Kingsbury General Improvement District
April 1, 2014
MINUTES OF THE SPECIAL BUDGET MEETING OF THE
KINGSBURY GENERAL IMPROVEMENT DISTRICT BOARD OF TRUSTEES
TUESDAY, APRIL 1, 2014
CALL TO ORDER– The meeting was called to order at the Tahoe Transportation Center located at 169 Highway 50, Stateline, Nevada at 6:00 p.m.by Natalie Yanish.
PLEDGE OF ALLEGIANCE– Yanish led the pledge to the flag.
ROLL CALL– Present were Chairman Yanish, Trustees Nelson, Norman, McDowell and Vogt. Also present were General Manager Cameron McKay, Counsel Scott Brooke, Operations Supervisor Eric Johnson, Business & Contract Manager Michelle Runtzel, KGID employee Jason Hudak, Bill Misslin-CH2MHill, Kara Thiel-Feldman, McLaughlin, Thiel LLP, and Bill Krischner-KGID Trustee Candidate
PUBLIC COMMENT - None.
APPROVAL OF AGENDA
M-4/01/14-1
Motion by Vogt, seconded by Nelson, and unanimously passed to approve the Agenda.
APPROVAL OF CONSENT CALENDAR
M-4/01/14-2
Motion by Nelson, seconded by Norman and unanimously passed to approve the Consent Calendar.
CONSENT ITEMS BROUGHT FORWARD FOR DISCUSSION–None.
NEW BUSINESS
For Possible Action; Settlement of Litigation Regarding the Water Treatment Facility and Related Easement Brought by Tahoe Shores LLC, by Approval of Agreement For Settlement of Litigation, Modification of Easement, and Transfer of Property
A summary of the issue is included in McKay’s staff report; progress is being made on the agreement.Legal counsel is working on revising the agreement language to properly express the needs of both parties. Efforts are being made to negotiate with Douglas County for storm water and snow removal agreements. No alternatives exist for storm water removal beyond Douglas County, but alternative options exist for snow removal. Ongoing negotiations are taking place with the University of Nevada, Reno regarding easements on their 4-H property. If no agreement is made with UNR, then the easement would need to be on the Tahoe Shores property. The entire agreement is based upon a guaranteed engineering timeline; the district will complete 100% of plans by June for submittal to NDEP. Brooke anticipates NDEP will approve the plans within 30 days and construction of foundation and slab to commence upon approval. This would allow for work to continue through the winter in order to complete the project in 2015. If the plans are not approved by NDEP within 30 days, then the timeline could be jeopardized, but KGID is committed to doing as much as possible in 2014 under TRPA’s ongoing requirement to continue construction requires that significant progress be made each construction season. Tahoe Shores is responsible for contacting TRPA for processing and permitting. Thiel does not expect any delays on the part of TRPA.
Reconnection fee payments (item 2.16) will be made in two equal sums- the first after phase 1 is completed and the second after phase 2 is completed. Engineer approved square footage changes are outlined in the board handout; the parcel and coverage size have increased.
No action is necessary at this point, but an official agreement is expected to be brought to the board by the April 15 meeting. Norman was thanked for his instrumental effort put into the reaching an agreement. If an agreement is not made, the expended engineering fees would not be recouped.
For Possible Action;Approval of a District Infrastructure Fee Agreement with Tahoe Shores LLC, including District Court approval pursuant to NRS Chapter 43
No action taken.
For Possible Action;Task Order #4 from CH2M Hill, Final Design of KGID Water Treatment Plant Project
McKay explained that since the pump station needed to be moved, CH2M Hill must make significant reconfigurations. Hill is working double time, water treatment plant move. Completing 100% of the plans by the June 26 due date is a requirement to receiving the project. If the plans are not completed by June 26, it would be considered a breach of contract and KGID reserves the right to utilize a third party.
The wayin which the building was originally set, it was closer than 100 feet to a residence.Reconfiguration was necessary to the internal workings. CH2M Hill redesigned the internal workings of the building to accommodate the 100 foot rule on the opposite side of the property. Misslin estimated that the design re-layout will cost approximately $30,000-$60,000.
The tentative action item is necessary for CH2M Hill to follow its work timeline, but final approval will not be given until the April 15 meeting.
M-4/01/14-3
Motion by McDowell, seconded by Vogt, and unanimously passed to approve the recommended action to tentatively approve Task Order #4 from CH2M Hill, Final Design of KGID Water Treatment Plant Project with the caveat to allow staff to further negotiate the price.
For Possible Action; Construction Manager At Risk services (CMAR) Project for the KGID Water Treatment Plant Project
McKay explained that KGID is delving into its first project utilizing the CMAR process. The CMAR process was created as an alternative to the traditional open bid process; NDOT has started using the CMAR process due to problems ensuing from accepting the lowest bid on projects. CMAR allows an organization to select the contractor based upon their overall response to a proposal rather than merely selecting the lowest bid. Additionally, engineering fees are typically reduced when the firm knows which contractor they need to cater their design plans towards.
