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Home My WebLink About2010-02-17 Min - Board ,.... REGULAR MEETING February 17, 2010 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 6:00 PM in the TDPUD Board room by President Bender. ROLL CALL: Directors Jeff Bender, Ron Hemig, and John Hillstrom were present. Director Joe Aguera was absent. PLEDGE OF ALLEGIANCE Steven Poncelet led the Board and public in the Pledge of Allegiance. EMPLOYEES PRESENT: Neil Kaufman, Mary Chapman, Rosana Matlock, Mark Thomas, Kathy Neus, Nancy Waters, Steven Poncelet, Michael Holley and Barbara Cahill CONSULTANTS PRESENT: Steve Gross and Shawn Koorn OTHERS PRESENT: Bruce Barth, Dan Warren, Jody Sweet and Tony Laliotis CHANGES TO THE AGENDA There were no changes to the agenda. PUBLIC INPUT Jody Sweet made a statement on behalf of his father regarding the street light letter he received. The homes in the Donner Trail/Book Lane area were built in the late 50's, lights were installed on the PUD poles and he thinks were paid by a county assessment. He wondered if the lights were grandfathered in when the Town of Truckee was incorporated. Mr. Sweet wanted to state that he has a concern for public safety and crime because street lights are being removed along Donner Pass Road. Is the Town making the PUD the bad guy by saying they will not pay to keep the lights? DIRECTOR UPDATE President Jeff Bender stated that the memorial service for Pat Sutton was well received by her family and they were grateful for all the TDPUD employees who attended. Minutes: February 17, 2010 CONSENT CALENDAR Director Hemig asked that Item No. 10, Settlement with Sierra Pacific Power and California Pacific Electric Co be moved to an Action Item. CONSIDERATION OF ADOPTING ENERGY EFFICIENCY TARGETS TO MEET THE SB 1037/AB 2021 REQUIREMENT This item involves action to establishment the triennial energy efficiency targets for the District. CONSIDERATION TO DESIGNATE THE PRESIDENT OF THE BOARD AS LABOR NEGOTIATOR FOR GENERAL MANAGER CONTRACT AND COMPENSATION This item involves the appointment of a negotiator to represent the Board regarding the General Manager's Contract. CONSIDERATION OF WRITE-OFF OF DELINQUENT ACCOUNTS RECEIVABLE This action requests the Board of Directors to approve the current semi-annual write-off of delinquent account balances for FY09. Director Hillstrom moved, and Director Hemig seconded, that the Board approve the consent calendar. ROLL CALL: Director Aguera, absent; All other Directors aye, by voice vote. SO MOVED �..,, ACTION ITEMS CONSIDERATION OF A SETTLEMENT WITH SIERRA PACIFIC POWER AND CALIFORNIA PACIFIC ELECTRIC CO. This item involves the settlement of a protest filed with the CPUC. Director Hemig moved, and Director Hillstrom seconded, that the Board authorize the Board President to sign the Settlement Agreement by and among Sierra Pacific Power Company; California Pacific Electric Company, LLC; and Truckee Donner Public Utility District ROLL CALL: Director Aguera, absent; All other Directors aye, by voice vote. SO MOVED CONSIDERATION OF ADOPTING A RESOLUTION COMMENDING PATRICIA S. SUTTON This matter involves adoption of a resolution commending Patricia S. Sutton for many years of dedication to the District. Director Hillstrom moved, and Director Hemig seconded, that the Board adopt the resolution recognizing Director Patricia S. Sutton for her many years of service on the Truckee Donner PUD Board, as amended. ROLL CALL: Director Aguera, absent; All other Directors aye, by voice vote. SO MOVED 2 Minutes: February 17, 2010 ,--- CONSIDERATION OF A PROCESS TO FILL A POSITION ON THE BOARD This involves the process to fill a Board vacancy. Director Hemig moved, and Director Hillstrom seconded, that the Board select the appointment process to fill the vacant position on the Board by placing a Public Notice of Vacancy in the Sierra Sun on February 19, 2010 and placing vacancy notices in three places within the District; and scheduling a Special Meeting on March 9, 2010 at 10:00 am to interview candidates and appoint a director ROLL CALL: Director Aguera, absent; All other Directors aye, by voice vote. SO MOVED CONSIDERATION OF THE 2009 YEAR-END FINANCIAL RESULTS AND REQUEST FOR BUDGET CARRY-OVERS AND TRANSFERS This item involves budget carry- overs, transfers, etc pertaining to FY09 District Budget. Director