HomeMy WebLinkAbout#15 Minutes Agenda Item # 15
DistrictPublic Utility
MINUTES
To: Board of Directors
From: Barbara Cahill
Date: November 18, 2009
Minutes for the Meeting Dates
Approval of the minutes for October 21 and November 4,
2009
l
y REGULAR MEETING
` October 21, 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 6:02 PM in the TDPUD Board room by President Hemig.
ROLL CALL: Directors Joe Aguera, Jeff Bender, Ron Hemig, John Hillstrom and Pat Sutton
were present.
PLEDGE OF ALLEGIANCE
President Hemig led the Board and public in the Pledge of Allegiance.
EMPLOYEES PRESENT: Ed Taylor, Stephen Hollabaugh, Steven Poncelet, Neil Kaufman,
Bob Mescher, Kathy Neus, Mark Thomas, Michael Holley and Barbara Cahill
CONSULTANTS PRESENT: Steve Gross
OTHERS PRESENT: Juanita Schneider, Dan Warren, Dan Wilkins, Becky Bucar, Wally
Auerbach, Lisa Doby, and one other member of the public.
CHANGES TO THE AGENDA
General Manager Holley asked item number 17 be pulled from the agenda: Closed Session
Government Code Section 54956.9 Subdivision (A), Existing Litigation: Claims of Pacific Rim
Construction Inc; and Advanced Asphalt and Teichert.
PUBLIC INPUT
Juanita Schneider asked if a customer will be able to look at their water consumption on-line
once a water meter is installed, similar to being able to check bank activity.
DIRECTOR UPDATE
Director Bender commented on the number of $100 and $30 rebate checks in the monthly
treasurer report on the disbursements register. He would like a workshop update on the
conservation rebates, how they are working and that the District is doing a good job. He also
mentioned an article he read in Public Power about co-generation and SMUD- sometimes it
works and sometimes it does not.
Director Hillstrom commented he likes the idea of co-generation when it works.
President Hemig reported that he attended the NCPA conference in September. Plus recently
NCPA held a Legislative Staff Tour and Policy Briefing in Tahoe where he spoke to the group
and felt the event went very well.
1 Minutes: October 21, 2009
ACTION ITEMS
SCHEDULE A PUBLIC HEARING TO TAKE PUBLIC COMMENT REGARDING A REVISION
TO THE SCHEDULE NM, NET METERING This item involves scheduling a public
hearing in regards to a revision to the Net Metering Schedule.
Director Hillstrom moved, and Director Bender seconded, that the Board schedule a public
hearing for December 2, 2009 to accept comments on changes to the Net Metering Ordinance.
ROLL CALL: All Directors aye, by voice vote. SO MOVED
SCHEDULE A PUBLIC HEARING TO TAKE PUBLIC COMMENT REGARDING THE
ADOPTION OF THE 2010-2011 BUDGET This item involves scheduling a public hearing
in relation to the adoption of the 2010-2011
Director Bender moved, and Director Aguera seconded, that the Board schedule a public
hearing for November 4, 2009 for the purpose of receiving public comment regarding the
adoption of the FY10 — FYI Budget.
ROLL CALL: All Directors aye, by voice vote. SO MOVED
CONSIDERATION OF THE ADOPTION OF THE 2010 AND 2011 PURCHASE POWER AND
RESOURCE PLAN This item involves the updating and adopting the 2010 and 2011
Purchase Power and Resource Plan.
Director Hillstrom moved, and Director Bender seconded, that the Board adopt the 2010 and
2011 Purchase Power and Resource Plan.
ROLL CALL: All Directors aye, by voice vote. SO MOVED
BUDGET PRESENTATIONS:
A. RESERVE FUNDS & REVENUES
B. OPERATING/CAPITAL BUDGET: ELECTRIC OPERATIONS
C. OPERATING/CAPITAL BUDGET: WATER OPERATIONS 2010 and 2011 Fiscal 2010
and 2011 Fiscal Year Operating and Capital Budget Preliminary Overview
Bob Mescher gave a presentation:
• Background / History
o July, 2008 — Board adopted Title 3 revision requiring a two-year budget
o July 1, 2009 — Staff began preparing FY10 and FYI budgets
o September 2, 2009 — Purchase Power Plan presented
o September 16, 2009 — Mission statement, objectives & goals, and budget
assumptions were reviewed
o October 7, 2009 — Operating & capital budgets were presented for supporting
services: Board, General Management, Administrative Services, Public Information
& Conservation, Power Supply
o Earlier tonight - Revised Purchase Power Plan
■ 3% decrease in purchased power costs in FY10 versus FY09 budget
■ 4% increase in purchased power costs in FYI versus FY10
• Other budget assumptions
o Labor rates flat in FY10 & increase 3% in FY11
2 Minutes: October 21, 2009
o Staffing level decreased by 4 full-time equivalents (FTE) through attrition
o Operational expenses will remain flat or will slightly increase, each category ranging
from 0% to 3%
o No new debt for Electric and Water
o Employee medical & retirement costs increase in FY10 & FY11
o Water conservation efforts increase significantly in FY11
• Electric Utility revenue requirements
o FY10 — Decrease in budgeted demand, no need to change rates
■ FY11 — Increase in budgeted demand, estimated 3% revenue increase needed
■ Recommend a rate study in early FY10
o Electric Utility- operating
o FY10 — Decrease in budgeted operating expenses & capital expenditures
o FY11 — Increase in budgeted operating expenses, decrease in capital expenditures
