Water Resources Board

MINUTES MURFREESBORO WATER RESOURCES BOARD March 23, 2021 The Murfreesboro Water Resources Board met on Tuesday, March 23, 2021 in the conference room at the Operations and Maintenance Building, 1725 S. Church Street. Consistent with the Governor’s Executive Order, members of the Water Resources Board participated by electronic means as has been determined necessary to protect the public health, safety, and welfare in light of the COVID-19 pandemic. Present at the meeting were Board members: Dr. Al Carter, Mr. John Sant Amour, Mr. Ron Crabtree, Ms. Kathy Nobles, Mr. Kirt Wade, and Ms. Madelyn Scales-Harris. Also present were Darren Gore, Michele Pinkston, Valerie Smith, Doug Swann, Roman Hankins, Steve Tate, Sharon Seibert, Marshall Fall, Matt Powers, Alan Cranford, Joe Russell, Andy McCrary, Alandria Barker, Travis Wilson, Linda Sullivan, Brent Fowler, and Ronnie Martin along with other members of the public. The Consent Agenda was presented for the following considerations: A. Consider SRWTP 2021 chemical bid – Bids were opened on March 1, 2021 for water treatment chemicals to be used at the Stones River Water Treatment Plant. There were five chemicals bid this year. The price of the chemicals will be reflected in the FY22 Operating Budget with a contract price through June 30, 2022. Staff recommended the Board recommend to City Council approving the chemical bid from the following responsive and responsible bidders as identified below. Estimated Company Name Chemical Unit Price Annual Expense Brenntag Citric Acid $6.500 $16,000 Brenntag Sodium Hydroxide $0.1600 $5,000 Brenntag Sodium Bicarbonate $0.1995 $10,000 Carmeuse Calcium Oxide $0.129125 $255,000 Univar Sodium Chloride $0.1780 $55,000 Staff has previously worked with all the suppliers. All chemical suppliers have a good working relationship with the Department for the chemicals being supplied. B. Consider purchase of Vocantas Interactive Voice Response (IVR) support renewal – Vocantas Interactive Voice Response (IVR) system was installed in 2015. Staff implemented this system shortly after installing our Customer Information System software. The system is used for the following purposes: 1) Allow customers to access account information (bill amounts, balances, due dates), Page 48 Water Resources Board Minutes March 23, 2021 Page 2 2) Allow customers to make payments and 2) Notification from MWRD to customers of a pending interruption in service due to unpaid past due balance. 2020 key data from the IVR: - Over 22,000 payments - Over 75% of calls from customers were handled via the IVR, reducing the number of calls that would go to a clerk - Approximately 20,000 outgoing calls to customers. Staff recommended the Board approve the support renewal in the amount of $11,890. Cost will be expensed over period of support. Funding will come from FY21 and FY22 operating budgets. C. Consider proposal from Jobe, Hastings & Associates for the Water Resources Department Audit and the Stormwater Fund Audit for the year ending June 30, 2021 – Jobe, Hastings & Associates submitted a proposal to perform the annual audits of Murfreesboro Water Resources Department and the Murfreesboro Stormwater Fund as of June 30, 2021. Staff recommended the Board accept the proposal as presented. The proposed fee is $29,300. As the audit is performed during the subsequent fiscal year, funding will come from the Professional Services expense account in the FY22 budget year. This amount is an $800 increase of the combined audit fee for the FY20 audits. D. Consider SCADA firewall configuration – In September 2020 the Water Resources Board and City Council approved Waypoint Solutions to configure and install firewalls for our Supervisory Control and Data Acquisition (SCADA) networks at the water and wastewater plants. This was completed in January. At the time that Waypoint was contracted, the plan was for WRD staff to complete the configuration of the firewalls. Given the importance of a secure firewall to protect our water and wastewater operating facilities, the ongoing risk of cyber intrusion, and the recent intrusion of a Florida water plant, securing these firewalls has become the highest priority. Staff recommended the Board approve the Statement of Work with Waypoint Solutions in the amount of $10,560 to complete the configuration and securing the SCADA firewalls at the water and wastewater plants. Cost will be paid from the FY21 Operating Budget. A motion was made by John Sant Amour to accept the Consent Agenda as presented and it was seconded by Kirt Wade. The Board voted unanimously to approve. The February 23, 2021 Board Minutes were unanimously approved as presented. The Board considered SSR Engineering Task Order 20-41-011.0, Stones River Water Treatment Plant Switchgear Improvements. The switchgear is over thirty years old and many of the components are obsolete. This presents problems with repairs and replacement of items in the switchgear. In addition, the switchgear is located Page 49 Water Resources Board Minutes March 23, 2021 Page 3 outside and the housing of two of the switchgears is in poor condition. The recommendation was for the Department to consider moving the equipment inside a building which would greatly extend its life and make repairs safer in all weather conditions. Staff