MANAGER'S REPORT
10/09/2019
County Auditor
In the event, it did not prove to be as onerous as I thought it would be. I recommend we sit on this for awhile. Too many irons in the fire at the moment.
Budget Position Report
Revenues for September were $64,937.25. Expenditures were $55,193.24. So we spent $9,744.01 less than we took in.
Contribution to reserves so far this year is $66,885.65.
We are 75% through the year. So any budget items below 75% remaining are below budget. That includes revenues, which are lagging behind the projected revenues by about $18,539. Total expenditures are at 73.4%.
Some notable over-budget expenses:
Billing Expense includes the newsletter and a couple of special stuffers.
Parts & Supplies reflects the rash of leaking service laterals.
Equipment Purchases reflects the acquisition of the dump trailer. Which has been a godsend.
Tools reflects the purchase of a new tapping machine to replace the worn out one.
Software Support reflects the set up of the new billing software.
It seems telephone rates have increased.
Travel reflects Small District Committee activities.
Equipment Rental includes the generator from the December storm.
Electricity rates seem to have increased.
Vehicle Maintenance reflects the exhaust manifold problem on the service truck.
Building Maintenance includes:
Shop Gutters
Office Water Heater
New Night Drop
Shop Vent Fan
Pumphouse Vent Motor
Shop Septic Tank Pumping
Water Utilities Repairs line item is for repairs other than water mains and building
maintenance. The big driver on this one was the Well #5 VFD replacement.
Capital Replacement (truck) Which is really a draw from reserves.
Treasurer’s Report:
The Treasurer’s Report gets cleaner every month as I am able to track down anomalies and get them fixed. The EFT clearing account will always look a little strange.
The $787,816.37 Cash Available figure is not quite the entire picture. That number includes Refundable Deposits and the USDA reserve. Both pots of money that are not available to spend on district operations. In reality, we have $685,623.76 to spend.
Monthly Utility Totals
See the Monthly Utility Totals report. The billing for Section 2 August and September (October 1 billing) was $64,071.45. Minus credit balances plus past due accounts receivables were $89,359.21.
Of the $126,286.07 the district was owed on September 1st by Section 1 customers, $79,697.91 was paid by the September 30th due date. See the Utility Payments Received report. So 63% of balances owed were paid.
Collections
There are two areas that still need some clarification. The first is the situation where someone has made a partial payment but still has a balance remaining from two previous billing cycles. My inclination is that they are due for shut off.
The second area is the lien and foreclosure situation. I want to do some research into each property that is due for lien and/or foreclosure. Many of these situations are not simply someone who has not paid over an extended period of time. The biggest questions revolve around abandoned properties.
Operational Issues
None
Highway 12 Cast Iron Pipe Replacement
Geotech study to be conducted on 10/01. Foresight proved wise. In doing site research it was learned that there is a deeply buried surface water management catch basin right where we need new pipe to go. We will have to work around that once we know exactly where it is located.
Reynvaan Reservoir
Completed.
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 fixing service laterals almost every day.
Contractor Repairs
Two on Central Park Drive. Both leaking service laterals.
Carl Way (July)
Caught up on repairing pavement cuts
As-Builts
On hold...again.
Highway 12 Meters
Installation is complete. Getting the remote part implemented has presented some challenges. We had a second training session recently.
New Connections
909 Walthom Lane
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.
Training/Certifications.
I picked up some CEU’s at the WASWD conference. Kenny has a Lock-out/Tag-Out class in October. We are past due in getting him this class. Unfortunately, the local one got canceled. He is having to go to Wenatchee.
Safety
We have a mini safety meeting every morning.
Vehicles
Service Truck: No issues
F-150: Replaced, but still on site. Logos are removed.
S-10: Replaced, but still on site.
Pickup Truck: No Issues
Pickup Truck 2:
No issues. The truck is outfitted except for the lettering. It has been ordered.
Shop Site South Fence
Gary Swartz got an estimate considerably below the one we had in hand. By having him contract for the fence and us re-imbursing, a lower price is possible.
We are in the process of clearing out the old fence and the brush along the fence line.
Alder Glen & Etc.
No news in February. Work orders are still out for the dead end lines that have not been examined.
Carl Way/Ridgeview: Not an issue
Hemlock Park
Lois Lane Not an issue
Waverly Court Not an issue
Garden Road: Not an issue
Walthom Lane: Not an issue
Greenbriar Court
Reynvaan Court
Madow Court
Reed Lane Not an issue
Blaine Road (End) Not an issue
Larson Lane Not an issue
Fremont Drive
Silkey Court
Lake Road
Hemlock Park
Fairway Park
River Road: Replaced
Alder Glen: Will need replacement.
Fairway Terrace: Will need replacement.
