| 09 August 2011 Minutes - Approved |
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MINUTES OF THE MEETING OF THE COMMISSION
August 9, 2011
• Approval of the Meeting Minutes and Claims
Commissioner Murphy noted a correction for the Minutes of July 26, 2011, Agenda Item # 6 Approve Revision No. 1 to Exhibit D of the Bonneville Power Administration (BPA) Regional Dialog Power Sales Agreement. Commissioner Murphy second the motion to approve, not Commissioner McClure as originally written. Corrected Minutes will be resubmitted for approval at the August 23 regular Commission meeting. ACTION: Commissioner Murphy motioned to approve the claims of August 9, 2011. Commissioner Kenner second the motion. Motion passed unanimously.
ACTION: Information only. No requested action taken.
The District must develop, monitor, and maintain an environmental mitigation site within its easement on Refinery property as mitigation for wetlands impacted by Project activities. One of the environmental permitting requirements from the Army Corp of Engineers under the Joint Aquatic Resources Permit Application (JARPA) process is that the District demonstrates its financial commitment & capability to fund the development, maintenance, and monitoring of a mitigation site over a five year period. The environmental consultant retained by the District to develop an environmental mitigation plan for the project has estimated the cost of the mitigation activities required to be approximately $60,000.00 and the Corps of Engineers (lead agency for the Nationwide Permit process and a reviewer of the JARPA), has accepted the establishment of a District administered project reserve fund as a means for demonstrating financial commitment and capability to fund the mitigation activities. Commissioner Murphy inquired if Resolution No. 634 should state that it is a five year period. Jilk said it was not necessary since the language in the Resolution meets the Corps' requirements. Sitkin added that at the end of five years, District staff will recommend to the Commission that the reserve fund be terminated. There is no fiscal impact as the amount to be set aside in the Reserve Fund is included in the 2011 Capital Improvement Plan for the Project CIP E-14 and included in the 2011 budget. ACTION: Commissioner Murphy motioned to approve Resolution No. 634, establishing an Electric System Project Reserve Fund in the amount of $60,000.00. Commissioner Kenner second the motion. Motion passed unanimously.
The District has an estimated $50,000.00 of remaining funds in its CRC account and will be unable to expend such funds on qualifying activities, prior to the end of BPA's current fiscal year, September 30, 2011. The District has the option of transferring the remaining funds to BPA or identifying another entity that can use the funds. The District first checked with the City of Sumas and the City of Blaine to see if they could use the funds by the deadline but both were unable to utilize as well. The District then identified Northwest Energy Efficiency Alliance (NEEA) as an entity that has qualifying CRC projects and are willing to utilize the funds under such purposes. If the District transfers funds to NEEA, it will be with the understanding that NEEA agrees to adhere to specific conditions: • The funds are to be expended only on qualifying BPA CRC conservation activities; NEEA will return any or all of the funds for which the District does not receive a dollar for dollar credit from BPA for the District's CRC obligation. NEEA offers efficiency programs such as irrigation; however, there are currently no projects in Whatcom County. The other possibility is to transfer the funds to Puget Sound Energy who has small farm customers. Walters said the District could ask for PSE to request that the funding be kept within Whatcom County. Commissioner Murphy asked if instead it is possible for the funding to be transferred to school districts in the county for energy and/or lighting projects. Walters said the difficulty is the time sensitive issue and the ending of the fiscal year. The CRCs will no longer be offered but the District may be able to invest funding in the future. There is no fiscal impact to the District as these funds have been held in reserve. ACTION: Commissioner Murphy motioned to approve Resolution No. 635 for the transfer of CRC funds to Northwest Energy Efficiency Alliance in the amount of $50,000.00. Commissioner Kenner second the motion. Motion passed unanimously.
