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Home My WebLink About6 Glenshire Water Company Agenda Item # TRU. I I, 'ty ; istrict Memorandum To: Board of Directors From: Peter Holzmeister Date: May 11, 2001 Acquisition of Glenshire Mutual Water Company The shareholders of Glenshire.Mutual Water Company have voted overwhelming in favor of receiving water service from TDPUD. Attached is an informal report on the voting that was given to me by Mark Thomas. It shows that 976 ballots were cast and 932 voted to be served by TDPUD. There are 1551 shareholders in all. Also attached is a draft scope of services for a due diligence review of the Glenshire water system. If the Board's wishes to consider acquiring the Glenshire water system I will need some help in reviewing various elements of the business to provide guidance on the apropriate terms of acquisition. The work product resulting from the attached scope of services should provide that guidaace. I also suggest that we begin the process of applying for annexation of that portion of Glenshire not yet in our District. It would be appropriate to have preliminary discussions with SR Jones to clarify the process and the timeline. Recommendations 1. I recommend that the Board approve the accached scope of services to be performed by Harold Morgan and Rubin Zubia of Navigant Consulting. 2. 1 recommend that the Board authorize the General Manager to have preliminary discussions with SR Jones regarding annexation of Glenshire into the District boundary. BALLOT COUNT Accumulated Mutual Consolidate Total % of 1551 shareholders March 29, 2001 1 1 0.06°% c� March 30, 2001 1 0.06% /� t-o f .D April 2, 2001 3 74 78 5,03% ? f�z �. rne� April 3, 2001 6 105 189 12.19% \f ote Ca«s5 � April 4, 2001 3 72 264 17.02°a April 5, 2001 2 117 383 24,69% April 6, 2001 1 53 437 28.18% o -- 4. 5 1S April 9, 2001 2 69 508 32.75% I or Mud a o�- 4 Hrne� April 10, 2001 2 56 566 36A9°!0 April 11, 2001 4 62 632 40.75% Se } t April 12, 2001 1 30 663 42.75% April 13, 2001 1 15 679 43.78% f�o f9 April 16, 2001 3 42 724 46.68% F-0 PUD o� April 17, 2001 1 15 740 47.71% 1 abstain A} k Sharei ol�erS April 18, 2001 4 26 770 49.65% April 19, 2001 0 25 795 51.26°!o Uo�ao o� Nod tt94ec April 20, 2001 2 0 807 52.03% 2.8 to April 23, 2001 1 22 830 53.51% 0 April24, 2001 1 20 851 54,87% AkN Shc <ehe�oers April25, 2001 0 10 861 55.51% vo�eo or No4 V6kv April 26, 2001 1 12 874 56.35% April 27, 2001 0 20 894 57.64% S1.�CG�hO WEf$ April 30, 2001 3 15 912 58.80% May 1, 2001 0 9 921 59.38% May 2, 2001 0 13 934 60.22% May 3, 2001 1 10 945 60.93% May 4, 2001 1 17 963 62.09% 313 Mere �or r E Qum 2�' all -FHe a e � t s'' Vo4eo 4o May 7, 2001 1 12 976 62.93% i 7 Ratio N w g Total Votes 44 + 932 = 976 21 to 1 to Consol �Sio voO ES oves- 50 010 o� �okot Stio- e` o�dec Ccr P,-o BC/PUD/votes 05/07/2001 Subject: Proposal to perform due diligence study on the Glenshire water system The District is contemplating an acquisition of the Glenshire Mutual Water Company. The following is a proposed scope of work which will provide a due diligence investigation and assessment needed to prepare a written letter report on the condition and adequacy of the water system for the district to consider before acquisition. The following is a Scope of Work as envisioned necessary to provide the needed due diligence information. SCOPE OF WORK 1. Conduct a system survey (tour) of the water system to observe the above ground system facilities comprising the water utility plant and interview operations personnel. This will require that an operation staff member or individual familiar with the system and its operation and maintenance be available to accompany us on the system tour. 2. Review the water system construction and O&M records and interview a representative from any local consultant utilized by the mutual water company. Specifically review and obtain copies as needed of system distribution maps, facility as-built plans and specifications, standard design details, pump and tank reservoir maintenance logs, water leak records, and other system related operation and maintenance records. Unless you request otherwise, well production facilities will not be included in view of the district providing alternative water supplies. 3. Review water quality monitoring data for the system for the last three years to determine compliance with current anticipated future water quality standards. Again, emphasis would not be on the source of supply. However, other water quality concerns such as lead and copper, and bacteriological levels could be an ongoing concern for the district. 4. Contact and interview Department of Health Services (DNS) staff in Sacramento to ascertain history of DHS inspections, citations issued (if any), and general acceptability and results of system regulation. A review of the DHS regulatory files would also be conducted. 5. Conduct a general review of the adequacy of the transmission and distribution system and storage capacity to meet and supply the flow requirements of the water system. 