Written on 04 December 2018.

20180627 Village Council Special Public Meeting

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 JUNE 27, 2018 AT 7:00P.M.

CALL TO ORDER- OPEN PUBLIC MEETINGS ACT- ROLL CALL- FLAG SALUTE

Mayor Knudsen called the meeting to order at 7:03 P.M. and read the Statement of Compliance with the Open Public Meetings Act. At roll call the following were present: Councilman Hache, Councilwoman Walsh, and Mayor Knudsen. Also present were Matthew Rogers , Village Attorney; and Heather Mailander, Village Manager/Village Clerk . Deputy Mayor Sedon arrived late. Councilman Voigt was absent.

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VILLAGE COUNCIL SPL:C !AL PUBfJC MEI.'TTNG-J lJN E 27, 20 18-P/\Ci.E I

VILLAGE OF RIDGEWOOD MAYOR & COUNCIL
WEDNESDAY, JUNE 27, 2018 COMMENCING AT 7:03 P.M.

IN THE MATTER OF

Ordinance #3636 Re-Establish

Water Rates and Fees - 2010-2017

B E F 0 R E:

VILLAGE OF RIDGEWOOD MAYOR & COUNCIL

THERE BEING PRESENT:

9 SUSAN KNUDSEN, MAYOR

10 MICHAEL SEDON, DEPUTY MAYOR

11 BERNADETTE WALSH, COUNCILWOMAN

12 RAMON HACHE, COUNCILMAN

TRANSCRIPT OF PROCEEDINGS

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LAURA A. CARUCCI, C.S.R., R.P .R., L.L.C .

CERTIFIED COURT REPORTERS

P.O. BOX 505 SADDLE BROOK, NJ 07663

201-641-1812

201-843-0515 FAX

LauraACarucciLLC@gmail.com

LAURA A. CARUCCI, C.S.R., R.P.R., L.L.C.

201-641-1812

1 A L S 0 P R E S E N T:

HEATHER MAILANDER, VILLAGE CLERK

7 A P P E A R A N C E S:

9 MATTHEWS. ROGERS, ESQ.

13 Prospect Street

10 Ridgewood, New Jersey 07450 Counsel for the Mayor & Council

SILLS CUMMIS & GROSS, P.C.

BY: GREGORY REID, ESQUIRE

One Riverfront Plaza

Newark, New Jersey 07102 Counsel for Interested Parties

McMANIMOM SCOTLAND & BAUMANN, LLC

BY: WILLIAM W. NORTHGRAVE, ESQUIRE

1037 Raymond Boulevard, 3rd Floor

Newark, New Jersey 07102

Counsel for Village of Ridgewood

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LAURA A. CARUCCI, C.S.R., R.P.R., L.L.C.

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1 I N D E X

2 PUBLIC COMMENT ORDINANCE 36-36 SWORN PAGE

TIM SHANLEY 5
RUSS KAMP 8

34 3rd Street

Midland Park
LORRAINE DeLUCA 9
GREG BROWN 11

4 4 4 Linwood Avenue

THOMAS MADIGAN 13

NANCY CRONK PEET 16

GREGORY REID, ESQUIRE 16

12 COUNCIL MEMBER COMMENTS ORDINANCE 36-36

13 DEPUTY MAYOR SEDON 22

COUNCILMAN HACHE 2 8' 36
COUNCILWOMAN WALSH 32
MAYOR KNUDSEN 36
PUBLIC COMMENT ORDINANCE 36-37 SWORN PAGE
RUSS KAMP 51

34 3rd Street

Midland Park
RICHARD CALBI, JR. 52
TIM SHANLEY 58
MARK BRAUN IUS 61

35 Plane Street

THOMAS MADIGAN 64

RUDOLPH BOONSTRA 68

1 MAYOR KNUDSEN: I would like to call

2 the meeting to order. The date is Wednesday, June 3 27, 2018, the time is 7:03p.m.

4 Adequate notice of this meeting has

5 been provided by a posting on the bulletin board in

6 Village Hall, by mail to The Ridgewood News, The

7 Record and by submission to all persons entitled to

8 same as provided by law of the schedule including the

9 date and time of this meeting.

10 Roll call?

11 MS. MAILANDER: Councilman Hache?

12 COUNCILMAN HACHE: Here.

13 MS. MAILANDER: Councilman Sedon has

14 not yet arrived.

15 Councilman Voigt?

16 (No response.)

17 MS. MAILANDER: Councilwoman Walsh?

COUNCILWOMAN WALSH: Here.

MS. MAILANDER: And, Mayor Knudsen?

MAYOR KNUDSEN: Here.

Please stand for the flag salute?

22 (All rise for a recitation of the

23 Pledge of Allegiance.

MAYOR KNUDSEN: Please join us in a

moment of silence for our men and women serving our

1 nation and all of our first responders.

2 (Moment of Silence.)

3 MAYOR KNUDSEN: Thank you.

Page 5

4 As we begin the meeting this evenlng,

if you're here to comment on the 2018 Water Rates

6 Ordinance 6-37, please hold your comments until the

7 public hearing for that ordinance.

We'll have public comments at this

time, not to exceed three minutes per person, and

10 these public comments would be unrelated to Ordinance

11 36-37, which will be the public hearing for that.

12 So any public comments, feel free.

13 MR. ROGERS: Just so everybody knows,

14 they can comment on whatever they want, we just ask

15 that you keep the ones for 36-37 till the public

16 hearing on that so it's on the record.

17 If you want to comment on that right

18 now you can.

19 MR. SHANLEY: Thank you. Tim -- Tim

20 Shanley from Wyckoff. I'm the town

21 township committeeman from Wyckoff.

I'm the

22 I'm here on behalf of myself as a

23 ratepayer and behalf of my constituents of

24 approximately 17,000 residents who are served by

25 Ridgewood Water.

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1 We were here the other night till three

2 ln the mornlng. It was a very long meeting, probably

3 should have been continued to tonight.

, - -

4 I saw -- I see that Councilman Voigt is

5 not here. He left at 12 -- 12 midnight and did not

6 come back.

7 So I would -- would have objected to

him voting on it tonight because he missed three

9 hours of testimony.

10 But my concern lS that Wyckoff

11 residents, Glen Rock and Midland Park residents don't

12 have an adequate voice on this this ordinance.

13 We had testimony of our expert, our

14 attorney here. And I'm not confident that you're

15 going to do anything but vote for this ordinance

16 tonight.

17 I hope you surprlse me, but I think at

18 some point we need a municipal utilities authority

19 set up where there's equal representation from all

20 towns that are served by Ridgewood Water. And I

21 think we need an exploratory committee where we have

22 two councilman from each of the towns to explore the

23 possibility of this.

24 I'm calling for that and I'm hoping you

25 will agree with me that we need this exploratory

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Page 7 committee so this isn't all governed by four -- or today it's four, usually it's five members of the Ridgewood Village Council, because there are

residents in Midland Park, Glen Rock and Wyckoff that

do not feel they're getting an equal voice from the Village of -- of Ridgewood.

So you've heard our testimony from our

expert that there's an approximately $13.4-million refund that should be coming to the -- to the ratepayers, which also include residents of Ridgewood.

But, you know, if you pass this

ordinance tonight, 36-36, you didn't hear anything from the experts that came from Glen Rock, Midland Park and Wyckoff.

Thank you.

MR. ROGERS: Just to correct the record, Mayor, Councilman Voigt left at 12:45.

MAYOR KNUDSEN: Yes.

idea	of the	thought that there	may be a vote on it
that	night.	Once he realized	by that time it wasn't

MR. ROGERS: He was aware of the fact that he wasn't going to be here --unbeknownst to me he wasn't going to be here tonight, stayed with the

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1 golng to happen, that's when he decided to leave.

2 MAYOR KNUDSEN: Yes. '.

3 MR. SHANLEY: Well, my apologies for

4 not getting the time right, but it was a little

5 disrespectful for the rest of the people here that

6 had to stay until 3:00. And we did stay.

7 So we did feel a little bit

8 disrespected by that.

9 MR. ROGERS: Yeah, but he knew he

10 wasn't golng to be here. And as I just explained, he

11 waited as long as he could so he could participate ln

12 the vote.

13 Once he realized that it was golng to

14 keep golng and we weren't going to reach a vote

15 tonight, that's when he decided to leave. So he was

16 being respectful to everybody for that purpose.

17 MR. SHANLEY: Thank you.

18 MAYOR KNUDSEN: Are there any other

19 public comments?

20 Sure, come on up. Just state your name

21 and address for the record, please.

22 MR. KAMP: Russ Kamp, Midland Park

23 Council.

24 And thank you for the opportunity to

25 speak with you.

,.-""' 1

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I just would like to echo what Tim just discussed, for the expressed purpose of -- I can envision us going through this process each and every year, because neither your expert nor our expert is golng to have a perfect report, perfect presentation.

There is going to be a constant debate

as to what is an adequate and appropriate indirect cost and what should that allocation be.

And so what I would love the see lS

that	they've	been a	part of that process.
		Thank	you very much.
		MAYOR	KNUDSEN: Okay. Thank you.

representation from each of the communities to come forward and decide once and for all what is an appropriate indirect cost? What is an appropriate allocation? And so when a rate is presented like it's going to be presented tonight, and it's 6 percent, that there's some process that went into it so that each and every one of the constituents feels

Good evening.

