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Home My WebLink About2008-10-01 Min - Board REGULAR MEETING October 1, 2008 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 perpetually and made available for listening to any interested party upon their request. The regular meeting of the Board of Directors of the Truckee Donner Public Utility District was called to order at 6:01 PM in the TDPUD Board room by President Taylor. ROLL CALL: Directors Ron Hemig, Tim Taylor and Bill Thomason were present. Directors Joe Aguera and Patricia Sutton were absent. EMPLOYEES PRESENT: Mary Chapman, Rosana Matlock, Ed Taylor, Ian Fitzgerald, Kathy Neus, Steve Hollabaugh, Bob Mescher, Michael Holley, Nancy Waters, Steven Poncelet, Neal Kaufman and Barbara Cahill CONSULTANTS PRESENT: Steve Gross, David Carlson, Kappy Mann and Jennifer Boehm OTHERS PRESENT: Juanita Schneider, Dan Warren, Tony Laliotis, Jeff Bender and Jody Sweet CHANGES TO THE AGENDA There were no changes to the agenda. PUBLIC INPUT Jody Sweet received a letter from Steven Poncelet, TDPUD Public Information Manager, about the water meter project. He found the letter to be confusing. He said it does not seem fair customers who have an old water meter and were charged for it should have to pay for a new one. There should be an offset to old timers. Mr. Sweet wanted to address his concern to the board. President Taylor suggested Mr. Sweet meet with General Manager Holley and a Director to understand the process. DIRECTOR UPDATE President Taylor wanted to say he was glad to see three of the candidates here at the meeting. CONSENT CONSIDERATION OF A RESOLUTION ADOPTING REVISIONS TO DISTRICT CODE - TITLE 2, ADMINISTRATION. This item involves approval of a resolution to adopt the revisions to District Code, Title 2, Administration. ADOPT AN ENCROACHMENT POLICY This item involves setting a policy on encroachment on District property, to be included in Title 8, District Property. Director Hemig moved, and Director Thomason seconded, that the Board approve the consent calendar, with an amendment to adjust the Conflict of Interest Title 2. ROLL CALL: Directors Aguera and Sutton, absent; All other Directors aye, by voice vote. SO MOVED 1 Minutes: October 1, 2008 ACTION CONSIDERATION OF A RESOLUTION ADOPTING A POLICY ON IDENTITY THEFT PREVENTION This item relates to the District's establishing an Identity Theft Prevention Policy as required by the Fair and Accurate Credit Transaction Act (FACT Act). Director Hemig moved, and Director Thomason seconded, that the Board adopt the resolution adopting the Identity Theft Prevention Policy; establish the Privacy Committee, appointing the Admin- istrative Services Manager, the Customer Services Manager, the Human Resources Administrator, the Credit and Collections Supervisor, the Work Order Accounting Supervisor and the Contracts Ad- ministration Clerk as members of the Committee to serve a one year term; and appoint the Customer Services Manager to act as the Privacy Officer. ROLL CALL: Directors Aguera and Sutton, absent; All other Directors aye, by voice vote. SO MOVED AWARD CONTRACTS FOR CONSTRUCTION OF THE FIBREBOARD WELL A. Award well drilling contract. B. Award test pumping contract. Director Hemig moved, and Director Thomason seconded, that the Board award the contract for the drilling of the Fibreboard Well to Boart Longyear Drilling Services in an amount not to exceed $933,991.80 (includes 5% change order authorization); award the contract for the Pump Development & Testing of the Fibreboard Well to Carson Pump, LLC in an amount not to exceed $66,202.50 (includes 5% change order authorization); and authorize the transfer of $1,000,194.30 from Water Facilities Fees to the Water Department General Fund to pay for these contracts. ROLL CALL: Directors Aguera and Sutton, absent; All other Directors aye, by voice vote. SO MOVED WORKSHOP REVIEW OF COMMERCIAL WATER RATES This item involves the discussion of commercial water rates and how the rates relate to conservation. Ed Taylor gave a presentation: • History and Background o The District has water rates for most commercial treated water customers consisting of a declining block rate structure ■ 4 Tiers ■ 1st Tier= $2.01/1,000 Gal ■ Last Tier = $1.03/1,000 Gal o The non-potable irrigation only accounts utilize water at a rate of $.27/1,000 Gal for operation and maintenance costs. In addition to this rate, they pay for the power to deliver the water • New Information ■ Commercial usage in the summer equals 33% of the total water production ■ The trend is that the smaller commercial services have a smaller percentage of consumption that exceed the base usage tier, but the larger services have a higher percentage that exceed the base ■ Commercial users are prime candidates for conservation measures • Commercial Water Users by Type and Usage Type Count Aug. Usage Mar. Usage Annual Mo. Ave. Commercial 418 21,841,346 8,051,539 12,925,580 Golf/non potable 1 18,184,914 0 6,236,040 Golf/potable 5 49,093,241 734,933 15,813,815 Gov. 59 10,719,279 2,006,244 5,492,031 2 Minutes: October 1, 2008 Gov/irrigation 12 6,419,574 0 2,411,954 Coml/irrigation 36 4,824,748 9,265 1,790,946 Multi-Family/Res 130 7,245,139 3,871390 5,134,612 Grand Total 661 118,328,242 14,673,370 49,804,977 • Commercial Water Rates # OF ACCTS & (%) # OF ACCTS & (%) # OF