Utility Board. Agenda topics. For Meeting of June 12, :00 PM to 9:00 PM City Council Chambers, City Hall

Transcription

1 Utility Board For Meeting of June 12, :00 PM to 9:00 PM City Council Chambers, City Hall Board Members: Council Liaison: Staff: David Laub, Chairman, Benjamin Levie, Vice Chairman, Suresh Malhotra, Robert Sexton, Glynda Steiner, Wendy Weiker, Kwan Wong Council Member Tana Senn Glenn Boettcher, Maintenance Director Chip Corder, Finance Director Francie Lake, Deputy Finance Director Patrick Yamashita, City Engineer Anne Tonella-Howe, Assistant City Engineer Terry Smith, Utilities Operations Manager Asea Sandine, Recording Secretary 7:00 PM Roll Call Agenda topics Approval of the Minutes of April 10, 2012 All 2012 Board Elections All Preview of Capital Projects Staff 2012 Work Plan All Transmitted via Agenda Meeting Minutes Preview of Capital Projects Work Plan Next Meeting: September 11, 2012

2 UTILITY BOARD REGULAR MEETING MINUTES APRIL 10, 2012 CALL TO ORDER: Chairman David Laub called the regular meeting of the Utility Board to order at 7:06 p.m. in the Farside Room at City Hall, 9611 SE 36th Street, Mercer Island, WA. ROLL CALL: Board Members David Laub, Chairman, Kwan Wong, and Ben Levie were present. Robert Sexton joined the meeting late. Staff Glenn Boettcher, Assistant City Manager, Francie Lake, Deputy Finance Director, Suzanne Riddell, Utility Billing Supervisor, and Asea Sandine, Recording Secretary were present. MINUTES: David Laub moved to approve the meeting minutes of March 13, Robert Sexton seconded the motion. The motion carried unanimously. APPEARANCES: There were no appearances. REGULAR BUSINESS: Utility Billing Adjustment Policy Francie Lake shared that due to an increase in requests for leak adjustments with unique circumstances, and the news of inappropriate account adjustments made to accounts at a neighboring city; staff felt it was time to review the City s current practices. Francie reviewed with the Board the current practices and the history of the current utility billing adjustment policies. She shared a memo which included four exhibits 1) Leak Policy Cards, 2) Comparison of leak policies, 3) Leak adjustment policy and 4) Utility Account Adjustment Guidelines, April Staff proposes the following changes to the current policy: a 10% fee plus wholesale costs for adjustments and a one time adjustment for theft or negligence. The board reached consensus to move forward with the proposed changes to the leak adjustment policy and to implement the Utility Account Adjustment Guidelines. OTHER BUSINESS None. NEXT MEETING: The next scheduled meeting is Tuesday, May 8, ADJOURNMENT: 8:45 p.m. Asea Sandine Recording Secretary Mercer Island Utility Board Meeting Minutes 1

3 Utility Board 2012 Work Plan Meeting Date January 10 February 14 March 13 April 10 May 8 June 12 July 10 August 14 September 11 October 9 Agenda Item Cancelled 2012 Work Plan 2012 Work Plan Project Updates Utility Billing Adjustment Policies (Francie) Meeting Cancelled Utility CIP Preview (Staff) Cancelled Cancelled Sewer Budget and Rates (Francie) Storm Water Budget and Rates (Francie) Water Budget and Rates (Francie) EMS Rates (Francie) November 13 To Be Scheduled: Board Elections (June) EMS Cost of Service Study (Francie)

