12/18/1986 - Minutes MINUTES411 411
Pn°74.5
PUBLIC UTILITIES ADVISORY COMMITTEE
Christmas Luncheon and Meeting of December 18, 1986
Public Utilities Advisory Committee Christmas Luncheon began at
12: 00 noon. Committee members present were : Chairman Marvin
Tuddenham, Virginia Lee, Vaughn Wonnacott, Richard Chong, Paul B.
Keyser and F. R. Robinson. Charlie Wilson, Joe Novak , Nick Sefakis ,
Ray Montgomery, Wendell Evensen , Jim Lewis, Craig Hansen, Bill
Farmer, George Jorgensen, Jim Matsomori , Dick Christensen , Ed
Erickson, Kevin Killpack, Tom Krumsick, Barbara Despain, Anna
Wilson and Chris Oakden were also present.
Chairman Tuddenham called the meeting to order at 1 : 00 p.m. in
the Sun Valley Room at Little America Hotel . He explained to
the Members that Mr. Hooton could not be present because he is
attending to some very important business back in Washington with
regard to the Trust for Public Lands and the property at the
mouth of Little Cottonwood Canyon.
AGENDA ITEMS
The first item on the agenda is approval of the Minutes of November
20, 1986. Chairman Tuddenham asked the members if anyone has any
comments regarding the Minutes . Virginia Lee asked if , when Wendell
was explaining that the funding was in place for the construction
of the the Little Dell Dam, did he mean for the re-location of
the highway. Wendell said "no, the total funding is actually in
place" . Chairman Tuddenham asked if there were any other comments ,
Richard Chong moved that the minutes be approved, Virginia Lee
seconded the motion, with all voting "Aye" .
DIRECTOR'S REPORT
The report on Diking of Great Salt Lake Plan was given by Chief
Engineer, George Jorgensen.
George explained to the members of the Advisory Board that there is
a little report in their packet on the Diking, but just as a review,
most of you know that the Great Salt Lake keeps rising and is causing
some problems. Last year the Governor and the Legislature finally
broke loose with some money to mitigate some of the flood damage
due to the lake. As part of that scenerio they allocated to Flood
Control of Salt Lake County $3 . 8 million dollars to mitigate flooding
problems. Two of the problems that they have affect our Wastewater
Treatment Plant. A little bit of background on that , last Spring
during one of the storm events we had enough flow in the sewer
canal that it actually backed-up and we over topped our chlorine
basin by a couple of inches or so. Since then they have come up
with a plan of how to handle that. There will be two phases :
( 1) a permanent pump station on the oil drain just up stream from
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our discharge point, and the reason for that is because if you were
down stream you would have to pump our effluent over that dike , so
they moved it up stream. At some meetings with the Flood Control,
we agreed to place part of the facility on our property and in
exchange for that they are raising the walls to our chlorine basin.
( 2) diking the canal to 2300 North and also out past the Jordan
River. Both of those projects are under construction at this time.
The exterior walls of the chlorine basin are almost in place and
they- are starting to work on the interior walls . The criteria for
that was dictated by the State that they would design it for lake
elevation of 4213 with a 2-foot windsage . With that in mind,
that 's how we set all the numbers and elevations for the diking .
He asked if there were any questions on that.
Chairman Tuddenham asked if they were on schedule. George said as
far as he knows everything is on schedule . Mr . Robinson asked if
4213 is a reasonable figure. George said he really doesn' t know, but,
the original report that came out had a number of 4216 and for
whatever reason it was reduced down to 4213. Mr. Robinson asked
what would happen if it went over 4213. There was some discussion
about this between the members and Bill Farmer said that if it ever
got higher than that there would be some major problems and at that
time there would have to be another program. George said that the
worst case scenerio would be that the backflow would cut off our
effluent channel and cause us to pump our effluent.
