Study/Work Session
September 21, 2026
Transcript
Describer:
CPNMD Study Work Session
September 21, 2026
AGENDA:
I. Call Work Session to order
A. Roll call
A work session is held for discussion and information only, so no official Board action is taken and a quorum is not required
II. Finance Items
A. Review monthly claims for payments made from August 13, 2026 to September 16, 2026
III. Legal Items
A. Review: Hidden Pointe Mill Levy Agreement
IV. District Manager Items
A. Expenditure Request: Meter Radios
V. Adjourn
Describer:
The video starts on graphic with a white background and forest green letters which says “Castle Pines North Metro District Board Meeting September 21, 2025”. The meeting opens on a Zoom call.
Board President Jason Blankaert:
Good evening, and welcome to the Castle Pines North Metropolitan District Board work session for September 21st, 2026. We will begin approximately 5:30, and we'll start with roll call.
Board Member Director James Mulvey:
Jim. Present. No conflict.
Board Member Director Tera Radloff:
Tera. Present. No conflict.
Board Member Director Jana Krell:
Jana. No conflicts.
Jason:
And Jason present. No conflicts. We're missing Leah. Tonight we'll close item number one and move to number two, which is finance items with a review of monthly claims for payments made from August 13th, 2026 to September 16th, 2026.
Describer:
The screen changes to a document of the financial report.
Claims Submitted for Review
District Finance is submitting $3,090,455.49 in Payment Claims for review at the work session, consisting of $2,793,599.84
in checks and $296,855.65 in electronic payments.
All the invoices included in this month’s Payment Claims Presented for Review were reviewed and evaluated for compliance
with the Financial Controls Policy/Matrix.
? Notable payment claims related to capital projects include the following:
o City of Castle Pines – Pay App #1 – Monarch Project: $577,590.64
o Myers & Sons Construction LLC – Pay App #11 – Filter Beds Rehabilitation Project: $206,901.00
o T Lowell Construction Inc – Pay App #6 – Lift Station Upgrades Project: $1,054,969.87
Financial Overview
A comprehensive financial report will be provided at the July Board Meeting, which will include an analysis of financial
activity through July 31, 2026.
2027 Budget Process
District staff and consultants have begun preliminary work on the 2027 Proposed Budget. The process involves the following
steps:
1. Review assumptions and prior-year actuals
District staff and consultants review the current year's actual and projected year-end revenues/expenditures, along
with key assumptions (assessed valuation trends, growth, inflation, interest rates, tap fees, service demand) that will
drive next year's numbers.
2. Project revenues
Estimate property tax revenue using the county assessor's preliminary assessed valuation and the district's mill levy,
plus specific ownership tax, fees, charges, grants, and any TABOR-limited revenue sources, fund by fund.
3. Estimate expenditures and capital needs
Departments or service areas submit operating expenditure requests; layering in debt service, reserve requirements,
and any capital improvement plan items for the coming year.
4. Reconcile funds and balance the budget
The budget officer nets projected revenues against expenditures for each fund, ensures beginning fund balances tie
to prior-year actuals, and adjusts spending or fund transfers so each fund balances per Colorado Budget Law.
Financial Director Eric Harris:
Good evening. Board. On page two of your packet you have our work session report noting our claims on this is $3,090,455.49. As mentioned, this complies as of claims submitted last month in electronic payments. A fairly large amount of claims on here, mainly related to all the construction projects that we have right now. We're currently in budget with the approved contract amendments that have been approved by this board right now.
So just wanted to make that point. Some high dollar items are noted on this report, which are, you know, with the city of Castle Pines for our cost share with them as well. Myers and sons and team will construction. So those are the larger ones. And then we have our electronic payments, which we have set up as our firm commitments and payroll.
And until at least some of those other items as well. One important item of note is we are working through the implementation for the expense management module. So we're going to layer that in with the financial controls policy. So I'm assuming Tera or someone else we will be routing those electronically. We'll have some. We'll take a five minute train at some point by the end of the year so that you can get notification and just click through and approve those electronically as those go out the door.
So we're implementing those approval within the software. So we have that in the future. And you'll be able to see a PDF of the invoice and everything after that's already been approved by maintenance staff. So that's just continuing enhancements of what we're doing with F, E and XT, which is the accounting system, very quickly. Before I ask if there's any questions, we are in the middle of budget season right now.
