• City of Cambridge Maryland
  • City of Cambridge Maryland
  • City of Cambridge Maryland
  • City of Cambridge Maryland
  • City of Cambridge Maryland
  • City of Cambridge Maryland
  • City of Cambridge Maryland
  • City of Cambridge Maryland
  • City of Cambridge Maryland
  • City of Cambridge Maryland
  • City of Cambridge Maryland
  • City of Cambridge Maryland
  • City of Cambridge Maryland
  • City of Cambridge Maryland
  • City of Cambridge Maryland
  • City of Cambridge Maryland
  • City of Cambridge Maryland
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City Council Minutes

February 17, 2009

Cambridge Maryland SealMINUTES

Council Meeting

February 17, 2009

 

 

The City Council met in regular session on Tuesday, February 17, 2009 in Council Chambers. A quorum being present, Mayor Victoria Jackson-Stanley called the meeting to order at 4:35 p.m. Those Commissioners in attendance were Commissioners Sydnor, Stout, Thomas, and Hanson.

 

Mayor Victoria Jackson-Stanley asked for a moment of silence. Commissioner Hanson led in the Pledge of Allegiance.

 

PUBLIC HEARING (Update)

 

For the purpose of reviewing the comments that have been received up to 4:00 pm on Tuesday, February, 17, 2009 on the proposed amendment to the Section 9-210 of Article 2B of the Annotated Code of Maryland now pending before the State Legislature (Senate Bill No. 333, and House Bill No. 425), which amendment would exempt the City of Cambridge from the 300-foot setback requirement for issuance of Class B Liquor Licenses issued by the Dorchester County Board of License Commissioners-Ed Kinnamon reported that City Hall received a total of 37 written comments after the public hearing. Of 37 comments, 35 are in favor are in favor of Senate Bill No. 333; 1 was against; and 1 is 'neutral' (in favor of people having a drink with dinner but is opposed to bars). At 4:05 pm, City Hall received an envelope addressed to Senator Colburn and one addressed to Delegate Eckardt along with a message that they had faxed them to the appropriate people. The envelopes were not opened.

 

Commissioner Thomas said he thinks any position Council takes should not only consider the letters they received in the last week since the hearing but also the cumulative comments, letters, public statements, and submittals made to any governmental body (Liquor Board, etc.).

 

Commissioner Sydnor said the 37 written comments did not include the people who spoke at the public hearing. Therefore, the comments would be 44 for the bill and 3 against. Ed Kinnamon stated that one person who spoke at the public hearing also submitted a letter against the bill. Rob Collison summarized that 9 people spoke for the bill at the public hearing and 2 people spoke against it. One of the 2 people against it also submitted a letter. Commissioner Sydnor said it seems like Council received around 93.6% responses for the bill; and 6.4% against it.

 

Rob Collison said on December 8, 2008, Council made a request to be included in legislation. Commissioner Sydnor made a motion to continue support for House Bill 425 and Senate Bill 333 as they have indicated in the past and to authorize a letter of support with the signatures of each of the Council Members. Commissioner Hansen seconded the motion. The motion passed 4:0. Mayor Stanley said Commissioner Knox (absent) sent a written note saying he is in support of the bills.

 

UNFINISHED BUSINESS

 

