CWC POLICY COMMITTEE MINUTES NOVEMBER 2, :25 AM

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1 CWC POLICY COMMITTEE MINUTES NOVEMBER 2, :25 AM Present: Michael Brandow, James Eisel, Jeff Graf, Michael Flaherty, Wayne Marshfield, Berndt Leifeld, Georgianna Lepke, Alan Rosa, Tom Snow Others Present: Tim Cox, James Martin, Frieda Suess I. Call to Order at 11:20 AM II. October, 2010 Minutes unanimously approved Update on Water Supply Permit Negotiations Timothy Cox stated that he invited Michael Sterthous to provide an update on the Water Supply Permit Negotiations. Tim provided to each Board member a copy of the red-line of the permit section concerning CWC funding (Special Conditions 25[SC-25]), a copy of the current draft of the water supply agreement, as well as the current draft of the water supply permit. Tim summarized that in 1997 New York City was granted by New York State DEC a Water Supply Permit. That permit was a ten year permit with a 5 year renewal that allows the City to purchase land here in the West of Hudson Watershed. That permit is expiring in January, Tim noted that the Coalition of Watershed Towns and several towns were in negotiations for some time regarding SEQRA compliance in the FAD. When the permit discussions caught up to those settlement discussions, many MOA signatories began earnest discussions of the new Water Supply Permit. Tim noted that in February, 2010, the CWC Board passed a resolution asking for a seat at that table since the funding for our programs was not being discussed. Since that time, CWC has been actively participating, and it s gotten to the point where Dan Ruzow has become a central contact for all of the local communities. Many of the documents that come from us go directly through his office, as the central point. In the original permit, our programs were a condition of the permit, where, so long as the City is buying land, our programs, under the MOA, have to be funded. As a baseline principle, we wanted that in the new permit. To the State s credit, their starting point was the original permit as well. Tom Snow confirmed that the copy of the draft water supply permit handed out today does not include the SC-25, but is up-to-date as of this morning, with all changes agreed upon by all parties at the last meeting. Tim confirmed that he has sent out the minor change that he had spoken to Georgianna Lepke about, regarding payment in lieu of tax matters, so those are not included in this draft. Mike Sterthous asked Tom if the omission of SC-25 is a reflection of the fact that the DEC is still reviewing that section. Tom confirmed this. James Eisel asked if SC-25 is establishing CWC program funding. Mike Sterthous responded that CWC funding would be enforceable pursuant to the permit, as well as pursuant to the side agreement, where CWC has an opportunity to enforce with respect to the continuation of the MOA. Mike added that he believes that through the negotiations with the City and the State and others, SC-25 did achieve that.

2 Jim asked how funding levels were determined for the programs. Mike answered that the goal was to try and identify historic levels of funding, and provide an assurance that, at minimum, the programs would continue to be funded at historic levels. Mike continued that the State encouraged us to try to come up with metrics, how we re going to measure that, because each of the programs are different. Tim reviewed Special Condition 25 with the Committee. He noted that under section b, the City has to continue to provide adequate levels of funding for Watershed Protection and Partnership programs. Most of these are going to last for the duration of the permit - 15 years. Tim also noted that for each Program,, the current funding provided through the 2007 FAD is going to remain available, and also describes the additional funding required by the permit. Tim explained that for the Septic Program, the city will continue to fund the Septic Program at a level to allow a minimum of 300 septic systems per year to be remediated or replaced. In addition, any conditions of any subsequent FAD or FAD Amendment requiring the City to fund are also going to be condition of the permit. Tim explained that dollar amounts on here don t necessarily work because system costs have been increasing since the start of the CWC Septic Program. Jim asked if the amount of 300 systems covers it, no matter what the costs. Alan agreed that it does. Tim continued that for the Small Business Septic Program, the original $4Million is going to remain available, and we ve added that for the duration of the permit, the City s going to provide comparable and adequate funding for the Small Business Septic Program, provided we demonstrate the need. Mike added that what we had in mind there was that the term comparable is enforceable, and that comparable is comparable to the $4Million, and so without saying $4Million, it s comparable to what funding has been for the program, and then CWC will be demonstrating the need because we re the ones that do the programs and have the records, Tim noted that as this program is made more widely available, CWC staff anticipate demand for the program is going to increase, just like the Septic Program. Mike Sterthous said, again, comparable is the metric against the $4Million, and adequate, in the same phrase, adequate meaning sufficient funding to continue the program based on the need that CWC is going to