We had a staff review budget today. We got some revisions and we're working through that right now. We are offering that forward to next month's work session. As a reminder, we have to submit a draft budget by October 15th. So please expect that I think is that Thursday that you'll see that in your inbox that will be included in next month's work session back as well.
We will work through that at that time. So it's everything from updated capital. All the numbers are expected. So we're working through all that and we'll have a memo to accompany what changed year over year. That makes sense. So that's an explanation of budget process. We will bring that back and potentially have we can have another, you know, session on that at the the next October board meeting, the November work session, so that we work towards approving that budget in no board meeting before Thanksgiving, which will be that Monday.
So that's our target.
Tera:
Because you were in place. We went through this with you last year.
Eric:
Correct, correct. So we did last year because we had so many changes to the financial statements. We did have a preliminary draft available at this work session last year. We did not do that this year. So we're just bringing that straightforward to you in October. So that's what we have right now. So pretty good conversations right now.
Some updates, everything from the distribution. Capital projects that we potentially discussed in the timing related to that. So that's one facet as well. Another item that we're working on with Nathan and Renee is conversations on the changes to the rate structure. We're bringing the stakeholder group that has been delegated by this board. So I think that's Jen and Jana.
Expect we'll have a meeting sometime in the next couple of weeks related to that, everything, you know, conservation, water budgets and things of that nature. More detailed conversations. So that's to be coming. With that, talked about our process, upcoming schedule. Are there any questions for these items.
Jason:
That hearing anything. So thank you, Eric, for your presentation.
Eric:
Perfect. Thank you.
Jason:
We will go ahead and close that item to the finance items. And we'll move on to item three legal items with Paul Paul.
Describer:
The screen changes to a document of the Mill Levy Equivalent Payment Agreement.
B. On June 22, 2026, the CPNMD Board adopted Resolution No. 2026-6-2 approving the
inclusion of the HPMD Boundary subject to the terms and conditions of the Inclusion
Agreement. On July 13, 2026, the District Court for Douglas County, Colorado, entered its
Order Setting Election on Inclusion of Property in Case No. 1984CV126, directing that the
question of inclusion be submitted to the eligible electors of the HPMD Boundary at an
election to be held on November 3, 2026 (the “Election”).
C. Section II.D.1 of the Inclusion Agreement contemplates that, if the Inclusion Date occurs
prior to December 15, 2026, CPNMD will certify a uniform mill levy for tax year 2026
(for collection in 2027) applicable to all property within the CPNMD Boundary, inclusive
of the HPMD Boundary.
D. Under § 39-1-110(1.5), C.R.S., a special district may not levy a tax against property
included within the special district for the calendar year during which the property was
included unless the court order of inclusion has been filed with the county clerk and
recorder prior to July 1 of that year. Because the Election will not be held until November
3, 2026, the order of inclusion cannot be recorded prior to July 1, 2026, and the Douglas
County Assessor has advised that CPNMD’s mill levy will not be applied to property
within the HPMD Boundary until tax year 2027 (for collection in 2028).
Legal Counsel Paul Polito, Esq.:
The legal status report is on page seven of the packet. I'm going to be discussing the endpoint levy equivalent payment agreement. But if there's any other questions at this point about the legal status report from that agreement, happy to answer that.
Okay. Or just get right into this. So on page 12 is the mill levy payment agreement. Just as a, as a little bit of background. So district is including endpoint metro district. The election is in November at which the Hidden point electorate, will receive mail in ballot and will vote on this. There is the wrinkle in that.
Well, under the agreement, the currently effective 25% surcharge that hidden Point residents pay on its water rates will cease. That's part of the inclusion. However, the district will not be able to collect, a mill levy payment from the Hidden Point residents within that district next year. And this is a quirk in Colorado law. If you if you don't include the district by May 1st, you can't collect taxes for the fall.
So because the elections in November were well beyond the May 1st deadline. So this agreement is a way to close that gap, to get the equivalent of what the district would get under those mill levy payments from the residents of Hidden Point. I've discussed this with the president endpoint. He's very open to this and was happy to agree to it.
I'm presenting this to you now in a draft form before I've sent a hidden point just to get any notes. Comments? What not? Are we sending it to them tomorrow? And and we'll also be collecting, some specific ownership taxes as well. Thank you, Eric, for for highlighting that. We wanted to I wanted to give him point flexibility and how to pay this so it's not tied to them collecting MLB from their residence.