MS. DeLUCA: Good evenlng. Lorraine DeLuca, Council, Midland Park.

I just want to say I also am in support of what the two gentlemen just spoke about.

In sitting here at the meeting the

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1 other night, you had stated that when you have

2 meetings in regards to the Ridgewood Water, you hold

3 them separate than your other council meetings,

4 because it is a separate situation.

5 MAYOR KNUDSEN: We --

6 COUNCILWOMAN WALSH: We hold them at

7 the beginning of the meeting. We always separate it

from Ridgewood Village.

9 MS. DeLUCA: Yes, you separate it. So

10 it's --

COUNCILWOMAN WALSH: So it's at the

12 beginning, so you don't have to stay for the whole

13 meeting.

14 MS. DeLUCA: Right. So -- yeah, you

15 separate it. So the thing lS my comment would be is

16 that being you separate it, I think that we should

17 have -- that the three towns should have

18 representation when this is being discussed. Okay?

19 Thank you.

20 MAYOR KNUDSEN: So just for the record,

21 that occurs at every single one of our council

22 meetings.

23 And to my knowledge at no time over the

24 course of the several years we've been doing this has

25 any representation has there been any

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1 representative from any of these municipalities here

2 to weigh in on any of the items that we've discussed.

3 So we appreciate that.

4 Good evening.

5 MR. BROWN: Hi, good evenlng. Greg

6 Brown, 444 Linwood Ave, Ridgewood here.

7 I'm actually excited that we have a lot

8 of council members from the other municipalities here

9 because as I've listened to all of this and I think

10 that one of the interesting topics is for all of us

11 to kind of be good neighbors to each other, because

12 we're all in this together as municipalities.

13 So I would -- I've questioned this

14 council a lot and I'd curious to maybe question the

15 other municipalities that as Councilman Walsh brought

16 up on Monday night, we have a certain ordinance in

17 town here that has restrictions within the stage two.

18 Now, it seems unfair that that

19 ordinance is only targeting Village of Ridgewood.

20 It's not -- there are no there are no similar

21 ordinances in any of the othe·r municipalities.

22 So I would say as a good neighbor and

23 as we sort of work together and as you might want to

24 get more representation, you know, a good step maybe

25 years ago would have been to enact similar ordinances

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1 for water restriction as we currently have in the

2 village, especially with the fact given that we're

all	being	serviced out of the	same aquifer.
		So thank you.
		MAYOR KNUDSEN:	Thank you.
		Did you want to	comment on that?

7 COUNCILMAN HACHE: I'm sorry.

8 MAYOR KNUDSEN: Did you want to comment

on that?	I heard you say something.
	COUNCILMAN HACHE: No, no, I --	so did
a little	research, and actually, Wyckoff does	have a

12 water emergency, Chapter 183 Water Emergency. It

13 talks about water restrictions, and the different

14 stages of them.

15 So that was the one that I looked up,

16 because we were told that that one didn't exist.

17 But, in fact, there is one.

18 So I'm happy to see that, because now

19 we can work together at, you know, having a united

20 front with our conservation efforts.

21 MAYOR ·KNUDSEN: And, also, for the

22 record, we have met in the past with representatives

23 from each of the municipalities and encouraged each

24 to adopt similar ordinances to ours.

25 I don't believe that any have to date

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/" /' done so, but we can certainly follow up on that. I

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appreciate the comment.

3 Please come on up.

4 Good evening.

5 MR. MADIGAN: Thomas Madigan from

Wyckoff.

I'm a township committeeman.

Just for the record, I want to be on

8 the record again, this is the third meeting I've been

at. I cannot hear the Mayor appropriately. I don't

10 know what she's saying.

11 I'm glad to have a moment of peace, but

12 other than first responders, I don't know what she's

13 say1ng .

14 So I'm just go1ng to say it as if she

15 didn't say anything, because we can't hear her. I

16 think she does it on purpose. I've brought it up

17 before. She slurs her words.

She goes through it

C.... ....

very quickly. That's just for the record.

Also, for the record, I just want to note that at two previous meetings the attorney for the village council, Mr. Rogers, made it abundantly clear he would not let us comment. And he used the words, I'm paraphrasing: You're not allowed to talk about anything legally on this case or anything that happened in court, yet the other night there was

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1 several things that were intertwined. And then it

2 was okay to talk about what was on the record.

3 So for two meetings he told us that we

4 weren't allowed to say anything. And then the other

5 night when he was challenged, and told it was

intimately involved in the case, what the legality

was, what the results were, what the judgement was.

8 All of a sudden it became okay.

The second thing is -- I just want to

10 mention is we came here the other night, we were told

11 specifically that you had added Wednesday night and

12 that you're only golng to 11 p.m., almost like-

13 just so you guys know, there's a time limit. We're

14 only going to go to 11 p.m.

15 And then we get here and then there's a

16 discussion at 11 p.m., after the attorney

17 representing our towns asked to properly speak with

18 your witness who had been here in May, and you

19 insisted that the witnesses from Wyckoff, Glen Rock

20 and Midland Park go first, our experts, knowing full

21 well that your expert is not available on a Wednesday

22 night, which is tonight.

23 Therefore, you made us stay here till

24 quarter-to-three in the morning, which was, for the

25 record, unconscionable.

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The last thing is, I just want to say that I hope that there's a little bit of climate control tonight. I hope Mr. Voigt feels better. I know he left. I'm not sure where we're going with this. There's a lot of confusion.

And I just hope wherever we're golng,

you try to glve us a little vlew as far as what your plans are, what you have -- because every time we come, it seems to change.

Thank you.

MR. ROGERS: Just -- just for the record, I know that the Mayor doesn't deliberately not want people to hear her.

And the record's golng to speak for itself.

Whatever your perception lS, the record will show that it was much different.

Thank you.

MAYOR KNUDSEN: And for the record, I just want to say I'm not one to slur my words at all. So just for the record.

MR. MADIGAN: And now you're enunciating and properly talking into the mic.

MAYOR KNUDSEN: No, I'm going to

MR. MADIGAN: You don't do it. I'm

C ..·

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1 just telling you.

2 MAYOR KNUDSEN: I'm-- you can just sit

3 down, point of order, we don't stand up and shout

4 from the audience in this courtroom. I am soft

5 spoken, just --you know, it's just how I am.

6 Come on up. And I'm going to make sure

7 you hear me tonight.

8 Good evening.

9 MS. CRONK FEET: Hi, good evenlng. I'm

10 Nancy Cronk Feet from 171 Hill Street, Midland Park,

11 councilwoman.

12 I just wanted to speak on behalf of

Midland Park. We do have a water restriction

ordinance that regulates stage one, two and three

15 watering. So I wanted that to be noted by this.

16 It's been ln effect, probably, over 18 years. So

17 Midland Park does abide by that.

18 So thanks so much.

20 Thank you.

MAYOR KNUDSEN: We so appreciate that.

Anyone else, public comment? Come on up.

MR. REID: Hi, good evenlng, Gregory

2 4 Reid, Sills, Cummis & Gross, on behalf of the

25 ratepayers. I'll be very brief.

Page 17

( 1 Two short points as it seems clear that

you intend to vote on Ordinance 36-36 tonight. I'm

3 not quite sure how you can do that two days after we

4 had an 8-hour meeting.

5 And my understanding was that a court

6 reporter was necessary for that meeting, that we had

7 to incur that cost, so that a transcript could be

8 made presumably so that you could review that

9 transcript.

To my knowledge, there's no way such a

11 transcript exists yet. That's -- that's one point.

12 The second one, I just want to make

sure you're clear on what you're doing here. If you

(

14 do pass this ordinance as written, you're taking the

15 position, among other things, but specifically that

16 any improper charges that were made prior to 2010, we

17 had a whole trial about this, lasted weeks, years of

18 litigation, you're just ignoring that. You're saying

19 it doesn't matter. We get to keep all that money.

20 You're not reflecting that 1n any way. And I think

21 that is pretty clearly improper.

22 MAYOR KNUDSEN: So two things I'm go1ng

23 to respond. The court reporter is not here for us to

24 review a transcript before our meeting. That's not

25 the purpose of the court reporter.

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1 My understanding lS the purpose of the

2 court reporter is to establish a record in the event

3 the court needs for review.

4 MR. ROGERS: Well, what happens is that

5 we have our reorganization on July 1. This lS ln one

6 of the letters I've sent to you, Mr. Reid.

7 The reason why we needed to get this

8 done before then is because we can't carry over

9 ordinances into the new council that's going to begin

10 as of July 1.

11 So we have to adopt all the minutes

12 beforehand.

So rather than have minutes transcribed,

13 because it wouldn't happen as quick, we're going to

14 have a transcript and use that as the minutes,

15 whether that gets used ln a further legal proceeding

lS	as a	consequence of whatever the	attorneys decide
to	do.	But the reason why we	needed the court

19 reporter is because we needed to have minutes to vote

20 on and adopt before the end of this council's term.

21 So that was the reason.

22 MAYOR KNUDSEN: So it has nothing to do

23 with us having to review the record before this

24 meeting. It has no relationship to that whatsoever.

