Town Manager’s Report To Mayor and Town Council

November 21, 2011

Negotiations with District III on Lease of Kitchen

You have in your agenda packet a five set series of letters between the Town and District III signed by District III Executive Director Mike Guy and me concerning negotiations over the lease of the kitchen. The letters are dated September 22, September 29, October 31, November 3 and November 15. Council gave me authority to negotiate this lease in September. The other two leases on the Senior Citizens Center, for utility reimbursement involving the Site Control Agreement, at $120.00 per month, and the reimbursement for operating a Nutrition Site, at $11.25 per hour at 32 or 36 hours a month, were finalized much earlier. All three agreements are effective beginning October 1, 2011.

Senior Citizens Director Mindy Dyer and I have been concerned over the years on how much the town is spending on the kitchen in comparison to the reimbursement we receive. Before around 2003 the town was receiving nothing for the rental of the kitchen other than a nominal reimbursement for utilities under the above mentioned Site Control Agreement. At that time we reached an agreement for the Town and District III to half of capital costs over $1,000 and for District III to pay for part of the repairs of equipment in the kitchen.

Although the kitchen and building were given to the town at no cost through a grant around 1979, significant depreciation had occurred due to the use of the kitchen by District III and the Town was bearing all that cost prior to 2003. District III was and is preparing meals at the Center and distributing them throughout the six county and two city area of the Mt. Rogers Planning District.

As explained in my first letter to Mr. Guy on September 22, the town incurred $14,461.32 in material cost for the repairs to the kitchen in May, June and July and I asked District III to assist us in that cost. They basically declined in their September 29 letter (with the exception of individual items over $1,000) saying that that cost sharing was not within the normal landlord /

Tenant relationship. That being the case, in my subsequent letters I proposed raising the per foot rental fee for the kitchen .61 to a much higher figure in order to help recoup the kitchen expense.

Hopefully, in my last letter of November 15, and after a meeting with Mike Guy and Town Staff on November 9, we have reached an agreement. We proposed the square footage fee go to

$1.10 from .61 (to help the Town recoup the $14,461 cost on the kitchen), keep the one half arrangement on capital costs in the kitchen over $1,000, retain the IT fee at $30 per month and give 20% credit to District III for going from five days to four days cooking at the Center. We also agreed to reimburse District III for the rent that paid over a two and a half month period when they could not use the kitchen. The District III Board is slated to meet on this proposal on November 17.

Although we don’t think that we are still be reimbursed enough for the use of the kitchen, we think that having our monthly fee increase for the use of the kitchen from $705 per month to $1,056 per month (a $351 increase) is at least a step in the right direction. Special thanks are extended to Mindy Dyer for her help in tracking this very complicated endeavor.

Status of Bio Gas Digester Project

You have in your agenda packet a November 9, 2011 letter from me to Mr. Walter Gills of the Department of Environmental Quality (DEQ). In that letter I requested an additional $760,285 in funding through DEQ at 0% interest over a 20 year term.

As has been reported previously, Thompson and Litton (T&L) predicts (conservatively, they say) that the project will save approximately $27,688.75 per year, not including projected maintenance costs at $3,500 to $6,000 per year. However, this is predicated on receiving the additional $760,285 from DEQ at 0% interest over the 20 year term. We already have a commitment from DEQ for $500,000 ($250,000 grant and $250,000 loan at 0%). DEQ seems amiable to provide this additional money at 0% in my conversations with them. I indicated to them in those conversations, and in my letter, that it would be very difficult to continue with the project if we did not get those favorable terms. As of this writing I have not received an affirmative response from DEQ.

Working with our bond Counsel, Carter, Spilman and Thomas, represented by Mr. Carter Brothers, and DEQ, we have set a public hearing for the project on December 5, 2011. At the public hearing on December 5 the council will be asked to approve a number of documents including a resolution to approve borrowing the additional money. Closing on the loan is scheduled for December 15. I will issue the Notice of Award to Frizzell Construction following the funding package being worked out and Council approval.

Transition of Holston Hills Country Club (HHCC) to the Town

We are moving forward on the transition of the HHCC to the town. The lease agreement has been prepared and approved by the Town Attorney Mark Fenyk. The loan agreement has been delivered by the Foundation and approved by the Mark Fenyk. We anticipate signing both agreements on Monday, November 21.