It doesn't, it doesn't force them to collect any money above what they would be doing. Now. They can pay it from their bank account. They can pay it however they'd like to. So it gives them that flexibility. Really makes no difference to the district.
It's conditioned on monthly payments, but they can prepay all of it at one time. That's essentially what this agreement. Does. Anybody have any questions about background? If I can add a few more things, we.
We discussed the staff. With CLA, which is. The management company for Hidden Point Metro. These are pretty typical. Some of. These kind of revenue. Conveyance things that happen. Between metro districts, IGA, these happen all the time. One item and they can implement that as well. We did have if you go back to the details associated with the inclusion agreement, there's this we referred to that this was forthcoming at some point in the future as far as the mechanism to true of any sort of loss of tax revenue associated with that.
So there's a there's a reference to it. This is just that completion of that agreement is out there. Yes. Thank you. Yeah. Appreciate that.
Tera:
Two questions I am curious about the specific ownership tax on vehicles. I think that's remitted to the city.
Describer:
The screen changes to the next page
C. Payment in Lieu of Levy. The Mill Levy Equivalent Payment is made in lieu of the mill
levy that Section II.D.1.b of the Inclusion Agreement contemplated CPNMD would certify
against the HPMD Boundary for tax year 2026, and CPNMD accepts it in full satisfaction
of any contribution from property within the HPMD Boundary on account of that tax year.
CPNMD will not seek any other payment from HPMD, or from property or customers
within the HPMD Boundary, on account of CPNMD’s inability to apply its tax year 2026
mill levy to the HPMD Boundary.
D. Subsequent Tax Years. Commencing with tax year 2027 (for collection in 2028), CPNMD
will certify its uniform mill levy against all taxable property within its boundaries, inclusive
of the HPMD Boundary, in accordance with Section II.D.1.b of the Inclusion Agreement
and § 32-1-402(1)(b), C.R.S., and no further Mill Levy Equivalent Payment will be due for
any tax year after 2026.
Paul:
We we get it as well as the district. So it's basically divvied up by the county treasurer and aggregate of a portion by tax base and mill levy assessed, if that makes sense. So if there's not a mill levy, if we would have levied three and a half mills, we we would just be remitting that a portion of that would be received, if that makes sense.
So it's just the combination at that point. So they would continue to levy it and then they'll just remit this the because it's based on the mills that are levy.
Tera:
So the county room to us correct.
Paul:
With property taxes okay.
Tera:
Glad I got the lawyer in the accounting here together.
Paul:
So so it's very interesting if you have different counties throughout Colorado the type of dollar amount that's remitted, if that makes sense.
Tera:
No, I just know that we buy a lot of the. Yes, yes. Yes. I've seen that before. And then the only other thing I think was, it talks about and it makes sense for this agreement and maybe it's in the inclusion agreement, which talks a lot about the hidden point metro district boundaries, which will cease to exist if they are included. So is that any or does that because I know there was something about upon final payment, something happened and I didn't know if we needed expressly state that there will be no more hidden district boundaries.
Paul:
Well, this doesn't. Oh, the subsection. Really Hidden Point will continue to exist. They will have if if they pull their overlaying property tax statement and point Metro and Castle, there'll be a separate process for them to dissolve. Oh.
So this is just including if that makes sense. So it's the same in the way that look a little like a filing. Number one, I believe they are in North Pines, Vista metro and Castle Metropolitan District, which are still. So they actually have an initial 60 sod mills for their mill levy for that new development that's occurred. So the same thing here.
I don't think they're leaving. It's to the discretion of the the board at endpoint whether or not they levy and the levy. I think everyone's on the same page here. They're not going to love, you know, Levy. So hopefully that they work towards dissolving.
Tera:
That absolutely makes sense. And thanks for reminding me about how to dissolve once you include that does correct. Okay. Great.
Paul:
They've had that. Yeah. So the way that so they've got they do have there's like two larger stormwater ponds and stormwater infrastructure. They also have some internal trails as I understand it. Those are currently owned and operated by the way. And then the metro district makes a payment to the A. So they'll be recovering those costs through probably some marginal increase their home dues.
I don't know how far it went. At one point the whole and Hidden Point Metro district were talking to the city about doing a similar transfer, where they'd give them some of the stormwater responsibility and then maybe some of the trails. I have no idea what the status of that is or if it went anywhere.
