Productivity Committee Public Utilities Subcommittee Minutes 06/03/2009 _I-- c
Public Utilities sub committee Wed., June 3, 2009. At county mgr. office
Attending: Joe Delaney, Margie Hapke, Tom Widesk Phil Gramatges, George Yiolmaz,
Bala Sridhan, Joe Bellone, Dan Rodriguez, Sheree Mediavilla, Tony Russo, Ray Smith,
Paul Mattausch, Donna Bergeron, Ania Curry, Bendisa Marku, Randy Greenwald, Jim
Hoppenstadt, Jim Gibson, Gina Downs, Janet Vasey
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Tom Wides, all directors are here and can respond. Can either answer questions or
hear from each director. Sub committee chooses to hear from each director..
Operations Support direction. Small dept. 10 people with accounts payable. And have
financial anaylsis. Do own financing, run it through finance committee. Finance,
treasurer and Do impact fee calculations for LARGE developments. Bala is the key
treasury person. Does all the financing decisions. Also does capital along with
engineering dept. Does rate studies, impact fee rates or user fee rates. Amia is
accounts payable. Ongoing monthly operations reports. Works with each op analyst in
each dept.
Phil Gramaches. Provides planning and project management. Administers impact fee
budget and repair and replacement budget. Responsible for planning, air and master
planning. Also does concurrency. All are engineers.
George Emas dir. Wastewater. Budget is fulfilling mission as well as LOS. Deliver est.
value, high quality to meet expectations two regional reclamation facilities. 850 Miles of
collection pipes that must be maintained. Over 15K manholes. Very flat, spread out
area. Over 750 pumping stations 96% is recycled water .... One of the best in the state.
130 miles of reclaimed lines, high-pressure system. 350 bulk contracts also. Manage
individual customers, bulk customers
Budget $21 M and feels it is a flat budget.
Paul Matash provides drinking water. From groundwater to customer is their
responsibility. 100 wells. Have grown in eleven years from 27 to 100 wells. Have two
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hybrid water treatment plants. Limited fresh water drinking in county, so they are using
reverse osmosis to provide drinking water from brackish water. Have over 900 miles of
distribution. Over 54K service connections All maintained. Water quality regulations as
well as other regulations such as cross connection control program, valves in system
number in tens of thousands.. FI. Code requires that they be tested annually and certify
that it is done. Everyone who touches the system in ANY manner must be (by 2011)
certified and pass a state conducted test and licensing system ... even meter readers.
Janet: Are you connecting the two water treatment plants? Paul: Both pump into one
big system of pipes. Unlike wastewater which is divided into north and south systems.
To George: Interconnectivity of the two systems Wastewater, technically, there are
some barriers. Design and operational constraints. 60% is gravity fed. To maintain that
low flow system, need to be able to collect and treat the wastewater. So, have limited
connectivity. Looking for larger capacity interconnectivity.
Joe Bologne transition person between water and wastewater. Utility billing customer
service provides billing and customer service. Collier County, Goodland systems.
Ordinances and legislation drive their department. Prohibits free service. Power to set
rates comes from state statute. Provides ability to settle disputes. 205.54 set the two
districts for service areas. Special assessments, delinquencies and liens. Must inspect
all vehicles that dispose solid waste. Exemption capacity haulers must also be
inspected. Small admin. Mgt. section, accounting section, cashiering section, customer
service center, utility ordinance set of 5 people.
New hookup business is down tremendously. Much more effort now goes to
collections. 805 accounts are locked permanently. Bankruptcy rules are very solid; you
cannot send them a bill. Roughly 60 deferred payment plans, now have over 200 kinds
of payment plans. Amount owed stays with the land. Year ago fewer than 400 locked
accounts. Probably only 200 in 2007.
Three new books of business. The ins and outs, lock their meter, and then they want
their meter unlocked and a new payment plan. That has become a reorganization of
effort. They work with individual clients. Pay in arrears makes it complicated.
Morphing into more customer service. Cost containment documents show that from two
years ago, the revenue stream was looking problematic. Asked themselves two years
ago if the unpaids would go up to 1000 locked accounts.
Dan Rodriquez, solid waste management director. Public private services at best value.
Last year 580K tons of waste. Solid waste, horticulture, hazardous, construction, of that
580K, 240K was send to landfill for disposal. Integrated solid waste management
disposal is strategy from commissioners.
