LRPC October 2020
Over the past couple months, LRPC efforts have focused on the remaining USDA Project scope and continuing the development of Asset Management Plan funding options.
The LRPC has been working with MC Engineering to complete fact-finding and negotiation of their proposed Amendment 7. Based on construction weather delays from this past winter and previous new scope tasks requested by BLSMWC, the Amendment includes funding for an estimated construction completion date extension from July 31, 2020 to October 30, 2020 as well as supporting USDA Project Closeout tasks into December. In addition, based on remaining funds within our USDA allocation, the Amendment also requests proceeding forward on additional scope tasks already presented to the Board. Most of those tasks are now complete with only the installation of house services, meters and 6 inch mainline pipes on Del Rio Dr. and Boro Court; and pipelines and valves at the water treatment plant. Amendment 7 status was presented to the board at our September meeting. As it stands, the above tasks to complete as well as estimated remaining construction change orders may slightly exceed our USDA allocation, which will be covered by an equal reduction in our reimbursable request.
As mentioned in previous Bubblers, the Asset Management Plan (AMP) funding plan goal is to develop options that are sufficient enough to meet our critical needs (highest risk assets) while being financially affordable within our annual and long-term budget forecasts, and avoid the need for assessments down the road. As we develop the AMP funding plan requirements, consideration will be taken into account for existing funding source options available to supplement the required asset replacement costs. These include funds already set aside in our Capital Asset Reserve Fund as well as USDA Project eligible reimbursements available at the end of construction. In addition, future years AMP funding requirements can be off-set by the payoff and elimination of the USDA Debt Reserve expense in 2030 and the USDA Loan Repayment in 2060. The funding plan options were presented to the LRPC for review and feedback on August 14th and to the board at our September meeting. Examples of 20, 40 and 90 year funding plan options were included for discussion with varying levels of annual funding required. Initially, the $346K to be allocated to our Capital Asset Reserve Fund at USDA Closeout will get the AMP funding process started. The recommendation agreed to by the board is to hold off on proposing the full funding process until the completion of the USDA Closeout.