12/19/1984 - Minutes LI
PUBLIC UTILITIES ADVISORY COMMITTEE APPROViriPigr
Minutes JA N 2 t7, t9 :
Meeting held December 19, 1984
CII�L Rganast
11:45 a.m. at Sun Valley Room, Little America Hotel
The following committee members were present: Chairman Mary Tuddenham, Howard
Dunn, Genevieve Atwood, Manuel Floor, Ralph Steenblik, Roger Boyer, Ray
Arnold and Jack Bonnett. Also in attendance were Jim Reynolds and Dal Wayment
of James M. Montgomery Engineers; Ken Cohn and Jack Larson of Arthur Young;
Al Haines, Chief Administrative Officer; Ray Montgomery of the city attorney's
office; Troy D'Ambrosio of the mayor's office; Chuck Gates of the Deseret
News; Brian Wilkinson of The Salt Lake Tribune; and Alice Shearer, Ione
Davis, Ed Parker and Leigh von der Esch of the City Council. Staff members
present were LeRoy W. Hooton, Joe Fenton, George Jorgensen, Mike Myers, Tim
Doxey, Anna Wilson, Wendell Evensen, Ray Ahlander and Jackie Gillen.
Chairman Tuddenham welcomed the group at 12 p.m. , and lunch was served.
At 12:55 p.m. Chairman Tuddenham brought the meeting to order.
I. Approve minutes of November 16, 1984 meeting
Mr. Arnold motioned that the minutes be approved as written and Mr. Bonnett
seconded the motion with all voting aye.
II. Recap of past year's highlights
Mr. Hooton said he wanted to thank the committee members for their help during
the past year. He also thanked Al Haines, Mayor Wilson and the City Council
for supporting the department in our programs over the past five years.
Water:
Mr. Hooton said that the department has been affected by Mother Nature during
the past two years, causing problems and damage to our facilities. It has
affected our whole division--facilities, budget, etc. Because of reduced water
sales we expect a S1,111,000 shortfall in revenue this year and will have to
cut back on the capital to compensate for the loss of revenue. That will
extend through the rest of this year and probably next year. We have not
sold the water we had anticipated. This last year has been the worst of the past
five years.
We have constructed record large storage reservoirs and large diameter pipelines
and once we are through, Salt Lake City should never go without water. We are
in a good position regarding the water supply and water delivery. Once we
extend the pipeline to North Temple and 2200 West to the CUP connection at
3800 West and 2100 South we will have the ability to deliver all of the
city's low-cost Deer Creek water to our service area. By 1985 we should have
the design and cost for the Little Dell Project.
r -2-s
We had the fire rating tests and the results will be out in March or April.
The flows on the west side are excellent. We have improved the fire flows in
the city with the construction of the reservoir and large pipelines.
- This spring there will be the Central Utah Project supplemental repayment
contract election. Currently they are renegotiating contracts. Salt Lake
County and the Metropolitan Water District are considering contracting for
the Jordan Aqueduct separately.
Sewer:
Mr. Hooton said that we have finished the near-term improvements and they
have greatly enhanced the operation of the facility. We are not having
problems with sludge. One thing that is significant is the wastewater flow
reduction. The facility was designed for 45 MGD and this chart shows the
effects of programs adopted by the city. Because user charges are based on
use we have realized a nine percent decrease in the amount of water used during
the winter months. Also, because of the Redwood Road trunk line replacement
and not renewing the Chesterfield contract we have gained a total of four
million gallons of additional capacity in the existing plant. During the
first eleven months of 1984 we were treating an average of 42.4 million gallons
per day. During the past three years flows have continued to go down. We
may find even more reductions in the flows as the wet cycle rescinds and the
ground water level lowers.
Mr. Tuddenham wondered about the possibility of us never getting back to what
we considered to be normal in terms of wet/dry weather conditions. Can we
continue to run on this level? Mr. Hooton said that we might be able to
defer in the second plant in the future because of these flow reductions We
will continue to remove storm drain connections, etc. , from the system, and
hopefully, further reduce nonwaste flows.
Mr. Hooton said our "trickling filter/solids contract process" pilot study is
working very well. We were considering standard filtration to meet higher
water quality standards, however, the pilot study is very encouraging at this
point. Mike Myers said that we are getting an effluent quality at five and
10 mil for BOD and suspended solids and we are expecting the process to be
stable throughout the winter.
Mr. Hooton said that based on that with the cash flow plan we would be looking
at 1995 before the rates will have to be raised. The pilot study will have
an impact on rates and the cost of services.
Mr. Hooton said on the sludge disposal plan we are now at a point where we
have a workable program. We will have to gain the regulatory agencies.
approval regading sludge injection.
Mr. Hooton said that on the site for the second plant we have to have a
master plan for the collection and trunk lines. We need to decide where it
will be. Flooding at the Great Salt Lake will affect the location. It
appears they will have to do diking and we will have to pump our flows from
our existing treatment plant over the dike.
Basically there are a lot of issues this coming year. We had a very successful
year. During the next year many of our projects will be finished.
1 '
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III. Program to aid elderly and poor who are unable to pay utility bills
--Mayor Wilson
Chairman Tuddenham introduced Dr. Edward Parker, city council member, and
_ Troy D'Ambrosio, representing Mayor Wilson who was unable to attend. Dr.
Parker complunented the group on the work that they contribute to the city.
Dr. Parker said that one day an elderly lady called him and told him she had
no additional income nor way to pay her bills. He wrote a letter to the
council and they thought that we should delve into it. They wondered about
attaching an additional amount to the bills to help the people in need.
Council staff has talked with the legal department. The Red Cross is the
organization that administers the program. It would be necessary for the
Public Utilities Department to approve the idea and an ordinance approved.
He feels that it would be a good thing to do. He would like this department
to consider this request. Governor Matheson is asking the legislature to set
money aside. He would like the staff to do more research into this matter.
Ms. Anna Wilson said that the needy must go through the social services
division and then they go through the Red Cross. Criteria must be must for
people to go on this program--they must be 60 or older, be disabled or handi-
capped, they must have a serious medial emergency and they must have received
a shut-off notice from the utility. This criteria must be documented with a
birth certificate and/or documentation from a doctor. They must first apply
through the Social Services Department for the heat program.
Mr. Ray Montgomery said that he would look at the direct-contribution-by-the-
city idea. He said that right now we are prohibited from making donations.
Mr. Troy D'Ambrosio, assistant to the mayor, said that the mayor wanted to
run this by the committee. We do need to do some more staff work on it.
Chairman Tuddenham said that he would expect that the needy would also need
help in repairing leaks, etc., also.
Councilmember Alice Shearer said she is concerned that we would not attract
many donations that the fuel and power customers would have. She would
suggest that we check into the contributions to donations. It should include
county customers.
Chairman Tuddenham said we should set up a committee and have a staff member
on it. He would like to have the individuals obtain information from the active
programs. Mr. Floor recommended that the staff get this information together
in preparation for the committee meeting. Chairman Tuddenham asked Ray
Montgomery to get the information back to us on questions we need more detailed
answers on.
IV. Public Utilities Audit Report - Arthur Young
Mr. Ken Dohn distributed copies of the "Financial Statements—Year Ended June
3U, 1984, with Report of Certified Public Accountants" which included letters
to the bond trustee and a management letter. He said that the utilities are in
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I
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a good financial position and had a good year even with the income being
down. The projects are doing what they are anticipated to do. There is
income to use in the future without going out for more bonding. On the new
construction activity we had $11 million on fixed assets during the year in
_water and $3 million in the sewer utility so we are moving ahead. He thanked
Mr. Hooton and the staff for their help during the past three years and said
the financial situation of the department is in good hands.
Mr. Floor asked Mr. Dohn his opinion if management has been responsive to
issues raised and have they been settled with efficiency. Mr. Dohn answered
yes. He said it is required by the contract and the management has been very
responsive to the requirements and in compliance with their requirements.
These comments have been refined from the original draft. The staff is doing
things right now to get them straightened out, and has been very happy to
work with the auditors.
V. Site for new wastewater plant to be located at the northwest quadrant -
James M. Montgomery Engineers
Mr. Dal Wayment showed flip charts which illustrated the major issues examined
in the preliminary site selection study process. He said four major sites
have been selected and summarized these sites' advantages and disadvantages
considering the following factors:
o Transfer line
o Collection System
o Nonplant Costs
o Flooding from Great Salt Lake
o Subsurface conditions
o Noneconomic factors
Mr. Wayment said that the conclusion they reached was that the northwest
quadrant plant should be constructed at the east site at approximately 4000
West and 500 South.
Mr. Hooton said he would recommend that we proceed with gaining an option on
the land and have the necessary public hearings to finalize the site selection
and purchase the property. We are satisfied with the selection when given
all factors.
Mr. Floor motioned that the committee adopt the engineer's recommendation
and ask the staff to focus the attention on the east site and investigate the
land acquisition to make a final determination at a future meeting. Mr.
Steenblik seconded this motion which carried unanimously.
The meeting adjourned at 1:55 p.m.
1
DEPARTMENT OF PUBLIC UTILITIES
YEAR END REPORT
INDEX
Sewer Utility Division
1 . Update Collection System
2. Report on Treatment Plant Construction
3 . Report on Sludge Injection Study
4. Update on Short Term Aeration Study
5 . Sewer Cash Flow
6. Flows
Water Utility Division
1 . Update - Little Dell , Strawberry-Deer Creek Exchange
and the Central Utah Project
2. Report on Meter Reading Devices
3 . ISO/Commercial Risk Services , Inc .
Public Fire Protection Survey
4 . Graphs
a. Department Statistics for Budget Years 1968-85
b. Accounts Receivable Balances for Years 1981-85
c . Operating Cost Comparison for Years 1980-85
d. Water Meters Replaced
e . Valves Exercised
Summary of PUAC Recommendations
WEE:dt
2DT: 28
•
1 t
UPDATE COLLECTION SYSTEM
We now have 765 miles of sanitary sewer lines in the collec-
tion system. These lines range in size from 8" to 78" in diameter
and in age from one to 100 years old . It contains many kinds of
sewer pipe, the majority of which is vitrified clay, there is also
considerable concrete and we have been allowing some PVC on a trial
basis.
For the past several years we have been televising the system
to check for inflow, breaks etc. The majority of the system has
been televised with about 75 miles being televised this year. Of
course when you check a system for the first time you find problems ,
and so far this fiscal year we have repaired 59 breaks in the
(; system. We repaired most of these areas with our own crews. On
400 , 500 and 600 North at about 550 West we found the ductile iron
pipe under the railroad tracks was in very poor condition and had
to be replaced by contract . We also contracted several other
problem areas, Kensington Avenue, 200 North, 400 South and Belmont
Avenue. We have several more areas which need attention for next
year , with several sections in 2100 South from State Street to 500
East . In 1985 we will be televising in the larger 18" diameter
lines. For this we will go to color television because the picture
quality is much better for detail of pipe condition. In the collection
system we have 21 sanitary lift stations and we also maintain 11
storm sewer lift stations for Public Works. This year we acquired
used , portable generators , mounted them on trailers , and wired all
the lift stations with quick connectors so when we have an emergency
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1
we can pump as long as necessary to keep the sewage flowing to the
treatment plant. Previously we depended on small portable gas pumps
in an emergency or power outage .
