Over the past month, the Long Range Planning Committee’s (LRPC) primary focus has been (1) assisting the BLSMWC staff and MC Engineering in oversight of the USDA Project’s transition from the design to the construction phase; and (2) formulating a recommended “Reserves Policy” to present to the Board of Directors (BOD) at our October 13th meeting.
A Pre-Construction Meeting was held on July 11th with our selected contractor, Mozingo Construction, Inc. and sub-contractors, along with BLSMWC management and staff, MC Engineering and subcontractors, and the responsible USDA and Calaveras County Dept. of Public Works representatives. The participation and discussions were very positive and covered the USDA and County requirements that must be met prior to the construction Notice to Proceed (NTP), as well as the processes, directives and documentation that must be followed throughout the construction contract. Based on the construction schedule, NTP is expected to occur 8/20/18, followed by mobilization spanning from 8/27 – 9/7/18.
A follow-up meeting was held with Mozingo on July 17th to review the construction sequencing to ensure a coordinated plan was understood and agreed to. Construction on the first zone is scheduled to start approx. 9/10/18 with final construction efforts planned to be completed in Dec. 2019. Shareholders will be notified of the timing of construction work planned for their area via the distribution of the sequencing plan, which will identify the timespans for each zone, regular updates of the planned work posted to the BLSMWC website, and road signs placed in the zones providing notice of upcoming work and potential detours.
The LRPC was tasked by the BOD at our last meeting to propose a recommended formal Reserves Policy. Our 2017 annual audit from Atherton & Associates noted a Capital Reserve as a “Control Deficiency” and recommended that BLSMWC establish a Capital Reserves Policy significant enough to support the USDA capital project for unexpected cash flow shortages, major repairs or downturn in economics conditions, which would be in addition to the debt service and short-live asset reserves as already required by the USDA. Since then, we solicited and received an Asset Management Plan proposal from MC Engineering, which the LRPC is currently fact-finding, and will review with the BOD. This Asset Management Plan is intended to provide the basis for a Capital Reserves Policy, and will be a recommended component of our overall “Reserves Policy”. In parallel, the LRPC is currently compiling and reviewing detailed guidelines for developing a Reserves Policy, along with several sample Reserve Fund Policies, including an example from a similar California water district. As mentioned previously, the LRPC will continue to review and discuss the information we’ve collected, with the goal of presenting a recommended Reserve Policy to the BOD at our October 13th Meeting.