April 27, 2009




The Ellettsville, Indiana, Town Council met for a Regular Meeting on Monday, April 27, 2009, at the Fire Department Training and Conference Room.  Dianna Bastin called the meeting to order at 7:30 p.m. with the Pledge of Allegiance and Phillip Smith led in prayer. 


Roll Call:  Members present were Dianna Bastin, President; David Drake, Vice-President; Scott Oldham, Phillip Smith and Dan Swafford.  Sandra Hash, Clerk-Treasurer and Mike Spencer, Town Attorney were present. 


Supervisors Present:  Jim Davis, Tony Bowlen, Mike Farmer, Jeff Farmer and Frank Nierzwicki were also present.


Approval of Minutes


Dianna Bastin entertained a motion for the approval of the minutes for the Regular Meeting April 13, 2009 and the Executive Session April 23, 2009.   Dan Swafford so moved.   Scott Oldham seconded.  Motion carried.


Accounts Payable Vouchers


Dianna Bastin entertained a motion to pay Accounts Payable Vouchers.  David Drake so moved.  Dan Swafford seconded.  Motion carried.




Resolution 10-09 Budget Reduction


Sandra Hash stated the Department of Local Government Finance told the Town of Ellettsville to reduce their budgets for this year.  This is the official document showing the budget reduction.  Dianna Bastin announced the document is on file for anyone who wants to read it in its entirety. 


David Drake made a motion we adopt Resolution 10-09.  Scott Oldham seconded.  Roll call vote:  Dianna Bastin – yes; David Drake – yes; Scott Oldham – yes; Phillip Smith – yes; Dan Swafford – yes.  Motion carried 5-0.


Ordinances on Second Reading


Ordinance 09-13 to amend Ordinance 08-11 fixing of Salaries for Budget Year 2009


Sandra Hash explained this ordinance changes the title in Planning Department from Administrative Assistant to Assistant Planning Director. 


David Drake made a motion we adopt Ordinance 09-13.  Phillip Smith seconded.  Roll call vote:  Dianna Bastin – yes; David Drake – yes; Scott Oldham – yes; Phillip Smith – yes; Dan Swafford – yes.  Motion carried 5-0.


Ordinance 09-14 to delete Chapter 154 from the Ellettsville Town Code eliminating the Department of Redevelopment


Dianna Bastin stated there was a decision not to do this and entertained a motion to table this ordinance.  She explained if we don’t eliminate the Department of Redevelopment it will be easier than bringing it back another year.  We can work with other parameters. 


Phillip Smith made a motion to table this ordinance.  Dan Swafford seconded.  Roll call vote:  Dianna Bastin – yes; David Drake – yes; Scott Oldham – yes; Phillip Smith – yes; Dan Swafford – yes.  Motion carried 5-0.


Old Business


Agreement between Northern Richland Sewer Corporation and the Town of Ellettsville


Mike Spencer went over the new contract.  There are no significant changes.  Paragraph 1 is amended by adding “If the IURC denies the application; the following amendment to paragraph 1(B) and 1(C) shall be void”.  Paragraph 3(C) was changed from “general rate increase” to “tracking factor”.  Section 4 paragraph 2 was amended by adding “If the IURC denies the general rate increase, this amendment to paragraph 2 shall be void”. 


Mike Spencer’s concerns were with the flow rates and the tracking factor petition being filed.  Mike Spencer spoke with and asked Mr. Carmin on April 17 if there is one petition for both the flow rate tracking factor for this year and the second increase in January 2010.  Mr. Carmin agreed that was the case.  Mike Spencer spoke with Mr. Carmin on April 27th   and was told NRSC’s accountant was ready to file the petition and needed an affidavit (which Mike Spencer has a signed one) and the signed contract.  Mike Spencer has the contracts and they are ready to be signed.  It is Mike Spencer’s “feeling” that the language he would have liked to have had in the contract was not included; based on the representation of Mr. Carmin, with the signing of the contract they will have everything they need to file the petition and it is ready to be filed within the next few days. 