Request from Aram S. Nersesian for reimbursement for expenses incurred at the Municipal Marina-Rob Collison said Mr. Nersesian asked Council to reimburse him for dredging he had done to his slip at the Municipal Yacht Basin. George Hyde said at the time the City was doing dredging at the marina, this particular slip was dredged to -7 mean low water. Because of the size of Mr. Nersesian's boat, he wanted deeper water. Mr. Hyde told him he had the option of having the work done himself under the City's permit. He chose to have the slip dredged an additional 3 feet at his expense. There was never any discussion about him getting reimbursed by the City. Commissioner Stout said he doesn't see where the City looses if they lock in a tenant like Mr. Nersesian for an extended period of time. He wants to be a part of the marina for a long time. His initial proposal was to be credited $1,000 a year for his slip fee over the next 5 years to recoup the investment that he put into the City's asset. If he is paying approximately $3,000 for that slip fee over 5 years, the City would still receive $10,000 from Mr. Nersesian. He would like to compromise and offer him a credit in the amount of $500 over 10 years. He would recoup the same money; however, over 10 years if the City is taking in $2,500 a year, that jumps to $25,000 from Mr. Nersesian while he put in a capital improvement to the City's asset. He doesn't think it would cost the City any money to encourage him to stay 10 years. The City would gain a lot of money over that time to have him in the marina. Commissioner Thomas said that with full knowledge, Mr. Nersesian chose to dig the hole, which by his own admission, will only last 10 years. He had the choice to put his boat in a deeper harbor and better protected. He chose to put it in there; he chose to pay the additional $5,000 for his own personal benefit; therefore, he does not see where it is the taxpayers' obligation to reimburse him for his investment. If another boater of similar size and depth comes along, the City cannot do the same thing, because the dredging company is gone. He had the work done without any preconceived notion of reimbursement. Commissioner Stout said there is or there isn't a boat there. He doesn't think it costs any taxpayers any money. If there is a boat there and it is occupying space and the space is paid for, the City is only making money on it. Commissioner Thomas said with the new slip fee schedule, the 50-ft and 60-ft slips will not be idle. Commissioner Sydnor said he agrees with Commissioner Thomas. He thinks they would be opening up Pandora's Box if everyone else was able to dig a hole if they bring in equipment. In this case, the equipment was there; now it is gone. He is glad Mr. Nersesian is there but he made the improvement on his own volition. Every time the City does something with the marina, it costs taxpayers money. At the present time, the marina is not producing the funds they are projecting for it to produce. It will not do that for the next 2 or 3 years or maybe longer. Each time it does not come up with those funds, the funds are taken from the General Fund. Commissioner Stout said to lock Mr. Nersesian in to receive $25,000 of compensation would far override the miniscule amount of credit that he would receive. Commissioner Sydnor said there was a letter sent to various community social groups. Last year the amount of money those groups received as $38,000. The City has sent them a letter telling them that the City may not be able to fund those activities this year for our youth. He asked if the City wants to send the message that this boat is more important than our youth. Commissioner Stout said he thinks that strays from the conversation a long way. We can either take $3,000 in compensation (the fair market price) this year or take the chance that in 2 years he will be gone and the money will not be there. He sees it as we either receive the income from his boat or we do not. Commissioner Sydnor said as of December 31st, the marina was $413,000 or $418,000 short. The budgets have to be looked at. He suggested that they could look at this later on after they complete the budget. Commissioner Thomas suggested that they could freeze Mr. Nersesian's slip rent for a certain number of years. Commissioner Sydnor suggested waiting to see what happens with the new rate schedule and then maybe they could revisit this issue. They must make sure a boat owner does not dredge without Council's approval. Commissioner Stout said he agrees with that. However, he improved the City's asset and to credit him, does not detract from what we take in. In the long term the City makes so much more for having him in that slip. Commissioner Thomas said if the City dredged 5 or 6 slips, they probably would have increased the rent for those slips because of the extra value added. If Mr. Nersesian pays the market rate of $3,000, in essence he is saving the increased value. The City is recognizing the money he has invested in his slip. The hole will be gone in 10 years. Commissioner Hanson said it is a difficult time to do something like this. Mr. Nersesian knew what he was getting into. It was an afterthought to ask the City for help. He also suggested revisiting this after the budget is out. Commissioner Thomas made a motion to reject Mr. Nersesian's request for reimbursement of $5,000. Commissioner Sydnor seconded the motion. The motion passed 3:1 with Commissioner Stout opposed. Commissioner Stout made a motion to revisit this topic for further discussion following the passage of the City's FY2010 budget. Commissioner Hanson seconded the motion. The motion passed 4:0.

