Bolinas Community Public Utility District
A Meeting of the Finance Committee Of The Board Of Directors
March 5, 2013     270 Elm Road, Bolinas


1.  Call to Order.

    10:10 a.m.

2.  Roll.

    Directors Amoroso and Kimball present; General Manager Jennifer Blackman also present.

3.  Reserve Fund Balances, Debt Schedule, Investments

    The Committee reviewed the district’s current debt schedule and fund balances.  The debt schedule reflects that several loans were repaid in full in recent years (using proceeds from the sale of the district’s Pine Gulch Creek property to the National Park Service) and further reflects that the district will retire approximately $50,000 in annual debt costs in 2014.  However, the district will incur approximately $30,000 in new annual debt as a result of the Terrace Avenue Water Main Relocation Project.   Director Kimball asked about the status of the district’s repayment of the bonds that financed the district’s solar arrays at the water and sewer treatment plants.  Staff answered that because of the power savings and the 5-years of rebates received (on a monthly basis) from PG&E, the district is able to repay the bonds from that combination of funds, as was projected by Director Smith when this project was developed. 

The Committee then reviewed the district’s reserves on deposit with the County of Marin; these reserves are earmarked for the water system, sewer system, septic/drainage contingencies, beach groin, hazardous tree work, and the solar bond repayments and total approximately $563,000.  The water system account in particular has been drawn down in recent years to help fund various improvements to the district’s water system, including the Horseshoe Hill Water Main Extension Project and the Wharf Road Saddle Service Replacement Project.  Director Amoroso expressed concern about the draw-down of reserve funds and suggested the Committee should explore rebuilding those reserve funds.  Staff noted that the district will realize $20,000 less in annual debt repayment costs, as just discussed, and perhaps that “savings” should be diverted to replenish the water reserves. 

The Committee then examined the district’s balance of funds from the proceeds of the sale of its Pine Gulch Creek property to the National Park Service.  These funds are invested in short-term CDs and in money market accounts with the Bank of Marin and total approximately $950,000.   Proceeds from these funds have been used to retire debt, to fund water and sewer system capital projects, to pay for the remodel of the BCPUD office building, and to pay for the geotechnical evaluation of the bluff at Surfer’s Overlook.

4.    Draft Fiscal Year 2013-14 Budget

    General Manager Jennifer Blackman presented an overview of the district’s tiered water rate structure; at the most recent regular Board meeting, Board members had expressed interest in evaluating whether the rates should be increased at the lower tier levels.  She noted that the two lowest tiers are $1.00 per hundred cubic feet (up to 1500 cubic feet per quarter) and $1.50 per hundred cubic feet (from 1600 – 2100 cubic feet).   Staff projected potential revenue amounts if the district were to increase both of these rates by $1.00.  Assuming ALL customers use at least 2100 cubic feet per quarter (which is not the case, but for purposes of discussion), then the district annual revenues would increase by approximately $49,000.  However, staff knows that district customers do not ALL use this amount of water; thus, using water consumption data from the 2012 calendar year, staff projects that if the district were to raise rates at the lowest tiers as just described, in fact the annual revenue increase would be closer to $23,000.   Director Kimball expressed concern about a 100% increase in rates at the lowest level; although the dollar amount is not high, it is a significant increase.  She suggests that staff check with the Stinson and Inverness districts and evaluate how the metered water rates compare; in addition, staff should research how long the current rates at the two lowest tiers have been in effect.  

    The Committee then reviewed a revised version of the draft budget for fiscal year 2013-14, which incorporates the revisions agreed-up at the February 5, 2013 Finance Committee meeting as well as an updated cost-of-living assumption (2.2% based on 2012 BLS information) and current wage rates.  Staff noted that the current draft budget has a revenue shortfall of approximately $80,000 as a result of the various revisions.   Discussion ensued and the Committee noted that if the full Board agrees that an increase of the tiered rates at the lower levels is appropriate, it will be possible to project another $20,000 in increased water sales revenues.   Staff offered to reexamine the operations and maintenance costs in the draft budget and explore whether expense reductions are possible; staff further noted that the projected $14,000 needed for new equipment for the water treatment plant may be able to be incorporated into the overall line item in the budget for the plant.  The Committee suggested that staff consider replacing the water line in the Cedar right-of-way as a two-phase project, so that the full $45,000 cost can be split across two fiscal years.  Similarly, the Committee suggested staff consider phasing the improvements needed at the sewer lab building (tenting and re-siding for $11,500) over two fiscal years.  Finally, the Committee asked staff to explore whether a used truck might be available, rather than the new Ford 250 currently in the budget, and provide an updated cost.

    Finally, the Committee asked staff to talk with the Bank of Marin about the current interest paid on its investments in the CDARs program and ask for the “best offer” if the district is willing to invest $500,000 of its current CDs in longer-term investments.

The next meeting of the Finance Committee is scheduled for April 9, 2013 at 10:00 a.m.

4.  Community Expression.


  5.  Adjournment.

    12:02 p.m.