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HomeMy WebLinkAbout1991-07-01 Min - Board REGULAR MEETING July 1, 1991 The regular meeting of the Board of Directors of the Truckee Donner Public Utility District was called to order by President Aguera at 7 :07 PM in the TDPUD Board Room. ROLL CALL: Directors Richard Curran, Patricia Sutton and Joseph Aguera were present; Director James Maass was on vacation; Director John Corbett was unable to attend. EMPLOYEES PRESENT: Mary Chapman, Peter Holzmeister and Susan Craig. CONSULTANTS PRESENT: Counsel John Phelps. OTHERS PRESENT: Bill Quisnell and Catherine Gibbs of the Sierra Sun. ACCEPTANCE OF AUDIT A meeting of the Finance Committee was held to review and discuss in detail the draft audit with representatives of Arthur Andersen & Company. Manager Holzmeister noted that Arthur Andersen audited the District's balance sheets as of December 31, 1990 and the related statements of earnings, retained earnings, and cash flows for the year then ended. The audit was conducted in accordance with generally accepted auditing standards and is unqualified. It is a combined audit covering the water and electric utilities, but the two divisions are broken out in comparative statements of earnings. A copy is attached for reference. Mr. Holzmeister highlighted the assets and retained earnings and liabilities on the balance sheets, the statements of earnings and retained earnings, statements of cash flows and reviewed the notes to financial statements. He then went over the divisional combining balance sheets, divisional combining statement of earnings and retained earnings and comparative statements of earnings for both electric and water operations, and details of other operating revenues. He noted that at the end of 1990 the electric department was very strong, but the water department had some financial deficiencies which the Board has now addressed. Entries under "Eliminations" for operating revenues, operating expenses and other income were discussed. These are transactions between the water and electric utilities. Director Sutton said she thought it would be helpful to have more detail on these items. With respect to rental income and whether or not it goes towards retirement of the building debt, Mr. Holzmeister noted that a history of the financing of the building is being prepared; suggestions regarding proceeds from the sale of the 1.9 acre parcel and rental income will be provided to the Board. 7/1/91 Pg 1 Director Curran moved, and Director Sutton seconded, that the Board accept the audit. Director Sutton noted that the Board paid the auditors before receiving the final audit; she said she doesn't think they should be paid until the audit has been presented to the Board. She also stated that the management letter hasn't been provided yet. She asked that the Board receive a copy by mail as soon as it is available. ROLL CALL vote on the motion to accept the audit: Curran, Sutton and Aguera, aye; Maass and Corbett, absent. PUBLIC INPUT Ms. Gibbs of the Sierra Sun noted that, at an earlier meeting, Director Maass asked that discussion of natural gas in Truckee be placed on the agenda. The Chairman said this would be a topic brought up at some future time. REVIEW OF PERFORMANCE AND COSTS OF MAJOR CONSULTANTS Mr. Holzmeister said that at the February workshop with Bob Rauch the Board expressed interest in reviewing the cost and performance of the PUD' s major consultants. . R. W. Beck and Associates - they have worked primarily on negotiations for transmission access on the PG&E and Sierra Pacific systems. The total costs in 1990 were $4, 127 .70; costs to date in 1991 are $358.86. McDonough, Holland and Allen - the firm assisted in negotiations for an allocation of water in the Truckee River Settlement Act and were very successful. They will remain involved in negotiating the Operating Agreement. Total costs in 1990 were $10,726. 96 , Costs to date in 1991 are $517 .51. Porter, Simon, Graham, Phelps and Cuttitta - Counsel Phelps provides a broad range of representation in legal matters. On occasion, he employs other consultants whose billing impacts his bills; Mr. Phelps estimated this amount as $35, 000 in 1990. Also, a portion of his costs are passed directly through to developers (about $10, 000 of the $35, 000) . Total costs in 1990 were $80,721.77 ; costs to date in 1991 are $45,902 .36. Glenn Reiter and Associates - this firm provided assistance in the areas of warehousing, work order budgeting, and finance department structuring. Gregg Lowry continues to have minor involvement in the work order budget process, but the majority of their work has been completed. Total costs in 1990 were $10,496.48 ; costs to date in 1991 are $4, 875.22 . SEA - they are working exclusively on Tahoe Donner pipeline issues. Total costs in 1990 were $60,230, 66; costs to date in 1991 are $196, 340. 