Sunday, February 13, 2011
Intervention in Artesian Application ML 115849 to Public Service Commission
Introduction
My appearance today is on behalf of 2 civic organizations: Cecil Land Use Alliance (CLUA) comprising about 100 families; Appleton Regional Community Alliance (ARCA) comprising about 200 families; and individual petitioners: Steve and Carol Wohner; James and Eva Walker; Eugene and Mims Hildabrant; Edward and Sally Cairns; Sue Fuhrmann; Ron Hamlen; Lindsie L. Carter and Darren and Kristen Magas. All of the individual petitioners reside in the “Elkton North” area - the subject of this application. (see Attach. VII which shows where petitioners live.)
Summary
This document presents six reasons why Artesian’s applications are contrary to the public interest. If any of these disagree with claims made by Artesian, note that ours are based on supported facts. Verifying information is presented - either herein, or in the supporting Attachments. We hope they cover all your questions, but it is not an easy task to anticipate them. In the event you find anything lacking, please let me know and we’ll be happy to provide more evidence or explanation. The six reasons are:
1) Turning water supply over to Artesian violates County Comprehensive Plans and will encourage residential development in rural area where other infrastructure needs are more expensive to supply.
2) Artesian and County officials hid expansion of franchise area into “Elkton North” from public view until this PSC application - violating public notification requirements.
3) Artesian’s out-of-state water sources increases risk of water supply loss during severe drought shortages.
4) Artesian is diverting Chesapeake Bay nutrient credits from County to Artesian thus possibly restricting future County expansion of their waste disposal facilities.
5) Lack of competitive bids on sale of County facilities and expansion into “Elkton North” after RFP was awarded to Artesian raises serious questions about true economic benefits to the County.
6) Sale of water and sewer facilities in active public use is illegal in Cecil County.
Discussion
1) Turning Water Supply Completely Over to Artesian:
The 1990 Comp Plan goals on pp. 3 & 55 states: “Plan and encourage a water supply under the control of the County government for the needs of development within the County”. Artesian’s application removes water supply from County control and puts it in their hands (see Attach.I - Md. Dept. of Environment & Md. Dept. of Planning Letters) thus giving Artesian a major voice in where development can occur. While the County Commissioners can still designate Master Water & Sewer Plan (MWSP) areas, they always allow them when adjacent to existing designated areas such as exists in “Elkton North”. (see Attach.II - comments by Matt Carter, former Director of Cecil County Dept. of Public Works)
The growth corridor was established between I-95 and US Rte. 40. (see Attach. III - appropriate pages from 1990 Comp Plan and 2000 Urban Growth Boundary Plan)
Artesian’s application extends the growth corridor into an area north of I-95 (“Elkton
North”) where it will be more expensive to provide roads, schools, emergency services, and other infrastructure that the County taxpayer must pay for - particularly County roads and intersections in this area which are now narrow, two lane, lacking shoulders and marginal in capacity. (see Attach. IV - Excerpt from Aston Pointe Traffic Impact Study) The I-95/Rte 40 corridor has major and minor road capacity and contains two RR lines that could provide alternate transportation to vehicular traffic - a major requirement of the 2010 Comp Plan now under preparation.
2) No Public Disclosure of Elkton North Franchise Area Expansion:
Cecil County officials and Artesian hid from public view, the amendment to include the Part II “Elkton North” extended area. (see Amendments to Franchises, pp 150-160 in ML 115849) At the 9/16 & 30/08 public hearings for an amendment to the franchise agreements, the only issue disclosed was amending Sec. 6.2 to provide that MWSP designation would not be automatic. No mention was made about inclusion of “Elkton North” in the franchise area. (see Attach. V - Minutes and Agendas for Meetings) When the amendments passed on 10/7/08 including the extended franchise area, again, the only public reference was to Sec. 6.2 amendments.
The First Amendment to Franchise copies in Artesian’s PSC application (ref: pp. 150-160) show they were typed on 9/11/08 prior to both public meetings (see typists notes in lower left corner). Obviously the decision was made before the public meetings which makes a farce of any consideration of public comments by the Commissioners and shows that inclusion of “Elkton North” was preordained and purposely hidden.
When supposedly complete documents were inspected by citizens on 10/31/08 under a PIA request, the 10/7/08 amendments were excluded. (see Attach. VI - Haislip Letter transmitting Documents.)
