November 21, 2023 Minutes

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, November 21, 2023, 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 November 21, 2023.

Agenda

1. Call to Order.
2. Roll Call, Absences Excused.
3. Pledge of Allegiance.
4. Next Meeting Date: Regular Board Meeting, Tuesday, December 19, 2023.
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 nonagenda 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.
8. Minutes: Correction and Approval: Special Board Meeting, October 10, 2023. Regular Board Meeting, October 17, 2023.
9. New Business and Special Orders:
   1. Presentation: Draft 2023 Wastewater Rate Study – presented by Mr. Kevin Burnett, Principal Consultant, Willdan Financial Services. 
   2. Discussion and Consideration of Rates and Fees. 
   3. 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. 
   4. Consideration for Adoption: Resolution No. 2023-11-01 – Amended and Restated Resolution Expressing the Intent of the District to be Reimbursed for Certain Expenses Relating to the Construction of Certain Sanitation Facilities – presented by Mr. Bieker. e. 
   5. Request for Approval: WRF and Lift Station Improvements Project, Merrick & Company, Application for Payment No.19, Dated November 7, 2023 – presented by Ms. Moore. f. 
   6. Public Hearing on Proposed 2024 Budget – presented by Mr. Bieker and 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. Executive Session: §24-6-402(4)(f), C.R.S., Personnel matters, related to general discussion of compensation for all District employees.
12. Adjournment.

Upper Thompson Sanitation District (District) prohibits discrimination against its customers, employees, and applicants for employment on the basis of disability, race, creed, color, religion, sex, sexual orientation, gender identity, gender expression, marital status, familial status, national origin, or ancestry, and in employment or in any program or activity conducted by the District. The District will make reasonable accommodation 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.

Record of Proceedings

Minutes of a Regular Meeting of the Board of Directors of
Upper Thompson Sanitation District
Held: November 21, 2023, 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 4:01 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:

Attendance

Board of Directors: 
Jack Reed, Chairman
Susan Doylen, Vice-Chairman/Secretary 
Kent Bosch, Assistant Secretary/Treasurer
Ronald I. Duell, Treasurer/Assistant Secretary 
Christopher Eshelman, Assistant Secretary/Treasurer

Staff: 
Chris Bieker, District Manager 
Suzanne Jurgens, Assistant District Manager 
Gina Moore, Financial Officer 
Henry Newhouse, Plant Superintendent
Matt Allen, Operations Manager 
Nathanael Romig, Collection Superintendent
Naomi McCracken, Secretary* Joined the meeting virtually at 4:00 p.m. and "in person" at 5:05 p.m.)

Guests: 
Kevin Burnett, Principal Consultant, Willdan Financial Services 
Steve Ravel, P.E., Water/Wastewater Project Manager, Merrick & Company 
Alana Plaus, Senior Associate, GBSM

Joined via web conference call

Pledge of Allegiance 

The Pledge of Allegiance was recited. 

Next Meeting Dates

A regular meeting of the Board of Directors will be held on December 19, 2023, at 4:00 p.m.

Approval of Agenda 

The Board considered the Agenda.

It was moved by Mr. Eshelman and seconded by Ms. Doylen 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. Reed opened the meeting for public comment. 

Mr. Reed 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. Reed 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.

Two members of the public joined the meeting, via web conference call. One member of the public joined the meeting in person. 

In attendance via web conference call, was Mr. Stewart Squires, of 618 Park River Place, Estes Park, and Mr. Jeff Blevins, Treasurer for Sundance Cottages Condominium Association, located at 960 Riverside Drive, Estes Park. Mr. Squires and Mr. Blevins did not offer comment on a non-agenda item. In attendance 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. 

Approve Minutes from Prior Meetings 

The Board reviewed and discussed the Minutes of the October 10, 2023, Special Board Meeting and the October 17, 2023, Regular Board Meeting. 

It was moved by Mr. Eshelman and seconded by Mr. Bosch to approve the Minutes of the October 10, 2023; Special Board Meeting as presented. Motion carried unanimously. 

It was moved by Mr. Bosch and seconded by Ms. Doylen to approve the Minutes of the October 17, 2023; Regular Board Meeting as presented. Motion carried unanimously. 

New Business and Special Orders 

Draft 2023 Wastewater Rate Study - presented by Mr. Kevin Burnett, Principal Consultant, Willdan Financial Services: 

Mr. Burnett began his presentation titled "Wastewater Rate Study" by outlining the presentation contents including: The purpose and process of a rate study, summary of proposed revenue increases, recommended rates, comparison criteria of Colorado sewer service providers, and system development fee adjustments. 

