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JAMESTOWN – The Jamestown City Council has approved a resolution to move forward with selling the Board of Public Utilities (BPU) Wastewater Treatment Plant to the Jamestown Local Development Corporation (JLDC).

The Jamestown City Council during the Dec. 18, 2017 voting session.

During Monday Night’s City Council voting session, nine different people spoke to the council and asked members to vote against or table the waste water treatment resolution.

Despite the concerns, the council eventually voted unanimously to approve the resolution. However, prior to the vote city councilman and finance committee chair Tony Dolce assured those in attendance that the vote was not to sell the plant, but only to keep the process moving forward.

“There have been some excellent questions/concerns brought forward by many of the members tonight,” Dolce said. “I just want to assure the public and the people that are here that this marks the beginning, or the initiation, of the possible process…. This has to go through JLDC, it has to go through the BPU board, it has to come back through a series of resolutions to the city. Many of the questions that came up tonight are questions that will have the be answered before an actual sale can take place.”

Some in attendance said that matter appeared to be an 11^th hour effort by the city to address its financial challenges, which Dolce said is simply not the case.

“tonight’s vote is not an eleventh hour thing. It has to take weeks and possibly months to vet this out, look at the possibility, and if there are legal objections, or either of the boards or this council feel that that this is not an appropriate way to go, there will be plenty of time to put a halt on it, to stop it, and go in a different direction,” Dolce said.

Earlier this Month Jamestown Mayor Sam Teresi announced the city was looking into selling the plant to the JLDC as a way to inject a large amount of capital into the city coffers so it could be used to pay for infrastructure and equipment needs that will run into the millions of dollars, while also putting some of the money into a tax stabilization fund.  The plant is valued at $18 to $20 million. The BPU would then pay the JLDC to use the plant, with the money coming from wastewater fees collected by the BPU and used to pay off the bonds the JLDC would have to take out to make the purchase. The plant itself would be used as collateral.

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Teresi said that because the city has reached its constitutional tax limit, it can’t borrow money through traditional bonding methods. He said that the proposal gives the city an alternative method of raising a large sum of money and instead of using taxes to pay it back the city would use rate payments from wastewater customers, located both inside and outside of the city.

• LISTEN TO WRFA’S INTERVIEW WITH MAYOR REGARDING WASTEWATER PLANT PROPOSAL

PUBLIC CRITICAL OF PLAN, REQUESTS MORE DETAILS

Some of those who voiced concerns about the proposed sale of the Wastewater Treatment Plant during Monday’s city council meeting included (clockwise from upper left): Todd Tranum, Greg Lindquist, Dan Heitzenrater, and Edward Premo.

Members of the public, including the Manufacturers Association of the Southern Tier (MAST), question the plan and feel that it will hurt business and economic development while also risking the stability of the BPU and JLDC.

Attorney Edward Premo – from the Rochester area law firm Harter Secrest & Emery – is representing MAST on the matter and spoke to the council about the issues the organization has with the proposed sale.

“Members of MAST are very concerned about what the city council is considering doing. They are very concerned about this being a step in the dismantling of the BPU,” Premo said. “We believe that the sale of the wastewater treatment plant and facilities not only violates the laws in the city of Jamestown, but also violates the laws concerning the JLDC.”

Premo then raised five legal concerns MAST has with the proposal. They are:

1. The Wastewater System cannot be sold without a majority vote of all residents, per the city charter;
2. The Wastewater System cannot be sold while it is still in use;
3. The BPU cannot pass through JLDC debt service to system users;
4. Users will be charged double for the same system;
5. As a lending agency, the JLDC doesn’t have the power to acquire nor bond for the Wastewater System.

• READ FULL LETTER TO CITY OUTLINING MAST CONCERNS/ISSUES

Also addressing the council and raising concerns were Todd Tranum, president of MAST and the Chautauqua County Chamber of Commerce, former BPU chair John Zabrodsky, former BPU member and Weber Knapp financial officer Wayne Rishell, who said that so far there has been no transparency regarding what impact the sale would have on waste water rates, as well as specific details on how the money from the sale would be spent.

Others who voiced concerns included labor representative David Wilkinson, town of Ellicott councilman-elect Dan Heitzenrater, and residents Doug Champ, Greg Linquist,  Raven Thompson.

The matter will continue to be discussed, perhaps as early as Tuesday afternoon when the JLDC board meets at 4:30 p.m.

