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Home My WebLink About2009-10-07 Min - Board REGULAR MEETING October 7, 2009 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 perpe- tually 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 6:00 PM in the TDPUD Board room by Vice President Bender. ROLL CALL: Directors Joe Aguera, Jeff Bender, John Hillstrom and Pat Sutton were present. Director Ron Hemig was absent. EMPLOYEES PRESENT: Kathy Neus, Bob Mescher, Mary Chapman, Steve Hollabaugh, Steven Poncelet, Neil Kaufman, Rosana Matlock, Nancy Waters, Michael Holley and Barbara Cahill CONSULTANTS PRESENT: Steve Gross OTHERS PRESENT: Juanita Schneider, Susan Auzelc, and one other member of the public CHANGES TO THE AGENDA There were no changes to the agenda. PUBLIC INPUT There was no public input. DIRECTOR UPDATE Directors Aguera, Bender and Hillstrom attended the annual Northern California Power Association conference last week. They found it to be interesting, and now know more about the NCPA and what they are doing in the next year. Director Sutton asked agenda item No. 7, Consideration to Extend the Janitorial Services Contract be removed from the Consent Calendar. CONSENT CALENDAR CONSIDERATION OF A RESOLUTION TO ADOPT PROPOSED REVISIONS TO DISTRICT CODE, TITLE 1 GENERAL PROVISIONS This item involves adopting a resolution to amend the District Mission Statement, Goals and Objectives. Director Hillstrom moved, and Director Aguera seconded, that the Board approve the consent calendar. Director Hemig was absent. There was a show of hands. SO MOVED 1 Minutes: October 7, 2009 ACTION ITEM CONSIDERATION TO EXTEND THE JANITORIAL SERVICES CONTRACT This item involves an extension of the Contract for the District Office Janitorial Services. Director Aguera moved, and Director Hillstrom seconded, that the Board extend the contract for janitorial services for one additional year to Dependable Cleaning Service of Truckee at an annual cost of$65,064.00. ROLL CALL: Director Hemig, absent; All other Directors aye, by voice vote. SO MOVED BUDGET ITEM OPERATING/CAPITAL BUDGET PRESENTATIONS: A. BOARD OF DIRECTORS AND GENERAL MANAGEMENT B. ADMINISTRATIVE SERVICES C. CONSERVATION D. POWER SUPPLY 2010 and 2011 Fiscal Year Operating and Capital Budget Preliminary Overview Bob Mescher, Kathy Neus, Mary Chapman, Steven Poncelet and Stephen Hollabaugh all participated in the presentation: • Background / History o July, 2008 — Board adopted Title 3 revision requiring a two-year budget o Since July, 2009 — Staff has been preparing FY10 and FY11 budgets o September 2, 2009 — Purchase power plan presented o September 16, 2009 — Mission statement, objectives & goals, and budget assumptions were reviewed o Purchase power plan ■ 2% decrease in purchased power costs in FY10 versus FY09 budget ■ 5% increase in purchased power costs in FY11 versus FY10 o Other budget assumptions ■ Labor rates flat in FY10 & increase 3% in FY11 ■ Staffing level decreased by 4 full-time equivalents (FTE) through attrition ■ 3 Electric Department and 1 Water Department o Fiber assets will provide an additional Electric revenue source o Operational expenses will remain flat or slightly increased, ranging from 0% to 3% o No new debt for Electric and Water o Additional budget assumptions ■ Employee medical & retirement cost increase in FY10 & FY11 ■ Water conservation efforts increase significantly in FY11 o Electric revenue requirements ■ FY10 — Decrease in demand, no change in rates ■ FY11 — Increase in demand, estimated 3% revenue increase needed in FY11 ■ Consider rate study in early FY10 o Electric expenses FY10 — Decrease in operating & capital expenditures ■ FY11 — Increase in operating expenses, decrease in capital expenditures 2 Minutes: October 7, 2009 o Water revenue requirements HDR cost of service study ■ Increases 1.75% in FY10 and FY11 ■ Rate adoption in process ■ Residential volumetric billing o Water expenses ■ FY10 - Increase in operating expense, decrease in capital expenditures ■ FY11 - Increase in operating