Mr. Burnett explained the District's rate study helps in evaluating sufficiency of existing wastewater revenue to provide funding for current and future operating, maintenance, and capital expenses and ensuring the minimum reserve level and future debt service coverage requirements are met. Mr. Burnett stated it is critical to develop rates equitable to customers which will generate sufficient revenue to meet the cost of providing essential services. Mr. Burnett reviewed for the Board the rate study process including working with District staff to identify financial plan options, refining the existing rate structure, and evaluating the cost associated with providing service to District customers. 

Mr. Burnett then recommended to the Board that the District's revenue should be increased to meet increasing operational costs, repair and maintain the system (including the Water Reclamation Facility and Lift Station Improvements Project and existing collection system), meet and maintain targeted reserve levels, and meet future debt service coverage requirements. Mr. Burnett explained this recommendation is based on several study assumptions including expected annual increases in operations and maintenance and capital costs, the inclusion of State Revolving Fund (SRF) and Water Infrastructure Finance and Innovation Act (WIFIA) debt for Project financing, minimum legal requirement or targeted debt service coverage and reserves, and targeted cash reserves based on current industry trends. 

Mr. Burnett then highlighted a proposed financial plan for the years 2024 through 2033 showing an annual revenue increase and resulting net cashflow and ending fund and target fund balances. Conclusively, Mr. Burnett recommends the District implement a rate increase of 8.5% in the years 2024 through 2028. 

Mr. Burnett presented considerations of revenue generation, stability, and equitable recovery. He explained the importance of generating the revenues required to efficiently and responsibly operate and maintain the system and to ensure seasonal customers are responsible for their proportionate share of system costs. 

Mr. Burnett explained cost-of-service system charges are categorized into flow related costs (cost per 1,000 gallons) and readiness to serve costs (cost per customer bill). Costs are allocated to either a metered or non-metered customer class, based on assumed flows and number of customers. 

Mr. Burnett summarized potential charges for non-metered and metered customers utilizing two different rate options, recommended and alternative. The recommended option incorporates a higher fixed charge base rate per month for both customer classes and a lower flow base rate per 1,000 gallons of usage for 2024 and increasing in years 2025 and beyond, whereas the alternative option proposes a lower monthly fixed charge base rate and higher flow base rate per 1,000 gallons of usage. Mr. Burnett explained the majority of the District's revenue, approximately 81 %, would be fixed with the recommended option and the District would not depend on a third party to obtain water flow data. Mr. Burnett emphasized that establishing a higher percentage of fixed revenue demonstrates a stable revenue stream which is more favorable for loan financing purposes than a variable revenue stream with a low percentage of fixed revenue. 

Mr. Burnett continued his presentation by comparing the District's existing monthly rates with other Colorado sewer service providers. Mr. Burnett emphasized comparisons are difficult because each sanitation district differs in their geographic location/density, size of treatment facility, customer base, growth rates, age of assets, site-specific regulatory requirements, type and quality of treatment, use of mill levies to offset rates, prior increases, and system development fees. 

In conclusion, Mr. Burnett described the District's current approach to adjusting System Development Fees (SDFs) compared to a more refined approach. The current approach is to adjust SDFs by the Engineer News-Record's construction cost index which is a common approach in the industry; however, it may not be representative in valuing the District's assets and the cost to replace those assets. The refined approach would be to look at current cost per gallon of treatment capacity and cost per linear foot of clay and polyvinyl chloride (PVC) pipe. The Board discussed and considered both options. 

Mr. Burnett answered questions of the Board regarding the rate study throughout his presentation. 

Director Doylen commented that the 2023 rate study makes several assumptions about the cost of the Project and financing and those assumptions may change in the near future as the Project cost and financing programs become better defined. Therefore, setting rates beyond 2024 would not be prudent. 

Mr. Eshelman concurred with Ms. Doylen stating the District should set rates for one year in 2024. He stated the District should not establish rates in 2024 that would be below the rate study recommendations. Director Eshelman also noted that in today's economy, water, wastewater, and other utility fees are no longer going to be the lowest household expenses. 

Director Reed noted the importance of setting a correct rate for metered customers to ensure those customers are paying their proportionate and equitable share of the service they receive from the District. 

Regarding the System Development Fee, Director Doylen commented that in 2024 the District should consider the methodology recommended in the rate study to set the basis of that fee. 

Director Eshelman echoed Ms. Doylen's concerns about the importance of setting a correct System Development Fee to ensure that fee relates to the true cost of replacement of the District's infrastructure. 

Director Bosch commented that the service the District provides is a "downstream" utility and is easily forgotten until the bill for service is received by the customer. 

Ms. Jurgens added that District staff will prepare information about the rate study's recommended structural change to setting the fee for metered customers, will reevaluate the methodology to calculate the system development fee, and will present both of those findings to the Directors for consideration in 2024. 

The Board thanked Mr. Burnett for his presentation of the draft 2023 Wastewater Rate Study and Willdan Financial Services' work on the report. 

