Study Session
October 23, 2024
Transcript
Describer:
Special Meeting
Wednesday, October 23rd, 2024, at 5:30 p.m.
7404 Yorkshire Drive, Castle Pines, CO 80108
I. Call Special Meeting Work Session to order.
II. Rate study presentation. Erik Helgeson, Bartle Wells
III. 2024 Draft Budget Presentation & Discussion. Phyllis Brown, Nathan Travis.
IV. Consider CDPHE Compliance order on Consent. Paul Politio, Esq.
V. Executive Session: Upon motion and affirmative vote of 2/3 of the Directors present, the Board may enter into executive session for the sole purpose of determining positions relative to matters that may be subject to negotiations; developing strategy for negotiations; and instructing negotiators intergovernmental agreements with water providers and evaluation and costs of professional contracts as allowed by Section 24-6-402 (4), C.R.S.
VI. Board action, if necessary.
VII. Adjourn.
Board President Jason Blankaert:
Good evening, and welcome to the Castle Pines North metro District. Special meeting tonight is Wednesday, October 23rd at 5:30 p.m.. We would like to call this Special Works Special Meeting work session to order. We will open up with the discussion of the rate study by Erik. Erik, are you here? Great. Come on up.
Describer:
On screen. Castle Pines North Metropolitan District 2024 Water and Wastewater
Rate Revenue Study October 23, 2024
Erik Helgeson, MBA, Principle, Bartle Wells Associates:
Good evening. thank you for having me. My name is Erik Helgeson. I'm a principal with Bartle Wells Associates. And, we've been working with, Castle Pines doing revenue projections and and, rate recommendations for a number of years. and so it's nice to nice to be back and, see some new faces. let me, there we go.
Describer:
On screen. Overview
Rates last increased in 2021
Objective for this financial plan: begin to bring revenues back in line with costs - An increase now reduces the size of future increases
Next years the District is planning to perform an asset management study and full cost of service rate study - identify ongoing capital needs - update rates to reflect the cost of service
Erik:
So, this presentation, I'm just going to say pretty high level, go over the recommendations for water and sewer, rates for the last increase in 2021. really, the objective for what we're, recommending today is to have, start bringing the revenues back in line with, with expenses. there's been a significant round of inflation.
we have capital costs. since rates were last in increased. And so, you know, really the purpose this time around is to get things moving in the right direction again. And then, the district is planning to have the asset management study. I think phase two of that next year. And then also I think, the district planning on or is planning on doing a more in-depth rate study to get into the actually review the, the, the cost of service, in a more in depth way.
So this is more of a high level revenue increase recommendation.
Board Member Leah Enquist:
Excuse me. As an as a newer board member, can I ask a quick question just for some context? Yes, absolutely. So yes, my understanding is our last rate study was in 2021. Is that typical or how often do most metro districts usually do a rate study?
Erik:
Well, studies are typically done.
It just it depends. five years is kind of a rhythm for a detailed study. That's pretty common. But rate increases are typically done annually. just because inflation keeps moving up. So you don't want to have your costs get too far away from your revenues, you kind of want to keep the the lines in parallel. so typically we, we recommend a series of increases and then, revisit that.
And it just depends two, three years, some utilities, five years, others just depends on where they're at. And if you have a lot of capital costs, if they're coming in differently than projected, then maybe you might want to look at it a little sooner. If everything is kind of staying with the projections. Five years is fine.
Leah:
Okay. that helps. And and one of the primary reasons I was asking that question is because when I met with Ron Red, the district manager for Parker, it sounds like they do smaller rate increases every year. to make that more palatable. And so I'm curious, like, when was the last time we've done an increase? And if it hasn't been in three years, why is that?
Nathan:
I can take that one. So, I also met with Ron, and so their, for their full context, they do similar to what we're doing this year. They do a rate update annually, and then they do a full cost of service analysis every four years. I think Castle Rock does something similar. I think they do their cost service analysis every five.
the reason that we fell behind on these, kind of twofold. One, moving into or moving out of moving toward the end of the failed inclusion with Parker, we had removed a fee, to kind of help balance the expected, rate decrease. And then the following transition, we ended up basically like that two years behind on our audits.
And so we can't really do like a rate increase until we have the audited actuals taken care of. And so we absolutely need to do this on an annual basis. and we will that the we haven't been able to just because we got so far behind on the audits and then it took us the last year and a half, two years, whatever it's been to get those caught up.
and so once we got that's why as soon as we got caught up, got the 2023 audit, we immediately went into this because we finally we finally could. But, we just had we just had that lag because we were behind.
Tera:
And in addition to that, the last time a rate increase was done, the board that was in place decided not to increase the rates, even though it was recommended to increase the rates.
So they made a decision not to increase it.
Nathan:
Yeah. And so it went from I think the last study covered up through 2022 or 2023. and so they only did the first year of that recommendation and then stopped doing the increases after that. and then once we got to a point where, we were so far behind on the audits, the board decision then was to like, well, let's make sure that we get all of these numbers really dialed in, get caught up, make sure that we're not just doing a rate revenue increase without having the financial information and data to back it up.
And so we delayed until we got caught up to where we are now.
Leah:
Thank you. My last question, again, just for context, I'm assuming at some point, you know, we'll go through and there'll be a recommendation. I'm assuming the board would vote on it, if we were all to approve. Is there any are there additional steps that need would need to be taken?
Nathan:
yeah. So we'll present the study tonight along with the draft budget. and then the actual voting on the rate increase will be done at the same time that we move to approve the budget in December. I think with the meeting's December 11th. so we'll have some time to get this out for you guys to review it.
Go over it. Look at the look at the budget impacts, and then we'll have our public hearing on the budget November 23rd, whatever, whatever that date is. And then we'll have the official vote December 11th to certify the budget. And the rate increase.
Erik:
And I appreciate those questions. And I did want to clarify what your cost of service is.
I thought probably technical in my in my world, it's, you know, that's when you kind of get into the analysis of how our customers using water. Are the rates still, apportioning, the, the cost and, reflecting the costs in a, in an equitable way. You know, are you kind of using what you're, you're paying for kind of what you use or how the cost you, make the system incur?
so doing those every five years or even ten years, you know, just you don't have to do that deep dive all the time. But, I do, as Nathan said, recommend the the revenues. should we we strongly recommend having them increase in smaller increments every year, just like the Parker manager recommended as well. Just because it's it's easier to, it's more predictable and easier for customers to handle.
Describer:
On screen. Water Enterprise - Water Capital Plan
District planning to complete asset management plan next year
Plan will update projected ongoing capital spending
Key Projects
WTP Filter Rehabilitation Program $6m
Waterline replacement
Well rehab & redrills
Castle Pines North Metro District 10-Year Water Capital Improvement Plan numbered in the Millions of dollars
In 2025 $9.4 million is planned $3.7 million in Treatment/Other $2 million in Source of Supply and $3.7 million in Distribution
In 2026 $6.9 million is planned $2.8 million in Treatment/Other $1.2 million in Source of Supply and $2.9 million in Distribution
In 2027 $5.3 million is planned and Treatment/Other cost are not planned, just $3.7 million for Source of Supply and $1.6 million planned for Distribution.
In 2028 $3.1 million is planned $1.8 million in Distribution and $1.3 million in Source of Supply. This is the low point on the graph, the same spending takes place gradually growing from 2028 to 2034 topping off at $4 million in 2034.
In 2034 $4 million is planned with $2.1 million in Distribution and $.8 million in Source of Supply and then $100,000 in Treatment/Other costs return.
Erik:
There's less of an impact. and you need to catch up. So going into the water enterprise first, I want to highlight the capital plan. the there's a significant amount of, capital spending that's been identified in the first three years beyond that point. It's, unknown. So we we put in our reasonable estimate for, kind of ongoing average maintenance costs.
However, once the asset plan is completed, then those will be probably a more, the number will be more, based on, more evidence based. and so that number will likely change when, when that study's completed. some of the key projects, one of them is the water treatment filter rehabilitation program. That's $6 million. And that's in the the first, first year.
and then the, well rehabs and the water line replacements as well. So there's a significant chunk of capital in those first three years that need to be, completed.
Jason:
Can I ask you, why are the, lift stations not included in that?
Erik:
this is just the water. Okay, that'll be next. But it will impact the water as well.
Describer:
On screen. Water Financial Drivers
BWA developed updated financial projections to identify funding needs & evaluate rate increases
Aging infrastructure & capital improvement needs
Water system upgrades, repairs & replacements needed maintain safe & reliable operations
$27.9 million over the next 5 years
Annual cash funding target: $4.0 million
Operating cost inflation
21% inflation since last rate increase in 2021
4.0% per year over next 5 years
Annual rate adjustments needed to keep rates in line with escalating costs (electricity, staffing, materials, insurance, etc.)
Loan to sewer enterprise for lift station upgrades
$8.4M, 30-year repayment with 2% interest beginning in FY 2028
Maintain Prudent Reserves
Emergencies, demand fluctuation, cash funding capital, etc.
Erik:
so the, you know, the financial projections, do you need to cover your operating costs and your capital costs? so we talked about capital. You have the infrastructure that needs to be updated and replaced. significant amount over the, over the next five years and trying to get to a point, where your cash funding $4 million a year.
and at the end of the ten year look, but that's all very the further out you go, the less certain anything is, but sustaining, you know, handling that initial capital costs and being able to sustain some level of capital funding, is, is what's key, on the operating side. As I said, your rates were last increase in 2021.