requested SSR to provide a proposal for design and construction engineering services for the switchgear improvements. Staff reviewed multiple options identified by SSR and elected to proceed with the option to replace the switchgear in its entirety in a more centralized outdoor lineup in lieu of new switchgear inside a new standalone building. SSR provided the revised and finalized scope for this project that will include new switchgear including new breakers, primary and secondary disconnects, and remote racking mechanisms. It will also include some key safety equipment such as incorporating arc-extinguishing switchgear which will enhance safety for the operations and maintenance staff at the SRWTP. The projected construction cost for these improvements is $870,000 with the projected engineering and construction administration costs of $93,920 for a total projected project cost of $963,920. The project has a contingency located in the projected construction cost of $145,000. Funding will come from rate- funded capital reserves. Staff recommended the Board to recommend the City Council approving SSR’s Engineering Task Order and the Switchgear Improvements project per SSR’s estimate. Kirt Wade made a motion to approve. Kathy Nobles seconded. The motion unanimously passed. The Board considered Salem Highway Phase 2 easement offers. The final plans for Salem Highway Widening from Old Fort Parkway to I-24 has currently been submitted to TDOT to be included in their contract for construction. In January staff determined there were 14 properties in which the Department needed water and/or sewer easements. A proposal for appraisals was approved from Boozer & Company in the amount of $36,400. Draft appraisals have been received and per those appraisals, easement offer amounts have been prepared for each property based on the easement size and type. It is typical for the City to offer 50% of the appraised land value for permanent easement and 10% per year for temporary construction easement. In this case, since it is anticipated for the widening to span two years, the offer for temporary construction easement is 20%. Staff recommended the Board recommend approval in the amount $407,350 to purchase water and/or sewer easements and if easements are not obtained within a reasonable amount of time, then also approval to move forward with condemnation. Other impacts from this project, are Engineering in the amount of $30,450 and the upgrade of a portion of water main estimated at $86,750. There are adequate reserves to fund this amount. Kathy Nobles made a motion to approve. Kirt Wade seconded. The motion unanimously passed. Page 50 Water Resources Board Minutes March 23, 2021 Page 4 The Board considered outside City sanitary sewer request for proposed Rutherford County Fire and EMS Station on Walter Hill Elementary School (WHES) property. Rutherford County has requested outside city sewer service for a proposed County Fire and EMS Station on a portion of the WHES property. Sewer service will be provided by connecting to an existing private sewer pump station and forcemain which currently serves the WHES. Sewer service to this facility meets consideration criteria due to a Fire and EMS Station meeting a higher benefit to the public than annexation affords. Staff recommended the Board recommend approval to City Council serving the proposed Rutherford County Fire & EMS Station as an outside the City sewer customer. All sewer improvements will be paid for by the County. John Sant Amour made a motion to approve. Ron Crabtree seconded. The motion unanimously passed. The Board reviewed results of Mercury Blvd Pump Station & Flow Monitor Basin 9A study. The Study has concluded that in the future, with required system upgrades of the Mercury Blvd Sewer Pump Station (SPS) #31 and the Oakland SPS #13, the flow from Flow Monitor Basin 10-4 can be rerouted comfortably to Flow Monitor Basin 9A. These improvements are only recommended after construction of the Northeast Regional Pump Station (NERPS) is complete. With the recommendation to limit the density of development within Basin 10A-3 & 10A-4, staff requested and the Board approved of a study of the Mercury Blvd Pump Station, within Basin 10A-4, as well as gravity sewer mains and Pump Station #13, within Basin 9A. This study was to determine whether the flow coming to the Mercury Blvd station could be pumped to Basin 9A in order to free up capacity within Basins 10A-3 & 10A-4. Per this study, the alternatives were to: 1. Do nothing, or 2. Replace Mercury Blvd SPS and pump to the 12” sewer along E. Main St (MF10), or 3. Replace upsize Mercury Blvd SPS and reroute force main out of Basin MF10 to Basin 9A and evaluate sizing of the Oakland SPS #13. Alternative No.1 is not a viable alternative, because the Mercury Blvd SPS will require replacement in the near future. It is quickly reaching 60 yrs. old, therefore has exceeded its useful life. Alternative No.2 is not an alternative as it would not allow the Department to lift the more restrictive density requirement over and above the Sewer Allocation Ordinance of 2.5 single family units per acre (sfu’s/acre) no matter the zoning. Alternative No.3 is ultimately the best long-term solution to afford Flow Monitor Basin 10 and downstream to continue to develop and