Discussion and Consideration of Rates and Fees: 

The Notice of Meeting for Consideration of Rates and Fees (Notice) was posted on the District's website on October 12, 2023. The Notice was published in the Estes Park News and Estes Park Trail Gazette on October 20, 2023. Additionally, the Notice was posted at the District administration building and on the District's Transparency Notice on the Special District Association of Colorado website on October 11, 2023. 

The draft 2023 Wastewater Rate Study was not included in the November board packet because it is in preliminary form and therefore unavailable for public review until it is in final form. However, the draft rate study was sent individually to the Board of Directors via email for their review and consideration. The final 2023 Wastewater Rate Study will be in the December 19, 2023, Board packet for consideration of approval by the Board and will be available for public review at that time. 

Regarding customer communication about the District's service rates, Mr. Bieker read to the Directors an email he received on November 20, 2023, from Ms. Mary Anne Lemoine. 

Ms. Lemoine's email is as follows: 

"In terms of future rate increases, is there any consideration being made for those of us who are only part-time residents of Estes Park and the Upper Thompson Sanitation District? My family has enjoyed our property on Middle Broadview, Estes Park, for many years (since the late 1940's) but unfortunately only during the warmer months. Our cabin is not winterized, and we are typically able to turn the water on and use it only between May and early October, depending on the weather. While we understand the importance of keeping the wastewater system in excellent operating condition, could the costs of maintaining the system be in some way proportional to the amount of use by the customer? I am speaking for myself and my family members who share our property. There are, however, many part-time resident families in the area who may be affected and thinking similar thoughts. Thank you so much for your consideration." 

Mr. Bosch stated that Ms. Lemoine's commentary is representative of many part-time residents. 

The Directors considered Ms. Lemoine's comments and noted the District must provide year-round service to each customer and the service fees reflect the annual cost of operating the infrastructure. 

Mr. Bieker then read a comment made online via Teams Chat from Mr. Squires: "I'm good with the direction the Board is going. Thanks." 

The Board considered recommendations made in the draft 2023 Wastewater Rate Study. 

The Board then directed Mr. Burnett to finalize the 2023 Wastewater Rate Study, adding footnotes to graphs and charts to provide clarification about data in the report. 

The final rate study will be accepted via resolution by the Board at the December 19, 2023, Regular Board Meeting. 

The Board concurred it is in the best interest of the District to set rates for year 2024 at the December 19, 2023, Regular Board Meeting. 

The Board directed staff to prepare the 2024 budget and resolutions to implement the following rate adjustments in 2024: 

• Increase the non-metered customer service rate 8.5% for year 2024.
• Set metered customer fees using the historic methodology which increases the metered customer flow rates/1,000 gallons and access fees 8.5% for year 2024.
• Increase all waste hauling fees as outlined in the rate study in the year 2024.
• Increase the system development fee, using the Engineering News-Record Construction Cost Index methodology, to $12,200 in 2024.

The Board directed staff to establish the following financial policies as outlined in the rate study: 

• Increase the emergency reserve fund balance to six months operating reserve (an increase over the current three-month Emergency Reserve balance).
• Meet legal debt service coverage requirements of 1.20x, and a target rate of 1.50x.
• Establish a debt service reserve fund equal to 1 year of debt service.

Regarding system development fees, the Board issued a directive to staff to examine the feasibility of applying an alternative methodology, as described in the rate study, to calculate the fee and present that finding to the Board for consideration in 2024. 

Regarding metered service rates, the Board issued an additional directive to staff to investigate the rate study's recommendation to make a structural change to metered customer rates. In 2024, staff will provide the Board with a thorough explanation of the proposed methodology, allowing the Board to understand the net effect (cost) to the metered customers. Ms. Jurgens explained the recommended structural change is not a generic increase across that customer class. Ms. Jurgens stated that preliminary investigation into this rate model indicates significant fee variations to metered customers­with some customers experiencing high increases and other customers experiencing decreases -necessitating further investigation. Ms. Jurgens suggested that in 2024 the District provide appropriate notice to all customers, and specifically metered customers, about that discussion and, if the structural change is adopted by the Board, provide timely information to metered customers prior to implementation of the change (before invoices are sent to metered customers). 

Mr. Reed then invited other public comments pertaining to the matter of District rates and fees. 

There were no other public comments. 

