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2003 04-17SOUTH TAHOE PUBLIC UTILITY DISTRICT "Basic Services for a Complex World" Richard Intedm General Ma James R. Jones, President BOARD MEMBER Edc Schafer, Vice President REGULAR MEETING OF THE BOARD OF DIRECTORS SOUTH TAHOE PUBLIC UTILITY DISTRICT APRIL 17, 2003 MINUTES The Board of Directors of the South Tahoe Public Utility District met in a regular session, April 17, 2003, 2:00 P.M., City Council Chambers, 1900 Lake Tahoe Boulevard, South Lake Tahoe, California. BOARD OF DIRECTORS: President Jones, Directors Wallace, Schafer, Mosbacher. Director Becker was absent. ROLL CALL STAFF: Solbrig, Sharp, McFarlane, Cocking, Schroeder, Hoggatt, Henderson, Attorney Kvistad. GUESTS: Dave Galicia/G.B. General Engineering Moved Schafer / Second Mosbacher / Becker Absent / Passed to approve the Consent Calendar as submitted: CONSENT CALENDAR Trench Paving and Patch Paving for 2003 Calendar Year - (1) Awarded trench paving bid to the lowest responsive, responsible bidder, Pederson Underground, in an estimated amount of $32,000; and (2) Awarded asphalt patch paving bid to the lowest responsive, responsible bidder, G.B. Construction, in an estimated amount of $102,000; REGULAR BOARD MEETING MINUTES - APRIL 17~ 2003 PAGE - 2 Johnson Sewer Pump Station Upgrade -Authorized staff to advertise for bids for a new generator set to be used as a backup power supply; 2003 Customer Satisfaction Survey - Authorized execution of letter of engagement with Meta Research, Inc. in the amount of $27,775; 2003~2004 California Legislative Advocacy - Authorized execution of contract with Lynn M. Suter and Associates in amount of $25,666.67; e. Approved Regular Board Meeting Minutes: April 3, 2003. CONSENT CALENDAR (continued) ITEMS FOR BOARD ACTION Director Mosbacher disqualified herself from participation in this item per a previously disclosed potential conflict of interest. She did not read the material associated with this agenda item, and she left the room while it was being discussed and voted on. B-LINE REPLACEMENT: PHASE 3 REPLACEMENT PROJECT The U.S. Forest Service (USFS) staff has been working on the EIR/EIS and associated studies for the project under a collection agreement, which is essentially a time and materials contract. The previously approved amount has been expended (used not only for B-line Phase 3, but previous projects requiring Special Use Permits, such as Gardner Mountain Tank No. 2 and associated waterline). Additional funding is necessary to allow the USFS to continue working on the project in a timely fashion. A discussion took place regarding the mitigation requirement conceming old growth forests. Moved Schafer / Second Wallace / Mosbacher Abstained / Becker Absent / Passed to approve Amendment No. I to USFS Collection Agreement in the amount of $5,975. Moved Schafer / Second Wallace / Becker Absent / Passed to approve payment in the amount of $688,588.18. PAYMENT OF CLAIMS REGULAR BOARD MEETING MINUTES -APRIL 17~ 2003 PAGE -3 Finance Committee: The committee will meet April 24. General Mana,qer Recruitment Ad Hoc Committee: The committee met April 17. Director Wallace reported he has been appointed interim general manager of the agency until the general manager position is filled. He has delegated duties to the former general manager, Bill Hetland. Board