• Water Utility revenue requirements
o HDR cost of service study
o Increases 1.75% in FY10 and FY11
o Rate adoption in process
• Water Utility operating expenses
o FY10 — Increase in budgeted operating expenses, decrease in capital expenditures
o FY11 — Increase in budgeted operating expenses, decrease in capital expenditures
■ 2006 COP pipeline replacement ends
• Electric Department
o Electric Operations
■ Two less FTE's due to unfilled FY09 budgeted positions
■ Medical & retirement costs increase in FY10 and FY11
■ No other significant changes in year-to year expenses
■ Focus will increase on system maintenance; new construction has slowed
o Electric Operations- Budget comparison (in thousands)
Budget % Variance
FY09 FY10 FY11 FY10 vs FY11 vs
FY09 FY10
Operations/PM Sup & Eng $ 563 $ 699 $ 732 24% 5%
Substation Operations/PM 152 164 171 8% 4%
Distribution Operations/PM 920 1,042 1,061 13% 2%
Meter Operations/PM 72 43 45 -40% 5%
Customer Installation Operations/PM 218 150 157 -31% 5%
Misc General Operations/PM 411 380 391 -8% 3%
Maintenance of Station Equipment 19 24 25 26% 4%
Maintenance of Distribution Lines 388 371 390 4% 5%
Other Maintenance 26 26 27 0% 4%
Safety 214 212 221 -1% 4%
Other Operational Expenses 44 9 10 -80% 11%
Total Operating Costs $3,027 $3,120 $3,230 3% 4%
Capital Expenditures $1,938 $1,540 $1,430 -21% -7%
Total Expenditures $4,965 $4,660 $4,660 -6% -0%
3 Minutes: October 21, 2009
o Electric Capital Projects and Equipment (In thousands)
FY10 FY11
Rates
Tahoe Donner Substation Upgrade $ 520 $ -0-
Line & Extension Upgrades 260 270
Routine - Poles, Reclosures, Regulators, Transf, Meters 230 230
Distribution Replacements & Improvements 160 610
Total Rate Funded Projects $1,170 $1,110
Facilities Fees
Truckee Circuit #5 Rebuild $ 150 $-0-
Donner Lake Underground on Skislope 110 -0-
Christie Lane Rebuild 110 -0-
Tahoe Donner#3 Three Phase -0- 170
Tahoe Donner#2 Reconductor -0- 150
Total Facilities Fees Funded Projects $ 370 $ 320
Total Electric Projects $1,540 $1,430
• Water Department
o Water Operations
■ One less FTE through attrition beginning FY10
■ Medical & retirement cost increase in FY10 and FY11
■ Less purchased power as efficiency increases and pipelines replaced
■ Placer County contract ends in FY09
■ Continuing focus on installing new residential meters
o Water Operations - Budget comparison (in thousands)
Budget % Variance
FY09 FY10 FY11 FY10 vs FY11 vs FY10
FY09
Operations/PM Sup & Eng $ 187 $ 58 $ 61 -69% 5%
Construction Engineering 37 53 57 43% 8%
Facilities Operations 526 576 611 10% 6%
Power Supply 1,653 1,575 1,602 -5% 2%
Distribution Operations/PM 423 482 518 14% 5%
Miscellaneous General Operations/PM 247 264 308 7% 17%
Maintenance of Op Supry & Eng 145 94 79 -35% -16%
Maintenance of Facilities 546 570 632 4% 11%
Maintenance of Distribution Lines 559 583 604 4% 11%
Maintenance of District Office Building 390 401 418 3% 4%
Other Maintenance 83 15 15 -82% 0%
Safety 108 121 127 12% 5%
Interdepartmental Rent 349 345 356 -1% 3%
Total Operating Costs $5,253 $5,137 $5,388 -2% 5%
Capital Expenditures $8,581 $5,610 $2,530 -35% -55%
Total Expenditures $13,834 $10,747 $7,918 -22% -26%
4 Minutes: October 21, 2009
o Water Capital Projects and Equipment (in thousands)
FY10 FY11
Rates
Northside Well $ 190 $ -0-
Pipeline Replacement -0- 230
Total Rate Funded Projects $ 190 $ 230
Facilities Fees
SCADA $ 970 $210
Emergency Power, Well 210 -0-
Stockholm Pump Station 110 -0-
Groundwater Study 150 -0-
Ponderosa Palisades Hydro Upgrade -0- 410
Total Facilities Fees Funded Projects $1,440 $ 620
District Pipeline Replacement Funded by 2006 COP $1,610 $ 90
Water Meters Funded by the Water Meter Reserve $2,020 $1,250
New Vehicles funded from the Vehicle Reserve $ 350 $ 340
Total Water Projects $1,540 $1,430
• Revenue requirements (in thousands)
FY10 Budget- Draft FY11 Budget- Draft
Electric Water Total Electric Water Total
Revenue $22,940 $11,190 $34,130 $23,920 $11,370 $35,290
Expenses 18,230 7,010 25,240 18,900 7,370 26,270
Net Income $ 4,710 $ 4,180 $ 8,890 $ 5,020 $ 4,000 $ 9,020
Plus:
From Funds $ 1,100 $ 7,060 $ 8,160 $ 700 $ 3,870 $ 4,570
Less:
Debt Service 3,500 3,340 6,840 3,450 3,310 6,760
Capital Projects 1,720 5,660 7,380 1,660 2,590 4,250
To Reserves 590 2,240 2,830 610 1,970 2,580
Surplus (Deficit) $ -0- $ -0- $ -0- $ -0- $ -0- $ -0-
• Electric Department Projected Reserve Balances (in thousands)
FY09 FY10 FY11 FY11 Goal Variance
Yr End Budget Budget Yr End
(est) Activity Activity
Operating Cash Reserve $4,600 $ -0- $ -0- $4,600 $7,000 $(2,400)
Rate Reserve 1,943 414 433 2,790 3,000 210
Total Operating Reserves $6,543 $ 414 $ 433 $7,390 $10,000 $(2,610)
Capital Replacement Fund $ 238 $ -0- $ -0- $ 238 $1,000 $ (762)
Vehicle Replacement 161 30 30 161 -0- 161
Total Capital Reserves $ 399 $ (30) $ 30 $ 399 $1,000 $ (601)
Total Reserves $6,942 $ 384 $ 463 $7,789 $11,000 $(3,211)
5 Minutes: October 21, 2009
• Water Department Projected Reserve Balances (in thousands)
FY09 FY10 FY11 FY11 Goal Variance
Yr End Budget Budget Yr End
(est) Activity Activity