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 October 17, 2023, Regular Board Meeting: 

• Overall Project:
  • Meetings were conducted with the District and Garney Construction to review the project.
  • Meetings were conducted with the District to review project financing and funding.
  • The EPA Water Infrastructure Finance and Innovation Act (WIFIA) accepted the District's loan application and conducted a review meeting to discuss next steps.
  • The US Bureau of Reclamation (USBR) provided written comments regarding the Environmental Assessment (EA) report. The USBR requested that a Finding of No Significant Impact (FONSI) summary be prepared for their use.
  • The design team mobilized and an updated project schedule including permitting, financing, and design considerations will be further developed for completion of the project as the team understands the impact of the value engineering (VE) and final design decisions. 
• Fish Creek Lift Station (FCLS), Wapiti Lift Station (WLS), WLS Interceptor, and WLS Force Main:
  • The site location application Process Design Report (PDR) for the WLS is under review by the CDPHE.
  • Updated value engineering (VE) layout drawings were provided to the District for review.
• Water Reclamation Facility (WRF):
  • Updated value engineering (VE) layout drawings of the operations building, liquid process, and solids process were provided to the District for review.
  • The WRF site plan submittal is under review by Larimer County.

In addition to the Project update provided in the board packet, Mr. Ravel stated that on November 8, 2023, he and District staff met with WIFIA's Senior Underwriter, Mr. Marnin Lebovits, to discuss the approval process, meetings, timing, and steps to close the WIFIA loan. Mr. Ravel reported the District will give a PowerPoint presentation about the District and the Project to the WIFIA team in December. 

Mr. Ravel reported that Larimer County (County) has reviewed site planning documents, and indicated they are sufficient. He stated the County requests that all final Project documents be signed and delivered to the County for approval. 

Mr. Ravel reported that Merrick is finalizing the updated environmental assessment and will submit it to the Bureau of Reclamation to fulfill the requirements of the National Environmental Policy Act. Mr. Ravel noted the updated environmental assessment will also be submitted to WIFIA and the Colorado Department of Public Health and Environment (CDPHE). 

Mr. Ravel stated Merrick is updating the 60% design drawings to incorporate value engineering and submit the drawing set and specifications to the District for review the first week of December. He noted the revised drawings will be included with the process design reports for the lift stations and water reclamation facility and submitted to CDPHE. He also stated the revised 60% design drawings will be included with the application to the Colorado Water Resources and Power Development Authority's (CWRPDA) State Revolving Fund loan program. 

Finally, Mr. Ravel reported that the Construction Manager at Risk (CMAR) contractor, Garney Construction, has indicated the updated construction estimate, developed using the revised 60% design documents, will be completed in February 2024. 

Director Reed asked Mr. Ravel if submitting the CWRPDA loan application to the State Revolving Loan program prior to receipt of the updated project cost figure would have an adverse effect on the application. Mr. Ravel stated the application, which will be submitted on or before January 5, 2024, will include the construction cost estimate developed from the original 60% design documents and the District will submit an updated Project cost figure to CWRPDA when that figure is known. 

The Board thanked Mr. Ravel for the Project update. 

At 5:15 p.m., Mr. Blevins exited the meeting. 

At 5:30 p.m., Mr. Squires excused himself from the remainder of the meeting. 

Consideration for Adoption: Resolution No. 2023-11-01 - Amended and Restated Resolution Expressing the Intent of the District to be Reimbursed for Certain Expenses Relating to the Construction of Certain Sanitation Facilities - presented by Mr. Bieker: 

Mr. Bieker presented Resolution No. 2023-11-01, which amends and restates previously adopted Resolution No. 2022-01-02, Expressing the Intent of the District to be Reimbursed for Certain Expenses Relating to the Construction of Certain Sanitation Facilities. Mr. Bieker added that Resolution No. 2023-11-01, was prepared by Ms. Kim Crawford, of Butler Snow.

Mr. Bieker explained that in January 2022, at the regular board meeting, the Board of Directors adopted Resolution No. 2022-01-02 Expressing the Intent of the District to be Reimbursed for Certain Expenses relating to the Construction of Certain Sanitation Facilities. The resolution formalized the District's intent to reimburse expenditures the District incurs for the Water Reclamation Facility and Lift Station Improvements Project prior to receipt of funding. 

Mr. Bieker noted that the former resolution addresses the District's intent to reimburse itself in broad terms for "certain capital improvements"; however, it does not specifically call out a particular capital project or identify the Water Reclamation Facility and Lift Station Improvements Project (Project). 

Mr. Bieker stated the District is moving the Project forward and continues to incur expenses for design, funding applications, permit fees, and other related expenses. The District has applied for and anticipates Water Infrastructure Finance and Innovation Act (WIFIA) financing and is currently preparing the application for financing from the CWRPDA's State Revolving Fund for the Project. In recent consultation with the District's bond counsel, Ms. Kim Crawford, of Butler Snow, it was determined that the reimbursement resolution adopted in January 2022 should specifically identify the Water Reclamation Facility and Lift Station Improvements Project. Therefore, an amended and restated resolution is before the Board for consideration of adoption at this meeting. 