The CMAR process allows for the selection of a contractor during the design phase of the project; the selected contractor in this project is anticipated to begin work with CH2M Hill in May. The contractor will thus have the ability to move forward quickly with construction once the design plans are approved.
The proposal for contractors will begin advertising in the printed April 2 edition of the Tahoe Daily Tribune and will also be available on the online version of the publication starting April 4.
A committee consisting of KGID staff, CH2M Hill and additional public works employees will conduct a performance based review process withthe top three construction firm proposals. The contractor bases its proposal on the collection of bids from subcontractors using the information from the preliminary design as well as a maximum budget set forth by KGID. KGID will have access to the subcontractor estimate information and have the ability to veto and suggest alternatives to the subcontractors. KGID will purchase the big ticket items for use in the project; they will not be included in the contractor proposals. The option exists for KGID can go out to open bid if not satisfied with any of the CMAR proposals, but this would undoubtedly cause delays in the project. CH2M Hill will be the primary project manager and is experienced in managing CMAR projects. The costs for CMAR are typically higher at the beginning during the interview process, but overall, it is more a more efficient process.
The old treatment plant will be maintained until the new plant is completely functioning. KGID staff will be trained to properly maintain the new plant system and equipment. The plant will be considered a Grade 3 treatment facility; KGID currently has five employees trained at this level.
M-4/01/14-4
Motion by Nelson, seconded by McDowell, and unanimously passed to approve Construction Manager At Risk services (CMAR) Project for the KGID Water Treatment Plant Project.
Budget Workshop - Discussion and Possible Action on theTentative Budget for the Fiscal Year Beginning July 1, 2014 and Ending June 30, 2015
Runtzel facilitated theFY 14/15 budget workshop. Rate increases are not recommended at this time.
General Fund:
$1.2 million in revenue, $785,000 in operating expenditures equals a net profit of $489,000 before depreciation expense. Accounting for $753,000 in depreciation, projected to end the year at a loss of $262,000. Capital outlay projects amount to $814,000. Overall net cash decrease for the year is projected at $373,000 with an ending cash balance of $2.8 million. Capital outlay/projects include the operations yard and paving projects.
Water Fund:
$3.5 million in revenue, $1.6 million in operating expenditures equals a net profit of $1.9 million before depreciation. Estimating $1.1 million in depreciation expense and $1.1 million in debt service (principal and interest) amounts to a net overall cash decrease of $949,000. The cash flow adjustment is $14 million. The net loss is projected at 352,000. The capital outlay/projects are estimated at $15 million – a large portion of which will be dedicated to the LT2 project. $13 million of the $15 million will be funded through loans. The Pine Ridge to Ponderosa project will cost approximately $400,000, but NDOT will reimburse those expenses. The ending fund/cash balance is estimated at $5.9 million.
Sewer Fund:
$1.6 million in revenue, $1.4 million in operating expenses equals a net profit of$144,000. Accounting for $83,000 in depreciation, the net cash increase is projected at $102,981. $41,000 will be spent in capital outlay/projects.
Snow Removal Fund:
$689,000 in revenue, $942,000 in operating expenditures (representing an extreme winter)equals a operating loss of $252,000 before depreciation. $38,000 in depreciation accounts to a net loss of $291,000 and a net cash decrease of $782,000.Administrative expenses are allocated to each of the funds. $486,000 is expected for capital outlay/projects. The ending fund/cash balance is projected at $769,066.The snow removal contracts guarantee a minimum of $310,000 to be spent each season –at the end of February this year, snow removal costs were only at $100,000 due to minimal snow removal needs. KGID will pay the minimum plus fuel surcharges between $6,000-$10,000. A big winter would accrue more fuel surplus costs, but receive a 25% hourly rate decrease after $250,000 is expended.
Accurate debt service figures for the LT2 project are not yet available as not all of the loans have been secured. Out of the $15 million needed to fund the project, only a $5 million loan has been secured. Once an agreement is approved, the other loans can be obtained. Once the guaranteed maximum amount for the project is confirmed, the decision can be made to use reserves or secure another loan.
KGID does not have a policy on standing reservesin place; staff will work on creating a policy. McKay advised the policy should require two years of reserves. Current reserves are at $13.5 million with $12 million expected for next year. Debt service figures do not include future loans. State Revolving Loans have 20 year repayment terms. Fund to fund loans are possible, but must be accounted.
Board suggested caution about the future debt. Yanish suggested a rate increase in preparation for future debt, but McKay warned against an increase at this time since the exact expenses are not yet known.
General Fund:
Revenues have increased over last year’s actuals and this year’s projections. Douglas County is projecting increases inproperty and sales tax revenues. Payroll has increased due to the seasonal hiring of a GIS entry employee to work on collecting location points for input into ArcView. This information is utilized primarily as an asset management mapof the entire system.
The net deficit is due to the $438,000 district wide sealing project and the $481,000 allocated for operation yard improvements. Part of the water line project on Virginia/Beverly will be covered by grants. The projected 13/14 net increase of $808,000 is attributed to not having completed the operations yard improvements.