When Artesian filed opposition to a petition for reopening PSC Case 9163 on 1/8/09 they showed the Elkton West Service Area as of 12/22/08 only as the Part I area it omitted “Elkton North”. (see Attach. VII - Exhibit A map from 1/8/09 Letter)
Mr. DiNunzio of Artesian presented a map at the Citizens Oversight Committee Water Resources meeting on 4/1/09 showing what he described as the Elkton West growth corridor (see Attach. VIII - Map). When questioned why “Elkton North” was included, he said because it was in the Meadowview plant service area; he didn’t cite the 10/7/08 amendment or ML#115849 filed with the PSC on the day before, 3/31/09.
The legal notice for ML#115849 appeared in the Cecil Whig on 4/22/09 (see Attach. IX - Legal Notice); it merely mentioned: “approval to exercise certain franchise areas” - it lacked specificity.
These actions violate good public relations and public notification requirements.
“Elkton North” includes a large, controversial, proposed development called Aston Pointe which has been the object of much public opposition and received final subdivision approval on 10/20/08 - only after Artesian offered water and sewer service. Cecil Bank has six outstanding loans totaling $7,963,000 to the developer (see Attach. X - Deeds of Trust), and the Board of County Commissioners’ President, Brian Lockhart, is a board member of that bank and a former officer. He is also a member of the Country Club slated as part of the Aston Pointe development - and was the sole Commissioner on the Franchise Agreement Evaluation Committee involved with Artesian negotiations. (see Attach. XI - Conflict of Interest Investigation Reports)
“Elkton North” is also adjacent to Fair Hill Natural Resource Area, a 5,000 acre state resource protection area which is one of Maryland’s “crown jewels”. Encouraging denser next door development will create a negative impact on this valuable resource.
3) Artesian’s Out-of-state Water Source:
In a presentation by Artesian at a CLUA public meeting, they described how they would bring water into Cecil County from Chester Water Authority (CWA) in Pennsylvania via Delaware. Both states can exercise control on exporting water out-of-state in the event of drought. Pennsylvania has 3 stages of Demand Measures for which the most severe allows the governor to shut down out-of-state water. (see Attach. XII- Drought Restrictions) Delaware requires guarantee of in-state needs before allowing out-of-state supply. We understand that during State II drought the supply from CWA can be reduced to 3 MGD and that this occurred during droughts of 1995, 1999, & 2002. Current projected needs from Artesian for the two franchise areas at build out with present zoning plus Elkton is in the 6.5 to 7 MGD range.
Current Meadowview wells have a permit capacity of 0.185 MGD and the water contract with United Water of Delaware allows 0.966 MGD but has a clause to stop flow in time of drought. The GAP for Aston Pointe wells has not been issued and MDE requires extensive testing before final approval for 0.24 MGD.
It seems demand is greater than supply in time of drought and the PSC should assure sufficient water supply in time of drought before allowing this application to proceed.
4) Artesian Takes Nutrient Credits from County:
The Artesian proposal follows up on County plans to divert treated waste effluent from plants in the Chesapeake Bay Watershed to the Meadowview plant that discharges into the Christiana River which flows into Delaware. This benefit to the Chesapeake Bay would bring nutrient credits to Cecil County which could be used for expanding their Seneca Point plant. However, p.375 of this PSC application (Section 7.4 of Asset Purchase Agreement) awards first availability of those credits to Artesian which might restrict the County from supplying waste disposal capacity to the western part of the County’s growth corridor. Ultimately it might force the County into also turning that unwillingly over to Artesian.
Also, establishment of the “Elkton North” franchise area will eliminate future nutrient credits which could otherwise be made available to Cecil County by diverting more plant discharge flows from the Chesapeake to the Delaware. Most of “Elkton North” is already in the Delaware watershed so development of this area will consume Meadowview capacity that could otherwise be utilized to take flow from the Seneca Point plant for example. So, establishment of the “Elkton North” franchise area works against maximizing nutrient credits to Cecil County - one of their main goals.
5) Divergence from RFP Raises Questions on Benefits to County:
After water and sewer service in the Elkton West area was awarded to Artesian, secret negotiations (see Attach.XIII - Commissioner Demmler e-mail) were begun to incorporate the “Elkton North” area and to sell most of the County’s water and sewer facilities to Artesian. Payment terms for the facilities were agreed without competitive bidding which was objected to by the alternative RFP bidder when they learned of it. (see Attach.XIV - Tidewater Correspondence) The $12 to $13 million price less allowances appears to be considerably less than the fair value. (see Attach.II and Attach.XV-WHIG Article on New Treatment Plant) There is no way for citizens to know whether they are receiving fair value without competitive bidding. The procedure followed here is not in the best interests: of Cecil County citizens and should not be condoned.
