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Home My WebLink About2001-05-23 Min - Board SPECIAL MEETING May 23, 2001 In accordance with District Code Section 2 08 010 the TDPUD minutes are action only minutes All Board meetings are recorded on audio tapes which are preserved Perpetu- ally and made available for listening to any interested party upon their request. The special meeting of the Board of Directors of the Truckee Donner Public Utility District was called to order at 7:00 PM in the TDPUD Board room by President Maass. ROLL CALL: Directors Joe Aguera, Ron Hemig, James Maass, Patricia Sutton and Nelson VanGundy were present. EMPLOYEES PRESENT: Peter Holzmeister, Mary Chapman, Ed Taylor, Neil Kaufman, Kathy Neus, Alan Harry, Stephen Hollabaugh, Scott Terrell and Susan Craig. CONSULTANTS PRESENT: Counsel Andy Morris and Engineer Keith Knibb. OTHERS PRESENT: Among those present in the audience were Juanita and Frank Schneider, Dorothy Burden, Marjorie Adkerson, Roger Terneuzen, Leonard and Laura Wait, Mark Thomas, John Byrne, Charlie White, Kevin Heckithorn and Lin Zucconi. PUBLIC INPUT There was no public input. CONSIDERATION OF THE TASKS AND PROCEDURES FOR THE DISTRICT TO OFFER WATER SERVICE TO DONNER LAKE; POSSIBLE ACTION At the direction of the Nevada County Superior Court, TDPUD took possession of the Donner Lake water system on Monday, May 21, 2001. Manager Holzmeister and Water Superintendent Taylor have met with Department of Health Services staff, administrators of the State Revolving Fund program and staff of Scalmanini and Garcia and Associates in an effort to determine the steps necessary to obtain funding and move forward with the rehabilitation of the system. The District will now apply for a revised Department of Health Services permit as well as permits from State Water Quality Control Board, Lahontan Region, Army Corps of Engineers, California Department of Fish and Game, State Lands Commission, Town of Truckee, TTSA and TSD and the Wetlands Study of Greenpoint Springs; obtain funding through and State Revolving Fund; and complete system design work. During the first year it is anticipated that the lake intake will be rehabilitated, the Southside water storage tank will be replaced and a transmission pipeline from the intake to the storage tank will be constructed. During June, the Board should consider an interim operating budget, initiation of billing and various contracts relating to Donner Lake. Charlie White and Juanita Schneider had questions about the particulars of taking over the Donner Lake water system that it was not possible to answer at this time. Kevin Heckithorn noted that the Donner Lake residents have been waiting for water for two years. 5/23/01 Pagel Mr. Taylor noted that DHS is rewriting the entire compliance order to take new developments into consideration. He believes that when the lake intake rehabilitation has been accomplished, the boil water order and moratorium on new connections will most likely be lifted. BROADBAND BUSINESS PLAN — REVIEW OF PRO FORMA — AUTHORIZATION FOR STAFF TO SEEK PROPOSALS FOR DESIGN AND FINANCING OF THE BROADBAND IN- FRASTRUCTURE At the last meeting the results of the due diligence trip to Glasgow were discussed. Mr. Harry is now waiting to hear when the Directors can make trips to Ashland and Alameda. The Board reviewed the modified broadband business unit pro forma, copy attached. Staff is requesting authorization to proceed to the next step which is to secure the services of a design engineer and arrange for financing. The request for proposal process was discussed. Director Hemig moved, and Director VanGundy seconded, that the Board authorize staff to re- quest and advertise for proposals for broadband engineering and financing. ROLL CALL: all Di- rectors, aye. SO MOVED. DISCUSSION AND POSSIBLE ACTION REGARDING APPROVAL OF SCOPE OF WORK RELATING TO THE PROPOSED ACQUISITION OF GLENSHIRE MUTUAL WATER COM- PANY The shareholders of Glenshire