4 Memo Finance Department To: From: Utility Board Members Francie Lake, Deputy Finance Director Date: June 7, 2012 Re: June 12, 2012 Meeting - Preview of Capital Projects As one of the early steps in preparing the Biennial Budget, staff has prepared a Capital Project proposal for the six year period ( ), focusing on the upcoming biennium ( ). The meeting on June 12th is an opportunity for the Utility Board to preview and comment on the projects that staff has proposed. City project managers will provide a visual presentation of the utility systems and the six year project plans at the board meeting. A preview of the proposed projects will be presented to the City Council at its June 18 th meeting. Prior to developing project proposals, staff was given annual revenue forecasts as projected during the 2012 rate studies for each of the utilities. In addition, beginning fund balances for 2013 were estimated, resulting in estimated Total Revenue for CIP (i.e. maximum capital spending targets) for each of the utilities. Rates forecasted during the 2012 rate review, as well as total revenue for CIP are shown in the tables on page 5. Attached you will find a six year capital project plan for each of the utilities Water, Sewer, and Stormwater. The City s Water Comprehensive Plan, General Sewer Plan, and Comprehensive Basin Plan are guiding documents used by staff in developing the six year plans. In addition, staff relies on information from the water hydraulic model, videotaping of sewer pipe, and periodic assessment of changing conditions in storm basins/ravines. The capital reinvestment needs of the Water Utility are considerable. The replacement of substandard water mains, particularly those that are undersized and do not comply with the City s fire flow policy, continue to be a primary focus of water system capital improvements in the coming biennium. The proposed Capital Reinvestment Plan for averages $2.1 million per year (see page 6). The preliminary projected ending fund balances for the Water Fund are presented below: Water Fund Estimated Funding for CIP 2,946,000 1,559,000 1,678,000 1,921,000 2,076,000 2,239,000 Total Est. Project Costs 2,861,000 1,523,640 1,655,065 2,105,289 2,408,077 2,267,698 Annual Net 85,000 35,360 22,935 (184,289) (332,077) (28,698) Est. Ending Fund Balance 85, , ,295 (40,994) (373,071) Note: Please see following Highlights section for a discussion of projected negative fund balances. (401,769) Page 1

5 The six year plan for Sewer (see page 7) continues the shift in focus started in the current ( ) biennium from the Sewer Lake Line project (completed in 2010), to repair, rehabilitation, and replacement of sewer mains, replacement of pump station generators, and pump station repairs. The proposed Capital Reinvestment Plan for averages $1.0 million per year. The preliminary projected ending fund balances for the Sewer Fund are presented below: Sewer Fund Estimated Funding for CIP 814, ,000 1,141,000 1,219,000 1,264,000 1,310,000 Total Est. Project Costs 987, ,147 1,112, ,255 1,262,945 1,013,865 Annual Net (173,432) 107,853 28, ,745 1, ,135 Est. Ending Fund Balance (173,432) (65,579) (36,869) 204, ,931 Note: Please see following Highlights section for a discussion of projected negative fund balances. 502,066 The six year plan for Storm Water (see page 8) continues to focus on the basin improvements and conveyance system replacement projects identified in the Comprehensive Basin Plan. The last large watercourse stabilization project (Basin 6.3) was completed in The six-year plan focuses on reinvestment in medium to small sized basins and begins a greater emphasis on rehabilitation of aging piped conveyance systems, similar to the water and sewer utilities. A new program for storm water treatment is also proposed. See the highlights section below for more detail. The proposed Capital Reinvestment Plan for averages $1.1 million per year. The preliminary projected ending fund balances for the Stormwater Fund are presented below: Stormwater Fund Estimated Funding for CIP 1,521,000 1,550, , , , ,000 Total Est. Project Costs 1,485,358 1,494, , ,097 1,024, ,198 Annual Net 35,642 55,252 (67,495) (115,097) (214,081) (146,198) Est. Ending Fund Balance 35,642 90,894 23,399 (91,698) (305,779) (451,977) Note: Please see following Highlights section for a discussion of projected negative fund balances. Highlights: (1) Stormwater Quality and Treatment Opportunities Mercer Island has invested in monitoring several streams since 1999 in an effort to understand water and sediment quality in five to six streams. Water quality issues in most of the streams were related to storm flow volumes and velocities, with subsequent erosion. Elevated levels of dissolved copper and zinc were observed in the streams tributary to the town center (sub-basin 10) and the south end shopping center (sub-basin 32b). Staff began the next logical approach in the monitoring effort this biennium to systematically look for the sources of this pollution. King County was hired in 2011 to begin this source identification effort. The second phase of the source identification is proposed for the next biennium ( ). If a specific source of pollutants is identified, the next step will be to control and eliminate the source if possible. If not, then one or both phases of treatment improvements identified in the 6 Year Stormwater Plan for and will be implemented to treat the stormwater. This effort supplements other water quality Page 2 Utility Board Meeting - 6/12/2012

