Special Board of Directors Agenda · September 26 Consent Agenda. 7. Draft 2015-2015 Capital Budget Discussion: Ken Andrews presented an overview of the draft 2015-2016 Capital Budget

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Special Board of Directors Agenda

Friday, September 26, 2014, 10:00 a.m. District Board Meeting Room, 8000 NE 52nd Court, Vancouver, WA 98665

Business Meeting

No Item Action/Info Presenter Time (minutes)

1. Call To Order

2. Flag Salute

3. Late Additions to the Agenda

4. Public Comment INFORMATION 5 This item is to provide an opportunity for citizen comment.

5. Consent Agenda ACTION 5 5a.

5b. 5c. 5d. 5e.

Board of Directors Meeting Minutes of August 15, 2014 Audit of Accounts Board Resolution – Managing Wastewater Quality Administrative Lead Agreement - Amendment Board Resolution – Financial True Up

6. Reports INFORMATION 6a.

6b. 6c. 6d.

Draft 2015-2016 Operating and Capital Budgets Operator: Clark County Second Quarter 2014 Operator: Ridgefield Second Quarter 2014 Transition Work Program Update

Andrews Henderson

Johnson Peterson

45 10 10 15

7. Board Reports INFORMATION 5

8. Adjourn Meeting

Next Meeting: Friday, October 17, 2014, 10:00 a.m., Business Meeting District Board Meeting Room, 8000 NE 52nd Court, Vancouver, WA 98665

The Board provides reasonable accommodations to persons with disabilities. Please contact a staff member (by noon Thursday) if we can be of assistance. If you should experience difficulty hearing the proceedings, please bring this to the attention of the Board by raising your hand.

Board of Directors Meeting MINUTES

Friday, August 15, 2014, 10:00 a.m. District Board Meeting Room, 8000 NE 52nd Court, Vancouver, WA 98665

Present:

Staff: Clark Regional Wastewater District: John Peterson, Ken Andrews; Battle Ground: Scott Sawyer; Clark County: Heath Henderson; and Hugh Spitzer via videoconference.

Audience: Clark County: Kay Hust; Sue Stepan; Clark Regional Wastewater District: Tammy Lecomte, Kim Thur, Robin Krause, Hugh Findlay, Norm Harker; Ridgefield: Lee Wells; Port of Ridgefield: Joe Melroy; Battle Ground: Lyle Lamb; Interested Citizens: Ron Lauser.

Business Meeting

Call to order: Chair Ron Onslow called the meeting to order at 10:00 a.m.

1. Late Additions to the Agenda Discussion: None.

2. Public Comment Discussion: No one present wished to speak.

3. Consent Agenda Action: Neil Kimsey moved, seconded by Ron Onslow, to approve the Consent Agenda, approving

June 27, 2014 meeting minutes and claim warrants #10027-10031 in the amount of $69,929.20, to authorize the Chair to sign Resolution #2014-05 Notice of Large Contracts, to authorize the Chair to sign Resolution #2014-06 Managing Wastewater Volume, and to authorize the Chair to sign Resolution #2014-07 Interlocal Formation Agreement Amendment. Motion carried unanimously.

4. Board Resolution – Managing Wastewater Quality Discussion: John Peterson presented the draft resolution for Managing Wastewater Quality for the

Board’s first review. Mr. Peterson reviewed the purpose of the resolution to establish a policy to manage the quality of wastewater flows into the Regional Assets. Mr. Peterson noted the Resolution continued the historical practices established in previous agreements. Hugh Spitzer reiterated the legal aspects of the resolution. The Board requested that the resolution be presented for approval on the September 26 Consent Agenda.

City of Battle Ground: Shane Bowman Clark County: Tom Mielke

Clark Regional Wastewater District: Neil Kimsey City of Ridgefield: Ron Onslow

Meeting Minutes of August 15, 2014 Page 2 of 3

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5. Administrative Lead Agreement – Amendment Discussion: John Peterson presented the draft Amendment to Discovery Clean Water Alliance

Administrative Lead Agreement for the Board’s first review. The Board requested that the resolution be presented for approval on the September 26 Consent Agenda.

6. Board Resolution – Financial True-Up Discussion: Ken Andrews presented the draft resolution of the Financial True-Up for the Board’s

first review. Mr. Andrews noted the Resolution continued the historical practices established in previous agreements. The Board requested that the resolution be presented for approval on the September 26 Consent Agenda.

7. Draft 2015-2015 Capital Budget Discussion: Ken Andrews presented an overview of the draft 2015-2016 Capital Budget document as a baseline two-year budget, a six-year programming window, and a 20-year planning horizon. An alternative two-year budget was reviewed, which utilizes a select use of debt to accelerate certain Capital Plan restoration and replacement projects that have higher risk/consequence of failure or have return-on-investment advantages. The Board provided preliminary endorsement of the alternative budget and directed staff to modify the Capital Plan sequencing of projects with a select use of debt. A final decision on the Capital Budget will be made after a draft Operating Budget is available for review, so that total Alliance costs are fully defined.

8. Quarterly Financial Report Discussion: Ken Andrews presented the Alliance Quarterly Financial Report through the quarter ending June 30, 2014.

9. Alliance Insurance Framework Discussion: John Peterson and Hugh Findlay presented the overall insurance framework for general information and for specific context associated with the Operating Budget for 2015-2016.

10. Transition Work Program Discussion: John Peterson reviewed the staff report. Current transition work activities include: 1) operating and access permit transfers, 2) capital plan and operating/capital budget development, and 3) developing the items required under the administrative framework.

Mr. Peterson also reviewed the status of easements needed for the future effluent pipeline and outfall projects, including a recent meeting held with property owners.

Mr. Peterson additionally reviewed the draft Public Works Assistance Account letter to legislators. The Board requested minor edits to the letter. Staff will provide an updated version for signature at the September Board meeting.

Meeting Minutes of August 15, 2014 Page 3 of 3

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11. Board Reports Discussion:

John Peterson reported on the status of the Discovery Corridor Wastewater Transmission System (DCWTS) work in progress.

Scott Sawyer provided an update on the status of Battle Ground’s ongoing projects and I&I reduction program. Heath Henderson commented that Clark County has made resources available to support the DCWTS project.

The meeting was adjourned at 11:00 a.m.

Prepared and edited by Alliance Administrative Lead staff. Approved by the Discovery Clean Water Alliance Board of Directors on:

September 26, 2014

___________________________________________________________________ Neil Kimsey, Secretary

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Staff Report Board Meeting of September 26, 2014

5c. Board Resolution – Managing Wastewater Quality

STAFF CONTACTS PHONE EMAIL

Hugh Spitzer, Foster Pepper, Alliance Legal Counsel Lee Marchisio, Foster Pepper, Alliance Legal Counsel

John M. Peterson, P.E., District General Manager

206-447-8965 206-447-6264 360-993-8819

[email protected] [email protected]

[email protected]

PURPOSE: The Administrative Framework presented to the Board of Directors at the April 18 meeting included a recommendation for a series of Board Resolutions to define the basic operating rules for the Alliance. One such rule relates to the quality of wastewater flowing into the Alliance Regional Assets. This is a companion resolution to the one reviewed previously by the Board regarding wastewater volume. Many of the requirements in this resolution are simply restatements of past rules from interlocal agreements, which predate the Alliance. Specifically, these agreements were entered into in 1995 and 2002, and all of these pre-Alliance agreements are set to expire on December 31, 2014. This resolution provides for similar rules regarding wastewater quality to be implemented within the new Alliance context. All comments received have been addressed and based on the direction provided at the August Board of Directors’ meeting, the Board Resolution is being presented for approval. ACTION REQUESTED: Adoption of Resolution No. 2014-08, adopting rules and regulations to manage the quality of wastewater flows into the Alliance Regional Assets and to comply with the NPDES waste discharge permits issued to the Alliance.

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DISCOVERY CLEAN WATER ALLIANCE

RESOLUTION NO. 2014 - 08

A RESOLUTION OF THE DISCOVERY CLEAN WATER ALLIANCE, ADOPTING RULES AND REGULATIONS TO MANAGE THE QUALITY OF WASTEWATER FLOWS INTO THE ALLIANCE REGIONAL ASSETS AND TO COMPLY WITH THE NPDES WASTE DISCHARGE PERMITS ISSUED TO THE ALLIANCE.

WHEREAS, Clark County, Clark Regional Wastewater District, the City of Battle Ground and the City of Ridgefield (collectively the “Members”) formed the Discovery Clean Water Alliance (“Alliance”), a Washington municipal corporation, by entering into the “Discovery Clean Water Alliance Interlocal Formation Agreement” (“Alliance Agreement”) and by causing the Alliance Agreement to be filed with the Washington Secretary of State, all pursuant to the Joint Municipal Utility Services Act, Chapter 39.106 RCW; and

WHEREAS, Section III.B of the Alliance Agreement grants the Alliance authority to provide jointly regional wastewater transmission and treatment services to Members and other contracting municipal wastewater utilities; and

WHEREAS, Sections 3 and 4 of the Joint Municipal Utility Services Act (RCW 39.106.030 and .040) and Section VII.B of the Alliance Agreement together authorize the Alliance to acquire from Members or new Members Regional Assets for wastewater utility purposes; and

WHEREAS, on January 1, 2015, the Alliance will assume ownership and management responsibilities over the Initial Regional Assets listed in Exhibit B of the Alliance Agreement; and

WHEREAS, the Regional Assets include the Salmon Creek Treatment Plant and Outfall and certain identified interceptors, pump stations and force mains; the Ridgefield Treatment Plant and Outfall; and the Battle Ground force main, and any additional assets as determined by the Alliance Board; and

WHEREAS, under the Water Pollution Control Law (Chapter 90.48 RCW), the Department of Ecology has jurisdiction to control and prevent the pollution of streams, lakes, rivers, ponds, inland waters, salt waters, water courses, and other surface and underground waters of the state of Washington; and

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WHEREAS, RCW 90.48.260 designates the Department of Ecology as the state water pollution control agency for purposes of the federal Clean Water Act and authorizes the Department to establish a comprehensive state point source waste discharge or pollution discharge elimination permit program so that Ecology may be the sole agency issuing permits required by its program in the state of Washington; and

WHEREAS, Chapter 173-220 WAC establishes a state individual permit program, applicable to the discharge of pollutants and other wastes and materials into the surface waters of the state, as a part of the National Pollutant Discharge Elimination System (“NPDES”) created by section 402 of the federal Clean Water Act; and

WHEREAS, WAC 173-220-040 requires any political subdivision or municipality that discharges pollutants to surface waters of the state to obtain a NPDES permit from the Department of Ecology; and

WHEREAS, the Department of Ecology issued to Clark County a NPDES Permit for the Salmon Creek Wastewater Treatment Plant and a NPDES Permit to the City of Ridgefield for the City of Ridgefield Treatment Plant; and

WHEREAS, the Alliance anticipates receiving from the Department of Ecology before January 1, 2015 a transfer of the NPDES Permits for the Salmon Creek Wastewater Treatment Plant and the City of Ridgefield Treatment Plant (“NPDES Permits”); and

WHEREAS, the NPDES Permits establish discharge limits, monitoring requirements, reporting and recordkeeping requirements, facility loading limits, and operating and maintenance requirements for wastewater transported to and treated by the Regional Assets; and

WHEREAS, the NPDES Permits will require the Permittees (all of the Alliance Members) to work with the Department of Ecology to ensure that all commercial and industrial users of Publicly Owned Treatment Works (“POTW”) are in compliance with the pretreatment regulations promulgated in 40 CFR Part 403 and any additional regulations that may be promulgated under section 307(b) (pretreatment) and 308 (reporting) of the Clean Water Act; and

WHEREAS, separately from any NPDES permits, the Alliance Members are responsible for developing POTW pretreatment programs pursuant to and in compliance with 40 CFR Part 403; and

WHEREAS, those POTW pretreatment programs are pretreatment regulations for the purposes of section 307(d) of the Federal Water Pollution Control Act; and

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WHEREAS, to carry out and implement cooperatively the current NPDES Permits and to satisfy the pretreatment program requirements of 40 CRF Part 403, all Alliance Members except the City of Ridgefield entered into a Pretreatment Services Agreement dated January 31, 2002; and

WHEREAS, the Alliance desires to set forth and implement by resolution the requirements of the NPDES Permits and to replace the applicable terms and conditions of the Pretreatment Services Agreement, which is scheduled to expire on January 1, 2015; and

WHEREAS, Section 4 of the Joint Municipal Utility Services Act (RCW 39.106.040) and Section IV.B of the Alliance Agreement authorize the Alliance Board to adopt rules, policies, and guidelines to administer and regulate the Regional Assets; and

WHEREAS, it is necessary for the Alliance to establish rules and regulations to manage the quality of wastewater accepted by the Alliance from its Members, in order to efficiently and effectively manage the Regional Assets consistent with the customary practices for wastewater facilities in Washington State of the type comprising the Regional Assets; now, therefore

BE IT RESOLVED by the Board of Directors of Discovery Clean Water Alliance as follows:

Section 1. Authority and Intent.

Pursuant to Chapter 39.106 RCW and the powers granted by the Alliance Agreement to the Alliance, the Board of Directors declares as follows:

A. It is the intent of the Board to manage the Regional Assets, which are comprised of the Alliance’s wastewater transmission and treatment facilities, in accordance with levels of service and operating standards that are customary for similar wastewater facilities in the state of Washington and that are consistent with applicable state and federal laws and regulations, including but not limited to the WPCL, the CWA, and the regulations promulgated under those laws.

B. In accordance with its policy, oversight, and governance powers granted by Section IV.B of the Alliance Agreement, the Board desires to set forth the rules and regulations for managing the quality of wastewater flows into the Regional Assets, including with regard to the Members’ pretreatment programs for wastewater discharged by all commercial and industrial users.

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C. The rules and regulations adopted in this Resolution are incorporated in, and considered a part of, the Alliance Administrative Framework or the Alliance Administrative Code, as those terms are referenced from time to time.

Section 2. Definitions.

For the purposes of construing this Resolution, capitalized terms have the same meanings as the terms that are defined in the “Definitions” section of the Alliance Agreement. For the purposes of this Resolution, the following definitions are incorporated herein:

A. “Administrative Lead” means any Member or other entity serving in that capacity, consistent with Sections V.A and V.B of the Alliance Agreement. If the Alliance determines to undertake administrative responsibilities itself, using its own staff, then as used in this Agreement the term “Administrative Lead” shall mean the chief executive officer of the Alliance. [Reference: see Alliance Agreement at § II.B]

B. “Alliance” means the Discovery Clean Water Alliance. [Reference: see Alliance Agreement at § II.D]

C. “Alliance Agreement” means the Discovery Clean Water Alliance Interlocal Formation Agreement. [Reference: see Alliance Agreement at § II.C.]

D. “Board” means the Board of Directors of the Alliance. [Reference: see Alliance Agreement at § II.I]

E. “Collection System” means all sewer lines, pump stations and other sewer facilities upstream from the Influent Points respectively owned and operated (or operated under contract) by a Member or a Contracting Municipal Wastewater Utility.

