Loading...
04/08/1975 - Packet TIGARDWATER DISTRICT RS41 S. W. COMMERCIAL ST. TIGARD, OREGON 97223 PHONE (503) 639-1554 April 8, 1975 AGENDA CALL TO ORDER 1. RESOLUTION TO APPROVE MINUTES OF LAST MEETING 2. VISITORS 3. RESOLUTION TO PAY VOUCHERS 4. RESOLUTION TO HOLD A SPECIAL MEETING AT 7:30 P.M., APRIL 22, 1975, IMMEDIATELY FOLLOWING WATER RATE HEARING, TO APPROVE OR DISAPPROVE WATER RATE INCREASE 5. RESOLUTION TO APPROVE CONTRACT WITH EITHER COOPERS & LYBRAND OR RAYMOND L. VAN BEER TO CONDUCT ANNUAL AUDIT FOR FISCAL YEAR 1974-75 6. RESOLUTION TO TRANSFER FUNDS WITHIN THE GENERAL FUND 7. OTHER BUSINESS: THE FIRST OFFICIAL MEETING OF THE BUDGET COMMITTEE WILL BE HELD AT 8:00 P.M., TUESDAY, MAY 13, 1975, IMMEDIATELY FOL- LOWING THE REGULAR BOARD OF COMMISSIONER'S MEETING ADJOURNMENT * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * THE FIRST MEETING OF THE BUDGET COMMITTEE WILL BE HELD IMMEDIATELY AFTER THE REGULAR MEETING. iolay ADMINISTRATOR'S REPORT 1. Resolution to approve the minutes of the last meeting. 2. Visitors. 3. Resolution to pay vouchers. 4. Resolution to hold syecial meeting at 7:30 p.m., April 22, 1975, immediately following water rate hearing, to approve or disapprove water rate increase. 5. Resolution to approve contract with either Coopers & Lybrand or Raymond L. Van Beek to conduct annual audit for fiscal year 1974-75. A contract must be approved with a Certified Public Accountant to conduct the annual audit. Coopers & Lybrand will perform the audit for $3,000 (the same as last year) while Mr. Van Beek will do it for $2,250. Jim Savage of Coopers & Lybrand has already been of assistance in the preparation of the new budget. A significant change is being made in the accounting system by transferring from a cash basis to the accrual method. Personal consultation with a CPA is mandatory to ensure that the new accounting procedures are accurate and within the law. Jim Savage is renowned within his profession as the most knowledgeable CPA on matters pertaining to municipal corporations throughout the State of Oregon. In addition to being a partner with Coopers & Lybrand he teaches night classes in accounting at Portland State University. In fact, Mr. Van Beek was one of his students. Nrr' -1- Some ADMINISTRATOR'S REPORT (Continued) The difference in cost for these professional services is only one consideration. As commissioners, you should demand the toughest, most comprehensive, audit report available. This independent report is one document you can depend upon in assessing the true financial position of the district. It protects and advises you in the performance of your duties, just as the attorney advises you in matters pertaining to law. There would be considerable burden upon the water district staff in "breaking in" a new CPA at a time when a change in the accounting system is contemplated. In view of the above, it is recommended that Coopers & Lybrand be assigned the task of performing the annual audit for this year, and if a change is deemed in the best interests of the district, it be considered for the next fiscal year. "ter 6. Resolution to transfer funds within the 1ienerat '1unh. A transfer of funds is required to insure that the budgeted amounts in the Material & Services and Capital Outlay accounts are not over-expended. Some "shuffling" of funds is usually necessary at this time of year due to unanticipated expenditures in some accounts. Other transfers may be required before the end of the fiscal year, June 30, 1975. The following transfers are recommended at this time: Account# Account# 700 Bond Sinking $42,750 to 555 Pipeline Replacements $28,750 550 Buildings & Additions -142.000 $42,750 701 Cap. Proj. Res. $ 5,440 to 525,1 Water Costs-Elect. $ 5,440 701-1 Repay of loan $18,000 to 549 Equipment $12,000 CPRF 518,1,2 Office Expenses 2,000 519,1,2 Professional Fees 4,000 $18,000 low 7. Other Business. -2- 4wr ADMINISTRATOR'S REPORT (Continued) 8. Water pumped from wells, calendar year 1975. Actually pumped Month Actual *Actual Allocation/Month in past years: 1975 Cubic Feet Acre-feet Acre-feet Acre-feet Jan 3,565,520 81.9 88 1970: 1,616 Feb 3,759,740 86.3 88 1971: 1,418 Mar 3,728,200 85.6 88 1972: 1,501 1973: 1,269 Total: 11,053,460 253.8 264 1974: 924 * 1 acre-foot = 43,560 cubic feet +err 9. Unmetered water. Pumped Purchased* Total Sold Loss Month & Cu. Ft. Cu. Ft. Cu. Ft. Cu. Ft. Cu. Ft. Loss Year x 1000 x 1000 x 1000 x 1000 x 1000 Mar 1975 3,728 2,725 6,453 5,733 720 11.2 , Cumulative Total: (FY74-75) (9 months): ** 32,268 46,730 78,998 69,853 9,145 11.6% * 42.2% of water consumed during March 1975 was purchased from Lake Oswego. ** 59.2% of water consumed during fiscal year 1974-75 (9 months) was purchased from Lake Oswego. -3- sow ADMINISTRATOR'S REPORT (Continued) 10. Work accomplished during March 1975. a. TWD installed 780' of 12" D.I. + 2 fire hydrants along Hall Blvd., Commercial to Scoffing, to replace 6" 0.D. steel pipe. (Pipe replacement). b. TWD installed 660' of 6" C.I. + 2 fire hydrants along S.W. 117th Avenue, south of Gaarde Street, to replace 4" O.D. steel pipe. (Pipe replacement). c. TWD installed 24 meters. (4356 - 4333). District also serves 116 meters in Metzger Water District. Total: 4472. 11. Work to be accomplished during remainder of fiscal year 1974-75. April 1975 a. TWD install 1200' of 8" C.I. and 720' of 6" C.I. + 1 fire hydrant along S. W. 96th Avenue, Murdock to Sattler Road, to replace 4" 0.D. steel pipe. (Pipe replacement). b. TWD install 550' of 8" C.I. along Pacific Highway, between Johnson and MacKenzie Streets. (Pipe extension). Mav 1975 a. TWD install, along with Cornell Manufacturing Company, a pump station, with 3-25 hp pumps at new Hi Tor reservoir site to provide adequate pressure in the area. (General Fund). b. TWD install 2400' of 6" C.I. + 5 fire hydrants along S. W. Greenway Avenue and Fairview Lane, near 115th and Gaarde, for develop- ment of 46 single family homes, called "Terrace Trails", for Mrs. Lee Fritz and Mr. Began. (Developers). June 1975: TWD install fire hydrants at following locations: a. Ash Drive and Preying Court (S. W. corner) b. Hill View and 103rd Avenue (S. E. corner) c. James Street at Howard Drive (S. W. corner) d. 119th and No. Dakota (N. E. corner)(6" fire hydrant) Nmw e. Burlcrest, between Burlheights & Summercrest (cul de sac) f. 121st and Summer (S. W. corner) g. 121st and Katherine (S. E. corner) h. 116th and Lynn (S. W. corner) i. Lynn, between 118th and 119th (So. side between TL 135 & 136) J. 88th and Pinebrook (N. E. corner) -4- , pp 1 Mrs. Harold Frederick Jensen 14190 Southwest 117th, Tigard, Oregon 97223 ...._J/L-c-.7 ,p CZ 4-1- Gt-e e k._. --4/0-1-4---, p---e-----), A-et,' ----.,---- r.- r U l7 .1.--_, -}aLi.4._} 7,q,„1 A-t4 5 h er----• de- !. 1. n {�°r'tru,C 'e 1.. ."0-1 -) e</%-a-t" 4awr a� 1. 1 <.t d .� / a ton r k., tr. Cha /'i..lt.,t,.�.�-� �.cZ-{�,� , �' ,,< ce., ,7 .,.f. €:.€-1 elt-, et/ ?7-1-_,O.--^t-i_i-e-J2,,,,A.-.2.-..) .,.,,1,, ---e/4,,,,L,, . . :. .,. ,..W.1--ev-c-t"-P.-e--6 ci v V COOPERS & LYBRAND CERTIFIED PUBLIC ACCOUNTANTS IN PRINCIPAL AREAS 2700 FIRST NATIONAL BANK TOWER OF THE WORLD PORTLAND. OREGON 97201 RESIDENT PARTNERS 503) 227-8600 \\E USER C HARRINGTON ROl li \\FNSIER CLI,FORD i ;TEWART PAROLE,O RR,,,G February 5, 1975 PERCN.I FLECK R CARD K POWERS JAS',ES L SAVAGE JOHN R.MAC ERE Board of Commissioners Tigard Water District 8841 S . W. Commercial Street Tigard, Oregon nentlomen: At the request of your administrator, Mr. Robert Santee, I have enclosed the audit contract for the fiscal year ending June 30, 1975. You will note the fee, $3, 000, is the same amount as the fee for the 1974 audit. We appreciate your consideration relative to this matter in our 1974 contract. Furthermore, we will attempt to utilize your office staff more in preparation of schedules, etc. for use in the audit. This has two beneficial aspects: (1) it helps develop your personnel and (2) it helps mitigate the cost of the audit. If the contract meets with your approval, please execute all three copies and forward to me. I will file one copy with the Division of Audits and return one copy for your files. If there are any questions, please contact me at your earliest convenience. Very truly yours, C-22\ two . - r�� James L. Savage JLS:dc • Enclosures • CONTRACT FOR AUDIT OF OREGON MUNICIPAL CORPORATION THIS AGREEMENT, made this day of 19 , in accordance with the requirements of Oregon Revised Statutes 297. 610 through 297 . 740 between Coopers & Lybrand by James L. Savage, Partner, of Portland, Oregon, hereinafter known as the Party of the First Part, and Tigard Water District hereinafter known as the Party of the Second Part. 1 . IT IS HEREBY AGREED that the Party of the First Part shall conduct an audit of the accounts and fiscal affairs of the Party of the Second Part for the fiscal year beginning July 1, 1974 and ending June 30, 1975 , in accordance with the prescribed Minimum Standards of Audit Reports , Certificates and Procedures. 2 . Party of the First Part agrees that the services he has contracted to perform under this contract shall be rendered by him or under his personal supervision and that the work shall be faithfully performed with care and diligence . 3 . It is understood and agreed that, should unusual conditions arise or be encountered during the course of the audit whereby the services of the Party of the First Part are necessary beyond the extent of the work contemplated, written notification of such unusual conditions shall be delivered to the Party of the Second Part who shall instruct in writing the Party of the First Part concerning such additional services . 4. The audit shall be started as soon after this contract is executed as is agreeable to the Parties hereto and shall be completed and a written report thereon rendered within a reasonable time after the close of the audit period covered by this contract. Four or more copies of such report shall be rendered to the Party of the Second Part and its form and content shall be in accordance with and not less than that outlined in the Minimum Standards of Audit Reports, Certificates and Procedures . 5 . In consideration of the faithful performance of the conditions, covenants, and undertakings herein set forth, the Party of the Second Part hereby agrees to pay the Party of the First Part $3 , 000 and the Party of the Second Part hereby affirms that proper provision for the payment of such fee has been or will be duly made and that funds for the payment thereof are or will be made legally available . COOPERS & LYBRAND By James L. Savage , Partner TIGARD WATER DISTRICT Party of the Second Part By RAYMOND L. VAN BEEK TELEPHONE 244-0355 CERTIFIED PUBLIC ACCOUNTANT 9435 8. W. TERWILLIGER BLVD. PORTLAND, OREGON 07219 1 February 25, 1975 Mr. R. Verne Wheelwright Board Chairman Tigard Water District 14150 S.W. 144th Ave. Tigard, Oregon 97223 Dear Mr. Wheelwright: I am pleased to present the following proposal to perform the annual audit of the Tigard Water District for the fiscal year ended June 30, 1975. This proposal outlines my personal background, my staff and associates' background, and the scope and timing of the audit, as well as my audit fee. iitare PERSONAL BACKGROUND, STAFF AND ASSOCIATES: • 5 years with Coopers and Lybrand with heavy emphasis on municipal auditing. Worked on City of Gresham engagement and worked as the in-charge accountant on the Multnomah County engagement. . 2 years with G.I. Joes, Inc., regional retailing firm, as Treasurer and member of the Board of Directors. . Presently in private practice as a Certified Public Accountant with a separate license for performing municipal audits. . I work in association with two Certified Public Accountants who share office space with me. Both of these individuals also have municipal audit licenses. Our working agreement provides for mutual staffing assistance as required. . I employ one Certified Public Accountant who has obtained her training from Price, Waterhouse, and Company, an international accounting firm. . I have been assured of staffing assistance, if required, from the accounting firm of Anderson, Asson, and Hess, P.C. y �• SCOPE AND TIMING OF THE AUDIT: . I will perform an audit in accordance with the provisions of the Minimum Standards of Audit Reports, Certificates, and Procedures prescribed by the Secretary of State in cooperation with the Oregon State Board of Accountancy and in accordance with generally accepted auditing standards. . I will deliver my report to the Board of Commissioners on or before October 1, 1975. I am agreeable to a penalty provision for failure to comply with this stipulation. FEE: . My fee for performing the audit will be $2,250.00. I will make monthly progress billings as my work progresses. This fee quote is based on the assumption that I will receive some assistance from your staff in the preparation of schedules and photo-copy work. 41000 If you have any questions or wish to discuss any of the items contained in this proposal feel free to call me at 245-2297. Thank you for the opportunity to present this proposal. I look forward to serving you. Respectfully, ytd' 7 6)L44 Ray Van Beek RVB/pm TIGARD WATER DISTRICT ADMINISTRATOR'S MESSAGE ON PROPOSED BUDGET, FY 1975-76 In the preparation of the new budget one must review and examine the long range (beyond 5 years) goals as well as the short range goals of the water district. The following paragraphs discuss: (A) the physical assets considered necessary to accomplish both the long and short range objectives; (B) the financial prospects of acquiring these assets; and (C) the proposed budget. Some of the ideas presented herein are my own and may or may not represent the views of a majority of the Board of Commissioners. (A). Physical Assets All water systems consist of three parts: 1. Source 2. Storage 3. Distribution 1(a). Source tBackground) Until 3 years ago the Tigard Water District was plagued with chronic water shortages at peak demand periods in the summer. Deep wells have been the main source of water since 1938 when the district was organized. Over the ensuing years as the water table dropped and as a result of population growth an ever-increasing demand was placed upon the system. Surface water had to be imported. The following table reflects the dis- trict's rapid growth during the past 6 years: 1268 ,1973 % Increase Meter in service 2,686 4,220 57% Water consumption (cu. ft.) 39,840,300 76,536,400 92% Assessed valuation $61,900,000 $194,780,000 214% During the past two years the district has connected to two reliable sources of water with 16-inch mains: (1) Clackamas River (City of Lake Oswego) (2) Bull Run (City of Portland) With the projected expansion plans by the City of Lake Oswego, enough fir.► water from the Clackamas River will be available Until 1995. Portland has expressed a willingness to serve Tigard Water District indefinitely into the future. The amount of water is no longer the problem, but the cost thereof is a major consideration. -1- ADMINISTRATOR'S MESSAGE (Continued) 1(b). Source (Long Range) Unfortunately, the Tigard area is not blessed with a pure, fresh water stream or river in close proximity. Neither the Tualatin River nor Fanno Creek meet the health requirements as possible sources of water. Water from Scoggin Dam is not economically feasible because of the distance involved. Clackamas River via Lake Oswego can be utilized until 1995. By a process of elimination only two sources are available to the Tigard Water District for the long range, those being Bull Run and the Willamette River at Wilsonville. Washington County is presently studying the possibility of forming a county service district, similar to United Sewerage Agency, to distribute wholesale water. If such a district is formed, water districts and cities within the county would purchase water from the county. Thus, the problem of obtaining sources of water would rest solely with the county. It is interesting to note that the Master Water Plan for Washington County recommends that either Bull Run or Willamette River water be utilized iftw by eastern Washington County for the long range. If Washington County does not get into the wholesale water business, separate entities of eastern Washington County will have to make the difficult decision whether to develop the Willamette River source or be dependent upon Portland's Bull Run water forever. It is estimated, as a minimum, that if Wilsonville, Tualatin, and Tigard Water District,jointly developed the Willamette River as a source, the cost would be about $10 million. Such a venture would take 5 years to materialize and water in the taps. 1(c) Source (Short Range) The capacity of the deep wells is limited to about 0.8 million gallons per day. The is 40% of the average daily demand of 2 million gallons per day required by the district. At present, 60% of the water consumed is imported surface water. Either Clackamas River or Bull Run can be utilized to make up the difference, and cost is the controlling factor. Water quality is about the same although Clackamas River water is filtered. No additional capital improvements need to be made on the short range. -2- ADMINISTRATOR'S MESSAGE (Continued) 2. Storage. Now The Oregon State Board of Health requires that each water utility have at least 3 days average demand in storage. The average demand of the district is 2.0 million gallons per day; therefore, storage capacity should be about 6 million gallons. The district has 7.5 million gallons of storage on hand. Plans are being prepared to construct a 5 to 10 million gallon reservoir on S. W. 125th Avenue, south of Gaarde Street, within 2 or 3 years. If a county service district is formed, they would build a 20 million gallon reservoir on this site in 1991. Thus, the water district is hesitant about constructing this reservoir until the county makes a decision. 3. Distribution. If the present rate of pipe replacements is continued, within 4 years '" the entire system will be either cast or ductile iron pipe, all adequately sized. All new pump station installations will be completed this year. system Before too long, expenditures for the distributionfwill be drastically re- duced, except for costs to oversize some mains and complete circulation loops. The water system will be fully telemetered after this year. Telemetry allows one to control pumps and other equipment remotely and to monitor the entire water system from one location, the shop building. This past year the shop building was doubled in size. It is planned to construct an upstairs to the present office building in the fire station. These improvements should be adequate for the 10 to 15 year period. The numbers of vehicles and equipment are ample for the present and are relatively new. ifte In summary, the water district is in good shape with the physical assets on hand and with those planned to be purchased during the next fiscal year. -3- ADMINISTRATOR'S REPORT (Continued) (B) Financial Considerations. 4.4111, It has been my belief fer some time that any public body should attempt to be solvent on a fiscal year basis without relying upon borrowed funds. This was impossible in past years because of the critical need for large expenditures for major capital improvements to serve the customers adequately. General obligation bonds were issued to acquire the necessary funds as follows: Year of Issue Amount Year of Maturity 1959 $ 160,000 1980 1962 250,000 1984 1965 250,000 1987 1968 300,000 1990 1971 980,000 1988 Total: $1,940,000 This indebtedness, as of July 1, 1975, will be decreased to Nor $1,481,000. Each year this debt is reduced by about $100,000, but approximately $65,000 additional is paid annually for interest on these bonds. In lieu of bond issues, my goal has been to accomplish the capital improvements from the General Fund and, if possible, establish a large Capital Projects Reserve Fund. The above discussion on bond issues is not intended to mean that there will never be a need for this type of financing in the future. There does appear to be "a light at the end of the tunnel" where bond issues can be used more sparingly, at reduced amounts, thus gaining time and funds to pay off existing bond issues. If the county's efforts to get into the wholesale water business do not materialize the water dis- trict will need a bond issue to develop the Willamette River source and to construct a 5 to 10 million gallon reservoir with appropriate trans- mission mains. At this time I predict the earliest date for a bond issue would be in May 1976 -- the latest, November 1978. -4- ADMINISTRATOR'S REPORT (Continued) It should be noted that the water system has been, and continues to be, constructed to serve the customers, including new connections, for Many years into the future. Capital improvements made now, in most cases, will not have to be repeated for enlargement. As the tax base becomes larger, without an increase in the tax rate, more of these funds can be utilized to pay off bonded indebtedness in lieu of from the General Fund. Further, commencing in 1980, some of these bonds will be liquidated. Also, with additional customers, more revenue can be generated by volume sales. (C). Proposed Budget. The water district will change from the cash basis to the accrual method of accounting on July 1, 1975. Only two accounts will be used: (1) General Fund (2) Bond Sinking Fund The Developer's Fund and Capital Projects Reserve Fund will be eliminated and will become a part of the General Fnnd. General remarks on each section of the budget are presented below. Budget members will discuss individual line items at the budget meeting on April 8, 1975. Income. Meter installations and water sales make up most of the income for the district. Income from meter installations was down last year because fewer new houses were constructed. This should improve next year. The projected figure on income from water sales includes a 25% increase in con- sumer rates. Historically, water consumption per household decreases when water rates are increased. Therefore, a 10% increase in consumption is projected versus the usual 15%. Personal Services. Essentially, a cost-of-living increase of 12% is recommended for all employees. To maintain the same standard of living, a family making $12,626 last year has to make $1,840 more this year just to break even. This is a 14.5% increase. These figures were presented by the U. S. Con gress' Joint Economic Committee. A newspaper clipping on this subject is enclosed. -5- ADMINISTRATOR'S REPORT (Continued) It is noted that most governmental agencies are granting at least 12% cost-of-living raises. Examples: Tigard School District's teachers: 13.9%; City of Gladstone employees: 13%; Oregon State employees: 26% over 2 years; etc. In the case of the Clerk-typist, Noreen Yolk, a 22% increase is recommended. Her actual "take-home" pay from her monthly salary of $490 is only $368. Unemployment compensation is $88 per week or $377 per month (and going higher). One has to wonder about this "great" society where one makes more by doing nothing than one who is gainfully employed. An- other reason a substantial raise can be justified in her case is the fact that between the bookkeeper and her, they are doing the work of 3 persons. For example, Metzger Water District, with the same number of customers as Tigard, employs 3 office girls to accomplish the same amount of work. Material and Services. Except for the price of water, costs for these items are generally w routine. The $160,500 figure for water costs includes the 78% increase in wholesale water rates from the City of Lake Oswego. Capital Outlay. The largest item in this account is a pump station at Hi Tor reservoir which costs $36,000. This pumping station will provide adequate pressure for those homes located at or just below the reservoir level. This station was approved for purchase over a year ago and was included in last year's budget. When it was learned that delivery could not be made until May 1975, and the need for another backhoe was immediate, a change of priorities in last year's budget was approved by the Board of Commissioners. $15,000 has been budgeted to expand the office building. Most would agree that such an expansion is necessary if the district is to function efficiently. -6- ADMINISTRATOR'S REPORT (Continued) As explained earlier, the continuation of the pipe line extension 'wise and replacement program to an early conclusion would certainly be in the district's best interest. These replacements will provide a significant savings in costs due to water losses and maintenance. During the past 3 years, cast iron pipe has increased in cost by as must as 80% for 6", 8" and 12" pipe. With these substantial increases in cost of material it becomes obvious that additional funds must be budgeted if the same rate of improvement is to be realized. Bond Sinking Fund. Along with the funds on hand on July 1, 1975, the same tax rate of 3401,000 will generate about $79,600, and a transfer from the General Fund of $124,800 will provide sufficient funds to pay off bonds and interest to December 31, 1976. Summary. `err We can be proud of the accomplishments of the district during the past 5 years, and it is believed that we are achieving the desired goals and objectives in a responsible and orderly manner. It is particularly gratifying to me to observe, on a daily basis, the improvements made, the quality of workmanship (with no return calls for shoddy work), improved service to our customers, etc., all accomplished with the funds on hand. Within a few years, major expenditures will cease or substantially reduced for pipe line replacements, buildings and additions, vehicles and equipment, pump stations, telemetry, etc. Commending in 1980, some of the older bond issues will be liquidated. Consequently, we can be optimistic that, before long, the water system will be the very best in physical assets, fiscally responsible on an annual basis, and fully prepared and able to take on a major project, such as development of the Willamette River as a source of water and a 10 million gallon reservoir. Ayr. April 4, 1975 Robert E. Santee Administrator/Engineer -7-