members discussed the level of participation the District should devote to this Board. They also discussed establishing a zone in order to allow the District to control its own tax revenues. Director Mosbacher reported on her attendance at the Upper Truckee River Watershed Group meeting where topics of discussion included: projects planned at the Country Club, beavers, and past and future restoration plans. President Jones reported the new energy bill passed in the House of Representatives. This bill proposes to to ban MTBE, increase the use of ethanol, and provide a safe harbor to protect MTBE polluters from lawsuits. The District has sent letters to legislators urging opposition against the passage of this bill. Interim General Manager: Richard Solbrig reported on two items: 1) The Union is scheduled to vote on the CalPERS proposal April 30. 2) A meeting regarding the access road (from the VVVVTP to Al Tahoe Boulevard) will be held April 18 with District, California Tahoe Conservancy, City of South Lake Tahoe, and STAR representatives. 3:20 P.M. 4:03 P.M. BOARD MEMBER STANDING COMMITTEE REPORTS BOARD MEMBER AD HOC COMMITTEE EL DORADO COUNTY WATER AGENCY PURVEYORS REPRESENTATIVES REPORT BOARD MEMBER REPORTS INTERIM GENERAL MANAGER / STAFF REPORTS ADJOURNED TO CLOSED SESSION RECONVENED TO REGULAR SESSION REGULAR BOARD MEETING MINUTES -APRIL 17, 2003 PAGE- 4 ACTION I REPORT ON ITEM DISCUSSED DURING CLOSED SESSION No reportable Board action. No reportable Board action No reportable Board action No reportable Board action. No reportable Board action Pursuant to Government Code Section 54956.95/Conference with Legal Counsel Regarding Claim Received from James and Millie Russ, APN 18-270-11 Pursuant to Government Code Section 54956.(a)/Conference with Legal Counsel - Existing Litigation: STPUD vs. John Breese Mumford, et al., El Dorado County Superior Court Case No. SC20020030 Pursuant to Government Code Section 54956(a)/Conference with Legal Counsel - Existing Litigation: STPUD vs. F. Heise Land & Live Stock Company, Inc., William Weaver, Eddie R. Snyder, Crockett Enterprises, Inc., ClV S-02-0238 MLS JFM United States District Court for the Eastern District of California, Sacramento, CA Pursuant to Government Code Section 54956.9(c)/Conference with Legal Counsel - Anticipated Liti.qation {one case) Pursuant to Government Code Section 54956.9(a)/Conference with Legal Counsel - Existing Litigation re: Meyers Landfill Site: United States of America vs. El Dorado County and City of South Lake Tahoe and Third Party Defendants, Civil Action No. S-01-1520 LKK GGH, United States District Ceurt for the Eastem District of Ca. REGULAR BOARD MEETING MINUTES -APRIL 17~ 2003 PAGE No reportable Board action No reportable Board action No reportable Board action. 4:05 - 6:00 P.M. A presentation was planned to present information and gather input from the public. Since no public attended, Rhonda McFarlane gave a brief summary of the budget and long-term financial plans. 