board of directors agenda - discoverycwa.org€¦ · different geographic region. chair onslow...

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Board of Directors Agenda Quarterly Meeting

Friday, June 21, 2019, 10:00 a.m. District Board Meeting Room, 8000 NE 52nd Court, Vancouver, WA 98665

Regular Meeting No Item Action/Info Presenter Time

(minutes)

1. Call To Order

2. Flag Salute

3. Late Additions to the Agenda

4. Public Comment INFORMATION 5 This item is to provide an opportunity for citizen comment.

5. Consent Agenda ACTION 5 a.

b. c. d. e.

Board of Directors Meeting Minutes of March 15, 2019 Audit of Accounts Resolution No. 2019-01 – Alliance Investment Policy Resolution No. 2019-02 – Alliance Capital Assets Policy Resolution No. 2019-03 – Alliance Debt Policy

6. Reports INFORMATION a.

b. c. d. e.

Treasurer Report – First Quarter 2019 Operator Report Clark County – First Quarter 2019 Operator Report Clark Regional Wastewater District – First Quarter 2019 Capital Program Report – First Quarter 2019 Administrative Lead Report

Andrews Capson Ludlow Lough

Peterson

20 10 10 30 30

7. Member Agency Staff Reports INFORMATION 5

8. Board of Directors Reports INFORMATION 5

9. Adjourn Meeting

Next Meeting: Friday, September 27, 2019, 10:00 a.m., Special Business Meeting District Board Meeting Room, 8000 NE 52nd Court, Vancouver, WA 98665

The Board provides reasonable accommodations to persons with disabilities. Please contact a staff member (by noon Thursday) if we can be of assistance. If you should experience difficulty hearing the proceedings, please bring this to the attention of the Board by raising your hand.

Board of Directors Meeting First Quarter 2019

MINUTES

Friday, March 15, 2019, 10:00 a.m. District Board Meeting Room, 8000 NE 52nd Court, Vancouver, WA 98665

Present:

Staff: Clark Regional Wastewater District: John Peterson; Battle Ground: Scott Sawyer; Clark County: Travis Capson; City of Ridgefield: Bryan Kast.

Audience: Clark Regional Wastewater District: Denny Kiggins, Neil Kimsey, Robin Krause, Dale Lough, Leanne Mattos, Kim Thur; City of Ridgefield: Lee Wells; Interested Citizens: Dan Clark.

Regular Business Meeting

Call to order: Chair Onslow called the meeting to order at 10:00 a.m.

1. Late Additions to the Agenda None:

2. Public Comment Discussion: None.

3. Consent Agenda Action:

Steven Phelps moved, seconded by Norm Harker, to approve the Consent Agenda, approving the December 21, 2018 meeting minutes; ratifying claim warrants #10373-10375 in the amount of $585,431.42 for December 2018, claim warrants #10376-10379 in the amount of $1,203,361.28 for January 2019, and claim warrants #10380-10381 in the amount of $787,017.39 for February 2019; and approving to cancel the September 20, 2019 Board meeting and schedule a special Board meeting on September 27, 2019. Motion carried unanimously.

4. Board of Directors Officer Elections John Peterson reviewed the Staff Report and Alliance election process. Norm Harker moved,

seconded by Steven Phelps, to retain the 2018 officers for the 2019 calendar year. Motion carried unanimously.

City of Battle Ground: Steven Phelps Clark County: Julie Olson

City of Ridgefield: Ron Onslow Clark Regional Wastewater District: Norm Harker

Meeting Minutes of March 15, 2019 Page 2 of 3

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5. Finance Report – Fourth Quarter 2018 In Ken Andrews’ absence, John Peterson presented the staff report, covering sources (income) and

uses (expenses) through the fourth quarter of 2018, or eighth quarter of the 2017-2018 biennium budget.

6. Operator Report Clark County – Fourth Quarter 2018 Travis Capson presented the Operator Report for Clark County covering the Salmon Creek

Wastewater Treatment Plant operating performance and budget through December 31, 2018. The facility is operating well and the final costs for the biennium are anticipated to be within budget. Several important repairs have also been completed with the Operator budget during the biennium. In addition, the report included information regarding the January 5-6, 2019 windstorm event, the impacts to the 36th Avenue Pump Station and the Salmon Creek Wastewater Treatment Plant.

7. Operator Report Clark Regional Wastewater District – Fourth Quarter 2018 In Rich Ludlow’s absence, John Peterson presented the Operator Report covering the Ridgefield

Treatment Plant operating performance and budget through December 31, 2018. Mr. Peterson reported on the District’s cross-training efforts for treatment plant operators, noting that two District staff members have recently passed their initial operator test and will become licensed operators when the requisite number of hours has been met.

8. Capital Program Report – Fourth Quarter 2018 Dale Lough presented the 2019-2020 Repair & Replacement and conditions assessment projects

programmed for the current biennium. Several important projects are planned for the Salmon Creek Treatment Plant and the Ridgefield Treatment Plant. The District as Administrative Lead is moving forward to implement the approved projects and has entered into professional service agreements for the engineering work associated with the projects.

9. Administrative Lead Report John Peterson presented the staff report, highlighting the following items, which were included in

the agenda packet: 1) state and federal regulatory process update, 2) the Columbia River Water Quality Monitoring program, 3) ongoing Alliance communications, including a possible new home site near the Salmon Creek Treatment Plant; 4) review of proposed updates to the Investment Policy, Capital Asset Policy, and Debt Policy, which are anticipated to be approved on the June Consent Agenda; 5) an update on the asset management program development, including condition assessments, planned 2019-2020 activities, the Salmon Creek Treatment Plant capacity management update, an update on the Phase 5 program delivery, noting that Ecology has approved the Phase 5A Engineering Report. Finally Mr. Peterson introduced Leanne Mattos as the new Senior Administrative Assistant/Alliance Board Clerk who began employment on February 25 and announced that Robin Krause, District Engineer, is leaving the District in May to relocate to a different geographic region. Chair Onslow thanked Robin Krause for all of his efforts for the Alliance and wished him well in his future endeavors.

10. Member Agency Staff Reports No reports.

11. Board of Directors Reports Councilor Julie Olsen commended John Peterson and his staff for all of their efforts, welcomed

Leanne Mattos and wished Robin Krause well in his future endeavors.

Meeting Minutes of March 15, 2019 Page 3 of 3

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The meeting was adjourned at 11:36 a.m.

Prepared and edited by Alliance Administrative Lead staff. Approved by the Discovery Clean Water Alliance Board of Directors on: June 21, 2019 ___________________________________________________________________ Steven Phelps, Secretary

Printed: 6/12/2019

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Consent Staff Report Board Meeting of June 21, 2019

5c. Resolution No. 2019-01 – Alliance Investment Policy

STAFF CONTACTS PHONE EMAIL Ken Andrews, CPA, Alliance Treasurer 360-993-8824 [email protected]

PURPOSE: A significant effort for 2019 will be to prepare the Alliance for its first revenue bond issuance, anticipated to support the Phase 5A and Phase 5B capital projects. As a new entity to the equity markets, it will be important to introduce the Alliance properly and communicate flow through provisions of the Alliance to underlying Funding Members (the District and City of Battle Ground). Updates to the Investment Policy are being made in support of this effort. BACKGROUND: An Alliance Investment Policy was first adopted in October 2013 with Resolution No. 2013-12. With a revenue bond issuance planned in early 2020 to fund construction of these capital projects, in order to properly account for and strategically invest these proceeds before expended, the following updates are made to the Alliance Investment Policy:

• Provision was added to the policy to carve out and invest bond proceeds separate from other Alliance reserves. These bond proceed investments will be laddered to mature in sync with forecasted construction expenditures.

• In 2018, the Washington State Legislature broadened the type of instruments in which municipal funds could be invested. The updated policy now reflects this legislative change and provides additional options to ladder bond proceeds investments over the construction period.

ACTION REQUESTED: Board adoption of Resolution No. 2019-01, adopting the Alliance Investment Policy.

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DISCOVERY CLEAN WATER ALLIANCE

RESOLUTION NO. 2019 – 01

A RESOLUTION OF DISCOVERY CLEAN WATER ALLIANCE, ADOPTING THE INVESTMENT POLICY AND REPEALING RESOLUTION 2013-12, FOR THE DISCOVERY CLEAN WATER ALLIANCE.

WHEREAS, the Board of Directors has determined after various meetings that it is in the best interest of the Alliance to approve the Investment Policy and repeal Resolution 2013-12, as proposed; now, therefore

BE IT RESOLVED by the Board of Directors of the Discovery Clean Water Alliance as follows:

1. The Investment Policy attached to this Resolution is hereby approved and adopted.

2. Resolution 2013-12 is repealed.

ADOPTED by the Board of Directors of Discovery Clean Water Alliance at a regular meeting held on June 21, 2019.


______________________________

Chair, Board of Directors

Investment Policy

Resolution #2019-01 Effective: 6/21/2019

TABLE OF CONTENTS

SECTION I. POLICY ................................................................................................................. 1

SECTION II. SCOPE ................................................................................................................. 1

SECTION III. GENERAL OBJECTIVES .................................................................................... 1

Safety ..................................................................................................................................... 1

Liquidity .................................................................................................................................. 2

Yield ....................................................................................................................................... 2

SECTION IV. STANDARDS OF CARE ..................................................................................... 2

The Alliance portfolio shall be managed with due diligence, prudence and ethics. ................. 2

Management—Due Diligence—Delegation ............................................................................ 2

Investment Advisor ................................................................................................................. 2

Ethics and Conflicts of Interest ............................................................................................... 2

Prudence ................................................................................................................................ 2

SECTION V. TRANSACTIONAL COUNTERPARTIES ............................................................. 3

Authorized Broker/Dealers ...................................................................................................... 3

Authorized Qualified Public Depositories ................................................................................ 3

Authorized Local Government Investment Pools .................................................................... 3

SECTION VI. AUTHORIZED AND SUITABLE INVESTMENTS ................................................ 3

Allowable Investments ............................................................................................................ 3

SECTION VII. SAFEKEEPING AND CUSTODY ....................................................................... 4

SECTION VIII. DIVERSIFICATION ........................................................................................... 5

Diversification ......................................................................................................................... 5

Maximum Maturities ............................................................................................................... 5

Strategic Allocations ............................................................................................................... 6

SECTION IX. INTERNAL CONTROLS...................................................................................... 6

SECTION X. PERFORMANCE STANDARDS ........................................................................... 6

SECTION XI. REPORTING........................................................................................................ 7

SECTION XII. POLICY CONSIDERATIONS ............................................................................. 7

Exemption .............................................................................................................................. 7

Periodic Review ...................................................................................................................... 7

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SECTION I. POLICY The general investment policy of the Discovery Clean Water Alliance (Alliance) is to invest funds to provide maximum security at the highest market investment return, while maintaining the ability to meet daily cash flow demands and conforming to state statutes governing the investment of public funds. Pursuant to the Alliance Administrative Lead Agreement with Clark Regional Wastewater District (District), the District serves as the Alliance Treasurer and manages the Alliance investment program in that capacity.

SECTION II. SCOPE This policy applies to all Alliance financial assets recorded as cash and cash equivalents or investments, which are accounted for in the Alliance Comprehensive Annual Financial Report. The amount of funds that is expected to be governed by this policy is $5,000,000 to $50,000,000.

SECTION III. GENERAL OBJECTIVES The general objectives of Alliance investment activities, in priority order, are safety, liquidity, and yield.

Safety Safety of principal is the foremost objective of the investment program. Investments are undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. The objective is to mitigate credit risk and interest rate risk.

a. Credit Risk The Alliance will minimize credit risk, which is the risk of loss due to the failure of the security issuer or backer, by: • Limiting investments to the types of securities listed in Section VII of this

Investment Policy • Pre-qualifying the financial institutions, broker/dealers, intermediaries, and

advisers with which the Alliance will do business in accordance with Section V • Diversifying the investment portfolio so that the impact of potential losses from any

one type of security or from any one individual issuer will be minimized

b. Interest Rate Risk The Alliance will minimize interest rate risk, which is the risk that the market value of securities in the portfolio will fall due to changes in market interest rates, by: • Structuring the investment portfolio so that securities mature to meet cash

requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity

• Investing operating funds primarily in shorter-term securities, money market mutual funds, or similar investment pools and limiting the average maturity of the portfolio in accordance with this policy (see section VIII)

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Liquidity The Alliance portfolio shall remain sufficiently liquid to enable the Alliance to meet all reasonably anticipated operating requirements.

Yield The Alliance portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the Alliance's investment risk constraints and the cash flow characteristics of the portfolio.

SECTION IV. STANDARDS OF CARE

The Alliance portfolio shall be managed with due diligence, prudence and ethics.

Management—Due Diligence—Delegation Authority to manage the investment program is delegated to the Treasurer, including, without limitation, oversight and responsibility for all transactions and investments. The Treasurer shall establish and act in accordance with written procedures for the investment program, consistent with this Policy. The procedures shall address safekeeping, delivery vs. payment, wire transfer agreements, custody agreements, collateral/depository agreements and investment-related banking and/or accounting services contracts. The procedures shall include a system of controls to regulate the activities of subordinate officers and employees of the Treasurer and identify the officers and employees who are authorized to make investments. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the Treasurer. The Treasurer shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials. The Treasurer is authorized to sign an agreement with an investment advisor who will assist the Treasurer or designee with investment strategy and investment transactions.

Investment Advisor An investment advisor selected by the Treasurer shall be registered with the Securities and Exchange Commission. The advisor will serve in a fiduciary investment role in respect to the investment program, will make investment recommendations, and will provide oversight of the investment program. The advisor may only transact business with the Treasurer’s approved broker/dealer list. The advisor may only provide non-discretionary investment services, which require prior approval of all transactions by the Treasurer or designee. The investment advisor must retain all documentation and provide it to the Treasurer or designee upon request.

Ethics and Conflicts of Interest Officers and employees involved in the investment process shall refrain from personal business activity that could conflict with the proper execution and management of the investment program, or that could impair their ability to make impartial decisions. Employees and investment officials shall disclose any material interests in financial institutions with which they conduct business. They shall further disclose any personal financial/investment positions that could be related to the performance of the investment portfolio. Employees and officers shall refrain from undertaking personal investment transactions with the same individual with whom business is conducted on behalf of the Alliance.

Prudence The Alliance portfolio of investments shall use a “prudent person” standard, which is the exercise of judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence would exercise in the management of their own affairs, that is, not for speculation but for investment, considering the general objectives established in Section III above.

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The Treasurer and authorized investment officers and employees, who act in accordance with the Treasurer’s written procedures and this Policy, and who exercise due diligence, shall be relieved of personal responsibility for the credit risk or market price change of an investment, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments.

SECTION V. TRANSACTIONAL COUNTERPARTIES

Authorized Broker/Dealers The Treasurer shall maintain a list of financial institutions authorized to provide investment services and a list of approved security broker/dealers selected by credit worthiness. These may include "primary" dealers or regional dealers that qualify under SEC Rule 15C3-1 (uniform net capital rule). An investment advisor is authorized to transact buys and sells on behalf of the Alliance from dealers on the approved list.

Authorized Qualified Public Depositories Funds must be placed with qualified public depositories (banks) that are currently participating in the Washington State Public Deposit Protection Commission (“PDPC”) program as provided in Chapter 39.58 RCW. The Treasurer must verify a compliance/listing with the PDPC, utilizing the Washington State Treasurer’s website. No public deposit may be made except as provided in Chapter 39.58 RCW.

Authorized Local Government Investment Pools The Alliance belongs to, and is authorized to invest in, two local government investment pools. The Washington Local Government Investment Pool (LGIP) is a voluntary investment vehicle operated by the Washington State Treasurer. Over 530 local governments have participated in the LGIP since it was started in 1986 to provide safe, liquid, and competitive investment options for local governments pursuant to Chapter 43.250 RCW. The Clark County Investment Pool (CCIP) is a voluntary investment vehicle managed by the Clark County Treasurer and invests in securities that comply with RCW 36.29.020.

SECTION VI. AUTHORIZED AND SUITABLE INVESTMENTS The Treasurer is authorized to invest in the security instruments identified in Chapters 39.58 and 39.59 RCW.

• This policy recognizes S&P Global Ratings, Moody’s Investors Service and Fitch Ratings as the major Nationally Recognized Statistical Ratings Organizations (NRSRO).

• In the case of split ratings, where the major NRSROs issue different ratings, the higher rating shall apply. Minimum credit ratings and percentage limitations apply to the time of purchase.

• All securities must be purchased on the secondary market and may not be purchased directly from the issuer.

Allowable Investments Allowable Investments include the following, as well as any additional investments that are authorized by Chapters 39.58 and 39.59 RCW, as may be amended:

US Treasury Obligations: Direct obligations of the United States Treasury.

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US Agency Obligations – Primary: Government Sponsored Enterprises (GSEs) – Federal Instrumentality Securities include, but are not limited to Federal National Mortgage Association (FNMA), the Federal Home Loan Mortgage Corporation (FHLMC), Federal Home Loan Banks (FHLB), and the Federal Farm Credit Bureau (FFCB). US Agency Obligations – Secondary: Other US Government Sponsored Enterprises that are less marketable are considered secondary GSEs. They include, but are not limited to: Private Export Funding Corporation (PEFCO), Tennessee Valley Authority (TVA), Financing Corporation (FICO) and Federal Agricultural Mortgage Corporation, (Farmer Mac). Municipal Debt Obligations: General Obligation and Revenue bonds of any local government in the State of Washington and General Obligation bonds only on government issuers outside the State of Washington. At the time of investment, the bonds must have at a minimum rating of AA- from S&P, Aa3 from Moody’s or AA- from Fitch. Corporate Notes: Unsecured debt obligations purchased in accordance with the investment policies and procedures adopted by the State Investment Board. At the time of purchase, corporate notes must have a minimum rating of AA- by S&P, or Aa3 by Moody’s or AA- by Fitch. Corporate notes must be purchased on the secondary market through a broker/dealer and cannot be purchased directly through the issuer. Issuer constraints for AA- or better issuers will be limited to 3% of market value at the time of purchase. Only U.S.-domiciled issues are allowable. Commercial Paper: Unsecured debt obligations of corporate issuers that are rated at least A1+ by S&P, P1 by Moody’s and F1+ by Fitch. Must be rated by two NRSROs at the time of purchase. Commercial paper holdings may not have maturities exceeding 270 days. Any commercial paper purchased must also have an underlying long-term credit rating of AA- from S&P, or Aa3 from Moody’s or AA- from Fitch. Issuer constraints for commercial paper combined with corporate notes will be limited to 3% of market value per issuer.

Certificates of Deposit: Non-negotiable Certificates of Deposit of financial institutions, which are qualified public depositories as defined by RCW 39.58.010(2) and in accordance with the restrictions therein.

Bank Deposits and Savings Accounts: Deposits in PDPC approved banks. Local Government Investment Pool: Investment Pool managed by the Washington State Treasury office. Clark County Investment Pool: Investment Pool managed by the Clark County Treasurer’s Office.

SECTION VII. SAFEKEEPING AND CUSTODY All security transactions entered into by the Alliance shall be conducted on a delivery versus payment basis. Securities purchased by the Alliance, in the Alliance's account, will be confirmed before payment is released. Such securities shall be held in the Alliance’s custodial bank safekeeping account. The custodial safekeeping shall be designated by the Treasurer, and all securities transactions shall be evidenced by safekeeping or confirmation receipts and statements. The investment advisor may have view access to reconcile investment purchases, sales and investments held directly with the custodial bank.

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SECTION VIII. DIVERSIFICATION

Diversification Allowable Investments include the following and any additional investments that are authorized by Chapters 39.58 and 39.59 RCW, as may be amended. The Treasurer will diversify Alliance investments by security type and institution. The Alliance will invest with the following diversification constraints based on the total investment of funds:

Table of Constraints on the Portfolio

Maximum Maturities To the extent possible, the Treasurer will attempt to match the Alliance investments with anticipated cash flow requirements (i.e., capital project plan). Unless matched to a specific cash flow, the Treasurer may not directly invest in securities maturing more than five years from the date of purchase, and the average maturity of the portfolio may not exceed two and one-half years. Bond Proceeds Funds will be invested in a manner to match expected disbursements based on projected funding schedules. The maximum maturity of any single maturity will be 5 years.

Issue Type Ratings Ratings Ratings S&P Moody’s Fitch

US Treasury Obligations 100% None N/A N/A N/A

US Agency Obligations - Primary FHLB, FNMA, FHLMC, FFCB 100% 35% N/A N/A N/A

US Agency Obligations - Secondary FICO, FARMER MAC etc. 10% 5% AA- Aa3 AA-

Municipal Bonds (GO only outside WA) 20% 10% AA- Aa3 AA-

Corporate Notes 3% for AA- AA- Aa3 AA-

Commercial Paper 3% A1+ Long Term AA-

P1 Long Term Aa3

F1+ Long Term AA-

Certificates of Deposit 10% 10% Deposits in PDPC approved banks

Deposits in PDPC approved banks


Bank Time Deposits/Savings 15% 10% Deposits in PDPC approved banks



Clark County LGIP 100% None N/A N/A N/A

State LGIP 100% None N/A N/A N/A

*Issuer constraints apply to the combined issues in corporate and commercial paper holdings.

Maximum % Holdings

Maximum % per Issuer

25%*

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Total Portfolio Maturity Constraints

Strategic Allocations The Alliance has two classifications of investment funds: Operating Funds (consisting of Liquidity and Core) and Bond Proceeds Funds.

1) Operating Funds: a. Liquidity funds for the operating account will be allocated to State/County LGIP, CD’s,

PDPC Bank Deposits and Commercial Paper. b. The structure of the Core Fund will be targeted to a selected market benchmark based

on the risk and return objectives of the portfolio.

2) Bond Proceeds Funds: Investment of bond proceeds are restricted further and will not include corporate bonds in the dedicated bond proceed portfolio. All other allowable investments including US Treasury, US Agency and Commercial Paper may be utilized. The investments will be made in a manner to match cash flow expectations based on managed disbursement schedules. Liquidity for bond proceeds will be managed through the State/County LGIP or PDPC Bank Deposit balances.

SECTION IX. INTERNAL CONTROLS The Alliance is subject to an annual independent review of its internal controls by the Office of State Auditor and will do its utmost to conform to the recommendations, if any, of those reviews. The Treasurer will develop specific internal controls, which will be included in the operating procedures of the Alliance. Arbitrage rules will be applied to the earnings on bond proceeds.

SECTION X. PERFORMANCE STANDARDS The investment portfolio will be designed to obtain an average rate of return during budgetary and economic cycles, which will be measured against the performance of the six-month U.S. Treasury bill and the LGIP. This performance standard shall take into account the Alliance investment risk constraints and cash flow needs. The Alliance investment strategy is expected to be active the majority of the time.

Maturity Constraints Minimum % of Total Portfolio

Under 30 days 10%

Under 1 year 25%

Under 5 years 100%

Maximum of TotalMaturity Constraints Porfolio in YearsWeighted Average Maturity 2.50

Security Structure Constraint Maximum % of Total Portfolio

Callable Agency Securities 25%

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Additionally, a market benchmark (i.e.: 0‐3 or 0‐5 Treasury Index) will be applied that is appropriate for longer-term core investments based on the Alliance’s risk and return profile. Return comparisons of the excess liquidity fund designated portfolio to the market benchmark will be calculated on a monthly basis. When comparing the performance of the Alliance portfolio, all fees and expenses involved with managing the portfolio shall be included in the computation of the portfolio’s rate of return.

SECTION XI. REPORTING The Treasurer shall prepare an investment report at least quarterly, including a management summary that provides an analysis of the status of the current investment portfolio and the individual transactions executed over the last quarter. This management summary will be prepared in a manner, which will allow the Alliance to ascertain whether investment activities during the reporting period have conformed to the investment policy. The report should be provided to the entity's chief administrative officer, the legislative body, the investment committee and any pool participants. The report will include the following:

• Listing of individual securities held at the end of the reporting period • Realized and unrealized gains or losses resulting from appreciation or depreciation by

listing the cost and market value of securities over one-year duration that are not intended to be held until maturity (in accordance with Governmental Accounting Standards Board (GASB) requirements)

• Total Return of portfolio investments as compared to applicable benchmarks • Listing of investment by maturity date • Percentage of the total portfolio, which each type of investment represents

SECTION XII. POLICY CONSIDERATIONS

Exemption Any investment currently held that does not meet the guidelines of this policy is exempted from the requirements of this policy. At maturity or liquidation, such monies shall be reinvested only as provided by this policy.

Periodic Review The Treasurer shall review this Policy every two to four years. If the Treasurer desires amendments to this Policy, the Treasurer shall propose such amendments to the Board of Directors for its review.

Printed: 6/12/2019

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5d. Resolution No. 2019-02 – Alliance Capital Assets Policy


PURPOSE: A significant effort for 2019 will be to prepare the Alliance for its first revenue bond issuance, anticipated to support the Phase 5A and Phase 5B capital projects. As a new entity to the equity markets, it will be important to introduce the Alliance properly and communicate flow through provisions of the Alliance to underlying Funding Members (the District and City of Battle Ground). Updates to the Alliance Capital Asset Policy are being made in support of this effort. BACKGROUND: An Alliance Capital Asset Policy was first adopted in April 2015 with Resolution No. 2015-01, and later amended in December 2016 with Resolution No. 2016-01. The Washington State Auditor’s Office (SAO) has devoted significant attention the past two years, both in education and audits, to how municipal governments report aggregation, value and depreciable lives of capital assets. As a result, the following updates are made to the Alliance Capital Asset Policy:

• Detailing out larger assets (treatment plants, interceptors, pump stations and force mains) by major system and assigning appropriate useful lives by major system.

• Pooling of like assets and depreciating the entire pooled asset group.

• Analyzing and adopting updated estimated useful lives of certain asset classes.

• Detailing more clearly the processes around disposal of surplus property.

ACTION REQUESTED: Board adoption of Resolution No. 2019-02, adopting the Alliance Capital Assets Policy.

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A RESOLUTION OF DISCOVERY CLEAN WATER ALLIANCE, ADOPTING THE CAPITAL ASSETS POLICY AND REPEALING RESOLUTION 2016-01, FOR THE DISCOVERY CLEAN WATER ALLIANCE.

WHEREAS, the Board of Directors has determined after various meetings that it is in the best interest of the Alliance to approve the Capital Assets Policy and repeal Resolution 2016-01, as proposed; now, therefore


1. The Capital Assets Policy attached to this Resolution is hereby approved and adopted.




______________________________


Capital Assets Policy


TABLE OF CONTENTS PURPOSE ................................................................................................................................. 1

DEFINITIONS ............................................................................................................................ 1

REQUIREMENTS ...................................................................................................................... 2

SCOPE OF CAPITAL ASSETS POLICY .................................................................................... 2

CAPITALIZATION THRESHOLD ............................................................................................... 3

TIMING ...................................................................................................................................... 3

REPAIR AND MAINTENANCE COSTS ..................................................................................... 3

BETTERMENTS / IMPROVEMENTS ......................................................................................... 3

DEPRECIATION METHOD AND EXPECTED USEFUL LIFE OF ASSETS ............................... 3

REVISION OF EXPECTED USEFUL LIFE ................................................................................ 4

IMPAIRMENT ............................................................................................................................ 4

NEW ASSETS ........................................................................................................................... 5

EXISTING CAPITAL ASSET RECORDS ................................................................................... 5

DISPOSAL OF SURPLUS ITEMS.............................................................................................. 5

LOST, STOLEN, OR MISSING PROPERTY .............................................................................. 6

PHYSICAL INVENTORY PLAN ................................................................................................. 6

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PURPOSE The Alliance has a significant investment in capital assets, such as buildings and infrastructure. This policy communicates the Alliance’s capital assets system and is designed to comply with all statutory requirements and increase control and reporting accuracy over those capital assets for which the Alliance has stewardship responsibilities. DEFINITIONS Betterment/improvement: An addition made to, or change made in, a capital asset, other than repair or maintenance, to prolong its useful life or to increase its efficiency or capacity. The cost of the addition or change is added to the book value of the asset. Book value: The recorded cost of a capital asset less accumulated depreciation. Capital assets: Tangible or intangible assets and other real or personal properties that are used in operations and have initial useful lives extending beyond a single reporting period. Capital assets system: The system used to track and manage the Alliance’s capital assets described by this set of policies and procedures. The system is intended to satisfy accounting/reporting requirements and demonstrate accountability for the Alliance’s capital assets. The Alliance uses a software system to track capital assets by location and ongoing maintenance for all infrastructure, buildings and structures. Capitalization threshold: The dollar value at which the Alliance elects to capitalize capital assets.

Componentization: Separating an asset into various components to better reflect useful lives of discrete elements. Cost: The total acquisition price of a purchase or total project expenditures, including sales tax, as well as ancillary charges (shipping, installation, etc.) necessary to place an asset into its intended location and for its intended use. Group depreciation: Pooling essentially similar assets and applying an average depreciation rate to the group as a whole. Impairment: The immediate recognition of permanent decreases in the production capacity of assets that are expected to remain in service. Intangible assets: An intangible asset lacks physical substance and is nonfinancial in nature. Mass quantity: The input of quantities (each, linear feet, etc.) to enable Finance staff to match repair and replacement of sections of new assets to existing assets for removal from the capital assets system at the time the asset is replaced. The Alliance will input mass quantity for new infrastructure assets (as appropriate).

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Small and attractive assets: Assets valued at less than $5,000 that are at a high risk for theft and normally are not consumed within one year. These assets may have one or more of the following characteristics:

1. Are portable and marketable, either alone or as a component unit; 2. Can be utilized for personal gain; and/or 3. Are often reported as lost or stolen.

Tangible assets: A tangible asset has physical substance and includes, without limitation: land, improvements to land, easements, buildings, building improvements, vehicles, machinery, equipment, works of art and historical treasures, infrastructure, and all other real and personal property that has physical form. REQUIREMENTS The State of Washington Office of State Auditor BARS (Budgeting, Accounting and Reporting System) Manual for Cities, Counties and Special Purpose Districts (GAAP) entities, Capital Assets System Requirements (Chapter 3) states, in part; The duty to make certain that public property is adequately protected and that its true use is properly managed is one of the fundamental responsibilities of public officials. Public officials have broad responsibilities with respect to Capital Assets; these are custody, insurance, maintenance and planning.

• Custody – what is owned, where is it located, what condition is it in, how is it protected from improper or unauthorized use

• Insurance – is adequate insurance provided • Maintenance and repair – the stewardship of public property • Planning – capital budgeting and utilization

SCOPE OF CAPITAL ASSETS POLICY This policy applies to capital assets owned by the Alliance with a cost of $5,000 or more that the Alliance intends to use or keep for more than one year. These include (but are not limited to) the following:

• Land • Capitalized costs associated with construction-in-progress • Infrastructure • Buildings • Furnishings and fixtures • Sewer lines • Pump stations • Machinery • Equipment • Tools • Vehicles • Intangible assets (including software)

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This policy also applies to small and attractive assets owned by the Alliance that the Alliance intends to use or keep for more than one year. CAPITALIZATION THRESHOLD The Alliance capitalizes all tangible assets with a value of $5,000 or more with an expected useful life of more than one year. TIMING The Alliance determines when a project should be capitalized based on physical completion forms. Physical completion forms are completed for all projects by a Capital Programs Engineer. These forms indicate when a constructed asset is substantially complete and has begun to be used, even if the entire project is not yet deemed to be complete and/or retainage has not been released. REPAIR AND MAINTENANCE COSTS Expenditures that retain the value of an existing asset are classified as repair and maintenance expenditures. In most cases, the Alliance repairs or replaces components of an individual capital asset in order to maintain its original useful life. Any outlay that does no more than return a capital asset to its original condition, regardless of amount, is classified as repair and maintenance. The Alliance expenses routine repair and maintenance costs. These costs are not capitalized. BETTERMENTS / IMPROVEMENTS When subsequent additions, such as betterments or improvements occur (unlike routine repairs and maintenance), the Alliance evaluates these and treats them in accordance with BARS guidance, as follows:

• If the project replaces part of an existing capital asset and the cost associated with the part replaced cannot be calculated and removed, outlays are expensed, not capitalized.

• If the project replaces part of an existing capital asset and the cost associated with the part replaced can be calculated and removed, the cost of the component of the asset being replaced will be disposed of, along with associated accumulated depreciation, and the cost of the replacement will be capitalized as a separate asset. Finance staff will identify the existing asset or component of the asset using historical records and disposal will be based on a standard mass quantity.

• If the distinction between replacement and betterment/improvement is not easily determinable, the Alliance expenses the entire cost of the project.

DEPRECIATION METHOD AND EXPECTED USEFUL LIFE OF ASSETS The Alliance uses the straight-line method of depreciation for all capital assets. Professional judgement will be used to determine the remaining life of any existing capital assets. At management’s discretion, the Alliance may pool essentially similar assets and apply group depreciation to that entire group of assets. An average depreciation rate is applied to the group as a whole. When using group depreciation, all assets are presumed to be

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fully depreciated at the time of disposal. The Alliance uses group depreciation for all wastewater mains. The useful lives of frequent Alliance capital assets are assigned as follows:

Asset Category Useful Life (Years) Buildings 50 Office Equipment electrical 5 Office Furniture, Fixtures and Equipment non-electrical 10 Pump Station Controls 10 Pump Station Electrical & Mechanical 20 Pump Station Odor Control 10 Pump Station Site & Structures 50 Shop Tools 10 Software 5 Telemetry/SCADA 10 Vehicles 10 Wastewater Cast Iron, Ductile Iron & Concrete Mains 75 Wastewater PVC Mains 75

Land is always tracked separately even though it may be related to another capital asset. Land normally has an indefinite useful life. An intangible asset is considered to have an indefinite useful life if there are no legal, contractual, regulatory, technological or other factors that limit the useful life of the asset. Intangible assets having an indefinite benefit period are not amortized as long as the benefit of the asset has not been compromised. Intangible assets with limited useful lives (e.g. by legal or contractual provisions) are amortized over their estimated useful lives. Renewals or extensions may be considered in determining useful life of the intangible asset if the Alliance can reasonably anticipate exercising the renewal option and incurring any anticipated outlays as part of achieving the renewal. REVISION OF EXPECTED USEFUL LIFE The Alliance may revise the useful life of a capital asset if the original life assigned is no longer representative of the remaining useful life. When needed, the useful life will be recalculated based on the remaining useful life at the time of the revision. The Alliance applies the new useful life in the present and future accounting periods. No changes are made to financial records of previous years. IMPAIRMENT Impairment of a capital asset is a permanent decrease in the productive capacity of a capital asset. Indicators of impairment may include:

• Evidence of physical damage • Changes in legal or environmental factors • Technological changes or obsolescence

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• Changes in manner or duration of use • Construction stoppage (unable to complete project)

The Alliance may use the restoration cost, service unit or deflated depreciation replacement cost approach when measuring the impairment. The method used will depend upon the indicators giving rise to the impairment. When impairment of a capital asset occurs, the Alliance decreases the book value of the asset on its financial statements and recognizes a loss which is presented either as a program expense, extraordinary item, or special item depending on the nature and magnitude of the impairment. NEW ASSETS All capital assets and small and attractive assets are recorded on asset listings maintained by the Alliance Treasurer. Asset listings include make, model, serial number or similar descriptions, depending on the nature of the asset. For all new capital assets, a mass quantity will be identified (where applicable) for purposes of future identification by segment. EXISTING CAPITAL ASSET RECORDS For assets placed in service prior to 2018, Finance staff will add further detail and systematically assign mass quantities (where applicable) either using historical records or a consistent method of estimation. DISPOSAL OF SURPLUS ITEMS Before a capital asset or small and attractive asset is sold or otherwise disposed, the Alliance shall first determine if the asset was originally purchased with grant monies. If this is the case, the Alliance shall review the grant agreement and follow prescribed procedures for disposition. For any capital asset or small and attractive asset with a value of $5,000 or less, the Administrative Lead must first declare the asset to be surplus before it may be sold or disposed in any manner. For any capital asset with a value of $5,000 or more, the Board of Directors must first declare the asset to be surplus before it may be sold or disposed in any manner. If the asset is to be sold, the Administrative Lead or the assigned Operator for the asset shall sell the asset in accordance with applicable state law. The Administrative Lead and the assigned Operator shall complete an asset sale or disposal form and remit the form and any proceeds from the sale to the Alliance Treasurer. If the asset is to be disposed, the Administrative Lead and the assigned Operator for the asset shall review the asset and determine that the asset is no longer in working order, cannot reasonably be repaired for resale or otherwise is not anticipated to have a market value greater than scrap materials value. The Administrative Lead or the assigned Operator shall dispose of the asset in accordance with applicable state law. The Administrative Lead and the assigned Alliance Operator shall complete an asset sale or

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disposal form and remit the form and any proceeds from the sale to the Alliance Treasurer. LOST, STOLEN, OR MISSING PROPERTY When suspected or known losses of capital assets or small and attractive assets occur, the Administrative Lead staff shall be notified. The appropriate Operator staff shall notify the Administrative Lead’s General Manager and the Alliance Treasurer, and if it is determined that the asset has been stolen, the appropriate authorities shall be notified. PHYSICAL INVENTORY PLAN The Alliance Treasurer shall coordinate with the Administrative Lead and the Operators to complete a physical inventory of both capital assets and small and attractive assets every two to four years. Current physical inventory records shall be kept until the State Audit for the respective inventory years is complete. The records shall note the following information:

1. Assets have been physically located and verified 2. Missing assets have been noted and explained 3. Incorrect and/or incomplete information has been corrected 4. Any new items located but not on the list have been added, with proper serial

numbers, locations, and other required information

Printed: 6/12/2019

Page 1 of 1


5e. Resolution No. 2019-03 – Alliance Debt Policy


PURPOSE: A significant effort for 2019 will be to prepare the Alliance for its first revenue bond issuance, anticipated to support the Phase 5A and Phase 5B capital projects. As a new entity to the equity markets, it will be important to introduce the Alliance properly and communicate flow through provisions of the Alliance to underlying Funding Members (the District and City of Battle Ground). Updates to the Alliance Debt Policy are being made in support of this effort. BACKGROUND: With the Alliance planning to go to the equity market in the next 12 months to secure financing for capital work at the Salmon Creek Treatment Plant, the following updates are made to the Alliance Debt Policy:

• Identify additional forms of long-term borrowing now available to the Alliance.

• Identify the process in which professional service providers would be selected to support the planned issuance.

ACTION REQUESTED: Board adoption of Resolution No. 2019-03, adopting the Alliance Debt Policy.

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A RESOLUTION OF DISCOVERY CLEAN WATER ALLIANCE, ADOPTING THE DEBT POLICY AND REPEALING RESOLUTION 2013-13, FOR THE DISCOVERY CLEAN WATER ALLIANCE.

WHEREAS, the Board of Directors has determined after various meetings that it is in the best interest of the Alliance to approve the Debt Policy and repeal Resolution 2013-13, as proposed; now, therefore


1. The Debt Policy attached to this Resolution is hereby approved and adopted.




______________________________


Debt Policy


TABLE OF CONTENTS

SECTION I. INTRODUCTION ................................................................................................... 1

Purpose and Overview ........................................................................................................... 1

SECTION II. LEGAL GOVERNING PRINCIPLES ..................................................................... 1

Governing Law ....................................................................................................................... 1

Permitted Debt by Type .......................................................................................................... 1

Purpose for Borrowing ............................................................................................................ 2

Limitations on Debt Issuance .................................................................................................. 2

Roles and Responsibilities ...................................................................................................... 2

Ethical Standards Governing Conduct .................................................................................... 4

SECTION III. PROFESSIONAL SERVICES .............................................................................. 4

Professional Services ............................................................................................................. 4

SECTION IV. TRANSACTION-SPECIFIC POLICIES ................................................................ 6

Method of Sale ....................................................................................................................... 6

Structural Elements ................................................................................................................ 7

SECTION V. COMMUNICATION POLICIES ............................................................................. 8

Rating Agencies ..................................................................................................................... 8

Credit Objective ...................................................................................................................... 8

Bond Insurers ......................................................................................................................... 8

SECTION VI. COMPLIANCE POLICES .................................................................................... 8

Investment of Proceeds .......................................................................................................... 8

Arbitrage Liability Management .............................................................................................. 9

Continuing Disclosure ............................................................................................................. 9

Bond Users Clearinghouse ..................................................................................................... 9

Legal Covenants .................................................................................................................... 9

SECTION VII. OTHER POLICIES ............................................................................................. 9

Refunding ............................................................................................................................... 9

Derivative Products ...............................................................................................................10

Alternative Financings Schemes............................................................................................10

Evaluating Capital Plan and Capital Budget Spending ...........................................................10

Modeling the Impact of Capital Plan Needs ...........................................................................10

Accounting for the Issuance of Debt ......................................................................................10

Debt Policy Review................................................................................................................10

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SECTION I. INTRODUCTION

Purpose and Overview This Debt Policy for the Discovery Clean Water Alliance (Alliance) is established to help ensure that all new debt is issued both prudently and cost effectively. The Debt Policy sets forth comprehensive guidelines for the issuance and management of all financings of the Board of Directors (Board). Adherence to the policy is essential to ensure that the Board maintains a sound debt position and protects the credit quality of its obligations.

SECTION II. LEGAL GOVERNING PRINCIPLES

In the issuance and management of debt, the Alliance shall comply with the state constitution and with all other legal requirements imposed by federal, state, and local rules and regulations, as applicable. The following section highlights the legal framework of the debt issuance and roles and responsibilities in debt issuance.

Governing Law State Statutes – The Alliance may contract indebtedness as provided for by RCW 39.106. Bonds evidencing such indebtedness shall be issued and sold in accordance with RCW 39.46 and the Securities Act of Washington (RCW 21.20). Under RCW 39.106 and the Alliance’s Interlocal Formation Agreement, borrowings for the Alliance may also be carried out by any Alliance Member, or by any Alliance Member on behalf of another Alliance Member. The Alliance may not issue general obligation bonds subject to the debt limitations provided under the Washington State Constitution or statutes. Federal Laws and Regulations – The Alliance shall issue and manage debt in accordance with the limitations and constraints imposed by federal laws and regulations, including the Internal Revenue Code of 1986, as amended; the Treasury Department regulations thereunder; the Securities Act of 1933, as amended; the Securities Exchange Act of 1934, as amended; and the Securities and Exchange Commission and Municipal Securities Rulemaking Board.

Permitted Debt by Type The Alliance may legally incur debt using any of the debt instruments described below: Revenue Bonds – The Alliance is authorized to sell revenue bonds, subject to approval by the Board, pursuant to RCW 39.106.040(1)(e) and the bond statute or statutes applicable to code cities, or the bond statute or statutes applicable to water-sewer districts, as further specified by resolution of the Board. Member Conduit Bonds – Pursuant to Section VI.D. of the Interlocal Formation Agreement, the Alliance is authorized to use conduit financing structures by or through any Member on behalf of the Alliance or on behalf of that or another Member, subject to approval the Board. Special Assessment Bonds – The Alliance is authorized to sell local improvement district or utility local improvement district bonds pursuant to RCW 39.106.040(1)(q), subject to approval by the Board and appropriate formation of the special assessment district.

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Grant and Loan Programs for Wastewater Projects – The Alliance may qualify for financing from federal or state grant and loan programs which support construction of public wastewater facilities. Short-Term Obligations – The Alliance is authorized to sell short-term obligations under RCW 39.50, subject to the approval of the Board. Local Option Capital Asset Lending (LOCAL) Program Debt – Pursuant to RCW 39.106.040(3)(c), the Alliance is authorized to enter into financing contracts with the Office of the State Treasurer under RCW 39.94, subject to approval of the Board.

Purpose for Borrowing The Alliance shall incur long-term debt solely for the purpose of financing the cost of design, planning and permitting, acquisition and/or construction of capital projects relating to regional assets, as defined in a Capital Plan. Revenue Bonds – The Alliance shall issue revenue bonds for the purpose of financing construction of betterments or improvements to Regional Assets. Federal or State Grants and Loans - Federal or State grants and loans shall be used for the purpose of financing construction of betterments or improvements to Regional Assets. Short Term Obligations – The Alliance may issue short term obligations in anticipation of the issuance of long-term debt or for the purpose of covering operating expenses due to cash flow variations. Consistent with Section VI.D. of the Interlocal Formation Agreement, borrowing for costs of Regional Assets, or for operating costs of the Alliance may be carried out by issuance of Bonds by the Alliance itself, or by or through any Member.

Limitations on Debt Issuance Debt Coverage Ratio - The Alliance’s bond covenants for revenue bonds, including debt coverage ratios, must be consistent with the Interlocal Formation Agreement, Exhibit A, and encourage favorable ratings and interest rates while taking into account the impact on the Members and their ratepayers. Exhibit A of the Interlocal Formation Agreement requires “a debt service coverage ratio of no less than 1.25 times annual debt service on Alliance-issued market debt”.

Roles and Responsibilities Finance Advisory Committee – The Committee shall review and advise the Board regarding:

• Manner of sale of debt; • Structure and type of debt to issue; • Refunding opportunities; • Changes in disclosure requirements; and • Annual report on debt outstanding.

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The Board of Directors – The Board shall: • Approve indebtedness; • Approve appointment of independent financial advisor and bond counsel; • Approve the Debt Policy; • Approve budgets sufficient to provide for the timely payment of principal and

interest on all debt; and • In consultation with the Alliance’s financial advisor, Treasurer and bond counsel

approve the most appropriate financing structure for a proposed bond sale. Treasurer – The primary responsibility for debt management rests with the Treasurer. The Treasurer shall:

• Provide for the issuance of debt at the lowest practicable cost and risk; • Determine the available debt capacity under applicable debt service coverage

requirements; • Provide for the issuance of debt at appropriate intervals and in reasonable

amounts as required to fund approved capital expenditures and make recommendations to the Board;

• Recommend to the Board the manner of sale and structure of debt; • Monitor opportunities to refund debt and recommend such refunding as

appropriate; • Comply with all Internal Revenue Service (IRS), Securities and Exchange

Commission (SEC), and Municipal Securities Rulemaking Board (MSRB) rules and regulations governing the issuance of debt;

• Develop a post-issuance compliance policy with respect to tax-exempt obligations and continuing disclosure undertakings;

• Provide for the timely payment of principal of and interest on all debt; ensure that the fiscal agent receives funds for payment of debt service on or before the payment date;

• Provide for and participate in the preparation and review of offering documents; • Provide for and participate in the preparation and review of disclosure documents; • Comply with all terms, conditions and disclosures required by the legal documents

governing the debt issuance(s); • Submit to the Board all recommendations to issue debt; • Distribute to appropriate repositories information regarding financial condition and

affairs at such times and in the form required by law, regulation and general practice, including Rule 15c2-12 regarding continuing disclosure;

• Provide for the distribution of pertinent information to rating agencies and participate in all rating calls and visits;

• Maintain a current database with all outstanding debt and, if required, other financial obligations;

• Apply and promote prudent fiscal practices; • Compute, or oversee a third party vendor’s computation of arbitrage rebate on

each issuance; and • Invest project fund proceeds until needed, generally based upon a cash flow

projection associated with expenditure needs of the project(s), and in compliance with IRS regulations.

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Ethical Standards Governing Conduct The Members of the Alliance and the Board will adhere to standards of conduct as stipulated by the following:

• Public Disclosure Act, RCW 42.56; and • Code of Ethics for Municipal Officers, RCW 42.23. • Open Public Meetings Act, RCW 42.30.

SECTION III. PROFESSIONAL SERVICES

Professional Services The Alliance shall procure professional services as required to execute financing transactions and, if necessary, to advise on non-transaction related work. Professional services may include Consultants (Financial Advisor, Legal Counsel -- Bond, Disclosure and Tax Counsel) and Service Providers (Trustee, Verification Agent, Printer, Arbitrage Rebate Consultant and Credit Provider). Selection Process – The selection of financial and legal professionals to assist the Alliance in carrying out financing programs must be consistent with the procurement procedures that may be required by federal, state or local law. If not required by federal, state or local law, the Alliance may elect to use a competitive process involving a request for proposal (RFP), request for qualifications (RFQ) or similar document. Appointment of Financial / Municipal Advisor – The Alliance will select a financial advisor (or advisors) to assist in the issuance and administration of all debt. The firm(s) selected as financial advisor will provide a full range of advisory services in connection with the Alliance’s financing programs. The recommendation of financial advisor selection will be made by the Treasurer in consultation with the Finance Advisory Committee (FAC), or by a selection committee, which includes a representative of the FAC. A financial advisor will provide the Alliance with objective advice and analysis, maintain the confidentiality of Alliance's financial plans, and be free from any conflict of interest.

A financial advisor under contract with the Alliance will not purchase or sell any Alliance debt until underwriting accounts are closed or debt is freed from underwriter pricing restrictions, whichever occurs first. The fees paid to financial advisors shall be on an hourly or retainer basis. Unless otherwise justified, no fees shall be contingent on the sale of bonds or dependent upon the amounts of bonds sold. The Treasurer shall submit to the Board a recommendation for the appointment of Financial Advisor(s). The recommendation shall be accompanied by an evaluation of options and a justification for the recommended course of action. The Treasurer shall monitor the services rendered by the Financial Advisor(s).

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Appointment of Bond Counsel – All debt issued by the Alliance shall include a written opinion by legal counsel affirming that the Alliance is authorized to issue the proposed debt, that the Alliance has met all federal and state legal requirements necessary for issuance and a determination of the proposed debt’s federal income tax status. This approving opinion and other documents relating to the issuance of debt shall be prepared by a nationally recognized legal firm with extensive experience in public finance and tax issues. Unless otherwise justified, the appointment will be made from among nationally recognized law firms with significant operations in Washington State. The firm selected as bond counsel will be expected to provide the full range of legal services required in connection with a) the successful issuance and delivery of the bond issues and b) on-going legal services for the Alliance financing programs. The recommendation of bond counsel selection will be made by the Treasurer in consultation with the FAC, or by a selection committee, which includes a representative of the FAC. A Bond Counsel under contract with the Alliance will not simultaneously represent any other party involving an Alliance's financing, unless a written dual representation conflict waiver is expressively obtained from the Alliance. Appointment of Verification Agent – In conjunction with the sale of refunding bonds, the Treasurer shall procure the services of a verification agent. The purpose of the verification agent is to confirm that sufficient proceeds are escrowed to ensure the timely repayment of principal and interest on the bonds being refunded. The verification agent must be a nationally recognized provider of verification services. Selection criteria shall include, but not be limited to:

• Demonstrated ability to provide accurate verification of escrow funding accuracy; • Demonstrated ability to provide timely reports; and • Competitiveness of fees.

Appointment of Underwriters – If a negotiated sale is approved under Section IV below, the Treasurer shall select an underwriter(s). Criteria used in the appointment of qualified underwriters shall include, but not be limited to:

• Demonstrated ability serving on financial transactions with similar complexity to the transaction being planned;

• Demonstrated ability to structure a debt issue efficiently and effectively; • Demonstrated ability to sell debt to institutional and retail investors; • Demonstrated ability to put capital at risk; • Experience and reputation of assigned personnel; and • Fees and expenses.

The Treasurer with assistance from the independent financial advisor, as applicable, shall monitor the services rendered by the underwriter(s).

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Appointment of Escrow Agent – The Treasurer shall, when deemed necessary or when required, e.g., in connection with bond refundings, procure the services of an escrow agent. The purpose of the escrow agent is to hold securities and/or funds that are to be delivered upon compliance with the conditions contained in an escrow agreement. Appointment of Arbitrage Rebate Consultant – The Treasurer shall, when deemed necessary or when required, procure the services of an arbitrage rebate consultant. The purpose of the arbitrage rebate consultant is to provide arbitrage rebate compliance services in accordance with the Internal Revenue Code of 1986, as amended (“Code”). The scope of services may include, but not be limited to, the following:

• Determine if the requirements of the spending exception applicable to a debt issue have been met;

• Prepare initial rebate calculations if the spending requirements are not met; • Prepare annual computations to update the initial calculations as needed to

determine the rebate amount as described in the Code; • Prepare computations if proceeds remain following the temporary period as

described in the Code to determine if any yield reduction payments are required; and

• Consult with the Treasurer as requested concerning arbitrage regulations and related issues including control procedures and industry practices.

Criteria used in the appointment of qualified arbitrage rebate calculation firm shall include, but not be limited to:

• Firm’s qualifications and experience in providing arbitrage rebate calculation services;

• Staff qualifications, tax expertise, and experience; • Demonstrated ability to provide timely reports; and • Cost of services.

SECTION IV. TRANSACTION-SPECIFIC POLICIES

Method of Sale All Alliance debt will require approval of the Board. Presumption of Competitive Sale – When deemed appropriate by the Alliance to minimize the costs and risks of the Alliance’s debt issue, the issuance and sale of fixed rate Alliance debt shall be achieved by competitive bid. Competitive Bid Method – Alliance debt issued on a competitive bid basis will be sold to the bidder proposing the lowest true interest cost to the Alliance. Such bid may take the form of electronically transmitted offers to purchase the bonds. Negotiated Method – When deemed appropriate to minimize the costs and risks of an Alliance debt issue, the Treasurer will submit to the Board a request to sell the debt issue on a negotiated basis.

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If debt is sold on a negotiated basis, the negotiations of terms and conditions shall include, but not be limited to; prices, interest rates, underwriting, remarketing fees and commissions. The Alliance, with the assistance of its Financial Advisor, shall evaluate the terms offered by the underwriting team. Evaluations of prices, interest rates, fees and commissions shall include prevailing terms and conditions in the marketplace for comparable issuers. If more than one underwriter is included in the negotiated sale of debt, the Alliance shall establish appropriate levels of liability, participation and priority of orders. The Treasurer shall require a post-sale analysis and reporting for each negotiated bond sale. The financial advisor shall perform such analysis and provide a final pricing analysis by the day of the closing. A post-sale analysis will include, but not be limited to:

• Summary of the pricing, including copies of the actual pricing wires; • Results of comparable bond sales in the market at the time of the Alliance’s pricing; • Detailed information on a) orders and allocation of bonds, by underwriting firm, b)

detailed information on final designations earned by each underwriter, and c) a summary of total compensation received by each underwriter; and

• Historic comparisons to Municipal Market Data indexes -- day of sale basis. Private Placement – When deemed appropriate to minimize the costs and risks of Alliance's debt issue, the Treasurer will submit to the Board a request to sell the debt issue through private placement.

Structural Elements Maturity - The Alliance shall issue debt with an average life less than or equal to the average life of the assets being financed. Unless otherwise stated in law, the final maturity of the debt shall not be longer than 40 years. Debt Service Structure – Unless otherwise justified and deemed necessary, debt service should be structured on a level basis. Refunding bonds should be structured to produce equal savings by fiscal year. Unless otherwise justified and deemed necessary, debt shall not have capitalized interest. If appropriate, debt service reserve funds may be used for revenue bonds. Maturity Structure – The Alliance’s long-term debt may include serial and term bonds. Unless otherwise justified, term bonds should be sold with mandatory sinking fund or annual redemption requirements. Price Structure – The Alliance’s long-term debt may include par, discount, and premium bonds. Discount and premium bonds must be demonstrated to be advantageous relative to par bond structures, given applicable market conditions. Rate of Interest – Unless otherwise justified and deemed necessary, long-term debt will bear interest at fixed rates.

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Coupon Type – Unless otherwise justified and deemed necessary, long-term debt will be sold using current interest coupons. If justified and deemed necessary, capital appreciation bonds (zero coupon bonds) may be issued. Redemption Features – For each transaction, the Alliance shall evaluate the costs and benefits of call provisions. Bond Insurance – For each transaction, the Alliance shall evaluate the costs and benefits of bond insurance or other credit enhancements. Any credit enhancement purchases by the Alliance may be competitively procured. Tax-exemption – Unless otherwise justified and deemed necessary, the Alliance shall issue its debt on a tax-exempt basis. Pledge of revenues – The Alliance’s pledge of revenues shall be determined for each debt issue depending upon the debt instrument. Revenue bonds of the Alliance shall be repaid from specified revenues, as defined in the authorizing document.

SECTION V. COMMUNICATION POLICIES

Rating Agencies The Treasurer shall manage relationships with the rating analysts assigned to the Alliance’s credit, using both informal and formal methods to disseminate information. Communication with the rating agencies shall include:

• Full disclosure, on an annual basis, of the financial condition of the Alliance; • A formal presentation, on a regular basis, to the rating agencies, covering

economic, financial, operational and other issues that impact the Alliance’s credit;

• Timely disclosure of any financial events that may impact the Alliance’s credit; • Timely dissemination of the Annual Financial Report, following its adoption; and • Complete and timely distribution of any documents pertaining to the sale of

bonds.

Credit Objective The Alliance shall seek to maintain a credit rating of AA or higher for revenue bonds.

Bond Insurers The Treasurer shall manage relationships with the analysts at the bond insurers assigned to the Alliance’s credit.

SECTION VI. COMPLIANCE POLICES

Investment of Proceeds General – The Alliance shall comply with all applicable Federal, State, and contractual restrictions regarding the investment of bond proceeds, including the Alliance’s Investment Policy. This includes compliance with restrictions on the types of investment securities allowed, restrictions on the allowable yield of some invested funds and restrictions on the time period over which bond proceeds may be invested.

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Refunding Escrow – Unless otherwise justified and deemed necessary the Alliance shall utilize State and Local Government Series (SLGS) for refunding escrows.

Arbitrage Liability Management Because of the complexity of arbitrage rebate regulations and the severity of non-compliance penalties, the Alliance shall solicit the advice of bond counsel and other qualified experts about arbitrage rebate calculations. The Alliance shall, when deemed necessary or when required, contract with a qualified arbitrage rebate consultant for preparation of the arbitrage rebate calculation. The Alliance shall maintain an internal system for tracking expenditure of bond proceeds and investment earnings. The expenditure of bond proceeds shall be tracked in the financial accounting system by issue. Investments may be pooled for financial accounting purposes and for investment purposes. When investment of bond proceeds are co-mingled with other investments, the Alliance shall adhere to IRS rules on accounting allocations. The Treasurer shall develop a post-issuance compliance policy detailing the Alliance’s procedures for complying with applicable regulations relating to tax-exempt obligations.

Continuing Disclosure The Alliance shall comply with SEC Rule 15c2-12, which requires municipal debt issuers to provide specified financial and operating information. The Treasurer shall be the Compliance Officer for disclosure requirements.

Bond Users Clearinghouse The Alliance shall ensure that the Bond Users Clearinghouse receives municipal bond information for all debt sold as provided by RCW 39.44.200 39.44.240 and WAC 365-130. The information requested by RCW 39.44.210.

Legal Covenants The Alliance shall comply with all covenants and conditions contained in governing law and any legal documents entered into at the time of a bond offering.

SECTION VII. OTHER POLICIES

Refunding Refundings will be conducted in accordance with the Refunding Bond Act, RCW 39.53. Unless otherwise justified, the Alliance will refinance debt to achieve true interest cost savings as market opportunities arise. Net present value savings should be 3% or greater. Refundings may also be conducted in order to better align debt service payments with future Alliance cash flow needs. Selection of maturities to be refunded - unless otherwise justified, all callable maturities of an issue will be included in a refunding.

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Derivative Products No derivative products will be utilized unless permitted by law, and not without prior Board approval. No derivative products shall be utilized without an analysis by an independent financial advisor. No derivative products shall be used for the purpose of interest rate speculation.

Alternative Financings Schemes The Alliance shall not utilize alternative financing schemes to avoid restrictions imposed by law or to utilize tax loop-holes. Specifically, the Alliance shall not use “On Behalf Of” or 63-20 financings.

Evaluating Capital Plan and Capital Budget Spending The Alliance shall integrate its debt issuance with its Capital Plan and Capital Budget spending. Annually the Finance Advisory Committee shall discuss the need for debt financing and the Treasurer shall, as needed, prepare a written report on the status of spending of the Capital Plan and Capital Budget and the need for debt. The report should include:

• Projected Capital Budget requirements, collected from the Capital Plan; • Projected near term financing needs; • Projected near term available resources, including cash, and bond proceeds; and • An analysis showing the impact of the proposed financing on revenues.

Modeling the Impact of Capital Plan Needs The Alliance shall develop and maintain an Operations Budget and Capital Budget financial model to evaluate the impact of Capital Plan spending, operations and maintenance costs, and debt service on its financial condition. To that end, the Treasurer shall oversee the ongoing maintenance of quantitative modeling that includes, but is not limited to, the following:

• Historic and projected cash flows for capital and operating expenditures; • Historic and projected fund balances; • Historic and projected debt service coverage; and • Projected revenue requirements.

Accounting for the Issuance of Debt The Alliance shall account for the issuance of debt using generally accepted accounting principles (“GAAP") as established by the Governmental Accounting Standards Board (“GASB”), consistent with state law and procedures adopted by the State Auditor. Cost of issuance shall be reported as an expenditure rather than netted against proceeds.

Debt Policy Review The Alliance shall review and update its debt policy every two to four years.

Printed: 6/12/2019

Page 1 of 2

Staff Report

Board Meeting of June 21, 2019

6a. Treasurer Report – First Quarter 2019


PURPOSE: The Alliance is a regional wastewater transmission and treatment utility, now in its fifth year of full operation in 2019. The goal of the Treasurer Report is to provide a quarterly update for ongoing activities in the financial and treasury areas of responsibility for the Alliance. Financial and Treasury Activities.

1. Alliance Budget/CAFR/SAO Audit. o 2018 Comprehensive Annual Financial Report (CAFR) Audits (Attachments A and B). A 2018

CAFR was prepared by the Administrative Lead in first quarter and audited by the Washington State Auditor’s Office (SAO) in second quarter. Clean audit opinions were received with no audit comments to management. Final financial and accountability audit reports are attached for the Board’s information.

o 2020 Operating/Capital Budget Amendment Calendar (Attachment C). The 2019-2020 Alliance Operating and Capital Budget was originally adopted in December 2017. Review of the budget and Regional Service Charges (RSCs) will be conducted per the attached calendar (Attachment C) in third quarter to determine if a budget and RSCs amendment is necessary going into 2020. The four focus areas to be reviewed are:

Administrative Lead, contracted with the District;

Operation of the Salmon Creek Wastewater Management System and Battle Ground Force Main, contracted with Clark County;

Operation of the Ridgefield Treatment Plant and Regional Biofilter, contracted with the District; and

Capital budget for construction of the Salmon Creek Treatment Plant Phase 5B Package 1.

Treasurer Report – First Quarter 2019 June 21, 2019

Page 2 of 2

2. Alliance Financial Management/Reporting. o First Quarter 2019 Financial Report (Attachment D). The first quarter financial report reflects

the results from operations in the three largest Alliance funds – Operations & Maintenance, Existing Assets Repair and Replacement (R&R) and New Assets Capital Improvement Projects (CIP) funds. These will be reviewed with the Board by the Alliance Treasurer.

3. Alliance Treasury Management. A significant effort for the remainder of 2019 will be to prepare the Alliance for its first revenue bond issuance, anticipated to support the Phase 5A and Phase 5B capital projects. Because the Alliance is a new entity to the equity markets, it will be important to introduce the Alliance properly and to communicate the flow through provisions of the Alliance agreement to the underlying Funding Members (the District and the City of Battle Ground). As part of this planned debt issuance, the following is underway:

o Debt Issuance (Attachment E). The kickoff for an Alliance debt issuance has begun. Putting together a financing team comprised of Municipal Advisor, Bond Counsel, Underwriter and Credit Rating agency in support of the Alliance as Issuer is now underway. A draft timeline is attached highlighting the major steps necessary in order to be ready to issue municipal debt in early 2020.

o Request for Qualifications (RFQ) for Municipal Advisor (MA) Services. A RFQ was issued on May 29 to a shortlist of five (5) parties who have expressed interest in assisting the Alliance in packaging a debt issuance for the municipal bond market this year. Statement of Qualifications (SOQ) are due back from each party wanting to bid for providing these services by June 27, with a final selection to be made by July 15.

o Bond Counsel. Marc Greenough and Lee Marchisio with Foster Pepper, PLLC, have been selected to team as bond counsel for the Alliance’s upcoming debt issuance in early 2020. Marc also acted as bond counsel in 2015 when the Alliance issued a privately placed bond. Hugh Spitzer and Lee served as general counsel for the Alliance at that time, and Lee still serves as general counsel for the Alliance today.

ACTION REQUESTED: Policy-level guidance for the various Treasurer activities.

Attachment A

Financial Statements Audit Report

Discovery Clean Water Alliance

For the period January 1, 2018 through December 31, 2018

Published May 20, 2019

Report No. 1023861

Insurance Building, P.O. Box 40021 Olympia, Washington 98504-0021 (360) 902-0370 [email protected]

Office of the Washington State Auditor

Pat McCarthy

May 20, 2019

Board of Directors


Vancouver, Washington

Report on Financial Statements

Please find attached our report on the Discovery Clean Water Alliance’s financial statements.

We are issuing this report in order to provide information on the Alliance’s financial condition.

Sincerely,

Pat McCarthy

State Auditor

Olympia, WA

Washington State Auditor’s Office Page 3

TABLE OF CONTENTS

Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance

and Other Matters Based on an Audit of Financial Statements Performed in Accordance with

Government Auditing Standards..................................................................................................... 4

Independent Auditor's Report on Financial Statements .................................................................. 6

Financial Section ............................................................................................................................. 9

About the State Auditor's Office ................................................................................................... 32


INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL

OVER FINANCIAL REPORTING AND ON COMPLIANCE AND

OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL

STATEMENTS PERFORMED IN ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS


January 1, 2018 through December 31, 2018

Board of Directors



We have audited, in accordance with auditing standards generally accepted in the United States of

America and the standards applicable to financial audits contained in Government Auditing

Standards, issued by the Comptroller General of the United States, the financial statements of the

Discovery Clean Water Alliance, as of and for the year ended December 31, 2018, and the related

notes to the financial statements, which collectively comprise the Alliance’s basic financial

statements, and have issued our report thereon dated May 9, 2019.

INTERNAL CONTROL OVER FINANCIAL REPORTING

In planning and performing our audit of the financial statements, we considered the Alliance’s

internal control over financial reporting (internal control) to determine the audit procedures that

are appropriate in the circumstances for the purpose of expressing our opinion on the financial

statements, but not for the purpose of expressing an opinion on the effectiveness of the Alliance’s

internal control. Accordingly, we do not express an opinion on the effectiveness of the Alliance’s

internal control.

A deficiency in internal control exists when the design or operation of a control does not allow

management or employees, in the normal course of performing their assigned functions, to prevent,

or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a

combination of deficiencies, in internal control such that there is a reasonable possibility that a

material misstatement of the Alliance's financial statements will not be prevented, or detected and

corrected on a timely basis. A significant deficiency is a deficiency, or a combination of

deficiencies, in internal control that is less severe than a material weakness, yet important enough

to merit attention by those charged with governance.


Our consideration of internal control was for the limited purpose described in the first paragraph

of this section and was not designed to identify all deficiencies in internal control that might be

material weaknesses or significant deficiencies. Given these limitations, during our audit we did

not identify any deficiencies in internal control that we consider to be material weaknesses.

However, material weaknesses may exist that have not been identified.

COMPLIANCE AND OTHER MATTERS

As part of obtaining reasonable assurance about whether the Alliance’s financial statements are

free from material misstatement, we performed tests of the Alliance’s compliance with certain

provisions of laws, regulations, contracts and grant agreements, noncompliance with which could

have a direct and material effect on the determination of financial statement amounts. However,

providing an opinion on compliance with those provisions was not an objective of our audit, and

accordingly, we do not express such an opinion.

The results of our tests disclosed no instances of noncompliance or other matters that are required

to be reported under Government Auditing Standards.

PURPOSE OF THIS REPORT

The purpose of this report is solely to describe the scope of our testing of internal control and

compliance and the results of that testing, and not to provide an opinion on the effectiveness of the

Alliance’s internal control or on compliance. This report is an integral part of an audit performed

in accordance with Government Auditing Standards in considering the Alliance’s internal control

and compliance. Accordingly, this communication is not suitable for any other purpose. However,

this report is a matter of public record and its distribution is not limited. It also serves to

disseminate information to the public as a reporting tool to help citizens assess government

operations.

Pat McCarthy

State Auditor

Olympia, WA

May 9, 2019


INDEPENDENT AUDITOR’S REPORT ON

FINANCIAL STATEMENTS



Board of Directors



REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of the Discovery Clean Water Alliance,

as of and for the year ended December 31, 2018, and the related notes to the financial statements,

which collectively comprise the Alliance’s basic financial statements as listed on page 9.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements

in accordance with accounting principles generally accepted in the United States of America; this

includes the design, implementation, and maintenance of internal control relevant to the

preparation and fair presentation of financial statements that are free from material misstatement,

whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We

conducted our audit in accordance with auditing standards generally accepted in the United States

of America and the standards applicable to financial audits contained in Government Auditing

Standards, issued by the Comptroller General of the United States. Those standards require that

we plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial statements. The procedures selected depend on the auditor’s judgment,

including the assessment of the risks of material misstatement of the financial statements, whether

due to fraud or error. In making those risk assessments, the auditor considers internal control

relevant to the Alliance’s preparation and fair presentation of the financial statements in order to


design audit procedures that are appropriate in the circumstances, but not for the purpose of

expressing an opinion on the effectiveness of the Alliance’s internal control. Accordingly, we

express no such opinion. An audit also includes evaluating the appropriateness of accounting

policies used and the reasonableness of significant accounting estimates made by management, as

well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis

for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects,

the financial position of the Discovery Clean Water Alliance, as of December 31, 2018, and the

changes in financial position and cash flows thereof for the year then ended in accordance with

accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the

management’s discussion and analysis be presented to supplement the basic financial statements.

Such information, although not a part of the basic financial statements, is required by the

Governmental Accounting Standards Board who considers it to be an essential part of financial

reporting for placing the basic financial statements in an appropriate operational, economic or

historical context. We have applied certain limited procedures to the required supplementary

information in accordance with auditing standards generally accepted in the United States of

America, which consisted of inquiries of management about the methods of preparing the

information and comparing the information for consistency with management’s responses to our

inquiries, the basic financial statements, and other knowledge we obtained during our audit of the

basic financial statements. We do not express an opinion or provide any assurance on the

information because the limited procedures do not provide us with sufficient evidence to express

an opinion or provide any assurance.

OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING

STANDARDS

In accordance with Government Auditing Standards, we have also issued our report dated May 9,

2019 on our consideration of the Alliance’s internal control over financial reporting and on our


tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements

and other matters. The purpose of that report is to describe the scope of our testing of internal

control over financial reporting and compliance and the results of that testing, and not to provide

an opinion on internal control over financial reporting or on compliance. That report is an integral

part of an audit performed in accordance with Government Auditing Standards in considering the

Alliance’s internal control over financial reporting and compliance.

Pat McCarthy

State Auditor

Olympia, WA

May 9, 2019


FINANCIAL SECTION



REQUIRED SUPPLEMENTARY INFORMATION

Management’s Discussion and Analysis – 2018

BASIC FINANCIAL STATEMENTS

Statement of Net Position – 2018

Statement of Revenues, Expenses, and Changes in Fund Net Position – 2018

Statement of Cash Flows – 2018

Notes to Financial Statement – 2018


ABOUT THE STATE AUDITOR’S OFFICE

The State Auditor's Office is established in the state's Constitution and is part of the executive

branch of state government. The State Auditor is elected by the citizens of Washington and serves

four-year terms.

We work with our audit clients and citizens to achieve our vision of government that works for

citizens, by helping governments work better, cost less, deliver higher value, and earn greater

public trust.

In fulfilling our mission to hold state and local governments accountable for the use of public

resources, we also hold ourselves accountable by continually improving our audit quality and

operational efficiency and developing highly engaged and committed employees.

As an elected agency, the State Auditor's Office has the independence necessary to objectively

perform audits and investigations. Our audits are designed to comply with professional standards

as well as to satisfy the requirements of federal, state, and local laws.

Our audits look at financial information and compliance with state, federal and local laws on the

part of all local governments, including schools, and all state agencies, including institutions of

higher education. In addition, we conduct performance audits of state agencies and local

governments as well as fraud, state whistleblower and citizen hotline investigations.

The results of our work are widely distributed through a variety of reports, which are available on

our website and through our free, electronic subscription service.

We take our role as partners in accountability seriously, and provide training and technical

assistance to governments, and have an extensive quality assurance program.

Contact information for the State Auditor’s Office

Public Records requests [email protected]

Main telephone (360) 902-0370

Toll-free Citizen Hotline (866) 902-3900

Website www.sao.wa.gov

http://www.sao.wa.gov/investigations/Pages/FraudProgram.aspx

http://www.sao.wa.gov/investigations/Pages/Whistleblower.aspx

http://www.sao.wa.gov/investigations/Pages/CitizenHotline.aspx

http://www.sao.wa.gov/Pages/default.aspx

https://portal.sao.wa.gov/saoportal/Login.aspx

mailto:[email protected]

Attachment B

Accountability Audit Report


For the period January 1, 2018 through December 31, 2018

Published May 20, 2019

Report No. 1023854

Insurance Building, P.O. Box 40021 Olympia, Washington 98504-0021 (360) 902-0370 [email protected]

Office of the Washington State Auditor

Pat McCarthy

May 20, 2019

Board of Directors



Report on Accountability

Thank you for the opportunity to work with you to promote accountability, integrity and openness

in government. The State Auditor’s Office takes seriously our role of providing state and local

governments with assurance and accountability as the independent auditor of public accounts. In

this way, we strive to help government work better, cost less, deliver higher value and earn greater

public trust.

Independent audits provide essential accountability and transparency for Alliance operations. This

information is valuable to management, the governing body and public stakeholders when

assessing the government’s stewardship of public resources.

The attached comprises our independent audit report on the Alliance’s compliance with applicable

requirements and safeguarding of public resources for the areas we examined. We appreciate the

opportunity to work with your staff and we value your cooperation during the audit.

Sincerely,

Pat McCarthy

State Auditor

Olympia, WA


TABLE OF CONTENTS

Audit Results ................................................................................................................................... 4

Related Reports ............................................................................................................................... 5

Information about the District ......................................................................................................... 6

About the State Auditor's Office ..................................................................................................... 7


AUDIT RESULTS

This report describes the overall results and conclusions for the areas we examined. In those

selected areas, Alliance operations complied with applicable state laws, regulations, and its own

policies, and provided adequate controls over the safeguarding of public resources.

About the audit

This report contains the results of our independent accountability audit of the Discovery Clean

Water Alliance from January 1, 2018 through December 31, 2018.

Management is responsible for ensuring compliance and adequate safeguarding of public resources

from fraud, loss or abuse. This includes the design, implementation and maintenance of internal

controls relevant to these objectives.

This audit was conducted under the authority of RCW 43.09.260, which requires the Office of the

State Auditor to examine the financial affairs of all local governments. Our audit involved

performing procedures to obtain evidence about the Alliance’s uses of public resources,

compliance with state laws and regulations and its own policies and procedures, and internal

controls over such matters.

In keeping with general auditing practices, we do not examine every transaction, activity or area.

Instead, based on our risk assessment for the year ended December 31, 2018, the areas examined

were those representing the highest risk of fraud, loss, abuse, or noncompliance. The following

areas were examined during this audit period:

Compliance with contractual provisions for regional service charges

Accounts payable – general disbursements

Compliance with public work projects – prevailing wage and retainage requirements

Procurement of public work projects


RELATED REPORTS

Financial

Our opinion on the Alliance’s financial statements is provided in a separate report, which includes

the Alliance’s financial statements. That report is available on our website,

http://portal.sao.wa.gov/ReportSearch.

http://portal.sao.wa.gov/ReportSearch/?qItemType=1&qItemDesc=Discovery%20Clean%20Water%20Alliance&qItemValue=3091


INFORMATION ABOUT THE ALLIANCE

The Discovery Clean Water Alliance was officially formed in 2013, and began full operations in

2015, to provide regional wastewater transmission and treatment services to Clark County, Clark

Regional Wastewater Alliance and the cities of Battle Ground and Ridgefield. These four

governments jointly own and manage the Alliance through an interlocal framework established

under the Joint Municipal Utility Services Act (RCW 39.106).

The Alliance has no employees and contracts with Clark Regional Wastewater Alliance to perform

administrative responsibilities and with Clark County and the Alliance to operate Alliance assets.

The Alliance is governed by a four member Board of Directors, composed of one elected official

from each member agency. During 2018, the Alliance had annual revenues of approximately $12

million.

Contact information related to this report

Address: Discovery Clean Water Alliance

P.O. Box 8979

Vancouver, WA 98668

Contact: Brian Wolf, Accounting Manager

Telephone: (360) 993-8852

Website: www.discoverycwa.org

Information current as of report publish date.

Audit history

You can find current and past audit reports for the Discovery Clean Water Alliance at

http://portal.sao.wa.gov/ReportSearch.

http://portal.sao.wa.gov/ReportSearch/?qItemType=1&qItemDesc=Discovery%20Clean%20Water%20Alliance&qItemValue=3091


ABOUT THE STATE AUDITOR’S OFFICE

The State Auditor's Office is established in the state's Constitution and is part of the executive

branch of state government. The State Auditor is elected by the citizens of Washington and serves

four-year terms.

We work with our audit clients and citizens to achieve our vision of government that works for

citizens, by helping governments work better, cost less, deliver higher value, and earn greater

public trust.

In fulfilling our mission to hold state and local governments accountable for the use of public

resources, we also hold ourselves accountable by continually improving our audit quality and

operational efficiency and developing highly engaged and committed employees.

As an elected agency, the State Auditor's Office has the independence necessary to objectively

perform audits and investigations. Our audits are designed to comply with professional standards

as well as to satisfy the requirements of federal, state, and local laws.

Our audits look at financial information and compliance with state, federal and local laws on the

part of all local governments, including schools, and all state agencies, including institutions of

higher education. In addition, we conduct performance audits of state agencies and local

governments as well as fraud, state whistleblower and citizen hotline investigations.

The results of our work are widely distributed through a variety of reports, which are available on

our website and through our free, electronic subscription service.

We take our role as partners in accountability seriously, and provide training and technical

assistance to governments, and have an extensive quality assurance program.

Contact information for the State Auditor’s Office

Public Records requests [email protected]

Main telephone (360) 902-0370

Toll-free Citizen Hotline (866) 902-3900

Website www.sao.wa.gov

http://www.sao.wa.gov/investigations/Pages/FraudProgram.aspx

http://www.sao.wa.gov/investigations/Pages/Whistleblower.aspx

http://www.sao.wa.gov/investigations/Pages/CitizenHotline.aspx

http://www.sao.wa.gov/Pages/default.aspx

https://portal.sao.wa.gov/saoportal/Login.aspx


Attachment C

FAC/MIC Meetings Alliance Board Meeting District RSC Review Due to Treasurer BG RSC Review

14

21

2

12 9

26

13 7 8 11

27

(over)

10

FAC/MIC Mtgs Budget Amdt

Kickoff

7

BOD Mtg - Budget Amdt

Calendar

24 26 27 28 29

30

2627

MEMORIALDAY

28 29 30 31 23 25

11 12 13 15

19 20 21 22 23 24 25 16 17 18 19 20 22

12 13 14 15 16 17 18

3 4 5 6 8

1 2 3

9 11

4

MAY JUNE

S M T W T F S S M T W T F S

9 10

2

9

30 31

23

27

13

20

9

24

28

21 22 25

19

District Board RSC Review (Affordability)

S

15 16

19

BOD Mtg - Draft #1 Alliance/ RSC

Review

12

1 2

FAC/MIC Mtgs Draft #2

Alliance/RSC

1814

T

BG Council RSC Review (Affordability)

14 15

11

22 26

8

15 21

28

1 2LABOR DAY 5 6

T F

10

1716 18

4

W

26

29

23 24

29

25

30

6

5

10

7


Alliance/RSC

20 17

S

14

T FM T W

12

19

28 31 25 28 29 302729 30 BG/Dist Staff RSC Review (Affordability)

21 23 25 27 18 21 22 2322 26 19 20

3

S

17

106 8

24

31

1

74 5FAC/MIC Mtgs AL, RTP, Capital

(Dist)

2 3

S S

20

7 8 9 10 11 13

11

4FOURTHOF JULY

5

15 16 12


JULY AUGUST

S M T W T T F S

2019-2020 Budget/RSCs Amendment Calendar

WT

1

5 6 7 8

MF

6

4

3

SEPTEMBER OCTOBER

S M

1

FAC/MIC Mtgs BDP/SCWMS, Alliance/RSC

BDP/SCWMS (CC) due to Treausrer

1614 17 18

3

13

24

(continued)

8 13

20

FAC/MIC Meetings - Budget/RSCs Amendment Kickoff

BOARD Meeting - Review Budget/RSCs Amendment Calendar

FAC/MIC Meetings - Review Draft #1 AL, RTP, Capital Budget Amendments (District)

Draft #1 Budget Decision Packages/SCWMS Budget Amendment (CC) Due to Treasurer

FAC/MIC Meetings - Review Draft #1 BDP/SCWMS Budget Amendment (CC),Summary Alliance/RSCs Budget Amendment

Battle Ground/District Staff Review of Budget/RSCs Amendment (RSC Affordability)

FAC/MIC Meetings - Review Draft #1 Complete Budget/RSCs Amendment

BOARD Meeting - Review Draft #1 Complete Budget/RSCs Amendment

Battle Ground Council Review Amended RSCs for 2020 (RSC Affordability), if necessary

District Board Review Amended RSCs for 2020 (RSC Affordability), if necessary

FAC/MIC Meetings - Review Draft #2 Alliance/RSCs Budget Amendment


FAC/MIC Meetings - Review Final Alliance/RSCs Budget Amendment/Staff Report/Resolution

Public Hearing: 2019-2020 Alliance Operating/Capital Budget/RSCs AmendmentBOARD Meeting - Adopt 2019-2020 Alliance Operating/Capital Budget/RSCs Amendment

9/13/2019

9/27/2019

10/7/2019

10/8/2019

10/11/2019

11/8/2019

12/13/2019

12/20/201912/20/2019

BUDGET PREPARATION TASKS

6/14/2019

6/21/2019

7/12/2019

8/2/2019

8/9/2019

8/26/2019

DISCOVERY CLEAN WATER ALLIANCE2019-2020 Budget/RSCs Amendment Calendar

24 26 27 28 2925

18

BOD Mtg - Adopt Final

Alliance/RSC

30 29 30 31

13 16

10

F

119FAC/MIC Mtgs Draft #3

Alliance/RSC

7

4 7

27

F

DECEMBER

S

1 2

S

8 9

5 6

14FAC/MIC Mtgs Rvw Final

Alliance/RSC

15

5

11VETERANS

DAY211910

2822 23 25CHRISTMAS 26

16 18

24

17

17 19 20 21THANKSGIVING

22THANKSGIVING 23

3 6

T W T

3

4

12

12

1

NOVEMBER

2

S MS M T W T

14 15

Attachment D

Printed: 6/12/2019 \\Crwwd-dc2\shared\Alliance\2 FINANCE\Quarterly Reports\2019\03 - March 2019\Board Staff Report - First Quarter 2019 Financial Report - Treasurer Report Attachment D.docx

Page 1 of 4

Staff Report

Board Meeting of June 21, 2019

6a. Treasurer Report – First Quarter 2019 Attachment D – First Quarter 2019 Financial Report


PURPOSE: To report to the Board the financial results from operations through the first quarter of the biennium ending December 31, 2020.

SUMMARY – ALL FUNDS

Category Amended Biennial Budget 2019-2020

Budget To Date12.5% Actual To Date

Difference Actual vs. Budget To

Date (%)

BEGINNING FUND BALANCE 6,426,000$ 7,232,883$ SOURCES Regional Service Charges (RSCs) 28,460,000 3,557,500 3,557,456 0.0% Investment Interest - - 37,768 Debt Proceeds 12,115,000 - - TOTAL SOURCES 40,575,000$ 3,557,500$ 3,595,224$ 1.1%USES O&M Administrative Services (2,311,000) (288,875) (130,095) 55.0% O&M SCWMS Operations (7,857,037) (982,130) (982,130) 0.0% O&M BGFM Operations (142,746) (17,843) (17,843) 0.0% O&M RTPO Operations (1,505,000) (188,125) (188,145) 0.0% Debt Service (8,921,000) (1,115,125) (180,561) 83.8% R&R Capital Expenditures (2,504,000) (358,250) (102,571) 71.4% CIP Capital Expenditures (17,298,000) (1,042,250) (329,042) 68.4%TOTAL USES (40,538,783) (3,992,598) (1,930,387) 51.7%SOURCES OVER (UNDER) USES 36,217 (435,098) 1,664,837 482.6%ENDING FUND BALANCE 6,462,217$ 8,897,720$

SOURCES: $3.6 million • RSC revenues: $3.6 million. RSC revenues were in line with budget through the end of the first quarter.

Attachment D – First Quarter 2019 Financial Report June 21, 2019

Page 2 of 4

USES: $1.9 million • Administrative services: $0.1 million. Administrative services through the biennium to date were under

budget by 55.0% due to the timing of payments for professional engineering services for capital program support and regulatory compliance, as well as other professional services such as legal and audit services.

• Operating costs: $1.2 million. Operating costs paid to contract operators, Clark County and Clark Regional Wastewater District, to operate the Alliance’s Regional Assets were in line with budget through end of Q1.

• Debt service: $0.2 million. Debt service costs through the end of Q1 2019 were under budget by 83.8% due to scheduled debt payments in Q2 and Q3 of $0.9 million and $1.2 million, respectively.

• Capital expenditures: $0.3 million. Capital expenditures through the end of the quarter were under budget due to the timing of work on projects. Activity is expected to increase going into Q2 and Q3 2019.

SOURCES OVER USES: $1.7 million

• Due to debt service and capital expenditures not occurring until Q2 and Q3 2019, there is a temporary large variance of sources over uses through the end of Q1 2019.

SOURCES AND USES BY TYPE – ALL FUNDS

Regional Service Charges

(RSCs)99%

Investment Interest

1%

Total Sources through 1st Quarter

O&M Administrative

Services7%

O&M SCWMS Operations

51%

O&M BGFM Operations

1% O&M RTPO Operations 7%

Debt Service9%

R&R Capital Expenditures

5%

CIP Capital Expenditures

17%

Total Uses through 1st Quarter

Sources:

• Regional Service Charges account for nearly all of the sources through Q1 of the 2019-2020 biennium.

Uses: • R&R and CIP capital expenditures through the biennium are under budget. Administrative Lead staff

anticipates activity to increase going into Q2 and Q3 2019.

CASH AND INVESTMENTS BY FUND HELD BY THE ALLIANCE Cash Investments Total

OPERATIONS AND MAINTENANCE 382,009$ 1,071,501$ 1,453,510$

RATE STABILIZATION 315,551 - 315,551

DEBT SERVICE 917,846 1,516,205 2,434,051

RESTORATION AND REPLACEMENT 41,130 3,528,707 3,569,837

CONSTRUCTION IN PROGRESS 400,357 7,477 407,834

2,056,893$ 6,123,890$ 8,180,783$

Cash and Investments at January 1, 2019 7,232,883

Change in Cash and Investments 947,900$


Page 3 of 4

Adopted Biennial Budget 2019-2020

Budget To Date12.5% Actual To Date

Difference Actual vs. Budget To

Date (%)

11,348,000$ 1,418,500$ 1,418,505$ 0.0%- - 3,725 0.0%

11,348,000$ 1,418,500$ 1,422,230$ 0.3%

(1) 2,311,000$ 288,875$ 130,095$ 55.0%7,857,037 982,130 982,130 0.0%

142,746 17,843 17,843 0.0%1,505,000 188,125 188,145 0.0%

11,815,783$ 1,476,973$ 1,318,213$ 10.7%

(467,783)$ (58,473)$ 104,017$

Notes

Investment Interest

Quarterly Financial Report Through the Quarter Ended March 31, 2019

Unaudited - Intended for Management Purposes Only

The following is a summary of the Alliance's financial results for operating funds. This information is summarized from financial activity for the three months ended March 31, 2019.

OPERATIONS AND MAINTENANCE ACCOUNT

Category

RevenuesRegional Service Charges

Total Expenses

Revenues Over (Under) Expenses

(1) Administrative services: $0.1 million. Administrative services were 55.0% under budget primarily due to the timing of payments for professional engineering services for capital program support and regulatory compliance, as well as other professional services such as legal and audit services.

Total RevenuesExpenses O&M Admin Services O&M SCWMS Operations O&M BGFM Operations O&M RTP/RB Operations


Page 4 of 4


Budget To Date12.5% Actual To Date Difference Actual vs.

Budget To Date (%)

2,753,000$ 344,125$ 344,151$ 0.0%- - 21,796 0.0%

2,753,000 344,125 365,947 6.3%

(1) 2,504,000 358,250 102,571 71.4%2,504,000 358,250 102,571 71.4%

249,000$ (14,125)$ 263,376$ Adopted Biennial

Budget 2019-2020Budget To Date

12.5% Actual To Date LTD

Alliance R&R ProjectsSCTP SBT Recovery - - 11,655 479,810 Klineline Interceptor Manhole Rehabilitation 287,000 7,000 - - SCTP Digester Maintenance and Modifications 334,000 83,500 - - SCTP Boiler Exhaust Stack Replacement 134,000 33,500 - - SCTP Biosolids Cake Transfer Screw Replacement 402,000 100,500 - - SCTP HVAC Systems Replacement 665,000 77,250 - - SCTP Fire Alarm System Replacement 127,000 - - - SCTP Boiler Digester Gas Booster 217,000 5,250 - - RTP Aeration Basin Mixer Support/Concrete Repair 76,000 19,000 - - Annual R&R Allowance 262,000 32,250 90,917 90,917

Total Alliance R&R Capital Expenditures 2,504,000 358,250 102,571 570,727 Notes

(1) Construction Costs: $0.1 million. R&R was under budget due to the timing of work on projects. Activity is expected toincrease going into Q2 and Q3 2019.


Budget To Date12.5% Actual To Date Difference Actual vs.

Budget To Date (%)

5,284,000$ 660,500$ 660,458$ 0.0%12,115,000 - - 0.0%

- - 2,669 0.0%17,399,000 660,500 663,127 0.4%

(1) 17,298,000 1,042,250 329,041 68.4%17,298,000 1,042,250 329,041 68.4%

101,000$ (381,750)$ 334,086$ Adopted Biennial

Budget 2019-2020Budget To Date

12.5% Actual To Date LTD

Alliance CIP ProjectsSCTPO Phase 5A Expansion (Outfall/Effluent Pipeline) 2,573,000$ 389,750$ 44,481$ 2,684,852$ SCTPO Phase 5B Expansion (Plant) 14,725,000 652,500 284,560 992,263

Total Alliance CIP Capital Expenditures 17,298,000 1,042,250 329,041 3,677,116 Notes

(1) Construction Costs: $0.3 million. CIP was under budget due to the timing of work on projects. Activity is expected toincrease going into Q2 and Q3 2019.

ALLIANCE R&R

Quarterly Financial Report Through the Quarter Ended March 31, 2019

Unaudited - Intended for Management Purposes Only

The following is a summary of the Alliance's financial results by operating funds. This information is summarized from financial activity for the three months ended March 31, 2019.

EXISTING ASSETS R&R ACCOUNT

Revenues

RevenuesRegional Service ChargesInvestment Interest

Total RevenuesExpenditures Construction Costs

Total Expenditures

Alliance R&R Capital Expenditures

NEW ASSETS CIP ACCOUNT

ALLIANCE CIP

Revenues Over (Under) Expenditures

Revenues Over (Under) Expenditures

Alliance CIP Capital Expenditures


Investment InterestTotal Revenues

Expenditures Construction Costs

Total Expenditures

Debt Issuance Proceeds

ACTION REQUESTED: Information and Discussion

Attachment E

Discovery Clean Water AllianceDRAFT Timeline2020 Financing/Revenue Bond Issuance

TASKS May June July Aug Sept Oct Nov Dec Jan FebSelect bond counsel

Foster Pepper PLLC (Greenough/Marchisio)Select municipal advisor

RFQ/selectionStructure financing

Purpose/authority/financial viability/terms and conditions/legal parametersSelect underwriter for negotiated sale

Prepare Preliminary Official Statement (POS)Rating agency

Draft resolution/other legal documentsBoard adoption of resolution

Distribution of POS by underwriterPricing day/bond sale

Underwriter comes with bid proposal(s)Bond purchase agreement signed

Closing/funding

2019 2020

Staff Report

Board Meeting of June 21, 2019 6b. Operator Report - Clark County First Quarter 2019

STAFF CONTACTS PHONE EMAIL

Ahmad Qayoumi, P.E., CCPW Director Travis Capson, SCTP Operations Manager

360-397-6118 ext. 4358 360-397-6118 ext. 7013

[email protected] [email protected]

PURPOSE: This report covers the Salmon Creek Wastewater Treatment Plant operations through March 31, 2019. Several Alliance capital projects are currently in progress at the plant, which are supported by plant staff on a continuing basis. Status updates for these projects are provided at this meeting under a separate report. Operations and Maintenance staff also continue to be engaged in operational repair and restoration allowance projects and regular maintenance services at the plant. Below is a summary of the operational activities contracted through Clark County, followed by brief project status updates. The County solicited bids for the #1 digester cleaning project. Only two bids were received, and both were nearly double the estimated cleaning cost. We will regroup and reassess the bids and the project based on these higher bids. Once we’ve come to understand the change in the costing for cleaning services, we’ll formulate a new bid package to possibly take advantage of the market’s slow season and any other opportunities that would provide more interest from contractors, which in turn should help provide more realistic bids. The Plant Drain Wet Well access project has been underway for most of May. There have been a few delays, but those did not impact the facility. It has just recently been finished and the County is now scheduling our first opportunity to clean the wet well now that the access hatch has made that task possible. The plant is struggling with a myriad of equipment functionality and network communication issues. The County staff has been doing a great job supporting the all-plant processes amidst equipment failures and communication anomalies. The County has been gearing up for the upcoming capital construction events by clearing out old equipment and parts inventories throughout the plant. The County has purchased new shelving and racks to manage the inventories once they’ve been cleaned out and reorganized. Building 87 is slated to be removed during the first round of construction to make room for Secondary Clarifier 5. Its current inventory/storage needs to be removed and gone through. Any

Operator Report – Clark County First Quarter 2019 June 21, 2019

Page 2 of 3

remaining materials can be housed in building 37. The exterior fenced-in storage area (bone yard), which has been a topic of discussion during open house events, has now been completely removed. There is no longer any storage or facility equipment being stored outside of the main perimeter fencing. Clark County Operations – Small Projects Allowance

Project Schedule Status Expenditures Aeration Basin Diffuser Replacement Q1 2019 Out for quotes $0.00

Misc. Small Repair and Replacement Projects Q1 2019 Several underway $0.00

ALLOWANCE PROJECT EXPENDITURES $0.00

ALLOWANCE 2019-2020 BUDGET $260,000

ALLOWANCE BUDGET REMAINING $260,000

Aeration Basin Diffuser Replacement: The County is currently soliciting quotes for replacement materials; installation of those materials will be performed over the summer of 2019. Misc. Small Repair and Replacement Projects: Several projects have just recently begun. Vibration analysis performed on Blowers 1 – 4 showed that there could be some resonance being developed by the blower air intakes. The vibration analysis suggested that newer-designed intake structures could deaden vibration, which should impede the resonance frequency being emitted. The County has ordered 2 of the new silencer/flow conditioning intakes to see if they will make a true difference in the blower vibrations. In addition, County staff are continuing to support multiple Alliance Capital and R&R programs and upcoming projects. The staff has made incremental adjustments to tune the facility for summer operation. The attached financial documents include the first quarter 2019 revenue and expense summaries for the operating fund (Fund 4580) and the repair and replacement fund (Fund 4583). Graphs of Funds 4580 and 4583 budget vs. actuals are also included. The overall operating fund is currently at 6.6% of actual expenditures versus budget for the 2019-2020 biennium budget. As of March 31, 2019 the biennium is 12.5% complete; therefore, the fund is currently 6.6% spent through the first quarter of 2019. The breakdown of expenditures to budget by area is as follows:

Lab 10.7% spent Maintenance 8.6% spent Battle Ground Force Main 6.0% spent

Operator Report – Clark County First Quarter 2019 June 21, 2019

Page 3 of 3

Biosolids 1.8% spent Operations 7.5% spent General Administration 5.2% spent

The Repair and Replacement fund is 0.0% expended through the quarter ending March 31 of 2019 of the 2019-2020 biennium budget cycle. ACTION REQUESTED: None, information item.

8.44 9.168.07

0

4

8

12

16

Influ

ent F

low

, MG

D

Salmon Creek WWTP

Influent Flow 2018

2019Design Flow 14.95 MGD

Planning trigger - 85% of Design flow -12.71 MGD

18757 19286 19042

0

5000

10000

15000

20000

25000

30000

BO

D, l

bs/d

ay

Influent BOD loading2018

2019Design limit 25,400 lbs/day

Planning trigger - 85% of Design limit - 21,590 lbs/day

2132720980 19394

0

5000

10000

15000

20000

25000

30000

TSS,

lbs/

day

Influent TSS loading 2018

2019Design limit 28,200 lbs/day

Planning trigger - 85% of Design limit - 23,970 lbs/day

2018 2019 2018 2019 2018 2019 2018 2019January 9.38 8.44 17784 19458 17166 21327 7.2 9.6February 8.72 9.16 19964 19286 19374 20980 8.7 11.2

March 8.53 8.07 19057 19042 18918 19394 8.6 13.6April 8.59 20168 19517 8.6May 7.50 18402 18539 7.9June 7.19 18171 18904 8.2July 6.98 18160 18214 5.6

August 7.01 18144 19227 5.7September 7.13 17401 17566 6.2

October 7.28 17047 17582 7.6November 7.54 18562 18938 8.0December 8.54 20500 22356 7.5

2018 2019 2018 2019 2018 2019January 5.9 5.8 21.9 5.9 3.1 2.8February 6.0 6.0 6.3 7.9 3.5 2.0

March 5.2 6.8 9.1 12.8 2.6 3.6April 5.6 5.2 8.7May 6.9 8.0 3.0June 6.6 6.3 1.8July 4.7 44.2 1.7

August 5.9 23.6 1.9September 6.4 24.0 1.9

October 9.0 14.2 1.7November 7.6 14.2 2.5December 6.6 6.2 1.4

average, mg/l

average, mg/l average, CFU/100ml average, mg/l

Influent Flow, Efflluent BOD5 Monthly

Efflluent TSS Monthly Fecal Coliform Monthly

Influent BOD5 Monthly

average, lbs/day

Influent TSS Monthly

average, lbs/day

Total Ammonia Monthly

MGD

5.9 7.9 12.8

0

50

100

150

200Fe

cal C

olifo

rm, C

FU/1

00m

l

Fecal Coliform

2018

2019Permit limit 200 CFU/100ml

2.8 2.03.6

0

4

8

12

16

20

Tota

l Am

mon

ia, m

g/l

Total Ammonia (as NH3-N)2018

2019

Permit limit 18.7 mg/l

9.611.2

13.6

0

5

10

15

20

25

30

35

BO

D, m

g/l

Effluent BOD2018

2019Permit limit 30 mg/l

5.8 6.0 6.8

0

5

10

15

20

25

30

35

TSS,

mg/

l

Effluent TSS2018

2019Permit limit 30 mg/l

DESCRIPTION BUDGET REVENUEREMAINING

BUDGET

Sale Of Merchandise -$ -$ -$ Sewer Flow Charges 7,883,388$ 999,973$ 6,883,415$ Sewer- City of Ridgefield 100,000$ -$ 100,000$ Other Jurisdictions - Repair Services 30,000$ -$ 30,000$ Interest 5,000$ 11,705$ (6,705)$ Insurance Proceeds -$ 11,656$

TOTAL $8,018,388 $1,023,333 $7,006,710

CLARK COUNTY PUBLIC WORKSSALMON CREEK TREATMENT PLANT

OPERATIONS AND MAINTENANCE - FUND 4580

January 1, 2019 through March 31, 2019

REVENUE

% REMAINING % REMAININGBUDGET EXPENSES SPENT BUDGET BUDGET EXPENSES SPENT BUDGET

Consolidated Fund 4580 Consolidated Fund 4580by Controllables by Category

Salaries and Benefits 3,352,866$ 408,182$ 12.2% 2,944,684$ Laboratory 535811 309,970$ 33,062$ 10.7% 276,908$

Supplies 1,106,836$ 36,438$ 3.3% 1,070,398$ Maintenance 535812 2,062,233$ 176,753$ 8.6% 1,885,480$

Services 3,699,611$ 91,305$ 2.5% 3,608,306$ BG Force Main 535813 142,746$ 8,629$ 6.0% 134,117$

Capital -$ -$ -$ BioSolids 535814 1,446,816$ 26,112$ 1.8% 1,420,704$

Operations 535815 3,063,607$ 231,079$ 7.5% 2,832,528$

General Administration 535819 1,153,941$ 60,288$ 5.2% 1,093,653$

Total $8,159,313 $535,925 6.6% 7,623,388$ Total $8,179,313 $535,925 6.6% $7,643,388

Laboratory 535811 BioSolids 535814

Salaries and Benefits 241,384$ 29,656$ 12.3% 211,728$ Salaries and Benefits -$ -$ -$

Supplies 40,446$ 1,851$ 4.6% 38,595$ Supplies 462,148$ 3,861$ 0.8% 458,287$

Services 28,140$ 1,555$ 5.5% 26,585$ Services 984,668$ 22,251$ 2.3% 962,417$

Total $309,970 $33,062 10.7% $276,908 Total $1,446,816 $26,112 1.8% $1,420,704

Maintenance 535812 Operations 535815

Salaries and Benefits 1,288,935$ 155,874$ 12.1% 1,133,061$ Salaries and Benefits 1,316,118$ 171,938$ 13.1% 1,144,180$


Services 450,856$ 1,775$ 0.4% 449,081$ Services 1,556,189$ 57,394$ 3.7% 1,498,795$

Capital 20,000$ -$ 0.0% 20,000$

Total $2,062,233 $176,753 8.6% 1,885,480 Total $3,063,607 $231,079 7.5% $2,832,528

BG Force Main 535813 General Administration 535819

Salaries and Benefits 47,246$ -$ 0.0% 47,246$ Salaries and Benefits 459,183$ 50,715$ 11.0% 408,468$


Services 10,000$ -$ 0.0% 10,000$ Services 669,758$ 8,331$ 1.2% 661,427$

Total $142,746 $8,629 6.0% 134,117 Total $1,153,941 $60,288 5.2% $1,093,653

CLARK COUNTY PUBLIC WORKSSALMON CREEK TREATMENT PLANT

OPERATIONS AND MAINTENANCE - FUND 4580

January 1, 2019 through March 31,2019 (12.50% of Biennium)

EXPENSES

`

CLARK COUNTY PUBLIC WORKSSalmon Creek Wastewater Treatment Plant

Operations and Maintenance Fund 4580 and Repair and Replacement Fund 4583January 1, 2019 - March 31, 2019

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

1st Qtr 2019 2nd Qtr 2019 3rd Qtr 2019 4th Qtr 2019 1st Qtr 2020 2nd Qtr 2020 3rd Qtr 2020 4th Qtr 2020

Fund 4580 Budget vs. Actuals 2017/2018

Actuals

Budget

of 3

Staff Report

Board Meeting of June 21, 2019 6c. Operator Report Clark Regional Wastewater District – First Quarter 2019

STAFF CONTACTS PHONE EMAIL

Rich Ludlow, District Operations Manager 360-993-8851 [email protected]

PURPOSE: This report covers operations of the Ridgefield Wastewater Treatment Plant (RTP) and the Regional Biofilter (Biofilter) through March 31, 2019. DISTRICT OPERATOR ACTIVITIES – RIDGEFIELD TREATMENT PLANT (RTP):

District Transition Activities:

• Staff Cross-Training Update: Four treatment plant operator trainees have completed their one-year training period and have applied for the Treatment Plant Operator 1 certification. These certifications will provide in-house certified operators to provide staffing flexibility while continuing to meet NPDES permit requirements for scheduled shift staffing.

District Operator Repair and Replacement (R&R) Projects:

Plant staff is engaged in operational repair and restoration projects and regular maintenance services at the RTP on an ongoing basis. Table 1 below has a summary of the activities contracted through City and District Operations during the 2019 – 2020 Biennium with project status updates.

Table 1

Project Schedule Status Expenditures PLC Upgrade Project Moved to 2019/20

biennium $37,000

Air Diffuser Replacement Not Performed Postponed Indefinitely

$7,000

Effluent Line Root Removal June, 2019 Planned Self-Performed

R&R PROJECT EXPENDITURES $44,000

Operator Report Clark Regional Wastewater District – First Quarter 2019 June 21, 2019

Page 2 of 3

Explanation of Projects:

• PLC Upgrade Project: This project is being scoped and is intended to kick off in late 2019.

• Air Diffuser Replacement: Postponed for future evaluation – The District has determined that current fine bubble diffusers are performing well with no indication of failure or end of useful life. Treatment plant operators are planning on taking one aeration basin down for inspection this summer.

• Effluent Line Root Removal: District staff began installing a flow meter in the effluent pipe to verify plant instrumentation and found the flow partially impeded. CCTV inspection revealed root intrusion in the line near Lake River. Sewer crews will deploy to clear the line early this summer.

Table 2 below has a summary of the activities scheduled through District Operations during the 2019 – 2020 Biennium, followed by brief project status updates.

Table 2

Project Schedule Status Expenditures Effluent Sampler Replacement February, 2019 Complete $11,000

Sludge Transfer Pump Overhaul Q2, 2019 Parts received, work scheduled

$11,000

SCADA Improvements Q2 – Q3, 2019 Scoping work $25,000

PLC Replacement Q1 – Q2, 2020 Planning $50,000

Table 3 below has a summary of scheduled CIP work scheduled at the RTP during the 2019 – 2020 Biennium, followed by brief project status updates.

Table 3

Project Schedule Status Expenditures Aeration Basin Concrete Repairs September 2019 In Design $75,000

Explanation of Project:

• Aeration Basin Concrete Repairs: This capital improvement project was identified when the City of Ridgefield operated the treatment plant. The anoxic mixers in the aeration basins are mounted to the top of two concrete walls and the mounting points are spalling and need reinforcement.

DISTRICT OPERATOR ACTIVITIES – REGIONAL BIOFILTER:

Maintenance activities for the Regional Biofilter consist of weekly site visits to verify proper operation of process equipment, security checks, and verification that biofilter media is free of weeds and debris. There have been no recorded odor complaints from this facility in Q1 2019.

Operator Report Clark Regional Wastewater District – First Quarter 2019 June 21, 2019

Page 3 of 3

DISTRICT OPERATOR BUDGET – 2019-2020 BIENNIUM

The attached financial documents include the first quarter 2019 expense summaries for the RTP and Biofilter operating funds. The RTP operating fund closed Q1 in the 2019-2020 biennium budget period at 9.6% of actual expenditures versus budgeted amount. The Biofilter operating fund also finished the period at 9.6% of actual expenditures versus budgeted amount.

ACTION REQUESTED: None, information item.

% Budget Actual Remaining Budget Term Expenses % Spent Budget

Salaries and Benefits 352,000$ 25% 76,198$ 21.6% 275,802$ Supplies 45,000$ 25% 11,533$ 25.6% 33,467$ Utilities 30,000$ 25% 11,712$ 39.0% 18,288$ Operations and Maintenance 27,000$ 25% 2,479$ 9.2% 24,521$ Professional Services 60,000$ 25% 6,255$ 10.4% 53,745$ Intergovernmental 176,000$ 25% 15,202$ 8.6% 160,798$ Capital Outlays 51,500$ 25% 18,503$ 35.9% 32,997$ RTP Total 741,500$ 25% 141,882$ 19.1% 599,618$ RB Operations 11,000$ 25% 2,750$ 25.0% 8,250$ Operator Total 752,500$ 25% 144,632$ 19.2% 607,868$

% Budget Actual Remaining Budget Term Expenses % Spent Budget

Salaries and Benefits 704,000$ 12.5% 76,198$ 10.8% 627,802$ Supplies 90,000$ 12.5% 11,533$ 12.8% 78,467$ Utilities 60,000$ 12.5% 11,712$ 19.5% 48,288$ Operations and Maintenance 54,000$ 12.5% 2,479$ 4.6% 51,521$ Professional Services 120,000$ 12.5% 6,255$ 5.2% 113,745$ Intergovernmental 352,000$ 12.5% 15,202$ 4.3% 336,798$ Capital Outlays 103,000$ 12.5% 18,503$ 18.0% 84,497$ RTP Total 1,483,000$ 12.5% 141,882$ 9.6% 1,341,118$ RB Operations 22,000$ 12.5% 2,750$ 12.5% 19,250$ Operator Total 1,505,000$ 12.5% 144,632$ 9.6% 1,360,368$

Ridgefield Wastewater Treatment Plant / Regional BiofilterFirst Quarter 2019 Annual Operator Budget and Expense Summary

Ridgefield Wastewater Treatment Plant / Regional BiofilterFirst Quarter 2019-2020 Biennial Operator Budget and Expense Summary

District Operator

District Operator

0.4 0.40.3

0.00.10.20.30.40.50.60.70.80.91.0

Influ

ent F

low

, MG

D

Ridgefield WWTPEffluent Flow 2018

2019

Max Month Avg Flow 0.7 MGD

5.07.0 10.0

0

5

10

15

20

25

30

35

BO

D, m

g/l

Effluent BOD Monthly Average 2018

2019

Permit limit 30 mg/l

7.0 8.0 10.0

0

5

10

15

20

25

30

35

TSS,

mg/

l

Effluent TSS Monthly Average 2018

2019

Permit limit 30 mg/l

2018 2019 2018 2019 2018 2019 2018 2019 2018 2019January 0.4 0.4 6.6 5.0 6.3 7.0 4.4 12.0 0.3 0.3February 0.3 0.4 7.5 7.0 8.0 8.0 10.0 12.0 0.6 0.3

March 0.3 0.3 7.0 10.0 7.0 10.0 8.0 12.0 0.3 0.3April 0.3 4.5 4.4 2.0 0.3May 0.2 4.2 4.8 7.0 0.4June 0.2 4.5 4.7 6.0 0.3July 0.2 3.8 3.3 3.0 0.5

August 0.3 3.0 3.0 4.0 0.4September 0.3 3.0 3.0 26.0 0.3

October 0.3 5.0 5.0 10.0 0.7November 0.3 4.0 5.0 6.0 0.3December 0.4 6.0 8.0 12.0 0.3

BOD5 = Biochemical Oxygen Demand (5-Day) TSS = Total Suspended Solids

Total Ammonia Monthly

MGD average, mg/l average, mg/l average, CFU/100ml average, mg/l

Effluent Effluent BOD5 Monthly Effluent TSS Monthly Fecal Coliform Monthly

12.0 12.0 12.0

0

20

40

60

80

100

120Fe

cal C

olifo

rm, C

FU/1

00m

l

Fecal Coliform Monthly Average 2018

2019Permit limit 100 CFU/100ml

0.3 0.3 0.3

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

Tota

l Am

mon

ia, m

g/l

Total Ammonia (as NH3-N) Monthly Average 2018

2019

Permit limit 1.4 mg/l

\\Crwwd-dc2\shared\Alliance\1 EXEC-ADMIN\1 BOARD\Agenda Packets\2019\2019-06-21 Q2\6d 062119 Capital Program Report Q12019.docx 6/12/2019

Page 1 of 5

Staff Report Board Meeting of June 21, 2019

6d. Capital Program Report – First Quarter 2019

PURPOSE: This staff report provides an update on the ongoing capital program and capital project activities for the Regional Assets (RAs) under Alliance responsibility. The capital program and capital project responsibilities are assigned to Members according to the following three elements:

Following is a brief summary of ongoing activities for each of these elements: 1. Overall Capital Program. The 2018 Alliance Capital Plan was adopted at the December 2018 Board

meeting based on all known needs at that time. The District is charged with tracking project needs that may result in future capital projects. Projects arise from the regulatory environment, from Regional Asset condition assessments initiated through a developing asset management program or as a result of more detailed design work as projects are developed. The Members evaluate new projects for incorporation in the next Capital Plan or implementation within contingency funding provided in the current capital and operating budgets.

Asset Management Program Development

In 2017, the Alliance took an important early step in the asset management journey by hiring CH2M (now Jacobs) to prepare an Asset Management Current Situation Analysis and Improvement Plan.

STAFF CONTACTS PHONE EMAIL John M. Peterson, P.E., District General Manager

Dale Lough, P.E., Alliance Capital Program Manager 360-993-8819 360-993-8856


Period Capital Program and Capital Project Responsibility

Salmon Creek Wastewater Management

System, RAs 1-7

Ridgefield Treatment Plant & Outfall, RA 8

Battle Ground Force Main, RA 9

2019-2020 Alliance

Full Operations

1. Overall Capital Program – Administrative Lead/ Members

2. Capital projects less than $63,000 – Operators

3. Capital projects greater than $63,000

– Administrative Lead

District/Members

Clark County

District

District/Members

District

District

District/Members

Clark County

District

Capital Program Report – First Quarter 2019 June 21, 2019

Page 2 of 5

This process provided the Alliance with an understanding of its level of maturity in seven Key Focus Areas (KFAs) of asset management. These are:

• Organizational Context

• Asset Management Vision and Leadership

• Asset Management Objectives and Targets

• Asset Management Information Requirements

• Planning to Achieve Asset Management Objectives

• Operational Planning and Control

• Asset Management Enablers and Support

As expected, the Alliance showed strong in some areas and weak in others. An early outcome of this work was the development of the ICCA process of condition assessment (risk of failure) and criticality (consequence of failure) that was documented in the 2018 Capital Plan. This process continues in 2019 and several new areas of assessment are being developed as noted below.

• Salmon Creek Treatment Plant and Ridgefield Treatment Plant buried pipelines

• Salmon Creek Treatment Plant and Ridgefield Treatment Plant outfall inspections

• Salmon Creek Treatment Plant transformers and power supply systems

• Salmon Creek Treatment Plant instrumentation and controls systems

• Salmon Creek Treatment Plant headworks channel inspections

• Salmon Creek Treatment Plant network separation

• Salmon Creek Treatment Plant waste gas incinerator

• Salmon Creek Interceptor CCTV inspection

• Battle Ground Force Main location

Any deficiencies noted will be developed into future repair and replacement projects. These projects will then be reviewed as part of the ongoing asset management program development process. As a reminder, the following steps are being taken to build a fully-sustaining program:

• 2019 – Complete new condition assessments.

• 2019 – Update asset condition and criticality scoring with new information. Define highest-need items based on combined score (Risk x Consequence).

• 2019-2020 – Define projects to address highest score items.

• 2020 – Update programming (sequence and schedule) to make highest-value investments within defined affordability framework.

• 2020 – Present 2021-2022 budget recommendations to Alliance Committees and Board.

2. Capital Projects Less Than $63,000. The adopted Operating Budget includes funding for repair and

replacement projects to be completed by the Operators. The Operators will continue to report on their respective capital project work elements as part of the quarterly Operator reports.


Page 3 of 5

3. Capital Projects Greater Than $63,000. A Capital Program Summary status report for the District-led capital projects included in the 2019-2020 budget period is attached for the Board’s information (Attachment A). This report reflects the 2019-2020 biennium repair and replacement (R&R) Program work, Capital Improvement Project (CIP) Program work, and R&R Allowance work. CIP Program (Projects 1-2 on Summary Report, Attachment A) The first quarter of 2019 focused on moving forward with design, permitting, and easement investigation activities for two major CIP projects identified in the Capital Plan, as summarized below.

• Salmon Creek Treatment Plant Phase 5A - Columbia River Outfall and Effluent Pipeline Project: The team is advancing permitting, design, and property acquisition work. Meetings with the major property owners impacted were held in April and May. Major permitting milestones were achieved with submittals to United States Army Corps of Engineers and Clark County in May. Other work in 2019 includes submitting applications for all other major permits, advancing design to 60%, and continuing property acquisition negotiations. The project is anticipated to be bid in late 2020 with construction in 2021 and 2022.

• Salmon Creek Treatment Plant Phase 5B – Treatment Plant Improvements: As previously reported, the Phase 5B project has been split into two packages. These are: Package 1 – Salmon Creek Treatment Plant Odor Control and Existing Facilities Improvements and Package 2 – Salmon Creek Treatment Plant Capacity Increase. The status of each package is described in detail in the following sections.

o Package 1 – Salmon Creek Treatment Plant Odor Control and Existing Facilities

Improvements. Staff is currently developing an Engineering Report for Package 1 to deliver to Ecology for review and approval. Ecology has reported that this process will be more straightforward as the project does not involve a request for new capacity. The team is currently reviewing the 60% design package and the 90% package is anticipated to be complete in September. The project is anticipated to bid in late 2019 for construction in 2020 and 2021. The primary goal for the work is to have odor control systems operational by the end of 2020.

o Package 2 – Salmon Creek Treatment Plant Capacity Increase. Ecology provided

comments on the Final Draft Engineering Report for the combined Phase 5B project and staff is working on the approach to address these comments upon approval of the Package 1 Engineering Report. Once staff has clear direction from Ecology on the capacity increase work contemplated for Package 2, an Engineering Report will be prepared in early 2020 for review and approval by Ecology prior to starting detailed design in 2021. This timeline will allow the Columbia River Water Quality Monitoring Program work described in the Administrative Lead Report to inform a decision on the dissolved oxygen impairment. Construction is anticipated to start in 2022 and continue into 2024

R&R Program (Projects 3-12 on Summary Report, Attachment A) The first quarter of 2019 focused on completion of a construction project that carried over from 2018 and moving forward with design activities for R&R projects identified in the Capital Plan. Retainage was paid and a final accounting was sent to the insurance company for the emergency response to the Salmon Creek Treatment Plant (SCTP) sludge blend tank overflow event of May 2, 2017.


Page 4 of 5

• Construction: o 36th Avenue Pump Station Pump Replacement – Construction is complete. Staff is

researching an issue at the facility where the pumping operation is causing vibration in the platform supporting the discharge piping. The design consultant is preparing a list of recommendations for staff review. The vibration does not impact the operation of the new pumping equipment, which is performing well.

o SCTP Sludge Blend Tank Overflow Recovery – Construction is complete. Retainage was paid to the electrical contractor and a final accounting of cost was sent to the insurance company. The majority of the claim has been paid with only one check remaining to be delivered.

• Design: o Klineline Interceptor Manhole Repair – This project will repair Klineline Interceptor

manholes degraded by hydrogen sulfide from the St. Johns Interceptor and Battle Ground Force Main. Design work is expected to start in late 2019 with construction in 2020.

o SCTP Digester Maintenance and Modifications – This project addresses expected corrosion in Digester 1 and installs safety hatches and level controls in both Digesters 1 and 2. Design work has begun and construction will be closely coordinated with the cleaning project performed by Clark County. The cleaning work is likely to be deferred until next year as a result of receiving higher than anticipated bids for the work due to a saturated bidding climate. This may result in the project being split into two phases with the instrumentation work occurring in 2019 and the remainder in 2020.

o SCTP Boiler Exhaust Stack Replacement – This project replaces existing boiler exhaust stacks with more robust equipment that is designed to withstand the required operating conditions. Design for this replacement is underway and the work is anticipated to be complete in 2019.

o SCTP Biosolids Cake Transfer Screw Replacement – This project replaces the existing biosolids cake transfer screw, which is worn out after 20+ years of continuous service. Design for the replacement is underway and the work is anticipated to be complete in 2019.

o SCTP HVAC Systems Replacement – This is a program to replace many of the aging HVAC systems at the plant. Units associated with Buildings 35 and 83 were replaced early in 2019. The design for Building 70 and 72 replacements is expected to start in mid-2019 with construction to occur in late 2019 and early 2020.

o SCTP Fire Alarm System Replacement – The existing fire alarm system is over 20 years old and in need of replacement. Design is anticipated to begin in 2020 with construction to follow in 2021-2022.

o SCTP Boiler Gas Boosters – This project installs gas pressure boosting equipment to optimize existing boiler performance and minimize condensation. Scoping for the design phase of this project is proceeding with construction scheduled for 2020.

o RTP Aeration Basin Mixer Support/Concrete Repair – This project will perform structural repairs to damaged aeration basin walls and modify the mixer support anchorage to prevent similar damage in the future. Design on these repairs has started and the work is anticipated to be complete in summer 2019.


Page 5 of 5

R&R Allowance Staff continues to assess Regional Asset operations on an ongoing basis to recognize and address needs not identified in the currently-adopted budget. An R&R Allowance is established for the 2019-2020 biennium budget period to fund these projects. Staff is currently researching recent stability issues with the computer network at the Salmon Creek Treatment Plant to scope a project that may be implemented this year under the R&R Allowance. This work has been vetted by the MIC.

4. Proposed New Home Development. The District has recently become aware of a potential new

home site in the immediate vicinity of the Salmon Creek Treatment Plant. The development to the south has a lot located between existing homes at the top of the slope and the plant Operations Building at the bottom. Plans for siting a home on this lot have been submitted to the District for preliminary review. This item will be described in more detail in the accompanying presentation.

ACTION REQUESTED: Information and discussion on the current Alliance capital project work activities.

Attachment A – Capital Program Summary – Q1 2019

Attachment A

2019-2020 Capital Program SummaryCurrent 2019-2020 Spent

PROJECT # PROJECT NAME DESCRIPTION TEAM PROJECT NO. STATUS

Capital Improvement Projects

1 Phase 5A Columbia River Outfall and Effluent Pipeline

Replacement of existing effluent pipeline and Columbia River outfall. Project extents include corridor between SCTP and Columbia River.

Lough, Jacobs 92-2015-0023 60% Design $24,500,000 $24,559,646 30% $2,616,646 $2,574,000 $333,050 $2,574,000 $19,369,000Project is moving forward with 60% design, final permitting, and property acquisition.Goal is to have bid-ready contract documents by the end of 2020 with constructioncommencing in 2021.

2 Phase 5B Salmon Creek Treatment Plant Improvements

Improvements at SCTP that include a new aeration basin and secondary clarifier; RAS pumping improvements; and odor control.

Lough, Jacobs 92-2017-0053 Pre-Design $24,000,000 $24,764,492 Program $679,492 $14,725,000 $370,549 $14,725,000 $9,360,000Project has been split into two packages (1-Existing Facilities/Odor Control and 2-NewCapacity). Goal is to have bid-ready contract documents for Package 1 in 2019 withconstruction commencing in 2020. Package 2 to go to construction in 2022.

Restoration and Replacement Projects

3 Klineline Interceptor Manhole RepairRepair 12 Klineline Interceptor manholes degraded by hydrogen sulfide from the St. Johns Interceptor and Battle Ground Force Main.

Lough, Roppo 93-2018-0095 Scoping $271,000 $287,000 Program $0 $287,000 $0 $287,000 $0 Design work is expected to start in late 2019 with construction in 2020.

4 SCTP Digester Maintenance and Modifications

Address expected corrosion in Digester No. 1 and installs safety hatches and level controls to both Digester No. 1 and Digester No. 2.

Lough, Jacobs 93-2018-0086 Design $324,000 $334,000 Program $0 $334,000 $0 $334,000 $0Design work has begun and construction will likely be split into two phases with theinstrumentation work occurring in 2019 and the remainder in 2020 due to high bidsreceived this spring for digester cleaning.

5 SCTP Boiler Exhaust Stack Replacement Install new, more robust boiler stacks that are designed to withstand the required operating conditions. Lough, Jacobs 93-2018-0096 Design $130,000 $134,000 Program $0 $134,000 $0 $134,000 $0 Design for this replacement is underway and the work is anticipated to be complete in

2019.

6 SCTP Biosolids Cake Transfer Screw Replacement

Replace the failing biosolids cake transfer screw to provide more reliable operation of this critical plant process.

Lough, Jacobs 93-2018-0089 Design $390,000 $402,000 Program $0 $402,000 $22,067 $402,000 $0 Design for the replacement is underway and the work is anticipated to be complete in2019.

7 SCTP HVAC Systems Replacement Replace aged HVAC equipment for several facilities at Salmon Creek Treatment Plant. Lough, Jacobs, BC Various Design $1,248,000 $1,309,130 Program $32,130 $665,000 $108,472 $665,000 $612,000

Units associated with Buildings 35 and 83 were replaced early in 2019. The design forBuilding 70 and 72 replacements is expected to start in mid-2019 with construction tooccur in late 2019 and early 2020.

8 SCTP Fire Alarm System ReplacementThe project will replace the existing 20-year-old fire alarm system at SCTP with a new system in line with current fire alarm technology.

Lough, TBD TBD Program $1,538,000 $1,545,000 Program $0 $127,000 $0 $127,000 $1,418,000 Design is anticipated to begin in 2020 with construction to follow in 2021-2022.

9 SCTP Boiler Gas BoostersInstall gas pressure boosting equipment to ensure boilers are operating at sufficient capacity without forming condensation.

Lough, BC 93-2019-0012 Design $205,000 $217,000 Program $0 $217,000 $0 $217,000 $0 Scoping for the design phase of this project is proceeding with construction scheduled for2020.

10 RTP Aeration Basin Mixer Support/Concrete Repair

Structural repairs to the aeration basins and modify the mixer support anchorage to prevent similar damage in the future.

Lough, BC 93-2019-0011 Design $74,000 $76,000 Program $0 $76,000 $0 $76,000 $0 Design on these repairs has started and the work is anticipated to be complete in summer2019.

11 36th Avenue Pump Station Pump Replacement

Replace raw sewage pumps and motors in order to maintain reliable and effective transmission of flow to the Salmon Creek Treatment Plant.

Lough, Jacobs, BC, Stellar J 93-2015-0019 Post-

Construction $1,302,000 $1,244,910 Post-Construction $1,224,910 $0 $0 $20,000 $0 Pump and piping replacements were completed in 2018 and station is operating well with

no clogging reported. Minor vibration issue is under investigation in 2019.

12 Salmon Creek Treatment Plant Sludge Blend Tank Overflow Recovery

The project is comprised of efforts to clean up an overflow, assess damaged systems, and restore all affected systems to proper operating condition.

Lough, Jacobs, Christenson Electric 93-2017-0032 Post-

Construction $525,000 $526,614 Post-Construction $503,109 $0 $23,505 $23,505 $0 Construction is complete. Retainage was paid to the electrical contractor and a final

accounting of cost was sent to the insurance company.

Annual R&R Allowance Allowance to account for undefined needs. Lough, TBD Various N/A $250,000 $262,000 Program N/A $262,000 $0 $262,000 N/A Potential allowance projects include SCTP computer network upgrades to reduce risk andimprove reliability.

CIP TOTAL $49,324,138 $17,299,000 $703,599 $17,299,000 100.0%R&R TOTAL $6,337,654 $2,504,000 $154,044 $2,547,505 101.7%TOTAL $55,661,792 $19,803,000 $857,643 $19,846,505 100.2%

NET DIFFERENCE -$18,945,357 $43,505% OF BUDGET 100.0% 4.3% 100.2%

Projects Carried Over from 2018

New Projects

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Attachment A

Printed: 6/12/2019

Page 1 of 4

Staff Report Board Meeting of June 21, 2019

6e. Administrative Lead Report

STAFF CONTACTS PHONE EMAIL John M. Peterson, P.E., District General Manager

Leanne Mattos, District Sr. Administrative Assistant 360-993-8819 360-993-8823


PURPOSE: The Alliance is a regional wastewater transmission and treatment utility, now in its fifth year of full operation in 2019. The goal of the Administrative Lead (AL) Report is to provide a quarterly update for ongoing activities in the executive and administrative areas of responsibility for the Alliance. Executive and Administrative Activities.

1. Member Agency and Public Engagement Services. The following work activities are noted with respect to recent communication efforts on behalf of the Alliance:

o June 4 Salmon Creek Treatment Plant Open House. The third annual open house was held on Tuesday, June 4. This forum has proven helpful in engaging residents who live near the regional treatment facility on operational level issues such as truck traffic, noise and odors. Updates on the Phase 5 Expansion program capital projects were also provided in an effort to provide awareness for upcoming construction-related disruptions. The first phase of construction work is expected to improve the odors noticed by residents living in close proximity to the facility.

o June 12 Partners Meeting. The quarterly briefing was recently held for plant operations and maintenance (O&M) staff. This meeting was focused on reviewing the progress towards establishing a basic asset management program, founded on asset condition and criticality. The condition and criticality information informs project definition and prioritization that, in turn, provides the basis for capital budgets and project delivery.

2. Water Quality Regulatory Processes - State and Federal Level. The Alliance continues to monitor

relevant water quality regulatory and legal processes at the state and federal level. Two items are highlighted in this report for the Board’s awareness:

o State Level – Puget Sound Nutrients – Petition for Rulemaking. Ecology has had a long- term focus on dissolved oxygen in Puget Sound, including the effects of nutrients such as nitrogen and phosphorus. The nutrients can contribute to aquatic plant growth which, in turn, consumes dissolved oxygen from the water. The focus on nutrients and dissolved


Administrative Lead Report June 21, 2019

Page 2 of 4

oxygen has been recently elevated through a series of regulatory and legal actions. Most recently, Northwest Environmental Advocates (NEA) has petitioned Ecology for rulemaking. Upon Ecology’s denial of the petition for rulemaking, NEA initiated legal action against Ecology in February 2019 in Thurston County Superior Court. The State of Washington has responded to the petition and largely denied the allegations. The case is not yet scheduled for trial.

o Federal Level – Columbia and Snake Rivers - Temperature TMDL. A consortium of

interests (Columbia Riverkeeper, et. al.) has sued the Environmental Protection Agency (EPA) to compel EPA to address documented impairments to the temperature standards for the Columbia and Snake Rivers. This case was initially decided in the United States District Court - Western District of Washington, at Seattle in October 2018. The court ruling compelled EPA to address the total maximum daily load (TMDL) for temperature in a short timeframe. That decision has been appealed to the Ninth Circuit Court of Appeals within the federal court system. Briefing for this case will not be completed until June 2019, with oral arguments currently scheduled for the end of August 2019. Assuming that continuances are not granted, a written decision is unlikely before the end of the year.

3. Columbia River Water Quality Monitoring Program. The partnership between the Alliance and the

City of Vancouver (Vancouver) continues to engage Ecology with respect to water quality issues for the Columbia River. This is primarily related to two current listings for dissolved oxygen (DO) impairment that resulted from volunteer study data and an earlier Clean Water Act (CWA) Water Quality Assessment process. Progress made since the March 15 Board of Directors meeting includes the following activities:

o A meeting was held with Ecology on March 28 to review two letters submitted in 4Q 2018 by the Alliance and Vancouver. The meeting also discussed any changes or refinements needed for the Columbia River Water Quality Monitoring Program for 2019.

o An updated Quality Assurance Project Plan (QAPP) has been prepared for the 2019 sampling efforts. City of Vancouver staff will be submitting the QAPP to Ecology and directing the consultant’s activities for the field work to start July 1. Sampling will occur July through September, with the planned work very similar to the 2018 activities.

o The data will be formally submitted to Ecology after the completion of field work, in

October and November 2019. This will take the form of consultant submittal of data to Ecology’s database in October 2019 and a letter from the Alliance alerting Ecology to the completion of the process and the availability of data in November 2019.

o Pending the outcome of the 2019 field sampling, this process will support Ecology’s

consideration of both the review of the original volunteer study along with the required two years of sampling results from 2018 and 2019. This combination of information on the original basis for the listing and the new data will likely allow Ecology to address the current impairment status with a single regulatory action.


Page 3 of 4

4. Phase 5 Program Delivery Update. As has been described at previous Board meetings, the AL is

recommending a particular sequence of project work to thoughtfully coordinate the plant site improvements and the ongoing regulatory processes. A summary of the current recommended timeline is presented as Attachment A. The recent engagements with Ecology, review with the Alliance Member agencies and other stakeholders have confirmed the appropriateness of this approach.

5. Operational Proposal for Risk Reduction and Efficiency. The Alliance Member agencies continue to work together in a cooperative manner to determine the optimum approach for delivery of services. As the construction period for the Phase 5 Expansion Program approaches (anticipated for a five year period 2020-2024), the Alliance is evaluating the most efficient and effective manner to address the additional workload that will be required to support the construction activities.

The construction work will be disruptive at the Salmon Creek Treatment Plant (SCTP) as three different construction contracts are administered at the facility. The SCTP must maintain 100% permit compliance through this period, while interrupting operations to take facilities on and off line, and coordinating shutdowns for critical pipelines and mechanical and electrical systems. All new systems must go through a comprehensive testing and commissioning process before being placed into service. All of this requires active coordination on the part of engineering, operations and construction teams. During past expansion programs, much of this coordination and construction interface work was contracted to the consulting engineering firms working on the projects. While helpful and effective, the consulting approach is also relatively expensive for a sustained multi-year program. This work can also be largely managed with a combination of District and Clark County staff familiar with the facilities and construction processes, if adequate time can be made available to support the program. In reviewing this need with affected District and County managers, a proposal has been identified that will better manage the construction process, result in net savings over the construction period and reduce operational risk for the Alliance and its Member agencies. The proposal is summarized as follows:

o Clark County. The Alliance Operator Agreement would be amended to remove three pipelines from Clark County operational responsibility, effective January 1, 2020. Those regional pipelines are the Battle Ground Force Main, the Salmon Creek Interceptor and the Klineline Interceptor. By reducing the responsibilities, this approach allows the current staff to devote additional resources to the upcoming construction period at the SCTP and reduce the overall permit compliance risks for Clark County and the Alliance in managing the facility during the construction period. Clark County’s overall staffing would remain the same. This approach makes the best use of Clark County’s skilled operational and maintenance staff members for the core pump station and treatment plant systems currently under Clark County operational responsibility.


Page 4 of 4

o District. The same three pipelines removed from the Clark County Operator agreement would be added to the District Operator Agreement. The District Operating budget would be amended, also effective January 1, 2020, to provide the budget resources needed to manage these pipelines for the Alliance. While this will increase the overall Alliance operating budget slightly, equivalent to approximately 0.6 FTE based on initial estimates, the District is the most efficient Operator for these systems because:

• The District already has certified collection system staff, specialized HVAC and

CCTV trucks and equipment for this work. In previous years, Clark County has contracted with the District to do this work, for this reason.

• The District operations team is already deployed throughout the service area where these pipelines exist geographically and, therefore, are in a position to be more efficient in responding to the necessary work. For example, the District will already have a full time locator responding to locate requests in these areas. It is very efficient for that locator to mark both District and Alliance pipelines in the same roadway. In the current approach, Clark County also dispatches staff to the same area to independently mark an Alliance pipeline, for a duplicative effort.

o Consultants. The construction phase consultant contracts would not include an on-site

presence for construction coordination responsibilities. This reduction in estimated consultant costs more than offsets the operating costs noted above, with an estimated net savings over the construction period of approximately $100-$200k, based on preliminary estimates.

Changes in the Operating Agreements for the District and Clark County would be permanent, even after the construction period is over. Clark County will have additional facilities, mechanical and electrical equipment to operate and maintain after the Phase 5 Expansion Program is completed and will devote the incremental staff resources to that new work. The District would have incorporated the three regional pipelines into its workload and staffing and would be in a position to continue to perform those services as the more efficient agency for the reasons noted above. In summary, this approach provides for the highest and best use of District and Clark County staff during the upcoming construction program, buys down construction-related operational risk, and provides for the most efficient framework in the post-construction period. If this approach is acceptable to the Board, a draft budget amendment will be provided at the September meeting, along with draft amendments to the Clark County and District Operator Agreements. If the draft documents are acceptable to the Board, these same items will be presented for approval at the December meeting, becoming effective January 1, 2020.

ACTION REQUESTED: Policy-level guidance for the various Administrative Lead activities.

Attachment A – Phase 5 Program Overview Schedule

Attachment A

Discovery Clean Water AllianceSalmon Creek Treatment Plant (SCTP) Phase 5 Program Delivery Timeline

PROGRAM 2019 2020 2021 2022 2023 2024

Columbia River

Water Quality

Monitoring Program

Field Sampling

(second year)

Data Submittal

Regulatory Review

Regulatory

Determination

SCTP Improvements-

Package 1

• Existing Facilities

• Odor Control

Permitting

DesignConstruction

Columbia River

Outfall and Effluent

Pipeline

Design

Permitting

Easements

Construction

SCTP Improvements-

Package 2

• Capacity Increase

Permitting

DesignConstruction

Printed: 6/11/2019 2:57 PM\\Crwwd-dc2\shared\Alliance\1 EXEC-ADMIN\1 FAC\2019\2019-06-14\1 2019-06-14 Alliance FAC Agenda.docx

Page 1 of 1

Finance Advisory Committee

Friday, June 14, 2019, 9:00 a.m. CONFERENCE CALL

Agenda

No Item Action/Info Presenter Time (minutes)

1. Alliance - Board Process a. Board Meeting Quarterly Schedule - Next Meeting: June 21 (attachment)

I. Treasurer Report – First Quarter 2019 (attachment) a) First Quarter 2019 Financial Report (attachment)

INFORMATION Andrews 15

2. Alliance 2019-2020 Budget INFORMATION Andrews 10 a. Current Fund Balances as of: June 7, 2019

AGENCY O&M 4580/407

DEBT SERVICE

RSC Rate Stab

R&R 4583/417/501-35

CIP TOTAL

ALLIANCE 1,396,964 2,275,101 328,356 3,674,897 771,910 $8,447,228

CC OPS 1,754,518 320,409 $2,074,927

CR OPS* 51,774 $51,774

CR AL* 74,052 $74,052

TOTAL $3,277,308 $2,275,101 $328,356 $3,995,306 $771,910 $10,647,981

*Portion of CR operating funds are included in Alliance O&M total

3. Alliance – Finance Work Plan DISCUSSION Andrews 10 a. Budget/CAFR/SAO Audit

I. 2019-2020 Operating/Capital Budget Amendment Kickoff (attachment) II. 2018 CAFR/SAO Audit Reports (attachment)

b. Financial Management and Reporting

c. Treasury I. 2019 Revenue Bond Issuance (RFQ – Municipal Advisor Services) (attachment) II. Draft Bond Issuance Schedule (attachment)

4. Alliance – Administration Updates INFORMATION Andrews 5 a. Management/Infrastructure Committee – June 14 (attachment) b. Operations Coordination Committee – June 26 (attachment)

`

5. Finance Advisory Committee Upcoming Meetings INFORMATION Andrews 5 a. Next FAC Conference Call – July 12

\\Crwwd-dc2\shared\Alliance\1 EXEC-ADMIN\1 FAC\2019\2019-06-14\Budget Kickoff Packet Documents\Alliance Budget Kickoff Packet Cover Pg.docx

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2019-2020 Operating and Capital Budget and RSCs Amendment Kickoff

FAC/MIC Meetings of June 14, 2019


PURPOSE: Kickoff the budget amendment process with the Standing Committees to (1) compute total operating and capital costs projected for the Alliance for 2020, (2) compare to the projected operating and capital costs estimated for 2020 in the original 2019-2020 Alliance budget when adopted in December 2018, and (3) assess if sufficient RSCs are now being collected to fund all operations and capital through 2020 or whether a budget amendment is necessary, along with any amendment to RSCs collected beginning January 2020 to meet expenditure and reserve build needs. The documents included in this kickoff package include:

1. 2019/2020 Budget/RSCs Amendment Calendar by 6/14

2. Draft #1 2020 budgets to be prepared by District by 7/5 a. Administrative Lead budget b. Contract operator budget for Regional Assets operated - RTP, RB c. Capital budget - R&R and CIP (Phase 5A and Phase 5B)

3. Draft #1 2020 budget to be prepared by County and provided to Treasurer by 8/2 a. Contract operator budget for Regional Assets operated - SCWMS, BGFM b. Budget Decision Package (BDP) Justification Form, if necessary

4. Draft #1 2020 Operating/Capital budget amendment by 8/9 a. Draft #1 Operating/Capital budget amendment summary - original vs. amended budget

for 2020 b. Draft #1 Amended Regional Service Charges, if necessary,

5. Draft #1 2020 Operating/Capital budget amendment to Alliance Board by 9/27 a. Draft #1 Operating/Capital budget amendment reviewed by FAC/MIC committees 9/13

Thank you in advance for your support in this process and timeline. This will be necessary in order for us to (1) have a complete draft budget to present to the Alliance Board at their September meeting, and (2) provide District staff, BG staff, the Battle Ground Council and the District Board and vet affordability analysis and concerns around any proposed changes to RSCs for the 2020 budget period.

FAC/MIC Meetings Alliance Board Meeting District RSC Review Due to Treasurer BG RSC Review

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BOARD Meeting - Review Budget/RSCs Amendment Calendar

FAC/MIC Meetings - Review Draft #1 AL, RTP, Capital Budget Amendments (District)

Draft #1 Budget Decision Packages/SCWMS Budget Amendment (CC) Due to Treasurer

FAC/MIC Meetings - Review Draft #1 BDP/SCWMS Budget Amendment (CC),Summary Alliance/RSCs Budget Amendment

Battle Ground/District Staff Review of Budget/RSCs Amendment (RSC Affordability)

FAC/MIC Meetings - Review Draft #1 Complete Budget/RSCs Amendment

BOARD Meeting - Review Draft #1 Complete Budget/RSCs Amendment

Battle Ground Council Review Amended RSCs for 2020 (RSC Affordability), if necessary

District Board Review Amended RSCs for 2020 (RSC Affordability), if necessary



FAC/MIC Meetings - Review Final Alliance/RSCs Budget Amendment/Staff Report/Resolution

Public Hearing: 2019-2020 Alliance Operating/Capital Budget/RSCs AmendmentBOARD Meeting - Adopt 2019-2020 Alliance Operating/Capital Budget/RSCs Amendment

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DISCOVERY CLEAN WATER ALLIANCE2019-2020 Budget/RSCs Amendment Calendar

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2017‐2018 2019‐2020

Budget Budget $ Change % Change

Expenses

Administrative Lead Contract

Contract Services

Executive and Administrative Services $168,000 $192,000 $24,000 14%

Financial and Treasury Services 167,000 169,000 2,000 1%

Engineering Services 484,000 699,000 215,000 44%

Total Contract Services 819,000 1,060,000 241,000 29%

Professional Services

Capital Program Support/Regulatory Compliance 400,000 615,000 215,000 54%

Computer/IT 1,000 1,000 ‐ 0%

Communications/Public Engagement 15,000 40,000 25,000 167%

Financial Consulting 20,000 10,000 (10,000) ‐50%

Total Professional Services 436,000 666,000 230,000 53%

Other Expenses

Utilities 2,000 1,000 (1,000) ‐50%

Advertising/Public Notices 2,000 1,000 (1,000) ‐50%

Miscellaneous 26,000 26,000 ‐ 0%

Total Other Expenses 30,000 28,000 (2,000) ‐7%

1,285,000 1,754,000 469,000 36%

Insurance Contract

Property, Liability, Errors/Omissions 380,000 340,000 (40,000) ‐11%

Legal Services Contract

Foster Pepper PLLC 85,000 80,000 (5,000) ‐6%

Professional Services ‐ Environmental Monitoring

City of Vancouver ‐ 90,000 90,000

Audit Services

Washington State Auditor's Office 29,000 29,000 ‐ 0%

Other Expenses

DAC Bond fee 5,000 5,000 ‐ 0%

Clark County Property Taxes 12,000 12,000 ‐ 0%

Misc Bank fee, permits, service charges 1,000 1,000 ‐ 0%

Total Other Expenses 18,000 18,000 ‐ 0%

512,000 557,000 45,000 9%

Budget/Plan Totals ‐ Administrative Services $1,797,000 2,311,000 $514,000 29%

Total Other Contracts

Total Administrative Lead Contract*

Administrative Lead Services

2017‐2018 2019‐2020

Budget* Budget Change ($) Change (%)

Operating Expenses

Personnel

Salaries and Benefits 530,000 701,000 171,000 32%

Training ‐ Registration 3,000 2,000 (1,000) ‐33%

Training ‐ Travel Expenses 2,000 1,000 (1,000) ‐50%

Total Personnel 535,000 704,000 $169,000 32%

Supplies

Office Supplies 1,000 1,000 ‐ 0%

Operational Supplies 18,000 18,000 ‐ 0%

Computer Equipment and Software ‐ 4,000 4,000

Small Tools and Equipment 3,000 4,000 1,000 33%

Fuel 8,000 8,000 ‐ 0%

Chemicals 40,000 51,000 11,000 28%

Uniforms 2,000 4,000 2,000 100%

72,000 90,000 18,000 25%

Utililies

Communications 5,000 6,000 1,000 20%

Electricity 52,000 45,000 (7,000) ‐13%

Natural Gas 1,000 1,000 ‐ 0%

Sewer 2,000 4,000 2,000 100%

Storm Water 2,000 2,000 ‐ 0%

Water 5,000 2,000 (3,000) ‐60%

67,000 60,000 (7,000) ‐10%

Operations and Maintenance

Vehicles and Equipment Maintenance 3,000 4,000 1,000 33%

Facilities Maintenance ‐ 1,000 1,000

Other Operations Maintenance 49,000 41,000 (8,000) ‐16%

Computer Maintenance and Services 4,000 8,000 4,000 100%

56,000 54,000 (2,000) ‐4%

Professional Services

Professional Services 25,000 25,000 ‐ 0%

Sludge Hauling 95,000 95,000 ‐ 0%

120,000 120,000 ‐ 0%

Intergovernmental Services

Lab Analysis ‐ Clark County 73,000 75,000 2,000 3%

Permits ‐ State and Local Agencies 17,000 18,000 1,000 6%

Sludge Treatment ‐ Clark County 130,000 128,000 (2,000) ‐2%

Administrative Support 255,000 131,000 (124,000) ‐49%

475,000 352,000 (123,000) ‐26%

Total Operating Budget ‐ Treatment Plant 1,325,000 1,380,000 55,000 4%

Regional Biofilter 22,000 22,000 ‐ 0%

Total Operating Budget ‐ Treatment Plant and Regional Biofilter $1,347,000 $1,402,000 $55,000 4%

Ridgefield Treatment Plant/Regional Biofilter ‐ Budget

Total Professional Services

Total Intergovernmental Services

Total Supplies

Total Utilities

Total Operations and Maintenance

DISTRICT CASH FLOW PROJECTIONSCONST CONST CASH FLOW CASH FLOW PROJECTIONS GRAND BEGIN END THRU 2018 2019 2020 2021 2022 2023 2024 TOTAL

DISTRICT PROJECTDist CFP rates/reserves funded 318,164$ 899,129$ -$ -$ -$ -$ -$ 1,217,293$ Dist CFP debt fnded 2019 2021 - 600,000 5,840,610 5,983,789 - - - 12,424,399 District CFP rates/reserves funded 318,164$ 899,129$ -$ -$ -$ -$ -$ 1,217,293$ District CFP debt funded -$ 600,000$ 5,840,610$ 5,983,789$ -$ -$ -$ 12,424,399$

ALLIANCE CASH FLOW PROJECTIONSCONST CONST CASH FLOW CASH FLOW PROJECTIONS GRAND BEGIN END THRU 2018 2019 2020 2021 2022 2023 2024 TOTAL

ALLIANCE PROJECTS5A rates/reserves funded 2,663,640$ 2,013,642$ 771,043$ 115,000$ 55,000$ -$ -$ 5,618,325$ 5A debt funded 2021 2022 - - - 9,637,000 9,637,000 - - 19,274,000 5B1 rates/reserves funded 706,012 1,537,500 122,000 56,500 - - - 2,422,012 5B1 debt funded 2020 2021 - - 8,082,500 2,577,500 - - - 10,660,000 5B2 rates/reserves funded - - - 1,355,714 50,714 35,714 32,857 1,475,000 5B2 debt funded 2022 2024 - - - - 6,036,000 6,036,000 3,018,000 15,090,000 Alliance 5A/5B rates/resvs funded 3,369,652$ 3,551,142$ 893,043$ 1,527,214$ 105,714$ 35,714$ 32,857$ 9,515,337$ Alliance 5A/5B debt funded -$ -$ 8,082,500$ 12,214,500$ 15,673,000$ 6,036,000$ 3,018,000$ 45,024,000$

Rates/reserves fundedDebt funded


EXISTING ASSETS REPAIR/REPLACEMENT AND RESERVE ACCOUNT (PROJECTS > $63K) ($000s)

Amended $ %

2015‐2016 2017‐2018 2019‐2020

Actual Budget Budget Change Change

Project Expenditures

Middle Salmon Creek Interceptor Point Repair 45$ ‐$ ‐$

Upper Salmon Creek Interceptor Repair 581 31 ‐

Regional Biofilter ‐ Upper Klineline Interceptor 190 1,078 ‐

36th Avenue PS Pump Replacement 145 1,102 ‐

SCTP Programmable Logic Controller Replacement 676 866 ‐

SCTP Influent Screen Rebuild ‐ 134 ‐

SCTP Dewatering Equipment Rebuild ‐ 233 ‐

SCTP Fire Pump Controller Replacement ‐ 27 ‐

SCTP Sludge Blend Tank Overflow Recovery ‐ 525 ‐

BGFM Valve & Vault Repair 396 ‐ ‐

SCTP Ops Water Chiller 65 ‐ ‐

Klineline Interceptor Manhole Repair ‐ ‐ 287

SCTP Digester Maintenance and Modifications ‐ ‐ 334

SCTP Boiler Exhaust Stack Replacement ‐ ‐ 134

SCTP Biosolids Cake Transfer Screw Replacement ‐ ‐ 402

SCTP HVAC Systems Replacement ‐ ‐ 665

SCTP Fire Alarm System Replacement ‐ ‐ 127

SCTP Boiler Gas Boosters ‐ ‐ 217

RTP Aeration Basin Mixer Support/Concrete Repair ‐ ‐ 76

Annual R&R Allowance ‐ 314 262

Total Existing Assets R&R Expenditures 2,098$ 4,309$ 2,504$ (1,805)$ ‐41.9%

Existing Assets R&R Account


NEW ASSETS CAPITAL ACCOUNT ($000s)

Amended

2015‐2016 2017‐2018 2019‐2020

Actual Budget Budget

Project Expenditures

SCTP Phase 5A Project ‐ Columbia River Outfall and Effluent Pipeline 1,000$ 1,830$ 2,574$

SCTP Phase 5B Project ‐ Plant Improvements ‐ 599 14,725

Total New Assets Capital Expenditures 1,000$ 2,429$ 17,299$ 14,870$ 612.2%

Footnotes:

(1)

(2)

New Assets Capital Account$

Change

SCTP Phase 5A Project ‐ Columbia River Outfall and Effluent Pipeline includes planning document development, supporting engineering

and surveying work, environmental permitting, legal support, right‐of‐way acquisition, supporting elements of financial

planning/stakeholder engagement, with construction slated to begin in 2021

SCTP Phase 5B Project ‐ Plant Improvements includes all studies and preliminary engineering related to odor control and plant capacity

assessment at SCTP, with construction slated to begin in 2020

%

Change

To: John Peterson, P.E., General Manager, Clark Regional Wastewater District Ken Andrews, CPA, Finance Manager, Clark Regional Wastewater District From: Travis Capson, Wastewater Operations Manager, Clark County Public Works Date: September 14, 2018 Subject: 2019/2020 Budget Proposal – Salmon Creek Treatment Facility

Attached is the county’s preliminary 2019/2020 budget proposal for the operation of the Salmon Creek Treatment Facility and the Battle Ground Force Main. The County is going to an annual budget in 2019. We have provided 2020 estimates for the Clark Regional Wastewater District to assist with their biennium process. This cover memo provides a summary of several key assumptions that are reflected in the budget proposal. There are three exhibits also attached:

Exhibit A: Fund 4580 2019/2020 Baseline budget with decision packages Exhibit B: Fund 4583 budget – repair and replacement Exhibit C: Decision package requests

The county operates on annual budget cycle beginning in 2019. Departments submit a “baseline” budget which typically matches total budget authority established for the previous term (minus any one-time requests.) The baseline includes any across the board increases for cost of living, countywide indirect costs, liability insurance, and any other line items that are considered fixed and not controllable by departments. All additional requests over and above the baseline operating budget are done through the decision package process and receive internal review. It is important to note that the operating expenses (Fund 4580) associated with the decision package requests are included in the attached spreadsheets. The county is proposing a preliminary 2019/2020 operating budget for the Salmon Creek Treatment Facility of $8,179,313. The Repair and Replacement budget for the treatment plant is based on one equipment repair and replacement project of $60,000, plus $200,000 for miscellaneous small project repairs and replacement projects that typically come up during the biennium. A few key budgetary assumptions are summarized below. Additional information on the budget assumptions, comparison to the adopted 2017/2018 budget, and descriptions of the decision packages are included in the exhibits.

Operating Budget (Fund 4580) – Salmon Creek Treatment Facility The 2019/2020 operating budget for Fund 4580 is shown in Exhibits A, B and C. (Includes BG Force Main.) A few of the assumptions and significant changes to this budget include:

• The proposed budget reflects changes in salaries and benefits. This is due to the following: 1. Additional request of a Grounds Maintenance Worker 3. Eliminate the salaries and benefits out of Solids and adding it to Operations 4. Increasing budget for two potential leave payouts in Operations 5. Increasing budget for management oversight 6. Add budget for over time and comp time for BG Force Main

• The proposal realigns budgeted expenses into appropriate plant object codes. 1. Increasing budget for unforeseen maintenance costs 2. Decrease budget for Battle Ground chemicals 3. Move a portion of professional services budget from 2019 to 2020 4. Move filing/recording/permit fee budget from Solids to Operations 5. Move budget from chemical supplies in Solids to parts in Maintenance

• The proposed budget adds one capital equipment purchase 1. Increase budget to purchase one forklift and add the corresponding ER&R costs

Repair and Replacement Budget (Fund 4583) - Salmon Creek Wastewater Management System A list of the proposed decision packages are shown in Exhibits B and C. Operating Budget (Fund 4580) – Battle Ground Force Main The 2019/2020 operating budget for the Battle Ground Force Main is shown in Exhibit C. Key assumptions used in developing the preliminary budget numbers include:

• The salaries and benefits budget is based on county maintenance plant staff spending approximately 8 hours per week for routine checks of the force main and appurtenances, miscellaneous maintenance, pump system control work, and utility locates along the pipe.

• The chemical budget assumes dosing at 15,250 gallons per year at a chemical cost of $1.97 per gallon plus sales tax. There is also spent carbon in the odor control units along the battleground force main that will need to be replenished on an as needed basis. This chemical addition and odor canister maintenance will continue to keep odors down and also mitigate further damage to the existing force main due to H2S release.

Page 2

535811 535812 535813 535814 535815 535819Object Obj Description Plant Laboratory Plant Maintenance BG Force Main Solids Handling Plant Operations Administration Total

100 Salaries 144,768 789,118 28,642 0 759,501 299,465 2,021,494140 Overtime 5,000 20,000 1,000 0 22,000 1,000 49,000141 Comp Time Non Exempt 5,000 20,000 1,000 0 17,000 500 43,500

Total Salaries 154,768 829,118 30,642 0 798,501 300,965 2,113,994210 Employee Benefits 11,448 62,351 2,263 0 120,015 24,022 220,099

211 (206) PERS/LEOFF 18,384 100,353 3,522 0 96,456 38,640 257,355220 EAP Premium 72 485 13 0 432 122 1,124221 Medical Insurance 45,576 229,190 8,911 0 237,864 75,542 597,083222 Industrial Insurance 5,112 33,770 1,022 0 30,672 6,024 76,600223 Dental 3,168 15,728 632 0 15,864 5,650 41,042230 Life Insurance 168 1,097 33 0 1,008 212 2,518232 General liability (risk) 1,632 10,938 0 0 9,792 5,802 28,164236 Disability Ins. 1,056 5,905 208 0 5,514 2,204 14,887

Total Benefits 86,616 459,817 16,604 0 517,617 158,218 1,238,872310 Office Supplies 0 0 0 0 0 1,000 1,000311 Central Stores-Office Max 0 0 0 0 0 5,000 5,000317 Xerox - Copy Charges 0 0 0 0 0 10,000 10,000321 Agriculture Supplies 0 7,500 0 0 0 0 7,500322 Cleaning & Sanitation 0 0 0 0 5,000 0 5,000324 Food/Water 0 0 0 0 0 2,000 2,000325 Evidence/Chem/Lab Supplies 35,000 0 75,000 360,000 0 0 470,000326 Expendable Equipment 0 15,000 0 10,000 3,000 2,000 30,000327 Computer Supplies 0 0 0 0 30,000 0 30,000328 Uniforms/Clothing 0 0 0 0 3,000 0 3,000329 Other Operating Support 0 100,000 0 15,000 15,000 5,000 135,000330 Building Supplies 0 20,000 0 0 0 0 20,000331 Electrical Supplies 0 30,000 0 0 0 0 30,000333 Plumbing Supplies 0 10,000 0 0 0 0 10,000335 Paint 0 8,000 0 0 0 0 8,000338 Nuts & Bolts 0 3,000 0 0 0 0 3,000339 Other Bldg. Supplies 0 3,000 0 0 0 0 3,000350 Equipment Supplies 0 0 500 0 0 0 500351 Parts 5,000 100,000 10,000 75,000 115,000 0 305,000357 Small Equipment Parts 0 5,000 0 0 0 0 5,000360 Gas Diesel & Oil 0 10,974 0 0 0 0 10,974362 Unleaded Gasoline 446 9,218 0 2,148 0 0 11,812366 Propane 0 750 0 0 300 0 1,050

Total Supplies 40,446 322,442 85,500 462,148 171,300 25,000 1,106,836416 Fund Overhead Allocations 560 8,018 0 746 408 0 9,732418 GenFund Indirect Charged to County Funds 0 0 0 0 0 362,968 362,968419 Other Prof. Services 15,000 50,000 10,000 930,000 60,000 200,000 1,265,000420 Communication Services 0 0 0 0 0 4,000 4,000

EXHIBIT ASALMON CREEK TREATMENT FACILITY

2019/20 BASELINE BUDGET - FUND 4580 - (with decision packages)SEPTEMBER 14, 2018

Page 3

535811 535812 535813 535814 535815 535819Object Obj Description Plant Laboratory Plant Maintenance BG Force Main Solids Handling Plant Operations Administration Total

EXHIBIT ASALMON CREEK TREATMENT FACILITY

2019/20 BASELINE BUDGET - FUND 4580 - (with decision packages)SEPTEMBER 14, 2018

421 Telephone 0 0 0 0 0 16,400 16,400422 Postage 0 0 0 0 0 2,500 2,500428 Cellular One/Pagers 0 0 0 0 0 5,000 5,000431 Airfare 0 0 0 0 0 3,000 3,000433 Local Mileage 0 0 0 0 0 3,000 3,000434 Long Distance Travel 0 0 0 0 0 3,000 3,000435 Meals 0 0 0 0 0 1,500 1,500438 Lodging 0 0 0 0 0 4,000 4,000452 Data Processing Rental Agreement 0 0 0 0 0 26,390 26,390455 Machinery & Equip Rentals 3,714 52,000 0 6,190 1,775 0 63,679456 Rental Cars/Other Vehicle Rental 0 20,000 0 0 0 0 20,000458 Hourly equipment rental 3,866 52,838 0 7,732 2,006 0 66,442460 Insurance Charges 0 0 0 0 0 0 0471 Electrical & Heating 0 0 0 0 1,115,000 0 1,115,000472 Garbage 0 0 0 0 75,000 0 75,000473 Gas 0 0 0 0 77,000 0 77,000476 Water & Sewer 0 0 0 0 12,500 0 12,500481 Building Maintenance. 0 15,000 0 0 0 0 15,000482 Equipment Maintenance 0 12,000 0 0 0 0 12,000483 Grounds & Parks Maintenance. 0 0 0 0 2,500 0 2,500486 Custodial Cleaning 0 32,500 0 0 0 0 32,500491 Assoc. Dues/Membership 0 0 0 0 0 5,000 5,000493 Filing/Recording/Permit Fees 5,000 8,500 0 40,000 210,000 10,000 273,500495 Taxes & Assessments 0 0 0 0 0 8,000 8,000496 Tuition/Registration 0 0 0 0 0 15,000 15,000499 Misc. 0 200,000 0 0 0 0 200,000

Total Services 28,140 450,856 10,000 984,668 1,556,189 669,758 3,699,611510 Inter Gov Service* 0 0 0 0 0 0 0

Total Intergovernmental 0 0 0 0 0 0 0600 Capital 0 0 0 0 20,000 0 20,000

Total Capital 0 0 0 0 20,000 0 20,000

Grand Total 309,970 2,062,233 142,746 1,446,816 3,063,607 1,153,941 8,179,313

Page 4

REPAIR AND REPLACEMENT BUDGET:

ITEM

2019 PROPOSED AMOUNT

2020 PROPOSED AMOUNT

19/20 PROPOSED AMOUNT ASSUMPTIONS

1. Aeration Basin 1 - 4 aIR Diffuser Replacement $60,000 $0 $60,000 Recommended by CH2M Hill2 Misc. Small Repair and Replacement Projects $100,000 $100,000 $200,000 Misc. small repair and replacement projects

$160,000 $100,000 $260,000TOTAL

SEPTEMBER 14, 2018

EXHIBIT BFUND 4583 - REPAIR AND REPLACEMENT

2019/2020 BUDGET PROPOSAL

PROJECT

Page 5

EXHIBIT C

2019/2020 DECISION PACKAGE REQUESTS

September 14, 2018

FUND 4580 (Operating Budget) PLANT LABORATORY (535811) – No decision packages MAINTENANCE (535812) – 1 decision package 1. Add Grounds Maintenance Worker to Maintenance (ongoing) 2019 $62,979 2020 $64,577 The treatment plant is struggling to manage the daily grounds maintenance activities at the facility. The facility has utilized offender corrections crews to help with the required workload, at a cost of $30,000 year. When these crews are not available, the other plant staff members pitch in to help keep the grounds maintained, at the expense of lost productivity in other operational areas of the facility.

OPERATIONS (535815) – 1 decision package

1. Add Salaries Budget for Anticipated Leave Payouts (one time) 2019 $60,000 for Operations This is to add budget due to anticipated retirements/payouts at the treatment plant. These are not budgeted in the current baseline budget of the treatment plant fund. By adding additional capacity, this ensures the capacity to pay for the retirements/payouts accordingly. Both positions are in the Operations section.

FUND 4583 (Repair and Replacement Budget) – 2 decision packages 1. Aeration Basin (1-4) Diffuser Replacement (one time) 2019 $60,000 The requested funds would cover a much needed air diffuser replacement in aerations basins 1-4 at the treatment plant. Current diffusers are impeded by mineral and biological fouling, which cannot be removed. This condition creates a short circuiting of the air as it passes

Page 6

through the stone and creates larger, more course air bubbles that are not conducive to biologic respiration. In addition, the condition of the diffuser stones has created an increase of back pressure on the blowers from this fouling, which creates additional head pressure, energy usage, high heat and subsequent wear on the blower components, which lead to plant failures. 2. Miscellaneous Small Repair and Replacement Projects (one time)2019 $100,000 2020 $100,000 These funds would cover unexpected emergency equipment repairs or replacements to

treatment plant equipment. There are inherently unknowns due to the age of the equipment.

Having budgetary approval for unanticipated purchases provides a quick turn-around when

necessary to maintain efficiencies and permit compliance at the plant.

Page 7

G:\Alliance\2 FINANCE\1 BUDGET\2019-2020\Meetings\2018-07-13 Kickoff Meeting\1-1a - Alliance BDP Template.docx

Budget Decision Package Justification Form DISCOVERY CLEAN WATER ALLIANCE

Package Title:

A. Expense Type:

☐ 1 – O&M expenditure (cost > $5,000)

☐ 2 – R&R <$63,000 B. Description: What do you plan to do? (Description of request:)

C. Budget Impact:

EXPENSE TYPE

O&M R&R TOTAL

Salaries / Benefits

Goods / Supplies Services Other R&R<$63k

1 – O&M

2 – R&R

D. Justification: (☐ Safety ☐ Level of Service ☐ Efficiency ☐ Cost Avoidance ☐ Workload) Why do you need it? (Justification for the request – please attach supporting documentation)

E. Analysis of Options: What happens if you do nothing? Did you look at other options?

F. Other:

1. Is there an FTE impact? Yes / No If yes, what is the impact?

2. Will additional revenue be generated? Yes / No If yes, how much?

3. Will operating expenses be reduced? Yes / No If yes, how much?

G. Approvals: Committee Date Treasurer Date


2019‐2020 OPERATING AND CAPITAL BUDGET ($000s)

Adopted

Operating & RSC Debt Existing Assets New Assets Budget

Maintenance Stabilization Service R&R Capital 2019‐2020

Beginning Account Balances

Alliance Funds 1,319$ 296$ 1,407$ 2,976$ 187$ 6,186$

Contracts Receivable 1,983 ‐ ‐ ‐ ‐ 1,983

Total Beginning Account Balances 3,302 296 1,407 2,976 187 8,169

Sources

Debt Issuance Proceeds ‐ ‐ ‐ ‐ 12,115 12,115

Regional Service Charges ‐ District 9,272 124 6,658 2,053 4,093 22,200 Regional Service Charges ‐ CofBG 2,076 30 2,263 700 1,191 6,260

Interest ‐ ‐ ‐ ‐ ‐ ‐

Total Sources 11,348 154 8,921 2,753 17,399 40,575

Uses

O&M Administrative Services (2,311) ‐ ‐ ‐ ‐ (2,311)

O&M SCWMS Operations (8,296) ‐ ‐ ‐ ‐ (8,296)

O&M BGFM Operations (143) ‐ ‐ ‐ ‐ (143)

O&M RTP/RB Operations (1,505) ‐ ‐ ‐ ‐ (1,505)

Debt Service ‐ ‐ (8,921) ‐ ‐ (8,921)

Existing Assets R&R ‐ ‐ ‐ (2,504) ‐ (2,504)

New Assets Capital ‐ ‐ ‐ ‐ (17,299) (17,299)

Total Uses (12,255) ‐ (8,921) (2,504) (17,299) (40,979)

Ending Account Balances

Alliance Funds 852 450 1,407 3,226 287 6,222

Contracts Receivable 1,543 ‐ ‐ ‐ ‐ 1,543

Total Ending Account Balances 2,395$ 450$ 1,407$ 3,226$ 287$ 7,765$

Operating Budget Capital Budget

Accounts


REGIONAL SERVICE CHARGES ($000s)

Amended

2015‐2016 2017‐2018 2019‐2020 $ %

Actual Budget* Budget Change Change

District

O&M

Administrative Services 888$ 1,153$ 1,521$ 368$

SCWMS 5,643 5,874 6,342 468

BGFM 62 60 27 (33)

RTP/RB 1,246 1,386 1,382 (4)

Rate Stabilization 108 122 124 2

Capital

Debt Service 4,422 5,122 6,658 1,536

Existing Assets R&R 964 2,010 2,053 43

New Assets Capital 671 1,877 4,093 2,216

Total District RSCs 14,004 17,604 22,200 4,596 26.1%

Battle Ground

O&M

Administrative Services 826 329 434 105

SCWMS 1,392 1,398 1,515 117

BGFM 250 231 116 (115)

RTP/RB ‐ ‐ 11 11

Rate Stabilization 34 32 30 (2)

Capital

Debt Service 1,438 1,816 2,263 447

Existing Assets R&R 299 928 700 (228)

New Assets Capital 211 652 1,191 539

Total Battle Ground RSCs 4,450 5,386 6,260 874 16.2%

Total Per Biennial Budget Period 18,454$ 22,990$ 28,460$ 5,470$ 23.8%

Footnotes

* 2017‐2018 budgeted RSCs reflect amendments in January 2018 (sludge blend tank overflow repair at the

Salmon Creek Treatment Plant) and July 2018 (change in contract operators at Ridgefield Treatment Plant)


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Staff Report Board Meeting of September 15, 2017

6e. Draft Resolution – Draft 2017-2018 Operating and Capital Budget and Regional Service Charges Amendment


PURPOSE: As the midpoint of the two-year 2017-2018 Operating and Capital Budget nears, Administrative Lead staff and Standing Committees have been reviewing operating and capital project costs-to-date to see how actual-versus-budgeted expenditures are tracking. This report highlights the findings from that review, summarizes requests for additional expenditure authorizations made via Budget Decision Packages (BDPs), and refers a draft 2017-2018 budget amendment resolution (Attachment A) to the Board, including Regional Service Charges adjustments for 2018 to pay for these additional authorized expenditures. Proposed expenditure authorization increases and funding sources are summarized below.

BDP

#Uses/Expenditures

($1000s)

O&M / R&R Insurance

Reserves Proceeds (CR) (BG)

OPERATING BUDGET AMENDMENT

Clark County Operator

1 ‐ Additional Indirect Costs $48 $48

2 ‐ Sludge Blend Tank Overflow Recovery $36 $36

Ridgefield Operator $0

Administrative Services $0

Subtotal $84 $48 $36 $0 $0

CAPITAL BUDGET AMENDMENT

Repair & Replacement Program

2 Sludge Blend Tank Overflow Recovery $825 $25 $800

3 R&R Program $200 $150 $50

Capital Improvement Program

4 SCTP Phase 5A Project $250 $185 $65

5 SCTP Phase 5B Project $350 $260 $90

Subtotal $1,625 $25 $800 $595 $205

TOTAL BUDGET AMENDMENT $1,709 $73 $836 $595 $205

RSCs

Sources/Revenues($1000s)

Description

Alliance Staff Report September 15, 2017

Page 2 of 2

BACKGROUND: For the 2017-2018 biennial period, an Operating and Capital Budget was adopted via Resolution 2016-03 by the Alliance Board on December 16, 2016. Administrative services, operating costs of the nine Regional Assets, debt service and capital costs are to be primarily funded from Regional Service Charges (RSCs) collected from the funding Members over the two year period.

As part of the mid-biennial budget review, five budget amendments are recommended by the Standing Committees for Board review and comment. One BDP identifies unanticipated Operating and Maintenance (O&M) expenses. One BDP identifies increases in both O&M expenses and Capital expenditures in the Existing Assets Repair and Replacement (R&R) Program for an emergency repair. Three BDPs request additional Capital expenditure authorization, one for ongoing projects in the R&R Program, and two for ongoing New Assets Capital (CIP) Program projects, both part of the Salmon Creek Treatment Plant Phase 5 Expansion. The budget amendments are detailed further in the attached Budget Decision Package Summary (Attachment B).

A presentation will be provided to the Board at today’s meeting (Attachment C) for consideration of the draft 2017-2018 Operating and Capital Budget and Regional Service Charges Amendment

NEXT STEPS: Funding Members, the City of Battle Ground and Clark Regional Wastewater District, will review the Regional Service Charges as proposed in this amendment for affordability. A final budget amendment will include input received from that affordability review, direction received from the Board today, and Standing Committees’ final review and recommendation. Staff will compile a final resolution and budget amendment for a public hearing and Board consideration in December.

ACTION REQUESTED: Review and comment. Adoption of the proposed budget amendment of the 2017-2018 Operating and Capital Budget, along with RSC updates for 2018, will be requested via resolution at the December Board meeting.

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Operations Coordination Committee Meeting

Wednesday, June 26, 2019 – 1:00 p.m. Salmon Creek Treatment Plant, 15100 NW McCann Rd, Vancouver WA 98668

Agenda

No. Item Action/Info Presenter Time (minutes)

1. Alliance – Board/Committee Process INFORMATION Lough 5 a. Board Quarterly Meeting – Next Meeting September 27

2. Ridgefield Plant Operations a. Brief Update b. DMR & Flow Reports (attachment) c. Operations Projects Update (under $63,000)

1) PLC and Control Strategy

INFORMATION Ludlow

15

3. Salmon Creek Plant Operations a. Brief Update

1) Pre-Construction Building 87 Clean Out and Site Cleanup 2) General Odor/Noise Complaints 3) Larch Mountain Crew Contract

b. DMR & Flow Reports (attachment) c. Operations Projects Update (under $63,000)

1) #1 Digester Cleaning Project (150,000) 2) Plant Drain Access Hatch Assembly 3) Digester Heat Transfer Pump(s) Installation(s) 4) Plant Network/Alarm Functionality (Fiber Optic Cleaning) 5) Air Diffuser Replacement Basins 1 – 4

INFORMATION

Capson

30

4. Pretreatment / FOG Program a. Brief Update

INFORMATION Thomas

5

5. Battle Ground Force Main and Telemetry a. Brief Update b. Operations Projects Update (under $63,000)

1) Chemical Tank Rehab c. Flow Reports (Manual vs. SCADA) (attachment) d. Odor Complaints

DISCUSSION Capson Capson

Capson Capson

All

5

6. Capital Projects Update (over $63,000) a. Alliance Capital Program Update (attachment)

INFORMATION Lough

5

7. Compliance – Agency Assignments a. Ridgefield Treatment Plant (attachment) b. Salmon Creek Treatment Plant (attachment)

INFORMATION Capson/ Ludlow

5

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No. Item Action/Info Presenter Time (minutes)

8. Calendar Update (attachment) a. Next OCC Meeting – Wednesday, July 24

INFORMATION Capson 5

ALLIANCE BOARD AND STAFF MEETINGS CONFERENCES AND IMPORTANT DATES

January 1 - New Year's Day September 2 - Labor DayJanuary 21 - Martin Luther King Day November 11 - Veterans DayFebruary 18 - Presidents Day November 28 - Thanksgiving Day (office closed 28-29)May 27 - Memorial Day December 25 - Christmas Day July 4 - Independence Day

S SF

26

S M T W

25 27 28

5

11 12 13

26

18

T W S

24 25

5

16 17 18 19

23 27

20

2W T FS S M T S

22

JANUARY FEBRUARY MARCH

APRIL MAY JUNE

JULY AUGUST SEPTEMBER

30

22

76

14

DECEMBER

6S

28

27 30 31

14

7SF

15 2114 15

41

10 11

13 14 20 2116 15 16

12

17 18

2 3

9 8

19

26 293028 29

31 2

8 10

16 17

15

29

23

T

30

23 2423

T

NOVEMBER

W TW T F

19 20 21

T S M

5

1826 17

51

9

12

2

25

3

1110

4

S S M

14 15

1 2 3M T W F

29 30 31

21 22

OCTOBER

4 5

29

7

7

2821 22

31 29 30

26 2724 22 23

3 1 21 2 3

12

6 4

6 710 118

5

9 13 4

4

8 10 11 13 5 6

46 1 3

7 8 9

3 4 5

11

1 2M T

31

S FW T

24 25 30

20

27 26 27 28

20 21

30 31 24 25 28 29

2322 23 17

S M T W T F

6

13

21 22 24 25

18

7 8 9 10

14

28 29

34

15 16 1019 10 11 12 13

9

FF S S MS S M T W TS M

15 16 17

512 3

23

S M T F

25 2021 22 27 19

T

3028

F S

5

12

4

11

18 22

1S

16

2924

15

M T W T

13

2118 191716

4 5 6

18 19 16

29 31

24 25

72 3

20

12

26 27 23 27 2830

9 10 1114 15 16 17 20

26

2

7

2726

1514

19 20 21

13

9

1

66 7

Jun

May ORACWA ConferenceAWC Annual Conference

2019

6 7

Jan AWC Mayors Exchange

26 2722

1412 13 15 17

28

18

8

Known and Potential Conflicts:

Holidays:

National HolidaysMay

Sep

Sep

Apr

TBD

Sep

Ridgefield Junction Nbrhd Assoc Mtg

Apr

TBD

Nov

WFOA ConferenceWASWD Fall Conference

District Board MeetingsTues

APWA National Conference (PW Expo)

WEFTEC Annual ConferenceSep

Sep

Qrtrly Alliance Partners Quarterly Meeting

2nd Fri

APWA Washington Spring Conf

AWC Mayors Exchange - Fall WSAC Annual Conference

PNCWA Annual Conference

AWWA/WEF Joint Utility Mgmt Conf

WASWD Spring Conference

4th WedAlliance OCC MeetingAs

Needed

Qrtrly Alliance Board of Directors Meeting

May

TBD - Clark County Council Retreat

Apr WPTA ConferenceAlliance FAC Conference Call

GFOA ConferenceAlliance MIC/FAC Joint Meeting

(Admin Lead)

2nd Fri

FebAlliance Agenda-Setting

Alliance MIC Meeting

2019 ALLIANCE CALENDAR

T W T F1 2

1726 18 19

14

S1 2 3 4 5

T W T

9 10 12

14 17 18 19

S

28

1st Fri

27 28 29 30 24

22 24

31

20 21 23 25

Alliance Agenda Packet Materials Due

13 15 16

6 7 8

25

24 22

26

111098

11 8 8

12 10

14

12 9 13

16 17 18 19 20

11 8 13

25

25

24

23 21

9

23

G:\Administration\2 - Admin Support Work Resources\Calendars\2019\2019 ALLIANCE MEETING CALENDAR Date Printed: 6/7/2019