There's been about 21%, inflation since then. So costs have continued to rise as those revenues have actually decreased because the renewable water charge was removed. In our projections, we assumed about 4% inflation per year. or we want to be a little on the high side, because we don't want to, Come in low, but, you know, it's hopefully it's stabilized that the,
Yeah. Not not as confident as we used to be before, before the Covid era. And, you know, inflation projections. so speaking of the lift station, we're looking at what we built into the models was having an interfund loan, to to the wastewater enterprise to cover the cost of the lift station to keep the wastewater rates from having to, go up significantly.
so the assumptions I put in was a 2%, interest to kind of cover some of the lost interest revenue to the water enterprise. 2% loan to the sewer fund. for 30 years of payments beginning in 2028. and and and the final assumption built into the, financial plan was to maintain reserves and not have them go below, a safe level.
We recommend maintaining reserves at least over a year of operating, which you, achieve that. and, and also maintaining, the having, having, being able sustain a year of the cash fund to capital as well. So the other component that goes into determining how much additional revenue need is deciding is looking at what your current baseline revenue is.
Describer:
On screen. Projected Water Demand line graph.
Steady growth since 2013
Highly variable, between low and high years (2022 v. 2023)
Projected annual demand baseline
540 million gallons
Conservative projection to hedge against demand fluctuations
CPNMD Historic Water Use in gallons
Starting in 2013 at 482 million gallons it rises to a peak in 2022 at 658 million gallons, drops dramatically back to 499 million gallons in 2023 jumps to 596 million gallons in 2024 and is projected to be 540 million gallons in 2025.
Erik:
We you looked at your historical demands and you have been, adding new customers, but your demands are also, very volatile, especially in the last couple of years. There's been some big swings in use. So we we used a number that, we went with, we wanted to be conservative, but still reflect the additional growth you've had.
So we really landed at, 540 million gallons as our projection. so it's a little different than the number that was in the budget. We basically brought that number down. what was in the the the draft budget you saw? So bring that all together. this is the ten year financial plan, and the graph is just a picture of that of the, water fund cash flow.
Describer
On screen.
Water Financial Plan
Recommended annual rate revenue increases of 7% through 2028 and 6% thereafter
Key Assumptions
Rate revenue based on 540 million annual gallons demand baseline
8 new connection per year
$8.4M loan to sewer fund for lift station upgrades
Description of CPNMD Water Cash Flow in the Millions bar and line graph as described:
O&M is a baseline of revenues starting in 2024 and projected from $5M a year to $7M a year by 2034
With Rate Funded Capital added started at about $14M, goes up to $15 million in 2025 and drops gradually to about $8M in 2028 and rises to about $12M by 2034.
Loan to Wastewater adds $8M in 2025, it is only planned for 2025 at about $23 million of the total budget
Reserve cash starts at $40M in 2024 and drops to $16M in 2027 and stays at this level through 2034
Revenues Start at $10M in 2024 and fall to $7M in 2025 and slowly rise to $12M by 2034 along the same line of O&M plus Rate Funded Capital starting in 2028 through 2034.
Erik:
And the columns are the total costs and the, which have three components. The operating costs, the rate funded capital costs, and then the loan to the wastewater fund. The Green Line is your total revenue, and the dotted black line is the, reserve level. that's a result of the difference between the revenue and your expenditures. So your capital costs, in addition to the loan to would bring down your reserves quite a bit, but they still would be at a very healthy level where you are meeting that.
target of being greater than a year of, of costs in reserve.
Leah:
I have a question. This isn't my area of expertise, so hopefully it makes sense. how much are we relying on? I believe it was the 18 million from the sale of our water rights to fund some of these projects.
Erik:
Well, I think that's in your.
What's in your what has built up your reserves. so that the drawdown of reserves will be tapping into that and other existing reserves. But your the the overall size and Nathan add to that if you have any.
Nathan:
Yeah. I was going to say so the the, the large bulk of the 18 million I don't have the exact number.
isn't funding any of this. So we did carry a certificate of participation debt. And so when we had sold the water rights, we took that $18 million and used it to immediately pay off the COP debt. the reason that the board at the time decided to do that is, really to keep, some sort of inclusion on the table.
One of the requirements for dissolving a district is that you can't own anything and you can't owe anything. And so we needed to resolve that debt so that $18 million was used to pay off the COP debt we haven't been, sitting with it in our accounts, the large bowl, the majority of the, large, fund balance that we have now was more tied to, tap fees and then that $15, renewable water fee the board removed a couple of years ago,
Leah:
and Nate would let COP debt.
How did we incur that?
Nathan
I I'm not entirely sure what it was related to. It got paid off right when I moved up and moved into this position. So I'm not I don't have a long view on what that is, but I can definitely get that answer for you.
Leah:
That's a lot of money. Yeah. Yeah,
Legal Counsel Kim Seter, Esq.:
it's mostly water and sewer It was before my time also the bond documents.
the bond documents referenced, lot of lines. So, pipelines.
Nathan:
Yeah. My my guess is that I think that a large portion of that was for the interconnect pump station and pipeline, but I'm just not entirely sure that entire project cost was around 13 or 14 million.
Leah:
I mean, fixing it and building it or building it. Okay. So installing it.
Okay. Thank you.
Erik:
And I correct myself. And so what it did do is it brought down your annual costs. So you're which helps a little bit with reserves but your annual costs. Now if you have the debt service that would be your column. Those columns would be higher. You'd have a, I forget what the actual your annual debt service payment was, but, I'm not going to try to do the mental math in my head, but yeah, it was several hundred thousand, if I remember correctly.
And so you did bring down your annual annual cost. And so in this, in this financial plan that we created, we also tried to be pretty, conservative with assuming new growth you're getting towards buildout. So we assumed eight new connections for the next five years, which, maybe on the low side, but we don't want to we didn't want to rely on connection fee revenue.
And one of the thing to keep in mind is if revenues come in better than expected, if you have a bigger a high water use year, you have more connections, you know, then then you can adjust your revenue slope, accordingly. You know, the green line will shoot up a little bit. Maybe instead of having a continual series of 7% increases, then you could dial it back to have, you know, be on a path with 6% increases or 5% increases.
and conversely, if, if, you know, things end up being more expensive, you know, then you have to adjust your slope a little higher. but really the, the goal is to and with the what we're recommending is, you know, the not falling further behind so that you're, you know, on a, on a trajectory and you're just making slight adjustments to it, which is easier to manage.
Tera:
And so Erik, when you're saying a recommended annual rate revenue increase of 7%, for how long?
Erik:
This is for the ten year period. So this is and you can kind of see it on the on the graph, basically getting you up to a point where you are, where your revenues. So it's a, it's a initial big draw on your reserves and then just a slight draw on your reserves to get to a point where you're, having, essentially breaking even at the end.
So you're meet at a point where your revenues are slightly exceeding your, your, your annual costs. now, in actuality, your capital spending is going to be much more, inconsistent. but we that's really a number that's trying to reflect kind of an average, average capital spend in those further out years where the what's going to happen is more unknown.
But we're and as I said before, once you complete your asset management study, you'll, you'll have a better handle on what the annual number will be. But we felt 4 million was a reasonable amount when we were going back and forth on what what we should, include for right now. And at the conclusion of that said, if it's a little lower, maybe you don't need as much.
If it's a little higher, you need more. But, and we're also this is the first year we're coming back into this. So we also are making more conservative assumptions, as I said. So for this year we're recommending 7%. In this model you're looking at, there's a 7% increase every year. But you know, the the real circumstances made and a sorry leading to something.
Tera:
I want to interrupt another question. So do we know what that looks like the like in dollars and cents to our customers, the end users. What does a 7% increase look like. Like
Nathan:
yeah we'll get to it.
Tera:
Well all right. So good.
Describer:
On screen. Regional Comparison: Single-Family Residential Residential Monthly Water Bills
Including Fixed Charges, Variable charges and Property taxes. CPNMD is currently rated in the lower 45% of the rates paid by all the surrounding water districts at $114.97. The break down is about $40 in Fixed charges, $64.97 in variable charges and $10 in property tax. The lowest being $76.59 and the Highest being $205.69. Even with the proposed rate increase they stay in the same range at $109.35.
Erik:
It's a great question. so this is, a typical bill, currently. And, you know, there's with the water budgets, you know, everyone has their own specific know there's not an exact typical, but, this is a typical bill, and it's a, you know, so you're at the about $115 a month.
and this is, you know, so this is not just winter use. This is kind of, I guess, spring use when we kind of where the average falls. and, you know, so a 7% increase to that will increase your bill up to 123. 14 in this calculation. And on the water side, you're, you know, above average and you'll stay above average with your water costs.
again, one other thing. We also estimated property taxes in here. So trying to, you know, keep, you know, the total water cost to give a picture of that. So your rates actually would put you a little bit lower. But we're, we're trying to, keep the, the full kind of cost of water picture in this chart.
Leah:
I have a question and maybe this may be for Nathan and Kim. Do we have the ability to adjust rates at any time, or are we is it like November every year is the,
Kim:
You have a 30 day notice period and that's it. But you can adjust them in any any time.
Leah
okay, The primary reason I asked is with the back to back boil notices, and the concerns around kind of water quality and just water quality.
I worry about the optics of increasing rates so quickly after those events
Erik:
in our anticipation. But this was for January 1st, just in line with the budget. But, you know, you do have flexibility. yeah. To whenever it feels, most prudent to do so. I think it's a, doing it with the budget is kind of just adds the rhythm to keeping it consistent.
And then also is easier to administratively, to account for any other questions on, on the water side before I move to sewer?
