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HomeMy WebLinkAbout1990-08-20 Min - Board REGULAR MEETING August 20, 1990 The regular meeting of the Board of Directors of the Truckee Donner Public Utility District was called to order by President Maass at 7 : 10 P.M. in the TDPUD Board Room. ROLL CALL: Directors Joe Aguera, John Corbett, Richard Curran, Pat Sutton and Jim Maass were present. EMPLOYEES PRESENT: Tom Buckhouse, Mary Chapman, Peter Holzmeister and Susan Craig. CONSULTANTS PRESENT: Counsel John Phelps and Consulting Engineer Keith Sauers. OTHERS PRESENT: Among those present in the audience were Scott Andre and Douglas Prouty. CONSENT AGENDA Invitation to attend NCPA annual meeting The Chairman noted that several of the Director' s spouses may want to attend the dinner at the NCPA annual meeting. If so, it was decided that a personal check to cover the expense be enclosed with the Board member's enrollment form. Director Aguera moved, and Director Corbett seconded, that the consent agenda be approved. Such a motion will authorize the Directors and General Manager to attend the NCPA annual meeting at Caesars Tahoe. All Directors, aye, by voice vote. SO MOVED. CONSIDERATION OF PROPOSALS AND POSSIBLE SELECTION OF AUDITOR Mr. Holzmeister noted that all firms that submitted proposals are solid professional accounting firms. It was his opinion that Arthur Andersen best fits the particular needs of the District. Director Aguera moved, and Director Curran seconded, that Arthur Andersen's proposal be accepted. ROLL CALL: all Directors, aye. SO MOVED. DISCUSSION OF DISTRICT POLICY ON LIABILITY INSURANCE Manager Holzmeister stated that the District normally requires certain contractors to carry liability insurance in the amount of $5, 000, 000. This is not a formal policy, but the general practice. He suggested a policy be established that distinguishes between very small projects and large projects, and that more clearly spells out the type of insurance required. 1 NCPA, Mr. Holzmeister noted, lets contracts ranging in size from a few thousand dollars to several hundred million dollars. Their minimum requirement is $200, 000 liability insurance. Contracts are submitted to their risk manager for evaluation and a determination as to insurance requirements on a case-by-case basis. After some discussion, the Chairman directed that Office/Finance Manager Chapman contact Cathy Pooler of Frank B. Hall and ask her to appear at the next meeting to discuss this matter with the Board. PUBLIC INPUT There was no public input. CONSIDERATION OF THE 1990 BUDGET The Manager advised that the District's general fund has increased substantially over the past year. A year ago, the Electric Fund had $31, 247 .90, now the balance is $70, 590.53 ; the Water Fund was ($23 , 362.76) , now it's ($68, 049 .82) . LAIF was $3 , 560, 000, now it ' s $4 , 601, 000. Closing of the mill has reduced the District' s net revenues by about $200, 000, but other revenues (due to growth) have picked up the slack. The PUD is experiencing a steady increase in customer base and Mr. Holzmeister anticipated it will continue. Mr. Holzmeister said that the 1990 budget does not contain a rate increase. He indicated that when NCPA finishes the rate study the District will be in a better position to adjust the water rates. The PUD, Mr. Holzmeister stated, is a financially healthy organization with time to adjust the rates reasonably and to study the Tahoe Donner leak problems and come up with logical solutions. He went on to say that the District has done some preliminary planning such as the mission statement, organization chart, work order planning and management, the SEA Tahoe Donner leak analysis, water master plan, and budget. Manager Holzmeister explained how the budget is organized and what's included in the budget. Director Maass stated that the PUD budget process is different than the State of California process ; the District uses the budget as a general guideline. Director Sutton said the District' s system does not provide for accountability; there are no transfers when additional monies are needed in a certain area. Director Maass responded that the District could adopt a policy to require transfers of funds in order to make things come out even, but at this point the PUD does not have an authorization budget. Director Sutton noted that the budget workshop, at which department heads would make presentations concerning budget items, had not been held yet. Mr. Holzmeister reviewed the major cost items - direct labor, fringe benefits, wholesale power, pumping costs and debt service - 2 which amount to 8s% of the total budget. He noted that the increase in customer base is steady, but moderate; the District ' s revenues increase as the customer base increases. Operating expenses increase with the age of the system and in relation to maintenance activities. The water utility, he said, needs a financial plan that recognizes this condition. Regarding rates, Mr. Holzmeister said, the electric revenues are sufficient; water revenues are not. The Chairman opened the public hearing at 8: 10 P.M. There were no comments, and Director Corbett moved that the hearing be closed; seconded by Director Aguera. All Directors, aye, by voice vote. Responding to Director Sutton's questions, Mr. Holzmeister noted that the budget contains four new vehicles and rehabilitation of the backhoe. Also, the Board authorized some vehicle purchases during 1991. The cost of the new employee in the Water Department