25 And I guess in terms of your assertion

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of improper charges, I think we'll just agree to

2 disagree.

Thank you.

MR. REID: Okay. But we can agree that

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this ordinance ignores any improper charges prlor -

MAYOR KNUDSEN: Yeah, I don't -- that's your comment. We appreciate your comment.

Thank you.

MR. ROGERS: And just in answer to that one, I'll do it. Yes, the ordinance only deals with the rates for '10, '11, '12. The -- that was the court's directive .

MAYOR KNUDSEN: Right.

MR. ROGERS: That's what we dealt with. MR. REID: So, hypo -- so,

hypothetically=.

MR. ROGERS: That's what we dealt with.

MR. REID: Hypothetically, if the court found millions of dollars in overcharges for that earlier period, you're s ying, okay, we get to keep that anyway. That's your position.

MAYOR KNUDSEN: Okay. Let me just remind you. This is public comment. This is not a rehashing of our previous discussion.

So if that's your comment

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1 MR. REID: I -- well, we've never had

2 this discussion. I just wanted to make that one -

3 MAYOR KNUDSEN: Okay.

4 MR. REID: -- discrete point to make

5 sure you understand that that's what you're doing.

If	you're	okay with	that ...
		MAYOR	KNUDSEN: Well, agaln

8 MR. ROGERS: We believe -- we

9 understand that's your position.

12 right.

MR. REID: Okay. Thank you.

MAYOR KNUDSEN: That's your position,

Thank you.

Any other public comments? (No response.)

MAYOR KNUDSEN: All right. With that,

17 we will close public comments.

18 Matt, do you want to go over Rules of

19 Procedure for the evening?

20 MR. ROGERS: Well, I don't know that

21 there's any-- at this point in time, the public

22 hearing was closed on Monday night or Tuesday

23 mornlng. And the -- the matter lS now set for the

24 council to make any comments or revlew what it may

25 want to do in regard to this.

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MAYOR KNUDSEN: Okay .

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C.---

MR. ROGERS: And then after that, we have the public hearing on 36-37, but just with

. regard to the next step, this is what's happening now on 36-36.

MAYOR KNUDSEN: Very good.

I move the clerk read Ordinance 36-36 by title on sixth reading at a public hearing thereon be open .

COUNCILWOMAN WALSH: Second.

MS. MAILANDER: Hache? COUNCILMAN HACHE: Yes .

MS. MAILANDER:	And, Knudsen?
MAYOR KNUDSEN:	Yes.
Will the clerk	please read the	title of

MS. MAILANDER: Sedon? DEPUTY MAYOR SEDON: Yes. MS. MAILANDER: Walsh? COUNCILWOMAN WALSH: Yes.

Ordinance 36-36.

MS. MAILANDER: Yes.

"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

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1 145, Fees, to re-establish the water rates and

2 fees for the 2010- 2017 calendar years."

3 MAYOR KNUDSEN: As our Village

4 Attorney, Matt Rogers, just indicated, the public

5 hearing on Ordinance 36-36 was held on June 25, 2018

6 and was closed.

7 Ordinance 36-36 has been continued to

8 this evening's meeting for the final comments from

this village council and a vote on the ordinance.

10 So with that, we'll go on with comments

11 and discussion among council members.

12 Do you want to start, Deputy Mayor?

13 DEPUTY MAYOR SEDON: Okay.

14 So this is -- this is council comments

15 right now?

16 The public comment which has been

17 closed.

18 I apologize.

19 MAYOR KNUDSEN: Public -- I'm sorry.

20 MR. MADIGAN: We don't know what you're

21 saylng, Mayor.

22 MAYOR KNUDSEN: All right. I'm sorry.

23 MR. MADIGAN: If you're going to throw

24 me out, throw me out.

25 MAYOR KNUDSEN: All right. All right.

I'm sorry. Let me --

Page 23

MR. MADIGAN: We have no idea what you're saylng.

MAYOR KNUDSEN: All right. We don't

shout from the audience. We do not do this. And I will have you removed from this courtroom if you - MR. MADIGAN: Go ahead, throw me out,

but we can't understand you.

MAYOR KNUDSEN: You cannot shout from the audience. Point of order.

We will do it one more time. Just for slnce nobody else seems to be complaining, but we

will do this

can't hear.

MR. MADIGAN: The people behind me

MAYOR KNUDSEN: I can't help them. I

am speaking into the microphone.

As the village attorney indicated, the public hearing on Ordinance 36-36 was held on June 25, 2018 and was closed.

Ordinance 36-36 has been continued to

this evening's meeting for the final comments from the village council and a vote on this ordinance.

Therefore, the village council will have comments and discussion amongst themselves.

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I indicated, I 1 m fairly soft spoken

and

apologies

you canlt hear.

ahead, Deputy Mayor.

6 been said.

DEPUTY MAYOR SEDON: Thank you.

So I 1 ve listened to everything that 1 S

I 1 Ve read the reports during this entire

7 time. I read the two reports from Howard Woods. I

8 read the critique rebuttal from Exeter.

Howard Woods 1 report found, through

10 independent calculations of his own, that although

11 the 2010, 21 percent rate increase looked excesslve

12 by itself, the increase should have actually been

13 higher. It should have been around 22 percent. That

14 was stated through testimony.

15 For about seven years before that,

16 there was no rate lncrease. And we had to catch up

17 because the village taxpayers were footing the bill.

18 When sales fall short that 1 s what

19 happens.

20 Using that allocation factors ln the

21 report, shared expenses between the village and

22 Ridgewood Water had been properly -- will be properly

23 allocated golng forward.

24 The Exeter report was not a rate study,

25 it was a critique. It did not offer any specific

Page 25 recommendations on how to do things differently. It merely said that some things were wrong, but some errors were made.

The Exeter report also said that no

cost for emergency services should be included, but it did not recogn1ze that one of the firefighters is the hazmat responder for the utility. And it didn't recognize that police provide security and consulting for facilities, nor did it recognize that the parks and rec department does tree maintenance and cuts grass and similar situations and facilities throughout Ridgewood.

Through their testimony, Exeter did not attempt to identify what services were provided by police, fire or any other department. They just simply said they shouldn't be -- they shouldn't be paid for.

The recalculated rates showed close agreement based on Woods' report. Therefore, retroactively, adjustments should not be made according to Howard Woods.

The report said that -- a surplus was also a big issue, and the report addressed that some of that. The surplus resulted from the use of

the actual rates represents only 0.88 percent of the

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1 three years, 2010, '11 and '12 revenue requirements

·. ·..

2 calculated using actual expenses, which is stated in

the report	and legally allowed by the State of	New
Jersey and	the BPU.

5 The surplus was a big issue and

6 testimony showed that there wasn't enough revenue

7 allocated to capital improvements prior to 2016. We

8 did hire a new -- a new director for the water

9 utility. And he reevaluated the utility's needs,

10 explained pending fines from the E -- from the EPA

11 administrative orders, and showed a need for a

12 massive investment to upgrade a complex and

13 difficult-to-manage utility.

14 We are currently ln the third year of a

15 Slx-year, approximately $44 million upgrade. Other

16 towns, as we found out through the testimony, were

17 not reinforcing -- were not enforcing water

18 conservation restrictions, while Ridgewood taxpayers

19 are being ticketed and violated for that ordinance.

20 Again, a burden of Ridgewood that is

21 not shared by other towns.

22 The shared servlces the village

23 provides keeps costs low and Ridgewood Water rates

24 are very competitive with surrounding utilities.

25 The village also issues general

(.. . 1 2

. 10

Page 27 obligation bonds to finance improvements for the utility.

The village is taking on risk to ralse

capital for the utility and the compliance risks associated with being the owner and operator of the utility.

The state and BPU recognlzes this and

allows for utilities, such as Ridgewood Water, to transfer 5 percent of the revenue into the village's general fund to compensate the owner for these risks.

Using general obligation bonds, it lS less expensive for all Ridgewood Water customers than uslng revenue bonds.

The 21 percent rate increase in 2010 lS

basically what brought on the current lawsuit. It seems all at once and out of context that it may have been improper, and that, again, it brought on this - this litigation.

When we finally -- when you put it into

context, we find that it actually should have been higher.

The study shows that we would be relatively in the same place today even if different allocations methods were used, such as the ones used

by Howard Woods in this current study.

(- == -------------- -=

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1 Therefore, that lS why I'm supporting

2 Ordinance 36-36.

3 MAYOR KNUDSEN: Thank you.

4 Councilman Hache?

5 COUNCILMAN HACHE: Thank you, Mayor.

6 Thank you, Deputy Mayor.

7 So I don't have much to add.

8 I do just want to make sure that

everyone understands that, you know, in this function

10 as -- as council members we take this job very

11 seriously. You know we're both stewards of taxpayer

12 dollars, as well as stewards of the ratepayers of

13 Ridgewood Water.

14 But I'm also respectful of our judicial

15 system, you know, we were ordered by a judge to hire

an expert to conduct this rate study. It was not at

17 our discretion. We were ordered to do this. And we

18 did.