Board Member James Mulvey:
yeah, I have one. if I'm looking at this chart and assuming this is a pretty good cross-section of costs per month for a residential person, what's driving us to be maybe not the highest, but pretty close to the highest per month.
Why don't you break that down for me and explain to me why our costs are, I would say, significantly higher percentage wise than some of our neighbors.
Erik:
I and I actually might have to bring Nathan in on that a bit. because, you know, every utility has its own economy of scale. so you're a smaller utility. but there's still significant cost that you have to, incur.
I know Castle Pines average water use tends to be a little higher than others, so you have to have infrastructure to support that. and then, what plays into a significant part is also the age of infrastructure. and how well maintained, you know, so every utility has its own unique characteristics. But Nathan, I'll turn it over.
Sorry to put you on the spot, but if you had
Jason:
Nathan before you answer that, why is, Castle Pines not on their list? I don't see it. The two areas. That's us talking about the village.
Nathan:
it's just not one that we looked at. So this is the same, same chart that we've used, kind of in the previous rate study in the other districts that we compared ourselves to. so we kind of reinvented that one that's, you know, it's information we could certainly get and get that out to ya.
Jason:
I think that one compares apples to apples better.
I mean, it's our sister district.
Nathan:
Yeah. And so one of the things that you can, that really like stands out on this chart also is if you look at the actual age of the systems, the the older and larger systems tend to have lower rates associated with them. And a lot of that is just like they got in the game early.
So they haven't had to spend like like Aurora for their current water rights. Colorado Springs, a lot of them have very old water rights that were found in an old district. So they haven't they haven't had to have a lot of capital outlay for newer water rights. another thing that'll drive those costs is the, an a really a big factor is the cost of getting that water.
So another thing that comes with, systems that are older and have larger amount of, larger amounts of available surface rights, that water just flows to your treatment plan, generally speaking. And so a lot of our costs are just our water, sewer, our primary water sources, you know, anywhere between 1800 and 2,200ft in the ground. Electricity costs a lot to get those out.
there's there's a lot of a lot of factors that kind of go into that, that overall picture. I think it's hard to, for me to just nail down, like very specifically like these are the reasons why, you know, city of Aurora is so much cheaper. Why? Centennial. So Centennial is is another example. So centennial rates, have gone up significantly in the last year.
They were for a long time using a lot of their tap fees to drive down and kind of artificially lower their rates. And so, just this last year, I think they ended up doing close to a 20% increase on their cost. So, there's just a lot of, a lot of different factors that can go into it.
Jana:
Does this reflect the 20% increase?
Nathan:
This is Centennial current rates. Yeah. It should.
Erik:
And I will say we you know, with this effort, you know, after the audits were complete, we've been kind of on a very fast pace. Going through the, an accident.
Describer:
A car accident takes place right outside of the CPNMD board meeting location.
Nathan:
yeah. I'm going to go make sure everybody is OK.
James:
Okay. I'll I'll ask you a different question then. do you want to take a pause?
Jason:
Yeah. Let's break for a minute. Okay.
Describer:
The CPNMD Live Stream Please Standby slide is shows for just a moment.
Jason:
All right. Thank you. And we're back. And we're going to resume our discussion here. Okay, Jim,
James:
I'll go back to asking my question a different way. there's a significant difference between districts here. you know, and then we look at ourselves and we look at where we're heading, and it it to me is problematic. and the part that's problematic is what's behind these numbers.
And, and I think I needed to explain to me what's driving our costs. Said 20 to 30% higher beyond some amorphous water. Right. This then you know, this thing, because and economies of scale, I go, do we have hard numbers of what constitutes our costs currently I understand future and we have some aging infrastructure, and I get all that and we have to pay for this stuff going forward.
But I, I kind of want to go at least one layer deeper than that. And I want to know that you understand and you can articulate clearly what's driving the costs from a percentage of that $100 a month to $120 a month that people are paying.
Nathan:
So to get to that level of detail is specifically why we have the full cost of service plan for next year.
So this is really kind of getting us in a stopgap position so that we don't continue to fall for it, fall further behind. Once we have the full cost of service, evaluation will be able to directly ties numbers where they go. And then we can also, easily get that information from neighboring water districts that have done theirs on a regular basis.
And we can really do a straight apples to apples comparison on those.
Erik:
And, and also so today you're going to go through the budget as well. And so the budget is, is the gray portion of these columns. So that's the your operating costs. So you know, those you know those costs are what drives that portion. And then the the yellow portion are the known, especially in years, the first three years, those are known capital project capital costs.
And so, you know, what's driving my recommendation is the fact that, you know, you have your actual previous costs, your budgeted costs and your capital costs that, you need to be able to, fund and then sustain your, reserves, once they once they stabilize. So, you know, looking at one year in advance, I think, you know, it's been several years since you've raised your revenues.
So really, this is, as Nathan said, a stopgap to get back on track with, having your rates, kind of keep pace with costs and then, next year recommending doing a deeper dive into, into your costs, your what are your what is the level of sustained capital spending you're going to need? Because that really affects the trajectory of the the revenues over time.
You have the essentially, if the yellow portion was half of what it was, then you could probably get away with 4% just to keep pace with inflation, essentially. And whatever inflation ends up being over time, you know, that would affect, you know, if inflation is starts to sustain at a lower level, then, you know, you wouldn't need the, you won't need to continue the 7% level.
But we plugged in at this 4% higher inflation level into these projections. just to really know that 7% will keep you in the ballpark. If you if you start raising rates at that level, it'll keep you in the ballpark. And, you know, you're not you don't need a 12% increase, but you do need more than a 2 or 3% increase.
and so we felt this was the amount that you could sustain, given current conditions. And then once, you have a better handle on things after the asset study and another year of, revenues at the higher rate, at the higher level, you know, maybe you have another good water year and not a 2023 water year.
And that could affect the picture as well.
Leah:
and this might be more for Nathan and, Jason and Tera. when we were exploring the integration with Parker, you know, just kind of looking at how these larger water districts have lower costs was, was that the idea is that, like the the cost would be less.
Jason:
And it wasn't just about cost.
The cost, I think would actually have gone down just a little bit. But the, whole purpose is to get renewable water to our district.
Nathan:
Yeah. And so the some of the, our as a district are communication around the potential inclusion. There was also a lot of things that weren't necessarily made clear to the public, unfortunately. a big part of that is if you looked at moving into the Parker inclusion, if you looked at the overall savings, I think it was like an average of like 2 or $3 per customer.
and again, the bigger driver there was to get attached to their, their, their renewable water plan. But that was the average savings for most customers. If you cut out our top users, we and then applied Parker's, their, their rate schedule for their water usage. We actually had a not insignificant subset of users with larger lots, just our bigger irrigators that would have seen their bills go up as much as 400% in the summer.
And so, like the overall cost went down. But the there was there are definitely residents here at residents here that were going to see their water bills skyrocket as a result of that change over.
Tera:
And I think, you know, Jim kind of hit on this a little bit. And I know I think looking at sort of the, the regional comparison, those seems a little misleading to me because we don't know really what those how, what those costs are comprising there. That isn't really a straight comparison. I don't know if there's any way to sort of normalize, you know, normalize that to really understand.
But yeah, I mean, that's not really it looks, you know, to have 205 to 76 looks,
James:
yeah. I mean, do we interrupt here a little bit? The way I've seen it presented in other water districts is essentially rates per delivered gallon or per 100,000 gallons of water to a resident. because that that's a metric that most people can look at and understand.
the water bill per month, you know, if you want to take that gallons delivered per customer per month and you want to divide that in there, I think that would be a much more useful number for us. It's for a comparative analysis. This is nice because it gives you what the delta is going to be, but it doesn't really help me understand where our costs really are and what's costing us more money than other adjacent districts.
And we need to understand that because we can't fix anything and we can't spend our money, you know, appropriately if there's something that's costing us a lot of money, like our water treatment facility and supporting that, I don't understand if that's a problem. I don't understand where our money's going, and I understand what's driving our costs significantly higher than our and our our neighbors here.
And you need to help us understand that a little bit better. And again, I don't want to talk about some, you know, there's a lot of things that go into this, but you need to quantize and make it discreet and tell us where that money's going and what's driving our costs, and then give us a cost per gallon, ten K gallons, a hundred K gallons per month, and do that for our neighbors.
And so we can actually see where we are on that continuum.
Jason:
I can I jump on that? Jim, I like what you're saying about comparing this to like a thousand gallons per month cost to, to a resident. I think that makes much more sense than this. But I also see that Stonegate is not up there. We don't have Castle Pines, this village, and still get two of the smaller districts in our neighborhood on this, showing us what their costs are.
I think that needs to be addressed.
Erik:
And we can we can update that. And again, my apologies on, you're not including enough, we're this is a fairly quickly, put together process. So we, we just really the purpose was just to give you a little bit of context to see what an average bill would look like.
I mean, for everyone with what we're recommending, their bill will go up 7%.
Tera:
I mean, that is helpful because this would be something that the end user would look at and kind of compare. It's also but, something that's more, quantitative that with our smaller, more like districts, I think would be helpful for our understanding \
Erik:
and would absolutely be happy to, apologize.
My battery is running low. I flew from Fresno earlier today. I think I need a plane in my in.
Nathan:
Erik, I can get you. I can get you a list of similar sized districts in the region there. Certainly. you know, beyond Stone gate in the village, the village is a little bit. They're actually quite a bit smaller than us, but it's a, like you said, a third sister district.
That's a good one to add, but we can also look at, you know, Pinery water and sanitation District Southgate, there's a bunch of them that are around and closer in size. So I'll get them, I'll get them a list of comparison parallels and we can update that.
