October 17, 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, October 17, 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 October 17, 2023.

Agenda

1. Call to Order.
2. Roll Call, Absences Excused.
3. Pledge of Allegiance.
4. Next Meeting Date: Regular Board Meeting, Tuesday, November 21, 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 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.
8. Minutes: Correction and Approval: Regular Board Meeting, September 19, 2023.
9. New Business and Special Orders:
   1. 2023 Wastewater Rate Study Draft Findings – presented by Mr. Kevin Burnett, Principal Consultant, Willdan Financial Services.
   2. 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.
   3. Request for Approval: WRF and Lift Station Improvements Project, Merrick & Company, Application for Payment No.18, Dated October 5, 2023 – presented by Ms. Moore.
   4. 2024 Proposed Budget Comments.
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 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: October 17, 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 4:03 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
Sheryl Panzer, Customer Accounts Manager 
*Naomi McCracken, Secretary

Guests: 
Kevin Burnett, Principal Consultant, Willdan Financial Services 
Steve Ravel, P.E., Water/Wastewater Project Manager, Merrick & Company 
* John Kuosman, Water/Wastewater Division Leader, Merrick & Company 
* 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 November 21, 2023, 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. 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 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. No members 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. Gerald (Jerry) Darmafall of 1331 Willow Lane, Estes Park. Mr. Squires and Mr. Darmafall did not offer comment on a non-agenda item. 

Approve Minutes from Prior Meetings 

The Board reviewed and discussed the Minutes of the September 19, 2023, Regular Board Meeting. 

It was moved by Mr. Eshelman and seconded by Ms. Doylen to approve the Minutes of the September 19, 2023; Regular Board Meeting as presented. Motion carried unanimously. 

New Business and Special Orders 

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

Mr. Bieker stated with regard to the District's ongoing Water Reclamation Facility and Lift Station Improvements Project and the need to determine other ongoing capital improvement projects, it was the Board of Director's directive to initiate a rate analysis for use in the year 2024 and beyond. 

Mr. Bieker then highlighted the District's following primary goals of the 2023 Wastewater Rate Study: 

• To review associated costs and projections of the District's administration, capital improvements, and operations and maintenance (O&M) procedures.
• To develop up to three recommended five-year equitable rate designs for District consideration.
• To review and recommend modifications to the District's fees.
• To confirm the use of the annual Construction Cost Index (CCI) for continued update of system development fees (SDF's).

Mr. Bieker explained that the District anticipates the output from the 2023 Wastewater Rate Study to include, but not be limited to, the following: 

• Up to three recommended five-year equitable rate designs based on the background information for review and adoption of a final recommendation by the District at the November 21, 2023, Regular Board Meeting.
• Recommendations regarding projected non-metered and metered rates, access fee base rate for metered customers, and associated changes to the metered rate per 1,000 gallons.
• A recommendation regarding continued use of the annual Construction Cost Index (CCI) for an update of system development fees (SDF's).
• A recommendation regarding the possible change from a flat rate structure to a metered rate structure and a description of the advantages, disadvantages, and necessary steps for implementation.
• A recommendation regarding approaches to rate leveling if metered billing is implemented with seasonal population fluctuations.
• Recommendations regarding other fees and charges outlined in the District's Rules and Regulations.

Mr. Bieker noted that the District does not operate on a mill levy and is not currently interested in implementing a mill levy. 

Mr. Bieker emphasized the goal for the 2023 Wastewater Rate Study presentation is to relay initial findings and that this Board meeting is not a public hearing to consider rates and fees. Mr. Bieker said the Board and District staff have not seen the preliminary findings and recommendations from the 2023 Wastewater Rate Study prior to the meeting. Mr. Bieker explained the draft findings of the rate study are a summary and it is anticipated that the Board will need time to review the information with the intent to consider rates and fees at the public hearings held on November 21, 2023, and December 19, 2023, Regular Board Meetings. 

Mr. Bieker elaborated stating that with the rates and fees data received, the Board can utilize the results of the 2023 Wastewater Rate Study and consider how to direct Willdan Financial Services with regard to rate tolerance, future debt capacity, and future capital improvements. 

Mr. Bieker then introduced Mr. Kevin Burnett, Principal Consultant of Willdan Financial Services. 

Mr. Burnett presented to the Board a PowerPoint Presentation titled "Wastewater Rate Study Draft Findings". 

Mr. Burnett began his presentation by explaining the purpose of a rate study. He 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 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 proposed to the Board that the District's revenue should be increased to meet increasing operational costs, repairs, and maintenance of the system (including the Water Reclamation Facility and Lift Station Improvements Project and existing collection system), targeted reserve levels, and 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 debt for Project financing, targeted debt service coverage and reserves, and targeted cash reserves based on current industry trends. 

Mr. Burnett then highlighted a proposed financial plan for years 2024 through 2033 showing an annual revenue increase and resulting net cash flow and ending fund and target fund balances. 