F. “Contracting Municipal Wastewater Utility” means a county, city, town, water-sewer district, public utility district, other special purpose district, municipal corporation, or other unit of local government of this or another state and any Indian tribe recognized as such by the United States government authorized by law to provide a system of sewers for the collection, transmission, or treatment of Wastewater that has entered into an agreement with the Alliance that provides for Alliance acceptance of some or all of that entity’s Wastewater.

G. “CWA” means the Federal Water Pollution Control Act, also known as the Clean Water Act, as amended (“CWA”), 33 U.S.C. §§ 1251-1387.

H. “Ecology” means the Washington State Department of Ecology.

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I. “Member” (collectively, “Members”) means one or more governmental members of the Alliance, and includes Original Members and Additional Members. For purposes of this Resolution, “Member” includes any “Contracting Municipal Wastewater Utility,” unless expressly excluded. [Reference: see Alliance Agreement at § II.S]

J. "NPDES Permit" (collectively, “NPDES Permits”) means the National Pollutant Discharge Elimination System waste discharge permit issued by Ecology to the Alliance or a Member, as applicable, for a Regional Asset pursuant to the WPCL and the CWA.

K. “Operator(s)” means any Member or other entity serving in that capacity, consistent with Sections V.A and V.C. of the Alliance Agreement. If the Alliance determines to undertake Operator responsibilities itself, using its own staff, then as used in this Agreement the term “Operator” shall mean the chief executive officer of the Alliance. [Reference: see Alliance Agreement at § II.W]

L. “POTW” means a publicly owned treatment works as defined by section 212 of the CWA. For purposes of this resolution, the Regional Assets together and separately are considered a “POTW.”

M. “Regional Assets” means the assets listed in Exhibit B of the Alliance Agreement and any additional assets as the Board may later determine to be Regional Assets under Section VII.B of the Alliance Agreement. [Reference: see Alliance Agreement at § II.Z]

N. “Wastewater” means the sewage and other wastewater flows in the sewers of the Alliance, a Member or a Contracting Municipal Wastewater Utility.

O. “WPCL” means the Water Pollution Control Law, Chapter 90.48 RCW.

Section 3. Compliance with NPDES Permits.

A. Alliance Compliance. The Alliance is responsible for compliance with the terms and conditions of the NPDES Permits issued to the Alliance to operate the Regional Assets.

B. Member Compliance. All Members are responsible for compliance with their respective duties and responsibilities under the NPDES Permits.

Section 4. Adoption of Pretreatment Regulations.

A. Permanent Pretreatment Regulations. Each Member discharging wastewater into the Regional Assets must adopt pretreatment regulations that satisfy the minimum pretreatment requirements and standards of the CWA, 40 CFR §§ 403.1-403.20, the pretreatment requirements and procedures of the NPDES Permits, the WPCL, and any other applicable laws and regulations.

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The pretreatment regulations of Members must be reviewed by the relevant Alliance Standing Committees (currently the Management/Infrastructure Committee and the Operations Coordination Committee), taking into account and considering the current version of the “EPA Region 10 Model Pretreatment Ordinance” and applicable laws and regulations. Every five (5) years, or at more frequent intervals determined by the Board, each Member must review its pretreatment regulations and submit to the relevant Alliance Standing Committees a report regarding the review. At the same review interval, the Administrative Lead must provide a report to the Board on the status of all pretreatment regulations for Members discharging wastewater to the Regional Assets.

B. Interim Pretreatment Regulations. Until a Member adopts pretreatment regulations consistent with subsection 4(A) above, the existing pretreatment regulations of that Member will continue in effect.

Section 5. Wastewater quality.

A. Wastewater Quality. The Alliance will accept and treat only wastewater that complies with all applicable laws and regulations, the NPDES Permits, and other permits for the Regional Assets.

B. Wastewater Quality Policy. The Members must comply with all Alliance adopted wastewater quality policies and must adopt laws and regulations that are necessary to comply with or implement those policies.

C. Monitoring of Wastewater Quality. Collectively, the Alliance and the Members must cooperatively monitor the quality of wastewater transported to and treated by the Regional Assets in order to ensure compliance with this Resolution, applicable laws and regulations, the NPDES Permits, and other permits for the Regional Assets.

Section 6. Collection Systems.

A. Collection System Standards and Practices. Each Member must observe or cause to be observed the highest practicable standards and practices in the construction, maintenance and operation of its Collection System. In accordance with those standards, each Member must regulate the pollutants, substances or wastewater in its Collection System and adopt regulations to enforce compliance. Each Member must periodically inspect its Collection System to ensure adherence to this Resolution, applicable laws and regulations, the NPDES Permit, and other permits for the Regional Assets.

B. Correction and Prevention of Collection System Violations. Each Member must take sufficient measures to correct or prevent any condition within or discharge into its

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Collection System that violates this Resolution, applicable laws and regulations, the NPDES Permits, or other permits for the Regional Assets. If a Member does not correct or take actions to correct or prevent the condition or discharge immediately upon knowledge or notice, the Alliance may act to correct or prevent the condition or discharge or direct the Member to act. The non-responsive Member must pay all reasonable and necessary costs and expenses incurred by the Alliance in connection with the correction or prevention of the condition or discharge.

C. Inspection of Collection Systems. The Alliance, or its agents and contractors, at any reasonable time and with appropriate notice, may inspect the Collection System of any Member.

Section 7. Wastewater Violations.

A. Discontinuance of Wastewater Violations. Upon receipt of notice from the Alliance, a Member must immediately discontinue discharging pollutants, substances, or wastewater into the Regional Assets that the Alliance reasonably believes:

i. Is causing or is likely to cause damage to the Regional Assets;

ii. Is causing or is likely to cause the Alliance to violate any laws and regulations, the NPDES Permits, or other permits for the Regional Assets; or

iii. Is creating a public nuisance or a hazard to life or property.

B. Costs and Expenses of Violations. Any Member violating subsection 7(A) above must pay any reasonable and necessary costs and expenses incurred by the Alliance to respond to or remedy the violation.

C. Enforcement Mechanisms. The Alliance is responsible for communicating with Ecology or other federal, state or local agencies, as applicable, regarding the NPDES Permits and other permits for the Regional Assets. If necessary to obtain compliance with a directive or order of Ecology or other federal, state or local agencies, the Board may take action against a Member in order to comply with the directive or order. This action may include, but is not limited to, termination of wastewater transmission and treatment, in whole or in part, imposition of special charges and penalties, or filing of a lawsuit to obtain a preliminary and/or permanent injunction.

D. Responsibility for Fines and Penalties. If the Alliance is fined or penalized by federal, state, or local agencies for failure to operate or maintain the Regional Assets or to transport, treat or discharge in accordance with applicable laws, regulations, the NPDES Permits, or permits for the Regional Assets, then each Member whose wastewater flows caused the fines

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or penalties, in whole or in part, will be obligated to pay to the Alliance any reasonable and necessary costs and expenses incurred by the Alliance in connection with the fines or penalties.

Section 8. General Provisions.

A. Powers and Duties of Administrative Lead. In consultation with the relevant Alliance Standing Committees, the Administrative Lead is authorized to administer and manage the rules and regulations contained in this Resolution and to monitor the NPDES Permits and other permits for the Regional Assets on behalf of the Alliance in accordance with the terms and conditions of the Administrative Lead Agreement, as currently in effect or as amended. The Administrative Lead may establish additional written policies from time to time as the Administrative Lead may deem necessary to carry out this Resolution.

B. Operators. In consultation with the Administrative Lead and the relevant Alliance Standing Committees, the Operators must operate their respective assigned Regional Assets in accordance with the rules and regulations contained in this Resolution.

C. Rules and Regulations Binding. The rules and regulations contained in this Resolution may not be waived, altered, or amended by the Administrative Lead, an Operator, a Member, or any other user of the Regional Assets. Changes, amendments, or additions to this Resolution may be made at any time by action of the Board. The Board may decide any question that arises under but is not fully settled by any of the provisions of this Resolution, and its decision in those cases will be final.

Section 9. Effective Date.

This Resolution will take effect and be in full force on January 1, 2015.

Section 10. Corrections.

Upon approval of the Administrative Lead and the Alliance attorney, the clerk of the Alliance is authorized to make necessary corrections to this Resolution, including the correction of (1) clerical errors, (2) references to other local, state or federal laws, codes, rules or regulations, and (3) resolution numbering and section and subsection numbering.

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ADOPTED by the Board of Directors of Discovery Clean Water Alliance at a special meeting held on September 26, 2014.

DISCOVERY CLEAN WATER ALLIANCE Chair, Board of Directors

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5d. Administrative Lead Agreement - Amendment



John M. Peterson, P.E., District General Manager

206-447-8965 206-447-6264 360-993-8819


[email protected]

PURPOSE: This staff report presents an amendment to the Administrative Lead Agreement as one part of the overall Administrative Framework. The current Administrative Lead Agreement intentionally included only a limited engineering services budget for the 2013-2014 transition period, largely to prepare the first Capital Plan for the Alliance. As of the January 1, 2015 Alliance Operations Date, additional engineering services consistent with standard utility practice will be required to meet the needs of the Alliance. The Amendment will simply replace the current Section 2.3 of the Agreement with a new Section 2.3. In all cases, the amount of work to be accomplished for each of these items will be limited by the approved Alliance budgets. All comments received have been addressed and based on the direction provided at the August Board of Directors’ meeting, the Amendment is being presented for approval. ACTION REQUESTED: Authorization for the Discovery Clean Water Alliance Board Chair to sign the Amendment to Discovery Clean Water Alliance Administrative Lead Agreement.

AMENDMENT TO DISCOVERY CLEAN WATER ALLIANCE ADMINISTRATIVE LEAD AGREEMENT

This amendment is effective as of the day of , 2014 by and between Clark Regional Wastewater District and the Discovery Clean Water Alliance, each a Washington municipal corporation (collectively, the Parties").

The Parties agree to replace Section 2.3 of the Discovery Clean Water Alliance Administrative Lead Agreement with the following :

2.3 Engineering services:

2.3.1 Capital Plan development. Prepare capital plans that assess regulatory requirements, industry trends, levels of service, capacity needs, and restoration and replacement for Regional Assets. Facilitate Alliance Board capital policy development in support of the Capital Plan.

2.3.2 Capital Plan delivery. Administer, manage, plan and carry out restorations, replacements, expansions, upgrades and additions to Regional Assets, where the estimated cost of a project is more than $50,000 in 2012 dollars (the cost to be indexed annually to the Engineering News Record construction index for Seattle). Capital plan delivery includes execution of contracts by the Administrative Lead related to the Capital Plan delivery services, including but not limited to planning, permitting, right-of-way acquisition, surveying, engineering, design, construction and construction management.

2.3.3 Regional Asset development review. Coordinate and review plans for public and private development projects occurring within the vicinity of the Regional Assets. Where the projects involve work that may affect the Regional Assets, approve engineering design and construction plans to protect or modify the Regional Assets as appropriate.

2.3.4 Regional Asset wastewater volume and quality. Administer, manage, and oversee Alliance Board resolutions and regulatory requirements related to wastewater volume and quality, including industrial wastewater pretreatment. Report to the Alliance Board periodically on the status of wastewater volume and quality provided by Members discharging to the Regional Assets. Coordinate and oversee preparation and adoption of Member pretreatment regulations, and report on Alliance and Member compliance with such regulations.

2.3.5 Alliance regulatory compliance. Administer, manage, oversee and perform Alliance duties, responsibilities, monitoring, testing and reporting under NPDES permits and other permits and approvals for activities not performed by Alliance Operators.

455344.1 1 035251 I ooo 1 -1-

All other provisions of the Administrative Lead Agreement remain in full force and effective.

Executed in duplicate to be effective as of the date set forth above.


Ron Onslow, Chair

Date: _________ _

455344.1 I 035251 I 000 I -2-

CLARK REGIONAL WASTEWATER DISTRICT

Denny Kiggin , s1dent

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5e. Board Resolution – Financial True-Up



Ken Andrews, CPA, Alliance Treasurer John M. Peterson, P.E., District General Manager

206-447-8965 206-447-6264 360-993-8824 360-993-8819



PURPOSE: The Administrative Framework presented to the Board of Directors at the April 18 meeting included a recommendation for a series of Board Resolutions to define the basic operating rules for the Alliance. One such rule relates to adopting policies and procedures to manage payment adjustments to the Operating Budget component of Regional Service Charges collected from Members. This process is often referred to as the financial “true-up” process, and it is based largely on past practice tied to specific requirements in the 1995-era interlocal agreements. Over the course of an Operating Budget cycle, many actual aspects of the work performed and costs incurred are somewhat different than assumptions made at the time of budget adoption. This resolution carries forward the historical practice to address the following two primary areas for adjustment: Budgeted Costs vs. Actual Costs – “Vertical True-Up” and Budgeted Cost Split vs. Actual Cost Split – “Horizontal True-Up”. The resolution also provides for execution of this reconciliation and decision-making process. All comments received have been addressed and based on the direction provided at the August Board of Directors’ meeting, the Board Resolution is being presented for approval. ACTION REQUESTED: Adoption of Resolution No. 2014-09, adopting policies and procedures to manage payment adjustments to the operating budget component of Regional Service Charges to reflect budgeted vs. incurred costs.

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RESOLUTION NO. 2014 - 09

A RESOLUTION OF THE DISCOVERY CLEAN WATER ALLIANCE, ADOPTING POLICIES AND PROCEDURES TO MANAGE PAYMENT ADJUSTMENTS TO THE OPERATIONS COMPONENT OF REGIONAL SERVICE CHARGES TO REFLECT INCURRED COSTS.