Sewer Line Maintenance
We have a lot of trouble calls for mainline plugs, with over
150 this past year. Our standard procedure is to send a man and a
high pressure truck to flush out the main. The quick response of
the maintenance people have kept serious problems to a minimum. We
have regular rodding and cleaning routes to keep the main lines
free. In problem areas where there is a lot of grease we clean
the lines more often, thus saving many serious problems before they
( happen.
REPORT ON TREATMENT PLANT CONSTRUCTION
The near-term improvements are nearly completed which included
the following projects : ( 1 ) Sludge thickeners , ( 2) Digester renovation,
( 3 ) A fourth digester has been constructed , and ( 4 ) the chlorine
contact basin. These projects were financed by the 1981 bond issue
at a cost of $4 , 193 ,000. Construction of the plant upgrade and
expansion will begin this spring with the first phase of construction
to rehabilitate the pretreatment plant and electrical systems .
REPORT ON SLUDGE INJECTION STUDY
We have also hauled 6 ,647 tons of sludge to the Hinkley farm
which is on Airport property, for disposal . As of Tuesday, December
11 , 1984 , all sludge hauled to the airport property has been plowed
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into the ground. When all the sludge at the
g plant site is placed
on airport property, we think we will be able to dispose of all
sludge at the plant on a yearly basis and eliminate accumulating
year after year as has been done in the past. This is in addition
to the sludge injection program which we have to find the most eco-
nomical way to dispose of our sludge.
UPDATE ON SHORT TERM AERATION STUDY
The pilot study for the short-term aeration is not complete ,
but it presently looks as if the results will be better than we had
hoped for with BOD and SS ranging between five and 10 PPM. It
appears that considerable savings can be made by using short-term
aeration rather than filters to achieve the polished secondary
standard.
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WASTEWATER PLANT FLOW REDUCTION
The programs to reduce flows at the wastewater plant have
been successful . Over the past three years a total of 3 .82
million gallons of flow have been measured and removed from
the treatment plant through conservation , replacement of
the Redwood Road trunk line , and cancelling the Chesterfield
Improvement District contract. Despite three successive
years and high groundwater table the plant flow has been
reduced for the first 11 months of 1984 to 42. 2 million
gallons per day.
Had the flow reduction program not been implemented
the plant flow would have been 46 MGD, exceeding the plant
design capacity. It is hoped that continued success in
removing unwanted waste flows will provide additional
capacity with the existing facility and defer the need for
additional facilities to meet the growth east of the inter-
national airport .
LWH:jg
47 :8
MGM
41.00•
44A0.
Fa MEA$UREO F�OMI REDUCTION
4741
4LIt
47,00�
44.34
4t,Ot
44.00.
40.54
.. 44.00-
0
0C 44.00.
44.77
rn /
43.00,
0
0
-J
4 t.00- 41.14 44.10
r r
tD 4441 4121 41.74
41.00.
Z
0
J 40A0- 311.7C1
31.00- 30.75
a1.00-
$7.00 -
1975 1976 non 1978 1979 1980 1981 ilit 11411 1984
YEAR
l
UPDATE
LITTLE DELL, STRAWBERRY-DEER CREEK EXCHANGE
AND THE CENTRAL UTAH PROJECT
In the fall of 1983 all of the major water agencies involved
in supplying water to the residences and businesses of Salt Lake
County worked out a Memorandum of Understanding which was to pro-
vide for future development of water sources to the County. From
the standpoint of Salt Lake City the two most important concepts
agreed upon in the Memorandum of Understanding were, (1 ) the
construction of the Little Dell Dam and Reservoir with support
from the Central Utah Water Conservancy District (CUWCD) in
funding the municipal and industrial (M & I) water portion of the
capital costs of that project and, (2) the acquisition by the
Metropolitan Water District of Salt Lake City (MWD) of 2/7 of the
Jordan Aqueduct system capacity (the Jordan Aqueduct and first
phase of the Jordan Valley Water Treatment Plant having already
been constructed) . This Memorandum of Understanding was approved
by the Salt Lake City Council , as well as by all of the other
water agencies that participated in the development of the Memor-
andum of Understanding.
The Board of Directors of CUWCD have postponed a decision on
the funds requested by MWD to finance the M & I costs of Little
Dell until completion of a financial audit of CUWCD' s finances.
Meanwhile , the Little Dell Project has been included as part
of the state-wide water plan being considered by Senator Finlinson' s
Legis
44 lative Committee , which will also be recommending funding on
a loan basis for the Little Dell Project as well as other state
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water projects . The MWD and the Salt Lake County have agreed to
share the costs of obtaining detailed engineering on the Little
Dell Project . Proposals have already been requested from five
engineering consultants . This engineering design study which
will produce firm costs for the Little Dell Project should be
completed by October/November of 1985 .
The projects included in the Memorandum of Understanding
which were desired by the Salt Lake County Water Conservancy
District (SLCWCD) , were the Strawberry-Deer Creek Exchange and
the Jacob-Welby Exchange . In the case of the Jacob-Welby Exchange
it was the responsibility of the SLCWCD to negotiate with the
Jacob and Welby Districts to obtain the necessary exchange agree-
( ment. All that has been accomplished to date, as far as these
negotiations are concerned, is that the SLCWCD has submitted a
proposed agreement to the Jacob and Welby Districts which is
unsatisfactory as far as those districts are concerned. No
personal negotiations have taken place. An agreement has been
submitted to effect the Strawberry-Deer Creek Exchange and nego-
tiations are presently underway by the parties involved in that
agreement . One of the points in this agreement causing some
difficulties is that the Strawberry-Deer Creek Exchange, which
involves the Deer Creek Reservoir, is only supposed to be a
temporary source of water until a permanent solution for supplying
the Central Utah Project water to the SLCWCD is developed .
Apparently the SLCWCD does not like the temporary nature of this
exchange , even though the Jordanelle Dam and Reservoir is planned
-'3_ '
for completion in the early 1990 ' s and should solve their quest for
a permanent water supply.
The Bureau of Reclamation and CUWCD are in the process of
negotiating a new contract to cover the costs of those aspects of
the CUP-Bonneville Unit which have not yet been completed . It is
anticipated that in April of 1985 the taxpayers of Salt Lake County
will be afforded the opportunity of voting on this proposed repay-
ment contract. Projected costs of C.U.P. water range from $60 to
$210 per acre foot .
WEE:dt
12/10/84
2DT: 20
ISO/Commercial Risk Services, Inc.
Public Fire Protection Survey
Insurance rating classifications are based on the survey per-
formed by ISO/Commercial Risk Services , Inc. , ( ISO) . The last sur-
vey which was completed for Salt Lake City was in 1974. As a result
of that survey Salt Lake City received a Class 3 fire insurance
rating. Early this year the city was contacted by this firm to
establish a time for a re-survey of this system. This survey began
in August of this year and involved both the City' s Fire Department
and the Public Utilities Department . When evaluating the adequacy
of the water supply the following factors are considered:
1. Peak Day Water Demand
2. Minimum Reservoir Water Levels Maintained
3 . Fire Hydrants :
a) Condition
b) Inspection Frequency
c) Capability of water system as determined
by hydrant flow tests
4. Pumping Capacities
A new Fire Suppression Rating Schedule was introduced by ISO in
June of 1980, replacing the 1974 guidelines.
Actual fire flow tests were conducted under the supervision of
ISO' s Field Rating Representative , Lyle J . Koller, with the assist-
ance of city crews . To begin with Mr. Koller selected only those
areas of the city where he suspected we might not have adequate
fire flows and pressures. There were 24 fire flow tests performed ,
two of which were in the University of Utah water system. As a
result of those tests the initial indication is that there is only
one area which was slightly deficient ; it is 4400 West and 700
South where there is only a long dead-end main and no watermain
grid. Other than that, major improvements to the water system,
such as the Victory Road Reservoir and the main supply line from
the Reservoir to 2200 West and North Temple , were evident in im-
proved hydrant flow test results. High hydrant flows were noted at
the Salt Lake International Airport , which showed a deficiency in
1974 , the Salt Lake International Center, University of Utah Re-
search Park , and even the Centennial Industrial Park met a needed
fire flow of 3000 gpm.
The overall indication given by Mr. Koller upon completion of
his survey here in Salt Lake City is that there is a good chance
that Salt Lake City may have improved its fire insurance rating .
WEE:dt
2DT: 26
( REPORT ON
METER READING DEVICES
In March of 1983 the Public Utilities Department selected an
automated meter reading device to replace our old meter book system.
Data Processing received delivery on these devices approximately
the end of May that year. Because Data Processing was busy with
other projects at that time it took a while to begin programming
the devices.
Various problems prevented us from reading with the devices
on July 1 , 1983 as scheduled. As we checked during the summer,
Data Processing told us that there were possible hardware problems
and Radix, who is the manufacturer, told us that it might be pro-
( gramming problems. We were finally assured by Data Processing that
we would have the devices tested and be able to read our meter
routes beginning November 1 , 1983 for our special sewer readings .
However, the problems were not worked out at this time and because
of the severe winter we put a hold on all testing and development
until the weather improved.
In the spring of 1984 we again involved Data Processing and
Radix but again had numerous problems and were never able to iso-
late the source . During this time period we set several deadlines
which were not met . On November 19 , 1984, in response to a letter
from Mr . Hooton to the president of Radix, we met with Mr . Allen
Reed and several of his people from Radix , together with two people
from Data Processing . At that time it was agreed that programming
was no longer a problem and Radix took all devices and hardware
r
back to the shop for a thorough check-up, repair, and update on
equipment. They delivered the equipment back to us on December 3
and we spent the balance of that week reading with the meter books
while personnel from Radix read parallel with the devices. We en-
countered no problems and since that time have been reading with
six of the devices . The only times we have been unable to read
with the devices have been due to the computer system being down or
the telephone lines between Data Processing and our building being
down.
We have had minor hardware problems which have been corrected
immediately. We are confident that all of the major problems have
been resolved and that we can implement the balance of the eight
devices into our reading system within the next few weeks. We had
already cut meter reading staff based on the devices being more
efficient and the readers reading more meters per day.
AW:dt
12/11/84
2DT: 23
-2-
WATER UTILITY FUND
( OPERATING COST COMPARISON
FOR YEARS 1980 - 85
SALARIES
15 — n OPERATIONS & MAINTENANCE
- OPERATING COST (without Depreciation)
14 — ; 14,014,445
.; (Budgeted)
.
13 — ,". 13,064,937
OPERATING REVENUE ..
