MINUTES FINANCE & ADMINISTRATION COMMITTEE Regular Meeting of September 17, 2013

Transcription

1 MINUTES FINANCE & ADMINISTRATION COMMITTEE Regular Meeting of September 17, 2013 The Regular Finance and Administration Committee (FAC) Meeting was held at its principal offices at Chaney Street, Lake Elsinore, California. Director Present Harvey Ryan Phil Williams (Chair) Staff Present John Vega, General Manager Norris Brandt, Assistant General Manager Terese Quintanar, District Secretary/Administrative Services Supervisor Margie Armstrong, Director of Finance David Bell, Director of Human Resources Gail Hansen, Claims Coordinator/Executive Secretary Angelo Sarao, Purchasing Supervisor Paul Carver, Director of Engineering Christina Henry, Customer Service Manager Others Present: None CALL TO ORDER The meeting was called to order at 3:30 p.m. PUBLIC COMMENTS The meeting was opened to public comments and there were none. EVMWD BOARD ACTION APPROVED APPROVED AS AMENDED DENIED CONTINUED 1. Claims Update Gail Hansen reported that the lawsuit involving the vehicle accident and the former Elsinore Water District (EWD) building is dragging on. Depositions are underway in connection with the wrongful termination suit and property damage that was found at the new sump booster station on Temescal Canyon Road. The fence at this location will be repaired under our $5,000 deductible. 2. Recruitment & Personnel Update - David Bell reported that an offer is pending for the Wastewater Treatment Supervisor position and background checks are in progress for the Water Operations Manager and the Electromechanical Technician I positions. Recruitment of Interns is on hold. We have one currently,

2 FAC Minutes September 17, 2013 Page 2 in engineering, but that person is leaving. We are surveying other agencies to see what they pay their interns. 3. Monthly Safety Report - David Bell reported that we are at 42 days without injury. There is one hernia and one rotator cuff injury currently. NIMS and SIMS training is underway and is moving quickly. He also reported that on the 25 th, the all hand s meeting/pancake breakfast will take place. Executive staff is cooking and serving. 4. Financial Operating Statistics - Margie Armstrong explained that the information in the packet for June and July is not quite done. The information was covered last month. 5. Consider Modifications to the EVMWD Administrative Code - John Vega asked Margie Armstrong to look at authorized levels for purchase authorizations and the associated costs and time. Angelo Sarao worked with Ms. Armstrong to put information together and to calculate savings that would be realized if the purchasing authority limit were to be revised. Mr. Sarao explained that transactions up to $3,000 result in staff time to process. Director Williams remarked that the process flow should be improved. Ms. Armstrong explained that anything over $250 has to have a purchase order processed and items also need to be bid out. Increasing the funding limits would reduce 50% of the work. What is being proposed is the limit of <$250 not needing a purchase requisition be increased to <$1,000. Margie Armstrong explained that the procedure now is that for anything under $250, a staff member could use a blanket purchase order set up with specific vendors, or the employee could bring in an invoice for payment. Director Ryan expressed reluctance. Use of the Purchasing Card (P) Card would mean that a per-transaction amount is preset and the specific materials are pre-approved for employee purchase, through the vendor. Limitations on the P card would be pre-programmed into the system. Mr. Sarao explained that the risk is very low in increasing the purchasing limit. Ms. Armstrong explained that the recommendation is to raise the limit to $3,000 for Purchasing Supervisor and the current authorization level for the General Manager is $25,000 and staff recommends raising that to $100,000. The reason for that is that it is a very low threshold, compared to other agencies and the level of work is greatly increased. Mr. Sarao explained that for transactions , it costs about 1 month of labor to process for a year. Transactions $1,001 to $3,000 result in the same staff time to process. Director Ryan asked to see the savings in dollars and specified that this would not include change orders. Ms. Armstrong also proposed 10% or $25,000, whichever is less, for change orders. In this case, a $25,000 change order would be brought back to the Board after the fact. Ms. Armstrong summarized that what is being requested would remove quite a bit of paperwork for very small dollar transactions. Director Williams stressed the need to improve the workflow

3 FAC Minutes September 17, 2013 Page 3 process. He also suggested combining the approval level change and the purchasing card process changes. 6. Consideration to Utilize the Purchasing Card - Director Ryan expressed that the P card would be similar to a credit card. Ms. Armstrong explained that a separate report detailing transactions paid with P cards could be supplied in addition to the list of demands in meeting packets. John Vega commented that this would move us to a more efficient level. Staff will be restricted and transactions will be completely visible. Ms. Armstrong opined that this would provide us with more control. P card purchase details could be downloaded, reporting could be done, and spot checks could be performed. This system would benefit field staff more than office staff. Director Williams requested a graph showing the system in place and the proposed system, combined with the request for funding authorization increases. He would like to see dollars and hours. Mr. Sarao explained that, in his experience, failures in the system were due to staff performance issues. A standard operating procedure (SOP) would have to be in place and it would have to be strictly complied with. 7. Engineering Labor Cost for District s Capital Improvement Projects - Margie Armstrong explained that this information was brought forth previously. The same allocation is applied to capital improvement projects (CIP) and developer projects. Overhead allocation includes general and administrative, facilities, and computers. Each labor dollar has $2.47 of overhead added. Labor is what is allocated internally to a specific project. Fringe benefit percentage is 73% and overhead is 247%. Part of the overhead is paid by that project. Of the fixed costs, 56% is paid by water, 52% by wastewater and 12% is paid by developer and District projects. Staff costs on staff reports include how many hours are spent. Engineering estimates total labor hours for each project and any excess dollars not utilized at the completion of the project are returned. For developer projects, an invoice is provided which includes a breakdown so they can see the number of hours being spent. The amount paid for the deposit is also shown. 8. Recycled Water Agreement Review - In regard to the Canyon Lake Recycled Water Agreement, there are five-year increments and this coming May, they will go from Block 1 of no charge to 50%, Block 2, 50% to 100% and Block 3, 100% to 150%. 9. Proposed Changes to the Variance Processing - Christina Henry explained that the default is four persons per household. The variance can be requested by the customers via a form found on line. 1,600 Variance requests were processed last year. Of those, 1,000 were to increase the number of people beyond four, and a small number was to increase the number of people to more than eight in the home. To speed up the process, we can take the variance over the phone for those requesting variances under eight. The Committee agreed to this suggestion.

