RWSA Board of Directors Meeting   3/26/2024

All right.

We will call to order the regular meeting of the board of directors of the Rivanna Water and Sewer Authority.

First item on the agenda is the approval of the agenda.

One thing, Mr. Chairman, to be clear, we have an amended agenda.

We wanted to propose to add presentation 9B about sediment in the drinking water system at the end of the meeting.

If the board's receptive to that, we wanted to add that.

That's sort of a late-breaking issue with this last week.

Second.

Any other discussion?

Hearing none, all in favor?

Opposed?

Okay, next item is the meeting minutes of the previous board meeting on February 27.

Yes, sir.

We wanted to amend two things on line 810.

Ms. Malek pointed out to us that her comment was about the allocation rather than the location.

So I can, we listened to the tape, you know, we listened to the tapes and sometimes it is hard to understand what people said, I'll confess.

So we never heard location, but apparently it should have been allocation.

And then secondly, we were added to the Rivanna staff present that Michelle Simpson was also here.

Motion and a second.

All in favor?

Aye.

Opposed?

Motion passes.

Seeing no recognition.

No board recognition.

Yes, sir.

Thank you.

So as I reviewed with the Solid Waste Board,

During my evaluation in June of 2022, the two boards asked me to put together a succession management plan and I did so and integrated it with our strategic plan of 2023 and presented to these two boards in January of 2023.

that succession management plan.

And then in July, 2023, you guys approved four positions.

One of those was a new finance manager to help Mr. Wood in our finance division.

And so I'm pleased to introduce to the board, Stephanie Deal, who's been hired as the new finance manager.

Oh, you did.

Stephanie is coming back to us, actually.

She worked here from 95 to 2001 as an accounting technician.

And then she decided to go back to college.

And now she's a graduate of the UVA McIntire School of Commerce.

And her last 13 years, she's been working for Greene County and most recently as the elected treasurer.

So we're pleased to have Stephanie rejoin us as we transform Rivanna.

For the folks that weren't here earlier, I was kind of indicating how much it had changed.

when I was here before, and it's all in a positive way.

Thank you.

OK. We also want to recognize Seth Marshall, who was recently promoted to a relief operator in our water department.

And further, we want to recognize Bonnie Evelynth and Hader Alsophete, who both

passed their class one water operator licenses and Hader's been with us since December 2019 and he came in I guess as a class four but he passed class three in one year, class two the second year and now class one so we're real pleased about that and Bonnie similarly was hired in November of 2022 and so last year she got her class two and this year class one so

I give a lot of credit to Dave Tungate and his management team, Daniel Campbell, our water manager, and Rob Hack, the wastewater group manager.

We've put an emphasis on our operators getting higher licenses.

We give them a 7% raise every time they increase their licenses, but clearly it helps us with our credentials.

And for on the water side, we're required to have a class one operator on site 24-7.

So class ones are very valuable to us.

We have to have a class one in charge of the wastewater facilities, but they do not have to be on site all the time.

So a little difference.

But nonetheless, class one is the highest Virginia license that these folks can get.

And we're always thrilled when they achieve that level.

We've done a lot of communicating the past month.

We had a community meeting with the Sugar Hollow folks where we had the issue of a ladder that deflated at the Sugar Hollow Dam.

And we went to Whitehall again one night and talked with that group for a second meeting about some of the ideas we had to improve their safety.

and in their community, audible alarms are all really on the table for consideration and that group compones those.

And so we're going to get some alternatives together and then have a couple of

representatives from that community meet with us and help us make the final decisions on what systems we might install because they're going to be some pros and cons.

Yeah, audible system, you can hear it, but you can also hear it even when you don't want to.

So we want everyone to be full, on board, and understanding of what they're going to get if we go to these awful alarms.

And this may be a common thing for our other reservoirs too, just to give you a heads up about that.

We were pleased to give a tour with the Charlottesville Albemarle Airport Management staff, Jason Birch, Chris White, Stuart Key, and Penny Shifflett.

And we gave them a windshield tour of our water facilities and came back here with a virtual tour of all of our water facilities.

So that was very informative for all of us.

We met with the Albemarle County Deputy County Executives, Trevor Henry, Ann Wall, and the public information staff and fire staff, and really talked about emergency communications and how we can communicate with the county and with the emergency communication center.

So that was a productive, Gary's folks also attended that meeting with us.

So that was very good.

Got your pictures now, Deborah?

So a stab went on high alert when we had the VARS fire out near the Piney Mountain tank, I believe that was last Monday evening, and our maintenance operations, engineering, IT staff were all planning on what to do if that tank was impacted out in Piney Mountain, which is on 29 North on the west side, and that helped serve that zone between the North Rivanna River and Green.

So fortunately, we did not have a problem, but we were prepared for it.

And I appreciate staff responding to that.

The fifth item I wanted to mention was the Rivanna Pump Station.

Just to give you a brief update, we continued to do an investigation of the cultivation of the submergence that we had in January.

for expecting a consultant's report within the next few weeks about that.

And then we'll be in discussions with the insurance company about what that report might say.

In the meanwhile, the contractors that are helping us, MEB contractors particularly, have taken the pumps and motors out of the pump station.

And yeah, so you can see the six pumps and motors right there sitting in the parking lot.

and the bypass system is now considered a 55 MGD pump system based on the pumps that we have installed now and we appreciated that the service authority staff and one of their board members and Chairman Gaffney all joined us for a tour last week and we went in the pump station and showed them all what a bypass looked like and

what the interior of the pump station was like.

Just wanted to give you a heads up.

Yeah, just to give an update on what happened, the current status.

OK.

not to grill you, but just as a way to share this more broadly at least with the Charlottesville City Community, Charlottesville City proper.

No, sir.

They're still gathering their information and we'll see the report when they send it to us and go from there to test and evaluate what they've said and make sure it seems like they've got their facts straight.

It could be before we get to a clear conclusion of causation.

Because I did do a presentation with the Rivanna River Basin Commission.

Chairman Malek invited me to make the presentation to that group.

I did so earlier this month about what had happened and what we knew about the Rivanna pump station and really what a bypass is, help people understand what a bypass is.

We are planning next week for two weeks, April 11th, to have a contractor information meeting about the four major piping projects that we have coming up.

This is our effort to try to encourage competition and improve prices with the contractor community.

And so we're going to sponsor an event on the 11th at the DoubleTree Hotel and have a discussion with them of what we're planning,

and when it's going to happen and again trying to get competition.

We plan to bid the Ragged Mountain to Observatory project, which is the Brown Line

This summer and the central water line, we expect that that's going to be construction around the end of the year in December by the South Rivanna crossing.

That's not shown on this map, but the pipe to go on the second pipe to go under the South Rivanna river, that would be later this year.

And then the

Rivanna to Ragged Waterline and Pump Station and Reservoir Modifications.

Hopefully we'll get at least part of that next summer.

So that's what we're going to talk to these contractors about and kind of generate some interest from them.

We did this for the water cream plant renovations with two plants going together and things to be successful.

And you are coordinating, I guess, the work for the

Ragged Mountain Observatory treatment plant with the university in terms of roadways.

Yes, sir.

Well, because that pipe will go through Fontaine, sort of near the biomedical under, across Fontaine and up the mountain.

And we're working with the university architect on the exact location and their attorneys on an easement

Not this summer.

Okay.

No, sorry.

Well, we will have 16 miles of piping work underway between

later this year, 2024 and 2030, 16 miles we can expect to build.

Yeah, extensive program, but all to support our community's water supply initiative to make sure we have enough water here in the community, particularly with the changing climate conditions and uncertainties that that creates and raising the water level at Ragged Mountain.

Let's see.

I also did a presentation to the Land Use and Environmental Planning Committee about our water supply projects.

That map I showed you of the three piping projects and letting UVA and VDOT and the dependents and everyone know about the 16 miles of piping that we're going to be doing over the next few years.

Under our environmental stewardship,

strategic planning priority.

We participated with the city and the ACSA in the Fix a Leak week program last week to encourage the community to save water.

And some of our staff volunteered with the Rivanna Conservation Alliance on the stream sampling program.

So we applaud those employees who

volunteered for that.

And we do have an allocation within our LEAN program that people have eight hours a year to volunteer and they can use those hours to do that.

Thank you, Bill.

Because even though we have a billion gallons coming on, the way the population has exploded around here, we just need to train people.

Yeah, we may have to beef that up.

Next, we'll move on to the items from the public.

And Deborah, first of all asking, is there anyone in the room that would like to speak at this time?

Yes, sir.

We have a comment from Dee Dee Smith.

Right.

Thank you and good afternoon.

I'm going to keep this short.

First of all, I'd like to commend you, I think I'm commending Ms. Anama, on your minutes.

They're incredibly comprehensive and I really appreciated this month that you corrected some of the comments to my comments.

But on a clarification of that comment about the Sugar Hollow Dam, wondering whether you had any plans to take it down, I would like to add to that, you know, that dam is 80 years old.

And there is a point in time where you're going to have to take it down.

So I just like to keep that in mind and keep it in mind when you're hearing your added agenda item about sediment and drinking water, because that's usually related to dams.

and on a last note I would like to just sort of put on your radar that there is a project right now in the city looking at the Oakwood Cemetery and how there's a very wet area at the base of the cemetery that has been exacerbated by pipe breaks and the Elliott Avenue being put in and it was brought up at a public forum that the central water line was going right by there.

So we all said just keep that on your radar and I'd like you to keep on your radar too that the city will be making some utility repairs in that same area.

I just want everyone to have it on their radar.

That's it.

Thank you, Dee Dee.

All right.

We'll close the items from the public.

I would just say I appreciate DD complimenting the minutes because I can tell you we spend hours on the minutes trying to make sure they make sense.

You know, it's all recorded, but when the person who types up what is said and you read it and you think, holy cow, what was this person trying to say?

And so Deborah and I and staff too spend a lot of time going through the minutes, not changing things, but trying to make sure the statements and the minutes make sense.

Thank you.

There's no plan to take down Sugar Hollow Dam at this point.

Okay, next item on the agenda is the consent agenda.

Are there any items on the consent agenda?

Board members would like to pull for comments or questions?

Seeing none, do we have a motion and a second to approve?

We have a motion and a second.

All in favor?

Aye.

Opposed?

Okay, motion carries.

Next is a presentation on

No, that was last month.

Okay, the introduction of the 2024-2025 budget and vote to consider approval with a resolution to adopt preliminary rate schedule.

Thank you.

And before we get started, I'd like to say we're very happy to have Stephanie here.

Stephanie was here when I started in 1999.

I'm glad we didn't scare away.

So very thankful she decided to come back.

All right, go ahead.

We start off our budget discussion today by reminding ourselves of what our strategic goal plans are.

There's a team behind each one of these working hard to

to bring these forward each for the next couple of years.

And they help guide us through what we're doing, including some budget formulations today.

We have four main areas we're focusing on this year.

We want to fully fund the debt service charges driven by our five-year CIP.

We want to establish resources to achieve the strategic plan.

We want to fully fund our operating costs with items that have lagged behind actual spending and September I went through year end results for 2023 and we had a couple of items there.

We're going to address that today.

And we want to translate our objectives into reasonable charges to the city and some services.

This is a high level view summary of our budget.

Our budget is increasing by $7.4 million or 15.6%.

It is heavily driven by debt service charges of $4.5 million and about $3 million increase in the operating budget.

The rates summarized below are the rates that we've computed that will help fund the $7.4 million going forward.

The operating rates are done on a per thousand gallon basis so they're based on usage rather than a monthly charge as the last couple of them down here are all monthly charged based on what we believe cost recovery needs to do.

Our budget is basically 50-50.

This year is debt service has surpassed the operating budget and these are all the two main categories of our budget that we summarize in the next.

And of the $27.4 million of our operating budget, the workforce is the largest share of that in the pie chart.

chemicals and utilities are the next two largest.

And those three together represent nearly 70% of the overall operating budget.

Most of the other items are listed here.

Information technology and maintenance and repairs and building and grounds are roughly about the same.

And smaller ones, depreciation, biosolid, transportation, lab, odor control, safety and professional services make up

the smaller chunks of the pie.

So this is a 10 year budget history.

The blue line is our operating budget over the last 10 years.

The orange line is the debt service and the yellow line represents both put together.

As you can see, it's been increasing steadily over the years, but the rate of increase has gone up the last two years.

And that is heavily driven by debt service and the CIP.

So this slide I wanted to show you what happens once in a while is called a flow shift so we use flows to estimate the charges between the city and the county and in this particular year we're using the flows from 2023 reported to us by the city and county retail flows they reported to us on a monthly basis

So we get the allocation between the two of the total retail flow, and we use that as a way to allocate a charge between the two authorities.

And that flow allocation affects certain of the cost allocation agreements, but it definitely affects the operating charge.

Initially, you'll see that there's a flow ship from the service authority to the city.

In 2025, and for water,

49, 47, and 43 for the wastewater charge.

And that's basically a one percentage point change.

Doesn't happen very often when it's both water and wastewater, but this year it does.

And what I wanted to show you here in the gray area, I mean, we use the allocations to allocate the flow, which we use to apply to the grade to get the estimated charge.

So if we look at the shaded area, you'll see at the very bottom here,

but she got covered up when I did that.

But you see at the very bottom there, $44.8 million didn't change between the two years.

So before we make any changes to the budget, we apply the flow shift and the flow shift causes roughly a $230,000 change shift between the two entities.

Again, this is just an estimate.

This shows you what happens in there.

They're estimating process, whether it really happens or not, and it'll probably shift back to next year.

That's what our experience is.

This is the revenue estimates that are needed to fund a $7.4 million increase.

Their customer charges will need to go up by $6.3 million in the box, the lower box here.

The city and the service authority have significant rate increases.

or charging increases.

Even though the service authorities is 3.7 million and harder than the cities, it's a smaller percentage of their total.

We also have interest income going up about $1 million because of interest rates have increased over the past year.

Solid Waste Authority, we charge the Solid Waste Authority for the administrative finance and IT efforts that

and some of the new positions we'll talk about in a minute.

We have about a $50,000 increase in subject acceptance.

All other revenues are anticipated going down and really that's mostly nutrient credits going down slightly and we're using $80,000 less in reserves.

These are the cost drivers of the budget.

Again, debt service is the largest cost driver in the increase of the $7.4 million and 60% of all increases.

Then we have personnel.

We'll go through each one of these in a few slides.

Utilities and chemicals.

Those four items right there make up 93% of the total increase in the operating charges.

The other are going to be IT, lab testing, and all other charges, which would be insurance, stand maintenance, things of that nature.

So we're going to start off with CIP and debt sales.

That first column there represents the adopted CIP.

The second column there is the CIP proposed and presented to you at the last board meeting.

Of the CIP, we show underneath them the ways that we are going about funding them.

That first number there, work in process of $25 million, the second column, that's either work completed, that's cash we have already here, or it's bond proceeds waiting to fund those projects, specific projects.

That $12.8 million is future cash reserves.

I want you to remember that number because I'm going to mention it here in a minute.

The $24.9 million is grants and recoveries.

It's mostly the grants for the Beaver Creek Dam and the GAC project.

And there's a betterment portion to the central water line that the city is going to reimburse to the service authority for the water line.

That leaves us with $308 million in new debt that is needed to fund the CIP.

And I'll put a note in here that

For great purposes that we computed for this presentation, we use the number of 323 and that is for assuming $15 million will be needed to fund the repairs to the Rivanna pump station.

So we don't have to come back to the board to redo this process again after we have more information on what the Rivanna pump station picture looks like.

So we're going to assume 15.

If it's more than that, we'll make it up during the next budget cycle.

If it's less than that, we'll make it up during the next budget cycle.

So these are the major projects just to summarize.

The first two there are pipeline related, been discussed about quite a bit at the board.

And then the next several large groups of projects Beaver Creek has been on the books for a while.

It is regulatory coordination related.

That's where the largest grant is.

So it's taking a while for that to go through the process.

Then the next project, the Concrete Rehab and the Crozet Rehab, those are kind of related.

Those facilities were built in the early 1980s right after the authority was created.

Those were projects specifically identified in the four-party agreement.

So they're about 40, 45 years old.

We really do need to go through some rehab work.

The administrative office building kind of falls in that too.

It was built in the 1980s, too.

It wasn't built for IT.

Electrical in this building is about maxed out.

There is no fire suppression.

Plus, we are running out of space.

So those six projects alone represent about 70 percent of the total CIP.

This graph shows you how our current bonds payable compared to what we're getting ready to do.

So the blue represents the current outstanding bonded debt over the last 15 years or so.

And the orange represents the new debt that will be needed to fund the CIP.

This slide will show you in the first column there, that's where we currently are,

The current debt level is $195 million outstanding.

Their current annual debt service cost is $16 million.

And there's that 323 number I showed you a couple slides before.

But 323 is the amount of new debt needed.

24 is the amount of annual debt service cost that needs to be added to their annual debt service.

with our total of 40 after we're done and a total of 518 outstanding in debt after we are done.

So the way we compute and put our charges in place is we take our target of $24 million each year and we divide it by five.

Then we have this as our level of debt service over the next five years.

So we add 4 million, we add 4.8 million,

We have 4.8 until we get to our target over the five year period and the 40 million over the five year period.

So this is the amount we estimate we need if we're going to issue $323 million in new debt to get to our target.

That's 150% increase in our debt service costs.

This is a visual of that same thing.

So what happens is this blue line represents the steady $4.8 million increase in our debt service charge.

This line, the orange line represents when we actually issue the debt.

So you can issue a debt in a two year period and you're given by our IRS regulations a couple of years to spend down that bond proceeds.

So you don't really issue the same debt every year that you need.

So in these years, you'll see a gap.

And this year, we'll use a little bit of reserve to make up the difference between what we're charging and what we're paying.

This year, we're going to have a gap in the other direction.

We are actually making reserves here and here.

So what that means is going back to that $12.8 million in future cash reserve, this is how we generate most of it.

We have these years where we're charge is steadily increasing to give you a consistent charge

But we have those years where we're riding the debt service issue.

So basically you're generating reserve to use them up front.

And I can tell you using $12.8 million up front will save you about $900 to $1 million a year in debt service.

Over 30 years, that's $30 million.

Our next cost driver is personnel costs.

We have programs that need to budget a 3% COLA and a 2% merit, and we'll go through some metric support cut in a second.

That is about a $425,000 increase.

We have four new positions.

And again, we'll go through those in a second.

And that'll be about $205,000.

We have to fully fund the positions that we created in the current year we're in, which is the finance manager, the engineering tech, and the SCADA tech.

Those were only funded for six months last year or this year.

That's $163,000 increase.

Then there's $364,000.

That's all the related benefit costs of the first three items that are listed here.

So that's $1.2 million increase for personnel costs.

Here is where those new positions will fall.

The communications and outreach will fall under the admin

Division.

The sustainability and grants falls under engineering and maintenance.

Deputy executive director is over top of these three divisions, and the wastewater operator will augment the current number of nine there to make it a total of 10.

Those are the four new positions.

These are the four new positions.

Again, the deputy executive will manage the finance and technology division, engineering and maintenance, and operations and environmental divisions.

The grant and sustainability coordinator is going to be helpful in acquiring and coordinating excellent funding sources, such as grants and maybe local financing sources, whatever the opportunity may be.

They will also help develop and implement and improve policies related to many of our sustainability efforts.

The outreach and communication coordinator will help with the effective marketing and public outreach as well as manage our website and social media pages.

And the wastewater operator will again augment the nine that are there now

on the wastewater side.

These are some of the metrics we use for the workforce development goals and their costs under the personnel drivers.

We have a goal in our workforce development of 10% turnover rate and it's well

Hopefully these will continue to help us focus our competitive pay and benefits to retain employees and attract new employees.

Our current annual inflation rate is 3.2% from February to February.

That's the latest and greatest.

Our market survey, Bill does an informal market survey when he meets with some of the local utility groups that we have.

here in Central Virginia.

And it looks like the survey ran between three to 8% increases with an average of 4.5.

I'm a member of the GFOA and I see these little informal surveys come across all the time.

It looked like there's four or 5% range.

And Social Security Administration just approved a 3.2% COLA for the calendar year 2020.

I just wanted to briefly mention we haven't done a compensation study since probably prior to COVID or right in the middle of COVID so it was probably about time for us to do another one but our compensation studies really focus on their job descriptions if they're accurate and if they're placed properly within the pay scale they actually go out and interview employees to make sure what they say they're doing matches what their job says they're supposed to be doing

and we make sure our pay scales are competitive in the market.

We've never used a compensation study to make a blanket increase in any employee or employee group at the authority.

It's just never been that way.

So American Poll is the only way our employees get increases.

The next item is the budget lag effects.

So utilities and chemicals between 2022 and 2023 experienced significant and extraordinary increases.

I've never seen them increase this large.

And we discussed these back in 2023.

There was a 40% fuel charge in the three of our largest utility accounts that makes up about 80% of all utility ball sector authorities.

and the bid prices came in in 2023 for the 60% increase in unit cost.

Now we were able to keep some of that down to being more efficient in our use of our chemicals.

What that creates is a budget lag effect.

So you go to the next.

So the budget lag here is 21, 22 and 23.

The blue line represents actual spending levels.

23, we're already below our 2024 budget, which is this orange line.

So this is the lag.

By the time we get the information for 2023, we've already developed, discussed and approved the 2024 budget.

We do believe these calls are going to flatten out.

Utility calls, actually, I've seen a couple of emails from the BEPG or whatever stall that there is some reductions in some of their field surcharges, but they're not at the minimum.

So they say.

It's like a cart then.

It's like a little bait and switch.

Anyway, the green line here represents where we are presenting to the 2025 budget.

I guess their bid prices came in almost flat so

But this year, we're going to try to change it around a little bit so we can have better information.

We're going to try to extend the current prices out three or four months if they'll take it, our current providers, and then try to fit it in November.

So we have at least four, five or six months of actual data for this year.

So fitting them in May, for June, for July beginning, we'll fit them next November, January.

Okay.

The next cost driver was our lab costs.

We have some new testing going on this year.

PFAS has been talked about a little bit at board level.

We don't have any regulatory requirements on this yet officially, but we're getting ahead of the curve on that to know where we stand.

So the PFAS testing program is already started, but gearing up and this is the cost to

one of the factors that are across there for the lab testing.

Pharmaceutical byproduct testing is the new one as well as the new calcium testing related to the sediment in the tanks, I believe.

So these aren't tests that are done in the lab as the picture may suggest.

These are tests that we go out and get the samples.

We're gonna send them all to the lab tools that are qualified to release.

And I think PFAS qualifications are pretty hard to get.

pretty hard to find a laboratory to do these.

So that represents 150% increase in their lab costs.

IT systems are just ever growing.

Every capital project adds new networks, new security firewall related issues, new PLCs.

We are still working to get all of our firewall related software and hardware on a system platform, which is best practices and made it more efficient administration.

We have a data site that's being put in place right now.

Just the building itself got finished.

It's over South Rivanna.

We're getting ready to equip it out.

So that's a new data center for cybersecurity and disaster recovery purposes.

Nine new programmable logic controllers, PLCs, which I'll show you a picture of in a second.

Each project has a couple of new ones.

We're using more third-party support than we ever have for mainly for cybersecurity efforts, pen testing, device management, and patch management.

to keep all the devices up to the latest and greatest protection standards.

Mobile device management and new systems, they're always coming along.

We've got a new asset management document management and HR system, but we're gradually increasing the modules that we're using within each one.

This is an actual PLC cabinet.

I know we say PLCs once in a while and you never know which one, but this is an actual PLC cabinet at this plant.

The actual PLC is right here.

That's the small thing, but it's control.

It's communicating with all these modules that are connected to the devices out into the plant.

So our maintenance crew has an instrument control position that is responsible

for terminating these connections, making sure they're properly communicating to the device out there, bringing them into the PLC.

At this point, the IT department takes over the SCADA PLC portion of this.

And then these are communicating back to previous screen.

You'll see the picture of the interface with the operators.

For about

There are about 110 of those out throughout the plant.

I can tell you five years ago there were about 65 to 70.

It shows you the growth in the PLCs.

In summary, these again, this is their strategic plan goals and I put in here where I thought many of these cost drivers are applicable to.

You'll see that CIP is pretty much applicable to all of them.

I don't think we need to go through too many of them, but the CIP is hitting communication and collaboration because of the education center here, workforce development because we're putting in a new modernized administration building, optimization, many optimization efforts in there.

So just a reminder of how we are addressing our strategic plan.

Again, a summary, debt service is over half of our budget, slightly over.

Workforce is another 25% of it, and all other costs are the other 25%.

This is where our financial forecast for the next five years.

These were presented in the five-year CIP last month.

We have a total capital budget just for 2025 of $79 million.

The CIP is $371 million as presented.

And the new debt anticipated is $308 million.

This last slide, I want to kind of give you a snapshot.

So this is where we are now and our charges to the city.

This is where we are now in our charges to the county.

Sorry, that keeps covering it up.

So in 2029, that's where we need to be in five years in our charges to the two customers to meet the needs of the Seattle community and operating box.

I'll move the number one now, I won't do that again.

So 86% increase for the city over the, I mean, for the service authority over the next five years.

A large part of it is driven by that 121% under the urban water, and that's driven by debt service.

61% for urban water and 70% for all other rates.

Debt service is driving the rates for, and the charges for the two customers.

And this simply put, I mean, if you add some inflation, these are estimates five years out, they're going to be bigger numbers.

That's been the trend.

You're looking at least on the services authority side, the retail rates doubling.

So it's a big commitment.

It's a big commitment when we approved the community water supply plan 12 years ago.

We do, for $50 million.

Yeah, Mr.

Chair, I just wanted to mention that I've got to leave at about four until four.

Okay, so this is the last slide.

This is the resolution that sets the public meeting for May 28th, public hearing, excuse me.

Basically the net O and U will approve the preliminary rate schedule

by the code of Virginia and you have to wait a certain amount of time.

I think that it has changed for advertising purposes.

And then you set the public hearing for May 28th.

Discussion?

I mean, I feel like with the CIP, you're just driving most of this as you say, we've discussed that a lot.

last week, last meeting in particular, but we certainly have been aware that this was coming and had some very specific conversations about debt service.

I think you're right.

I mean, this was sort of set in motion years ago with getting our water supply where there's

Now, I feel compared to a lot of the other utilities in the state of Virginia Valley country, we are in better shape because of what we've done over the last five years.

But we've got a ways to go.

Certainly middle of the pack.

When you talk about the service authority or the city's charges.

My favorite data from Gary is the gallon and a half

For Penny?

Remind me of the... Two.

Two gallons.

Okay.

That compared to the price...

It's still a good deal.

$1.95 or whatever people are paying for these things.

It is.

I think the issue...

I think the issue you're going to see a lot of utilities talking about, not just the averages, but what's affordable in your community.

And in this community, that's very different.

I mean, the kind of these national norms, if you look at median income, and then you put a percentage to that.

But if you start carving out the groups in the community that are having the most problems with affordability,

that $30 increase a month can put a lot of pressure on somebody fixed income or low income or part of an apartment complex.

It's not being subsidized.

So I think one of the things we're going to look at is that first tier and our rate, how can we keep that affordable even as these other costs are increasing and maybe look at some different ways to try to pay for that.

And the second piece, this is as much for your knowledge, we've been probably for 10 years, saw the water supply plan costs increasing.

We've been collecting a reserve we call a race stabilization reserve that is really meant to try to cushion

the wholesale increase coming to us as to what we pass on to our customers.

And I suspect our rates will be about half of what the wholesale rate is.

And we're trying to do financial studies to be in a position to sustain that for at least the next five years.

That's kind of our challenge.

Well it's an important effort.

We're lucky we have options like that.

That's great.

This has already been, Lauren, you've already had a chance to look at this, right?

Yes.

In the preparation of all these things?

Yes.

Yeah.

This will be my third time doing this.

We have a motion and a second.

Any other discussion?

Hearing none.

All in favor?

Aye.

Opposed?

Okay.

Motion carries.

Thank you.

And now we have the sediment and the drinking water.

Thanks.

So I wanted to take a minute and talk a little bit about, there's been a letter that was sent to the Board of Supervisors about sediment in their drinking water.

So we want to brief everyone on what we know now.

So just a brief summary, ACSA have received calls from Glenmore residents finding sediment in their hot water systems.

A laboratory analysis determined the sediment to be a calcium phosphate material.

We're currently coordinating with ACSA, Glenmore Homeowners Association, we met with them on December 12th, 2023, and Cornwall Engineering Group to investigate the cause of the settlement.

Another survey was sent to all 1000 homes in the Glenmore subdivision.

early January to better understand the extent of the issue to further quantify and qualify what we're seeing, what the customers are seeing.

and then currently we have at least one resident in the Farmington area that's called about sediment.

That sediment is on its way now to be determined that it is the same sediment that's being seen in Glenmore.

RWSA staff along with ACSA staff will begin a sampling program in Glenmore and a Farmington home next week.

We're making home visits.

We have a work authorization that's been established, a plan to follow.

One of those tasks is an in-depth analysis

Holmes, Incline Water.

We literally have homes with the problem, the homes without the problem, next door to each other, on the same street.

So we're trying to determine what's unique about that.

They're getting the same water.

Currently we have laboratory test simulations and laboratory, Cornwell Engineering Group's laboratory.

So they're running simulations where they're comparing different chemicals.

So comparing how the

The different doses work in the system to see if they can simulate in a lab setting what's going on in our water distribution system.

But we expect to have those results in two to four months.

And again, it's been quite a topic of discussion amongst both here at Rivanna and with our sister utility ACSA.

because we are seeing no similar sediment issues reported from the City of Charlottesville, Crozet, Scottsville, or the UVA distribution systems, roughly 49,000 questions.

So why are we seeing it in those sections of Glenmore?

Why are we not seeing one possibly in the Farmington area?

That's what we're trying to answer.

Just to review for everyone, this is a picture of our graphic of our urban water system.

As we can see at the north, we have North Urbana Water Treatment Plain on the North Urbana River.

South Band Treatment Plant, and then again, the Observatory Treatment Plant on UVA grounds.

All of those three water treatment plants feed what we call the urban water system.

And what we're talking about now is the Glenmore area, which is the far eastern portion of our urban water system.

And the issue in the Farmington area, again, is in the Ivy area, so I'm gonna follow the western portion of the urban

Water Distribution System.

So this is a picture that we received from one of the customers in the Glenmore area.

It looks like flat fish food, essentially looks like fish food.

The online survey was sent to a thousand residents and we had 280 respondents.

We were pretty happy with that.

79% of those 280 did not have noticed any sort of sediment.

And these are the pictures.

As part of the survey, we asked a series of detailed questions.

It was a 20-minute survey.

It was an online survey.

The data was compiled by Foreign Well Engineering Group.

And again, we asked for pictures of the sediment.

So this is one of the pictures we received.

These are all four pictures of the sediments that we received.

And again, part of the process is for us to determine what is like the first picture and what is not.

So that's what led us to initiate the intensive in-home sampling.

in the second picture.

Again, there's that sediment again.

Initial analysis of the online survey data indicates a correlation between total home square footage of greater than 5,000 square feet, tankless water heaters, and hot water recirculation systems.

Some homes have a hot water recirculation system that pumps run all the time so that a sink or a bath or a shower at a distance far away from the water heater will have hot water instantly.

I'm going to have to wait on that one.

So we're seeing a correlation between those three factors in the data.

So the study, the sediment study will evaluate corrosion inhibitors.

It's been a topic greatly discussed.

We did change from a zinc polyphosphate product to a sodium orthophosphate product in 2019 to 2021.

That's a change that was, the board was briefed upon at the time.

We upgraded our corrosion inhibitor technology from a polyphosphate product to an orthophosphate product.

Lab tests currently going on are comparing the impact of the zinc and sodium orthophosphate corrosion.

Even some anecdotal evidence that the removal of zinc could have caused this problem.

So part of the studies going on in formal engineering group now are looking at the difference between water treated with zinc orthophosphate and sodium orthophosphate, which will be used right, which are what we use.

our current chemical provider of the sodium orthophosphate very commonly used throughout the U.S.

He's got dozens of customers that use our same product large metropolitan areas so that we are not using a unicorn product this is commonly used as sodium orthophosphate so again why are we seeing it in some places and not others the other thing we're looking at is water age

To get to the Glenmore subdivision, the water has to travel from South Rivanna for observatory treatment plan through our five million gallon pent up water storage tanks through also a ACSA storage tank in the Glenmore area before entering the Baltimore system.

Does that water rates have an impact on why we're seeing it in some parts of the systems and not others?

We're determining that also.

And then again,

Coming back to it again, there are no reported issues in the city, Crozet, Scottsville, or UVA.

And also, as you all know, we have a wastewater treatment plant in the back of the Glenmore subdivision.

We've not noticed a sediment in the Glenmore wastewater treatment plant.

As part of this study, we're going to take out our existing tanked water heater.

We're going to tear that apart and see if you find the sediment.

We're going to put in an instant water heater or a tankless water heater there again, see if we can generate this condition in the back of the one more sub-vision of which we want to treat it.

So really what it comes down to

The goal of our settlement study is to understand the cause of the settlement issues before changing the drinking water system for 100% of our population for a problem that's less than 1% of our customers are experiencing.

That's not an issue we take lightly.

That's not a matter we take lightly.

I understand there are complaints.

I understand there are customers that have issues.

And we understand and empathize with them.

But we need to fully understand why this is happening before we make a change.

Because if we don't understand it, we're going to make people all change.

I think that's it for my questions.

Can you talk about safety aspect and actually occurring?

Mineral, safe to drink, we talked about VDH.

with the Glenmore HOA.

A resident in Glenmore wrote to Europe's representative Bob Goode's office and requested if EDH get involved with the safety aspect of the water.

And there are no, this is an aesthetic issue of the water, but this is not an issue of the water, not being safe to drink it.

It's been estimated all water quality standards.

And we're clearly seeing the issue in the hot water.

We're not seeing it in the cold water.

That's another issue.

Cannot understand, do not understand

We're hoping that these studies will point us in that right direction.

But as you guys all know, we do fill out monthly operations reports.

We calculate our chemical uses, our pHs of the system.

We're testing the water quality test and the distribution system.

We've all been really quite serious about it.

So we've been involved.

I know you had a question.

This is a similar question to what Gary just mentioned.

So yeah.

Sounds like it could be connected to maybe the electrodes in the tankless hot water heaters maybe?

It's been a long process.

It's been one we've been hand-gloved with ACSA and it's one that even came up earlier today with more information from the other customers.

Not necessarily.

That will have a combination of two?

That will have a combination of all three.

Amount of use over time maybe.

Yeah, and then.

Thanks, Brian.

We looked at water usage in the homes, and typically there is lower amount of water use.

One of the questions we asked, the number of showers per day, because that's typically one of the bigger water uses in the home on the domestic side.

And they were usually one to two, but most people, there are one to two people in the home that one or two showers a day.

Thanks.

Are there any other items from board or staff?

Do we have a motion and a second?

Please adjourn.

Motion and a second.

All in favor?

Aye.