. / (Est Actual)
12 — CASH COLLECTED ,%j 11,852,901
�- „or_
,�- 10,987,679
11 — I0,574�
K:4 6;285
10 -
9,461J€W
( 9 —
N 8 —
C
O
7 —
6,249�265
6,41T,148 6,590,4T8
6 —
5528992
5 064 523
5' —
r. .t
4 —
3 —
2 —
1 --
0 - ___. .�.• �.. .
F.T.E. 263 261 258 250 %4 250 %4
1980-81 1981-82 1982-83 1983-84 1984 -85
PUBLIC UTILITIES •
ACCOUNTS RECEIVABLE BALANCES
FOR YEARS 1981-85 .
Delinquent Amounts 1984`-85
4
3.21 .29 3.03
3
2.89
2.4
2
1 ?� -87 .. .82 .88 777 .78
4:71983-84
4
3.30 3.52
�3 - 3.02 2.90
2.63 2.62
2.33
2 - 2.05 1.99 2.01 2.11
1 - , 81 .94 79
7f77,777 ^
66 61 63 4p 58 49 54
0 1982-83
=4
3 - 2.73 2.88
2.47 237
2 - 1.84 2.00 2.19 2.22 2.22
1.83 1.78 1.88
-
_ . . 59 .48 .44 .41 :49 .52 .56
73 94
1981-82
4
3.21 3.32
3.18
3 - 2.84 2.86
2.41 I 2.43 2.27
2.19 2.11 1.94 2.07
2 -
55
N IA E E o t
>` n 8 a) a) c p T.- o c
Q O Z li 4
rtiDLR .., V I ,ILI I IGO / VIA! c.r
DEPARTMENT STATISTICS FOR BUDGET YEARS 1968-85
( SERVICE CONNECTIONS EMPLOYEES PER
t THOUSAND CONNECTIONS
6 to
85,000 3,50 n
g .,
E
80,000 .— - $ o -
14 ,6
3.00
75,000 '
70,000 _ c
2.50
IC e
65,000
I I n r e ,. m w o - N n 4 .
m m7 � .- 7 • . . .- . 7 o c m o m m wo _ ry •
WATER DELIVERED TO ENERGY COST ._ a
CONDUITS-ACRE FEET +o =o
O 1,000 e n
S $
90,000 m '- - cr. j m
- m O m J
C o n m - c 800
A N o
80,000 - - IL. ^
O o o O
v ^ .. fN i
70,000 m Z 600
Q
0
S
60,000 _ F
400
mwO - « nemmOOwo - Y++ 'im7 7r77- 2em:: m
o
AVERAGE ANNUAL ? n o a CAPITAL EXPENDITURES
WATER CHARGES FOR o = '- w
G m N. FINANCED GED fROU
CITY 9 COUNTY - +� n
RESIDENTIAL CUSTOMERS REVENUES MIM1441 -
$ 100.00 14' SOND I m m
o P
0 12' —
co
m o m ¢
Q i m
80.00 " j 10- o w: e
O
m 0 6' _. �e�m
40 ! pi
4
0
60.00 co 6- O m ^ 8
'"
O O1 - - �O mo
40.00 II i
1 w
0
WATER ` METERS
, REPLACED
(
8,000
Meter Replacement Program(79,700 In System) t, `.
Ten Year Program: 7,790 Replacements/Year a
15 Year Program: 5,310 Replacements/Year _
7,000
i
f
6,000
.
5,000
C.) ,
11.1 4,000
3,000
{
2,000
,000
�+i L e:".n i.r.. ' —au+M:.... env.. t -_-.':::‘,:a..L .'-L` - -
0
10
IN N � N � 0 0 Co
YEARS
VALVES EXERCISED
16,000
14 900
15,000 ,. ,:- ;>
•
14,000
13,250 Valves in system should be exercised annually.
13,000
12,000
x
F
1 1,000 r
10,000
9,000
8,000 "
Q
w
7,000
r
6,000
5,000
4,000 F :
n. w ., b t
3,000 . , x.,t,T.
r'
Y 1
,000 A r
2
li
1 ,000 � r .-f''4}t� V.:', �3 . i i;f - <; ;' (� ' y �`
02kl 1 L L, r-a$-s' 4 .t t
0
W Co W 2
YEAR
SUMMARY OF MAJOR P.U.A.C. RECOMMENDATIONS
TO MAYOR AND CITY COUNCIL
January
CUP: Mr. Steenblik recommended that a letter be written to
accompany Mr. Clyde ' s statement stating that the PUAC' s
position is the same regarding the CUP, that we recommend
that the Council meet with the CUP people to have their
questions answered and that they approve the project.
February
CUP Study: Mr. Floor motioned that we should not stand back
while an additional CUP study is undertaken. The PUAC took a
stand and the council should consider and support is recom-
mendation. He said that a meeting should be held for the
council to listen to Ed Clyde' s presentation on the CUP. The
PUAC would also like to attend that presentation and discuss
it with the council. Mr. Boyer seconded this motion with all
voting aye.
Wilderness Area : Mr. Floor motioned that the city support
the state' s congressional wilderness recommendation (which
excludes the Dog Lake area) provided it has the same conditions
as the Lone Peak Wilderness Area with regards to watershed
ordinances and fire protection. And furthermore , the Dog
Lake designation should be excluded as wilderness because of
potential hardrock mining and the proposed ski interconnect
system. Mr. Featherstone seconded this motion with all
voting aye .
March
Sewer Utility Fund: Mr. Floor motioned that we approve the
sewer utility budget ending June 30, 1985 as prepared by the
staff and recommend approval to the council. Mr. Bonnett
seconded motion with all voting aye .
Water Utility Fund: Mr. Floor motioned that we adopt the
water utility fund budget ending June 30, 1985 and recommend
to the mayor and city council a rate increase increasing
the minimum by $1 in the city and $1 .50 in the county and
raise the rate for 100 cubic feet after the first 1000
cubic feet from 31 cents to 39 cents in the city and from
46 to 58 cents in the county ( for an overall increase of
revenues of 25 percent) . Mr. Arnold seconded the motion
with all voting aye.
-2-
Ordinance relating to special services: Mr. Floor said
that once the owner transfers the responsibility for the
water to someone else that someone else should have to make
the arrangements for turnoffs . He motioned that the ordinance
be approved subject to the change (which would specify
written notices for termination of services ) and Mr. Arnold
seconded the motion with all voting aye.
April
(Meeting held with Mayor and Council )
May
June
Overview of 1984 flood as it affected the Department of
Public Utilities: Mr. Steenblik motioned that because of the
valuable information obtained through handling the floods we
should ask the mayor to have a summary report prepared to
document it . This should include Salt Lake County and other
entities that were involved. Mr. Bonnett seconded this
motion with all members voting aye .
Little Dell Project -- Private of Federal Construction -
Presentation by Jay Bingham: Mr. Arnold motioned that the
committee recommend to the mayor and council to strongly
consider going local and urge the Metropolitan Water District ,
etc. , to go ahead with the preliminary plans and make funds
available which are necessary to do the project. Also,
that all parties affected come to the conference table as
soon as possible. Mr. Featherstone seconded the motion with
all voting aye.
July
Recommendation for changes in the 201 Plan -- Amend wetland
treatment and wetland discharge for proposed Northwest
Quadrant wastewater plant: Mr. Featherstone motioned that
the committee write a letter to Mayor Wilson recommending
that we not approve the wetlands approach and amend the 201
plan as the polished treatment process . Mr. Arnold seconded
the motion which carried .
Water Supply Problems : Mr . Arnold motioned that Salt Lake
City and Salt Lake County are facing a crisis in years ahead
in water supply and distribution . There are water supplies
in the mountains but we have to get them to the faucets in
the homes . It is apparent that water supply and distribution
problems need to be brought to a head--that the public is
confused and it is necessary to resolve this important public
-3-
6 issue in a timely manner. The city and county need to be
decisive and provide leadership in solving this problem. Mr.
Featherstone seconded the motion which carried.
August
Site selection for the new Northwest Quadrant plant -- Sludge
disposal . A recommendation that sludge injection on land on
the Northwest Quadrant from the proposed new treatment facility
be abandoned : Mr. Arnold motioned that we recommend to the
city council to amend the 201 Plan that we not use sludge
injection as a method of sludge disposal ( at this plant
only) ; and that we not purchase the land at this time. Mr.
Steenblik seconded the motion with all voting aye .
Consider request by the city council to reduce the winter-
use reading dates for sewer charges : Mr . Arnold motioned
that inasmuch as he felt that the department was using the
most economical and fairest way to determine rates that we
recommend to the city council that we keep the same period
of time for readings, but clearly explain to them how the
rates are determined. Mr. Dunn seconded the motion which
carried.
September
�. Central Utah Project Bureau of Reclamation Repayment Contract:
Mr. Steenblik motioned that we go along with the concept of
local ownership of the Jordan Aqueduct from the Orem plant
to Bluffdale, including the plant and the related facilities
to 2100 South 3800 West where it would tie into the Salt Lake
City water system; we should move towards contractural control
and ultimate ownership; and that we would be willing to
recommend to the Salt Lake County Water Conservancy District
and Metropolitan Water District of Salt Lake City to work
together to operate facilities . Mr. Boyer seconded this
motion which carried unanimously.
