HomeMy WebLinkAbout10-19-18 AgendaPacket
THE FULL PACKET IS POSTED ON THE WEBSITE
www.mwmcpartners.org
MWMC MEETING AGENDA
Friday, October 19, 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 9/14/18 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 – 8:30 IV. EXECUTIVE SESSION – BIOGAS: NW INTERCONNECTION AGREEMENT
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Kristin Denmark/ Josh Newman
Action Requested: The Metropolitan Wastewater Management Commission will now
meet in Executive Session pursuant to ORS 192.660(2)(f) for the purpose of consulting
with legal counsel about information or records exempt from public disclosure because
they are subject to attorney-client privilege.
Adjourn Executive Session and convene Regular Session
Note: Memos presented in Executive Session are confidential and must be turned in at
the end of the meeting.
Action Requested: Discussion and direction on entering into an Interconnection
Agreement with NW Natural.
8:30 – 8:50 V. MWMC FINANCIAL PLAN INVESTMENTS #5 . . . . . . . . . . . . . . . . . . . . . . . Katherine Bishop
Action Requested: Provide staff with direction to accept or amend proposed policy
language.
THE FULL PACKET IS POSTED ON THE WEBSITE
www.mwmcpartners.org
8:50 – 9:05 VI. FY 2017-18 ANNUAL FINANCIAL SUMMARY, BUDGET RECONCILATION
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meg Allocco
Action Requested: Information only
9:05 – 9:20 VII. BUSINESS FROM COMMISSION, GENERAL MANAGER, & WASTEWATER DIRECTOR
9:20 VIII. ADJOURNMENT
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 MINUTES
Friday, September 14, 2018 at 7:30 a.m.
City of Springfield City Hall, Library Meeting Room
225 Fifth St., Springfield, OR 97477
President Ruffier opened the meeting at 7:30 a.m. Roll call was taken by Kevin Kraaz.
ROLL CALL
Commissioners Present: Pat Farr, Bill Inge, Doug Keeler, Peter Ruffier, and Jennifer Yeh
Absent: Walt Meyer, Joe Pishioneri
Staff Present: Meg Allocco, Katherine Bishop, Dave Breitenstein, Chaim Hertz, John Huberd, Laura Keir,
Tonja Kling, Kevin Kraaz, Shawn Krueger, Troy McAllister, James McClendon, Todd Miller, Brian Millington
(attorney), Josh Newman, Sharon Olson, Loralyn Spiro, Matt Stouder, and Mark Van Eeckhout.
Guest: Wayne Gresh, Carollo Engineers
CONSENT CALENDAR
a. MWMC 7/13/18 Minutes
MOTION: IT WAS MOVED BY COMMISSIONER KEELER WITH A SECOND BY COMMISSIONER YEH TO
APPROVE THE CONSENT CALENDAR. THE MOTION PASSED UNANIMOUSLY 5/0.
PUBLIC COMMENT
There was no public comment.
FY 2018-19 SUPPLEMENTAL BUDGET #1
Meg Allocco, MWMC Accountant, stated that Supplemental Budget #1 includes rolling forward the
capital projects ($3.9M), the unspent operating funds ($1.7M), and new money requests ($5.1M). The
specifics are detailed in the memo.
The new money requests are for three items, they include: 1) a transfer of $100,000 from the Operating
Reserve to fund appropriate “Small Home” SDC costs for qualifying developments as directed by the
Commission; 2) a transfer of $985,000 from the Operating Reserve to the Insurance Reserve to fund the
Insurance Reserve at $1.5 million as directed by the Commission; and 3) a transfer of $5,019,885 from the
Capital Reserve to SRF loan principal to retire two outstanding loans. Payoff of the SRF loan principle will
save $1.2 million over 12 years.
MWMC Meeting Minutes
September 14, 2018
Page 2 of 11
Ms. Allocco stated all the operating items in the supplemental budget were done out of the carryforward
cash and there was still an $800,000 operating reserve increase. On the Capital side the carryforward was
$3.9M, of which $3.7M were projects, and Eugene capital carryforwards.
DISCUSSION: Commissioner Farr stated there are 23 Tiny Homes going in Eugene who have already paid
their SDCs. He asked if their SDCs could be reimbursed. Mr. Stouder stated staff has talked to the City of
Eugene and the Tiny Home representatives. They were told the money would be available July 1, 2018,
but elected to move forward ahead of that date.
President Ruffier asked if the addition to the operating reserves would maintain a two-month reserve.
Ms. Allocco replied that it was originally budgeted for two months so the increase would bring it over.
RESOLUTION 18-12: IN THE MATTER OF APPROVAL OF FISCAL YEAR 2018-19 SUPPLEMENTAL BUDGET #1
MOTION: IT WAS MOVED BY COMMISSIONER KEELER WITH A SECOND BY COMMISSIONER YEH TO
ADOPT RESOLUTION 18-12. THE MOTION PASSED UNANIMOUSLY 5/0.
MWMC RESILIENCY PLANNING PROJECT UPDATE
Josh Newman, Managing Civil Engineer, stated the MWMC is implementing a Resiliency Plan project to
develop a Disaster Recovery and Mitigation Plan (DRMP) for the MWMC’s critical infrastructure. Mr.
Newman introduced Wayne Gresh, from Carollo Engineers, the project manager for the Resiliency Plan
project. Mr. Gresh is working with a team of sub consultants that includes SEFT Consulting Group, Infra
Terra, and McMillan Jacobs Associates. Each of those firms brings specific talent to this effort. On the
partner agency side, there is a wide cross section of people that are involved in the planning, including
various managers as well as the Emergency Managers from both cities. Resiliency touches everyone and
everything we do so the coordination with the ongoing planning efforts that we have in the region is
really important. Mr. Newman pointed out this project will end up with a prioritized list of
recommendations and a plan that will be executed over a 50 year planning horizon.
Mr. Gresh stated that community resiliency planning is defined to be prepared for anticipated hazards,
to be able to adapt to changing conditions, and be able to withstand and recover rapidly from
disruptions. This project focuses primarily on a Cascadia Subduction Zone (CSZ) seismic event and a 500
year flood.
An earthquake will damage all systems at the same time making it much more difficult to recover. You
lose power, transportation, fuel supplies, water, and wastewater. They are all dependent upon each
other and they all have to come back together. A lot of the resiliency planning is community based.
Interdependencies are looked at and taken into account such as where the MWMC is on the priority list
for getting supplies. For example, fuel will be given to hospitals, and critical facilities, and even the water
facility before the treatment plant.
There are three major earthquake sources in the Pacific Northwest. They are the Cascadia Subduction
Zone (CSZ) earthquake, the deep Intraplate earthquake, and the Crustal Fault earthquake. The Eugene
area has the Juan de Fuca Plate and the Pacific Plate. The interaction of those two is targeted to happen
several miles off the coastline (west of Eugene) and then propagate inward. The effect on the Eugene
MWMC Meeting Minutes
September 14, 2018
Page 3 of 11
area would be about a magnitude 9.0, but more important is that it has a shaking period of 2-4 minutes.
That is a lot of motion, especially when you think of liquid baring structures such as the clarifiers. The
wave action would be very destructive. We also need to be prepared for the more minor earthquakes
which are also associated with those plates. What is learned from other earthquakes is applied in our
resiliency planning.
Mr. Gresh stated the other event that is being looked at is a significant flooding event. His team asked
the Emergency Managers from Eugene and Springfield whether we should be looking at a natural
flooding event or an inundation from a massive dam failure. They recommended planning for the 500
year major flooding event, because for significant dam failures, it isn’t going to matter because the
whole area is inundated.
Mr. Gresh said that they are looking at MWMC’s critical facilities: pump stations, conveyance pipelines,
treatment facility and the biosolids facility. Then a work plan will be created with six tasks that build
upon themselves:
1. Establish performance objectives which are different for each facility.
2. Assess vulnerability to CSZ event and identify upgrades needed
3. Assess critical interdependencies and identify strategies/actions needed
4. Assess vulnerability to catastrophic flood and identify upgrades needed
5. Assess sensitivity to climate change and identify how to incorporate into plan
6. Estimate costs, revisit performance objectives if needed, and prepare plan
Once the gaps are known, the team will perform a benefit cost analysis and will come up a Capital
Improvements list with strategies and actions the MWMC should take.
Commissioner Keeler asked about the interdependencies list, does it include the suppliers such as the
suppliers of the chemicals used at the plant. Mr. Gresh said yes, staff has been going through all the
things the MWMC is dependent upon in the operation; the list is extensive. Mr. Newman added that
they are keying it down to the critical essentials for an emergency. Commissioner Keeler said then you
would need to know how prepared those suppliers are for an emergency.
Mr. Gresh said that he would recommend partnering with EWEB as they are planning a Sodium
Hypochlorite generation facility for their water plants. Mr. Newman said that staff just found out about
that and has begun a conversation with EWEB in regards to how the MWMC can partner with them so
we could have a regional Sodium Hypochlorite generation capacity that we could all use. Commissioner
Keeler said another benefit may be that we are developing or improving relationships and finding
opportunities that might not even involve a disaster. Mr. Gresh said that is correct; the partnerships that
are built through this (Resiliency Plan) will give you a lot better relationship with those utilities to be able
to respond to one another.
Mr. Gresh stated that the time frame for the tasks is about one year. His team will do extensive tours of
each facility, making seismic vulnerability assessments. They will take that information into the gap
analysis and then move through the planning process and come up with strategies.
Mr. Newman gave kudos to Sharon Olson, Eugene Wastewater Division, on collecting the massive
amount of data for this project.
MWMC Meeting Minutes
September 14, 2018
Page 4 of 11
Level of Service Goals (LOS): LOS is a very specific time frame for recovery. The Oregon Resilience Plan
(ORP) sets target goals for many sectors: business, power, water, transportation, etc. The Willamette
Valley Wastewater Systems goals for a CSZ event are listed in the ORP. LOS goals for treatment plants is to
be 20-30% operational within 1-2 weeks, 50-60% operational within 3-5 months, 80-90% operational 6-
12 months, and then three plus years to get back to regulatory compliance.
Mr. Stouder reminded the Commission that the resiliency plan has a 50 year planning horizon. Mr. Gresh
stated that ORP was written to get facilities to try to prepare over the next 50 years to meet these goals.
Mr. Stouder added that the ORP is for all the sectors and is focused on business needs because if you
can’t provide water, power, and sewer service within a couple of weeks after an event, the businesses
cannot be sustainable and will collapse. It is driven by the economy.
President Ruffier asked about the LOS specified in the memo, if they basically follow the ORP. Mr. Gresh
replied yes. He said the MWMC could adopt its own plan or use Oregon’s. His guidance is to take the
ORP into account because this is what the emergency managers are using when they are looking at all
the interdependencies. Also, The National Institute of Standards and Technology (NIST) established the
same resiliency plans nationwide for a number of different vulnerabilities and events. They match up
pretty well to Oregon’s resiliency plan. There are both Oregon’s standards and national standards for the
utilities to follow. He added when staff met to have the workshop on resiliency they came up with the
following LOS goals.
Conveyance Pump Stations and Pipelines: In 1-2 weeks be capable of routing and conveying 30%
of our average wet weather flow (AWWF) to the plant. In 4-12 weeks, routing 60% AWWF to
plant; and in 3-6 months routing 90% AWWF to plant.
President Ruffier pointed out that the LOS is dependent upon the Cities getting the collection system
working to convey wastewater to the pump station. Mr. Gresh said that is correct and we know from
previous earthquakes that you will end up with a lot of port-a-potties to begin with, and that is where a
lot of the flow will come from.
Commissioner Inge asked if we have changed anything since this discussion started. Mr. Stouder replied
it will potentially change the analysis and potentially change the construction we do in the future.
President Ruffier asked if in 1-2 weeks we are routing only 30% where is the other 70% going. Mr. Gresh
replied that it may not be getting to the MWMC. It depends when an event happens. If it happens during
dry weather, you are not going to have those flows. If it happens during the severe wet weather period,
you could be getting a lot more than that. What it does tell us is that the other percent is getting
discharged somewhere. This is where the emergency management teams are looking at, they want to
know where it is going and make sure it is being routed away from the populations. Part of ORP is to
make sure threats to public safety are controlled.
Mr. Gresh stated one goal that isn’t part of the ORP and that he suggests to add is what is happening to
the flow during the event. You want to make sure you have a passive release.
Treatment Plant and BMF: 0-1 day have flow bypass or through plant to outfall. In 1-2 weeks
doing primary treatment and disinfection for 30% of the average dry weather flow (ADWF). In 3-
6 months doing primary treatment, secondary treatment and disinfection for 60% ADWF. In 9-12
months coming back to compliance with regulatory requirements.
MWMC Meeting Minutes
September 14, 2018
Page 5 of 11
FLOODING EVENT: The MWMC is set up for it now, which means the electrical gear and pumps are
above the 500 year flood level. This may be revisited if we find that one of the pump stations needs to be
raised 10 feet.
Conveyance Pump Stations & Pipelines are capable now of routing peak wet weather flows (WWF)
to the plant. Likely the 500 year flood event will have a lot more flow than the WWF because
there will be water coming in from everywhere throughout the whole system.
Treatment Plant is set up to handle the 100-year flood plain and the 500-year flood plain is not
any greater. The MWMC should be in total compliance within 3-7 days – the interdependency
here is how many treatment plant operators can get to the site.
Commissioner Farr stated that Lane County took a large step in emergency management this week.
They transferred authority from the Sheriff’s department to Public Works. He asked if Lane County’s
transfer of state mandated authority affects the MWMC’s resiliency plan. Mr. Stouder replied that his
assumption is that it won’t affect the planning effort as far as the analysis of MWMC’s infrastructure. But
staff has coordinated with the Emergency Managers of both cities and they are in tune with Lane
County’s Emergency Manager. If there were an event, the declarations and tracking of that event would
be to follow the city to the county to the state and ultimately FEMA. There have been conversations with
the county’s emergency management at the local level from the global perspective of what happens in a
large scale emergency.
Mr. Gresh said the work being done on the Resiliency Plan is meant to feed in to MWMC”s broader
Facilities Plan and will become part of it. He said he will be back after the gap analysis to share findings
on the upgrades and actions required.
Commissioner Keeler referred to the graph that shows the LOS versus time of recovery, he was surprised
that the end state is that the MWMC would have a level of service that is greater than it is now. Mr. Gresh
explained that it is a progression; when a disaster happens and you are able to recover, the next time it
happens, the expectation is that you recover faster and have a better level of service. Mr. Breitenstein
said another way of looking at it is to look at how the MWMC’s facilities have been constructed over the
last 35 years. The building code has changed and not all the facilities meet the current building code. So
if we build to meet today’s building code, we will have an improved level of service.
President Ruffier stated he would appreciate a little more detail and have some discussion on LOS. He
asked Mr. Gresh if it is possible to share with the Commission the disaster scenario performance
objectives memo that came out. Mr. Gresh agreed to send it to the Commission.
Commissioner Inge said what the MWMC will be able to accomplish is contingent upon pipes. If it
doesn’t get to us we can’t do anything. What is the interconnectivity between those two components?
Mr. Gresh replied that Infra Terra, a consultant that is on the Resiliency team, specializes in long linear
utilities such as pipelines for gas, power, etc. McMillan Jacobs is giving Infra Terra parameters on
movement and settlement of the soil and Infra Terra will plug those parameters into their programs and
be able to tell us the number of expected breaks in the system. In the gap analysis, we will be able to
make a determination if the MWMC should upgrade the pipes or just plan on an assumed number of
breaks occurring. One of the first tasks in restoring the flow would be to make sure you have crews and
repair materials for those types of pipes on hand to go out and restore your pipes. Commissioner Inge
asked what about the pipes the MWMC does not control. Mr. Gresh replied that is where
interdependency comes in. Springfield and Eugene are working on their backbone systems. How they
MWMC Meeting Minutes
September 14, 2018
Page 6 of 11
classify their backbone system is up to them but it will surely include getting the flow to the MWMC. Mr.
Gresh said one of the recommendations is to sit down with the Cities and find out where those critical
points are.
President Ruffier said we may consider a special work session in the future on Resiliency so we could get
a little further in the planning process and have a longer discussion. Mr. Stouder said definitely.
MWMC FY 2019-20 ASSET MANAGEMENT PLAN
John Huberd, Finance and Administrative Manager, stated staff just finished the first annual Asset
Management Plan (AMP) which was sent out in the packets. There are two outcomes the AMP supports:
1) maximum reliability and useful life of regional assets and infrastructure and 2) fiscal management that
is effective and efficient. Staff also developed some objectives that support the outcomes. They are to
provide services in a financially sustainable manner, taking a long-term 20-year approach to asset
management, and linking to other long-term financial planning efforts (annual budgets, CIP projects,
and rate modeling).
A Strategic Asset Management (SAM) Gap analysis was done early on by staff. The following gaps were
found:
Organization (fragmented between work groups)
Asset management skills (needed to be further developed by staff, best practices, software tools)
Information systems (Maximo software for asset management – some tools were underutilized)
Data and knowledge (30+ years of assets and the knowledge gathered over the years has varied)
Staff defined the Asset Management roles and responsibilities. A lot of staff is involved in asset
management and it requires a good information workflow and ongoing training.
Assets for MWMC are defined as having a purchase price greater or equal to $10,000 with a life greater
than one year. That equates to over 1,500 rows of assets in the asset registry, which breaks down to over
8,000 components in Maximo. Anything that needs a standing or preventative maintenance work order
gets put in Maximo. The estimated current replacement cost is $459 million. The AMP puts everything
into today’s dollars so we don’t have to adjust for inflation.
Staff is using the ISO 55000 Standard as the template for the AMP. The AMP is comprehensive and covers
the following: levels of service (LOS), future demand, asset management lifecycle, risk management,
financial summary, and an improvement plan. It also contains a continuing improvement segment and
a two-page Executive Summary.
President Ruffier asked if staff has thought about getting certified to ISO 55000. Mr. Huberd replied
there has not been much discussion on that subject.
Mr. Huberd gave an overview of each section in the AMP starting with the LOS section. He said funding
levels are sufficient to continue to provide the existing LOS in the medium term but more discussion on
LOS would help to inform the AMP as it is updated each year. He added the AMP breaks the LOS into two
sections - a community LOS and an organizational LOS. Determining the appropriate community LOS is
mainly the Commission’s role.
MWMC Meeting Minutes
September 14, 2018
Page 7 of 11
President Ruffier said he thinks it would be well warranted for the Commission to have that
conversation because LOS defined under Asset Management is a little different than Resiliency planning.
These LOS would have multiple components like regulatory requirements define certain LOS but there
may be other community aspects that are more discretionary in our consideration that the Commission
may want to discuss; having a more explicit overview of LOS would be helpful.
Commissioner Inge asked what “medium terms” means. Mr. Huberd replied it means the next 5-10
years.
Mr. Huberd, continuing with the AMP overview by section, stating the purpose of the Risk Management
section is to document risks associated with assets and planning for risk mitigation for unacceptable
risks. The Future Demand section looks at regulatory changes, population growth, service area changes,
inflow & infiltration, and commercial/industrial development. The Lifecycle Management section contains
an asset condition summary. Staff wants to be more systematic in asset condition reporting and
assessments. This section also has 20-year forecasts for operation and maintenance costs, equipment
replacement and major rehab, and for CIP projects. The Financial Summary shows that the MWMC has
done a good job on asset management – no deferred maintenance, no backlog of asset replacements,
and proceeding on a pay-as-you-go basis. Funding is adequate to meet current service levels. Financial
projections are based on best available data. However, asset data confidence needs to be improved.
Having better data on asset condition will give staff better information for estimated asset life which
affects the replacement schedules and better information on estimated asset replacement costs.
Mr. Huberd gave an update on the work done for the Asset Management project since April 2018:
Trained 35 staff on Maximo (different training for the different roles)
Asset data standard developed (metadata that defines the data required fields)
Asset condition reporting tools and software are being selected/ implemented (tools that work
well with I Pads and software that works with Maximo)
Asset registry data improvement underway (mountain of data being reviewed – estimate a
couple years of work)
Maximo Asset Cost roll-up features deployed (new feature)
Tools to import/export asset data (from/to Maximo/Excel)
Initial Asset Management Plan completed; and important milestone
Commissioner Farr asked about the two software programs that the Cities use. Mr. Huberd replied
Eugene’s Maximo is for asset management and Springfield’s Constructware is project management.
President Ruffier stated that there was a considerable investment in Maximo. He asked if there has been
any assessment if it is still the tool to use. Mr. Huberd replied that question comes up every couple of
years and yes, it is still the tool we want to use.
GOING FORWARD: There are currently 12 items listed in the Improvement Plan Section (page 25) of the
AMP. Priority items are implementing asset condition reporting, update asset remaining life, update
asset current replacement costs, continue investigating assets not captured in Asset Registry and
Maximo (such as the mid-voltage electrical cable), and to improve methodology and criteria for selection
of renewal/replacement assets. Mr. Huberd stated the AMP is a working plan for staff and is a great
MWMC Meeting Minutes
September 14, 2018
Page 8 of 11
communication device for the Commission. The updated AMP will be sent out to the Commission each
year as part of the budget development process.
DISCUSSION: Commissioner Inge asked if there is a way or a mechanism that will allow us to be more
precise in figuring out the asset’s life expectancy. Mr. Huberd replied there are so many different types
of assets that it depends on the asset. Some assets are just harder to predict how long they will last.
Commissioner Inge asked if we see any kind of consistency amongst assets such as certain ones that we
over estimate and others that we under estimate. Mr. Huberd said that is more a mechanical
maintenance question then a financial one. What he does see on the financial side is we plan to spend
more money on replacing the assets than what we actually spend. Mr. Breitenstein added that the closer
an asset is to the $10,000 cut-off the better we are at predicting its life expectancy because their lives are
shorter, we are doing it more often, and staff is more familiar with replacing those types of assets. Assets
that are closer to $200,000 are harder to predict.
Commissioner Inge said he isn’t asking staff to do anything; he is just concerned about the reliability of
the data. If we are using data as a factor in our decision making, then it seems that the closer that we can
get to a more accurate assessment the better our decision making will be. Mr. Huberd replied that as
with most financial models, there is a higher confidence level in the data for the first 5 years of the 20
year projections. This means we have reliable confidence in our asset planning for the next five years.
Commissioner Keeler said it is a great thing staff is doing on improving and optimizing the assets. He
asked, in regards to mitigating operational risks, has staff ever taken a comprehensive look at
redundancy itself to assess if we need to do more or less. Mr. Huberd replied staff has discussed the
criticality of assets and redundancy plays into that. As staff works on improving this data set and looks at
conditioning reporting, they are going to prioritize which assets they want to start with and criticality is
going to affect that prioritization.
President Ruffier stated some redundancy is specified on regulatory requirements but some
redundancy is discretionary. He would like to reduce discretionary redundancy because it is costly to
maintain additional systems.
President Ruffier noted that the plan addresses the future projections for providing LOS given growth in
the community. The growth projection was stated at 1% but the assumption was impacts of growth on
flows would be offset by continuing water conservation efforts. He is not sure about the assumption
about water conservation efforts; he thinks at some point they are going to hit their effectiveness. Mr.
Stouder replied that staff can analyze the trends over time and modify as needed. Mr. Huberd added
the other part of that calculation is the MWMC’s hydraulic capacity; how much cushion do we have.
President Ruffier stated the plan also said to develop an asset disposable plan. There may be some
policy implications for the Commission to consider in regards to disposal; whether to donate some to
non-profit or sell them at a loss to municipal entities. Mr. Huberd replied there are two parts to the asset
disposal; 1) is there a salvage value, and 2) is there a disposal cost. He said generally when the MWMC is
ready to dispose of an asset it is worn out, obsolete, and nobody wants to buy it for much money. He
stated the purchasing regulations also give guidelines on how assets can be disposed of.
MWMC Meeting Minutes
September 14, 2018
Page 9 of 11
Mr. Breitenstein recognized both John Huberd and James McClendon for doing a good job. They both took
a correspondence course and became certified in Advanced Asset Management and they put together a
good plan. Mr. Huberd added that it takes a lot of people to do advanced asset management.
Since the meeting was going long, Mr. Stouder checked with the Commission to see if they
preferred the next presentation be moved to another meeting. The preference was to hear the
presentation but Commissioner Farr would have to leave half way through it.
RECYCLED WATER DEMONSTRATION PROJECT UPDATE
Todd Miller, Environmental Management Analyst, stated the recycled water demonstration project is
one piece of Phase 3 of the three-phased Recycled Water and Thermal Load Implementation Study.
While the MWMC has been doing water recycling for a period of years, this project presents two exciting
firsts for the MWMC: 1) The first production of Class A recycled water (the highest quality recycled water
under Oregon rules); and 2) The first off-site uses of MWMC recycled water.
The key drivers for Class A recycled water demonstration, which were identified in the Phase 2 study in
2014, are the following:
Look at recycled water as a thermal load compliance strategy
Promote adoption by committed users long-term
Demonstrate consistent and reliable production of Class A recycled water
Demonstrate safe and effective use of recycled water to the public
Coordinated goals with water resource agency partners
The Recycled Water Demonstration Project proposes three key elements: 1) Class A disinfection at the
tertiary filter units; 2) Recycled water storage/distribution tank; and 3) Pump stations and metering to
points of use. The project needs disinfection of filtered water to Class A standards, a storage tank and
piping, a truck fill station, and metered distribution lines. These would be all on-site at the WPCF.
DEMONSTRATION PROJECT PLAN:
WPCF Landscape Demo: The first demonstration of Class A recycled water will be the landscape
irrigation at the WPCF. Currently 12.7 acres of the site is irrigated with potable water (EWEB drinking
water) and 15.3 acres with non-potable water (Class D). With Class A recycled water, the MWMC will be
able to irrigate those public accessible lands with recycled water and bring the plant up to 100%
recycled water use.
Street Tree Watering: A 500 gallon tank truck will fill at WPCF to water Eugene’s street trees. There are
watering bags on all the street trees that fully contain the water; up to 25 gallons applied per tree. Total
use per day will be approximately 2,500 gallons at locations throughout Eugene.
Industrial Aggregate Site Use - Delta Sand and Gravel and Knife River demo: This project needs a tie-in to
the West Bank Trail pipeline. The MWMC is responsible for getting the recycled water to Delta Sand and
Gravel and Knife River’s fence line and they would be responsible for doing all their own infrastructure,
and operations and maintenance of everything within their fence line. The target use of the recycled
water is for a wheel wash, vehicle wash, and tanker fill stations on their facilities. They are upgrading
their facilities right now and said it is a very apt time to adopt recycled water for these purposes. Their
projected use is approximately 100,000– 500,000 gallons per day, year around.
MWMC Meeting Minutes
September 14, 2018
Page 10 of 11
The permitting considerations are as follows: For land use the county/city has a Conditional Use Permit
(CUP) and the state has Land Use Compatibility Statement (LUCS). For recycled water use there are the
user agreements and use plan. The MWMC will have a new recycled water production/use that is not
under the current NPDES permit. There are a few options that staff has been exploring with the DEQ over
the years. As we move forward with the design concept, staff will sit down with the DEQ and discuss it
more concretely. A separate WPCF permit for the different points of use appears to be the best fit.
PROJECT ROLL OUT: Staff plans to finish conceptual design and cost estimation in October, amend
Kennedy/Jenks’ contract to fulfill full design and construction bid process in the winter, and go into full
design and construction bid process in early 2019. Optimistically we will get this built in 2019 but the
reality of that timeline is to be evaluated once the design process is finished.
President Ruffier asked if our timeline is consistent with Delta Sand and Gravel’s upgrades. Mr. Miller
replied yes, they should be doing their upgrades this summer. Staff is working on a system to get them
either recycled water or river water depending on where we are.
BUSINESS FROM COMMISSION, GENERAL MANAGER, AND WASTEWATER DIRECTOR
General Manager:
Goshen: Mr. Stouder and Mr. Breitenstein attended the Lane County Board of Commissioners
meeting on August 21. The Board received a report from Kennedy/Jenks Consultants on the costs to
complete the project regarding the large industrial site in Goshen. The Board of Commissioners gave
the County staff the go-ahead to move forward with the project and to start talking with the MWMC
staff about connecting Goshen’s wastewater to MWMC’s system. MWMC staff expects County staff to
reach out soon for further discussion and will inform the Commission as details emerge.
President Ruffier asked if the Commission needed to discuss policy regarding extraterritorial. Mr.
Stouder replied that the connection point would be the pipe line at McVey highway in Springfield. That
would be a line that the Commission owns, beyond that would be the County’s line. The County is aware
of the extraterritorial issue and they would have the policy discussion. President Ruffier said that
provision outside the service area is not allowed currently in the IGA. Mr. Stouder replied that the IGA
may or may not need to be amended; the service area would change. The County has talked to the State
about getting a special designation for the Goshen area.
South Town Rotary Presentation: Staff did a presentation at the end of August. Commissioner Meyer is
the president of South Town Rotary. It was a well-received presentation with lots of good questions.
Clean Water University is occurring September 26 and 27 at the treatment plant. More than 700
students are expected to attend from the Eugene, Springfield, and Bethel school districts.
ACWA Conference went well this year. There were a lot of good presentations, especially from the
federal level and legislation that is pending. There was an interesting presentation on climate and
impacts to climates. The message was that the country is going to be warming; Oregon and
Washington are going to warm the least in the next 30 years when compared to the rest of the
nation. The experts expect a significant amount of folks moving here. We saw that last year with 60-
70,000 people moving in. They expect 1.5 million people in the next 20-30 years coming to Oregon
and that will tax our water systems, transportation systems, recreational systems, etc.
Poplar Grilles: The poplar has been milled and made into grills for ceiling grates.
MWMC Meeting Minutes
September 14, 2018
Page 11 of 11
Wastewater Director:
NACWA Peak Performance Award: The MWMC received its 11th annual Peak Performance award from
the National Association of Clean Water Agencies for compliance with permit requirements and
producing clean water.
LRAPA has renewed the air contaminant discharge permit. Sharon Olson was in charge of
coordinating that.
Major Rehab Project: Commissioner Pishioneri had previously asked about replacing Springfield’s
pump station built-up roof with a metal roof. Staff went out for quotes and out of the ten
contractors they contacted, they received five quotes. Only one company would bid on a metal roof
because it would require additional engineering work and relocation work related to electrical and
ventilation systems. This increased the price quote to between $40,000 and $45,000. The four quotes
on the built-up roof ranged between $5,000 and $8,000, depending on which options staff picks.
Staff is going to move forward with a build-up roof and get that project completed this summer.
ADJOURNMENT
President Ruffier adjourned the meeting at 9:45 a.m.
Submitted by: Kevin Kraaz
______________________________________________________________________________
M E M O R A N D U M
DATE: October 4, 2018
TO: Metropolitan Wastewater Management Commission (MWMC)
FROM: Katherine Bishop, Environmental Services Program Manager
SUBJECT: MWMC Financial Plan Investments #5
ACTION
REQUESTED: Consider proposed minor revisions to the investment policy language
ISSUE
Based on earlier discussions regarding the 2005 MWMC Financial Plan, including input from the
Commission specific to policies and/or discussion in the Financial Plan, staff is proposing revisions to the
language to update key components of the financial policies.
BACKGROUND
Staff and the Commission have discussed specific policies and/or discussion text in the 2005 Financial
Plan over a series of meetings during the previous year. A summary of these discussions is provided
below for background and context.
At the December 8, 2017 meeting, staff and the Commission began discussions on the reserve policies,
including a review of the financial administration of the Regional Wastewater Program as directed
toward achieving the objectives required by Section 3.f of the MWMC Intergovernmental Agreement
(IGA).
In summary, the financial administration objectives include:
1. Establishing revenue adequacy to provide for long-term health and stability of the regional
sewerage facilities through a program of monthly sewer user charges, and system development
charges that are imposed uniformly throughout the service area to achieve full cost recovery
2. Fully funding a program of capital improvements to address capacity, regulatory, and
efficiency/effectiveness needs
3. Ensuring equity between newly connected and previously connected users for their total
contributions toward regional sewerage facilities
Memo: MWMC Financial Plan Investments #5
October 4, 2018
Page 2 of 3
4. Ensuring equity among various classes of users based on the volume, strength, and flow rate
characteristics of their discharges together with any other relevant factors
5. Ensuring efficient and cost-effective financial administration of the regional sewerage facilities
6. Complying with applicable laws and regulations including those governing the establishment of
user charges and the establishment of system development charges
At the December 8, 2017 meeting, staff and the Commission reviewed the reserve policies located on
page 12 of the MWMC Financial Plan including: F5a) Working Capital Reserve; F5d) Equipment
Replacement Reserve; and F5j) adding an Insurance Liability Reserve policy.
At the February 9, 2018 meeting, staff provided a chart displaying the flow of regional wastewater funds,
including: (1) sources of funding for reserve funds, (2) individual reserve funds by type, and (3) how each
of the funds and reserves relate to their intended purpose. The presentation included a discussion on
cash reserves in total and per each reserve fund, with input from the Commission.
At the June 8, 2018 meeting, staff provided additional details on reserve funds, incorporating policy
language input from the Commission on the recommended Reserve policy language changes, including:
F5a) Working Capital Reserve; F5b) Operating Reserve; F5c) Capital Reserve; F5d) Equipment
Replacement Reserve; and F5j) Insurance Liability Reserve policy addition.
At the July 13, 2018 meeting, based on discussion and input from the Commission, staff included
language changes to the Asset Management policy language, including policies A2 and A3 and the
discussion on page 18 of the 2005 MWMC Financial Plan.
DISCUSSION
Current Policy Review and Input – Staff will be discussing investment policies 11 and 12 with the
Commission at the October 12, 2018 meeting.
As part of the MWMC administration functions, the City of Springfield manages MWMC funds in
compliance with the Springfield Investment and Portfolio Policies, as updated and amended from time
to time. Investment polices 11 and 12 are located on page 14 of of the Financial Plan document and as
Attachment 1 to this memo. Proposed revisions are outlined below, with strikethrough representing
deletions and underline representing additions:
Policy 11) Cash on hand that is not invested is kept in a local bank. Because the
balance is usually in excess of the FDIC insured amount of $100,000 $250,000, the
bank must participate in the Oregon Certificate of Participation Collateral Pool. This
protects depositors from loss in the event of bank failure.
Policy 12) MWMC funds are invested based on the following criteria: Safety,
Diversity, Legality, Liquidity, Diversity, and Yield. For purposes of investing, MWMC
and Springfield funds are co-mingled, but yet tracked separately.
The Investment and Portfolio Policies in Appendix IV beginning on page 45, have been updated by the
City of Springfield Finance Director, who also serves as the MWMC Chief Financial Officer. When the
Memo: MWMC Financial Plan Investments #5
October 4, 2018
Page 3 of 3
proposed updated Investment Policies are finalized, the policy document would then be incorporated
into the MWMC Financial Plan under Appendix IV.
Planned Future Policy Review/Next Steps – At the next Commission meeting, staff will discuss the Sewer
User Rates and SDCs policies, located on pages 16-17 of the Financial Plan document, for review and
Commission input. Upon completion of recommended changes to those policies, staff anticipates a
proposed review of all recommended amendments by the MWMC’s Financial Advisor. The estimated
completion date for the updated 2019 Financial Plan is currently February 2019.
ACTION REQUESTED
Consider the proposed minor revisions to policy language, including Investment Policies 11 and 12 on
page 14 of the Financial Plan document, and provide staff with direction to accept or amend proposed
policy language.
ATTACHMENT
1. 2005 Financial Plan – Investment Policies 11 and 12
ATTACHMENT 1
______________________________________________________________________________
M E M O R A N D U M
DATE: October 4, 2018
TO: Metropolitan Wastewater Management Commission (MWMC)
FROM: Meg Allocco, MWMC Accountant
SUBJECT: FY 2017-18 Annual Financial Summary, Budget Reconciliation
ACTION
REQUESTED: Information only
ISSUE
This memo presents the results of the FY 2017-18 Operating and Capital budgets from two perspectives:
(1) a comparison between actual results and the FY 2017-18 budget, and (2) a comparison of actual
results and the FY 2017-18 year-end estimates used during the FY 2018-19 budget and rate
development process.
DISCUSSION
Results of Operations:
It is important to compare budget and actual results to ensure that legally authorized expenditure levels
are not exceeded, as well as to evaluate overall budgeting accuracy. “Budget to Actual” results are
detailed in the regular MWMC monthly report for June 30, 2018 (Attachments 1 and 2 to this
memorandum). The results are summarized in Table 1 on Page 2.
The difference between budgeted and actual operating revenues reflects the following factors.
Operating revenue exceeded budget by $1,271,403 or 3.6%. This was driven mainly by a combination of
septage fees ($312K) and monthly user fees ($504K) exceeding budget and also items such as FEMA
reimbursement ($53K) not budgeted, interest income over performing budget, and other miscellaneous
receipts.
Actual user fees were $504,929 (1.6%) more than originally budgeted. A big portion of this was due to
the temporary direct discharge from International Paper (IP) related to the March 2018 event. For that
case, IP was billed a onetime charge of $130K.
Memo: FY 2017-18 Annual Financial Summary, Budget Reconciliation
October 4, 2018
Page 2 of 4
Operating expenses came in under budget by 5.3% for Eugene and Springfield combined.
The Springfield savings were $441,168 comprised of 99% materials and services, with the most
significant areas of savings in contractual services, litigation/attorney fees, insurance premiums and
computer software. These items comprised 82% of the Springfield savings. Personnel costs were under
budget by 1%, making up an insignificant portion of the savings.
In Eugene savings were $1,312,959. Personnel costs came in 3.7% ($331,500) less than budgeted due
mainly to turnover and holding positions vacant during the hiring process.
The variance in Eugene’s materials and services (M&S) was driven by a number of factors. Temporary
employment services were not used to fill in for vacant positions to the extent they have been in prior
years, which resulted in the budgeted amount being underspent by $56,000. Work was not completed
on a one-time upgrade and improvement to the distributed control systems ($429,000) and the upgrade
was re-budgeted in FY 2018-19.
Spending on tools, minor equipment, materials and parts were $148,500 less than budget, and
equipment maintenance spending was $148,000 less than budget. Utility costs were $167,000 higher
than budget due to extended down-time of the power co-generation equipment related to the
construction of the 4th digester. Additionally, indirect costs are a percentage of personnel and M&S, so
the indirect costs were lower ($104,031) in proportion to the items listed above.
Table 1 – FY 2017-18 Budget-to-Actual Comparison
The Capital Revenue is slightly over budget (5%) almost entirely due to a conservative interest income
budget. The interest rates have almost doubled since last fiscal year and capital has not been spent
down as quickly as staff projected. Capital expenditures as a whole commonly come in below budget
Budget Actual Variance % over/under
Operating Revenue $34,956,960 $36,228,363 $1,271,403 3.6%
Beginning Cash 90,633,206 90,633,206 - 0.0%
Capital Revenue (excludes SDC's)15,215,450 16,007,314 791,864 5.2%
SDC Revenue 1,430,000 2,327,285 897,285 62.7%
Total Revenue $142,235,616 $145,196,168 $2,960,552 2.1%
Operating Expenditures $33,274,122 $31,519,995 $1,754,127 5.3%
Capital Expenditures 44,007,388 22,699,046 $21,308,342 48.4%
Debt Service 5,458,032 5,458,007 $25 0.0%
Reserves 59,496,074 85,519,120 ($26,023,046) -43.7%
Total Expenditures & Reserves $142,235,616 $145,196,168 $2,960,552 2.1%
Memo: FY 2017-18 Annual Financial Summary, Budget Reconciliation
October 4, 2018
Page 3 of 4
because the projects are budgeted at their full cost in order to award contracts, regardless of overall
length of construction.
The capital expenditures that were budgeted, but not yet expended also directly reflect in the reserves
ending higher than budgeted. While these reserves are present as of the end of the year, they are re-
programmed in FY 2018-19 for those same capital projects.
FY 2018-19 Supplemental Budget Adjustments:
Actual amounts often differ from estimates used during the budget process, principally because the
budget development process takes place mid-year. Consequently, estimates for the future year are
based on approximately six months’ actual experience. As a result, certain adjustments are generally
necessary at the beginning of a new fiscal year in order to reconcile actual prior year ending balances
with budgeted beginning balances for the subsequent year. These adjustments were discussed with the
Commission at the September meeting (Supplement Budget #1 request). The following summaries
show the difference between estimated (mid-year) and actual amounts for the major components of the
Regional Wastewater Program FY 2017-18 Budget.
Operating Fund - The Operating Reserve adjustments, displayed below in Table 2, outline what makes
up the change to beginning cash for the current budget year, and how much was re-budgeted in FY
2018-19. The remainder of the beginning cash adjustment not re-programmed will be returned to
reserves resulting in an increase of $847,911.
Table 2 – Operating Fund – Estimated vs. Actual
Adjustments to FY 2018-19 Operating budget:
User fee revenues above estimates 4,929$
Operating expenditures under estimates 1,028,737
Septage revenue above estimates 288,306
Administrative expenditures under estimates 158,940
Miscellaneous revenue above estimates 301,144
Beginning cash adjustment for FY 2018-19 1,782,056
Supplemental budget - Tiny home pickups (100,000)
Supplemental budget - Constructware (37,750)
Supplemental budget - Eugene operations (46,700)
Increase Insurance reserve (985,000)
Reduce SDC Loan reserve 235,305
Net increase to reserves with SB1 847,911$
Memo: FY 2017-18 Annual Financial Summary, Budget Reconciliation
October 4, 2018
Page 4 of 4
Capital Fund:
The Capital reserve adjustments displayed below in Table 3 outline what made up the change to
beginning cash for the current budget year, how much was re-budgeted in FY 2018-19, and new money
requests in SB1. The amount over and above the beginning cash adjustment will reduce reserves
resulting in a decrease of $4,830,453.
Table 3 – Capital Funds – Estimated vs. Actual
ACTION REQUESTED
This is informational only, no action is requested.
ATTACHMENTS
1. MWMC Statement of Revenues and Expenses
2. MWMC Comparison and reserve charts
Adjustments to FY 2018-19 Capital budget:
Capital projects not spent 3,171,589$
Eugene capital not spent 538,300
Major rehab not carried forward 19
Capital projects returned to reserve - not carried forward 1,822
Major capital outlay returned to reserve 259,739
Equipment replacement returned to reserve 57,576
SDC Revenues above estimates 397,285
Interest income above estimates 365,042
Miscellaneous income below estimates (521)
Merchant fees under estimates 3,470
Brown Lane not included in estimated actuals (890,000)
Beginning cash adjustment for FY 2018-19 3,904,321
Supplemental budget - Capital project carryforwards (3,171,589)
Supplemental budget - capital outlay (15,000)
Supplemental budget - Major rehab (288,300)
Supplemental budget - Equipment replacement (235,000)
Supplemental budget - SRF Loan payoffs (5,019,885)
Supplemental budget - remove 412 interest income (5,000)
Net decrease to capital reserves with SB1 (4,830,453)$
Statement of Revenues and Expenses
REVENUES Budget Current YTD % YTD Budget
OPERATIONS:
User fees, Septage & lease income 32,525,500$ 5,527,226$ 33,347,068$ 103%
Miscellaneous & internal engineering 2,331,460 191,901 2,718,565 117%
Interest income 100,000 (7,335) 162,729 163%
Beginning cash-operations 14,812,787 - 14,812,787
Total operating revenue 49,769,747 5,711,792 51,041,149
CAPITAL:
Capital and ER support from user fees 14,850,000 - 14,850,000 100%
SDC Revenues 1,430,000 661,904 2,327,285 163%
Interest income 358,300 (40,894) 1,151,042 321%
Misc Revenue 7,150 265 6,272 88%
Beginning cash - capital 75,820,419 - 75,820,419
Total capital revenue 92,465,869 621,274 94,155,018
Total revenue 142,235,616$ 6,333,066$ 145,196,168$
EXPENDITURES Budget Current YTD
OPERATIONS:
Administration - Springfield 3,937,900$ 284,753$ 3,496,732$ 89%
O&M - Eugene 14,486,222 2,068,178 13,173,263 91%
Capital and ER contribution 14,850,000 - 14,850,000 100%
Total operating expenditures 33,274,122 2,352,931 31,519,995
CAPITAL:
Capital projects 39,256,893 4,510,008 18,807,654 48%
Eugene equipment replacement 715,000 22,564 422,424 59%
Eugene major rehab.2,010,145 293,759 1,447,088 72%
Other Capital Items - SDC 4,000 31 530 13%
Interfund transfers 2,021,350 - 2,021,350 100%
Total capital expenditures 44,007,388 4,826,362 22,699,046
DEBT SERVICE 5,458,032 - 5,458,007
RESERVES 59,496,074 (846,227) 85,519,120
TOTAL EXPENDITURES & RESERVES 142,235,616$ 6,333,066$ 145,196,168$
METROPOLITAN WASTEWATER MANAGEMENT COMMISSION
STATEMENT OF REVENUES AND EXPENSES
For the Month Ending June 30, 2018 - FINAL
ATACHMENT 1
Schedule of Cash Reserves
Budget vs. Actual Revenues and Expenditures
-
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
80,000,000
90,000,000
Budgeted EOY 6/30/2018
Improvement SDC reserve
Reimbursement SDC
reserve
Equipment replacement
reserve
Capital reserve
Rate stability reserve
Rate stabilization reserve
Insurance reserve
SRF Loan reserve
Springfield working capital
Eugene working capital
Operating
RESERVES
FY 2017-18
ATTACHMENT 2