The other issue Mike Spencer has is with the billing rates to cover the cost of Ellettsville billing Northern’s customers.  That is tied to a general rate increase and different from the tracking factor.  The general rate increase will not occur with the tracking factor increases.  The board needs to make a decision on whether they are willing to do it that way.  Mike Spencer understands Northern can not afford to pay the additional rate unless they can pass it on to their customers which they “legitimately” can not do unless they get IURC approval.  Dan Swafford stated “until they approve the entire package we can not increase the billing”.  Mike Spencer went on to say there are two petitions; one for a tracking factor that covers the flow and the other will be a general rate increase which covers items not related to Ellettsville Utilities but will include the billing rate increase.  They can not include the billing rate increase in the tracking factor. 


Marlene Allen and NRSC received all the information.  Everything has been signed, notarized and sent back.  The tracking factor was filed late today.  All other signatures are in place to move forward with the second rate increase as well.  NRSC found out they do not need the contract filed in order to move ahead with the rate increase.  NRSC does not know how long it will take the state to approve the papers.  In the meantime, NRSC will receive an increase they can work with.  They do not know if it will be enough to cover all the billing.  It would not be good business to move forward with something and then be denied.  The contract is presented with a clause stating they are more than willing to move forward and want to do this.  If it comes down to a contract not being signed, NRSC will move forward and hopefully have a contract after they receive their increase from the IURC.


Dan Swafford asked how long it will take to get  IURC approval.  Mike Spencer does not know on the general rate increase.  The tracking factor should take 30 - 60 days from the time they receive it.  This information is based upon Mike Spencer’s conversation with Kurt Gastred at IURC.  Dan stated the board needs to decide whether or not to accept the contract the way it is presented.  The cost for billing is $120 per month until the rate increase goes into effect. 


Marlene Allen said Mr. Krohn informed NRSC it usually takes six months or less.  The tracking factor starts the process and it will move faster after that.  The rate increase, itself, will go in within days from now since the tracking factor has been filed. 


Mike Farmer, Ellettsville Utilities stated “it is just $120”; on the surface, Ellettsville Utilities can wait.  Ellettsville Utilities is currently in litigations and being sued by NRSC, costing several thousands of dollars to fight back.  When it comes to paying for business, NRSC has not been paying their share for ten years.  Besides some mistakes Ellettsville Utilities has made recently during conversations with the sewer wholesale customers, they have always participated in good faith service.  Mike Farmer stated we need to move forward with the rate increase for the billing.  Ellettsville Utilities has been providing service below cost for a long time.  Ellettsville Utilities asked for a water rate increase and still have not received it.  H.J. Umbaugh put together the rate case and it went before the OUCC (Office of the Utility Consumer Counselor).  The information was shared with the IURC.  Everything was done that was asked and it has been five months with no rate increase.  Mike Farmer believes there are some signed contracts with Eastern.  Ellettsville Utilities had meetings with Eastern, NRSC, lawyers and accountants.  Everyone looked over all the paperwork and everything was ready to go except NRSC. 


David Drake agrees with Mike Farmer and feels things could have been done a lot faster.  It is ironic NRSC has the money to sue the Town but not to pay for the billing increase.  David Drake’s thought is there is a new cooperative attitude among some of the people with NRSC.  He understands everything NRSC has said this evening.  For the small amount of money they are talking about, he thinks it would be better to put this issue to rest and get it over with.  In the spirit of this new found cooperation, hopefully we can get this all worked out and not have this problem again. 


Mike Farmer said if they do not have enough money to pay us a $120 increase in billing, he would advise them to consider, when they apply for their general rate increase, an increase large enough to cover things like an increase for their billing, timely maintenance, upgrades to their system and things that would keep the sewer plant working properly.  When they go for their general rate increase he would petition NRSC to consider those things and go for an aggressive upgrade to their system.


Scott Oldham said it does not seem fair with Eastern having already agreed that we now allow one party to opt out. 