Mr. Bieker informed the Board of changes made to Resolution No. 2023-11-01 in comparison to the original resolution. Resolution No. 2023-11-01 Amended and Restated Resolution Expressing the Intent of the District to be Reimbursed for Certain Expenses Relating to the Construction of Certain Sanitation Facilities, changes the third "Whereas" in the original resolution, to identify Project specifics. The second change to the original resolution is in Section 2 (page 2) of the amended resolution. In Section 2, the original resolution indicated the District intended to finance approximately $74,000,000 in Project costs. Amended Section 2 of the resolution indicates the District intends to finance approximately $90,000,000 in project costs which is based on Mr. Ravel's estimated total project cost of $89,000,000. 

Mr. Bieker stated all other elements of the original resolution remain unchanged. 

Mr. Bieker elaborated that the resolution indicates that at a future date the District plans to reimburse the general fund for project expenses paid by the District. 

Mr. Bieker then noted revisions from the Internal Revenue Service (IRS) to its regulations, provided by Ms. Crawford, concerning the use of tax-exempt financing. Under the new regulations, the proceeds of financing may be allocated to a prior capital expenditure for a period of time after the expenditure is made, but only if a formal declaration of reasonable intention to reimburse the expenditure with the proceeds of a loan or bond had been properly made. 

Ms. Crawford has provided the District the following points for the Board to consider regarding the proposed resolution: 

1. The IRS always allows reimbursement for "soft costs" such as engineering, architect work, studies, etc., but not for "hard costs" such as acquisition of any capital, like pipes, construction materials, etc.
2. However, the IRS does allow for reimbursement of these hard costs if the District has adopted a resolution saying that it is the intent to construct a tax-exempt project, but the District will need to make some expenditures before the financing is in place.
3. The IRS rules allow the District to be reimbursed for expenses incurred up to 3 months prior to the approval of this resolution, through the time that the financing is completed.
4. This allows the District the flexibility to start purchasing materials now, if needed, and if it is deemed to be in their best interest to do so.

Mr. Bieker relayed that Ms. Crawford recently communicated that the revision to the reimbursement resolution should align with IRS regulations. 

Mr. Bieker concluded that in the best interests of the District, staff recommends the Directors adopt Resolution No. 2023-11-01 - Amended and Restated Resolution Expressing the Intent of the District to be Reimbursed for Certain Expenses Relating to the Construction of Certain Sanitation Facilities. 

The Board discussed and considered the Resolution. 

It was moved by Ms. Doylen and seconded by Mr. Eshelman to adopt Resolution No. 2023-11-01 Amended and Restated Resolution Expressing the Intent of the District to be Reimbursed for Certain Expenses Relating to the Construction of Certain Sanitation Facilities. Motion carried unanimously. 

Request for Approval: WRF and Lift Station Improvements Project, Merrick & Company, Application for Payment No. 19, Dated November 7, 2023 - 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 10055737 in the amount of $18,667.64. Ms. Moore explained Invoice Number 10055737 is for work performed on the Water Reclamation Facility and Lift Station Improvements Project from September 30, 2023, through October 27, 2023. 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 Mr. Eshelman and seconded by Mr. Bosch to approve payment to Merrick & Company for Invoice Number 10055737 in the amount of $18,667.64. Motion carried unanimously. 

Public Hearing on Proposed 2024 Budget - presented by Mr. Bieker and Ms. Moore: 

At 5:41 p.m. Mr. Reed opened the Public Hearing on the Proposed 2024 Budget. 

Mr. Bieker mentioned the Proposed 2024 Budget has been revised since it was originally presented at the October 10, 2023, Special Board Meeting. 

Mr. Bieker stated the proposed budget complies with legal requirements, showing estimated beginning and ending fund balances, previous year audited figures, year-end estimated figures for 2023 and figures for the year in which the budget will be adopted. 

Mr. Bieker informed the Board that The Notice of the Public Hearing for the Proposed 2024 Budget was published in the Estes Park News and Estes Park Trail Gazette twice, on October 13, 2023, and on October 20, 2023. 

Mr. Bieker reported that the District has received questions and comments from a customer concerning the 2024 Proposed Budget. The District has not received other communication from the general public regarding the 2024 Proposed Budget. 

Mr. Bieker stated that when the budget was presented at the October 10, 2023, Special Board Meeting, he asked the Board to direct their questions and comments to him regarding the 2024 Proposed Budget. Mr. Bieker said he and the staff will respond to inquiries about the 2024 Proposed Budget at this meeting and prior to the December 19, 2023, Board Meeting at which time the budget will be submitted for approval and adoption by the Board of Directors. 

Mr. Bieker noted that he was asked for clarification of a few items including salaries and benefits, the WRF Project, and capital expenditures. 

Mr. Bieker stated the 2024 budget is a collaborative effort of District staff, including he, Ms. Moore, Ms. Jurgens, Ms. Panzer, Mr. Allen, Ms. Mourning, Mr. Newhouse, and Mr. Romig. Mr. Bieker extended his thanks to each staff member for their participation in the budget process. 

