Tuesday, December 5, G. Bruce Ward, Executive Director
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1 ATLANTIC CITY MUNICIPAL UTILITIES AUTHORITY PUBLIC HEARING ON THE AUTHORITY'S PROPOSED 0 BUDGET AND PROPOSED CHANGES TO THE RULES, RATES AND REGULATIONS Tuesday, December, 0 G. Bruce Ward, Executive Director 0 TAKEN BEFORE: JACQUELINE M. ZARRILLO, Certified Court Reporter of the State of New Jersey, License No. XI0, at the ATLANTIC CITY MUNICIPAL UTILITIES AUTHORITY, 0 North Virginia Avenue, Atlantic City, New Jersey 00, commencing at 0 a.m CERTIFIED COURT REPORTER TILTON ROAD NORTHFIELD, NEW JERSEY 0 (0) -
2 I N D E X PUBLIC (NO PUBLIC PRESENT.) PAGE 0 0
3 0 0 MR. WARD: Good morning. My name is Bruce Ward. I'm the Executive Director of the Atlantic City Municipal Utilities Authority. Today is December the th, and today at 0 a.m., which it is, is the second of our Public Hearings to discuss the Proposed 0 Budget. There are no members of the public in the room at this time. The meeting is being transcribed by a certified transcriber. So I'm going to begin with a reading of the press release on the Budget. The Atlantic City Municipal Utilities Authority will hold Public Hearings on the Authority's Proposed 0 Budget and Proposed Changes to the Rules, Rates and Regulations on Tuesday, November, 0 and Tuesday, December, 0. The November, 0 and December, 0 hearings will be held in the Atlantic City Municipal Utilities Authority, located at 0 North Virginia Avenue, Atlantic City, New Jersey. Both hearings will begin at 0 a.m. The Budget is scheduled for adoption at the regularly scheduled Board meeting on December 0, 0. The MUA will also accept written comments. Comments received before the hearings will be read into the hearing record. Written comments
4 0 0 not read at the hearings will be presented at the Board meeting. The Board meeting is open to the public. The 0 Proposed Budget is a fully funded budget, providing for the continuation of all of the Authority's major programs. The proposed appropriations for 0 are anticipated to be approximately $, higher than the budgeted appropriations for 0. The increase is primarily due to an increase in the 0 Renewal and Replacement Reserve that approximated $,. This additional reserve will be utilized to help fund the 0 Capital Budget. The Authority will recognize a 0 percent increase in the amount of $0,000 for Administration's Repairs and Maintenance account due to higher anticipated repairs to the Authority's administration building. The. percent increase for Operation's Outside Services/Professional Services are higher due to anticipated laboratory expenses as more sampling protocols (UCMR ) are required by the State starting in 0. Offsetting the increase is a decline in 0 Debt Service Principals and Interest. The Authority's Debt Service Principals and Interest will be decreased in 0 by percent in the amount of $, and by
5 0 0 percent in the amount of $, respectively. The 0 rate increase was structured to ensure that the projected revenues would be sufficient to cover the anticipated appropriations for the year. The rate increase will also assist in the funding of scheduled projects as specified in the Authority's Capital Improvement Program. The Authority is anticipating an increase of two percent in flat and four percent in excess rates for all customers. The residential rates for residential customers will be increasing from the flat rate charge of $0 a quarter to $ a quarter. Residential customers that will exceed the allowed allotment will be subject to a four percent increase in the excess rate. The Authority anticipates that the average annual bill for residential customers will be $0. in 0 as compared to $0. in 0, a net annual increase of $.0. The Authority is anticipating a 00 percent decline in other service charges as New Jersey American Water did not renew the contract that ended on November, 0 or pursue an emergency interconnection agreement with the Authority. This reduction was also taken into consideration in developing the 0 rate structure. The Connection Fee rate will not
6 0 0 increase. The City of Atlantic City has experienced a steady decline in annual new construction and development. As a result, the Authority has recognized a significant decline in Connection Fee income. In the past, the Connection Fee income has been utilized for capital projects recommended by the way of the Authority's Capital Improvement Program. This anticipated decline in income was considered in developing the 0 rate structure, thus allowing for additional income to be generated for the use of capital projects. State Law sets a formula mandating the specific calculation of Connection Fees. State Law further requires that Connection Fees be recalculated at the end of every calendar year, and that all Debt Service and Capital Expenditures be included in the new calculation. The proposed Connection Fee for 0 is. per gallon of average daily flow. This applies to new construction. The MUA is also making changes to the Rules, Rates and Regulations. The full text of the changes is available by contacting MUA offices. It is also available on the MUA's website. That would be