Operating Cash Reserve $ 640 $ -0- $ -0- $ 640 $2,700 $(2,060)
Debt Service Coverage 1,336 593 603 2,532 -0- 2,532
Total Operating Reserves $1,976 $ 593 $ 603 $3,172 $2,700 $ 472
Capital Replacement Fund $4,221 $ 198 $ 201 $ 4,620 $4,000 $ 620
Res: Future Water Meters 730 (728) (2) -0- -0- -0-
Vehicle Replacement 140 16 59 65 -0- 65
Total Capital Reserves $5,091 $ (546) $ 140 $4,685 $4,000 $ 685
Total Reserves $7,067 $ 47 $ 743 $7,857 $6,700 $1,157
• Next steps
o November 4, 2009
■ Present entire draft budget
■ Present Financial Master Plan
■ Hold Public Hearing
• November 18, 2009
o Consider the adoption of the FY10 — FY11:
■ Budget
■ Water rates
■ Overhead rates
There was no public input.
Board discussion:
• Interested in all employees, job descriptions and wages
• Will the District's fiber assets provide additional revenue sources
• Since there may be no growth for some time, the facilities fees should suffer
• Article in San Francisco Chronicle about smart meters
• For water there is a larger drop in energy by reducing consumption and fixing leaks
• Is there going to be money in the budget for the Glenshire arsenic problem
• Each year, I think about when the District will be rid of the Idacorp debt/COP, how that
will work once it is paid in 2013 and we do not have an annual payment of $3M. I want
to layout the groundwork now. Should we not raise electric rates in 2011, put the money
into the rate stabilization fund, or maybe not put the $433K into reserves in 2011 (or is
that a calculated risk and against District policy). I would rather see rates flattened out.
• Is there a difference on how the District uses operating reserves- does it take Board
approval to use the reserve funds
• What is the difference between operating cash and debt service reserves
• Why does FY10 have such a large negative for the Future Water Meter Reserve
• Will conservation be able to spend all the funds budgeted for year 2009 set at $1.3M
• Why is the provision for bad debt going down from $27K in 2009 to $20K in 2010
• Surprised how easy the Board has been on staff- passive- need to be interactive
6 Minutes: October 21, 2009
WORKSHOP
DISCUSSION REGARDING TRUCKEE TAHOE COMMUNITY FOUNDATION "SPEAK
YOUR PEACE" This item involves the Truckee Tahoe Community Foundation "
THE CIVILITY PROJECT"
Counsel Gross wanted the Directors to be aware that he serves on the Board of Tahoe
Truckee Community Foundation.
Steven Poncelet gave a presentation:
• Background / History
o Town of Truckee has a rich history: collaboration and conflict
o Speak Your Peace Civility Project: created and promoted by Truckee Tahoe
Community Foundation (TTCF) for the purpose of project is to improve communica-
tions
o TTCF is asking local agencies to adopt a Resolution adopting the principals of the
Speak Your Peace Civility Project
Truckee Tahoe Community Foundation presentation by Lisa Doby:
• Goal: residents of Tahoe Truckee to communicate in a more respectful & effective way.
o This is a campaign to improve public discourse by simply reminding ourselves of the
very basic principles of respect and not a campaign to end disagreements
• Key Strategies:
o Support from all public bodies in the community
o Buy in from a critical mass of individuals
o We are not just targeting those who are uncivil, but those who allow uncivilized
behavior to happen
• Support the 9 Tools for Practicing Civility
o Pay Attention: only after we notice the world, can we begin to care for it
o Listen: much of the conflict in our lives can be explained by one simple but unhappy
fact: we don't really listen to each other
o Be Inclusive: welcome all groups of citizens working for the greater good of the
community
o Don't Gossip: don't discount the power of your words; speaking with consideration
and kindness is at the heart of civil behavior
o Show Respect: disagree without being disagreeable; respect includes recognizing
that others are entitled to look at the world differently
o Be Agreeable: two key ingredients for being agreeable in conversation: ability to
consider that you might be wrong; ability to admit that you don't know
o Apologize: be sincere and repair damaged relationships; simple, decent words, that
soothe the bruised soul: "I'm sorry"
o Give Constructive Criticism: make sure your intention is to help with a problem, not
to humiliate
o Take Responsibility: don't try to shift blame onto others
o Choose Civility
■ It is quite possible to be true to one's beliefs and be civil at the same time
■ The issue is not whether to stand firm or to compromise, but how to express our
firmness
7 Minutes: October 21, 2009
• Spread the word with two key strategies:
o Encourage our local public and private entities to adopt these nine norms of civility
o Encourage general population to live by these norms, particularly in public sphere
• How you can help:
o Sign the pledge — add your name
o Encourage workplace, public organization, non-profit, etc. to adopt these norms.
o Spread the word to your friends, co-workers, etc
• "We never touch people so lightly that we do not leave a trace."
