BROOKTRAILS TOWNSHIP COMMUNITY SERVICES DISTRICT
BOARD OF DIRECTORS
BROOKTRAILS COMMUNITY CENTER
24850 Birch Street, Willits, CA 95490
April 20, 2002
The Board of Directors and the Finance Committee of Brooktrails Township Community Services District
met in special session on April 20, 2002 at 9:00 a.m. in Brooktrails Community Center.
A. PLEDGE OF ALLEGIANCE
B. ROLL CALL
Roll call showed the following present: Directors Pohlson, Venturi, Orth and Skezas; Finance Committee members Bill Jack, Chris Brown, and Chuck Hardin. Also present were General Manager Chapman, Superintendent of Utilities Wendell Wilson, and Board candidates Jack Housman, Mike Phelan, Randy Eads, Ed Horrick and Carol Gee.
C. ADDITIONS/ ADJUSTMENTS TO THE AGENDA
D. MINUTES OF PREVIOUS MEETINGS
E. SPECIAL PRESENTATION
F. PUBLIC HEARING
G. PUBLIC COMMENTS
H. ACTION AGENDA
1. CONTINUED REVIEW OF THE FISCAL YEAR 2002/2003 PROPOSED BUDGET
General Manager Chapman began with a summary of his statement of assumptions and an overview of the budget development process. He pointed out that the budget was tackling three challenges at once, cash flow, fund balance problems and infrastructure.
Utilizing the overhead projector, he began with a review of the combined funds budget, focusing on the expense for sewer treatment, water plant operations, contract services, legal fees, and contingency.
Calling attention to page 15, he emphasized the importance of the forecast, using the Fire Department and General Fund as an example. Finance Committee member Chris Brown asked for clarification of the effect of development and lot reduction on fire department revenues. Former General Manager and Board candidate, Mike Phelan voiced concern that the administrative expenses were being funded disproportionately out of the property tax revenues.
General Manager Chapman next reviewed the sources of revenue by fund. Director Orth commented that a recent recreation bond was passed at the March 5th election, and raised the question whether those funds may be used to repay the loan from the sewer fund to the golf course. President Skezas suggested separating the grant funds in the budget.
In response to an inquiry from President Skezas, General Manager Chapman pointed out an error in the Personnel Summary on Page 28. The Water Operator III allocation to the General Fund should be .05, not .50. Discussion ensued concerning the time allocations.
Moving on, he reviewed the capital outlay items on page 10. Randy Eads asked for clarification of the term "compelled by the State." Superintendent of Utilities, Wendell Wilson, explained the issues that must be addressed regarding the clear-well and charcoal filters. He read excerpts from correspondence from the State Water Quality Control Board directing the District to meet their standards. General Manager Chapman stated the importance of staying "pro-active" on the issues.
He provided an update on recent correspondence with the State Water Resources Control Board concerning the District's water rights application. He reported that the District would be hiring an hydrologist to conduct a study to determine appropriate connection fees.
Chris Brown provided information on grant money available for water and wastewater systems.
Calling attention to page 37, General Manager Chapman reviewed the summary page of the replacement reserves schedule. He pointed out that the District is currently $1.6 million behind in its reserve schedule, and at current dollar values the assets are wearing out at a rate of $327,000 per year. He stated his goal of accumulating funds by setting aside $100,000 per year into the reserves and stressed the importance of converting the reserves into infrastructure.
A break was called.
BREAK at 10:23 a.m. - RECONVENE at 10:38 a.m.
General Manager Chapman next reviewed the personnel summary and wage allocations to each department. He confirmed that the numbers took into consideration projected increases in health insurance and workers compensation costs.
Beginning with the Water Fund on page 21, he reviewed the projected expenses. Mr. Wilson answered questions concerning the expenses in the Water Fund. General Manager Chapman explained each of the footnotes.
Randy Eads questioned the substantial increase in the Bad Debt expense. General Manager Chapman explained that he and the auditor had written off all debts that were not realistically expected to be collected. Mr. Eads urged the General Manager to obtain requests for proposals when hiring consultants.