expense, decrease in capital expenditures ■ 2006 COP pipeline replacement ends • Comparison of Budgets: FY09, FY10 and FY 11 (in thousands) FY09 FY10 FY11 Electric Water Electric Water Electric Water Revenue $23,854 $10,701 $23,010 $11,190 $23,920 $11,370 Expenses 18,694 6,926 18,300 7,010 18,900 7,370 Income $5,160 $3,775 $4,710 $4,180 $5,020 $4,000 Plus: From Funds $2,571 $10,250 $1,670 $7,190 $980 $4,250 Less: Debt Service 3,540 3,503 3,500 3,350 3,450 3,310 Capital Projects 3,606 8,880 2,290 5,790 1,940 2,740 To Reserves 585 1,642 590 2,230 610 2,200 Surplus (Deficit) $-0- $-0- $-0- $-0- $-0- $-0- -- • Board of Directors o $20K election expense in FY10 o Medical cost increase in FY10 and FY11 o No capital expenditures o Comparison of Budgets: FY09, FY10 and FY 11 (in thousands) FY09 FY10 FY11 Supplies, Materials Services 26 27 28 Election Expense -0- 20 -0- Miscellaneous 136 139 145 Total Operating Costs 162 186 173 • General Management o No change in staffing o Medical & retirement cost increase in FY10 and FY11 o Industry dues decreased in FY10 o No capital expenditures o Comparison of Budgets: FY09, FY10 and FY 11 (in thousands) FY09 FY10 FY11 Labor 512 510 533 Supplies, Materials Services 204 195 197 Industry Membership/Dues 139 117 122 Miscellaneous 21 17 15 Total Operating Costs 876 839 867 3 Minutes: October 7, 2009 • Administrative Services o No change in staffing o Medical & retirement cost increase in FY10 and FY11 o Decrease general insurance in FY10 o Increased bad debt write off o Allocation of common expenses shifts from 60/40 for Electric and Water to 50/50 o Capital expenditures: $20K in FY10 for major accounting software upgrade o Comparison of Budgets: FY09, FY10 and FY 11 (in thousands) FY09 FY10 FY11 Labor 1,802 1,824 1,914 Supplies, Materials Services 1,036 1,043 1,063 General Insurance Bad Debt Expense 34 38 39 Total Operating Costs 2,872 2,905 3,016 Capital Expenditures 92 95 75 • Conservation & Public Information o No change in staffing in FY10 o Medical & retirement cost increase in FY10 and FY11 o More focus on water conservation in FY10 & FY11 o Less labor required for S131 — CA Solar Initiative in FY10 o Additional Y2 full time equivalent (FTE) in FY11 o Comparison of Budgets: FY09, FY10 and FY 11 (in thousands) FY09 FY10 FY11 Conservation-Electric 986 1,011 1,042 Conservation-Water 126 134 195 SB1-CA Solar Initiative 225 221 227 Public Information 103 106 113 Legislation & Regulation 20 21 23 Other 59 61 63 Total Operating Costs 1,519 ,1554 1,663 Capital Expenditures 40 41 42 • Power Supply o Reduce 1 FTE from FY09 budget to FY10 o No change in staffing in FY11 o Medical & retirement cost increase in FY10 and FY11 o Capital expenditures for computer hardware & software: $24K AutoCAD upgrade in FY10 and $60K server upgrades in FY11 o Comparison of Budgets: FY09, FY10 and FY 11 (in thousands) FY09 FY10 FY11 Labor 562,000 517,000 549,000 Supplies, Materials 143,000 131,000 133,000 Professional Services 98,000 98,000 99,000 Total Operating Costs 803,000 746,000 781,000 Capital Expenditures 84,000 97,000 158,000 4 Minutes: October 7, 2009 • Next steps o October 21, 2009 ■ Operating and Capital Budget Workshop: Electric and Water ■ Reserve Funds Workshop ■ Revenue and Rates Workshop ■ Set Public Hearing ■ Publish draft budget books o November 4, 2009 ■ Present draft budget ■ Present Financial Master Plan ■ Public Hearing o November 18, 2009 ■ Adopt budget ■ Adopt water rates ■ Adopt overhead rates Public Input: • What is happening with the fiber lease- has one been signed yet? • What type of rebates are available for customers Board discussion: • 2010 has a decrease of 4 full time employees • What is the headway on leasing the fiber assets • What is the projected revenue for fiber in 2010 • How can there be no capital improvement in 2010 • In the administrative budget, how can software cost $20,000 • Do the SB1 numbers include the hold back/refund dollars • What are the public benefit percents for 2010 and 2011 • In Power, how did staff come up with the $60,000 