6 related work that is already part of the Maintenance Department s ongoing work plan including the following programs that capture pollutants before they enter our streams and Lake Washington: 1. Street Sweeping Program to capture polluted road grit. 2. Catch Basin Cleaning Program to remove polluted road grit 3. Ditch Retrofit Program to enhance filtering of stormwater runoff. One additional series of proposed capital is the construction of two to three treatment devices annually throughout the island in the existing drainage system to treat stormwater before it enters streams and the Lake. The intent is to start this water quality effort in 2013 while the second phase of the source identification project is underway. (2) Engineering Technician position The number and complexity of utility and street capital projects over the past few years is outpacing the capacity of the City s small engineering staff, which consists of the Assistant City Engineer, the Street Engineer, the Utility Engineer, and one Project Manager. Together, they are responsible for 46 projects with a combined budget of $12 million this biennium. To address this ongoing problem, the addition of an engineering technician is being proposed. This new contract position would be paid wholly from the capital program and would have no impact on utility rates or the street fund. An engineering technician has basic engineering skills but is not professionally licensed and is compensated at a significantly lower rate. The technician would be assigned smaller projects to manage and would provide support for the engineering staff on larger projects. Staff believes this is a cost-effective way to ensure that projects continue to be successfully completed on time and within budget. (3) Technology Projects Utility funding required for technology projects is estimated to be $65,000 per Utility for the biennium. Several systems are in need of upgrade or replacement in 2013 or 2014, including the City s Financial System, Utility Billing System, Maintenance Management System, and the Server Software which houses these applications. The estimated cost of these systems has been included within the estimated funding available for CIP, and will have no impact on the proposed utility rates. (4) Negative Fund Balances Both the Water and Storm Water Funds have projected negative fund balances starting in These negative balances are several years out, and there are several possibilities which could result in additional revenue for each of these funds. For the Water Fund, the First Hill property could sell for more than currently projected. In addition, water use could be higher than projected if we have a warm/dry summer. For the Storm Water Fund, as the economy and development picks up, fee-in-lieu of stormwater detention payments could exceed budget. In addition, the City could apply for and possibly receive King County Flood Control District funding for one or more projects. Page 3 Utility Board Meeting - 6/12/2012

7 The Sewer Fund has a projected negative fund balance in and a projected positive fund balance in 2018 of $500,000. In this case, staff recommends dipping into reserves ($725,000 at the end of 2011) in order to fund several high priority projects in As a reminder, the rates, forecast revenue, and operating expenses are based on the rate updates reviewed by the Board last fall during its 2012 rate deliberations, and adopted by City Council last November. The only thing that has been updated at this point is the forecasted capital spending for Following the preview of proposed capital projects to the Utility Board and Council, staff will proceed with development of a proposed operating budget during the months of July and August for each of the Utilities and return to the Utility Board in September and October to present the full budget (operating and capital) and rate analyses for the Board s review. The City Council will review the proposed 2013 utility rates on November 5 th, will adopt the 2013 utility rates on November 19 th, and will adopt the Budget on December 3 rd. Page 4 Utility Board Meeting - 6/12/2012

8 Utility Revenue Forecast and Available Fund Balances (From CIP Kick-Off presentation to Staff on Mar. 7, 2012) Water Fund Forecast Utility Rates, Connection Charges, Interest (dollars in thousands) Year: Rate Increase 12.35% 8.25% 8.25% 8.25% 8.25% 8.25% 8.25% Available Fund Balance $ - $ 823 $ 823 $ - $ - $ - $ - Rate Funding for Capital $ 667 $ 995 $ 1,293 $ 1,491 $ 1,733 $ 1,872 $ 2,021 Water Connection Charges $ 113 $ 130 $ 144 $ 159 $ 162 $ 180 $ 192 Sale of First Hill Property $ - $ 250 $ - $ - $ - $ - $ - Interest $ 6 $ 25 $ 22 $ 28 $ 26 $ 25 $ 25 Total Revenue for Water CIP $ 786 $ 2,223 $ 2,282 $ 1,678 $ 1,921 $ 2,076 $ 2,239 Sewer Fund Forecast - Utility Rates, Connection Charges, Interest (dollars in thousands) Year: Rate Increase 9.3% 9.3% 9.3% 8.0% 3.7% 3.7% 3.7% Available Fund Balance $ - $ 81 $ 82 $ - $ - $ - $ - Rate Funding for Capital $ 373 $ 638 $ 894 $ 1,127 $ 1,205 $ 1,250 $ 1,296 Connection Charges $ 194 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 Interest $ 6 $ 9 $ 8 $ 10 $ 10 $ 10 $ 10 Total Revenue for Sewer CIP $ 573 $ 732 $ 988 $ 1,141 $ 1,219 $ 1,264 $ 1,310 Storm Water Fund Forecast Utility Rates, Fee in Lieu, Interest (dollars in thousands) Year: Rate Increase 0.0% 3.1% 3.1% 3.1% 3.1% 3.1% 3.1% Available Fund Balance $ - $ 591 $ 592 $ - $ - $ - $ - Rate Funding for Capital $ 685 $ 703 $ 716 $ 722 $ 725 $ 740 $ 750 Fee in Lieu of Detention $ 35 $ 50 $ 65 $ 65 $ 65 $ 65 $ 65 Grant - Dept of Ecology $ 225 $ - $ - $ - $ - $ - $ - Interest $ 6 $ 12 $ 12 $ 10 $ 5 $ 5 $ 5 Total Revenue for Storm CIP $ 951 $ 1,356 $ 1,385 $ 797 $ 795 $ 810 $ 820 Note: Available Fund Balance may be spread across the 6 years ( ) as staff determines. For presentation purposes, Available Fund Balance has been split between Page 5 Utility Board Meeting - 6/12/2012