October
November
December
: 3g
47 : 7
ri\BS-4
SALT LAKE CITY WATER UTILfTY
and
SALT LAKE CITY SEWER UTILITY
(ENTERPRISE FUNDS OF SALT LAKE CITY CORPORATION)
FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 1984
with
REPORT OF CERTIFIED PUBLIC ACCOUNTANTS
LETTERS TO BOND TRUSTEE
MANAGEMENT LETTER
SALT LAKE CITY
NORTHWEST QUADRANT
WASTEWATER TREATMENT PLANT
SITE SELECTION STUDY
JAMES M , MONTGOMERY CP
CONSULTING ENGINEERS , INC , � s
/ FACTORS CONSIDERED , \
• TRANSFER LINE
• COLLECTION SYSTEM
• NON - PLANT COSTS
• FLOODING FROM GREAT SALT LAKE
• SUB - SURFACE CONDITIONS
• NON - ECONOMIC FACTORS
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• COM Tn•C TOIS LEASING INC
SALT LAKE CITY
S
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TRANSFER LINE COST
ANNUAL
CONSITE COSTg(f ) - P J UMf WR7HE({O&M )
• NORTH 2 , 940 , 000 77 , 000 3 , 596 , 000
• EAST 4 , 935 , 000 98 , 000 5 , 769 , 000
• WEST 5 , 087 , 000 111 , 000 6 , 032 , 000
• 5 , WEST 5 , 741 , 000 118 , 000 6 , 746 , 000
REM MOW IMP MON MEM MIN AIM 1.11 AIM MN All ILI Ell MI IL 111111
EVALUATION MATRIX
PIPELINE ROUTE SELECTION
TOTAL
FACTOR P055 , W 5 N E
OPERATION 45 30 30 45 40
TOPOGRAPHY 10 6 8 8 10
CONSTRUCTION 10 4 10 6 10
ACCESSABILITY 10 5 10 6 10
COMPATIBILITY 15 15 15 10 15
UTILITY 5 5 3 5 0
EASEMENTS 5 1 2 3 5
TOTAL POINTS 100 61 78 83 90i
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COLLECTION SYSTEM COST
CONSTR , PUMP PRESENT
SITE COST ( * ) O&M ( * ) WORTH ( * )
• S , WEST 13 , 300 , 000 23 , 000 13 , 496 , 000,
• NORTH 15 , 400 , 000 60 , 000 15 , 910 , 000
• EAST 15 , 500 , 000 118 , 000 16 , 500 , 000
• WEST 16 , 500 , 000 113 , 000 17 , 461 , 000
-11.11111Ai 11111 31111 XII all RN all MN MI all MI all BR
TOTAL NON - PLANT COSTS
SITE TOTAL COST
* NORTH $ 19 , 500 , 000
* SOUTH
$ 20 , 500 , 000
* EAST $ 22 , 900 , 000
• WEST $ 24 , 000 , 000
10,
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I
I
GROUNDWATER
• LEVELS FROM 2 , 5 FEET TO 5 , 5 FEET
• RANKING
1 , EAST
2 , SOUTHWEST
3 , WEST
4 , NORTH
�. ... MEP MOO i i am a
SPREAD FOOTINGS
. VERY SOFT SURFACE SOILS
• LIGHTLY LOADED STRUCTURES
• ALL SITES EQUAL
mg N — — — t dm dm i i a a a
DEEP FOUNDATIONS
1 , EAST SITE
• DENSE SAND AT 20 FT ,
2 , SOUTHWEST SITE
• DENSE SAND AT 45 FT ,
3 , NORTH SITE
• NO BEARING LAYERS
• RUNNING SANDS AT 3 FT , TO 5 FT ,
4 , WEST SITE
• NO BEARING LAYERS
• RUNNING SANDS AT 3 FT , TO Livir
�,_ 5 F T ,
/ SAMPLING PROGRAM
IIIMINIMINIIL
WATER SAMPLES
• IRON ( mg / I )
• MANGANESE ( me / I )
• SODIUM ( mg/ I )
• PHENOL ( mg/ I )
• pH ( units )
• SPECIFIC CONDUCTIVITY tumhos/ cm )
• CHLORIDE ( mg / I )
• SULFATE ( mg / I )
• TOTAL ORGANIC CARBON ( mg / I )
• TOTAL ORGANIC HALOGEN tug / I )
s am no on MN I On MO IN r i
SAMPLING PROGRAM
SOIL SAMPLES
• SILVER ( mg/kg )
• ARSENIC ( mg/kg )
• BARIUM ( mg/kg )
• CADMIUM ( mg/kg )
• CHROMIUM ( mg/kg )
• MERCURY ( mg/kg )
• LEAD ( mg/kg )
• SELENIUM Cmg/kg )
g• i NA a a a i
TOTAL ORGANIC HALOGENS
SITE TOX ( 4/ I0
• NORTH 178
• SOUTH -
• EAST 63
• WEST 83
EVALUATION MATRIX
PLANT SITE SELECTION
FACTOR 701 , POSS , W N S E
• PHASING 20 5 5 15 20
• ACCESS 10 4 6 8 10
• CONSTRUCTION 30 5 10 25 30
• LOCAL IMPACTS 20 10 10 15 20
• LAND USE 10 2 5 2 10
• W/W REUSE 5 3 5 3 1
• RESOURCES 5 2 1 2 4
TOTAL POINTS 100 31 42 70 95
s
CONCLUSION
THE NORTHWEST QUADRANT PLANT SHOULD
BE CONSTRUCTED AT THE EAST SITE
'4 t
SALT LAKE CITY WATER UTILITY
and
SALT LAKE CITY SEWER UTILITY
(ENTERPRISE FUNDS OF SALT LAKE CITY CORPORATION)
FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 1984
with
REPORT OF CERTIFIED PUBLIC ACCOUNTANTS
1 o
QLA A MEMBER OF ARTHUR YOUNG INTERNATIONAL
1
aLJ LET V u U u ORLI K 8 50 South salt Lake Cain,Utah 140
1 Telephone: (801)359-7711
i
' The Honorable Mayor,
Members of the City Council and
Public Utilities Advisory Board
Salt Lake City Corporation
1
We have examined the accompanying balance sheets of the Salt Lake
City Water Utility and the Salt Lake City Sewer Utility, enter-
prise funds of Salt Lake City Corporation , at June 30, 1984, and
the related statements of income, changes in fund equity and
changes in financial position for the year then ended. Our exam-
inations were made in accordance with generally accepted auditing
standards and , accordingly , included such tests of the accounting
1 records and such other auditing procedures as we considered
necessary in the circumstances .
1 In our opinion , the financial statements mentioned above present
fairly the financial position of the Salt Lake City Water Utility
and the Salt Lake City Sewer Utility at June 30, 1984, and the
results of their operations and changes in financial position for
the year then ended , in conformity with generally accepted
accounting principles applied on a basis consistent with that of
the preceding year.
1a/Wihi4. a%rAN, ,912ra7-
1 September 28 , 1984
1
1
1
I
SALT LAKE CITY WATER UTILITY I
AND
SALT LAKE CITY SEWER UTILITY
(ENTERPRISE FUNDS OF SALT LAKE CITY CORPORATION) I
BALANCE SHEETS
June 30 , 1984 I
Total II
Water Sewer (memorandum
ASSETS Utility Utility only)
Current assets: IICash equivalents (Note 3) $ 6,583,282 $ 11,486,058 $ 18,069,340
Accounts receivable, less allowance for
doubtful accounts of $183,000 in the Water
Utility and $83,000 in the Sewer Utility 3,068,044 1,251,352 4,319,396
Other receivables, less allowance for doubtful IIaccounts of $100,000 in the Water Utility 223,467 10,048 233,515
Accrued interest receivable 136,385 102,886 239,271
Inventories of supplies 998,999 302,793 1,301,792
Total current assets 11,010,177 13,153,137 24,163,314 II
Restricted cash equivalents (Notes 3 and 4): II
Unexpended bond proceeds restricted for
specified capital improvements 1,941,156 3,072,310 5,013,466
Unexpended bond proceeds restricted for
Revenue Bond debt service 2,159,920 970,399 3,130,319 II
Amounts restricted for Revenue Bond debt
service 862,231 252,162 1,114,393
Amounts restricted for renewal and replacement 72,264 17,736 90,000
Amounts restricted for consumer deposits 414,824 - 414,824
Amounts restricted for reservoir and IIsupply line construction 918,423 - 918,423
Total restricted cash equivalents 6,368,818 4,312,607 10,681,425
II
Property and equipment:
Land and water rights 6,936,428 1,529,318 8,465,746 IIBuildings 7,699,044 8,274,127 15,973,171
Improvements other than buildings, principally
water and sewer lines 51,654,883 16,166,772 67,821,655
Machinery and equipment 4,786,996 5,638,107 10,425,103
Construction in progress 15,292,937 6,261,048 21,553,985 I
86,370,288 37,869,372 124,239,660
Less accumulated depreciation (19,534,624) (10,352,392) (29,887,016)
Net property and equipment 66,835,664 27,516,980 94,352,644 I
Long-term note receivable (Note 5) 3,436,000 - 3,436,000 I
Bond issue costs, less accumulated amortization 282,357 108,221 390,578
Investments in water company stock 854,160 - 854,160
$ 88,787,176 $ 45,090,945 $133,878,121 II
See accompanying notes . ( 91:; II
I
I SALT LAKE CITY WATER UTILITY
AND
SALT LAKE CITY SEWER UTILITY
I (ENTERPRISE FUNDS OF SALT LAKE CITY CORPORATION)
BALANCE SHEETS (CONTINUED)
IJune 30, 1984
I
dater Seiler Total
(memorandum
LIABILITIES AND FUND EQUITY Utility Utility only)
II Current liabilities:
Cash overdraft in pooled cash account of Salt
Lake City Corporation $ 3,394,195 $ 235,454 $ 3,629,649
Accounts payable 1,402,710 243,133 1,645,843
Accrued payroll 497,104 162,536 659,640
11 Accrued interest payable 544,445 179,439 723,884
Long-term debt due within one year (Note 6) 879,983 203,167 1,083,150
Contract retainages 75,219 143,944 219,163
I
Total current liabilities 6,793,656 1,167,673 7,961,329
Liabilities payable from restricted cash equivalents:
Long-term debt due after one year (Notes 4 and 6) 4,101,076 4,042,709 8,143,785
Consumer deposits (Note 4) 414,824 - 414,824
IIDeferred contributions for reservoir and supply line construction (Notes 1 and 4) 918,423 - 918,423
Total liabilities payable from restricted
cash equivalents 5,434,323 4,042,709 9,477,032
II
Long-term debt due after one year not associated
with restricted assets (Note 6) 20,750,770 3,443,840 24,194,610
I Noncurrent compensation liability (Note 2) 898,850 206,158 1,105,008
Commitments and contingent liabilities (Notes 9
and 10)
I
Fund equity:
Contributed capital:
Federal and state grants in aid 5,631,896 4,417,845 10,049,741
Municipality 3,218,421 11,336,874 14,555,295
Private 17,234,059 4,856,068 22,090,127
II
26,084,376 27,210,787 46,695,163
Less accumulated amortization (9,034,722) ( , 10,394) (16,245,116)
II Total contributed capital 17,049,654 13,400,393 30,450,047
Retained earnings:
Restricted (Note 4):
For Revenue Bond debt service 862,231 252,162 1,114,393
I
For renewal and replacement 72,264 17,736 90,000
Unrestricted:
Designated for claims and damages 150,000 150,000
Designated for capital improvements 131,129 1,710,000 1,841,129
Undesignated 36,644,299 20,850,274 57,494,573
IITotal retained earnings 37,859,923 22,830,172 60,690,095
Total fund equity 54,909,577 36,230,565 91,140,142
I
$ 88,787,176 $ 45,090,945 $133,878,121
I
See accompanying notes .