I have sent a letter to the surveyor, Mike Heldreth to prepare to begin the survey. I indicated to him in my November 15 letter that I would give him the Notice to Proceed as soon as the above lease was signed. He bid $9,350 for the job and said he would complete it in 45 days. Assuming I ask him to begin on November 21 that 45 day window would be on or about January 5, 2012. At that time we should be able to close on the sale with the survey on hand.

We have advertised on the PGA Website for a General Manager of the Course. We will also be advertising in the Roanoke Times and Bristol Herald Courier. The deadline for submitting resumes is December 16, 2011. We have about eight resumes that have already been received at this writing. The submittal for proposals for a consultant has passed with the due date being November 14. The consultant was envisioned to assist with screening applicants and hiring a General Manager. The person was also envisioned to possibly assist with a long term capital improvement plan for the club as well as a strategic marketing plan. We had one applicant for that position.

We are meeting with the employees of the Country Club on November 22. At that meeting we will discuss the transition of the employees and the club. As I understand it and we have discussed, all employees will retain their current full time or part time status at the same rate of pay as before. They will need to fill out a Town of Marion Application for our records. The employees there who have health insurance will retain it at the same rate they are paying now. Again as I understand it, the current employees at HHCC will remain classified as Seasonal Employees under our Personnel Policy until which time the General Manager will make an assessment on the current employees and begin the process to transitioning them to full time town employees.

We will be getting employees pay information in anticipation of starting them on payroll. All proceeds needed to meet payroll will be taken out of the $75,000 advance loaned by

the Foundation.

Situation on Virginia Department of Transportation (VDOT) Signalization Project and Baughman Avenue Bridge

The first of the three substantial upgrades of the signal at the Wendy’s Intersection is slated to begin in the very near future. One of the two landowners involved at the Hardees’s intersection wants an exorbitant amount, in my opinion, for two small parcels and is refusing to budge. The third intersection at Walgreen’s involves only one small piece of 8 foot by 13 foot section of property. My letter in June asking for the easement initially went to a property management group in Raleigh, North Carolina. After repeated calls there they referred me to Walgreen’s Real Estate Office in Chicago, Illinois around August. They told me it was approved and on an attorney’s desk. I have called at least 12 times to and sent letters and emails trying to get them to sign the easement with no success. They have even stopped returning my calls.

I would like to set up a meeting of the Street Committee, along with Mr. Matthew Cox of VDOT, in the near future to discuss this situation. I think we need to move forward on the two remaining projects since we have been trying to get an easement since June. If we don’t get have any movement soon I think we should consider beginning condemnation proceedings.

Concerning the property on Baughman Avenue, the town and property owners have agreed to a price for the needed property. The deed preparation has been in the attorneys hands for at least three months with no resolution. I have been trying to get that document completed for some time now.

Briefly

Draper Aden Water and Wastewater Study - You have in your agenda packet the 2011 installment of the Draper Aden Water and Wastewater Study. This is the most definitive guide for rate evaluations done in Virginia. As you can see by the study, the Town of Marion compares very well with the rest of the state, and is lower than most similar size systems, particularly when you use the 5,000 gallon comparison……………..Proposed Use of Additional Money for Phase 1 Sewer Treatment Plant (STP) Improvements – We anticipate having approximately $75,000 left over from the Phase 1 STP Project. The total project allocation from Rural Development is $606,600 over 40 years at 2.35%. I have asked the STP Staff and Engineering Department to come up with a recommendation on how to use this money. I want to call a Sanitation Committee Meeting in the near future to hear the Staff’s recommendation. If approved by Council, a Change Order would have to be processed on the existing contract with F.L. Showwalter……………….Flu Shots – Flu shots were administered to Town Employees / Volunteers on October 26 by Rite Aid Personnel at the Purchasing Department. 26 shots were given, which was under the 43 shots that were done last year by Greever’s Clinic at around $28 per shot. This year the shots given by Rite Aid did not cost the town anything if the employee had the town’s health insurance, or if it was provided by another insurance carrier. Only two of the 26 did not have coverage and the town picked up that cost at around $27 each.

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Though it’s hard for me to conceive that Thanksgiving is here, best Thanksgiving wishes to you and yours,

John E. B. Clark, Jr.

Town Manager