Filing System
On going.
Fire Station
Moving along.
Reynvaan Lower Pump House
Perhaps next year.
Grant Funding Pursuit
David Carnahan and I visited the City of Carbonado. They did $15 million worth of water, sewer and street improvements with 85% grant funding. We learned a lot.
Capital Asset Management
No big news this month. See the report on the WASWD Conference. I am interviewing software providers. So far I have not been impressed with the Bias offering.
Disaster Management Planning
This is going to have to go into high gear. See the report on the WASWD Conference.
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
Include Reynvaan Pump Station in SCADA
Probably will require new controls, which are getting due anyway
Include Hirschbeck Pump Station in SCADA
Convert SCADA Communications to Cellular, or whatever.
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.
Respectfully Submitted:
Reg Hearn
General Manager
WASHINGTON ASSOCIATION OF SEWER AND WATER DISTRICTS FALL CONFERENCE 2019
This year’s fall conference was particularly valuable. There was a lot of good information. In addition, this year I am a committee chair, which grants some higher level of credibility and ability to initiate conversations.
In discussing the sessions, I will focus on my observations and items that occurred to me during the session rather than get down in the weeds as to what the session was all about.
I will embed any RECOMMENDATIONS or OBSERVATIONS that I see as applicable to GHCWD#2 in session discussions.
Pre-Conference
Prior to the conference, the Executive Director (Judi Gladstone) and I met with a representative of a company that aids systems set up with GIS mapping towards a comprehensive asset management program. Basically it was a sales pitch.
However, out of the conversation an item was brought to the front of my mind that has been in the back of my mind as a left over from the private sector.
Public sector organizations tend to focus their financial management on operations and maintenance. Which is fine for an organization that is not managing a substantial capital asset.
Private companies tend to focus financial management on the capital assets. The objective of private companies (for the most part) is to increase owners’ equity. Public entities don’t care about owners’ equity.
The result is that public entities that manage large capital assets (such as water districts) are facing major financial crunches due to aging infrastructure with no real plan on how to deal with the problem. The problem has been compounded by the requirement that public agencies use cash accounting methods.
Changing that mind set is not easy, but one of the outcomes is that public entity managers are becoming aware that they have not been generating the revenues necessary to properly manage the assets.
Most people do not complain (very loudly) about paying substantially more for cable/internet/cell phone services than for water service. Those are privately held companies and most of the rates reflect the cost of their capital investment. Many government utilities, particularly water, have not considered capital costs in their rate structures.
Nobody has a good answer, yet, on how to change that mind set.
District Profile Workshop
John Peterson, General Manager of the Clark County PUD (which manages sewer and water districts), is one of my heroes. He is incredibly insightful, which results in the PUD being one of the most respected special districts in the state.
One of his recommendations is that districts establish minimum levels of service. Those standards may simply be the conformance to WAC 246-290 minimums. However, it is his observation that those standards are below most customer expectations and that customer expectations should be considered in establishing minimum service levels. He recommended it as a discussion item among the commissioners.
A second recommendation by John is that districts consider preparing strategic plans along side of, or within, their Water System Plan (WSP). The typical WSP touches on strategic planning very lightly, basically enfolded in the six year budget. Private sector businesses engage in strategic planning on an ongoing and very detailed way.
The failure to engage in effective strategic planning makes it difficult to arrive at decisions that work toward ultimate goals (since there are none).
This grabbed my attention. I have an ultimate goal. And that is that when I walk out the District door for the last time I will be leaving behind a properly functioning district. In reality, that is a personal goal.
I don’t feel that the district has really considered strategic goals.
RECOMMENDATION: That GHCWD#2 consider engaging in some strategic planning, including detailed consideration of minimum service levels, in order to establish some ultimate goals.
I can work on an outline, but establishing direction is ultimately the responsibility of the commissioners. End
The second presenter in this session discussed the advantages of communicating to customers. We are already pretty aggressive in that area. As you know, I am of the opinion that the more our customers know the easier it is for us to do what we need to do.
The third presenter, Sally Mohr, Business Analyst for the Covington Water District, underscored John Peterson’s call for strategic planning. But she made one point that got my attention. She is of the opinion that unfocused efforts to establish reserves makes for poor decisions in rate setting and in timing on spending reserves.
Sally recommended that reserves be realistically focused on established objectives. She strongly recommended that reserves be dedicated to specific future expenses (actually a requirement of the State Auditor) and that, if a general reserve is desired, that a specific level be defined.
