• 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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muc meeting minutes

October 22nd, 2009

Municipal Utilities Commission


October 22, 2009

The Municipal Utilities Commission met on Thursday, October 22, 2009 at the Council Chambers, 305 Gay St., Cambridge, Md.   Mayor Jackson-Stanley convened the meeting at approximately 6:30pm.

Present:             Mayor Jackson-Stanley

                           Andy Pasden-MUC Commissioner

                          Glen Ford-MUC Commissioner

                          Gary Newcomb-MUC Manager

                          Carrie Hall- Asst. Manager

                          Sylvester Molock-MUC Superintendent

                          Kevin Johnson-MUC Asst. Superintendent

                          Greg LeBlanc-DPW-Asst. Engineer

Mayor Jackson-Stanley stated she checked and MUC board members must be City residents.  She asked for names of individuals for Ward 1 to fill Mr. Prahl's vacancy.

Mayor Jackson- Stanley asked for approval of expenses for the month of September.

Mr. Newcomb pointed out ck#20075  to Todd Mullaney Insurance in the amount of  $750.00,  this is actually a bond on Mr. Newcomb which is good for five years. Also ck#20090 to Dover Plumbing Supply for $5,944.76 is for materials for the West side by-pass.  This project is getting close to completion.  Ck#20099 to George Brem Concrete for $675.22 is for sidewalk repair.  He is a good finisher and we use him on occasion which is needed when services are replaced and repairs are made.

Mr. Pasden questioned Ck#20087 to USA Bluebook for $1,695.71. 

Mr. Newcomb responded that USA Bluebook is a supplier of Water supply products. We can get products that are specific for the water industry.

Mayor Jackson-Stanley questioned ck#20095 to United Rentals for $1464.31.

Mr. Newcomb stated it was for a pnuematic rock drill.  It is a purchase not a rental.  The 1993 drill was worn out.  This will drill thru concrete and blacktop.

Mr. Newcomb noted that Delmarva Power is listed twice, once on September 3rd and again on September 25th.  We are not paying duplicate bills but just paying two times in one month.

Motion to approve the expenses in the amount of $128,418.41 for September 2009 was made by Mr. Pasden, seconded by Mr. Ford. Approved.

Mayor Jackson-Stanley asked for motion to approve the minutes of September 24th, meeting.

Motion to approve was made by Mr. Pasden, seconded by Mr. Ford. Approved.

Debit, Credit Cards Acceptance

Mr. Newcomb stated, after our last meeting we met with representatives from BB&T Bank.  They detailed the billing and costs of credit cards for us to utilize credit cards.

Mr. Newcomb stated that Visa represents 85% of the market. The other example they talked about at the last meeting with rates as low as 1%, would be in addition to the visa charges. According to BB& T, we would qualify under utility rates.  The utility rates are 45 or 65 cents per transaction.  That would be their total charge.  That would mean 65 cents for a $36.65 bill and for a $500.00 bill.  The other accounts charge a percentage of the bill and that is why they charge 10 cents or nothing for a transaction.  The representatives from BB&T strongly suggest the only way for us to go is under utility. Master Card or Visa would be 45 or 65 cent per transaction.  The question is where does BB&T come in?

BB&T charges would be .38%.  The other company we looked at was 1%. BB&T is the only local bank in the Cambridge area that does this themselves.  The other companies go thru another party and the percentage would go up above 1%.  That would be above the 45 or 65 cent transaction.  Mr. Newcomb said on a $36.65 water bill, the fee should work out to be 65 cents and 14 cents for a total of 79 cents.  The out of pocket expense we would have is, $365.00 for a terminal fee for the machine and that comes with a years warranty.  If a replacement is necessary after a year then a $150.00 fee would be required at that time.  Mr. Newcomb said BB&T Representative said usually a replacement would not be necessary for about 5 or 6 years.  The other costs we would have is a one time fee of $150.00 which is usually $250.00 and they will reduce this to the $150.00 and they will also waive an annual membership fee which is normally $100.  The only other cost we would have is a $5.00 monthly charge per month.  If we agree to their proposal, it would be a three year agreement contract.  If we started, and used this for three months and evaluated the overall cost and we say, this is too costly, then the only commitment would be the $5.00 monthly charge for the balance of the 36 month contract.

Mayor Jackson-Stanley asked would we be refunded the terminal fee and the membership fee?

Mr. Newcomb said no, they are not refundable and the terminal would belong to us.