James:
The Centennial water, I forget the engineer's name that I go to his presentations.
He has over 25 different districts done that way. So all we have to do is make a phone call and and get his presentation and include it in there.
Erik:
And I will say just one, one thing with the per gallon, we're making an assumption of kind of the average water use. And so there's fixed and variable cost.
So he's still taking it's still going to be there's going to be a number of assumptions built in to the number, that we had to build in here as well. Thank you. so, you know, taking the fixed costs, what is the because you can see the portion on this chart on this graph where the, there's fixed charges and variable charges and, you know, if you are saying what's the cost per thousand gallons for Arapahoe County and if you had it be 5 thousand gallons and they're going to be much higher, and if it's, 30,000 gallons, because so much more of their bill is fixed than there will be much lower.
So it's also just picking, you know, making the assumptions. You can look at varying levels of use. You know, we could run multiple versions of this, of this chart, but even the cost per gallon is going to be a bit of a it'll change depending on where you what you pick, as
Jason:
I think we were just looking for an additional slide that just shows the cost of gallons per or the cost per thousand gallons or whatever, you know, number that is.
Erik:
And, and most cost for most utilities are fixed. So that's, you know, about, you know, depending on if they're purchasing water or if they're producing water, most of it's fixed. So you're looking at, you know, 80 to 90% of those costs are actually fixed. And and the actual variable cost is is a pretty small component of the overall, overall cost of the utility.
James:
So you're kind of getting to my point because I understand their fixed costs. You have a facility it costs X dollars per year, and that doesn't really change depending on flow rate. I get it, but we can't begin to understand where our costs are really hurting us. You know, until we get those kind of numbers, I mean, we there's a flow rate and there's, you know, a number of dollars associated with that flow rate.
What's that number?
Erik:
like And what you're kind of talking about is total flow of the system divided by. And then I can take the operating and maintenance numbers. Sure. And you can kind of bang them against that and just say, where are we spending all this money. So you're taking the total system flow divided by system costs. That's is one way of doing it.
That's a total gross, probably a dumb way of doing it. But I'm just saying I don't even have that number. Okay. like you said, this is a good set of numbers, but what's I want to scratch through that and try to understand what's getting us to $123 a month for an average customer. and forgive me, it doesn't feel like you know that answer either.
Erik:
Well, and I'll be totally transparent. the I'm, I have the, the on the finance side, so I'm coming in and taking the budget and the capital plan and projected demand and putting it together into, Long-Range Financial Plan. So I'm not diving into the, engineering or the, operating. that's not my area of expertise, and we're fine.
James:
And then I'll hit you with this then and interrupt you. How do you and I do this all the time for budgetary cost estimates at my work? I need to understand my cost structure so I can put out a proper bid proposal. So I know my I'm not going to screw up my company and put out a bid that we're not making any money on.
All right? We're we're a utility that we don't really need to make money per se, or we need to have a little extra in the bank in case something bad happens. But we need to understand what our costs are. And all I keep hearing is next year, next year for deep dive, next year for budget. I'm kind of sick of it.
So I really I don't want to wait next year. I want to understand what you understand today and why you say we need 7% per year. What? And if you can give us an answer of what you based your assumptions on, then I'm concerned,
Jason:
Jim. I think if he's basing his assumptions on the budget, then I think we need to wait to have those conversations with the budget.
And but, I mean, I understand what he's saying. He's just taking those numbers. He's not, he's not
James:
I know I'm giving him a hard time but. No, it's like people are going to give us a hard time. Yeah. All right.
Erik:
It's absolutely fair. And, and I guess the other thing I would say is, you know, we based on prior year actual spending and, and the current budget, so we compared the budget to actuals.
If there was, some areas that looks high, we tried to normalize that for the future years. And, and as you know, it is this, going to maintain at this level? I think we made a few adjustments as we went along to the budget to bring it more in line with actuals, but you compared the last, I think, three years of actual spending to the budget.
And then use that information to kind of form our base projections going out for the next ten years. yeah. So and drilling into the what's driving the the cost will be in the line item details in the in the budget.
Describer:
On screen.
Sewer Capital Plan
Key Projects
Lift Station Upgrades - Compliance advisory
Asset Replacement Program
CPNMD 10-Year Wastewater Capital Improvement Plan a bar graph
In 2023 $3 million in resources went Lift station Renovation projects and new vehicles. In 2024 $4 million went to more lift station renovation
In 2025, we have budgeting for an additional $1.6 million to go for lift station renovation. From 2026 to 2032, we turn to an Asset Replacement Program starting with $500 thousand in 2026 and rising to $1.4 million in 2032. In 2032, we have plans again to purchase new vehicles.
Erik:
And so for the sewer we went through a similar process. your main cost is the lift to lift station renovation. and so that's shown for the next three years. And then after that, we'll put in an estimate for asset replacement called asset replacement program. It's mostly repairing maintaining and repairing your collection system for the sewer.
Describer:
On screen. Wastewater Financial Drivers
BWA developed updated financial projections to identify funding needs & evaluate rate increases
Aging infrastructure & capital improvement needs
Sewer system upgrades, repairs & replacements needed maintain safe & reliable operations
$9.6 million over the next 5 years
Loan from water fund for lift station upgrades
Operating cost inflation
21% inflation since last rate increase in 2020
4.0% per year over next 5 years
Annual rate adjustments needed to keep rates in line with escalating costs (electricity, staffing, materials, insurance, etc.)
Maintain Prudent Reserves
Emergencies, demand fluctuation, cash funding capital, etc.
Erik:
flow. same process, you know, bring the capital together with your budgeted costs and, and putting in long, long term assumptions and, to, to gauge idea of where you're, where you're are now and where you're going. a couple significant things. Current, in the current budget, you have a, sale of, I think it was minimal mineral rights or oil rights for $1 million.
Describer:
On screen. Sewer Financial Plan
Recommended annual rate revenue increases of 8%
Key Assumptions - Steady increases to property taxes, within TABOR and Mill limitations - $8.4 million loan from the water fund for lift station upgrades
CPNMD Wastewater Cash Flow a bar and line graph description
O&M in 2024 starts at $2.6 Million, stays steady until 2026 and then rises steadily to $3.5 million in 2034. Debt Service is $200 thousand from 2024 to 2027, then it jumps to $500 thousand in 2028 through 2033, and finally reduced to $200 thousand in 2034. Rate Funded Capital stands at $500 thousand in 2024, drops to $50 thousand in 2025. It is absent in 2026 and returns in 2027 at about $100 thousand and jumps to $400 thousand in 2028 to 2030. In 2031, it spikes to $1.2 million through 2033 and increases again to $1.4 million in 2034. Revenues Start at $3.9 million in 2024, rise to $4.1 million in 2025, drop to $3.2 million in 2026 and rise steadily overcoming debt service through to 2028 and then overcoming rate funded capital in 2034 at $5.4 million. Reserves start at $6 million in 2024, increase to $7.5 million in 2027 and steadily fall to $5 million in 2033 and 2034.
Erik:
So that, is what is driving revenues, fairly, in 2025. but then after that, you know, and, and financing the, the lift station. So you're in the first 3, 25, 26, 27, you don't have many capital costs. And then, you have a inflow of revenue which, which boosts your reserves. the sewer side, the revenues are tighter.
if you we we put in the assumption of an inter fund loan, to pay for that lift station. If you do end up deciding to finance that and maintain water revenue, water reserves at a higher level, it looks like you need likely, about 12% for a couple of years. revenue increases. And, that would be to be able to sustain the debt service coverage and meet, coverage requirements that, you would need to meet if you use the, third party to, to finance
Jason:
so it's 12% or something like that.
So it's 12% if we don't do the, the, debt service from the water district.
Erik:
Yes. That that was the preliminary number we were looking at. to to have a reasonable, I think, maintain coverage at about over one. We wanted to have it be on the conservative side to some maintain, over 1.4, times coverage.
You need about that 12% given where you're, current, expense, given what your current expense level is. we did revise that. I think the budget has some lower, projections, for sewer revenue. We did go back and look at your actual revenues, and we revised that number up. because sewer revenues are based on your are fixed based on your average winter consumption.
So, we know, for the remainder of this year, you're going to have higher revenues than was stated. And so it did make the picture a little rosier. But 8% is kind of the, minimum. If you do the inter fund loan, it's, you know, if you if you go up, if you go up for a bond, you would need, a higher, higher level rate revenue.
We also, on the sewer side did assume that the mills would increase as your revenue increase, you know, saying below the 10% cap, but you're authorized up to seven and a half. So we also to kind of keep everything moving together. We had the the property tax also increasing with the rate revenue. And on the water side, we kept the property tax flat in our projections.
Leah:
I have a quick question about the loans. Were we to pursue an integration with the larger water district? How would that work? Like would they make if we've taken out loans? Do they assume those or is that something that's negotiated or.
Kim:
Typically, typically we would have to cover that, but it could be negotiated. The the last deal with Parker, we had to get those paid off.
Describer:
On screen.
Single-Family Residential Regional Sewer Bill Comparison bar graph described. It shows sewer charges and property taxes. CPNMD stands in the mid to upper end of the spectrum as compared with surrounding districts. They lowest is $25.05 by the City of Aurora, CPNMD stands at $53.01 and the top end is $90.91 from Sterling Ranch.