Hillstrom moved, and Director Hemig seconded, that the Board authorize the following transfers: 1. Transfer $102,000 from the Electric General Fund to the Electric Capital Reserve Fund 2. Transfer$835,000 from the Water General Fund to the Water Capital Reserve Fund ROLL CALL: Director Aguera, absent; All other Directors aye, by voice vote. SO MOVED CONSIDERATION OF MODIFYING THE CONTRACT WITH HDR ENGINEERING, INC. ,..,, TO PERFORM A RESIDENTIAL ELECTRIC RATE RESTRUCTURING STUDY This item involves modification of HDR's contract to perform an Electric Rate Restructuring g Director Hillstrom moved, and Director Hemig seconded, that the Board authorize the addition of the proposed Scope of Services for Residential Electric-Rate Restructuring outlined in the HDR Engineering, Inc.'s proposal dated February 9, 2010 in an amount not- to-exceed $15,000 ROLL CALL: Director Aguera, absent; All other Directors aye, by voice vote. SO MOVED WORKSHOPS DISCUSSION OF THE RESULTS OF THE WATER STANDBY STUDY PERFORMED BY HDR This item involves a report about the Water Standby Study performed by HDR. Neil Kaufman started the presentation with some background: • Water Rate Study awarded to HDR in April 2009 • During preparation of Water Rate Study, issue of Water System Standby Charges was discussed • Existing Standby Charge has been in place since 1991 o Has not been increased o Cannot be applied in Donner Lake or Glenshire areas • New Standby Charge would be subject to requirements of Proposition 218 3 Minutes: February 17, 2010 Consultant Shawn Koorn of HDR continued with a presentation: • Purpose of the presentation o Update of the District's existing standby charge o Defining water standby charges o Purpose of standby charges o Legal requirements under California state law o Water standby charge methodologies o Calculation of standby charge o Board discussion • Definition of a Standby-by charge "A limited-use charge made by a water utility to a property owner between the time when water service is made available to the property and the time when the property connects to the utility's facilities and starts using the service." • Purpose of Standby o Provides funds for construction & maintenance of facilities available but not yet accessed o Brings equity between current and future customers o Provides funding for facilities in place for vacant parcels with facilities available but not connected o Recovers the investment to extend facilities with the ability to serve potential future customers o Only applies until the property connects to the system .� • Understanding of Applicable California State Law o Uniform Standby Charge Procedures Act Details the Following Elements be Included in the Engineer's Report: description of charge, amount of charge, de- scription of the methodology, how charge will be applied, public hearing details o Proposition 218 requires the vote of people affected and a 45 day notification before the hearing o Notice must contain ■ Amount to be charged ■ Charge for identified period ■ Reason for the charge ■ Calculation basis ■ Public hearing details ■ Summary of voting procedures ■ - Information on recipient o A change to the existing standby charge would require a Prop 218 process • Present Water Standby Charge has been in place since 1991 o Imposed on all parcels where water is available except: parcels dedicated to transportation of persons or property, Donner Lake and Glenshire o $80.00 per parcel per year o Generate annual revenues of approximately $180,000 (-2,200 parcels X$80) • Water Standby Charge Methodologies o Long-term debt financed ■ Dividing outstanding debt by number of parcels ■ District does not have significant debt o Debt, capital plus O&M 4 Minutes: February 17, 2010 .... ■ Net capital, plus applicable O&M, debt service, billing, & administrative costs ■ Difficult to determine the applicable costs o Cost of capital ■ Net capital, times cost of capital, divided by total parcels ■ Recommended approach for update to the District's current standby charge • Cost of Capital Approach o Step 1: Total investment— contributed capital = net investment o Step 2: Net investment X cost of capital (%) = annual cost o Step 3: Annual cost/total parcels = $/parcel/year • District Standby Charge Based on Cost of Capital Approach Description Total Total Capital $76.3 million Less: Contributed