 

Discuss Sanitary District's Request to Wave Impact Fees for Existing Home Sites at the Madison-Woolford Sanitary Sewer Extension-Robert Tieder, Chairman of the Dorchester Sanitary Commission, said this project has been in the works for at least 10 year now. The project pre-dates the impact fees. The various grant people who will make the project possible have been dragging their feet because money has not been available. Money will now become available to do this work. A significant part of the $7 or $8 million will be from grant money. There is a limit on how much debt can be imposed on these people to make this happen. Coupled with the amount of money the Sanitary District pays to the City to have the sewage treated ($250 per customer per year) at the City's wastewater treatment plant, and their cost ratio ($200) to operate and maintain the system, it would be a $450 cost that is about to go up. The proposed indebtedness with the cost of the impact fees would make the project economically unfeasible. If they were to grant the waiver and were able to hook the 357 customers up, all they are asking for relief for are those with existing septic tanks. People who have undeveloped parcels will come fully under the impact fee system. They are taking septic systems off line to help the environment and bring these people on line. The City's sewage plant will be receiving 357 additional $250 charges which amounts to $80,000 in perpetuities that will be used to help operate and maintain the City's sewage system. The Sanitary District was under the impression that they had a Memorandum of Understanding. Now they have found out that they do not. They reached an agreement but it was never put in writing. Now they need the Memorandum of Understanding to get the grant money to start the project. He is asking the City Council to grant relief to those property owners with existing septic systems. Of the 357 parcels, 21 are unimproved lots and will be subject to the impact fee. There are 326 parcels that have existing septic tanks. The County has granted relief from the excise tax.

 

Rob Collison said planning this project started in about 1999. There was a group of property owners in that area that approached the County for relief because they had failing systems. The soils did not comply with the then current standards for new septic systems. The County came to the City to start negotiations and they started seeking grant funding in conjunction with the Sanitary District. The proposal was to expand the Church Creek Sanitary District. At that time he advised the City Council that it would have to fall within the parameters of a policy that Council adopted in extending City services outside the City limits. They should only do that in three criteria: (1) A pre-existing contractual relationship that they have to do it; (2) Annexation if possible; (3) Based on environmental concerns, the State dictates, requests, or requires that the City bring the properties in. The Church Creek Sanitary District was created under the third option in the mid-1980s. MDE came to the City and told them they had excess capacity at the treatment plant. The town of Church Creek had failing systems that were polluting the Church Creek and the Little Choptank River. They requested that Cambridge take them in. It was Cambridge's choice but if they did not, there would be a fine of $25,000 a day for each day they did not take them in. The Cambridge City Council made a quick decision to take them in. With this particular case, there is documentation from the State indicated there are failing systems; they qualified for a standard septic system cost-prohibitive to do anything else; and they were requesting that the City take them in. At that time, the City said they have excess capacity. They were estimating 70,000 gallons per day of sewage allocation would be granted for this proposed extension. What was not completed was the actual survey of the area to be completed. There were a lot of issues as to whether it was to be any unimproved lots or just existing lots; any commercial or industrial users or just residential; there were a lot of unknowns. He drafted an MOU agreement in October 2000. It was never formally adopted or signed. Mr. Merryweather called him a few weeks ago to tell him that the grant funds were available but they could not find the signed agreement. His files indicate that there were still some unresolved issues identifying the exact area and there was not a signed document. This pre-existed the City's impact fees. It was not discussed at that time and they were not mentioned in the draft of the MOU because the City did not have impact fees at that time. The impact fees came into being in July 2003. The City has an impact fee; the County has an excise tax. The basis for an impact fee is that you are charging new users to offset some of the costs that all of the current users have incurred to maintain your excess capacity. The City has certain costs to maintain the water and sewer systems (debt service, etc.) that the current users are paying for. The impact fee tries to make up for this impact of having the excess capacity that will allow this new user to come onto the system. He provided Council with an agreement which the City, County, and Sanitary District entered into in 2005. Prior to this agreement, the various Sanitary Districts had different fee structures. The rates were standardized to make them uniform in all the districts. There is a provision that all the parties confirm and agree that owners of record within an existing Sanitary District can tap into the system provided they pay the applicable impact fees imposed by the City for out-of-town users. It is his recommendation that it should be imposed. He does not know of any exemption that the City has permitted from impact fees other than through some of the annexation agreements or for affordable housing. Based on that, it is his recommendation not to provide an exemption. The County provided a letter saying the excise tax only applies to new construction and they are not going to impose it on these existing houses. Those people have been paying County taxes; however, they have not been paying City taxes.