Erik:
And so this this is again just a high level comparison on the sewer side. you know, your position is somewhat similar, with the sewer costs and then, bringing it all together, combining the water and sewer, you stay in the same neighborhood, but once everything's brought together, you're all in costs would be a little bit higher than just slightly higher than Parker.
for with the given, with the assumptions that we included, for water use and, and, and as I said, once we go back in and do it deeper, dive into your customer data. This is a very high level. look at your, water use and revenues. We'll have a better understanding of what your current average customer is.
You know, this is, kind of basing it on older information on what your average customer uses. but, just wanted to show where where you are and where where it would take you. and so with that, I'll conclude and ask if any more questions.
Jason:
It doesn't appear so. thank you very much for your presentation. we have a lot of data to dissect now, so thank you, Erik. Thank you.
Okay. We'll go ahead and close out the, item number two, the rate study presentation, and we'll move on to item number three, the 2024 draft budget presentation and discussion with Phyllis and Nathan. Phyllis, are you with us?
Phyllis Brown, Community Resource Services of Colorado (CRS):
yeah. With you. and probably, I don't know, Nathan, are you going to share the screen or are you going to be looking at your packets?
Nathan:
We'll be looking at the packets.
Phyllis:
Okay. So I'll let you leave, and then I can ask for an answer. Any questions? If that works for you.
Nathan:
sure. So for the, for the budget this year, there's definitely some things that we need to continue to look into.
we do have a pretty good feel for, the capital. We have a really good feel for the capital projects that we're looking at doing in the individual funds. so I'm in the water fund right now. So the few things we have coming up. So we are, looking at a potential, well, regional re drill for A1.
I'm sorry, A2 we're doing some investigating there. so I apologize. Hold on. Let me get my. Start at the top and work my way down.
Okay. Sorry. We'll start with the other one. So, one of the, one of the main increases. So we we had a meeting not too terribly long ago looking at potential, additional full time employees. So this budget includes the addition of two FTEs. Those positions would be a, an operations manager, somebody to kind of step in and look at, a lot of the capital projects that we're doing, put more focus and attention to things like the CCR.
those kind of those kinds of projects and really just get a better and more consistent eye on all of our individual facilities. And then primarily to help with capital planning, capital development, looking at all of those projects. So that's, one FTE the other FTE that. We're, that I'm requesting to add would be a field services technician.
that person would primarily be, for, customer service requests, high usage, meter reading.
The other component, the other big component of that position would be for to try and save us quite a bit on capital outlay. So we are have been in for a while now in the process of upgrading all of our water meter radios to a new style. So there's, an old version and new versions. We're trying to get all of those swapped out.
We've looked at outsourcing that the cheapest way that we could find. The last time we looked was $225 a house, just in labor cost. And that's on in addition to about $150 per each one of those radios. And so being able to turn that program over to them as well, we've got about 800 of those that need to be redone.
And then moving beyond that, we're going to need to start replacing water meters as well. So we kind of cycle, through the radios and get them turned back around on the water meter. So that position, would handle really just a lot of day to day calls and requests. with that, we're requesting, we're, we're requesting vehicle purchases.
So we would need a, vehicle purchase for the operations manager. Go ahead.
Leah:
Didn't we just get rid of vehicles?
Nathan:
Correct? Yeah. So we had we were down to the one vehicle that I sold or that we sold that was mine. or at least my assigned vehicle, because we got to a point where it was aging out anyway.
So there were some vehicles that got transferred as a Parker,
Leah:
how do we know it was aging out?
Nathan:
Because the cost of maintenance on it was skyrocketing. It was well over 100,000 miles. It was needed.
Leah:
What was the cost of maintenance.
Nathan:
I'd have to go back two budgets ago that we were putting, if I remember correctly, around 5 or $6000 a year.
Leah:
Okay. I'd be interested in seeing that. That to me, that feels like a bait and switch. Like we made a case to get rid of vehicles and then we want to purchase more vehicles. Okay.
Nathan:
so and then also comes with that just general office furniture, equipment that they need, tool purchases that would come with bringing some of those operations staff and operation functions and functions in-house. And so that's driven up some of the like a temporary increase would be a one time, one year increase to the small tool line item, which is the 60, 60, 52, 36 also rolling down on the water side, there's there's $100,000, charge for the backwash reclaim tank upgrade when following the first boil water notice, we had to put a temporary temporary cap on top of the backwash reclaim tank.
For whatever reason, we didn't get billed for that. this is something that I brought to the board a few months ago. and the agreement that we made with PCL was the contractor was that rather than because they delayed their, because they delayed in charging us on that like two years, that they would allow us to push that invoice into the next budget, next, next fiscal year.
So that sits on the budget. we are continuing with the water treatment plan and O&M manual development. So we've been steadily working through that. We've got a lot of facilities that were poorly documented. Our water treatment plant, the only documents that we were able to find anywhere were the original 1984 construction drawings. So we didn't have anything on either of the upgrades.
And so or either of the, additions that were done to that building, in 2006 and then again or 2001 and then again in 2003 or 2004. We didn't have any information on that. So we're essentially having to reverse engineer the entire treatment plant, as well as some of the wells. And so we're putting time and effort into getting O&M manuals built, schematics built, process diagrams PNMIDs, which are the kind of the control and electrical schedules we're getting all of that developed.
So, that's a that's a carryover. But we do have some additional work to continue to do there. we are anticipating for 2025, $3.3 million for the water, water treatment plant filter rehab program. that includes the engineering costs, an estimate as well as the first calendar year of construction. So the total cost on that project will be closer to $6 million.
But the other 3 million of that will incur, we project to incur in 2026. So, half of that project is sitting in there. This, the water treatment plant, water treatment building, construction filter room, office 150, that one. I don't know how that got back in there. That one's done. So we will be able to omit that from the final version.
we do need to, do a water loss study and a pipe condition assessment for the water line and distribution system that will get done as part of one of the final pushes on the asset management side. So we really, as especially as we talk about making sure that we know where expenses are going, we really need to take a harder look at our the actual condition of our distribution system.
So we have some, qualitative data that's driving a lot of those, a lot of assumptions. But we really want to spend some time and effort to dial that in and really know exactly what areas are pipe condition. The pipe conditions are what our pipe condition is, especially in the earlier construction parts of the district. So that we can have that projected and dialed in our capital plan.
we did our capital plan, our very, very rushed capital plan in 2020. the deferred capital costs, like $19 million 19 or $20 million of that was assumed in the water line side. And so we really need to get, really need to get that more, more dialed in the monitor water line replacement. That's the, final phase of the project that's going on this year.
We expect to start construction. on that project in June and then finish replacing the water line from, Berganot or Berganot, to, Buffalo Trail. So that'll be another project that's done. in conjunction with the city. we have $100,000 for the interconnect pump station surge system modifications. We really just need to spend some time and go through and design that and potentially redesign that system.
The one that's in there, we just it's not effectively maintainable. there is also a and it's, it's it's redundant. Anyway, there is a surge arresting valve in there that is separate from the surge tanks downstairs. And so one of the things that we want to look at is if that's sufficient or if we can put a similar device in there and then kind of get rid of that.
So we do have some money set aside to, engineer and then, potentially if the, if the fix is relatively inexpensive, potentially get that corrected as well. the, we have 1.3, in there for the, for the Yorkshire Water line. That one should have been zeroed out. So. Well, that one is going to be significantly lower.
I understand why that one got caught in there. But so the following the break that we had a few weeks ago, and I've got a piece of paper that I meant to bring in, on Clare Court,
Leah:
Sorry Nathan, Where are you? What page are you on, page three. Okay. Thank you.
Nathan:
Yep. so for the Yorkshire Water line, we need to.
And I just spoke with Greg about this. This one's a little bit more recent. The one we need to look at. We had a pretty significant break on, Clare Corby Court. I can't remember which one. When we pulled the pipe out of the ground, the electrolysis and the degradation is really, really high there. so I'm not actually anticipating doing a construction project on that, on that.
But we do want to do a series of potholes to do physical pipe inspection and then do design to look at, construction of replacing the south side of Yorkshire, and those individual cul de sacs into into 2026. and
Tera:
so I wasn't clear, you said it's in there for 1.3, but you think the cost is less than that
Nathan:
for. Yeah. Because for, for, for next year. this one was a little bit of a moving target was so recent. So we're not looking to construct that next year. So the 1.3 construction cost isn't going to be there. We'll have a design cost that's closer to like 60 or $70,000. So that one will come down significantly.
that should cover any the main changes, the major changes, at least the capital, and the large line increases for the water side we're, doing kind of a general overall, 5% for, inflation and projected costs. That's right in line with what most districts are doing. at least the few that, at least a few that I called, I talked to Castle Rock, the village, and then Ron and I briefly discussed it, but we didn't get into super heavy details.
But that kind of five, 5% across the board increase just for increasing costs. All of that is kind of kind of what we're expecting from, an industry standpoint. And that is in line with what the state had presented for their capital projects for, for their, cost forecasts at, NSDA when they gave their statewide financial report.
Those numbers that they presented aren't necessarily all that great. By their own admission. They've had a pretty low response, pretty low response rate to their survey. They expect a very large adjustment when they, when they shore those numbers up in March. And then their information also only covers Denver and Lakewood. for whatever reason. That's what projects their whole state help.
So that's where we, that's where we got the 5% on that one. we'll, we're working on, similar to last year, we'll have, once we have the numbers dialed in a little bit more, we'll have a much tighter packet. There'll be written explanations for, especially the capital projects. the staffing increases, all of that. So we will have prior to the budget hearing, well, prior to the budget hearing, we'll have a document that is much, much cleaner and ran through.
one of the things that we've been struggling with, especially with missing the audit again, is just slamming ourselves into such tight timeframes to get these budgets done. So one of the things that I'll definitely be, very, very, active on next year is readjusting those budget timelines so that I'm not sitting in meetings with an Excel spreadsheet trying to get a budget done at the last minute.