WHEREAS, Clark County, Clark Regional Wastewater District (the “District”), the City of Battle Ground (“Battle Ground”) and the City of Ridgefield (“Ridgefield”) (collectively the “Members”) formed the Discovery Clean Water Alliance (the “Alliance”), a Washington municipal corporation, by entering into the “Discovery Clean Water Alliance Interlocal Formation Agreement” (the “Alliance Agreement”) and by causing the Alliance Agreement to be filed with the Washington Secretary of State, all pursuant to the Joint Municipal Utility Services Act, Chapter 39.106 RCW (the “Act”); and

WHEREAS, on January 1, 2015, the Alliance will provide certain Members with regional wastewater transmission and treatment services in accordance with Sections III.B and V.A–V.C of the Alliance Agreement; and

WHEREAS, Sections IV.F, V.B and VI.A of the Alliance Agreement set forth the process for staff development and Board adoption of an Alliance operating budget (the “Operating Budget”) to determine the costs and necessary payment obligations for providing wastewater transmission and treatment services; and

WHEREAS, the majority of Alliance costs are incurred by the procurement of contracted services and products, including administrative costs, for example Administrative Lead, legal, insurance, and auditor services and products, and operator costs through separate Discovery Clean Water Alliance Operator Agreements with Clark County (the “Clark County Operator Agreement”) and Ridgefield (the “Ridgefield Operator Agreement”), both effective January 1, 2015, and as may be amended from time to time; and

WHEREAS, Section 4 of the Clark County Operator Agreement requires Clark County to provide operator services within its authorized allocation of the Operating Budget, but also provides that costs incurred by Clark County in providing services to the Alliance may require adjustments to its allocation from the Operating Budget in order to reflect its incurred costs; and

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WHEREAS, Section 4 of the Ridgefield Operator Agreement requires Ridgefield to provide operator services within its authorized allocation of the Operating Budget, but also provides that costs incurred by Ridgefield in providing services to the Alliance may require adjustments to its allocation from the Operating Budget in order to reflect its incurred costs; and

WHEREAS, the Operating Budget will provide allocations for administrative services and products according to anticipated costs, but may also require adjustments if incurred costs are less than or more than anticipated costs; and

WHEREAS, from time to time, amounts paid by the Alliance for administrative or operations and maintenance costs, as established by the Operating Budget, may vary from the costs incurred by the entities providing those services or products to the Alliance; and

WHEREAS, together Section VI.B and Exhibit A of the Alliance Agreement provide that the costs for the operations and maintenance component of Regional Service Charges will be assessed to the Members according to each Member’s proportional use of regional services, as measured by Average Annual Flow, and that administrative costs not related directly to the day-to-day operations or capital costs will be determined by the maximum amount of wastewater each Member is permitted to discharge into the Alliance’s treatment facilities, as calculated by Treatment Facilities Allocated Capacity; and

WHEREAS, from time to time, amounts paid for regional services by the Members to the Alliance, as established by the Operating Budget, may vary from the costs incurred by the Alliance for providing those services to the Members or to a particular Member; and

WHEREAS, Section 4 of the Act (RCW 39.106.040) and Section IV.B of the Alliance Agreement authorize the Alliance Board to adopt rules, policies, and guidelines to administer and regulate the Regional Assets; and

WHEREAS, it is necessary for the Alliance to establish policies and procedures to manage Regional Service Charge payment adjustments to reflect incurred costs in order to ensure that each Member pays its agreed upon portion of Alliance administrative costs and operations and maintenance costs to provide that Member with regional services; now, therefore

BE IT RESOLVED by the Board of Directors of Discovery Clean Water Alliance as follows:

Section 1. Authority and Intent.

Pursuant to Chapter 39.106 RCW and the powers granted by the Alliance Agreement to the Alliance, the Alliance Board of Directors declares as follows:

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A. In accordance with Section VI.B and Exhibit A of the Alliance Agreement, the Board of Directors desires to set forth the policies and procedures for managing payment adjustments to ensure that each Member pays its share of the Alliance’s incurred costs. Operations and maintenance costs for providing regional wastewater transmission and treatment service will be allocated to Members based on each Member’s proportional use of the Regional Assets, as measured by Member Average Annual Flow. Administrative costs of the Alliance not related directly to operations and maintenance costs or to capital costs will be allocated to Members based on each Member’s proportional allocated discharge capacity into the Alliance’s treatment facilities.

B. The policies and procedures adopted in this Resolution shall be incorporated in, and be considered a part of, the Alliance Administrative Framework or the Alliance Administrative Code, as those terms are referenced from time to time.

Section 2. Definitions.

For the purposes of construing this Resolution, capitalized terms have the same meanings as the terms that are defined in the “Definitions” section of the Alliance Agreement. For the purposes of this Resolution, the following definitions apply:

A. “Administrative Lead” means any Member or other entity serving in that capacity, consistent with Sections V.A and V.B of the Alliance Agreement. If the Alliance determines to undertake administrative responsibilities itself, using its own staff, then as used in this Agreement the term “Administrative Lead” shall mean the chief executive officer of the Alliance. [Reference: see Alliance Agreement at § II.B]

B. “Alliance” means the Discovery Clean Water Alliance. [Reference: see Alliance Agreement at § II.D]

C. “Alliance Agreement” means the Discovery Clean Water Alliance Interlocal Formation Agreement. [Reference: see Alliance Agreement at § II.C.]

D. “Alliance Treasurer” means the person or entity appointed pursuant to RCW 39.106.050(13) and Section VI.E of the Alliance Agreement. [Reference: see Alliance Agreement at § II.EE]

E. “Average Annual Flow” or “AAF” means the total flow of wastewater in millions of gallons during any 12-month consecutive period, or any shorter period approved by the Board, divided by the number of days in that period, expressed in MGD. [Reference: see Alliance Agreement at § II.G]

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F. “Board” means the Board of Directors of the Alliance. [Reference: see Alliance Agreement at § II.I]

G. “Contracting Municipal Wastewater Utility” means a county, city, town, water-sewer district, public utility district, other special purpose district, municipal corporation, or other unit of local government of this or another state and any Indian tribe recognized as such by the United States government authorized by law to provide a system of sewers for the collection, transmission, or treatment of wastewater that has entered into an agreement with the Alliance that provides for Alliance acceptance of some or all of that entity’s wastewater.

H. “Maximum Monthly Flow” or “MMF” means a measure of flow expressed in MGDs and representing the highest average monthly flow, taking into account the total flow of wastewater discharged into the Regional Assets, measured in millions of gallons for any calendar month divided by the total number of days in that month. [Reference: see Alliance Agreement at § II.U]

I. “Member” (collectively, “Members”) means one or more governmental members of the Alliance, and includes Original Members and Additional Members. For the purposes of this Resolution, “Member” includes any “Contracting Municipal Wastewater Utility,” unless that entity’s wastewater acceptance agreement with the Alliance provides otherwise. [Reference: see Alliance Agreement at § II.S]

J. “MGD” means million gallons per day, referring to a rate of flow. [Reference: see Alliance Agreement at § II.T]

K. “Operating Budget” means the periodic operating budget prepared consistent with Section VI.A of the Alliance Agreement. [Reference: see Alliance Agreement at § II.V]

L. “Operator(s)” means any Member or other entity serving in that capacity, consistent with Sections V.A and V.C. of the Alliance Agreement. If the Alliance determines to undertake Operator responsibilities itself, using its own staff, then as used in this Agreement the term “Operator” shall mean the chief executive officer of the Alliance. [Reference: see Alliance Agreement at § II.W]

M. “Operator Agreement(s)” means an agreement between the Alliance and an Operator(s) to operate one or more of the Regional Assets.

N. “Regional Assets” means the assets listed in Exhibit B of the Alliance Agreement and any additional assets as the Board may later determine to be Regional Assets under Section VII.B of the Alliance Agreement. [Reference: see Alliance Agreement at § II.Z]

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O. “Regional Service Charge” means charges for service imposed by the Alliance under Section VI.B of the Alliance Agreement. [Reference: see Alliance Agreement at § II.AA]

P. “Treatment Facilities Allocated Capacity” means the MMF of wastewater that a Member may discharge into the Salmon Creek Treatment Plant and Outfall and the Ridgefield Treatment Plant and Outfall, as described in Exhibit B of the Alliance Agreement and as supplemented or adjusted in an Alliance Capital Plan. [Reference: see Alliance Agreement at §§ II.F and II.FF]

Section 3. Expenditure Adjustment Policy—Incurred Costs.

Alliance payment adjustments to service providers and vendors for incurred administrative cost expenditures and to the Operators for incurred operations and maintenance cost expenditures in any calendar year will be determined by the individual service provider or vendor agreements and the Operator Agreements, respectively. In consultation with the Operators, the Administrative Lead will determine the incurred cost expenditures for each calendar year prior to May 1 of the following calendar year.

Section 4. Payment Adjustment Policy—Operations and Maintenance.

Annually, the Alliance will adjust each Member’s payment obligations to the Alliance for the operations and maintenance component of that Member’s Regional Service Charges according to the following procedure:

A. Before June 1 of each year, the Administrative Lead will provide Members a reconciliation for the prior year that includes the following:

i. The total incurred operations and maintenance cost expenditures for each Regional Asset or groupings of Regional Assets where operations and maintenance costs can be reasonably determined;

ii. The percentage of use by each Member of each Regional Asset or Regional Asset group according to that Member’s Average Annual Flow to those Regional Assets;

iii. The total operations and maintenance cost responsibility of each Member for each Regional Asset or Regional Asset group (calculated as item (i) multiplied by item (ii) for each Member for those Regional Assets);

iv. The total Regional Service Charge payments for operations and maintenance costs received by the Alliance from each Member for regional services provided by each Regional Assets or Regional Asset group; and

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v. The total overpaid or underpaid amount for operations and maintenance costs for each Member’s use of each Regional Asset or Regional Asset group (calculated as item (iv) subtracted from item (iii) for each Member for those Regional Assets).

B. If the total operations and maintenance component of the Regional Service Charges paid by any Member to the Alliance in the prior year for the use of the Regional Assets varies from the amount due for that year based on the total overpaid or underpaid amount expressed in subsection 4(A)(v) above, the Alliance will, as the case may be, make payment adjustments in one or more of the following ways, as reasonably requested by the Member:

i. Add or credit the overpayment or underpayment amount equally among the remaining payments due for the final six months of the current calendar year;

ii. Disburse or bill the overpaid or underpaid amount as a lump sum payment(s) or invoice(s);

iii. Offset the overpayment or underpayment against the Regional Service Charges to be paid by the Member in the next annual or biennial budget; or

iv. Such other payment adjustment method agreed to between the Alliance and the Member.

Section 5. Payment Adjustment Policy—Administrative Services.

Annually, the Alliance will adjust each Member’s payment obligations to the Alliance for the administrative component of that Member’s Regional Service Charges according to the following procedure:

A. Before June 1 of each year, the Administrative Lead will provide Members a reconciliation for the prior year that includes the following:

i. The total incurred administrative cost expenditures;

ii. The percentage of Treatment Facilities Allocated Capacity for each Member;

iii. The total administrative cost responsibility for each Member (calculated as item (i) multiplied by item (ii) for each Member);

iv. The total Regional Service Charge payments for administrative costs received by the Alliance from each Member for regional services; and

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v. The total overpaid or underpaid amount for administrative costs for each Member’s Treatment Facilities Allocated Capacity (calculated as item (iv) subtracted from item (iii) for each Member).

B. If the total administrative component of the Regional Service Charges paid by any Member to the Alliance in the prior year varies from the amount due for that year based on the total overpaid or underpaid amount expressed in subsection 5(A)(v) above, the Alliance will, as the case may be, make payment adjustments in one or more of the following ways, as reasonably requested by the Member:

i. Add or credit the overpayment or underpayment amount equally among the remaining payments due for the final six months of the current calendar year;

ii. Disburse or bill the overpaid or underpaid amount as a lump sum payment(s) or invoice(s);

iii. Offset the overpayment or underpayment against the Regional Service Charges to be paid by the Member in the next annual or biennial budget; or

iv. Such other payment adjustment method agreed to between the Alliance and the Member.

Section 6. Board Report.

The Alliance Treasurer will annually report to the Board a summary of payment adjustments made under the policies and procedures set forth in this Resolution.

Section 7. Effective Date.

This Resolution shall take effect and be in full force on January 1, 2015.

Section 8. Corrections.

Upon approval of the Administrative Lead and the Alliance attorney, the clerk of the Alliance is authorized to make necessary corrections to this Resolution, including the correction of (1) clerical errors, (2) references to other local, state or federal laws, codes, rules or regulations, and (3) resolution numbering and section and subsection numbering.

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ADOPTED by the Board of Directors of Discovery Clean Water Alliance at a special meeting held on September 26, 2014.

DISCOVERY CLEAN WATER ALLIANCE Chair, Board of Directors

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6a. Draft 2015-2016 Operating and Capital Budget


Ken Andrews, CPA, Alliance Treasurer John Peterson, P.E., District General Manager

Tammy Lecomte, District Senior Administrative Assistant

360-993-8824 360-993-8819 360-993-8823

[email protected] [email protected] [email protected]

PURPOSE: This staff report will provide the Board with a first touch of the overall 2015-2016 Operating and Capital Budget for the Alliance, including a second touch of the Operating Budget and third touch of the Capital Budget. This September 2014 Draft is inclusive of all budgets received from Members through August 31. Regional Services Charges (RSCs) are computed to fund the overall budget for 2015-2016. The funding of capital projects per the Capital Plan is the basis for preparation of the Capital Budget.

The structure of the 2015-2016 Operating and Capital Budget is as follows:

• Section 1 – Budget Introduction. Provides an introduction to the Alliance, including historical context, overview of Alliance structure and operations, financial policies impacting the budget, and an executive summary of the total budget prepared for 2015-2016.

• Section 2 – 2015-2016 Operating Budget. Provides an Operating Budget to fund administrative costs and costs to operate Regional Assets owned by the Alliance (two treatment plants, two regional pump stations, three force mains and two gravity mains).

• Section 3 – 2015-2016 Capital Budget. Provides a Capital Budget to fund capital projects per the Capital Plan. This budget includes servicing outstanding debt on Regional Assets, funding two R&R projects with proceeds from a debt issuance, funding repair or replacement of existing assets, and funding to acquire or construct new assets.

• Section 4 – 2015-2016 Operating and Capital Budget. Ties the Operating and Capital Budgets together into a comprehensive budget for the Alliance. Revenues by source and expenditures by use are detailed out for all five Alliance accounts. Regional Service Charges are computed for each Member to fund all operating and capital requirements of the Alliance.

Alliance Staff Report September 26, 2014

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Draft 2015-2016 Operating and Capital Budget A combined operating and capital budget for the two-year period totals $19.914 million, summarized in the table below.

ADOPTED Monthly RSC

Accounts Operating & RSC Debt Existing Assets New Assets BUDGET Allocation

Maintenance Stabilization Service R&R Capital 2015-2016 2015-2016BEGINNING BALANCE 1,225,000$ -$ 1,059,240$ 1,800,000$ -$ 4,084,240$

SOURCES RSC - District 8,637,687 117,706 3,131,573 728,541 657,691 13,273,198 553,050$ RSC - Battle Ground 2,230,584 33,587 1,807,750 317,726 224,851 4,614,498 192,271 Interest 26,000 - - - - 26,000 Bond Proceeds - - - 2,000,000 - 2,000,000 TOTAL SOURCES 10,894,271 151,293 4,939,323 3,046,267 882,542 19,913,696 745,321$

USES O&M Admin Services (1,743,322) - - - - (1,743,322) O&M SCWMS Operations (7,460,027) - - - - (7,460,027) O&M BGFM Operations (477,500) - - - - (477,500) O&M RTPO Operations (1,213,602) - - - - (1,213,602) RSC Stabilization - - - - - - Debt Service - - (4,939,142) - - (4,939,142) Existing Assets R&R - - - (2,800,828) - (2,800,828) New Assets Capital - - - - (782,542) (782,542) TOTAL USES (10,894,451) - (4,939,142) (2,800,828) (782,542) (19,416,963) ENDING BALANCE 1,224,820$ 151,293$ 1,059,421$ 2,045,439$ 100,000$ 4,580,973$

Operating Budget Capital Budget

Two-Year Operating Budget – Baseline Assumptions The draft two-year Operating Budget reflects that the majority of services necessary for Alliance operations are to be provided via contract from three of its Members. The District is contracted to provide Administrative Lead services to the Alliance, including capital program development, regulatory compliance and industrial pretreatment services. Clark County is contracted to operate the Salmon Creek Wastewater Management System and the Battle Ground Force Main. The City of Ridgefield is contracted to operate the Ridgefield Treatment Plant and Outfall. The Operating Budget for the two-year biennium totals $11.046 million.

