LRPC

A significant portion of the LRPC efforts continue to focus on the research and analysis being applied toward designing our new rate structure for 2020 and beyond. There are still many questions to be answered and much data gathering to occur in the next 1‐2 months to ensure we fully understand our long‐term cash flow impacts, expenditures and revenue requirements.

This is necessary so that our final water rate structure design reflects the full cost of providing water service today and into the future. That includes covering the full cost of producing, treating, storing, and distributing water to our shareholders, as well as all operating and maintenance costs such as salaries, taxes, insurance, utilities, chemicals, lab fees, contracted services, and repairs. The full cost must also include debt service payments (i.e., USDA loan), capital improvements, all regulatory compliance costs, and contributions to financial reserve funds. The goal is to have our “draft” rate structure ready for review at the Oct. 5th BOD Meeting, with the “final” to be approved by the Nov 2nd BOD Meeting.

Over the past month, further reviews and updates were also performed on both the proposed “Bi‐Monthly Electronic Billing and Payment Process” and the “USDA New Scope Request” which resulted in LRPC recommendations presented to the BOD at the Aug 17th Meeting.

Bi‐monthly electronic billing and payment process – As of last month, we had received cost quotes from Billing Document Specialists (BDS) and Black Mountain Software (BMS) that, combined, would provide all the services needed to cover this process. On Aug 13th follow‐up conference calls were conducted with both companies to validate the start‐up and per billing fees, as well as identify and select the services applicable to BLSMWC. It was determined that the services will meet our process objectives. Based on the total cost for services provided, a recommendation to establish contracts with BDS and BMS was presented to the BOD at the Aug 17th Meeting and approved.

New USDA Project Scope – As mentioned in prior months, the BLSMWC staff requested we consider the addition of new high priority scope items within the total USDA budget allocation. The highest priority “A‐1 Project” is to replace the treatment plant driveway pipe (Task A1a); install a new cross‐country pipe from Snowflake to Del Rio Ct. (Task A1b); and fix the water treatment plant mains and vault replacements (Task A1c). The LRPC requested that further analysis of the current baseline USDA project cost and schedule performance must occur prior to approval. As a result, a meeting was held Aug 6th between the LRPC, BLSMWC staff and Jeff Graham from Mozingo, to review the above information and validate the new scope costs. Based on that discussion, in order to maintain an acceptable level of USDA budget reserve, the LRPC recommended to the BOD at the Aug 17th Meeting that we proceed forward with only Task A1a at this point, and re‐visit the remainder of the A‐1 Project in the fall once Task A1a is complete. The BOD approved the LRPC recommendation.