James:
And I didn't understand if we're going to with this before going to have any additional responsibilities.
Paul:
No, we currently own all the facilities in the district.
Eric:
Okay. Like I said, I'll be sending it over to representatives tomorrow, so hopefully I have an update on Monday, if not the next.
Jason:
All right. Thank you Paul. We will go ahead and close out. Item number three, the legal items, and we'll move on to item number for the district manager items. Okay.
Describer:
The screen changes to a document of the Meter Radios Expenditure Request.
Need and Purpose of Expenditure
The District has budgeted funding in 2026 for meter and meter-radio replacement.
As part of that effort, I am requesting approval to purchase 783 Sensus M2 meter
radios from Core & Main at $180 each, for a total cost of $140,940.
This purchase is intended to serve both an immediate need and as the first phase of
a larger meter replacement and Advanced Metering Infrastructure (AMI) program.
While the radio replacement is a budgeted expense for this year, the larger meter
replacement program will be included in the 2027 budget.
Replacing the radios now allows us to begin upgrading our existing meter
infrastructure while moving toward a system capable of providing more detailed and
timely water-use information. Ultimately, this approach is intended to position the
District to have customer water-usage portals available in 2028, allowing customers
to monitor their own water consumption while improving the information available
to District staff.
Alternative Means
The primary alternative would be to defer the radio replacements and complete the
radio, meter, and AMI upgrades together as one larger project. Because funding for
radio replacement is already included in the current-year budget, staff does not
recommend delaying this portion of the work.
We also evaluated NEXT meters as an alternative to continuing with the Sensus
platform. Based on the information and pricing reviewed by staff, a broader
conversion utilizing NEXT meters was projected to cost closer to $4 million. Given
the significantly higher anticipated cost, staff determined that this was not the
preferred path forward.
Instead, staff recommends a phased approach: purchase the budgeted radios in
2026, incorporate the larger meter replacement program into the 2027 budget, and
continue implementation of the AMI system with the goal of providing customer-
facing usage information in 2028.
District Manager Nathan Travis:
So what I have for the board tonight is an expenditure request for water meter radios. You guys will remember we had a representative from next meters come and visit the board several months back to give us a presentation. I still really, really enjoy that system. The biggest issue there is that the full implementation is somewhere between three and a half and $4 million.
We were waiting to hear back from Corrine, Maine, who is the vendor for census meters that we use on their total pricing. We don't have that yet. So the ultimate goal getting from where we are now to residents with fully realized portals that let them track their usage and give leak alerts, but we're looking at it like a total cost of somewhere around 350 and $400,000.
This request is just inclusive of $140,000 to purchase 783 meter radios. So these would replace existing radios that we have. There are older technology going back like pre 2010. With all of these in place, we'd be able to go ahead and take that next step, which is fixed based fully Amr. So we'd be able to read all of the meters remotely.
And then the subsequent step following that would be to replace the remaining like 800 or so we have that don't match with the smart technology. We need all of the meters replaced to get the full use of the customer portal. We can start that like the Amr process and to get some level of customer portal in place with just the remaining of the radios replace.
So unlike next meters where it's the meter and the radio is all in one unit census has a separate meter and radio project product, so we're going to upgrade the meters.
First total request for that is 140- 140,940. And that was budgeted for this year.
Jason:
What was the budget?
Nathan:
Budget amount was 160 something. 151 60.
Eric:
So it's a little it's a little convoluted because there's three different components in our capital program, if I may, before getting into this. So there's the meter replacements. There's a meteor meter radio equipment. Then there's the fixed base reading system. Between all of that, we had $1.24 million in our capital plan over the next 3 to 4 years associated with. So it's a 1.24 million.
Jason:
And you Think It's going to be closer to three Or 4 million. Yeah. At most. Okay.
Tera:
And I don't remember I mean, I before, but I don't remember a presentation from a meter person. I remember discussing the meters. But do you guys remember I made a promise.
Jason:
Yeah. His name was Eric.
Nathan:
Have a lot of information. Yeah.
Jason:
It was kind of a it was more of a sales pitch.
Jana:
And we're not talking about the guy that wanted to do the locks in the parking card.
Nathan:
The final amount for like the turtle Project on this one, including this upper end, half a million, probably closer to 350.
