MANAGER'S REPORT
03/11/2020
Budget Position Report
The Reconciled Budget Position report is one of the two most important reports within the BARS accounting system. The other being the Treasurer’s Report.
It is a big, ugly report. But it is very useful. It is divided up by fund. You can see a list of all of our funds on page 1 of the Treasurer’s Report.
The fund of most interest, from an operational standpoint, is the 401 Regular Maintenance Fund. It is detailed in pages 1 through 3 of this report. Don’t panic when you see the Fund Excess/Deficit of $1.23. It is that low because I transferred $30,204 out of the 401 Fund into the 405 Major Repair Reserve Fund. That is previous revenue that we did not spend, so into reserves it goes.
Because this is a budget report, it includes beginning and ending balances.
In terms of budget position for the Regular Maintenance Fund:
Beginning Balance: $505,340.73
Income: $ 78,845.77
Total Revenues: $693,485.04
Expense: $ 39,965.01
Inter Fund Transfers Out: $ 38,973.75
Fund Expenditures: $528,791.39
Fund Excess: $164,693.65
That excess is actually more than I would like to keep in this fund. I plan to move more of that money into the Major Repair Reserve. But I am still feeling my way a bit in terms of how much to keep in what Fund.
I have included a revenue/expense report for the Regular Maintenance Fund which is a great deal easier to follow in terms of the past month’s performance.
The bottom line is that we brought in $78,940 and spent $39,965. In addition, we transferred $4,571 to Capital Replacement, in accordance with our Capital Replacement Plan, $4,200 into the Debt Service Fund (USDA payment), and $30,204 into the Major Repair Reserve. That leaves $1.23.
Treasurer’s Report:
The funds that contain actual District money are:
401 Regular Maintenance Fund: $164,693.65
403 Capital Replacement Fund $ 9,141.25
404 Debt Service Fund $ 55,331.23
405 Major Repair Reserve Fund $415,958.00
410 General Facilities Fund $102,727.50
Only the 401, 405 and 410 Funds are “unreserved” funds. That is, we can allocate that money any way we find useful for operating and maintaining the water system. The total in those funds is $535,155. The 403 Fund is reserved for planned capital replacements.
There is some confusion between the 402 Revenue Bond Reserve Fund and the 404 Debt Service Fund. It appears that the County, and myself, have gotten a little tangled up on these two funds. The 402 Fund should contain our final USDA payment. The 404 Fund should be accumulating the money to make the semi-annual payments. I keep running out of time to get this straightened out. I will try and tackle it during March.
Page 2 of this report details the cash accounts in which all the money is residing.
If I have done the bookkeeping properly, the final numbers on page 1 and page 2 should balance. Which they do.
Rate Study
I was hoping to have a reasonable rough draft for you at this meeting. I am not even close.
I want to give you sufficient time to examine it and make comments before we get into the budgeting cycle in July.
The big problem has been confirming the basic data. The foundation of a rate study is customer usage numbers. While that should be straight forward, it always ends up being a challenge. I believe I have conquered that problem. I ran a test case on 2019 and the run came very close to agreeing with what we actually billed.
New Regulations
The big piece of legislation that will pass this session implements the Federal EPA rules regarding PFAS and PFOS testing. No. I don’t, off the top of my head, know how to spell those out. Nor am I able to pronounce them. I expect I will learn.
Those two chemical groups are the “forever” chemicals that have been in the news. We don’t know exactly what the requirements look like yet. The legislation leaves the State Department of Health a great deal of latitude in actually writing the rule. Even the EPA rule has some holes. For instance, nobody is quite clear the degree of precision attainable by the labs.
The good news is that we tested for these chemicals a couple of years ago. The results were “non-detect” across the board. We were chosen to participate in EPA’s Unregulated Contaminants Rule program. The very expensive testing was paid for by EPA.
Recurring SCADA Power/Communications Problems
I have a proposal from Systems Interface to change the protocol from the radios to internet. You have a copy from last month. $5,990.
We have run into the problem again in the first week of March. We try and stay ahead of the problem, even on weekends. That racks up some overtime. My concern is that a communications failure could occur at night, or some other time we are not on-site that did not last long enough to trigger a notification, but occurred during a pump call. That scenario could result in a complete draining of the reservoirs with the attendant system-wide notifications and testing (plus the publicity).
Because the radio communications are so slow, we have to set the alarm notifications out five minutes in order to avoid continual, false alarms. So the above scenario is well within the realm of possibilities.
Jim has cast his absentee vote that we move forward with this project.
Personnel
Awaiting final resolution on the legal issues.
County Delegation
The County continues to reduce it’s level of service to us. I have enclosed a letter from the County detailing the latest.
My first reaction is that it simplifies some of our tasks. The certified annual budget will be quite a bit simpler. The way I read this the County will want two lines: projected total revenue and total expenditure budget.
They will no longer be tracking our budget. Though it has been trending in that direction, the letter makes it clear that all responsibility to the State Auditor for use and accounting of public funds rests with the District.
Referring back to the beginning of this report and the complexity of the financial reporting, the effort put in to bring the district fully into compliance with BARS has been well spent. This latest delegation makes it very clear that the County has washed it’s hands of any responsibility for the District’s conformance to Title 57 requirements. We are 10 months ahead of that conformance being absolutely necessary.