19 But, agaln, golng back to the point of

20 being stewards, we wanted to make sure that we hired

21 the best expert on the field. And that's Mr. Howard

22 Woods. He's handled countless cases involving water

23 rates for, you know, municipalities that -- that

24 apply enterprise accounting. And we wanted to make

25 sure he was also independent, which he was.

Page 29

( 1 I mean, I've never had a conversation

2 with the man. This was all on his own due diligence

3 and -- and his conversations with the different

4 departments ln the village.

5 important.

So that was very

··.. 14

And, agaln, as a steward, we wanted to ensure that this was an open, fair and transparent process. And it was. We had countless meetings. We had countless public meetings here. We gave the public plenty of opportunity to ask questions.

We brought in Mr. Howard Woods, I think, on three separate occaslons or if not four.

So, you know, I'm happy about two

things that were brought to light by Mr. Woods' work. One is that Ridgewood Water is a well run professionally run operation under the guidance of Rich Calbi now. I think we've seen the benefits now of the efficiencies that we have attained.

And that validates the six-year, $40

million-plus capital improvement program that we have engaged in.

So I'm glad, agaln, as a steward to the ratepayers and taxpayers that that work is -- is continuing and lS being done well.

The other thing that I'm happy about lS

(

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1 looking back at the rates charged based on Mr. Woods'

2 work, you know, we were not that far off the mark.

3 You know, again, as a steward I'm just happy that no

4 great justice was committed here.

Now, we had Plaintiff bring in their

6 experts to present their case. And I have to say

7 that -- that was not very convincing in my Vlew. It

8 was simply a critique of someone else's work.

I can sit here and criticize how Tom

10 Brady throws a football, but I -- I -- I can't go out

11 and actually do the work that he would.

12 You know, it probably would have

13 carried more credibility if they had done an actual

14 rate study and said, look, this -- we -- we actually

15 did this, went through the exercise and this is what

16 we came up with.

17 Instead it was, you know, a lot of

18 nitpicking and focusing on -- on -- on some very

19 small items. And even within that, not taking the

20 time to really talk to the different departments to

21 see how the functions within the village work.

22 It's a very complicated system here.

23 It's a municipality. And it has a lot of

24 interdepartmental dependencies. And there's a lot of

25 functions that may not seem clear to someone who's

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not well versed in how they function and operate.

And I think that a little more time focusing on that, would have -- I think would have just garnered a little more credibility in the process.

An inordinate amount of time was spent

on nitpicking on very small things. For example, police, you know, this is a $39,000.00 allocation, I mean, that's not even a quarter of a percentage point when you look at the grand scheme of what the total budget for Ridgewood Water lS. That's not even a rounding error.

So -- so why focus so much on that, if, ln fact, we were talking about much bigger problems and much bigger issues. We spent, I mean, most of

the time on this cross examination focusing on the

allocations to -- to the police.

You know, and along those lines I want to bring up another issue that came up and that was when Mr. Fiorenza was -- was questioning Mr. Woods about the -- the allocation factors and, you know, here's the manual, you find where --where those allocation factors are addressed in the manual.

And I bring this up so that if a court

revlews this, and I expect that the court will, the

C... _,

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1 court lS aware that the American Water Association

2 Manual, the M-1, which we talked about, does refer to

3 allocation factors, even though Mr. Woods couldn 1 t

4 find the place when asked on Monday night, they were

5 there. So now going back and looking at it, but, you

6 know, very interestingly Mr. Fiorenza stated that he

7 couldn 1 t find it. And Mr. Morgan from -- from Exeter

8 stated that he couldnlt find it either. But they

9 both had time to look since they knew the question

10 was coming, this was part of the cross-examination.

11 So this is -- goes to credibility as well.

12 So that 1 S all I have to add.

13 As I 1 m voting for -- I 1 m voting ln

14 favor for -- for -- to reestablish the water rates

15 for 2010- 2017.

16 MAYOR KNUDSEN: Councilman Walsh?

17 COUNCILWOMAN WALSH: I 1 ll try to lean

18 forward so that I can --

19 MAYOR KNUDSEN: Lean ln. Lean in.

20 COUNCILWOMAN WALSH: speak in here.

21 It needs to just be a little longer.

22 I want to thank the governing bodies

23 and residents, and ratepayers of Glen Rock, Midland

24 Park, Wyckoff and Ridgewood for attending the

25 meetings and providing input.

.·····- 1

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Page 33

As the board of directors for Ridgewood Water every ratepayer is our client and deserves to be heard. As the prior ordinances, not the rates were invalidated by court ruling, we were tasked with hiring an expert and reviewing and providing an analysis of the rates.

You can't hear me? You're shaking your

head.

MR. REID: No, just disagreeing with you.

COUNCILWOMAN WALSH: Okay. Okay.

You're disagreeing? Okay. Sure.

In November 2017 the village council and the village manager chose Howard Woods to provide his services and produce a report and rate study for Ridgewood Water. He was and is independent of the Village of Ridgewood. I'm confident in his credentials as presented and his role in the process.

I have read his report and his findings

and was present at each of the meetings regarding the same.

I feel he has presented a thorough reporting of the Ridgewood Water rates to the council and to the public.

Simply stated, the task was to review

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1 the rates from 2010 to 2016 uslng the data from those

2 years both budgeted and actuals.

3 It's understood that this study used

4 standard techniques in the industry to come up with

5 those results.

6 Mr. Woods interviewed staff, reviewed

7 budgets, reviewed audits and asked pertinent

8 questions, all in anticipation of reporting his

9 unbiased results for the study.

10 As I understand from my revlew of the

11 documents and testimony provided, the revenue

12 requirement versus the revenue generated are all ln

13 close agreement. Meaning that a hindsight review of

14 the data shows us that the water utility was running

15 efficiently and within acceptable standards with

16 regards to those rates.

17 His data showed the results over the

18 years varied slightly, but within reason. It gives a

19 layman's understanding of the process and policies of

20 allocation. Ridgewood Water is solely owned by the

Village of Ridgewood and as such this enterprise

22 operation shares services with the Village of

23 Ridgewood. Those expenses are then allocated to

24 Ridgewood Water. These types of allocations also

25 provide cost savlngs to Ridgewood Water since it does

,.. · "'- 1

not have to provide standalone servlces as we

Page 35

(

- 14

discussed the other night, police, fire, DPW, any of the services that might be needed by Ridgewood Water.

It should also be noted that the surplus that's developed over the years is meant for the future benefit of all ratepayers. Competent management must plan for future events. Variations ln use, as seen with the weather-related challenges over the years, as we discussed with the water restrictions, aging infrastructure, and any other capital requirement needed to run the water company efficiently.

I believe Mr. Woods' study and the accompanylng data affirm the need to approve the water rates as presented in this ordinance.

I understand and agree with his methodology. And I believe my council colleagues and I should vote affirmative tonight.

And just as a closing note to all the

ratepayers, we put Ridgewood Water first on our agenda each night to provide those in neighboring communities, as we mentioned at the beginning of this meeting, that don't plan on spending the whole night listening to other Ridgewood business, to let them

come, provide information, provide input to Ridgewood

l.=/---::=:::--------:---------=--=-=---:-::-;:------=----:::--- -=:::=

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1 Water, because that•s when anybody lS available to

2 come in and make a comment.

3 I, myself, recently challenged my

council colleagues on what I felt was a large

5 unnecessary expenditure for Ridgewood Water.

6 I hope all of you, those watching on

7 TV, those in the courtroom, will provide similar

8 input in the future.

9 MAYOR KNUDSEN: Thank you,

1o Councilwoman.

11 COUNCILMAN HACHE: Mayor, just one -

12 one note, because I talked about the AWWA, M-1, if

13 you•re so inclined to do so, look on Page 29, at the

14 bottom of the page, and going into Page 30, it

15 addresses the interdepartmental allocations

16 MAYOR KNUDSEN: Very good.

17 COUNCILMAN HACHE: -- that Mr. Woods

18 used, so ...

19 MAYOR KNUDSEN: I appreciate that. So

20 we•ll note that. Great.

So, for me, throughout this process

22 I•ve actually attended almost all of the court

23 proceedings. I read Judge Friscia•s ruling, read all

24 of the reports and documents, reviewed evidence and

25 listened to testimony proffered by Mr. Woods,

"'....- 1

' 14

I 18

Page 37 Ms. Sherwood, and Mr. Morgan, I've listened to the comments and questions of attorneys, elected

officials and residents of other towns. And based on

that information, I am prepared to vote.

But before doing so I want everyone to understand that this village council recognizes the importance of our job as stewards of Ridgewood Water and appreciates that water is a precious resource that must be protected with diligence and used wisely.

We take this responsibility very

seriously. Ridgewood Water carries water over long distances and delivers it to customer homes ready for safe consumption; infrastructure and water safety are addressed daily and responsibly.

Water utilities are capital intensive

and operating and capital costs are not insignificant.

Furthermore, it is this govern1ng body's obligation to plan to ensure the continued sustainability of the utility and, for that reason, the village council has made a commitment to the future viability of Ridgewood Water.

I'm certain my council colleagues

recogn1ze that the ratemaking process is a balancing

( .· ./

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1 act among competing interests, especially so ln this

2 situation.

3 I hope others involved in this process

4 understand that balancing act as well, especially

5 important since we're not strangers to one another,

6 we're neighbors. We know each other.

I'd also like to point out the respect

this council has for the legal process. One example

9 of this is that upon reading the court's opinion and

10 order directing this council to act, we sought out an

11 independent expert with no prior ties to the village

12 or this utility, and who was considered by many in

13 the utility world in this state to be the very best

14 in rate studies and establishing rates.

15 We were determined to live with

16 whatever answer and final opinion he determined to be

17 necessary from his rate study.

18 The fact that the village paid for his

19 fees was ordered by the court. So those who stated

20 this to be a problem or conflict are without basis in

21 their comments.

22 As a practical matter, I think it is

23 important to focus on where Ridgewood Water's rates

24 are in comparison to other communities and other

25 utilities in the area. Our's are highly competitive

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( 1 and remaln some of the lowest ln the area. The

Page 39

2 market, itself, validates the rates charged by the

3 Ridgewood Water utility.

4 Whether our neighbors accept it or not,

5 Ridgewood taxpayers have often subsidized the

6 utility, leading part to the lower rates charged.

7 Mr. Woods said, in response to a challenge from one

8 speaker, that he reviewed the expenses and revenue of

9 the Water Utility in 2009, and found that if the cost

10 had been allocated properly, the utility was $2.2

11 million short of what it needed to operate.

12 To be clear Ridgewood taxpayers would

13 have made up the shortfall. Taxpayers of this

(

14 village.

15 What sparked this litigation was a 21

16 percent rate increase in 2010 and subsequent 5

17 percent lncreases in 2011 and 2012, resulting in a 31

18 percent lncrease. The outrage expressed chooses to

19 ignore two very important facts. First, there had

20 been no rate increase between 2004 and 2010. If the

21 same 31 percent increase had been averaged over each

22 budgeted year between 2004 and 2012, the annual

23 lncrease would be significantly less.

24 Indeed, that yearly percentage lncrease

25 lS further reduced to less than 3 percent if

(....• ./

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1 including all the current years, most recent years,

2 of 0 percent lncrease. We've heard nothing about

3 those years.

4 Second, the direct costs, salary and

5 benefits, for utility employees, equipment and

6 chemicals needed for the operation of the utility and

7 the water, itself, that utility needed to purchase

8 from outside sources, rose almost 60 percent during

that same period. But there was no increase ln the

water rates to keep up with the rise in costs. The

11 upset expressed in this matter focused on "indirect

12 allocations", yet those costs rose only 18 percent

13 during that same period.

14 The rate lncreases here were driven not

by the village, but by the actual cost to run the

utility.

17 And, as Mr. Woods noted in response to

a resident's question, Ridgewood taxpayers, in fact,

19 subsidized the operation of the water utility for

20 2008 and 2009, if not earlier.

21 Indirect allocations paid for the cost

22 of servlces provided by the Village of Ridgewood to

23 the water utility. The court and even Plaintiffs'

24 experts agreed that it would be inequitable for the

25 ratepayers not to pay for services they were

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rece1v1ng.

Page 41

The other option 1s to have the water

. 13

- 14

c .

utility function as a separate unit of government, with its own complete staff of personnel, legal, finance, purchasing and administration. That would be costly, and all ratepayers would pay those increased costs. In fact, on June 25th, Mr. Woods responded to this same question indicating the shared-service arrangements between the Village of Ridgewood and Ridgewood Water is efficient and directly benefits ratepayers in the form of lower rates .

In rev1ew1ng Mr. Woods• report, and

follow-up rebuttal report prepared by Exeter, and 1n assess1ng testimony, several observations are made: Mr. Woods, as directed by the court, presented an independent review and did not seek input from any stakeholders. Both Exeter representatives,

Ms. Sherwood and Mr. Morgan, indicated several drafts

were exchanged with Plaintiffs• attorneys before a final report was settled on.

It lS difficult for me to discern which parts of the Exeter report were prepared by

Ms. Sherwood or Mr. Morgan. The unsigned and undated Exeter report, tantamount to a critique of Mr. Woods

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1 report, fails to name contributors to the final

2 product.

3 Furthermore, neither of the Exeter

4 witnesses exhibited an understanding or familiarity

5 with the Ridgewood Water utility operations,

6 logistics, property locations, sizes, conditions, or

7 other details. Neither appeared to offer any

8 testimony to suggest a modicum of understanding of

9 enterprise accounting.

10 In several arbitrary instances

11 Mr. Morgan inextricably, and inappropriately,

12 connected allocation decisions directly to the water

13 delivery system and summarily dismissed those

14 allocations.

15 Neither had any knowledge that the

16 court had previously recognized the legitimacy of the

17 same allocations they removed.

18 Based on their own testimony,

19 Mr. Morgan and Ms. Sherwood made no effort to

20 communicate with Ridgewood Water or the Village of

21 Ridgewood to understand the operations of the

22 utility.

23 Clearly ratemaking, or such a critique,

24 requlres some level of knowledge and understanding of

25 system design, logistics, operations, water safety,

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customer servlce, and other f ctors that may relate

to setting rates, fees, and charges.

3 Howard Woods report and testimony refer

to fourteen allocation factors developed to allocate

5 shared-service costs to the water utility and back to

6 the village uslng principles described in the AWWA

7 M-1 Manual; based on expert testimony and cross

8 examination I accept there was a recognition the

manual does not outline specifics about allocations,

10 but instead relies on different methodologies to

11 recover the full costs associated with the water

12 system in an effective, efficient, fair and equitable

13 manner. Albeit, not an exact science, appropriate

14 rate setting must avoid any unfair subsidies.

15 Based on his report and testimony,

16 Woods used both actuals and budgets in his analysis

17 to recalculate the appropriate rates for the years in

18 question.

19 Mr. Morgan's testimony indicated a lack

20 of familiarity with this aspect of the Woods' report.

21 According to Woods, the comparison of revenues at

22 actual rates to the reallocated actual expenses

23 showed a close agreement between the revenue

24 requirement and the revenues generated. This alone

25 suggests that any downward adjustment would

l.

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1 undoubtedly result in a subsidy --

2 THE COURT REPORTER: Please speak a

3 little more slowly.

4 MR. MADIGAN: See, someone else says

5 the same thing.

6 MAYOR KNUDSEN: No, she asked me to

7 slow down.

8 MR. MADIGAN: Well, that's what I was

9 saylng. We can't understand you because you talk a

10 million words an hour --

11 MAYOR KNUDSEN: Okay.

12 MR. MADIGAN: --we can't hear --

13 MAYOR KNUDSEN: Not from the audience.

14 Okay. I'll go back.

15 MR. MADIGAN: -- which you do on

16 purpose. I'll leave on my own.

17 MR. ROGERS: Go ahead, Mayor.

18 MAYOR KNUDSEN: According to Woods, the

19 comparlson of revenues at actual rates to the

20 reallocated actual expenses shows close agreement

21 between the revenue requirement and the revenues

22 generated. This alone suggests that any downward

23 adjustment would undoubtedly result in a subsidy

24 shouldered, once again, by Ridgewood taxpayers.

25 Additionally, both Morgan and Woods

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agreed that retroactive ratemaking lS uniformly avoided in the industry.

Accordingly, ln New Jersey, if a

regulated water utility over-earns, there's an

Page 45

. 13

; 24

l.--

adjustment to the utility rates going forward, but it does not make retroactive rate adjustments. Conversely, if the utility under-earns, a rate adjustment must be made to meet future revenue requirements.

According to Woods, the development of

the utility's revenue requirement lS the basis for the setting the overall level of the utility's rates, while providing the utility with adequate and sustainable funding levels for both operating and capital costs.

In developing the revenue requirement

for the water utility, Woods and Associates reviewed the actual expenses incurred and booked for the years 2009 through 2012 and conducted a review of the entire village budget by line item to identify shared costs that must be allocated.

The result of normalizing those values

and reverslng same, was a cost-center accounting of expenses directly incurred to develop the revenue requirement.

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1 Allocation factors developed based on

·. ·

2 averaglng the normalizations appear to be appropriate

and, according to testimony, also supported by the

4 M-1 principles.

5 During the court proceedings, Judge

6 Friscia pointed out the lack of discussion among

7 council members during the original public hearings

8 establishing the water rate increases.

9 The absence of discussion left a

10 perception that there was no basis for the then

11 council's decision.

12 Notwithstanding the likelihood former

13 council members many have conducted an ample revlew

14 of background materials provided ln advance of work

15 session and public meetings.

16 I agree that the absence of discussion

17 left a void in establishing the record.

18 The independent report by Woods and

19 Associates, respectfully compliant with Judge

20 Friscia's order, in my opinion, properly establishes

21 a methodology for allocation factors and

22 appropriately addresses the issues of indirect

23 allocations.

24 Finding the Woods' report credible and

25 fair, and his testimony consistent, independent and

unwaverlng, I agree with Mr. Woods conclusions regarding those allocations.

Page 47

In contrast, I reiterate my concerns about the Exeter report and relying on the testimony of Mr. Morgan and Ms. Sherwood in determining my opinion that their report was neither independent nor reliable.

During testimony, cross examination, and comment, much was made of the allocation for police, and I agree with Councilman Hache, that that

-- I think it was 38 or $39,000.00, the amount of time spent on that.

Comparisons were made to policing servlces provided by the Glen Rock, Wyckoff and Midland Park. It's important to note that Ridgewood Water pays property taxes in each of the three municipalities involved in this litigation. As such, continued policing of Ridgewood Water properties by these towns is appropriate and expected.

As it relates to the transfer of surplus: The water utility borrows money based on our outstanding AAA credit-rating of the village allowing for lower interest rates for bonds issued by the village.

The ratepayers, including Wyckoff,

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1 Midland Park and Glen Rock benefit from the low rate

2 of interest charged on village bonds. Therefore, the

·. ·

3 transfer of surplus compensates the village for both

4 the risks it takes in issuing debt and the exposure

5 the village faces for both financial and legal

6 liability occurring as a result of water utility 1 S

7 operations. It compensates the village for those

8 years where the village, because the utility either

9 canlt or hasnlt paid for services provided, in fact

10 subsidizes water utility operations. And, once

11 again, those are the taxpayers of the Village of

12 Ridgewood.

13 As the owner of the utility, state law

14 recognlzes the village has the right to transfer a

15 reasonable amount of surplus.

16 The criticism of the village taking

17 surplus might be appropriate if the water utility

18 were not able to produce the extremely competitive

19 rate that it offers its ratepayers, as I noted

20 earlier. Ridgewood Water rates are less than most of

21 the surrounding communities, undoubtedly a result of

the efficient operation based on responsible

23 stewardship and shared services with the Village of

24 Ridgewood.

25 I believe the transfer of a reasonable

,.._,-- 1

(

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(

Page 49 amount of surplus to the village current fund is appropriate since it is the village that is at risk.

If the water utility has an insufficient amount to

pay its debt, and at some point in the future, none of the Plaintiffs ln this matter are at risk. Ridgewood taxpayers, alone, assume all associated risks.

In closing, it seems to me this matter

got out of hand early in the process .

Although none of the people on this dais, and probably none on the dais in Wyckoff, Midland Park, or Glen Rock were part of that initial frenzy. This matter must end. It really needs to end. I don't think anyone can reasonably argue that Ridgewood Water utility lS not a first rate well run operation. It provides clean, safe drinking water at an extremely competitive price.

In light of the foregoing, I will vote yes on Ordinance 36-36.

I hope this council and all future

village councils will commit to working cooperatively

with elected	officials	from Glen Rock, Midland Park
and Wyckoff,	on behalf	of all of our constituents,
and continue	to ensure	the excellence of both the

water and service provided by Ridgewood Water.

('···

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1 Thank you.

2 And so, with that?

3 DEPUTY MAYOR SEDON: I move that

Ordinance 36-36 be adopted on sixth reading and final

5 publication as required by law.

6 COUNCILWOMAN WALSH: Second.

7 MS. MAILANDER: Hache?

COUNCILMAN HACHE: Yes.

16 absent.

MS. MAILANDER: Sedon? DEPUTY MAYOR SEDON: Yes? MS. MAILANDER: Walsh? COUNCILWOMAN WALSH: Yes.

MS. MAILANDER:

And, Knudsen?

MAYOR KNUDSEN: MS. MAILANDER:

Yes.

Councilman Voigt

MAYOR KNUDSEN:

I move the clerk

read

Ordinance 36-37 by title on this sixth reading of the

19 public hearing on thereon be open.

20 COUNCILWOMAN WALSH: Second.

21 MS. MAILANDER: Hache?

22 COUNCILMAN HACHE: Yes.

23 MS. MAILANDER: Sedon?

24 DEPUTY MAYOR SEDON: Yes?

25 MS. MAILANDER: Walsh?

..-••- ·, 1

COUNCILWOMAN WALSH: Yes.

MS. MAILANDER: And, Knudsen? MAYOR KNUDSEN: Yes.

Page 51

4 Will the clerk please read the title of

5 Ordinance 36-37.

6 MS. MAILANDER: An ordinance to amend

7 Chapter 145 of the code of the Village of Ridgewood,

8 Fees, exception 145-6, enumeration of fees relating

9 to code chapters.

10 MAYOR KNUDSEN: The hearing on

11 Ordinance 36-37 was continued to this evening's

12 meeting from on June 25th, 2018.

13 Each speaker will be limited to 5

(

14 minutes. The public hearing lS now continued.

15 Okay. You can come on up, the public

16 hearing lS open.

17 MR. KAMP: Russ Kamp, 34 3rd Street,

18 Midland Park Council.

19 With regard to water rates established

20 for this year, may I ask is it 1.8 million still for

21 capital improvements?

22 MR. ROGERS: Bring up Rich.

23 MS. MAILANDER: I'm going to have

24 Mr. Calbi come up

25 MAYOR KNUDSEN: Yes, come on up.

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1 MS. MAILANDER: -- so that he can

2 answer --

3 MR. KAMP: I just have a couple of

4 questions.

MAYOR KNUDSEN:

6 MS. MAILANDER:

Sure.

-- some questions.

7 So he's the Director of Ridgewood

8 Water, so we'll have him come up.

9 And Mr. Calbi, if you'll sit on the

10 side of the as it's set up so that the audience

11 can hear you.

12 MR. ROGERS: And, hopefully, the court

13 reporter will be able to take his testimony as well.

If you can't hear

15 Mr. Calbi, just let us know.

16 THE COURT REPORTER:

if you can't hear

I'm golng to move.

17 (Whereupon, a brief recess is taken.)

18 MS. MAILANDER: Mr. Tirnrneny -- Dan

19 Tirnrneny is also here. He's the business manager for

20 Ridgewood Water. Hold on one minute while the court

21 reporter sets up.

22 MR. CALBI: If you could just bear with

23 me for a second.

24 MR. KAMP: Sure.

25 MR. CALBI: I want be sure of the exact

number.

MR. ROGERS: Rich? Rich? MR. CALBI: Yes.

Page 53

MR. ROGERS: You have to wait for the court reporter.
MS. MAILANDER: She's setting up. MR. CALBI: Oh, sorry.

Thank you. In that time I found it.

The number you're referring to, I believe, the 1.28 million, so that's the amount that was approved ln capital. But prior to that there was a $3.57 million capital approved for the Carr treatment plant.

In addition to that, there's

$1,360,000.00 ln pay-go capital. That's part of the operating budget.

So, all in total, for '18, there's close to $7 million of capital that was approved.

MR. KAMP: All right. And so my question is, how much of that being allocated to the other districts as opposed to just Ridgewood?
MR. CALBI: The Carr project is here ln Ridgewood. It's actually right up the block from here at our Carr plant. That water does go

throughout the whole low zone. So it services all

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--------------------------------

1 four municipalities. That's one of our largest

2 treatment plants, about 1 million gallons a day ..

3 It's been offline slnce January 2017. This new

4 treatment would be on line some time riext spring.

5 The remaining projects still include

6 tanks, including the Ames tank in Wyckoff, the

7 eastside tank which is here in Ridgewood. We are

8 those are the last two tanks that will be done as

part of our rehab program, what we've been doing over

10 the last three years. We've recently completed

11 Lafayette tank in Wyckoff. Earlier, the prior year

12 we did the Glen tank in Midland Park, Aqueduct tanks

13 ln Midland Park. So we're wrapping up the tank

14 improvements.

15 MR. KAMP: Okay. So is it safe to say

16 the difference in the 6 percent lncrease relative to

17 the national inflation rate 2-and-a-half percent is

18 all related to capital?

19 MR. CALBI: I wouldn't say "all."

20 A good portion of it is also a metering

program, customer service. Because the fixed-service

charge that is being increased as part of this

2 3 ordinance, the volume rate is not being changed. The

24 fixed charge is meant to cover those costs, capital

25 improvements, metering, customer service. The volume

(1 rate's meant to cover the balance of another 80

2 percent of the real expenses.

Page 55

3 You know so if you look at it that way,

4 the 6 percent increase, it's to benefit all

5 ratepayers.

6 MR. KAMP: Okay. And then my last

7 question -- and thank you very much for your answers.

8 Ibelieve you said this is the third

9 year of a Slx-year plan. And so how much in

10 additional capital should we expect to see in the

11 budget, say, over the next three years? And what

12 percent will be allocated to Ridgewood versus the

- 13 other districts? Do we know?

··-- 14

is just	the beginning.	This only just touches the
sources	of our system.

MR. CALBI: Icouldn't tell you the allocation, but Ican tell you this, this $46 million

After that Iexpect at least another

$45 million in distribution improvements, all our pipes, hydrants, valves, everything you don't everything you don't see in the ground, 100-year-old plpes.

After that, based on merglng contaminant rules you're probably looking at another

$160 million in new treatment. So we're just

C..-"---- --=----------------:=-----------=-----= = ·

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Page 56

1 touching on surface right now.

2 MR. KAMP: And what lS that golng to

3 equate -- I mean because that's a scary number

4 obviously, a series of scary numbers.

5 What -- what could be, as ratepayers,

6 expect to see in terms of the impact on our bills?

7 MR. CALBI: It's a-- it's a

8 MR. KAMP: Which many people think are

9 high.

I mean, they may be relatively comparable to

10 other areas, but we all believe that they're fairly

11 high.

