Ridgewood Water.  Mr. Woods stated that his bills were being paid but he wasn’t sure where the Village was charging.  Mr. Madigan yielded to Mr. Shanley at this time.

Timothy Shanley, 565 Burritt Place, Wyckoff, stated that he wasn’t going to speak tonight, but he felt he needed to address that at the meeting when the ordinance was introduced, knowing that there was going to be no public comment at it, he did speak at the General Council meeting and urged the Village Council to consider mediation.  He added that the Mayor of Wyckoff went before the Village Council tonight and did the same thing.  Mr. Shanley stated that he felt that the response that he got was that there is no indication that any of the Village Councilmembers really want to sit down and try to resolve this matter, and he urged them to reconsider.  He stated that all three towns would be willing to sit in a mediation room with the Village Council to try and resolve this matter. 

Mr. Rogers stated that he had a couple of comments for Mr. Woods in regard to the public comments that were received.  He questioned if during the rate study that was undertaken in this regard, during the time period that he was actually doing the calculations and formulating his process did he ever consider or look back at the allocation rates that were utilized in the original ordinances that were adopted in those separate years.  Mr. Woods stated that he did not, and when he started his investigation, he asked the Village to provide him with the detailed line item Budgets, with over 1,000 line items, for 2009, 2010, 2011, and 2012, and then also to provide the actual expenses that were recorded for the same years.  He stated that he performed his calculations using an industry standard, The American Water Works Association Manual M1 to determine what the revenue requirement was for each of those years.  Mr. Woods stated that he also went back and compared the revenue requirement, calculated both on a Budget basis and an Actual basis, to the actual revenues that were generated, with the rates in effect for each year, and it was on that basis that he reached his conclusions.  He added that he never went back and looked at what the allocations were in the past.

Mr. Rogers stated that he knew Mr. Woods had done some calculations in his review with regard to the actual expenses of the Village, and he had made a determination that there was a difference between Direct Expenses and there were still some that needed to be allocated, but out of the budget, how much of that is direct expense.  Mr. Woods stated that following the method that is in M1, the first step in any rate study like this is to identify any expenses that are direct allocations of the function being examined.  He stated that for a water utility, things that would be direct expenses are the power bills that are paid to run the pumps or the chemicals that are purchased to treat the water.  Mr. Woods stated that he identified all of those expenses and they amount to about 77% of the budget, on average.  The other 23% is what is allocated from the Village functions, or the shared expenses.  Mr. Rogers stated that out of the 23%, a certain amount of that allocation is for water utility employee benefits, pension and health insurance.  Mr. Woods agreed, stating that out of the 23% of the expenses that are allocated expenses, half of that is pensions, benefits, and employee insurance.

Mr. Rogers stated that Mr. Woods had been asked at the last Public Hearing about the allocation with regard to the Water Utility office and usage of the Village Hall, asking how he considered those expenses.  Mr. Woods stated that in the study, there are fourteen separate allocation factors that he developed and the allocation factor that he used for the Village Hall expenses is based on the amount of square footage that is occupied by the Water Utility.  He stated that there is 2,500 square feet out of about 42,000 square feet in the building, so that works out to just under a 6% allocation.  That allocation factor is applied to operating expenses for this facility and the total dollar amount that is allocated to the Water Utility, as a result of that allocation factor, is less than $10,000 a year.  Mr. Rogers asked if the Water Utility wasn’t operating in the Village Hall, would the Water Utility have to go someplace else and find a facility that would charge them less than $10,000 a year to make it equal.  Mr. Woods said that would be the case, and emphasized that was one of the benefits that he saw in the shared services arrangement that the Water Utility has, with being essentially a Department of the Village.  If the utility were completely independent of the Village and it had its own office space, he doubted that they could lease office space for between $8,000-$10,000 per year.  Mr. Woods stated that what was not allocated in any of these factors is the actual cost of the Village Hall, the cost of capital to produce the building is not allocated so that is still an outstanding number that could be calculated and allocated to the Water Utility.  He didn’t do that, he stuck with the Operating Expenses and the Capital Expenses that are incurred directly by the Water Utility.

Mr. Rogers stated that he had a couple of questions for Mr. Calbi, adding that he believed Mr. Braunius had brought up an issue with regard to Mr. Calbi’s involvement in writing the specifications for the tub grinder, asking if Mr. Calbi could explain what his involvement was in that.  Mr. Calbi stated that as his position of Director of Operations for the Village, 20% of his time is allocated to the Village, not the Water Utility.  That main function is overseeing the Division of Public Works, Streets, Fleet, Recycling, and Sanitation.  He stated that the tub grinder was part of the yard waste program in the Department of Public Works, and he was the one that prepared the specifications and put it out to bid.  Again, 20% of his time and salary, is allocated back to the Village as brought up in Mr. Woods’ report and during the trial.  Mr. Woods asked Mr. Calbi if he also held the title of Director of those different departments, to which Mr. Calbi stated that was correct.

Mr. Rogers stated that someone had brought up the fact that they had no knowledge of the new fee structure of the 2018 ordinance which is also under consideration by the Village.  He asked Mr. Calbi if he tried to disseminate the information or at least contact the other municipalities with regard to that.  Mr. Calbi stated the day after the ordinance introduction, he sent an email to the Administrators of the other three towns in Ridgewood Water, saying that the ordinance had been introduced, inviting them to contact him and have a meeting to discuss the details of the Budget and the ordinance, prior to the Public Hearing.  Mr. Rogers asked if there was any contact or any discussion with anyone with regard to that.  Mr. Calbi stated that there was no contact until after the last hearing.

