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
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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
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