ACCTS & (%) METER SIZE TOTAL USAGE OVER BASE OVER BASE (IN) ACCOUNTS BASE ONLY WITHIN TIERS HIGHEST TIER 3/4 262 113 (43%) 138 (53%) 11 (4%) 1 154 44 (28%) 84 (55%) 17 (21%) 1 1/2 81 18 (22%) 46 (57%) 17 (21%) 2 61 23 (38%) 19 (31%) 19 (31%) 3 7 2 (29%) 2 (29%) 3 (43%) 4 & OVER 12 3 (25%) 2 (17%) 7 (58%) • New Information o Benefits of large irrigation users on separate non potable supply ■ Reduces maximum day demand on District's potable water system ■ Reduces the Water Department electric bill �- ■ Reduces the total amount of electric energy to pump irrigation water Board Discussion • 33% is commercial usage- what will the percent be when 2 golf courses are moved off potable water? • Are there five golf courses on potable water? • Good information • Drill more non potable wells for irrigation of golf courses- is this plan in the Water Master Plan • Beyond the golf courses, who are the largest commercial users • How does staff feel about the current tiered rate/declining block structure • How can the PUD get other agencies to conserve • What are a couple ideas of the "low hanging fruit" for conservation of the largest users • Very helpful • Information can be used in the future for conservation measures DISCUSSION OF WATER METER IMPLEMENTATION FINANCE PLAN This item involves a discussion on possible financing plans for the water meter project. Bob Mescher gave a presentation: • Background/History o AB 2572 requires volumetric billing for all water customers o Workshops held on April 16th, June 18th, July 2nd and July 16th o Estimated cost of water meter project is $10 million o Expedited meter implementation approved on July 23rd • Funding sources for metering project o Existing Source: $1.3 million -Water meter reserve fund o Identified Potential Sources: $3.0 million - Sale of vacant parcel; $1.5 million - Operational expense reductions; $1.5 million -Conservation 3 Minutes: October 1, 2008 o Remaining: $3.8 million — Surcharge • Uses of funding sources o Project cost= $10 million for 12,500 customers o Average cost per customer = $800 o Surcharge for 5 years = $300 for new meters & radios o Other District sources = $500 for infrastructure • Projected cash flow (thousands) from 2008 through 2017 include meter reserve $1,272, land sale $3,000, reduced expenses $1,510, conservation $1,471, surcharge $9,837, interest earned $72, internal loan -0-, external loan $2,545, meter project (10,867)and loan payments (2,840) • Next Steps o Today— Board direction regarding implementation financing o Oct 15th — incorporate implementation financing into 2009 budget o Oct 17th —public outreach o Dec 3rd —public hearing & adoption of surcharge o Jan 2009—surcharge starts Email was read from Charles White: Gentlemen, Mr. Holley was kind enough to attend the meeting of the Donner Lake Property Owner's Association and tried to explain the proposed 'Water Metering Implementation Plan". Most People in attendance at that meeting were extremely confused at one aspect of your "Plan": charging about $1200 to install each meter "because of the excavation needed to install new ser- vice boxes and the meters". Since the water services at Donner Lake had all been replaced and were supposed to be "Meter- Ready", Donner Lake property owners don't understand why they should be charged the above $1200 to install a meter in their service boxes since there should be no "excavation" etc needed to install those meters—they had already paid for that excavation during the replacement of our di- lapidated water system and are paying a hefty Bond Assessment for that replacement. Please tell us what your thought process was to decide that Donner Lake property owners need to subsidize the rest of the District's excavation costs. That appears to be double-payment. Public input • 1 am fine with $5 per month • Compliment to staff for a good job • This is a lot more palatable • Good to extend external loans for only 5 years • How will the PUD charge people who an existing meter box • So the $5 per month is for customer meter and radio Board discussion • What is the likelihood of all happening for fund sources • Good job- like that debt does not begin until 2011 • Board wants to accelerate the project- have an issue with off ramps • Believe we should get the program done as fast as we can • Source list- good if able to achieve operational and conservation savings, but if there are excess dollars, why not offset rates rather than meters • Are the dollars for the sale of vacant land conservative • Like the idea that the customer surcharge only pays for the meter and radio because everybody needs the equipment. The meter box is not part of the surcharge- good way to allocate. • Recollect debt concern- good staff found a way to not go into long-term debt- creative way to make palatable to everyone. 