Public input:
• In full agreement and want to see the PUD Board take action
Board discussion:
• Where did Truckee Tahoe Community Foundation get the rules
• Believe in the golden rule- apply to anybody anywhere
• District Board does a pretty good job with these already
• Rules may be intimidating for adults and could dampen what they are trying to do at a
meeting
• People should have the opportunity to address public and express their opinion- rules
could detract from the spirit of free speech and democracy
• Need new thinking
• Not in favor of this
• Feel none of the rules are constraining
• It is a matter of manners- guidelines to follow
• Have not seen the Board or public violate since I have been here- am behind this
• Can see where the need comes from- community at large
• Well received and believe in the principles
• Agree to direct staff to prepare a resolution to adopt the "9 Tools for Practicing Civility"
DISCUSSION REGARDING THE BROCKWAY TRAIL ALIGNMENT This item involves a
proposed trail alignment across District Property located on Brockway Road.
Kathy Neus gave a presentation:
• Background / History
o Town of Truckee is responsible for building multi-use trails throughout Truckee
o Portion of Brockway Road Trail is already completed
o Potential trail has been identified: alignment crosses District property
o Description of Trail section: class 1 bike path; paved 10-foot wide trail surface with
2-foot gravel shoulders
• New Information
o Town of Truckee approached the District
o Potential trail crosses District parcels APN 19-450-14 and 19-450-54
o Potential trail connects Regional Park to the Rock Commercial Complex
o Town completed an environmental baseline study of wetland, threatened and
endangered species, and cultural resources; and has a preliminary design
• Next Steps
o Town to prepare a CEQA Mitigated Negative Declaration (MND)
o Once MND is complete, Town intends to return to TDPUD Board
8 Minutes: October 21, 2009
■ Provide conceptual plan for a wetlands mitigation project on the TDPUD property
(exact location pending)
■ Request a right of entry/easement to construct and maintain the trail and the
proposed wetlands
■ Estimated timeline: 6-9 months
• Fiscal Impact
o District will have no fiscal impact associated with this item
o Town of Truckee responsible for all project construction and costs, maintenance
costs and liability for this project
Public input:
• Path would encourage good environmental behavior by reducing vehicle transportation-
conservation and reduction of fuel use
• Provides key infrastructure component
• Agree for the Town to do this as long as it does not infringe on PUD property
Board discussion:
• Not sure how the project got this far- isn't it beyond what we were thinking about
• Has the PUD had any input
• Is there any special easement needed for the wetland
• The three phases do not seem to take very long
• Where is the trail located along the PUD property
• What is the estimated cost of the whole project- not just the PUD area
• Isn't there a drop off right on the road
• How much of the project relates to the ice rink area
• Is the Truckee Donner Rec & Park involved
• There has been controversy about the dollars for bike trails
• People have been waiting for this connection; people walk along Brockway and this is a
safety hazard
• Is there potential for value of the District property, even though part of it is wetlands
• Do not want to have a conservation easement- whoever has the conservation easement
must maintain the wetlands; the PUD should be the custodian of our own land
• Have a pretty good idea of the price of the land now; the PUD has participated in
projects like this in other areas
• Go on to next step as long as questions are answered
• Is this part of the Legacy Trail
DISCUSSION OF ARSENIC LEVELS AT GLENSHIRE DRIVE WELL
This item involves a discussion about the Tier 2 MCL Violation at Glenshire Drive Well,
public notification, and what's being done to solve the problem.
Ed Taylor gave a presentation:
• Background / History
o USEPA changed the arsenic standard from 50 ppb to 10 ppb in 2006
o Glenshire Drive Well has been in compliance since construction
o Dec. 2008 Glenshire Drive Well was sampled for arsenic with a result of 13 ppb
o Department of Public Health required quarterly arsenic sampling/analysis
9 Minutes: October 21, 2009
o Glenshire Drive sampling was completed in October with a 12.1 ppb average of the
last four quarters
0 12.1 ppb is a MCL Tier 2 violation which requires TDPUD to notify all customers
o The system average was 6.5 ppb during the last 12 months,
• New Information & Next Steps
o Tier 2 violation notification letter has been completed and approved by the California
Department of Public Health and will be sent to all customers next week
o Post on website — letter and links to arsenic related sites
o Options for abating arsenic levels in the Glenshire well
■ Well modifications— physical & operational
■ Blending with other wells
■ Treatment at the well
■ Abandon and drill new well
■ Increased monitoring
• Fiscal impact associated with this workshop item
o Piping modifications - $5,000
o Increased in monitoring - $10,000
There was no public input.
Board discussion:
• Keep going and update us
• Are there other wells with similar problems
• When water is blended, what is the source and is the blending working
• Is there a well with an arsenic treatment vessel
• This is really a harmless level to the rate payer, but we have to send out the notice
• We are doing better than providing just adequate water
• We should step up the monitoring even though the state requires quarterly
• What is the standard gallons per minute from the Glenshire Drive Well
• Is the Glenshire Drive well off line
• Wasn't it about two years ago that the Federal Government changed the arsenic level
from 50 ppb to 10 ppb
ROUTINE BUSINESS
TREASURER'S REPORT: SEPTEMBER 2009
Approval of the report: Director Aguera moved, and Director Sutton seconded, that the Board
approve the treasurer's report for the month ended September 30, 2009.