Wendell Evensen gave the report on the Safe Drinking Water Act
(SDWA) . He said several years ago they passed the Safe Drinking
Water Act and Congress gave to EPA the responsibility for monitoring
local water supplies and making sure that they are safe for culinary
purposes. Last year they were not satisfied with the action that
EPA had taken so far, so they came out with the SDWA Amendments and
they're actually pushing EPA into regulating more elements in the
drinking water supply. We don' t know what effect this is going to
have on us ; however, there are two concerns that LeRoy brought home
from a meeting that he went to a month ago that indicated we could
have some pretty high expenses associated with regulations . One was
the fact that they' re thinking about making it necessary to disinfect
all public water supply sources . What that does to us in Salt Lake
City is, whereas we now pump directly out of the ground water wells
into the system, under this new program we could conceivably have
to provide disinfection and chlorination at each one of those
wells . That ' s quite a requirement because most western cities take
water out of the ground and simply pump it into the system, they
don' t disinfect ; however it is safe because we have aquifers that
are protected by clay layers and we constantly test the water.
They say that they will have some rule in place by December of 1987 .
Right now they are working on criteria that will exempt certain
water systems , so we ' re waiting to see what will happen.
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The other one is that at one time they wanted to lower the turbidity
standard from where it is now about 1 NTU, they wanted to lower it
down to 1/10 NTU, and that would really be difficult to accomplish
because we have pretty muddy streams in the Spring. Gayle Smith
who is with the State Bureau of Water Supply, went back to testify
on this standard and he asked what is their warrant for this. He
pointed that we 've never had a case of any water born disease
coming from treatment plants, if they are operated properly. As a
result of his testimony and everything they have heard, EPA is now
thinking of dropping the standard down to 5/10 which would still
give us some problems due to muddy water in the Spring, but it is
something we can live with . -
Mr. Robinson asked what is the problem with turbidity. Chairman
Tuddenham explained that turbidity cuts down on the effectiveness
of chlorination, and that it is just part of the process of making
the water safer. The members discussed this matter a little bit
and Virginia Lee asked if there is anyone who can be called about
this. Wendell suggested to contact the State Bureau of Public
Water Supply when public comments are asked for. He will keep the
Committee informed.
AUDITOR' S REPORT
Jim Lewis passed out an official Auditor's Report to all of the
members. He then introduced the two Auditors who worked on the
audit, Ed Erickson and Kevin Kilipack, and announced that Ed would
be saying a little about the audit and answer any questions that
anyone might have .
Ed went through the financial statement with them first, he said
their opinion is a little bit different from last year; it is still
a unqualified opinion, it is a qualified opinion. They have had to
write a middle paragraph to inform other agencies that the water
and sewer utilities are just a segment of the City and does not
reflect the financial position of Salt Lake City Corporation.
Property and equipment are obviously the largest assets ; in the Water
it increased approximately five million dollars and the Sewer had
about a thirteen million dollar increase which reflected a signifi-
cant investment for the Treatment Plant. Also, the long term
receivable decreased by $1, 280, 000, which relates to the first land
transfer in the mouth of Little Cottonwood Canyon by T. P. L. On the
liability side and equity, if you compare this statement to last
year' s, you will notice that there is not an overdraft reflected in
the liability, each utility account has an overdraft balance in the
pool cash account of Salt Lake City; however, this year we have
made a determination that it would be more reflective of the utili-
ties true position to net that overdraft by reducing the cash
balance on the asset page .
s .
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Fund equity has increased in both funds, four and a half million
in the Water Utilities and about eight and a half million in the
Sewer Utilities . The total asset picture is well over a hundred
million combined and shows a very strong financial position between
the two Utilities .
Our statement of earning and operating revenues had about a 7%
increase in the Water Utilities and a slight decrease in the Sewer
Utilities due to that rate reduction that came into effect which
was a 16% decrease ; however, our total revenues in the Sewer only
went down a little over 1%. Operating expenses were held somewhat
in line, about a 7% increase in the Water Utilities and a little
under 7% in the Sewer Utilities . As you can see our net earnings
for the year 3. 4 million in the Water and almost 8 million in the
Sewer, are about $480,000 less than last year in each one of the
Utilities.