4 FAC Minutes September 17, 2013 Page Southern Section Sewer Norris Brandt presented EMWD s proposal. $31.57 per edu is listed. We assume the flow in Rancho California Water District s (RCWD s) system will continue with no wheeling fee, because we have paid that. This does not include the use of RCWD s sewers. Staff is working on the costs to get that flow, but a number has not been determined. We would connect where Eastern Municipal Water District (EMWD) connects now; Elm and Adams. We will come up with another way to get the sewage to that location. Capital costs estimated for us are 17,912,000, but that doesn t include some RCWD fees. Our flows are 1.0 and the credit is credit to us for EMWD is not allowing us the option to take the credit unless there is a demand. We can peak with the 0.54, instead of building a tank. Factored into the price is EVMWD getting recycled water back; but EVMWD s profit on that water is not included. Debt service analysis has yet to be done for all options. RCWD say that EMWD is utilizing the water on a take or pay agreement. There are upgrades and expansions we would be phased into. They are using a total EDU for all agencies involved. $241,000,000 for the expansion will be spread across all agencies. This is also their ultimate costs for build-out. This would mean there would be no additional costs in the future. A parallel 36 main needs to be installed as an improvement and that includes a lift station improvement. $18,580,000 would be the total per gallon participation price. We would own part of the plant. Their rate is $4,470 per million gallons for operations and maintenance. They gave us a model that showed projected operations and maintenance costs. EMWD s differences were that they were all inclusive and increased 3% each year. The model given to us by RCWD is not inclusive. The cost over 20 years and the debt payment amount is what was presented by RCWD. We need to clarify at a minimum vs up to CPI. They set a price for recycled water and any costs not covered by that revenue is put into the rate. This is above what they are already collecting from their customers. In lieu, property tax is the same as replacement reserve, $4.26 per month. In the first few years, they want to make sure they build up that reserve to make sure they are covered. $0.77 is for operating reserves to cover unusual operating expenses. This is equivalent to our operating reserve. This will always carry 25% of the operations and maintenance so it would never go completely away. Staff will request the ability to audit the fund. Sludge has not yet been discussed, but staff believes that this is all inclusive. $31.57, plus debt service, is the bottom line for EMWD. There are two pieces we are looking at for our approach. We would have to install a gravity system to collect the sewage, push it to Clinton Keith through a force main. This is estimated to cost $14M. There are options. One option is to take it down to the Wildomar Chanel through a force main. It would go by gravity to Diamond, where there is a lift station planned. That would pump the sewage to the top of the Lakeshore North segment. The MWH cost for this option is $27M

5 FAC Minutes September 17, 2013 Page 5 (including upgrades to McVicker, gravity line, force main and all.) That gets us 2.5mgd. The alternative would be to go through the McVicker Lift Station and use the existing force main to get it to Palomar and Mission Trail. Mission Trail is at capacity, and the cost to replace that segment of pipeline (to Malaga) is $27M (according to Kennedy Jenks), as the ultimate size. Once there, it would take a path to the North Reach. Mr. Carver stated that the choices to make are at the Regional Lift Station and look at building the ultimate size wet well at $5M. Plus, $7M for dual force mains to take the sewage to the Lakeshore North Reach. This brings us to a total of $60M. We have $19M in upgrades to do at the Regional Plant (1MG). EVMWD would have more flexibility if we choose one of these options..5mg of additional capacity is in addition to what will be done at Mission Trail. $28M gets EVMWD 22MGD. We would have some flexibility in determining how much will be paid for by future development. The Three-Party Agreement will have to be renegotiated. We need to send the water back towards Wildomar and we may be able to use EMWD s 40 pipe. We would need a connection through the Wasson Sill. John Vega asked if we could exchange Canyon Hills and take it to Wildomar; exchanging 1MGD for 1MGD. RCWD has provided information showing the buyout costs. This does not include the recycled water component and recycled costs. There is debt on that as well. Staff asked what RCWD spent our money on and they responded that some was spent on design costs. RCWD staff said that they initially thought the money would be reimbursed through new debt. They have tried to split out the total number between collection and treatment. We need a proposal from RCWD similar to what EMWD has presented. 11. Consider Items for Board Review No new items were suggested. 12. Discuss Future Agenda Items The Southern Section Sewer will be included on future Finance and Administration Committee Meeting (FAC) and the second Study Session of the month agendas. 13. Other None. 14. Adjournment at 6:00 p.m.