Mr. Bieker stated this proposed budget represents the District's best effort to predict business activity and outline initiatives for the year 2024. 

Mr. Bieker added the proposed budget reflects the District's ongoing work to finalize design and begin construction of the new water reclamation facility and lift station improvements. 

Mr. Bieker emphasized the importance of continuing careful operation and maintenance of the existing wastewater treatment facility, lift stations, and collection system, and support professional development of District staff. 

Mr. Bieker extended his appreciation to the employees for their unwavering commitment to managing and operating the District's resources while ensuring the delivery of top-tier water reclamation services. Mr. Bieker continued stating in an era where environmental sustainability and fiscal responsibility are paramount, the expertise and diligence of our staff are the foundations of our success. 

Mr. Bieker said it is important to note that while this proposed budget focuses on identifying and estimating revenue and expenditures of financial resources, upon adoption it becomes a policy setting document. The proposed budget offers directives on Upper Thompson Sanitation District's allocation of staff time and resources and affects management decisions for the year 2024. 

Mr. Bieker explained that the budget message provides a review of District activity through October 2023 and summarizes the basis of the 2024 budget. Additionally, the budget document addresses revenues and overhead and operational expenses as they are allocated for each of the District's departments. The proposed budget document includes a capital improvement plan which specifies anticipated capital projects spanning the years from 2024 through 2033. 

Mr. Bieker noted as of this date and because 2024 service rates and system development fees have not been set by the Board, this iteration of the budget proposes 2024 revenues using the 2023 service rates and system development fees. 

Mr. Bieker stated the proposed 2024 General Fund Budget Summary indicates operational revenues to be $5,887,500 and capital revenues to be $142,800. He reported 2024 total income is budgeted conservatively at $6,030,300. 

Mr. Bieker stated budgeted overhead expenditures for the year 2024 total $4,415,739, and budgeted operation expenditures total $1,039,154. He reported budgeted operation and overhead expenditures total $5,454,893. 

He stated total capital expenditures for 2024 are budgeted at $7,063,942, which includes a $500,000 contingency. 

Mr. Bieker stated all expenditures for the 2024 year, including overhead, operation, and capital equal $12,518,834. He noted overall 2024 budget expenses increased approximately 18.7% above 2023's budgeted expenses. The 2024 proposed budget indicates a net operating and capital deficit of $6,488,534 which will be funded with appropriate reserve funds. This is a result of anticipated expenditures for planned capital projects valued at $7,063,942. Mr. Bieker reminded the Board that as of today, this deficit is reflective of revenue budgeted using 2023 rates. 

Mr. Bieker noted the proposed 2024 budget reflects total revenues increasing approximately 5% over 2023's budgeted revenues. This minor increase reflects 2024 revenue projections using 2023 estimated revenue figures without a rate increase on service and system development fees. Interest income is budgeted conservatively. 

Mr. Bieker then explained contingency funds are incorporated into the budget document for a future event or circumstance that is possible but cannot be predicted with certainty. He stated the 2024 budget for Overhead Contingency, Account 5960, is $10,000. He reported the 2024 Operation Contingency, Account 6400, is allocated at $50,000; and the Capital Contingency, Account 7062, is allocated at $500,000 and may be reduced to $250,000 when the final budget has been set. This reduction in capital contingency is per the recommendation of Willdan Financial Services in the 2023 Wastewater Rate Study. Mr. Bieker further explained contingencies will only be used at the discretion of the District Manager and Board of Directors 

Mr. Bieker communicated estimated 2023 capital revenue is $324,344 which is $88,844 over the 2023 budgeted capital revenue figure of $235,500. The 2023 capital expenses are estimated to be $839,173, which is $3,711,227 under the 2023 budget of $4,550,400. This is due to delays in the WRF Project value engineering process and closing in on project financing; receipt of CDPHE's determination of preliminary effluent limits, and the site application approval. 

Mr. Bieker stated anticipated 2023 revenues total $6,722,415 and anticipated 2023 expenses including overhead, operations, and capital total $4,475,225. The estimated operating and capital surplus for 2023 is $2,247,190. 

The 2024 budgeted beginning fund balance is $15,654,782 and the ending fund balance is $9,166,248. 