I would much prefer to fall back into a pattern of getting the audit done relatively early so we can move into a comprehensive rate study, and then we really should be having these budget conversations beginning in late June or July, so that we're we're lined out a lot better. it's just it's it's been frustrating that it's taken us so long to get caught up.
And so, I certainly, certainly am looking forward to getting to a more workable and feasible schedule. So we don't constantly feel so, so rushed on this stuff.
Leah:
Nathan, I have a question about page 4. Before. I don't know if we're going to get there. for the wastewater operating expenditures under salaries and benefits. who are those salaries for?
Nathan:
so the operations manager and the customer service supports by or the customer service field position. It's the same one we take. yeah. Two new positions. Those those funds are split between them because theoretically, they're, we're, we're working on. So like, my position is split between the individual funds because I'm working on both of them.
Certainly the same for the operations manager field services person. So because our staff has responsibilities inside of both funds, we split the cost, for all the employee compensation and benefits.
Leah:
Okay. So the clarifying just make sure I understand. So it's line item (606) 100-5111. it has 83,498. Is the salary for 2023 actual. And the 2024 budget is 114,000.
So I want to understand that delta. And then same for the next one. It's 75,000 year to date. And then the estimated is 115,000.
Nathan:
I'm sorry, which line item was that. What were the last four?
Jason off-mic:
it's page 4. It's Page..
Phyllis:
I can help with that answer.
Nathan:
Thanks Phyllis.
Phyllis:
Remember. Remember last year we had, storm drainage fund and we had the general fund, the water fund and the wastewater fund.
And so the salaries were split between all those funds. Now we're down to two funds for the budget. And so that split that we had starting of March last year was, 65, 35 between water and wastewater. So you'll see your estimated for 2024 is higher than it was. and, and 24 had us split. So now we're looking all 65, 35.
So you're getting much higher numbers for all employees and benefits. And the expenses that were shared between all those funds.
Leah:
And then sorry, just to clarify. So it sounds like those numbers are split between those two funds. I don't know, like what the total numbers would then be. but is that reflecting how many people salary or does that taking into account, the two additional headcount.
Phyllis:
It is so you have the three for 24, and then we've added the two employees for 25 split 65/35. If you look at your packet, on the right side, let's see page one and two, you can see the combined expenditures. I think we did this last year for you guys. So you can see for 24 and 25 what the combined water and wastewater totals are.
Leah:
Okay. So we have our actuals. And then is that that 2024 estimated I'm assuming because that goes up quite a bit. That would be reflecting the two additions. Sorry I'm trying to get it.
Phyllis:
well it goes up between 24 and 25. It goes up for those two extra, the 549 for 24 combined. You'd have to take your 238 for water, your wastewater.
And then we had general which is also in here.
Leah:
So if I'm looking at the total salary for 2025 proposed and that's 349 400, I'm assuming that would include the district manager and the two additional employees. Is that correct?
Phyllis:
Well three, there are five employees total.
Nathan:
so yeah. So five, the district manager, office operations manager, customer service specialist are the three existing positions.
And then we're adding two additional so it's for five positions.
Leah:
So the 349 400 would be for five positions
Nathan:
for the for the water fund. Yeah. And so if you go to the
Leah:
and that's just straight up salary I'm not including benefits but
Nathan:
correct. Yeah. And so if you go there's on that first page there's a column that's over there to the right where you can kind of see the combined one.
It's like separate. So the total salaries and benefits for five employees for looking at $692,780, compared to $549,680 for last year with the two additional employees.
Leah:
Got it. And that that looks like it's fully loaded. The 692 number. Yeah. Okay. Yeah. Thank you.
Nathan:
All right. Any other questions on the Water Enterprise Fund? And we can certainly, circle back around.
Jason:
I think we can continue.
Nathan:
All righty. so wastewater enterprise fund. I'll go again to kind of the end of the fund so we can start with the, capital projects. I apologize, I don't have page numbers on the, version that I printed out. but I'm looking under water non-operating expenses. this one is much more straightforward.
Again, we have the vehicle purchase. Those are, for the three vehicles that are split across the funds, the debt service. So the debt service is, funds that we have, it's a, PCWRA water or PCWRA wastewater treatment plant expansion. So we're continuing to pay on that. I can't remember exactly when that that gets paid off, but so, that's going to stay relatively stable, compared to last year.
And then the big one on that side, the projected for 2025, is for we're looking at $2.9 million for the, kickoff of the wastewater renovation. So overall, I think we're looking at that project being somewhere close, closer to around, five, six, right around like 9 million. so we're looking at spending a little bit under, I guess, but so we're looking at spending the $2.9 million and, 2025, probably closer to 4,000,000 in 2026.
And then we do anticipate that that project will have some spillover into 2027. it's it's going to be a massive construction project for basically, redoing our entire wastewater, wastewater system. And so, that final year will be for anticipating between 2 and $3 million into 2027. so for the first year of that, we're looking at $2.9 million.
That project, is currently broken down into two schedules. the first schedule A is set to go to bid, sometime late first quarter. And then the second, bid package will get released and sent out, probably somewhere around the late second quarter, early third quarter. And we'll get we'll get both those projects off and running.
Jason:
Nathan, this is all in conjunction with the compliance order that we got
Nathan
correct. Yeah. So this is the resolution, the ultimate resolution of the compliance order to make sure that we bring all of our lift stations back up to snuff. you're kind of going back to the rate study. Our costs are the reason that our costs are higher or in the ballpark of like, larger districts or even a little bit above on the wastewater side is absolutely driven by the lift station.
So even aside from the capital projects, we have a ton of them. I think Parker has four lift stations in their entire system. Castle Rock now has more than us. I think they've got 10 or 11. But I mean, for our relatively small geographic area, we've got eight lifts, the eight active lift stations, and that's driven by we have so many of them for two reasons.
One, the biggest one is just poor system planning. We there was not really an overall look at where we would be able to capture wastewater. so it put us in a position where when we were being developed. Each group of filings just got their own lift station, and so there was no real overall picture. That is something that we're correcting.
So we are taking one of the lift stations completely off the books through this project. and then they're just their lift stations are high operations cost. There's a lot of maintenance that they need. There's constant attention, and they have high electricity costs. They're just they're just financial beasts for the most part. And so getting one of those off the books will certainly be helpful long term.
but that's, that is a primary driving factor in the wastewater side. one of these that I've got to go find the but the PCWRA fees. we actually just got those at the board meeting this morning. And so we, that's, one page back, 60, 61, 51, 67. so it's not a it's not a huge delta, but so the 2024, estimated we've got that at 725,000.
And then we've got that increase for, 761. just found out this morning that number will actually go down. So for, PCWRA fees were calculated for the next year based on the previous year, loading flow rates, all of that kind of stuff as a total of the entire, facility. And so we're actually going to go down 0.7%, from where we're currently sitting.
and Castle Rock in the village both saw pretty significant increases. Castle Rock looking at their both, double digit increases, 10 and 12% for a PCWRA for the other PCWRA members. so same thing. Office and furniture equipment has a has a bump for the projection projected new employees coming on board.
same thing for getting the small tools that we, we need. And I will, part of that and part of what I'll provide to the board is a specific breakdown of those tools. So you can actually see what we need to buy, what the costs are. rather than just having this kind of like amorphous blob of money for new equipment, I'll make sure that I've got that, dial down and, really much more broken down.
And, and I'll go through any of these line items that I can, and make sure that we've got that, that backup for, for these numbers.
Leah:
Kim I, I have a question? What if there are certain aspects of the budget that. I personally wouldn't support? how would that be handled before voting on, like, the overall budget?
Kim:
that's actually what you're doing right now. Okay. So the budgets being presented to you being explained, then over the next, let's see you get to do the work session and the meeting, you can get the budget changed to however you want it.
Okay. And eventually we need to approve it before November. December 10th.
Leah:
Okay. So it sounds like in November those would be additional opportunities to talk through those particular line items.
Kim:
Correct? Okay. And then at that same time, you'll have a public hearing. So the public will have a chance to weigh in on it. and you'll hear whatever they have to say.
And you can make changes based on that or not. okay. And then eventually, as I say, you'll have to approve a budget before November, before December 10th so that we can get the mill levy certified. Okay. Thank you.
Phyllis:
I have a couple of comments I can add. Number one, the wastewater debt service will go away, in 2033, that will be paid off.
So you still have a few more years of that? and the 5% increase, I could just tell you, if I look down and I'm looking at my spreadsheet, my Excel, you know, the the salaries are based on actual estimates and not, 5%, items like property liability insurance. some of the, office supplies, the furniture, the small tools, the vehicle stuff that needs and talked about those are specific amounts based on his estimates rather than the 5%, and then the most of the remainder other than the capital or the 5% increase amounts.
So that makes sense.
Leah:
It does. And then Kim, I guess is a follow up question. So for example, the vehicle purchase like that's new to me. could we have a process where or is this part of the problem? Like what? I don't want to happen as it feels like things are snuck into the budget and then they get missed, and so is there some way we could almost do like a, like a change right instead of just putting something into the budget, like presenting it to the board so we know it's going to be in the budget, or is it up to us to kind of go through every line and, you know, catch
those things that were put in there that we weren't aware of yet?
Kim:
No. You can, establish the system for spending those funds. So this is, is your budget where you're setting aside money for vehicles and other purposes. But if you want to, you can certainly direct Nathan to bring those purchases to you before they're made. And at that time, you can approve them or not approve them.
