Study Session

November 20, 2024

Transcript

Describer:

Special Meeting Wednesday, November 20th, 2024, at 5:30 p.m.

7404 Yorkshire Drive, Castle Pines, CO 80108

I. Call Special Meeting Work Session to order.

II. 2024 Draft Budget Discussion. Phyllis Brown, Nathan Travis.

III. Updated Rate study presentation. Erik Helgeson, Bartle Wells

IV. Adjourn.

Board President Jason Blankaert:

Good evening and welcome to the Castle Pines North Metro district. Special meeting. Today is Wednesday, November 20th, 2024 at 5:30 p.m.. We will call this special work meeting session to order tonight we need to talk about section two, which is the 2024 draft budget decision. A discussion with Phyllis and Nathan, Nate.

District Manager Nathan Travis:

Thank you Jason. And then we actually have, Andrea with CRS physically present with us tonight too.

So if there's some questions I can't answer, she'll be in the back. Stop those. so really, we need to get to a point where, the budget, the final draft version can be ready for Monday. So we've got some lingering questions about what to leave in and take out. Tonight's the night. really can really kind of cover that stuff and make some decisions.

so I wanted to start with, before we get into the meat of the budget, it's been a lot of discussions around the staffing request stuff. And hold on one second. I'm not able to zoom for some reason. Sir,

Jason:

I have a real quick question for Kim. Kim, this is a special meeting. Work session. Do I need to take roll call?

Kim:

You don't need to.

Jason:

Okay. Thank you.

Describer:

On screen.

DRAFT

Staffing Requests

What are the planned staffing changes, and what impact will this have? At our peak CPNMD had six full-time, and two part-time employees dedicated to the water and wastewater operations of the district. We currently only have three full-time staff members. In 2025 we are looking to bring back two of those positions.

First, we are planning to hire an Operations Manager. This position was formerly held by our current District Manager and was never backfilled after he took on his new role in 2022. This position is vital to ensure proper supervision of our field operations staff and contractors, facilitation of our ongoing and planned capital projects, as well as identifying future capital needs.

Second, we are hiring a Field Services Technician. This position will be primarily dedicated to customer service calls, meter reading, meter replacements, and general facility maintenance. These tasks are currently handled via an operations staffing contract, and although that has been mostly effective, we simply aren't able to meet the customer service standard we would like to under the current structure. Additionally, this position will be able to work on capital meter replacements and upgrades, which is substantially more effective than outsourcing this work.

Nathan:

Okay, so we have had a lot of conversations around staffing. ultimately, what's currently in the draft proposed budget is the addition of 2, 2 full time employees. Both of those are would be on the operations side. so the first one of those we have, well, first, let me back up a little bit, for a little bit of context there.

we previously had as many as like seven between seven full time and two part time employees dedicated just to the water wastewater operations. We currently have three FTEs. And so we're looking to kind of move back, well, not necessarily move back, but move forward with, with intention on selecting the positions that we rehire. And so from an operations perspective, the first one that I wanted to to fill or to backfill would be the operations manager.

So we haven't had an operations manager. That was the position that I vacated, when I took the district district manager role and it was never backfilled. We really do need somebody on board that can just one pay closer attention to operations. so that it's a position opposite. Sorry. Cottonmouth.

so obviously, one of the primary responsibilities of that position is going to be overlooking day to day stuff. So we'd still be primarily contract operated with Semocor, but really having somebody that's on staff and invested, that's checking in on things like the water treatment plant is looking at the lift station sites, just verifying that the daily work that needs to be done is getting done correctly.

this position would also manage, really manage a number of contracts. So, Semocor would obviously be under their purview, but also some of our other maintenance contracts. So we use QP services for water for lift stations and collection system cleaning and maintenance, emergency pipe repair, other emergency repair contractors TW summit that does our valve operation, our fire maintenance.

And so they really would have a lot of daily operation things just to keep track of another part of their responsibility is going to be, to continually develop our standard operating procedures. there's a lot of those that could definitely use updating. And then not only for the currently planned capital projects, they can, they would be primarily responsible for, facilitating those.

So working more directly with the engineers, and then would provide a monthly report to the board to kind of summarizes those things that also have them looking, making sure that we're on time with our regular regulatory stuff. so like our, our consumer confidence report every year and making sure our bacteriological testing stuff is getting done, really just a set of eyes that's 100% focused on operations moving forward.

Board Member Leah Enquist:

Hey, Nathan. Yes? I have a question. And this is probably more for, Kim.

One of the things that, I know that you and Paul had worked on was, an amendment that, you know, the board had a majority vote that we could adopt that would put some accountability, and requirements around hiring and also approvals for capital spend. and so I just wanted to make sure, if that's something that we're going to adopt, that that would be in place before any hiring approvals were made or how would that work?

Legal Counsel Kim Seter, Esq.:

Yeah. so that will be in your packet for Monday. Okay. And it hasn't changed since the draft that I set at your seats at the last meeting. So we need to discuss that. And then all you need to do is when you approve the budget, if you just want to make a statement Leah that, there will be no hiring, no action toward hiring until that, amendment is adopted, that will take care of it and you may want to adopt it Monday night, I don't know, we'll see.

Leah:

Okay. And then I mean, I still want to just to make sure I review it again. And I don't anticipate having a lot of feedback, but, if that's something that would be done, like as a formal part of the agenda or under directors matter. So how would that work?

Kim:

I would do it as a part of the motion to approve the budget, and I'll make a note of it and remind you if it doesn't happen, remind the board that it came up tonight.

Leah:

Okay. All right. Thank you. Appreciate it.

Describer:

On screen.

Additionally, this position will be able to work on capital meter replacements and upgrades, which is substantially more cost effective than outsourcing this work.

These positions do have an impact beyond compensation on the 2025 budget. This includes the purchase of three vehicles (60-60-7116 / 60-61-7116), one for each new position, as well as a vehicle for office staff use (and field use should a vehicle be out of service for repairs and maintenance). Additional workstations (60-60-5235 / 60-61-5235), and a variety of tools (60-60-5236 / 60-61-5236) will be needed to properly support these positions. The increase to these line items will be limited to 2025, and we will return them...

Nathan:

All right. so the second position that we're looking to hire is a field services technician. this is has become a pretty apparently necessary, largely through conversations with our existing front office staff. Semocor has done a fairly serviceable job at these tasks, but we really need them to be much more focused on, Everything Alright. Okay cool.

we just need them to be much more focused on daily operations stuff that's really their wheelhouse. So operating the treatment plan, operating the system, really getting their hands in those spaces, they do spend a considerable amount of the time that they have allocated for our district to handling basic things like customer service calls, meter reading, customer service calls can be anything from like high pressure water quality issues, high usage, any myriad of questions, and then the monthly meter reading and then the associated repairs.

So there's, you know, a certain subset of meters that either need a replacement or radio repaired. this position would also handle things like, excuse me, handle the capital project or the capital program that we have had on hold for a number of years. It's not in the budget for this year, but we'd look to bring it back, in 2026, 2026, which is the capital meter replacement.

we got through the radio part of that. So each water, each each house has both a water meter and an associated radio. The meter actually gets the meter reading. The radio sends the the read to us when we drive by with our vehicles. About a third of those are outdated technology that we need to get brought up to snuff.

And then that opens up a bunch of different possibilities. one of the main reasons that we've had that on hold is that the cheapest that I was able to find was a $235 cost per household, to get those replaced by a subcontractor. And that is just the just the labor. generally speaking, if there aren't any other issues, you can swap out a meter in a radio in a house in about 15 minutes.

So if we have that person on staff, and, on staff, they'd be able to do that as part of their salary and it would save us quite a bit of money. That's a project that'll take probably another couple of years to complete. We just take it in pieces as we go and till we get caught up.

once that radios phase is swapped out, we're gonna. We need to start over, almost, and start working on the water meters just to get our older, start to get our older water meters out of the system. We're not at a space now where we're losing a ton of revenue to the old meters, but the meter usage on especially anything that's really got over like 2 or 3 million gallons on it, you can start to see a pretty heavy depreciation in the amount of water it catches.

So it really is important to one get the radios brought up to to snuff and then start working on those water meters to make sure that we're not losing revenue just to, faulty meters. this position does help. almost completely pay for itself. One of the things that we've talked about, is also having this person trained as a backstop to the front office staff.

So if we have Susan or Jacqui out on vacation, this person would be generally trained to answer phones, be able to take payments, do fairly normal tasks. Right now we're handling that as part of our contract with CRS. and that's Allison. She's does an amazing job and we love her, but we're also spending a lot of money on that position.

So right now, having Allison in here three days a week to make sure that we have that backup is costing us somewhere in the neighborhood of 120 to $120,000 a year. And so we'd be able to eliminate once this person is on board and train, we'd be able to phase that portion at least of the CRS, contract out and use this position as a backfill.

Board Member Jana Krell:

What does that mean for Allison?

Nathan:

She would continue her career with CRS. She wouldn't be with the district at that point. Okay. Got it.

Board Member Tera Radloff:

And when you say that it would pay for itself. Walk. Walk me to.

Describer:

On screen.

An Excel style grid titled Proposed Full-Time Employees

Position - Operations Manager Salary $100.000, Benefits/401k $21,000 No Overtime or Workman's Comp, Other $13,000 and the total for this position $134,000. Position Field Services Technician Salary $75,000, Benefits/401k $19,950.00, Overtime $10,000, No Workman's Comp, Other $10,000, Total for this position $114,950, Totals for Salary $175,000, Benefits/401k $40,950, Overtime $10,000, Workman's Comp $5,000, Other $23,000, and Total costs for both positions $235,950. Benefits & Salary: Assumes the high range of salary, based on experience and certification levels.

Other: Training, certificate renewals and testing, clothing and PPE allowance, phones, tablets, and fuel expenses

Nathan:

Yeah. Let me I can jump down a little bit here. so that's this field services technician position. so right now, our expenditure for Allison, an office three days a week is roughly $120,000 a year. And our total out-of-pocket, assuming that we hire somebody, at the ..., at the maximum level for that position, would be an anticipated cost of about $115,000 a year.

Jason:

When we talk about when you're talking about that cost and that includes your capital cost request for the vehicles and the, equipment,

Nathan:

it does not. So this would be the ongoing after the first year purchases. So once we got the, vehicles purchased, put, appropriate safety lighting on them, got the appropriate tools on board? that would be a one that would be, well, not a one time capital expense, but it would be a purchase of a depreciating asset that's moving forward.

same thing with the, operations manager. That would also involve a vehicle purchase. we have in the budget we've got currently we have three vehicles in there. the general use office staff. One is is a vehicle. That would be nice. So we talked about it internally into the office that we've got people going to trainings.

we have to run two letters plus and drop off bills every once in a while. There have been some discussions about, even changing far enough down the road, stopping using a lockbox service for our checks, and go back to having residents send us checks directly, which would involve daily bank deposits. it's also not. Completely necessary.

And so I left it in the budget, really, so that I could put the board in the decision to ultimately make that in the position to ultimately make the decision about a third vehicle. I'm not completely sold on it, and I'm not completely married to it either, but I wanted to, include it and let you know why the request was made for it.

Jana:

Would this be on top of continuing to pay and a car allowance vehicle allowance to for district manager, i.e.

Nathan:

it as it's currently presented? Yes, that is something that we could also look at doing, would be moving me back off of a stipend and into a district vehicle, and then we could I could have that vehicle, but that would also be at I honestly hadn't considered.

Jana:

So potentially it could be this pool car shared and then we could remove the vehicle, the vehicle reimbursement stipend and put it towards that too. Okay. Yeah.

Tera:

Yeah. So catch me up with why would these positions need a full time depreciating asset? Do they follow these. Are they only used in service of the day to day job? Are they here eight five.

Are these vehicles then or driven home. Why would we want a vehicle as opposed to like running to the bank or something? There's a mileage reimbursement. The government and contracts agrees. I don't I don't understand why we why we would need this

Jana:

instead just continuing to do the process of mileage reimbursement. Yeah.

Leah:

and this is Leah again.

And just to kind of piggyback off of that, I know I've made my frustrations about this clear in, you know, future sessions where like, if we really needed vehicles, like we had some and then we got rid of them. and so again, like, this just feels a little bit like whiplash, and like, there wasn't a lot of foresight involved, when we had that discussion around, like, why we had to get rid of our current vehicles and now we're talking about getting vehicles again.

so I respectfully, I push back,

Nathan:

yeah, absolutely. And I'm happy to explain a little bit more on that.

Jason:

Nathan, sorry. Before you go any further, how far out are we depreciating these vehicles? This is a five year depreciation on these vehicles. Is a ten year depreciation.

Nathan:

that I don't know, since we don't have any in there.

We I don't know that we've had a specific depreciation on vehicles. Generally speaking, we just pay attention to the maintenance costs. And when maintenance costs start to climb severely, then we'll look at replacing a vehicle.

Jason:

And I didn't see maintenance cost or fuel involved or insurance involved with your estimates here either.

Nathan:

Right. So those those are captured in the and it's hard to jump back and forth.

But so those are captured in the overall budget. And so once I have once I switch screens I can pull it up and show you those line items.

Jason:

So given that, you're talking about hiring somebody for 115,000 to replace somebody at 120,000, and then we've got, let's say we depreciate over five years a $50,000 vehicle at $10,000 a year, plus gas plus insurance, plus maintenance.

We're talking much more than what we're paying for right now.

Leah:

Yes. And then again, to piggyback on that, in the prior meeting where I voiced my frustration, I had asked, for the maintenance costs of the the vehicle that we, got rid of, and still haven't received those. And so again, like, if we got rid of that vehicle because our maintenance costs were getting so high, like we're going to run into that same problem again, but because I've never seen those numbers, it's hard to determine, like if we're making the right call here.

Describer:

On screen. "The Summary"

Didn't we sell our vehicle fleet last year? The concern voiced by some board members, related to selling a vehicle last year and looking to purchase a new vehicle this year is understandable.

Following the Parks IGA, CPNMD only had one vehicle remaining in our possession. That vehicle was in poor condition, and in need of replacement. In 2023 we spend nearly $10,000 in vehicle repairs for that one truck. Wheels needed to be replaced due to cracks found in the rims, the heating and air conditioning system failed multiple times, Interior seatbelts had to be replaced, and an alignment was completed to try and alleviate a persistent "shimmy" that we were ultimately unable to find the source of. Rather than purchase a replacement vehicle, the cost-saving decision was made to move the District Manager to a stipend, in leu of a vehicle replacement with the consideration that no other vehicles remained in our possession at the time.