Statement of changes and financial position, a couple of highlights,
working capital provided from operations-the Water Utilities provided
5 million dollars from their operations after you add depreciation
expense and Sewer Utilities over 9 million, both of these figures
are very comparable to last year. In the Sewer especially, there
is a significant amount of property equipment additions, as a
result there is actually a decrease of working capital in the Sewer
Utilities, about a million and a half dollars; however, Sewer
Utilities still have seventeen and a half million in working capital .
The Water Utilities had a increase this year of 1. 2 million which
leaves an excess of 7 million, and a large amount of that money is
to be used on projects which are already in place.
All footnotes are very basic, note D. on the long term receivables
discusses the fact that one million two hundred eighty thousand was
collected. There will be a final payment due beginning in October
1988, so hopefully that can be resolved and won ' t effect the
Utilities cash flow. One new footnote on Page 13 relates to the
refunding bonds that were issued. These financial statements do
not reflect the new bond issues since it was after June 30th;
however, it was significant enough that they felt they should
include it in a footnote .
Then, there are some letters that are required to issue to the bond
trustee , the first letter is just a schedule of the investment
balances controlled by the Trustees and the construction fund is
totally expended now. The next letter they ask for assurance that
the Utilities complied with the bond resolution and covenants . The
only covenant which was not met was the one regarding the delinquent
accounts and the 60 day requirement. With the reissue of the new
bonds, the covenant concerning delinquent accounts was changed to
75 days . The next letter relates to net revenues , the bond requires
that you have 1 . 25 ratio with net revenues that exceed your debt
requirements . The net revenues are four and half times the debt
requirements, which reflects a large cushion.
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Finally, some other information that they asked for is consumer
information as well as information regarding insurance policies .
The last document we have included in this financial statement is
our management letter to you, the first is somewhat standard where
we explain the system controls and management responsibilities .
In the last paragraph we say that our study evaluation disclosed no
condition that we believe to be a material weakness ; however, there
was one matter that we felt needed to be brought up, with the
understanding that it has already been corrected, there were certain
customers that were under special agreements with the Sewer Utility
and due to some problems with their meters, that did not get billed
for a seven month period. That was roughly a $200,000 amount that
finally ended up getting billed at year-end, so obviously there was
some cash that was not available to Public Utilities that should
have been there .
There was a question raised at that time regarding insurance for
public bond and if it should include the Board of Directors. The
members discussed this for a time and decided to have the issue put
on the agenda for the next Public Utilities Advisory Committee
Meeting to discuss it in more depth.
1986 OVERVIEW
The 1986 Overview was given by Craig Hansen. Craig said that there
were four significant, leading achievements in 1986, he lists them
as follows:
( 1) Began the Little Dell Project with assistance from the Metro-
politan Water District and Salt Lake County.
( 2) Re-financed bonding which freed up some funds for additional
projects.
( 3) Suplemental Repayment Program for the CUP and acquiring the
2/7ths interest in the Jordan Aqueduct
( 4) Proceeded with scheduling on the 201 project and completing
projects at the Pre-Treatment Plant .
( 5) Started to look at our own people and utilize them in their
areas of strength.
Craig passed out a copy of the Public Utilities Annual Report at
the beginning of the Lunch, he wanted everyone to know that this
was only a proof and they will be perfecting it before actually
publishing the estimated 2,000 copies.
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COMMENTS
Virginia Lee wanted to know what was happening with regard to
replacement of the aqueduct. Nick Sefakis said that they have
commenced work on installing the liner and is expected to be com-
pleted sometime in the Spring .
Chairman Tuddenham, along with everyone else, wanted to thank LeRoy
for the nice Lunch. They all appreciate the Host, even if he
couldn' t be there .
Paul Keyser moved to adjourn, it was seconded, and everyone
responded with an "Aye" . The meeting adjourned at 1: 52 p.m.