Just because you're budgeting them doesn't mean you have to spend the money.
Nathan:
yeah. And so I'm pretty sure and I'll review it again. But in terms of, sneaking things into the budget, kind of rolling through, what I just did was specifically calling out anything that hasn't been in previous year's budget. So I wanted to make sure that that was vocalized, put on the record. And, I'll make I'll definitely go through and make sure that there aren't any other, glaring additions that I'm missing.
But, I really did want to make sure that I called specific attention to large item line changes, new items that weren't on previous year's budgets, capital purchases, those kinds of things.
Phyllis:
And then when we present the budget for the next meeting, we'll have the revised amounts as we fine tune these, and then you'll be able to see the revised and this version, so you'll be able to see anything that changes.
So it'll be clear what's changed since this version that you've seen. Nathan's already given me a few additional items that he, like the ammonia sulfate project. Nathan. I think is going to be added. so there that that we got information after this was presented, after this was prepared. So that'll show up on the next budget.
Nathan:
Yeah. Yeah, I've got some adjustments. I the LAS will be. Yeah. I'll have to go back and look at that one, but that one should be completed in the next couple of weeks. I don't think that the ammonia sulfate I anticipate to carry over there, but, okay. Yeah, we'll, we'll go through and and double check it and triple check it.
Tera:
So I notice that there was no cost in there. And that's because that was for the project. It's not the liquid ammonium sulfate isn't consumable.
Nathan:
Correct. Yeah. So the the LAS the actual consumable sits under the, there's a, line item for the water treatment plan expenses. So a chemical cost gets incorporated into that, for those costs and for that budget line item, Will goes through, for all of those districts, but Will go through calls, all chemical suppliers goes and checks with them, see what their projected rating.
Well, all of them there are, there's like two. But gets an idea of what their projected cost increases are. And then we know how much we use. And he'll build the build the budget out with those getting incorporated into the water treatment plant expenses. there we we did a lot of it last year. There is definitely room, in the budget to further break a lot of those down, we broke out a bunch of different items.
So we're kind of in these like glob line items. But, the water treatment plant expenses is definitely one that, I want to get to a place where we're, like, specifically breaking out chemical costs. We're specifically breaking out INC and SCADA and design costs and kind of those. So rather than just this kind of like lump sum, there's some opportunity to do that with like water distribution system, line item budgets.
A lot of those are, a little bit of guesswork because we just don't know how many water lines are going to break. so that that one can be a little bit flexible, but there's there's definitely some space to be a, to be more clear on some of these larger budget line items with the specific costs that are going into them.
Jason:
Nathan is the news media that we're looking to go to. Is that reflected in here somewhere?
Nathan:
yeah. So that is on the under the water budget, non-operating expenditures. That one is the 60-60-7756. So that's the water treatment plant filter rehabilitation program. so that that capital project is, well, yes, it is swapping over to a media.
and we'll have a presentation from Kennedy Jenks on that on Monday. we're doing far more than changing out the media. We're, we're looking at the seeing basically the entire way that the filter is constructed. We're going to be brand new. So we're adding better cleaning technologies that'll help us get the filters cleaner so we can increase our iron and manganese removal so that we can drive down, continue to drive down the discolored water call.
We discolored water calls and discolored water concerns. we're also going to be looking at doing some, like, general building upgrades. The floors need some attention. So we're going to get some epoxy coatings over just like some old crummy concrete. The the blower system. We'll look at the, entire filter process to do to really, really go through and dial, dial all of those in.
And so there's unfortunately some unknowns that sit inside of that project. Excuse me for one second.
a lot of that is because we just really don't know exactly what is under those filters, what the conditions are, what the under drain systems look like, because we don't have any documentation on it. and so that's, awhile ago, Alex with Kennedy Jenks had given us the presentation on the CMAR contract. So that's why we're recommending that we move forward with the CMAR contract on that, because we can get the contractor on board earlier and then really start to get, potholing done on filters, get things torn apart so we can really get a good look at those existing components.
And then we can also start to procure longer lead items. But prior before major construction begins and hopefully get to a place where we're we're ready to start demoing, filters. August, September of next year.
Jason:
All right. Very good. Does anybody else have any questions about this preliminary budget?
Nathan:
He's got that look in its eyes.
Tera:
So, as I'm looking at. Yeah, on the right hand side of our combined water and wastewater and I'm not into flipping over two pages. I'm not able to see the whole thing, but but it looks like our revenues exceed our expenses, exceed our revenues. That.
Nathan:
Correct. And so that was if you look at the go back to the rate study that Erik had presented, the, the increased rate isn't meant to necessarily get us to a point where we automatically jump up in our revenues, exceed our expenditures. So we do have a really healthy fund balance behind us, specifically in that water side.
So the general approach there is to use some of that fund balance to hedge the rates and bring them together over a period of time, rather than do a massive rate increase. Right now, while we still have this huge amount of money in reserves. so the, there's one page on the on his presentation, but if you see the, the costs and then our reserves laid over, the revenues that the plan to like slowly bring those together so we will run at a deficit for I'd have to go back and look.
But we're running the deficit for a number of years. When we get those caught up.
James:
You're good. Okay. sort of a top level question or set of questions, but, we talk about doing a the filter project, and then in the same vein, we're, we're going to remove lift stations. I guess you could talk to them one after the other is what what is the benefit financially for the filter upgrades and then lift stations you talked about.
It's sort of a little bit loosely about how it's going to be a tremendous cost savings. So I need you to talk about that as well. If the filter isn't really a cost savings, it's just an upgrade. Yeah. Yeah. Moves us into the future then talk to lower maintenance lower long term costs, that kind of thing make me understand what we're doing and why we're doing it.
Nathan:
Correct. So yeah. So for the filter project, the filter rehab rehabilitation project, specifically, one of the primary drivers there is that our filter material has aged out. So we generally speaking, in about 10 to 15 years on the filter media, the last time that that was swapped out was 2012. we have reason to believe that, especially in, filter number five, that we're experiencing something called breakthrough.
so when we when we clean those filters, it becomes apparent that there is probably a compromise in the system, in the under drain system. And so the under drain is the support structure that holds the filter material. And so because we don't have a good idea of what's in there, rather than just look at and because everything else that the water plant has been aged out, it's it's old technology.
We've got a lot of issues in a lot of areas, where we could drastically increase, the water quality that we produce. So we're also using a filter media technology that's the best of the best in the 1980s. And so we're looking at needing to replace our filter media, media anyway, we do not have an effective cleaning system right now.
We're using just a standard backwash, which just runs water backwards. It's really very inefficient. we've just all of that to say, we really just have a lot of old technology that's failing in that building, and it's time to swap it out, or we're going to see a gradual increase in the number of dirty water complaints. We'll see, you know, issues with consistent chemical dosing.
And so there's not going to really be a cost unless there will be some marginal operating costs saved by moving over to, a new system just because it's new. But we're really not going to save a lot of money year over year. We really just have a filtration system that is outdated, collapsing and aged out. And one of our concerns was if we just did the filter media replacement and we go pull all this filter material out and we find a bunch of compromised under drains with we don't know what technologies there are.
We don't know when they're put in or how they're put in that we would then be in a position where suddenly we're trying to scramble to do an under drain system. the plant was designed with a surface wash. So if we're talking about the cleaning, which is just a bar that spins around, surface washes really don't do anything to clean that filter media.
and so because while we're tearing everything out, we want to move to a modern air scour and really just bring the plant up to 2024, 2024 or 2025 standards in terms of operation and production. the existence of the treatment plant in its entirety is largely unnecessary from a compliance perspective. So we're we're really more in the vein of making sure that we provide a superior product to our to our residents.
that well exceed the federal, the federal and state guidelines. We could, if we really wanted to scrape our water treatment plan, put an individual chlorinated and some polymer, add into one of our well in our individual wellhead and send it directly to our distribution system. and there are actually a number of utilities that choose to do that.
But along with that comes, water that is always a little bit yellow. Parker was in a similar position where they did a lot of source point chlorination. They actually invested 40, over the past few years. They actually invested $40 million to get their wells to a system that were similar to us. So they were. All right.
James:
I'm going to stop you there. Yeah. so you answered my question, and then we started talking about other stuff, and I appreciate it, but I think I understand that. And I want to, you know, shift and, concisely talk about what the actual savings are going to be. Have we documented, have we reflected that anywhere? When we take a lift station off line, what is that actual cost savings?
Nathan:
so it is the, the we're removing one lift station from the system. It pays for itself in one life cycle. So the average cost for, specifically for a lift station two, I don't remember what the numbers were off the top of my head, but when I went back and looked at how much we're spending to generally maintain that station, keep it clean, operations cost, electricity costs, removing it from the system basically pays for itself in a 20 in a projected 20 year life cycle.
it was somewhere in the neighborhood of 7 or 7 or $800,000, over that one one year period. we'll have to see what the maintenance costs look like on the rest of the stations. we we do anticipate some level of reduction in repair costs. We've had these things bolted together for a very, very long time.
So we're spending a lot of money in just keeping these things running. I don't we haven't quantified that in terms of what we think a brand new lift station is going to be. A lot of those are fixed costs will still do. You know, cleaning quarterly. There's a lot of like ongoing maintenance that we do. But certainly in that kind of emergency, reactive repair costs are going to, are going to go down.