Nathan:

So when we got rid of that vehicle in August of that year, we had already spent just north of $10,000 on maintenance in that calendar year. and then that is included, in the summary. Let me get back up to it. in the when we talked about getting rid of the vehicle fleet. So we had gotten to a point where, following the parks transfer, the majority of our vehicles went to, the city as part of that agreement.

So they they grabbed those vehicles, a couple of them, and aged out before that. And so we, we'd gotten rid of them. But so when we got to that point last year, the only vehicle, the Castle Pines North Metro District owned was the one truck that I was driving. And so that was the one that had the ever increasing maintenance cost.

So we had put, I guess nearly $10,000 in vehicle repairs above normal maintenance stuff. So that doesn't include, you know, normal oil changes. And since we were in, the issue still hadn't been resolved. the truck was really acting like at some point somebody hit a curb with it or something really, really hard. We replaced, two cracked rims that were found on it, and the vehicle had a pretty bad shape when it got above up around like 55, 60 miles an hour.

we did alignment. The alignment was it was one of those situations where they could get it within spec, but it just never really drove. Right. So because we only had one vehicle, I was the only one using it. it made more financial sense for the district rather than replace that one truck to just move away from them.

it certainly wasn't my intent that if we were ever in a position where we wanted to start bringing operations staff, either, you know, in whole or in part and back into the system that we wouldn't ever have vehicles for them.

Jason:

can I just say one other thing? Absolutely. So, first of all, I am, in total support of another operations manager.

I think right now we have a single point of failure in this, district, and I think we need to rectify that. so I can justify the expense for that. But if we go back to this other person, that's going to be replacing the contractor. if we took you off stipend, would you be able to share a vehicle with somebody that goes out and reads meters?

Is that feasible?

Nathan:

No, not reasonably so. The it even between these two positions, the one that is going to be in their truck more than anybody else or in that vehicle will be the field services technician. that that position is basically going to almost exist entirely outside of this office. So when they're driving individual customer service calls, when they're the meter readings, just a one once a month event.

But that maintenance needs to continually happen for that position to be effective. They really need to be spending most of their time outside of this building. We're able to backfill that office position because really, the reason that we need a third person in in our office is to, provide that, that additional support for our, customer service staff, basically.

So for Susan and Jackie, they really just need somebody they can fill, can fill in behind them if they need to. So that would be a tertiary job responsibility for the field services. Their primary responsibility would be out in the field.

Tera:

But then it sounds like if we took the district manager office type and then the ops manager and the district manager could share a vehicle, and they're way ahead of me because I still want to go back and understand why.

Now, the field technician, you've explained why they need a vehicle because they're in the field all the time. Doing things that make sense to me. Still don't understand the parameters. On if that's 8 to 5, do they come here and then they take the truck out and survey?

Nathan:

Exactly. So that'd be, yeah. either, either a 410 schedule or but yeah, would be a full time during the day position here.

They would drive to work and then take the vehicles for work and stay here.

Tera:

Then why would the ops manager need one? the same reason.

Nathan:

So the operations manager position is also going to be largely out in the field. So we're talking about like the capital projects that they're managing. The a large portion of that is being able to have people that are physically on site for those, when we're doing various design things.

So, once the lift station project and even leading up to it. So as we've been leading up to the lift station project, just as a kind of an example in a silo, there have been through the engineering process, I can't even tell you how many phone calls or requests from our engineering team that, like, need somebody to run out and take a photo or something, or need somebody to run out and verify something.

so like that would be one aspect leading up to design. Once the project is actually in full swing, having somebody that's out there spending more time in the field working with the contractor, making sure that we've got the valves that need to be turned off, off, really working through making sure all the, coordination that needs to happen with operations is taking care of all of those things.

And then this is somebody that I'm also going to be expecting to spend, be spending a large portion of their time out in the field, probably at least 50%, if not more than that. Just checking on our facilities and making sure that things are getting done right, creating punch list, creating work orders, all of those kinds of things that come with it.

there there's a lot of need for the operations manager to be out in the field. it is probably,

I the the answer to whether or not the operations manager and the district manager could share a vehicle. Vehicle is, I don't know, I genuinely I'm just not sure if that would work until we're in it. And I know there's going to be a lot of times where I've got meetings that take me out of district. you know, certainly I probably have 2 or 3 of those a week on average anyway.

And so if I need to be out of district and they need to be driving around in district, I could see a creating some sort of problem, which I think is why, most many districts use a vehicle stipend for district managers. And then, it's also very, very common for an operations manager to have, a vehicle available to them during their work day.

It's probably a coin toss between utilities that assign that position a vehicle permanently for at least for driving back and forth from work. and just allow them to have it or just have it parked here during the day. given the size of our district, I don't think that it would be necessary for them to. And because this isn't going to be like an officially on call position, since we still have the on call operations, I don't see them needing to take a vehicle home every night, so I think it'd be one that's or I'm planning on it being one that's parked here, along with the one for the field services technician.

Jana:

Can I chime in? Oh it's okay. So my thought is that it makes sense for to me to have a branded metro district field service vehicle. You know, they're going to homes I want to see us represented for that. If this op's legit. Yeah. But for the ops person they're going to the field. They're going to construction sites.

They're going to our, our facilities. I'd be okay with them being on a stipends for mileage for that, because I know with my position I drove my personal vehicle to construction sites. You know, it's not like I'm it's not that big of a deal because I'm getting out. I'm not customer facing necessarily. I'm working with contractors. So to me, I'm kind of on board with one.

I'm on board with the one that's customer facing more so and letting the district manager and the ops manager, because we're not we're not a huge city. So I can see us buying a vehicle and not putting many miles on it. That's the other thing that you think, like, how much can you possibly even drive all over the city?

Yeah. So it feels like an expense that we probably are going to save quite a bit of money if we just do a mileage reimbursement, if we're not letting this ops manager drive it home anyway. So I don't know, I can kind of get behind one, but maybe not. I can do it. Yes. Definitely not three.

Tera:

I can support the way you're thinking.

Jason:

Well, especially I can see this going forward for the first year or something. Instead of getting hit with $165,000 capital expense for this,

Nathan:

right? And I think that that approach would be helpful too, because there's nothing. So right now what I'm hearing is we've got a pretty good consensus to support the support, the purchase of one vehicle. I didn't plan on the general use one to go through really.

Anyway. And then for oops, I made my note backwards for that operations manager. That's something that we can always evaluate after a year or two. So I mean, if we're paying out an obscene amount of money because they're driving it all the time and it's costing a ton of million to reverse, but then moving into 2026, we can we can look at an additional vehicle purchase.

and that'll, that'll that'll flow. Well, also, because, that also puts us in a position, one of the things that I want the operations manager to really pay attention to is our potential future staffing considerations, too. So I also want them to be doing, you know, evaluations, tracking their time, really looking at this contract and see what other positions, if any, moving forward.

We'd want to pull in-house too. So I think that that's a that's a solid workflow.

Tera off mic:

And I think Leah just said

Jason:

yeah. Leah. What did you have. Thanks.

Leah:

I was just going to echo what Tera said, that, I'm supportive of that point of view, and Jana I appreciate it. Like, I feel like your unique experience here is really helpful, and I, I follow your reasoning, and I think it also buys us some flexibility.

That's always been, like, my primary concern is doing too much right off of the bat. And so I like being thoughtful about how we approach it. And then if it makes sense to expand, we can always expand, versus too many cars. And then we're trying to get rid of them if they're not used or doesn't make sense.

Tera:

Thanks, Leah. And I do appreciate that. And I do want to fully recognize that most metro districts I know they're vehicle heavy. Usually the district manager gets one. And, you know, that's certainly gotten Parker in trouble for her. But, I just acknowledge that, you know, that does is very common in the industry. However, I really appreciate all of our collective input.

I think that makes a lot of sense. And, thanks, Leah, and thanks, Jana. That's, really helpful.

Nathan:

sounds good. So I will plan on, keeping both the operations manager and field services technician positions in the budget, but we will strike, the operations manager and general use office staff vehicle. I included it in the packet.

I do have jobs. Just job descriptions for these positions. I don't know that there's a lot of value in completely running through these, if the board has a desire. Any specific questions? I can do that. but otherwise, I think we'll, kind of cross that bridge when we come to it. These were vetted by our, human resources firm to make sure that they're reasonable, that they meet all of the standards that those need to meet, you know, verifying that they're exempt or nonexempt positions.

but so those are included in your packet. And

Leah:

so I really appreacite The level, I, I appreciate the, the level of information here. I know for me, I would like to, to go through it and just kind of internalize it, but I am appreciative that you provided it. So thank you.

Nathan:

and then your for you're very welcome.

I'm sorry I was distracted. I'm sorry.

Tera:

And I was just going to have one question before we leave this where it says, the, field services technician primarily dedicated to customer service calls, meter reading meter replacements and general facility maintenance. What is general facility maintenance? Because this facility isn't ours. Really? So what facility are you talking about?

Nathan:

Live stations. Well, sites. Water treatment plant, booster pump station, interconnect pump station. stuff like changing light bulbs, spraying for weeds. we do have we do have maintenance contracts or we're in, evaluating those for this year. But we do have some general level, some level of maintenance contracts for the landscaping on those it gets. It's much cheaper to have a landscaper do kind of the overall it gets really expensive when you just need to like pull some weeds around a building really quick.

So for those facilities, thank you. And then the the hiring ranges, that were set on both of these. So we've got I did want to cover that really quick at least. So for the utility operations manager, we've got 80 to a hundred, $80,000 a year to $100,000 a year, depending on qualifications. and then for the field services technician position.

Oops. Easy for me to say.

Tera:

And while you're pulling those up for context, where are those ranges? How did those get established?

Nathan:

Exactly what I was getting to. And so we've got 60 to 75 for that one. we established those based on the, well, one, I had HR make sure they sounded reasonable, but the, salary ranges were set using AWWA American Waterworks Association guidance.

So they do a nationwide salary survey. that breaks it down by general position type. and then the, the, the salary range for those positions and what's actually been in the field. So the we're using the 2023 numbers. and then it goes, what I really like about that specific comparison with was opposed to like Mountain States employer council is they break it down by district size and population served and whether or not it's a private or public board.

So we were able to look at the national average for salary ranges very specifically for a district that is relatively our size and controlled by a board. What are those positions being paid on a on a national basis? So that's the the impetus for those salary ranges.

Leah:

All right. all right, quick question, Jana, I would be curious, just with your kind of experience with Aurora, and kind of the reputation that they pay. Well, just as we review those, if those pay pay ranges seem in line, with your experience,

Jana:

I will do a quick look and just let the board know if that seems.

But also, you have to recognize that Aurora is going to be vastly larger. So, like Nathan said, he used a comparable city in size and that might not Aurora might throw that off, but I'll do a quick check and give you guys a range kind of for that. And, because at least we want to see that we're in the ballpark.

Yeah.

Leah:

Well, and part of my, I guess question was to your point, with Aurora being so much larger, larger and generally paying well, like if our pay ranges are above theirs, like to me that would be something to to look at. so I know it's not necessarily apples to apples, but I was just wanting to understand, like if our pay ranges were like way above Aurora, then I would want to understand more.

Jana:

I'll follow up with that shortly.

Nathan:

Yeah. And so what you'll what you'll likely see. and this is what, I'll be definitely interested to see what? Jana finds. Excuse me. Jana finds out, is you'll see that the management positions tend to make quite a bit more in the larger districts. and then the, in the kind of the mid-sized districts, the maintenance positions often make more than you would in a larger district.

And that largely comes down to specialization. So if you're talking about an aurora or a Denver water and you're in their operations department, you either work, you work at one water treatment plant and that is the only water treatment plant that you work at. So you're very specialized. They have, Denver water goes so far as having hydrant repair crews that are brand specific.

So you can get really dialed down to a very small job function when you're in the smaller and midsize utilities, you just, generally speaking, have to wear a hat, a lot of hats. So like our operators, you know, even we had operations staff on on board. Sure. We had somebody that was primarily responsible for the treatment plant, primarily responsible for the collection distribution system, primarily responsible for field service and meter reading.

But they really need to be able to do all of that to make a district function. And so that's, another good comparison and one that's really easy to find. is Town of Castle Rock actually post all of their pay ranges online? They're really easy to get to. and we weren't far out of line for what they're paying, their employees there either.

Tera:

But that's a larger district considering it serves a larger population. Yep. Okay.

Nathan:

All right. so with that, we can jump over to the draft budget. and then I do apologize for this one. It's going to be a little bit messy here. for those of us that are present, just because the resolution on the projector isn't that great.

And it doesn't like the landscape layout as much.

Describer:

On screen.

CPNMD Draft

2025 PROPOSED BUDGET

With our focus sharply on the future, CPNMD is excited to carry forward the momentum we have gained over the past year.

Before you dive in...Before you read through the budget, it’s important to get a little guidance.

Tips for reading this Summary:

This document is intended to be a summary of the 2025 budget. We highlight changes that create significant changes to individual line items, as well as our planned capital projects. You will notice that there are references to individual ledger codes throughout. These are in the general format of “60-60-XXXX”,and “60-61-XXXX” These codes reference an individual line-item in the included budget tables. Although a little cumbersome, referencing these ledger codes allows those that are interested to quickly identify the impacted budget line-items.

What are the “2025 and 2024 COMBINED” Columns?

Some budget line items are shared between the funds. These are largely employee compensation, contract staffing, and administrative functions, many of which were previously (at least in part) accounted for in our General Fund. To ensure that these are equitably accounted for, expenses that apply to both. funds have been allocated 65% in the Water Enterprise Fund, and 35% in the Wastewater Enterprise Fund. This allocation is commensurate with the relative revenues of both of those funds. The “2024 COMBINED” column shows the total budget of these line items and is only filled out on applicable line items.

How much money do we collect from our mill levy, and how are the funds allocated?

In addition to water and wastewater revenues, the District also collects property taxes as a source of additional revenue. These revenues are accounted for directly in the Water and Wastewater Enterprise Funds. To ensure that these are equitably accounted for, and follow TABOR and enterprise fund regulations, revenue from our mill levy will be allocated 65% in the Water fund, and 35% in the Wastewater fund. Enterprise funds are essentially government run businesses, and as such no more than 10% of total revenue for any enterprise fund can come from public tax dollars. You can see how these are calculated in the table below. ("AV" is the Assessed Value)

A property Tax Table is shown here based upon Mill levies. The chart is too detailed to explain please contact Nathan Travis for access to this document for detailed explanations.

