Town Manager’s Report to Mayor and Town Council

December 20, 2010

Update on Virginia Department of Transportation (VDOT) Signalization Project

On December 10, 2010 I received a copy of an email from a Mr. R.J. Yates, VDOT Regional Operations Project Manager. The December 10 email was to Richardson and Wayland Electrical Company in Roanoke and giving them a Notice to Proceed on the nine signals that are to

be upgraded.

Town Engineer Cecil Hicks called a representative with Richardson and Wayland on December 10. This representative with the company said that they would begin ordering materials for the job. He said that the materials would take two or three weeks to come in. He said they hoped to begin work in mid-January, 2010.

Cecil and I further talked with VDOT personnel on this project on December 14. They want to have meeting of the town and contractor to discuss the project, including scheduling. This meeting will held on January 4, 2011 at the town hall at 11:30 and I am going to ask the street committee to be involved with this meeting. Some of the things to be discussed will involve the order of doing the nine lights, for example going from east to west. Also discussed will be doing the Sheffey and West Main Light last because of its configuration. As you recall, the light there is an old style head that will not accommodate a 12 inch lens. By waiting and doing the Sheffey light last we will be able to see how much money we have left from doing the other eight upgrades. If there is not enough money left over we could upgrade the lights by putting in the LED lights and keep the eight inch lens. However, if there is enough money left over we could consider substantially reconstruct the Sheffey and East Main Intersection along with the other three planned substantial upgrades.

Regarding the three substantial upgrades at Main, Chatham Hill Road and Lee Street, and at Main and Dabney, and at Park and Main, I have written all eight property owners asking for the land to be donated. Two of the certified letters came back as undeliverable. Upon further investigation the addresses furnished by VDOT was incorrect. These two addresses were for the Rite Aid property and the Walgreen property. We found the correct letters and

resent them earlier this month.

So far three of the property owners have agreed to donate property. They are the Hardees’s intersection (one person with two parcels) and at the Wendy’s intersection (one parcel for each

property owner). At a meeting with Town Attorney Mark Fenyk earlier this month I asked if

could use the final VDOT plans as a reference in the deed work. Although the final plans have not been done, this would be less time consuming than hiring a surveyor to survey all

the parcels.

Financial Situation with Sewer Treatment Plant (STP) Cogenertion Project

You have in your agenda packet a portion of the Preliminary Engineering Report on the STP Cogeneration Project. You have included the Thompson and Litton (T&L) December 2010 cover letter of the PER and pages 18 to 23 encompassing the financial aspects of the project. Anyone who wants a full copy of the report should contact me and I will be happy to supply it.

If you look on page 21 of the report, you can see the total projected cost is $909,535 for the project. The Virginia Department of Environmental Quality (DEQ) funded package just listed below is listed at $500,000, which we have been funded. Of that amount $250,000 is grant and the balance is loan forgiveness at 0% at a term of 20 years. The $500,000 figure is what we applied for and are pending to receive.

However, it appears another $409,435 will be needed according to Thompson and Litton’s December 2010 PER. That is the bad news. The good news is that Thompson and Litton estimates that the project will save $43,680 per year in fuel cost and electricity ($23,280 in electricity and $20,400 in oil). As you may recall, the project will use methane naturally produced from the digester, recycle it to heat the digester thus saving the town purchasing oil and electricity to do the same job). Thompson and Litton estimates that if DEQ allows for another $409,535 to be borrowed over the $250,000 at 0% and at 20 years it will cost about $32,977 per year for twenty years. If these figures are correct it would actually save the town about $10,703 by borrowing this extra money and doing the job.

After I saw the new cost figures I contacted T&L and the Virginia Resources Authority (VRA) who is servicing the loan and asked where the extra money is coming from. They suggested we write DEQ and request the additional money. Before I did that I wanted to present this entire matter, and the need for additional money, to the Town Council before I moved forward. I have asked Mr. Brian Tew, Project Manager, and/ or representatives of T&L to appear before Council and fully explain this new scenario with its positives and negatives.

Notice of Availability for Loan Funds From Virginia Department of Health (VDH) for Repairs to High Level Tank

You have in your agenda packet a November 22 letter from Mr. Steve Pellei of the Virginia Department of Health. In that letter it offers the Town $49,900 in a low interest loan to complete the rehabilitation of the High Level Water Tank.

This is the same program that we have been getting grants in the past. We have gotten about $50,000 in past seven years for several projects including the Lee Street water line, the Gilman Street water line, the Town Street water Line, the water leak analysis, and the Riverview Pump Station project. However, Mr. Pellei indicated that the grant money had been state money and it is all gone. The only remaining money is federal money and it is all loan money.

While the administrative requirements are fairly cumbersome, they are not nearly as cumbersome as others especially Rural Development. Upon speaking with Vice Mayor Jim Gates, he felt that a 1% loan below AA rate would be a very attractive rate, at a 20 year term, would be far cheaper than any loan offered by a commercial bank. Also by having this money, it would serve as an impetuous to begin this badly needed project. With that being the case I will recommend that we go ahead with this project.

Merry Christmas to You and Yours,

John E. B. Clark, Jr.

Town Manager

Orange Bowl – Virginia Tech 42 Stanford 31