MANAGER’S REPORT
11/13/2019
Budget Position Report
Revenues for October were $72,660.81. Expenses were $37,298.50. So we took in $35,362.31 more than we spent.
Treasurer’s Report:
The Treasurer’s Report is enclosed. There seems to always be a discrepancy between the Fund Page (Page 1) and the Cash Account Page (Page 2). The wild card is the EFT clearing account, and I don’t know how to fix that.
The short version is that we have $665,230.80 to operate and maintain the water system.
Note that the investment accounts are no longer broken out into a separate sub-heading. The reason for that is simplicity. The process of making the entries that result in the sub-heading is complicated, time consuming, and subject to errors. The investment accounts are still listed, but without the sub-heading and sub-total.
Monthly Utility Totals
See the Monthly Utility Totals report. The billing for Section 1 billing (November 1st billing) was $81,236.50. Minus credit balances plus past due accounts receivables were $121,357.51.
Of the $126,286.07 the district was owed on October 1st by Section 2 customers, $90,656.30 was paid by the October 30th due date. See the Utility Payments Received report. So 63% of balances owed were paid.
Collections
In preparing for the rate study, I have already learned some interesting information. One thing learned: Apart from the large ongoing receivables, we are collecting about 85% of what we bill. That is an improvement.
See discussion on the Rate Study.
Claims Request
It is a big one this month. Brumfield got around to issuing all the invoices for the past Summer’s work. The general liability insurance invoice is in there, too. The total, $151,741.42 includes:
1. All of Brumfield’s work over the Summer. About $68,000.
2. The Highway 12 connection, offset by the meter installation charge. About $8,675
3. The Dick Lee extension, $12,500 of which is covered by the meter deposit. $38,813
4. The 2020 General Liability Insurance premium. $13,097
5. Re-coating the Reynvaan Reservoir roof. $8,500.
I am suggesting that we transfer the balance of the Dick Lee expense ($26,315) from General Facilities to the General Maintenance Fund as those expenses very definitely represent an expansion of District capacity. I asked Scott to have a resolution to that effect at the meeting.
We will also need a budget amendment of $50,000 to keep the County happy. I requested a resolution from Scott.
Rate Study
I have commenced preliminary work on the Rate Study. There is a great deal of data to organize, and that is the phase I am in right now: how to organize the data so that it can be analyzed and conclusions drawn.
Some things learned so far:
We are collecting about 85% of what we bill.
We have more connections than we thought. 1,645 vs. 1,470.
Routine operational expenses have actually decreased from 2015 to 2018. There may
be a slight uptick in 2019. The bulk of increasing costs have been in projects,
unexpected expenses (blown VFD’s), and major purchases.
The additional data from the main Bias program, as well as new data from the Bias
Asset Management application, will make it possible to actually plan when
to make major purchases.
I will have an example of what you will receive to review at the November meeting.
New Regulations
See the attached report on the IACC Conference.
Operational Issues
Full Cost Budgeting
Highway 12 Cast Iron Pipe Replacement
Contract documents are being prepared. We will put it out to bid, but we won’t start construction until next Spring.
Maintenance Activity:
Usual daily/weekly/monthly maintenance activity. See attached report.
At one point I thought we were ahead of the curve for service lateral repairs. Not the case. Right now we are fixing service laterals almost every day.
Contractor Repairs
One on Hill road.
As-Builts
See the report on the IACC conference.
Highway 12 Meters
We are still having training issues.
We are learning some new things with these meters, even though we haven’t got the radio read process completely in place.
A big one is the discovery of service side leaks. If water passes through the meter for a full 24 hours, the meter is programmed to flash the word “Leak” on the face. A couple of instances have been found in which leaks were not suspected, but were occurring.
Another handy feature is being able to pull a daily history. We haven’t had cause to use it on the highway yet, but seeing daily usage would be very useful in chasing down abnormal usage. We have had several instances with mechanical meters in which it would have been useful to get a report on daily usage.
Something that is coming up…There is an acoustic technology that has been in use for some time. It involves attaching specialized equipment to fire hydrants that can “hear” water main leaks. If the equipment is attached to two hydrants, it can pinpoint where in between the two hydrants the leak is located. Kamstrup is introducing a service meter with that technology built in.
Despite the difference in cost we may want to consider using Kamstrup as our replacement meters.