1
SALT LAKE CITY WATER UTILITY II
AND
SALT LAKE CITY SEWER UTILITY II(ENTERPRISE FUNDS OF SALT LAKE CITY CORPORATION)
STATEMENTS OF INCOME
Year ended June 30 , 1984 II
II
Total
Water Sewer (memorandumII
Utility Utility only)
Operating revenues: I
Metered sales $12,861,301 $ - $12,861,301
Charges for sewer services - 11,360,665 11 ,360,665
Charges for other services and IIother revenues 450,266 1,285,726 1,735,992
Total operating revenues 13,311,567 12,646,391 25,957,958 II
Operating expenses:
Cost of sales and services 8,540,867 4,453,227 12,994,094
General and administrative 2,446,812 658,968 3,105,780 II
Depreciation and amortization 1,335,198 929,745 2,264,943
Total operating expenses 12,322,877 6,041,940 18,364,817 I
Operating income 988,690 6,604,451 7,593,141
Other revenues: I
Interest income 1,461,878 1,133,393 2,595,271
Gain on sale of property and
equipment 34,862 4,320 39,182 I
1,496,740 1,137,713 2,634,453
Interest expense 1,942,088 640,046 2,582,134 II
Less capitalized portion (Note 1) 676,076 90,115 766,191
1 ,266,012 549,931 1,815,943 I
Net income $ 1 ,219,418 $ 7,192,233 $ 8,411,651
II
See accompanying notes . li
GD)
I
I SALT LAKE CITY WATER UTILITY
AND
SALT LAKE CITY SEWER UTILITY
I (ENTERPRISE FUNDS OF SALT LAKE CITY CORPORATION)
STATEMENTS OF CHANGES IN FUND EQUITY
IYear ended June 30, 1984
II
Water Utility Sewer Utility
I
Contributed Retained capital earnings Contributed Retained
capital earnings
Balance, June 30, 1983 as previously
I
reported $16,846,959 $37,074,666 $13,570,376 $15,454,550
Adjustment relating to accrual of
compensated absences (Note 2) - (887,565) - (233,405)
' Balance, June 30, 1983 as restated Net income 16,846,959 36,187,101 13,570,376 15,221,145
1,219,418 7,192,233
Contributions 656,099 - 246,811 -
I
Transfer of amounts equal to
depreciation on fixed assets
acquired by grants externally
restricted for capital acquisition
IIand construction (453,404) 453,404 (416,794) 416,794
Balance, June 30, 1984 $17,049,654 $37,859,923 $13,400,393 $22,830,172
II
II
II
II
II
II
II
IISee accompanying notes.
SALT LAKE CITY WATER UTILITY
AND
SALT LAKE CITY SEWER UTILITY
(ENTERPRISE FUNDS OF SALT LAKE CITY CORPORATION)
STATEMENTS OF CHANGES IN FINANCIAL POSITION
Year ended June 30, 1984
1
Water Sewer
Utility Utility
Source:
Operations:
Net income $ 1 ,219,418 $7, 192, 233
Items included in net income not
affecting working capital in the
current period :
Depreciation and amortization 1 , 335, 198 929, 745
Gain on sale of property and
equipment (34, 862) (4, 320) I
Increase in noncurrent compensation
liability 81 , 919 -
Working capital provided from '
operations 2,601 , 673 8, 117,658
Restricted assets made available to I
fund construction projects 3, 543, 070 1 , 531 , 369
Proceeds from sales of property and
equipment 3,487,562 21 , 447
Proceeds from issuance of long-term debt 3,436 ,000 -
Contributions 656,099 246, 811
Net increase in deferred contributions 140,790 Net increase in consumer deposits 77, 745 - I
13,942,939 9 ,917 ,285
Application: '
Additions to property and equipment 11, 219,768 3, 279,320
Payments and current maturities of
long-term debt 807, 179 201 ,628
Invested in long-term note receivable 3 ,436 ,000 -
Additions to water company stock 2, 530 -
15,465 ,477 3,480,948 I
Increase (decrease) in working capital $( 1 ,522,538) $6,436 ,337 I
See following page
for changes in components of working capital .
( 1),
II
I SALT LAKE CITY WATER UTILITY
AND
SALT LAKE CITY SEWER UTILITY
U
(ENTERPRISE FUNDS OF SALT LAKE CITY CORPORATION)
STATEMENTS OF CHANGES IN FINANCIAL POSITION (Continued)
Year ended June 30, 1984
II
I Water Sewer
Utility Utility
I Changes in components of working capital :
Increase (decrease) in current assets:
Cash and cash equivalents $ 745 ,748 $6 ,476 ,518
Receivables 138,044 (232,820)
IInventories of supplies 12 ,003 (13,704)
895,795 6,229, 994
IIncrease (decrease) in current liabilities:
Cash overdraft 1 , 643,098 235, 454
I Accounts payable 499,394 (340,488)
Accrued liabilities 160, 826 8, 784
Long-term debt due within one year 108 ,372 15 ,628
Contract retainages 6,643 (125, 721)
I2,418 ,333 (206,343)
IIncrease (decrease) in working capital $(1 ,522 ,538) $6 ,436 ,337
I
I
I
I
I
I
See accompanying notes.
I
1
i
1
1
1
1
1
1
NOTES TO FINANCIAL STATEMENTS 1
1
1
1
1
1
1
1
1
SALT LAKE CITY WATER UTILITY
AND
SALT LAKE CITY SEWER UTILITY
(ENTERPRISE FUNDS OF SALT LAKE CITY CORPORATION)
NOTES TO FINANCIAL STATEMENTS
June 30, 1984
11
1 . Summary of significant accounting policies
' Basis of accounting - The Salt Lake City Water
Utility and the Salt Lake City Sewer Utility are enterprise
' funds of Salt Lake City Corporation (the City) . The accom-
panying financial statements include separate Revenue ,
' Construction, Principal & Interest , and Renewal & Replace-
ment Funds for the Water Utility and for the Sewer Utility.
' These funds were established in accordance with bond
requirements.
' Revenues and expenditures for the Water Utility and
the Sewer Utility are recognized using the accrual basis of
' accounting. Revenues are recognized in the accounting
period in which they are earned and become measurable;
' expenses are recognized in the period incurred. Unbilled
Water Utility service receivables of $1 ,299,403 and unbilled
Sewer Utility service receivables of $652, 997 were recorded
' at year end.
' Inventories of supplies - Inventories of supplies are
stated at the lower of cost (first-in, first-out) or market .
Property and equipment - Property and equipment are
stated at cost , or in the case of contributed assets, at the
fair market value at the date of contribution. Depreciation
of property and equipment is computed using the straight-
' line method over the following estimated useful lives:
I
SALT LAKE CITY WATER UTILITY I
AND
SALT LAKE CITY SEWER UTILITY
(ENTERPRISE FUNDS OF SALT LAKE CITY CORPORATION)
NOTES TO FINANCIAL STATEMENTS
June 30, 1984
I
1 . Summary of significant accounting policies (continued)
Buildings 35 - 60 years
Improvements other than buildings 13 - 100 years
Machinery and equipment 5 - 30 years I
No depreciation is provided until construction is complete I
and the asset is placed in service.
Amortization - Amortization of bond issue costs and
bond discounts is computed on a method which approximates
the interest method over the life of the related bond issue
(15 years for 1981 series revenue bonds; 20 years for 1983
series revenue bonds) . At June 30, 1984, accumulated I
amortization of bond issue costs totalled $24, 299 in the
Water Utility and $7, 213 in the Sewer Utility. I
Contributions - The Water Utility and Sewer Utility I
have received contributions for aid in construction from
various sources . These contributions are credited directly
to contributed capital accounts and are not reflected in the
statements of operations. Amounts equal to depreciation on
property and equipment purchased with the contributed assets
are transferred from contributed capital accounts to retain-
ed earnings each year. I
i
�F 1
1
SALT LAKE CITY WATER UTILITY
AND
SALT LAKE CITY SEWER UTILITY
(ENTERPRISE FUNDS OF SALT LAKE CITY CORPORATION)
' NOTES TO FINANCIAL STATEMENTS
June 30, 1984
I
1 . Summary of significant accounting policies (continued)
Deferred contributions for reservoir and supply line
construction - Some contributions in aid of construction
' from land developers and private individuals impose obliga-
tions which must be satisfied before they can be recognized
as contributed capital . Such contributions are recorded as
deferred contributions when received and recognized as con-
tributed capital when the legal and contractual requirements
have been satisfied .
Retained earnings - Management has designated a por-
tion of retained earnings for possible claims and damages in
the Water Utility and for certain capital improvements to be
constructed in subsequent years by both Utilities.
Capitalized interest - In June, 1983, the Financial
' Accounting Standards Board (FASB) issued Statement of Finan-
cial Accounting Standards No . 62 (SEAS No. 62) "Capitaliza-
tion of Interest Cost in Situations Involving Tax-Exempt
Borrowings and Certain Gifts and Grants." By applying the
' provisions of SFAS No. 62, the Utilities have capitalized as
part of their construction costs $676,076 in the Water
Utility and $90 , 115 in the Sewer Utility for interest in-
curred during the current fiscal year.
1
SALT LAKE CITY WATER UTILITY
AND
SALT LAKE CITY SEWER UTILITY
(ENTERPRISE FUNDS OF SALT LAKE CITY CORPORATION) '
NOTES TO FINANCIAL STATEMENTS
June 30, 1984
2 . Accounting change
The National Council on Governmental Accounting I
(NCGA) has adopted Statement No. 4, "Accounting and Finan-
cial Reporting Principles for Claims and Judgments and '
Compensated Absences ." Beginning in 1984, the statement
requires the Utilities to record a liability for that por- '
tion of vacation and sick pay which has been earned as of
June 30, 1984 and which they estimate they will have to pay
in future years. The cumulative effect of this change was
to decrease fund equity at June 30, 1983 by $887,565 in the
Water Utility and by $233 ,405 in the Sewer Utility. The
effect of the change for the year ended June 30, 1984 was to
increase payroll related expenses by $87 ,263 in the Water
Utility and by $4, 574 in the Sewer Utility.
1
3 . Cash equivalents
Cash equivalents (certificates of deposit and U .S .
government securities) are stated at cost and are invest-
ments made by the Revenue, Construction , and Principal &
Interest Funds of the Water Utility and of the Sewer Util-
ity. Construction and Principal & Interest Fund investments
are held by an appointed trustee in accordance with the
various Revenue Bond Resolutions .
II
1 SALT LAKE CITY WATER UTILITY
AND
SALT LAKE CITY SEWER UTILITY
I (ENTERPRISE FUNDS OF SALT LAKE CITY CORPORATION)
I
NOTES TO FINANCIAL STATEMENTS
June 30, 1984
II
4. Restricted assets
IUnexpended bond proceeds - The Bond Resolutions re-
strict all bond proceeds and revenue earned on bond proceeds
Iremaining in the construction fund (see Note 6) to expendi-
tures for construction projects specified within the resolu-
IItions, and the payment of bond debt service.
IIAmounts restricted for revenue bond debt service -
The Bond Resolutions (see Note 6) require that a debt ser-
' vice reserve be maintained in the Principal and Interest
Fund that is equal to the "average aggregate debt service, "
I as defined , on outstanding revenue bonds and that a sinking
fund be established for the "accrued aggregate debt ser-
vice," as defined, on the outstanding revenue bonds. The
Iassets which have been restricted for Revenue Bond debt
service came from earnings from operations rather than bond
Iproceeds. Retained earnings has therefore been restricted
for this amount .
Amounts restricted for renewal and replacement - The
II Bond Resolutions (see Note 6) require that a renewal and
replacement reserve of $2, 500 per month be established until
a total of $300 ,000 has been reserved . Retained earnings
Ihave been restricted for the $90, 000 established through
June 30 , 1984.
