There was one amendment to the Agenda with the addition of an Action Item to authorize the General Manager, Chris Thomas, to finalize the terms of a potential tower lease with KGI Communications. The amendment to the Agenda was approved.
Public comment opened with Yvonne Richard reading a prepared statement [EDITOR'S NOTE - Neil Richard, a co-founder of Project94, is the spouse of Yvonne Richard.]. In her statement, she described her previous experience with the Service Authority, including being told "... I couldn't possibly know anything because I am a girl!" In her statement, she asked the Board of Directors to remove Chris Werle from his position as Chairman and that the Board of Supervisors replace him on the Board of Directors as soon as possible. She also asked the Board of Directors to review the employment contract of Chris Thomas to see if he violated any terms and, if he did, she asked the Board to take "appropriate disciplinary action." She concluded her comments by saying the Service Authority needed to start taking responsibility for their actions and to continue cash funding any future projects or to seek out additional grants.
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Chris Werle then read into the public record a prepared statement from Howard Yarus. Mr. Yarus was present in the audience but did not stand to read his statement. Mr. Werle read the statement verbatim, including the correct pronunciation of words that were spelled incorrectly. Mr. Yarus pointed out in his statement that according to the Service Authority Regulations, the Purpose section defined the obligations of the Service Authority and included a line, as he pointed out in his attachment to the statement, that stated customers should be charged the full cost of providing the service. He closed his statement by again requesting that the Service Authority become "... a department under County Administration."
Mike Bennett began his comments by saying he was at a disadvantage as being the Vice Chair and the newest person on the Board, thus meaning he was first to comment but didn't have the luxury of seeing what everyone else is doing. Regarding the recent news articles and press releases, he said the Board was limited at the present time in what they can say. He said he may win the "Captain Obvious" award for his statement but he felt the situation was very serious and unacceptable. Bennett also said he can assure everyone that they are working to resolve the issue to the best of their ability and the whole situation is "a burden I am carrying."
Richard Granger, Ruby Brabo, and Cathy Binder had no report.
Chris Werle, Chairman, said he met with the Economic Development Authority (EDA) on April 19th about KGI Communications getting a grant and that they did not have a grants program like the Tourism Advisory Committee. He did say the EDA can consider awarding financial assistance on a case by case basis. He said he met with KGI Communications on April 20th to work on a revised lease agreement, subject to approval from the Service Authority Board of Directors. The new proposal was a five year lease at $1,000 per month with monthly installments waived for the first 12 months and an option to waive an additional six months if financial hardship can be documented along with other specific limitations. There was also an addition of a lease escalation factor that would have a rate to be determined later. On May 1st, he said the owner of KGI Communications, Juan Marte, countered that offer by asking for the 18 months of no lease payments with no requirements to prove hardship and no annual escalation rate until the five years was over.
The Consent Agenda was approved.
The County Attorney, Eric Gregory, had no report.
The previously added action item regarding the updated lease negotiations was next. Werle restated some of his previous comments regarding the current state of the potential KGI Communications lease of tower space on the Arnold's Corner facility. He said the original agreement was for $1,000 per month for 12 months and that at the last meeting, the President of KGI, Michele Wido, and her husband Steve, requested 18 months rent-free. Werle said that with the new counter-offer he stated earlier, his concern was that there was no escalation over five years and there was no proof of hardship. Granger asked how much of a burden their request was to prove hardship. Werle said it was just a simple balance sheet. Brabo asked if that was just for King George services and Werle responded yes.
Brabo said she didn't think it was too much of a burden to ask for that, the proof of hardship, after 12 months. As for the escalation, or increase in lease payments, she wasn't sure she wanted to be a stickler for that. Binder asked if the escalation fee was standard. Werle said he wasn't sure but Gregory said it was typical. Werle said three percent was a normal rate increase. Bennett said 12 months seems like enough.