Two-Year Capital Budget – Selective Use of Debt Instruments After review of the draft baseline Capital Budget with the Board on August 15, the Board provided initial direction to draft an alternative model, one in which we fund construction of five R&R projects in years 2016 and 2017 with a modest debt issuance. This updated Capital Budget now reflects new debt of $4 million to be issued in 2016, with $2 million expended in 2016 (in the 2015-2016 budget) and the remainder in 2017 (in the 2017-2018 budget). The R&R projects include:

• Complete two R&R capital projects in 2016

o Upper Salmon Creek Interceptor – Targeted Repairs

o Battle Ground Force Main – Valve & Vault Repair


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• Complete three R&R capital projects in 2017

o Upper Klineline Interceptor – Regional Biofilter

o 36th Avenue Pump Station – Pump Replacements

o Salmon Creek Treatment Plant – Programmable Logic Controller Replacement Funding for preconstruction work on one new asset Capital project, the Salmon Creek Treatment Plant & Outfall Phase 5 Expansion (Effluent Pipe) is also included in the 2015-2106 Capital Budget. A combination of RSCs and debt proceeds will fund the Capital Budget totaling $8.868 million for the two years for debt service, existing assets R&R and new assets Capital projects. 2015-2016 Alliance Budget Summary Message The Alliance Operating and Capital Budgets for 2015-2016 represent full Alliance operations under the new regional framework. This framework presents the continuation of work from the Alliance transition budget and integration of budget elements from each of the four Member agencies. While there are many changes in this new environment, a large number of the items are simply moving historical costs from the Member agency budgets into the new Alliance format, and therefore do not represent a net change in the overall work performed or in the composite cost profile. Other budget items do represent new investments or levels of services, and are further depicted in the attached table. The table reflects those items identified as net material changes (individual items valued at $100,000 or more) from the 2013-2014 budgets, to assist the Board of Directors and Member agencies in evaluating all significant changes from the budget environment of the last several years. Budget Development Process Ongoing This staff report presents the first full draft of the Alliance Operating and Capital Budgets for 2015-2016. As noted on the attached document, work is ongoing in the Standing Committees to further evaluate several budget items. The Standing Committee input will be integrated with Board policy direction from today’s meeting to present a second full draft of the budget documents at the October 17 Board of Director’s meeting. Final input from the October Board and Standing Committee meetings will be considered in a third full draft of the budget documents that is currently planned to be presented for approval at the November 21 Board of Directors meeting. Administrative Lead staff looks forward to the Board input on these first draft documents. ACTION REQUESTED: Policy-level review and discussion regarding the draft 2015-2016 Operating and Capital Budget. No formal action is required at this time.

Printed: 9/17/2014 Page: 1 of 1 Filename: Alliance Budget Summary Message

Budget Item

Approximate 2015-2016

Budget Variance ($)*

Description Comment

1-Alliance Core Administrative Costs

● Executive/Financial/Legal $ (169,000) The costs for Executive, Financial and Legal services are decreasinggoing forward, largely reflecting the completion of the transition workprogram. While some transition items will continue to be completed in2015-2016, the majority of transition items were completed in 2013-2014.

The Alliance Board has supported an efficient administrative structureallowing for reduced development and implementation costs. Pleasenote that this budget does not sponsor any of the following activities:travel, education/training, citizens advisory committees, strategicplanning, planning retreats, code development, retail rate modeling orwork on significant legal issues.

2-Insurance● Property 400,000 Property insurance for regional assets is now provided at full

replacement cost value. This item represents a net increase in cost.Additional costs are required to provide for an adequate insuranceframework. This is needed going forward, regardless of partnershipstructure.

3-Engineering Services● Capital Plan Development/Regulatory Compliance/Regional Asset Development Review

252,000 Washington State Department of Ecology is promulgating new waterquality standards for the first time in many years, based on GovernorInslee’s 2014 decision on “fish consumption” standards. TheAdministrative Lead budget includes resources to evaluate what thesenew standards mean for the Alliance treatment plants and associateddischarge permits. Other regulatory trend work related to biosolids andseveral permit compliance costs are included in this budget.Additionally, it is anticipated that completion of several of the transitionperiod permit transfers will take place in 2015. This budget alsosupports ongoing capital program and policy development, NPDESpermit renewal, technical support and biennial program updatesassociated with the 2017-2018 budget process. This budget alsoprovides Regional Asset development review/coordination and policycompliance management.

Ecology’s rule-making process is important to dischargers. Evaluatingthe potential impacts early is an important element of a proactiveprogram. A more reactive policy direction could be adopted, whichwould have the effect of moving some of these costs into the 2017-2018 budget when certain discharge permits will be renewed. Thisbudget assumes minor updates of the current Capital Plan areprepared every two years, but does not include the costs necessary todevelop a stand-alone Alliance General Sewer Plan/WastewaterFacilities Plan document or engineering support to evaluate multiplegrowth plan scenarios (Clark County GMA process).

● Capital Plan Delivery 183,000 Increased capital activity level per the Capital Budget items requiresprogram oversight and project management direction by AdministrativeLead staff to deliver program.

Reducing capital project work will reduce the requirements for thisitem. This work is in direct response to the amount of capital projectwork undertaken.

● Pretreatment 214,000 Industrial pretreatment services will now be billed directly to theAlliance, rather than through the Clark County budget.

No net change to Pretreatment – see offset in the Clark County portionof Operating Budget.

4-Operating Costs – Salmon Creek Wastewater Management System (SCWMS)

195,000 Salaries/Benefits: General COLA/benefit increases, additional 0.25FTE Administration allocated to treatment plant for Clark CountyOperations Manager.

As noted.

149,000 Supplies: Solids process polymer increases at +$100k is mostsignificant item.

Plant process is consuming more polymer than historically has beenthe case. Process investigation underway.

639,000 Services: Biosolids hauling increase proposed at +$96k. Biosolidsbudget is based on 55% of material applied locally and 45% applied vialong haul contracts.

Efforts to optimize local program may support additional materialapplied locally if weather, crop and grower conditions are supportive.

Services: Engineering consulting services proposed at +$250k for (1)plant site IT/network issue support, (2) updates of electronic O&Mmanual, (3) technical support for process/operational issues and (4)support for 117th Street Pump Station strategies.

Work included here has been coordinated with and is not duplicative ofengineering work being performed by Administrative Lead. Theseitems are related to direct support of operations.

Services: Digester and solids tank cleaning proposed at +$437k. Thethree solids tanks at the Salmon Creek Treatment Plant have not beencleaned since 2008. Additional operating costs are included in thebudget to reflect this increased level of service.

Tank cleaning could be deferred but not eliminated. Nominal industryapproach is a 5-6 year cleaning cycle. Investigating possibility to cleanone tank every two years to normalize costs and be consistent with 6-year cycle going forward. Also evaluating starting the cleaning cycle in2017 to reduce current budget amount by $425k. Reducing ordeferring tank cleaning increases operational risk in terms of reducedeffective digester treatment volume and the potential for debrisclogging of digester system piping.

Services: Budget moves (object codes 410/413/452/453 reclass to419) (Prof Svcs/Engr Svcs/IT Rental/Eqpt Rental reclass to Other ProfSvcs): <$132k>.

As noted.

Insurance: Insurance +$8k is shown as a direct cost line item on theClark County operating budget.

As noted.

(214,000) Pretreatment: Industrial pretreatment services now billed directly toAlliance.

No net change - see offset in the Administrative Lead engineeringbudget.

5-Operating Costs – Battle Ground Force Main (BGFM)

311,000 The BGFM has been operated with a reduced level of servicehistorically. This approach has reduced short-term operating costs.However, significant odors and corrosive byproducts have impacteddownstream infrastructure. The draft operating budget proposesmoving the BGFM to a more industry-standard level of service, resultsin increased operating costs for routine visual inspection andmonitoring (+$43k), materials and supplies (+$51k), and for additionalchemical dosing (+$232) to the force main to better control corrosion.

A reduced level of service is being evaluated by the Alliance Standing Committees in coordination with the possible acceleration of near-term repair and replacement projects. Reducing chemical dosing below industry standards could save an additional $216k in the current budget process. This approach would increase the risk for downstream infrastructure degradation from corrosive compounds not fully controlled with the reduced chemical dosing. If this approach is undertaken, it is critical that the repair and replacement capital projects move forward as planned.

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(391,000) City of Ridgefield, in coordination with the District, budgeted tocomplete a number of RTPO projects in 2014 before transfer of theRegional Asset.

As noted. Limited ability to reduce budget further.

7-Capital Costs - Debt Service 513,000 Debt service on 2016 debt issuance that would be paid during 2015-2016 budget period.

Project work moved forward to reduce risk and consequence of failurepotential, due to deferred maintenance during recessionaryenvironment.

8-Capital Costs – Repair and Replacement

1,851,000 Maintenance on regional assets has been deferred during therecessionary environment. Capital Plan development with the Boardhas identified six critical repair and replacement projects that arescheduled to move forward over the 2015-2017 budget period,assuming a $4M debt issuance. This is a higher level of repair andreplacement work than occurred during the last several years.

Project work could be deferred if the Board was willing to acceptincreased risk and consequence of failure for Regional Assets. Threeof the six projects are related to the BGFM discharge, one smallinterceptor point repair, replacement of the pumps at the 36th AvenuePump Station, and replacement of PLCs at the SCTP.

9-Capital Costs – New Capacity 783,000 With the completion of the Phase 4 project in 2009, no capital work fornew capacity has been pursued in the last 5 years. The current budgetproposes starting work on a new capacity project with the EffluentPipeline/Outfall project.

Deferring work on the outfall is possible but will increase risk of streambank erosion (Columbia River) and risk of permitting difficulties (Fazioproperty). Project is critical to the long-term ability of the Alliance toprovide for low-cost treatment associated with the Columbia Riverdischarge.

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10-Financial Reserves 196,000 Per IFA, Appendix A regarding Alliance-adopted financial policy aroundreserves, and the reserves build strategy included in the 2015-2016Operating and Capital Budgets, includes (1) RSC stabilization build of$151k (built over 12 years), (2) existing assets R&R reduced rate ofbuild of <$55k> (built over 12 years), and (3) new assets Capital buildof $100k (built over 6 years).

The proposed budgets reflect the lower reserve levels recommendedby the Standing Committees and adopted by the Board in 2014.

Total $ 4,912,000 Net cost changes for Operating and Capital Budgets per aboveitems.

Opportunities for engaging each budget item as noted incomments above.

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2015-2016 Alliance Budget Summary Message - SEPTEMBER 2014 DRAFTThe Alliance Operating and Capital Budgets for 2015-2016 represent full Alliance operations under the new regional framework. This framework presents the continuation of work from the Alliance transitionbudget and integration of budget elements from each of the four Member agencies. While there are many changes in this new environment, a large number of the items are simply moving historical costs fromthe Member agency budgets into the new Alliance format, and therefore do not represent a net change in the overall work performed or in the composite cost profile. Other budget items do represent newinvestments or levels of services and are further depicted below. The following items are identified as net material changes (individual items valued at $100,000 or more) from the 2013-2014 budgets to assistthe Board of Directors and Member agencies in evaluating all significant changes from the budget environment of the last several years:

Variances are between the 2013-2014 budgets as funded vs. proposed 2015-2016 Alliance Operating and Capital Budget

2015-2016 OPERATING

and

CAPITAL BUDGET

September 2014 Draft

DRAFT

Discovery Clean Water Alliance

2015-2016 Operating Budget/Capital Budget

Core Values

1. Ensure reliable, predictable service for all customers

2. Manage resources responsibly, efficiently and equitably

3. Protect public and environmental health

4. Optimize use of existing facilities

5. Be financially transparent

6. Use new technologies to achieve system efficiencies and environmental protection

7. Provide a fair, positive and secure work environment for utility employees

8. Ensure capacity to support regional land use and economic development decisions

9. Invest in improvements that create system wide benefits

10. Make business decisions collaboratively with all partners

DRAFT



CONTENTS SECTION 1 - INTRODUCTION ........................................................................................................................... 1

1.1 HISTORY ............................................................................................................................................. 1 1.2 OVERVIEW .......................................................................................................................................... 2 1.3 FINANCIAL POLICIES ............................................................................................................................. 2

TABLE 1.1 FINANCIAL POLICIES FRAMEWORK ............................................................................................................ 3 1.4 EXECUTIVE SUMMARY .......................................................................................................................... 3

TABLE 1.2 TOTAL BUDGET SUMMARY 2015-2016 ................................................................................................... 4 SECTION 2 - 2015-2106 OPERATING BUDGET ................................................................................................. 5

2.1 OPERATING BUDGET INTRODUCTION ..................................................................................................... 5 2.2 ALLIANCE OPERATING FUND STRUCTURE AND RELATED FINANCIAL POLICIES ............................................ 5

TABLE 2.1 – ALLIANCE OPERATING FUND STRUCTURE .............................................................................................. 6 2.3 ALLIANCE OPERATING COST ALLOCATION FRAMEWORK .......................................................................... 6

TABLE 2.2 – ALLIANCE OPERATING COST ALLOCATION FRAMEWORK ...................................................................... 6 2.4 OPERATING EXPENSE SUMMARY ........................................................................................................... 6

TABLE 2.3 TOTAL OPERATING BUDGET ....................................................................................................................... 7 2.4.1 ADMINISTRATIVE SERVICES ............................................................................................................ 8

TABLE 2.4 – ADMINISTRATIVE SERVICES – 6-YEAR FINANCIAL PLAN ($000S) ........................................................ 8 CONTRACT ADMINISTRATIVE LEAD – CLARK REGIONAL WASTEWATER DISTRICT ...................................... 9

TABLE 2.5 – CONTRACT AND PROFESSIONAL SERVICES ............................................................................................ 9 TABLE 2.6 – OTHER EXPENSES ................................................................................................................................... 10

INSURANCE, LEGAL AND AUDIT SERVICES ........................................................................................... 10 TABLE 2.7 – INSURANCE, LEGAL AND AUDIT SERVICES ........................................................................................... 10

2.4.2 OPERATOR SERVICES ................................................................................................................... 11 CONTRACT OPERATOR – CLARK COUNTY ............................................................................................ 11