6:25 P.M. Pursuant to Government Code Section 54957.6(a)/Conference with Legal Counsel - Existing Litigation: STPUD vs. Lakeside Park Association, et al., County of El Dorado, Superior Court Case No. SC20010165 Pursuant to Government Code Section 54956.6(a)/Conference with Labor Negotiators: Agency Negotiators - Board of Directors; Employee Organization - Represented and Unrepresented Employees Pursuant to Government Code Section 54957/Public Employee Employment: Position of General Manager MEETING BREAK 6:00 P.M. PUBLIC MEETING: 2003/04 PROPOSED BUDGET AND TEN-YEAR FINANCIAL PLAN ADJOURNMENT S~th Tahoe Public I~flity District kathy sharp/~ler~f the Bo~/ra South TahoE Public Utility District April17,2003 SOUTH TAHOE PUBLIC UTILITY DISTRICT WELCOME SOUTH TAHOE PUBLIC UTILITY DISTRICT 2OO3/O4 BUDGET AND LONG-TERM FINANCIAL PLANS 2 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 3 SOUTH TAHOE PUBLIC UTILITY DISTRICT District-Wide Changes · New Cost-Sharing Allocation · Shared Costs are Now Split Equally · Prior Cost Split was 60% Sewer and 40% Water · New Interest Rate Return on Investments. · The Rate is Now 3.5%; Last Year it was 4%. 4 SOUTH TAHOE PUBLIC UTILITY DISTRICT Salary & Benefits [SewerEnrpdse Salaries I Benefits I Total I PrlorYear I Chan~e $3.885,901 / $1,410,000 I $5,295.901 I $5237775 [ $58,126 ~Water Enterprise$2.392,526 $881.825I $3274,351~ S2 616.000 [ 5458,351 [TOTAL $6.278,427 $2.291.825 [ $8,570252[ $8,053,775 I $516,477 PERCENT 6.4% · Cost of Living Change · Compensation Equity Adjustments · Funding for Self-Insured Medical Program · One Position Eliminated SOUTH TAHOE PUBLIC UTILITY DISTRICT Maintenance & Operations f Fund I Sewer I Water I Total I Prior Year I Change 'Professional ServicesI $425,050 I$427,550 [$852,600 ~$814,405 ~$38,195~ Insurance t $120,000 I $88,500 [$208,500 [$203,400 [$5,1o0 J Chemicals ! $261,850 I $60,850 [$322,700 [$305,750 [$16,950 I Repair& Maintenanc~ $689,775 ~$661,525 [ $1 351,300 [ $1,385,400 [ IS34. t00]1 Monitoring ! $75,000 I$145 000 [$220,000 [$352,500 [ f~132500~ Travel/TrainingJ $121,525 ~$101,500 [$223,025 [$266,275 [ Utiitie3 ~ $1,689,675 ~ $662,575 [$2,352 250 [ $2 457 950 [ ~'~105 Other [ $1,394,800 [ $572,625 [$1,96712.25 [ $116901670 [ TOTAL ~ $4,777,475 [ $2,720 125 [ $7 497,600 [ $7 476,350 [ $21,250J PERCENT .3% 5 SOUTH TAHOE PUBLIC UTILITY DISTRICT Maintenance & Operations · Natural Gas Costs ($129,000) · Electricity 60,000 · Refuse (22,000) · Bio-Solids/Odor Control 109,500 · Training/Travel (43,250) · Ground Water Mgmt (140,500) · Small Water Meters (20,000) SOUTH TAHOE PUBLIC UTILITY DISTRICT Maintenance & Operations · Grease Management ($25,000) · Equipment Repair Temporary Help 16,600 · Election Expense 19,000 · Tahoe Restoration Act 130,000 · RDA Tax Transfer 70,000 · CTS Mitigation 22,250 · Other (31,350) SEWER ENTERPRISE FUND SEWER ENTERPRISE FUND 2003/04 Budget Proposal · Keep Present Rates - No Increase · Revenue $14.5 Million · Operating Costs $10.1 Million + $3.9 Million for Depreciation =$14 Million · Infrastructure Projects $11.1 Million · Debt Service $948,000 l0 SEWER ENTERPRISE FUND 2003/04 Proposed Spending Debt serVice 4% I I Salar~ & Benefits 24% Maintenance 8, OPerations 22%I SEWER ENTERPRISE FUND CAPITAL PROJECTS Presented by Richard Solbrig Interim General Manager SEWER ENTERPRISE FUND 2003/04 Capital Outlay $11.1 Million · Export Pipeline $2.2 Million · Section B - LPPS to USFS Campground (2004 building season) EXPORT PIPELINE MAP El Dorado Co LEGEND STPUD Service Area "C" line Dougl~ Co Alpine Co 13 14 SEWER ENTERPRISE FUND 2003/04 Capital Outlay $11.1 Million · Complete WWTP Improvements $4.3 Million · Sludge Handling Facility · New Sludge Storage Tank · Covers for Primary Clarifiers #1 & #2 SEWER ENTERPRISE FUND 2003/04 Capital Outlay $11.1 Million · Alpine County Recycled Water Facilities $1.6 Million · Recycled Water Master Plan · Project Implementation · Ditch Improvements · Pipe Snowshoe Thompson Ditch 15 16 SEWER ENTERPRISE FUN D 2003/04 Capital Outlay $11.1 Million · Gardner Mountain Pump Station $850,000 · Wildwood Interceptor $800,000 · Add Al Tahoe Pump Station Pump and VFD & Paving $150,000 · IFAS Software Conversion $170,000 · Engineering Staff & Expenses $477,000 l? REVENUE SEWER BUDGET 2003/04 Funding Sources I Connection Fees 4% PropertyTaxes 17% Interest & Other 2% rvice Fees 31% [ Borrowing 46%] SEWER ENTERPRISE FUND Recommended Borrowing Postponed from 2002/03 · Alpine County Master Plan $12.2 Million · 20-Year Debt Service $941,000 2O SEWER BUDGET 2003/04 Revenue Connection Fees Property Taxes 30%J 2] SEWER ENTERPRISE FUND REVENUE · Up in Total $726,000 · Property Taxes up $428,000 · Connection Fees up $457,000 · Service Charges up $86,000 · Grant Funds down ($135,000) · Interest Income down ($110,000) 22 TYPICAL RESIDENTIAL CUSTOMER · $72.42 Per Quarter · No Change 2003/04 QUARTERLY SEWER SERVICE FEES North Tahoe J i Tahoe City South Tahoe Incline Village Kingsbury 23 24 2003/04 QUARTERLY SEWER SERVICE FEES So.Tahoe P.U.D. Compared to State Averages South Tahoe California SEWER ENTERPRISE FUND Controlling Costs 1@95 to 2004 Operating Costs Excluding Depreciation $7,000 $6,000 $8,000 $4,000 $3,000 $2,000 $1,000 0 COST/MG [] 1995 [] 2004 [] 1995 CPI Adjusted 25 26 SEWER ENTERPRISE FUN D 1995 to 2004 Operating Costs Excluding Depreciation $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 0 TOTAL [] 1995 [] 2004 [] 1995 CPI & VotumeAdjusted 27 SOUTH TAHOE PUBLIC UTILITY DISTRICT Lo'ng-Rang~ Forecasts District-Wide Changes · Now Ten-Year Forecasts · Financial Planning to June 30, 2013 · Assumed New Building Allocation Rules Decrease Allocations by 50% Beginning in Year 2006 · Reduces Connection Fees · Reduces Service Charge Revenue · Impact: Sewer $500,000 per year & Water $100,000 per year 28 SOUTH TAHOE PUBLIC UTILITY DISTRICT Long-Range Forecasts District-Wide Changes · Forecast Assumption Changes · Salary & Benefits Increase at 2.5% · Other Expenses Increase at 2% · Interest Earnings at 3.5% 29 SEWER ENTERPRISE FUND TEN-YEAR FORECAST 30 EXPORT PIPELINE Sections A and B Within Tahoe Basin $37 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 million 3! SEWER ENTERPRISE FUND CAPITAL PROJECTS Ten Years Ending June 30, 2013 2003/04 $11,060,000 2004/05 6,392,000 2005/06 4,007,000 2006/07 6,198,000 2007/08 4,476,000 2008/09 4,869,000 2009/10 1,539,000 2010/11 4,853,000 2011/12 2,657,000 2012/13 8,676,000 Total $54,727,000 32 SEWER ENTERPRISE FUND CAPITAL PROJECTS Ten Years Ending June 30, 2013 I Plant]Systems Upgrade $27,314,000 Pipelines $14,880,0007"~ Bldg./Grounds $620,0001 Various Equipment $1,173,000 Heavy Eq./Vehicles $2,126,000 Pump Stations $3,144,000 [ 33 SEWER ENTERPRISE FUND CAPITAL PROJECTS Ten Years Ending June 30, 2013 · Major Changes From Last Forecast · Export Pipeline Costs Up $1 Million · ICR Oxygen System $500,000 · Plant improvements $10.8 Million · Convert to Hypochlorite, Relocate/Update Main Control Panel, Replace Final Export Pumps, Recoat Secondary Launders and Aeration Basins, New Lines to Ballast Ponds, and