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New landfills permits have been denied by state. Only 25 years of landfill left in that
landfill. Private services like Waste Mgmt., have been able to hold down fees. 110K
accounts. Pick up is twice a week. Benchmark, have one of the lowest assessments in
the state $171 per year. Divert a lot of waste.
County landfill was originally 25 acres. Commissioners said to maximize capacity.
$5.9M to reclaim the 25 acres. Have recycled 25% of the waste. That freed up 25% in
the landfill. Two closed landfills, Eustis and Immokalee. Quit receiving trash, but will be
kept as an inoperable landfill. Unlined. Have liabilities associated with that.
Contingency fund 471 Landfill closure fund; $6 million from that fund used elsewhere in
the county (loan to purchase Elks building). What should the appropriate funding level
be? Agreement with waste mgmt., they are responsible for Collier County landfill.
Eustis and Immokalee landfill liability will remain with this department.
Jim Gibson: Cells one and two, primary responsibility for closing costs resides with
waste Mgmt. However, if waste mgmt. goes bankrupt, Collier County would have to
take over the closing of the fill .Property owner is ALWAYS responsible in the eyes of
the state. Future cells from six on out, will be Waste Mgmt. responsibility.
What does it cost to reclaim a landfill? Every acre of reclaim $5.9 divided by 25 acres to
get that figure. About $250K per acre.
Janet congratulates on reduction of odors at the landfills.
Education is a big push by several departments. Trying to get yellow tops in Immokalee.
Ray Smith Pollution control and prevention. "Traffic cops". Protect drinking water.
MPDES ordinances, contracts and agreements all go through his department to protect
water. Implements well field protection program inland development code. Assessment
every two years. Seven well fields in the county. Presently have 111 muni water supply
wells. Inspects businesses close to those well fields to assure they are controlling their
waste products. $440K to replace a well field. Ensure storage tank management at gas
stations are not leaking and are properly operating. Other pollutant tanks are inspected,
such as pesticide tanks. New or old tank install/remove is also monitored by his dept.
Jim Gibson: Fuel storage tank and inspection .. does that include marine storage?
Answer: Yes. ALL tanks. Joe Deloney: When hurricane hits, they worked with many
agencies to safeguard storage tanks. Emergency support is always ready to respond.
Even small tanks from homeowners become part of his department responsibility.
Ray Smith: Have technical team that knows the regulations, rules, involved in clean up
to ensure the right thing is done. Hazardous waste compliance is state mandate.
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Inspect businesses that have potential or DO generate a hazardous waste. They are
compliance assistance. NOT regulators. However, through Fl. Dept of Environmental
Protection, they will see that the offenders are fined. Is hospital waste included in county
oversight? Answer: Yes.
Wastewater/sludge applications sights. Issue licenses that transport sludge, biowaste,
etc. Wastewater plants, they inspect to comply with Fl. Admin. Codes. Must be able to
respond to sewage spills 24/7.
Pollution complaints: They respond to about 200 complaints a year. Wide range of
what is needed to address a complaint. Water resource monitoring, to identify
problems. Standards are the same for water throughout the state. Have 73 ground
water monitoring stations that are monitored semiannual. 64 surface monitors. Have
63K analysis per year.
Located within public utility division. Provide tech support if there is a wastewater
release.
Tom Wides: Current version of GOVMAX documents. Is available and will supply
to us. Cost containment started in second half of 2007. Reviewed quarterly. Finds
flow in water sewer district and in solid waste division are rather convoluted.
Enforcement action is generally with DEP. Ability to enforce is limited by state law. So,
county only does `front end' and then turns over his findings to state or federal. He is
sentinel. Only about a dozen counties have the high level of pollution control that we
have.
EPA will establish standard for flushed prescription drugs ... then, county can help to
administer. Studies ongoing to determine what level of risk is occurring from flushed
drugs. Acetominephine in river but a person would have to drink thousands of gallons a
day to pick up a measurable amount of that drug. Some compounds are naturally
occurring anyway.
There is always either concern or reassurance when dealing with environmental issues.
Must have a minimal level to begin a measure but we do not have that yet for
prescription drug flushing. Efforts are being made to educate and entice public to bring
drugs to special sites. Medical waste is always a top concern. Pushing to update
ordinances to require drug stores to collect. Advertising
Jim Hop?: Staffing size of departments: Answer from Jim Deloney: three
Administration workers. Secretary is on 30 hour week.