ROLL CALL: All Directors, aye. SO MOVED.
Approval of disbursements: Director Aguera moved, and Director Bender seconded, that the
Board approve the September 2009 disbursements report
ROLL CALL: Director Sutton, no (feels the Board should approve the checks before they are
mailed); All other Directors, aye. SO MOVED.
10 Minutes: October 21, 2009
APPROVAL OF MINUTES : SEPTEMBER 10 AND 16, AND OCTOBER 7, 2009
Director Hillstrom moved, and Director Bender seconded, that the Board approve the minutes
of September 10 and 16, and October 7, 2009. ROLL CALL: All Directors, aye. SO MOVED
CLOSED SESSION
CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTION 54956.9,
SUBDIVISION (B), POTENTIAL LITIGATION, ONE CASE
RETURN TO OPEN SESSION
Report from closed session
No reportable action.
ADJOURNMENT
There being no further business before the Board, the meeting was adjourned at 9:30 PM.
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
J. Ron Hemig, President
Prepared by
Barbara Cahill, Deputy District Clerk
11 Minutes: October 21, 2009
E
E
E
REGULAR MEETING
November 4, 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 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 Hemig.
ROLL CALL: Directors Joe Aguera, Jeff Bender, Ron Hemig, John Hillstrom and Pat Sutton were
present.
PLEDGE OF ALLEGIANCE
Juanita Schneider led the Board and public in the Pledge of Allegiance.
EMPLOYEES PRESENT: Tricia Phillips, Mary Chapman, Nancy Waters, Bob Mescher, Rosana
Matlock, Neil Kaufman, Steven Poncelet, Michael Holley, Stephen Hollabaugh and Barbara Cahill
CONSULTANTS PRESENT: Steve Gross
OTHERS PRESENT: Juanita Schneider
CHANGES TO THE AGENDA
There were no changes to the agenda.
PUBLIC INPUT
There was no public input.
DIRECTOR UPDATE
There were no director updates.
BUDGET ITEMS
DRAFT 2010-2011 BUDGET SUMMARY 2010 and 2011 Fiscal Year Budget Overview
Bob Mescher gave a presentation:
• Background / History
o July, 2008 — Board adopted Title 3 revision requiring a two-year budget
o July, 2009— Staff began 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 October 7, 2009— Operating & capital budgets were presented for supporting services
• Board
• General Management
• Administrative Services
• Public Information & Conservation
• Power Supply
1 Minutes: Nov 4, 2009
o October 21, 2009- Revised Purchase Power Plan
• 3% decrease in purchased power costs in FY10 versus FY09 budget
• 4% increase in purchased power costs in FY11 versus FY10
• Other budget assumptions
o Labor rates flat in FY10 & increase 3% in FY11
o Staffing level decreased by 4 full-time equivalents (FTE) through attrition
• 3 Electric Department (2 Operations; 1 Power Supply)
• 1 Water Department
o Operational expenses will remain flat or will slightly increase, each category ranging
from 0% to 3%
o No new debt for Electric and Water
o Employee medical & retirement costs increase in FY10 & FY11
o Water conservation costs increase significantly in FY11
• Electric Utility revenue requirements
o FY10 - Decrease in budgeted demand, no need to change rates
o FY11 - Increase in budgeted demand, estimated 3% revenue increase in FY11
• Recommend a rate study in early FY10 for FY11
• Electric Utility
o FY10 - Decrease in budgeted operating expenses & capital expenditures
o FY11 - Increase in budgeted operating expenses, decrease in capital expenditures
• Water Utility revenue requirements
o HDR cost of service study
o Increases 1.75% in FY10 and FY11
o Prop 218 rate adoption process is on-going
• Water Utility expenses
o FY10 - Increase in budgeted operating expenses, decrease in capital expenditures
o FY11 - Increase in budgeted operating expenses, decrease in capital expenditures
• 2006 COP pipeline replacement ends
• Overall District Budget Summary (in thousands)
FY10 Budget- Draft FY11 Budget- Draft
Electric Water Total Electric Water Total
Revenue $22,940 $11,190 $34,130 $23,920 $11,370 $35,290
Expenses 18,230 7,010 25,240 18,900 7,370 26,270
Net Income $ 4,710 $ 4,180 $ 8,890 $ 5,020 $ 4,000 $ 9,020
Plus:
From Funds $ 1,100 $ 7,060 $ 8,160 $ 700 $ 3,870 $ 4,570
Less:
Debt Service 3,500 3,340 6,840 3,450 3,310 6,760
Capital Projects 1,720 5,660 7,380 1,660 2,590 4,250
To Reserves 590 2,240 2,830 610 1,970 2,580
Surplus (Deficit) $ -0- $ -0- $ -0- $ -0- $ -0- $ -0-
2 Minutes: Nov 4, 2009
• Electric Department Projected Reserve Balances (in thousands)
FY09 FY10 FY11 FY11 Yr Goal Variance
Yr End Budget Budget End
(est) Activity Activity
Operating Cash Reserve $4,600 $ -0- $ -0- $4,600 $7,000 $(2,400)
Rate Reserve 1,943 414 433 2,790 3,000 210
Total Operating Reserves $6,543 $ 414 $ 433 $7,390 $10,000 $(2,610)
Capital Replacement Fund $ 238 $ -0- $ -0- $ 238 $1,000 $ (762)
Vehicle Replacement 161 30 30 161 -0- 161
Total Capital Reserves $ 399 $ (30) $ 30 $ 399 $1,000 $ (601)
Total Reserves $6,942 $ 384 $ 463 $7,789 $11,000 $(3,211)
• Water Department Projected Reserve Balances (in thousands)
FY09 FY10 FY11 FY11 Yr Goal Variance
Yr End Budget Budget End
(est) Activity Activity
Operating Cash Reserve $ 640 $ -0- $ -0- $ 640 $2,700 $(2,060)
Debt Service Coverage 1,336 593 603 2,532 -0- 2,532
Total Operating Reserves $1,976 $ 593 $ 603 $3,172 $2,700 $ 472
Capital Replacement Fund $4,221 $ 198 $ 201 $ 4,620 $4,000 $ 620
Res: Future Water Meters 730 (728) (2) -0- -0- -0-
Vehicle Replacement 140 (16) 59 65 -0- 65
Total Capital Reserves $5,091 $ (546) $ 140 $4,685 $4,000 $ 685
Total Reserves $7,067 $ 47 $ 743 $7,857 $6,700 $1,157
• Last steps
o Tonight:
• Present entire draft budget
• Present Overhead Allocation Rates
• Present Financial Master Plan
• Hold Public Hearing
o November 18, 2009
• Consider the adoption of the FY10 - FY11:
• Budget
• Water rates
• Overhead rates
There was no public input.