Gregory Reid, Sills, Cummis, and Gross, Attorney for the Plaintiff Class of Ratepayers, stated that he wanted to confirm on the record his understanding from Mr. Rogers that there would be another hearing on June 25th, which will be when they will cross-examine Mr. Woods and their expert will also be present on that date.  Mr. Rogers stated that was correct, and the meeting would start at 7:00 P.M.  Mr. Reid added that their expert was also available the entire week of June 18-22 if they thought more time would be needed, they would be happy to make him available any of those nights, and the report would be available on or before June 15th.  Mr. Rogers stated that they tried to search availability for those other times, and June 25th was the only date when everyone was available. 

Mr. Reid stated that he wanted to confirm with Mr. Woods that he didn’t look at the allocation percentages at all that were in place from 2003-2009.  Mr. Woods stated that the first time that he looked at the percentages was actually after both of the reports were done and Mr. Calbi asked him if he could match up the allocations that he used, with the way that the Village does their budget with the same categories.  Mr. Reid asked if he was correct then, for example with health insurance, the allocation was 21%-22% for that six-year period and then Mr. Woods did his analysis and said it should be 14%-15%.  The difference that was collected, amounts to millions of dollars, which is not reflected in his report anywhere.  Mr. Woods stated that the allocations are only part of the revenue requirement, 77% of the cost of running the Water Utility is involved with direct expenses.  Mr. Reid stated that on June 25th they can get into this in detail, but Mr. Woods didn’t go back and say they had been allocating 21%-22% for health insurance but should have been allocating 14%-15%, therefore they collected $2.3 million more than they should have. 

Mr. Woods stated that what he did for each year, looking at 2010 for example, he looked at the Budget that was adopted by the Village and the Water Utility and he allocated that Budget using industry standard principles to determine what the revenue requirement should have been.  He did the same set of calculations for the Actual Expenses that were recorded on the Village books, as Budget and Actual aren’t always the same.  He added that he then looked at the revenues that were collected with the rates in effect in 2010 and compared the revenues that were collected with both of those numbers, and that’s how he determined whether the rates were adequate or not. 

Mr. Reid stated that Mr. Woods took individual yearly snapshots, to which Mr. Woods responded that was correct.  Mr. Reid stated that the Water Utility over collected millions of dollars leading up to 2009, that wasn’t part of Mr. Woods analysis.  Mr. Woods stated that previously, a question came up about 2009, and he actually went back and looked at what occurred in 2009.  There was a $2 million shortfall in 2009 and that’s why there was a 21% rate increase.  In fact, looking at that $2 million shortfall against the revenues that were collected, it should have been almost a 22% rate increase.  Therefore, they didn’t fully recover the revenue requirement that year.  Mr. Reid asked in Mr. Woods’ report, using the health insurance example, hypothetically there was $3 million in excess that was collected for health insurance that Mr. Woods isn’t reflecting anywhere in his report.  Mr. Woods asked when did the Water Utility over collect health insurance by $3 million.  Mr. Reid stated that it was in 2003 and 2009.  Mr. Woods stated that those years were not part of his study.

There were no additional comments from the public.

Mayor Knudsen moved the Public Hearing on ordinance 3636 be continued to June 25, 2018 at 7:00 P.M.  Deputy Mayor Sedon seconded the motion.

Roll Call Vote

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

b.Ordinance #3637 – Amend Water Rates and Fees – 2018

Mayor Knudsen moved the Clerk read ordinance 3637 by title on fourth reading and that the public hearing thereon be opened.  Deputy Mayor Sedon seconded the motion.

Roll Call Vote

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

Timothy Shanley, 565 Burritt Place, Wyckoff, stated that he asked that this ordinance be continued with ordinance 3636.  He also wanted to thank Mr. Calbi for meeting with him a couple of weeks ago to explain this ordinance and the meter rate changes.

There were no additional comments from the public.

Mayor Knudsen moved the Public Hearing on ordinance 3637 be continued to June 25, 2018 at 7:00 P.M.  Deputy Mayor Sedon seconded the motion.

Roll Call Vote

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

5.COMMENTS FROM THE PUBLIC

Mark Braunius, 35 Plane Street, Midland Park, stated that he wanted to clarify that he asked about the specifications for the tub grinder, because the resolution indicated that the specifications were developed by the Water Department, and it did not say that Mr. Calbi was in charge of other Departments in the Village.  Mr. Rogers stated that Mr. Calbi explained tonight, that it was done as part of his job as Director of Operations for the Village of Ridgewood.  Mayor Knudsen stated that the resolution is correct, it was on the wrong letterhead.  Mr. Braunius stated that the resolution said Water Department Engineers developed the specifications for the tub grinder.  Mr. Calbi said that it should have stated Village Operations and clarified that there are five divisions that he oversees.  Mr. Braunius clarified that then the resolution was incorrect, to which Mr. Calbi agreed.

6.ADJOURNMENT

There being no further business to come before the Village Council, on a motion by Deputy Mayor Sedon, seconded by Councilman Voigt, and carried unanimously by voice vote, the Village Council’s Special Public Meeting was adjourned at 8:02 P.M.

______________________________
              Susan Knudsen                        
                   Mayor    

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            Heather A. Mailander
      Village Manager/Village Clerk