Financial operations has approved budget of 51. Two are unfunded, so have 49.
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406 authorized. 19 unfunded for 2010 suggest 21 unfunded. Have 26 unfilled but
budgeted positions. Total 47 empty positions ... some anticipate being filled but have
been putting that off as much as possible. Trying to trim workforce. Can they wait to
hire more staff? Can they leave the unfilled on a month-by-month basis? When they
determine they cannot, they will slowly hire. $13K upfront cost for new hire for benefits.
Combine period of cost containment with just in time hiring decisions. Cost multiplier
has been schedule related. Staggered hours have helped to eliminate overtime but still
provide service coverage hours.
Sick leave hours, OT hours, comp time, leave accrual ... they keep track of all. Deloney
thinks head count is muddled when you just look at the number.
12% employee positions unfilled. Hiring lag has produced opportunities to hire
experienced people from other departments in the county. Staffing up in a just in time
fashion.
Reserve issue questions from Jim Gibson. Page Capital 1. FY10 total net operating
74.3M Non-operating component not including reserves.
46M reserves in aggregate. 41% is reserves difference between operating and non
operating. Half is for debt service, the other half for capital. Covering debt service at
rate of 2 times Have 21.8 M Have reserve of 24.7. Says coverage is way above any
norm. Average is 1.28 so, why is ours so high?
Answer from Tom Wides: Numbers changed around. Over last two years, have taken
60Million out of projects which were in the master plan. They are not doing many
expansion projects as they are concentrating on existing systems. 22Million out of
capital program for 09 and moved it into 10 , 11 and 2012. Reserve fund is expected to
get even bigger in the future.
Adequacy of reserves for just water/sewer district. Page 3A. Have tracked since 2006,
when rating agency visited. They tracks reserve levels, etc. according to that study.
Column E is adjustments due to GOVMAX. $17 M from that column will go back into
reserves.
Excludes operating fund 408, will have 78.1 M in reserves column F27. However,
column J27, following Fitch recommendations, they expect $81.4 M. That puts us in
shortfall WITH the rate increase at a $3.2 million short.
Columns 17 and 19, those shortfalls from lost impact fees are NOT brought across.
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Tom thinks reserve is adequate but still do not comply with Fitch. Number days of cash
is 384, Jim Deloney did not know two years ago how the credit rating would end up
with all the foreclosures and unknown quantity of how much water would be sold.
How much will be treated wastewater? History gives examples, but climate, cultural,
conservation, vacancy rate all affect the wastewater and water numbers. Third thing,
how much solid waste will be generated? Wants to maintain AAA rating. Given
vulnerability to hurricanes, stewardship, Looked at Katrina damage in New Orleans.
No federal or state money came to help rebuild their systems. They have to be able to
get bonds to build. We do not want our bond rating to drop.
Earned $1.8 interest on unspent money. Own $6 million Elks Lodge, which they loaned
to general fund to help finance the purchase of that lodge. Expect to pay impact fee
debt service out of fund of about $10 million in two years. NOT out of FY10. NEW
budget will reflect that coming out of 2011 an 2012.
$15 M out of wastewater will not be covered in 10, 11, or 2012. Cannot get impact fee
revenue. Leaves $45 M for project related activities over the next five years.
Emergency on Interstate 41 was $5 Million about two years ago. Projects that are
emergencies tend to e big item repairs
Currently deferred MR&R they anticipate picking up the coverage for those items when
impact fees pick up. If they retain triple A rating, they will be able to recover quickly. If
reserves drop, rate increase or borrow money and have an unfavorable financial
picture.
Want to be able to borrow at best and lowest rate and be ASSURED of being able to
borrow. Would rather keep up with maintenance to AVOID costly emergency repairs
$20M from impact fees. In 2010, moving 20M from user fees.
$78.2 M is earmarked for $20M to move to capital and debt service. See on page
Capital 1
On that page, sewer impact fee is getting $25M loan from fund 414 (user fee)?
Cap 1 Trans to impact fee is 4M, will go to one. Trans to 413 is 20M will go to 3.9M.
This is how they remove impact fee expectations
Deloney reports that BEBR numbers for population came in yesterday. Do not need
new plants based on those numbers.
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Few projects coming on line. Phil says the few projects are LARGE projects. However,
there are 257 capital items that project mgrs are pursuing. They have about 2 weeks
per project to get them out the door.
