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HomeMy WebLinkAbout04-13-18 Agenda Packet The meeting location is wheelchair-accessible. For the hearing-impaired, an interpreter can be provided with 48-hours- notice prior to the meeting. To arrange for service, call 541-726-3694. All proceedings before the MWMC are recorded. MWMC MEETING AGENDA Friday, April 13, 2018 @ 7:30 a.m. City of Springfield City Hall, Library Meeting Room 225 Fifth St., Springfield, OR 97477 Turn off cell phones before the meeting begins. 7:30 – 7:35 I. ROLL CALL 7:35 – 7:40 II. CONSENT CALENDAR a. MWMC 3/9/18 Meeting Minutes Action Requested: By motion, approve the Consent Calendar 7:40 – 7:45 III. PUBLIC COMMENT Request to speak slips are available at the sign-in desk. Please present request slips to the MWMC Secretary before the meeting starts. 7:45 – 7:55 IV. FY 2018-19 USER RATES, PUBLIC HEARING & ADOPTION. . . . . . . . . . Katherine Bishop a. Staff Presentation b. Public Hearing c. Discussion and consideration of adoption of Resolution 18-04 Action Requested: To conduct a public hearing on the proposed schedule of regional wastewater user rates, consider adoption of Resolution 18-04, and recommend to the appropriate governing bodies for implementation. 7:55 – 8:05 V. FY 2018-19 REGIONAL WASTEWATER PROGRAM (RWP) BUDGET & CAPITAL IMPROVEMENTS PROGRAM (CIP), PUBLIC HEARING, AND ADOPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Katherine Bishop a. Public Hearing b. Discussion and consideration of adoption of Resolution 18-05 Action Requested: To conduct a public hearing and consider adopting Resolution 18-05 adopting Regional Wastewater Program Budget and CIP, and forwarding it to the governing bodies for ratification consistent with the MWMC Intergovernmental Agreement (IGA). The meeting location is wheelchair-accessible. For the hearing-impaired, an interpreter can be provided with 48-hours- notice prior to the meeting. To arrange for service, call 541-726-3694. All proceedings before the MWMC are recorded. 8:05 – 8:20 VI. CONSTRUCTION CONTRACT AWARD FOR THE ELECTRICAL DISTRIBUTION SYSTEM UPGRADES, PROJECT P80092 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . John Casto Action Requested: By motion, approve Resolution 18-06 8:20 – 8:40 VII. PUBLIC INFORMATION PROGRAM UPDATE . . . . . . . . . . . . . . Loralyn Spiro & Laura Keir Action Requested: Informational Only 8:40 – 8:55 VIII. MWMC ASSET MANAGEMENT PROGRAM UPDATE . . . . . . . . . . . . . . . . . . . . John Huberd Action Requested: Informational Only 8:55 – 9:05 IX. BUSINESS FROM COMMISSION, GENERAL MANAGER, AND WASTEWATER DIRECTOR 9:05 X. ADJOURNMENT THE FULL PACKET IS POSTED ON THE WEBSITE www.mwmcpartners.org MWMC MEETING MINUTES Friday, March 9, 2018 @ 7:30 a.m. Water Pollution Control Facility, Willamette Room 410 River Avenue, Eugene, OR President Inge opened the meeting at 7:30 a.m. Roll call was taken by Kevin Kraaz. ROLL CALL Commissioners Present: Pat Farr, Bill Inge, Walt Meyer, Peter Ruffier, Jennifer Yeh Conference Phone: Doug Keeler Absent: Joe Pishioneri Staff introductions were made: Meg Allocco, Todd Anderson, Jolynn Barker, Katherine Bishop, Dave Breitenstein, John Huberd, K.C. Huffman (attorney), Laura Keir, Tonja Kling, Kevin Kraaz, Barry Mays, Troy McAllister, Michelle Miranda, Josh Newman, Kim Olson, Sharon Olson, Destin Ranch, Karen Roybal, Loralyn Spiro, Matt Stouder, Dan Trujillo, Mark Van Eeckhout, and Greg Watkins ELECTION OF OFFICERS Matt Stouder, MWMC General Manager, thanked Commissioner Inge for serving as President for the last year. He explained traditionally the Commission rotates between the agencies the responsibilities of President and Vice-President with the Vice President becoming the President. So if they stick to tradition, Commissioner Ruffier would become the President and a Springfield representative would become the Vice President. MOTION: IT WAS MOVED BY COMMISSIONER MEYER TO APPOINT VICE-PRESIDENT RUFFIER AS PRESIDENT AND COMMISSIONER KEELER AS VICE-PRESIDENT. THE MOTION WAS SECONDED BY COMMISSIONER FARR. THE MOTION PASSED UNANIMOUSLY 6/0. CONSENT CALENDAR a. MWMC 2/9/18 Meeting Minutes MOTION: IT WAS MOVED BY COMMISSIONER INGE WITH A SECOND BY COMMISSIONER MEYER TO APPROVE THE CONSENT CALENDAR. THE MOTION PASSED UNANIMOUSLY 6/0. PUBLIC COMMENT There was no public comment. MWMC Meeting Minutes March 9, 2018 Page 2 of 11 RESILIENCY PLANNING (P80096) CONSULTANT SELECTION Josh Newman, Managing Civil Engineer, requested approval of Resolution 18-03 authorizing staff to execute a Consultant Services Agreement with Carollo Engineers. Mr. Newman explained that the agenda packet went out before the not-to-exceed (NTE) value had been negotiated; the negotiation happened this last week. The hand carried memo has the NTE dollars information. Mr. Newman went over the background to the Resiliency Planning project, stating it is basically to be prepared for a Cascadia Subduction Zone earthquake. The MWMC owns and operates critical infrastructure, and the impact of a disaster places the MWMC in a position of responsibility to recover as quickly as possible. The request for proposals (RFP) was issued on January 26, 2018. On February 28, 2018 staff issued a Notice of Intent (NOI) to award the contract for engineering consulting services to Carollo Engineers starting the seven-day protest period as required. On March 1, 2018 staff received Carollo Engineers’ fee proposal of $696,000 which is higher than the preliminary budget estimate of $500,000. Staff went back and looked for ways to reduce the scope to better align the fee proposal with the existing project budget assumption. Staff considered an alternative where the scope was reduced by removing the seismic assessments for the following facilities, which were thought to be lower priorities relative to other MWMC facilities immediately following a disaster: Biosolids Management Facility (and associated force mains and infrastructure), Beneficial Reuse Site; and the Wet Weather Pump Station (located in Springfield near the site of the old Springfield treatment plant). Removal of these elements resulted in a fee amount of $666,000 which is $30,000 less than the full scope of work. Mr. Newman stated there are two alternatives for Resolution 18-03. Alternative 1 is for the whole scope of work, NEV of $696,000. Alternative 2 is for the reduced scope of work, NEV of $666,000. Mr. Newman stated the staff’s recommendation is to go with the whole scope of work. DISCUSSION: Commissioner Inge asked what the scope of the work is – how many facilities/buildings are actually being talked about. Mr. Newman replied that he doesn’t have a number for how many buildings but within the wastewater plant there are 10-15 process assessments that would be evaluated and at the biosolids facility there are probably two. Then there is the critical conveyance system such as the Willakenzie Pump Station; there are several force mains. The work was not broken out by buildings and he hadn’t seen the full list of but he estimates there are around 40 separate assessments. The standard approach for doing resiliency is the condition assessment and seismic review. There is a geotechnical component that is a separate specialty. It is looking at all the DOGAMI and soil maps and understanding what the ground shaking will be in different areas. There is also a process assessment comparing the criticality of this facility versus that facility. There is an interdependency assessment which asks how the MWMC does business, such as, what utilities and supply chains (such as chemicals, mechanical parts, etc.) does it rely on. This establishes where certain vulnerabilities lie. In its scope, there is an optional task for looking at climate and what its impact might be in exasperating any of the conditions. When asked what other disasters should the scope of work look at, staff replied flooding. Fire was discussed, but it was determined that fire is not actually going to substantially impact MWMC’s operations. MWMC Meeting Minutes March 9, 2018 Page 3 of 11 Commissioner Meyer asked if the geotechnical evaluation determines, for example, that the Willakenzie Station has the potential for liquefaction, what the cost would be to bring that station up to par so that it will not have catastrophic failure. Mr. Newman replied that is the goal and to generate a CIP list based on what the findings are which would involve cost estimation for either replacement of facilities or harden the facilities to better prepare them to withstand or mitigate failure. Commissioner Meyer asked if the seismic evaluation is a complete seismic evaluation. Mr. Newman replied that it is a high level evaluation that will be based on when it was built, what the seismic standards were at the time of construction, and what category/type of building. They’ll understand what kind of shaking it will be subjected to and apply that to the standard building type and figure out whether it will be operable or not following the event, what will be required to restore the function of that facility given criteria for levels of service that will be determined as part of the study. Commissioner Farr stated that he was in a meeting with FEMA last week and was told not to count on FEMA for flooding. Mr. Newman stated that flooding is part of the assessment. Commissioner Inge asked if this type of assessment had ever been done before. Mr. Newman replied that a comprehensive Resiliency assessment has not been done before. Mr. Newman stated that he thought some elements had been done but he would refer to Dave Breitenstein, Interim Wastewater Director. Mr. Breitenstein replied that back in 1995 consulting engineers came into the plant and did a cursory review of the critical process buildings and the Administrative building. They identified some weaknesses and then staff followed through with improvements to harden some of the processes buildings. It was not a comprehensive assessment. The most common types of improvements made were roof/wall tie-ins. The Administrative building was determined, at the time, to meet the seismic zone 3 standards, so no improvements were made to it. Commissioner Inge asked if that assessment was not enough to warrant using it instead of having another one done. Mr. Breitenstein said correct, it only looked at a few process buildings and did not look at any of the regional pump stations, the biosolids management facility, or the underground piping infrastructure. Mr. Stouder added that the seismic standards have changed significantly since that time; the Cascadia earthquake zone was not well understood back then. The shaking from a Cascadia Subduction event would be substantially more severe than what was contemplated back in the mid- 1990s. The key drivers for doing the new assessment are the magnitude of the quake that Oregon expects, the duration of the shaking, and the changes in seismic standards. MOTION: IT WAS MOVED BY COMMISSIONER MEYER WITH A SECOND BY COMMISSIONER FARR TO APPROVE RESOLUTION 18-03 FOR NOT TO EXCEED VALUE $696,000. THE MOTION PASSED UNANIMOUSLY 6/0. PRELIMINARY FY 2018-19 REGIONAL WASTEWATER PROGRAM (RWP) BUDGET Mr. Stouder recognized Tonja Kling, Katherine Bishop, Meg Allocco and John Huberd for their work on the budget. He went over the budget schedule, stating that on April 13 the MWMC will hold a Public Hearing on the FY 2018-19 budget and user rates. The budget and CIP will go to the Springfield City Council for ratification on May 7, to Eugene City Council on May 14, and to Lane County Board of Commissioners on May 15. Final adoption of the budget and CIP by the Commission will be on June 8. MWMC Meeting Minutes March 9, 2018 Page 4 of 11 Capital Program Budget: $34.1 million, of which $30.8 million is carryover for projects currently under construction including the following: Operations and Maintenance (O&M) Buildings Improvements, Electrical Distribution System Replacement/Upgrade, and the fourth digester. Regional Operating Budget: $18.1 million combined. The operating budget includes an overall net decrease of $168,783 or 0.9%, when compared to last year’s budget. The five year trend looking back reflects an average annual budget increase of about 2.2%. This year the budget is coming in at about a 1% decrease. Personnel costs increased 2.8% due to regular wages, PERS, and health insurance changes. Materials and Services combined reflect a decrease of 7.2%. Capital Outlay includes one-time expenses at $163,706. Springfield’s Budget: $3.9 million. Ms. Bishop went over Springfield’s 5-year budget trend. Over the recent 4-years, the average annual budget increase was 0.4%. The FY 2018-19 proposed budget is $3.9M. Staffing levels remain the same, Personnel Expenses increased by 5.2% or $94,579 due to a salary market study comparison which occurs every four years and is expected to be implemented in the next fiscal year. Materials and Services decreased by 3.1% or $66,813 and is mainly due to a reduction in project management software funding. Commissioner Meyer asked about indirect costs. Ms. Bishop replied that there are two different types. There are the internal costs like IT services, Human Resources, Finance, vehicle maintenance – most are coming from the general fund and then each department is paying their share of that overhead. The indirect costs are based on a federal formula. It varies from year to year. This year there is an increase on the indirect but in other years there has been a decrease. Eugene’s Budget: $14.1 million. Mr. Breitenstein stated that the proposed FY 2018-19 Operating Budget for Eugene includes a decrease of 1.4% or $196,549 when compared to the prior year. Looking back four years, the trend reflects an average annual increase of 2.7%. The proposed budget includes a 0.96 FTE increase. The staffing addition came in the form of reclassifying a position from limited duration to a regular full time position in the Facilities Maintenance Services. The limited duration position was added in 2015 to help with the work load associated with the maintenance of the $1.6M landscape improvements as well as contracted temporary help until it could be determined how much effort it would take to maintain the landscape. It was determined, mid-year, that it would take at least 1 FTE to maintain the landscape so the limited duration position was changed to regular. Materials and Services show a decrease of 8.9% or $464,888 and that reflects staff’s intention to narrow the budget remaining at year’s end; it was 10% last year. Some of the temporary help was removed as a tradeoff for the FTE and also professional services associated with the laboratory were reduced. The Capital Outlay increase of 51.8% is actually only $55,000. The whole Capital Outlay budget is $163,706 which is only 1% of the total Operations and Maintenance budget. Personnel Services increased 2.4% due to regular wages based on contractual labor agreement increased 2%, PERS/OPSRP increased 4.5%, and health insurance increased 1.2%. Materials and Services decreased 8.9% or $464,888 due to a 36.6% decrease in contractual services, 8.9% decrease in utilities, and 3.9% decrease in indirect charges. MWMC Meeting Minutes March 9, 2018 Page 5 of 11 Commissioner Inge said he would prefer to see the difference between this year’s and last year’s budgets based on last year’s amended budget rather than the adopted budget because that is the amount actually spent. Ms. Bishop said that is something staff would discuss and consider. Commissioner Meyer asked why the utility budget went down 9%. Mr. Breitenstein replied that last year money was added to the budget to cover the cost of the planned down-time for the co-generation engine (Cogen) while doing the digester project. The Cogen is back up so that funding can be reduced. President Ruffier asked if landscaping services are no longer being contracted out and if it has been internalized. Mr. Breitenstein replied that the Sheriff’s Work Crew is still utilized but not for-profit landscapers. President Ruffier stated Exhibit 3 (page 14 in the proposed budget) line item Regional Pump Stations Personnel Services shows a 14.2% decrease, why? John Huberd, Eugene Finance and Administrative Manager, replied that staff looks at the actuals for the last couple of years and make adjustments between the allocations where that work is happening. Proposed Rate Change: Proposed 2.5% rate change effective July 1, 2018. This is a lower rate change than was forecasted (3.5%) Residential increase is $0.64 monthly for 5,000 gallons of wastewater treated and comes out to $26.49 for the regional portion and then there is the local cities portion. Currently the average residential usage in Eugene is about 3,700 gallons per month which would be around $23.05. In Springfield it averages about 4,300 gallons per month which comes to $24.64. Ms. Bishop showed a residential wastewater fee comparison chart for local communities. The average rate is $48.82 when applied to 5,000 gallons monthly. Springfield’s combined rate (regional + City) is $48.71 and Eugene’s combined is $37.15 currently. Financial Plan Strategy: To stay consistent with MWMC’s strategies and only make changes when necessary. Use SDC revenues for debt service, replenishing Capital Reserves, and positioning financially for future permit renewal. While maintaining responsible rate changes to work towards pay-as-you-go capital investments, with moderate and incremental rate changes to avoid future rate spikes. Multi-year Financial Work Plan: In 2016 paid off the 2006 revenue bond and advance refunding of 2008 bonds. 2017 included SDC update based on revised SDC capital project lists. In 2018 staff will be coming back to the Commission with financial policy updates and discuss reducing SRF loan financing expenses. In the future a Cost of Services analysis would be valuable to perform to look at the base charge and volume charges to make sure our rate structure is properly balanced by customer type. Proposed Rates: Ms. Bishop stated the proposed rate plan includes a 2.5% rate change in FY 18-19, which is lower than the forecasted 3.5%. It would result in a lower impact to our customers and the FY19-20 projection is reduced from 4.0% to 3.5%. Optional Scenarios: Option A: 3.0% rate change which is lower than the projected 3.5% and would allow for significant capital transfers to fund capital improvements and continue replenishing capital reserves. The projection for FY 19-20 is 3.0%. MWMC Meeting Minutes March 9, 2018 Page 6 of 11 Option B: 2.0% rate change, the lowest rate option and results in FY 19-20 with a strong 4.0% rate change at this point-in-time. But when we get into the future and have more information, particularly in our Capital Program where we are seeing the greatest inflationary impacts, this rate could be higher. Ms. Bishop showed the residential trend for the last six years. Residential usage has decreased since FY 11-12 to FY 16-17. When determining a rate change, it is determined by what is actually used. The average monthly residential wastewater flow in Eugene is 3,700 gallons and Springfield is 4,300 gallons currently. DISCUSSION: President Ruffier asked what effect revising the assumed per capita consumption would have on the rate projections or the revenue projections. Ms. Bishop replied that she is waiting for Springfield’s usage to go down below 4,000 before changing from 5,000 to 4,000. It would also have to be discussed with both Springfield and Eugene because they show on their rate fliers’ typical usage at 5,000 gallons. President Ruffier asked doesn’t using 5,000 gallons skew the revenue projections. Ms. Bishop said that the revenue estimate is based on the actual trend looking at both the revenue and the volume. A 2.5% increase will not necessarily produce a 2.5% increase in revenues. However, we have both the industrial and commercial components too. Commissioner Inge asked why then isn’t the actual average usage used when showing the Commission the proposed rate increase. Ms. Bishop replied that the 5,000 gallons is what is used by both Cities and presented to their councils. It would need to be agreed upon by all partners to change. Commissioner Inge said he thinks it is crazy that even though the usage is going down we continue to use 5,000 gallons as an example. It seems to him that the MWMC is a more exacting enterprise and we should try to be more where we can. Mr. Stouder said that is something staff can look at but it would be more appropriate going into next year’s budget process to normalize to something like 4,000 or 4,500. Ms. Bishop added that she thinks both Cities would need to be doing it also. Commissioner Meyer asked how the revenue from service fees is doing this year. He thought he saw it was down. Ms. Bishop said what makes it appear down is the turnovers from EWEB and SUB. The turnover from SUB is about a one month delay and from EWEB it is a two month lag. Staff estimates on the monthly report. Ms. Bishop stated that the revenue is actually on target. Commissioner Inge said the Resiliency Plan that the Commission just approved for around $700,000 is in the proposed budget for $375,000. Will that be changed in the budget going forward? Ms. Bishop said it would be brought forward in Supplemental Budget 3 which will require a change to the proposed budget. Mr. Newman interjected that $500,000 was anticipated for the whole project and that some of it would be used this year. The proposed budget for next year assumes that some of the money was spent this year so that is why it is for $375,000. Mr. Stouder stated that the amount will need to be amended. The whole contract is approved in this year’s budget and the Supplemental Budget process will revise the amount. We will spend a portion of that from May to July 1st and the remainder will be coming out of next year’s budget. Commissioner Yeh stated that in 2020 and 2022 there will be some PERs increases and asked if that was calculated into the projected rate change. Ms. Bishop replied that the Personnel Services where they are projected to be this year then we have projected amounts going forward, the materials and services budget forecast includes minor inflationary adjustments. A significant component of the rate is for the MWMC Meeting Minutes March 9, 2018 Page 7 of 11 Capital projects. Commissioner Yeh said, so it is not a big issue. Ms. Bishop said that is correct. Mr. Stouder said it is not a large portion in MWMC’s budget but on the local side it can be a big impact. President Ruffier asked, in regards to Commissioner Yeh’s question, if the staff is calculating a PERs increase projection. Ms. Bishop replied that there are projections from Finance and Human Resources that is part of a forecast that is very focused on PERs, so yes there are numbers that are in the forecast. They are estimates, not actuals. Commissioner Yeh said that what she understands is that while the budget is down we need a rate increase because usage is also down and in order to keep funds where we need them we need a rate increase. Ms. Bishop replied that yes, the operating budget is fairly level but we don’t anticipate that will continue each year. The rate change that we are asking for is not just for this isolated year, it is actually looking at what is on the five year plan. When you look at the Capital plan currently, there is $92 million in the 5-year plan with $34.1 million in year one. You look at the cash flow and estimate when the expenses will occur and when we will be drawing down the capital reserve and when revenues need to be coming back in to offset it. Commissioner Yeh asked if there was ever a decrease in user rates or is it just assumed that we need to maintain a certain level and we keep raising rates to maintain that. Ms. Bishop replied in a utility fund, the only source of revenue is coming from the customers we serve who receive a direct benefit from the regional wastewater services. There are no funds coming from a General Fund that is property tax based. Our revenues are based on customer usage. The other component is System Development Charges (SDC). If you are going to purchase property and build a commercial building, you pay SDCs to buy into the existing infrastructure. The third would be financing. That would be loans to fund infrastructure or equipment, or revenue bonds that would support capital construction and financing would include interest expenses. Commissioner Yeh said, if she is asked by a constituent why the rates go up every year, what is the answer? Commissioner Inge replied that there was a long period of time where the rates were not raised at all. Then as we got into the much more regulatory demand for construction, it changed the dynamic of what we had to do. One of the decisions we made as a Commission was rather than sit tight and then have large increases of 11% or 7% was to have small incremental increases instead of large ones less often. It was more palatable to the constituents and is really more fiscally responsible. Commissioner Keeler stated that he appreciates that we are looking at a proposed 2.5% increase because that is relatively lower than what we have been seeing. He encourages staff every time we come to this point in the year to do what we can to keep rates increases low. He thinks we are doing a good job with it. He longs for the days when we can get back to where, compared to the general inflation rate, we are actually flat lined. He also added that in comparison to inflation, the proposed budget increase is less than inflation. Ms. Bishop added that the construction costs index increase was 3.9% in 2017 calendar year over the prior year. When we look at the CPI Urban Wage Earners and Clerical Index, it went up 3.9% in 2017 and for the All Urban Consumer Index increased 4.2% for materials and services. We are seeing inflation spike up based on the key indexes. Mr. Stouder added that relative to the CPI we are having less change. Also, the Commission has been very strategic in directing staff to be looking at replenishing the Capital MWMC Meeting Minutes March 9, 2018 Page 8 of 11 Reserve and be intentional about small incremental rate increases over time. So that when we do get the new permit, we will be better positioned than we were 10-12 years ago where we had to go out and sell bonds. If we do have to, it will be for much less if we have a large Capital Reserve. Hopefully avoiding future large rate increases so that in the long run the customers will be paying less than they would have with large rate increases. Commissioner Inge said that as a Commission, we hold it pretty tight. We are still below the average for the services that is provided. Springfield is a little closer but Eugene is well below the average for the services that we provide. The Commission is very cognizant of the importance of that and will continue to hold staff accountable to the fiscal responsibility of running these facilities. Mr. Stouder stated an example of why Springfield is closer to the average on the local side is because they have much less population base to spread the cost over. They did have to sell bonds on the local side where Eugene did not have to. That is what the MWMC is trying to avoid in the future. Commissioner Meyer said that MWMC has kept the FTEs very constant over the last five years. This year there was an increase and that is actually a plus because we cut the contract for maintenance. So we kept the FTEs and are subject to the rate negotiations of the two cities, so we simply participate in that based on the number of FTEs we have. It is important to have a rate increase that is at least approaching the cost of living and the CPI increases otherwise we erode the capacity to do things when the regulatory change comes along (which we know is coming); to be able to do it on money that we have rather than borrowing. If at any time we think that we can, we can always pay down the debt that we have. He thinks 2.5% is a very prudent approach. Ms. Bishop said another projection that is considered is Asset Management and what that may generate in terms of the additional equipment reserve requirements needed in the future. President Ruffier said that he was on the other side of the table during the time when the MWMC went five years without a rate increase. We took a great deal of pride in that only to really suffer the consequences with a significant rate increase when we needed it. He is supportive of small, incremental rate increases. That said, however, he still has some concern with the size of the reserves. He wonders what the effect would be of paying off some of the loans or bonds that we have now – how it would affect future rate increases. As well as changing some of our policies such as reducing operating reserves. There is an insurance reserve that is intended to pay the deductible which seems a bit redundant to him considering that the operating reserve is for unexpected circumstances. There are two rate stability funds that total $4 million. There is some work to be done, perhaps buying down future costs with using some of the reserve funds to balance the equation. Mr. Stouder replied that those are conversations staff plans to have with the commission in the coming year as part of the Financial Plan and policies and discussion about whether we should pay down the SRF loans. Commissioner Yeh asked about the two stability reserves. Ms. Bishop replied the Rate Stabilization Reserve is a requirement by the revenue bond’s covenant to be used at any point in the future when net revenues are insufficient to meet the bond covenant coverage requirement. The Rate Stability Reserve was established in the Financial Policies in 2005 after Hynix closed. They were a very large volume MWMC Meeting Minutes March 9, 2018 Page 9 of 11 customer and it really impacted the revenues when they closed down and consequently there were large rate increases after that happened. This reserve was established to avoid that type of spike to the rates. Mr. Stouder stated that staff was looking for feedback from the Commission and any changes that were recommended would be incorporated into the budget. President Ruffier asked if the discussions about utilization or adjustments to the reserves and their effects on rates would be a future discussion and not for this year’s budget. Mr. Stouder said it would be challenging to have a meaningful conversation and have it result in a budget change this year given the aggressive time line which would be complete by June. Ms. Bishop added that we will continue the discussions and want to hear from the Commission to make progress but it would not be implemented on this budget document. President Ruffier replied that he would encourage us to have the discussions in a timely manner in order to factor it into next year’s budget. Both Mr. Stouder and Ms. Bishop agreed. Commissioner Farr said that this is one of the clearest and most understandable expenditure budgets that he has seen. He would also like to see a line item budget on the revenue side. He told Tonja Kling, Management Analyst, well done. MOBILE WASTE HAULER FEES/RATES Mr. Breitenstein went over the history of rate and methodology. In earlier years, septage rates were based on a survey taken of peer agencies and the average of the survey results would be the septage rate. From fiscal year 2005 through 2008, the septage rate followed the residential user rate increase. Septage rates are a price sensitive market and when the rate increased from 12 cents to 14 cents and then to 15 cents per gallon, the haulers went away and the revenue declined. Starting in FY 2009 the rate was developed based on the cost of service to take into account high strength waste and market factors. The septage rate varied from $0.121 to $0.127 per gallon. Recently, the septage rate model was updated to provide a more complete and accurate assignment of actual treatment costs. It is similar to the rate model applied for connected users as it is based on the relative cost of treatment for removal of total suspended solids and biochemical oxygen demand. It also takes into account all MWMC expenses incurred for operations, maintenance, administration, and capital program activities. Commissioner Farr asked if Short Mountain’s leachate, which is hauled to the treatment plant, is based on the septage rage. Mr. Breitenstein replied no, it is based on the industrial user rate. Proposed FY 18-19 Mobile Waste Hauler Rate: Staff recommended no increase; keep rate at $0.127 per gallon with projected revenue of $900,000. The $900,000 includes a 20% surcharge collected above the domestic source rate for strength and replacement costs. This is because money needs to be put aside for equipment replacement associated with the septage facility and also recognizing that septage is a different waste to treat. It is a harsh waste with a lot more grit than regular sewage. Then, of this projected revenue of $900,000, if everything stayed the same in terms of volume, we will collect an MWMC Meeting Minutes March 9, 2018 Page 10 of 11 additional $20,000 above all costs. Staff will rerun the model next year to see how things look at that time. Staff expects a minor increase in the rate during FY 2019-20. Commissioner Meyer asked if the $0.127 is based on the cost of service analysis. Mr. Breitenstein answered it is. Commissioner Inge stated he doesn’t like that we raise user rates by 2.5% but not the mobile waste haulers’ rate. He said he was a proponent, early on, for raising mobile waste hauler’s rate consistent with the other users. (Commissioner Farr left for another appointment.) Commissioner Meyer said the MWMC doesn’t run the rate model every year but since the most updated model was just run on the septage haulers rate and the cost reflects what we are charging – that is great. But in subsequent years, if there is a rate increase for user rates, it seems it would be prudent to go ahead and increase the septage rate also. It wouldn’t be a whole penny but a percentage increase. The rate increase reflects the increase in operation, maintenance, and reflects our future capital needs to maintain our facilities. Mr. Stouder replied that we could have a conversation with the Commission next year of what the increase should be. Mr. Stouder said in addition to the septage rate, the MWMC amended the IGA to accept non-septage hauled waste from outside the service area. Staff would like to set the hauled rate (non-septage) the same as the septage rate for now. The reason is that given the nature of requests received in the past, 1) we don’t need to accept it if there is concern; 2) the requests are infrequent in nature; 3) the strength has been equal to or less than the strength of septage. These rates will be brought before the Commission in April to be set. Commissioner Inge asked if we collect any data on who the haulers are that dump at WPCF. Mr. Breitenstein replied that we have their information; each septage hauler has a permit. Commissioner Inge said in the event that we raise the rate and we see a significant decline in dumping, can we follow up and ask them where they are going. Mr. Breitenstein said yes, we have surveyed them in the past. Commissioner Inge asked if there is an enforcement mechanism that if we saw a decline we could ask them to prove that they are dumping in another qualified facility as oppose to dumping it in a ditch. Mr. Breitenstein said that it wouldn’t be MWMC’s enforcement but if there is suspicious information, we could report that to DEQ and they would do the investigation and enforcement. Commissioner Inge said that he remembers a time when there was a lot of illegal dumping of waste happening and that was another issue for us. President Ruffier said it would be worth looking into if we see decreases in the hauled waste. MWMC Meeting Minutes March 9, 2018 Page 11 of 11 BUSINESS FROM COMMISSION, GENERAL MANAGER, AND WASTEWATER DIRECTOR General Manager: Community Meetings: Presentations made to Goodpasture Island Neighbors and Springfield Lions Club. The presentations were well received and attendees were very appreciative of MWMC’s services. One upcoming presentation on March 15th at noon at the Emerald Empire Kiwanis Club. FEMA Reimbursement: The MWMC received reimbursements of $43,900 (debris removal) and $146,900 (Poplar farm damage) for damage sustained during the 2016-17 winter ice storm. That represents a recovery of greater than 75% of costs. Poplar Ceiling Demonstration Project: MWMC and Springfield will be partnering to install poplar ceiling planks in the Library Meeting Room at Springfield City Hall. The poplar was harvested at the Poplar farm, milled at Urban Lumber and turned into ceiling grilles by 9Wood. Staff is hoping to do some similar projects in Eugene and Lane County in the future. FOG Kits: Communication Staff ordered and received FOG kits to be used for education at upcoming community events. They were passed out to the Commissioners. Wastewater Director: Application for Peak Performance Award: Mr. Breitenstein just submitted the application to ACWA for the last calendar year. There were no effluent violations and therefore qualified for the Platinum 11 Award which means 11 consecutive years without a violation or incident on the discharge permit. Thank You Video from Tala, Mexico: The plant had safety harnesses that were replaced. Anna, a temporary employee from Tala, Mexico, asked for the used harnesses for her home town’s volunteer fire department. ADJOURNMENT President Ruffier adjourned the meeting at 9:28 a.m. Submitted by: Kevin Kraaz M E M O R A N D U M DATE: April 6, 2018 TO: Metropolitan Wastewater Management Commission (MWMC) FROM: Katherine Bishop, Environmental Services Program Manager SUBJECT: Fiscal Year 2018-19 User Rates, Public Hearing and Adoption ACTION REQUESTED: To conduct a public hearing on the proposed schedule of regional wastewater user rates and to consider adoption of Resolution 18-04 ISSUE A public hearing is scheduled for the April 13, 2018 Commission meeting to review and discuss the proposed fiscal year 2018-19 (FY 18-19) user rates for the Regional Wastewater Program (RWP) and to solicit public comment. A public hearing notice was published in the Register Guard and the meeting agenda was provided to the standing list of parties interested in notification of the Metropolitan Wastewater Management Commission (MWMC) meetings. The notice provides the Commission with the opportunity to adopt the schedule of user rates on April 13th. Per the intergovernmental agreement (IGA), once the Commission takes action, the recommended schedule of user fees will be forwarded to the cities of Springfield and Eugene for adoption and implementation. BACKGROUND The Commission has reviewed and discussed the components of the FY 18-19 Regional Wastewater Program Budget and Capital Improvements Program over the past three months, including: On January 12, 2018, the Commission reviewed the proposed Key Outcomes and Performance Indicators as part of the FY 18-19 Budget Kick-Off. On February 9, 2018, the Commission reviewed the proposed FY 18-19 Capital Budget and 5-Year Capital Plan. On March 9, 2018, the Commission considered the operating program budget, user fee rate scenarios and provided input on the Preliminary FY 18-19 RWP Budget. Memo: Fiscal Year 2018-19 User Rates, Public Hearing and Adoption April 6, 2018 Page 2 of 2 DISCUSSION Wastewater User Rates - On March 9th, the Commission was presented with three multi-year user fee rate scenarios for FY 18-19 including a 3.5% user rate scenario (as previously forecasted), a proposed 2.5% rate change, and a 2.0% rate scenario. Based on discussions and input from Commissioners, the Commission provided direction to move forward with a 2.5% rate increase in FY 18-19 in order to maintain revenue adequacy to: (1) support the capital improvements program; (2) continue to replenish capital reserves; (3) meet debt service obligations; (4) recognize cost of living and consumer price index (CPI) increases, and; (5) continue to implement moderate rate changes annually to avoid future rate spikes. Fiscal Impact to the Typical Residential Monthly Bill - A 2.5% user fee rate change to the regional wastewater component results in a $0.64 increase monthly from $25.85 to $26.49 for a residential customer based on 5,000 gallons of wastewater treated. While 5,000 gallons is commonly used when comparing a “typical” residential monthly bill with other communities, the “average” residential usage varies by community. When considering the average single family residential monthly bill based on current usage trends in Eugene and Springfield and including the proposed 2.5% rate change, the average residential monthly bill would be about $23.05 in Eugene and $24.64 in Springfield for the regional wastewater treatment component. The average bill amount in Springfield is slightly greater due to an increase in the average usage (gallons) in Springfield which is attributed to a greater number of people per household (families) when compared to Eugene. With the proposed 2.5% increase in regional wastewater user charges applied to the base and flow charge, the FY 18-19 revenue from the increased rates is projected to meet the covenants of the Revenue Bonds and SRF loan requirements, and to maintain or exceed an unenhanced credit rating of A (as required by the IGA) by adequately funding operations, administration, capital financing and reserves as proposed in the FY 18-19 Regional Wastewater Program Budget and CIP. Septage Haulers / Hauled Waste Rates – Septage haulers and the addition of hauled waste (non-septage) fees are charged to mobile waste haulers based on the volume of septage/hauled waste discharged. Septage/hauled waste fees will remain at $127 per 1,000 gallons in FY 18-19. There is no rate adjustment proposed at this time based on the outcome of the rate analysis. Staff plans to provide a brief presentation on the proposed user fees, to be followed by a public hearing. ACTION REQUESTED The Commission is requested to conduct a public hearing on the proposed schedule of regional wastewater user rates and to consider adoption of Resolution 18-04. ATTACHMENT 1. Resolution 18-04 ATTACHMENT 1 PAGE 1 OF 2 METROPOLITAN WASTEWATER MANAGEMENT COMMISSION RESOLUTION 18-04 ) IN THE MATTER OF THE FY 2018-19 ) MWMC REGIONAL WASTEWATER SCHEDULE ) OF USER RATES AND SEPTAGE AND HAULED ) WASTE RATES AND RECOMMENDING ) THEM TO THE GOVERNING BODIES WHEREAS, the Metropolitan Wastewater Management Commission (“MWMC”), pursuant to the Intergovernmental Agreement (“IGA”) between the cities of Springfield and Eugene, and Lane County (collectively “Governing Bodies”), is responsible for the administration and operation of the regional wastewater system; and WHEREAS, the IGA requires MWMC to recommend to the Governing Bodies a schedule of sewer user fees; and WHEREAS, MWMC’s recommendation must set forth: 1) the rates and amounts MWMC reasonably determines are necessary to meet MWMC’s bond covenants and to achieve and maintain an unenhanced credit rating of A from at least one nationally recognized rating agency (“Goal 1”) and 2) such additional rates and amounts MWMC determines are appropriate to adequately fund the actions necessary to perform MWMC’s functions under the IGA (“Goal 2”); and WHEREAS, on April 13, 2018, the MWMC held a public hearing on the levels of sewer user rates, including septage haulers and hauled waste (non-septage) rates necessary to meet the requirements set forth above for Fiscal Year 2018-2019; and WHEREAS, MWMC has determined the user rates proposed satisfy Goal 1 and that additional funds, such as would satisfy Goal 2, are not necessary; and WHEREAS, MWMC, to the extent such exist, have considered all written and/or oral comments made at the public hearing, the recommendation of staff, and being otherwise fully advised; NOW, THEREFORE, BE IT RESOLVED BY THE METROPOLITAN WASTEWATER MANAGEMENT COMMISSION that the Metropolitan Wastewater Management Commission Schedule of Regional Wastewater Sewer User Fees for Fiscal Year 2018-2019 in the form attached as Exhibit A, incorporated herein by this reference, with the rates set forth therein increased by the amounts that are necessary to reflect an overall rate increase of 2.5% over the user rates currently in effect, satisfies Goal 1 and is recommended to the appropriate Governing Bodies for implementation. Septage and Hauled Waste (non-septage) fees, which are implemented only in Eugene, remain at $0.127 per gallon with no rate change at this time. ADOPTED BY THE METROPOLITAN WASTEWATER MANAGEMENT COMMISSION OF THE SPRINGFIELD/ EUGENE METROPOLITAN AREA ON THE 13TH DAY OF APRIL, 2018. ______________________________________ Peter Ruffier, MWMC President ATTEST: __________________________________ Approved as to form: _____________________ K.C. Huffman, MWMC Legal Counsel ATTACHMENT 1 Page 2 of 2 M E M O R A N D U M DATE: April 6, 2018 TO: Metropolitan Wastewater Management Commission (MWMC) FROM: Katherine Bishop, Environmental Services Program Manager SUBJECT: Fiscal Year 2018-19 Regional Wastewater Program (RWP) Budget and Capital Improvements Program, Public Hearing and Adoption ACTION REQUESTED: Review the Preliminary Fiscal Year 2018-19 RWP Budget, conduct a public hearing, and consider adoption of Resolution 18-05 ISSUE The Preliminary Regional Wastewater Program (RWP) Budget and Capital Improvements Program (CIP) for fiscal year 2018-19 (FY 18-19) is attached for review and consideration. A public hearing is scheduled for the April 13, 2018 Commission meeting to solicit public comment. A public hearing notice was published in The Register Guard and the meeting agenda was provided to the standing list of parties interested in notification of the MWMC meetings. The notice provides the Commission with the opportunity to adopt the RWP Budget and CIP on April 13. BACKGROUND On January 12, 2018, the Commission reviewed the proposed Key Outcomes and Performance Indicators as part of the FY 18-19 Budget Kick-Off. On February 9 the Commission reviewed the proposed Capital Budget and 5-Year Capital Plan. On March 9 the Commission considered the operating program budget, user rate scenarios, and provided input on the Preliminary FY 18-19 RWP Budget. The Preliminary FY 18-19 RWP budget funds all operations, administration, and capital projects planned for the MWMC Regional Wastewater Facilities. Based on feedback received from the Commission during prior years, staff does not intend to make a significant presentation on the budget document at the April 13 Commission meeting; however staff will be prepared to support the Commission’s discussion. DISCUSSION Operating Program Budget – The total operating budget is $18,119,417, reflecting a decrease of 0.9% ($168,783) in FY 18-19 when compared to the adopted FY 17-18 budget. Administration – The administration budget for Springfield is $3,969,666 in total, reflecting an increase of 0.7% ($27,766) in FY 18-19 when compared to the adopted FY 17-18 budget. Memo: Fiscal Year 2018-19 RWP Budget, Public Hearing and Adoption April 6, 2018 Page 2 of 2 Operations and Maintenance – The operations and maintenance budget for Eugene is $14,149,751, reflecting a decrease of 1.4% ($196,549) in FY 18-19 when compared to the adopted FY 17-18 budget. Capital Programs Budget – The FY 18-19 capital programs budget is $33,100,000 which includes capital project carryover funding of about $17M. Based on the status and phasing of capital improvements, projects are fully budgeted in the fiscal year in which the contract is awarded. Projects and associated expenditures often span multiple years. The 5-year Capital Program plan includes $93,484,000 in total. Wastewater User Rates – The Preliminary FY 18-19 RWP Budget and CIP document reflects a 2.5% user rate increase effective July 1, 2018. With the 2.5% rate change included in the preliminary budget, sufficient revenues will be generated to fund daily operations, planned capital projects, and debt service obligations while maintaining a positive financial position. Next Steps – Per the MWMC intergovernmental agreement, once approved by the MWMC, the Budget and CIP will be referred to the City of Springfield, City of Eugene, and Lane County for consideration and ratification. After the ratification process is complete, the budget will be brought back to the MWMC for final adoption on June 8, 2018. ACTION REQUESTED The Commission is requested to review the Preliminary FY 18-19 RWP Budget and CIP materials, conduct a public hearing, and consider adoption of Resolution 18-05. ATTACHMENT 1. Resolution 18-05 ATTACHMENT 1 Page 1 of 1 METROPOLITAN WASTEWATER MANAGEMENT COMMISSION RESOLUTION 18-05 ) IN THE MATTER OF ADOPTING THE FY 2018-19 ) MWMC REGIONAL WASTEWATER PROGRAM ) BUDGET AND CAPITAL IMPROVEMENTS ) PROGRAM AND RECOMMENDING THEM TO ) THE GOVERNING BODIES WHEREAS, the Metropolitan Wastewater Management Commission (“MWMC”), pursuant to the Intergovernmental Agreement (“IGA”) between the cities of Springfield and Eugene, and Lane County (collectively “Governing Bodies”), is responsible for the administration and operation of the regional wastewater system; and WHEREAS, the IGA requires MWMC to prepare an annual budget and Capital Improvements Program and recommend them to the Governing Bodies for adoption; and WHEREAS, MWMC’s annual budgeting process involves a number of public meetings in which the MWMC’s administrative and operational needs for the upcoming fiscal year are presented and reviewed; and WHEREAS, on April 13, 2018, MWMC held a public hearing on the proposed FY 2018-2019 Regional Wastewater Program Budget (RWP) and Capital Improvements Program (CIP); and WHEREAS, MWMC, to the extent such exist, have considered all written and/or oral comments made at the public hearing, the recommendation of staff, and being otherwise fully advised; NOW, THEREFORE, BE IT RESOLVED BY THE METROPOLITAN WASTEWATER MANAGEMENT COMMISSION that the RWP and CIP for FY 2018-2019 as presented to the MWMC on April 13, 2018, are hereby approved and the General Manager is directed to refer them to the Governing Bodies for ratification in accordance with the IGA. ADOPTED BY THE METROPOLITAN WASTEWATER MANAGEMENT COMMISSION OF THE SPRINGFIELD/EUGENE METROPOLITAN AREA ON THE 13TH DAY OF APRIL, 2018. ______________________________________ Peter Ruffier, MWMC President ATTEST: __________________________________ Approved as to form: _____________________ Kevin Kraaz, MWMC Secretary K.C. Huffman, MWMC Legal Counsel ______________________________________________________________________________ M E M O R A N D U M DATE: April 6, 2018 TO: Metropolitan Wastewater Management Commission (MWMC) FROM: John Casto, Design and Construction Coordinator SUBJECT: Construction Contract Award for the Electrical Distribution System Upgrades, Project P80092 ACTION REQUESTED: Approve Resolution 18-06 ISSUE Staff requests that the Commission approve Resolution 18-06 (attached) awarding the construction contract for the Electrical Distribution System Upgrades Project P80092, to the lowest responsible bidder and authorizing the MWMC Executive Officer to enter into a contract with Lantz Electric, Inc. in the amount of $1,995,000. BACKGROUND In August 2016, staff informed the Commission that the medium voltage conductors installed at the treatment facility in the 1980s were at risk of failing due to the type of insulation used at that time. With Commission approval, a contract was executed with CH2M HILL Engineers in August of 2017 for design and technical services during construction to replace the conductors to the electrical distribution system. Also, the MWMC authorized an agreement dated January 29, 2018 with Graybar Electric Company to pre-purchase an automatic transfer switch (ATS) due to manufacturing long lead time. On March 12, 2018 the construction project was advertised for the bidding phase that included a mandatory pre-bid meeting for bidders. Six prospective bidders attended the pre-bid meeting. DISCUSSION On April 3, 2018 a total of one sealed bid was received by the deadline. The bid results are provided below. Contractor Total Bid Lantz Electric, Inc. $1,995,000 Memo: Construction Contract Award for the Electrical Distribution System Upgrades, Project P80092 April 6, 2018 Page 2 of 2 The apparent low bid submitted by Lantz Electric, Inc. was reviewed by staff, the design consultant (CH2M HILL), and legal counsel. The Electrical Distribution System Upgrades approved project budget is $6,000,000 to cover costs related to planning, design, permits, construction, administration, etc. The cost estimate provided by CH2M HILL for construction of the project is $2,650,000. Staff issued a Notice of Intent to Award on April 5, 2018 to address the MWMC Procurement Rule 137- 049-0395. With the Commission’s approval of Resolution 18-06, a notice to proceed is anticipated to be issued no later than June 1, 2018 after the contract elements have been finalized. Construction is anticipated to be completed in December of 2018. ACTION REQUESTED Staff requests that the Commission approve Resolution 18-06 (attached) authorizing the MWMC Executive Officer to execute a construction contract for the Electrical Distribution System Upgrades project with Lantz Electric, Inc. in the contract amount of $1,995,000. ATTACHMENTS: 1. Resolution 18-06 2. Bid Tabulation (bids opened on April 3, 2018) 3. Letter from CH2M HILL (design consultant) 4. Letter from MWMC Legal Counsel ATTACHMENT 1 Page 1 of 2 METROPOLITAN WASTEWATER MANAGEMENT COMMISSION RESOLUTION 18-06 ) IN THE MATTER OF DELEGATING ) AUTHORITY TO AWARD A ) CONSTRUCTION CONTRACT ) FOR PROJECT P80092 ) ELECTRICAL DISTRIBUTION SYSTEM UPGRADES WHEREAS, the Metropolitan Wastewater Management Commission (MWMC) advertised for bids on March 12, 2018 for Project P80092, Electrical Distribution System Upgrades; and WHEREAS, the MWMC has budgeted $6,000,000 for overall expenses related to administration, design, technical services, and construction of P80092, Electrical Distribution System Upgrades (Project); and WHEREAS, on April 3, 2018, staff received a total of one (1) bid for the Project; and WHEREAS, the apparent low bidder was Lantz Electric, Inc. (address: 34531 Highway 58, Eugene, Oregon, 97405) with a total bid of $1,995,000; and WHEREAS, the MWMC legal counsel (Thorp, Purdy, Jewett, Urness & Wilkinson, P.C.) has reviewed the bid for compliance with applicable law and determined that Lantz Electric, Inc. is the low responsive bidder; and WHEREAS, the MWMC design consultant (CH2M HILL Engineers) has reviewed the technical portion of the bid document from Lantz Electric, Inc. for the Project and found it to be in substantial compliance with the technical requirements of the specifications; and WHEREAS, pursuant to the MWMC Procurement Rule 137-049-0395 (3), the award of the contract shall become final if no bid protests are received within seven (7) calendar days after the date of the Notice of Intent to Award the construction contract; and WHEREAS, the MWMC has appointed a duly authorized Executive Officer for efficient execution of the day-to-day administration of the MWMC business. NOW, THEREFORE, BE IT RESOLVED BY THE METROPOLITAN WASTEWATER MANAGEMENT COMMISSION THAT; The duly authorized MWMC Executive Officer, or its authorized designee, is hereby authorized to: 1) Enter into a Contract for construction services for P80092, Electrical Distribution System Upgrades, for a contract price of $1,995,000; and ATTACHMENT 1 Page 2 of 2 2) Execute or designate qualified staff to execute all contract and project management functions including, but not limited to, issuance of notices to proceed, contract changes not to exceed a cumulative total of 15% (or $299,250) of the contract price listed above, and to manage the contract to ensure the products and services meet the contract specifications. ADOPTED BY THE METROPOLITAN WASTEWATER MANAGEMENT COMMISSION OF THE SPRINGFIELD/EUGENE METROPOLITAN AREA ON THE 13TH DAY OF APRIL, 2018. ____________________________________ MWMC President: Peter Ruffier ATTEST: _______________________________ Secretary: Kevin Kraaz Approved as to form: _____________________________________ MWMC Legal Counsel: K.C. Huffman MWMC Electrical Distribution System Upgrades - P80092 Bids Due: 2:00 PM April 3, 2018 Bids Opened: 4:00 PM April 3, 2018 CONTRACTOR Engineer's Estimate Lantz Electric, Inc. Total Lump Sum Bid $2,352,549 $1,995,000 ATTACHMENT 2 Page 1 of 1 ATTACHMENT 3 Page 1 of 1 THORP PURDY JEWETT URNESS WILKINSON, P.C. ATTORNEYS AT LAW K.C. Huffman ~ Shareholder 1011 HARLOW ROAD, SUITE 300 SPRINGFIELD, OREGON 97477 PHONE: (541) 747-3354 FAX: (541) 747-3367 E-MAIL ADDRESS: kchuffman@thorp-purdy.com WEBPAGE: WWW.THORP-PURDY.COM MARVIN O. SANDERS (1912-1977) JACK B. LIVELY (1923-1979) JILL E. GOLDEN (1951-1991) April 5, 2018 & Sent via Email: jcasto@springfield-or.gov John Casto Project Manager 225 North 5th Street Springfield, OR 97477 Re: Bids Received for Contract P80092 – Electrical Distribution System Upgrades Our File No. 434-367 Dear John: We have reviewed the one (1) Bid which was submitted to the MWMC and delivered to us for the P80092 – Electrical Distribution System Upgrades project. Lantz Electric, Inc. was the only bidder who submitted a Bid. Based on the Bid submitted, the apparent bidder who will best serve the interests of the MWMC is Lantz Electric, Inc. Subject to further negotiations with Lantz Electric, Inc., it is our recommendation the Commission may properly make a final award of this Contract to Lantz Electric, Inc. Finally, this letter will serve as your reminder the MWMC must comply with any legal requirements to timely submit information regarding the MWMC’s determination of responsibility to the appropriate party. Thank you. Sincerely, THORP, PURDY, JEWETT, URNESS & WILKINSON, P.C. K.C. Huffman ATTACHMENT 4 Page 1 of 1 ____________________________________________________________________________________________________ M E M O R A N D U M DATE: April 6, 2018 TO: Metropolitan Wastewater Management Commission (MWMC) FROM: Loralyn Spiro, Communications Coordinator Laura Keir, Communications Coordinator SUBJECT: Public Information Program Update ACTION REQUESTED: Informational Only ISSUE This memo is an update on the status of the Metropolitan Wastewater Management Commission’s public information program guided by the updated MWMC Communication Plan developed in 2017. A presentation will be delivered at the April 13th Commission meeting detailing progress made toward meeting goals and strategies set in the plan. The presentation will also include an overview of upcoming activities to help meet the set goals and strategies. Examples of the types of tactics that will be covered will be continued efforts around branding of the MWMC, progress with the MWMC social media channels and e-newsletter, presentations to community groups, and Clean Water University. BACKGROUND Objectives, strategies, and tactics for the MWMC Communication Plan updated in 2017 were set by observing Commission Goals and particularly those objectives set within Key Outcome #5 – Achieve and maintain public awareness and understanding of MWMC, the regional wastewater system, and MWMC’s objectives of maintaining water quality and a sustainable environment. The Communications Plan contains four overarching strategies: 1. Increase community understanding of the connection between well-managed wastewater services and a healthy local environment. 2. Raise awareness of the MWMC as a leader in water resources management, specifically in wastewater treatment practices and expertise. 3. Increase community understanding of how their behavior and practices affect the health of local waterways and what they can do to help protect our environment. Memo: Public Information Program Update April 6, 2018 Page 2 of 2 4. Strengthen communications by evaluating the effectiveness of strategies/tactics implemented. ACTION REQUESTED This memo is being presented for informational purposes. No specific actions or decisions are being requested from the Commission at this time. ____________________________________________________________________________________________________ M E M O R A N D U M DATE: April 6, 2018 TO: Metropolitan Wastewater Management Commission (MWMC) FROM: John Huberd, Finance & Administration Manager, City of Eugene Wastewater SUBJECT: MWMC Asset Management Program Update ACTION REQUESTED: Informational Only ISSUE Management of MWMC assets is vital for achieving effective fiscal management, maximizing the reliability and useful life of assets and infrastructure, and ensuring long-term sustainability. Areas for improvement in asset management have been identified and a program is underway to implement those improvements. BACKGROUND The regional wastewater services are supported by a network of assets currently valued at over $260 million. With many of the MWMC’s assets being greater than 30 years old, staff is engaged in bringing the latest best practices into the current MWMC asset management program. Over the last two decades there has been growing recognition of the importance of aligning short-term decisions regarding investments, maintenance and asset renewal with long-term comprehensive asset management practices. Reflecting this, best practices in asset management have evolved with greater emphasis on developing comprehensive asset management programs. In 2016, a Strategic Asset Management Gap (SAM Gap) analysis was conducted by staff on the MWMC asset management program. The SAM Gap analysis tool was developed by the Water Environment Research Foundation and is comprised of 88 questions. Staff completed the gap analysis and from this work, identified the current state of asset management practices, identified gaps in those practices, and selected initial objectives for improvements in asset management. These objectives include developing improved methodologies for determining total lifecycle costs, asset replacement costs and useful life estimates. Other initial objectives have been identified that focus on developing greater staff coordination and competencies in sustainable asset management. With the SAM Gap results helping to identify “what needs to be done,” staff researched the best ways for how to make improvements to asset management. The 2015 International Infrastructure Memo: MWMC Asset Management Program Update April 6, 2018 Page 2 of 2 Management Manual (IIMM) developed by the Institute of Public Works Engineering Australia (IPWEA) encourages the use of an annual Asset Management Plan and staff is planning to follow this guidance. DISCUSSION An overview of the asset management program and a preview of the fiscal year 2019-20 (FY 19-20) Asset Management Plan will be presented at the MWMC’s April meeting. The initial FY 19-20 asset management plan is scheduled for completion by September 2018. This will allow the asset management plan to inform the FY 19-20 budget process. Going forward, staff intends to update the asset management plan annually. ACTION REQUESTED Informational Only