The Board of Directors and the Finance Committee of Brooktrails Township Community Services District met for the annual budget meeting Saturday, April 9, 2005 at 9:00 a.m. in Brooktrails Community Center.
A. PLEDGE OF ALLEGIANCE
B. ROLL CALL
Roll call showed the following Directors present: Ziady, Horrick, Pohlson, Skezas and Orth. Also present were Finance Committee members Chris Brown and Chuck Harden and General Manager Chapman. Finance Assistant Joanne Cavallari was also present.
REPORT ON CLOSED SESSION
None.
C. ADDITIONS/ADJUSTMENTS TO THE AGENDA
None.
D. MINUTES OF PREVIOUS MEETINGS
None.
E. SPECIAL PRESENTATION
None.
F. PUBLIC HEARING
None.
G. PUBLIC COMMENTS
None.
H. CONSENT CALENDAR
None.
I. ACTION AGENDA
1. Review of Draft Budget for Fiscal Year 2005-06. General Manager Chapman reviewed the draft budget by means of transparencies and commentary. He said that he does not expect the City of Willits sewer audit figures until May 15 and therefore could not prepare an accurate sewer budget, but could only go on history. He made some draft budget updates after the April 5 Finance Committee meeting. He mentioned he did not intend to raise water or sewer monthly base rates, but that golf rates would increase.
General Manager Chapman said he had successfully rearranged financing with Greg Aanestad, USDA Rural Development for the clearwell project's overrun, but that we will have to go into some cash reserves because USDA requires a $100,000 contingency within the project.
Mr. Chapman reviewed a report of cash on hand. He said that despite the ERAF cuts, the General Fund had increased from $148,000 June 30, 2003, to $178,000 expected June 30, 2004, but was then expected to drop from $178,000 down to $97,000 June 30, 2005, and then subsequently drop to $60,000 June 30, 2007. Director Ziady voiced she did not believe that the ERAF shift will end in two years as promised by the State; she feared using up the reserves in reliance on the Governor's promise.
Chris Brown, Finance Committee member, asked for the figures that were known about the Willits sewer plan project. Mr. Chapman stated the current estimate was $11.1 million net, noting the project was now expected to go to bid in March 2007. Director Skezas noted that sewer rates could be adjusted at any time, when we receive more information.
Director Pohlson said previous rate increases had consistently received public comments that these not be imposed all at once, when it is known they are coming, but by increments. She said also that the sewer tax assessment ordinance needed to be changed and used differently. She suggested a $2.00 increase since we know the expense is coming. President Orth said that we can anticipate the Willits sewer project will increase in cost, as our clearwell project has. He discussed raising rates for inflation, due to increased electric, purchasing and fuel costs, and suggested a minor $1.00 increase. Director Horrick suggested that since we do know we will have to pay our share of the Willits project, we should raise rates. General Manager Chapman said he calculated the operational cost share will run about $170,000 for capital, plus chemical costs of about $145,000. He said the District had been paying almost $20,000/month for 10 or 11 months and he suspected we are in a possible credit situation with the City. Director Ziady supported paying $1.00/month more now and letting it accumulate in reserves.
Fire revenue will increase from $161,000 to $278,000 and this department was expected to transit to self-sufficiency in the future. Mr. Chapman said a slight subsidy will still exist to the Golf Enterprise Fund and a loan still needs to be paid there between Golf and the Sewer department. In other rates he pointed out that lot merger fees will be increased due to dramatic fee increases by the County, and will now be $175.00 for the first two lots, and $35.00 for each additional lot. Photocopy costs will increase to $1.00 a page. Director Pohlson said she did not feel that cost could be justified; Mr. Chapman said he felt much more than that could be justified. Joanne Cavallari commented that the County charges $2.50 per page. Returned check fees of $13.00 will be instituted. Director Pohlson said that for grant purposes she felt the District should reference its continuing responsibilities for golf course operations; Mr. Chapman concurred.
General Manager Chapman reviewed pending projects. He noted an anticipated additional well being scheduled for the fall, and that based on comments from the Board, we will probably hire a water witcher. Recreation grant funds showed about $40,000 remaining for park improvements; he pointed out the $15,000 being set aside for matching funds for the Thimbleberry Trail bridge grant. Telemetrics are still being installed. Mr. Chapman pointed out a scheduled $30,000 tank liner for October 2005 as a definite project. He clarified that the Fire Department is not now pursuing a thermal imaging device after all, but in its stead is seeking a grant of about $60,000 for radio equipment (3% match or $3,500). The compound yard is in process. He referred to the Willits Creek by-pass project, which has now changed as a result of an idea by Robert Melluish that reduced the project cost from $50,000 to $10,000. In another matter, the need for a third pressure relief station in Spring Creek was discussed.