78: 40/co
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PUDIC UTILITIES
' NJ RATE MAME SEVER UTILITY FIN) ATTPaPEVP II
PRIOSED CA 1 ROA Et R 4ARS1FW?TITFRR PLANT E'PPNSICN
ASCFJANJARY 1987
EXISIRND LAD FIRCHASE
R EU:GET CPERATDD 201 RARE CXTI4ECTICN CPERPNENS CAPITAL DEBT SERVICE PLANT AND PBCPO.S3)1EW YEARLY NET
RARE YEAR REV%NJE I RFASE FEES &1.AINT P?PEDDTIURE pans M)DIFICATICNS MAJOR SDER 16 MSD PLANT TOTAL INTEREST C701 HOW
1% 1% 1% 3% 3% LINE CII)SI.32M EST COST 5.5%
9(CThIEJ;CASs BALANCE 2,500,000
1.08*1982-83 6,793,230 1,469,113 495,890 5,450,495 726,938 275,995 50,375 2,254,380 403,620 5,158,131)
1.C8*1983-84 6,390,025 5,710,438 736,C00 5,025,392 503,947 864,917 713,160 5,724,097 665,135 11,547,232
1.03*1934-85 6,335,43O 5,707,8E 1,172,951 4,938,634 1,384,905 854,955 371,830 5,665,925 1,532,562 18,745,719
.90* 1935-86 6,855,864 5,856,609 789,145 5,170,357 1,015,831 852,670 7,723,723 2,655,13D -3,916,093 1,521,564 16,351,190
.90**1986-87 6,63O,700 5,1E8,200 956,100 6,012,507 3,755,800 425,000 7,075,073 -4,463,330 700,000 12,587,810
.90 1937-88 6,747,507 5,219,882 965,661 6,192,832 3,8E8,474 7O1,181 5,43,223 2,000,000 -5,267,710 560,637 7,880,737
.90 1938--89 6,814,92 5,272,031 975,323 6,378,66 3,984,523 701,182 2,000,000 -1,938 433,391 8,312,129
.90 19 9 90 6,883,132 5,324,802 985,071 6,570,029 4,104,064 701,182 2,000,000 -182,270 452,610 8,582,469
.90 1990-91 6,951,963 5,378,050 994,921 6,767,130 4,227,186 701,158 2,000,000 -370,539 462,772 8,674,703
.90 1931-92 7,021,43 5,431,830 1,004,871 6,970,143 4,354,002 701,153 2,000,000 75,O00 -642,119 461,056 8,493,63)
.90 1992-93 7,091,698 5,486,14 1,014,919 7,179,248 4,484,622 839,587 75,0)) 1,154,309 496,008 10,143,956
.90 1993-94 7,162,615 5,541,010 1,025,069 7,394,625 4,619,160 699,587 933,900 31,421 558,703 10,734,079
.90 1994-95 7,234,241 5,596,42O 1,035,319 7,616,464 4,757,735 701,764 1,013,416 -223,399 584,789 11,095,470
.90 1995-96 7,306,583 5,652,384 1,045,672 7,844,958 4,900,467 701,764 13,618,355 -13,063,9O4 233,725 -1,61,706
.90 1996-97 7,379,649 5,708,908 1,056,129 8,C8O,3O7 5,047,481 697,070 14,026,903 -13,707,075 -435,171 -15,823,951
.90 1997-98 7,453,446 5,765,997 1,066,691 9,322,716 5,198,906 837,070 14,447,710 -15,33O,2E9 -1,254,824 -32,459,044
.90 1993-99 7,527,930 5,823,657 1,077,357 9,602,37 5,354,873 697,316 -1,225,592 -1,815,887 -35,500,523
.90 1999-0 7,603,260 5,831,894 1,088,131 9,89O,4613 5,515,519 837,316 -1,530,020 -1,990,779 -39,021,127
TOTAL 126,233,787 95,995,34i 17,435,216 126,407,422 67,804,487 12,370,872 21,377,34 12,655,130 44,240,24 -45,141,236 3,619,914 -41,521,127
* ECRU'YEARS 1932 THEdU 1985 ARE ACTUAL CAST AMIIIIS OOL LECIFD.
** 1936-87 ARE CURRENT H1A'ETED AMSUNIS.
1. OPERATING REVENUE, 201 RARE INCREASE, AND CLINF3TICR4 FEES ARE ESTIMATED TO C4@7 BY 1%'THRU THE TOMEI''YEARS 1937-2000.
