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HomeMy Public PortalAboutJFOCP 2011-08-25INET CASH FLOW 'ANNUAL CONTRIBUTION I (CUMULATIVE TOTAL III OTHER TOTAL PER YEAR II I 11 IUV SYSTEM I I I 'WATER SYSTEM I HVAC SYSTEM 1 'SLUDGE HANDLING 'SECONDARY BUILDING I PRE TREATMENT ITHE PLANT EXTERIOR CONCRETE PAINT EXTERIOR ROOF Glass covers Ballast cards Bulbs Pumps 150 gal water heaters Total system Polymer System J 'Grinder Pumps 'Centrifuge 'Submerged Turbine IHibbon blowers 'Spencer Blowers I Floating Covers IClariflocculator IWAS pumps IRAS Scum pumps I Recycle Pumps 1Sludge_Zone Mixers IBasin Diffusers 1Bar Screens 'Grit pumps 'Grit equipment 1 Hibbon Blowers 'Equipment I 30 III 3 01 60 II II Number $300,000 1 $200,000 I $192,000 1 $150 I $1,200 1 $200 $3,000 I $3,0601 $320,5201 1 $23,154 $16,867 $293,700 $57,200 $26,463 I $121,500 $68,238 1 $105,696 1 $27,713 $20,258 $9,729 $3,570_ $88,180 $73,167 $6,782 $24,602 Install factor l $10,000 12004 cost 2% III 500 50000 10000) i I 30001 installation l 2000 Additional ei $300,000 I $200,000 1 $192,000 I $4,500 1 $36,000 1 $12,000 _$14,000 $9,180 $320,520 $23,154 $33,734 I $343,700 $134,400 I $88,389 I $243,000 $68,238 I $211,392 $27,713 I $60,774 I $38,916 1 $14,280_ I $88,180 L $73,167_ 1 $13,564 $24,602 lby number $24,000 Lmultiplied_ )Total and 25 -35 8 -12 II 25 -30 1 2 -4 2 -4 2 -4 5 -10 IOn going I i 1 7 -10 1 I 110 120+ I 120 15 -10 15 -10 15 -10 15 -10 1 1 15 -20 I 5 7 1 10 use minimum 10 'life in years I Estimated $227,188 1 $360,000 I $132,812] $132,812 I $4 950 1 $39,600 I $13,200 1 I I $0 IIHIIIII L $75,062_ 2006 1 1 0 %0 $582,188 1 $360,000 1 $137,812 I $5,00 II YIII I $5,0001 IHIH H HIIIIHHHI 200• 1 %0 $874,188 1 $360,000 $205,812 I $68,000 I IIIIAI $5,400 1 $43,200 $14,4001 $5,000 1 1 11u 2008 1 20% $932,332 1 $360,000 I $507,668 I $301,856 I 1 N�11�1 17,500 I_ $5,000 I IIIIII 1 $85,298 I $34,641 I $75,968 $48,645 1 $17,850 $16,955 2009 _25% $1,287,332 I III IJI III III IHII III III III $360,000 1 $512,668 1 $5,000 I $5,000 I III� 2010 1 30% $1,522,916 I $1,486,531 1 III H H III IIJIII H IIIIIHI $360,000 13,00C.I 1 $637,0841 $1,033,4691 $124,416 $396,385 I $280,0001 INII $6,0757 $48,6001 �III $16,200 I $12,852 Id $8,000 $8,00 II 1 $45,541 II IIIHIIHIIIIIIHII 2011 1 35% $95,533 lu11M 1111 2012 1 40% $1,838,531 I III1 !!iIIIIV $360,000 I $1,041,469 I $8,000 I 1 I $8,0001 IY II II 2013 1 45% $1,415,797 1 $1,134,191 I $360,000 I $1,800,000 1 $1,824,203 1 $3,905,809 1 $782,734 I $2,081,606 I I $350,000 1 $6,7501 $7,875 1 1 $54,0001 $63,000 1 $18,000 1 $21,000 1 $10,000 1. $132,5841 $102,3571 $41,570 $91,161 1 $58,374 $21,420 $132,270 1 $20,346 I $36,903 2014 $36,000 1 50& $21,000 1 I $24,500 $16,065 $30,000 $59,035 $601,475 $235,200 $119,417 $48,498 $106,355 $68,103 $24,990 $154,315 1 $128,042 1 $23,737 2019 175 $918,787 I $1,800,000 1 $5,921,213 1 $2,015,404 1 $9,000 $72,000 I $24,000 I $28,000 $30,000 $46,308 I $176,778 I $486,000 $136,476 1 $422,784 I $55,426 $121,548 $77,832 I $28,560 $176,360 1 $27,128 1 $49,204 2024 $48,000 1 100% $54,265 I $1,800,0001 $8,225,735 I $2,304,523 I $675,000 1 $450,000 1 $432,000 1 $10,125 1 $81,000 1 $27,000 1 $20,6551 1 $30,0001 11 $75,9021 I 1 $153,5361 I $62,3541 1 $136,7421 $87,561 1 1 $32,1301 $30,519 1 1 20291 1 125% I •icn 0 0 cncn c5c cnm o co C p (p n n s n X i v v v v m v 0 3 3 B' 3 (n i =i c n a CD (u (D i C 0 5•R. rti oo m C f c i m 1 c m 0 N cii D a•� CD G c N D v s (D (p N 0 N CD (Q o v i 7 u 'o m 0 m c o t N n 6 s s1 su (D a. 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N V N N N V ID W A V is .✓ wp N0 co O co O A W OD pd p d"CS}k,, JOINT FACILITIES CAPITAL REPLACEMENT RESERVE FUND INVESTMENT POLICY I. INTRODUCTION AND PURPOSE Pursuant to the Upper Fraser Valley Wastewater Treatment Agreement (the "Consolidation Agreement the Manager has the authority to oversee and manage the Joint Facilities. Part of the Manager's responsibilities include the maintenance of the Joint Facilities' Capital Replacement Reserve Fund (hereinafter referred to as the "Fund This investment policy applies to the activities of the Manager with regard to investing the financial assets of the Fund. II. PRIMARY INVESTMENT OBJECTIVES The primary investment objectives for the Fund are as follows: 1. Preservation of Fund principal; 2. Preservation of Fund liquidity; and 3. Maximize Fund