LRPC

Asset Management Plan

MC Engineering has progressed to 100% complete with the GIS mapping of assets and the asset inventory database for water mainline replacements (which includes the mainline pipes, house services, valves, PRV’s, hydrants and air relief valves). MC Engineering is currently wrapping up the asset inventory database for the wells, water treatment plant, storage tanks, booster pumps, and individual PRV’s, and plans to include the new water meters in the final report.

The next phase in completing the asset management plan will consist of discussions to decide on the reserve account cost output reports to establish (i.e., long term capital replacements, short term repair & maintenance, and meter replacements). We realize that effective management of our assets involves knowing and actually doing the most cost‐effective maintenance, repair and replacement activity at the right time during the life cycle of each asset. In addition, our asset management plan should translate into long term financial planning which will help identify our priorities, what we can afford or not afford, and any challenges to meeting the desired level of service for each asset. To that end, the final plan will focus on and document our asset maintenance, repair and replacement strategy as well as our objectives, priorities and affordability plan.

Shareholder Service Line Replacement Program

In follow‐up to the specifics described in the April Bubbler, a final proposed shareholder service line replacement zero interest loan program (limited to shareholders experiencing financial hardships) was presented to the Board of Directors at the May 11th Meeting and approved for implementation. Information on the loan agreement, application process and timing of the program will be made available to shareholders from the BLSMWC office staff very soon, and will also be discussed in the Annual Shareholder’s Meeting June 8th to address any questions.

Additional USDA Scope Items

As mentioned in previous Bubbler issues, the BLSMWC staff has proposed that several high priority tasks be added to the USDA Construction Project. To evaluate these proposed tasks, and ensure that total expenditures will remain well below our USDA allocated budget with adequate reserves, MC Engineering has continued to work with Mozingo Construction, Inc. to obtain firmer cost quotes. The analysis also includes identifying the added schedule resulting from each additional work task, as this impacts our interim loan interest costs.

Based on the discussions to‐date, a revised 3‐phased approach and priority of the projects has been proposed to the LRPC and Board. It has been requested that the Phase 1 (highest priority tasks) be considered now, which will address improvements to increase fire flow and replace old damaged or failing parts of our water system that were not included in the initial scope of our USDA contract. The decision to proceed on tasks within Phases 2 and 3 will be delayed until specified dates downstream and approval will be based on the overall cost and schedule performance on the USDA contract at those points in time.

At the May 11th Board of Director’s Meeting, a LRPC recommendation to move forward with the preparation of required MC Engineering drawings and sketches for five (5) Phase 1 tasks was approved by the Board. These drawings and sketches will allow Mozingo to generate firm price quotes for construction, at which time the Board will decide which tasks to approve and add to USDA Project Scope.

Bi‐Monthly Billing and Payment Process

As mentioned in the April Bubbler President’s Report, a plan to move forward with a new bi‐monthly electronic billing and payment process starting in January 2020 is currently in the works. Each bi‐monthly bill will segregate charges for the shareholder’s base rate, consumptive charges based on metered usage above the base allotment, and a USDA loan repayment surcharge (which will start at the end of the USDA construction contract). The BLSMWC staff is currently receiving information from several companies on the billing and payment service options offered, along with the fees charged for each service. From the information reviewed thus far, it’s become apparent that 3rd Party services for electronic payments (i.e., credit card conveyance fees and bank account ePayments) can vary substantially and have potentially significant annual cost impacts. Based on this information, analysis will be performed over the next couple months to determine which services or software products must be purchased and/or performed externally versus which may be more cost effective to perform internally. The goal will be to arrive at a solution that our office staff can reasonably maintain and is the most financially affordable for shareholders and BLSMWC.