Mutual Water Company voted overwhelmingly in favor of receiv- ing water service from TDPUD. There are 1,551 shareholders; 976 ballots were cast and 932 voted to be served by TDPUD. Mr. Holzmeister presented a draft scope of services for a due diligence review of the Glenshire water system. He noted that if the Board wishes to consider acquiring the Glenshire system, he will need assistance in reviewing various elements of the business and guidance on the appro- priate terms of acquisition. Also, Mr. Holzmeister suggested that the annexation process for the portion of Glenshire not yet in the District be initiated and that their be contact with SR Jones to clarify the process and timeline. After some discussion, Director Van Gundy moved, and Director Aguera seconded, that the Board approve the modified scope of services to be performed by Harold Morgan and Rubin Zubia of Navigant Consulting. ROLL CALL: Sutton, no; all other Directors, aye. SO MOVED. DISCUSSION AND POSSIBLE ACTION REGARDING CONSTRUCTION OF A WATER TANK AND TRANSMISSION PIPELINE Counsel Andy Morris excused himself from the room noting a possible conflict of interest since his firm represents one of the developers involved in this matter. Staff and the Directors have discussed the need for the District to bring a number of developers together, along with the District, to construct some of the upcoming infrastructure projects, in the area northeast of downtown Truckee. Maps showing the upcoming projects were reviewed. The Woodlands project is currently under development and the Pioneer Commerce Center will likely begin within the next two months. Other projects will likely begin construction either in the fall or next spring. It is proposed that the 3.6 million gallons storage necessary to serve these projects be provided in two separate tanks 5/23/01 Page 2 located adjacent to each other. The site for this storage has been identified as the 129 acres of " land acquired from the Steele Family Partners. A conceptual piping network has also been laid out. Director Van Gundy moved, and Director Hemig seconded, that the Board approve the proposal from Sauers Engineering for professional services related to the storage tank site and the 24- inch pipeline located on District-owned property. The proposed fee is $84,500. ROLL CALL: Sutton, no; all other Directors, aye. SO MOVED. Counsel Morris returned to the meeting. NEVADA COUNTY LOCAL AGENCY FORMATION COMMISSION: REVIEW OF THE LAFCo BUDGET AND THE ASSESSMENT LEVIED TO TDPUD New legislation changes the way LAFCos are funded; now, counties, cities and special districts share in their funding. The District's portion is calculated to be $13,267. Counsel was asked to determine whether the level of funding to be provided by TDPUD accurately reflects the Dis- trict's responsibilities under the law. The conclusion was yes, although there is a provision that would permit alternative financing schemes if the county, cities and special districts could agree on the details of an alternative. Counsel noted he could not answer with certainty without reviewing a particular document published by the State Controller's office. CONSIDERATION OF REVISING THE DISTRICT'S ALTERNATE COMMISSIONER POSI- TION ON THE NCPA BOARD OF COMMISSIONERS All TDPUD Directors are listed as alternate commissioners of NCPA at the present time. Other NCPA members have an appointed commissioner who is an elected official and their alternate commissioner is the manager of their electric utility. It is difficult to go to an NCPA meeting and serve as commissioner unless you have been follow- ing the flow of issues consistently for a period of time. Director Maass is suggesting that he re- main as commissioner and that the manager be appointed to serve as alternate. After some discussion, Director Aguera moved, and Director Van Gundy seconded, that the General Manager be appointed to serve as the District's only alternate commissioner to NCPA. ROLL CALL: all Directors, aye. SO