demonstrate by our records. For Cluster Systems, Tim explained that originally there was $2million allocated, and CWC doesn t have any history established with this program funding. Tim noted that the main reason the program rules have taken so long is CWC and DEP went from a conception of, let s take two or three houses, to let s define some hamlets that weren t on MOA list and try to address them in some fashion. Tim continued that in order to do that, towns will need to establish septic districts if they agree to participate in this. To date, CWC hasn t spent any money from this with the exception of Administration money coming up with these rules. Tim continued that for Septic Maintenance, the metric we came up with is 20% of the total systems eligible for maintenance under the CWC Septic Maintenance Program Rules, providing we demonstrate the need for funding. The eligible systems are those 300 per year, plus the new systems that have been built since 1995 as new construction under residential, because they can be pumped out as well. Mike stated that this is math that he and Dan (Ruzow) worked on with CWC s records, and they think that to date there are about 3400 systems replaced, and about 565 maintained. That s approximately 20%, and so they determined moving forward, understanding that these have a 5-year term on when they would need to be pumped out again, using the metric, based on every five years, you have basically all of the systems having a pump out, and at that point in time we re either at the new

3 FAD or we re at a new cycle, and so this is intended to continue for the duration of the permit, unless there s some modified conditions in the next FAD. For Community Wastewater Management Program, there is provision for funding to complete the next 5 communities. Tim noted that this is what s required under the current FAD and it s also an obligation under the original MOA For Stormwater Retrofit, Tim noted that the original $4.65Million that s available in funding will remain available. For the duration of the permit, the City has to continue to fund the Stormwater Retrofit Program to allow the program to continue to run at a level of activity that has been maintained since the inception of the program, consistent with our program rules, provided that we demonstrate the need for such funding to continue, and the same condition that any subsequent FAD or FAD Amendment also require the City to fund Stormwater Retrofit as a condition. Mike Sterthous added that the difficulty here was in trying to define a numeric metric, because the projects under this program are all very different, they re not able to say that 15 programs at x dollars, because they re not all going to be the same. The measure is CWC s record and reports on work that has been done to date, using that in order to remain consistent.. For Local Consultation on Land Acquisition, the current funding level is $30,000, including the Villages (who were originally at $10,000). Tim noted that no municipality has spent even half of those funds yet, and that CWC does not get any administration costs. For Public Education, the City will continue to fund the Public Education and Outreach program at a minimum level of $203,734 per year, provided that CWC demonstrates the need. For Operating Expenses, this is a little different from the duration of the permit. Tim explained that this funding is so long as the City is acquiring land under the permit. That covers the odd situation where the City suspends their land acquisition program, for whatever reason. Under the permit the City s going to continue to fund our operating expenses as needed, and they estimate the total funding will be $4,373,625 over the duration of the permit. For the Stormwater Coordinator Position, that partially funds Kim Ackerley s position, the City is going to ensure adequate funding and continue to fund the appropriate engineering position at CWC, for salary and cost of standard fringe benefits. For the Tax Litigation Avoidance Program, Tim stated that a conference call is scheduled for tomorrow. Tim explained that broadly speaking if the Towns desire and there s a challenge pending, or the Town is doing a town-wide re-valuation, the City will agree that the property s going to be assessed pursuant to an agreed upon template. Tim continued that the City s experts are going to take the first crack at an evaluation report that s based on that template. CWC will then have funds to hire an evaluation expert that will look at that report and see where the differences are within the template, so that the City, the Town and CWC can sit down and agree upon a value without the need of litigation. For Gap Funding, Tim noted that this is basically for our septic programs and operating. Tim explained that this will allow CWC to continue to enroll people in the Septic Program. Mike Shultis asked if this is to cover the programs if we run over in Tim confirmed, stating that we are putting people in now who might not need the funds until 2013, and we have to ensure that right now we re going to have the funds available to cover them, or else we d have to stop the program. Tim noted that for operating, CWC can t move funds from CWC Future Stormwater Program so if CWC moves funds