General Manager Chapman stressed you can only work on so many projects simultaneously. He said that after completion of the current major projects we will turn our attention to dredging in about two years. President Orth said he was concerned that we are not putting money into the environmental process for the dredging yet, and asked the General Manager to keep in mind the opportunity to use the rubber spillway environmental process as a basis for the dredging environmental process. Mr. Chapman noted raising Lake Emily by any degree could affect lakeside landowners.
President Orth said he would want off-site storage to start being prioritized above raising Lake Emily 15 feet, as that was the reality of where we are going. He said once dredging is finished, additional water should flow into off-site storage; the other directors concurred. Director Pohlson stated a 2 million gallon tank will support 41 SFRs for 5 or 6 months. A brief discussion ensued about a 218 election.
In more budget matters President Orth asked about transfers to Recreation; Joanne Cavallari explained the complex multi-step process of paying back interest and principal separately. Director Pohlson asked if these repayments could be suspended for the next two years; she felt the General Fund could not afford to pay these currently.
Director Ziady asked if we should raise our connections fees. Mr. Chapman recommended against this; he said you have to conduct an engineer’s study to do this. Director Pohlson voiced that the cost of fire and other costs should all be in our development fees. She said the ratepayers should not pay for new hookups. Director Skezas said this should be part of the planning session. Director Ziady suggested the budget meeting should come prior to the planning meeting annually; Mr. Chapman suggested the planning meeting be in May.
Director Pohlson said she did not see anything in the budget for a fire safe plan. Mr. Chapman said that is General Fund; he said there has just been a two-hour meeting on the Fire Safe Council's $50,000 grant. Director Pohlson said we just have to acknowledge that we are working hand-in-hand with them.
Mr. Chapman discussed setting up a recreation reserve fund; he suggested taking a percentage of the net gain of the General Fund, such as 5%. Director Ziady said the Recreation/Greenbelt Committee would like to have something like this set up. Director Pohlson moved to transfer the franchise fee to a new recreation fund. Mr. Chapman objected to transferring the entire amount if the General Fund cash position dropped to less than $50,000. Director Ziady said she somewhat agreed with Mr. Chapman's objection and that it should be a percentage of increase to the recreation fund due to economic reality. After a lengthy discussion Director Pohlson moved that at this time $5,000 be put into a new recreation budget to be used to implement the greenbelt plan, and that this be addressed every year. Director Pohlson and Director Ziady clarified this was $5,000 in the budget now from the franchise fees, not 5%. Director Ziady seconded the motion. President Orth clarified this was to help them implement a neighborhood by neighborhood plan. Director Skezas said that the funds so transferred should not be spent without Board approval. Director Ziady said it would have to be. Roll-call vote was as follows:
AYES: Directors: Ziady, Horrick, Pohlson, Skezas, Orth
NOES: Directors: None
ABSENT: Directors: None
President Orth reiterated the sewer rate situation, saying that the General Manager could come back at any time, but asking again whether there should be incremental increases as opposed to large increases all at once. Director Skezas said he would support a cost of living increase for all fees. He said once the City of Willits audit came in and our own audit was completed, we could meet in July and adjust according to better facts. General Manager Chapman gave the cost of living percentage as 3%. The Board discussed an inflation increase and it appeared consensus was reached. Mr. Harden commented that the increase at 3% would be an uneven amount and consensus was quickly reached that it should be rounded up to $1.00. Director Skezas moved to increase the water and sewer rates by $1.00 each; the motion was seconded by Director Horrick and it carried unanimously.
J. ADDITIONS TO FUTURE AGENDAS.
None.
K. SPECIAL REPORTS
None.
L. PUBLIC COMMENTS
None.
M. ADJOURNMENT
Director Skezas moved to adjourn, and President Orth declared the meeting of April 9, 2005 closed at 10:58 a.m.
CHARLES A. ORTH
President Orth
MICHAEL V. CHAPMAN
Secretary to the Board of Directors
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