Nancy Elkins stated NRSC is asking for a base rate increase at the same time to have enough money to operate on.  NRSC has 231 customers.  If Ellettsville Utilities is so “hard up” they should ask for more money too.  None of the money NRSC is asking for is going to them.  Every penny in the contract will be going to Ellettsville Utilities.  There has not been a rate increase since 1971. 


Dianna Bastin would like to move forward with this since it was started in good faith back in October.  Scott Oldham asked if any of the representatives from Eastern would like to comment. 


David Williby would like to see Northern get things worked out.  David Drake asked if Eastern would feel put out or taken advantage of if NRSC is given more time to do their billing when Eastern is going to start now.  Mr. Williby said Eastern can live with that.


David Williby brought up another issue.  He thought the Maintenance Interest Money, the town took out, was $63,000.  He is now finding out two withdraws have been taken out (the other for $73,000).  Eastern would like to know why they were not informed about it.


Dan Swafford stated this happened before the present Council was elected.  He knew there were two withdraws but not sure of the amounts.  After the meeting, there will be a discussion with Mike Spencer to figure out what happened in 2002.  Mike Spencer stated there were two withdraws, one in 2002 and one in 2005.  Mike Spencer received a letter from Mr. Krohn indicating Eastern conducted an evaluation and came up with one withdraw.  Eastern was operating on information that was provided before the second withdraw.  The information received, the first time, was accurate at the time then there was a second withdraw shortly after that.  Mr. Williby asked if there has been a third withdraw.  Mike Spencer spoke with Becky Wines (Utilities Office Manager) who confirmed there have only been two withdraws. 


David Williby would like to see NRSC come into an agreement.  Mr. Williby received a call from the IURC and was told they need a minimum of thirty days on the tracker.  Dan Swafford would like some more time to look into it and then meet with Eastern and NRSC.  Dan asked if everything in the contract was okay except for the billing.  Mike Spencer said yes. 


Dan Swafford would like to make a motion we adopt the agreement between Northern Richland Sewer Corporation and the Town of Ellettsville.  David Drake seconded.  Roll call vote:  Dianna Bastin – no; David Drake – yes; Scott Oldham – no; Phillip Smith – no; Dan Swafford – yes.  Motion failed 2-3.


The following discussion took place before the vote


Dianna Bastin asked Mike Spencer “if I sign this am I agreeing to give them the extra time for the rate increases?”  Mike Spencer said yes because the contract states the rate increases are not going to go into effect until the IURC approves.  This will give them the time they need. 


Phillip Smith asked what happens if this is denied by the IURC.  Mike Spencer said the rates will not go into effect and we will be back to “square one”.  David Drake stated “they can not charge the extra money to pay the rates if they don’t get approval from the IURC.  It is out of our hands”.  It is Mike Spencer’s understanding, with talking with Mr. Gastred, that the tracking factor almost always gets approved.  There is not an issue to the flow rate.  David Drake asked how long this contract is good for.  Mike Spencer said the contract goes back to 1971 and will continue until they are amended and the rates are changed.  Dan Swafford commended the supervisors for operating the sewer plant for the last ten years without an increase in rates.  It costs money to review the rates and if we did this annually, it would cost several thousand dollars to get the consulting.  Dan hopes the rates do not need to be reviewed annually.  The vote was taken. 


Dan Swafford said the board is going to have to amend the contract and send it back to NRSC.  How do we proceed now?  Mike Spencer said we are currently at our existing rates.  We are getting into an issue as to whether we can impose the new rates without entering into a new contract. 


David Drake stated this is going to put us into a long drawn out fight and the litigations will draw these increases out a whole lot longer than it would have been by waiting for the IURC approval.  Dan feels this is going to cost us more money than it would to wait. 


Phillip Smith suggested the Utilities Department, Mike Spencer and NRSC have a discussion and bring this back to the Council at the next meeting.