Nathan:

Okay, so this is, very similar to the draft that we prepared, last year. and so we've got kind of, like I said, it's a little bit difficult. So it starts off with just kind of how to read this document. And so as we go through the, the individual line items or the individual capital projects, you'll see the actual general ledger code that's associated with it.

So when you're talking about a capital project, it makes it relatively easy to go find that directly in the budget. we also did, like we did last year, included the 2025 and 2024 combined columns. for this one and for this version, we only have that on the water side. when we do the final draft, we can make that for both of them.

for the mill levy this year. we're looking to key, I can't remember. Whoops. Jump in. This is where it's going to get a little bit messier. so the. Well, we're looking at doing the same mill levy certification that we did last year, split up the same way. This keeps us into, or keeps us under the table regulations.

and so you can see the. like I said, I apologize. I get this a little bit cleared up. Oh, one more thing to cover. So this one, this far right column. This this just shows the changes over the last draft that was presented at the October board meeting. So that's also one that wouldn't be included, in this document, that's really just more so that you guys can reference it.

if you need to, but so for the mill levy certification, we're still looking at, three and a half mills for 2024. So we have the, permanent authorization to do seven. we are, requesting that we again, certify the mill levy for three and a half mills this year.

Tera:

So I did notice, and I don't know if you're planning on going through in detail, but I noticed that, the revenue numbers in the budgets, I think, and all except for the general fund, I think they went down. Correct. The general fund went up. the general fund is, is more a function of, like the final accounting for the water treatment or for.

I'm sorry for the, parks, open space transfer, IGA. It's hanging out because it has to. And we did a budget that we did, you know, related budget amendments. And so there's there shouldn't be anything going into that. so, yeah, so the budget does include all we've got, this up there, we can talk about rates. So the budget that we have presented does include the percent rate increases.

Describer:

On screen.

Organization-Wide Budget Impacts

Additional staffing, and greatly improved capital project planning are on the way...

New Rates for 2025

CPNMD will be instituting a rate increase this year. We are implementing a 7% rate increase for wastewater services, and an 8% rate increase for water services. That's an average monthly increase of $3.91 per customer for wastewater, and $8.17 for water services. Overall, on average our residents will see a monthly bill increase of $12.08 for 2025.

For context, CPMD has not implemented any rate increases since 2021. Over that same period, we have seen costs increase across the board, and inflation rise by 21%. In 2022 we actually lowered monthly fees by removing a fixed monthly $15.00 renewable water fee. Although certainly an increase over what our residents have been paying for the past few years, our total bill amounts will be almost $3.00 lower per month, than they were at the beginning of 2022, in spite of higher-than-average inflation, and rising costs.

We remain committed to providing wastewater services and high-quality, clean, safe, reliable, and on-demand drinking water to the residents of Castle Pines North Metro District at the lowest possible cost. To that end, following the rate update study in 2024, we will be utilizing our improved capital forecasting platform to complete a full cost of service study in 2025 (60-60-5419 / 60-61-5419). The goal is to gain a better understanding of our funding needs, anticipate any needed rate adjustments well in advance and ensure that we are providing our residents with the best possible value for the services we provide.

Capital Planning (60-60-7755)

We have been spending considerable time and resources getting caught up with our deferred Capital Projects in both our water and wastewater funds. We are turning the page to proactive instead of reactive in our Capital Needs. We are nearly complete with a comprehensive update to our asset management program and that will have a big impact on district financial planning. Our capital needs forecasts will look ahead 50 years into the future, providing vital information to our board to make well-informed decisions, and will also help ensure that our rates and fees are sufficient, without being excessive.

Nathan:

The reason that we have that for this year that we're showing or we're anticipating a slight dip in revenue, even with the rate increase, is because we are essentially built out. So we can't have the same assumptions in terms of new homes coming online that we did previously. So the, tap fees and all of those that we've gotten for a very long time are drying up.

So even though the rates are going up a little bit, at least in that first year, we're not going to see a significant revenue jump. We might even see a little bit less just because we're not going to have that money coming in. We've only got a handful of commercial properties left. outside of that, we've basically collected everything we're going to collect for, residences.

and so Eric, will, Eric is on with us. Once we get through the budget, he'll jump in and, review the rate study information again. along with some additional data that you guys have requested. But so the budget as it sits does show, a rate increase of 7% for wastewater services and 8% for water services.

that's roughly $12.08, per resident, per average bill. in addition to what they're currently paying, I think worth noting is that that is still the overall total of the water bill is still going to be cheaper than it was in 2022 before we remove the renewable water fee. So even with a 7% and 8% increase, we're still below the 2020, the beginning of 2022 numbers.

before we pulled that $15 a month flat fee off.

so capital planning. So this is, line item really geared toward

Jason:

Nathan. Sorry. Go ahead. What was the renewable water fee used for?

Nathan:

It was I'm not sure I, I need to go back and see when that was put on. Eric. My Eric might know, but the general idea was it was a renewable water fee for some sewer is for, for long term, water purchases, water rights, purchases, things like that.

in terms of the timeline, I don't know if it was put in as part of the, renewable water plan that ultimately got voted down. I don't know if it was a precursor to that, or if it was something that had just been sitting on there for a while. I can definitely get some more historical information on that for you.

Nathan:

So that collected money just went into the general fund and got spent over the years. It didn't get really even that spent. So that's a primary driver for why we have such a large fund balance on the water side for the things that we're now using to fund a lot of the capital projects that we've got.

so for, capital planning, for this year, we're really, really looking to finally turn, turn a pretty solid corner. I should have the asset registry from our asset management project by the end of this month. Once that gets put in place, it'll be a matter of working with our, the aims vendor and asset information management system that we also use for our GIS.

To get all of that information uploaded, start tracking those assets, and then we'll be able to do a much better job of projecting our capital needs moving forward. So that's going to be a really hard push in quarter one, especially moving into the full cost of service study and agreement. so we'll be spending some money on those contracts really.

And realistically we there wasn't like a commensurate buzz budget increase. We've had money on those working on those GIS programs. steadily for a number of years now. So we're not actually going to be spending, that much more above and beyond, what we have been this also folds into, General, oh, what's it called, the water treatment plant facility documentation.

So also part of part of that list for the asset management is because of the missing records that we had on a lot of our facilities, especially the water treatment plant. We're having to reverse engineer a lot of those. So, as we go through and do the as we've gone through and done these asset inventories, we're also working on basically retroactively designing our treatment plan or creating a set of as-builts from the building.

the final the final part of that effort for the water treatment plant will be the filter rehabilitation project will take care of a lot of that. It'll kind of wrap that up on the wastewater side, the finishing up the lift stations. we didn't do anything, really, except for one lift station on the asset management registry for the lift stations, because it would have been redundant if we went in through and recorded all of the equipment and pumps and everything that we have right now, only to rip them all out a year later.

So we'll just update that as we go. But those also won't have a long term impact or an immediate impact. I guess a medium impact on the capital planning. there won't be a lot of things that need to be done at the water treatment plant or the lift stations in the next 5 or 10 years, since it will be effectively brand new.

Leah:

Nathan, I have a question. Yes. And you were projecting that document on the screen a little bit ago. was that, resident facing communication?

Nathan:

It ultimately will be. Yes. Okay. Yeah, there's there's a lot that need. Well, we still got some cleaning up to do for sure.

Leah:

Okay. Yeah, I was just going to ask like that hasn't gone out yet, has it?

Nathan:

no. No, it hasn't been. It is. It is available as part of because we just post the board packets online. So it's available if you go to like the meeting documents. but the, the final version will look fairly different, especially when you look at like the individual like line columns. Those will be cleaned up. There'll be some columns removed.

and then we'll have to go through work, work on some of the language. I was made aware of, of one error where I had Colorado Department of Health and Education instead of environment. So there's some of those things that still need to be cleaned up. But we're still in a draft draft format here.

Leah:

Okay. And then my assumption is that we would wait to communicate some of the things like hiring and rate increases until they're approved.

Nathan:

Correct? Yep. Exactly. Yeah. So generally this, you know, the rate increases will go, you know, if we if we do those, we're going to want to get start getting that information out, relatively quickly. But I would plan on having this document fully ready for release by the end of this year, moving into January 1st at the latest.

And this is also different than the Department of what is DOLA stand for? Department of Labor administer or something. Whatever DOLA stand what whatever DOLA stands for, this this is this is different than this, but what is it?

Phyllis Brown, Community Resource Services of Colorado (CRS):

Department of Local Affairs, department of local. And see, just like, I guess

Kim:

Division of local governments too. Division of local. yeah.

Nathan:

So this this does look different than what gets filed for our regulatory purposes. So this is kind of a, ultimately this document is much, much more geared toward, our residents. So they have a clear way to see what's going on, where the money is being spent.

Tera:

Right. But we wouldn't I mean, that the ten, 15, 24 board version, we're the only ones that really saw that.

Or would that column stay in there?

Nathan:

No. So this every you could like for this one, this would be for the property taxes. It's only going to be everything from here to the left would be the final in the final document.

Phyllis:

The final document will include the three columns as required. have the 2023 actual, the 2024 estimated and the 2025 adopted.

And if you look at the last year, that's the format. That's that that's in there.

Kim:

And and Phyllis, while we're on this point. So this first chart shows, the tax revenue. But then on page I think it's nine is the general fund, and it doesn't show in general. It shows the taxes going into the water enterprise, but there's no general fund.

Will there be a general fund to receive the taxes and then going out to the Water Enterprise Fund?

Phyllis:

No. Because remember in the audit, we during 2023, the general fund and the storm drainage fund both went away. And so all we're left with are the conservation Trust fund, which that will end up going away, if the city takes over that.

And then we have the water and the wastewater, which is why we're we're using this 10% limit of the revenues received. So it so I have the general fund information in there. but but there's nothing for 2025. No. Estimated for 2024. Same with storm.

Nathan:

So the mill levy. And it's the same thing that we did that we're doing for 2024.

But the mill levy revenue will be accounted for directly into those individual funds.

Kim:

Would it be possible, though, to show it in the official budget as mill levy revenue going into the general fund and then transferred to the enterprise Fund. So just be three numbers tax revenue.

Phyllis:

I mean, I sure show that on the audit because the audit would show it just with the two funds, because those funds went away and are zero.

So, you know, you try to keep your budget to match your audit. However, I will say that districts present a budget, internally, sometimes different than that. So does that answer your question,

Tera:

Kim? Why are you asking for it to be done that way?

Kim:

Yeah, I've been working all day today on those new disclosures for disclosures, which are going to require a showing of the tax revenues and then comparisons to prior years.

And I when I looked at this, I understood I understand what you're doing, but without having any general fund to receive the taxes, I don't know how to go about completing those, new statutory disclosures. And it just feels to me like it'd be much clearer to have a 2025 general fund tax money comes in and immediately is, dispersed to the enterprises.

Phyllis:

Yeah. Well, there is, you know, enterprises that just operate as an enterprise don't no longer have a general fund. So all the expenditures, so I and if you'd like, I can look at your disclosures and we could maybe tweak the disclosure, put a note on it or, to try and because it is apples to oranges, I see what you're saying.

It's going to be apples to oranges.

Kim:

Yeah, yeah. And that's my concern. I don't know how to I don't know how to explain that explain that I can I did that, you know. But really what what is happening is that tax revenue is going into a fund, isn't it. And then it's being, we the reason you did the 10% comparison is to make sure that the enterprise funds aren't getting more than a 10% grant from the government.

And the government being the district operates on that general fund. So that that's way to me, it just would be so much clearer to just have a general fund tax money goes in tax when it goes out.

Phyllis:

So it and this is my understanding for all enterprise funds, they don't generally have a general fund if they're strictly operating as a business.

It's just. Right. And if you only had one fund that you just had a water fund, it would just be there's water fund and that's all you have. So here you're right that we're splitting and, and all the expenses would go allocated to that enterprise fund because there is no general fund. So all of your general expenditures, all your they're shared between the wastewater and the wastewater.

Like I said I can help.

Nathan:

So so if I'm Kim, if I'm hearing you correctly the way that this would if I make if it try and simplify it for my understanding is that in that case we would still maintain a general fund, but the general fund would basically show the tax revenue. And then we'd only really have two GL codes that are associated with it, one for the Water Enterprise Fund, one for the wastewater fund.

So we're we're really it's a it's a pass through, but we're documenting it through a general fund.

Kim:

yeah. And the reason the reason it's important to me is because the district so you have the district and you have two enterprise funds to, as Phyllis said, businesses that you're operating but the tax, the taxing entity is the district.

Okay. So I would like to see the tax dollars come into the district. And then the district gives grants to the to enterprise funds, which Phyllis has already calculated on this first page. That's what that 10% calculation is. And then then you have a clear path. Tax money goes to the government. The government gives it to the two enterprises and that's it.

Nathan:

Okay. That that makes sense to me.

Phyllis:

I could talk to the auditor as well to see like, hey, we want to present it this way in our budget to show it and to be able to compare apples to apples. And then how does that translate for the audit presentation?

Kim:

Okay. Yeah. If you could that be great? Because it it really concerns me.

There's a, there are lawsuits and things going on now about, districts surviving solely without any taxes and whether or not, you know, can a district pay? it's auditors and its attorneys if there's no tax mill levy, if the, you know, there's a district operates on the taxes, even though it's just distributing them and it's the only entity authorized to assess those taxes.

So to me, it just feels cleaner legally. And I'm not a good numbers guy. But even numbers

Tera:

transparency. Yeah. Legally and transparency. Yeah.

Kim:

Yeah. Tax money comes into the district the government and then the government disperses it right out. Okay.

Nathan:

Yeah. Yeah I think Phyllis definitely go go ahead Kim. That's it. Oh yeah. Phyllis, if you want to follow up with the auditor, I think that would be helpful.

But it sounds like the right way to do this is to plan on keeping the general fund in place just so that we can disperse those to the individual ones. And then I can we have a little explanation on what we're using the general fund for. But I can I can pretty quickly adjust that. And then it's just a matter of, you know, adding that in.

But I see what you're saying that makes that makes sense. Okay.

Tera:

I appreciate you bringing that up. (Kim spoke but it was spoken over by Tera and unintelligible)

Describer:

On screen.

Organization-Wide Budget Impacts (continued)

Additional staffing, and greatly improved capital project planning are on the way...

What are the planned staffing changes, and what impact will this have?

At our peak CPNMD had six full-time, and two part-time employees dedicated to the water and wastewater operations of the district. We currently only have three full-time staff members. In 2025 we are looking to bring back two of those positions.