6. Provide an assessment of the physical condition of the water system as presented in operation and maintenance records, discussions with the local fire department, interview of operation personnel, observations made during the water system tour and files reviews, and interviews with consultants familiar with the system. 7. Review the quantities, sizes, types of materials and ages to the extent such information exists on the assets proposed to be conveyed to the District. This would also include real estate assets. 8. Review the record of easements, encroachment permits, contract obligations, will serve commitments, debts and other obligations that may impact the District should the Mutual be acquired by the TDPUD 9. Provide a written letter report on the due diligence investigation reporting on the results of the various reviews together with conclusions on the condition and adequacy of the system. 10, Provide advice to the District on the terms and conditions that should be satisfied by the Mutual Water Company as part of the transfer of ownership. This task would cover such items as records to be conveyed to the District, transference of easements and permits, satisfaction of contract and debt obligations, and other pertinent matters that may come to the attention of the consultant in the process of the scope of services. A field visit could take place in late May, followed by records review and assessment. Following our field investigations and system visit, we anticipate having a written report by the end of June, if not sooner. Attached to this proposal is a current fee schedule for services of Bookman-Edmonston Engineering, a division of Navigant Consulting, Inc. The work would be performed on a time and expense basis with a maximum not-to-exceed budget. Primary assistance in this study would be given by Ruben Zubia of this office, a principal design engineer, with extensive experience in municipal water system design and operations. Based on a careful evaluation of the Scope of Work required, it is anticipated that it will require about 100 to 120 hours of professional engineering time to conduct this study. This would include my involvement as Project Manager, Mr. Zubia's involvement as the primary engineering investigator, plus the added support of the firm's staff engineers as needed. We estimate the total cost for performing the study for engineering labor hours to amount to no more than $17,500. In addition, we anticipate that clerical hours for report preparation, plus travel expenses, including airfares, hotel accommodations, and other travel expenses for Mr. Zubia and myself would not exceed the sum of$2,000, Accordingly, we propose a not-to-exceed budget of$19,500. Please note that the Scope of Work does not provide for any detailed investigations on potential environmental contamination of facility real estate sites. It is our opinion that, based on the remote location of the water system and its service areas, there probably does not exist any potential threat from hazardous materials. However, during our field visit of the system facilities, we will make careful observations for the presence of soil staining, hazardous waste material storage, or other potential threat from this source. If necessary, a recommendation would be made in the due diligence report to further investigate this area as needed. Several of the District's Board members may have specific concerns on the condition of the Glenshire water system. We certainly invite the sharing of any concerns your Board members might have and anticipate being able to address such specific concerns in the report so long as they are generally contained in the overall Scope of Work. BOOKMAN-EDMON57'ONENGEIEERLVC the WaterResourcesPractice of NA VIGANT CON5&EYIVG,INC 5CHED LPL E OF FEES CLA55V7C4770N RATEPERHOUR Managing Executive Consultant $199 114ana,-7ngExecutiveEng7neer , 5176 FrincipalExecutive Engineer/Consultant $165 Executive Engineer/Consultant $Z56 Principal Engineer/Consultant $145 Mana87ngSemorEnb17neer/Consultant $135 SenlorEngineer/Consultant $= Associate Engineer/Professional $99 Assistant Engineer $79 Technician IV $86 Tecluuclan III $79 Technician II $67 Technician I $54 CADDManager $86 Senior CADD Operator $79 CADD Operator $67 Administrative/Clerical $54 FOR OUT-ORPOC[a7ZTEN5FS,including but not limited to plane tra vel, lod,-zng, reproduction expenses, andlong distance telephone, will be billed at the actual cost thereof, with computer time billed at$I5per hour, automobile mileage at the amount allowed by IRS recqulat'ons per mile, except vehicles used for construction management support which will be billed the amount allowed by IRS reoaulations plus 10 cents per mile, and copies at 10 cents each. subcontractors will be billed atactual costplus 10percent. This Fee Schedule is reviewed annually and subject to change. Effective January 1,2001.