RECOMMENDATION: As I start work on the next rate study, I recommend that we discuss specific objectives for our reserves. One point that was made to me in casual discussions was that attempting to aim reserve accumulations towards water main replacement is not a workable goal. The ability to accumulate reserves is so far below the cost of replacing water mains that attempting to do so is not a wise planning exercise, unless we were able to raise rates to a level that could accumulate water main replacement level reserves. I don’t view that as viable on the front end. Once water mains are replaced, capitalization will need to occur, which will raise rates quite dramatically. End
Keynote
The keynote speaker addressed succession planning. In most of our industry there is a very serious manpower crunch. It was a very interesting presentation, but not very many take aways for our district.
I guess that the main point for us is that when it comes time to recruit new employees, it will be both more difficult and more expensive.
Legislative Session
About the only thing that came out of this session applicable to our district is that there is a change in the per diem rate. The commissioners get a raise. I need to find out how much.
There was a second item. The legislature passed, and the governor signed, legislation allowing special districts serving less than 5,000 population to offer health insurance to their commissioners. I can follow up if you are interested.
The legislature failed to pass legislation extending the exemption for the homeless fee on recorded documents to special purpose districts. There is an exemption for municipalities.
Changes to Contaminant Landscape
Any discussion about this subject is always one that generates a lot of anxiety.
There is some bad news coming up, but it could be a lot worse.
The biggest change coming down the road is the need for surface water sources to address cyanotoxins. We are not a surface water system.
There are some changes in the Lead & Copper Rule coming. It is not quite clear what those are yet, except there is (practically without notification) a new requirement that lead & copper samples MUST be taken between June 1st and September 30th. Starting this year. I got the notice about the change while at the conference. Our staff hero-ed out and got the task done in just a couple of days.
OBSERVATION: It is my objective, as a manager, and to the extent possible, that the general manager have few routine responsibilities. Obviously, in an organization as small as ours, that is not even close to being achievable. I am immensely proud of my staff. While I was out of the office for a week and a half, all routine tasks were performed properly and on time. The lead & copper crunch was handled perfectly. There were minimal items sitting on my desk awaiting my attention when I arrived back in the office. This district is blessed with a great staff. End.
What will probably be a big change is that there has been a re-classification of manganese. Historically, manganese has been treated as a secondary contaminant. That is, it impacts taste, odor, and staining, but is not a health risk. It has been discovered that manganese is a neurotoxin. Our levels of manganese have always been low to non-detect, but testing will almost certainly become more onerous, and it is likely that the Maximum Contaminant Level (MCL) will drop from 0.30 mg/L to 0.02 mg/L.
Another change, that has been coming for quite some time, is testing for a family of chemicals known as PFAS. These chemicals are usually residuals from manufacturing processes (typically, non-stick coatings) and fire fighting chemicals. The current thinking is that there will be a round of testing for everybody, but systems that don’t have possible sources for the chemicals and have all non-detects in their initial testing, will probably have their testing requirements drastically reduced. However, the state has conducted some exploratory PFAS testing. PFAS’s were detected in 98% of the wells tested. Both the state and the Federal EPA are working on rules now. A preliminary rule is expected sometime in the Summer of 2020.
Safe Drinking Water Act Amendments
Regarding my comments about the water quality monitoring changes could be worse. In other aspects, changes to the Safe Drinking Water Act are worse.
Safe Drinking Water Act (SDA) amendments include changes to Emergency Response Preparedness, Asset Management, the Consumer Confidence Report, and the Troubled System Rule.
EMERGENCY RESPONSE PREPAREDNESS: This section of the SDA has gotten a lot of attention lately. It now consists of three documents: Vulnerability Assessment; Risk and Resiliency Assessment, and; the Emergency Response Plan. We have the first and the second, but in less detail than the new requirements. We will need to upgrade these documents. Normally they are addressed during the Water System Plan process. But EPA is setting deadlines independent of the WSP process.
I need to do a lot of study before I fully understand what we need to do, and when.
ASSET MANAGEMENT: Not only is the a subject in the SDA, it is a part of new State Auditor requirements, and the State Department of Health is paying a great deal of attention to it as well. Getting ahead of this one is proving to be a major project. The time involved is a bit overwhelming. I am working on it. This item will almost certainly impact rates, if not immediately, then in the not to distant future.
CONSUMER CONFIDENCE REPORT: The new amendments allow distribution of the CCR electronically. We could post our CCR on the web site and that would satisfy the regulations. However, I am of the opinion, in the interests of keeping our customers informed, that we should continue to include it in the June newsletter.
UNREGULATED CONTAMINANT RULE
Another topic discussed in this session is the Unregulated Contaminant Rule. We have been required to participate in this program in years past. However, since EPA pays for testing and provides all the supplies, it is not a major problem or expense. Some changes have been made that may mean that we are going to be subject to participation again in the future.