Jana:
So you like this product?
Nathan:
It's the one we currently have. Oh yeah. So this this is continuing with the current vendor that we've used historically, updating our remaining meters and then using their product to go live. The for three and a half to 4 million was a wholesale vendor change. So we would have to change every meter in the district.
Jana:
But Eric, you're saying some people need new meters, some people need new meter radios. Correct. And one was the third one.
Eric:
Fixed base spring system.
00:16:25:27 - 00:16:27:08
Speaker 7
So what is that third One mean.
Nathan:
So yeah. So right now we have a vehicle that drives around. We load a uploader out, downloader out. The fixed base system is permanently installed antennas at various locations around the district. We're looking between 3 or 4 of them that are always online. And so then those pull those pull meters four times a day. So that's what gets us that like running read.
And then we can also like automatically pull a meter. So it's it's less staff time gives us instant access to reading meters. Finals become a lot more simple when people call in for selling their homes. The.
Has to physically drive around to get the meters reads every month. And then we only have that one data point. We don't get the daily usage to track.
Eric:
So we can budget savings.
Nathan:
To upgrade our full system. We'll get to that like under 500000 The 1.2 is projected based on like the first step of the next meter system that I'm not recommending we continue with.
Eric:
So yeah, budget savings as we're.
Tera:
Saying overall is it three or is it one overall.
Describer:
The screen changes to the next page.
Alternative Proposals
Staff obtained two proposals from Core & Main related to the proposed meter and
AMI improvements.
The first proposal, Castle Pines North Metro Radio Replacement, dated August 24,
2026, is for the purchase of 783 Sensus M2 radios at $180 each, for a total of
$140,940. This proposal represents the expenditure for which approval is currently
being requested.
The second proposal, Castle Pines North Metro AMI Project, dated April 17, 2026,
provides a broader picture of the infrastructure and services required for AMI
implementation. The proposal totals $383,076.60 and includes Sensus M420B base
stations, 800 M2 radio endpoints, software setup and integration, training, analytics,
commissioning, and projected software and warranty costs through Year 5.
Installation is not included, and the number and location of base stations would
ultimately be determined through a Sensus propagation study.
At this time, staff is not requesting approval of the full $383,076.60 AMI proposal. It
is included to provide the Board with context regarding the anticipated system
architecture and future costs. The current request is limited to the $140,940 radio
purchase, which was contemplated as part of the District's 2026 budget and will
support the larger meter replacement and AMI program moving forward.
Nathan:
Yeah. Overall it'll be. We're still waiting on the final survey to tell us. Yeah this year, this year, next year and 2028 overall it'll be like between 350 and 450.
Jana:
To the next amount that's written into this. About that. 333 to 3. Sorry. Yeah. So can you explain what this 3 to 3 is for?
Nathan:
Right. And so this number, this is the one that will change a little bit. But so the 140 covers just the radio replacements. The remainder covers the rest of the physical meters that need to get changed out. And the implementation of the fixed base reading. System and do. That also. That number also includes ten years of service on that product or on the fixed base stations. Software updates, equipment replacements, maintenance, repair?
Okay, so we buy that equipment. We're buying it. Neighbor service agreement for ten. Yeah. For the telecom with it. Right.
This one it's not. This one's not cellular. We'll have cellular. But yeah. So it's.
Jana:
Coming back to the three three is 2026. So like the three. 2027 it will be. Yeah okay.
Nathan:
4041 I know that's not a round number but yeah. So 4041 total meters. So we have 4040. Yes we have 4000 total meters that exist. Of those 800 have radios that we need to replace roughly 800 kind of that same number, about 800 of them also have meters that we need to replace. The other ones are all new meters, new radios.
And then the fixed based system is the final layer on top of that.
Tera:
And then how does all that translate to me being able to look at my meter? And will I have an app.
Nathan:
Yeah. So the their, their general recommendation is that you get the fixed based system in place and run it for approximately a year just to make sure you've got any bugs, make sure you've got the proper coverage, and then that system reads your meter four times a day. And then, there's an we have a lot of options at that point.
So there's a bunch of different software packages, we packages we can look at for that user interface that'll look at those readings and kind of like talk to our billing system. The one that census has is honestly kind of junky and no one really likes it. So there's a couple other ones that they recommend. But so the 2027 or 2028 step would be to implement that interface.
And that's all for package, which is not included in this. And in.
