CANBY UTILITY REGULAR BOARD MEETING NOVEMBER 13, :00 P.M.

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1 CANBY UTILITY REGULAR BOARD MEETING NOVEMBER 13, :00 P.M. I. CALL TO ORDER AGENDA I. AGENDA Additions, Deletions or Corrections to the Meeting Agenda II. III. IV. CONSENT AGENDA Approval of the Agenda Approval of Regular Board Meeting Minutes of October 9, 2018 (pp. 1-4) Approval of Write-Offs Approval of Payment of Water and Electric Bills CITIZEN INPUT ON NON-AGENDA ITEMS BOARD REPORT Chairman Comments Board Member Comments V. STAFF REPORTS Operations Superintendent: Employee Resignation Operations Field Supervisor Recruitment Update Finance Manager: Fourth Quarter Financial Report (pp. 5-8) Accounting Clerk Recruitment Update Customer Service Supervisor: Red Flag Rules Update (pp. 9-17) General Manager Updates VI. ADJOURN

2 CANBY UTILITY REGULAR BOARD MEETING MINUTES OCTOBER 9, 2018 Board Present: Staff Present: Others Present: Chairman Potter; Members Daniels, Brito, Wagner, and Hill Daniel P. Murphy, General Manager; Barbara Benson, Board Secretary; Carol Sullivan, Finance Manager; Sue Arthur, Purchasing Agent; Dee Anne Wunder, Customer Service Supervisor ; and Jim Stuart, Operations Manager Tim Dale, City Council Liaison; Ken Miller and Erich Zaugg Chairman Potter called the Regular Board Meeting to order at 7:00 p.m. Chairman Potter presented the meeting agenda for consideration. He asked for any additions, deletions or corrections to the meeting agenda and there were none. Chairman Potter presented the consent agenda for approval. Member Brito made the *MOTION to approve the consent agenda, consisting of the meeting agenda, regular meeting minutes of September 11, 2018, write-offs in the amount of $564.36, payment of the electric and water department bills in the amount of $965, Member Daniels seconded, and the motion passed unanimously. Chairman Potter asked for citizen input on non-agenda items and there was none. Finance Manager Carol Sullivan presented a recommendation to update the master fee schedule under Resolution No Sullivan stated that the proposed updated fee schedule is a housekeeping item that incorporates the new wage rates and inventory charges. Staff updated the cost for the meter set and the main-to-meter service lateral, incorporating the new wage rates and inventory costs. Sullivan also presented a meter set, and service and meter charge rate comparison to nearby cities. Canby Utility s fees are among the lowest rates from the comparisons, with some exception. Chairman Potter asked if the door hanger fee was still an active charge. Sullivan replied that it was, although infrequent since disconnect notices are now mailed to customers. Chairman Potter suggested the fee be discontinued at such time that staff no longer uses door hangers. Potter also asked if these proposed changes are mailed out to any interested parties like the water system development charges. Sullivan stated that they are not mailed since the update reflects actual costs, whereas the system development charges are updated using a construction cost index and have a greater financial impact to developers. Chairman Potter asked for explanation for line items on the comparison, noting that Canby Utility is considerably higher than the comparators with regards to the service and meter fee. Operations Manager Jim Stuart stated the reason for the variation is that some of the comparators are city utilities and not a separate utility like Canby Utility. Sullivan also noted an error in the chart for the 2-inch service and meter charge. The actual cost is not $834 as shown. Member 1

