MANAGER'S REPORT
05/12/21
Budget Position Report
Operational income for April was $86,050.74. Operational expenses were $54,289.08. We took in $31,761.66 more than we spent.
There were no capital expenditures in April.
We transferred $31,780.04 into reserve funds:
April YTD
Capital Replacement Reserve $ 4,771.00 $14,313.00
Major Repair Reserve $22,809.04 $58,538.27
Debt Service Reserve $ $ 8,400.00
Total YTD to Reserves $75,622.27
I overlooked the contribution to the Debt Service Reserve and did not catch the omission until it was too late to fix. I will make a double transfer next month.
I have included, in addition to the report for the General Fund excluding beginning balances, a full report for all funds.
Treasurer’s Report:
Fund Balances To Date:
Regular Maintenance $ 59,136
Capital Replacement $ 76,335
Major Repair Reserve $288,139
General Facilities $152,545
Total Funds Available $576,155
Chlorine
There is a chlorine shortage on the horizon. The demand for chlorine, driven by the pandemic and the need to disinfect everything in sight, is rapidly outpacing the manufacturing capability.
Most of the popular press is focused on the impact on pool owners. There was a fire in Louisiana that destroyed a factory that produces chlorine tablets (calcium hypochlorite) for use in swimming pools. That event has little impact on the supply of NSF-60 sodium hypochlorite.
The big concern is the demand for liquid sodium hypochlorite. Bleach. Household bleach is typically 6.25% sodium hypochlorite. The NSF-60 sodium hypochlorite used by water utilities, including this district, is 12.5% and is passed through additional quality control steps to ensure no unwanted substances or objects (typically bits of metal picked up in processing) are present. The demand for bleach directly affects the production capability of NSF-60 sodium hypochlorite as the two are produced in the same facilities and, largely, the same production lines.
In the short term, we will do whatever we have to do. We may have to resort to using non-NSF-60 chlorine from time to time. We have done that in the past. We will have to notify the Department of Health and our customers if the need arises. The worry is that it is the demand for non-NSF-60 chlorine that is creating the crunch.
This is the second time that NSF-60 chlorine has been difficult for us to source. Acquiring NSF-60 sodium hypochlorite out here is not easy. Fortunately, Grays Harbor Equipment has stocked it, but they are the only ones. City of Montesano has bulk chlorine delivered by tanker. City of Aberdeen uses chlorine gas.
My big concern is that we are captive to a single source for NSF-60 sodium hypochlorite. From time-to-time I have searched for alternative supplies, just as a back up. I have been unable to find an attractive alternative.
I would like to work on investigating on-site chlorine generation (OSG). This is a mature technology in which an electric current is used to generate sodium hypochlorite from salt. It has been around since the 1970’s. Generally, softener salt is used, but any sodium chloride (table salt) will work. It would not be inexpensive, perhaps in the $30,000 range. But our dependence on a single supplier of chlorine is a major concern.
There would be significant operational savings which would essentially pay for the eventual replacement at the end of it’s service life. Cost comparisons, conducted by those marketing OSG products, indicate a significant reduction in operational costs. We are currently paying $7.23 a gallon for chlorine. A gallon weighs about 6 pounds. At 12.5% concentration we are paying $7.23 for about 3/4’s of a pound of chlorine, so roughly $9.00 per pound of available chlorine. Cost estimates for OSG range from $0.65 to $0.75 per pound of available chlorine, primarily the cost of salt and electricity. We go through about 40 gallons of sodium hypochlorite a month or about 30 pounds of available chlorine. So the operational savings of $250.50 ($270.00 - $19.50) per month would recover the roughly estimated installed cost in 10 years. I would expect and maintenance costs would extend that payoff. All assuming that my shirt cuff estimate is close to the actual installed cost.
The primary benefit in my considerations is the freedom from dependency on a single source supplier. If there is a secondary benefit, it would be the ability to stockpile salt. Sodium hypochlorite at a 12.5% concentration has a shelf life of from 30 to 60 days.
I have investigated other suppliers of sodium hypochlorite, but we would need to pay substantial delivery fees, or we would have to go in to Tacoma or Seattle to pick it up.
I have looked at piggy backing on the City of Montesano delivery, but installing the capability of receiving and storing bulk chlorine looks at least as expensive as installing OSG and would still make us dependent on a single supplier. Remember that 12.5% sodium hypochlorite is classified as hazardous material and the storage facility would have to address that consideration.