Second, we are hiring a Field Services Technician. This position will be primarily dedicated to customer service calls, meter reading, meter replacements, and general facility maintenance. These tasks are currently handled via an operations staffing contract, and although that has been effective, we simply aren't able to meet the customer service standard we would like to under the current structure. Additionally, this position will be able to work on capital meter replacements and upgrades, which is substantially more cost effective than outsourcing this work.

These positions do have an impact beyond compensation on the 2025 budget. This includes, the purchase of three vehicles (60-60-7116 / 60-61-7116)one for each new position, as well as a vehicle for office staff use (and field use should a vehicle be out of service for repairs and maintenance). Additional workstations (60-60-5235 / 60-61-5235), and a variety of tools (60-60-5236 / 60-61-5236) will be needed to properly support these positions.

The increase to these line items will be limited to 2025, and we will return them to normal operating levels for the 2026 budget year. Vehicle maintenance costs, and fuel expenses will continue to be ongoing budget considerations.

Nathan:

All right. We already talked about staffing. This is, basically the this is the same page that we covered before. with a little bit less information, just more for public facing. And I'll make the adjustments to that. one thing that I did want to ask the board about, so we have these kind of placeholders, I know that visuals are certainly helpful for just understanding what we're working on.

I've heard several things that would be helpful. We have a limited amount of space. And so we've got two requests that I've gotten from, various board members. Is one to be showing, a mapping location of some of these or just like a relative, like a related image, like, do we just want to put a picture of this actual, well, site on there?

Would that be more helpful for the for the average resident reading it, or would a pin drop or some

Jana:

one of these requests is coming from me because as a board we forget where the lift stations meaning which list station is which, which well is which. And so to me, a vicinity map is going to let our residents see.

Oh, I know where that is. Okay. Got it. So, as far as a picture associated with it. Sure. In a perfect world, you know, you could show a drill, a drill rig and on half and you can show vicinity map on half, but also the vicinity map is just more important to me to see if you're impacted.

Is it going to be in your, you know, in your sight line of sight all the time kind of thing? So, I like this. I like where this is going though, Nathan.

Tera:

And it would be great to fit both, but, size wise may not be good, but I know communications is a very is one of Leah's passion, so I'd love to hear her thoughts.

Leah:

I'm not able to see what you guys are talking about.

Jana:

Leah. It's going to be on your, budget packet and it's PDF, PDF, page five.

Leah:

Yep. Thank you.

Tera:

So those green boxes,

Nathan

correct? Yeah. Those are image placeholders.

Leah:

I really like the formatting in the layout. I'd have to read through, like the verbiage, but it reads well and presents well, I think, and, and I don't know what a vicinity map is, but being able to see, like, where it is exactly. Yeah. Be helpful for me.

Jana:

Yeah. Okay, a vicinity map. Sorry, is just a location map. So, and then. Hey, Nathan, one thing I want to adjust instead of saying on this first one, worst case scenario, could we just use something like to be conservative financially or something like that? Yeah, just just a thought on that one. Worst case scenario can be said better

Nathan:

sounds.

Sounds good. Bailey, you got that? Yeah. Sorry. Perfect change. Oh, you don't have to apologize to Bailey. I wrote these ones.

Leah

Like, turn it into a positive.

Describer:

On screen.

Water Enterprise Fund

There are several Capital Projects underway or planned for 2025. Each will provide vital improvements to system reliability, and water quality. Here, we highlight the necessity of these projects.

CAPITAL PROJECT

Arapahoe Well Re-Drill (60-60-7740)

One of our wells in the Arapahoe Aquifer has failed. We had previously replaced. the electrical and pumping equipment at this site, however shortly after starting the well with the new equipment the driveshaft for the pump failed.

We are currently in the process of evaluating the cause of the failure. It is not guaranteed that we will need to fully re-drill the well to make it operable, but it is certainly a possibility.

To prepare for the worst-case scenario, we have budgeted $1,800,000.We will explore all options prior to taking this step.

CAPITAL PROJECT

Backwash Reclaim Tank Upgrade (60-60-7754)

This project was completed in 2023. In 2021, emergency repairs were made to this tank at our water treatment plant, prior to construction on the full capital project. Unfortunately, we were not fully billed for the emergency repairs.

This was brought to our attention in early 2024 by the contractor that completed the work. However, as we did not budget for this overdue expense our board and the contractor agreed to delay payment so that it could be appropriately budgeted.

We will make the $100,000 payment in January of 2025 to resolve this account.

Nathan:

Okay. so going through the Arapahoe, through the water enterprise capital projects, then, the first one we have noted here is the potential Arapahoe. Well, re drill. So this is, well, A-2 it's it's, south of Castle Pines Parkway and monarch on the east side of the road.

it's pretty visible. we have already we've done quite a bit of work on this. We've done a lot of work on the controls. And then, we actually had the the well failed before with the with a broken drive shaft, a couple of years ago. And so we had pulled the well out. We did, we did an inspection, at that time, replace the pump, replace motor, dropped everything back in it, ran for a little bit, bound and snapped again.

so we're not entirely sure at this stage if we're going to have to re drill the entire well. And so if you guys can picture, you know, a, a well casing is really just a pipe that goes straight down into the ground. And then your pump and equipment go down inside that. So your pump actually sits all the way at the bottom.

it is very possible that there's, just a slight deflection in that. Well, so over time you can get some geographic movement. If that's the case, you'll get that drive shaft will just bend a little bit. And so when it runs, it'll eventually snap. It doesn't mean we necessarily have to re drill the well. It's entirely possible that we can just raise it up a little bit.

So if that deflection or whatever that issue is is near the bottom, we might be able to just raise the wellhead, continue to use the well casing. And then that will reduce the lifespan on it. So we'll definitely have to look at re drilling it at some point. We just don't know yet. so the the budgeted amount is for $1.8 million.

That is assuming that we have to re drill the well, reconnect everything. if it's a matter if it's just a matter of setting the pump depth on the, well a little bit higher, it'll cost like $70,000. It'll be a lot significantly cheaper. So there's a wide range there. We just wanted to make sure that we had, the budget covered for it.

Tera:

So then when you're talking about kind of that deferred maintenance and that the well would need to be re drilled eventually. Do you have an estimate on whether that's five years, ten years? And then how do you track that to make sure that that it is planned for? Because that that basically just sounds like it's deferring maintenance.

Nathan:

So that gets captured inside of our asset management program.

So the well, the well itself, the well casing, the pump, the motor, all of those have defined current conditions and expected asset life based on those conditions. And so when we're talking about how long it would last, we don't really know yet. It depends on if we can reuse it. A lot of it depends on how far we have to pull that up.

So if we still have a large amount of water over the top of the wellhead, we can probably keep using it for another 5-10 years. If we're really high up in the water table and we don't have a lot of water above the well one, it's going to drive down how much we can pump to eventually the aquifer is going to catch up with it, and that could put us back into like the sub five year range.

But we'll know that once we have a solid diagnosis on the issue, there.

before the, backwash reclaim tank upgrade. So this project was already done. fully completed. However, following the failed Parker inclusion and the boil water advisory back in 2021, we needed to get our plant to a running state. And so the backwash reclaim tank is going back up slightly, but the backwash reclaim tank is really just when we cleaned the filters, that's where that water goes.

It sits in there. We pull it back in. when we were trying to get the well off or get that, tank just so that it was operating safely. you could see daylight from the inside of it. So if you went down inside the tank, you could literally look up and see sunlight. So in order to get the plant running before we were able to do the full capital replacement, a year and a half, two years later, we had to put a temporary cap on top of it.

that work was done and for whatever reason, it was never billed. So we did talk about this, at a board meeting, I want to say in like May or June, where we gotten a bill that was 2 or 3 years old from PCL contractors. We made the agreement that we would pay that at the beginning, that just like, let us get us into the next budget year.

That's what that is. So it's just a it's a unbilled payment that we're making, in January.

Leah:

Hey, Nathan. Yep. now that I'm looking more closely at it. Thank you. Tera. I am noticing a decent amount of grammatical errors. I'm assuming that, like, Bailey will review those and clean them up, but I would be happy to, you know, review them once she's done that.

Nathan:

Okay, great. That would be that would be helpful.

Describer:

On screen.

CAPITAL PROJECT

Water Treatment Plant Filter Rehabilitation (60-60-7756)

It’s no secret that our community has experienced periodic issues with discolored water over the past several years. Although the discolored water poses no health or safety threat, we are committed to going above and beyond to provide our community with the highest quality water possible. We have already seen a substantial drop in the number of these events, especially during the second half of 2024. We have accomplished this through significant upgrades to our water treatment plant, and through operational adjustments. However, we have no intention of stopping there.

This discoloration is caused largely by iron that we are unable to efficiently capture with our current, outdated filter design. In 2024 we laid the ground work to solve that issue. CPNMD conducted a 6 week “filter pilot” test. We tested 4 different types of filters under a variety of conditions and have selected a new filter type that is significantly better at removing iron than our current filters are. This project is not driven only by a desire to reduce discolored water events.Much of the equipment associated with our filters is also outdated, and in some cases in need of eminent replacement. We are already hard at work, designing the new filters and plan to begin construction in late summer of 2025. We anticipate completing this project by May of 2026. The total projected cost of the project is $6,000,000 with $3,340,000 budgeted for 2025.

CAPITAL PROJECT

Well Control Vault Rehab Program (60-60-7760)

This project aims to standardize the flow meter vaults at all our well sites, as well as ensure the proper operation of the related equipment. Additionally, this will allow us “flush” our wells prior to sending water to our treatment plant. This is an important capability because it allows us to reduce the amount of iron that needs to be filtered by the water treatment plant. Work has already started on this project; however, it will not be completed until early 2025.

The total cost of this project is $200,000 dollars, the bulk of which will be spent in 2024. We have budgeted $100,000 in 2025 for the project completion.

Nathan:

so the water treatment plant, field plant filter rehabilitation. we just had a presentation on that a month ago. A couple months ago. so we're we're moving forward, on that. This is the this is the project that we're looking at doing the, construction manager at risk approach on, we approved the Kennedy Jenks portion of that at a, at a prior board meeting as well to get that process going.

we're looking at a total project cost for that of $6 million, but we've got 3.3 and some change budgeted for 2025 for that project to move forward. this accomplishes a few things. One, it'll help us significantly improve improve the amount of iron that we're removing from our system. we're removing prior to the water going out into our system.

So, you know, as we continue our flushing programs, we expect to see those flushing times come way down. you know, if we have things like waterline breaks, we expect to see, like, far less disturbance than we currently do. expecting to completely eliminate that isn't, isn't reasonable, but we're we're going to make some pretty drastic improvements with the filters,

Jason:

I think a chart or something demonstrating that would be good for that placeholder with this particular subject.

Nathan:

Okay, great. Yeah. We can, yeah, maybe even that iron there was, the iron removal one. I think it would be a great one that from, Erica's presentation. Keeping it up to make sure Bailey's got notes.

Leah:

Some other general feedback that I have around these communications is to me, like we are leading with our problems and we're leading with the issues.

And I think, I mean, and this is my personal opinion, and other board members may feel differently, but I would love to lead with, like, we're investing like, here's where we're investing in our services. And then maybe tie in how that investment addresses the issues because like as I'm reading it, like I am just going like, oh my gosh, I forgot about that and that and that and that.

And we have all these issues versus like reframing it.

Nathan:

Okay. So we did have last year, a page prior to this one that was like kind of an overall introduction. Is that an explanation you'd want to see kind of at the beginning of the document in terms of the investing, or are you talking more about just trying to change the language with the individual capital project?

Leah:

we'll both I don't think is a bad thing, but I, I was specifically more thinking for the capital projects, and, and leading with like, why we're I don't know. Yeah. I think it's more just reframing it in a more positive way that like, we, we are making investments versus saying like, oh, it's no secret that we have brown water like eeek!

Tera:

absolutely Leah.

I love what you're saying because that's something I'm much more positive, you know, proactive positives. Put the positive on there instead of like you said, we don't need to remind everyone, this is this is a marketing document, right? It's it's putting our best, image forward. So, not a marketing document, but it's certainly a chance to tell our story in a good way.

Nathan:

Perfect. Yeah, I can, Bailey, and I can definitely work on Bailey will be much more skilled at changing that language. I think that it's fair to say that with my operations background, you know, that my my world is problem, fix it problem, fix it. So I think that comes out in the way that I communicate some of these things sometimes.

So thank you for that.

Where are we? I we talked about your well-drilled drill. Oh, the well control vault rehab program. So this is a project that is currently underway. it was budgeted for 2024. it will be substantially complete this year, but there will probably be a few punch list items and then some, billing that needs to be completed in 2025.

so the total, That's actually incorrect. I need to adjust that one I missed that was on a previous draft. so the total project cost of that one is actually, it's like $600,000 that was budgeted for this year. and then $100,000 just to finish that up next year. So, Bailey, if you can note that one for me as well.

well, control vault, this is just standardizing equipment inside of the vault. So we're making sure we have all the same meters in everything. we're adding access alarms. Those are security measures that come with that. and then the, we talked about that we've talked before about the blowdown capability of wells, meaning that we can we can send wells to waste before we bring them to the plant, which is another key component in reducing the amount of iron we have in our system.

Describer:

On screen.

CAPITAL PROJECT

Monarch Blvd Waterline Replacement (60-60-7767)

In 2024 we replaced more than 5,500 feet of critical water main beneath Monarch Blvd from Castle Pines Parkway to Berganot Trail. Despite the challenges that come with a project of this size, we were able to replace 1,500 feet of waterline above what we originally planned for the year capturing cost savings by avoiding ongoing inflation and increased material and labor costs.

With the expanded first phase of the project complete, there is still more work to be done. In 2025 we will continue our partnership with the City of Castle Pines to complete the final phase of the Monarch Rehabilitation Project. We plan to replace an additional 1700 feet of waterline in Monarch Blvd, starting at Berganot Trail and moving north to Buffalo Trail. By working simultaneously with the City of Castle Pines we capture cost-savings for both organizations. This section of waterline was improperly installed and improperly sized for the growth that has occurred in the district to the North. This is a fantastic opportunity to correct those issues, while increasing our ability to isolate and maintain waterlines. Work is expected to begin in June of 2025, with a budget of $1,250,000 for CPNMD's portion of the project.