MOVED. DISCUSSION OF DISTRICT'S RETAIL ELECTRIC RATE SCHEDULE Attached to these minutes are materials presented and discussed relating to the District's retail electric rate schedule. CLOSED SESSION Conference with real property negotiator — Donner Lake water system. Negotiating par- ties are Dennis DeCuir and Peter L. Holzmeister for the District and Robert Fortino for Donner Lake water system. Under negotiation is acquisition of the Donner Lake water system Conference with legal counsel —existing litigation pursuant to Government Code Section 54956.9(a), pending litigation, two cases: TDPUD vs. USA Media and USA Media vs. TDPUD 5/23/01 Page 3 There was no closed session. ADJOURNMENT There being no further business before the Board, the meeting was adjourned at 10:05 PM. TRUCKEE DONNER PUBLIC UTILITY DISTRICT J es A. Maass, Pre ' ent Prepared b Susan M. Craig, eputy District Clerk smc 5/23/01 Page 4 Agenda Item # TRUCKEE DONNER Memorandum To: Board of Directors From: Peter Holzmeister Date: May 11, 2001 Retail electric rate schedule Attached are graphs prepared by Steve Hollabaugh that show our wholesale power costs from now to the end of 2010. Forward Mid-C Wholesale Power Prices 2001 through 2010: This graph shows the market price of wholesale power in blue, and the price of our wholesale power in green. Through 2003 our price is significantly lower than the market. After 2003 our price is at or slightly above the market TDPUD Power Supply Costs $1MWhr: This graph shows how our wholesale price has increased from 2000 through 2009. In 2000 we were paying $35.35 per MWhr (megawatt hour), which is the same as 3.535 cents per KWhr(kilowatt hour). In 2001 the wholesale price went to 4.602 cents per kilowatt hour. In 2002 it will go to 7.054 cents per kilowatt hour. Finally, in 2003 it will go to 8.25 cents per kilowatt hour. So, in 2002 we will be paying an additional 2.452 cents for wholesale power. Our retail rates will need to go up a like amount by January 2002. The next year our wholesale power costs will go another 1.196 cents per kikowatt hour, and our retail rates will again need to go up by that amount. TDPUD Power Supply Costs$: This graph simply takes the prior graph, which is stated in unit costs per megawatt hour, and converts the unit costs to gross dollars per year. You get the idea that our power supply budget goes from $6.2 million in 2001 to $15.8 million dollars in 2009. The price we would pay for failing to keep our retail rates current could be staggering. Truckee Donner Forcasted Load and Resources, April 2002 - March 2003: This graph shows our commitment to puchase power from Idaho in red, and our load in black. The red area above the black represents our surplus power, which we will sell at market prices. When the black spikes above the red we will be in the market buying power to meet our loads. Truckee Donner Forcasted Load and Resources, April 2008 - March 2009: This graph is similar to the prior graph, except it convers the year 2008. It shows that we grow into the Idaho contract, and in 2008 and 2009 we do not have much excess power to sell. We will need to secure additional wholesale power toward the end of the Idaho contract. Review of retail rates: Our current residential retail electric rate is 6.811 cents per kilowatt hour. By January 2002 it will need to be increased to 9.263 cents, and by January 2003 it will need to be increased to 10.459 cents. By comparison, the current PG&E residential rate is 13 cents per kilowatt hour and will be going up significantly. However, the SPPCo rate is currently about 7.3 cents per kilowatt hour. They will need to increase their rates significantly soon, but I do not know when. It is easy for us to remain competitive with PG&E. We will remain competitive with SPPCo in the long run, but in the short run we may not be. I invite the Board to consider how to deal with electric rate increases. 1) We can phase them in steps. 