Mr. Pasden said a quick calculation, on a normal household bill, we would lose about 2% of the revenue.  We would have to project the cost over a period of time using the different percentages of our customers that use the service and see what that would cost us over the time and project it at different levels.  If 50% of our customers use this, it would be a substantial amount of revenue lost. $20,000 or $30,000 a year.

Mr. Newcomb said he does think 50% would be extremely high.  Another option which is being discussed with Mr. Kinnamon is to charge a convenience fee. This is beneficial for large bills such as tax bills.

Mayor Jackson-Stanley asked is there a way to recoup some of the cost?

Mr. Newcomb said yes, but he doesn't know what kind of numbers we will be looking at.

Mr. Newcomb said he does not see us loosing that kind of money.  He said all of the cost should not be coming away from water sales.  Some of the cost would be absorbed by Sewer service charges and bay restoration has a credit card processing fee payback.

Mr. Newcomb said if we agree to try this, we are looking at the $365.00 plus the $150.00.

Mayor Jackson-Stanley said plus the $60.00,  this would be $575.00 right off the top just to get it started,  not counting the service charges.

Mr. Newcomb said if we try this, we would know what kind of costs we would be looking at for the service.

Mr. Pasden stated, currently we do not have much in the way of bad debts, so this would be a convenience to our customers.  It is not really a business decision to better collect.

Mr. Newcomb said he looks at this as strictly a customer convenience.

Mayor Jackson-Stanley said particularly to the out of town customers.

Mr. Newcomb said we had a prime example today, a property owner from Washington DC had a tenant, the tenant moved out and water was shut off, meter removed, he called to have water turned on and we told him we need payment first. With no local agent to handle the account, he was unable to get water back on until payment is received.  If we accepted credit cards, we could he could have handled this over the phone.

Mr. Pasden asked, how do we know the credit card is good? 

Mr. Newcomb said once it is approved the payment is in our account the next day.  This transaction is done with the swipe of the card.  It will automatically approve or disapprove.  The Bank said there is a possibility that someone can contest a charge.  They said that more than likely won't happen since they are paying a particular charge like this.  Not a purchase.  If you have the card in hand it should have the 3 digit number on the back for security.

Mr. Pasden stated our only problem would be how much goes to sewer, water and bay restoration.

Mr. Newcomb said he would do this quarterly.

Mr. LeBlanc asked if this would be city wide, so DPW could get a terminal?

Mr. Newcomb said this would be strictly MUC and set up as a Utility.  He said there could be an instance where someone like Mushroom Canning could use a corporate card to pay the bill.   The fees would be 65 cents plus .38%.

Mayor Jackson-Stanley asked if we could tack on a convenience fee?

Mr. Newcomb said he asked why is this the best deal for us?  He explained the added fees the other businesses would receive for using credit cards.  Their monthly fees are different as well. 

Mr. Pasden said he doesn't think it is a big risk financially.  He asked, would we have to let the Sewer Revenue know we would be reducing their revenue because we are taking credit cards?

Mr. Newcomb stated we have already lost $50,000 from Sewer Service charges due to the city budget reduction. 

Mayor Jackson-Stanley said she understands this is the way of the future, however we do need to discuss this with Council and maybe figure out a way to recoup the cost.

Mr. Newcomb said we are allowed to collect 5% or cost for the collection of Bay Restoration, whichever is smaller.

Mayor Jackson-Stanley stated she knows where we are going with this, the State would have a part in the cost.

Mayor Jackson-Stanley asked if we would like to defer this decision until Mayor & Council and City Treasurer could discuss this as well.

Motion to defer was made by Mr. Ford , seconded by Mr. Pasden.   Motion approved.

Magothy Well

Mr. Newcomb stated at the last meeting the Commission gave him authorization to get proposals.  He contacted the Schultes people to get clarification of what they provide.

They informed him that they are a sole source  provider for well drilling in the area.  They felt that we do not need a design. We will need a change in our water appropriation permit thru MDE which requires a technical person involved in ground water source review. That gentleman, Schultes and an electrician, we met and discussed it and he was hoping to have some numbers and proposals from them with an outline of what they would do. Needless to say it will save us $50,000 on a design.  Mr. Newcomb said he reviewed the last well that was drilled in 1995 and at that time, Beavin Co did the design at a cost of $38,000. He said he wanted to see what they had to offer when looking at a  sole source before we proceeded. It is something we don't have to accept. We may also want to consider getting some proposals for engineer services.

Mr. Pasden asked if there were any percurements or regulations that we would need to do a sole source of that size?  Over/under a certain dollar amount?

Mr. Newcomb said in a dollar amount maybe $2500.00.  Another thing we could do is run  an ad for other well drilling companies.