CAPITAL PROJECT

Sampling Stations (60-60-7753)

As required by the State of Colorado, we have increased the number of water quality sampling locations throughout the district. To ensure we get the highest quality samples, we are installing 25 designated sample stations throughout the district. This work has already begun, and will continue through the end of the year, and into 2025. We have budgeted $200,000 to complete this project in 2025.

CAPITAL PROJECT

Interconnect Pump Station Surge Modifications (60-60-7763)

This facility is the pump station that sends us our renewable water from Centennial Water in the winter months. That station has a system that protects the piping from sudden large pressure surges. A portion of that system is not currently functional, and although there is a backup system in place, this redundancy is important to maintain. We are evaluating the most cost-effective option to replace the failed portion of the surge protection system and have budgeted $75,000 to get things working appropriately.

Nathan:

yeah. So, the other, in terms of distribution system piping stuff, we've got the monarch water line replacement. So this will be the final phase of that one. we're looking at completing another a final 1700 feet of water line that will go from, Monarch and Berganot Trail, to monarch and what does that buffalo trail?

we substantially reduced the size of this project for 2025 because we doubled the amount of it that we completed this year. so that's the the $1.25 million includes our portion of the roadway cost with the city, water line is roughly. It's it's close to it's close to half of that. The water lines roughly $500,000. In some change, the roadway is projected.

I'm sorry. The water line is 600,000 to some change. The water. The roadway was about half a million, a little over half million that we inspect, expect. and then we added, I think 8%. contingency.

Whoops, sampling stations. So this is another one that we've been kind of chipping away at. the state increase the number of samples that we need to collect for bacteriological. So we, we collect, I'm sorry they didn't increase the number of samples. They increase the number of sites. So we now have to rotate through sites.

they really, really like to see these, like, designated sample stations. I think this would probably be a good one to actually put a picture of. It looks like a tiny little green phone box. But really, all that is, is a place for an operator to go to make sure that we know we've got a clean sample. We're not worrying about pulling it off of a fire hydrant or resident tap, or any of those things that have high probabilities for contamination of your sample.

and so we're we'll continue to, to work on getting those done. we've, the locations that we identified, we did specifically to avoid having to go through like a full engineering process. So we're doing them one at a time as we can. So we picked samples that are representative throughout the district. And we're in places where we have existing easements so we could install them.

and so we're kind of chipping away at that one rather than doing it, doing it all at once. We already have all of the sample stations we purchased those year and a half ago. So they're, sitting over in the shed of the treatment plant. So as we work through them, we'll grab them and install them.

interconnect pump station modifications. this is for the Or surge modifications. So the interconnect pump station has that huge surge tank that protects it from a sudden shutdown that we simply can't get working. The original vendor, that put that in no longer does work on part of the systems. there's a big problem with the air

Compressors aren't functioning appropriately. Appropriately. We have tried to get that manufacturer out here to service those for the better part of two years now, and for whatever reason, we can't get them out here to do it. I think part of it is that they're it's a really unusual application for those types of air compressors. in our initial conversations with Kennedy Jenks and, Greg Sekera, specifically, it is a redundant system.

So there's already a single surge arresting valve. but he thinks that rather than spending a lot of time and money evaluating and repairing that existing system, that it's probably going to be a lot cheaper just to abandon it and put a much more reasonable solution in place. and so we've only got 75,000, only we've got $75,000 budgeted for that.

If we really get into it and find out that we do need to do something larger, that's something that we can address in 2026. but because it's a redundant system, there's not a huge push to make sure that we get this thing done and throw a huge budget number at it. We want to be really measured with it and make sure that we get it done right.

But for also, in the most cost effective way.

Describer:

On screen. A Water Enterprise Fund table which spans two pages in this document. Its details are too much to describe here. Nathan will describe the most pertinent elements. Contact Nathan for more descriptions of this table.

Nathan:

All right. So following that, we have this incredibly easy to read the document. I apologize for the, lack of clarity on the screen here. it looked great on my TV of the same size. we can go through this if we want to. We've covered really any of the large changes. So the the staffing evaluations, the vehicles, all of the capital costs.

There weren't really any other line items. outside of the line items associated with that. we'll look again at, fuel and insurance. So we did add vehicle R&M and fuel expenses. That was based on what we had before. So we can lower those budgeted items, appropriately to coincide with, the reduction in the vehicles. And I wish that I didn't have any remember which column is which here.

Yeah. So that's the 2025 proposed, so I apologize. This doesn't fit on the screen. Guys. yeah. So for 2025 we've got 4000 and 13,500. So we'll revise those down to be in line with having one vehicle.

Tera:

Well, so to have a couple of questions, and it's hard for me to read.

Nathan:

Oh, here. And second.

Describer:

Nathan rises and leaves the room to get something for Tera which may be better to read.

Muttered chatter off-mic while waiting for Nathan to return.

Nathan returns with larger documents for the board.

Tera:

That's awesome. Okay. So,

So one of the things, accounting and payroll, you'll probably adjust. Oh, just for Kim. And it seemed like the legal services in both the funds went down a little bit. Does that make sense?

Kim:

Yep, yep. Yeah. We'll be slowing down all those property transfers and the things we've been doing with the city the last two years took it way up so

Tera:

Just want to make sure we weren't trying to quit on us. Never, the other the communications, public outreach, outreach seemed to go up.

I mean, there were quite a bit of line item changes from the version that we saw previously to now. They're not necessarily all, you know, all going up. That one just went up. That was interesting to me. legal services, we covered the revenue. We covered

Nathan:

Andrea is that can you is that the communications and public outreach. So I know that we did an inflation assumption across the board of

5%. and so

Phyllis:

correct yep.

Tera:

Okay,

Jana:

Can I ask a question about the credit card fees? because those are the fees we paid for people, didn't we get those reduced any?

Jason off mic:

Yea we were going to do direct deposits.

Jana Off mic:

it's under its like one of the 4th ones.

Jason:

It's 6060 I just lost it. 6060 zero zero, 5159.

Nathan:

So I think we need, Phyllis what's the what's the proper rate? That's a good catch on those. What's the proper way to account for that? Right. Because it's not it's a we're still going to have those expenditures but it's a pass through. Or do we. Are we. I don't think we're getting we don't get billed for those directly at all now do we.

That's between bluefin or whatever vendor we use and the customer. I think the customer pays those charges directly.

Phyllis:

Yeah. So you don't see the revenue side because it's on the bills.

Nathan

Well, so the credit card fee isn't on the bill though. Right. So the way that could be wrong. But the way that I understood that working is for resident, a resident is paying with credit card. They go to our credit card processor and then that fee, the credit card surcharge I think we pay 2.25% goes gets paid by the resident, but directly to the processor.

I don't think we see that that at all. So we we need to zero those line items out if I unless I'm drastically misunderstanding something.

Phyllis:

And I'll look and see what's in there for the estimated. So I'm making a note. I'm making notes as you guys talk on on this budget.

Jana:

Nathan, also, how come we don't have any, laboratory testing budget for 25?

We don't do it every year, or we don't need lab testing.

Nathan:

Is there a line item we're looking at?

Jana:

Yeah. It's blank.

Jason off mic:

It's, 60, 60 zero zero spaces.

Sorry, Nathan. 6060 005168.

Nathan:

And we can start. That's actually probably a good one to start breaking out. Well, we still have those fees. They've been being accounted for in the, water treatment plan expenses. So we'll still we'll still have those,

Tera:

But there's nothing budgeted.

Nathan:

Yeah, well, that'll be we can I'll make that adjustment. Oh, sorry.

Now, Will was waiting. Sorry. I just got this email today, so we had been waiting for Will to get vendor pricing for the next year. I don't know what I just did there. And so that one will be whatever we add to that line item will be deducted from what is currently the water treatment plan expenditure.

So that's one of the ones that we needed to move out and get it and get it into its own space. But we just didn't have that projected number yet. So that'll be a net zero change to the budget, but we'll account for it in the appropriate line code.

Tera:

And then the water distribution expenditures also went down. Very, very bottom.

Last last one on this page there's that 5360.

Jason:

Yeah 6060 zero zero 5360.

Looks like it's been steadily going down for the last couple of years.

Nathan:

Yeah. So that that's one that has been trending nicely and that's, more direct result of like our increased maintenance. And then a lot of the capital projects that we've been doing. So we've had a lot of valve failures that we don't see anymore since we've had like Valve and Flushing, programs, we've been seeing a reduction in the number of line breaks as we slowly replace some of these capital projects out.

the that one might get a slight adjustment to the, I also need to look at it. Included in that information that I got from Will today is also the contractor pricing for, all of the scheduled service stuff, valve maintenance, hydrant stuff. So I need to.

Tera:

Right. So it went down from the last version that we saw.

So what in general, what's the difference between this last version that we saw and then this proposed version that we're seeing what?

Phyllis:

Phyllis. Yeah. Phyllis, do you have some information on that? Wasn't that wasn't one that I had noted for, and what change?

Notes here.

Jana:

I'm going to ask a question while Phyllis is looking for that. But to understand that that is money is being spent on repairs and maintenance. Okay.

And then, then also let's talk about the sorry to jump around, but the operations staffing contract. so this looks similar to the 2024 budget, but shouldn't it be different bringing in two staff members in-house?

Nathan:

So Will and I still need to finalize that conversation. So we didn't know until we got the staffing approval. So that's just a carryover from what it was.

Jana:

So some something to be adjusted in the future.

Nathan:

So we'll we'll have to look at look at that I don't see large reduction there. with the staffing a big try, a big drive there isn't necessarily to have Semacor here less or working here less, but to have them working on operations base things. So rather than spending, so the time that they're currently spending doing on work orders and things like that would be better spent in an equivalent amount of time, but doing system operator stuff.

Jana:

So we will not we will not see a reduction much in that line item.

Nathan:

Yeah. I mean, I'll, I'll have to talk to them. I don't think yeah. I mean the 265 is probably going to be a carryover across, I don't know that we'll need to go up to the 278, but we'll, I'll have those conversations with them, next week.

Well, this week,

Leah:

for the future, is there a way to. I mean, I would think there should be a way to maybe designate which numbers are, like, not finalized. or have, like, changed from one version to the next. I think it just would make it easier to follow.

Nathan:

Perfect. Thank you. Keep that feedback in mind.

That's not where I was keeping notes

Phyllis:

and looking at my update versions. And I do, by the way, keep track of that. and I could send that to Nathan so he can look and see, but I made notes saying, hey, these these were calculation changes. We had some updates to estimated numbers based on the current financials, which will drive the change for 2025.

If we're using the 5%. And then other items are specifically identified by Nathan. So yeah, we can we can do that.

Nathan:

And so one of the things that I want to look at, certainly next year when we go through the budget process much, much earlier is also and this is just where it's out of my wheelhouse.

So one of the things that gets tricky the way that the budget is currently set up. So if we take water distribution expenses, as kind of, a litmus test. So one thing we don't have a lot of control over is how many line line breaks we have ultimately emergency stuff. Right? So this line item can get, you know, if we've got, $450,000 budgeted, our baseline repair, repair and maintenance expenses aren't going to be nearly that high.

So a large portion of that water is or if that money is sitting there in case something breaks. And I have to think that there's got to be a better way to account for that. If we've got like an emergency contingency fund that we just have to refill to a certain level every year and then have this better representative of actual daily R&M stuff is just as we've improved the budget year over year.

That's something that we need to look at going forward. So just so we've got a better a more clear understanding of what that looks like.

Jason:

I was going to channel, Jim here for a minute. last February, Nathan, you came to us and, needed to do a budget amendment. because the Alan Brady drives at the, at the, interconnect Public Interconnect pump station.

there is a big issue there. And one of the things that Jim brought up is, that's like a level ten piece of equipment. And one thing that he asked was, have you identified all the level ten equipment in the district? And then do we have a contingency plan in the budget if those things fail?

Nathan:

Yeah. So that's part that's also been a part of the asset management registry update.

So is doing that cofcoa consequence of failure evaluations. And so every one of those asset comes with its own consequence of failure. and that's rated on a scale of it's like 1 to 5 or 1 to 10 on one side, but you basically have the condition of the asset and then the consequence of failure, and it creates these kind of bands.

And so that really drives that capital replacement cost, because there's going to be a lot of things, a lot of assets. most of our valves, you know, if we've, we've, we have a 75 year expected lifespan on a valve. We're going to run that thing to failure. We're just going to use it until it breaks. And then we'll we'll get it in there.

Unless that valve happens to sit on like a major distribution line, then we're going to run that to like a seven out of ten or a 70% on there. And then we're going to proactively replace it because we don't want it to go down. And so that is something that's being done as part of that overall asset management program.

Phyllis:

And the water distribution expenditures, the prior version was decreased based on, Nathan's updates that he sent me November 10th. So that's in that PDF you sent me, Nathan, to decrease that?

Nathan:

Yep. And so that I think that I was looking at that projected burn rate and then a lot of the assets we were doing. But I think that that's one that we honestly just don't have the time to get it in this year.

But that's one that I'd really like to move away from trying to capture so much. And under that umbrella and a line item to take some of that instability or unpredictability out of it. So if we, like I said, if we move to, like more of a contingency fund for emergency repairs that needs to be replenished at whatever point, and then we can we can really dial on these line items a lot better.

Tera:

And I don't know if Jana had any more questions on this page, but I'm looking at the next page, the water enterprise fund on page nine. And why are we projecting that property tax revenues will go down?

Phyllis:

Because we're changing the allocation of property taxes from 2024. That was 75%, 25% in order to stay within the 10% limitation, we moved that from to 65%, 35%, which also aligns with our allocation of expenditures 65% 35% water, wastewater.

Nathan:

So less money into water or money into wastewater.

Jana:

So to do that, it'll even out on the next sheet.

Got it. Okay.

Tera:

And then, about halfway down the page, under water and on operating expenditures, what does the board room construct?

And why would we be paying for that?

20 it's like 70, 200.

Nathan:

I actually meant to strike that one out that missed my, but we had we had talked about turning the theater room into a permanent board room, and really, for and the number that was in here was kind of our, better guess at that. I just wasn't able to get to a point where we had, the full feasibility on it.

We need to make sure that it's, handicap accessible, that it follows all of those, all of those standards that we can really put that room in. I'm just not at a point where I think we're confidently ready to throw a throw a number at it with any, any great deal of confidence.

And also, if we do go that route, I think that trying to look at options that could be multi-purpose and also involve the city would potentially involve the city might be helpful, but we'll pull that one.

Jason:

Nathan on, 7753, the 27 sampling stations. I thought you just said we purchased all those.

Nathan:

Correct. That is just the install cost.

Jason:

Installs 250,000.