2) We can redesign our rate structure to utilize assending block prices 3) We can increase the flat rate monthly customer charge 'i BROADBAND BUSINESS UNIT E Assumptions Launch Date of Broadband Business Unit-July 1,2002 COP Interest Rate-6% In-Lieu-Of-Franchise Fees to be paid to Town of Truckee,Nevada and Placer Counties 5%of Gross Cable Television Revenues Staffing Levels BBU to Provide- Cable Television,High Speed Internet,Business to Business Ethernet Connectivity BBU to be sole ISP for first year,with platform available to local,Regional,National ISP's thereafter Staffing to include;BBU Manager.2 Customer Service Reps,2 Technicians Yr.1 Yr.2 Yr.3 Yr4 Yr5 Yr6 Yr7 1,6 Yu Y,36 j Homes passed 9,480 9.764 10,057 10,359 10,670 10,990 11.320 11,659 50.09 50.0% Cable Penetration 35.0% 30.0% 38.0% 38.0% 40.0% 40.0% 45.0% 45.0% 50.0% 50.05 Cable Subs 1,659 2,929 3,822 3,936 4,268 4.396 5,094 5,247 6,004 6,185 Increase 1,270 892 115 331 128 698 153 758 180 Basic RevJMonihy Cost 29.95 29.95 29.95 33.95 33.95 33.95 37.95 37.95 37.95 37.95 No.of Channels offered 60 60 60 65 65 65 70 70 70 70 Digital Tier Penetration 10.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% 55.0% 60.0% Digital Tier Subs 166 586 955 1.181 1,494 1,758 2,292 2.623 3,302 3,711 Digital Tier RevJMonthly Cost 10.00 10.00 10.26 10.51 10.77 11.04 11.31 11.60 11.89 12.18 ! Premium Penetration 20.0% 20.5% 21.0% 21.5% 22.1% 22.6% 23.2% 23.8% 24.4% 25.0% ` Premium Subs 332 601 803 848 942 995 1,181 1,247 1,463 1,545 Premium ReviMonthy Cost 10.00 1025 10.51 10.77 11.04 11.31 11.60 11.89 12.18 12.49 PPV Buys Per Month 1.00 1.00 1.02 1.04 1.06 1.08 1.10 1. 1. 1. 17 PPV RevJCost Per Movie 2.95 2.95 3.02 3.10 3.18 3.26 3.34 3.42 3.51 3.59 s Cable TV Equipment Rental Charge 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 Cable Installation Charge 24.95 24.95 24.95 24.95 24.95 24.95 24.95 24.95 24.95 24.95 Billing 0.40 0.42 0.44 0.46 0.49 0.51 0.54 0.56 0.59 40 0% 0.62 ISP Penetration 10.0% 20.0% 25.0% 30.0% 30.0% 35.0% 35.0% 35.0% ISP Subs;TDPUD 474 ISP Subs;Platform 0 1953 2514 3108 3201 3846 3962 4081 4804 4948 ISP Rev. 24.95 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 ISP Equipment Rental Charge 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 Total Buildings Passed-Ethernet 192 196 200 204 208 212 216 221 225 229 Building Penetration-Ethernet 50.0% 51.0% 52.0% 53.1% 54.1% 55.2% 56.3% 57.4% 58.6% 59.8% No.of Buildings Entered-Ethernet 96 100 104 108 112 117 122 127 132 137 Demand Per Building-Ethernet 60.090 63.0% 66.2% 69.5% 72.9% 76.6% 80.4% 84.4% 88.6% 93.1% 90 98 107 117 12 Ethernet Subs 29 63 69 75 82 . 00 Ethernet RevJMonth Cost 550.00 550.00 6W.00 550.00 550.00 550.00 550.1>D 550.00 550.00 550. Advertising Revenue/Sub 36.00 36.00 36.00 36.00 36.00 36.00 36.00 36,00 36.00 36.00 Telephony Subs 0 0 0 0 0 0 0 D 0 0 Telephony Rev. 0 0 0 0 0 0 0 0 0 0 During 1st four years of operation facility rent and GM salary%waived 9 ( ) 9 ears of operation 1 million estimated to be$11,700,000 Cost of Project,including all Financing Costs(est.$450,000).Risk Mitigation est.$1.5 million),and loss during first two y p ($ ) Pole Make Ready costs to be distributed between Broadband and Electric Business Units at 30%-70%split Connection to"W W W-to begin as'T-1',to"T-r.to fiber to POP SCADA Services saving to Electric and Water Business Units-$122,000 annually. s Draft Proforma 4-May 2001 xis F Program Year 20021 20031 20041 20051 2006 20071 20101 2011 Revenue SCADA(savings to Electric&Water Units) 122.000.00 122,000.00 122.000.00 122,000.00 122,000.00 122,000.00 122,000.00 122,000.00 122,000.00 122,000.00 S ISP;TDPUD Operated 141.915.60 t ISP;Platform(open access) 0.00 351,518.40 452,579.94 559,388.81 576,170.47 692.364.85 713,135.79 734,529.87 864,646.59 890,585.98 Cable Television;Basic 696,244.60 1,052,797.61 1,373,649.95 1,603.705.55 1,738,754.44 1,790,917.07 2,319,728.86 2.389.320.73 2,734.444.83 2.816.478.18 4 Cable Television;Digital 19,908.00 70,303.68 117.519.92 148,885.99 193,035.91 