SALMON CREEK WASTEWATER MANAGEMENT SYSTEM .......................................................................................... 11 TABLE 2.8 – SALMON CREEK WASTEWATER MANAGEMENT SYSTEM – SIX-YEAR FINANCIAL PLAN ($000S) ..... 11 BATTLE GROUND FORCE MAIN.................................................................................................................................. 12 TABLE 2.9 – BATTLE GROUND FORCE MAIN – SIX-YEAR FINANCIAL PLAN ($000S) ............................................ 12

CONTRACT OPERATOR – CITY OF RIDGEFIELD ...................................................................................... 12 RIDGEFIELD TREATMENT PLANT AND OUTFALL ........................................................................................................ 12 TABLE 2.10 – RIDGEFIELD TREATMENT PLANT AND OUTFALL – SIX-YEAR FINANCIAL PLAN ($000S) ................. 13

2.4.3 OPERATING RESERVES ................................................................................................................. 13 TABLE 2.11 – OPERATING RESERVES ......................................................................................................................... 13

2.5 OPERATING-RELATED REGIONAL SERVICE CHARGES TO MEMBERS AND OTHER SOURCES .......................... 14 TABLE 2.12 – OPERATIONS-RELATED REGIONAL SERVICE CHARGES AND OTHER SOURCES ................................ 14

SECTION 3 - 2015-2016 CAPITAL BUDGET .................................................................................................... 15 3.1 CAPITAL BUDGET INTRODUCTION ........................................................................................................ 15 3.2 CAPITAL PLAN SUMMARY ................................................................................................................... 15 3.3 ALLIANCE CAPITAL FUND STRUCTURE AND RELATED FINANCIAL POLICIES ............................................... 16

TABLE 3.1 – ALLIANCE CAPITAL FUND STRUCTURE .................................................................................................. 16 3.4 ALLIANCE CAPITAL COST ALLOCATION FRAMEWORK ............................................................................. 16

DRAFT



TABLE 3.2 – ALLIANCE CAPITAL COST ALLOCATION FRAMEWORK ......................................................................... 17 3.5 DEBT SERVICE AND RESERVE FUND ...................................................................................................... 17

TABLE 3.3 DEBT ON REGIONAL ASSETS .................................................................................................................... 17 TABLE 3.4 – DEBT SERVICE AND RESERVE FUND – SIX YEAR FINANCIAL PLAN ($000S) ...................................... 19

3.5.1 NEW DEBT ................................................................................................................................. 20 3.6 EXISTING ASSETS REPAIR/REPLACEMENT AND RESERVE FUND ................................................................ 20

TABLE 3.5 – EXISTING ASSETS REPAIR/REPLACEMENT AND RESERVE FUND – SIX YEAR FINANCIAL PLAN ($000S) ..................................................................................................................................................................................... 21

3.7 NEW ASSETS CAPITAL AND RESERVE FUND .......................................................................................... 21 TABLE 3.6 – NEW ASSETS CONSTRUCTION/ACQUISITION AND RESERVE FUND – SIX YEAR FINANCIAL PLAN ($000S) ....................................................................................................................................................................... 23

3.8 CAPITAL-RELATED REGIONAL SERVICE CHARGES TO MEMBERS ............................................................... 23 TABLE 3.7 – CAPITAL-RELATED REGIONAL SERVICE CHARGES TO MEMBERS – SIX YEAR FINANCIAL PLAN

($000S) ....................................................................................................................................................................... 24 SECTION 4 - 2015-2016 TOTAL BUDGET ...................................................................................................... 25

TABLE 4.1 2015-2016 TOTAL BUDGET – SIX YEAR FINANCIAL PLAN ($000S) ..................................................... 25 APPENDIX A – ORGANIZATIONAL CHART ................................................................................................................. 26 APPENDIX B – 2015-2016 CLARK COUNTY CONTRACT OPERATOR BUDGET – SCWMS AND BGFM ............... 27 APPENDIX C – 2015-2016 RIDGEFIELD CONTRACT OPERATOR BUDGET - RTPO ................................................ 40 APPENDIX D – 20-YEAR PLANNING HORIZON – OPERATING BUDGET-RELATED REGIONAL SERVICES CHARGES

..................................................................................................................................................................................... 41 APPENDIX E – 20-YEAR CAPITAL PLAN .................................................................................................................... 42 APPENDIX F – DEBT MIGRATION STRATEGY ............................................................................................................. 43 APPENDIX G – 20-YEAR PLANNING HORIZON – CAPITAL-RELATED REGIONAL SERVICE CHARGES ..................... 47 APPENDIX H – 20-YEAR PLANNING HORIZON - TOTAL BUDGET REGIONAL SERVICE CHARGES .......................... 48

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Section 1 - Introduction

1.1 History In September 2007, Clark County adopted an updated 20-Year Comprehensive Growth Management Plan, addressing the future needs of the community. This planning process identified the growth potential and related infrastructure needs of several of the urban growth areas within Clark County. As a result, wastewater providers in the County began to discuss the concept of regionalizing wastewater service to support a healthy environment and to provide infrastructure needed to realize the area’s economic development potential.

The initial discussions resulted in the Sewer Coalition Planning Study, started in 2008 and published in November 2009, with twelve local agencies. This study considered a 50-year vision for growth and infrastructure needs in a county-wide context. The study resulted in a Memorandum of Understanding (MOU) to Develop the Structure for a Regional Wastewater Entity. Four of the twelve agencies (Clark County, Clark Regional Wastewater District, and Cities of Battle Ground and Ridgefield) agreed in the MOU to move forward to form a new regional partnership. The remaining eight coordinating agencies would continue to coordinate with and stay informed on the process.

In 2010 and 2011, the four agencies conducted a regional business planning study to explore viable options for how a new regional partnership might be structured, what services it might provide, what it might own, how it might be governed and how it might be funded. The regional business planning effort resulted in a second MOU signed in April 2012 providing agreement-in- principle for the framework of the new partnership. Key elements of the MOU included formation of the new entity under the Joint Municipal Utility Services Act (RCW 39.106), use of an asset- based cost allocation model, oversight from a four member Board of Directors composed of one elected official from each agency, and contracting key administrative and operational responsibilities to the partners best suited to provide those services.

Building on the April 2012 MOU, an Interlocal Formation Agreement (IFA) was completed in September 2012 providing the necessary framework elements for the Discovery Clean Water Alliance (Alliance). The Alliance incorporated in January 2013 and transition activities took place in 2013 and 2014. Transition activities included drafting an administrative framework for this new legal entity, drafting asset transfer and franchise agreements for transferring Regional Assets, and preparing the first 20-year Capital Plan and 2015-2016 Operating and Capital Budgets for the Alliance. Effective January 2015, the Alliance will own and operate two wastewater treatment plants with outfalls, two regional pump stations, three regional force mains, and two gravity interceptors.

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At that time the Alliance will become fully operational and provide wastewater treatment services to about 100,000 people in Clark County.

1.2 Overview The 2015-2016 Total Budget is comprised of an Operating Budget, to fund administrative services for the Alliance and to operate Regional Assets, plus a Capital Budget, to restore or replace existing Regional Assets and construct or acquire new Regional Assets. Regional Assets that will transfer ownership at the Alliance Operations Date (January 1, 2015) include the Salmon Creek Wastewater Management System (SCWMS), now owned by Clark County, the Ridgefield Treatment Plant and Outfall (RTPO), now owned by the City of Ridgefield, and the Battle Ground Force Main (BGFM), now owned by the City of Battle Ground. Costs to operate these Regional Assets will become the responsibility of the Alliance upon ownership transfer, and will be funded from wholesale wastewater treatment services charged to Members of the Alliance. An organization chart (Appendix A) outlines relationships between the Alliance Board, contract service providers and three advisory committees to the Board.

1.3 Financial Policies At the time of formation in September 2012, the Alliance adopted a series of fiscal categories, objectives and Financial Policies which to operate under in support of the long-term fiscal and organizational health of the Alliance, contained in the Interlocal Formation Agreement (ILA), Exhibit A, outlined below. Amendments to these Financial Policies were also recently adopted by the Board in August 2014. The preparation of Operating Budgets, Capital Plans and Capital Budgets, and the determination of Regional Service Charges paid by Members shall be consistent with these Financial Policies. DRAFT

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Table 1.1 Financial Policies Framework

Category Objective PoliciesReserves Reserve balances are funds that are set aside for specific

project, task, covenant requirement, and / or emergency.These balances are maintained in order to meet short-termcash flow requirements, while at the same time minimizing therisk associated with meeting financial obligations andcontinued operational needs under adverse conditions.

O&M, RSC Stabilization, DebtService, R&R and CapitalReserves

Debt Market debt, non-market debt and loans are all potentialfunding sources to buy, build or rebuild/replace capital assetsby the Alliance. All debt issuances require that debt servicecoverage ratios be met and compliance with continuingdisclosure requirements.

Debt Service, Debt Service Coverage Ratio, Continuing Disclosure and Debt Policy

Revenue Sufficiency The Alliance has ongoing revenue requirements from itsMembers to pay operating expenses, buy or build capitalassets, service debt and maintain reserves. Revenuesufficiency insures that charges will be set at a level to remaina self-sufficient utility.

Charge Adoptions and Revenue Pledge by Members

Financial Planning, Regulatory Compliance and Investments

Policies which support financial planning, regulatorycompliance and investing help promote the financial integrityand stability of the Alliance, and help provide guidance andconsistency in decision-making for the Alliances’management and Board.

Financial Planning, Regulatory Compliance and Investment Policy

Sustainability of Infrastructure

In conjunction with establishing or planning its capitalprogram, Alliance will develop a corresponding capital-financing plan that supports execution of that program, and is capable of sustaining long-term capital requirements. Thecapital program will incorporate system expansion, upgradesand improvements, and system repair and replacement. Theintention is to establish an integrated funding strategy.

Capital Facilities Planning andCapital Facilities Funding

1.4 Executive Summary An overall budget totaling $19,914,000 for the 2015-2016 biennium follows for the Board’s review. The Operating Budget totaling $11,046,000 is funded primarily by Regional Service Charges collected from Members for wholesale wastewater transmission and treatment services. Budgeted operating expenses include administrative costs and operations of all Regional Assets for the two year budget period. The Capital Budget totaling $8,868,000 includes funding from Regional Service

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Charges plus $2 million of expenditures from a planned $4 million debt issuance scheduled in 2016. Budget capital expenses include debt service on debt transferred to the Alliance from Members at January 2015, repair and replacement of existing assets and construction or acquisition of new assets for the two-year period ending December 31, 2016.

Table 1.2 Total Budget Summary 2015-2016

ADOPTED

Accounts Operating & RSC Debt Existing Assets New Assets BUDGET

Maintenance Stabilization Service R&R Capital 2015‐2016

BEGINNING BALANCE 1,225,000$ ‐$ 1,059,000$ 1,800,000$ ‐$ 4,084,000$

SOURCES

Regional Service Charges 10,869,000 151,000 4,939,000 1,046,000 883,000 17,888,000 Interest 26,000 ‐ ‐ ‐ ‐ 26,000 Bond Proceeds ‐ ‐ ‐ 2,000,000 ‐ 2,000,000 TOTAL SOURCES 10,895,000 151,000 4,939,000 3,046,000 883,000 19,914,000

USES

O&M Admin Services (1,743,000) ‐ ‐ ‐ ‐ (1,743,000) O&M SCWMS Operations (7,460,000) ‐ ‐ ‐ ‐ (7,460,000) O&M BGFM Operations (478,000) ‐ ‐ ‐ ‐ (478,000) O&M RTPO Operations (1,214,000) ‐ ‐ ‐ ‐ (1,214,000) RSC Stabilization ‐ ‐ ‐ ‐ ‐ ‐ Debt Service ‐ ‐ (4,939,000) ‐ ‐ (4,939,000) Existing Assets R&R ‐ ‐ ‐ (2,801,000) ‐ (2,801,000) New Assets Capital ‐ ‐ ‐ ‐ (783,000) (783,000) TOTAL USES (10,895,000) ‐ (4,939,000) (2,801,000) (783,000) (19,418,000)

ENDING BALANCE 1,225,000$ 151,000$ 1,059,000$ 2,045,000$ 100,000$ 4,580,000$


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Section 2 - 2015-2106 Operating Budget

2.1 Operating Budget Introduction The Alliance will operate Regional Assets and provide wastewater treatment services to Members when ownership is transferred to the Alliance at the Alliance Operations Date, January 1, 2015. A 2015-2016 Operating Budget is provided and the financial framework outlined necessary to fund operations for the two-year budget period. The Operating Budget has been prepared to be consistent with specific Alliance financial policies and general professional practices appropriate for a regional wastewater transmission and treatment utility. A formal definition of the Operating Budget as presented in the IFA is “the periodic operating budget prepared consistent with Section VI.A.: An annual or biennial Operating Budget and periodic Capital Budgets will be prepared by Alliance staff or consultants (or, if there is a separate Administrative Lead, then by the staff of or the consultants selected by that entity).“ The components of the Operating Budget are presented in the following sections:

A summary of the proposed Alliance operating fund structure and related financial policies is provided in Section 2.2

A summary of the Alliance operating cost allocation framework is provided in Section 2.3 A summary of operating expenses for administration and operations of Regional Assets is

provided in Section 2.4 A summary of Regional Service Charges to fund all operating budget costs of the Alliance is

provided in Section 2.5. Appendix B reflects a 2015-2016 contract operator budget for Clark County to operate the Salmon Creek Wastewater Management System (SCWMS) and Battle Ground Force Main (BGFM). Appendix C reflects a 2015-2016 contract operator budget for City of Ridgefield to operate the Ridgefield Treatment Plant and Outfall (RTPO).

2.2 Alliance Operating Fund Structure and Related Financial Policies The Alliance will administer its Operating Budget responsibilities through two separate funds (accounts). The individual funds are summarized on the following table, including a brief excerpt of key financial policies that apply to each fund.

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Table 2.1 – Alliance Operating Fund Structure

Fund Name Purpose Key Financial Policies (from IFA, Exhibit A)

Operations and Maintenance Fund

Maintain financial viability of the utility despite short-term variability in revenues and expenses.

Accrue funds sufficient to pay day-to-day administrative costs and costs to operate Regional Assets for the Alliance. Additionally, maintain a reserve of not less than 60 days of operating costs.

Regional Service Charge Stabilization Fund

Mitigate major year-to-year fluctuations in revenues and expenses upon unplanned revenue shortfalls or expenditures, including debt coverage.

Accrue funds sufficient to, when directed by the Alliance Board, fund unplanned operating revenue shortfalls or expenses, or debt coverage. Additionally, maintain a reserve of not less than 60 days of operating costs.

2.3 Alliance Operating Cost Allocation Framework The Alliance applies a “usage-based” cost allocation framework where Members pay Regional Service Charges based primarily on Average Annual Flows in individual Regional Assets or groupings of Regional Assets. After the transfer of the City of Ridgefield’s wastewater collection system and utility customers to the District in 2014, Clark County and the City of Ridgefield do not contribute flows to the Regional Assets. Therefore, Clark County and the City of Ridgefield do not pay Regional Service Charges. All Alliance costs are allocated to either the City of Battle Ground or Clark Regional Wastewater District. Per IFA Section VI.B.1, the Alliance cost allocation framework is summarized in the table below.

