LRPC

Shareholder Service Line Replacement Program

As mentioned in the March Bubbler President’s Report, the LRPC was tasked at the January 2019 BOD Meeting to review the shareholder lateral service line replacement costs and provide our findings and a recommended implementation plan to the board. As has been communicated to the shareholders at prior meetings, the cost of new service lines from the meter at the street to the house (since this is on the shareholder’s property and not in the public right‐of‐way) cannot be funded through the USDA loan.

Based on the LRPC analysis, there are currently a total of 1,714 connections that will have meter boxes. Of those, 553 (32%) of the residences previously paid to relocate their service line from the rear of their lot to the street, and 976 (57%) of the residences will be required to replace their service line once the new meter is installed as part of the USDA construction project. The remaining 185 residences (11%) will not be required to move their service line.

Based on the estimated cost to replace the service lines, and the potential USDA project budget risks that must be managed over the next year, it was concluded by the LRPC that funding this from our reserves would not be feasible. As a result, a Zero Interest Loan Program (limited to shareholders experiencing financial hardships) was recommended by the LRPC and adopted by the BOD at the March Meeting. Drafts of the loan program ‘Loan Agreement” and “Loan Application” have been completed by BLSMWC General Counsel and Staff, and are currently under review by the LRPC. The goal is to review and approve the loan program at our May 11th BOD Meeting and immediately thereafter make it available to those shareholders that qualify.

Asset Management Plan

A meeting was held with MC Engineering April 11th to review the Asset Management Plan progress to‐date, and discuss the remaining process and scope of tasks to complete. The completed plan will describe the characteristics and condition of our infrastructure assets, the levels of service expected from them, planned actions to ensure the assets provide the expected level of service, and financial strategies to implement the planned actions. The plan will answer the following questions:

• What we own (Asset Inventory)
• Where each asset is located (Geographical Information System)
• What is it worth (Value of each asset)
• How we operate (Optimal service level for each asset)
• What is the condition of the assets (Risk of failure/Consequence of failure)
• What we need to do with each asset (Maintain or Replace)
• How much will it cost and how will it be funded (Financial Plan)

Before constructing the Asset Management Plan, the first step is to conduct a complete asset inventory. This will serve as the basis for our plan. The asset inventory should include: (a) a listing of all the assets we have; (b) where each asset is located; (c) the value of each asset; (d) when they were built or bought; (e) their predicted lifespan; and (f) the estimated replacement cost of each asset. The efforts thus far have focused on inputting data for the GIS mapping of all assets (completed) and building the asset inventory database structure and inputting the assets. Completing the Asset Inventory still requires populating the remaining entries for c, d, e, and f directly above.

At this stage in the plan development, MC Engineering is on target with their proposed hours and dollars. At the April 11th meeting, 65 hours were authorized to complete populating the remaining asset inventory entries mentioned above by month‐end April. The completed asset inventory database will satisfy a substantial portion of the “draft” asset management plan task, and form the basis for our chosen output reports, which will detail short and long term replacement, repair and maintenance costs. MC Engineering was also requested to review the BLSMWC Reserves Fund Policy and current annual operating budget repair and maintenance processes with our staff to ensure the Asset Management Plan does not commit us to duplicating resources.

Once the Asset Inventory Database is complete, it will be reviewed with the LRPC. The proposed scope for the remaining tasks (which will address items 1 ‐7 listed above) and the output reports will then be reviewed and agreed to by the LRPC, with a recommended path forward for the “Final” Asset Management Plan presented to the BOD for approval in May 2019.