2002 05-02 Public HearingSOUTH TAHOE PUBLIC UTILITY DISTRICT
"Basic Services for a Complex World"
Duane Wallace, President
BOARD MEMBER
James R. Jones, Vice President
PUBLIC HEARING OF THE BOARD OF DIRECTORS
SOUTH TAHOE PUBLIC UTILITY DISTRICT
MAY 2, 2002
MINUTES
The Board of Directors of the South Tahoe Public Utility District held a Public Hearing, May 2, 2002,
7:00 P.M., City Council Chambers, 1900 Lake Tahoe Boulevard, South Lake Tahoe, California.
BOARD OF DI.RECTOR$:
President Wallace, Directors Becker, Jones, Schafer,
Mosbacher.
ROLL CALL
STAFF:
Baer, Solbrig, Sharp, McFarlane, Cocking, Coyner,
Henderson, Metz, Nolan, M. Alsbury, Donovan,
Attorney Kvistad
GUESTS:
John Cefalu, Susan Wood/Tahoe Daily Tribune,
Barney Mosbacher
7':00 P.M. PUBLIC HEARING
This Public Hearing was held to gather public input.
Meeting notices were published in the Tahoe
Daily Tribune on April 11 and 26.
2002/03 FISCAL YEAR BUDGETS:
SEWER ENTERPRISE FUND AND
WATER ENTERPRISE FUND,
PUBLIC HEARING MINUTES - MAY 2, 2002 PAGE - 2
President Wallace opened the Public Hearing at 7:00 p.m.
Rhonda McFarlane and Richard Solbrig gave an over-
head slide presentation reviewing the 2002~03 Fiscal
Year Budgets for the Sewer and Water Enterprise Funds.
Planned expenditures and revenues were explained.
McFarlane answered questions from John Cefalu
during the course of the presentation.
President Wallace opened the hearing for Public
Comments at 8:20 p.m.
John Cefalu commented and/or received clarification
regarding the following topics:
1) MTBE settlements and related legal costs;
2) Budgeting, construction, and use of the access road
to Al Tahoe Boulevard;
3) Funding for depreciation;
4) Proposed rate increases are successful due to the
apathetic nature of this community;
5) Relayed his objection to any rate increases.
Director Schafer stated the budget is based on a projected
increase in operating costs. He pointed out that the District
is taking a prudent course, and at the same time, attempting
to make it manageable for the community. The environment
is heavily regulated and a spill would be costly.
Director Mosbacher commented that an increase is needed
since the state and federal government continue to mandate
regulations that are unfunded. For example, Lahontan is
requiring that TMDLs (Total Daily Maximum Loads) be
monitored. If contaminants are found, they must also be
addressed. The District must fund these requirements.
Director Jones stated if suppliers would keep their costs
down, the District could too. Depreciation needs to be
funded. Rates are not increasing at the same pace as other
utilities. The District chose to implement small rate increases
over time.
President Wallace stated when he became a Board Member
in 1991, the District was in poor financial shape. Thanks to
prudent fiscal management by the Board and staff, it is now
Open Hearing
Staff Report
Public Comments
Board Member Comments
PUBLIC HEARING MINUTES - MAY 2, 2002 PAGE - 3
doing well. Rates were raised for infrastructure improvements
and to contend with problems posed by MTBE, but the public
was told there would be an end to the rate increases. Wallace
feels the District has sufficient funds and does not support
rate increases this year.
8:45 P.M.
8:45 P.M.
Board Member Comments
(con't.)