for the server • Does it make any sense to just lease servers • If server replacement is every 4 years, when is the next cycle • So all Auto Cad seats will be brought up to date and be on one platform • Out in the cold- how much does one full time employee reduce the FY09 budget • There is not enough information to know the dollars • What is the financial master plan- who prepares, approves and implements • Is it possible to get a list of all employees and their wages • What are overheads WORKSHOP DISCUSSION OF THE SCHEDULE FOR ADOPTING NEW WATER RATE This item involves a discussion of legal process required to complete the adoption of the new water rates: Prop 218, letter to customers and owners, public hearing, etc. ,.. Mary Chapman gave a presentation: • Background / History o Ca State Law requires the District to begin volumetric billing in January, 2010 5 Minutes: October 7, 2009 o District is working to transition from flat rate water bills to volumetric water bills o District is considering a 1.75% water rate increase in FY10 & 1.75% increase in FY11 o The Board has gone through a lengthy process to make sure the District complies with Prop 218 requirements relating to a water rate increase • To date, the Board has taken the following action: 0 4/15/09 Awarded a contract to HDR to perform a Water Rate Study 0 5/6/09 Workshop to discuss Water Rate Structure Alternatives 0 5/20/09 Workshop to discuss Non-Conforming Water Accounts 0 6/3/09 Workshop to discuss Water Rate Structure Alternatives 0 7/5/09 Workshop to discuss the Water Rate Study Report 0 8/19/09 Workshop to discuss the Water Rate Study Report 0 9/2/09 Workshop to discuss the process to adopt the Proposed Water Rates 0 9/2/09 Workshop to discuss Non-Conforming Water Accounts 0 9/2/09 Workshop to review draft ordinance: Proposed Water Rates FY10 & FY11 0 9/16/09 Adopted the Water Rate Study Report 0 9/16/09 Approved ordinance setting Proposed Water Rates for FY10 & FY11 0 9/16//09 Scheduled a Public Hearing for November 18, 2009 0 9/23/09 Mailed notices for Public Hearing • Remaining schedule for implementation of new rate structure: o 10/21 & 10/23/09 Publish notice in Sierra Sun for Public Hearing on Nov. 18, 2009 o 11/18/09 Hold Public Hearing on Proposed Water Rates & take rate adoption vote o January, 2010 Implement new water rates There was no public input. Board discussion: • Would like a report from staff as to what some rate payers will pay with the new rates versus now • Some people do not have a calculator or computer to figure out the new rate- need to have something available so customers can calculate their new rate • So in 2010, residential customers will still be on fixed rates • What percent of customers will have meters and when will they be on the new volumetric rate • Rates cannot go up for 30 days after the ordinance is adopted • Information should say what date the rates go into effect CLOSED SESSION CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTION 54956.9, SUBDIVISION (A), EXISTING LITIGATION: CLAIMS OF PACIFIC RIM CONSTRUCTION, INC.; ADVANCED ASPHALT; AND TEICHERT CONFERENCE WITH LABOR NEGOTIATOR: SECTION 54957.6 OF THE GOVERNMENT CODE. DISTRICT REPRESENTATIVE: MICHAEL D. HOLLEY CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTION 54956.9, SUBDIVISION (b), POTENTIAL LITIGATION, THREE CASES 6 Minutes: October 7, 2009 Vice President Bender recused himself for the final closed session item for a potential conflict of interest. CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTION 54956.8, CONFERENCE WITH REAL PROPERTY: 14630 GLENSHIRE DRIVE APN 49-011-31; DISTRICT NEGOTIATOR: GENERAL MANAGER; NEGOTIATING PARTIES: KELLER WILLIAMS; UNDER NEGOTIATION: PRICE AND TERMS RETURN TO OPEN SESSION Report from closed session There was no reportable action. ADJOURNMENT There being no further business before the Board, the meeting was adjourned at 9:00 PM. TRUCKEE DO NER PUBLIC UTILITY DISTRICT J. FO&Hemig, Or sident Prepared by Barbara Cahill, Deputy District Cler 7 Minutes: October 7, 2009