New Connections
6215 Central Park Drive
8 Sandtrap Lane
Parcel 769000004202 on Aberdeen Lake Road
16 Sandtrap Lane
32 Sandtrap Lane
The task of putting an 8” line across Alder Grove raised the price, as compared to simply doing a service connection, considerably. Subject to your approval, I would like to transfer some funds from the General Facilities Fund to the Regular Maintenance Fund. The 8” line definitely qualifies as increasing system capacity. I expect we will recover the difference in General Facilities Charges from new connections on Alder Grove.
Shop Organization
We keep looking for a window to get this job done. I am going to have to personally supervise this job if there is any hope of it getting completed.
Some time that could have been devoted to shop organization has been used up preparing the site for the new south side fence.
Training/Certifications.
Nothing in October. I attended sessions at the IACC conference that had CEU’s attached, but I neglected to turn in my sheet. Dumb.
Especially as it is getting more and more difficult for me to find classes. I have one in February that will involve me ducking out of the commissioners meeting as early as possible. I will need to travel to Mt. Vernon.
Safety
We have a mini safety meeting every morning.
Vehicles
Service Truck: No issues. The old tires were worn below the wear indicators. There were chunks out of the tread. The new tires are 10-ply. I haven’t gotten mileage information yet.
F-150: Replaced, but still on site. Logos are removed. I am playing telephone tag with someone who is interested.
S-10: Gone
Pickup Truck 1: No Issues
Pickup Truck 2:No issues.
Shop Site South Fence
The fence line is cleared. Just waiting for the contractor.
Filing System
On going.
Fire Station
Moving along.
Reynvaan Lower Pump House
Tentatively scheduled in the Rate Study.
Reynvaan Light
Someone is pulling the breaker on the security light at the Reynvaan Reservoir. We can (and will) lock it. But it means the next step for the party crowd will be to take a BB gun to the light itself.
I am thinking that we will need to fence that site.
Grant Funding Pursuit
See the report on the IACC Conference.
As chair of the Small Districts Committee I was obligated to develop a statement of purpose and outline some immediate goals. See attached.
Capital Asset Management
Pretty much committed to the Bias application. It is fairly bare bones, but we don’t really need more than that. The price is attractive, too.
I still need to get my arms around inventory control. That will be based on the FIIX software and will depend on getting the shop organized. Inventory control is an element of Full Cost Budgeting.
Disaster Management Planning
No action in October
Isolation Valve Exercise Program
On hold due to inadequate as-built information.
Future and/or On-Hold Programs
Email Bills
Online Bill Pay (way down the list. Customers can pay bills online through their bank)
Installation of additional isolation valves
Unfunded “Dream” Projects
See the discussion regarding the Rate Study.
Long Distance Service Laterals
We had the situation. Fortunately, the leak turned out to be on the served customer’s property. We repaired it in order to prevent any possibility of a problem.
Still open to ideas.
Respectfully Submitted:
Reg Hearn
General Manager
INFRASTRUCTURE ACCESS COORDINATING COUNCIL MEETING
10/21/2019 TO 10/25/2019
October 21st and 25th were travel days. Due to the possibility of inclement weather in the passes, I elected to book a flight. I had mixed results. I did not like fighting I-5 to and from SeaTac. The outgoing flight went as scheduled. The incoming flight, from Wenatchee to SeaTac started with almost three hours of sitting on the taxiway awaiting clearance to depart Wenatchee.
The purpose of the IACC is to bring together utilities, regulators, and funding agencies in order to explore funding opportunities and to provide education on a variety of subjects. The annual conference is the only IACC event. Except as necessary to arrange the conference, there is no formal organization.
SESSION 1
The first session I attended was devoted to first timers at the conference. I got two things from this session:
1. A description of the conference as stated above.
2. The news that there are organizations that assist with income surveys. I may contact some
of those organizations to find out what they do, how they do it, and what it costs. A more
specific idea of Central Park income levels, as opposed to the census data which includes
the entire county, would be very useful in conducting the Rate Study.
SESSION 2
The next session was presented by the Washington State Auditor’s Office. The headline subject was “Connecting with Community”. The meat of the session was a discussion on the their Financial Intelligence Tool (FIT). The theory is that, using this tool, one has access to all of the data maintained by the SOA. That would be very useful. I returned to the District looking forward to exploring the tool. Except I can’t make it work. Emails are flying back and forth trying to figure out what the problem might be.
Other tidbits include the recommendation that the District have AT LEAST 60 days of operational expenses in emergency reserves (we do) and that utilities should use 10-year planning cycles. The planning cycle recommendation stems from the new rule that the Office of Drinking Water may allow water systems to develop Water System Plans in 10-year cycles instead of the current six.
