For those shareholders not able to attend the Annual Meeting in June, the following will provide a summary of the Long‐Range Planning Committee (LRPC) presentation. As a reminder, the Charter of the LRPC is to serve as an “advisory committee” to the BLSMWC Board of Directors (BODs) providing on‐going “recommendations” for long term water supply and demand management strategies that will ensure dependable and high‐quality water at the most affordable price possible. The primary task focus over the past year has been to:
Provide technical and budgetary oversight assistance to BLSMWC management and staff, and MC Engineering on the USDA Water Infrastructure Project. This required significant coordination as the design evolved to ensure that we were meeting overall system requirements without overdesigning and at a cost that was within our USDA funding. As we approached the final design much effort was required to ensure drawings, specs and material quantities were as accurate as possible for the construction bidding process. This resulted in the successful receipt of a construction bid within our target and USDA budget.
Formulate and provide a recommended 2018‐2021 multi‐year cash flow, rate structure and contingency reserves analysis for BOD consideration. Based on documented assumptions, this analysis provides a forecast of revenues, expenses, and reserves (including all USDA loan and interim financing requirements) along with a suggested rate structure approach. Using a conservative expense escalation factor, and recommended shareholder rates (including USDA loan repayment surcharges) which are comparable to existing base rates currently in place, a forecasted +$1M contingency reserve can be maintained.
Continue to compile water meter data to analyze usage levels and evaluate trends over time for future rate structure recommendations to the BOD. Our sample size of new radio read meters used in our study has increased to 662, which is approximately 39% of the total residences. Over the past 2 years, based on total usage, the average per residence ranged from 302 to 305 cubic feet (CF) per month. Our study data for 2017 based on 5,535 total readings showed an average of 309 CF per month. Trends show that usage levels can fluctuate substantially during various months of the year. Our current base allotment is 350 CF per month. Based on the 2017‐meter readings, approximately 76% of residences used less than the base allotment and only consumed 27% of the total water.
Over the next several months, the LRPC will continue to provide oversight support to the USDA project during the scheduled construction period to ensure that all costs (including the interim financing loan costs) are proceeding according to the cash flow plan. The usage studies will also continue throughout 2018‐2019 as the remaining water meters are installed and connected, with the findings factored into our final rate structure analysis. In addition, a recommended “Reserves Policy” will be formulated of the next few months for BOD review and approval. The policy shall identify all internal reserve needs and cover overall reserve objectives, reserve process approvals, reserve definitions, costs and timelines for each.