3 Canby Utility Regular Board Meeting Minutes October 9, 2018 Page 2 of 4 Daniels made the *MOTION to adopt revised Exhibit A to Resolution No. 267, related to the Master Fee Schedule. Member Brito seconded the motion and the roll call ballot was as follows: Member Brito, aye; Member Daniels, aye; Member Wagner, aye; Member Hill, aye; and Chairman Potter, aye. The motion passed 5 to 0. Chairman Potter thanked Member Daniels for serving as Chairman Pro-tem in his absence last month. Chairman Potter announced that the board will have an update on the Water Master Plan in January or February This topic will be a significant discussion item for the board that will entail bringing in a consultant to provide information about where Canby Utility is currently in the Plan. The consultant will also address critical decisions to be made by the board, and other organizations that may be involved in the future planning for the City of Canby, such as water quality, how and where Canby Utility will get water in the future, and how the existing system measures up to meet the future needs. Operations Manager Jim Stuart presented the quarterly reliability report. Stuart stated there have been significant improvements over the past three months. Our average duration of power outages have decreased from 81 to 43 minutes per customer. This is a reflection of good maintenance activities in the field. The frequency of our outages has dropped 30% this quarter. The MAIFI indices for the Northwest region will not be published until November; therefore, the next quarterly report will have a more accurate comparison. The CAIDI has decreased 10% for the average duration of outages per the number of customers. Stuart stated the overall quarterly report is very positive. The board had no questions. Stuart also reported that staff is currently advertising for a water Utility Worker I or II. This recruitment is a result of an employee who had to leave Canby Utility due to medical issues. Stuart noted that the employee will be missed. Finance Manager Carol Sullivan reported that the board had previously made a request for staff to compare Canby Utility s water system development charges (SDCs) to other entities. Sullivan presented a chart showing how Canby Utility compared to neighboring cities. Canby Utility was among the lowest charges. Member Hill asked how often the SDCs are updated. Sullivan stated annually. Prior to increasing SDCs, staff sends letters to contractors to notify them of the proposed increase in charges. Discussion ensued about the comparison and the difficulties staff faced in trying to compare Canby Utility SDC drivers to the methodologies of other cities. Sullivan reported that we are currently recruiting for an Accounting Clerk, noting that there are several strong candidates that have applied. The position is open until filled. Customer Service Supervisor Dee Anne Wunder reported that we have hired a temporary customer service representative to help cover duties at the front counter while another employee is off work due to maternity leave. Wunder noted that Maribel is doing a good job and is pleased to have her here. 2

4 Canby Utility Regular Board Meeting Minutes October 9, 2018 Page 3 of 4 Board Secretary Barbara Benson reported on the upcoming employee recognition event. The event will be held on December 7. Benson shared the details of the upcoming event, and encouraged board members to offer any feedback and suggestions for changes to this year s event. General Manager Dan Murphy reported on the upcoming open house and building dedication that is scheduled for October 19. An advertisement has been placed in the Canby Herald and mailed to customers with utility bills. Murphy shared the event schedule, which includes a ribbon cutting ceremony, building tours, giveaways, and food. Wunder displayed samples of the giveaway items and Benson gave a description on the food to be served at the event. Murphy reported on the board workshop on the Water Master Plan. Brian Ginter of Murray, Smith & Associates, will be present to review the Plan and address the items Chairman Potter had mentioned earlier in the meeting. Murphy explained the agenda for the workshop. Murphy anticipates it will be a very informative workshop for board members. The workshop will likely be held in January. Murphy reported on the new building construction. There are still some remaining punch list items to be completed before the project is finished. Murphy gave an example of the delay to install the parking lot fence screens. Member Brito asked about any concerns for meeting water needs over the next 15 to 20 years should Canby continue to grow like it has been in recent years or will we be in a position of needing to buy water. Murphy noted that the growth factors are thoroughly detailed in the Master Plan. At the last Master Plan review workshop, Ginter reported that the actual population growth was much lower than the Plan s projections. As a result of the lower growth rate, Canby s demand for water is pushed out 10 years into the future from what is identified in the Plan. Discussion ensued regarding Canby s historical peak usage and that Canby Utility has more than enough water to meet demands. Murphy noted that he would like to see a couple large water demand customers come to Canby to utilize some of the excess water capacity we currently have. Member Daniels noted he read in the trade journals about increased demands in electricity as a result of electric vehicles and marijuana grow operations and wondered if Canby Utility had seen an impact. Murphy stated that Canby Utility hasn t seen any changes as a result of any marijuana grow operations due to the City s curtailment on grow operations, but we have seen an increase in demand for bitcoin mining operations. Stuart reported the bitcoin mining operations in the city have increased our electric demand by 2 to 2 ½ megawatts in the past year and a half. Member Daniels made the *MOTION to adjourn the meeting. Member Wagner seconded, and the motion passed unanimously. There being no further business, the meeting was adjourned at 7:41 p.m. 3

5 Canby Utility Regular Board Meeting Minutes October 9, 2018 Page 4 of 4 Gary Potter, Chairman Walt Daniels, Member Jack Brito, Member Bob Hill, Member Todd Wagner, Member Barbara Benson, Board Secretary 4