Mr. Bieker then discussed the 2024 Capital Improvement Plan which forecasts capital projects and expenses through the year 2033. Capital Expenditures in 2024 total $6,563,942, In 2024, the capital budget includes funds for: 

Administration: 

• Video conferencing equipment ($10,000)
• Telephone system ($13,000)
• Residential unit purchase for duty housing/employee residence ($450,000)
• Connection of Administration Building to Town of Estes Park water service ($40,000)

Collection System: 

• The 2023 CIP allocates funds ($200,000) needed for ongoing collection system rehabilitation (CIP, Pipe Burst, and New)
• Big Thompson Interceptor Assessment/Construction Improvements ($75,000)
• Jet truck ($365,000)
• Utility truck ($58,000)
• Push camera system ($12,000)
• 4 x 4 conversion of the CCTV van ($15,000)
• Conversion of 2011 dump truck body ($30,000)
• Connection of Collection Building to Town of Estes Park water service ($45,000)

Treatment Plant: 

• Electronic gate for the perimeter fence of the existing treatment plant ($15,000)
• TRLS/FCLS wet well repair/rehabilitation evaluation ($50,000)
• A-Basins/Digester structural evaluation ($11,000)
• ISCO portable sampler for laboratory ($7,000)
• Thermo BOD incubator for laboratory ($7,000)
• Filter PLC cabinet ($50,000)
• Biosolids screw press ($1,200,000)
• Connection of the treatment plant to Town of Estes Park water service ($55,000)

New Water Reclamation Facility Lift Station and Improvements Project: 

2024 costs for engineering design, construction manager at risk consultation, legal and permit management, membrane design, and engineering services during construction total $2,815,000. 

The 2024 capital budget also includes the first debt service payment of $1,040,942 on a loan for the Project. 

Mr. Bieker then explained that expenditures in the 2024 Proposed Budget exceed revenues primarily due to the 2024 capital improvement projects, specifically the Water Reclamation Facility and Lift Station Improvements Project, driving the operating/capital net position. The capital improvement projects are subject to approval by the Board of Directors. 

Mr. Bieker concluded stating financing of approved 2024 capital improvement projects that are not funded by 2024 revenues, will be funded through use of the District's net position, appropriated reserves, and low-interest loans from WIFIA and CDPHE's State Revolving Fund. 

Ms. Moore then reported that since the October 10, 2023, Special Board Meeting, she has edited the 2024 budget message to reflect updated figures presented in the October Proposed Budget. 

Ms. Moore noted the 2023 forecast spreadsheet has been updated to reflect actual year to date revenues and expenses through October 31, 2023. Additionally, Ms. Moore stated the 2023 estimated revenues and expenses have been revised based on year-to-date figures and staff input and reflect a best effort to predict final totals. Forecasted revenues for system development fees (SDF's) and permit fees were decreased in the November 21, 2023, Proposed Budget in comparison to the October 10, 2023, Proposed Budget. Ms. Moore explained this decrease was based on the Board of Directors input at the October 10, 2023, Special Board Meeting concerning the slowed real estate market. Budgeted permit fees were decreased from twenty to fifteen and SDF's from fifteen to twelve. 

Ms. Moore then summarized revisions to the 2024 budgeted expenses since the proposed budget was presented to the Board on October 10, 2023. 

The following notable revisions made to the 2024 Administration budget include: 

• Account 5220 (Budget Page 36) - Computer Maintenance - Decreased iPad budget for the Board of Directors from $10,000 to $2,500.
• Account 5742 (Budget Page 39) - IT Special Projects - Decreased from $30,000 to$10,000.
• Account 5775 (Budget Page 39) - Professional Services - Decreased 5775.05, Program Consulting/Organizational Training, from $75,000 to $30,000. Added new account 5775.11 for employee recruiting services in the amount of $35,000.

The following notable revisions made to the 2024 Plant budget: 

• Account 5115 (Budget Page 35) - Janitorial - Increased from $7,500 to $8,200 to allow for more outside cleaning service hours.
• Account 5175 (Budget Page 36) - Cell Phone - Increased from $800 to $1900 to account for potential new cell phone for new hire.
• Account 5410 (Budget Page 37) - Salaries & Wages - Removed salary for one new plant operator position. In the October budget, there was an amount budgeted for two new plant operators.
• Account 6020 (Budget Page 40) - Plant Repairs & Maintenance - Per Plant Superintendent, added $15,000 more for the rebuild of RAS Pump #4 for a new total of $30,000.

The following notable revisions have been made to the 2024 Collection budget: 

• Account 5115 (Budget Page 35)- Janitorial - Increased from $5,000 to $10,500 to allow for more outside cleaning service hours.
• Account 5505 (Budget Page 38) - Training/Seminar- Increased by $6,500 to account for three collection employees to obtain a CDL Class A.
• Account 6215 (Budget Page 41) - Collection Supplies/Repair/Maintenance - Increased from $50,000 to $55,000 per Operations Manager.