Nathan:

I've got it at. I'm sorry. 200,000 200,000, correct. Yeah, that's an average of about 9000 $8 to 9,000 each. Most honestly, most of that cost is in asphalt for making the taps.

Jason:

Any other questions? We can move on to the least water. One more.

Describer:

On screen.

Wastewater Enterprise Fund

CAPITAL PROJECT

Wastewater Lift Station Renovations (60-61-7766)

Having received a compliance advisory, and a subsequent violation for sanitary sewer overflows, we are in the process of completing substantial upgrades at 7 of the district’s 8 lift station sites. We began work with our initial design report in early 2022.

We have been working closely with the Colorado Department of Health and Education (CDPHE) throughout the process. Designs for these stations are substantially complete and have been submitted to CDPHE for review. This project will include a combination of new lift station facilities, upgrades to existing sites, and the complete decommissioning of one lift station.

This project is one of the largest undertakings in CPNMD’s history. We are finally ready to begin construction in 2025. This is a multi-year project, with completion expected in early 2027. We are anticipating a total project cost of $10,000,000 with $2,900,000 budgeted for 2025.

Nathan:

All right. Yeah. wastewater. We've only got the one planned capital project, but it is a doozy. so this is finally getting ready to move to the construction phase. So we started looking at our lift stations. we started doing the design study on our lift stations.

Even prior to the Parker inclusion failing. We started that early that year. and so we have since that time, received both a compliance advisory and then the subsequent subsequent violation that we got last year. So this is a required project, one as part of the resolution of that violation. But we really need to just get ourselves back into compliance with current current standards.

so we're looking to start that project. it's going to it exists inside of two bid packages. So there'll be a scope A and a scope B. they are in the final design at CDPHE. We're just waiting on the comments for the second of those packages, and then we'll start construction in 2025. So overall, we're looking at a total project cost of $10 million.

with 2.9 million, anticipated for 2025. I think we had three and a half or 4 million for 2026, which is when both of those projects will be up and running. and then the balance will be completed in 2027 when we, when we wrap those projects. But so this addresses, upgrades at seven. Well, substantial changes to seven of the eight lift stations.

one lift station is going to be a completely rebuilt. One lift station is going to be removed. And the other ones are going to get, a combination of equipment replace. So they'll be, increased better communication stuff put in place. We're going to get all that up to snuff. The biggest driver for the site upgrades is protection against sanitary sewer overflows.

So we're, putting either vaults or alternative pumping systems in place so that if a lift station does go down and it overflows, it goes into a defined containment area. And then that's not a violation. It's just something that we can, address and move on from. So this is, this one's really, I'm really excited for this one.

It's going to be a ton of work, but, it's going to be a great project overall.

Jana:

Minor comment that I would like to see if I'm going to spend $10 million. I want to see something more substantial in the photograph other than this small. Yeah. Lift station.

Nathan:

Yeah. That was this is one that's going to fully replace. But yeah. Well we can and we've got plenty of room on this page.

Jana:

We just can do better on a, on a graphic if this is our biggest overhaul ever for the city, for the metro district.

Nathan:

Yeah. For. Yeah, for this one, I think especially since we've only got the one capital project and we've got plenty of room to add multiple pro photographs, site location, stuff like that. We can throw a lot at it.

Leah:

the other piece of kind of general feedback that I have is I'm trying to take this packet in, is not a board member, but is a resident.

And even knowing, you know, the background on some of these things, like it's really overwhelming the amount of capital projects that we have and the money that we're spending. And to me, that seems disconnected from any type of narrative. and so, you know, when you were asking about kind of positioning, you know, the, the capital projects is, is an investment and, you know, do we want to do that throughout or in the beginning?

You know, now that I've kind of gone through it a little bit more, I'm wondering if it would be helpful to to preface that narrative in the beginning and, you know, tell the larger story, which is like, we're making these investments and, and here's the, the why. I don't know. That's just and maybe it's, you know, silly feedback.

I don't know, or annoying, but, just the amount of projects and the amount of money with, like, it's just a lot.

Tera:

So how do you put a positive spin on? It's been neglected for a really long time, and we kind of got left holding the bag. And if if anybody can spin it, I know you can

Jana:

say something like, we're making improvements, you know,

Leah

Tera to your point.

Like, I don't I don't know necessarily like if we have to quote unquote spin that. But that's the why. Right. Like that is the why. Absolutely. Like this has been neglected. And like we're taking that really hard step as a board to make the investments and then tying the investments to like why we're doing it for the people and what that means for them, which is ultimately, you know, so I don't know necessarily if we would have to spin that because it's factual.

Right. But it's almost like setting the stage for the like, why? Before you just get into all of, you know, these projects in these high price tags, I like that. Great point.

Nathan:

All right. that gets us into the, wastewater fund. So we'll pull, I completely lost my train of thought there. I apologize.

Phyllis:

I did look up the the credit card fees, and it really is bank fees. We're getting charge fees primarily from citywide bank. and that's what that is. So it's not credit card fees. I'll change the title of that.

Jana:

Its bank fees?

Several at once:

So why we got them lowered? Would we get them lowered?

Phyllis:

So the beginning of the year had more.

Tera:

what are we what are we getting for those fees? What is what are those? I don't understand what the fees are for

Phyllis:

bank account, but the standard charge citywide bank charges a fee based on your balance.

Nathan:

Could you get us a breakdown of those fees for the board meeting on Monday so we can look at them specifically?

Phyllis:

Yep. look, here it is.

Nathan:

So sorry. Andrea. Yep. I will do that. So can I get you to come up to the microphone? That's a little on for little.

Andrea Manson, Community Resource Services of Colorado (CRS):

I got it, I got it, okay. I know those also include the, the vanco fees, which are usually 700 to $800 a month.

Nathan:

What is Vanco?

Andrea:

I don't know, is that some kind of of your processing? it comes through the bank IC.

Nathan:

I don't know,

Andrea:

and I think it was you had switched from something to Vanco, some kind of processing.

I'll have to ask Susan. I know, so, like, halfway through the year, I noticed we switched from the prior vendor to Vanco, and I can get you that breakdown.

Nathan:

Yeah, if you could let us know.

Andrea:

If I get the invoices. So.

Nathan:

Yeah, I'm, I apologize. I'm not familiar with Vanco.

Andrea:

Yeah, and we can change that line item to, say, bank fees instead of credit card fees.

Nathan:

Yeah. And then, yeah, if we could just get more detail on what those fees are specifically. Yep.

Jana:

Nathan I have a question about, the PCWRA sewer fees. Kind of a general sewer fee. What's the sewer fee?

Nathan:

so PCWRA is Plum Creek Water Reclamation Authority. That is the, money that we pay them to treat our wastewater. Yep.

Jason:

So, Nathan, if I'm seeing this right. Sorry. Going back to the credit card fees, we're taking $40,000 out of each fund. So that's $80,000 a year. We're paying the fees.

Nathan:

Yeah, we need to figure out what those are directly tied to.

Tera:

Maybe we need to look for a different bank.

Leah:

but we passing those fees along to customers. Or is that so?

Nathan:

The the line item is erroneously named cutter credit card fees. It appears that it's a catch all for all of our bank fees. And so that's what, Andrea and Phyllis are going to dive into us, dive into for us, and get a breakdown of exactly what we're paying for, what those are associated with.

Leah:

Thank you for spelling that out more clearly. For me, I totally misunderstood. But yeah, that's a lot of money.

Nathan:

Yeah, it is.

I want to be a credit card fee.

Jana:

And then, I know this is minor in the scheme of things, but any where we can save money, I'm always looking. why is it so expensive to have an election? Because I think it's costing us $45,000. Kim.

Kim:

Those costs can be because of all of the, the printing costs and the delivery costs. if we're talking about the May election, you will most likely cancel that before you spend that money. So we'll call the election in early January. And, if you don't have actual contests by mid-March, then the election is called off.

It's very expensive to print ballots and mail them to people

Jana:

I did.

Yeah, that is very expensive. Okay. Got it.

Leah:

I have a question about the, communications slash public outreach. So 5169. those numbers seem high, especially in conjunction with the communications and public outreach numbers on page eight. and so is it like, am I correct in assuming those are separate costs?

And then we would add them together for like a total communications and public outreach costs or is the wastewater like a subset of what was under the water.

Nathan:

Yeah. You're correct. We would add those together. I'm trying to

Jason:

because Nathan isn't, wastewater picking up 35% of it. And, general fund or the water fund is picking up 65% of it.

Phyllis:

Correct? Correct. And you're working on that shows the proposed combine those those line items, are combined water and wastewater. So if you're looking at, credit card fees, where it says 42,000 for water, and you look at the line item, it says 81,900 combined, that's water and wastewater. So you can look at

Jason:

Phyllis I don't see a combined column.

Nathan:

It's so if you look up at the main screen, it's just they didn't get carried over to the water wastewater.

Phyllis:

no. Right. If you want to in those spots, it's just up on the water side so it's not duplicated.

Jason:

Okay. Thank you.

Phyllis:

Yeah, yeah.

Nathan:

And that's I, I need to go back and look at that one. I think, we can probably revise that one down quite a bit because the, the, it's.

So this is based on the actual expenditure plus a little bit for this year. But we also bought like the water cart, which was a pretty substantial expense. And some things like that we can we can peel that back. so that covers a lot of different things. So all the things that we purchased for events. So the like water bottles, all of that stuff comes out of there.

The water cart ultimately comes out of there. The, website web hosting fees come out of there. the communications contract comes out of there. there's I'd have to go back and dig through it a little bit, but there's there's a lot of it's another one of those line items that's been a long time catchall for a lot of different stuff.

Leah:

okay. That's going to be my next question, because if you add it up, the water and the wastewater for that line item, it's $189,000. Yeah. So I just wanted understand what was included, but that makes a little bit more sense,

Tera:

which is why I mentioned it on the first page in that. So I appreciate Leah bringing that back up.

Jason:

All right, Nathan, I think we can move on a little further.

Nathan:

yeah. So all we have beyond that is, general funds. So we talked about the changes that Kim would like to see there. there's not really a lot to cover. Conservation trust fund right now is a pass through account. Andrea is working on getting us out of that loop so that that money just goes directly to the city, rather than coming to us and being forwarded on, and then the stormwater fund, we had to do some final accounting in 2023, but we're no longer collecting anything, so we're no longer expending anything.

those just get captured in the budget for regulatory purposes.

Tera:

Sorry, I did have one question on page 12. And it's again, the bottom line, the county treasurer fees are those a function of something else? because I noticed that when we saw it in earlier October, it was about 4700, but now it's 5000, which kind of seems more in line with the trend.

But I'm just kind of curious if that's a function of something or

Phyllis:

it is. It's a function of the property taxes so directly related to the property tax collections. So since we changed that allocation it's 1.5% of whatever your property taxes.

Tera:

Awesome. Thank you.

Jason:

All right. are there any other questions regarding the draft budget and. All right, not hearing any. We'll go ahead and close out, section two and we'll move on to section three. Update rate study presentation with Eric and Bartle. Welcome, guys.

Erik Helgeson, MBA, Principle, Bartle Wells Associates:

Hi there. And it's just it's just me. Bartle Wells is our our company name. So

Jason:

sorry. My fault.

Erik:

No. No worries.

Nathan:

I can make that more clear on the agenda.

Erik:

it's all right. Well, they were, I think it was, Dick Bartle was. It was a guy at one point. But I think that he is long since passed.

but, so I'll. I'll share my screen. I was going to briefly go over that the previous presentation, and, I'm not sure. Nathan, did you were you able to send out those? I know I sent them kind of last minute. Those updated table or any of the table.

Nathan:

Yeah. So I dropped an email. So, Leah, if you haven't seen it, you should have it in your email.

And then there's physical copies here for the board members.

Erik:

Okay. Awesome. And I just wanted to reference those those kind of show the process where you go through in detail, you know, bringing all the, the budget information and capital information together. just, you know, so that's kind of the foundation for, what we're talking about here today.

I'm just pivoting over to my presentation here. There was the one moment. All right. that is all right. There we go. So I'm just going to go through. Sorry if I'm, All right. So I'm just going to go through, yeah an overview of what we're what what our, process or study was designed to do.

Describer:

On screen. Castle Pines North Metropolitan District 2024 Water and Wastewater

Rate Revenue Study November 20, 2024

Presentation Overview - Overview - Rate Study Process - Water Financial Plan & Rates - Wastewater Financial Plan & Rates - Questions and Discussion

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 - Analysis of customer demands - update rates to reflect the cost of service

Erik:

Go through the process and then talk about the specific outcomes for water and wastewater. really, the objective of what we're doing here is to, you know, bring revenues back in line with costs. It's been, since 2021 when rates were last increase. It actually rates or decreased the renewable water fee was, removed. and, you know, as you've been talking about tonight, you have a lot of deferred maintenance you're catching up on, your, your operating costs.

you know, have gone up, whether through inflation or, you know, having to, do more patches, as infrastructure gets older, and, and so to, to pay for, pay for all that rates need to start catching up. You're in a good position where, you do have sizable reserves, but, you know, we, Nathan felt it was and I agree that it's, you know, important to start getting your revenues back in line sooner rather than later.

to prevent the need for larger increases in the future. so there's a lot of, a lot of unknown items. you know, we talked about there's bus, there's the, asset management study, there's some of the, potential JPA things. There's, you know, there's a lot of unknowns in the future. but we're trying to get, get rates, on the right track to be able to handle those things with, out meeting without needing large rate increases, that are unexpected.

Describer:

On screen. Rate Study Process which includes Data Gathering, Demand Analysis, Ten-year Financial Plan, Cost Allocation, Rate Design and Adoption and Implementation.

Erik:

So just kind of the overall rate city process is a lot more in-depth. we go into doing an in-depth demand analysis. we develop the financial plan, and that's really what we're doing in this, this go around, also due to the time constraints, you know, trying to get the get get get a reasonable revenue recommendation, in time for the budget to be adopted as well.

normally in a, in a rate city, we then we identify the revenue need and then we look at updating the cost allocation. So how are different customers. You know, how is the Pi. We identify the size of the pie. And then how does the pie need to be split up. And then ultimately between customer classes and ultimately within customer classes.

Describer:

On screen. Ten-Year Financial Plan

Develop 10-year financial projections to the identify rate revenue necessary to:

Fund operating & maintenance expenses

Fund capital improvement needs

Maintain adequate fund reserves

Meet debt service coverage requirements

Financial plans serve as roadmaps for funding operating and capital programs and maintaining long-term financial health.