Marlene Allen and NRSC were advised by their attorney, before this evenings meeting, to present this contract one more time.  If the contract was not signed, they would not meet again until they receive their rate increases.  They do not have the time to continue legally and doing the research to pursue this.  NRSC will stick with the old contract and hope to receive the rate increase information soon.  NRSC’s attorney recommendation was to table this until they receive the information from the state. 


Mike Farmer would like to meet with NRSC as soon as possible.  They need to talk about what they are trying to accomplish with the new contract and billing rates.  Ellettsville Utilities should be involved in the NRSC general rate increase.  Mike Farmer feels they need advice and direction; they can partner with Ellettsville Utilities to make sure they have enough money to operate, pay bills and to start an infrastructure rehab program.  NRSC needs to do proactive work on their system.


Marlene Allen stated NRSC has a good accountant and was prepared ahead of time.  The infrastructure is not behind and they are right on target.  They have a scheduled maintenance repair and handled anything that came up in a timely matter.


Dianna Bastin asked Phillip Smith and Dan Swafford to work together, come up with something and put it on the next meeting agenda.  At the next meeting, if NRSC does not want to move forward; Dianna will let them know if Ellettsville will continue to pick up the difference.


Supervisors Comments


Jeff Farmer, Ellettsville Utilities explained the transfer of the interest money.  All three utilities pay into an Equipment and Replacement account.  The Clerk-Treasurer invests the money into CDs.  In 2002, H.J. Umbaugh reviewed the books and advised the Utilities Department (with the agreement of Mike Spencer) to take the interest money from the money invested and transfer it into an Operations and Maintenance account.  It was a transfer, not withdraw, and prevented the Utilities from having a rate increase from 2002 – 2009.  There was no terminology in the contract stating whether this was allowed or not.  Mike Spencer stated the contract did not address the issue of interest.  It was the Town’s money they were earning interest on.  There was a specified amount they were supposed to pay in that would be set aside; that exact amount was set aside into a separate account and it has always been set aside.  Mike Spencer’s position is there has never been anything wrong with the transfer of interest. 


Frank Nierzwicki, Director of Planning Services has been asked by a Rose-Hulman Environmental Engineering student to work and gain experience in the Planning Department this summer starting the first week in June until September.  She would like to have a twenty hour per week volunteer internship.  Her name is Jessica Spore and she is from Monroe County.


Phillip Smith made a motion that we allow Jessica Spore to go on an unpaid internship with the Planning Department.  Scott Oldham seconded.  Motion carried.  Roll call vote:  Dianna Bastin – yes; David Drake – yes; Scott Oldham – yes; Phillip Smith – yes; Dan Swafford – yes.  Motion carried 5-0.


Sandra Hash and Frank Nierzwicki received a phone call from the Southern Indiana Development Commission.  There is money available through the Mediation of Flooding.  Frank explained there is an 80/20 match and SIDC was able to get the first 80% back.  They are going to assist the Town in getting the remaining 20%.


Scott Oldham asked Frank about a violation letter that was sent out last week.  Frank explained there are many issues with Autumn Ridge and a letter, dated May 8th, will be sent out.  Rick Coppock sent a citation letter regarding an erosion problem and a down erosion fence.  Scott Oldham asked what the law is regarding the letter being sent May 8th.  Frank explained there needs to be 10-15 days on legal notice from the environmental concerns. 


Council Comments


Dianna Bastin announced Micah Austin, a SPEA (School of Public and Environmental Affairs) Service Course student, will be leaving the Town of Ellettsville.  He worked in the Planning Department, with Redevelopment Commission and anything else that needed to be done for the last two years.  Dianna presented Micah with a certificate of appreciation.  Dianna and the Council wished him the best of luck in his future.


Micah Austin formally thanked everyone for the two years he has been with Ellettsville.


Dan Swafford stated there is some hostility between the wholesale customers and he hopes they can all work together to get this resolved and worked out.  He is hoping for compromises.




Phillip Smith made a motion we adjourn.  Dan Swafford seconded.  Motion carried.  Dianna Bastin adjourned the meeting at 8:22 p.m.