The alluded to method of submitting claims requests seems to simplify the process. We will have to see how the County reports pan out. I have often thought (but didn’t have the time to follow up) that an electronic transfer of the claims request, with the ability for the County to download the information directly, made a great deal more sense than the process we have been following.
Highway 12 Cast Iron Pipe Replacement
Pipe is due to arrive 3/16. Construction is scheduled, tentatively, to commence on 3/24. The pre-construction meeting is tentatively scheduled for 3/10.
Maintenance Activity:
Usual daily/weekly/monthly maintenance activity. See attached report.
Contractor Repairs
None
Tank Cleaning
Reservoirs should be cleaned and inspected at least every five years. We have very limited sedimentation, so five years is a good goal but does not need to be set in cement.
Our tanks were last cleaned and inspected in 2014, so we are a year behind for Clemons and North Bank. Reynvaan was recoated in 2017, so is only three years out. But there is no point in doing the others and not Reynvaan.
My main interest is the condition inspection of the reservoirs. My biggest concerns are the below grade condition of the North Bank reservoir and an in-service examination of the new coating in the Reynvaan reservoir.
The final cost in 2014 was just shy of $7,000. I will be contacting Liquivision for an estimate for a cleaning sometime next year once some of this other stuff is off my desk.
As-Builts
I have not had time to pursue information about the Flo, Inc. program.
Highway 12 Meters
We actually ran a billing using the remote reading process. There were a couple of minor glitches, so I think we are finally operational.
New Connections
None
Consumer Complaint
Letter sent to the customer. The customer has registered a complaint with Secretary of State. We will respond to that as soon as we have a clear path ahead.
Billing Policy
The policy has been to charge the base rate for any property that has a meter installed. Recently, a resolution surfaced that indicated a resolved policy that a property owner could declare a property abandoned, or the District could declare a property abandoned if there had been no usage for 12 months, and the connection removed at no charge to the property owner.
In light of that resolution, we need to either re-write our policy or generate a resolution superseding the existing resolution.
My recommendation is that we continue with the existing resolution.
I think it would be advisable to issue another resolution, referencing the existing one, requiring that property owners be informed, if they can be contacted, that the removal of the water meter constitutes removal of the service. If service is desired at some future time, the property will be treated as a requested new connection. The exception being that any charges due at the time of removal shall be paid before the new connection can be completed.
Further, I recommend we review all the cases in which there are large receivables associated with unoccupied properties, roll the receivables back to the 12-month period, and follow the abandonment process outlined in the resolution.
Our resolutions are not filed by number. They are filed by subject. This particular resolution was filed with resolutions relating to personnel issues. I happened across it while conducting research for our HR problem.
An example is a property that has been abandoned since 2012 and has outstanding receivables and late charges over $50,000.
Shop Organization
The process of inventory has begun.
Training/Certifications
I took a class on cross-connection control. It was billed as an advanced class.
Kenny attended the ERWOW conference. He learned a lot, collected some CEU’s, and made some valuable contacts.
Safety
We have a mini safety meeting every morning.
Vehicles
Service Truck: No issues.
Pickup Truck 1: No Issues
Pickup Truck 2: No issues.
Backhoe: Our little tractor went in for it’s Spring maintenance. Several issues were identified. Both hydraulic cylinders on the bucket had leaky seals and had to be rebuilt, and an electrical cable was badly frayed and had to be replaced.
Web Site
Our web site has a lot of good information on it. It gives us a chance to inform the public in detail that is not possible any other way. If you haven’t looked at it lately, take a peek.
An item I think we should add is budget information. If HB2588 had passed this session (it probably won’t) it would have required us to do that. But I think it is a good idea.
Filing System
No action in February
Fire Station
The line through the District property is complete. There was some confusion with the County regarding the ownership of the line, and therefore the nature of the forthcoming easements. That has been cleared up.
Payroll System
The hosted software that we implemented to accurately track benefit time is almost to the point of being stunning.
I have included a copy of the February turnaround report for your information. You will get a copy of this every month. It details who worked what hours for the month.
I have included a copy of the benefit time accrual report as well. The main reason behind implementing this program. The big take away? None of us take a lot of time off.
I think that being up and running on this is timely. I would not be surprised if the next item the County delegated down was payroll. If that happens, this program will handle all of our needs and then some.
Customer support is great, too.
Grant Funding Pursuit
The committee had it’s first meeting on Tuesday, March 3rd. That meeting was primarily concerned with initial administrative details.
I have also become a part of an Office of Drinking Water working group, thanks to my position as Small District chair, seeking to address small district issues. The first meeting of that group was 03/04 at the ODW offices in Kent. It was an interesting meeting. As well as a bit of fun. I got a chance to catch up with some ODW folks I have known for a long time but haven’t visited with in quite awhile.
It presented an excellent opportunity to address small district infrastructure challenges to ODW directly. We will want their support when we go to the legislature.
Capital Asset Management
Nothing new. I still need to do the narrative portion of the plan.
Disaster Management Planning
We now have a deadline. I sincerely hope to make some progress once the rate study is in better shape.
This one has me worried.
Isolation Valve Exercise Program
On hold due to inadequate 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
Shop Insulation
I will be getting some estimates on repairing the shop insulation as soon as some of this other stuff is off my desk. I don’t view this as a high priority maintenance item.
Long Distance Service Laterals
No change.
Respectfully Submitted:
Reg Hearn
General Manager