Mr. Pasden said he was just making sure we are not violating some purcurement rule.

Mr. Newcomb said he would like to get the information back and review it and also show it to Mr. Collison,  the city attorney.  This would cover us. 

Mr. Newcomb said he would like to defer this until the next meeting.

Pink's Pond

Mayor Jackson-Stanley said City Council stated they would give water to Pink's Pond project if they agreed to annex into the City.

Audit FY-2009

Mr. Newcomb mentioned he has the draft of the Audit.  The areas he was going to question have already been changed.  The compensated absences (vacation) were adjusted by 22,117.  They added this cost to the salaries. This was changed about 3 years ago, we have to have a number of compensated absences which is basically vacation time that is accrued by individuals. This was changed because some Cities did not take into account unused vacation time.   The other thing he wanted to point out was the recorded depreciation expense.  Depreciation is not a budgeted item. Mr. Newcomb said further down on the audit it refers to control deficiency again in reference to the preparation of the financial statement.  This is considered a deficiency because we do not have a practicing certified public accountant.  Looking a page 3 concerning changes, basically this says we actually lost 59,012.00. This total is after depreciation.  Page 4 addresses changes in net assets. 2008 on paper, we had a net loss of $324,931, in 2009 was  $59,012.  If you take in depreciation and expense, we did fairly well.

Page 14 deals more with operations side.  If we look at our operating revenue, it did not meet our projected amount by $197,276.

If we go down to salaries, it shows a loss of $19,388.  This is a little misleading because this factors in the $22,117 for compensated absences.  It looks like we were over budgeted but we were not.  The compensated absences were not budgeted.  Maintenance items were under budget.  Meter purchases were over budget but this is because of the meter purchases.  Master plan update comes from the impact fees. Utility costs were down.  If we had pumped more the utility cost would have been more.  Chemical costs were more but this is where they added in the previous years consumer confidence report.

We had two years consumer confidence report charged in this audit. The other items, we did a good job of keeping within the budgeted amount.  On Salaries, the big item that stands out is the group insurance. We based our budget on the previous year and it was approved at the last minute so we did not change the budget after the city changed the cost.  Non-operating revenues of impact fees  and interest was due to changing the interest to a higher yielding CD.    If we look at the changes in net, we show a loss of $62,653 which is not too bad since our revenue was so low.  After the depreciated expense is added in, the net asset  was a negative 59,012. 

Mr. Pasden asked if we should start budgeting in the uncompensated absences?

Mr. Newcomb said that in next years budget he would include that item.

Mayor Jackson-Stanley said we should defer approval of audit until we get the final copy.

Mr. Newcomb said this is just a draft. 

Mr. Pasden said the only question he has is on page 2, what is the net impact of all those changes and adjustments?

Mr. Newcomb said we do not put adjustment on during the regular year. The auditors make all the adjusting entries.

Mr. Pasden said after 30 plus years of government audit experience, this is a good audit.

There is nothing in this that we have to worry about at all.

Holiday Schedule

Mr. Newcomb said he wanted to plan a least one more meeting before the end of the year.  With the holidays, he wanted to schedule the next meeting.  Maybe split the two months and have it in between.

The Commission agreed to have the next meeting on Thursday, Dec 3rd, 2009.

Superintendent's Report

Mr. Newcomb noted on page one, we had no new services.

Street openings, a couple on Race St.  

A picture was submitted where the hydrant was snapped off at Locust and Glenburn Ave.

We will be making a claim to insurance on this.

Another hydrant on School St was reported to police last evening.  We do have a report on it and this will also be submitted for an insurance claim.

Monthly pumpage , unaccountable water is much better 8%.

Mr. Pasden asked if we found the leak on Poplar St yet?

Mr. Newcomb said no.  We have also ordered UME's for the larger meters.  Your just replacing the measuring elements of the larger meters at a very reduced rate.

Mr. Pasden asked when the Hyatt meter would be in?

Mr. Newcomb said November 3rd.

Mr. Newcomb said he also included the invoice on the maintenance on the three tanks.

This is the base amount.  Mr. Newcomb said anytime you are in a maintenance agreement you need to stay in it until the recoating is done.  If we were to stop and had to paint the tank it would run up to $150,000.

General Ledgers standing is not too bad. 

Briefly went over the billing of water/sewer.

With no further business, motion to adjourn was made by Mr. Pasden, seconded by Mr. Ford.  Meeting adjourned at approximately 7:42pm.

Respectively submitted:

Jane Dorman