Upgrade to Title 22 Tertiary Treatment 34 SEWER ENTERPRISE FUND CAPITAL PROJECTS Ten Years Ending June 30, 2013 · Major Changes From Last Forecast · Pump Station Rehabs $200,000 per year - 2008 to 2013 · Pump Station Force Main Rehab $1.2 Million · Sewer Line Rehab $200,000 per year- 2008 to 2013 · Highway 89 & 5th Street Crossing $ 200,000 SEWER ENTERPRISE FUND CAPITAL PROJECTS Ten Years Ending June 30, 2013 · Major Changes From Last Forecast · Alpine County Facilities $2.9 Million · Wetland/Infiltration Basin Pilot, Pipe Upper Dressier Ditch, Pipe Snowshoe Thompson Ditch Phase 2 · Financial Software Conversion $170,000 35 36 SEWER ENTERPRISE FUND Funding Sources for Capital Projects Borrowing 12% I Connection Fees 15 ~ 37 SEWER ENTERPRISE FUND PROJECTED RATES Ten Years Ending June 30, 2013 · No Rate Changes in 2004 and 2005 · Rates Increase 3.5% per Year in 2006 to 2013 · Lower Rates than Prior Forecast 38 PROJECTED QUARTERLY SEWER RATES Typical Residential Rate Ten-Year Forecast YEAR RATE CHANGE 2003/04 72 42 · 0.00 2004/05 72.42 0,00. 2005/06 , 74.96 ' 2,54 2006/07 77.59 2.63 2007/08 ' -' 80.31 2.72 2008/09 ' 83.13 2.82 2009/10 86.04 2.91 2010/11 89.06 3.02 2011/12 92.18 3.12 2012/13 95.41 3.23 Typical Single Famil / Home with Three Sewer Units. 39 SEWER ENTERPRISE FUND Capital Reserves · Projected for 2013:$10.8 Million · Capital Reserves are Needed for Additional Export Pipeline Replacement in 2020 · 54% of Annual Needed Savings 4O WATER ENTERPRISE FUND 4! WATER ENTERPRISE FUN D 2003/04 Budget Proposal · Keep Present Rates - No Increase · Revenue $9.9 Million · Operating Costs $6.5 Million + Depreciation $1 Million = $7.5 Million · Debt Service $1.4 Million · Infrastructure Projects $6.2 Million 42 WATER ENTERPRISE FUND 2003/04 Proposed Spending I Salary Debt Service 10%] Maintenance & Operations 20%] WATER ENTERPRISE FUN D CAPITAL PROJECTS More From Richard Solbrig Interim General Manager 43 44 WATER ENTERPRISE FUND 2003/04 Capital Outlay $6.5 Million · MTBE Projects $1.7 Million · Lake Tahoe Boulevard Waterlines · Tata Booster Station Discharge Line · "Y" to Winnemucca Waterline · Redrill Twin Peaks Well · Twin Peaks Discharge Line & PRV WATER ENTERPRISE FUND 2003/04 Capital Outlay $6.5 Million · Other Waterlines $500,000 · Cornelian, Cedar, Pine, In-house · Well Drilling $1.2 Million · Redrill Elks Club Well · Redrill So. Upper Truckee Well · Replace Cornelian Booster Station 45 46 WATER ENTERPRISE FUN D 2003/04 Capital Outlay $6.5 Million · New Customer Service Center $1.3 Million · New Vactor Truck $175,000 · GIS Surveying & Implementation $300,000 · Engineering Staff $459,000 REVENUE 47 48 WATER BUDGET 2003/04 Revenue Service Fees 61% Capital Improvement Charge 15% Interest & Other 18% } Connection Fees 2%'I 49 WATER ENTERPRISE FUND REVENUE · Up $385,0O0 · Interest Income Up $681,000 · Connection Fees Up $33,000 · Grant funding Down $335,000 5O WATER ENTERPRISE FUND REVE N U E · Grant Funding · County Water Agency $195,000 · Tahoe Restoration Act $150,000 RESIDENTIAL CUSTOMERS Water Rate · $99 Per Quarter · No Change $! 