Erik:

Has that pie split up with the design of the rates? so we're really just focused on the financial plan portion of that. And as I mentioned before, the revenue requirement needs to be able to fund operating costs, capital costs, maintain reasonable fund reserves and, pay for your debt and meet your debt coverage requirements. And so today you've heard about your capital needs, your operating costs.

And basically we're we're bringing those together, and making a recommendation for what your revenues should be to, to fund those items.

Describer:

On screen. Gradual Rate Increases

Gradual annual rate increases are customer focused because they:

Keep revenues aligned with costs of service

Minimize annual impact on ratepayers

Bills are predictable, no rate "shock"

Deferred Rate Increase Example Line graph

It describes an annual rate increase of 7 percent per year for 4 years and 6% in year 5, a cumulative increase of 39% applied to the water fund to make up for $6 million in reduced revenues.

Erik:

And just one more, you know, to kind of bring the point home. why, you know, I recommend raising rates sooner than later. you know, gradual rate increases over time. You collect more total revenue that helps fund your capital projects. and, allows you to not, reduce your reserves as much. also, you know, having those cumulative rate increases, they're easier for customers to handle and, know what's coming rather than waiting.

so with our kind of recommended increases on the water side is what I'm using in this example, you have for 7% increases. and then a 6% kind of tapers off. you know, if you were to wait and kind of get to the point where you need all that, you know, that that revenue jump all at once, it'd be about 40%.

But having it, happen over time, you keep up with inflation a little more than inflation. And, you actually generate more revenue for the district and it's a little less, painful for a customer to absorb.

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 $7.7 million is planned $4 million in Treatment/Other $1 million in Source of Supply and $1.7 million in Distribution

In 2024 $6.6 million is planned $1.7 million in Treatment/Other $.5 million in Source of Supply and $3 million in Distribution

In 2027 $5.1 million is planned and Treatment/Other cost are not planned, just $3.5 million for Source of Supply and $1.6 million planned for Distribution.

In 2028 $2.8 million is planned $1.8 million in Distribution and $1 million in Source of Supply. This is the low point on the graph, the same spending takes place gradually growing from 2028 to 2033 topping off at $3.4 million in 2033.

In 2034 $3.7 million is planned with $2 million in Distribution and $1.5 million in in Source of Supply and then $100,000 in Treatment/Other costs return.

Erik:

So jumping into the water side, talking about all those capital projects, and, and I will I recognize you for taking draft numbers that you haven't approved yet and putting it into this, model. and, and basically the the larger the, you know, the more you increase rates now, the less you'll need to increase rates in the future.

so I'm pretty comfortable with the recommended numbers, even with removing some of the items you talked about today. you haven't, you know, it's kind of catching up. You know, we're, we're not sure what demands are going to be, but, you know, having that, kind of getting getting on the, the wagon again, I guess.

anyway, so first, the main driver capital plan, capital projects on the water side, you have some significant projects identified. About 7.7 million in 2025, the filter rehab program. you know, we broke out on this chart between distributions or some sorts of supply and treatment. and basically, you know, we know what the costs are going to be for the first three years thereafter.

It's a bit uncertain. so we're designing the with our initial rate recommendation is to make sure that you can get to a point where your rates are able to fund a sustained amount of ongoing average cap, annual capital without, needing to dip into reserves and or go into take out debt. So essentially that that 2.8 million growing to almost 4 million at the end is, is what we're targeting for your rates to be able to sustain and as I said earlier, when when you have a clear picture of what your needs will be, then that number will change.

And, you know, so we just want to put you in a good position where you know you're not waiting for that and then having to make a big reaction, you can make a minor change in the trajectory of your rate, revenues. as, as you, perform the different studies and get a clear idea of those, those ongoing capital costs.

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

$25.1 million over the next 5 years

Annual cash funding target 2029: $3.0 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

58.4 million, 30-year repayment with 2% interest beginning in FY 2028

Maintain Prudent Reserves

Emergencies, demand fluctuation, cash funding capital, etc.

Erik:

So you have your capital needs. Costs have inflated significantly since, 2021. CPI has gone to 21%. We're projecting 4%, cost, inflation going forward. Hopefully that's too high. But we want to on the safe side, be conservative, make sure the rates are sufficient. and then, also, one of the key things is, with the, the project, the lift station project, you have a significant reserve on the water side.

You could do a loan to the sewer side, to help pay for that. if you did that, it would have a significant increase, impact on the amount of sewer rate increases you need right now. It's in 8 percent ballpark. It'd probably be about double that if you had to go out and get financing, and meet a debt coverage, test on that, on that financing.

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 480 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:

As I mentioned before, the your your revenue, your demand is is pretty variable.

and so we also want to on the conservative side of that. with what we're assuming for projected revenues. if you have a string of better water years then your recommended recommended revenue increase, amounts will will go down. but, you know, this is the first year to get revenues back on track. We want to take a more conservative approach on most most assumptions.

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

Rate Funded Capital started at about $14M and drops gradually to about $8M in 2028 and rises to about $10M by 2034.

Loan to Wastewater is the highest spend at $21M in 2025 it is only planned for 2025 at about $12 million of the total budget

Reserve cash starts at $40M in 2024 and drops to $19M 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 $10M by 2034 along the same line of O&M plus Rate Funded Capital starting in 2028 through 2034.

Erik:

So this is the shows the the ten year picture I went over last time. The columns are your expenses. the green line is your revenues. the reserve drop initially is all of those capital projects and then the loan to wastewater and, really the objective is to bring your operating revenues, to be able to fund your ongoing capital costs and your ongoing operating costs and not further draw down your reserves.

So just getting, getting moving in the in that direction. in the model that I, updated today, it looks like about 7% increases through through 2028 and then 6% after that would get you up to that break even point and stabilization point. at the end of the ten year ten year window. We also had a pretty, conservative growth assumption.

We assumed eight connections per year for the next, five years, and then, assumed it built out after that.

Leah:

Eric, I have a question for the eight new connections per year. Like, where did that assumption like, was that just where did you get that from?

Erik:

I think we talked I talked to Nathan. There was a higher number before, actually go back into it was I think it, but I think it was looking at what your current, you know, new permit or new building, new builds are looking like and not wanting to over, also knowing that you're getting close to build out and just really not wanting to rely

on those new, new construction revenues. We linked the capacity fees to that. And, and the revenue growth to that. So we really don't want to assume that growth is driving much of your increased revenue right now. but I think that to answer your question directly, it was just a conversation with Nathan looking at and where you're what you're current and, new construction levels are not wanting to over estimate that.

Nathan:

Okay. Yeah. Yeah. In that framework, connections is also a little bit misleading. What we're we're actually looking at there is single family equivalencies. So that doesn't necessarily mean one asset fee is a three quarter inch tap, which is the standard tap for a house. the properties that we have yet to be developed are largely commercial. And so, you know, like one commercial project with a larger diameter pipe would have like eight asset fees associated with it.

So it's not necessarily eight new structures. It's just 8 single family equivalencies in terms of the tap, which is what drives the tap fee.

Jana:

I have a quick question about the, the loan to wastewater, the $8 million. So I understand giving a loan to the wastewater part. But where is that projected to come back in to the water fund.

Erik:

It's built into the revenue line. So we have, I think in that

Jana:

it's reflected in the green. Okay.

Erik:

Correct. And in the detailed, tables that we sent over, there's, I believe it's in the, other. Sorry, some of the transfer. It's called transfer. And we should have, probably should have made it more clear.

But on table three, in those detailed tables, there's a transfer in beginning in 2028, of about 375,000 as a repayment. And we, we assumed a 2% interest on that as well. Thirty with the 30 year repayment. But that that Green line represents all all revenue.

Describer:

On screen. CPNMD Historic Operating Costs per KGal Sold in a line graph

Starting in 2014 Operating costs with $5.273 per KGal sold and rose to $10.092 per KGal sold in 2025.

Erik:

We also looked at, just you're you're just kind of responding to questions. Last time we, we brought up, we looked at your operating costs and your total demand over time. and, you know, follows a, you know, it's kind of goes up and down. you know, there's a lot of variables, you know, into why your operating costs change a lot of variables and demand, but it's a pretty steady trend.

and, you know, we you can see we kind of estimated just a little above the trend, which is our, you know, as I said before, trying to be trying to be conservative. but, just for what it's worth, know, kind of an interesting, you know, look at your, your, the path of your costs and, and, and demands.

Jason:

Excuse me. last time, too, we asked if, that can be if that can be compared to other districts our size. Did you do a comparison against the other districts?

Erik:

We haven't. we started looking at that. The data wasn't as readily available for all the all the districts. we we can definitely do that. We just kind of needed a little more time to pull that together.

but we we can do that by the board meeting. If and, you know, take some calls and you know more, you know, more, more time to, to bring in. But we could try to do that. especially, you know, for and are you asking for one one year or,

Jason:

probably a couple of years. I mean, if we're going to tell people we're raising their rates, we want them to see where we compare with the surrounding communities.

Erik:

we can we can look into that, and pull that together, and I apologize. We just haven't been able to to do that. also, you know, just, you know, kind of the this has been a, you know, a fairly condensed, and just kind of working it in, but we're, you know, if, if it helps tell the story, we're absolutely, you know, happy to to provide that,

Describer:

On screen. Bill Comparison Bar graph

Average Use 10 Gal per month $6.84 per month

The graph graph states that existing rates are at $92.50 composed of $11.75 of Service Charges, $31.05 of Capital Maintenance Charges and $49.70 of Volumetric Rate charges. The Proposed Rates are $98.98 composed of $12.75 of Service Charges, $33.22 of Capital Maintenance Charges and $53.18 of Volumetric Rate charges.

Erik:

this is basically just taking the your current and went back and looked at some of the older consumption data I had and it it confirmed 10,000 gallons per month.

and so I did a comparison of what a bill at that level would be with the increase. So seven some percent. You know, we're recommending that across the board this time. but just to show the components of the bill, you know, the service charge, the capital maintenance fee and the volumetric, rate and just to show what the component would be of that, for that customer.

I also went back and looked at your average water budget and that changed the survey amount of it. And it impacts this. It looks like the average water tier one water budget amount is about 14,000 gallons throughout the year. you know, it's a little misleading. You have winter, summer, which is winter. You're down to 5000. Summer you're up to, you know, it goes up quite a bit more, but, on average year, the tier one level is about 14,000.

Describer:

On screen. Single-Family Residential Regional Water Bill Comparison

Monthly Fixed Service Charges Plus 10,000 Gallons Consumption including Fixed Charges, Variable charges and Property taxes. CPNMD is currently rated in the lower 30% of the rates paid by all the surrounding water districts at $102.87. The lowest being $70.26 and the Highest being $176.25. Even with the proposed rate increase they stay in the same range at $109.35.

Erik:

so we updated that for this, this chart as well added in, several new, districts, including we made sure to get Castle Pines Metro and the Pinery and believe it was stone gate that we added in. I apologize for the size. It's it's a little hard to see, but trying to fill all the all the, different districts on there.

but, you know, as I said before, the key thing, you know, every district is very different. You know, your costs, your capital needs are you know, what you're talking about today are very specific to, what year where, you know, what you're facing your the, you know, deferred maintenance age of your system. your sources of water, the amount of customers you have.

So every, every agency is very there's a lot of factors kind of driving that. But, you know, based on all of that, I think, and depending on the level of water use, you know, some every, every rate is kind of designed for each, each agency's specific kind of demand profile as well. So you're taking your averages and applying it to other customers also kind of muddies the waters.

But really, really the takeaway I would have from this is that you're you're not in and in extreme, compared to other agencies and and you know, for what you're doing and, you know, looking to do you know, I think that means you're in a, you know, you haven't you know, you're not all the way bottom and all the way at the top.

You're kind of in the middle.

Nathan:

Erik, really quick, I didn't did you? I may have missed it. Did you send that to me? It wasn't in the PDF that you sent late in the day that that just that particular slide wasn't included.

Erik:

I'll send it my presentation. Okay, perfect. And we're updating the re update, taking all the updated budget numbers and putting into our, financial plan model and, and, yeah.

So we'll get this this over to you as well.

Nathan:

And then real quick, Jason, is that is this the chart that you were specifically looking forward did you want?

Jason:

Yeah, that's what I was referring to. Thank you. Okay.

Erik:

But you want to see this on a per like, per thousand or. I guess

Jason:

that would be. That'd be helpful.

Erik:

Okay. And so what we'll have to do is we'll get to probably total operating costs of the district and their total, metered water sale or total water sales and try to and use that as the, the metric.

So cost per utility. Cost per thousand gallons sold. Operating cost per thousand gallons of.

Describer:

On screen.

Sewer Capital Plan

Key Projects

Lift Station Upgrades - Compliance advisory

Asset ReplacementProgram

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 $1.5 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:

So then going into capital, same story we've gone down through your capital is really on wastewater. Is that lift station that's really driving a large portion of the cost. But after that's completed, you'll need to get a build up to having, ongoing, capital repair and replacement. I think it sounds like there's some more critical needs on the wastewater side, actually.

and so, you know, building building up to, the initial number was 1 million, up to 1.5 million. But we're talking with Nathan. We've kind of refined that down to have a have a ramp up period of about a half million a year and then building up to a million, for what we use as our assumptions in this, in this, model.

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

$9.5 million over the next 5 years

Loan from water fund for lift station upgrades

Aim to cash fund $1 million per year by 2031

Operating cost inflation

21% inflation since last rate increase in 2020

4.0% per year over next 5 ears

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:

So wastewater needs about 9.5 million over the next five years, aiming to fund 1 million by 2031. the same drivers for inflation and, and, applied to the wastewater fund as well. However, wastewater also has debt. and the the reserve isn't quite at the level of the water fund. So, you know, maintaining those reserves, being able to meet debt service coverage and payments, with the existing debt, and then bring on the funding, which we assumed, as an enterprise, loan Inter Enterprise or Inter fund loan, is also a key big driver of the, the needs.

however, you know, you still have a you still are in a good position with the with the, with your reserves. And if you can do an inter fund loan, and really looking at fairly, modest rate increases with all, all things considered. and I will emphasize starting, you know, starting now, the longer the rate increases are delayed, the more, you know, the higher they'll probably need to be.

