Sacramento Area Sewer District Board Meeting - August 19, 2024 (Note: Transcript indicates meeting held August 14, 2024; see discrepancy below)

Discrepancy Note: The meeting transcript states the meeting occurred on Wednesday, August 14, 2024, but the provided source material specifies the meeting took place on 2024-08-19 11:28:43+00:00. The summary below reflects the transcript content with the date as given.

The Sacramento Area Sewer District Board convened on August 19, 2024, to address consent items, a delegation of authority for employee benefits agreements, and an update on the long-term financial plan with capital funding projections. The meeting was called to order with a quorum present; all members participated. The board unanimously approved consent items, the benefits delegation, and the financial plan recommendations.

Consent Calendar

• Items 1 through 5 were approved unanimously via motion by Director Maple and second by Director Viegas. No questions or public comments were raised.

Public Comments & Testimony

• No public comments were submitted for agenda items or for issues not on the posted agenda.

Discussion Items

• Staff Introductions and Engineer Update: The District Engineer introduced recently promoted section managers William Yu (Engineering Section Manager at Echo Water Facility) and Helen Hugh (O&M Manager II, overseeing daily operations and employee development). The Engineer also announced a $3 million state grant for the Harvest Water Project from the State Water Board’s revolving fund and noted the next meeting (August 28) is canceled; the next meeting will be September 11.
• Delegation of Authority to Execute Employee Benefits Agreements: The Engineer requested broad authority to finalize and execute a series of agreements with vendors for employee benefits (e.g., dental, vision, pet insurance) following a competitive broker selection. The board had approved benefit concepts earlier; due to time constraints, the Engineer asked to execute agreements and later present them as a package. The motion carried unanimously.
• 2024 Long-Term Financial Plan and Capital Funding Projection: Director of Finance Tepa Bundha presented the updated 10-year financial plan. Key points:
  • The district holds AA+ credit ratings (S&P, Fitch, Moody’s) on both collection and treatment systems.
  • Inflation has raised operating costs, but recent rate increases have stabilized net revenues.
  • A June 2024 bond refunding eliminated variable-rate debt; all debt is now fixed-rate.
  • Capital spending projection: $220 million over 10 years for the collection system (front-loaded in first 5 years), and $1.13 billion for the treatment and resource recovery system (with ~$1 billion in first 5 years; Harvest Water Project accounts for 42% of 10-year spending).
  • Assumptions: customer growth at 0.5% (conservative), cost inflation 2-5%, interest income at 3%, and significant grant funding (septic conversions 99% grant-funded; Harvest Water ~65% grant-funded; Biogen facility expects up to $52 million in Inflation Reduction Act tax credits, ~36% of project cost).
  • Operating costs projected to grow 5.1% annually, revenues 3.2% (Director Kaplan clarified that revenue base is larger, so revenue growth in dollars covers cost growth).
  • Debt management: collection system has $159 million outstanding; no new debt planned. Treatment system has $961 million outstanding; anticipates $225 million new debt for Harvest Water (amount may decrease due to lower bids).
  • Possible future action: refunding Build America Bonds to reduce federal subsidy risk.
• Introduction of Viviana Dazo: Director Viegas introduced his assistant deputy Viviana Dazo, a bioengineering graduate from West Sacramento, who attended to observe board operations.

Key Outcomes

• Consent calendar (Items 1-5) approved unanimously.
• Delegation of authority to execute employee benefits agreements approved unanimously (motion by Director Kaplan, second by Director Tao).
• The board unanimously voted to receive and file the 2024 update of the long-term financial plan and approve the 10-year capital funding projections for both the collection system and treatment/resource recovery system (motion by Director Kaplan, second by Director Maple).