2003/04 QUARTERLY WATER SERVICE FEES Incline Village South Tahoe Tahoe City No~h Tahoe Cave Rock Kingsbury 2003/04 QUARTERLY WATER SERVICE FEES So.Tahoe P.U.D. Compared to State Averages $80 T. $60 T. $40 T. SOuth Tahoe California 53 54 WATER ENTERPRISE FUND Controlling Costs 1994 to 2004 Operating Costs Excluding Depreciation $2,5( $2,0( $1 $1,00 $50 COST/MG [] 1995 [] 2004 [] 1995 CPI Adjusted 55 WATER ENTERPRISE FUND Controlling Costs 1995 to 2004 Operating Costs Excluding Depreciation $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,0OO $2,000,000 $1,000,000 TOTAL [] 1995 [] 2004 [] 1995 CPI&Volume A~usted 56 WATER ENTERPRISE FUN D TEN-YEAR FORECAST MTBE Lawsuit Completed August 2002 (Millions) Total Settlements $69 Litigation Costs (27) Future Costs (32) Costs to Date (10) Net Proceeds $ 0 5? OUT OF POCKET DAMAGES $'12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 -- 0 12198 [] Overhead [] Interest [] Professional Fees 6199 6/00 6/01 6~02 2/28103 [] Other [] Contractor [] Labor MTBE Settlement Funds Reserved for MTBE Related Costs · Beginning MTBE Reserve $37 Million · Ending MTBE Reserve $30.3 Million · Reevaluation of MTBE Reserve Level After 2004 and 2005 Water Exploration Efforts · Add More MTBE Water Treatment Systems if Additional Water Supplies Are Still Needed 60 WATER ENTERPRISE FUND CAPITAL PROJECTS Ten Years Ending June 30, 2013 2003/04 2004/05 2005/06 2006/07 20O7/08 2008/09 2009/10 2010/11 2011/12 2012/13 Total $6,476 000 5,819 000 4,630 000 3,002 000 5,258 000 5,442 000 3,201 000 3,309 000 3,131 000 3,545,000 $43,813,0O0 6! WATER ENTERPRISE FUND CAPITAL PROJECTS Ten Years Ending June 30, 2013 Plant/Systems/Bldg. Upgrade $5,225,000 Water Resources $6,270,000] Various Equipment $1,791,000] Pump Stations $2,383,000~ Equip. & Vehicles $1,899,000] Engineering $5,260,000J Tanks $2,455.0001 62 WATER ENTERPRISE FUND CAPITAL PROJECTS Ten Years Ending June 30, 2013 · Major Changes From Last Forecast · In-house Waterlines $1!0,000+ per year in years 4 to 10 · Contracted Waterlines $14.2 Million · Includes Mainline Down Pioneer Trail · Replace Water Tanks $1 Million · H Street, Tata, Ralph · Arrowhead Flagpole Intertie Replacement $750,000 WATER ENTERPRISE FUND CAPITAL PROJECTS Ten Years Ending June 30, 2013 · Major Changes From Last Forecast · Iroquois Booster Station $500,000 · Keller Booster Station Generator · Replace Generator Sets $185,000 · New Vactor Truck $175,000 63 64 WATER ENTERPRISE FUND Funding Sources for Capital Projects Improvement Fee 33% Connection Fees 6% l Capital Reserves 13% WATER ENTERPRISE FUN D PROJECTED RATES Ten Years Ending June 30, 2013 · No Rate Changes in 2004 and 2005 · Rates Increase 2.75% per Year in 2006 to 2013 · Lower Rates than Prior Forecast PROJECTED QUARTERLY WATER RATES Ten-Year Chart YEAR 2003104 2004/05 2005/06 2006/07 2007/08 2008/09 200g/10 2010/11 2011/12 2012/13 RATE $99.00 $99.O0 $101.73 $104.53 $107.40 $110.36 $113.40 $116.53 $119.74 $123.04 CHANGE $0.00 $0.001 $2.7~/ $2.80/ $2.871 $2.96 $3,00I $3,13/ $3.21/ $3.30~ 6'7 WATER ENTERPRISE FUN D Capital Reserves · Segregated Between General Funds & MTBE Remediation Fund · $33.2 Million Projected for 2013 · Of that $30 Million Remediation Fund 2003/04 PROPOSED BUDGET Sewer & Water Combined · Revenues $24.4 Million · Operating Costs $16.1 Million · Depreciation $5 Million · Debt Service $2.3 Million · New Borrowing $12.2 Million · Capital Spending $17.5 Million · Grant funded $125,000 SUMMARY 2003/04 Budget · No Rate Change for Both Sewer & Water · Operating Costs Excluding Depreciation Up 3.3% 69 70 Thank You THE END n,' I-- Z 0 ZZ -~z ~-0 0 oo n, 0 0 Z