After 6 months as Presidents of the Boards, we have begun to get a grasp on the current state of the Water District and Sanitary District and are formulating a plan / process to address the shortcomings that we see.  The work ahead will almost certainly have financial impact on rate payers.

We think it’s essential to be transparent with all rate payers about what we are finding and our currently planned approach for moving ahead.  Meetings with the community are scheduled as follows;

A. Current State of the Districts

The good news

1. On April 27, 2022, the Oregon Health Authority (OHA) notified the Water District that we have been rated an “Outstanding Performer”.  <<Click Here >> for OHA’s criteria.
2. We have 2 conscientious and-hard working District staff members who are performing well in their new jobs.  It is their work that keeps the plant and equipment operating 24×7 in all weather conditions.
3. We have grant funding in place that should be sufficient to complete all necessary road work in the Arch Cape Forest.  This road work will help to maintain the water quality, to improve fire protection access and to minimize our ongoing costs to maintain the roads.

The not-so-good news

1. Last Spring our professional engineer assessed the status of the plant and equipment for both districts and made recommendations of what needs to be done.  Those recommendations include a) $1.9 million in capital improvements over the next 10 years (See below) and b) $120,000 in deferred maintenance of plant and equipment that needs to be addressed immediately. 
2. Maintenance records show that preventive maintenance of plant and equipment has been infrequent and has not followed the manufacturers’ recommendations.  Contributing factors are:
   • Preventive maintenance has not been a high priority for district staff.
   • There is no documented maintenance schedule for what needs to be done. Without such a schedule, staff would have to read each and every manual and keep in their memories the required maintenance procedures for every piece of equipment.
   • Now, due to the historical lack of maintenance, staff is having to react to malfunctions and failure as they happen rather than taking steps to prevent them from happening. React mode is expensive in time spent by district staff, unplanned down time and unexpected / unbudgeted cost of parts and equipment.
3. Our current level of staff (two full time staff members and a contracted part-time administrative support person), cannot keep up with all of the work. District staff’s workload consists of plant operations, deferred maintenance, preventive maintenance, capital improvement projects, and federal or state-mandated projects.  The District Manager also manages both districts’ administration including board support, budget preparation and management, contract management, procurement, and other tasks. 
4. Our operations computers are so antiquated that we can only run an old version of the plant control software and the vendor will not be supporting our older version much longer.  Century Link is no longer supporting the phone/internet service at the Water plant.  Our admin computers can’t keep pace with state requirements for our administrative and financial accounting systems.  Our required audits are two year in arrears.
5. The Arch Cape Forest was purchased without a specific plan for how its operating costs will be paid.  The Water Board’s Finance Committee has concluded that additional funds will be required for ongoing operations of the forest.  Those funds will come from logging revenue, rate increases, a local option property tax levy, or some combination of these but no specific plan is yet in place.

B. Our Plan / Process for Moving Ahead

1. The new District Manager has recently put together and maintains a rolling 15- month project plan to identify, prioritize, and keep track of the work in front of the districts, as well as to identify and manage the costs.   The Boards are having monthly strategy work sessions with him (open to the public) to better understand the work ahead, along with the computer requirements, and how the work might be organized/managed and funded.  It appears likely that more than two staff will be required to do the work, now and into the future.  (That shouldn’t be too surprising since the plants have aged, haven’t been adequately maintained and new projects and requirements continue to surface.)
2. We are evaluating software that will help District Staff to know about, keep up with and report on preventive maintenance requirements for plant and equipment.
3. As we anticipated during last year’s budget process, we believe we have secured grant money to help finance the Webb lift station capital project. We are continuing to look for other grants that would apply for this and other projects.
4. We have put together a financial planning process for the Arch Cape Forest and will continue to have meetings with the Community to determine the preferred means to finance ongoing costs using a local option tax, rate increases, logging, or some combination of these.  There will be a formal process for the community to “weigh in” on the options.

C. Likely Implications for the Community: Continued Rate Increases

1. The districts’ current Long-Range Financial Plans (10 years) indicate 5% rate increases each year to fund ongoing costs, capital improvements, the deferred maintenance costs for equipment and to keep pace with inflation.  It is likely that starting with the new fiscal year in July, additional rate increases will be needed to pay for additional staff resources and computer upgrades to keep up with the work load that is being identified in the strategy work sessions  These financial matters will be discussed and considered during the annual budget process in the spring.
   • Note: The need for capital improvement projects and the plans/funding to meet those needs will continue to be evaluated by our engineer and district manager to ensure we are finding the best possible and financially responsible solutions.
2. Depending upon the Community’s preference for how to pay for Forest operating expenses, a local option property tax levy or additional rate increases may be required starting in 2025/2026.

Bottom line, there will be a financial burden on the Districts and their ratepayers to be able to bring the plant and equipment up to maintainable standards and to keep it there, and to finance ongoing operations of the Forest.  It is tough for us to be the bearers of this news, but we believe transparency is essential.

   

We will be holding community meetings to discuss these issues on Saturday February 3rd at 10:00 am by Zoom and on Saturday March 2^nd at 10:00 am in person at the Firehouse

  

Anticipated Capital Improvements

Sanitary District

Capital Improvement	Description	Estimated Costs	Scheduled
Webb Station Upgrade	Renovate the deteriorated building structure and limited capacity of pumping equipment leading to waste-water overflowing into the creek.  Replace the onsite generator that no longer works, so that staff doesn’t need to move in a portable unit before every storm.	$355,000	FY2024 & 2025
Screening Upgrade	Replace screens that remove raw sewage inorganic materials prior to entering the membrane treatment basins.  Critical for effective treatment of waste and protecting the membranes from damage.	$250,000	FY2024 & 2025
Collection System Repairs	Repair over 2000 feet of damaged or missing sewer pipes allowing for entry of rainwater that burdens pumping stations and treatment plant.	$70,000	FY2025
Scoping the Sewer Pipes in the Collection System	Inspect 10,900 ft of sewer pipes to identify damaged or missing pipes that allow entry  of rainwater that burdens pumping stations and treatment plant.	$55,000	FY2026
North Pump Station	Convert to submersible type pump to minimize exposure of equipment to the marine environment.  Equip with a generator plug to allow the District to move their standby generators to each site to provide backup power in the event of a power outage	$250,000	FY2028 – 2029
Asbury Pump Station	Convert to submersible type pump to minimize exposure of equipment to the marine environment.  Equip with a generator plug to allow the District to move their standby generators to each site to provide backup power in the event of a power outage	$250,000	FY2029 – 2031
Membrane Replacement	Replace wastewater treatment filters that reside in the concrete basins at the wastewater treatment plant.	$350,000	FY2028
TOTAL		$1,580,000

Water District

Capital Improvement	Description	Estimated Costs	Scheduled
Membrane Replacement	Replace the membranes that filter the source water from the creeks.	$70,000	FY2025
South Reservoir	Build new reservoir at sound end of Arch Cape to increase capacity for housing growth	$240,000	FY2032
TOTAL		$310,000