Due to the location of the east sediment pond, Whatcom PUD has requested a temporary construction easement from the property owners for a twenty foot wide (20 ft.) easement running west to east along the southern boundary of the adjacent property. The easement will terminate upon completion of the Capital Improvement Project RW-1 Water Plant 2 Upgrade Project or March 31, 2014 whichever comes first. The property owners have reviewed and signed the temporary construction easement and Whatcom PUD staff recommends the Commission approve it and authorize the General Manager to sign and execute the easement. There is no fiscal impact as this work is included in the 2011 Capital Improvement Plan and included in the 2011 budget. Jilk noted the only cost involved was composing the easement document. ACTION: Commissioner Murphy motioned to approve the Temporary Construction Easement for Plant No. 2 East Pond Solids Removal Project (RW-M-2) and authorize the General Manager to sign and execute easement. Commissioner Kenner second the motion. Motion passed unanimously.
Commissioner Kenner asked where the soil is going. Holden said it is being dumped at the Ferndale Town Center development site (behind McDonalds), to be used as fill. The work is going along well.
Revenue Sources: Shosten said that the District is right on target for the second quarter although we are 800 million gallons below the amount of water estimated to be sold because usage is down all across the board (15% - 16%) due to the wet spring and early summer cooler weather. Raw Water Service revenue is down by $170,736. The Miscellaneous and Business Revenue is up by $45,889 because of the BP Water Reclamation Project Study. At the end of second quarter, 55% of the budget has been spent. Shosten noted Electric Pass-Thru costs are down by $20,240 due to cash flow timing. There is a $40,309 Residential Exchange Credit from BPA and water variable costs such as the purchasing of water chemicals is also down because of lower usage volume and the river water has been cleaner. Labor and Benefits is up slightly because more is charged to operations than capital. O & M Expenses Ongoing is right on target and $30,000 from O & M Expenses One Time has been moved to the capital budget. $40,000 of the Extraordinary Maintenance has been moved to Professional Services for on-call engineering services. Office Expenses Ongoing is down $21,070, in part due to in-house grounds maintenance and Office Expenses One Time is up $21,648 due to modular office mobilization costs. Miscellaneous and Elections is up $42,057 because of the election costs (invoice) received from the County Auditor coming 2011 instead of 2010. Taxes on District Services are down $92,513 as Shosten said this amount was not factored in because higher revenue was expected. Business Development is also down $89,018 due to items such as electric rate studies and water contracts being done in-house, as is Business Services (-$21,911) due to grants, the BP Water Reclamation and power studies. The Rate Funded Capital Transfers from Rates had a small carryover amount from 2010.
The variable revenues do not equal the variable costs because some fixed O & M costs are recovered through the volume charge to give customers more control over their bill. As noted earlier, this is a clean year for the river so chemical needs may go up but cost per unit may go down so this ratio of cost reduction relative to revenue reduction is probably reasonable to assume. For every dollar reduction in revenues there will be approximately $0.70 reduction in costs. By year end net revenues will go down but net costs will go down by even more for an expected net increase in cash on hand of $430,000. With the reduction in these expenses, the District has $429,250 more in reserves. Jilk said that the District will not know until the end of the year whether or not the City of Ferndale will continue with their water contract. The City says they can provide their own water cheaper and is in the process of building connector lines from their wells.
The completion rate on CWIP projects is 93% for 2011. The completion rate on maintenance costs is 80% which includes some carry over due to time delays with permitting.
Almost the entire amount under budget is due to a permanent reduction in costs - primarily due to the energy conservation project and the intake air backwash system being much lower in cost than what was projected.
Almost the entire amount under budget will be carried over (see amount above on Operating Budget).
Over $300,000 will be available that was not planned for. However, the impact on the amount of the capital transfer will have a minimal impact on rates in the short-term given the size of the capital budget. The Commissioners thanked Shosten for her presentation and job well done and Jilk added a thank you and congratulations to Walters, Yabsley, Holden and Strand for project timing and the significance of project completion rates. ACTION: Information only. No requested action by the Commission. • Manager's ReportWSU Field Day - Anerobic Digester Project Jilk attended a full day event near Monroe presented by WSU on anerobic digesters. The focus of the event was on nutrient management and how to strip out nitrogen and ammonia in order to produce a saleable fertilizer, which would bring more revenue to the project. WSU has patented the process. There was a good turnout for the event with representation from Whatcom County as well as Andgar and other local businesses. Mt. Baker Foothills Telecom Project • There being no further business for the regular meeting, the Commission adjourned the regular meeting at 9:10 a.m.
President/Commissioner |