MANAGER'S REPORT
09/11/2019
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 August were $76,405.96. Expenditures were $40,724.24. So we contributed $35,681.72 to reserves.
We are 67% through the year. We have collected 65% of the projected revenue. We have expended 66% of budgeted expenditures. I expect that the revenue percentage will pick up in September.
Treasurer’s Report:
I am having some struggles with this report. Some anomalies have occurred, almost completely related to the EFT Clearing Account. When I can get some clear time, without interruptions, I will go through the year and see if I can’t get all these numbers to coincide.
One errant number not related to the EFT account is the $707.43. That number comes from a deposit in which the software decided to put the entire deposit in the EFT account when only a part of it was credit card receipts. Bias staff is not clear as to why that happened.
Another strange number is the -$5,100.98 in the Facilities Investment account. That should not be there. I will get it straightened out.
In actuality, we have $676,364 in Regular Maintenance and General Facilities with which to operate, maintain and repair the water system.
2020 Budget
Most of the expense line items are what they are. Budget levels have either been held steady, adjusted based on past experience, or adjusted according to hope-for expenditure restraint or anticipated increased costs.
A few deserve comment.
I always include 6% in Salaries and Wages for you to work with in terms of compensation levels. That money can be applied to wage increases, or increases in benefits. If we were to consider a PEBB retirement benefit we would need about 15% of gross wages for Ken and Mick added to Benefits just for that benefit. That would increase the Benefits line item from $23,745 to $34,348. It would decrease the contribution to reserves by about $10,600. That would assume no wage or salary increases.
I am awaiting a quote from the Washington Counties Insurance Fund for health insurance. That is who is carrying our dental insurance. If the health insurance is as good, from every standpoint, as the dental insurance, it may well be worth switching.
We have expended quite a bit of money on software in 2018 and 2019. I am determined to avoid acquiring any new software in 2020. If successful in that objective the actual 2020 software expenditures should be about half of what I have budgeted. The higher budget proposal is in anticipation of the unexpected.
Admin Fees & Services covers our payments to the County for their treasury services. If we start writing our own checks, we may attempt to renegotiate that payment. See comments on writing our own checks.
Travel has been given a bump to cover the anticipated costs of my efforts to encourage the legislature to consider developing grant programs for major infrastructure projects for small districts. Small districts, especially those outside the I-5 corridor, tend to be an independent lot and getting them all behind a common initiative may be somewhat like herding cats. So I will be doing some traveling.
Parts and Supplies always ends up being a wildcard. While this line item includes the cost of chlorine, the real driving force is the repair of failing service laterals. For awhile it appeared we had gotten ahead of the curve in terms of failing service laterals. That has not been the case for 2019 and the Parts and Supplies line item will almost certainly exceed the budget by a considerable margin. I have assumed that 2020 will not be much different than 2019 and have increased that line item accordingly.
For Projects I have proposed that we address all of the Reynvaan issues. That would be controls, the booster station pump house, and the extension down the hill. I would also like to incorporate the Reynvaan booster station into SCADA. See comments on Rates, below.
Contribution to reserves is always a major objective. Leaving out water main replacement, our reserves have improved considerably over the last few years. But we mustn’t get complacent. Leaving out the Highway 12 project, we could contribute about $60,000 to reserves in 2019. Of course, that project is the wildcard. We have about $128,500 left in the Projects line item for 2019 after spending about $21,450 on the Highway 12 project. So that project may not suck up all of our reserve contribution for 2019. In which case we should consider the Reynvaan set of projects. If, however, we have to dip into reserves to meet our budget as a result of the Highway 12 project, we should consider scaling back the Projects budget, perhaps not even tackling any projects in 2020 with the objective of replacing what we have may have drawn out of reserves.
We could adopt a budget that includes Projects, but choose not to implement any projects if the Highway 12 project takes too big a bite out of reserves.
Which brings us to Rates. At our current $2.15 per 100 cubic feet, I believe we are at the upper limit of a defensible usage rate. I am proposing that we not increase the usage rate for 2020. So a 10% increase in the base rate may not deliver a full 10% increase in revenues. Without a full rate study, which is not in my schedule for 2019, nailing down the expected revenue increase is a bit difficult. I plan to conduct a full rate study in 2020 in time for budget discussions for 2021. For 2020 I am hoping that a more aggressive collections policy will result in more cash in the door.
The 2019 increase was substantial.
I recommend a 10% increase. Of that 3% allows for increased costs and 7% is additional contribution to reserves. That is still a substantial increase, but less than 2019.
If the new collections policy works as intended, some of increased costs should be covered by increased collections.
I would really like to reconfigure the rate structure. But that would be both risky and unpopular.
Monthly Utility Totals
See the Monthly Utility Totals report. The billing for Section 1 July and August (September 1 billing) was $90,005.65. Minus credit balances plus past due accounts receivables were $126,286.07.
Of the $86,427.91 the district was owed on August 1st by Section 2 customers, $63,357.14 was paid by the August 30th due date. See the Utility Payments Received report. So 70% 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.
I am proposing that we have a formal payment plan for those on the edge of a lien. I will have details at the meeting.
Operational Issues
None
Highway 12 Cast Iron Pipe Replacement
WSDOT has approved the application with the provision for a soils characterization. Awaiting that study.
Reynvaan Reservoir
I have an estimate. I have issued a notice to proceed. I haven’t seen any activity.
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
I have learned that NWS, Inc. has a GIS capability. Neither of the other firms interested have the in-house capability, though all can work with the County. This capability allows the tracking of a great deal more information and makes it more readily available to the district, as well as the county.
I will devote more time to this project once the Highway 12 project is about wrapped up.
Well Site Fence
Completed. The part I thought would be expensive was not. The repairs to the existing fence were. When the fencing contractor went to make repairs, he found that the barbed wire was so corroded it simply fell apart to the touch. Quite a few of the barbed wire supports needed to be replaced, as well.
But the site now has an intact fence and we have a “bay” we can pull into, completely off the road, to unlock the gate.
Highway 12 Meters
Installation is complete. Getting the remote part implemented has presented some challenges.
New Connections
6602 Olympic Highway is installed.
The road crossing for Dick Lee’s new service on Alder Grove Road is complete.
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.
Nothing in July.
Safety
We have a mini safety meeting every morning.
Vehicles
Service Truck: No issues
F-150: Replaced, but still on site. We are getting the logos removed bit by bit.
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, the owner of the mobile home park, contacted us about sharing the expense. I responded in the affirmative. If Gary replaces the fence he does not have to deal with prevailing wage, and we can reimburse.
Still in discussions.
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
The foundation excavation is complete.
Reynvaan Lower Pump House
See budget discussion.
Grant Funding Pursuit
The WASWD board voted to approve the Small Districts Committee with me as chair. Off we go.
Capital Asset Management
I have expanded the Projects List into a very preliminary Capital Replacement Plan. Ideally, this preliminary outline should be expanded to indicate how much money the district needs to devote to capital replacements each year.
Making that expansion has felt a lot like an exercise in futility since so many items are past their critical date.
There are other items that classify as “projects” but are not necessarily capital replacement items. Updating and organizing the as-built information falls into that category.
As part of the next year’s rate study I will work in future capital replacement projects and make an attempt at budgeting in projects that are past due. But it won’t be pretty, from a proposed rate standpoint.
As noted above, Bias has a very inexpensive Capital Asset Management module. I will be making use of the 30 free trial to see if it fits.
Disaster Management Planning
I have not had the opportunity to follow up.
Isolation Valve Exercise Program
This is another Sanitary Survey item. It has been on my to-do list since 2012. Getting this organized is dependent on having good 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