Table 2.2 – Alliance Operating Cost Allocation Framework

Cost Category Cost Allocation Framework (from IFA, section VI.B.1.)

Administrative CostsProportional to share of Treatment Facilities AllocatedCapacity.

Regional Asset(s) Operating CostsProportional to share of use of a Regional Asset or group ofRegional Assets as measured by Average Annual Flows.

Custom Cost Allocation As determined by the Board of Directors on an ad hoc basis.

2.4 Operating Expense Summary The total Operating Budget for the two-year budget period is funded from Regional Service Charges totaling $11.02 million and miscellaneous revenues (investment income) of $26,000.

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Table 2.3 Total Operating Budget

2015-2016 % ofSOURCES Budget TotalRegional Service Charges 11,020,000$ 99.76%Miscellaneous Revenues 26,000 0.24%TOTAL SOURCES 11,046,000$ 100.00%

USESAdministrative Services 1,743,000$ 15.78%SCWMS Operations 7,460,000 67.54%BGFM Operations 478,000 4.33%RTPO Operations 1,214,000 10.99%Operating Reserves Build 151,000 1.37%TOTAL USES 11,046,000$ 100.00%

Administrative costs of the Alliance (contract Administrative Lead services provided by the District, professional services and other expenses), and insurance, legal and audit services from other service providers are primarily funded from Regional Service Charges. In addition, costs to operate all Regional Assets (two wastewater treatment plants with outfalls, two regional pump stations, three regional force mains, and two gravity interceptors) and provide wholesale wastewater transmission and treatment services to Members, are also funded from Regional Service Charges.

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2.4.1 Administrative Services

Table 2.4 – Administrative Services – 6-Year Financial Plan ($000s)

Planning Year 1 2 Adopted 3 4 5 6 Financial

Budget Plan

Calendar Year 2015 2016 2015/2016 2017 2018 2019 2020 2015/2020ExpensesAdministrative Lead Contract

Contract ServicesExecutive and Administrative Services 80$ 83$ 163$ 86$ 88$ 91$ 94$ 522$ Financial and Treasury Services 85 88 173 91 93 96 99 552 Engineering Services 214 222 436 159 164 169 274 1,201

Professional ServicesCapital Program Support/Regulatory Compliance 200 200 400 106 209 115 219 1,050 Computer/IT 1 1 2 1 1 1 1 5 Communications/Public Engagement 5 5 10 5 5 5 6 32 Financial Consulting 10 10 20 10 11 11 11 63

Other ExpensesUtilities 1 1 2 1 1 1 1 5 Advertising/Public Notices 1 1 3 1 1 1 1 8 Miscellaneous 12 12 23 12 12 13 13 73

Total Administrative Lead Contract 608 623 1,230 471 586 503 718 3,509 Insurance Contract

Property, Liability, Errors/Omissions 200 200 400 206 212 219 225 1,262 Legal Services Contract

Foster Pepper PLLC 45 45 90 46 48 49 51 284 Audit Services

SAO 12 12 23 12 12 13 13 73 Budget/Plan Totals-Administrative Services 864$ 879$ 1,743$ 736$ 858$ 783$ 1,007$ 5,127$

The 2015-2016 Operating Budget for administrative services, totaling $1,743,000 (comprising the first two years of the six-year financial plan in the table above), includes administrative services provided under an Administrative Lead contract, plus professional services and other expenses. Insurance, legal and audit services are also included in this budget. The 2015-2016 Operating Budget is the second biennial budget for the Alliance. The initial 2013-2014 Operating Budget for the newly formed Alliance reflected administrative costs primarily for transition activities both to create the new entity and prepare for full operations to begin effective January 1, 2015. The 2015-2016 Operating Budget also funds the full operation of Regional Assets and provision of wastewater transmission and treatment services to two wholesale customers serving about 100,000 people in central Clark County.

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ContractAdministrativeLead–ClarkRegionalWastewaterDistrictAn Administrative Lead contract was executed between the Alliance and Clark Regional Wastewater District (District), an Alliance Member. This initial contract specifies that the District will oversee Alliance activities through a transition period, 2013-2014, and through its initial five-year operating period, 2015-2019. The Alliance will have no staff of its own during this period. Contract and Professional Services Contract Administrative Lead services, capital plan development and delivery, regulatory compliance support, information technology support, communications/public engagement, and financial consulting services are all included in the 2015-2016 contract and professional services budget for the Alliance.

Table 2.5 – Contract and Professional Services

2015-2016Contract and Professional Services Budget Services

Contract Administrative Lead*Executive and Administrative Services 163,000$ Board and committee meetings preparation/facilitation,

prepare/maintain levels of service, coordinate with contract operators, manage/oversee consultants/service providors, coordinate with legal counsel, manage/oversee risk/claims, public engagement.

*Financial and Treasury Services 173,000 Oversee preparation of Capital/Operating Budgets and compute RSCs billed to Members, prepare quarterly financial reports, pay vendor bills, manage cash/investments, issue and service debt, and oversee annual CAFR/SAO audits.

*Engineering and Pretreatment Services 436,000 Capital Plan development and delivery, public/private development review, manage watewater volume/quality and manage regulatory compliance.

Professional Services*Capital Program and Regulatory Compliance Support

400,000 Technical support for capital program development and plan updates, delivery of six R&R projects and ongoing regulatory compliance.

*Computer/IT Support 2,000 Annual maintenance of Springbrook Software ERP accounting system @ 22%.

*Communications/Public Engagement 10,000 Web and public engagement in Alliance operations.*Financial Consulting 20,000 Financial consulting needs.Total Contract and Professional Services 1,204,000$

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Note that this Administrative Lead budget for 2015-2016 now does include Pretreatment services billed by the District directly to the Alliance as part of the overall Engineering services. Other Expenses Other expenditures in the 2015-2016 Operating Budget include utilities, advertising and public notices, and miscellaneous expenses, including Pretreatment supplies and tests.

Table 2.6 – Other Expenses

2015-2016OTHER EXPENSES BUDGET SERVICES

Utilities $ 2,000 Website hosting and ongoing maintenance.Advertising & Public Notices 3,000 Allowance for ongoing materials and communications around rollout

of DCWA to stakeholders, partners and community.B&O Taxes - Budgeted at $0, JMUSA Act, Chapter 39.106 RCWMiscellaneous Expenses 23,000 Conference calls, mailing, printing, Pretreatment supplies/tests

($20,000).TOTAL OTHER EXPENSES $ 28,000

Insurance,LegalandAuditServicesInsurance services, purchased from the Water and Sewer Risk Management Pool for the two-year budget period, include property, liability and errors and omissions coverage. Legal services for general counsel to the Alliance are contracted with Foster Pepper PLLC. Audit services will be performed by the Washington State Auditor’s Office with audit work scheduled to be done in both 2015 and 2016.

Table 2.7 – Insurance, Legal and Audit Services

2015-2016Insurance, Legal, Audit Services Budget Services

Insurance Services $ 400,000 Premium paid to WSRMP for property, liability and errors andomissions insurance for the Alliance. Above ground assets(approximately $164 million historical cost) are property insured atreplacement cost value.

Legal Services 90,000 General counsel for Alliance beginning at Alliance Operations Date.Audit Services 23,000 Budgeted for 2013-2014 financial and accountability audits in 2015

and 2015 CAFR audit in 2016.

Total Insurance, Legal, Audit Services $513,000

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2.4.2 Operator Services The Alliance has contracted with two Members, Clark County (County) and City of Ridgefield (Ridgefield), to operate all Regional Assets. The County, which previously owned the Salmon Creek Wastewater Management System (SCWMS) until ownership was transferred to the Alliance effective at the Alliance Operations Date of January 1, 2015, will continue to operate via contract the SCWMS (one treatment plant, two force mains, two pump stations and two gravity interceptors). In addition, the County will begin to operate via contract another Regional Asset, the Battle Ground Force Main (BGFM), effective January 1, 2015. A separate operating budget is prepared for each. Ridgefield previously owned the Ridgefield Treatment Plant and Outfall (RTPO) until ownership was transferred to the Alliance effective at the Alliance Operations Date of January 1, 2015. Ridgefield will continue via contract to operate the RTPO.

ContractOperator–ClarkCountyClark County will be a contract operator for eight of nine Regional Assets effective at the Alliance Operations Date of January 1, 2015. County employees will continue to operate the SCWMS and will now also operate the BGFM.

Salmon Creek Wastewater Management System

The County prepared a detailed two-year budget totaling $7,460,000 to operate the SCWMS via contract for the 2015-2016 budget period (comprising the first two years of the six-year financial plan in Table 2.8 below), included as Attachment B to this budget, with detailed explanations and support for these County-budgeted expenses. This operator contract is a part of the overall operating budget for the Alliance for the 2015-2016 budget period. The table below also highlights a six-year financial plan through 2020 for SCWMS operations.

Table 2.8 – Salmon Creek Wastewater Management System – Six-Year Financial Plan ($000s)


Budget Plan

Calendar Year 2015 2016 2015/2016 2017 2018 2019 2020 2015/2020

Expenses - Operator Contract - Clark County -

Operations and Maintenance - SCWMS - Salaries and Benefits 1,389$ 1,389$ 2,778$ 1,431$ 1,473$ 1,518$ 1,563$ 8,762$ Materials and Supplies 509 509 1,017 524 540 556 572 3,209 Services and Utilities 1,466 1,466 2,931 1,510 1,555 1,602 1,650 9,247 Internal Services 278 278 556 286 295 304 313 1,755

Total Operations and Maintenance-SCWMS 3,641 3,641 7,283 3,751 3,863 3,979 4,098 22,973 R&R Allowance (projects < $50k) - SCWMS 89 89 178 91 94 97 100 560

3,730$ 3,730$ 7,460$ 3,842$ 3,957$ 4,076$ 4,198$ 23,533$ Budget/Plan SCWMS Expenses

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Battle Ground Force Main

Effective January 1, 2015, the County will also begin operating the Battle Ground Force Main, previously owned and operated by the City of Battle Ground. It will provide routine weekly visual inspection of the exterior lines, valves and vaults, clean the interior of the lines, perform routine and minor repairs and maintenance, and do chemical dosing of the line for odor control and to mitigate deterioration within the line and downstream interceptor. The County prepared a separate detailed two-year budget totaling $478,000 for operating this Regional Asset via contract (comprising the first two years of the six-year financial plan in Table 2.9 below), and also included in Appendix B. The table below also highlights a six-year financial plan through 2020 for operating the BGFM.

Table 2.9 – Battle Ground Force Main – Six-Year Financial Plan ($000s)


Budget PlanCalendar Year 2015 2016 2015/2016 2017 2018 2019 2020 2015/2020

Expenses - - Operator Contract - Clark County - -

Operations and Maintenance - BGFM - - Salaries and Benefits 22$ 22$ 43$ 22$ 23$ 24$ 24$ 136$ Materials and Supplies 24 24 49 25 26 27 27 154 Services and Utilities 1 1 2 1 1 1 1 6 Dosing Chemicals (BGFM) 192 192 384 198 - - - 581

Total Operations and Maintenance - BGFM 239 239 478 246 50 51 53 877 R&R Allowance (projects < $50k) - BGFM - - - - - - - -

239$ 239$ 478$ 246$ 50$ 51$ 53$ 877$ Budget/Plan BGFM Expenses

ContractOperator–CityofRidgefieldThe City of Ridgefield (Ridgefield) will operate one of nine Regional Assets, the Ridgefield Treatment Plant and Outfall, for the 2015-2016 budget period.

Ridgefield Treatment Plant and Outfall

Ridgefield prepared a detailed two-year budget totaling $1,214,000 to operate the RTPO via contract (comprising the first two years of the six-year financial plan in Table 2.10 below), included as Attachment C to this budget, with more detailed explanations and support for these Ridgefield-budgeted expenses. This operator contract is a part of the overall operating budget for the Alliance for the 2015-2016 budget period. The table below also highlights a six-year financial plan through 2020.

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Table 2.10 – Ridgefield Treatment Plant and Outfall – Six-Year Financial Plan ($000s)


Budget Plan

Calendar Year 2015 2016 2015/2016 2017 2018 2019 2020 2015/2020ExpendituresOperations and Maintenance - RTPO

Personnel 237$ 206$ 443$ 212$ 218$ 225$ 231$ 1,329$ Supplies 25 26 51 26 27 28 29 161 Services 54 54 107 55 57 59 60 338 Intergovernmental Services 242 243 484 250 258 265 273 1,531 Maintenance 24 22 46 23 23 24 25 140 Utilities 36 37 73 38 39 40 42 232

Total Operations and Maintenance - RTPO 617 587 1,204 604 622 641 660 3,731 R&R Allowance (projects < $50k) - RTPO 5 5 10 5 5 5 6 32

622$ 592$ 1,214$ 609$ 628$ 646$ 666$ 3,763$ Budget/Plan RTPO Expenditures

2.4.3 Operating Reserves Reserves are funds set aside for a specific project, task, covenant requirements, and/or emergency. Operating reserve balances, in particular, are maintained in order to meet short-term cash flow requirements, while at the same time minimizing the risk associated with meeting financial obligations and continued operational needs under adverse conditions. To that end, that Alliance Board established two operating reserve funds, the Operating reserve fund and the Regional Service Charge stabilization reserve fund. The Operating reserve fund, with a current balance of $1,225,000, is fully funded. The RSC stabilization reserve fund has a current balance of zero at January 1, 2015. Table 2.11 below outlines the purpose, reserve build strategy, and planned reserve build included in the 2015-2016 Operating Budget.

Table 2.11 – Operating Reserves

2015-2016Reserve Budget Services

Operating Reserve $ - O&M reserve has excess reserves (60 days of operating expenses) atbeginning and ending of budget period and therefore no reservebuild is budgeted for in the current 2015-2016 bienniel budget.

RSC Stabilization Reserve 151,000 RSC stabilization had no reserves (60 days of operating expenses) atbeginning of budget period. Current strategy is to build reserve tomeeting minimum reserve balance over 12 years, by 2026.

Total Operating Reserves $ 151,000

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2.5 Operating-Related Regional Service Charges to Members and Other Sources Regional Service Charges For the 2015-2016 budget period, full Alliance operations are funded from Regional Service Charges billed by the Alliance to its Members. The Regional Service Charge (RSC) is set by the Alliance Board of Directors as part of the biennial budget adoption. The revenue to be collected from Members for 2015-2016 is intended to fund administrative costs and full operations of Regional Assets in providing wholesale transmission and treatment services to Members with approximately 100,000 wastewater utility customers in central Clark County. The split in RSCs by Members to fund the 2015-2016 Operating Budget expenses is detailed in Table 2.12. Appendix D graphs operations-related Regional Service Charges projected for the entire 20-year planning horizon, 2015-2034.