It is significant that the County’s Public Works Director, Scott Flanigan, who has responsibility for the water and waste facilities, was excluded from these negotiations.
The resolutions on sale of facilities claim “the Board of County Commissioners has determined that the County is realizing substantial economic and other benefits” from these sales agreements with Artesian but when citizens inspected documents under a PIA request there was no documentation of any economic evaluation present. A follow-up request specifically asked for the economic evaluation; but a County official replied that there was none. (see Attach.XVI-Correspondence on Document Inspection)
6) Sale of Water & Sewer Facilities in Active Public Use is Illegal:
Maryland Code - Article 25 section 11 clearly states that the County Commissioners may: “Sell at public sale any property when no longer needed for public use”. (see Attach. XVII - Maryland code) After citizens raised the concern that these properties were in active public use, the commissioners declared in their subsequent sales resolutions that the Facilities are: “no longer needed for public use and that “the sale and transfer of the sale is in the public interest”. This pronouncement belies the fact that the facilities were in public use at that time, are still in public use today, and are intended to remain in public use for the foreseeable future. Further, no evidence exists that the sale is in the public interest and there is considerable evidence that it is actually contrary to the public interest. Several legal decisions uphold the opinion that actions such as these are arbitrary, capricious, or an abuse of discretion.
There are currently two consolidated cases active in the Cecil County Circuit Court: Civil Cases 07-C-08-000284 & 07-C-08-000349. On 4/30/09, Judge Campen issued an opinion that preliminary motions by both parties be denied, and that the County produce records of the proceedings to permit the Court to make informed decisions as the matter proceeds on its legal merits. (see Attach.XVIII-Judge’s Memorandum Opinion)
Conclusion:
Usually, elected officials actions are accepted as in the public interest unless proven otherwise. In the Artesian case they are tainted by a very persuasive president of commissioners who was most influential in altering the course of this franchise. We direct your attention to the attached ethics investigation reports and ask you consider the findings therein. Another Commissioner remarked that now when I get a citizen complaint about water service, I can just tell them to call Artesian. These kind of responsibility disclaimers are not necessarily to the best interests of citizens.
We respectfully request that this Public Service Commission deny this application on the basis of evidence we have submitted herein
Psc0425.inter.doc ELC 5/12/09
____________________________________________________________________
Click on Supporting Documents to Enlarge:
Introduction
My appearance today is on behalf of 2 civic organizations: Cecil Land Use Alliance (CLUA) comprising about 100 families; Appleton Regional Community Alliance (ARCA) comprising about 200 families; and individual petitioners: Steve and Carol Wohner; James and Eva Walker; Eugene and Mims Hildabrant; Edward and Sally Cairns; Sue Fuhrmann; Ron Hamlen; Lindsie L. Carter and Darren and Kristen Magas. All of the individual petitioners reside in the “Elkton North” area - the subject of this application. (see Attach. VII which shows where petitioners live.)
Summary
This document presents six reasons why Artesian’s applications are contrary to the public interest. If any of these disagree with claims made by Artesian, note that ours are based on supported facts. Verifying information is presented - either herein, or in the supporting Attachments. We hope they cover all your questions, but it is not an easy task to anticipate them. In the event you find anything lacking, please let me know and we’ll be happy to provide more evidence or explanation. The six reasons are:
1) Turning water supply over to Artesian violates County Comprehensive Plans and will encourage residential development in rural area where other infrastructure needs are more expensive to supply.
2) Artesian and County officials hid expansion of franchise area into “Elkton North” from public view until this PSC application - violating public notification requirements.
3) Artesian’s out-of-state water sources increases risk of water supply loss during severe drought shortages.
4) Artesian is diverting Chesapeake Bay nutrient credits from County to Artesian thus possibly restricting future County expansion of their waste disposal facilities.
5) Lack of competitive bids on sale of County facilities and expansion into “Elkton North” after RFP was awarded to Artesian raises serious questions about true economic benefits to the County.
6) Sale of water and sewer facilities in active public use is illegal in Cecil County.