Water Fund Table:
Net decrease in current year budget is due to not having receive a $400,000 reimbursement. Salaries are projected at $528,000, benefits at $337,000. A 20% estimated increase in insurance premiumsis projected – the exact percentage has not yet been released by the State. $758,000 is estimated in operating expenses. The capital outlay/projects are estimated at $15 million, including LT2 and the operations yard. Debt service for the year is estimated at $705,000. Loan interest is included incapital outlay/projectsas a cost to the project based upon the advice of the auditor.
Sewer Fund:
Revenues flat $1.6 million, salaries flatat $91,000, benefits increase due to medical insurance increases. Capital outlay is minimalat $41,000 including manhole rehabilitations and software upgrades. The fund net increase is estimated at $102,000 with an ending cash balance of $2.9 million. A $70,000 invoice was received this year from DCSID – the payments will be spread out over the course of 5 years through the application of credits toward the bill.
Snow Fund:
Revenues flat at $690,000, salaries flat at $78,000. Benefits will increase. Operating expenses are higher as a bigger winter is anticipated. The actual net increasefor FY12.13 was last year was $238,000. FY13/14 has a projected net decrease of $631,000, but an$800,000 gain projects the FY13/1 to end with a net increase of$149,000. The FY14/15 budget projects a $782,000net decrease. Capital outlay will be significant this year due to the allocation of funds to build a new storage center for equipment. This project was previously delayed in light of the emergence of the LT2 project. The yard was purchased in 1996 and has evolved into a staging area for snow removal. It has utilities, but there are issues with the sewer. Collaborative efforts to build with NDOT fell through. Any funding for the operations yard will be brought before the board for approval. A new building would eliminate the need to rent the Pineridge building for storage and the significant expenses associated with it.
LT2 Treatment Plant:
Total costs estimated at $15million including all phases of engineering, construction and equipment. CH2M Hill has always stated the project would cost approximately $14 million. The lower bids were submitted by HDR but the estimates were not based in reality. The $500,000 loss of the project by the lake is included. Engineering costs typically make up 15-20% of the entire project budget. Nelsoninquired about how the loss of the current water treatment plant will affect next year’s budget. Runtzel will need to conduct further research into the issue.
Payroll increased overall by 2% - the current contract is for a three year term.
Capital Outlay (Between now and June 30):
Station 4 Motor Softstart with electrical is estimated at $14,000.
Beverly & Virginia Waterline Replacement budgeted at $2,820. 90% of the project engineering is complete.Overall, the project will cost approximately $400,000 with 25% of the project funded through grants. Runtzel proposed using restricted cash from the Water Fund for use on this project.
Virginia & Beverly Paving Project estimated at $3,621.
New Well at Station 4 including all engineering and construction estimated at $52,000. Originally drilled in 1961 to 300 feet with a pump at 120 feet, the well produced until 2004/05. The water level is currently high, but the well needs to be researched, cleaned, rehabilitatedand analyzed for potential production. All KGID water is blended and must be treated as the system includes surface water.
Terrace View Watermain Crossing budgeted for $ 230,000. Q&D has been selected as the contractor and work is scheduled to begin in for May 2014.
Pine Ridge to Ponderosa Waterline costs of $400,000 will be reimbursed by NDOT.
ManholeRehabilitation (3) Highway budgeted for $6,900. The project has run into NDOT permitting issues. It would be ideal to work collaboratively with Q&D to do this project in coordination with the highway construction.
Manhole Rehab CMP Cone Highway budgeted for $15,000. Camera coverage under Kingsbury is in place for water and sewer lines. All are in good shape, but uncertainty exists during construction. Runtzel suggested manhole inspections before May1 when the Kingsbury construction starts.
Kingsbury is slated for camera work after the construction is complete. Kingsbury will be closed for the month of May and after Labor Day. Outside of those times, it will be closed completely from 8:00pm-6:00am. It will be open for big events.
LT2 budgeted for $344,000 in preliminary design and $1.4 million in final design.
Mountain Greenery Tenant Improvements will be completed by April 16. $41,000 in construction costs budgeted, but Runtzel predicts that the improvements will come in under budget. McKay will negotiate with landlord about the $19,000 staircase improvements once they are completed. Furnishings are expected to come in under the $15,000 budget. IT support for office move is estimated at $5,500. Radio antenna will cost $1,900, including removal old antenna and computer is budgeted for $1500.
The current year capitalized interest SRF is projected at $127,000.
$2.7 million in total expenses are anticipated through June 30.
Beverly & Virginia water line project was authorized last year and received engineering grant funding for it. KGID receives regular complaints about the roads as they are the only ones in the district not paved.The waterlines must be completed before the roads can be paved. Waterline work can commence early this summer. The summer district-wide sealing project will last 4-5 weeks during July/August.
The camera monitoring system views the pipes, and then they are cleaned and finally viewed again to ensure success. This aggressive program helps maintain a clear sewer system. The sewer system is in overall good condition with little degradation, breaks, or intrusions.