9 Capital Improvement Program Water Fund Six Year Plan Detail of Expenditures Description of Projects Budget Budget Forecast Forecast Forecast Forecast Undersized Main Replacements 88th Ave SE & 86th Ave SE Water System Improvements $ 131,000 $ 619,000 $ - $ - $ - $ - Sandy Cove Water System Improvements 374, Mercerwood Neighborhood Water System Improvements ,000 1,502, rd Ave/SE 72nd St and 89th Ave SE & 90th Ave SE south of SE , , Madrona Crest West Addition Water Sys Improvement ,000 1,728, WMW ,000 SE 40th & 83rd Ave SE - 230, Sub-total Undersized Main Replacements $ 505,000 $ 1,015,000 $ 1,176,000 $ 1,730,000 $ 1,728,000 $ 497,000 Water System Improvements Hydrant Replacement $ 60,000 $ - $ 80,000 $ - $ 85,000 $ - Water System Components (air vac, blow off, and etc.) 20,000 30,000 35,000 35,000 35,000 35,000 ICW and 85th Ave SE, btw SE 40th and SE 44th St Water System Im 1,596, EMW 5400 to 6000 block Watermain & PRV Stations ,000 1,102,000 Mercerwood Drive Watermain Replacement 442, Street Related Water CIP Projects - 200, , , , ,000 New PRV Station Installation ,000 Sub-total Water System Improvements $ 2,118,000 $ 230,000 $ 315,000 $ 185,000 $ 458,000 $ 1,537,000 Other Water System Projects Water Model Updates/ Fire Flow Analysis $ - $ 25,000 $ - $ 20,000 $ - $ 25,000 Water System Plan Update 70,000 60, Meter Replacement Program 45,000 45,000 45,000 45,000 50,000 50,000 Sub-total Other Water System Projects $ 115,000 $ 130,000 $ 45,000 $ 65,000 $ 50,000 $ 75,000 Interfund Transfers and other Capital Projects Capital Project Management $ 93,497 $ 98,640 $ 104,065 $ 109,789 $ 115,827 $ 122,198 CIP (Maint Building Reinvestmt) 5,750 8,750 15,000 15,500 53,250 25,500 CIP (Technology) 23,753 41, ,000 11,000 Sub-total Interfund Transfers and Other $ 123,000 $ 148,640 $ 119,065 $ 125,289 $ 172,077 $ 158,698 TOTAL PROJECT COSTS $ 2,861,000 $ 1,523,640 $ 1,655,065 $ 2,105,289 $ 2,408,077 $ 2,267,698 Page 6 Utility Board Meeting - 6/12/2012