Other advantages:
Improved taste and odor
No handling of hazardous material, which 12.5% sodium hypochlorite is.
Lower stored concentrations (0.4% to 0.8%) lowers corrosion damage in the pumphouse
An ongoing problem
Salt can be stockpiled. Sodium hypochlorite can not.
I am requesting authorization to issue a request for statements of qualifications to engineering firms to develop a basic sizing specification and engineer’s cost estimate. Once we have a solid idea of the installed costs we can move on from there.
I have included a proposed request for statements in your packets.
Cornucopia of Federal Funding
I have included two news articles discussing upcoming Federal funding for water and waste water projects.
At first glance, it looks like our industry is being inundated with new funding. But, as always, the devil is in the details.
The article from the Hill discussing the Senate bill sounds very promising. It does discuss grants. But those grants are directed at distressed communities (I doubt we would qualify) and “small” water systems serving between 10,000 and 100,000 people. That is not us.
Further careful reading indicates that the funding will be channeled through existing state funding programs. Our state has two: The State Revolving Fund; and the Public Works Trust Fund. Both programs are loan programs.
The EPA announcement relates to various EPA loan and loan guarantee programs. My experience with government loans is that the savings in the interest rates (or guarantees) are offset by the administrative burden and the addition of unrelated provisions, such as Americans with Disabilities Act and the hiring of vendors identified as disadvantaged. All worthy causes, to be sure, but unrelated to the water district’s mission of providing safe and reliable drinking water.
Copier
Specifications have been sent to Aberdeen Office Equipment. This acquisition falls under the “Vendor List” process.
6908 North Bank Road
This is another situation where the service lateral crosses adjacent properties. In this instance, the service lateral had a leak on a neighboring property.
The district repaired the leak. The adjacent property owner was cheerfully accommodating. I recommend that we reduce the customer’s water bill to the minimum during the time the leak was active. The basis for that request is that the customer should not be held responsible for a service lateral located off their property.
Request for Public Information
Our process needs updating. I will be looking at this after dealing with the Risk & Resilience Certification.
June Newsletter
I emailed you the first draft. I need approval on this so we can get it to the printer.
Current Projects
Indefinite Delivery Contract
Awarded to Rognlin’s Inc.
Reynvaan Extension
In engineering.
Water Rights
On hold
North Bank Reservoir and Clemons Reservoirs Access Roads Paving
In engineering
Ryenvaan Booster Station Pumphouse
Doing some evaluation. I am thinking that a metal building would be preferable to a wood building. Rot is an ongoing problem in wood pumphouses. We made some substantial repairs to this building about 10 years ago.
Hidden Valley Service Meter
Awarded to Brumfield Construction. Contract has been signed. No schedule yet.
North Bank Reservoir Roof Recoating
In engineering
Because of the need to provide consistent specifications in our solicitations for bids we must utilize consultants (engineers) to develop detailed scopes of work. Therefore, projects start off with engineering.
Payroll Report
No surprises. We will always have some overtime. There are tasks that have to be accomplished after hours, and there are always emergency responses.
We can expect to go over budget on payroll as we train Charli’s successor.
Pandemic
Phase 3 does give us the option of in-person commissioners’ meetings. Total attendance, including any public, is limited to 10 people.
Since the public rarely attends, and when they do it is only one or two people, we could return to in-person commissioners’ meetings. Anyone uncomfortable in-person could attend by phone.
Isolation Valves
Several paved over isolation valves have been found. We hope to raise those valves in May.
Past Due Accounts
I have included the “Collections List” report in your packets. Some of these folks are trying to keep up. Others have not made a payment in quite awhile and may be experiencing pandemic related hardships. However, no one has talked to us about that.
In generating the report I included accounts with balances over $350.00. With the average bill running about $105, that would put residential connections past due by three billing cycles. The total is almost $103,000.
We will need to take these shortages into account at budget time. I doubt very much that many of these people will be able to immediately catch up their accounts once we are able to pursue collections. In effect, those who have been keeping their accounts current will be subsidizing those who have not.
I will not be posting this list on the web site in the interests of protecting privacy.
Damaged Fire Hydrant
No news
Well #5 Source Meter
The meter is on back order.
North Bank Reservoir
JWM&A is building a specification for re-coating the roof. I will generate the full Small Works Roster packet in house. The estimate for engineering is $1,300.00.