Werle proposed that he and Chris Thomas go back to the table one last time with KGI Communications to propose a five year lease with no escalation fee. After 12 months of no lease payments, KGI could get another six months free if they proved financial hardship. He added that any funding from the EDA would go to pay any of the lease payments that fell under the free period. The motion to authorize the General Manager to negotiate this and vote at the next meeting was approved.
Ryan Gandy, Director of Economic Development, then presented three options for potential business incentives. He wanted to gauge the Board's reaction and gather feedback. Option 1 was a delayed waiver where the connection fee payment would be delayed and paid from revenue from the County by having a business established. Werle said the Service Authority Regulations currently address payment plans for low income households but that they don't apply to businesses. He said the reason to collect the connection fee is to cover the costs the Service Authority has already invested in the infrastructure. He also commented that the Service Authority budget operates on an assumed number of connections for projected income and that this option would make it more difficult to predict revenue. He also said that in the end, it would mean an increase in rates. Brabo said that this option raising rates was discussed at length at the Board of Supervisor's work session when this was first presented.
Option 2 was a rebate that would be similar to Option 1 but the business would pay the connection fee up front and then the County would offer a rebate at a later time.Werle said that if the small business pays up front and then the County pays the business back later via rebate, why not have the County transfer funds to the Service Authority up front so the business doesn't have to.
Option 3 would require the business to seek a grant from the Economic Development Authority (EDA) to cover the up-front costs of the connection fee. Gandy also said that a combination of these three options could be considered.
Werle again stated he had problems with Option 1. Brabo said Option 3 did not require their approval. She said she suggested at the work session that maybe a 50% rebate was a better option so that the Service Authority knew some money was coming in. She also suggested a limit of maybe three businesses a year. Werle said by law, they need to collect the connection fee. Brabo agreed, but said the payment would be delayed. She also said the Service Authority itself isn't fiscally solvent enough to offer incentives.
Gregory said Options 1 and 2 may raise legal questions regarding the County giving money to a private business but Option 3 was just fine.
Bennett said he has heard the anecdotal evidence but asked if there was any documented data of a business not coming to King George because of the connection fees. Gandy said he had not dealt with any businesses personally that opted to not come to the County because of connection fees. Gandy said it may have happened in the past. Dr. Young, County Administrator, said he has run across two businesses and Brabo said she's encountered another. Bennett asked if the connection fees to surrounding counties were known. Gandy said he could find out. Bennett asked how many commercial connections are there per year. Thomas said it varies from year to year and the current budget is four for this year. Bennett asked to look at three years of data for commercial connections.
Chris Thomas, General Manager, only had one item to report to the Board. He gave an update on the industrial park pump project, stating that the private pump station was purchased in an effort to give the Service Authority better control of the flow in the industrial park and Oakland Park. He said the purchase was for a small sum of money and had to upgrade it to meet current requirements, including auto-dialers and generators. He said the work is nearly complete and that the last item to be completed was the switch from the existing building power to separate power. He said this change would be done by Virginia Power when they could schedule an outage for the nearby business.
The Board then went into Closed Session at 7:15pm to discuss actual or probable litigation and a personnel matter. Invited to the Closed Session were Jeff Jenkins, Supervisor, Jeff Bueche, Supervisor, Dr. Young, County Administrator, and Eric Gregory, County Attorney. Jenkins, Bueche, and Thomas left the Closed Session at 7:59pm. The Board returned from Closed Session at 8:34pm and adjourned at 8:35pm.
Meeting Attendees:
Christopher Werle (Chairman, Board of Directors)
Christopher Thomas (General Manager of Service Authority)
Richard Granger (Board of Supervisors)
Michael Bennett (Citizen)
Ruby Brabo (Board of Supervisors)
Cathy Binder (Board of Supervisors)
Neiman Young (County Administrator)
Eric Gregory (County Attorney)
Meeting Agenda
Next Meeting:
The Service Authority will next meet on May 15, 2018 at 6:30 pm at the Revercomb Building.
Previous Meeting:
Read about the previous Service Authority Meeting.
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