The following notable revisions have been made to the 2024 Capital budget: 

• Account 7020 (Budget Page 42)- Office Equipment- Increased from $10,000 to $13,000 per updated vendor quote received for the new telephone system.
• Account 7030 (Budget Page 42) - Computer Software/Hardware - Decreased from$30,000 to $10,000 for the budgeted video conferencing equipment.
• Account 7060 (Budget Page 42) - Building Improvements - Included Town of Estes Park water service taps for existing buildings and construction of new taps for administration, collection, and wastewater treatment facilities (WTF). Administration costs total $40,000, Collection $45,000 and WTF $55,000. This estimate is per Mr. Steve Ravel.
• Account 7065 (Budget Page 42) - Plant Expansion - Increased by $260,000 per estimates from Mr. Steve Ravel for Larimer County Building Department permits for the Water Reclamation Facility, Fish Creek Lift Station, and Wapiti Lift Station.
• Account 7070 (Budget Page 42) - Vehicle Improvements - Added $30,000 for a 2011 International Dump Truck Body Conversion, per Operations Manager.
• Account 7080 (Budget Page 42) - Reduced the cost of the 2024 Ford F150 Utility Truck from $62,000 to $58,000 per updated vendor quote received.
• Account 7085 (Budget Page 42) - Per District Manager and Operations Manager, removed the $60,000 hydraulic pump and power pack.

Ms. Moore noted the Capital Improvement Plan was modified for the years 2027 through 2033 with the increase in Account 7090, Collection System Equipment, from $200,000 to $500,000 per the 2023 Wastewater Rate Study. 

Throughout the budget hearing, the Board asked questions of Mr. Bieker, Ms. Jurgens, Ms. Moore, and Mr. Allen. 

Ms. Moore indicated that before adoption of the 2024 budget, further revisions will be made and presented to the Board for consideration at the December 19, 2023, Regular Board Meeting. 

Ms. Moore explained to the Board that, at the December 19, 2023, Regular Board Meeting, a resolution will be prepared for the Board to adopt the budget and appropriate funds for the 2024 budget year. Upon adoption of the 2024 budget, she stated, as statutorily required, it will be submitted to the Division of Local Government in January 2024. 

Mr. Reed thanked Mr. Bieker and Ms. Moore for the update on the Proposed 2024 budget. 

At 6:15 p.m. Mr. Burnett excused himself from the remainder of the meeting. 

At 6:21 p.m. Mr. Reed closed the Public Hearing on the 2024 Proposed Budget. 

Reports of Officers, Committees, Professional Consultants, & Staff 

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

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. Bosch 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. 

At 6:50 p.m. the Board took a sixteen-minute recess. 

Executive Session: §24-6-402(4)(f), C.R.S., Personnel matters, related to general discussion of compensation for all District employees: 

At 7:06 p.m., it was moved by Ms. Doylen and seconded by Mr. Eshelman to go into Executive Session pursuant to §24-6-402(4)(f), C.R.S. "For personnel matters, related to general discussion of compensation for all District employees." Motion carried unanimously. 

The Executive Session was attended by Directors Reed, Doylen, Bosch, Duell and Eshelman; Mr. Bieker; Ms. Jurgens; Ms. Moore and Mr. Allen. 

The Board did not engage in substantial discussion of any matter not enumerated in §24-6-402(4)(f) C.R.S., nor did it adopt any proposed legislative policy, position, resolution, rule, regulation, or formal action.

The Executive Session was adjourned at 8:00 p.m. 

Return to Regular Session: 

At 8:00 p.m., the Board returned to regular session. 

The Directors discussed the commitment of the employees and their valuable contribution to the mission and success of the District. The Directors also expressed concern for each employee's wellbeing in and out of the workplace and a desire to provide a wellness benefit to the employees, which can be used at their discretion, in the spirit of their health and wellbeing. 

The Directors also considered the daily work demands on the staff knowing the collection and plant departments are each understaffed by one employee. Given the current workload of the collection, plant, administration departments, the Directors concurred it is prudent to temporarily allow all employees, including salaried employees, to work overtime, which has been approved by Supervisors and Managers. The Directors also concurred the overtime work shall not exceed 10 hours per week and shall be for the purpose of accomplishing essential work for the District. This temporary allowance for overtime work shall be at the discretion of the District Manager and may be discontinued at any time. All Federal and State overtime laws apply and pay policies outlined in the District's Personnel Manual will be followed. The overtime allowance is not applicable to the District Manager and Assistant District Manager. 

After consultation with Financial Officer, Ms. Gina Moore, with respect to the 2023 employee compensation budget, the Board directed the District Manager to compensate all District employees with a net wellness bonus of $1,500. The wellness bonus is to be distributed to employees on December 15, 2023. 

After further consultation with Financial Officer, Ms. Gina Moore, regarding the 2023 and proposed 2024 employee compensation budgets, the Board Directed the District Manager to temporally allow all employees, including salaried employees, to work overtime up to 10 hours per week. Overtime work will be permitted to complete essential work of the District and must be approved by Superintendents and/or Managers. Overtime work may begin immediately and is allowable for an unspecified duration into 2024 at the discretion of the District Manager. 

Adjournment 

Having no further business, at 8:03 p.m. it was moved by Ms. Doylen and seconded by Mr. Bosch to adjourn the meeting. Motion carried unanimously.