Moving on to Water Connection Fees, he explained that his numbers were based upon development of 13 new homes. President Skezas commented that there were no increases proposed to the connection fees.
Moving on to the Sewer Fund, General Manager Chapman called attention to the chart on page 9, pointing out the need for the users of the system to cover the projected operating costs, including debt and the cost of the Environmental Impact Report. Chris Brown felt that if the $106,000 debt was for expansion of the system it would be appropriate to use connection fees. General Manager Chapman pointed out that if there were a moratorium on development, all of the expenses would have to be covered by the existing users, and suggested the question be addressed as a part of the study on connection fees. He asked the Board of Directors if they were supportive of his proposed rate. Directors Venturi, Pohlson and Orth voiced their support. President Skezas voiced concern that sewer rates had increase by 104% over the last 11 years, while inflation was only 3% per year. Discussion ensued concerning the argument that sewer rates were artificially low for many years.
Moving on to the Fire Fund, he commented that no reserves were budgeted until such time as a tax measure passes. He explained that the $8,000 in revenue from grant funds which was shown in the General Fund would be separated, as suggested by President Skezas. Therefore, there would be no $5,000 transfer from the General Fund to the Fire Fund. Randy Eads inquired about the transfer from the Franchise Fee. General Manager Chapman explained that the Franchise Fee goes into the General Fund, and the auditor had instructed him that he must be in the black in the General Fund prior to transferring funds out.
He next provided a brief explanation of the Tax Revenue Anticipation Notes (TRAN) program which would assist with cash flow in the Fire Fund and General Fund. He commented that utilizing such funding would alleviate the public perception that water fund money is being used for other purposes.
Mike Phelan spoke against the program, suggesting that the District borrow money, with interest, from the Water or Sewer Funds. Wendell Wilson reminded the attendees that the Sewer Fund loaned $184,000 to the Golf Course which was to be repaid at the rate of $27,000 per year, then ultimately extended for an additional thirty years to avoid rate increases, dropping the payments to $2,300 per year.
General Manager Chapman asked the Board for their opinion on the TRAN notes proposal. Director Venturi asked the General Manager to prepare a cash flow statement including the funding and repayment of the TRAN notes financing for consideration at the next Board meeting. Director Pohlson spoke against the program. She suggested reallocating the administrative costs to the Enterprise Funds. Director Orth spoke in favor of the program, noting that improving public perception would boost voter approval of the fire tax. President Skezas also asked to see a breakdown of the numbers, and questioned the allocation of wages and benefits.
In response to questions, General Manger Chapman reviewed the projected State and County Charges, Other Expenses, Vehicles, Telephone, Propane, and Utilities Expense in the Fire Fund. Director Pohlson suggested an energy audit be conducted to cut costs.
A break was called for lunch
BREAK at 12:07 p.m. - RECONVENE at 12:37 p.m.
General Manager Chapman began the afternoon session with a review of the Ambulance Fund, noting that the ambulance was no longer operating, therefore the budget was zero. The vehicle was for sale, with an estimated value of $10,000 to $15,000. He stated his intention to repay the service clubs for the repair to the transmission, reimburse the General Fund, and transfer into the Fire Fund. Questions were addressed concerning EMT training.
Randy Eads encouraged the Board to work out the areas of fiscal uncertainty prior to putting another fire tax measure on the ballot.
Director Orth commented on the need for the next tax measure to focus on basic fire department operations, treating ambulance and abatement as add-on programs and separate elections. Director Pohlson suggested separating the abatement program from the fire department.
2. CONSIDERATION OF PROVIDING ADDITIONAL FINANCING FOR THE FIRE FUND AND GENERAL FUND THROUGH TAX REVENUE ANTICIPATION NOTES (TRAN NOTES)
I. SPECIAL REPORTS - GENERAL MANAGER
i. Significant Correspondence received since last meeting:
v. Possible upcoming agenda items
J. PUBLIC COMMENTS
Director Orth moved to adjourn and President Skezas declared the meeting of ENTER DATE closed at p.m.
MICHAEL V. CHAPMAN
Secretary to the Board of Directors