12 MR. CALBI: I -- I shared a table with

13 the administrators and council people that attended a

work	session we had where we presented	the	budget
that	was shown to the village council.

16 And part of the chart showed where

17 Ridgewood Water is comparatively to other utilities.

18 We're right in the middle.

19 There's several that are much, much

20 higher than we are.

21 And we even projected on that form with

22 this current increase that's being discussed in this

23 ordinance where we'd be and we'd still be in the

24 middle.

25 So we are very competitive. Where you

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.-- 1

(

. 10

Page 57 expect that we're go1ng to go, every year since I've been here, we do a projection on the budget. We look about 10 years out.

This year we've looked three years out

knowing where this $46 million is going in particular, because debt service is going the 1ncrease greatly.

We eventually have to start pay1ng for the loans that we're taking out .

We've infused operating budget with pay-go capital to avoid that, but still there's a large majority that we have to bond for.

So with that projection and if -- you

know, you're looking for a clear answer, it's not exact, after this ordinance for this year I would expect on average anywhere from 4 to 6 percent 1ncrease moving forward, but that's variable.

MR. KAMP: Sure.

MR. CALBI: We could have a very good revenue year, this year, and more surplus can come 1n and balance what's spent this year. Things can

change in the budget that we've projected in terms of expense.

Every year we re-look at it. You know, Howard Woods said it best, you just look at the

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1 snapshot of that year, what that revenue requirement

2 lS.

3 But then at the end of the year we

4 balance that off of what we actually spent.

5 MR. KAMP: Sure. No, I understand

6 about that.

7 And, hopefully, the interest rate

environment will stay as low as it has been. And

9 obviously, that impacts debt servlces.

10 MR. CALBI: And I want to tell you, and

11 I thank the council for their comments. But we're --

12 we're taking it even further, we've gotten involved

13 in Trenton. We're lobbying legislature. We're

14 trying to get more grants. We're trying to expand

15 the loan programs that the state has, because water

has not had its day. Everything's about

17 transportation. So it's about time it paid attention

18 to the water industry.

19 MR. KAMP: Okay. Well, thank you very

much. Appreciate it.

21 MR. CALBI: Thank you.

22 MR. SHANLEY: Tim Shanley, Wyckoff,

township committeeman.

Mr. Calbi, thank you. We -- I was at

that meeting with our township administrator, so from

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(.-/ 1

. 13

Page 59 what I understand Ordinance 36-37 is just increasing the -- the meter -- meter fees not the volume? Is that correct?

MR. CALBI: Correct.

MR. SHANLEY: And, thank you.

You showed us at that meeting how it was out of line with Suez and I believe American Water, and how you were bringing it up to be more ln line with other water companies, but not at their levels. You didn't hit their level; is that correct?

MR. CALBI: Yes. The second utility

was Passaic Valley Water Commission .

MR. SHANLEY: Right. Thank you.

(

14 And that's why I wasn't initially golng

15 to come up, but I figured since you were up there I

16 wanted to thank you for the meeting and showing that

17 we can understand.

18 So I don't have an objection to those

19 rate increases for those fixed meters because they're

20 a little out of line with the other water companies.

21 So I'm showing I can work with you guys

22 and everything doesn't have to be adversarial. And I

23 do apologize for my colleague. I don't know if he's

24 back, but, you know, we are willing to work with you.

25 And that's why I had suggested, you know, because all

l

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1 this lS falling on you, setting up a committee to

2 explore a municipal utilities authority, so all four

3 municipalities: Wyckoff, Glen Rock, Midland Park and

4 Ridgewood, are equally represented at, you know,

5 setting the rates and running the water company. And

6 you can do it based upon an amount of ratepayers that

7 you have.

8 Ridgewood would have more

representation on an MUA, you know, because you have

10 the most ratepayers.

11 So I will renew that agaln to consider

12 that because we've been very adversarial for years.

13 I wasn't here at the start of it, you're correct, I

14 think only two members of our township committee were

15 -- are still on it, it's Rudy Boonstra and Brian

16 Scanlan who is our current mayor, were part of that

17 initial back in 2009, 2010 when this all started.

18 And that's why Isuggested early on in this process

19 of this hearing why don't we sit down and try to

20 resolve this matter because this is going to continue

21 on, I fear, going on down the line unless we sit down

22 and try to resolve this amongst all four

23 municipalities because we don't want this to

24 continue.

25 But, thank you.

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(

- 1 MAYOR KNUDSEN: Thank you.

2 Anyone else?

3 MR. BRAUNIUS: Good even1ng.

4 MAYOR KNUDSEN: Good evening.

Page 61

(

.14

MR. BRAUNIUS: I want to thank you for the opportunity, once aga1n, to be able to speak on Ordinance 36-37.
MR. ROGERS: Just identify yourself, if

you would, Mr. Braunius?

MAYOR KNUDSEN: Name and address. MR. BRAUNIUS: Oh, I'm sorry.

MAYOR KNUDSEN: That's okay.

MR. BRAUNIUS: My name lS Mark Braunius, I live in Midland Park, 35 Plane Street.

THE COURT REPORTER: Address lS 35?

MR. BRAUNIUS: Yes, 35 Plane, P-L-A-N-E.

THE COURT REPORTER: Spell your last

name, please.

20 MR. BRAUNIUS:

21 -R-A-U-N-I-U-S.

"B" as 1n boy

22 THE COURT REPORTER: Thank you.

23 Mr. BRAUNIUS: I, too, share the

24 concern of water conservation as has been really

25 brought on by Councilwoman Walsh at our last meeting.

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1 I guess my real concern is with this

2 particular rate hike on a connection fees. It seems

3 to me that we're not hitting the people that we

-...

. ·. ·

4 should be hitting for the rate lncrease.

5 We are hitting everybody, not the

6 abusers. You're not showing conservation when you go

across the board, and especially with your common

8 5/8ths water connection, which is over, oh, 17,000

9 connections that they're getting an increase. And if

10 the increase went with rate flow, you would be

11 hitting those that are not conserving.

12 I think the way you're doing it right

13 now by hitting everybody, is not portraying

14 conservation to the ratepayers at this given point.

15 I think if you could go and put a formula in that lS

16 the average use of water used by a household, and

17 then anything that exceeds that have a surcharge,

18 then you would be forcing people to conserve water.

19 The way we're doing it across the board

right now with connections,	if you	take an elderly
person, the only one in the	house,	they're getting

22 hit with the same rate charge as a family of six

23 using six times as much water.

24 I know the flow rate they're still

25 getting charged more, but they're not being penalized

1 for it, just a suggestion, you know.

Page 63

; 10

( ... 14

' 15

The connection fees is really a 40 percent lncrease in connection fees. It's a 6 percent lncrease across the board. But when you calculate it out, it's a 40-percent lncrease on connection fees, you know.

It's it's -- it's something that I feel really has to be looked at to try to make it fair and to try to force conservation of the water at this glven point.

And we all know, the only way you

conserve, and we talked -- and I heard it talked about here the other night that abusers should get a

-- get a fine. Okay.

This is not encouraglng that at this glven point. You're not encouraging conservation, you know.

Last, but not least, we've hit on this a lot throughout all these proceedings, and many of my colleagues here have asked that, you know, the biggest problem we have is representation from the three communities, you know, I liken it, unfortunately, we're coming on July 4th. And many years ago our forefathers started a revolution

because we had taxation without representation.

(__ /

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	I think that's what	we're feeling as
the three	communities. We really	have no

Page 64

3 representation to Ridgewood Water and how it

4 structures its rate. How its money is being spent

5 and what is happening.

6 And I would like you to consider these

7 -- these areas and see if we can come together as a

8 full community.

9 Thank you.

10 MAYOR KNUDSEN: Thank you.

11 Any other comments? Come on up.

12 on up. Loud and clear.

13 MR. MADIGAN: Thomas Madigan from

14 Wyckoff.

Come

15 I know we just all heard -- and I do

16 have a couple of specific questions of Mr. Calbi -

17 from all the council members espoused on Ridgewood

18 Water, and how they were recognized as being so well

19 run.

20 So I would just like a clarification, I

21 believe you have 51 wells; is that correct?

22 MR. CALBI: Fifty-two.

23 MR. MADIGAN: Fifty-two.

24 And out of the 52 as of today how many

25 were operational?

..·· - 1

(

MR. CALBI: Thirty-nine .

MR. MADIGAN: Thirty-nine.

So approximately 25 percent are currently not operational?

Page 65

' 10

(

' . 14

MR. CALBI: I can•t do that math. I think it•s a third.
MR. MADIGAN: Okay. And the plan you just told us on this 36-37 you•re going to add, I think you said, two wells, if I understood you correctly?
MR. CALBI: Five wells will be online next sprlng. Another two will be re-drilled, total of seven.
MR. MADIGAN: Okay. So if five there would mean -- there would mean you•d have 44 our the 51, correct?
MR. CALBI: It•s 46 -- 46 out of 52.

MR. MADIGAN: Okay. Okay. But you•d still have 15 percent not operational, correct?
MR. CALBI: Again, I would have a calculate the percentage, but that
MR. MADIGAN: Again you•re talking about efficiencies and --
MR. CALBI: Sure.