4 from CFF to fund our operating, the City s got to repay that. Mike Sterthous explained that if there is a void or breakdown in the communication and demonstration of reasonableness back and forth with the City on some of these programs, we have another fund where the City is compelled under this permit to reimburse. Tim concluded that that was it on the latest draft of SC-25, and it was a joint submittal of the City and CWC, and DEC is currently reviewing it. Tim explained that Tom Snow had concerns about the enforceability of vaguer language and expressed those to CWC Board and Policy Committee. Georgianna noted that for CWC, SC-25 was, and rightfully so is and needs to be, our top priority. She publicly thanked Alan for bringing to the attention of the Board back in February the importance of us being at the table with SC-25 in mind. She thanked Whiteman, Osterman and Hanna and Tim for working very hard. She noted that CWC is looking for some determination from the State that this language is enforceable. She also noted the MOA was an agreement that brought us all together, and what we need to do going forward is not lose sight of that. Tom responded stated that the State is in the process of review to ensure that it meets NYSDEC s regulatory requirements from an enforceability perspective. Michael Flaherty asked Alan if he is comfortable with this. Alan stated that he is comfortable with this, and he thinks it s key to what DEC thinks after their review. Tim then explained the Side Agreement. He highlighted several points. Tim noted that a draft agreement he saw when CWC first got involved had a clause at the very end that said nothing in the MOA governs that agreement. Tim said that now there s an express recognition by all the parties that the programs established by the MOA are being implemented through this permit and will keep going. There s also agreement that all parties to the Watershed MOA can enforce this permit as well. Tim continued that Town Supervisors or Town Board Members still have that ability to say, if the City bought a house in my Town, they ve violated the MOA. That was something important for us to keep in there for you all because we understand that at the end of the day, that agreement is what binds us all together. Tim then reviewed the Permit itself. He explained the major change is the natural features criteria. Tim noted that the original permit just said contain a buffer within so many feet of a water course, 15% slope, etc. Tim continued that under the new permit contain has been defined such that now at least 50% of the property has to have that steep slope and, 7% of the property has to have the surface water criteria. The other change is to the Hamlet Expansion Areas. For Towns that chose to exercise it, they have proposed expansions to Hamlet areas. That expanded hamlet matters for both the Watershed Regulations for stormwater as well as areas that a Town Resolution can limit the City s ability to acquire parcels within the expanded area. Tim added that Towns are now going to have to review their prior hamlet resolutions. Georgianna asked if a municipality wishes to make no changes, do they have to do anything. Tom Snow responded if the Town precludes fee acquisitions in existing hamlet, and they don t have to do anything more. Tim noted that in such a case, the City could still purchase easements in the Hamlet. Tim continued that the prohibition can be changed to not allowing any purchases in your Hamlet fee or easements. Tim also noted that for expanded hamlets, the State is requiring under the permit that those property owners should get notice of any Town hearings on the matter. Georgianna noted that prior to the first permit, Whiteman Osterman and Hanna put together a memo for CWT for all of the municipalities that in layman s language laid out their options, and if they chose to act, what that means. She would like to see that memo redone in a layman s language so that the communities understand to the best of our knowledge what their options are and what it means to

5 them. Georgianna stated that she probably has it in the archives, but something like that should be done again. Tim Cox responded that there is going to be a menu option for Towns to say yes or no to the expansion. Michael Flaherty asked Tim to define how expansive is the area the City can t acquire land in. Tim explained the City has agreed to suspend solicitation in those Hamlet areas, but once this permit is issued, the Towns are going to have six months to decide. James Eisel asked if a Town Board approves that extension, they can add in WAC easements with that? Tim responded that it applies only to all acquisition paid for by the City, including WAC. Tom Snow explained that you have to invoke your right to an expansion area in one resolution, and then a second resolution would allow you to preclude fee and watershed conservation easements. Jim asked if there are several land owners within that expansion area that want to opt out, can the Town carve them out? Tim responded that when the Expanded Hamlet is defined, that s the opportunity to remove some tax parcels. Tim noted that if property owners want out, they are out of the Hamlet for all purposes, including under the Watershed Regulations. Tim continued that under the Watershed Regulations, there s no prohibition from putting a new impervious surface within 100 feet of a water course. Tim stated that once this is all finalized the CWC Board is going to have to vote upon the side agreement this is why CWC staff and counsel reviewed all of this today with the Committee. Tim noted that there are