The meeting will be the first for the three new members of the BPU, who were appointed by Mayor Sam Teresi and approved by the Jamestown City Council at the start of the year to replace three previous members. The three new members will be Tyler Case, Terrance Horner, and Ralph Wallace who are replacing John Zabrodsky, Wayne Rishell and Carl Pilliterri, after Teresi made the controversial decision not to reappoint the three long-time board members.  Zabrodsky, Rishell, and Pilliterri were each opposed to Teresi’s proposal in recent years to use BPU profits as a revenue stream to balance the city’s annual operating budget.

Because Zabrodsky had served as the chair of the BPU, there will also be a new board chairman for the first time in several years. An article in Monday’s Jamestown Post-Journal says the new chair will likely be Chuck Cornell or Martha Zenns, who are the two other community representatives who serve on the board and who were both appointed in 2014.

Monday’s board meeting begins at 4 p.m. at the BPU administrative offices and is open to the public.

During the city council’s New Year’s Day inaugural meeting on Friday, all nine members of the city council were sworn in to a new, two-year term in office, with just one new member joining the fold. Ward III Democrat Victoria James will be the only new member of the city council, replacing Republican Alphonso Pagan, whom she defeated in the November Election.

Also during Friday’s meeting the council approved several appointments by Teresi, including three new members for the BPU.

The newest BPU members will be Tyler Case, Terrance Horner, and Ralph Wallace. They are replacing: John Zabrodsky, appointed by Teresi in January 2000 and serving as BPU chairman from January 2002 to December 2015; Wayne Rishell, appointed by Teresi in January 2002; and Carl Pillittieri, appointed by Teresi April 2004.

The appointments came with no discussion or comment and were included in a laundry list of mayoral appointees for various agencies, commissions and boards involved with city government.

Jamestown Mayor Sam Teresi

“After consulting with members of the city council, colleagues on BPU and senior management staff, and advisors in the community, I decided to bring in [the three new members],” Teresi told reporters on Friday following the meeting. “They come from three different disciplines and backgrounds in the community and share mine and the council’s love for the city and commitment to building the entire city of Jamestown. Each showed a great deal of interest in joining the city government family on the BPU and I’m very happy to have them join us.”

The three new members will replace three individuals who bring a combined 42 years of board experience to the BPU. Perhaps even more noteworthy, the three outgoing members have been outspoken critics of the city government’s use of BPU profits – by way of dividend payments – to help balance its annual budget each year since 2014. That dividend sharing was first used by the city decades ago, but eventually went out of favor with city leaders. However, the dividend sharing was re-introduced by Teresi in an effort to close spending gaps in the city budget the past three years.

Despite the difference of opinion on how to best use BPU profits and the ensuing (and at times contentious) debates that took place, the mayor would not say that was the reason for not reappointing the three to another term.

“I’m not going to make this about what has happened in the past,” Teresi said. “New Year’s Day is a day about looking forward and that’s exactly what we’re doing here – celebrating and thanking the contributions of those board members that I had the opportunity, the pleasure and the honor of originally appointing. They’ve been good board members that have served the public utilities of this city well, and this city as a whole well. We thank them and honor them for their service through a difficult and diverse period of challenge and accomplishments for [the BPU].”

Chase is a city resident who currently serves as Human Resources Administrator at The Resource Center, where he’s been employed since 2003. This past November he also ran as a Democratic candidate for city council in Ward 1, losing to Republican incumbent Brent Sheldon. He’s also active in several community groups and organizations.

Horner is a retired Biomedical Technician who worked at WCA hospital in Jamestown for 30 years before retiring in 2013. He’s also a U.S. Army veteran and is involved in several community and regional organizations.

Wallace serves as the Operations Manager for Jamestown Metal Products, a position he’s held for the past 15 years. He’s also worked in management for several other manufacturers including CAE Ultrasonics, Jamestown Sterling Corporation, and Visu-Wall Storage Systems.

Teresi said he believes the diverse backgrounds of the three new members will serve the BPU well, ensuring representation from all aspects of the city and also bringing new energy and ideas into the fold.

“This is not about the three members that gave 16, 14, and 12 years of dedicated, good service to the community. It’s a matter of moving forth and refreshing and replenishing,” Teresi said. “It’s not the first time there have been new members brought onto the BPU and it certainly won’t be the last time.”