There was no Board discussion.
3 Minutes: Nov 4, 2009
DISCUSSION REGARDING BUDGET OVERHEAD ALLOCATION RATES The proposed FY10
& FYI overhead allocation rates will be discussed.
Bob Mescher gave a presentation:
• Background / History
o Overhead allocation rates are used to allocate indirect expenses (overhead) to work
orders, departments, etc.
o Direct expenses are easily attributed to a specific job, function, work order, etc.
o Indirect expenses are impossible or impractical to assign to a specific job, function,
work order, etc.
o Metrics (drivers) are related factors of direct expenses that can be multiplied by the
overhead allocation rates to allocate overhead to the same accounts as the direct
expenses
o Overhead allocation rates are no indication of efficiency or inefficiency
o Overhead allocation rates are strictly a factor used to allocate indirect expenses
o There is no industry standard for overhead allocation rates
o Overhead allocation rates are used in billable work orders and are an integral part of
the budget
o Overhead rates have traditionally been adopted along with the District's budget
• New information
o FY09 and proposed FY10 & FY11 overhead allocation rates
Overhead Rate Metric FY09 FY10 FY11
Labor Payroll Dollars 85.45% 85.91% 89.82%
Transportation Payroll Hours $ 10.28 $ 10.97 $ 11.25
Inventory Inventory Issues 23.64% 24.73% 25.81%
Administration JPayroll Dollars 1 1.04% 2.79% 2.81%
Construction JPayroll Dollars 1 25.75% 24.93% 25.71%
There was no public input.
Board discussion:
• Why use the word issue in terms of inventory
• Is there an industry standard for overhead allocations
• Did staff compare the TDPUD overhead rates to other districts
• The overhead rates seem high
• How does overhead fit in to the budget
• What is the GASB 45 OPEB in Labor Overhead
FINANCE MASTER PLAN THE Financial Master Plan is a 10-year financial projection
beyond the proposed budget.
Bob Mescher gave a presentation:
• Background / History of Finance Master Plan
o Presented to the Board annually since 2006
o Ensures progress towards Board's long-term financial goals & identifies challenges
o Projects revenue and expenses through 2020
■ 8 months actual results of 2009
■ Proposed 2010 & 2011 budget
4 Minutes: Nov 4, 2009
■ Set of revenue and expense assumptions
• Assumptions
o Customer growth: 0.50% in 2012; 0.75% in 2013;1.00% thereafter
o Standby fees decrease 1% per year
o Interest earnings 3% per year starting in 2012
o Expenses increase 3% per year
o Purchased power costs: increase 9% in 2012 and increase 8% in 2013
Electric Finance Master Plan (thousands)
FY09 FY10 FY11 FY12 FY13 FY14 FY15
Operating Cash Flow
Operating revenue $22,450 $23,083 $24,068 $23,994 $24,180 $24,426 $24,674
Operating expense (17,617) (18,234) (18,911) (20,203) (21,511) (22,289) (23,165)
Other revenue (expenses) 663 08) 417 58 148 174 203
Net Income $4,170 $4,631 $4,740 $3,733 $2,817 $2,311 $1,712
Transfers from (to) funds (389) (396) (420) 1,373 (436) (445) (465)
Debt principle payments (2,795) (2,885) (2,992) (3,340) (47) -0- -0-
Rate-funded capital projects 856 1( ,350) (1,328) (1,299) 1( ,511) 899 923
Change in Cash 130 �0- � 0- 467 823 967 334
Cash & Reserve Balances $6,645 $7,111 $7,568 $8,641 $9,849 $11,484 $12,319
Proposed rate increase 0.00% 0.00% 3.00% 0.00% 0.00% 0.00% 0.00%
Transfer to Rate Reserve 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%
Rate funded Capital $856 $1,350 $1,328 $1,299 $1,511 $899 $923
Water Finance Master Plan (thousands)
FY09 FY10 FY11 FY12 FY13 FY14 FY15
Operating Cash Flow
Operating revenue $11,096 $11,265 $11,438 $11,714 $12,092 $11,642 $11,892
Operating expense (6,835) (7,003) (7,370) (7,530) (7,721) (7,921) (8,127)
Other revenue (expenses) (806) 758 (785) 713 (678) JL44) 608
Net Income $3,465 $3,504 $3,283 $3,471 $3,693 $3,077 $3,157
Transfers from (to)funds (1,858) (2,415) (2,144) (1,941) (694) 2 25
Debt principle payments (834) (852) (853) (890) (923) (961) (1,001)
Rate-funded capital projects (856) ((1,350) 1( ,328) (1,299) (1,511) (899) 923
Change in Cash 263 $00- � 0- LO- $-0- LO- 00-
Cash & Reserve Balances $6,952 $7,583 $7,371 $8,057 $8,279 $8,169 $8,062
Proposed rate increase 0.00% 1.75% 1.75% 2.00% 2.82% 2.09% 1.26%
Transfer to Rate Reserve 6.00% 6.00% 6.00% 6.00% 0.00% 2.00% 3.00%
Rate funded Capital $500 $237 $286 $640 $2,076 $2,118 $2,181
• The Finance Master Plan shows that the proposed FY10-FY11 budget is consistent with
the District's long-term goals
There was no public input.