redevelop. This Basin 10 encompasses Basins 10-3, 10-4 and MTSU. However, these improvements are not feasible until the Northeast Regional Pump Station is constructed. Overall rough estimate for these improvements is approximately $6.33M. Page 51 Water Resources Board Minutes March 23, 2021 Page 5 The Board considered FY2024 Pro Forma and FY2022 Rate recommendation. The Murfreesboro Water Resources Department was provided a cost of service study (COSS) from Jackson Thornton Utilities Consultants for FY2019. That study was presented at the March 3, 2020 Board meeting. Jackson Thornton has since that time provided staff a pro forma for FY2024. The FY2024 pro forma was run using two scenarios: 1) Scenario “A” that assumes no new debt was added between FY19 and FY24. This assumes using reserves on hand to pay for $49,000,000 in capital projects. 2) Scenario “B” where $49,000,000 in debt (20-yr @ 3%) is incurred to pay for the Northeast Regional Pumping Station and Force main, Overall Creek Pump Station upgrades, as well as the necessary capital equipment to perform full scale biosolids drying at the Water Resource Recovery Facility (WRRF). Full payback of the total loan amount was assumed to start in FY2024. The chart below is a combined look at both water and sewer revenues. The most relevant number is the $3,049,614 “excess revenues” over and above anticipated expenses, or $45,831,260 minus $42,781,646. The assumptions of the No Debt scenario demonstrate a 7.1% over-recovery in FY24. Historical COS Studies and FY24 Pro Forma (No Debt Scenario) Page 52 Water Resources Board Minutes March 23, 2021 Page 6 The following chart is also a combined look at both water and sewer revenues with the assumption of $49,000,000 in debt service (20-yrs @ 3% fixed interest). The most relevant number is the $1,006,004 “excess revenues” over and above anticipated expenses, or $45,831,260 minus $44,825,216. The assumptions of the $49M in debt scenario demonstrate a 2.2% over-recovery in FY24. Historical COS Studies and FY24 Pro Forma ($49M Debt Scenario) While both of these scenarios demonstrate an over-recovery of anticipated revenue to cost of service expenses, there is a small issue associated with water rates not fully supporting the cost of service associated with water related expenses in FY24. The over-recoveries charted above entail a subsidization of sewer related revenue covering water related expenses. From a cost of service standpoint, this is not an ideal position and staff recommends avoiding it from occurring. No new debt is associated with water expenses during the timeframe between FY19 and FY24, so debt service does not affect increased expenses; therefore, the increase of $1,724,152 is associated with operations and maintenance only. Also, MWRD’s water system is encompassed by Consolidated Utility District of Rutherford County; therefore, no new revenue derived from growth has been integrated into the FY24 pro forma. Using these assumptions, the water revenues are expected to fall short in an amount of $(956,210) as compared to expenses in FY24, under-recovering (6.1)%. Page 53 Water Resources Board Minutes March 23, 2021 Page 7 A proposed rate design for meter sizes 5/8” to 2” below by adjusting the minimum annually as tabulated below recovers approximately 20% of the under-recovery anticipated for FY24. Making these adjustments over a 4-yr period would make up a majority (approximately 80%) of the “gap” of the anticipated ($956,210) shortfall. Table 1: Proposed Minimum Monthly Charge Adjustments Meter Size FY20 Total FY21 Proposed Difference # of Added (INCH) minimum minimum Accounts Revenue 5/8” $8.22 $8.72 $0.50 24,917 $149,501.00 1” $19.18 $20.71 $1.53 688 $12,668.01 1-1/2” $41.10 $43.77 $2.67 359 $11,508.82 2” $65.76 $69.05 $3.29 464 $18,307.58 3” $164.40 $164.40 $0.00 96 $0.00 4” $328.80 $328.80 $0.00 34 $0.00 6” $685.00 $685.00 $0.00 17 $0.00 8” $685.00 $685.00 $0.00 1 $0.00 Total 26,576 $191,985.41 MWRD staff is recommending a water rate increase for FY22 consistent with Table 1. An updated cost of service study will be conducted for FY21 after the Department receives our audit, and the water rate design may be adjusted for FY23 or FY24 based on those findings. MWRD’s current rate design meets the affordability index for 1-person through 5-person homes. The good news is that the pro forma for FY24 also meets the current 2019 HUD affordability indexes. However, the cost of service for FY19 and pro forma for FY24 do show the need to increase the minimum monthly fees rather substantially and flatten out the commodity charges. Staff recommended the Board recommend a rate increase for water minimum monthly fees for 5/8” through 2” meters consistent with Table 1 for FY22. Rate revenue for water and sewer is anticipated to equal or exceed that which was collected in FY19, or $43,247,652, and exceed the estimated cost of service expenses for FY22 at $42,308,245. Kirt Wade made a motion to approve. Ron Crabtree seconded. The motion unanimously passed. Staff presented and discussed the Water Resources Dashboard Performance for February 2021. Staff presented the Financial Reports for the year ending February 28, 2021. There being no further business, the meeting was adjourned. ______________________________ Alphonse Carter, Jr., Vice Chairman Page 54