Wyndemere was acquired by county to be on line with our systems. We pay a lot of
money to keep them up. Working with community for 18 months to coordinate with
them. Have put over 1000 person-hours of time and it is only about a $500K project.
Kings Lake. Also ongoing project. Three engineers have been `given out' to the plants.
They provide tech support also use project managers to analysis costs.
'06 Moody's Rating Aaa, Fitch increased from aa to AAA.
Jim Gibson question: Have you looked at refunding the existing bond debts? Tom says
they are looking through finance committee; they are looking to refinance the '93 bond.
However, the return is only about three %. Rate has been 5% historically.
June 12 report from financial adviser to their finance committee. Mike Sheffield
has details.
Jim Gibson New operating 27M add in for non operating of 3.8 So basically, have
expenses basis of 31.7 M. Add contingencies together have 8M.
Operating budget is basically 30%. Or, 110 day s of solid waste operations without
raising revenue. Is that adequate or not? Joe answered: Three funds in reserves.
Reserves for contingencies and mandatory collection. Reserve for cash flow and
reserve for capital. Bulk is in fund 473 for unexpected things that you do not want to put
in the rates now. Both franchisees said their fuel costs have increased and they want
rate increases. Waste mgmt Wanted $1 million increase. Choice environmental
wanted 17$ increase. Those are the kinds of things that are reserved in that fund.
Disposal last year rejected a claim from Waste Mgmt. for over $2 M. Was for soil
reimbursement charges. Says that is why they need to maintain reserves Waste Mgmt.
is great, HOWEVER, they need to constantly look at the contract because waste mgmt.
always wants to increase whenever and wherever they can.
We fought off$3 million increases last year, but not as likely to be able to stave those
off much longer. Rather than take a decrease in rate, they want a small incremental
increase yearly Slight decrease in 2010 but slight increase in 2011. Trying to run off
NOT having a residential increase every 3 to 5 years. Prefer to raise rates by cost of
living in the long term. Without extraordinary circumstances (hurricane) or regulatory
blurp from state or federal, they anticipate being able to avoid spikes in fees. Capital
spending is currently deferred but worries what will happen three or five years out, .
Jim Gibson:Post closing landfill costs. $4.8M.
Gasbee(sp?) 18 TO fund closing costs must be maintained as a reserve. Jim's reading
of that is in that reserve has to be designated, but it does not have to be a current
expense. If you have an estimate of what the closing costs could be, you could set
those rates on a yearly basis. Deloney thinks having that estimate of the closing costs
($6 Million) that current residents are responsible for using up the landfill and current
users should be paying for the closing costs. Current customer should/must contribute
to the closing costs.
Deloney things Gasbee was set up to account for current users paying their share.
Gibson thinks it is a fund balance killer. Have had a lot of discussion about this over the
years. Currently, landfill has a 25-year life. Janet: we do not want to underfund it, we
want to properly fund it. Set at debt service level. Liability is 6.6M if county does
everything they should do. Liability rises to 24M if conditions are not met properly.
Rodriquez: Reclaiming cells 1 and 2 can help reduce liability. Staffing correctly, and
pull materials out of landfill will help increase life of landfill. 60% of materials that were
pulled out of the landfill. Deloney: Future land for landfill. Go which direction?
Interested in expanding to the west OR open completely different location closer to
newer population centers. Best value in the short term is to go up. In the long term,
where do you expand, or do you look for a different site?
Must decide 10 or 15 years prior to close off or max out of landfill where and what to do
to either increase capacity or build another landfill. 2016 MUST have capacity for future
landfill or site for future landfill. Diversion is a key component. Get people more adept
at recycling to reduce need for landfill space. Pressure is on industry and society to
change the culture.
Gibson: Triple A rating in Baltimore in 89 or 1990. In 1996, S&P in late 80s were rates
AA+, interest costs are hundreds of millions in savings by maintaining triple a rating.
Thinks it well worth the efforts to maintain this rating. Look at it regionally. Competing
with larger borrowing market. Bump in 2006 from Fitch. Risk/reward by Deloney. Muni
ratings. Triple a is best value decision. Goal posts are changing. They look at you
over time, not just a snapshot in time. Three essential components. Management of
the entity, mgmt of debts and economic demographics. That was the battle in Baltimore
County.
Solid waste program is debt free right now. However, it could change. If an opportunity
arises, debt picture could change immediately.
Contact Tom Wides with questions.
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Short discussion about consolidating with transportation department to go back to
Public Works department.
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