Discussion
1) Turning Water Supply Completely Over to Artesian:
The 1990 Comp Plan goals on pp. 3 & 55 states: “Plan and encourage a water supply under the control of the County government for the needs of development within the County”. Artesian’s application removes water supply from County control and puts it in their hands (see Attach.I - Md. Dept. of Environment & Md. Dept. of Planning Letters) thus giving Artesian a major voice in where development can occur. While the County Commissioners can still designate Master Water & Sewer Plan (MWSP) areas, they always allow them when adjacent to existing designated areas such as exists in “Elkton North”. (see Attach.II - comments by Matt Carter, former Director of Cecil County Dept. of Public Works)
The growth corridor was established between I-95 and US Rte. 40. (see Attach. III - appropriate pages from 1990 Comp Plan and 2000 Urban Growth Boundary Plan)
Artesian’s application extends the growth corridor into an area north of I-95 (“Elkton
North”) where it will be more expensive to provide roads, schools, emergency services, and other infrastructure that the County taxpayer must pay for - particularly County roads and intersections in this area which are now narrow, two lane, lacking shoulders and marginal in capacity. (see Attach. IV - Excerpt from Aston Pointe Traffic Impact Study) The I-95/Rte 40 corridor has major and minor road capacity and contains two RR lines that could provide alternate transportation to vehicular traffic - a major requirement of the 2010 Comp Plan now under preparation.
2) No Public Disclosure of Elkton North Franchise Area Expansion:
Cecil County officials and Artesian hid from public view, the amendment to include the Part II “Elkton North” extended area. (see Amendments to Franchises, pp 150-160 in ML 115849) At the 9/16 & 30/08 public hearings for an amendment to the franchise agreements, the only issue disclosed was amending Sec. 6.2 to provide that MWSP designation would not be automatic. No mention was made about inclusion of “Elkton North” in the franchise area. (see Attach. V - Minutes and Agendas for Meetings) When the amendments passed on 10/7/08 including the extended franchise area, again, the only public reference was to Sec. 6.2 amendments.
The First Amendment to Franchise copies in Artesian’s PSC application (ref: pp. 150-160) show they were typed on 9/11/08 prior to both public meetings (see typists notes in lower left corner). Obviously the decision was made before the public meetings which makes a farce of any consideration of public comments by the Commissioners and shows that inclusion of “Elkton North” was preordained and purposely hidden.
When supposedly complete documents were inspected by citizens on 10/31/08 under a PIA request, the 10/7/08 amendments were excluded. (see Attach. VI - Haislip Letter transmitting Documents.)
When Artesian filed opposition to a petition for reopening PSC Case 9163 on 1/8/09 they showed the Elkton West Service Area as of 12/22/08 only as the Part I area it omitted “Elkton North”. (see Attach. VII - Exhibit A map from 1/8/09 Letter)
Mr. DiNunzio of Artesian presented a map at the Citizens Oversight Committee Water Resources meeting on 4/1/09 showing what he described as the Elkton West growth corridor (see Attach. VIII - Map). When questioned why “Elkton North” was included, he said because it was in the Meadowview plant service area; he didn’t cite the 10/7/08 amendment or ML#115849 filed with the PSC on the day before, 3/31/09.
The legal notice for ML#115849 appeared in the Cecil Whig on 4/22/09 (see Attach. IX - Legal Notice); it merely mentioned: “approval to exercise certain franchise areas” - it lacked specificity.
These actions violate good public relations and public notification requirements.
“Elkton North” includes a large, controversial, proposed development called Aston Pointe which has been the object of much public opposition and received final subdivision approval on 10/20/08 - only after Artesian offered water and sewer service. Cecil Bank has six outstanding loans totaling $7,963,000 to the developer (see Attach. X - Deeds of Trust), and the Board of County Commissioners’ President, Brian Lockhart, is a board member of that bank and a former officer. He is also a member of the Country Club slated as part of the Aston Pointe development - and was the sole Commissioner on the Franchise Agreement Evaluation Committee involved with Artesian negotiations. (see Attach. XI - Conflict of Interest Investigation Reports)
“Elkton North” is also adjacent to Fair Hill Natural Resource Area, a 5,000 acre state resource protection area which is one of Maryland’s “crown jewels”. Encouraging denser next door development will create a negative impact on this valuable resource.
3) Artesian’s Out-of-state Water Source:
In a presentation by Artesian at a CLUA public meeting, they described how they would bring water into Cecil County from Chester Water Authority (CWA) in Pennsylvania via Delaware. Both states can exercise control on exporting water out-of-state in the event of drought. Pennsylvania has 3 stages of Demand Measures for which the most severe allows the governor to shut down out-of-state water. (see Attach. XII- Drought Restrictions) Delaware requires guarantee of in-state needs before allowing out-of-state supply. We understand that during State II drought the supply from CWA can be reduced to 3 MGD and that this occurred during droughts of 1995, 1999, & 2002. Current projected needs from Artesian for the two franchise areas at build out with present zoning plus Elkton is in the 6.5 to 7 MGD range.
