I won’t be able to be at the Workshop on Tuesday. Here are some of my questions. I hope I get answers.
Questions for CCSD Board Regarding Budget and Rates
Thank you for the opportunity to ask the following questions. I will be looking for the answers on your FQAs.
Charlotte Darehshori
1. Lobbyists: Did you cancel the contract with the lobbyist, D. B. Neish? If so when? You said at an earlier board meeting that you would continue using lobbyist. Are any fees for lobbyist included in the current proposed budget?
2. Build out Reduction. RBF Consulting’s Study for Part III, was estimated at $106,420. What did parts I and II cost and how much of Part III’s $106,420 has been funded. Is any of the $106,410 included in the proposed budget?
3. The proposed budget shows $48,000 for BRP for FY 2008/2009. So is the land conservancy still purchasing lots for the build out reduction whose final cost is proposed to be $39,000,000? As this is the mitigation for the desal and the tests are budgeted on the CIP, aren’t you going forward with a water source which Mr. Sanders calls the 800 pound gorilla?
4. The 2007/2008 Project Priority List for State Revolving Fund Loan Program shows Project Number 4744-110 for Cambria Community Service District Project Description Biosolids & Nitrate Removal Project of estimated funding of $1,256,000 for 2009. Is this in addition to the amount shown on the WW capital improvement program and proposed note?
5. Proposed Note for Water and WW Do you have a commitment letter for the proposed note? What are the terms of the note? Did you pay any funds to any person or parties to obtain this loan? Why did you choose to go with a note rather than a bond? What is the payback period? The Capital Improvement Program states, “Prior year expenditures, $3,200,000.00. Isn’t it misleading to include project description of CIP projects which for the most part have already been completed? The Financing plan does not clearly set forth what reserves are required, nor what fees are to be paid out of the proceeds. Or is the note for more and you are netting out the gross proceeds.
6. Capital Expenditures Geotech Investigation for the Desal Have you updated the costs associated with the Desal project? In reviewing the Conditions of Approval, Phase I, Phase II, Phase III, covering the installation of the wells, geophysical exploration, temporary equipment access, ramps, Costs of the environmental monitor, Permitting, Signage, Cable laying Divers, Support Vessels, Survey vessels, marine mammal monitor and marine wildlife, a meter archaeological control unit and archaeological excavations and qualified archaeologist etc. etc. What is the age of the bids given of $720,000 and $600,000, and does it cover all the items as set forth on the document of Approval?
7. Chevron Settlement for Water Contamination: Isn’t it inappropriate to transfer funds from the enterprise funds to the governmental funds? The Chevron settlement was negotiated as follows: $1,520,710.00 for note charged to Water for SR4 well construction. Reimburse Water Dept for direct expense related to contamination 1,231,319.00. Weren’t all the funds put in the General Fund and when the note was paid back it was paid by the water fund and that is why there are no enterprise reserves?
8. Projects: SCADA – The budget calls for further expenditures of $253,000 for water and $168,000 for WW. Described as Repair and Rehab. As of your 2-27-08 Agenda, V.A.1, ““All of the SCADA equipment is now at CyberNet. CyberNet has completed all the installation and testing. We have not received shipment of our equipment and will be picking it up ourselves to save on shipping and made sure it arrives not damaged like so much of the sensitive equipment we receive these days.” How much money has been spent on this project? What was the original bid? Why is there a need for rehab and repair when it is supposedly still at CyberNet? Will it too, be antiquated by the time it is up and running?
9. The new Board agenda program. What was the cost? Is it up and running? If not when will it be operational?
10. Proposed funds for financial software? Are there any funds proposed to get the districts financial reporting needs under control and up and running? When will you be able to issue current financial statements (not budgets) but real and current statements which most entities can issue and do issue monthly?
11. Personnel Costs. Union Contract upcoming as of 6-30-08? Will this contract be pegged to the service union’s contract? What will be the budget impact? Will it have the 4% COLA, +longevity and +merit increases as the service contract? Will it continue to pay benefits into retirement for medical, dental, life for retired employees and families? What are the current costs for retired employees’ medical and retirement benefits?
12. New Reporting Requirement. What will be the budget impact of the new regulation requiring the setting forth of the liability for non-retirement related benefits, such as medical benefits? Isn’t this a new unfunded liability added to the district’s balance sheet, along with compensated balances and retirement?
13. New Interest Income: On the Water Fund YE/09 proposed and YE09/10 you show interest income on note of $79,500 and $91,500, respectively. Please describe the note and its terms and for what purpose did we make a loan and to whom?