Describer:

On screen. Sewer Financial Plan

Recommended annual rate revenue increases of 8% through 2028 and 7% thereafter

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, drops slightly to $2.5 million until 2026 and then rises steadily to $3 million in 2034. Debt Service is $400 thousand from 2024 to 2027, then it jumps to $1.6 million in 2028 through 2033, and finally reduced to $800 thousand in 2034. Rate Funded Capital stands at $500 thousand in 2024. It is absent in 2025 and returns in 2028 at about $400 thousand through 2030. In 2031, it spikes to $1 million through 2033 and increases again to $1.2 million in 2034. Revenues Start at $3.5 million in 2024, rise to $4 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 million. Reserves start at $5.5 million in 2024, increase to $7.5 million in 2027 and steadily fall to equilibrium with Rate funded capital and revenues in 2034 at $5 million.

Erik:

which, you know, is kind of like ... that Nathan felt the urgency to kind of bring this into this budget as well. but, you know, right now, great increases are in place. It looks like, you know, you could go with basically less than double digit rate increases, which I think hearing the the needs and the project amounts relative to the size of the enterprises is, definitely a a good story.

we also assume that, the property tax on the sewer side would, would increase, within the Tabor, limitations as well. We, we kept it flat on the water side, but on the wastewater side to also help supplement, the rates, to an extent, to keep those going up within the boundary. at the same level as the rate increases.

Describer:

On screen.

Single-Family Residential Regional Sewer Bill Comparison

Monthly Fixed Service Charges Plus 5,000 Winter Use bar graph described. It shows sewer charges and property taxes.

CPNMD stands on the lower end of the spectrum as compared with surrounding districts. They lowest is $25.05 by the City of Aurora, CPNMD stands at $54.44 and the top end is $99.20 from Roxborough.

Erik:

was one other assumption we made on the sewer side. And here's the same chart again, with, the on the with the sewer, showing the sewer charge and that property tax, estimated property tax element. and again, you know, very, middle of the road, some of the higher ones, there's more volumetric components. there's,

Jana:

Eric, you know, have you go back one slide real fast, please. Okay. Yeah. The what's the $1 million dip in revenue between 25 and 26?

Erik:

Oh great question. you have a $1 million, one time pay uh. I think sale of. Let me bring it up really quick because I.

Nathan:

Yeah. So that's anticipating the sale of the oil and mineral rights that we're currently working through.

so we're going to put that in the wastewater fund to help keep those rates lower. But so there's a one year, one point

Jana:

But wouldn't that make the revenue go up. If you're selling something

Nathan:

it does. So that's the peak is the jump. And then the drop. So that's the one-time sale. And then because it's only in that year.

Jana:

So instead of that being a steady line there's a peak in 25 I follow.

Erik:

That's correct. and one other one other thing I'll point out there's also, higher connection fee revenue. I think in 24 and, the, you know, the rate funded capital, you're funding it with the inner fund loan, with the, for the lift stations for those three years.

So the expenses are kind of suppressed. So you you build up, you actually build up reserves in those years, but it's a little bit artificial because this fund isn't paying for its, you know, for capital during those, those few years, but it gives it a chance to kind of catch up. And then there's basically a draw on the reserve to bring it back down to today's levels.

But, you know, and look at all the all of your expenses will have gone up by the end of the ten years, but it maintains your, your reserve, above basically a year of your, ongoing expenses. So your debt service, your rate funded capital and, your operating costs. So that was basically the target. And, and that really for, for water and sewer, that's the, the whole well, goal of what we set up is to and I'll go back to the water after this, but just, essentially we come in with a soft landing.

So you have, you know, you rate your rates will have to keep going up. But it's all about the, you know, trajectory of your revenue line relative to your costs, but, you know, recommending that you get get the rates on get that trajectory, started so that, you know, it's not it's and it's not going to be a, exact thing, you know, some maybe you'll maybe you'll start your rates will go up at 7%.

And you can bring that, bring the slope of the line down a little bit. If things are more favorable. You are making some conservative assumptions. but really it's to come into a with a have a soft landing where you're having, gradual rate increases and you get to a point where your revenues exceed your annual expenditures without, drawing your reserves, to a point that's a little lower than than prudent.

And just going back to your to the water graph. You know, that's that's all. But it's a little zoomed out because of the size of the initial size of the reserve. But but really the, the basically and if you look at the tables I sent the, the final, you know, the year ten is where it's breaking. You know, it's positive you're not having any draw on your reserves.

On the water side. There's some fluctuation some years are positive some are negative. But really trying to get to a point where you're ongoing. where you have an ongoing positive, net revenue, essentially. and your reserve levels stay at a reasonable level. reserves are much harder to build back than they are to draw down. So not, you know, we want to keep keep you at a stable level there.

So it's just kind of a soft landing for both enterprises with, you know, single digit rate increases. really 3 or 4% above inflation. to catch up to a point where you're, for your rates or funding operating costs and cash run capital and, and your debt service, and you're not no longer drawing down reserves.

Describer:

On screen. Regional Comparison: Single-Family Residential Monthly Combined Water & Sewer Bills including water, sewer and property tax.

CPNMD stands in the middle of the spectrum as compared with surrounding districts. The lowest is $101.57 by Stonegate Village, CPNMD stands at $167.69 and the top end is $263.00 from Sterling Ranch.

Erik:

And, I think the this is the combined graph. So basically the same punch line, you're kind of in the middle and you'll stay in the middle of the 7% increase.

Describer:

On screen. Summary

Revenue increases needed to support each utility's operating, debt service, and capital needs

Interfund loan reduces sewer rates

Increases now reduce future increases

Recommend updating rate study when there is a clearer understanding of ongoing capital needs

Erik:

and really just basically what I said before the soft landing is really the I think the, the key point to, to take from all of this and, and try to get, get your revenues moving in a, in the positive direction now so you're not looking at larger increases in the future, but, you know, more single digit rate increases whether they're higher or lower than the ones we're recommending for this year.

but keeping it consistent so it's predictable and, easier for customers to digest.

that concludes my presentation.

Jason:

Thank you very much, Eric. Does anybody have any questions?

Tera:

Thank you. Eric, I do appreciate it because, I think again, that's something that has been neglected and we, absolutely need to understand what our cost of doing business is so we don't run the district into the ground. I do have a couple questions.

One is for Kim and then one is for Nathan. So Kim.

Are you still with us? I think you're on mute. Oh,

Kim:

yeah. I'm trying to find my buttons there.

Tera:

rate increase requires a public hearing. Yes.

Kim:

Not a public hearing, but public notice of the first meeting where you're going to discuss the rate increase. You don't have to have a hearing. You just have to allow people to come in here.

What you're going to say.

Tera:

Okay. and then for Nathan, I don't know when we I know in your estimations, Eric, you had it 2025 as if we were doing this January 1st. few things rolling around in my mind. One, as I know, Centennial did a rate increase. I would like to know what their process and what their communications look like.

I think there are some than some other districts, but this is, something certainly that would require very heavy amount of communications. So I'm kind of wondering if that's a topic that we would talk about later. and understanding sort of that process and, you know, sort of, again, the process, the timeline, this is something that would require, a lot of communication.

This is not something we would want to spring on any of our, ratepayers. And, so I just kind of would like to know if maybe we're going to talk about that, that that's maybe another study session topic. We can talk about the whole thing. I just, I'm wanting to wrap my head around that a little bit.

Nathan:

yeah, I can certainly look into and see what Centennial, Castle Pines Village also has done some pretty substantial rate increases over the last few years. Kim, I thought maybe I misunderstood or got lost somewhere, but I thought we had posted for, or at least on the legal posting to discuss the rates with the idea that they would go into effect January.

Mute. Kim, you're muted. You look great in pantomime.

Kim:

So sorry about that. I'll have to check, Nathan, but I think you're right. I think we did it in, maybe October. Or maybe the first time Eric came.

Nathan:

Yeah. So we can. Well. And so we can. And we can look at that, too. So from a from a resident perspective, we're okay in that time frame. So even if the rate goes into effect for January 1st, that's not going to be nobody's going to see that on a water bill until the first week of February. And so one of the reasons I wanted to get this rolling, and into the board meeting, is that first round of communication really needs to happen with the bill insert that goes out for the November bill, which would go out beginning of December.

and so I want to make sure that we've got a pretty solid plan in place for that initial one. And then that gives us all of December and all of January to do whatever full court press. And so that also gets us into our ad, our advertising space into, that deadline's December 15th, so we could have that ready to go for the advertising that'll get released at the end of December.

And then also we can again for the ad that would go at the end of January. if that made sense from a timeline perspective,

Jana:

do you foresee this being a thing we put in the paper? Oh, absolutely. Just checking. Yeah. Okay. and then with the billing insert. So it's going to go in the billing insert for one month.

Do we want to put it in two months.

Nathan:

Absolutely. Yeah. So if it goes in December 1st we want it to so we can run to December and and January. And then they would see it effective on the bill they get in February plus two newspaper cycles. Okay.

Tera:

Yeah I just I mean this is a time of year when

People aren't paying attention to that, they're not you know, they're they're you know, distracted. There's holidays and a lot more social events happening, and I just don't want to catch anybody off guard. So, Bailey, what is. If you wouldn't mind coming up to the podium so I can talk to you?

I know that you keep the, record. So what is, our best method of communication that we get the most feedback on is that our bill inserts. It's,

Communications Director Bailey Budnik:

I would say billing insert and then also email. So definitely doing the corresponding emails out. And then and that way as well we can out line and a little bit more delicately and explain you know in 2021 was what is the background.

You know, everything with that. So.

Tera:

do you guys feel comfortable with that? I would have preferred a quarter of us notifying people for a full quarter before we, implement anything, but, yeah, we have.

Nathan:

We can do that. Will have to change the projected revenue on the budget.

Leah:

So. Well, and I think, Terry, you made a good point. I think the timing with with the holidays to like, I don't know, I, I don't feel like that's super ideal.

that seems kind of Scrooge like, so I don't know, but I'm with you. Like, I know we want to get that in place sooner rather than later, but, would we have options to potentially push out the timing a little bit?

Nathan:

Yeah. I mean, we can push it back.

Tera:

it's not it's not ideal. I, I just, and I don't even know whatever we posted or that communication, it feels like I don't I mean, we weren't the board and staff wasn't even aware that we posted that.

We did that. I mean, I'm just trying to be thoughtful about it. I, it just seems like it's a again, I'm curious how long a centennial or a castle Pines did.

Nathan:

I can have that answer Monday.

Tera:

Yeah. Just, So. And the cadence of that.

Nathan:

So, Jason, real quick, when you said a quarter, were you are you talking about a three month timeline from when we decide to do it, or are you talking specifically about the first quarter?

Jason:

I think, three months notice before we actually put it into place so that people have three months to give us their input?

Jana:

I'm going to just give you guys something to think about. So if we're telling them in two different months and I know it's a busy month, but then we're telling them with the email and we're telling them with the billing insert, this is going to go through two different bills.

They're not our residents are not going to be paying this increase cost until the first week of February, which is more than three months away. Okay. But then also January, just in general, the winter months have lower water usage, so we're not hitting them in July when in August when they're watering. So that's the other gentle roll out in my opinion.

So I feel like it in my thought process. This is 90 days before it hits, and it's a month of not huge costs. Just my $0.02,

Tera:

but good perspective.

Jason:

All right, I can be sold on that. but I do think we need to get emails out to people ASAP and definitely make sure we have this in both mailers and in the Castle Bones connection as well

Nathan:

done or will be done.

Leah:

That's on having our eyes on those communications before they go out.

Nathan:

Yeah, we'll make sure we run all those through the board. Okay. So the draft. So let's go ahead.

Jana:

I'm sorry. In our, in our inbox and I missed it, but, there's the newspaper ad that's going to go out for December's. No, November. Has the November paper gone out, so forgive me.

Nathan:

Yeah. That one. Yeah. That one sent. So the newspaper ad will be able to get in. the submission deadline is December for the January December. So we're really only going to be in the paper once. Well, and then we'll be in January 15th for the February issue. Okay.

Tera:

Deadline is the 15th of the month prior.

Yeah. So it was November the 15th for the December 1st. So it's not on the December connection.

Jana:

Okay. I'd feel better if it was in the December connection. Can we pull strings. Has that paper been printed

Nathan:

I can I can ask but we'd have to get an ad copy together.

Jana:

Okay. Well then never mind. Disregard that. That's to that

Tera:

I think they have resources.

The paper has resources that can help pull the ad together. But I'm trying to think of when it rolls out.

Nathan:

I'll call Terry tomorrow.

Erik:

And if I could add, I just, you know, based on other agencies, I think, believe what director Enquist was saying earlier about, you know, emphasizing that, you know, what you're getting for, you know, you have these capital projects and, you know, but it's going to be delivering, you know, as part of part of that, you know, is is always at least what's, you know, kind of I haven't done the surveying myself.

So but other, you know, water professionals have found to be, you know, kind of generate positive feedback. And, when you're telling the story of what, you know, it's not just rates are going up there. You're getting these projects and in return that are going to increase the quality of service you're getting. And, but I'm not a communications professional, but just kind of around what you were saying does kind of echo what what I've heard from other other folks we've worked with.

but, and also the level of outreach can be quite varied from district, district to district. I would say previously some your district was near the high end and, you know, other districts, you know, do minimal effort and, you know, receive, you know, very minimal pushback. But some districts, yeah, you know, your district better than, better than anyone you live in it.

And you know, you know what. But people need to hear. But there's there's quite a range. And for a district your size kind of what you're talking about is pretty standard. yeah. Sometimes if there is a kind of community, you know, you hear a lot of discussion sometimes holding a workshop to answer individual questions. usually there's very low attendance, but you know, that that can be so helpful to work People

Nathan:

we could. Yeah, we could do an open like, a rate open house in January.

Leah:

Yeah. I think there was one meeting where, I suggested maybe like an open house and, and giving folks the ability to submit their questions ahead of time, so that we're not just relying on people to ask questions live. Because, number one, it'll probably be low attended.

you know, number two, people might ask questions, but might not come. and the other thing I was thinking about, too was like, sometimes FAQs can be helpful. you know, so things like, why is my water bill going up? what is the money going to be used for? Like, are we more expensive than other districts?

Do other districts have, you know, rate increases? Where do we fall in alignment with them, maybe, you know, stuff like that to to ground people.

Jana:

I second, I second that, I think it's it's wise to, to partner these things together. What am I getting. Why is this going up I like it.

Leah:

And that could be in like the billing insert to the announcement and some FAQs.

Jason:

Sounds great. Does anybody else have any other comments? All right. I think we'll go ahead and, close out the updated, rate study presentation. Thank you again, Erik. And, we will go ahead and adjourn the meeting for tonight. And we will see everybody on Monday, November 25th at 6 p.m.. Thank you all.