7 0 0 I want to also read into the record a letter from our engineering firm, Buchart Horn, dated November, 0, addressed to G. Bruce Ward, Executive Director, reference, Atlantic City Municipal Utilities Authority 0 Annual Budget Review. "Dear Mr. Ward: "Buchart Horn has reviewed the Atlantic City Municipal Utilities Authority's (ACMUA's) proposed 0 Budget and supporting information and schedules provided by the Authority, and confirms the following:" One, "The appropriations indicated in the proposed budget are generally consistent with the recommendations made in the 0 Annual Report, with our observations of the Authority's facilities during November 0 inspections, and with the ACMUA's Master Plan. Major facilities or equipment identified for improvement are being addressed within the budget." Two, "The capital appropriations indicated in the proposed budget appear to be sufficient to fund the projects scheduled for the 0 fiscal year." Three, "Anticipated Revenues include an
8 0 0 increase in the quarterly (flat) charge of $ per quarter, and a projected four percent increase in excess usage charges. No other increase in Revenue is needed due to a decrease in the Authority's Debt Service." Four, "While reserve funds for emergency repairs and ongoing renewal and replacement of facilities are being increased, the Authority may still have to borrow additional funds to cover any major, unexpected expenses in 0. "Should you have any questions, please feel to contact the undersigned or Edward DiMond. "Very Truly Yours, "Buchart-Horn, Inc. "Dennis Tracey, P.E." Professional Engineer and Project Manager. I would like to point out that the Budget has been constructed to, for the most part, carry the Authority through its normal course of events under 0. The State of New Jersey has instituted the New Jersey Water Quality Accountability Act, which provides for additional unfunded mandates against all water purveyors throughout the State of New Jersey. In this regard, it is anticipated for this Authority, as well as
9 0 0 other similarly situated authorities, that we will have to seek bond funding from the New Jersey Environmental Interest Trust to support the additional asset management and cyber security responsibilities of the Water Quality Accountability Act. All of this is illustrated in the complexity where we have in 0, 0 the closing of the Taj Mahal, a major water customer of the Authority. And at the same time, the construction of Stockton University, as well as a Boraie apartment development, South Jersey Gas in a corporate center next to Stockton University, and the coming in of a brewery into Atlantic City. So while we have constructed a Budget to reflect what would be the anticipated normal conditions for providing water to our customers, public would be mindful that the complexity of new installations changes the fact that we have some Debt Service reductions and at the same time the responsibilities of the New Jersey Water Quality Act. There is more of a turns and twists and ups and downs that the Authority will have to address and accommodate throughout the year. We also have an employee work force that has had its contract provisions stalled for the
10 0 0 0 past three years, and it's anticipated in 0 that some movement to begin to negotiate with our unions will be permitted by the State of New Jersey. And at this time it is 0: a.m. There are no members of the public in the hearing. What I'm going to do is put the hearing on pause. I will be upstairs in my office and should any member of the public come in, we will come right down immediately and go back into Open Session. And the meeting will continue to remain available until p.m. today. So it is 0: a.m. and I'm going to sign off for a pause until next notice. Thank you. (Whereupon the hearing paused from 0: a.m. to p.m.) MR. WARD: It is now p.m. and this has been the Public Hearing of the Atlantic City Municipal Utilities Authority's 0 Budget. We've now concluded our Open Session, and the meeting is now closed. Thank you. (The hearing adjourned at p.m.)
11 C E R T I F I C A T E 0 I, JACQUELINE M. ZARRILLO, a Certified Court Reporter of the State of New Jersey, do hereby certify that I am neither a relative nor employee nor attorney nor counsel of any of the parties to this action, and that I am neither a relative nor employee of such attorney or counsel, and that I am not financially interested in the action. JACQUELINE M. ZARRILLO Certified Court Reporter License No. XIO DATED: December, 0 0
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Tuesday, November 28, G. Bruce Ward, Executive Director. Kelley Williams, Board Administrator
ATLANTIC CITY MUNICIPAL UTILITIES AUTHORITY PUBLIC HEARING ON THE AUTHORITY'S PROPOSED 0 BUDGET AND PROPOSED CHANGES TO THE RULES, RATES AND REGULATIONS Tuesday, November, 0 0 G. Bruce Ward, Executive
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