Current Meadowview wells have a permit capacity of 0.185 MGD and the water contract with United Water of Delaware allows 0.966 MGD but has a clause to stop flow in time of drought. The GAP for Aston Pointe wells has not been issued and MDE requires extensive testing before final approval for 0.24 MGD.
It seems demand is greater than supply in time of drought and the PSC should assure sufficient water supply in time of drought before allowing this application to proceed.
4) Artesian Takes Nutrient Credits from County:
The Artesian proposal follows up on County plans to divert treated waste effluent from plants in the Chesapeake Bay Watershed to the Meadowview plant that discharges into the Christiana River which flows into Delaware. This benefit to the Chesapeake Bay would bring nutrient credits to Cecil County which could be used for expanding their Seneca Point plant. However, p.375 of this PSC application (Section 7.4 of Asset Purchase Agreement) awards first availability of those credits to Artesian which might restrict the County from supplying waste disposal capacity to the western part of the County’s growth corridor. Ultimately it might force the County into also turning that unwillingly over to Artesian.
Also, establishment of the “Elkton North” franchise area will eliminate future nutrient credits which could otherwise be made available to Cecil County by diverting more plant discharge flows from the Chesapeake to the Delaware. Most of “Elkton North” is already in the Delaware watershed so development of this area will consume Meadowview capacity that could otherwise be utilized to take flow from the Seneca Point plant for example. So, establishment of the “Elkton North” franchise area works against maximizing nutrient credits to Cecil County - one of their main goals.
5) Divergence from RFP Raises Questions on Benefits to County:
After water and sewer service in the Elkton West area was awarded to Artesian, secret negotiations (see Attach.XIII - Commissioner Demmler e-mail) were begun to incorporate the “Elkton North” area and to sell most of the County’s water and sewer facilities to Artesian. Payment terms for the facilities were agreed without competitive bidding which was objected to by the alternative RFP bidder when they learned of it. (see Attach.XIV - Tidewater Correspondence) The $12 to $13 million price less allowances appears to be considerably less than the fair value. (see Attach.II and Attach.XV-WHIG Article on New Treatment Plant) There is no way for citizens to know whether they are receiving fair value without competitive bidding. The procedure followed here is not in the best interests: of Cecil County citizens and should not be condoned.
It is significant that the County’s Public Works Director, Scott Flanigan, who has responsibility for the water and waste facilities, was excluded from these negotiations.
The resolutions on sale of facilities claim “the Board of County Commissioners has determined that the County is realizing substantial economic and other benefits” from these sales agreements with Artesian but when citizens inspected documents under a PIA request there was no documentation of any economic evaluation present. A follow-up request specifically asked for the economic evaluation; but a County official replied that there was none. (see Attach.XVI-Correspondence on Document Inspection)
6) Sale of Water & Sewer Facilities in Active Public Use is Illegal:
Maryland Code - Article 25 section 11 clearly states that the County Commissioners may: “Sell at public sale any property when no longer needed for public use”. (see Attach. XVII - Maryland code) After citizens raised the concern that these properties were in active public use, the commissioners declared in their subsequent sales resolutions that the Facilities are: “no longer needed for public use and that “the sale and transfer of the sale is in the public interest”. This pronouncement belies the fact that the facilities were in public use at that time, are still in public use today, and are intended to remain in public use for the foreseeable future. Further, no evidence exists that the sale is in the public interest and there is considerable evidence that it is actually contrary to the public interest. Several legal decisions uphold the opinion that actions such as these are arbitrary, capricious, or an abuse of discretion.
There are currently two consolidated cases active in the Cecil County Circuit Court: Civil Cases 07-C-08-000284 & 07-C-08-000349. On 4/30/09, Judge Campen issued an opinion that preliminary motions by both parties be denied, and that the County produce records of the proceedings to permit the Court to make informed decisions as the matter proceeds on its legal merits. (see Attach.XVIII-Judge’s Memorandum Opinion)
Conclusion:
Usually, elected officials actions are accepted as in the public interest unless proven otherwise. In the Artesian case they are tainted by a very persuasive president of commissioners who was most influential in altering the course of this franchise. We direct your attention to the attached ethics investigation reports and ask you consider the findings therein. Another Commissioner remarked that now when I get a citizen complaint about water service, I can just tell them to call Artesian. These kind of responsibility disclaimers are not necessarily to the best interests of citizens.
We respectfully request that this Public Service Commission deny this application on the basis of evidence we have submitted herein
Psc0425.inter.doc ELC 5/12/09
____________________________________________________________________
Click on Supporting Documents to Enlarge:
