May 21, 2024 Minutes

Upper Thompson Sanitation District
Regular Meeting of the Board of Directors
District Administrative Conference Room

Pursuant to C.R.S., §32-1-903, notice is hereby given to the members of the Upper Thompson Sanitation District Board of Directors and to the general public that the Board will hold its regular meeting, which is open to the public, at 4:00 p.m. on Tuesday, May 21, 2024, at the Upper Thompson Sanitation District Administrative Office, 2196 Mall Road, Estes Park, CO, 80517. Individuals who wish to address the Board via public participation may do so “in-person,” via telephone, or virtually through online participation, facilitated by the Microsoft Teams platform. Members of the public wishing to join the meeting via online or telephone participation, please email a request for the meeting link or telephone number to Ms. Gina Moore, Secretary to the Board, at gina@utsd.org by 2:00 p.m. on May 21, 2024.

Agenda

1. Call to Order.
2. Pledge of Allegiance.
3. Roll Call, Absences Excused.
4. Next Meeting Date: Regular Board Meeting, June 18, 2024.
5. Agenda: Correction and Approval.
6. Disclosure of Potential Conflicts of Interest.
7. Public Forum: An opportunity for presentation by the public to provide information to the Board of Directors on any non-agenda item. Note: The Board cannot take any action on non-agenda items but may direct staff to include the item on a future agenda.
   Public Comment on Agenda Items: Public comments will be heard by the Board at the conclusion of the presentation of the agenda item. Persons addressing the Board shall first be recognized by the District Manager or Board Chairman and may speak only one time per agenda item. Speakers shall state their name and address for the official minutes, address comments to the Board as a Body, and shall be allotted three (3) minutes for public comment. All public commentary must be made at the podium or offered virtually via Teams Chat.
8. Minutes: Correction and Approval: Special Board Meeting, Tuesday, April 11, 2024.
   Regular Board Meeting, Tuesday, April 16, 2024.
9. New Business and Special Orders:
   • Review of the Loan Agreement and Term Sheet Between United States Environmental Protection Agency
     WIFIA Program and Upper Thompson Sanitation District for the Water Reclamation Facility and Lift Station Improvements Project – presented by Ms. Kim Crawford, Attorney, Butler Snow, LLP.
   • Consideration for Adoption: Resolution No. 2024-05-01 – A Resolution Approving a Loan from the United States Environmental Protection Agency, WIFIA Program – presented by Ms. Kim Crawford, Attorney, Butler Snow, LLP.
   • Update: Phase II - Design of the Water Reclamation Facility (WRF) and Lift Station Improvements Project – presented by Mr. Ravel, P.E., Water/Wastewater Project Manager, Merrick & Company.
   • Request for Approval: WRF and Lift Station Improvements Project, Merrick & Company, Application for Payment No. 23, Dated April 18, 2024 – presented by Ms. Moore.
   • Request for Approval: WRF and Lift Station Improvements Project, Merrick & Company, Application for Payment No. 24, Dated May 15, 2024 – presented by Ms. Moore.
10. Reports of Officers, Committees, and Staff: Questions, Comments, Correction and Approval:
    • Treasurer’s Report.
    • Plant Report.
    • System Development Fee Allocation and Connection Report.
    • Collection System Report.
    • Operations Manager’s Report.
    • Assistant District Manager’s Report.
    • District Manager’s Report.
11. Adjournment.

Upper Thompson Sanitation District (District) prohibits discrimination against its customers, employees, and applicants for employment on the basis of race (including traits historically associated with race, such as hair texture and length, protective hairstyles), color, ethnic or national origin, ancestry, age, disability, sex, gender, sexual orientation, gender identity and expression, religion, creed, political beliefs, marital status, familial or parental status in employment or in any program or activity conducted by the District. The District will make reasonable accommodations for qualified individuals with known disabilities. If any person has a disability and requires a reasonable accommodation to fully participate in this event, please contact District Manager, Mr. Chris Bieker, three days before the event via email at chris@utsd.org, or telephone at 970.586.4544, or dial 711 to connect with Relay Colorado.

Minutes

Record of Proceedings 

Minutes Of A Regular Meeting Of The Board of Directors Of 
Upper Thompson Sanitation District 
Held: May 21, 2024, at 4:00 p.m., at the 
District Office, 2196 Mall Road, Estes Park, Colorado 

Call to Order 

A regular meeting of the Board of Directors of the Upper Thompson Sanitation District, Estes Park, Colorado, was called to order at 4:02 p.m. and held as shown above and in accordance with the applicable statutes of the State of Colorado with the following Directors present and acting: 

Pledge of Allegiance 

The Pledge of Allegiance was recited. 

Attendance 

Board of Directors: 
Christopher Eshelman, Chairman 
Susan Doylen, Vice-Chairman/Secretary 
Stanley Gengler, Treasurer 
Jack Reed, Assistant Treasurer/Secretary 
Kent Bosch, Assistant Treasurer/Secretary 

Staff: 
Chris Bieker, District Manager 
Suzanne Jurgens, Assistant District Manager 
Gina Moore, Financial Officer 
Matt Allen, Operations Manager 
Nathanael Romig, Collection Superintendent 
Henry Newhouse, Plant Superintendent Uoined via web conference call) 
Sheryl Panzer, Customer Accounts Manager Uoined via web conference call) 
Naomi McCracken, Secretary Uoined via web conference call) 

Guests: 
Kim Crawford, Attorney, Butler Snow LLP Uoined via web conference call) 
Mattie Prodanovic, Senior Vice President/Investment Banker, Hilltop Securities Uoined via web conference call) 
Jason Simmons, Senior Managing Director/Regional Head of Investment Banking, Hilltop Securities Uoined vial web conference call) 
Steve Ravel, P.E., Water/Wastewater Project Manager, Merrick & Company 
John Kuosman, Water/Wastewater Division Leader, Merrick & Company Uoined via web conference call) 

Next Meeting Date 

A regular meeting of the Board of Directors will be held on June 18, 2024, at 4:00 p.m. 

Approval of Agenda 

The Board considered the Agenda. 

It was moved by Ms. Doylen and seconded by Mr. Bosch to approve the Agenda as presented. Motion carried unanimously. 

Disclosure of Potential Conflicts of Interest 

Disclosure of potential conflicts of interest is a topic of discussion at every Board meeting to address potential conflicts of interest that may arise as new agenda items are introduced. District Directors who have disclosed potential conflicts of interest can vote as issues arise. 

Public Forum 

Mr. Eshelman opened the meeting for public comment. 

Mr. Eshelman explained the Public Forum is an opportunity for presentation by the public to provide information to the Board of Directors on any non-agenda item. He further explained the Board cannot take action on non-agenda items but may direct staff to include the item on a future agenda. 

Regarding public comment on Agenda Items, Mr. Eshelman provided the following statement: 

Public comments will be heard by the Board at the conclusion of the presentation of the agenda item. Persons addressing the Board shall first be recognized by the District Manager or Board Chairman and may speak only one time per agenda item. Speakers shall stand at the podium, state their name and address for the official minutes, address comments to the Board as a Body, and shall be allotted three (3) minutes for public comment.

One member of the public joined the meeting. 

In attendance via web conference call was Ms. Rebecca Urquhart, of 1955 Homestead Lane, Estes Park. Ms. Urquhart indicated she was observing the meeting on behalf of the League of Women Voters. Ms. Urquhart did not offer comment on a non-agenda item. 

Approve Minutes from Prior Meetings 

The Board reviewed and discussed the Minutes of the April 11, 2024, Special Board Meeting and the April 16, 2024, Regular Board Meeting. 

It was moved by Ms. Doylen and seconded by Mr. Gengler to approve the Minutes of the April 11, 2024, Special Board Meeting as presented. Motion carried unanimously. 

It was moved by Ms. Doylen and seconded by Mr. Bosch to approve the Minutes of the April 16, 2024, Regular Board Meeting as presented. Motion carried unanimously. 

New Business and Special Orders 

Review of the Loan Agreement and Term Sheet Between United States Environmental Protection Agency Water Infrastructure Finance and Innovation Act (WIFIA) Program and Upper Thompson Sanitation District for the Water Reclamation Facility (WRF) and Lift Station Improvements Project- presented by Ms. Kim Crawford, Attorney, Butler Snow, LLP: 

Ms. Crawford presented to the Board the Loan Agreement (Agreement) and WIFIA Loan Specific Terms (Term Sheet) between United States Environmental Protection Agency WIFIA Program and Upper Thompson Sanitation District, for the WRF and Lift Station Improvements Project (Project). 

Ms. Crawford highlighted the disbursement conditions and requisition procedures detailed in the Agreement. Ms. Crawford stated the term of the loan is 35 years from the effective date. Repayments for the loan will be twice annually for interest and once annually for principal. Ms. Crawford explained that the WIFIA loan amount cannot exceed 80% of total Project costs and the District is in compliance with this requirement. 

Ms. Crawford noted Project contractors must comply with federal requirements such as The Davis­Bacon Act and The American Iron and Steel (AIS) provisions. Mr. Ravel added that the District was granted a Build America Buy America Act (BABA) waiver due to the Project planning and design starting prior to May 14, 2022, the effective date of BABA requirements. 

Ms. Crawford explained that the WIFIA loan and Colorado Water Resources and Power Development Authority (CWRPDA) loan are parity debt obligations. Ms. Crawford elaborated stating remaining net revenue, after operation and maintenance expenses are paid, is pledged in an equal split to each loan. 

Ms. Crawford provided an overview of covenants and accounting and audit procedures listed in Article V of the Agreement and events of default and remedies described in Article VI of the Agreement. 

Ms. Crawford answered questions of the Board regarding the ability to change wording in the Agreement and the likelihood of WIFA selling the loan to a bank. Ms. Crawford said in the event WIFA did sell the loan, all terms would remain the same. She indicated that WIFIA selling the loan would be unlikely. 

Ms. Crawford and the Board reviewed and discussed the fees detailed in Section 10 and Schedule I, Part F, of the Agreement, including a servicing set-up fee, construction period servicing fee, initial construction period servicing fee and an annual operating period servicing fee of $9,220. 

Ms. Crawford then provided an overview of Schedule I, WIFIA Loan Specific Terms. Ms. Crawford highlighted that the Project substantial completion date in the Agreement is April 30, 2027; however, if necessary, may be adjusted. Ms. Crawford reported the maximum principal loan amount is $96,386,500, which excludes capitalized interest. The capitalized interest payment period is the period from the first disbursement to the date that is six months prior to the debt service payment commencement date. Ms. Crawford explained at the end of the capitalized interest period, the loan will be re-amortized to include the initial principal loan amount of $96,386,500 plus the accrued capitalized interest, increasing the total principal amount of the loan. Interest payment dates will be twice annually on January 1 and July 1, beginning on January 1, 2031. Ms. Crawford noted that if the District elects to prepay the loan it must be in $500,000 increments paid on either January 1 or July 1. Ms. Crawford stated the final maturity date of the WIFIA Loan is the earliest of July 1, 2061, the date on which the maturity of the WIFIA Loan has been accelerated, or subject to mandatory redemption or prepayment. 

In no event shall the final maturity date extend beyond 40 years from the effective date. 

Ms. Crawford then highlighted system funds and accounts the District is required to establish and/or maintain pursuant to the WIFIA Loan Agreement including Income Fund, Senior Obligations Debt Service Fund, WIFIA Debt Service Reserve Account and Operating Reserve Account. Ms. Crawford noted the Income Fund is the account holding deposits of gross pledged revenues. Ms. Crawford explained that the Senior Obligations Debt Service Fund is for the purpose of setting aside monthly loan principal and interest amounts due each year. Ms. Crawford stated the WIFIA Debt Service Reserve Account is funded pro-rata over a five-year period beginning with the substantial completion date (April 30, 2027) and each anniversary of the substantial completion date. The Operating Reserve Account is equal to 6 months of the District's operation and maintenance expenses. Ms. Prodanovic added that this Operating Reserve Account is built into the pro-forma model that Hilltop Securities, Inc. has developed for the District. 

At 4:46 p.m., Mr. Simmons joined the meeting and Ms. Prodanovic excused herself from the remainder of the meeting. 

Ms. Crawford then concluded her review of the Agreement by summarizing the flow of funds, Project details including the budget and construction schedule, borrower, litigation and environmental disclosures, requisition procedures, and reporting requirements. 

The Board thanked Ms. Crawford for presenting the Agreement and Term Sheet between United States Environmental Protection Agency WIFIA Program and Upper Thompson Sanitation District. 

Mr. Eshelman asked Mr. Simmons the status of the final investment grade credit rating from Standard & Poor's (S&P). Mr. Simmons stated that he anticipates the final rating from S&P before the WIFIA closing date. 

Consideration for Adoption: Resolution No. 2024-05-01 - A Resolution Approving a Loan from the United States Environmental Protection Agency WIFA Program - presented by Ms. Kim Crawford, Attorney, Butler Snow, LLP: 

Ms. Crawford presented to the Board Resolution No. 2024-05-01, A Resolution Approving a Loan from the United States Environmental Protection Agency, an agency of the United States of America, acting by and through the administrator of the Environmental Protection Agency (the USEPA) in the approximate aggregate principal amount not to exceed $96,386,500, Authorizing the form and execution of the loan agreement and promissory note to evidence such loan; Authorizing the construction of the Project; And prescribing other details in connection therewith. 

Ms. Crawford highlighted Section 5, "Delegation" of Resolution No. 2024-05-01 (Resolution) stating that the Board Chairman, District Manager, and Finance Director have the independent authority to make determinations relating to the WIFIA loan interest rate, principal amount, dates on which the principal and interest are paid, and the amount of capitalized interest or reserve funds for the WIFIA loan. Ms. Crawford emphasized that the interest rate on the WIFIA loan shall not exceed 5.50%, the original authorized principal amount shall not exceed $96,386,500, the maximum annual repayment cost shall not exceed $13,200,000 and the total repayment cost shall not exceed $289,000,000. The final maturity of the WIFIA loan shall not extend for longer than 40 years from the effective date. Ms. Crawford stated that this delegation is effective for one year after the adoption of this Resolution. 

Ms. Crawford noted that pursuant to the Loan Agreement, Mr. Eshelman, Mr. Bieker, and Ms. Jurgens are each designated as an Authorized Officer for the purpose of performing any act or executing any document relating to the Loan, the District, the Note, or the Loan Agreement. 

The Board considered the Resolution. 

The Board thanked Ms. Crawford for presenting Resolution No. 2024-05-01. 

As required in the Resolution, Ms. Doylen conducted and certified an affirmative vote of each Board member; all members voted yes to duly move, second, and adopt Resolution No. 2024-05-01. 

It was moved by Ms. Doylen and seconded by Mr. Bosch to adopt Resolution No. 2024-05-01, Approving a Loan from the United States Environmental Protection Agency (US EPA) in the Aggregate Principal Amount not to Exceed $96,386,500; Authorizing the form and execution of the loan agreement and promissory note to evidence such loan; Authorizing the construction of the Project; And prescribing other details in connection therewith. Motion carried unanimously. 

At 5:11 p.m., Ms. Crawford and Mr. Simmons excused themselves from the remainder of the meeting. 

Update: Phase II - Design of the Water Reclamation Facility and Lift Station Improvements Project - presented by Mr. Ravel, PE, Water/Wastewater Project Manager, Merrick & Company: 

Regarding the design of the Water Reclamation Facility and Lift Station Improvements Project (Project), Mr. Ravel noted the following updates which occurred after the April 16, 2024, Regular Board Meeting: 

• Meetings were conducted with the District, Hilltop Securities, the Colorado Water Resources and Power Development Authority (CWRPDA) State Revolving Fund (SRF), the Colorado Department of Public Health and Environment (CDPHE), and the US Environmental Protection Agency (USEPA) Water Infrastructure Finance and Innovation Act (WIFIA) to review project financing and funding.
• The preconstruction notification (PCN) for the force main river crossing, wetland area, and outfall construction was submitted to the US Army Corps of Engineers (USACOE) on April 11, 2024.
• The 90% design drawings and specifications were submitted to the District on April 22, 2024.
• The 90% design drawings and specifications were submitted to the US Bureau of Reclamation (USBR) on April 22, 2024. The USBR will review the Fish Creek Lift Station (FCLS), Wapiti Lift Station (WLS), WLS Interceptor, and WLS Force Main components.
• An Industry Day was conducted on April 24, 2024, to notify the contracting community of the intention of the District to bid the project in the Fall of 2024.
• The updated environmental assessment (EA) report was submitted to CDP HE, EPA WIFIA, and the USBR. The USBR released the EA for the 30-day public comment period on May 3, 2024. The USBR provided a copy of the EA to over 400 entities.
• A WRF design review meeting was conducted with the District staff on May 8, 2024. District comments will be incorporated into the 100% final drawings and specifications.
• A FCLS, WLS, and WLS Force Main design review meeting with the District will be conducted on May 22, 2024. District comments will be incorporated into the 100% final drawings and specifications.
• The process design report (PDR) for the FCLS, WLS, WLS Interceptor, and WLS Force Main and 90% drawings will be submitted to the CDPHE for design review.
• The WRF 90% site drawings and reports will be submitted to Larimer County for use with finalizing the site plan approval.
• The CDPHE has initiated its review of the Basis of Design Report for the WRF that was submitted on February 20, 2024.

In addition to the Project update provided in the board packet, Mr. Ravel highlighted that he, Mr. Bieker, Ms. Jurgens, and Ms. Moore presented a Project and financial update to S&P on May 21, 2024, to obtain a final investment grade credit rating required for the WIFIA loan. 

Mr. Ravel thanked District staff for their review of the 90% design drawings and specifications and stated the feedback received will be incorporated into the 100% final drawings and specifications. 

Mr. Ravel informed the Board that Merrick & Company is working on the 90% cost opinion for the Project, and it will be available to the District in the next two to three weeks. 

The Board, Mr. Bieker, Ms. Jurgens, and Mr. Ravel then discussed a covenant outlined in the CWRPDA Loan Agreement pertaining to expending at least five percent of the proceeds within six months from the date of the loan closing, May 23, 2024. Ms. Jurgens stated the 5% equates to approximately $900,000. Ms. Jurgens noted the CWRPDA Loan will only be expended on the Water Reclamation Facility (WRF) portion of the Project and will not be used to construct the force main or lift station components. Mr. Ravel added the District may seek reimbursement for WRF project costs already incurred. The Board and Mr. Ravel discussed incurred costs the District may requisition for reimbursement such as professional services, site acquisition and easement, permit and application fees, engineering design time, and the dewatering screw press that may move from the existing plant to the new facility. Ms. Doylen suggested the reimbursed funds be deposited into the District's Colotrust Edge account to yield interest income. 

Mr. Eshelman initiated a discussion regarding payment restructuring of the WIFIA loan, to include principal and interest payments after Project closing instead of paying interest only during the first five­year period of the loan. Mr. Ravel stated interest is accrued during the first five years after the Project's substantial completion and loan interest payments are to commence in year 2031. Mr. Eshelman indicated a desire to see a revised proforma prepared by Hilltop Securities which considers principal and interest payments commencing upon the Project's substantial completion. Mr. Ravel suggested this request be asked of Hilltop Securities at the next meeting with the District. Mr. Eshelman directed District staff to inquire of WIFIA at the May 23rd meeting about the option to prepay principal before the five-year interest only payment period and to Hilltop Securities to revise the proforma accordingly. 

At 5:42 p.m., Mr. Newhouse excused himself from the remainder of the meeting. 

At 5:49 p.m., Mr. Kuosman excused himself from the remainder of the meeting. 

Request for Approval: WRF and Lift Station Improvements Project, Merrick & Company, Application for Payment No. 23, Dated April 18, 2024 - presented by Ms. Moore: 

Ms. Moore asked the Board for approval to remit payment to Merrick & Company for an invoice received by the District: Invoice Number 10100332 in the amount of $348,107.23. Ms. Moore explained Invoice Number 10100332 is for work performed on the Water Reclamation Facility and Lift Station Improvements Project from January 27, 2024, through March 29, 2024. Ms. Moore stated she has prepared a check for payment of this invoice, and it is ready for signature at this meeting. 

It was moved by Ms. Doylen and seconded by Mr. Gengler to approve payment to Merrick & Company for Invoice Number 10100332 in the amount of $348,107.23. Motion carried unanimously. 

Request for Approval: WRF and Lift Station Improvements Project, Merrick & Company, Application for Payment No. 24, Dated May 15, 2024 - presented by Ms. Moore: 

Ms. Moore asked the Board for approval to remit payment to Merrick & Company for an invoice received by the District: Invoice Number 10104481 in the amount of $266,822.47. Ms. Moore explained Invoice Number 10104481 is for work performed on the Water Reclamation Facility and Lift Station Improvements Project from March 30, 2024, through April 26, 2024. Ms. Moore stated she has prepared a check for payment of this invoice, and it is ready for signature at this meeting. 

It was moved by Ms. Doylen and seconded by Mr. Reed to approve payment to Merrick & Company for Invoice Number 10104481 in the amount of $266,822.47. Motion carried unanimously. 

Reports of Officers, Committees, Professional Consultants, & Staff 

The Board considered the Reports of Officers, Committees, Professional Consultants, and District Staff. 

Ms. Doylen praised District staff for keeping expenditures within budgetary limits. 

The Board asked questions of the staff regarding the departmental reports. 

The Board did not have corrections to the departmental reports. 

The Board thanked District Staff for preparing the reports. 

It was moved by Ms. Doylen and seconded by Mr. Gengler to accept the Treasurer's Report, Plant Report, System Development Fee Allocation and Connection Report, Collection System Report, Operations Manager's Report, Assistant District Manager's Report, and District Manager's Report. Motion carried unanimously. 

Adjournment 

Having no further business, at 6:08 p.m. it was moved by Ms. Doylen and seconded by Mr. Gengler to adjourn the meeting. Motion carried unanimously.