10 Capital Improvement Program Sewer Fund Six Year Plan Detail of Expenditures Description of Projects Budget Budget Forecast Forecast Forecast Forecast Sewer Collection System Improvements General Sewer System Improvements $ - $ - $ 350,000 $ 400,000 $ 400,000 $ 400,000 East Mercer Way Sewer Replacement - 500, Street Related Sewer System Improvements 50,000 50,000 50,000 50,000 50,000 50,000 Backyard Sewers , ,000 25, ,000 Lake Line Clean-outs , ,000 - Sewer System Emergency Repairs 50,000 50,000 50,000 50,000 50,000 50,000 Sub-total Sewer System Improvements $ 100,000 $ 600,000 $ 975,000 $ 675,000 $ 1,075,000 $ 675,000 Pump Station Improvements Sewer System Generator Replacement $ 95,000 $ - $ - $ 160,000 $ - $ 170,000 Sewer System Pump Station Repairs 60,000 60,000 65,000 65,000 65,000 65,000 Pump Station 14 Rebuild 375, Sanitary Sewer System Telemetry 263, Sub-total Sewer System Rehabilitation $ 793,000 $ 60,000 $ 65,000 $ 225,000 $ 65,000 $ 235,000 Interfund Transfers and other Capital Projects General Sewer Plan - 20 year Capital Plan Update $ 15,000 $ 35,000 $ - $ - $ - $ - Capital Project Management 49,929 53,147 57,290 61,755 66,695 72,365 CIP (Maint Building Reinvestmt) 5,750 8,750 15,000 15,500 53,250 25,500 CIP (Technology) 23,753 41, ,000 6,000 Sub-total Interfund Transfers and Other $ 94,432 $ 138,147 $ 72,290 $ 77,255 $ 122,945 $ 103,865 TOTAL PROJECT COSTS $ 987,432 $ 798,147 $ 1,112,290 $ 977,255 $ 1,262,945 $ 1,013,865 Page 7 Utility Board Meeting - 6/12/2012

11 Capital Improvement Program Stormwater Fund Six Year Plan Detail of Expenditures Description of Projects Budget Budget Forecast Forecast Forecast Forecast Watercourse Stabilization and Improvement Watercourse Condition Assessments $ 10,000 $ 25,000 $ 15,000 $ 25,000 $ 15,000 $ 25,000 Watercourse Minor Repairs/Maintenance 15,000 15,000 20,000 20,000 20,000 20,000 Sub-Basin 46a.6 (minor improvement) 46, Sub-Basin 52.1 (minor improvement) 96, Sub-Basin 4.2/4.3c/ , Sub-Basin 27a.3/27a , Sub-Basin 27a.6 (minor improvement) - 51, Sub-Basin , , Sub-Basin 6.4/6.5 40, , Sub-Basin 42.1/42.1a - 15, , Sub-Basin 49b , , Sub-Basin 46a , ,800 - Sub-Basin , ,800 - Sub-Basin 45b , ,920 Sub-total Basin / Conveyance System Replacemts $ 535,080 $ 792,880 $ 451,200 $ 259,520 $ 425,600 $ 230,920 Water Quality Treatment Sub-Basin 10 & 32b Dissolved Metals Source ID $ 40,000 $ 40,000 $ - $ - $ - $ - Sub-Basin 32b Treatment Improvements Ph. 1 & , ,000 20, ,000 Water Quality Treatment Improvements 75,000 75,000 75,000-75,000 - Sub-total Basin / Conveyance System Replacemts $ 115,000 $ 115,000 $ 95,000 $ 125,000 $ 95,000 $ 125,000 Conveyance System Projects Neighborhood Spot Drainage Improvements $ 80,000 $ 80,000 $ 85,000 $ 85,000 $ 90,000 $ 90,000 Street Related Drainage Improvements 75,000 75,000 80,000 80,000 80,000 80,000 First Hill Drainage System Extension 425, Drainage System Extensions ( ) , ,000 Drainage System Video Inspection Program 60,000 30, East Seattle Drainage System Replacement 40, , Drainage System Replacements ( ) , , ,000 Drainage System Emergency Drainage Repairs 15,000 15,000 15,000 15,000 15,000 15,000 Sub-total Neighborhood Drainage Impvmts $ 695,000 $ 420,000 $ 180,000 $ 380,000 $ 310,000 $ 435,000 Interfund Transfers and other Capital Projects Capital Project Management $ 110,775 $ 116,868 $ 123,295 $ 130,077 $ 137,231 $ 144,778 CIP (Maint Building Reinvestmt) 5,750 8,750 15,000 15,500 53,250 25,500 CIP (Technology) 23,753 41, ,000 5,000 Sub-total Interfund Transfers and Other $ 140,278 $ 166,868 $ 138,295 $ 145,577 $ 193,481 $ 175,278 TOTAL PROJECT COSTS $ 1,485,358 $ 1,494,748 $ 864,495 $ 910,097 $ 1,024,081 $ 966,198 Page 8 Utility Board Meeting - 6/12/2012