The six other members of the BPU, in order of seniority, are: Jeff Lehman, serving by way of position as DPW director since 1994; Teresi, serving by way of position as mayor since 2000; Greg Rabb, serving by way of position as city council president since 2008; Maria Jones, serving as city council liaison since 2013; Martha Zenns, appointed by Teresi in January 2014; and Charles “Chuck” Cornell, appointed by Teresi in July 2014.

Members of the Jamestown Board of Public Utilities listens to Chautauqua Co. Chamber of Commerce President Todd Tranum during the Nov. 23 board meeting.

JAMESTOWN – The projected property tax increase in the city of Jamestown’s 2016 budget now sits at 4.06 percent. The Jamestown Board of Public Utilities on Monday approved giving the city a $482,000 dividend payment for next year following a 6-2 vote.

The $482,000 payment is $232,000 more than what Jamestown mayor Sam Teresi had proposed in his initial 2016 budget. That’s because the Jamestown City Council, during closed-door budget deliberations last week that were not open to the public, came to a unanimous decision to request $482,000 – the same amount the BPU gave the city for the current fiscal year.

City Council president Greg Rabb said the additional $232,000 will bring down the projected tax hike by 1.5 percent.

“[The $482,000] is almost double what the mayor requested, so it does have an effect on the budget. I think the the tax increase – whatever it might work out to be next week – might be much worse if we didn’t have the additional funding. So it does help a lot,” said Rabb, who also sits on the BPU.

The BPU spent more than 90 minutes discussing the dividend payment before acting on it, with board chairman John Zabrodsky, board member Carl Pillittieri, and general manager David Leathers saying the don’t support the payment because it would deplete the BPU reserves in either the electric or water divisions. If taken from the water division, it would create a rate increase higher than the 2.3 percent already being projected. If taken from the electric division, it could compromise a future 2.5 percent electric rate increase currently being considered by the state Public Service Commission (PSC).

The BPU was going to act on finalizing and approving its 2016 electric and water division budgets but held off following a request by Teresi, who wants to first find out if there could be any further cost saving measures in the water division budget before it is finalized. The issue of whether or not taking money from the electric division would impact the PSC rate case is something he also felt should be investigated further.

Rabb agrees it wouldn’t hurt to hold off on approving the two division budgets.

“There was much discussion about how we were going to handle this and I believe we tentatively committed to Dec. 7 as an additional board meeting for the BPU so that we could deal with the electric and water divisions, with the mayor making the point that now that we’ve agreed to the $482,000, can we go back and take a look at the budgets and make sure there isn’t something else we can ring out of the budget so we don’t have to talk about a rate increase.”

Both Zabrodsky and Pillittieri voted against giving the city the $482,000 dividend payment. BPU members voting in favor of the resolution included Teresi and Rabb, along with Chuck Cornell, Maria Jones, Jeff Lehman, and Martha Zenns.  Board member Wayne Rishell was absent.

CHAMBER SPEAKS OUT AGAINST DIVIDEND PAYMENT

Chamber president Todd Tranum.

Prior to discussing the dividend payment, several members of the public addressed the BPU, including Chautauqua County Chamber of Commerce and Manufacturers Association president Todd Tranum. Tranum criticized the board for approving dividend payments in past years, saying it’s the reason why the BPU electric division had to file for the rate increase request with the PSC.

“Based on our reserach and looking at the numbers, the current rate increase submitted by the BPU is absolutely unnecessary,” Tranum said. “It is an indirect tax driven by the city of Jamestown, taking money from this utility.”

Tranum also told officials that if they continue to profit share with the city, it would continue to force the BPU to increase its rates, causing it to lose its edge as an affordable utility provider to both residents and businesses not only in Jamestown, but the entire service area including the communities outside of the city.

Tranum also pointed out that the BPU already pays $3.5 million a year in the form of tax equivalent payments, adding that the dividend payments are excessive.

According to an article in the Jamestown Post-Journal, seven of the 12 members of the Joint Task Force on Efficiency and Cost Reduction were in attendance for the meeting. The task force was set up by Jamestown Mayor Sam Teresi late last year to discuss various cost cutting measures for city government and the Board of Public Utilities.