TROUBLED SYSTEM RULE The topic of discussion in this session (yes it was a very full and informative session) is the Troubled Water System Rule. Previously, this rule was very vague and with few guidelines as to how it was to be implemented. The new SDA amendments flesh this rule out quite a bit. A big change (though it doesn’t sound that way) is a firm definition of an Intractable Water System. That definition now defines an Intractable Water System as a system that can not or will not conform to ANY Safe Drinking Water Act requirements. The amendments specify that states can require such systems to enter into consolidation studies with conforming systems. But there are still some details that need to be clarified. Implementation is awaiting clarifications. How those clarifications come down may impact our District. If the clarifications indicate that not only does the Intractable System need to enter into a consolidation agreement, the closest conforming systems may not have a choice either. There are two smaller systems actually within our designated service area that could well become non-conforming systems.
How Do We Fit and Why Resilient Critical Infrastucture
This session focused on defining the National Incident Management System (NIMS) and how water utilities fit into it. We are in somewhat reasonable shape on this one, as I have attended NIMS training, have achieved the first step in NIMS Emergency Responder certification. We are already a part of the Washington Water Available Resource Network (WAWARN).
What is not yet quite so clear in my mind is what the word “resiliency” actually means in terms of planning and preparedness. I have learned that for sewer operators that word means a lot of work and a lot of money. I am hoping it means something a bit less for water-only districts.
The presentation included lessons learned by the West Sound Utility District when their service area was hit by a pretty substantial tornado. Some recommendations came out of that incident that are worth considering:
1. Establish an emergency water filling station. We have one.
2. Establish a solid working relationship with the County Emergency Management organization.
We need to work on this one, though some progress has been made.
3. Make contact. and arrange processes with local amateur radio operators.
4. Establish District communications that do not depend on the voice part of the cell network.
There are cell communications that use the data part of the cellular network. They are
specifically hardened and backed up to function during major emergencies/catastrophies.
Or districts can use radios.
5. Establish a protocol for administering cash and in-kind donations.
6. Establish a relationship with “Team Rubicon”, a group of volunteers trained in emergency
response.
Small District Committee
During the conference the kick-off meeting for the Small Districts Committee was held. Some representatives that have expressed interest/support were not able to attend the conference or were obligated to attend their Section Meetings, which were concurrent with the Small District meeting.
It was a good meeting, but few concrete items were nailed down. The primary first work item is to develop a list of issues to be addressed. Our issue, funding major asset replacement projects, is already at the top of the list.
My next work item is to attend the meetings for Section 3 and 4. We are in Section 2. A meeting with Section 1 (Eastern Washington) will wait until Spring.
The conference with the Infrastructure Assistance Coordinating Council (IACC) in October is a part of the Small District Committee activity. If the committee is going to address the number one issue on it’s list, I have to be up to speed. Along that line, I have arranged to fly (commercial) over to Wenatchee. The airfare cost, versus mileage, is a wash and flying will minimize weather problems over the passes.
Another committee activity is visiting with the City of Carbonado clerk. David Carnahan and I conducted that visit. They recently snagged a $15 million grant for infrastructure replacement. I will prepare a separate report for you and for the WASWD board, which is part of my job as committee chair.
Vendors
AAKAVS AKTIVOV ASSET MANAGEMENT: This is a company offering asset management software. I have already looked at the Bias asset management software and so far I am not impressed. The software from this company looks better. I will be looking at them in greater detail soon. They are based in Sammamish.
EMPOWER RETIREMENT: These folks offer a program that may be of interest to Kenny and Mick. I will be talking to them (the company) to see if this is something we might be interested in. Theirs is an investment (rather than fixed benefit) program that could be used by our staff. They have programs that do not require an employer contribution.
GRAY & OSBORNE: They offer their clients free grant writing services. I will probably talk to them. I would prefer to stay with Jerome Morrisette & Associates and Northwest Water Systems, but I am not about to cut off my nose to spite my face.
INDUSTRIAL COMMUNICATIONS: This company provides digital cellular communications equipment. The prices are remarkably reasonable.
Picked up along the way
1. Look at financial management from an asset management perspective instead of operations and
maintenance, as private sector companies do.
2. Investigate including the rogue drainage districts (subjects of recent news stories) into the Small
Districts committee and finding a place for them within WASWD.
3. Make people feel heard.
4. Lots of Districts experience reservoir vandalism. We may want to up our security at our
reservoirs. The latest craze is reservoir diving. One incident hit the news, but there have
been others.
5. In communicating to customers, introduce concept of “buried treasure” to develop our
customers’ understanding of the value of our infrastructure. Talk about
infrastructure monetary value in the November newsletter, FB and web site.
6. Talk to our legislators.
7. A lot of support from the membership in general regarding the Small Districts Committee.
I believe this committee can count on help from larger districts.
Misc.
I didn’t win any of the prizes.