I
I
SALT LAKE CITY WATER UTILITY
AND
SALT LAKE CITY SEWER UTILITY
(ENTERPRISE FUNDS OF SALT LAKE CITY CORPORATION) ,
NOTES TO FINANCIAL STATEMENTS
June 30, 1984
5. Long-term notes receivable
During the year, the Water Utility entered into a
series of agreements related to a parcel of land it had
purchased with the proceeds from the issuance of the 1983 B
Subordinated Revenue Bonds (see Note 6) . The purpose of the
agreements is to insure the preservation of the property as
a quality watershed. In exchange for the land, the City
received a $3,436,000 note due October 1 , 1988, which bears
interest at 9 .25%. Interest is due on the note semi-
annually at April 1 and October 1 . The note is secured by
the land which is held in trust until such time as the note
is satisfied by payment or by land transfers, as defined in
the various agreements. ,
6. Long-term debt
The following is a summary of outstanding long-term
debt at June 30, 1984: '
Water Sewer
Utility Utility
Revenue and subordinated revenue bonds:
1981 Series revenue bonds, 6.625%, due
1984-1997 $ 4,576,000 $
1983 Series revenue bonds, 5% to 9.25%,
due 1984-2003 17,270,281 7,854,719
1983 B Series subordinated revenue
bonds, 9.25% due 1988 3,436,000 -
Less unamortized discount (367,464) (165,003)
Total revenue and subordinated
revenue bonds 24,914,817 7,689,716
Watermain extension debt 817,012 -
$25,731,829 $7,689 6 '
�1 F
I
ISALT LAKE CITY WATER UTILITY
AND
SALT LAKE CITY SEWER UTILITY
II (ENTERPRISE FUNDS OF SALT LAKE CITY CORPORATION)
INOTES TO FINANCIAL STATEMENTS
June 30, 1984
I
6. Long-term debt (continued)
IWater Sewer
Financial statement classification Utility Utility
IAmount due within one year $ 879,983 $ 203,167
Amount due after one year associated
Iwith restricted assets 4,101,076 4,042,709
Amount due after one year not associated
with restricted assets 20,750,770 3,443,840
I $25,731,829 $7,689,716
The 1983 Series revenue bonds maturing on or after
April 1 , 1994 are subject to redemption, in inverse order of
IImaturities, based on the following:
Redemption price
I as a % of the
Redemption dates principal amount
I April 1 , 1993 through March 31 , 1994 103%
April 1 , 1994 through March 31 , 1995 102-1/2%
April 1 , 1995 through March 31 , 1996 102%
April 1 , 1996 through March 31 , 1997 101-1/2%
I April 1 , 1997 through March 31 , 1998 101%
April 1 , 1998 through March 31 , 1999 100-1/2%
April 1 , 1999 and thereafter 100%
I
The 1983 B Series subordinated revenue bonds are
Isubject to redemption at the election of the City at any
time at the principal amount , plus accrued interest .
I
SALT LAKE CITY WATER UTILITY I
AND
SALT LAKE CITY SEWER UTILITY
(ENTERPRISE FUNDS OF SALT LAKE CITY CORPORATION) I
NOTES TO FINANCIAL STATEMENTS I
June 30, 1984
I
6. Long-term debt (continued)
Long-term debt maturities and related interest costs I
are as follows:
Principal Interest
Year ending Water Sewer Water Sewer
June 30 Utility Utility Utility Utility I
1985 $ 879,983 $ 203,167 $ 2,071,582 $ 659,421
1986 963,019 210,981 2,031,569 648,247 I
1987 963,391 226,609 1,987,232 635,588
1988 915,763 242,237 1,937,280 620,859 111
1989 4,355,338 255,750 1,730,183 599,548
Years thereafter 18,021,799 6,715,975 12,737,254 5,326,105
Unamortized I
discount (367,464) (165,003) - -
$25,731,829 $7,689,716 $22,495,100 $8,489,768 I
The Bond Resolutions approved in conjunction with the I
issuance of the Salt Lake City Water and Sewer Revenue Bonds
provide, among other things, that , with regard to each Util- '
ity:
A. First , all revenues derived from providing utility I
services by the Utility shall be deposited into that
Utility' s Revenue Fund.
B. Then the operating and maintenance costs of the Util- I
ity shall be paid first by that Utility 's Revenue
Fund.
I
II SALT LAKE CITY WATER UTILITY
AND
SALT LAKE CITY SEWER UTILITY
I (ENTERPRISE FUNDS OF SALT LAKE CITY CORPORATION)
NOTES TO FINANCIAL STATEMENTS
IIJune 30, 1984
I
6. Long-term debt (continued )
1 C . Next , monthly transfers are made to the Principal &
Interest , and Renewal & Replacement Funds. The re-
quired monthly transfers to the Principal & Interest
I Fund equal one-twelfth of the next year 's debt ser-
vice. The required transfers to the Renewal &
Replacement Fund are $2 ,500 monthly for 120 months.
ID. Any remaining amounts in the Revenue Fund may be
applied to any lawful utility purpose.
IThe Revenue Bond Resolutions constitute a contractual
I agreement between Salt Lake City Corporation and the bond-
holders , under which the City has irrevocably pledged the
net revenues of the Utilities to the payment of the bonds .
IIThe bonds are obligations of the Water Utility and Sewer
Utility, and both Utilities have pledged their individual
Ifuture net revenues against the entire balance of the
revenue bonds outstanding. Net revenues are defined as the
Irevenues derived by the City from or attributable to the
Water Utility and the Sewer Utility, less all operating and
I maintenance costs. Under the terms of the Resolution , the
City covenanted that rates will be established to yield net
revenues equal to at least 1 .25 times the debt service to
Ibecome due in the next fiscal year.
I
The Subordinated Revenue Bond Resolution constitutes
a contractual agreement between Salt Lake City Corporation
and the bondholders under which the City has irrevocably
1 pledged the subordinated net revenues of the Water Utility
after payment of all amounts required in connection with the
Ioutstanding revenue bonds.
SALT LAKE CITY WATER UTILITY
AND
SALT LAKE CITY SEWER UTILITY
(ENTERPRISE FUNDS OF SALT LAKE CITY CORPORATION) ,
NOTES TO FINANCIAL STATEMENTS
June 30, 1984
6. Long-term debt (continued )
During 1983, the Utilities issued revenue bonds for
the purpose of paying part of the costs of certain construc-
tion projects and refunding and defeasing the 1982 series ,
revenue bonds. The purpose of the refunding was to reduce
interest costs. The 1983 series revenue bonds (1983 bonds)
bear interest ranging from 5% to 9 .25% while the refunded
and defeased 1982 bonds bore interest from 10.5% to 12. 5%.
The watermain extension debt represents the Water
Utility ' s liabilities to developers who have constructed '
watermain extensions that became part of the City ' s system.
The principal is payable over a ten-year period. Yearly
installments are based on water consumption in the areas
where watermain extensions were constructed.
7. Related party transactions
Expenditures for the year ended June 30, 1984 include
$463, 359 in the Water Utility and $162,099 in the Sewer
Utility for administrative services provided by other funds '
of the City. The Utilities also paid $311 ,062 in the Water
Utility and $125,000 in the Sewer Utility for fleet mainte- 1
nance and $264 , 155 in the Water Utility and $3,908 in the
Sewer Utility for data processing services provided by other
funds of the City. These charges, under terms of the 1981
Bond Resolution, do not exceed the cost of the services
provided.
I
SALT LAKE CITY WATER UTILITY
AND
SALT LAKE CITY SEWER UTILITY
' (ENTERPRISE FUNDS OF SALT LAKE CITY CORPORATION)
NOTES TO FINANCIAL STATEMENTS
June 30, 1984
7. Related party transactions (continued)
' During the year ended June 30, 1984, the Water
Utility charged the Sewer Utility $346, 051 for the Sewer
' Utility 's portion of the billing system costs and $28,471
for repair costs. The Sewer Utility charged the Water
' Utility $30 , 715 for relocation costs associated with water-
main expansion.
' During the year ended June 30, 1984, the Water
Utility paid $919,748 for water. purchased from and treated
by the Metropolitan Water Board of Salt Lake City. The
Utilities also included revenues of $570 ,442 in the Water
' Utility and $44,444 in the Sewer Utility from the sale of
services to the other funds of Salt Lake City Corporation.
8. Pension plans
The Water and Sewer Utilities, as enterprise funds of
the City, participate in several pension plans established
' by the Utah State Retirement Board. Contributions are based
upon participating employees ' annual salaries, at rates
determined by the State of Utah which are intended to fund
' current pension costs as they accrue and to fund past ser-
vice costs over a 40-year period. The Utah State Retirement
' Board does not segregate the assets and vested benefits of
the plans by unit within the plan. Therefore, it is not
' possible to determine the portion of the assets, vested
benefits or unfunded liabilities of the plans that are
applicable to the Utilities ' employees.
1
I
SALT LAKE CITY WATER UTILITY
AND
SALT LAKE CITY SEWER UTILITY
(ENTERPRISE FUNDS OF SALT LAKE CITY CORPORATION)
NOTES TO FINANCIAL STATEMENTS
June 30, 1984
8. Pension plans (continued )
The Utah State Retirement Board engages an indepen-
dent firm of actuaries at least biennially to estimate the
present value of accumulated benefits for the purpose of
evaluating the reserves for retired individuals, funding
ratios and contribution rates . Accumulated plan benefits
are those future periodic payments, including lump sum dis-
tributions , that are attributable to the service employees
have rendered and which are vested under the plan provisions
of the various systems . The present values of accumulated
plan benefits as of December 31 , 1983, the date of the most
recent available actuarial study , do not exceed the book
value of the assets . '
The Utilities ' contribution for the year ended June
30, 1984 was $676,836 in the Water Utility and $291 ,647 in
the Sewer Utility. The Utilities have no liability beyond
the amount of their annual contributions. '
9. Commitments ,
At June 30, 1984, the Utilities had construction con-
tract commitments in the approximate amount of $1 ,264,000 in
the Water Utility and $1 , 171 ,000 in the Sewer Utility.
Subsequent to June 30, 1984 additional commitments of
$1 , 593, 000 in the Water Utility and $2,254,000 in the Sewer
Utility were incurred.
SALT LAKE CITY WATER UTILITY
AND
SALT LAKE CITY SEWER UTILITY
' (ENTERPRISE FUNDS OF SALT LAKE CITY CORPORATION)
' NOTES TO FINANCIAL STATEMENTS
June 30, 1984
10. Self-insurance
The Utilities, as part of the City, are self-insured
for general liability claims. The City has established the
' Governmental Immunity Fund to pay these claims. The operat-
ing departments of the Utilities assume financial respon-
siblity for property damage losses.
Further, the Utilities, as part of the City, are
self-insured for employee health , accident , long-term dis-
ability, unemployment and workmen ' s compensation. Health ,
' accident , and long-term disability claims are administered
and paid by Educators Mutual Insurance Association (Associa-
tion) . The Association determines amounts to be paid for
such claims. The City ' s Employee Benefit Self-Insurance
Fund reimburses the Association with money advanced from
other City funds at amounts required to cover the fund 's
estimated liabilities .