Close Public Hearing
ADJOURNMENT
Duane Wallace, Board President
South Tahoe Public Utility District
ATTEST:~~__~ ~_~,~/'~ .~_
Kathy Shar~lerk of the Bbard
South Tahoe Public Utility District
SOUTH TAHOE
PUBLIC UTILITY DISTRICT
WELCOME
May 2, 2002
SOUTH TAHOE
PUBLIC UTILITY DISTRICT
2002/03
BUDGET AND LONG TERM
FINANCIAL PLANS
A SOUND DISTRICT BUDGET
PROVIDES FINANCIAL
MEANS TO:
· Operate Safe and Reliable
Water and Wastewater Systems
· Protect Lake Tahoe's Environment
· Allocate Our Resources Prudently
· Be Accountable to Our Customers
SEWER ENTERPRISE FUND
3 4
SEWER ENTERPRISE FUND
2002/03 Budget Proposal
· Rate Adjustment: Overall Up 2%
· RevenueS13.8 Million
· Operating Costs $10.2 Million
+ $3.9 Million for Depreciation
=$14.1 Million
· Infrastructure Projects $10.4 Million
· Debt Service $944,000
REVENUE
SEWER BUDGET
2002/03 Funding Sources
IConnection
IntereSt & Other 5% l
PropertyTaxeS29% ]
SEWER ENTERPRISE FUND
REVENUE
· Up in Total $278,000
· Property Taxes up $205,000
· Service Charges up $204,000
· Grant Funds up $260,000
· Interest Income down $270,000
· Connection Fees down $118,000
Typical Residential Customer
· $72.43 Per Quarter
· Monthly Change 47 Cents
· 2% Adjustment
Other Customer Classes
· Commercial 2.9%
· Motel/Hotel 1.4%
· Restaurant 2.9%
· Trailer/Mobile Home Park 1.3%
9
10
2002/03 QUARTERLY
SEWER SERVICE FEES
NoAh Tahoe Incline Village Kingsbury
2002/03 QUARTERLY SEWER
SERVICE FEES
South Tahoe P.U.D. Compared to State
South Tahoe
California
11
12
SEWER ENTERPRISE FUND
Recommended Borrowing
· Alpine County Master Plan
$12.2 Million
· 20-Year Debt Service $933,150
SEWER ENTERPRISE FUND
2002/03 Proposed Spending
~ DebtService4% j
[ Salaw & Benefits 25°/_~J
I Maintenance&Operations23%I
]3
14
SEWER ENTERPRISE FUND
CAPITAL PROJECTS
Presented by
Richard Solbrig
Assistant Manager/Engineer
SEWER ENTERPRISE FUND
2002/03 Capital Outlay $9.5 Million
· Export Pipeline $2.2 Million
· Section B - LPPS to USFS Campground
(2003 building season)
15
16
EXPORT PIPELINE MAP
El Dorado Co
LEGEND
STPUD "C" line A~pmc Co
Service Area
Douglas Co
17
SEWER ENTERPRISE FUND
2002/03 Capital Outlay $10.4 Million
· WWTP Improvements $5.2 Million
· Sludge Handling Facility
· New Sludge Storage Tank
· Covers for Primary Clarifiers #1 & #2
· Wildwood Sewage Interceptor
$500,000
· Plant SCADA System $260,000
· Replace Utility Billing Software
$157,000
18
SEWER ENTERPRISE FUND
2002/03 Capital Outlay $10.4 Million
· Rebuild Johnson Pump Station
$145,ooo
· Recoat Small Tank at LPPS
$100,000
· GIS Implementation $94,000
· Engineering Staff & Expenses
$568,000
SEWER ENTERPRISE FUND
Salary & Benefits
· Up 2.9%
· Wages up $100,000
· Positions up ¼ FTE (60% Sewer/40% Water)
· Step raises and COLAs for existing
employees
· Benefits costs up $50,000
19
2O
SEWER BUDGET
MAINTENANCE & OPERATIONS
GOAL: DECREASE 2~-----
BUDGET BY 2°/o~V
· M&O Budget Down $76,000 · Natural Gas Costs ($140,000)
· UR Pipes/Covers/Manholes ($100,000)
· Alpine County Monitoring Expense
$45,000
· Alpine CO. Land Taxes $54,000
· Grant Coordinator $23,000
· Other Net Increases $42,000
SEWER ENTERPRISE FUND
1994 to 2003
Operating Costs Excluding Depreciation
$12,000,000 -
$10,000,000 · ~
$6,000,000
$4,000,000
,$2,000,000
0
[] 1994
[] 1994 CPI& Volume Adjusted
[] 2003
21
22
SEWER ENTERPRISE FUND
Controlling Costs 1994 to 2003
Operating Costs Excluding Depreciation
$7,000 -
$6.000
1,487 MG 1;696MG
$5,ooo ·
$4.ooo -
$3,ooo
$2.000 ..
$1.ooo
0
[] 1994
[] 2003
[] 1994 CPi Adjusted
SEWER ENTERPRISE FUND
FIVE YEAR FORECAST
23
24
EXPORT PIPELINE
Sections A and B Within Tahoe Basin
$36 Million Project
· Prior to the New Fiscal Year · $30 million spent
· All $10.6 million in federal funding
received
· District's remaining obligation for
matching $5.6 million
SEWER ENTERPRISE FUND
CAPITAL PROJECTS
Five Years Ending June 30, 2007
2002/03 $10,396,000
2003/04 6,353,000
2004/05 4,933,000
2005/06 3,076,000
2006/07 4,540,000
Total $29,298,000
25
26
SEWER ENTERPRISE FUND
CAPITAL PROJECTS
Five Years Ending June 30, 2007
PlantJSystems Upgrade $15,~ 10,000
Bldg./Grounds $234,000
HeaVY Eq~VehicJes
various Equipment Sl,318,000 ]
Stations $3,635,000]
2?