Table 2.12 – Operations-Related Regional Service Charges and Other Sources

2015-2016 MonthlySource Member Budget Allocation

Regional Service Charges District 8,756,000$ 364,833$ Battle Ground 2,264,000 94,333

Subtotal RCSc 11,020,000 459,167

Investment Income 26,000 1,083 Bond proceeds - - Total Sources 11,046,000$ 460,250$

With the transfer of City of Ridgefield’s collection system and retail customers to the District in January 2014, all Alliance operating costs to serve Ridgefield’s wastewater utility customers are now funded by the District. Investment Income This budget also includes projected investment income on operating and capital reserves of $26,000 on an average reserve balance of $3.3 million during the year. Minimum operating reserves are simply held in checking accounts, with excess reserves invested per the Alliance’s adopted investment policy, primarily in the Clark County Investment Pool. Reserve levels are budgeted to be built by $496,000 over this two-year budget period.

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Section 3 - 2015-2016 Capital Budget

3.1 Capital Budget Introduction In support of establishing the Capital Plan, the Alliance is also presenting a Capital Budget, a component of the 2015-2016 Operating and Capital Budget, to provide the financial framework necessary to support delivery of the Capital Plan. The 2015-2016 Capital Budget has been prepared to be consistent with specific Alliance financial policies and general professional practice appropriate for a regional wastewater transmission and treatment utility. The formal definition of the Capital Budget as presented in the IFA is “one or more capital budgets adopted consistent with Section VI.A.: An annual or biennial Operating Budget and periodic Capital Budgets will be prepared by Alliance staff or consultants (or, if there is a separate Administrative Lead, then by the staff of or the consultants selected by that entity). Similarly, prior to Board action, comprehensive Capital Plans, including a renewal and replacement fund mechanism, will be periodically prepared by Alliance staff (or, if there is an Administrative Lead, by the staff of that entity in cooperation with staff of any Operator).” The components of the Capital Budget are presented in the following sections:

A summary of the 20-year Capital Plan is provided in Section 3.2 and Appendix E

A summary of the proposed Alliance capital fund structure and related financial policies is provided in Section 3.3

A summary of the Alliance capital cost allocation framework is provided in Section 3.4

A plan for servicing transferred debt, outlined in a debt migration strategy plan in Appendix F, issuing $4 million in new debt in 2016, funding of a debt service reserve as required, and meeting all debt-related financial policies is provided in Section 3.5

A financial plan for repair and replacement (R&R) of existing assets and funding of a R&R reserve is provided in Section 3.6

A financial plan for construction and acquisition of new assets (Capital) and funding of a Capital reserve is provided in Section 3.7

A summary of capital-related Regional Service Charge requirements for the 2015-2016 budget period and the 2015-2020 planning window is provided in Section 3.8, along with a 20-year planning horizon outlined in Appendix G

3.2 Capital Plan Summary The table contained in Appendix D presents a summary of the capital investments necessary to maintain the existing Regional Assets in good working order and to construct new Regional Assets for

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the 20-year planning horizon, 2015-2034. Eleven projects are identified to repair or replace 11 existing assets and six projects are identified to construct new assets during that period, in response to capacity demand, anticipated regulatory requirements or to provide community-appropriate levels of service. Capital investment planned for the 2015 – 2016 budget cycle totals $8.87 million. A debt issuance totaling $4 million is planned for 2016 in order to construct five capital projects over 2016 and 2017. During the 2015-2016 budget period, plans are to expend $2 million of that new issuance to construct two projects.

3.3 Alliance Capital Fund Structure and Related Financial Policies The Alliance will administer its Capital Budget responsibilities through three separate funds (accounts). The individual funds are summarized on the following table, including a brief excerpt of key financial policies that apply to each fund.

Table 3.1 – Alliance Capital Fund Structure

Fund Name Purpose Key Financial Policies (from IFA, Exhibit A)

Debt Service Fund Provide for the servicing of Alliance-held debt.

Accrue funds sufficient to service principal and interestobligations timely on all debt either assumed by the Alliancefrom Members or on new debt issued by the Alliance.Additionally, maintain a reserve sufficient to meet ReserveRequirements per the Bond Resolutions and/or satisfy rate oradditional covenants contained in the Bond Resolutions.

Existing Asset Repair/ Replacement Fund

Provide funding for existing Regional Asset repair and replacement projects.

Accrue funds sufficient to repair or replace existing RegionalAssets as needed. Additionally, maintain a reserve of not lessthan 2% of historical cost of assets. Funding from RegionalService Charges is scheduled to support a 20-year repair andreplacement program.

New Asset Construction/ Acquisition Fund

Provide funding for new Regional Asset construction and acquisition.

Accrue funds sufficient to construct or acquire new RegionalAssets as needed. Additionally, maintain a minimum reservenecessary to buffer for fluctuations between uniform revenuesand non-uniform expenditures as new assets are constructedor acquired.

3.4 Alliance Capital Cost Allocation Framework The Alliance utilizes an “asset-based” cost allocation framework where Members pay Regional Service Charges based primarily on Allocated Capacity in individual Regional Assets or groupings of Regional Assets. Considering the change in Allocated Capacity from Section 2.5 of the Capital Plan, at this time Clark County and the City of Ridgefield do not contribute flow nor have Allocated Capacity in the

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Regional Assets. Therefore, Clark County and the City of Ridgefield do not pay Regional Service Charges. All Alliance costs are allocated to either the City of Battle Ground or Clark Regional Wastewater District. Per IFA Section VI.B.1, the Alliance cost allocation framework is summarized in the table below.

Table 3.2 – Alliance Capital Cost Allocation Framework

Cost Category Cost Allocation Framework (from IFA, section VI.B.1.)

Regional Asset Capital Costs Member Allocated Capacity in Regional Asset(s).

Custom Cost Allocation As determined by the Board of Directors on an ad-hoc basis.

3.5 Debt Service and Reserve Fund As of the Alliance Operations Date, January 1, 2015, the Alliance will be responsible for debt service on $33.6 million of outstanding principal debt on the Regional Assets. Those existing principal debt obligations are summarized as follows:

Table 3.3 Debt on Regional Assets

1‐7. Public Works Trust Fund Loans $12,314,582 DistrictState Revolving Fund Loan 676,308 DistrictSewer Revenue Bonds1 9,205,000 DistrictPublic Works Trust Fund Loans 8,598,089 Battle Ground

8. Limited Tax General Obligation (LTGO)

Bonds1

1,340,000 Ridgefield (District with change in Member Allocated Capacity)

State Revolving Fund Loan 1,431,244 Ridgefield (District with change in Member Allocated Capacity)

9. Battle Ground No Debt on Regional Asset N/A$33,565,224

Regional Asset Number/Name

TOTAL1 Bond debt instruments will not be transferred to the Alliance

Alliance Member Responsible for Debt

Existing Debt Instrument

Salmon Creek Wastewater Management System

Ridgefield Treatment Plant and Outfall

Existing Debt (principal at

January 1, 2015)

The Finance Advisory Committee (FAC) has reviewed the existing forms of indebtedness in the context of the transfer of Regional Assets to the Alliance. The analysis considered a variety of financial, accounting and regulatory elements in order to determine the optimum disposition of the existing debt. The analysis has resulted in the recommendation that all forms of debt transfer to the Alliance, except for the two bond issuances (District Sewer Revenue Bonds and Ridgefield Limited Tax General

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Obligation Bonds). These two instruments will remain with the District and Ridgefield, respectively, until maturity. The Debt Migration Plan is included as Appendix C for reference. Table 3.4 below presents for a 2015-2016 budget period and 2015-2020 financial plan revenue requirements for servicing debt on all existing debt scheduled for transfer at January 1, 2015. This is all debt outstanding on Regional Assets that will also transfer at the Alliance Operations Date. Table 3.4 also contains debt service on a new $4 million issuance planned for 2016 to fund several R&R projects in 2016 and 2017. The plan depicts the following elements of an integrated debt service strategy:

Initial fund transfers of $1,059,000 at Alliance Operations Date for 2014 accrued debt service to be paid out in 2015

Revenues (Regional Service Charges) of $4,939,000 in the 2015-2016 budget period collected from Members to service debt, satisfy rate or additional covenants contained in the Bond Resolutions, and meet any other financial policy tests

Expenditures of $4,935,000 to fulfill all debt service obligations timely for the two-year period

Ending fund balance for each year ($1,055,000 at December 31, 2015 and $1,050,000 at December 31, 2016)

Regional Service Charges allocated to Members appropriate to meet revenue requirements

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Table 3.4 – Debt Service and Reserve Fund – Six Year Financial Plan ($000s)

Planning Year 1 2 Adopted 3 4 5 6 FinancialBudget Plan

Calendar Year 2015 2016 2015/2016 2017 2018 2019 2020 2015/2020

Beginning Fund Balance - Debt Service Fund 1,059$ 1,055$ 1,050$ 1,046$ 1,041$ 1,036$ RevenuesRegional Service Charges

Clark Regional Wastewater DistrictAnnual Debt Service 1,414 1,717 3,132 1,712 1,707 1,702 1,696 9,948

Annual Debt Service - CRWWD 1,414 1,717 3,132 1,712 1,707 1,702 1,696 9,948 City of Battle Ground

Annual Debt Service 804 1,004 1,808 1,000 997 993 989 5,786 Annual Debt Service - CoBG 804 1,004 1,808 1,000 997 993 989 5,786

Annual Regional Service Charges 2,218 2,722 4,939 2,713 2,703 2,694 2,685 15,735 Debt Service

Debt Transferring From DistrictPWTF - Principal (03691PRE107) 53 53 105 53 53 53 53 316 PWTF - Interest 2 2 4 2 2 1 1 10 PWTF - Principal (04691033) 537 537 1,073 537 537 537 537 3,220 PWTF - Interest 27 24 51 21 19 16 13 121 PWTF - Principal (05691PRE116) 53 53 105 53 53 53 53 316 PWTF - Interest 3 3 6 2 2 2 2 13 PWTF - Principal (08951009) 421 421 842 421 421 421 421 2,526 PWTF - Interest 29 27 57 25 23 21 19 145 SRF - Principal (L0700014) 49 50 99 51 53 54 55 312 SRF - Interest 17 16 33 15 13 12 11 84 SRF - Principal (L9800042) 165 172 337 180 188 196 205 1,106 SRF - Interest 61 54 115 46 38 30 21 250

Total Principal & Interest Payments 1,417 1,411 2,828 1,406 1,401 1,395 1,390 8,421 Debt Transferring From CoBG

PWTF - Principal (05691003) 551 551 1,103 551 551 551 551 3,308 PWTF - Interest 30 28 58 25 22 19 17 141 PWTF - Principal (06962005) 211 211 422 211 211 211 211 1,267 PWTF - Interest 13 12 24 11 10 8 7 60

Total Principal & Interest Payments 805 802 1,607 798 794 790 786 4,775 Debt Issued by Alliance (a)

Private Placement - Principal - 400 400 400 400 400 400 2,000 Private Placement - Interest - 113 113 113 113 113 113 566

Subtotal Principal 2,039 2,448 4,487 2,457 2,466 2,476 2,486 14,371 Subtotal Interest 183 279 462 260 242 223 204 1,391 Annual Debt Service 2,222 2,726 4,948 2,717 2,708 2,699 2,690 15,762

Ending Fund Balance (Debt Service) 1,055$ 1,050$ 1,046$ 1,041$ 1,036$ 1,032$

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The 2015-2016 portion of Table 3.4 is presented for adoption as a component of the upcoming two-year Capital Budget. The 20-year planning horizon is graphed in Appendix D-1.

3.5.1 New Debt In review of the Existing Assets Repair and Replace (R&R) plan as outlined in Section 3.6, this budget includes a schedule to undertake a planned $4 million issuance of debt in early 2016 to complete construction of five capital projects in years 2016 and 2017. Both the Debt Service and Reserve fund, Table 3.4, and the Existing Assets Repair and Replacement Fund, Table 3.5, reflect the debt service on this new issuance and construction of these five capital projects in 2016 and 2017.

3.6 Existing Assets Repair/Replacement and Reserve Fund Section 2.3 of the Capital Plan presented the repair and replacement (asset management) projects necessary to keep the existing Regional Assets in good working order. This section will present the framework for the Repair and Replacement Fund that will be utilized to financially sponsor the projects and to provide for compliance with applicable financial policy tests described in Section 3.3. The repair and replacement projects are generally financed by year-over-year receipt of Regional Service Charges from Members. Table 3.5 has been developed to present a balanced and integrated management strategy to meet the following criteria:

Repair and replacement projects are principally financed with available fund balance year-by-year.

In the initial two year Capital Budget for 2015-2016, issuance of $4 million in debt is scheduled for 2016 to construct five R&R projects in 2016 and 2017, with $2 million scheduled to be expended in 2016.

Beginning R&R reserves of $1,800,000 are in place at the Alliance Operations Date. A minimum fund balance reserve of 2% of historical asset cost per financial policy (approximately $3.2 million at Alliance Operations Date) is provided through a gradual build-up of fund balance reserve by year 12 of the planning horizon (2026).

Regional Service Charges totaling $1,046,000, collected from Members, for the two-year budget period to support the program are allocated per the “asset-based” cost allocation framework for the Alliance, as noted in Section 3.4 above.

Project costs, escalated to bid-year dollars, total $2,801,000 are budgeted for 2015-2016.

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Table 3.5 – Existing Assets Repair/Replacement and Reserve Fund – Six Year Financial Plan ($000s)


Calendar Year 2015 2016 2015/2016 2017 2018 2019 2020 2015/2020

Beginning Fund Balance 1,800$ 1,921$ 2,045$ 2,174$ 2,303$ 2,433$

Debt Issuance Proceeds - 2,000 2,000 2,000 - - - 4,000 RevenuesRegional Service Charges

Clark Regional Wastewater DistrictExisting Assets R&R 465 73 538 75 25 232 2,522 3,391 R&R Reserve Build 94 97 191 100 100 101 109 601

Annual Regional Service Charges - CRWWD 559 170 729 175 125 333 2,630 3,992 City of Battle Ground

Existing Assets R&R 241 22 263 34 9 81 881 1,268 R&R Reserve Build 27 28 54 29 29 29 31 171

Annual Regional Service Charges - City of Battle Ground 268 50 318 62 37 110 912 1,440 Annual Regional Service Charges 826 220 1,046 238 163 443 3,542 5,432 Project Expenditures

Middle Salmon Creek Interceptor Point Repair 52 - 52 - - - - 52 Upper Salmon Creek Interceptor Repair 21 764 784 - - - - 784 Regional Biofilter - Upper Klineline Interceptor 103 27 130 803 - - - 933 36th Avenue PS Pump Replacement 77 117 194 781 - - - 975 SCTP Programmable Logic Controller Replacement 258 637 894 492 - - - 1,386 SCTPO Columbia River Outfall Pipe Replacement 124 106 230 33 34 313 3,403 4,012 BGFM Valve & Vault Repair 72 446 518 - - - - 518 Annual R&R Allowance (2013/2014) - - - - - - - -

Annual R&R Projects Expenditures 706 2,095 2,801 2,109 34 313 3,403 8,660 Ending Fund Balance (Existing Assets R&R Reserve) 1,921$ 2,045$ 2,174$ 2,303$ 2,433$ 2,572$

The 2015-2016 portion of Table 3.5 is presented for adoption as a component of the upcoming two-year Capital Budget. Years 2017-2020 (in the 6-year planning window of Table 3.5) reflect work completed on five critical R&R projects and pre-construction work on the Columbia River Outfall Pipe Replacement project. The full 20-year planning horizon, detailed in Appendix G, reflects a balanced budget approach to estimated future project needs based on the best available information at the time of adoption. The future work will be reviewed and updated every two years in the process of preparing the Capital Budget for the next budget cycle.