2. CPERNPME AND CAPITAL STENDTIIRESE ARE EXPECTED TO INCREASr BY 3%PER YEAR T(HJ THE LSDCST YEARS 1937-200D.
3. DEBT SERVICE IS THE ACTUAL ItTal2BST EXPREE AND PRINCPLE PA)MRP REQUIRED CN THE REELII)ID 1936 83505.
4. INEEI3EST IS ESTIMNIED EAST)CN 5.5%CN PRICE4 YEARS BALANCE AND 2.5%ON THE YEARLY NET TOTAL FOR THE E(II3E'YEARS 1937-2000.
5. PUriET F YEAR 1997 93(PERA1TONS AND NAINIENANCE COSTS NAVE PEEN INCREASED EL 1,0(0,00O TO ADJUST FUR SIARIUP CF NEW PLANT.
6. L1.1. u±JJ NON PLANT IS ESTIMATED AT OOST1AG 324 IN 1936 DaLARS ADJUS INE FOR INFLATION AT 3%THE OOSP INCREA7S TO$44,240,234.
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1UPLIC UPILIIZES
SUER UTILITY FIND i i i i•ESIM I
SCHEE I E OF TREALMENT PLANE IIQ+ADJN?
7/1/82'IHU 6/30/89
FIX-AL FIX AL FIS:AL VIS'AL FI.S'AL FIS.'AL FIX-AL
TEEN 1983-84 1934-85 1934-85 19135,36 1936-87 1937-88 1938-89 IDEAL
REPARFA`E46 r PLANE UPGRADE 74,960 3,375,075 812,450 4,262,45
MIN PLANT LEGRADE 2,439,957 2,260,000 4/6999,957
ENERGY REaNERY 1,689,934 601,00D 2,269,934
ADMWCPS Cm /LAB Brags 1,180,000 1,180,000
SIIE IM'LOVE• 97,112 31,095 12,207
'3]I0;N F7rfFR AND 80LSDS CENE 842,927 5,157,073 6,000,000
IFSTG9 CF 1RICKLIBE FIL1IER 21,150 281.,150 567,300
MAINEENFN AND EQUIP SA7Z4E 525,000 525,000
E113INEER N DES1E26 325,7E39 126,881 572,546 1,025,196
`7IiflP INJFXlICN ADD EQUIP 50,375 274,944 72,877 121,194 519,39O
9371N1ARY CLARIL1F1j/ZLEE:EPPLE 117,447 117,447
INSiATrCN OF DIGE'SI1:R 77,418 77,418
OCNCIRME BLECK BJILDIN3 10,000 10,000
0
TOTAL 50,375 718,1E0 371,830 7,723,723 7,075,073 5,43F.,223 21,377,334
1. THIS 5PAThIIENS DAPS N1f INCLUDE 61s)IN iovE 1ENiS OF 6,749,892 EXPENDED LI1RI%411E LASE ECUR YEARS.
fl?
FEB 1 - i 67
LEROY W. HOOTON, JR. - 1\ !}i -mimor *ism1i J 1� ,�,
DIRECTOR DEPARTMENT OF PUBLIC UTILITIES
JOSEPH S. FENTON WATER SUPPLY & WATERWORKS PALMER DEPAULIS
SUPERINTENDENT, WATER RECLAMATION WATER RECLAMATION MAYOR
WENDELL E. EVENSEN, P.E. 1530 SOUTH WEST TEMPLE
SUPERINTENDENT SALT LAKE CITY, UTAH 84115 WATER SUPPLY & WATERWORKS
February 10, 1987 ?- ff 4/1411
The Honorable Palmer DePaulis C}
Mayor of Salt Lake City AP�';C)\1
324 South State Street/Fifth Floor
Salt Lake City, UT 84111 FEB
Dear Mayor DePaulis : C,1 RQc
RE: Public Utilities Advisory Committee
Attached are the minutes of the Public Utilities Advisory
Committee meeting of December 18, 1986, which were approved
in the committee meeting of January 15, 1987 .
I request that the minutes be approved at the mayor' s
executive meeting and filed in the city recorder ' s office .
Yours truly,
ICJ►-He o
LEROY W HOOTON, R.
Directo
LWH:mf
Attach:
cc: City Council