Board discussion:
• Is growth consistent with the Town of Truckee assumptions
• What is the definition of a customer
5 Minutes: Nov 4, 2009
• The 3% electric expense increase does not include Purchased Power
• Why does standby decrease by 1%
• What would the projections look like if electric rates were raised 2% per year after 2013
• It is strange to look at projections with no electric rate increase
• When there is going to be an event to lower electric expenses, wouldn't that be a time to
not raise rates
• What if carbon taxes does not happen and our expenses do not increase
• If something happens, borrow on electric rate reserves
• What about an electric scenario where chop out 3% in 2011, zero in 2012 and 2% in 2013
• What about not placing the 2% into electric reserves in 2011 and not do a 3% increase-
although this would deplete the reserve account
• See if there may be a reduction in expenses and power supply levels off- may not need a
3% electric increase in 2011
• What is an operating cash balance
• What can reserves be used for
• If raise electric rates by 3% in 2011, this will keep the District on an even keel
• Need to keep building the reserve balances- do not want to drop for a year
• Once the 2003 Electric COP is paid off, dollars may be needed for something else and not
be available to build reserves
• Once the 2003 COP is paid, maybe give the community a respite for a year or two
• Board can change goals
• How is the rate for a reserve goal determined
• Do not want to raise the electric rate by 3% one year and then reduce the next
• A rate increase is derived out of a revenue requirement
• Why do capital water projects have a big jump in 2013
• The Board decided on a pay as you go to do water system improvements
• Costs could go up 3% but rates could go up less
• When were reserve goals set
• How many years has the Financial Master Plan been used as part of the budget process
• How well have Financial Master Plan projections matched reality- growth, expenses, etc
PUBLIC HEARING
DRAFT BUDGET 2010-2011 PUBLIC HEARING This item involves a public hearing on the
Budget and overhead rates for 2010 and 2011.
President Hemig opened the Public Hearing. There were no public comments or none received
by mail. The Public Hearing was closed.
ACTION ITEMS
CONSIDERATION OF THE AWARD OF A CONTRACT FOR THE BUILDING ENERGY USE
ASSESSMENT AND IMPROVEMENT STUDY This item involves the award of a contract for
the TDPUD Building Energy Use Assessment and Improvement Study.
Director Sutton objects to the 10% change order authorization as part of the motion.
Director Hillstrom moved, and Director Aguera seconded, that the Board award a contract for a
base amount of $15,500 plus a 10% change order authorization for an amount not to exceed
6 Minutes: Nov 4, 2009
$17,050 to Enovity for the TDPUD Building Energy Use Assessment and Improvement Study.
ROLL CALL: All Directors aye, by voice vote. SO MOVED
CONSIDERATION OF A RESOLUTION ACCEPTING FINAL COMPLETION OF THE TDPUD
WATER WISE DEMONSTRATION GARDEN PROJECT This item involves the closeout of
the TDPUD Water Wise Demonstration Garden project and recording of the Notice of
Completion.
Director Bender moved, and Director Aguera seconded, that the Board adopt a resolution
accepting the TDPUD Water Wise Demonstration Garden project as complete and authorize the
filing of the Notice of Completion
ROLL CALL: All Directors aye, by voice vote. SO MOVED
CONSIDERATION OF A RESOLUTION ADOPTING THE "SPEAK YOUR PEACE CIVILITY
PROJECT" This item involves adopting a resolution to support the 9 principals for
practicing civility.
Director Aguera moved, and Director Hillstrom seconded, that the Board adopt a resolution
incorporating the principals of the "Speak Your Peace Civility Project".
ROLL CALL: Director Sutton, no; All other Directors aye, by voice vote. SO MOVED
CONSIDERATION OF A POWER SALES CONTRACT FOR PAYSON/NEBO NATURAL GAS
GENERATION This item concerns approving and executing an Absolute Assignment and
Lay Off Power Sales Agreement for a portion of the NEBO Natural Gas Generation project.
Director Bender moved, and Director Hillstrom seconded, that the Board approve the attached
resolution and authorize the President of the Board to execute the Absolute Assignment and Lay
Off Power Sales Agreement concerning the transfer of 3.6768% entitlement share of the Payson
Project from the City of Payson to Truckee Donner PUD; and authorize the payment of $164,287
to the City of Payson from the FY09 Purchase Power Budget. ROLL CALL: All Directors aye, by
voice vote. SO MOVED
CONSIDERATION OF APPOINTING A DIRECTOR TO THE JPA BOARD WITH UAMPS AND
LASSEN MUD This item involves the appointment representative to the newly formed
JPA, in cooperation with UAMPS and Lassen MUD.