Mr. Burnett explained the generation, stability, and recovery of revenues. He emphasized 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 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 and a lower flow base rate per 1,000 gallons of usage, 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 that the majority of the District's revenue would be fixed with the recommended option and the District would not need to involve a third party to obtain flow data. Mr. Burnett emphasized having a higher percentage of fixed revenue shows reliability which is more favorable for loan financing purposes than a less reliable lower percentage of fixed revenue. 

Mr. Burnett concluded 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, capital improvement needs, regulatory requirements, frequency of rate increases, and methods to generate revenue. 

Mr. Burnett answered questions of the Board regarding projected negative cash flows, the impact on the rate study for monthly versus quarterly billing, and the uncertainty of receiving financing from the State Revolving Fund. 

Director Eshelman commented on the recommended fixed monthly charge of $136.36 forecasted in year 2033 compared to the current fixed monthly charge of $66.42. He stated in today's dollars he is spending more on monthly internet and streaming services than the projected sewer service charges ten years from now. Director Eshelman acknowledged the cost impact on small communities from needed centralized infrastructure. 

Director Doylen stated her concern of the District not knowing the final design figure and is cautious of determinations based on assumptions. Director Doylen stated the importance of being cognizant of the implications of a rate increase to the District's customers and future. 

Mr. Burnett then offered to update the rate study in the future if there are changes in assumptions that were considered for the 2023 Wastewater Rate Study. 

The Board thanked Mr. Burnett for his presentation of the 2023 Wastewater Rate Study Draft Findings. 

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 September 19, 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 opportunities.
  • The Colorado Department of Public Health and Environment (CDPHE) issued the site location application approval on October 9, 2023.
  • The District provided approval to proceed with an EPA Water Infrastructure Finance and Innovation Act (WIFIA) loan application on September 19, 2023. The application was submitted to WIFIA on October 5, 2023.
  • The US Bureau of Reclamation (USSR) visited the project site and provided comments regarding the Environmental Assessment (EA) report.
  • The District provided approval to proceed with the design on September 21, 2023. The design team is mobilizing and an updated project schedule including permitting, financing, and design considerations will be further developed for completion of the project as the team reengages.
     
• 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.

Mr. Ravel informed the Board that Merrick & Company and Garney Construction anticipate having a 60% design update to the District by the end of November. 

Mr. Ravel answered questions of the Board regarding the timeline for submitting the State Revolving Fund application and loan distribution process. 

The Board thanked Mr. Ravel for the Project update. 

At 5:06 p.m., Mr. Squires excused himself from the remainder of the meeting. 

Request for Approval: WRF and Lift Station Improvements Project, Merrick & Company, Application for Payment No. 18, Dated October 5, 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 10046979 in the amount of $8,643.46. Ms. Moore explained Invoice Number 10046979 is for work performed on the Water Reclamation Facility and Lift Station Improvements Project from August 26, 2023, through September 29, 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 Ms. Doylen to approve payment to Merrick & Company for Invoice Number 10046979 in the amount of $8,643.46. Motion carried unanimously. 

2024 Proposed Budget Comments: 

Mr. Bieker asked the Board if they had questions or comments pertaining to the 2024 Proposed Budget presented at the October 10, 2023, Special Board Meeting. Mr. Bieker stated the "Notice Concerning Proposed Budget" was published in the Estes Park News and Trail Gazette on October 13, 2023, and is scheduled to be published in both newspapers on October 20, 2023. Mr. Bieker stated he has not yet received questions or comments pertaining to the 2024 Proposed Budget. 

Ms. Jurgens answered questions of Director Bosch and Director Eshelman regarding the employee residence and duty housing that was included as a placeholder in the capital expenditure 2024 Proposed Budget. Ms. Jurgens said the District currently has employees in temporary housing situations and has a need for duty housing for employees who are on call and expected to respond timely in emergency situations. Ms. Jurgens explained to the Board she plans to investigate employee residence and duty housing further and will report back to the Board with proposals at a future meeting for consideration. 

Reports of Officers, Committees, Professional Consultants, & Staff 

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

In addition to the Assistant District Manager's Report, Ms. Jurgens reported that on October 11, 2023, she and Mr. Bieker attended the 2023 Small Communities Workshop that was hosted by the Department of Local Affairs in Johnstown, Colorado. The workshop presentation included topics of water efficiency and conservation, affordable housing, constructing sustainable public facilities, and disaster recovery. Ms. Jurgens commented that the workshop was very valuable, and she appreciated the opportunity to network with other municipal entities. 

Ms. Jurgens then extended her thanks to Mr. Allen and Ms. Mourning, Lab Analyst, for their efforts in coordinating the Estes Park PWO (Professional Wastewater Operator) Seminar sponsored by the Rocky Mountain Water Environment Association. The Seminar is scheduled on October 18, 2023, at the American Legion in Estes Park. 

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. 

Adjournment 

Having no further business, at 5:37 p.m. it was moved by Mr. Bosch and seconded by Mr. Eshelman to adjourn the meeting. Motion carried unanimously.