And so we can we can make an estimate. But that's going to be something where really just time tells what time will tell what that does to the budget. we have been spending, you know, I mean, the just in violations, you know, we've got $140,000 or whatever because of our because of the lift stations. Each one of those sanitary sewer overflows cost us anywhere between 10 and $30,000 to manage.
We've had, you know, think 10 or 11 of them in the past. I'd have to go back and look since 2014, 2015. And so we're spending a ton of money reactively to clean up sewer, like clean up lift stations, bills that don't need to be happening because we've got all the equipment that with no with no, overflow protection.
And so as we do these, these capital projects, we're putting things like overflow protection in. And so we'll have, not only do we have a new lift station that meets current specifications, but should it go down, we'll have a stopgap to prevent that. One more, one more layer of redundancy to prevent that from going into a creek or going into an overflow.
And so a lot of the lift station side is certainly driven, because we're absolutely being required by the state to do this, as we should be. we've got all of our lift stations, with the exception of Lift Station nine or the Legae lift station, have some level of, pretty major work that needs to be done to them just to get them compliant with today's standards.
And we have done from a capital respect that we've done nothing with them for the entire time that any of them were installed. For the most part.
Leah:
So, Jim, I don't know if this is maybe where you're going, but I know what would be helpful for me is and something I am planning to talk to the board about when we go into executive session.
But I think it would be helpful when when there's a budget, ask for a project to have some type of documented business justification with the why. as well as, you know, when I hear statements like it'll pay for itself, I want to I want to see the justification and see the numbers and understand the rationale. and I, I would prefer to get that for every single task.
and so Jim, I don't know, like, is that where you're going, like to have something, you know, documented like a business justification that so we can make an informed decision?
James:
Yeah. It's exactly kind of, you know, from a project perspective, you know, what's the ask? And why are we doing this? What's it going to cost and what's the payoff?
And then there's a budget line item that, you know, ties all that together. And, just in these two things, you sort of answered the first question. Second one again, I got a couple numbers, but, having the pieces together in my head, and I don't want to do that. I want to, you know, a discrete project description and why we're doing it.
And what it's going to cost and what the payoff is and what that payoff period is. if it's a compliance issue, that's real straightforward, enumerate those issues of why we're non-compliant and what it's going to cost to become compliant. And then if we're taking the lift station off, there's electricity savings, there's maintenance savings, whatever those facilities costs are that gets lined out.
Yeah. Correct. Yeah. And so we I want to understand what that number is.
Nathan:
Yeah. And I, I completely understand that. So for the lift station project, I am happy to, resend all of the documentation. So we've definitely brought these proposals, to the board multiple times over the last few years or over the last couple of years.
So, all of those costs are very broken out. We're at the point now. We're at the 90% design rate, and we've been presenting on them relatively regularly since we began that initial, station evaluation. So I will, get all of that information pulled back together, and then I'll send that out. And then, on Monday, Kennedy Jenks is scheduled to be here specifically to talk about the filter rehabilitation program, the filter pilot project.
and then we're going to be reviewing, their project cost estimates and their projections and the reason to go in to CMAR contract. So we're I do have the general budget numbers for this tonight. I'll resend the information that we've got on the lift stations, and then we'll have a lot more information on that filter project, very specifically driven by the, the results of the filter pilot project that we did this last year and the projected cost and timeline on there.
So we do we do have those. And I'll make sure that, outside of the presentation, that we get the other stuff to you, in the next couple days.
Jason:
All right. Are there any questions? Other questions. Okay. Hearing none. Let's go ahead and close out this, item number three and move on to item number four to consider the CP or CDPHE compliance order.
Kim:
This is Paul Polito who's joining my firm. He has a lot of experience with CDPHE type compliance matters. He worked on them in Florida and I think in the agency. so he's just gonna give you a quick update on where we are with that, and he'll be continuing to work on that in the future. Welcome, Paul.
Legal Counsel Paul Polito, Esq.:
Thank you, thank you Kim.
Describer:
Paul rises and hands out some paperwork, he is off-mic as he speaks.
Paul:
Can I just go ahead and hand out....
We received correspondence from Jocelyn Brank who's the enforcement specialist on this earlier this month. she sent us this compliance order on consent. This is the final version from the Department for signature. we do not need any any board action at this meeting for it. It's it's just an update. but what we're looking at here, essentially, are two main compliance baskets, if you will.
One, I already mentioned lift station upgrades. we're looking, those will be completed by July 1st, 2027. And then we're looking at the supplemental environmental projects. and those funds will total $130,978. I, I did a review of this. typically, what I look for when I'm looking at these sort of compliance orders are are there any holes to poking it as far as, penalties can we try to can we argue to lower them?
And then two is the timeline. it's very regularly, the timelines are too short. They have to deal with extensions. So I just wanted to avoid that. and discussed it, with Nathan, with the engineer. And the timelines are more than adequate. In fact, the department, when we initially proposed timelines, the department came back and actually gave us some more time.
so I shouldn't run into any problems with that. when I reviewed, you know, the order for any, any things that department may have missed, you know, statute limitations regarding certain sewer overflows. there is really nothing there. There's there's nothing to really argue. It's it's pretty airtight. so, you know, I will be submitting this, to the enforcement specialist tomorrow.
A signed copy. if you're if you all have any questions, I'm happy to answer them.
James:
one real quick, I reviewed what was in the packet. Is this the identical? That's right. Okay. Thanks.
Leah:
This may not be answerable by this group, but these are a lot of sewer spill events or they seem like it. Any idea?
Like, is, is that something that happens across other metro districts?
Nathan:
Absolutely. No, not to this extent. yeah, I mean, I can there's no reason to try and pretend like the when when you get to a point with your sanitary sewer overflows that you are in a compliance action, you are almost by definition, well out of the scope of what is a normal district.
And so this is these issues, these constant spills because we don't have any protection. This these issues are specific what the lift station renovation program is designed to eliminate and get rid of. But yeah, this is yeah, absolutely. This is what happens when you don't know any capital improvement to lift stations for 30 years.
Leah:
Okay. I it seemed like it was far out of the ordinary.
But, Paul, you looked like you were going to say something. Did you have anything?
Paul:
In my experience. But this is in Florida, Oh, sorry. All I can give right now is my Florida experience. They were extremely common in Florida. this is something that we dealt with. I know almost every heavy rain event that occurred. with a lot of different municipalities.
even when I was in the agency, I probably negotiated about 30 of these. so it's something that I have seen a lot. But again, that's with the caveat that, you know, it's in Florida. So,
Nathan:
yeah, we've been I guess because it's an easy comparison. You. So, if you look at Parker's number of sanitary sewer overflow events for the same time period, it can even be a little bit misleading.
So if you look at for the over the same time period, Parker actually had 2 or 3 more sanitary sewer overflow events. And so if you're looking at the total number of events, that's not even necessarily the driving factor, because if you break those down and look at them, there are we had two separate events that by themselves released more wastewater than Parker lost in their entire 11 or 12.
And so it's not it's not only like the number of events that we have, but also the severity of them. a lot of that was, driven by, lift Station five and the station three specifically. We're kind of the two problem. Well, and Lift Station two, which is the one that we're going to eliminate. and so, yeah, there's there's definitely, definitely major issues that we're facing with these.
We need, we need to take care of.
James:
I'm going to, do this to you again, five, three and two describe those locations just for people on the phone or.
Nathan:
Perfect. Yeah. so lift station, lift station five is located, north of Crossing Circle and hidden in the Hidden Point neighborhood. It's kind of tucked behind a row of houses over there.
lift station two is probably is one of our more visible lift stations. if you're standing at the corner of, Hidden Point and Monarch, it is the little green shed that is out in the field to your south east. Yeah. well, off Serena's lift station, the one that's right off Serena is lift station one. So this is the one that's kind of out in the field right off the trail system.
and it's it's quite a ways from the road, but it's right under the Xcel, power line easement stuff. lift station three is our is our big bad. That one's our 500,000 gallons a day. Lift station, it's kind of, for most of the other stations, it's, it's a master to the slave. So all of the other lift stations, with the exception of the station nine pump their water to lift station three.
That one's a little bit harder to describe. it's right in the middle of our trail system. It is, as you're driving north on monarch from Castle Pines Parkway. you pass Stone Mont on your right hand side, kind of side, kind of. At the peak of the curve, you'll see a driveway that just kind of goes off into the field.
that's where that one said. So it's it's really obvious if you walk the trail system, it's, have some building, cinder block building, but it's it's more centrally located in the district.
Jason:
Okay. Thank you, Paul, for your presentation. Any other questions? Hearing none. We'll go ahead and close out. item number four. And, we'll move on to item number five. we need a motion, or we're looking for a motion to, enter an executive session for the sole purpose of determining positions relative to our positions relative to matters that may be subject to negotiations, developing strategy for negotiations and instructing negotiators, intergovernmental agreements with water providers, and the valuation and costs of professional contracts as allowed by section 24-6-402 Item four CRS do I hear a motion.
Board Voting All Speak:
I'd like to make a motion for what Jason just said. Can I do that? Okay. I'll second. All right, having a second. We'll move to vote. Jim, I approve. Tera, I Leah approve Jana I can I approve as well. So at this time, we'll go ahead and move into executive session.
Thank you.
Describer:
On screen. CPNMD Board Executive Session Please Stand By
Kim:
The board has returned from executive session at 845. The individuals that went into the executive session, remained in the executive session. No action was taken during the executive session. And the topic remained on, within the bounds of the motion. and whether or not the board wants to take further action tonight. they can proceed with that now if they choose to do so.
Jason:
Okay. If the board at this time, I think we're just going to adjourn the meeting for the night. Thank you. Everyone.