And so then, you know, we associate those meter readings with your account that gets tied to our billing system. We can even tie that into our GIS so that we can check this stuff out in the field. But then yeah, as a resident, you can look in and you'd see how much water you used up to four times a day.
So you can see a 24 hour view. And then it'll start to track all kinds of things like depending on the software. Package out of.
It will generate. Yeah. We can generate user. Catching in your monthly. Yeah.
Jana:
Is any of this cost passed on to the reason at all?
Nathan:
Yeah. Ultimately all of it is.
Jana:
I mean like an actual point of.
Nathan:
No, it'll be in rates and fees. It was being inclusive Of the bill.
Jana:
Do you foresee this driving? I mean it's kick the can down the road and master created just what we're going to continue to have the.
Nathan:
Yeah I mean we'll have continual rate adjustments year over year.
Jana:
I mean that's inevitable. I guess I'm just trying to think how will this impact that the next time we do a rate analysis.
Nathan:
Compared to our like capital outlays and expenditures? It's relatively small, so it shouldn't have to. Larger. Overall day.
Paul:
We do know that Nathan has conveyed we talked about known meter issues throughout the district that are to this whole resolve. Okay.
Jana
Sounds like a good investment.
Nathan:
So that is all I had.
Jason:
Any other questions?
Describer:
The board discuss inaudibly.
Yeah. That's a pretty common pipe condition that we're finding through that entire area. Over the next couple of weeks, we're going to be digging holes to kind of do some spot checks on pipe. We just got a runner and we're just calibrating it earlier today, but we just got a little device that tells us wall thickness for ductile pipes.
So we're going to pop some holes and take that. That'll be kind of like the at least for this like upcoming condition assessment report. That'll be kind of the fast the first piece or the last piece. We need place to get that. This will have this will have some budget impact. Overall, we're looking at what that ultimate pipe replacement program looks like with the frequency of breaks that we're having.
Over here. Yeah, yeah. So we're looking at recommending a kind of just one large project to get it up on, rather. We were talking about earlier. It's about pre 1994, 1994 and before about 90% of it that needs to be replaced.
Yeah. At this point people probably I mean I don't know, but I can imagine there probably.
Yeah. Yeah we're starting to get some and it's we've had some pop up on next door, a few phone calls. It's more mixed than I would expect. So there's a lot of like the initial post of a couple of them. Pull back, you'll see an initial post that's like, hey, there's this terrible street repair. Like, why are there so many?
And then it's pretty mixed, kind of following that with half people being like, yeah, they're doing a great job much better than they have. You have to break things to fix things than the other half are like, they're forever idiot. So, they're they're very they're kind of mixed. But I think we're gonna I mean, with the break frequency that we've got over there, we've got some issues.
I think we'll probably scale back, especially once we have, like a replacement program in, kind of defined and planned. I think we'll probably scale back maintenance in those areas to, to kind of like reduce these types of breaks, knowing that would replace in a year or two. Anyway.
Tera:
And when you say budget impact, do you mean 2026.
Nathan:
And beyond? Yeah. So we look we'd like to do the design and well, not 2026. So we'd like to design 2027 if it's one project and aim for bidding construction 2028, it's probably about a 12 month plus ish construction project. My like very, very back of the napkin wag is somewhere around like $10 million. So I want to also look at potential financing options to spread that one out.
Eric:
So that's the so please expect that and think about that over the next couple of weeks as we kind of approach budget season, because we're the first part of that is a budget allowance potentially in 2027, like Nathan mentioned. But we're going to be looking at what makes sense from the standpoint, what a potential market rate is, what's the debt service associated with this as well?
It may not be. If that timeline plays out, it might not be until 2028 that we would have to seek a date that covenant for financing, similar to what we have with the Jason. We may have the potential to look at refunding and reissuing some component of that just because of how the document, how was structured back in 2017, I believe it was issued.
Or we just paid off and this was the first he got involved as well. We have no debt authorization currently from a property tax standpoint. So if we were to finance it without going to the voters or having a ballot question would be at a rate of that expense.
Tera:
Well, I mean, that's the oldest part of the system. Correct. Can't handle it.
Paul:
In my due to the just by the sheer cost of it. I would recommend if this is something that does need to happen, that would be the way to go.