Capital $19.8 million Net Invested Capital $56.5 million Cost of Capital 3.5% Total Annual Cost of Capital $1.9 million *Number of Parcels 13,605 Proposed Charge per Parcel per year $145.47 Present Charge $ 80.00 Dollar Change $ 65.47 *2,284 Vacant Parcels + 577 Glenshire & Donner Lake + 10,744 Occupied Parcels = 13,605 • Summary Conclusions o District may charge up to $145.47/parcel o Recommend no increase in fee for inflation or deflation o Fee is fixed value based on capital investment o Currently generates approximately $180,000 o If proposed charge is implemented it will generate approximately$415,000 o Additional revenues of$235,000 o 3.5% of O&M budget can be funded based on additional revenue generation if proposed standby charge is implemented There was no public input Board Discussion: • How does fire flow come into play- requirements are increasing • PUD would gain revenue- going from $235,000 to $415,000- this could forestall the need for a rate increase • Matter of equity-there are two communities without the standby charge • Bring in those parcels that are now left out of the standby charge • Would the old standby charge have been done as a cost of capital • The cost seems to get more expensive over the years • How much has changed in the last 5 years for the cost of capital • Now there is a basis to support the cost to change the standby charge- allow to spread around all lots in an equitable number • This hits only empty parcels- so would it hit the construction side who have already had a difficult time 5 Minutes: February 17, 2010 • What are some standby rates at other utilities • What would happen if a new standby rate does not get passed with the Prop 218 process • Sounds like the Board is not ready to move ahead with this now • Is there a time limit the calculations from this study will not be applicable- can we revisit later- what is the "shelf life" REVIEW THE STATUS OF WATER SUPPLY PERMIT This involves an update on the arsenic testing results. Mark Thomas gave a presentation: • Background / History o December 3, 2008, staff sampled Glenshire Drive Well for arsenic as part of normal water quality sampling ■ The result of the arsenic sample was 13ppb ■ Staff notified CDPH of the result over the MCL o February 18, 2009, the District received written notice of increased monitoring for arsenic at Glenshire Drive Well ■ Monitoring went from every 3 years to one sample per calendar quarter ■ Results from the quarterly testing were 12.1 ppb which ended in Sep of 2009 o October 21, 2009, staff reported the CDPH compliance order issued for Glenshire Drive Well to the Board ■ As part of the compliance order the District was required to send out a public notification for the arsenic MCL exceedance of 10ppb ■ October 30, 2009, the notice was mailed out to all the District's water cus- tomers ■ November 11, 2009, a notice was published in the Sierra Sun • New Information o October 26, 2009, staff began blend testing of Glenshire Drive Well with Prosser Village Well and Old Greenwood Well ■ Blend testing was completed on November 25, 2009 ■ Results showed that: ■ Arsenic at the blending point would be 7ppb with two other wells running and a yield of 1,500gpm at the Glenshire Drive Well ■ Arsenic at the blending point would be 7ppb with one additional well running and a yield of 1,200gpm at the Glenshire Drive Well o December 15, 2009, TDPUD staff met with the CDPH District staff to discuss a proposed permit amendment ■ Verbal approval was received ■ Compliance order for Glenshire Drive Well was lifted o February 9, 2010, the District received the amendment to the Water Supply Permit for the main system effectively ending the compliance order issue There was no public input. 