' Any general liability claims against the Water and
Sewer Utility funds are paid solely by the funds mentioned
above.
11 . Subsequent event
On July 1 , 1984, a water rate increase to fund con-
struction projects and anticipated increased operating
expenses of the Water Utility became effective. The Water
' Utility anticipates that the increase will generate approxi-
mately $2,628,000 of additional revenue in the fiscal year
' ending June 30, 1985.
SALT LAKE CITY WATER UTILITY
and
SALT LAKE CITY SEWER UTILITY
LETTERS TO BOND TRUSTEE
SEPTEMBER 28, 1984
I
I
I
O
Q� A MEMBER OF ARTHUR YOUNG INTERNATIONAL
ARTHUR
)J' 1 n � 50 South Main,Suite 1400
wU if U Salt Lake City,Utah 84144
Telephone:(801)359-7711
Mr . LeRoy Hooton, Director of Salt Lake City Public Utilities and
The Salt Lake City Public Utilities Advisory Board
Salt Lake City, Utah
We have examined the balance sheets of the Salt Lake City Water
Utility and the Salt Lake City Sewer Utility , enterprise funds of
Salt Lake City Corporation, at June 30, 1984, and the related
' statements of income, changes in fund equity and changes in
financial position for the year then ended , and have issued our
' report thereon dated September 28, 1984. Our examination was
made in accordance with generally accepted auditing standards
and, accordingly, included such tests of the accounting records
' and such other auditing procedures as we considered necessary in
the circumstances.
1
In connection with our examination, nothing came to our attention
' that caused us to believe that the Salt Lake City Water Utility
and Salt Lake City Sewer Utility are not using their four separ-
ate funds (the Trustee investment balances of which at June 30,
1984 are shown in Schedule 1 attached) in accordance with the
' provisions of Resolution No. 100 Providing for the Issuance of
Water and Sewer Revenue Bonds adopted November 3, 1981. However,
it should be noted that our examination was not directed primar-
ily toward obtaining a knowledge of noncompliance with such
resolution.
11/21-r7-
September 28 , 1984
' Schedule 1
SALT LAKE CITY WATER UTILITY
and
SALT LAKE CITY SEWER UTILITY
SCHEDULE OF INVESTMENT BALANCES CONTROLLED BY TRUSTEE
at
June 30, 1984
Restricted and Accrued interest
' unrestricted investments receivable on
investments
controlled by controlled by
Trustee Trustee
Construction Fund $5 ,054 ,289 $ 32,349
Principal and Interest
(Debt Service) Fund 4, 162, 393 82, 320
$9 ,216,682 $114,669
I
1
I
1
1
Balances in the Revenue Fund and the Renewal & Replacement Fund
' are controlled by the Salt Lake City Water and Sewer Utilities.
I
I
Q1—I A MEMBER OF ARTHUR YOUNG INTERNATIONAL
111
eD 50 South Main,Suite 1400
� D� Ll M o Salt Lake City,Utah 84144
Telephone:(801)359-7711
' Mr. LeRoy Hooton, Director of Salt Lake City Public Utilities and
The Salt Lake City Public Utilities Advisory Board
Salt Lake City, Utah
We have examined the balance sheets of the Salt Lake City Water
' Utility and the Salt Lake City Sewer Utility, enterprise funds of
Salt Lake City Corporation, at June 30, 1984, and the related
statements of income, changes in fund equity and changes in
financial position for the year then ended, and have issued our
report thereon dated September 28, 1984. Our examination was
made in accordance with generally accepted auditing standards
and, accordingly, included such tests of the accounting records
' and such other auditing procedures as we considered necessary in
the circumstances.
I
In connection with this examination , we noted that one of the
covenants of Resolution No. 100 Providing for the Issuance of the
Water and Sewer Revenue Bonds adopted November 3, 1981 had not
been met . The covenant that was not met is as follows:
Section 6.07(a) requires, in part , that if payment for either
service (meaning both water and sewer service) is permitted
to become delinquent and then remain delinquent for a period
of 60 days, the water service must be discontinued.
The Utilities have numerous accounts that are delinquent and
have remained delinquent beyond 60 days and water service has
not been discontinued .
Except as previouslynoted , nothing came to our attention in
' connection with our examination that caused us to believe that
the Utilities were not in compliance as of June 30, 1984 with the
terms, covenants , provisions or conditions of Resolution No. 100
�° QUNIDIT2 mime
Providing for the Issuance of the Water and Sewer Revenue Bonds
adopted November 3, 1981 or the terms, covenants, provisions or
conditions or Resolution No. 101-1981 , Resolution No. 39-1982,
Resolution No. 16-1983 and Resolution No. 83-1983, which are
supplementary and amendatory resolutions authorizing the issuance
of the Series 81 , Series 82 and Series 83 Water and Sewer Revenue
Bonds and the Series 1983 B Subordinated Revenue Bonds. However,
' it should be noted that our examination was not directed primar-
ily toward obtaining knowledge of such noncompliance.
17/
September 28, 1984
I
I
I
1
i
QI-1 A MEMBER OF ARTHUR YOUNG INTERNATIONAL
i n n'TH nN if n�8 50 South Main,Suite 1400
Lr�lfl] v LJ V L Salt Lake City,Utah 84144
Telephone:(801)359-7711
i
Mr. LeRoy Hooton, Director of Salt Lake City Public Utilities and
The Salt Lake City Public Utilities Advisory Board
Salt Lake City, Utah
We have examined the balance sheets of the Salt Lake City Water
iUtility and the Salt Lake City Sewer Utility, enterprise funds of
Salt Lake City Corporation, at June 30, 1984, and the related
istatements of income, changes in fund equity and changes in
financial position for the year then ended, and have issued our
report thereon dated September 28, 1984. Our examination was
made in accordance with generally accepted auditing standards
' and, accordingly, included such tests of the accounting records
and such other auditing procedures as we considered necessary in
the circumstances.
i
In connection with our examination, nothing came to our attention
to indicate that the attached computation of ratio of net
revenues to aggregate debt service of the Salt Lake City Water
Utility and Salt Lake City Sewer Utility for the year ended June
30, 1984 (as the terms "net revenues" and "aggregate debt ser-
vice" are defined in Resolution No. 100 Providing for the Issu-
ance of Water and Sewer Revenue Bonds adopted November 3, 1981)
was not made in accordance with the provisions of Resolution No.
100. However, it should be noted that our examination was not
directed primarily toward obtaining knowledge of noncompliance
Iwith such Resolution .
1(j447
September 28 , 1984
i
SALT LAKE CITY WATER UTILITY
and
SALT LAKE CITY SEWER UTILITY
' COMPUTATION OF RATIO OF NET REVENUES TO
AGGREGATE DEBT SERVICE
Year ended June 30, 1984
Net revenues $11 ,772, 139
' Aggregate debt service:
Total revenue bond interest incurred during
the fiscal year, as shown in the June 30, 1984
financial statements $ 2, 582, 134
Add principal payments on revenue bonds during
1 the year 819, 000
$ 3,401, 134
Ratio of net revenues to aggregate debt service 3 .46 : 1
Minimum ratio required 1 .25 : 1
1
QO A MEMBER OF ARTHUR YOUNG INTERNATIONAL
QnTML (fin �/J' V n � 50 South Main,Suite
' w V�(1] if U Salt Lake City,Utah 84144
Telephone:(801)359-7711
1 Mr . LeRoy Hooton, Director of Salt Lake City Public Utilities and
The Salt Lake City Public Utilities Advisory Board
Salt Lake City, Utah
We have examined the balance sheets of the Salt Lake City Water
Utility and the Salt Lake City Sewer Utility, enterprise funds of
Salt Lake City Corporation , at June 30, 1984, and the related
statements of income, changes in fund equity and changes in
financial position for the year then ended, and have issued our
report thereon dated September 28, 1984. Our examination was
made in accordance with generally accepted auditing standards
and, accordingly, included such tests of the accounting records
and such other auditing procedures as we considered necessary in
the circumstances.
In connection with our examination, nothing came to our attention
to indicate that the consumer information for the year ended June
30, 1984 and listing of insurance policies at June 30, 1984 of
the Salt Lake City Water Utility and Salt Lake City Sewer Util-
ity, as reflected in Attachments 1 and 2, are not materially
accurate. In accordance with the provisions of Resolution No.
100, this information and listing are required to be provided to
the Bond Trustee. However, it should be noted that our examina-
tion was not directed primarily toward substantiating the infor-
mation reflected in Attachments 1 and 2.
azi-A04, t/Z./1/0
September 28, 1984
I
I
Attachment 1
ISALT LAKE CITY WATER UTILITY
I
and
SALT LAKE CITY SEWER UTILITY
IICONSUMER INFORMATION
II
Year ended June 30, 1984
IIWater Utility
I Number of metered water consumers at
June 30 , 1984 80 , 141
I
Number of unmetered water consumers at
June 30, 1984 105
I
Billed charges by the Water Utility:
Residential $ 8, 310, 351
Industrial 483 ,903
Commercial 2,439,274
I Miscellaneous 864 ,829
Special agreements 878, 708
I
$12, 977,065
Average monthly billing $13.49
II
Sewer Utility
1 Number of sewer accounts at June 30, 1984 46,660
I
Billed charges by the Sewer Utility:
Residential $ 4, 319,962
Commercial and industrial 6, 494, 825
Special agreements 815 , 863
I $11, 630,650
IAverage monthly billing $20.77
= I - r E I M M - - - = I ME =
Attachment 2
SALT LAKE CITY WATER UTILITY
and
SALT LAKE CITY SEWER UTILITY
LISTING OF INSURANCE POLICIES
at
June 30, 1984
Type Policy Limits Description
Property (all risk) INA Maudo $25,000,000 per occurrence* All risk, quake and flood
4007177 $10,000 deductible
$250,000 quake and flood
deductible
Boiler and machinery Continental $1,000,000 per occurrence $1,000 deductible
260 4737
Bond (1) Safeco 4368974 $1,000,000 Public official bond
(2) Hartford DDD8129 $500,000 per employee Faithful performance
Blanket position
(3) Hartford DDD8809 $100,000 Money losses inside and outside
building
$100 deductible
Liability Self insured
Auto physical Self insured
* On July 1, 1984 the loss limit was increased to $35,000,000.