was included in the budget; Mr. Holzmeister was not sure whether the part-time meter reader who was changed to a full-time employee had been included; the extra Water Foreman position (an upgrade for an existing employee) was not included. Mr. Holzmeister said that the budget does not reflect the recent reorganization. Director Sutton asked why, and he noted that when the organization chart was finally adopted, he made the decision to present the budget based on how the draft had been put together; he didn't ask staff to recast the budget taking into account the organization chart. Director Sutton questioned why the budget wasn't presented last October. Director Maass noted an editorial appeared in the Sierra Sun regarding the District's budget as well as a news article on the front page. However, no letters or calls expressing concern were received by the District. Director Corbett moved that the Board adopt the budget for 1990 ; seconded by Director Aguera. Director Sutton stated that she will vote "no" because it ' s the only manner she knows to convey her concern about the budget being delayed for seven or eight months. ROLL CALL: Directors Aguera, Corbett, Curran and Maass, aye; Director Sutton, no. SO MOVED. DIRECTION REGARDING BOARD MANAGEMENT WORKSHOP Manager Holzmeister noted he is interested in having the Board schedule a workshop. Director Corbett moved that the Manager be given authority to contact Donner Lake Village for available dates; seconded by Director Aguera. Director Curran amended the motion to include authorization to contact a facilitator for the workshop. ROLL 3 CALL: Aguera, aye; Corbett, aye; Curran, aye; Sutton, no; Maass, aye. SO MOVED. Director Sutton said that in her opinion all the things that would take place at the workshop should take place at the PUD podium at Board meetings, not at a meeting that will be less accessible to the public. Mr. Holzmeister said it would be an open meeting to which the public would be invited. CONSIDERATION OF GENERAL MANAGER'S CONTRACT Mr. Holzmeister noted that his original contract, which was amended at one time, has expired. After some discussion, Director Corbett moved that the District extend the contract and subsequent amendments through December 31, 1990, and that the matter come back to the Board for review at that time. Mr. Holzmeister' s compensation and benefits are to remain the same. The motion was seconded by Director Aguera. Director Sutton noted that deferred comp is a part of an employee ' s compensation. The Manager' s salary is set by ordinance. The Board increased the District' s contribution to Mr. Holzmeister' s deferred compensation several years ago without revising the ordinance having to do with the salary package. She wondered whether the Board could approve the foregoing motion without also making provisions for the ordinance revision. Counsel Phelps said he would research and let the Board know as he wasn't sure if all forms of compensation needed to be approved by ordinance. Director Maass said members of the community could challenge the District if they believe there is a problem. ROLL CALL: Aguera, Corbett and Maass, aye; Curran and Sutton, no. So MOVED. CONSIDERATION OF NEPOTISM POLICY; POSSIBLE DIRECTION Director Corbett moved, and Director Aguera seconded, that this matter be tabled. ROLL CALL: Aguera, Corbett and Maass, aye; Curran, no; Sutton, abstain. SO MOVED. ALDER CREEK PIPELINE - STATUS REPORT - BID AWARD Three bids were opened on August 8, 1990 for the Alder Creek pipeline replacement project. Keith Sauers reviewed the bids and qualifications of the low bidder and recommended award of the contract to Estabrook Construction. Mr. Sauers noted that Nevada County has issued an encroachment permit for the project which contains the standard general provisions plus a list of special provisions. The County is requiring that repairs be done to sections of the roadway that have been affected by the leaks in the District' s pipeline. The damage consists of settlement of the pavement in the areas of the leak 4 sites. The County wants an overlay of the settled zones to fill in the depressions and to bring the paved surface up to match the elevation of the surrounding unsettled pavement. Mr. Hyde has examined the areas the County delineated as the District ' s responsibility to repair and believes it to be a reasonable request as does Tim Grover of SEA. Since the permit was received the day before the bid opening, the repair work was not included in the bids. The area of roadway to be overlaid totals approximately 4 , 000 square feet. It could be included in the project by change order, or the District could contract directly with a paving firm. Director Corbett moved, and Director Curran seconded, that the Board award the Alder Creek pipeline bid to Estabrook Construction. ROLL CALL: all Directors, aye. SO MOVED. DOCUMENT IDENTIFICATION Director Sutton asked that all documents prepared by District staff be dated and that the employees' initials be included to show who prepared the document. DISCUSSION OF DRAFT POLICY REGARDING ANNEXATION PROCEEDINGS Manager Holzmeister noted there is a related item to be discussed during closed session. The matter was tabled. CONSIDERATION OF AMENDING ELECTRIC FACILITIES FEES Electrical Engineer Tom Buckhouse advised that, in reviewing the origin of the District' s electric facilities fee to assure compliance with AS 1600 and District ordinance, an inconsistency has been found in the fees charged to commercial/industrial