14. Allocated Costs: Shouldn’t the governmental funds be charged a portion of the storage tanks since the larger tanks, as well as large capacity fire pumps are for firefighting? Why should water and WW be charged the full costs of these safety expenditures?
Last 5 posts by charlotte
- No Water, No Development
- Sanders Viewpoint, June5
- May 22 Budget Hearing
- Salaries and Benefits and Public Safety
- A Cautionary Tale
Charlotte, thanks for the excellent questions about the proposed CCSD budget.
Here’s a memo I sent to CCSD yesterday about Capital Improvements.
DATE: 12 May 2008
TO: The Board of Directors and the General Manager of the Cambria Community
Services District @cambriacsd.org
SUBJECT: Draft of the CCSD Budget for Fiscal Years 2008-2009 and 2009-2010
Capital Improvement Programs.
1. In the table for Water the first project described is Pine Knolls Storage Tank Placement, including a needed $3,517,000 ($3,300,000 by 6/30/08, $112,000 for FY 2008-09, and $ 205,000 for FY 2009-10).
According to the CCSD website description of the Pine Knolls Water Storage Tanks, as of January 15, 2008, “Both Pine Knolls water storage tanks are now in service. There are some minor electrical, fencing, and other projects left to complete. Depending on the weather situation, the project should be completely finished by mid-February.”
Since the tanks are now in service, why is $3,517,000 still needed for this project?
2. In the table for Wastewater, the only capital improvement project listed is Bio-solids Dewatering. The cost given here is $ 875,000 by 6/30/08 and $ 326,000 needed for fiscal year 2008-09 for a total of $1,201,000.
In your meeting on Nov. 21, 2005, Bryan Bode reported that with CCSD wastewater staff doing most of the work, the contract for the bio-solids dewatering would need $ 750,000 in FY 2005-06 and $ 200,000 in 2006-07.
Since the project is now near completion, why is $ 1,201,000 still needed?
3. The four capital improvement projects listed in the Draft of the FY 2008-09 and FY2009-10 budget total $8,148,000. In the Operating and Capital Outlay Budget for the Water Fund/Department and for the Wastewater Fund/Department this is exactly the amount of a note to be issued on 12/01/08 at an interest rate presumed to be 4.25%.
4. The Pine Knolls tanks are in service. The Bio-solids Dewatering project nears completion. So why does CCSD need to borrow $4,075,000 for them in the current Fiscal Year, 2007-2008?
5. Subtracting this $4,075,000 from $8,148,000 shows that $3,221,000 is posited in the fiscal years 2008-09 and 2009-10 to cover costs in those years for all four capital improvement projects. (I do not mean to imply that I agree with the costs listed for Pine Knolls and Bio-solids for those years. No reason is given for those projected expenditures.)
Borrowing this amount at 4.5% interest would reduce the new debt service in FY2009-10 in the Water Fund from $567,853 to $154,350 and from $96,641 in the Wastewater Fund to $14,670.
6. In the Capital Improvement Program Financing Plan the Debt Issuance Proceeds figures do not quite agree with the figures given for a note to be borrowed on 12/01/08. What is the source of the “Debt Issuance Proceeds” in this plan?
I look forward to the workshop tomorrow for conversation about this and other aspects of the budget drafted for FY 2008-09 and FY 2009-10.
At last night’s meeting, I provided question #5 for Tammy and Allan to answer. Here is their response: Do you have a commitment letter for the proposed note? No. What are the terms of the note? Undetermined at this time. Likely better than the rate on a bond. Did you pay any funds to any person or parties to obtain this loan? No, except for the cost of one long distance call. Why did you choose to go with a note rather than a bond? The note would have no costs associated with getting it. A bond has about $400,000 in fees. What is the payback period? Tentatively, 20 years. But could change since they are just in the research phase. The Capital Improvement Program states, “Prior year expenditures, $3,200,000.00. Isn’t it misleading to include project description of CIP projects which for the most part have already been completed? They claimed that including this was more transparent than the way they used to identify the CIP and outlay. (I didn’t really understand this part of the answer, to be truthful.) The Financing plan does not clearly set forth what reserves are required, nor what fees are to be paid out of the proceeds. There would be no fees on the note, if they use the source they have talked to.
The issue of the SCADA was also addressed, sort of. They didn’t indicate what the original bid is. But they explained that Cybernet came and analyzed the whole system to see what was working and what wasn’t. They found some problems, so took some equipment back to their place to calibrate and fix problems areas. Some of the software has to be tweaked also. The unique nature of the Cambria Topography means that the system has to be customized, according to Brian Bode. Getting the equipment back in service has taken a backseat to other priorities of the district.
I didn’t get a chance to ask the other questions, but we may get some more answers as the rates and budget processes move forward.