6 Memorandum November 6, 2018 To: From: Chairperson Potter, Member Daniels, Member Brito, Member Wagner, and Member Hill Carol Sullivan, Finance Manager Subject: Quarterly Financial Update as of June 30, 2018 Fiscal Year 2018 Please find attached the Executive Financial Summary through June 30, 2018, the Utility s whole fiscal year This report does not include the adjustment for the Governmental Accounting Standards Board Statement 68 and 75, accounting and financial reporting for pensions and postemployment benefits other than pensions, when included it will increase expenses and the comparison to budget will be distorted. The report is cumulative to date and gives a quick overview of profit and loss resulting from operations and capital contributions, a comparison to budget with notes, and cash reserves compared to the budget target and minimum. For monthly information refer to the financial packet sent via . I will present these at the next board meeting and will be available for comments or to answer any questions. 5

7 Canby Utility Executive Financial Summary Profit (Loss) Resulting From Operations and Capital Contributions*** Year To Date Twelve Months Ending June 2018 Legend = Electric =Water Electric Profit (Loss) From Operations Revenue Expense Operating Profit (Loss) $ 13,229,657 $ 11,824,709 $ 1,404,948 Operations And Capital Contributions*** Operating Profit (Loss) Capital Contributions Net Income (Loss) $ 1,404,948 $ 759,593 $ 2,164,541 Water Profit (Loss) From Operations Revenue Expense Operating Profit (Loss) $ 3,511,785 $ 3,015,398 $ 496,387 Operations And Capital Contributions *** Operating Profit (Loss) Capital Contributions Net Income (Loss) $ 496,387 $ 1,302,479 $ 1,798,866 ***Capital Contributions are contributions of capital, in the form of money or assets/infrastructure to Canby Utility from a customer or a vendor. 6

8 Canby Utility Executive Financial Summary Profit (Loss) Resulting From Operations With Capital Contributions Compared To Budget Year To Date Twelve Months Ending June 2018 Electric Net Income (Loss) Budget Over (Under) Budget $ 2,164,541 $ 2,004,000 $ 160,541 Notes : YTD Net Income is 8.01% over budget. Operating revenue is over budget 2.70% mainly due to higher reimbursements of qualifying conservation expenses from BPA's conservation credit program. Overall operating expenses are over budget 2.80% mainly due to higher customer conservation payments and purchased power & transmission. These are somewhat offset by the timing of tree trimming and capitalized labor. Capital contributions are over budget 10.07% due to more customer funded projects. Water Net Income (Loss) Budget Over (Under) Budget $ 1,798,866 $ 1,333,673 $ 465,193 Notes : YTD Net Income is 34.88% over budget. Operating revenue is over budget 7.52% due to higher water consumption than budgeted. Operating expenses are under budget 1.95% mainly due to capitalized labor and this is somewhat offset by bond refunding expenses. Capital contributions are over budget 9.32% mainly due to capital contributions by two new subdivisions. 7

9 Canby Utility Executive Financial Summary Cash Reserves Year To Date Twelve Months Ending June 2018 Electric Budget Target 6/30/18 Current Cash Reserves FYE 2018 Target Over (Under) Target $ 9,548,842 $ 7,158,791 $ 2,390,051 MINIMUM Current Cash Reserves Minimum Over (Under) Minimum $ 9,548,842 $ 4,000,000 $ 5,548,842 Water Budget Target 6/30/18 Current Cash Reserves FYE 2018 Target Over (Under) Target $ 4,407,518 $ 4,597,468 $ (189,950) MINIMUM Current Cash Reserves Minimum Over (Under) Minimum $ 4,407,518 $ 2,000,000 $ 2,407,518 8

10 MEMORANDUM November 6, 2018 TO: FROM: SUBJECT: Chairperson Potter, Member Daniels, Member Brito, Member Hill, and Member Wagner Dee Anne Wunder, Customer Service Supervisor Annual Red Flag Rules Update Overview: The Federal Trade Commission requires every creditor to establish an Identity Theft Prevention Program that is defined by the Red Flag Rules. Canby Utility established this program in November Staff follows the current policy which is in compliance with the Federal rules. We are pleased to report that there have not been any incidents over the past year. The annual Red Flag Rules training was completed by our customer service staff on October 18, A copy of the Identity Theft Prevention Program is attached for your review. I will be available to answer any questions the Board may have. 154 NW First Avenue PO Box 1070 Canby OR Tel: Fax:

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