Des Moines Water Works 3/26/2013

and severe honey I think we'll go ahead

and get started and if it's acceptable

to everyone I'm going to start with our

resolution of appreciation which is item

three a little bit out of order this

being Jim probably has forgotten that

this is his last week but we haven't

this is Jim's last meeting and we are

going to miss him he has been a great

asset to this war I guess the boss told

him it was time to do something else and

you hadn't listened right well I'm doing

a few other trying to bomb the

construction specialists for an elevator

addition Archer

you have thumbs like that so so now it

was a good time you know exactly

retirement is new projects different

projects I understand we all know that

these these resolutions are a bit

awkward but I'm going to read this you

know and now there's a few things about

all that we please have a ride to blow

away let me instead of reading all the

whereas is I mean we all know that that

jim has added a great deal to this board

both in common sense and sometimes his

ability to calm things down I think we'd

all agree on his work start up the

Saylorville water treatment plant

launching the parka texture project

which was the international design

competition for water works park that

included our cooperation with the City

of Des Moines work with our wholesale

customers the list goes on and on I

won't go through it all but Jim is I

think what a lot of us would aspire to

be in being board member we appreciate

your time and all your efforts on this

board you have served in this capacity

for a long time and we appreciate it we

have a gift for you and I'm like to

share I also brought and I wish

everybody would start taking advantage

of this some forms pizza both 20 in

appreciation for your service and also

appreciation to farms for what their how

their year began so that's in the back

of the room but that's also appreciation

for you

Jim we want you to open that up and

laura's here to get a picture all of you

together also you guys wanted crowd over

there around James that would certainly

be appreciated for on my stage in this

okay we would have found this gym and if

I made Jim if that weren't embarrassing

enough the staff and great regard for

all the work you've done on behalf of

the utility have come together with it

with card a small token of our

appreciation that we hope you we're in

remembrance of us I've had the pleasure

Jamie working with you for many years

before I came here and it's always

comforting to find a friendly face and

you've always been a friendly face to me

and to the organization of water works

into our customers so I hope you enjoyed

this and I'm gonna say it again that

pizza is just gonna get cold so right so

Jason Ted its bonds I know you have a

deep interest there's a thai chicken

pizza and I don't work with you look wow

so good stuff it is a complementary

customer in many ways applause now

that's a city Des Moines problem i'm

happy to say not our problem that's why

it's time for you to leave

thank you all thank you John where's my

place would be really good thanks boys

yeah the house more ah there you go I'll

also mention that we're joined today the

mayor has appointed in the City Council

will probably take action on a new

member of this board in their next

meeting but mark Wallace's which is

America's appointed mark for those of

you who don't know mark you should

introduce yourself to him he bring he

will bring a lot of experience let it

over on the east side and I won't go

through his resume but in the next few

weeks mark will be around here and we'll

try to scare them off bring him up the

speed but if you have chance before the

meetings over today introduced yourself

to mark and Mark be the coordinate

having you up here as opposed to sitting

there pretty much all right first item

an item one is our consent agenda that

includes minutes februari 26 Board of

Water Works trustees meeting the March

5th planning committee meeting in the

March 12 finance and Audit Committee

meeting financial statements a list of

payments for februari 2013 our next

meeting date is april twenty third and

summary of the CDU CEO approved expended

excess of twenty thousand dollars which

as we all know is is a new item in our

consent agenda and I believe that our

CEO is going to make common but those

are our consent agenda items if I could

have a motion to approve those so moved

second in a second and I know you wanted

to talk about this bill and if I may

before your approval of 1d a couple

comments really to the issue of

different eyes see things differently

you'll note on your item 1 c 8 pages and

i believe some 520 line item checks that

have been written in the month of

februari a finance staff is kind of

worked with what i thought was the

intent of your concerns about red

flagging off of these pages issues that

may be of interest to you they have come

up with a single item that i'm going to

talk about in my perusal of these 520

items i've added an additional item but

as always we're very interested in your

feedback about whether we're using the

right criteria essentially we're looking

at things more than twenty thousand

dollars and rather there is some

discretion exercised or other potential

concern that you might have and we're

trying to read flight them for you as an

example the finance staff red-flagged a

payment of fifty two thousand eight

hundred three dollars and forty-five

cents to xenia rural water district a

great catch one that i want to provide

you some explanation for typically we

don't pay money to xenia they pay money

to us as a wholesaler of water to them

however helping moon

joint facility we under agreement with

with Xenia and others essentially have

apportioned that portion of our OEM

costs of that facility to a number of

other communities who also use the pump

station there in 2009 however Xenia

constructed their own stand aside pump

station at that facility also but we

continue to build them a portion to cost

for our oh NM and i believe it was Mike

I thought I saw him in here yes Mike

wasn't at your staff that red flag that

and realized and amy is walking back

through as well as Peggy to confirmed

that that was in fact the correct amount

worm confident that Xenia would not have

picked up on it but it's really a

situation where we over build and on our

initiative paid out almost fifty three

thousand dollars to xenia so that

obviously is a kind of item I assume you

would have some interest in seeing it

was very grateful for the windfall

payment of fifty two thousand eight

hundred three dollars and forty-five

cents Amy aiming further you want to add

on the payment and we'd be happy to try

and answer any questions or concerns you

might have on that one as you think that

went through another item that at my

perusal of this I pulled out simply

because it fell under my informal

criteria thanks you might have an

interest in if I can't find it it's a

payment on page six of the materials you

have a fifty thousand dollars for the

greater Des Moines partnership that's

our annual payment to them I know that

there's history here that I've not been

privy to but it is essentially our

continued support for the greater Des

Moines partnership and some fifty

thousand dollars it's near the bottom of

that so again if our lenses mean

recalibration or there is anything

further that you'd like to see

any considerations that are important to

you you'll continue to read full will

give you the raw materials as we did

here again 520 check payments here for

the month of februari kind of tedious to

go through will try to do that on your

behalf but if we miss anything or

over-reporting whatever it may be under

over-reporting we sure would appreciate

your feedback on that but those are the

two items that I had members of the

board on the CEO approved expenditures

in excess of 20,000 any questions or

comments not just a crab because I thank

you for saying that I know you're coming

in new to the whole point Gardner ship

we were very specific i would say with

the leadership at the Des Moines

partnership as to what we would like to

see in return for our $50,000 and there

was a lot of debate at the board level

and so I think we were very clear I

think it would be a nice item to bring

back to an upcoming finance meeting

exactly the status of those expectations

a lot of them would involve staff and

then secondly and I know last year Linda

attempted the partnership trip to DC and

it would be nice to know if they intend

to have anything that is of concern to

us on the legislative agenda as we go

back in May because I I don't know that

there are that many companies or

organizations that contribute at that

kind of level that are in a situation

like a sonata

and we'll be happy to provide you an

update finance an audit or the board

more generally whatever your preferences

maybe I will certainly one issue that

can report out on sue we were invited to

participate in the washington trip after

review in my after my review of rather

the benefit cost analysis made sense

this year i chose not to participate in

that i believe and whether you may

remember the dollars 2300 or something

it was a fairly significant investment i

decided either not personally to attend

or to have a member of the Water Works

staff attempt but I realized a larger

question you're asking is a status

report on a number of things involving

the partnership happy to come back on

that but I wanted to argue that we were

extended the invitation which I declined

to take the Washington lobbying trip

bill actually I'm going

yeah that we were invited to okay not to

go to so you are as I think the

partnership and I have let me say to

that I initially turned out the

partnership trip but in the last couple

of days I may be going on that trip for

another reason and so I might be there

if there's a reason to if there's a

meeting that I can attend you need to

know because I'm attending the smell Ori

how a lot of familiar faces for you all

at the plane right but we'll come back

and report out more specifically what

the expectations that were provided and

how those are being fulfilled or not

i'll add that at least my mind is not

going to be a waterworks expensive or i

think is soon so anyway I pretending

else on the consent agenda let me say

just as far as the CEO approved

expenditures for mark for anybody that

this is new we we increased the CEOs

spending ability and a couple months ago

and the our discussion we had a couple

of discussions that are at that time he

should have the ability to spend those

dollars but we wanted transparency and

some reporting and that's why we talked

about it maybe we spend a little bit

more time I I had a back and forth with

a Des Moines resident recently on this

matter as a guy who

she was responding to my public comments

about another body's lack of

transparency and she brought up this

issue and mentioned that we had not

discussed as a board providing you this

authority in public and my recollection

serves me correctly I think we had at

least two public meetings about this but

my recomendation to her as it remains

with everyone that this in this

particular matter when it comes to the

CEO spending authority we it is

something we are revisiting visited

every every month at our board meeting

we're going to continue to if there is a

concern on this board there's concern in

the public now is the time to talk about

it at public at our public comment

periods of time to talk about it we're

we're willing to revisit this at any

time if there's a problem but the last

thing I'd want to want this board ever

be accused of is not being open and

transparent so anyway I appreciate that

so that's a consent agenda if there's

any other comment not hearing any all

those in favor hi those opposed all

right hearing none we will move to item

3b done a praise Jim we can go back and

pray Jim one later and the first part of

this is a public hearing and this is a

public hearing that we would look for

comments from the public concerning this

project which is the award of the 2013

roof replacements and repairs to Central

States roofing in the amount of 100

13900

teen dollars and authorizes chairperson

and CEO and general manager to execute

the contract so I opened that hearing

and I'm looking for any comments from

the public or others none were received

and written we des moines water works

have received no written or oral

comments from the public on okay are

there any wanted to speak at the public

hearing at this point seeing I will

close the public hearing see it the

board has reviewed the appropriate

coordination in the existing

infrastructure right yessir need the

2080 finding on this one because it's

there and so whoever prepare as opposed

to a facility construction that same

since tempted it is so my next step is

to approve the project's form of

contract is that right that's correct

plans and specifications plans and

specifications and I would need a motion

to do so Graham I move to adopt the

formal contract plans and specifications

if I'm with estimated costs second is

there a second thing in a second from

day any comments anything you'd like to

add a couple this is one you all have

the bid tab immediately behind the

yellow sheet on this but this is a

solicitation where we were looking for

some basic roofing associate with the

floor dr nitrate removal facility and

then several options depending on what

the market and our budget could provide

in terms of additional roofing you'll

see the bid tab with some 246 different

respondents so good market out there

with a lot of interest in this project

but as we add up the base bid and the

options which are well within our budget

the market be very favorable to us we're

seeing a

a respondent bit of a hundred fourteen

thousand one hundred thirty nine fifteen

from Central States as both being

responsive and responsible and remaining

under our proposed budget of 100s tomato

121,000 we would certainly recommend the

board's approval of the contract to

central states for the roofing project

of 113 915 dollars any thoughts or

comments on I think the next step is to

take the vote on the motion to approve

the formal contract form a contract

specifications and estimated cost and

that was the motion that sue made

correct your second of that so any

discussion on that all right all in

favor hi and so if I'm correct here Rick

our next motion is to improve the bid is

that correct toopnet recreation ward the

contract to what the prime foundation

made but mr. stone Graham I move that we

approve the recommendation of staff to

Central States roping for 130 thousand

nine hundred fifteen dollars and

authorized the chairperson CEO and

general manager to execute the contract

is there a second 170 good any further

comment awkwardness when it comes to

handling the public hearings are we

going seeing none all in favor aye those

opposed this moves us to our next item

which is item C request authorization

solicit fits for the 2013 water sister

system improvements contract 1 and

established the data public hearing as

the date of the april 2013 board meeting

i would make the motion one here excuse

me just a second I need a motion

authorized staff to solicit bids for

that project any comments to add images

briefly as as you all know we have about

2 million dollars budgeted PC each year

for water main replacement our

experience leads us to the process of

splitting that and do smaller bids that

it's essentially to 1 million dollar

projects this is the first phase of that

series of projects that we're looking at

you have a map in the materials behind

the yellow sheet that will indicate

where our distribution Department and

our engineering department and

coordination to have pinpointed the

greatest need for main replacement most

of it as you'll note in North West Des

Moines but we estimate this project in

these areas to be at about 1.1 million

dollars we're asking your approval to

authorize and solicit bids here for

phase one or contract one of the water

project and again the public hearing

will be in April correct any questions

or thoughts yes why those newer ones of

course so what's the deal isn't just the

material you know and one of the ironies

that I'm finding is I'm around here more

Leslie is that age itself is not a good

indicator of failure I think Ted and

others bar knowledgeable than me in this

audience will would indicate to you that

a lot of cast iron that's 100 years old

has probably more life cycle left in it

than some newer pipe that's been

produced particularly since World War

two ERA so our recommendations here are

really based not on life cycle only I'm

sorry not on life only but on analysis

of where failures are and condition eam

will certainly help us to provide more

informed judgments in the future on that

that is we'll have a better sense of not

only age but better ability to be able

to pull out condition and maintenance

history but these are the best

recommendations that we would make not

simply on age of pipe but on condition

and our need to have gone in there and

performed repairs particularly in the

last couple years Ted anything you or

Gary want to add to that on why here and

why they're not the oldest is basically

the difference in

actually if it was cast or if it was

some other newer material right

basically the wall thicknesses well that

brings up a similar question that I will

put our CEO on the spot I had a call

yesterday from a customer doing what

works customer about the insurance that

we now offer through home sir and the

question was and since this is televised

a lot of people may want to know the

same thing she said my house was built

in the early 70s should I be concerned

about the pipe with that age of a hall

and I said you know it's insurance my

house was built in 78 I'm not going to

risk it i'm going with it but does that

hold true we look at the connections let

me try to weight into it a little bit

there certainly against some very

informed folks out here in the audience

though I'm short of of the home serve

product is ultimately it's a risk

management brokerage if you will on the

end of it on an individual basis there's

no clean rule that's going to say if it

was before ex-state you should buy it or

if it was built after why date you

shouldn't buy it a lot of it is going to

depend upon the powers for risk fifty

dollars a year for insurance as opposed

to a risk of replacement of the

thousands of dollars but as an example I

live in this area with a house that's

less than 15 years old I'm confident the

construction standards under Des Moines

requirements were met but the length of

my service is so long that the

opportunity for problem is different

than if it's a shorter service so it's

more than simply the type of pipe the

year of construction there are lots of

things that have to go into your

individual risk calculus for a 1970 home

that isn't create any particular concern

to me of imminent failure if it were a

1907 home my view of the risk would be

substantially higher but ultimately

becomes you know how somebody wants to

spend fifty dollars a year which is

essentially the cost of the home serve

product you'll want to weigh in on that

one differently Gary it's no heart and

there's no hard and fast rule again

people will make the decisions that's

their most informed to make but if I

were living in a house that were

relatively new and we're built by a

contractor with home surrounding me

where the failure rate was high that

would be an indication to me that I

might want to broker that risk by buying

insurance it's not simply a date of

construction there a lot of factors that

play into it thank you but the motion

again is to authorize the staffs list

bids for the 2013 of water system

improvement any other questions or

covers all in favor aye those opposed

as item 3d and looking to accept the

McMullen treatment plant for all water

system repairs and wells one three four

five and six contract completed by Riley

construction in the amount of 1 million

seven hundred and thirty-three thousand

one and twenty two dollars and seventy

six cents promotion so note to explain

this if i may just briefly comment on

this this one has some fema implications

so i wanted you to be aware of it this

is work that has been performed we've

been reimbursed this is about 1.75

million dollars a work that's been

performed we have been reimbursed

through FEMA at about 1.3 million as you

know they have since D obligated that

money essentially asking us in one form

or another to refund to 1.3 million

that's been spent to us we have

challenged them and continue to

challenge it under under Rick's guidance

in the federal court system to give you

one piece of additional information a

motion to dismiss our lawsuit has been

filed we're resisting that that's

probably more information on the lawsuit

that you have a specific interest in but

my point in disclosing that to you is

this is a fairly large construction

contract that's been completed the work

has been done satisfactorily Riley does

very good work you'll see on the second

page a nice map that's been prepared by

our engineering department to give you a

better sense of where exactly around map

and this is done but this is part and

parcel to larger litigation that we have

going on but at no point does that

larger litigation remove our obligation

to pay Riley for work completed here

about

1.75 million dollars kind of brings it

home litigating it's right there

any questions or comments about this all

in favor aye those opposed

which brings us those are those are our

action items for the day we'll do some

committee reports and I am thinking

before we have these committee reports

discussing this with Bill the fact that

we until we have a new board member

that's approved by the City Council we

were bored of for leaving one member on

our planning committee at this time and

it may make sense to just kind of

suspend the committee's and not have

meetings in the month of april until

we're till we're full full board again I

would hate to get us into a position or

work on doing that if there's any second

thoughts on that weekend if I made just

to articulate from I've you wipe that

may be appropriate right now what I'm

concerned about is that we in committees

present a position that either the

entire board essentially has to be there

to hear because three of you would hear

audit and finance issues David then to

be able to fully appreciate that would

have to come to the audit audience that

would be part of the audience for the

finance and Audit Committee or we would

have to come back and redo it entirely

in front of the full board so it's a bit

awkward I think given our current status

we have some fairly important items that

are going to be in front of Finance and

audit in this next month and my concern

is that we're again forcing David either

to come in off meeting alpha normally

but would be a meeting for him to

finance an audit or we're walking

through the process and i said i think

that creates issues and how we record it

and how we make the data available to

the public so i just ask your

consideration and patients here to

suspend the committee system if we can

for a while to move us

or with full consideration that's fully

recorded and available to the public and

this goes to that larger discussion that

we started in January I race at least in

January about thinking about our

committees that were efficiently

operating the committee structure one of

my concerns about our current committee

structure is that that we not put staff

in a position to have to present the

issue twice present something at a

committee meeting and then presented to

the board I have a second I guess

there's a second possibility where we

could discuss something at great length

in a committee meeting and then not

spend the time in this meeting when

members of the public and others might

come to hear it and feel like somehow

we're circumventing the public process

but my bigger concern is that we

efficiently use our time as a board that

the staffs time as well I think the

issue that Sue raised about the

partnership is a good example that is a

good I think a good use of a committee

structure where there's a specific

question that the board would like to

explore instead of having the board take

its time the committee do that and then

report back so I think over the next

time period and then as we get a new

member of the board we should have that

discussion about how we if we're going

to change the process at all with

committees now is the time to do it so I

think it all comes at a good time if

that's acceptable to everybody

so we just wouldn't have a meeting

probably are you saying disdain for

worries just one time just April I think

I don't know when we would ever thought

realistically I think I would do it in

month increments certainly in April to

suspend it whether you would decide to

do that may or not I think depends on

the time frame in which we get our fifth

member and what you all decide in terms

of the efficiency of the current system

so i take it at a month at a time right

now it's an april proposal that I would

make to you whether it goes beyond that

I think there's really kind of dependent

on what happens between now and the end

of April the one thing I don't want to

lose if we change maybe we don't change

anything but is the board's ability to

digging as deep as they want an issue

and if somehow revamping the committee

process arms that in some way that we

don't have the ability to ask the

questions or dig as deep that I don't

want to do it but if there's a way to

make it more efficient which I think

there might be then that's what I would

be more fun yeah maybe maybe or at least

you know the board could that decide and

something like the partnership issue or

something the committee's to sign that

in and go

for and I don't have them I guess what

I'm saying is I don't have a gender hear

a clear ID I just think I want to

explore the more efficient way to do it

of course the committee meetings are

public as well they're public meetings

publicized and recorded that the

recorded a different level than the

visual grantee recording I hear one of

my concerns is that not just the

inefficiency but sometimes the

difficulty of making sure that we're

clearly communicating with all of you in

when you have a subgroup sometimes it

becomes difficult to know if that has

been if there's some redundancy in the

communication that is didn't we cover

that because we covered it with a

subcommittee that becomes a bit of a

challenge from a staff perspective to

know if we've effectively communicated

with all the board members ever recency

recollections just talked with her

committee but did that was everyone

there for that they all heard that

discussion becomes a little bit puzzling

sometimes for us at least for me so I

just asked you to try this for one month

if it you know if it raises concerns for

you it's merely a recommendation we can

go through it twice but I think at this

point it becomes a pre awkward for Dave

who's a member of a committee with a

single member do we then have that

committee meet I mean how does that work

no yeah I did that being said committee

reports Jim

last month we looked at the particle

planning staff took us through several

different issues that related to that

and ties to the greater greater property

of water works

mullen some of the others

so we learned a little bit about ragbrai

coming here and the hay fields that are

out

we talked about that crabapple tree

grafting a little less

graphing fundraising efforts that are

going on the part planets of the

architecture that was that was good to

hear that were that far along

miss my situation we also talked about

the building restoration Reese awesome

some illustrations of the type of work

that they go into the next phase which I

think will be coming up maybe next month

agenda on the bidding and the options

and so forth and

and we talk just a little bit in general

about

the lighting and some of the things that

are happening here at waterworks so it

was a good informative meeting some of

the things are already on this agenda

others are coming next month or so so it

was a good meeting I think those and

listened into even from public

get a good idea that this is an active

place this is not a static place it's

very active then there's a lot of public

use

if I may add a couple of updates on

items that you raised jam on ragbrai

certainly there is an assumption that

right Bry will be here we're still

negotiating that with the register and

certainly it's an action that we would

bring back for your consideration but we

have every intention of making sure that

it is a money-making process for us that

is we host a lot of events here each

event takes a toll out of our operation

and maintenance budget we would view

this is no different than others that we

host we will be negotiating fees for

that and bring it back for your approval

it's not a fait accompli that that's

going to happen second some discussion

on part planning I know there's been

some pushback Scott isn't here but I

know Scott ads and attended a meeting

last night of the urban deer hunters as

you know we have gone down a path of

suspending a deer hunting in the park

there are certainly some folks who

disagree with that approach and it made

that very clear to us last night and had

some discussions actually in this room

so I wanted you to be aware of that I am

told that board counsel people in

particular pretty interested in that so

you you may hear something back about

that but again you're certainly welcome

to change the approach that staff is

taking but staff is clear in its

approach to the public that we are going

to suspend based upon our view that the

deer herd has been cleared significantly

that we're not seeing traffic accidents

on either flu or flight Parkway nor

damage within the park that would

indicate to us that we need to continue

to participate in the urban deer hunt so

that is the path we're taking you may

hear more about that from a number of

different sources but I want you to be

aware that's a hot-button issue as

recently as last night

Jim I have a question for your right

right I would be very excited if we

could have ragbrai you know staying

right here at waterworks park and I saw

Laura here earlier but I think she left

Laura sarcone our marketing person if we

do have this chance I hopefully promote

the heck out of water works and what a

unique jewel we have here you know the

size of our Park and what we do for the

community and you know the hub of all of

the trails that we have is right here

and so when I saw that it was very

excited at the possibility we can do it

great thanks June financing audit oh yes

right that's not a lively discussion I

look to a couple of gentlemen in the

back row jump to the end of the meeting

thank you very much for being part of

the public comment process and I noticed

you brought some additional friends with

you and I want to start with the last

item we discussed and that was the

pension it was brought up during the

public comment period and it was clear

that I think some rumors have started to

circulate regarding what we are doing on

the pension and I just want to make it

public that we have not had any

discussions as bored with what we are

doing but we look forward to finding out

what we can do to make this financially

work for the four des moines water works

we are spending 3.2 million dollars we

were reminded out of our operating

budget too

support our pension plan and we want to

ensure that it works for all and

regarded but I do want to thank both of

you for speaking up and I hope that you

continue to do so but the first item

which was extremely helpful was Peggy

furries went over a different

methodology for the budget and most of

us were there I think we really

appreciated a different approach to

looking at how we are spending money

within each department so thank you for

that and then as a board we reviewed and

supported the current process that we

have in place regarding tenant

collection and delinquencies and this

was something that i think it was

extremely helpful for us to understand

how many of our accounts of the total

des moines water works accounts are made

up of those that are tenant properties

and yet but a high percentage of those

actually go to collections so it was

kind of a wake-up call anything for all

of us as to the amount of time that our

staff and our CEO happens to be spending

on some of those collectibles so just

thank you for bringing it to our

attention

if you have the full support of the

court my own I only mentioned the

greater des moines Botanical Garden that

they had their groundbreaking beginning

the process of remodeling and exciting

things that the Botanic Garden will be

closed this summer as they begin that

process as a as it relates to us I've

agreed to chair a strategic planning

meeting for the pretend garden as it

goes forward and at some point we need

to have a discussion about one of the

things that is available to waterworks

as as our over a ten-year commitment is

some sort of an education component at

the at the gardens and when you start

thinking about the vision for that and

discussing that but no action needed on

that at this point item be the CEO and

general managers comments thank you i

just have two comments and one of them

relates back to Sue's discussion on

pension plans tomorrow at seven o'clock

at eight-thirty we'll be meeting with

employees at the training facility in

the plan itself and then at ten o'clock

and two o'clock we'll be meeting here

doing exactly the same thing the

materials that are going to be provided

to our employees tomorrow we will be

providing to you all as a board either

in the finance and audit committee or

again depending on the direction you

want to take to the committee to the

board generally next monthly you'll have

a chance to see it but it's our

commitment letters employees see it

first obviously and get comments from

them and suggestions about how to

proceed yes just for clarification these

are going to be presented to the

employees tomorrow

their comments are then taken into

account does something change between

the time it's presented to them these

content these comments are made in time

it comes to the board no no is the basic

answer to your question tomorrow the

format is essentially this I'll

introduce our consultant our consultant

from Omaha will be in here Bellevue to

be precise will be in here Kevin aw

McDonald I will be in here to make a

presentation about the current status of

the plan some possibilities on how we

can reduce costs for continuing the plan

some suggested approaches to that

process of making the plan sustainable

alternatives to the current plan will be

asking employees for their suggestions

concerns that's basically the format it

will take about an hour and we'll be

doing that again to meet two meetings

down within the plan itself to hear will

be done tomorrow with that process that

consultant will gather that information

and be in the process of synthesizing

that as well as options will come back

to you before there any recommendations

that are made so that you can see the

same materials that our employees saw

obviously the conversation maybe a

little bit different because we're not

going to have all 200 people in front of

you unless they choose to come to the

board presentation but I really again

despite all of the suspicion that's been

raised on this issue of you it's

entirely appropriate to talk with our

employees about the current condition

and the process that we're going to go

through before we get into any specifics

with you that's the approach that I've

taken that's the approach I'm going to

continue to take until you correct me

otherwise but I do want you to be able

to see after the employees have seen the

slides the presentation itself and that

will be queuing up for your regular

April meeting so we'll see everything

they see yes and you'll see all of the

formal presentation that they'll see

right here are the same comments I

understated because obviously each of

the four meetings will have a little bit

different tone and different

that's but now those comments how will

those be presented to us how how do we

there's no sirree 8am way to do that

Graham we're not going to be recording

it except as it relates to somebody off

shift being able to see it but we're not

going to throw a camera in front of

delvin face or whomever and go through

that process of getting on record

something that would be brought and this

is it this is what I want you get to

because we have our meeting that's going

to be an opportunity the employees will

have had an opportunity to look at this

in depth to talk about it employee group

will have had the opportunity and at

that point you know between tomorrow and

when we meet and in our meeting

employees can bring to the board their

thoughts and their comments and we'll

have the opportunity at this at our

meeting to do so absolutely let me be

clear we will be providing you the

slight information that's going to be

provided to our employees in April

that'll be a public meeting so certainly

an opportunity for comments there will

be no recommendations that are going to

be made to you in April when those

recommendations are made to you at a

date that's in the entity term yet to be

determined but if I were guessing today

and it's merely a guess it's not with

precision it would be July timeframe

certainly that would be in a public

meeting and lots of opportunity for

comment at that point 2 so this

iterative process of staking out a

direction getting additional information

to correct our direction based upon our

employees and based upon our consultant

coming back to you multiple times and

doing it in public is the process we're

going to continue to fall

those meetings tomorrow again to make

clear to you all that if any of you

would decide to attend those meetings

I'd certainly like to know about it

because if three or more of you are in

attendance it raises questions and

concerns about open meeting requirements

so certainly like to know about that if

you would choose to do that not to

discourage you from doing it but perhaps

to consider how it's time let's put it

that way well in the fact that but

that's why I asked the question I did

the fact the man that we're going to get

this information and we have the ability

to discuss and people have the ability

to contact us to discuss this item I

think is the appropriate process the

second and final item that I have just

to provide you some information on Rick

and I have been in pretty intensive

discussions actually in the last 24

hours or so with the City of Des Moines

on the emergent issue that's the issue

where the City of Des Moines has come to

us and asked us to approve a sale of a

portion of the land we jointly owned to

the City of Des Moines to hell in a

chemical I on your behalf of raised some

concerns about that process there's been

a counter offer made to us Rick and I

are sorting through that process but

ultimately this may likely require a

special meeting that is a meeting before

your next scheduled meeting for you to

approve an amendment to the existing

2080 with the City of Des Moines to

allow their transaction to go forward

but with substantial amendments in our

relationship and that process so and I

at our last meeting I'd mentioned that

that potential special meeting and

frankly the city did not recontact us

until last friday so this issue seems to

be in terminology that Rick and I've

used before hurry up and wait but I'm

pretty confident now based on the

specificity of the materials they

provided us that they're very interested

in having this closed down so they can

move on

with our transaction voting Helen Helen

on chemical before your next board

meeting so we'll work on the

requirements for an open meeting that is

still a special meeting in a way that

will comport with Iowa law and with your

requirements for public involvement if

the public has any interest in this

issue but stay tuned on this one where

Rick and i'll be talking about it after

this meeting in fact so there have been

some significant developments there we

view them positively in general but some

specific concerns about some of the

language that's been provided to us so

stay tuned on that one pretty

complicated that deagol as you can

imagine that's all I happen tell you

anything further on the legislative

update blend it basically everything is

pretty much the same as you had last

Friday two of the bills that were honey

you may want to just for sake of trying

to help us at recording it go up there

and let him do the Masters task of

recording and making sure we get out of

the record all right a lot has not

changed since the last friday's report

two of the bills that we've been

following the one with rural water

associations and the one with looking at

some of the DNR they have four items in

the bill and all four of those are

moving forward we've been following them

we've been talking with them and we're

in agreement with the provisions we're

both supposed to be debated today but

both the House and the Senate have

convened and left for caucus probably

with less than five minutes of actually

being in some being convened session so

they not moved ahead very far today a

couple of things I did want to mention

to you kind of outside the legislative

realms but John Glenn who is the

director of the rathburn Regional Water

Association has been on the

Environmental Protection Commission

which oversees the DNR he and a couple

of other warranties are not being

renewed

this year and so we will be losing a

representative of the drinking water

industry on the EPC and the governor has

chosen not to replace them with a water

person so the Iowa Association water

agencies are is going to try to get with

the other water associations and

indicate that we are disappointed with

that and that we would like to see them

reconsider one of the governor's

appointments to date has had to withdraw

his nomination and so there is still one

position open so we're hoping to be able

to do that water day at the Capitol was

last week and we had a very good turnout

we were a little skeptical because the

legislature doesn't usually come in

until noon on Monday and this was the

day after st. Patrick's Day so we didn't

know how much of a turnout we would have

but most all of the feedback that I

received from people who attended

thought that it was very well attended

we thought we saw more traffic of

legislators coming by then we have seen

the last couple of years and so was very

pleased with it and we'll plan to

continue that into next year again

Graham I would just like to mention on

that I was at the Capitol and and our

CEO was out running around talking the

legislators they said he was not

standing behind the booth but Mike Riley

was there and lund was there and they

had a very nice setup and they were

handing out des moines water works

jugs and it was just a nice

representation of what you do here so

yep a lot of traffic and if I may want

to just add on we had a brief meeting

that is Amy blood and I had a brief

meeting yesterday with legal

representatives from the Iowa League of

Cities there is a landlord leaning

process that it's past the Iowa House on

commercial property not on residential

property that we think is dave pointed

out in some of our discussions at

subcommittee on this issue we have an

opportunity to work with legislators and

lobbyists to craft legislation that we

think is going to be as favorable to us

as it possibly can be but I want you to

be aware of that well I'm hopefully have

more specificity on that as the

committee assignment comes through the

Iowa Senate onto the floor and has

passed this particular piece of

legislation passed the Iowa House 94 20

so we have a great interest in it and it

making sure that although its

legislation that is not terribly

favorable to municipal utilities since

it has a head went to it we want to make

sure that we have the greatest

opportunity to make sure that it's

minimizing any risk to the utility

itself

thanks a number of other information

items there is there anything we need to

discuss know their you know their items

from the staff at this point is there

are there any anybody from the public or

staff would like to add anything this

point yes sir if you wouldn't mind

stepping up here so I'm top on a knee

and water distribution I just have a

question about the pension meetings

tomorrow everything that's presented all

the employees comments I'm wondering if

there and I've heard a little bit about

this but are they going to be recorded

so you can hear every employees concern

about Tom we've committed to recording

the presentation so off shift people

have an opportunity to see it I have

chosen not to record verbatim everything

that's said for a number of different

reasons or some logistical reasons and

also because intimidating folks who want

to share information in one context

isn't necessarily in my view and our

employees best interest so we're not

going to be recording your comments or

my comments verbatim certainly they're

going to be other opportunities for

employees to repeat those comments if

that's what they choose to do but

they're not going to be recorded in a

way that you're not so much like we're

being recorded right but maybe you know

note-taking or something so you

understand well I'm confident that both

our consultant and staff who hear

something that's you know an important

consideration right that has not come

across our minds before are going to be

doing that but it's not going to be a

situation in my view where we want you

know some formal record that attributes

comment excellent i'm donating certain

understand thank you thank you anybody

else

hearing and what we're going to do now

is we're going to adjourn this meeting

but has been the practice of the last

few meetings we're going to continue it

in a session discuss the budget format

it will not be a public meeting in the

fact that we won't take any action but

the doors remain open those of you who

are interested in staying and there's

pizza and still be equal to eat you're

welcome to do so but with that this part

of the machines meaning is a jerk anyway

I think we go ahead and get started

whenever if I reapply if I may just take

at least a couple minutes to queue this

one up not even a couple minutes you'll

recall in our committee discussion and

finance and audit what we're attempting

to do is a staff is provide you an

alternative to the work plan method of

presenting information to you looking

more at the department's itself

operating expenses maintenance expenses

as well as capital expenses during that

discussion a couple things came to mind

based on your comments we wanted to

provide you greater detail a couple of

charges and the line items that Peggy is

going to go through but with particular

detail and the benefit information that

you'll see in the last page so all yours

mysteries all right well the first one

is a correction of something that I

stated that was entirely incorrect so as

long as bills put me up here again I'll

just set the record straight and that is

in this line on this slide where it says

capital and that's six hundred and

forty-one thousand dollars under IT

capital that contains no labor dollars

that is entirely other expenditures ie

equipment and software so all labor

expenses are contained on the labor line

and again if you recall we narrow this

down to just three departments in

full-blown there would be eight

departments across there in a total at

the end so you would see the labor

caused by department for all eight

departments

a total specifically that's six hundred

and forty-one thousand dollars of the

capital IT budget hardware and software

up at the top computer replacement for

about forty three thousand dollars

telecom infrastructure for 22 network

infrastructure for about forty thousand

and microsoft licensing for 50 and then

the second section down below eam

software and mobile equipment 109,000 if

you round up and the consultants about

375 if you round up for a total of four

hundred and eighty-three thousand

dollars for 2013 which is phase three of

I am second this a question was raised

when we went through the information

about under utilities under the IT

expenses we had phone expense of 131,000

budgeted and the question was raised

which I certainly couldn't answer off

the top of my head was what what was

that what was the breakdown of that so

here is the breakdown the first forty

two thousand dollars that generic phone

system description that means our

corporate phone system both coming into

all the offices and coming into the call

center radio frequency for a thousand

dollars and i only put that up there

it's a small amount but that does it is

the communication back to des moines

water works for RF meters and any other

kind of other radio frequency data cards

for laptops we have laptops out in the

field used by engineering text for

example other people also but those need

data cards so that when they're out

there that information talks back to the

system here and vice versa it goes both

ways and then cell phone service fifty

two thousand dollars

and benefit detail okay there are a lot

of numbers on here and shown a couple of

different ways so the first column is

strictly the dollar amounts that are

budgeted and I'll just tool through them

really quick on my I won't name the

amounts as we go through about retiring

medic retiree medical insurance employee

medical insurance long-term disability

better known as ltd life insurance and

accidental death and dismemberment

insurance deferred comp match flexpay

car and sell allowance employer sheriff

FICA I purrs and the pension plan

contribution and days before we leave I

make sure I understand we explain

flexpay ah or on either one whoever Ron

you might be better I can explain it but

you might be more cognizant and

explaining pain was instituted many

years ago in an effort to offset the

cost of some benefits that water works

doesn't cook doesn't pay for its forever

employees 151 dollars and fifty cents

per month that they can use to purchase

life insurance pay if they need to part

of the medical costs

medical insurance co sponsors comes to

you may hear the number of $69 it's $69

nonsense a

second Hyper's contribution that for

those of us who are part of the I pers

plan that's the employer's contribution

correct these are all strictly employer

which how many I pers covered employees

do we have money man 21 happens about

ten percent or 22 now because

everybody's at september's about 20 I'm

sorry about ten percent of our labor

force Peggy the previous slide that

reference cell phones versus this slide

that has cell allowance the difference

this some employees hat receive a an

actual cell allowance instead of company

cell phone it partially offsets the cost

of that cell phone so that they aren't

caring to take a quit management i try i

think part of the question here at least

part the question I would have is this

amounts 27,000 as I recall the other

ones 52 are those additive no so the 50

to go back one will you Peggy just sent

or there may be sorry this is where it

gets hard to maneuver this section I'm

sorry that's my fault the 52 thousand

dollars here is cell phone allowances

that are paid by water works or these

are cell phone charges this would be the

cell phone bill that we received from

verizon or sprint yeah is it sprint

sprint sprint okay thank you I'm sorry

we have our employees carry so in

addition to the 52 thousand dollars here

that are this is a direct payment made

by waterworks to the provider and in our

context essentially our cell phones are

replacement for a radio system it's the

push to talk sprint feature that's

pretty helpful essentially supplants a

UHF or VHF radio system so this is

direct payment by us to sprint has to be

contrasted with the next slide

which our payments may do people like me

who have a cell phone allowance where

the the phone is actually a number

ascribed to me the account is in my name

the cell phone activity would not be

subject to open records requirements as

an example there are two different

payments so in my view they are additive

there where instead of 52,000 or 27,000

are actually talking to roughly about

roughly eighty thousand dollars I

believe actually specifically in

financing oughta talking about how does

it break out across departments that's

not easy to do but so what I did do is

we have 208 if you round up FTEs or

full-time equivalent employees budgeted

so if you divide the 7.6 million by the

208 you get 36,000 37,000

the cost per FTE also shown in the

middle column there is for all of those

benefits the percentage that they are of

the total of seven point six million

dollars so top-line retiring medical

insurance 204,000 it is two point seven

percent of the total seven point six

percent so that would be one way of

looking at the various benefits and then

in the third column over is a percent of

labor costs and I shown the labor costs

down at the bottom almost 13 million

budgeted total in labor and so each of

those benefits as a percentage of that

plus i get a question I think I'm my mom

see car sell a separate car loans are so

there's no

as soon as we can pull that out of

peoplesoft is shows my Aubrey I'm sorry

sorry I didn't well let me try it one at

a time here we assume we can pull off

separately from PeopleSoft car allowance

versus sellouts we can provide that

detail I'm sorry next you wanted to go

back well I'm not sure did we already

buzzed through I have some operating

plans early this was intended provide

you detail on a couple things that came

up if you have additional questions on

the budget itself let us let us see you

up more detail on that well then let's

let's hear where they are that most like

good are there particular items that you

want us to drill into I wanted to know

more about services

and refresh my recollection pay you what

a purchase of services I mean our

services are one other labor so I like

to chat more real probably a few outs

it's probably all kind it's everything

it is in essence anything that we pay to

an outside service provider and the real

only difference be you'll also notice a

classification of like materials which

would be probably what you're thinking

of as paper other kinds of supplies but

services are everything from consultants

on the capital side those would be

purchase services purchase services some

of these items actually depending on if

they don't have a separate line item

might fall under purchase services are

you looking at the actual footage what I

want to help us listed with what the

item is particularly I'm just thinking

of when you ask Blackie tell me right

right right we were in your answering

the question I just want to make sure

i'm looking at the right stuff that

would be I think maybe in the future

we'll try to paginate these you'd

probably a little bit easier but I see

the page you're on tell me where correct

got it okay uh and you tie i think our

utilities are probably primarily

electrode but uh would be both electric

and gas curious that was he correct yes

maybe both electric and gas the largest

components gonna be

electric right certainly we can provide

that detail I may also like to point out

that as we went through the longer

budget presentation at finance and audit

for instance or the finance department

that was one of the categories that I

had for purchase services and what we

would expect as each of the directors

went through that that they would cover

that within each of their own

departments im a champion I think you

understand that but I think the question

is to provide I'm sorry the point is to

provide the better opportunity to ask

questions as we go through the budgets

that learning what the components are

for this 18 million dollars is going to

pretty important to their consideration

so we'll give you the broker you will

roll that up for you suits right you

know absolutely hearing water main get

some outside people and will do this

will do this Peter's all consultants got

it will do the same with utilities

utilities will be far more

straightforward that make sense okay got

it we can do that I think so well I'm

sorry what's your reservation no I don't

have a reservation I I'm a little

confused I guess I see it as as each as

we go through each department you would

see pieces of the 17 million dollars in

detail yeah i think the point i think

the point is this though Peggy we're

going to provide it to them on a micro

basis by looking at eight or nine

departments dropping these columns of

numbers in they roll up to roughly 17

million dollars a big number I think

from their vantage going into that

discussion of looking at nine

departments what are the components that

in the macro sense roll up to 17 million

dollars it's hard to make an informed

judgment by looking at IT and seeing

something that says purchase services

for X number of dollars if you don't

understand the context of how that rolls

up that's kind of the point I think so

is this consulting services is it

janitorial services just so they have an

informed basis to be able to keep in the

back of their mind what

at line item may be in budget after

budget after budget right okay other

questions that is the end I only

provided the things that were follow-up

and Peggy the reason that we're all kind

of looking at this as a new methodology

as I look at mark would you tell him why

the previous plan that we had always

seen it as a budget and why we're trying

to move to this I mean I would think

it's a new board member coming in it

that would be very important ah yes I'm

trying to I'm trying to process a quick

short explanation of that at the one

waterworks we both do budgeting and our

ongoing management reporting on an

activity costing basis and so what that

means in essence is are you an attorney

correct okay then I have that I have it

explanation I think will help you we in

essence do project accounting or what

you might do in your business accounting

by customer account ie how much charges

by that account whatever they how much

revenue off of that account and you're

looking at it by customer we do that on

the expense side not necessarily on the

revenue side but so we have about 300

projects to cross the utility and that

is both on a capital basis which I think

most businesses expect to see capital

projects but we also have operating

projects and the example I use is in

accounting or finance we have several

different projects by which we keep

track of our time we have financial

services and we have several projects

underneath that payroll accounts payable

financial reporting there are several

others but I'm just going to leave it at

that and those are typical activities of

any accounting departments so as both my

people spend their time doing payroll

they will charge their time to that

project and any materials the checks we

buy those types of things will also be

associated with the project and at the

end of the day what that tells me is how

much the utility is spending on payroll

how much is the utility spending on Finn

reporting how much is the utility

spending on other types of services and

across each department each director

decides basically on how they want to

look at those operating costs by project

that is a lot of details so as I said we

have about 300 projects we have multiple

line items under each one of those and I

think what we've found is that it's a

lot of detail which is great for us but

it is hard to kind of bills point is

it's hard to assimilate that much detail

into what does it really mean for the

utility overall and so one of the

questions that has come from the board

is about budgeting on a department level

basis and so we go back to maybe I can

make it go back to this very first slide

this is a snapshot it is obviously not

the full utility but and the reason we

didn't do the full utility is we were

doing it as a kind of a test basis to

present to the board to get some input

but without spending taking up eight

hours of their time is they didn't like

it so I did a short presentation of

Finance and audit for just these three

departments because they are smaller

departments from that standpoint showing

the expenses and the labor and went into

a little bit of detail so this is what

we would propose as I indicated at the

beginning we have eight departments so

if we did this on a full utility basis

we'd have eight departments across and a

total column and then provide additional

detail when I did a presentation at

finance and audit I went into a little

bit of detail for instance for finance

what makes up that the nine hundred

thousand dollars which is corporate

insurance that's an easy one but then

each of those other line items inventory

materials and services I gave a little

bit of an explanation of what made up

those items so detail but not the

excruciating detail of 300 projects

I am 25 words or less make it 50 words

or less to get my take on what's

different here and why first of all the

capital budget pretty straightforward we

know when we're doing main replacement

that there's a two-million-dollar

allocation and you as board members have

a good sense of the metes and bounds of

what that means unfortunately you get

away from capital and get you get into

om budgets in the utility world the

accounting is complex because it's all

based upon our view that we're trying to

prove our cost of service which is not

very intuitive to outsiders we that is

all of us think of departments and

functionality look around the room and

you see distribution and you see

production and you see customer service

and that intuitively is a lot easier to

understand than this across the

organisation a work plan cost of service

accounting that's so fundamental to how

we have to explain our rates that we

assume that that is the construct that

we should provide to you it's a pretty

confusing construct even to those of us

who are trying to get to the inside game

so that really has driven us to a way to

look at this by department on the

operating and maintenance side capital

far more straightforward and far more

easy to get your hands around that was

more than 50 words but that would be my

take on what's different important

reason we had been faced with some hefty

rate increases to our customers and

trying to justify that as board members

and so for instance when we looked at

human resources we saw a number if you

combine all those work plans up close to

900

dollars we said it can't take nine

hundred thousand dollars to run our HR

department now we're starting to see

what the real number is so that's what

led us to this point it was to go back

to justify those rate increases we felt

the entity

Peggy thank you that was very thoughtful

I appreciate the extra detail will flesh

out better what utilities are which is

going to be pretty straightforward

purchase services to provide you a more

informed an opportunity to ask questions

later on and also you wanted to break

down between Karl ounces and sell when

you have to provide that matter but this

is again a pretty iterative process so

as you think of things enlighted to be

able to try and get our hands around a

more responsive way to explore in a way

that you're comfortable ultimately

voting for rather than against

you