customers and residential customers. Commercial/industrial customers are charged $80 per KW of demand. Residential customers are charged a flat $200 per meter. These fees were calculated at the time the Martis Substation was constructed and were apparently based upon the cost of constructing that facility, $1, 136, 000. The figure does not include the cost to connect the substation into the existing electrical circuitry. Mr. Buckhouse estimated that $60, 000 was spent to tie the new substation circuits into the existing lines for a total cost of $1, 196, 000. The method of calculating the commercial and industrial demand was modified in 1985 based upon a survey of commercial/industrial customers that showed that the average demand of this class of customer was 40% of the switchboard capacity. A load survey was conducted of residential customers during the 1987-88 Christmas and New Year weeks to determine the typical electrical demand for this customer class. The result was a demand of 5 KW per customer. This means the residential customer has been charged a facilities fee rate, on a per KW basis, of $200 divided by 5 KW, or $40 per KW. 5 Mr. Buckhouse explained that the Martis Substation nameplate rating is not applicable for the climate conditions of Truckee. The temperature of the transformer winding is the factor that determines the amount of load that transformer can carry and not reduce the expected useful life. Given the District' s winter peak load conditions and the presence of cooling fans on the transformer radiators, a more realistic rating for the substation is 22 , 500 KVA. Also, not all electric users experience their individual peak demand at the same time of day. He explained in detail transformer load ratings and how they were used to develop the proposed revisions to the electrical facilities fees. The fees must be the same for all classes of customers in order to comply with AB 1600 . Mr. Buckhouse recommended a flat fee of $200 for residential customers, and $40 per KW of demand for commercial/industrial customers. He also suggested that a more detailed five-year electric master plan be developed as soon as possible. Director Corbett moved, and Director Aguera seconded, that an ordinance amending electrical facility fees be drawn up for review at a public hearing on September 4 , 7: 30 P.M. All Directors, aye, by voice vote. SO MOVED. The possibility of making refunds to customers was discussed, and the Chairman asked Counsel Phelps to research the matter for the next meeting. ACCEPTANCE OF ANNUAL TRUST FUND REPORT OF THE TDPUD DEFINED BENEFIT PENSION PLAN AND TRUST Mr. Holzmeister briefly reviewed the Trust Fund Report for the District's Defined Benefit Pension Plan and Trust and explained that the discrepancy between the actuary's and Ron Richardson' s figures was because one was based on January 1989 figures, the other on January 1990 figures. Director Corbett moved, and Director Aguera seconded, that the Board accept the report. All Directors, aye, by voice vote. So MOVED. DIRECTION REGARDING DRAFT MINUTES OF AUGUST 6, 1990 Directors Corbett and Maass as well as Counsel Phelps suggested several corrections. Thereafter, Director Corbett moved that the minutes of August 6, 1990 be accepted as corrected; seconded by Director Curran. All Directors, aye, by voice vote. SO MOVED. CORRESPONDENCE The following correspondence was received by the Board: August 13, 1990 letter from the County Department of Sanitation thanking the District for its part in household hazardous waste collection day. 6 A copy of the July 31, 1990 letter from NWPPA to Senator Packwood asking him to urge his colleagues on the budget summit to reject the revenue proposals. July 18, 1990 letter from the U. S. Senate Committee on Energy and Natural Resources regarding reclamation law and possible amendments. August 17, 1990 letter from Bruce Bolinger, Nevada County Clerk/Recorder asking the District to include a reminder to register to vote with the bills. They will be provided by the County. August 15, 1990 letter from the Tahoe-Truckee Bar Association requesting that the District consider allowing Nevada County to use the Board room to hold Superior Court sessions one Friday each month at no cost. The Board directed that this matter be placed on the next agenda for discussion. Director Sutton noted her concern that the above mentioned correspondence had not been properly received by the District since there were no date stamps. BILLS FOR APPROVAL Director Aguera moved, and Director Corbett seconded, that the bills presented for consideration be approved for payment. All Directors, aye, by voice vote. SO MOVED. STAFF REPORTS A copy of the staff reports have been attached. They address the following subjects: Tahoe Donner leak project, monthly bacteriological report and CMUA legislative report. CLOSED SESSION The meeting was adjourned to closed session at 9: 57 P.M. for the purpose of discussing personnel matters and potential litigation in accordance with Government Code Sections 54957 and 54956.9 (c) and (b) (1) . RETURN TO PUBLIC SESSION The Board returned to public session at 11: 53 P.M. No action was taken as a result of closed session. ADJOURNMENT There being no further business before the Board, Director Aguera moved, and Director Corbett seconded, that the meeting be 7 adjourned. All Directors, aye, by voice vote. SO MOVED. • TRUCKEE DONNER PUBLIC UTILITY DISTRICT J es A. Maass, Pr siden Prepared by Susan M. Craig, Deputy District Cl smc 8