Among the items to discuss is BPU profit sharing, which has become a contentious item in recent years with the city budgeting additional money from the BPU’s electric and water divisions to help pay for the cost of running the city. Teresi has said that since the city owns the BPU, it has the right to use some of the profits in the BPU budget – which some members of the BPU have said that all profits should be reinvested in the utilities to help stabilize rates.

The task force is chaired by Jamestown city councilman Tony Dolce – who also serves as the chair of the city council’s finance committee. It also consists of other city council members, department heads and officials from the BPU.

According to the article in the Post-Journal, Wednesday’s task force meeting was attended by Dolce along with city council president Greg Rabb, city controller Joe Bellitto, city clerk Jim Olson, city DPW director Jeff Lehman and BPU members Chuck Cornell and Wayne Rishell. Those not attending included city councilwoman Kim Ecklund, city attorney Marilyn Fiore-Lehman, BPU board chairman John Zabrodsky, BPU general manager David Leathers and BPU business manager Mike Anderson.

The Post-Journal says Wednesday’s meeting involved the task force reviewing several cost savings ideas that have been put forward by officials with the BPU, which include consolidating the city DPW into the BPU as well as whether or not city government should oversee the operations of Diethrick Park. Those ideas will be revisited during the next meeting, which is set to take place at 4 p.m. on Wednesday, Jan. 28 and is open to the public.

According to an article in the Jamestown Post-Journal, the vote for sharing the dividends was 6 to 3. And although it had initially been proposed that the dividends come from both the electric and water division, in the end all the money will come from the electric division profits.

Jamestown Mayor Sam Teresi had initially proposed the dividends be given to the city in his 2014 proposed budget. However, some BPU members were against the idea, and held off on including the dividend sharing in the BPUs 2014 spending plans.

Voting against the dividend sharing were BPU chairman John Zabrodsky along with members Carl Pillittieri and Wayne Rishell. Voting for the dividend sharing were Teresi along with Maria Jones and Gregory Rabb, who also sit on the city council, Len Faulk, Fred Larson and Jeff Lehman.

According to the Post-Journal, the BPU members met in executive session prior to the vote to discuss potential litigation that may arise should the dividend sharing take place.

Following the vote, Zabrodsky is also reported to say that the BPU will need to develop a policy on how to use revenues toward the city’s budget in future years.

This is the second year in a row that the dividends have been shared with the city. Prior to last year, the last time BPU profits were shared with the city was in the 1930s.

The BPU will hold a meeting Tuesday afternoon at its offices on Steele St. to discuss the matter of sharing $475,000 in dividends from this current year with the city. City officials have already included the money in the recently approved 2014 budget, although not every member of the BPU is in favor of the dividend sharing.

However, Jamestown Mayor Sam Teresi, who serves as BPU President, says that it only makes sense for the BPU to share profits with the city, since the city is the sole owner of the operation.

“As with a dividend payment for any type of business that is provided to stockholders, that is something that is looked at on a year-to-year basis,” Teresi explained. “Depending on how the performance of the operation is doing, the circumstances in the economy and what the officers of that corporation feel is a reasonable share of profits – dividend statements are made and dividend payments are  distributed. That’s the way it should work in any private business model, similar to what we’re doing here with our private business model operation.”

In addition to Teresi, city council president Greg Rabb, also a member of the BPU, regards the BPU as part of the city, which means its only appropriate to share profits…

“We’re all in this together. Either we succeed together or we fail together,” Rabb told WRFA following the November city council meeting. “The BPU is a great asset and there are times when I feel it is appropriate to use [dividend payments] and I think this year is one of those times – especially because through a lot of hard work and good management, the BPU is doing very well.  I think it is a testament to what you can do in the public sector. There is no reason why the taxpayers of this city shouldn’t benefit from a well-run utility. It’s an asset.”

During its November meeting, BPU member Wayne Rishell said he didn’t want to share dividends with the city unless it moved forward and implemented various cost-saving recommendations from BPU officials.

The 2014 proposed budget for the BPUs electric division and the budget for the water division have also failed to include the dividend sharing. Under the city’s recently approved budget – $400,000 would come from electric and $75,000 would come from the water division.

The BPU will meet Tuesday to approve next year’s budget and decide whether or not the dividend sharing will take place. According to both Rabb and Teresi, there is enough support on the BPU to make that happen.

Tuesday’s BPU meeting begins at 12:30 p.m. in the BPU board room on Steele St. and is open to the public.