Rate Covenant is essentially enterprise debt that's backed by your, bills. Yeah, that's it, not property taxes. And so essentially it's not a property tax. It's called just a pledge by your rates. So this district in this instance would be required to raise rates sufficiently enough to pay for that long. It's slightly more expensive debt than property tax. Not not too much.
I can't quantify the basis points, but it's pretty portable way to finance enterprises with this.
Tera:
The the issue in the past hasn't been, you know, nobody wants to see rates go up or whatever. But I think issue of the past is that there hasn't any transparency. And whatever we do, we certainly have a, you know, a great communications team. It's really about.
Nathan:
Yeah. And a. Heavy heavy cost offset for this one. So one of the things that I guess that was probably like if I sat down and thought about it, I would have realized. But really seeing it on paper is like when we plotted all of our breaks that we've had over the last 15 years, with the exception of like minor curb stop repairs or the like, some expensive curb stop repairs, with the exception of like some minor repairs, minor valve repairs, every large water line break we have had has either been on one of the transmission mains that we just finished replacing, or it's been in like these three neighborhoods, like every single one.
And so there's a real reasonable expectation that once we get this replaced, that we could see those break frequencies drop down to like one or fewer per year.
I'd have to go back and pull it together.
Eric:
And that'd be roughly what we'd be looking at dextrose associated With it.
Describer:
Nathan goes off-topic, but the conversation isn’t very audible.
Nathan:
I do. And one of the other things kind of the two year pushback. So if we pull back maintenance every try and reduce the like physical wear on the system, see if we can have fewer breaks. Is really make sure that we're moving away from the kind of like modus operandi of using Kennedy Jenks as like our key fall design engineer, especially for a distribution system where design is big.
I want to make sure that I want to take it out and actually fit it for engineering firms. And then Kennedy Jenks and service Design review. And of course, you know, they'd be welcome to bid the project as well. So we'd have to. And one thing that'll be helpful, having Renee on board is we can do a heavier lift on the actually, like, proposal review and then select from there.
But how can it be Jenks manage the project, design it with another firm has got plenty of spare time. She's going to throw a number on. It.
Jana:
Volunteer to do it. And I'm not joking. No, because I did it for a Aurora for many years through the water line replacement program. Oh, so easy. It's so easy. It's like 2D plants, you know, you just draw a line. So I think you guys won't won't have any trouble finding somebody that. Yeah. So we already have a standard objective.
Eric:
Just a couple things to look at over the next probably 4 to 8 years. Everything related to renewable water and storage tank project. This project as well is we're really trying to line up the cash flows and make sure that this all works in accordance with our reserve planning. So there's a lot of moving parts with that. Perfect.
Describer:
Nathan:
Oh, we also think we have a plan to avoid cutting over cutting open the floor of the treatment plan for the drainage problem over there too. So we're working through that right now. To sun pumps and creative engineering. But it's.
Describer:
The staff continue to talk but the conversation is inaudible.
Nathan:
You will be on a forever is the problem is is forever liability like. So we'll have a distribution system. Piping are the best way to do it is to remove and replace. So you go through all the new piping, get the new system in place, then go back through and rip out all the old piping. It is very much more expensive than just laying next to it.
But the the problem with those abandoned facilities is one like nobody your records never really follow them, as well as they should. And you like you own that pipe forever. So if that pipe ever gets collapsed and, you know, starts taking up a bunch of sediment and starts creating sinkholes, like there's there's reasons to pull it out, but it is like a, like doubles your project cost.
Jana:
And then what? Also, the reason I even brought it up is because I hate it. It's like leaving trash in the ground. Yeah, but I get that it costs more money, I get that. But then when you get into older parts of town, there's so many abandoned things you can't even work around new anymore because you're saying, well, get this much clean dirt left because of 30 years, 60 years as abandoned pipe.
So I hate it. It just makes. And also, just like Nathan said, a lot of times we don't get marked. And then you hit one and you think.
Nathan:
Well, you can't mark them, right? Because like, you're above your band and all the great assets because you don't want to cause operational confusion.
Jana:
That space jump up there. No space junk bothers me too. So category where it just feels like kicking the can to the.
Describer:
The board had a conversation but it’s in audible.
Jason:
All right. Out this section. Yes you do. All right. We will go ahead and close item for the district manager items, and we'll move to item five, which is adjourned the meeting. Thank you everyone.
Describer:
Meeting adjourned. Thank you for watching.