 

Mr. Tieder said the survey has been completed. The property has been identified as being in critical areas. Specific properties have been outlined as being eligible. It has also been taken in account so it is one hook-up per lot of record. Without relief, this project probably will not happen. They have a USDA grant for $2 million and a USDA loan for $1.7 million. The loan will be over a 40-year period being paid for by the 357 people who are being provided the service. They do not pass on bond issues from district to district. On top of the $1.7 million, approximately $900,000 is what they are talking about is the cost of the impact fees which makes the bond, in the eyes of everyone involved, prohibitive. The impact fee would be $2,800 for each of the 357 residences. Rob Collison said the impact fees on the unimproved lots will not be due until they tap in. Mayor Stanley asked if the project would be feasible if they reduced the amount or spread it out. Mr. Tieder said the number that was presented to them at their meetings with USDA and the grants division of MDE is that once you get to the point of $750 or greater per year per person, it becomes a burden. Some of the people will be removed from septic systems that are working. About 175 of the systems have already been declared 'failed' by the Health Department but the others are only 2 to 3 years old. The government says the cost of hooking up for an individual may be as much as $7,500 or $8,000. If they homeowner does it now, it will be in the form of a grant. If they do not do it now, when their system fails, they will have to pay for the hook-in. Rob Collison suggested that the City review it and investigate if there is any additional stimulus money that would help offset the expense. Commissioner Thomas suggested spreading the $2,800 out over 10 years.

 

Commissioner Sydnor said this situation is slightly different than the situation in Christ Rock. In that case, they had to hook in if they agreed to accept the services because it will be done through annexation. Mr. Tieder said the bond payments for each homeowner will be between $150 and $200 a year. Paying impact fees would amount to another $1 million worth of bonds which would probably be another $125 or $150 per year on top of the $750. Rob Collison suggested Council discuss this further at their meeting on February 23, 2009. Mr. Tieder said they need the MOU so the money will become available. The homeowners will probably be paying approximately $700 a year if they were to get the relief. Of that, $500 a year will be user fees and operational costs and then bond indebtedness fees will be anywhere from $150 to $250. Income surveys will be done on the people who live in the area and that will determine their share. If they do not get this relief, he is going to recommend that they pull the plug. There is no point in spending another $300,000 or $400,000 on another study that they did 10 years ago. Commissioner Sydnor asked if the County will look for other sources of funding. Mr. Tieder said the Sanitary District is working on it alone. The funding is there for everything but the City's impact fees. The City will receive about $70,000 as user fees. He doesn't think it will cost that to add 340+ people to the system. George Hyde said the City is not making a whole lot on that because of the costs to treat the sewage. The City will be forced by MDE to do upgrades in the next 2 to 3 years which will cost the City at least $8 million. MDE says they will fund about 90% of that amount. The money that they receive from impact fees can be used to offset the City's portion of the upgrade cost. Rob Collison said he will see if there are any other funding sources available and will report back to Council at the next Council meeting.

 

Department of Public Works Budget Amendments-Commissioner Sydnor made a motion to improve the budget amendments for DPW that were presented at a previous meeting. Commissioner Thomas seconded the motion. Commissioner Sydnor said he received updated information from DPW. The amendment indicated 2 employees were going from contract to salary. The other part of the amendment was for operational materials to carry them through the rest of the year. The accounts needed to be increased. The motion passed 4:0.

 

ADDITIONAL ITEMS

 

Commissioner Sydnor asked the Council to review the budget books that Mr. Kinnamon provided for them so they can begin discussing the FY10 budget. The department heads will make presentations to Council on their budgets. The other community organizations will also be given an opportunity to make presentations to Council. This should be done in March. Commissioner Sydnor said the City Council will then meet with the Dorchester County Council.

 

Commissioner Hanson made a motion to develop an internal investigation policy under the guidance of Rob Collison. Commissioner Sydnor seconded the motion. The motion passed 4:0.

 

 

With no further business, Mayor Victoria Jackson-Stanley adjourned the meeting at 5:35 p.m. I hereby certify that the foregoing is a true and accurate account of the Council meeting Tuesday, February 17, 2009, insofar as I personally am aware.

 

 

 

Edwin C. Kinnamon

Clerk & Treasurer