4 Minutes: October 1, 2008 • By 2012, will know if can sell land and should see conservation measures • Good solution to have only a $5 surcharge • Considering Proposition 218 and completing in the project in two phases, does the PUD have to do two mailings to notify customers The Board gave staff to direction to follow all five of the next steps: implement financing, incorporate implementation financing into 2009 budget, October 17 - public outreach, December 3 - public hearing & adoption of surcharge and January 2009—surcharge starts 2009 PROPOSED BUDGET: OVERALL BUDGET SUMMARY AND RATE PROJECTIONS THIS ITEM WILL INVOLVE A DISCUSSION OF THE OVERALL BUDGET FOR 2009 AND A DISCUSSION OF POTENTIAL RATE IMPACTS. Bob Mescher started with his presentation: • Retrospective Changes Affecting FY08 Budget o Electric rates increased 7% in FY08 and 3% in FY09 o Water rates increased 3% in FY08 o Direct labor increased o No additional debt incurred o Solar initiative began o Public benefit programs increased o Funding to the reserve accounts increased • Mission, Goals and Objectives o Actively seek renewable energy sources as set forth in the District's renewable portfolio o Provide adequate, reliable and high quality water and electrical power service o Manage District resources in an open, responsible, environmentally sound manner at the lowest practical cost • Budget Assumptions o Direct labor costs: overtime decreased 5% from 2008 Budget; bargaining unit employees increased per MOU; non-union employees increased based on CPI o Net staffing level changes: reduced one part-time position o Broadband — no change from FY08 Budget o Increased conservation — especially water conservation o Vehicle replacement reserve fund established o No electric capital reserve fund established o General Services Department: Eliminated; associated costs & budgets allocated to other departments; FY08 Budget normalized to compare to FY09 Budget • FY09 Budget impact on rates and debt o No additional electric rate increases o No water rate increases o No new debt in FY09 • Next Steps o Today - present more detail by department o October 15t": conservation; reserves; entire FY09 Budget o Hold public hearing for FY09 Budget (November 5th) o Adopt budget (November 19th ) • Board of Directors FY08 Budget FY09 Budget $168,672 $161,607 • General Management Staff: General Manager, Secretary and Technical Program Administrator 5 Minutes: October 1, 2008 FY08 Budget FY09 Budget $803,369 $870,016 Mary Chapman gave a presentation for the Administrative Services Department • Cost drivers: identity theft prevention program, increased collections & write offs, internet service and increase in wellness program costs • Operating budget FY08 Budget FY09 Budget $2,732,487 $2,837,275 • Capital Budget: upgrade accounting software, inventory bar-coding system, computer replacements and office equipment replacement$88,000 Stephen Hollabaugh gave a presentation for the Electric Department and GIS • Cost drivers: system reliability (continue tree clearing, pole clearing, safety training); natural gas and market projections • Operating budget FY08 Budget FY09 Budget Electric $2,855,542 $2,986,352 GIS & power supply $741,858 $774,543 • Electric Capital Budget: Tahoe Donner sub rebuild, lien extensions & upgrades, pole replace- ments, various District projects, reclosers & controls, transformer replacement and conduit & boxes $1,036,778 • GIS Capital Budget: mobile computer upgrades, dept computer upgrades, labor for various District capital projects $97,881 Ed Taylor gave a presentation for the Water Department: • Cost drivers: labor wage increase, decrease in power supply requirements, reduced number of water main leaks, change focus from system repair to preventative maintenance • Operating budget FY08 Budget FY09 Budget $4,745,784 $4,850,297 • Capital Budget: water meters, development agreements, SCADA, emergency power at pump stations, pipeline replacement, Fibreboard Well, Northside Well Building, Martis Well #2, Stockholm Pump Station and Test Wells $8,508,038 Board discussion: • Good detail • A 3% electric rate increase was approved in 2008 for 2009 • Good job to balance the budget • Congratulations to Michael Holley to balance this budget as the 2008 budget was already in the hole- got the District rolling down a path that is outstanding • This is a lot to get through • In the Electric Department, some capital item are being deferred and also not creating a capital reserve fund • The price of natural gas is down- good thing for the District • For capital expense, is it all District labor • Concern defer electric capital projects to the future and there is no capital reserve- but by 2013 a significant deft goes away and could be available to address capital projects • Where is the District at in the timeline for the Water COP spending for pipeline replacement- are we ahead of projections • Why is District operations up 61% in the Water Department CLOSED SESSION 6 Minutes: October 1, 2008 CONFERENCE WITH REAL PROPERTY NEGOTIATOR PURSUANT TO SECTION 54956.8 OF THE GOVERNMENT CODE. PROPERTY: 14629 GLENSHIRE DRIVE APN 49-011-29 AND 14630 GLENSHIRE DRIVE APN 49-011-31; DISTRICT NEGOTIATOR: GENERAL MANAGER; NEGO- TIATING PARTIES: TOWN OF TRUCKEE: DAN WILKINS; COLDWELL BANKER REALTY: KAPPY MANN; UNDER NEGOTIATION: PRICE AND TERMS RETURN TO OPEN SESSION No reportable action. President Taylor reported out that the Truckee Donner Public Utility District has entered into an agreement with Jerry Carroll, Kathleen Fickle and Wally Stevens for the 10297 East River Street parcel, APN 19-160-34. ADJOURNMENT There being no further business before the Board, the meeting was adjourned at 8:40. TRUCKEE DONNER PUBLIC UTILITY DISTRICT Tim F. Taylor, Pr sid nt Prepared by i` D 06CA ..%c._ Barbara Cahilli; eputy District Clerk bhc 7 Minutes: October 1, 2008