19 . 7/1/91 Pg 2 Sauers Engineering - Mr. Sauers provides a broad range of water • system engineering for the District. He prepared the master plan, has been involved in Proposition 55 engineering, and works on special projects proposed by developers. Many of his costs are passed through to developers for reimbursement. Director Sutton said she is surprised at how much the District spent last year in consultant fees. She wondered why Keith Sauers was paid so much when the District had an on-staff civil engineer. Mr. Holzmeister noted that the District tackled some significant water projects during 1990. He said he thinks the District's water engineering requires too much expertise to all be done in-house. Director Sutton asked what role the District engineer should play - engineer or departmental manager. Maybe his time wasn't being put to the best use. Mr. Holzmeister noted that staff has been evaluating this issue and feels that the District gets excellent service from its consultants. Perhaps the PUD needs a person who is highly experienced in the construction and scheduling end of things; a technical person. Director Sutton stated that the legal fees for 1990 were also very high. CONSIDERATION OF PRE-AUTHORIZING CERTAIN SEMINARS AND CONFERENCES FOR BOARD MEMBERS • During the February workshop with Bob Rauch, Mr. Holzmeister said, there was discussion about Board member attendance at conferences and seminars. The Board established as an item for further discussion and action the question of pre-authorizing certain seminars and conferences for attendance with all others needing specific Board approval a case by case basis. Mr. Holzmeister suggested the following policy: 1. In order to perform its function, the Board of Directors needs to remain informed on the issues, laws and procedures relating to policy management of a public utility district. 2 . In order to become and remain informed the General Manager shall budget, and Directors shall be encouraged to attend, appropriate seminars and conferences. 3 . Except with respect to those seminars and conferences listed in paragraph 4 , no Director shall attend any conference or seminar at District expense unless specifically authorized by motion of the Board of Directors. 4 . Attendance at the following listed conferences and seminars are pre-authorized, and any Director may attend ® these conferences and seminars at District expense without further authorization: 7/1/91 Pg 3 a) Annual conference of the California Municipal Utility Association. b) Annual meeting of the Northern California Power Agency. c) Any of the three seminars offered annually by the California Special District Association constituting the certificate in Board management. Manager Holzmeister said that $6,000 was budgeted for attendance by Directors at conferences and seminars for 1991. Director Sutton suggested that paragraph 4 (c) be revised to say any Director may attend one (rather than all) of the designated conferences/seminars. Director Curran did not think any of the Directors would take advantage of the policy, and suggested that the Manager budget a larger amount for 1992 . There being no further discussion, Director Sutton moved that the Board approve the policy as presented by the Manager; seconded by Director Curran. All Directors, aye, by voice vote. SO MOVED. Mr. Holzmeister said that Director Corbett indicated his interest in attending the Northwest Public Power Association conference . scheduled in Calgary during July. It was decided that, although the NWPPA has many good training seminars for staff, the issues facing the utilities in the northwest are very different from those encountered by the District and it would not be beneficial for Board members to attend. TAHOE DONNER PIPELINE REPLACEMENT PROJECT - STATUS REPORT - CONSIDERATION OF MISCELLANEOUS INVOICES - CONSIDERATION OF PAVEMENT DAMAGE SETTLEMENT Director Sutton asked that Item 7 (c) , consideration of pavement damage settlement, be tabled until after closed session. The Chairman agreed. Mr. Holzmeister said a question was raised about corrosion and cathodic protection. He spoke with Bob Churn (the on-site supervisor of inspectors for the project) and was informed that the contractors are using a standard push-on joint with a rubber gasket on the Tahoe Donner pipeline job. There is a single bag polyethylene coating, but no continuous strap and no form of cathodic protection. Mr. Holzmeister explained that there are three options open to the District according to Tim Grover of SEA. One is to install the ductile iron pipe and do nothing else. The second option is to install ductile iron pipe with a cathodic protection system. The • third is to install the ductile iron pipe with a polyethylene bag to separate the pipe from the soils. 7/1/91 Pg 4 Mr. Grover advised that, based on the District's previous corrosion study, the updated corrosion study, and on input from the Ductile Iron Pipe Research Institute, a decision was made to not use a cathodic protection system. It was deemed expensive and unnecessary to install cathodic protection. If cathodic protection had been selected for installation, continuous strap would have been needed and the pipe would have needed a bonded coating. The bag was chosen because studies show that, except in a few isolated areas, the soils in Tahoe Donner are not corrosive. With respect to the isolated areas in Tahoe Donner that have soils more corrosive than normal, the Ductile Iron Pipe Research Institute recommended using the bag as the preferred treatment. The PUD adopted polyethylene service line material to eliminate the problem caused by dissimilar metals. Director Sutton said she didn't recall that the Board was involved in any decision about cathodic protection and went on to say that if there's something wrong with the package presented by SEA that SEA is responsible. Director Curran, because of his position with Truckee Sanitary District, has been on the construction sites. He noted that the construction crews are doing a good job with the fill and how they're putting it in. He further noted that he still strongly objects to the fact that the design engineer is providing the • inspectors. He thinks the District should furnish its own inspectors; training would only take two or three days. The Chairman agreed but said SEA will be liable if the job isn't done right. With respect to the contractors' request to go to a six-day week, Manager Holzmeister wrote to Tim Grover of SEA asking him to address several concerns. The Directors agreed that there should be no additional cost to the District or other public agencies agencies that may be involved with the project. The District has received invoices relating to the project from SEA Engineering, Standard and Poor' s, Moody's, Rauscher Pierce and Deloitte/Touche in a total amount of $80, 603 . 63 . Administrative Manager Chapman reviewed with the Board the status and distribution of the bond proceeds, the status of the acquisition fund, and the bills presented for Board approval. Mrs. Chapman noted that the bond proceeds totaled $9, 978 , 752 .26 ; $7, 637, 071. 37 was transferred to the acquisition fund, $828,942 . 50 was transferred to the reserve fund, $1,408,933 . 39 was transferred to the capitalized interest fund and the District' s general fund was reimbursed the amount of. Total proceeds on deposit equal $9,921, 052 . 26, and the balance of the acquisition fund, less invoices paid at closing, is $7, 579, 371. 37. With respect to the bills relating to the project presented for Board consideration, Mrs. Chapman said that the $31, 623 . 50 SEA bill for test and design work was previously included on the statement 7/1/91 Pg 5 of general fund in error and needs to be paid out of the • acquisition fund. Director Aguera moved, and Director Curran seconded that the Board approve the bills presented for payment in the amount of $80, 603 .63 and authorize the appropriate transfer of proceeds from the acquisition fund. All Directors, aye, by voice vote. SO MOVED. WESTSTAR REQUEST TO AMEND LEASE AGREEMENT; CONSIDERATION AND POSSIBLE ACTION By letter, Joel Alford requesting that WestStar be permitted to change their equipment at the District's Northside well site. They currently have a container building and three satellite television receive dishes located on the site. In order to continue the same programming, they need to install a fourth dish at the site. Water Foreman Rully reviewed the drawing and could see no problem with the installation; he said it would not interfere in any way with District operations. Counsel Phelps said it would be very simple to amend the lease agreement to include another dish; it would probably be just a one page amendment. Director Sutton said she wants the item on a future agenda to specifically consider the terms of the lease - to see if the amount the District is charging is a reasonable amount or needs to be adjusted, and also to consider if there are any other items that should be changed. Director Curran stated that the ridiculously low amount the District is charging WestStar is definitely not reflected in the rates they charge people for service. He said he thinks there is a new law that gives cities the authority to adjust the rates; he wondered if this also applies to counties. Mr. Holzmeister said it is a FCC ruling; under some conditions, where there is no competition, some regulation of rates can occur on the basic tier of service (but not on the pay for view items) . The Chairman tabled the matter to the next regular meeting agenda. DIRECTION REGARDING MINUTES OF MAY 20 AND JUNE 3, 1991 At the last meeting, Director Maass indicated he was working on amendments to the May 20, 1991 minutes. Chairman Aguera tabled consideration until Mr. Maass has had a chance to submit those corrections. Director Sutton said she would like to submit corrections to Page 4 of the June 3 , 1991 minutes, and the matter was tabled to the next meeting. CORRESPONDENCE • There was no correspondence discussed by the Board. BILLS FOR APPROVAL 7/1/91 Pg 6 Director Curran moved, and Director Sutton seconded, that the bills presented for consideration be approved for payment. Director Sutton noted that the Board used to receive copies of consultant bills, but no longer gets them. Mr. Holzmeister explained the Sauers Engineering charge in the amount of $830 for "miscellaneous after Andy. " (This charge is for concluding several matters started by Andy Hyde before his departure. ) Voice vote on the motion to approve the bills: all Directors, aye. SO MOVED. STAFF REPORT A copy of the staff report has been attached to these minutes for reference. Water quality report The Board was provided with the monthly bacteriological report for May 1991. It shows that all of the 29 samples taken within the District' s distribution system were free of coliform bacteria and met the state' s drinking water standards. There was presence of coliform bacteria at the Northside well on one occasion during the month, but samples taken before and after showed no more coliform bacteria present. • Director Sutton mentioned she recently experienced a high concentration of chlorine in her water. The Manager asked her to call the next time this happens so District personnel may conduct a test. Financial report The statement of general fund, water and electric balance sheets, and water and electric income statements for the months of March and April were included in the Board packet. Annual water quality report Each year the state requires the District to mail to customers an annual water quality report. Since the water system is viewed as three distinct entities, three different annual reports were issued - Hirschdale, the Prosser system and the Truckee system. The Directors were provided with copies of each report. Mr. Holzmeister mentioned that the high iron and manganese content in the Hirschdale water still exists. At the last meeting with the Hirschdale residents, about a year and a half ago, the District agreed to try several possible solutions. He said another meeting should be scheduled with the residents to discuss the situation. Mr. Holzmeister did not know whether Mr. Hyde provided a final status report of the situation, but indicated he would investigate the matter and report back to the Board. 7/1/91 Pg 7 Surprise inspections • During the past few weeks the District was inspected by Cal OSHA and Lahontan Regional Water Quality Control Board. In both cases the inspector indicated that an anonymous request initiated the visit. Mr. Holzmeister said he expects a letter from Cal OSHA requiring the PUD to take corrective action on several items. The Lahontan inspector was concerned over the transformers stored at the Martis Valley Substation. He said the oils in the transformers may leak some day and find their way to the Truckee River. Mr. Holzmeister said he is anticipating receiving something in writing. CLOSED SESSION At 9: 10 PM the Board adjourned to closed session to discuss possible litigation and personnel matters in accordance with Government Code Sections 54956. 9 (b) (1) and 54957 . RETURN TO PUBLIC SESSION The Board returned to public session at 10: 02 PM. No action was taken or direction given as a result of closed session. ADJOURNMENT iThere being no further business before the Board, the meeting was adjourned by unanimous consent at 10: 03 PM. T CKEE DON R UBLIC UTILITY DISTRICT ,r ep " R. Aguer reside t i Prepared by �- Susan M. Craig, Deputy District Clem smc 7/1/91 Pg 8