232.911.62 311,212.68 365,069.77 471,071.83 542,546.27 Cable Television;Premium 39.816.00 73,862.80 101,244.88 109,561.52 124,801.38 135,053.03 164,415.15 177,920.82 213,928.79 231,501.70 i Cable Television;PPV 5,872.86 20,739.59 35.361.75 45,695.79 60.431.12 74,372.75 101,363.16 121,282.72 159,628.47 187,525.43 Business Ethernet 190,080.00 415,294.39 453,675.89 495,604.62 641,408.40 591,445.366 646,106.744 705.819.933 771,051.811 842,312.420 Telephony 0 0 0 0 Equipment Rental;Cable Television 19,908.00 70,303.68 114,653.58 141,711.83 179,253.04 211,006.43 275,066.66 314,798.51 396,290.00 445,292.99 Equipment Rental;ISP 56,880.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Cable Installation 41.392.05 31.694A8 22,267.03 2,860.61 8,270.67 3,194.55 17,411.60 3,812.73 18,908.31 4,494.36 Cable ins 59,724.00 106.455.52 137,584.30 141.711.83 153.645.46 158,254.82 183,377.78 188,879.11 216.161.65 222,646.50 AdverIn-Lieu-of-Franchise Fees 33.092.07 60,885.18 81.353.82 95,392.44 105.851.14 111,662.72 144,835.99 152,679.70 178,953.70 188,902.58 Gross Revenue 1.293,741.11 2,313,970.15 2,930,437.25 3.371.126.55 3,697,770.89 4,011,520.49 4,853,818.43 5.123,434.18 5,968.138.62 6,305,383.83 Less;Bad Debt and Collections 12,937.41 23,139.70 29,304.37 33,711.27 36,977.71 40.115.20 48,538.18 51,234.34 59,681.39 63,053.84 Total Revenue 1.280,803.70 2,290,830.46 2,901,132.88 3,337.415.28 3,660,793.18 3,971,405.28 4,805:280.25 5,072,199.84 5,908,457,24 6,242.329.99 Expenditures g•04 549419.98 641,482.22 695,601.78 716,366.83 927,891.54 955,728.29 1,093,777.93 1,126,591.27 Vrorammin mmin ;Basic 238,497.84 421,11;Premium 21.898.80 40.624.54 55,684.69 60.258.84 68,640.76 74,279.17 90,428.33 97,856.45 117,660.83 127,325.93 mmin ;PPV 3,876.09 13,668.13 23,338.76 30,159.22 39,834.54 49,086.02 66,899.69 80.046.59 105,354.79 123,766.78 -ot-Frenchise Fees 33,092.01 60,885.18 81,383.82 95.392.44 105,851.14 111,662.72 144,835.99 152,679.70 178,953.70 188,902.58 Sales and Mark 100,000.00 35,000.00 36,000.00 35,000.00 35,000.00 35,000.00 35.000,00 35,000.00 35,000.00 35.000.00 Access to W W W 30,000.00 120.000.00 120,000.00 120,000.00 120,000.00 120,000.00 120,000.00 120.000.00 120,000.00 120,000.00 Operations ,5 Facility Rent 0.00 0.00 0.00 0.00 382,500.00 382,500.00 382.500.00 382,500.00 382,500.19 109 Transportation Overhead 42,054.27 86,631.80 89,230.75 91,907.68 94,664.91 97,504.85 100,430.00 103,442.90 106.546.19 109,742.57 66.25 80.68 16.55 74.49 Administrative Pllant Malnenancce 20 ad 9000.00 20,000.00 20,000.00 20 6,180.82 3000.00 20 0000.00 20.8000.00 20,5000 00 20 000.00 213.01 6,000.800.000 0 20,000.00 Plant Maintenance Personnel 132,080.00 272,084.80 280.247.34 288,654.76 297314.41 306,233.84 315,420.85 324,883.48 334,629.98 344,668.88 Utilities 42 27934 102 ,861 10 . 339 18,000.00 611138 1 _Ex nsednstal ion Costs 124, 5,00 95, 4.00 66,934.96 8.599. 24, .72 9.628452, .49 111. .11 568 .62 135100 General&Administration Management and Staff 57,076.50 117,577.59 121.104.92 124,738.07 162,470.21 201,334.31 241.364.34 282,595.27 325,063.13 368,805.03 y Employee Benefits(AID 127,831.96 263,333.84 271.233.86 279,370.87 310,722.44 343,014.56 376,275.44 410,534.14 445,820.61 482,165.67 Subscriber Billing 7,963.20 14,763.77 2%224.89 21,873.22 24,900.94 26.930.36 32,765.83 35,436.25 42.582.56 46,053.04 Other .37 1. i Operating iting income 330 094.95 1 7 .846.94 1,143148.08 1,441,512.69 1,253 399.65 1,452,073.23 1,872,554 25 2 032,680.47 2,515 569.62 2,724,310 63 Principle&Interest 1.020,000.00 1.020,000.00 1,020,000.00 1.020.000.00 1,020,000,00 1,020.000.00 1,020,000.00 1,020,000.00 1,020,000.00 1,020,000.00 ' Technology Reserve Fund 500'000.00 500,000.00 500,000.00 500,000.00 + Total Expenses 1,970,708. 5 2,604,9 3. 2,7 ,984.80 2,861.802.59 3,427,393.53 3.539,332.66 3.952,726.00 4.059,519.37 4,412,887.62 4.538.019.36 Net Income .68 .0 -31 3, 48.08 4 ,612.69 233'399.65 432,073.23 352,554.25 512.680.47 995,569.62 1,204,310.63 Draft Proforma 4-May 2001.x1s