Contracting
I have run into what maybe a minor issue, but does cause me some concern. Responses to the contracts include detailed insurance information along with the Certificate of Insurance. This information covers quite a few pages.
I have tried to review the couple we have received, but it is difficult for me to determine if the provisions meet the objective. Which is protection for the water district.
The only alternative I see is to pass every one of these on to Scott for his review. This step will slow the progress of the projects as well as represent a significant cost in attorney’s fees. I have no problem with that for large projects. But for smaller projects, typically in the $10,000 to $20,000 range, it seems out of proportion.
I have included the certificate of insurance on the Hidden Valley meter as an example. I have read this one and am reasonably confident it meets our requirements, and I turned around the contract. But for future projects I would like a bit clearer direction.
Ashley & Kayla
No Action in April
6314 Central Park Drive
Petition to the commissioners. Please see letter in your packets.
Hydrant Maintenance
Some hydrant flushing got done in April. We are still behind in tagging and painting. See “Maintenance Activity” below. We will be hitting hydrant maintenance hard in May and going forward into the Summer.
A major emphasis is making sure all the hydrants are clearly numbered. This is useful for the district and vital for the fire district.
Rate Study
I have plugged the 2020 numbers into the rate study. It is a bit of a task, and I may change the format a bit to make it easier to get data from Bias into the study.
There is a report in your packets. It is the spreadsheet simply labeled “2020”.
For 2020 I did not include a breakdown of Allocated Usage and Overage Usage. It is difficult to arrive at those number using the Bias reports. I added a Budget column for comparison purposes.
We spent less on Maintenance & Operation in 2020 than we budgeted in 2019. The “Revenue” number is what we actually collected, not what we billed. We billed $911,983. The difference being the accounts that have chosen to defer payment until the Governor’s moratorium on collection activities is lifted.
I have also included the “Water Use By Class” report from Bias for your information.
Shop Fence
No progress on this project yet. This will take some discussions with the fire district as the 50-foot strip of fire district-owned property to the west presents some challenges as to where the fence should be located.
This issue has developed some complications as we have not been able to develop a working relationship with the new fire chief. That will happen soon.
I will need more information before I can propose a funding source.
New Regulations
No new regulations this month.
Personnel
Charli has announced her retirement. The effective date is May 28th, 2021. We have a successor, Dali Stires, who you will meet at the meeting.
The only other news is the letter from Paul McDonald. I will not take any further steps without clear direction from the board.
Maintenance Activity:
See the attached report. We need to work on making sure work orders are assigned to the appropriate class of work and project.
Roads
In engineering
Contractor Repairs/Assistance
None
Tank Cleaning
Awaiting a date.
Shop Organization
We may need to retain some temporary help to get the inventory done preparatory to surplusing all those old ductile iron fittings, and other items that are of little to no use. The district’s field techs are simply too busy on tasks more related to serving our customers to have the time to go through all the old parts.
It is apparent that this project will require my direct supervision.
I am reasonably positive that the value of the items we would want to surplus exceeds the $2,500 amount requiring commissioners’ approval.
As a side issue, we also have a collection of obsolete computers that need disposal.
I really, really, want to get this done and get all those old, and generally useless, fittings gone. I am sure that the disorganization in the shop is costing the district money. The first step to organizing the shop is getting rid of all the bits and pieces for which we have no need.
And there is the requirement within the Asset Management rules that there be an inventory control system. Though we have developed some of the pieces for such a system, the physical aspects cannot be planned or implemented until the shop is organized.
Training/Certifications
I have scheduled myself for a class at the end of May. That will fill out my CEU requirements.
Safety
We have a mini safety meeting every morning. Kenny was victim to an injury of his finger that has required medical attention.
We have reviewed the necessity of IMMEDIATELY addressing even very small injuries.
Vehicles
Service Truck: No issues
Pickup Truck 1: No Issues
Pickup Truck 2: No issues
Backhoe: No issues.
Web Site
The March Manager’s Report has been posted.
New Connections
None
Spoils Site
No News.
Capital Asset Management
Everything is proceeding according to the plan.
Disaster Management Planning
No progress in April.
Isolation Valve Exercise Program
On hold
Long Distance Service Laterals
No new thoughts or events.
Respectfully Submitted:
Reg Hearn
General Manager
Link to: