AGENDA #3c

 

BUDGET WORKING PAPER

 

TO:                  W. Calvin Horton, Town Manager

 

FROM:            George Small, Engineering Director

 

SUBJECT:       Reimbursement from Carrboro for Water Quality Testing Performed by Chapel Hill Staff

 

DATE:             April 2, 2003

 

At the Engineering Department’s initial budget presentation to the Council on February 28, the Council questioned why no increase was proposed in the amount that Carrboro reimburses Chapel Hill for stream water quality testing performed by Chapel Hill staff.

 

BACKGROUND

 

In 1998, at Carrboro’s request, an inter-local agreement was executed between Chapel Hill and Carrboro whereby Chapel Hill agreed to sample and test stream water from three sites located in Carrboro on the same schedule that sites located in Chapel Hill are sampled and tested.

 

Under the terms of the agreement, Carrboro reimburses Chapel Hill on a quarterly basis for the Town’s costs of sampling and testing at the Carrboro sites.  The agreement further states that the reimbursement amount may be adjusted from time to time to accurately reflect actual costs incurred. We do not consider this to be a fee per se.  Rather, it is a direct reimbursement for services provided.

 

We have been sampling and testing stream water at the Carrboro sites since 1998 under the terms of the agreement.

 

DISCUSSION

 

We initially established a reimbursement rate of $300 per sample per site, that included the time and materials costs associated with taking samples, the laboratory testing costs, and the time and materials costs associated with preparing and providing a quarterly summary of results for the Carrboro sites.

 

Each year we review our costs for the sampling, testing and reporting associated with the Carrboro sites.  We have determined in past years, and for the current year, that our costs do not exceed the $300 reimbursement rate presently in use.  These costs involve primarily staff time and laboratory charges.

 

Because we were very conservative when we originally set the reimbursement rate, we find that our costs for providing these services for Carrboro do not yet exceed $300 per sample per site.  Although we do not expect our actual costs to exceed the current reimbursement amount in FY2003-2004, we can revise the reimbursement amount at any time in response to increased staff or laboratory costs, and Carrboro can decide at any time whether or not it wishes to continue having Chapel Hill provide the services.

 

We will continue to routinely evaluate the reimbursement rate on an annual basis; and intermittently in response to unexpected changes in sampling or testing costs, should they occur.