Director Bender moved, and Director Aguera seconded, that the Board appoint Director Ron
Hemig as the representative and Stephen Hollabaugh as the alternate to the Joint Power Agency
(JPA) Board between Truckee Donner Public Utility District, Lassen Municipal Utility District and
Utah Associated Municipal Power Systems (UAMPS).
ROLL CALL: All Directors aye, by voice vote. SO MOVED
WORKSHOPS
DISCUSSION REGARDING A UAMPS WIND PROJECT AT HORSE BUTTE IN IDAHO Status
of the DAMPS Wind Project at Horse Butte in Idaho
Steve Hollabaugh gave a presentation:
• Background / History
o Truckee Donner PUD is in the Resource project at UAMPS
7 Minutes: Nov 4, 2009
o Resource project investigates possible generation resources prior to starting study
project
o UAMPS Idaho Wind project is now in the study phase and is close to becoming a real
project with a purchase power agreement
• Project Cost Estimate was presented by UAMPS at the October 21, 2009 meeting
o Internal Model — Base Case Scenario
■ Traditional 100% muni debt financing
■ Currently mid $70s/MWh, including REC's
o Citi Model ( Prepay structure)
■ Mid $60's/MWh
■ High degree of confidence with structure, and price assuming the constructions
costs are accurate
■ New IRS regulation gives the ability to fix the market value to this structure,
providing even more certainty to the proforma
• Land Lease Agreement
o Encountered problems with principal landowners: term, indemnity, assignment and
payment structure
o UAMPS met with land owner on Monday Nov 2"d and have an agreement in principal
• Environmental Schedule
o Complete pre-construction Biological Surveys
o Late Sept — Begin consultation and coordination process with Idaho F&G and Fed
F&W
o Mid September: begin Avian studies; specifically, raptors, other/migratory birds; full life
cycle (breeding (Leks), nesting, brooding, wintering)
o Early October— bat monitoring
o Late fall — big game surveys
o Summer 2010 —full biological report
o Cultural report if necessary
• Data Collection
o 3 additional Towers and Anemometers
■ Collect additional data to ensure corroborative wind mapping
■ Enough data to enable optimal micrositing and geotechnical drilling at turbine
locations by next summer
• Critical Path Items
o Finalize Site Control (ink to paper)
o Fall Environmental Work (raptor/migratory bird study almost complete)
o Transmission (feasibility to be delivered to UAMPS on Oct 29tn)
o Power Sales Contract (developed first draft and is being reviewed)
• Power Sales Contract Schedule
o Target January - Financing (Wing Turbine Generator down payment)
• Dec 14 — Participant Governing Body Approval of power sales contract
• Dec 24 — Return executed package to UAMPS (power sales contract and
Certificate & Opinion of Counsel)
• Jan 1 — Fully authorized and able to finance
• Updated Entitlement Share as of Sept 1, 2009: 6,111 Project participation KW, 16.59%
There was no public input.
Board discussion:
• Is the project just starting and when will it be complete
8 Minutes: Nov 4, 2009
• Why did staff suggest a 8 MG limit
• What wind projects do we have now from UAMPS
• Why are turbines a good price now
• Who gets the RECS
• In favor of 8 MG-that is in line with where we want RPS to be
• How is this funded by us—rates, rate reserve fund
• Is the transmission cost on top
• Now we buy a lot of wind RECS- do we plan to reduce and replace those RECS with
projects like this
• In favor of increasing to 8 MG
• PUD is large in project participation
• Go up a little to 8 MG
REVIEW OF IDENTITY THEFT PREVENTION POLICY This item involves review of the
Policy and Committee members.
Rosana Matlock gave a presentation:
• Background / History
o Fair & Accurate Credit Transaction Act "FACT Act" required all creditors to adopt an
Identity Theft Prevention Policy in order to detect, prevent and mitigate identity theft
o FACT Act requirements referred to as: "Red Flag Rules"
■ Red Flag defined as "A pattern, practice or specific activity that indicates the
possible existence of identity theft"
■ Identity theft defined as "The illegal use of someone else's personal information
(such as a social security number) in order to obtain money or credit
o October 1, 2008, Board adopted Identity Theft Prevention policy and appointed a
Privacy Committee
o The policy requires an annual review
• November 1, 2008 policy implemented
o Modified new service application packet
o Placed placards at customer service counter
o Required photo ID at counter
o Required identifying information over phone
o April, 2009 began using OnLine Utility Exchange for identification validations
o July, 2009 letters sent to property managers and realtors
o Privacy Committee met five times in the past year to develop and administer the
program and procedures
■ ID Validations
■ Over 400 validations processed through OnLine Utility Exchange
■ All new customers at counter have provided photo ID
o Red Flags Encountered
■ Match to other name
■ No record found
■ Security alert
■ No valid ID
■ Birth date mismatch
There was no public input.
9 Minutes: Nov 4, 2009
Board discussion:
• What does staff do with social security numbers- need to be very careful with them
• Has any customer objected to giving their social security number
• Important customer information needs to be protected
• Excellent this has been implemented and taken care of
CLOSED SESSION
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
(A), EXISTING LITIGATION: CLAIMS OF PACIFIC RIM CONSTRUCTION, INC. AND;
ADVANCED ASPHALT; AND TEICHERT
CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTION 54956.9, SUBDIVISION
(B), POTENTIAL LITIGATION, TWO CASES
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 10:00 PM.
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
J. Ron Hemig, President
Prepared by
Barbara Cahill, Deputy District Clerk
bhc
10 Minutes: Nov 4, 2009