SALT LAKE CITY WATER UTILITY
and
SALT LAKE CITY SEWER UTILITY
MANAGEMENT LETTER
OCTOBER 19, 1984
QI-1 A MEMBER OF ARTHUR YOUNG INTERNATIONAL
GT nR MOn n[8 50 South Main,Suite 1400
Lrzlll ll L! LI LIhJLI 11 LI vL Salt Lake City,Utah 84144
Telephone:(801)359-7711
I
October 19, 1984
Mr. Le
Roy Hooton, Director of SLC Public Utilities and
' The Salt Lake City Public Utilities Advisory Board
Salt Lake City, Utah
' We have examined the financial statements of the Salt Lake City
Water Utility and the Salt Lake City Sewer Utility (the Util-
ities) , enterprise funds of Salt Lake City Corporation, for the
year ended June 30, 1984, and have issued our report thereon
dated September 28, 1984. As part of our examinations , we made a
study and evaluation of the Utilities ' systems of internal
accounting control to establish the level of our reliance on such
' systems in determining the nature, timing and extent of other
auditing procedures necessary to enable us to express an opinion
on the Utilities ' financial statements.
IOur studies and evaluations were more limited than would be
necessary to express an opinion on the systems of internal
' accounting control of the Utilities taken as a whole. According-
ly, we do not express such an opinion. Because of its limited
nature, our studies and evaluations would not necessarily dis-
' close all material weaknesses or other conditions requiring
attention in the systems of internal accounting control .
1
SALT LAKE CITY WATER UTILITY
AND
SALT LAKE CITY SEWER UTILITY
MANAGEMENT LETTER
Year ended June 30, 1984
Present Condition Potential Error or Weakness Recommendations Management Comments
CONDITIONS REQUIRING ATTENTION
Our studies and evaluations disclosed
no condition that we believe to be a
material weakness, but did disclose the
following conditions as to which we
believe corrective action should be
taken or documentation (including cost
/benefit considerations) should be
prepared as to the reasons why correc-
tive action was not considered neces-
sary in the circumstances.
1. Accounts Receivable Allocation
Compliance
In situations where there are Although this situation has no immedi- Payments which do not include payment We concur with the recommendations
multiple receivable accounts for a ate financial statement impact, it stubs received for multiple accounts made and will implement a suspense
customer, payments which do not creates major reconciliation problems could be credited to a suspense account account and procedures to clear the
include payment stubs received for the individual customer accounts. by the bank. The suspense account account on a timely basis.
through the lock box system are In addition, this could cause the aging detail should identify the customer,
being allocated equally to each of of the receivable balances to be in list the amount of the payment and the
the accounts rather than crediting error and management decision about date the payment was made. Procedures
each account as billed. collectibility and collection efforts should then be established to ensure
could be based on incomplete or erron- that the account is cleared on a timely
eous information. basis by: 1) resolving the question of
which accounts and in what amounts the
payment should be allocated, and 2)
transferring the credit to those
accounts. The suspense account should
be cleared to a zero balance at month
end.
2. Investments
A. Currently, the utilities are Financial information with respect to The City utilities should review in- The treasurers office has implemented
responsible for recording accrued interest receivable was suffi- vestment reports monthly for interest changes to their existing investment
interest receivable on invest- ciently misstated to require audit received on unmatured Treasury Notes. program to adjust for interest re-
ments based on monthly invest- adjustment. Adjustments should be made manually and ceived on unmatured Treasury Notes,
ment summaries. These sum- shold be recorded or alternatively, the and any manual adjustments will be
maries do not adjust accrued investment summary report should be recorded on a timely basis by the City
interest for interest on modified to adjust accrued interest for Utilities.
Treasury Notes received before interest received on unmatured invest-
maturity. This requires these ments.
accruals to be made manually.
At June 30, 1984, the City
Utilities did not record these
manual accruals.
B. Water and Sewer Utility The identification of the components by The Utilities' management should re- We concur with the recommendations
investments are being made fund in the Water and Sewer Utility quire that all Water and Sewer Utility made and it is our intent to work with
with cash from the various investments is difficult and very time investments he reconciled from the the treasurers office to make sure
funds of the Water and Sewer consuming. investment summary to the investment Water and Sewer Utility investments
Utility without the cash con- safekeeping advices on a monthly basis. are reconciled against the investment
tributions of the individual summary on a monthly basis.
funds being identified on the
safekeeping advices due to
bond resolution requirements.
SALT LAKE CITY WATER UTILITY
AND
SALT LAKE CITY SEWER UTILITY
MANAGEMENT LETTER
Year ended June 30, 1984
Present Condition Potential Error or Weakness Recommendations Management Comments
3. Donated Lines
A. Water and sewer line donations Fixed asset and contribution informa- Procedures should be established so We will implement controls which will
were recorded at year end tion with respect to donated lines may that donated lines are not recorded insure donated lines are not recorded
prior to the completion of be misstated. until the assets being donated are until constructed and approved.
construction of the lines by constructed and documentation support-
contractors. An audit adjust- ing the fact that construction has been
ment was required to correct completed.
this account at June 30, 1984.
B. The amount capitalized for The financial records may be misstated, Procedures should he established for We will enforce contracts which re-
donated water and sewer lines because the estimates may not represent the Utilities to require actual cost quire actual cost information to be
is generally based on an esti- the actual costs. We were able to information from donors before the submitted by contractors installing
mate made by a member of the determine, based on alternative proce- Utilities approve the donated water and water and sewer lines by implementing
Utilities' engineering depart- dures, that this condition did not have sewer lines for use. This would elimi- a new policy of withholding contrac-
ment rather than based on the a material impact on the financial nate the time spent by the Utilities on tors bonds until costs are submitted.
actual cost incurred by the statements. However, this may not be engineering estimates and provide
donor. the case in future years. accurate data for the financial
records.
We concur with the recommendation and
C. The Sewer Utility did not When support for transactions is not Good internal accounting control re- will require supporting documentation
retain support (actual cost required to be retained, control over quires that supporting documentation is to be kept on all donated lines.
data or basis for estimating proper valuation of transactions is retained for all transactions including
cost) for some of their impaired. those related to contributed lines.
donated lines.
4. Inventory
Included in inventory are many old, Since periodic reviews are not being We recommend that a periodic review of We concur with the recommendation made
slow moving parts. Although these made, these old, slow moving parts may the inventory take place to determine and plan to review our existing inven-
parts are not usable in the current become obsolete as new lines are com- whether replacement of old water and tory on an annual basis.
construction of water and sewer pleted. If these parts do become sewer lines has caused these parts to
lines, they are being retained to obsolete and are not removed from or become obsolete.
maintain and repair existing lines. written down to realizable value in the
inventory detail, future financial
statements would he misstated.
5. Fixed Assets
The fixed asset detail records A significant amount of clerical effort The Utilities need to work with data We recognize this problem and it is
supporting disposals and deprecia- is required for correcting the prob- processing so that programming changes our intent to work with City informa-
tion require many manual correc- lems. can be made to ensure that disposals of tion management services and City
tions and adjustments to properly fixed assets can have depreciation finance to resolve it during the com-
reflect fixed asset activity during expense calculated on the disposals ing year.
the year, as the existing system during the year of disposition accu-
does not provide depreciation for rately.
current year disposals.
r 1
SALT LAKE CITY WATER UTILITY
AND
SALT LAKE CITY SEWER UTILITY
•
MANAGEMENT LETTER
Year ended June 30, 1984
Present Condition Potential Error or Weakness Recommendations Management Comments
STATUS OF PRIOR YEAR COMMENTS
The following comments were included in
our previous management letter dated
October 25, 1983. We noted that some
action has been taken on several
matters mentioned, but we feel that the
following comments still merit the
continued attention of management.
1. Accounts Receivable System
The current accounts receivable Because the aging serves as one of the The program that produces the aging of We recognize this problem and have
aging program ages customer estimation processes for doubtful accounts receivable should be modified requested programming changes.
accounts based upon the number of accounts, the allowance may require so that aging is based on the billing
bills issued instead of billing adjustment if the aging is not correct- date instead of the number of bills
dates. This causes incorrect ed. issued.
agings on accounts with more than
one billing per normal billing
cycle.
2. Work Orders
The Utilities do not allocate a Capitalized costs of improvements may Overhead should be charged to the We will start working on a system to
portion of their indirect costs or be understated if the actual cost does appropriate work order and included in allocate overhead costs to all work
overhead (general and administra- not include a portion of overhead costs the amount capitalized and billed back orders.
tive costs), other than a portion which are now being expensed. The to contractors. A study should be
of direct supervision costs to amounts billed to construction in pro- performed to determine a reasonable
construction work orders. cess accounts may not include the full method to allocate overhead to work
costs to the Utilities. orders.
3. Inventory Costing Method
All inventory is valued at the most Inventories may be misstated. However, If feasible, management should adopt a The City has programmed and is imple-
recent invoice price regardless of we were able to determine at June 30, valuation method which reflects the menting a new computerized inventory
the quantity purchased on the most 1984 that because of turnover, inven- actual cost of inventory on hand. system.
recent invoice. This method does tories were materially correct.
not always reflect the actual cost
of the inventory on hand.
' These conditions were considered in determining the nature, tim-
ing and extent of audit tests applied in our examinations of the
Utilities ' financial statements and this report does not affect
our report on those financial statements dated September 30,
1984.
The management of the Water and the Sewer Utilities is respons-
ible for establishing a system of internal accounting control .
In fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and
related costs of control procedures . The objectives of a system
are to provide management with reasonable, but not absolute ,
' assurance that assets are safeguarded against loss from unauthor-
ized use or disposition, and that transactions are executed in
accordance with management ' s authorization and recorded properly
to permit the preparation of financial statements in accordance
' with generally accepted accounting principles .
' Because of inherent limitations in any system of internal
accounting control , errors or irregularities may nevertheless
' occur and not be detected . Also, projection of any evaluation of
the system to future periods is subject to the risk that proce-
dures may become inadequate because of changes in conditions, or
' that the degree of compliance with the procedures may deterio-
rate.
This report is intended solely for the use of management and
' should not be used for any other purpose. We would be pleased to
discuss the matters reported or to respond to any questions at
your convenience.
Very truly yours ,
LEROY W. HOOTON, JR.
DIRECTOR DEPARTMENT OF PUBLIC UTILITIES
JOSEPH S. FENTON WATER SUPPLY & WATERWORKS TED L. WILSON
SUPERINTENDENT, WATER RECLAMATION WATER RECLAMATION MAYOR
WENDELL E. EVENSEN, P.E. 1530 SOUTH WEST TEMPLE /a
SUPERINTENDENT SALT LAKE CITY, UTAH 84115 / V
WATER SUPPLY&WATERWORKS
Pa. 41,4e(66iid
January 18 , ;1985
Honorable Mayor Ted L. Wilson
300 City and County Building
Salt Lake City, UT 84111
Dear Mayor Wilson:
Re : Public Utilities Advisory Committee
Enclosed are the minutes of the Public Utilities Advisory
Committee meeting of December 19 , 1984 , which were approved
at the committee meeting of January 17 , 1985 , and the Public
Utilities financial statement prepared by Arthur Young.
I recommend that the minutes be approved in the mayor' s
executive meeting and filed in the city recorder' s office .
Sincerely,
t .a a Q ti 7
r
LEROY W. HOOTON, R.
Director
:jg
Enc.
cc : City Council
JAN2 S ISE
Gat moue