MR. MADIGAN: -- water restrictions,

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1 year, after year, after year. And you also just told

2 about us about other capital plans going forward when

3 my colleague Mr. Kamp from Midland Park asked you.

4 So I'm just curious if Ridgewood Water

5 lS so well run, why is a need for such dramatic

6 capital over these next several years including where

7 you said replacing 100-year-old plpes and all this

8 infrastructure because -- if it's that well run.

MR. CALBI: Like many other utilities

10 ln this state and the country, they were neglected

11 for decades. So now all these structures that

12 they're at the end of their useful life.

13 So, unfortunately, every utility has to

14 take on that burden now of replenishing those systems

15 and rebuilding them. Some cases from the very ground

16 up, you know, there's -- I've been there three years

17 now

18 MR. MADIGAN: Okay.

19 MR. CALBI: -- actually last week was my

20 annlversary being here three years.

21 Since I stepped in the door, I've

22 realized the need to do that.

23 And, fortunately, I got the great

24 support of this council to go forward with that $46

25 million plan.

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....- ,- - 1

- 13

(

- 14

. 16

Page 67

But as I -- I mentioned in the answer, that's not the end. There's more to go. You know, those wells have been out of servlce for decades, you know, and our goal is to get as many of them back on line as we can, but that can't happen overnight.

To drill a new well, then get the permlSSlon to put it back on line, provide the

treatment for it, that takes years.

MR. MADIGAN: Okay. And, agaln, I just want to compliment you personally. I've had some dealing with you, you've been very professional, very accommodating, very open-minded and it was very appreciated.
MR. CALBI: Thank you.

MR. MADIGAN: And the this lS the last comment/question, whatever you want to call it, I'm just concerned that, you know, we just went through something. We just want an issue that we can't talk about because we're onto 36-37, where we talked all this surplus.

And now we're golng to spending a lot of money due to negligence over the years. So it just concerns me. And I think it's something the

24 council should take into consideration.

25 MAYOR KNUDSEN: Okay.

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1 Corne on up?

2 MR. BOONSTRA: Good evenlng.

4 the record.

MAYOR KNUDSEN: Name and address for

5 MR. BOONSTRA: Rudy Boonstra,

B-0-0-N-S-T-R-A, township committee member from

7 Wyckoff.

8 I am one of the few rernalnlng governlng

body members who was present when this all started.

10 And I promise not to go on a trip down memory lane

11 here tonight.

12 What I'm here to ask about or talk

about is the capital

project

which

has some pretty

pretty extraordinary

Councilman Karnp from

numbers

Midland

as --

Park.

as stated by

14 I .

16 But I have a question as it relates to

17 Wyckoff. We have a -- an area in Wyckoff now ln

18 which no new hook-ups are being permitted called the

19 Booster Zone.

20 Are there any other areas ln the entire

21 system where that occurs or is it just our -- I don't

know.

Is it just our area in Wyckoff?

MR. CALBI: Currently right now there's

24 a moratorium on all connections throughout the entire

25 system.

.. 1

(

.. 14

Page 69

MR. BOONSTRA: Throughout the entire system? Why is that?
MR. CALBI: Because the utility doesnlt

have adequate firm capacity to serve the system.

MR. BOONSTRA: And --

MR. CALBI: Based on the number of wells that are out of --
MR. BOONSTRA: I 1 m sorry.

MR. CALBI: Based on the number of wells that are out of service.
MR. BOONSTRA: Okay. So -- so any of

the knew construction I see in other areas covered by Ridgewood Water necessitate the drilling of wells?

Do I have that correct?

MR. CALBI: To get --

MR. BOONSTRA: Because that 1 S -- that is the situation in Wyckoff.
MR. CALBI: But this GAC project, this

Carr Avenue improvement, will solve that deficit initially so those developments would be allowed to continue.

But the Booster Zone, ln particular,

will always have a moratorium on it because there 1 S

no gravity storage

MR. BOONSTRA: Okay. So let 1 S --

(..... .....·

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	MR.	CALBI: --	ln that zone.
	MR.	BOONSTRA:	So let's -- then let's
come	back to that	because I	-- I would also note that

4 we have a a four-lot subdivision going on and

5 several single home projects within the Booster Zone,

which the developers have to drill wells, which

which seems inconsistent with having a public water

8 utility servicing the area.

9 In fact on the one cul-de-sac, I

10 believe, we're going to have a fire hydrant, but it's

11 not going to activated, which is a public safety

12 issue, to some degree.

13 We also have the Vista project ln

14 Wyckoff which, I believe, Ridgewood Water is not

15 capable of servicing so they're going to be supplied

16 by Hawthorne water utility, that's the case. I don't

17 know if Ridgewood has been approached to service

18 that, but part of the -- part of the project lS

19 physically located in Hawthorne, so they can do a

20 connect on Hawthorne and service the entire

21 700,000-square-foot building with Hawthorne Water.

22 And just to continue on the Booster

23 Zone, agaln, parochially speaking from Wyckoff, what

24 is the plan -- other than the 85-foot tower, is there

25 any plan to alleviate the situation in the Booster

..,...-- 1

Zone --

MR. CALBI: Yes, as part of --

MR. BOONSTRA: -- throughout this -- I

mean, you know, we were -- the Mayor just said it's a

5 well, when you fill it, you should have a plan

6 because and the reason I ask that is we've been

7 down-- now we'll go down memory lane a little bit.

8 We've been down the road with the

9 85-foot tower off Merrywood a couple of time and

10 that, in all honesty, if it came up again, would

11 probably result in our dreaded protracted litigation

12 with neighbors in the township so I -- so I ask the

13 question.

(

- 14

(

MR. CALBI: Yeah, I don't know the whole history behind that project. I just know it's decades old.
MR. BOONSTRA: Right.

MR. CALBI: There were many attempts to build a gravity storage tank in the Booster Zone.

It, unfortunately, never happened due to neighbor concerns.

But the Booster Zone tank has lS

part of that $46 million capital plan. And it's actually -- the beginnings of it start next year.

MR. BOONSTRA: Same design? Same

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1 design tank or --

MR. CALBI: No. We're looking at

3 MR. BOONSTRA: -- it's something that

4 might be a little more acceptable in the

5 neighborhood?

6 MR. CALBI: We're looking at different

7 options.

8 MR. BOONSTRA: Okay. Thank you.

MAYOR KNUDSEN:

Thank you.

Anyone else?

(No response.)

MAYOR KNUDSEN:

With that, I move

the

public hearing be closed.

14 COUNCILWOMAN WALSH: Second.

15 MS. MAILANDER: Hache?

16 COUNCILMAN HACHE: Yes.

17 MS. MAILANDER: Sedon?

18 DEPUTY MAYOR SEDON: Yes?

19 MS. MAILANDER: Voigt is absent.

20 Walsh?

21 COUNCILWOMAN WALSH: Yes.

MS. MAILANDER:	And,	Knudsen?
MAYOR KNUDSEN:	Yes.

24 DEPUTY MAYOR SEDON: So I move -- I

move that Ordinance 36-37 be adopted on sixth reading

LAURA A. CARUCCI, C.S.R., R.P.R., L.L.C.

201-641-1812

bB102fu4 b7e le3 c01 3aal3257590

and final publication as required by law.

COUNCILWOMAN WALSH: Second. MS. MAILANDER: Hache? COUNCILMAN HACHE: Yes.

MS. MAILANDER: Sedon? DEPUTY MAYOR SEDON: Yes?
MS. MAILANDER: Voigt is absent.

Walsh?

COUNCILWOMAN WALSH: Yes.

MS. MAILANDER: And, Knudsen? MAYOR KNUDSEN: Yes.

(Whereupon, this matter is concluded.

Time noted: 7:52p.m.)

LAURA A. CARUCCI, C.S.R., R.P.R., L.L.C.

201-641-1812

b8102:fi=4-5b7e-4le3-ac01-a3aal3257590

Page 74

1 C E R T I F I C A T E

I, LAURA A. CARUCCI, C.C.R., R.P.R., a Notary

4 Public of the State of New Jersey, Notary ID. #15855,

Certified Court Reporter of the State of New Jersey,

5 and a Registered Professional Reporter, hereby

certify that the foregoing is a verbatim record of

6 the testimony provided under oath before any court,

referee, board, commission or other body created by

7 statute of the State of New Jersey.

I am not related to the parties

8 involved in this action; I have no financial

interest, nor am I related to an agent of or employed

9 by anyone with a financial interest in the outcome of

this action.

10 with

regulation

11 Code.

\....... _... ··-······-····· ···

Administrative

. CAR I, C.C.R., R.P.R.

e #XI02050, and Notary Public

Jersey #15855, Notary

tion Date March 1, 2019

17 Dated:

LAURA A. CARUCCI, C.S.R., R.P.R., L.L.C.

201-641-1812

b8102 fu4 --5b7 e-41e3 --ac01--a3aa132 57 59 0

( ADJOURNMENT

There being no further business to come before the Village Council, on a motion by Councilman Sedon, seconded by Councilwoman Walsh, and carried unanimously by voice vote , the Village Council's Work Session was adjourned at 7:52P.M.

?M.o!liflh£1

Heather A. Mailander

Village Manager/Village Clerk

Hits: 2762

20180627 Village Council Special Public Meeting

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