6 Minutes: February 17, 2010 -- Board discussion: • Good job to get this compliance done so fast • Glad this is resolved • Will the change out of the pump at Glenshire Drive Well to a lower volume lower the arsenic ppb as well • Blending is the only solution • Thanks to staff for keeping the Board up to date REVIEW OF DISTRICT FINANCIAL GOALS, RESERVES AND DEBT This item involves review of District financial goals, reserves and debt. Mary Chapman gave a presentation: • Background / History o In 2004, the Board adopted a set of financial goals o Financial goals were last reviewed on February 18, 2009 o No changes were adopted during the update to Title 3 of the District Code o Board acknowledged that it would take time to achieve some of reserve goals o New Information • Planning Goals o Review master plans at least every five years ■ Urban Water Management Plan is scheduled for FY10 ■ Water Master Plan update is scheduled for FY11 �^ o Prepare ten-year Capital Improvement Plan ■ Plan is under way; scheduled to be done by end of FY10 • Revenue Goals o Review facilities fees every year ■ Last water facilities fees increase adopted on April 6, 2005 ■ Fees are reviewed with each budget cycle ■ Fee changes or increases require a Proposition 218 process ■ Detailed review after completion of Water Master Plan Update in FY11 • Debt Goals o No more than one-half projected annual facilities fee revenue committed to debt service ■ FY10 projected water facilities fees revenue $ 98,400 ■ FY10 water debt payments from facilities fees $505,854 ■ % of annual facilities fees committed to debt 514% o No debt more than 25 years maturity ■ 2006 COPs were a 30 year financing —27 years remaining • Operating (Cash) Reserve Goals o General fund cash reserve should be twice highest month budgeted expendi- tures ■ Electric general fund reserve goal $7,000,000 ■ Current general fund balance @ 12/31/09 4,858,741 ■ Fund balance short of reserve goal $2,141,259 "^ o Electric rate stabilization fund should maintain a balance of$3,000,000 ■ Rate stabilization fund balance @12/31/09 $17935,322 ■ FY10 budgeted contribution is $413,930 7 Minutes: February 17, 2010 =� • Capital Reserve Goals o There should be an electric Capital Reserve Fund in the amount of$1,000,000 ■ Electric Capital Replacement Fund balance at 12/31/09 $2370742 • Recommendation to Change Goal o Change Revenue Goal 3 from "Review facilities fees every year" to "Review facilities fees every budget cycle and after the completion of a master plan" There was no public input. Board discussion: • District has a strong financial position and is doing well- aggressive goals • Do not hit all the goals • Good to be aware of goals and monitor • Work toward some significant reserve balances • Like the thought to modify the facilities fees review to every budget cycle and after a master plan • Confused about the goal of no more than one-half projected annual facilities fee revenue committed to debt service- does this goal make sense • In favor of looking at updating the District Code regarding the facilities fees review goal revision ROUTINE BUSINESS ITEMS TREASURER REPORT: INTERIM DECEMBER, 2009 a. Approval of the Interim Treasurer's report through December 31, 2009 Director Hemig moved, and Director Aguera seconded, that the Board approve the interim treasurer's report for the month ended December 31, 2009. ROLL CALL: Director Aguera, absent; All other Directors, aye. SO MOVED. b. Approval of the Disbursements for December 2009 Director Aguera moved, and Director Hemig seconded, that the Board approve the De- cember 2009 disbursements report. ROLL CALL: Director Aguera, absent; All other Directors, aye. SO MOVED. Treasurer Report: Interim January, 2010 a. Approval of the Interim Treasurer's report through January 31, 2010 Director Hemig moved, and Director Aguera seconded, that the Board approve the trea- surer's report for the month ended January 31, 2010. ROLL CALL: Director Aguera, absent; All other Directors, aye. SO MOVED. b. Approval of the Disbursements for January 2010 Director Aguera moved, and Director Hemig seconded, that the Board approve the Janu- ary 2010 disbursements report. ROLL CALL: Director Aguera, absent; All other Directors, aye. SO MOVED. 8 Minutes: February 17, 2010 Approval of Minutes for January 20 and February 3, 2010 Director Hillstrom moved, and Director Hemig seconded, that the Board approve the mi- nutes of January 20 and February 3, 2010. ROLL CALL: Director Aguera, absent; All other Directors, aye. SO MOVED CLOSED SESSION PUBLIC EMPLOYEE PERFORMANCE EVALUATION - GOVERNMENT CODE SECTION 54957 (E) - GENERAL MANAGER'S PERFORMANCE PLAN REVIEW Report from Closed Session There was no reportable action. ADJOURNMENT There being no further business before the Board, the meeting was adjourned at 10:30 PM. TRUCKEE DO NER PUBLIC UTILITY DISTRICT Je Ben r, President nff Pre ared b p y (W Barbara CahM, Deputy District Clerk 9 Minutes: February 17, 2010