SESSION 3
This session was all about rate setting and Rate Studies. This session confirmed my reading of the RCW that some future infrastructure costs could be included in the General Facilities Charge. I learned that interest could be included in the costing of original construction. Both of these issues are limited to a 10-year window and inclusion of future capital expenditures have to be in the WSP.
This session stressed that Full Cost Budgeting is now the rule.
It was suggested that minimum wage affordability be included in evaluating rates, alongside the time honored use of median family income. No further guidance was given on that suggestion and I am not sure how to implement it other than to acknowledge the percent of income the rate represents assuming a two-earner household at minimum wage.
SESSION 4
This session focused on Water System Plans (WHP).
The guidance for preparing plans has expanded considerably and is no longer available in print form. It is only available on line. One of the listed “advantages” is that changes can be incorporated in a more timely fashion. I’m not sure I consider that an advantage.
As stated earlier, planning cycles may be expanded to 10 years at the Office of Drinking Water (ODW) discretion. That may apply to our next cycle. Our next WSP is still due in about three years.
Stress was again placed on the new rule that planning is to incorporate Full Cost Budgeting in planning and rate setting.
A new wrinkle was that Well Head Protection Plans (WHPP) must be updated every two years. The only submission to ODW is within the WSP. But evidence of the updates must be included in the WASP. I need to catch up on this one, as I have not updated our WHPP since we were in the WSP process. Not a big deal. Nothing has changed since the last WHPP, but I do need to ensure the paperwork is in order.
SESSION 5
Evergreen Rural Water of Washington (ERWOW), in partnership with their national organization, the U.S. Department of Labor, and the State Labor & Industries, has developed a new apprenticeship program for water utilities. It does not have direct application for our District, but it might in the future.
All the details are not completely clear. This is a brand new program. But the propaganda is that the utility provides on the job training at a reduced wage, and the program provides class room training. The objective being for the apprentice to achieve Water Distribution Manager 2 certification.
SESSION 6
There is a company that is teaming with the Association of Washington Cities to provide GIS services to smaller entities at reduced cost. They had a very convincing presentation on the use of GIS in asset management.
The buzz is that their services can be provided at a small fraction of non-affiliated organizations. Actual costs are based on the size of the district or municipality and the level of service requested.
I will be in touch with these folks. Their services may be the most cost effective means of organizing our as-built information.
NON-SESSION ACTIVITIES
There was considerable excitement over the establishment of the Small Districts Committee within WASWD. It has always been difficult getting information to small districts. I had quite a few discussions with movers and shakers and my ideas for reaching small districts were well received. I found myself quite popular. Essentially, it is my contention that the traditional means of disseminating information, meetings and conferences, does not work well for small districts with limited time and money. That is really the second song I sing. The first being that small districts located outside the I-5 urban corridor do not have the financial ability to replace aging infrastructure.
Successful fence-mending was done with Gray & Osbourne. I was quite up front with my view of the WSP they had done for the District. There was quite a bit of pursed lips and nodded heads when I named the person who was the lead on that WSP. They are actively re-organizing to work with smaller water systems and I am impressed with our primary contact, Steve Clarke. They could be a very valuable resource in our pursuit of grant funding (should it become necessary). They have even hired a grant writer and offer free grant writing services at the head end of projects. I got a steak dinner out it, too.
David Carnahan, general manager of the Hartstene Point Water & Sewer District, and I got several chances to visit during the conference. It appears that we are forming an effective team in making the Small Districts Committee function.
A very valuable contact I made is Cathy Reed. Cathy is the current mover and shaker behind the conference. She works in the Department of Commerce, which has a big impact on infrastructure funding.
My informal discussions with a number of conference attendees and organizers indicate that, at this time, there is no process for pursuing grant funding. Grant funding has been available, and can be available again, but the usual route is to convince a local legislator to include a project in their discretionary funding requests (pork). That is a difficult proposition as legislators have many calls on those funds. It is not, to my mind, a “process”.
One of the features of the conference is Tech Team Meetings in which a utility huddles with regulators and funding agency representatives to hammer out a plan. We are not ready for that yet, as it is really targeted at utilities that need funding “right now”.
So the task still stands. If this district is to get funding it will require some changes in the way small districts are supported. The only way to make those changes is if the small districts work together.
Having said that, this conference was well worth the cost.
Respectfully submitted
Reg Hearn
General Manager
11/13/2019