SEWER ENTERPRISE FUND
CAPITAL PROJECTS
Five Years Ending June 30, 2007
· Changes From Last Forecast
· New Headquarters Building Changed to
the Water Enterprise Fund
· Plant improvements $3.5 million
~ Primary Building Rehab, Filter
Replacement/Rehab, Plant SCADA
Equipment, Sludge Storage Tank
28
SEWER ENTERPRISE FUND
CAPITAL PROJECTS
Five Years Ending June 30, 2007
· Changes From Last Forecast
· Alpine County Master Plan Projects $6.5
Million
,-General Implementation, Harvey Place
Emergency Storage Ponds, Diamond Ditch
Waterfall Pipeline, Wetland Infiltration Basin,
Snowshoe Thompson Pipeline
· Wildwood Interceptor $1 Million
· Pump Station Force Main Rehab
$800,000
29
SEWER ENTERPRISE FUND
FUNDING SOURCES FOR
CAPITAL PROJECTS
Connection Fees 20%
Service Charges 30% I
Interest & Other 1,
Capital Reserves 14%
30
SEWER ENTERPRISE FUND
PROJECTED RATES
Five Years Ending June 30, 2007
· Consistent With Previous Forecast
31
PROJECTED SEWER RATES
FIVE YEAR CHART
Quarterly
YEAR RATE CHANGE
' 2%
2002/03 72.43 1.41
2003/04 ' 73.89 1.46
2004t05 , ,; , ~: ~ 75.37 1.48
2005/06 : ' - 76.88 1.51
2006/07 '' , ' 78 41 1,53
Typical Single Family Home with
Three Sewer Units.
32
SEWER ENTERPRISE FUND
Capital Reserves
· Projected for 2007:$8 Million
· Capital Reserves are Needed for
Additional Export Pipeline
Replacement in 2020
~ 62% of Annual Needed Savings
WATER ENTERPRISE
FUND
33
34
WATER ENTERPRISE FUND
2002/03 Budget Proposal
· Revenue $9.5 Million
· Operating Costs $5.3 Million +
Depreciation $1 Million = $6.3 Million
· Debt Service $1.3 Million
· Infrastructure Projects $5.3 Million
· 2% Overall Rate Adjustment
35
REVENUE
36
WATER BUDGET
2002/03 Funding Sources
Service
I CaCtal Improvements 15%
Interest & Other 12%]
Connection Fees 2%~
WATER ENTERPRISE FUND
REVENUE
· Up $869,000
· Rate adjustment adds $146,000
· Interest income up $687,000
· Grant funding down $59,000
37
38
WATER ENTERPRISE FUND
REVENUE
· Grant Funding
· County Water Agency $185,000
· Tahoe Restoration Act $485,000
RESIDENTIAL CUSTOMERS
Water Rate
· $99 New Quarterly Rate
· 2% Adjustment
· Change Amounts to 65 Cents per
Month
· Adjustment Based on Cost of
Service Calculation
39
4O
COMMERCIAL CUSTOMERS
Water Rates
· Change Based on Cost of Service
· 1% to 3%
2002/03 QUARTERLY
WATER SERVICE FEES
250.00 -
200.00 -
150.00 -
100.00 -
50.00 -
0
InclineVillage
Cave Rock
South Tahoe
Nor[h Tahoe Kingsbury
4!
42
2002/03 QUARTERLY WATER
SERVICE FEES
South Tahoe P.U.D. Compared to State
80.00 -
60.00 -
40.00-
0
South Tahoe California
43
WATER ENTERPRISE FUND
2002~03 Proposed Spending
Capital 44%]
L SalarY & Benefits 24%
Debt Service t t%]
44
WATER ENTERPRISE FUND
CAPITAL PROJECTS
More From
Richard Solbrig
Assistant Manager/Engineer
45
WATER ENTERPRISE FUND
2002/03 Capital Outlay $5.3 Million
· MTBE Projects $1.6 Million
· So. Y Treatment, Tahoe Restoration
Act Project, Geophysical Exploration
· Waterlines Highway 50 $1.1 Million
· Winnemucca to Y & San Jose to Bigler
· Other Waterlines $299,000 · at Longs
· Cedar Avenue
· So.Y
· Carson Avenue
46
WATER ENTERPRISE FUND
2002/03 Capital Outlay $5.3 Million
· Tanks $650,000
· Gardner Mountain #1
· Keller
· Echo View
· Road to Al Tahoe Boulevard/
Headquarters Building Planning
$600,000
· Re-drill Glenwood Well $100,000
· Engineering Staff $384,000
4?