yields at a low risk. III. INVESTMENT POLICY The Manager may invest Fund assets in any manner set forth in Section 24 -75 -601 et seq., C.R.S., as currently enacted or as may hereinafter be amended. Any investment made by the Manager shall also be in compliance with the Public Deposit Protection Act, Section 11 -10.5- 101 et seq., C.R.S. The Fund investment portfolio shall be designed to attain a market average rate of return throughout budgetary and economic cycles, taking into account the investment risk objective stated above and the Fund cash flow requirements (liquidity) discussed below. Safety of Fund principal is the foremost investment objective of the Manager. Each investment transaction shall seek to lessen the potential for capital loses. Investments for the Fund shall be made to diversify its investment portfolio to eliminate the risk of loss. The Fund was created for the primary purpose of accumulating sufficient pecuniary resources to pay for anticipated capital replacements to the Joint Facilities. Accordingly, investments, wherever possible, should be made so that maturity dates coincide with dates of anticipated disbursement needs. When the manager submits the Joint Facilities annual operation and maintenance budget to the JFOC for consideration, it shall also submit a listing of anticipated capital replacement projects for the upcoming year. Subsequent to the approval of the anticipated capital replacement projects by the JFOC, the Fund shall be managed to have sufficient liquid assets available for the yearly anticipated projects without incurring any unnecessary early liquidation penalties. The responsibility and authority for conducting investment transactions related to the Fund resides within the sound discretion of the Manager. The Manager may delegate such responsibility to one or more of its employees. Until further written notice is provided by the Manager, at least one member of the Board of Directors for Fraser Sanitation District and the Fraser Sanitation District's Administrator shall act as the investment officials for the Fund. The Manager will be responsible for all investment decisions and activities. No person shall engage in an investment transaction with respect to the Fund except in compliance with this investment policy. The standard of prudence to be used by the Manager shall be the "prudent person" standard and shall be applied in the context of managing an overall portfolio. Investment officials acting in accordance with written procedures and this investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and the liquidation and sale of securities are carried out in accordance with the terms of this investment policy. IV. REPORTING Within ten (10) days of the end of each quarter (i.e., March 31, June 30, September 30, and December 31), the Manager shall provide each District with a written Fund Investment Report, which shall be in summary form. Any district may, in writing, request a periodic investment report, which the Manager shall provide within ten (10) days of receipt of such request. V. POLICY AMENDMENT This policy may be amended or revoked at any regular or special meeting of the JFOC in accordance with the voting procedures provided in Article 4.6 of the Consolidation Agreement. Nancy Anderson From: Nat Havens "sent: Wednesday, August 10, 2011 12:03 PM a: Nancy Anderson (nanderson @town.fraser.co.us) Subject: 2012 JFF Budget and Related Documents Attachments: 2011 Capital Replacement Reserve Options Memo.docx; Plant Capital Reserve Plan.pdf; 2012 CRRS.pdf; JFF 2012 Proposed Budget.pdf Mr.'s Klancke and Hutchins, Attached is the 2012 JFF Budget, the 2011 CRRS Memo and the Ten Year CRR /CIP Schedule. A few points to note: We have included the original Capital Reserve Replacement spread sheet along with the new Capital Reserve Replacement Schedule, and its corresponding memo, and the ten year excel budget spread sheet (which does not have ten years filled in yet but soon!). I am not sure if after today's Ste visit to the facility if there will be a need to change the budget we will play that one by ear today, but I know Kirk needed the documents today to send out. At the JFOC meeting in September we will have everything spiffed up all fancy like! Let me know if you have any questions now or after your boards take a look at the budget, and we will provide you with the answers as well as any additional information you may need. n The Management Fee charged to the partners will not change in 2012, and is not shown on the JFF ten year budget document, so you will want to make sure you have it budgeted in your enterprise fund. There is a "plug" number in the amount of $175,000 in sale of assets in the 2011 Year End Estimates (YEE) revenue line item. This plug number offsets the capital expenditures so that it does not reduce the O &M fund balance. This will not be necessary in future years as we now account for the Capital Reserve dollars in the "new capital fund" area. To bottom line your examination, as per my 2011YEE the budget is at —$734,000 (with lots more savings on expenditures anticipated by year -end), the 2012 budget is —$739,250 (also I would expect this to come in under budget too). Even though some line items went up and others down, the roughly five grand difference is the bump in payroll which is there to help (possibly) in recruitment. Personally I would color this 2012 budget as status -quo with no changes, expenditures are budgeted to stay roughly where they have been for two years now. Nat Havens Finance Manager Town of Fraser 153 Fraser Avenue, P.O. Box 370 Fraser. CO. 80442 Phone: 970 726 -5491 x206 Fax: 970 726 -5518 www.frasercolorado.com Memo To: JFOC From: The Managers of: WPRW &S, GCW &S #1, TOF -WWF CC: Members of the JFOC Date: 8/16/2011 Re: Capital Replacement Reserve Fund Study (a.k.a. The Nat Plan) The Capital Replacement Reserve Study (CRRS), Section 4.1.7.2 4.1.7.3 of the Upper Fraser Valley Wastewater Agreement states: "The Capital Replacement Reserve Study shall be prepared annually thereafter. The manager shall prepare a study of the Capital Replacement Reserve Account requirements including at a minimum; anticipated maintenance and replacements, useful life, cost estimates and hence the annual budgeted contribution amounts per entity." Prior to the initial operation of the plant a Capital Reserve Plan was formulated and presented to the members of the Joint Facility. This plan projected anticipated expenditures for major capital equipment repair and replacement along with facility maintenance over a twenty five year period. The original plan set expenditures along with its needed revenue stream to prepare for and to address the capital needs of the new facility. Through the yearly contributions by the members of the joint facility, today's reserves sit with a balance of over $2.283 million dollars, nearly a million dollars more than originally projected for this date and time. The current Management Team has assembled a new Ten -Year Capital Replacement Reserve Study (exhibit 1). Management re- visited the original study and its assumptions, reviewed the eight years of operational knowledge, and firmed up the short term projections for major capital repair and or replacement in the study, all while maintaining the long range view. The difference between the Original CRRS (exhibit 2) and the 2011 Revised CRRS can be attributed to a multitude of explanations /reasons associated to a life expectancy and cost approach versus an operational and life expectancy cost approach. There are likewise many ways a reserve study can be done /justified. Certainly, issues will always arise unexpectedly and those must be financially prepared for as well (thus the importance of an annual review of the CIP and CRRS). 1 Based upon management review, we would recommend the following: Initially a base reserve amount must be agreed upon. This base amount is that amount we feel is comfortably enough to address any unexpected (in timing or identification) capital replacement reserve repair or replacement projects. Initially a reserve base amount of $1.5 million dollars is recommended. The current reserve should be reduced during fiscal years 2012, 2013 and 2014. Then, the following seven years anticipated expenditures will be averaged over that time frame and billed on an annual basis allowing the base reserve to "hover" around the $1.5m amount (exhibit 3). The averaged seven year billing amount will be re- figured on a bi- yearly basis (once every two years), with the next two years payments amounts determined. Page 2 m n m a m co G. 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