a couple of other new facets of the Land Acquisition Program including the Riparian Buffer Program, that will be based upon a plan developed with funding from a CWC L- TAP grant for the Town of Hunter, as well as Watershed Forest Conservation Easements, and Enhanced Land Trust Program. Tim explained that the City was required by the 2007 FAD Agreement to involve land trusts in the Land Acquisition Program. Tim continued that the land trusts have agreed to abide completely by the City s process, as well as to be open about what they are doing. Tim said that the Enhanced Land Trust Program will focus on a few large acreage parcels whose owners have been reluctant to sell to the City for whatever reason, and would then be able to approach those land owners and get reimbursed by the City after the sale, with the land trust able to work a little faster than the City can. Mike stated that the land trust has the ability to purchase properties with structures. Tim continued that the land trusts can purchase properties that aren t vacant, but they have to subdivide out the parcel containing the structure, so that the City can then purchase the vacant land. Wayne asked if WAC does not sign this agreement if these transparency issues disappear. Jeff Graf replied that no, they would not, but that DEP would have to enforce transparency through their contract with WAC. Wayne asked if they don t sign the agreement if they ll be excluded from the permit. Tim stated that there will be some reference to them in the agreement, but they would be required of the City, not of WAC. Jeff explained that WAC is a contractor of DEP s, so DEP is required to force WAC to comply with the side agreement. Tim noted that what s in the draft agreement in front of the Committee is a draft that was circulated yesterday, and the City hasn t had the opportunity to comment on it yet. Mike Sterthous added that to their credit, WAC has come to the table and they ve been an active participant in these discussions. Jim stated that the City has veto over WAC, and asked if that is going to remain. Jeff confirmed. Tim continued on to the Transparency Resolution, found under tab 19 in the Board Book. Tim noted that the Committee had talked about a resolution at the October meeting. CWC staff completed this resolution because time is short for the public comment period on the WSP. Tim reminded the Committee that Delaware County requested CWC to join their request that WAC be subject to Open Meetings Law and Freedom of Information Law (FOIL). Tim explained that this resolution goes a bit

6 broader, in that it reaffirms this Board s commitment to conducting its affairs in an open and transparent manner and it complies with Public Officers Law and both the Open Meetings Law and FOIL. The Resolution also supports other not-for-profits to comply with Open Meeting Law and FOIL to the same extent as CWC when they are implementing programs funded partially or wholly by public funds. Tim noted that the Resolution is broader than just WAC, and also covers the Land Trusts, and can even cover some organizations that aren t required to be directly or indirectly involved in watershed issues. Tim opened the floor to comments or suggestions before sending the resolution before the board. Alan stated that there is absolutely nothing wrong with transparency. Tom Snow stated that from the State s perspective there is nothing wrong with transparency and openness, but because there are ongoing negotiations with the permitting process, anything that would otherwise pre-judge that SEQRA process, he would not be able to vote on this, based on Counsel s input on this. The State will abstain from voting. Georgianna asked for the record to show why the State would recuse themselves. She continued that CWC from the beginning voluntarily put ourselves subject to transparency and openness. Tom agreed, and restated that they have a process that they have to maintain, but maybe a month or so from now it would be different. Georgianna said that this could be revisited in a few months, also. Tom stated that the State s issue shouldn t become anybody else s. Jeff Graf stated that DEP also fully supports transparency, and they do believe that there are issues that notfor-profit organizations buying into Public Officers Law. Jeff noted that the City will now require transparency in their contract with WAC. Jeff said that the City fully supports the ultimate goal of transparency in the organization, which we will force in the manner of contract with WAC. Georgianna added that it s important to note that in drafting the resolution, it is not specific to WAC, but affirms a belief, and it s general in nature Tim said that the CWC staff are recommending two resolutions be put to the Board for Outside Counsel. Tim said that there are significant bills for Whiteman Osterman and Hanna and the current contract will need to be increased. Tim also said that in lieu of an RFP, that the Committee may want to consider waiving the RFP the requirement and continue to employ Dan and Whiteman Osterman and Hanna due to the current negotiations. Tim affirmed that the rates won t significantly increase in 2011, and rates will be the same for all bills in 2010Committee unanimously voted to recommend the Board approve a 2011 contract with Whiteman, Osterman, and Hanna and pay bills incurred for 2010 III. Next Meeting scheduled for December 7, 2010 at 11:00 AM IV. Adjourned at 11:50 AM