WATER ENTERPRISE FUND
Salary & Benefits
· Up 4%
· Benefits costs up $36,000
· Wages up $73,000
,- ¼ FTE (40% Water/60% Sewer)
· Other increases from step raises and COLAs
48
WATER BUDGET
MAINTENANCE & OPE~
GOAL: INCREASE EQUAL~ir~/
· ~.50% INCREASE $'158,000'"'
· State Mandate for Water Operator
Certifications $61,000
· Chemical Supplies for Arrowhead MTBE
Treatment System $20,000
· USFS Order to Destroy Infiltration Gallery
and Spring at Iroquois Tank $20,000
· Federal Mandate for New Contaminant
Monitoring $30,000
· Grant Coordinator $14,500
· All Other $12,500 Net
WATER ENTERPRISE FUND
O
0
Controlling Costs 1994 to 2003
)erating Costs Excluding Depreciation
[] 1994 CPI&Volume Adjusted
49
50
WATER ENTERPRISE FUND
Controlling Costs 1994 to 2003
O')erating Costs Excluding Depreciation
Z271~G ~592MG 2,592 -
$2,500
$2,000
$1,500
$1,o0o
[] 1994 [] ~008 [] 19940PIAdjusted
WATER ENTERPRISE FUND
FIVE YEAR FORECAST
51 52
MTBE
· Future Costs At Least $33 Million
(Boyle Interim Water Master Plan)
· Costs to Date $9.1 Million + Litigation
Expenses/Fees
· Success with the MTBE Lawsuit Has
Provided $33 Million in Settlements
(Before Litigation Costs)
· Jury Trial Outcome May Provide
Additional Resources
53
OUT OF POCKET DAMAGES
20,000,000
15 000 000 '
10,000,000
5,000,000
12/98 6/99 6/006/01 1/1102 200;3 2004 2005 2006 2007
[] Overhead [] Other
[] Interest [] Contractor
[] Professional Fees [] Labor
54
WATER ENTERPRISE FUND
CAPITAL PROJECTS
Five Years Ending June 30, 2007
2002/03 $ 5,258,000
2003/04 5,018,000
2004/05 6,089,000
2005/06 4,299,000
2006/07 3,270,000
Total $23,934,000
55
WATER ENTERPRISE FUND
CAPITAL PROJECTS
Five Years Ending June 30, 2007
[ Water Resources $9,300,000
56
WATER ENTERPRISE FUND
CAPITAL PROJECTS
Five Years Ending June 30, 2007
· Changes From Last Forecast · Waterlines up $1.1 Million
· Cornelian Booster Station $400,000
· Arsenic Treatment $5.5 Million
· MTBE Treatment So. Y $2 Million
· Tahoe Restoration Project $485,000
· Shift of Road/Headquarters Building from
the Sewer Fund $4.1 Million
5?
WATER ENTERPRISE FUND
FUNDING SOURCES FOR
CAPITAL PROJECTS
Capital Improvement Fee 30%
ConnectionFees4%
PROJECTED WATER RATES
FIVE-YEAR CHART
Quarterly
2002/03 : ~ : $99.00 ~ $1.95
2003/04: $101.00 ~ $2;00
$103.00;: :$2.00
2005/06 $105.05 $2.05
12006107 : $107:15 : $2,10
WATER ENTERPRISE FUND
Capital Reserves
· Segregated Between General Funds
& MTBE Remediation Fund
· $7.9 Million Projected for 2007
~ of that $6.1 Million Remediation Fund
· $1 Million Contingent Obligation
to the State for Sher Funding
· Future MTBE Sites to Address:
Paloma Well, Country Club Well,
and Bakersfield Well
60
WATER ENTERPRISE FUND
Reserves
· Recommendation to Pass Ordinance
Restricting MTBE Remediation
Funds
,Timing May 16, 2002 Board Meeting
~Allows Funds to Be Separately Segregated
on the Financial Statements
,Sends a Clear Message that MTBE Funds
are for the MTBE Contamination Costs
~ Requires Public Input for Future Changes to
the Ordinance
PROPOSED RATE CHANGE
· How Will the Proposed Rate Change
Look on our Customer's Quarterly
Bill?
d!
62
CURRENT BILL 2002
2003 BILL - PROPOSED RATES
63
64
2003 BILL: PRIOR FINANCIAL PLAN
65
2002/03 PROPOSED BUDGET
Sewer & Water Combined
· Revenues $23 Million
· Operating Costs $16 Million
· Depreciation $5 Million
· Debt Service $2.3 Million
· New Borrowing $12.2 Million
· Capital Spending $16 Million
, Grant funded $745,000
66
SUMMARY
2002/03 Budget
· Rate Adjustments of 2% for Both
Sewer & Water
· Operating Costs Excluding
Depreciation Up 3.6%
· 42% of the Change is from Interest
Expense (Without the Alpine County
Borrowing Costs Are Up 2.1%)
Thank You
THE END
67 68
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