3.7 New Assets Capital and Reserve Fund Section 2.4 presented the capital projects necessary to provide for system capacity needs, regulatory compliance requirements and level-of-service opportunities. This section will present the framework for the Capital Fund that will be utilized to financially sponsor the new Regional Assets projects and to provide for compliance with applicable financial policy tests described in Section 3.3. These capital projects tend to be larger in scope and cost and, therefore, often require financing. At this time, there are no projects scheduled to bid within the 2-year biennial budget or the 6-year

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planning window that would require project-specific analysis to determine the optimum financing framework. In future Alliance Capital Budgets with near-term capital projects, however, a separate financing evaluation will be presented for each capital project. Table 3.6 has been developed to present a balanced and integrated management strategy to meet the following criteria:

No project debt financing is assumed in the upcoming 2-year biennial budget for 2015-2016 or in the 6-year planning window through 2020 for new assets capital projects. In the 20-year planning horizon, however, debt financing will be required to fund several larger capital projects with individual projects costing greater than $10 million each.

A minimum fund balance reserve to handle construction funding fluctuations on larger capital

projects is provided through a gradual build-up of fund balance reserves by year 6 of the planning period, in 2020. A reserve build of $100,000 is programmed in the 2015-2016 Capital Budget.

Regional Service Charges totaling $883,000 for the 2015-2016 budget period are calculated to

support the program and are allocated to individual Members according to the “asset-based” cost allocation framework for the Alliance.

Project costs totaling $783,000 for the two-year period are escalated to bid-year dollars

(project costs are escalated to the future anticipated bid date assuming an escalation value of 3% annually).

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Table 3.6 – New Assets Construction/Acquisition and Reserve Fund – Six Year Financial Plan ($000s)

Planning Year 1 2 Draft 3 4 5 6 FinancialBudget Plan

Calendar Year 2015 2016 2015/2016 2017 2018 2019 2020 2015/2020Beginning Fund Balance -$ 50$ 100$ 150$ 200$ 250$ Debt Issuance Proceeds - - - - - - - - RevenuesRegional Service Charges

Clark Regional Wastewater DistrictNew Assets Capital 324 255 580 97 25 301 310 1,312 Capital Reserve Build 39 39 78 39 39 39 39 233

Annual Regional Service Charges - CRWWD 363 294 658 136 64 340 349 1,546 City of Battle Ground

New Assets Capital 113 89 203 34 9 105 108 459 Capital Reserve Build 11 11 22 11 11 11 11 67

Annual Regional Service Charges - City of Battle Ground 124 100 225 45 20 116 119 525 Annual Regional Service Charges 488 395 883 181 84 456 468 2,071 Project Expenditures

SCTPO Phase 5 Expansion (Effluent Pipeline) 438 345 783 131 34 406 418 1,771 Annual New Asset Expenditures 438 345 783 131 34 406 418 1,771

Ending Fund Balance (New Assets Capital Reserve) 50$ 100$ 150$ 200$ 250$ 300$

The 2015-2016 portion of Table 3.6 is presented for adoption as a component of the upcoming two-year Capital Budget. Years 2017-2020 (in the 6-year planning window of Table 3.6) are all comprised of pre-construction costs on the Phase 5 expansion of the Salmon Creek Treatment Plant Outfall. The full 20-year planning horizon, detailed in Appendix E, reflects a balanced budget approach to estimated future project needs based on the best available information at the time of adoption. The future work will be reviewed and updated every two years in the process of preparing the Capital Budget for the next budget cycle.

3.8 Capital-Related Regional Service Charges to Members The Capital Plan and Capital Budget provide a long-term infrastructure and financial plan that will support the Alliance in providing regional wastewater transmission and treatment services to its Members. A summary of the total capital portion of the Regional Service Charges is provided in Table 3.7 to support the work of the Debt Service Fund, the Existing Assets Repair and Replacement (R&R) Fund and the New Assets Capital Fund. The Regional Service Charges for capital-related funds will be added to Regional Service Charges for operating-related funds in order to determine total Regional Service Charges to be billed to Members of the Alliance who utilize the wholesale wastewater transmission and treatment services. Table 3.7 highlights:

Debt issuance proceeds to be expended of $2 million in the two-year budget period.

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Total RSCs collected from Members of $6.868 million to fund capital-related expenditures in the 2015-2016 budget.

Table 3.7 – Capital-Related Regional Service Charges to Members – Six Year Financial Plan ($000s)


Calendar Year 2015 2016 2015/2016 2017 2018 2019 2020 2015/2020RevenuesDebt Issuance Proceeds -$ 2,000$ 2,000$ 2,000$ -$ -$ -$ 4,000$ Regional Service Charges - DistrictTable 3.4 Debt Service 1,414 1,717 3,132 1,712 1,707 1,702 1,696 9,948 Table 3.5 Existing Assets R&R 559 170 729 175 125 333 2,630 3,992 Table 3.6 New Assets Capital 363 294 658 136 64 340 349 1,546 Total Regional Service Charges - District 2,336 2,182 4,518 2,024 1,896 2,374 4,675 15,486 Monthly Regional Service Charges - District 195 182 188 169 158 198 390 215 Regional Service Charges - CoBGTable 3.4 Debt Service 804 1,004 1,808 1,000 997 993 989 5,786 Table 3.5 Existing Assets R&R 268 50 318 62 37 110 912 1,440 Table 3.6 New Assets Capital 124 100 225 45 20 116 119 525 Total Regional Service Charges - CoBG 1,196 1,155 2,350 1,108 1,054 1,219 2,021 7,751 Monthly Regional Service Charges - CoBG 100 96 98 92 88 102 168 108 BUDGET/PLAN RSCsTable 3.4 Debt Service 2,218 2,722 4,939 2,713 2,703 2,694 2,685 15,735 Table 3.5 Existing Assets R&R 826 220 1,046 238 163 443 3,542 5,432

Table 3.6 Assets Capital 488 395 883 181 84 456 468 2,071 BUDGET/PLAN TOTAL RSCs 3,532 3,336 6,868 3,131 2,950 3,593 6,696 23,238

BUDGET/PLAN TOTAL MONTHLY RSCs 294$ 278$ 286$ 261$ 246$ 299$ 558$ 323$

The 2015-2016 portion of Table 3.7 is presented for adoption as a component of the upcoming two-year Capital Budget. Again, the detailed 20-year planning horizon capital projects are detailed in Appendix E and the capital-related RSCs to fund those same projects over the 20-year period is graphed in Appendix G.

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Section 4 - 2015-2016 Total Budget

A summary of $19,914,000 is budgeted to be expended in the 2015-2016 biennial budget. This will fully fund the Operating Budget, administrative services and operating costs for all Regional Assets, and the Capital Budget, a number of existing assets R&R projects and new assets Capital projects, as sequenced per the Capital Plan. Three funding sources are identified with the primary source being Regional Service Charges collected from Members. Table 4.1 below identifies beginning reserve balances, funding sources, uses of funds by account, and ending reserve balances as programmed per this adopted budget.

Table 4.1 2015-2016 Total Budget – Six Year Financial Plan ($000s)

ADOPTED Monthly RSC

Accounts Operating & RSC Debt Existing Assets New Assets BUDGET Allocation

Maintenance Stabilization Service R&R Capital 2015‐2016 2015‐2016

BEGINNING BALANCE 1,225,000$ ‐$ 1,059,240$ 1,800,000$ ‐$ 4,084,240$

SOURCES

RSC ‐ District 8,637,687 117,706 3,131,573 728,541 657,691 13,273,198 553,050$ RSC ‐ Battle Ground 2,230,584 33,587 1,807,750 317,726 224,851 4,614,498 192,271 Interest 26,000 ‐ ‐ ‐ ‐ 26,000 Bond Proceeds ‐ ‐ ‐ 2,000,000 ‐ 2,000,000 TOTAL SOURCES 10,894,271 151,293 4,939,323 3,046,267 882,542 19,913,696 745,321$

USES

O&M Admin Services (1,743,322) ‐ ‐ ‐ ‐ (1,743,322) O&M SCWMS Operations (7,460,027) ‐ ‐ ‐ ‐ (7,460,027) O&M BGFM Operations (477,500) ‐ ‐ ‐ ‐ (477,500) O&M RTPO Operations (1,213,602) ‐ ‐ ‐ ‐ (1,213,602) RSC Stabilization ‐ ‐ ‐ ‐ ‐ ‐ Debt Service ‐ ‐ (4,939,142) ‐ ‐ (4,939,142) Existing Assets R&R ‐ ‐ ‐ (2,800,828) ‐ (2,800,828) New Assets Capital ‐ ‐ ‐ ‐ (782,542) (782,542) TOTAL USES (10,894,451) ‐ (4,939,142) (2,800,828) (782,542) (19,416,963)

ENDING BALANCE 1,224,820$ 151,293$ 1,059,421$ 2,045,439$ 100,000$ 4,580,973$


Regional Service Charges, collected from Members and detailed in Table 4.1 above, total $17.888 million over the two-year budget period, or $0.745 million monthly.

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Appendix A – Organizational Chart

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Appendix B – 2015-2016 Clark County Contract Operator Budget – SCWMS and BGFM

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Appendix C – 2015-2016 Ridgefield Contract Operator Budget - RTPO

unt Nu Description

2015 Beginning

Budget

2016 Beginning

Budget Draft Budget

2015-2016 CommentsRevenuesCharges for Goods and Services

Total Charges for Goods and - - - Other Revenue407.0 Investment Interest 500 500 1,000 Investment income on reserves407.0 Other Revenue 786,830 741,507 1,528,337 Operator Contract with Alliance - RTPO

Total Other Revenue 787,330 742,007 1,529,337 Transfers

Total Transfers - - - Total Revenue 787,330 742,007 1,529,337

Expense Total Intergovernmental - - -

Debt Service Prnc: 0.7MGD Const2006 GOBonds 95,000 100,000 195,000 Principle payment GO Bonds Int: 0.7MGD Const2006 GO Bonds 59,815 55,775 115,590 Interest Payment GO Bonds Total Debt Service 154,815 155,775 310,590

Transfers Total Transfers - - -

Capital Outlays Total Capital Outlays - - -

Total Sewer Collection Expense 154,815 155,775 310,590 37 TreatmentPersonnel407.3 Salaries 160,000 115,875 275,875 2015 Salary includes retirement payout for

operator and new employee training period. Reduced in 2016 to account for retirement

Social Security 9,920 7,184 17,104 Medicare 2,320 1,680 4,000 State Unemployment 2,400 1,738 4,138 Overtime 5,000 5,000 10,000 Benefits/Medicare 28,100 22,542 50,642 Health Care 35,600 39,160 74,760 Healthcare 10% increase 2015 - 2016 Total Personnel 243,340 193,180 436,520

Supplies Operational Supplies 9,684 9,975 19,659 Portland CPI-U inflationary factor Uniforms 581 598 1,179 Fuel 3,844 3,960 7,804 Small Tools/Equipment 759 781 1,540 Chemicals 10,098 10,401 20,499 Total Supplies 24,966 25,715 50,681

Training Registration 5,500 5,500 11,000 Certification and training Travel Expenses 1,500 1,500 3,000 Total Training 7,000 7,000 14,000

Utilities Electricity 28,500 29,355 57,855 Portland CPI-U inflationary factor Natural Gas 546 562 1,108 Water/Sewer 3,453 3,556 7,009 Storm Water 911 938 1,848 Communications 2,513 2,589 5,102 Total Utilities 35,922 37,000 72,922

Operations and Maintenance Vehicle Maintenance 1,000 1,000 2,000 Annual maintenance Computer Software Support - 1,000 1,000 Other Operations/Maintenance 20,000 20,000 40,000 Annual and unexpected maintenance Total Operations and Maintenance 21,000 22,000 43,000

Services Sludge Hauling 47,580 47,580 95,160 Per contract for 156 loads Lab Analysis 1,000 1,000 2,000 Outside Professional Services 5,000 5,000 10,000 Consultant fees - As needed Total Services 53,580 53,580 107,160

Intergovernmental Permits-State Agencies 6,000 6,000 12,000 Annual permits Sludge Treatment-Clark County 65,000 65,000 130,000 Sludge analysis and treatment Solid Treatment - CRWD 20,000 20,000 40,000 Sludge treatment Lab Analysis - Clark County 35,000 36,050 71,050 $33,000 since 2012 Interfund Admin Services 115,707 115,707 231,414 Overhead per cost allocation plan Total Intergovernmental 241,707 242,757 484,464

Capital Outlays Total Capital Outlays - - -

Transfers Transfer to Equip Replacement 5,000 5,000 10,000 ER & R annual transfer to reserves Total Transfers 5,000 5,000 10,000

Intergovernmental Cash Transfer - CRWWD/DCWA 250,262 - 250,262 Cash transfer to DCWA Total Intergovernmental 250,262 - 250,262 Total Sewer Treatment Expense 882,777 586,232 1,469,009 Total Expense 1,037,592 742,007 1,779,599 Net Total (250,262) - (250,262)

Fund Balance00 Street Fund001.0 Fund Balance Available/Unreserved 356,262 106,000 106,000

Total Fund Balance 356,262 106,000 106,000 Net Fund Balance 106,000 106,000 106,000 O&M Reserves (60 days)

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Appendix D – 20-Year Planning Horizon – Operating Budget-Related Regional Services Charges

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Regional Asset / Project Name Scope of Project 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 PROJECT COST

1 Salmon Creek Interceptor

Middle Salmon Creek Interceptor Point Repair

Open excavation and short‐term bypass pumping to replace 20' of pipe. Couplings will connect the replacement section to existing interceptor. Permitting likely required for jurisdictional wetland boundary.

50,000$

Upper Salmon Creek Interceptor RepairRe‐line 2,525' of 21‐inch and 24‐inch concrete pipe to repair corrosion damage in Salmon Creek Ave east of I‐205.

740,000$

2 Klineline Interceptor

2a ‐ Regional Biofilter ‐ Upper Klineline Interceptor

Replace interim 2004 chemical system for BGFM and biofilter for St. John's Interceptor with new regionally‐sized biofilter sized for permanent odor & corrosion protection. Reduced operating costs for chemicals will be realized.

860,000$

3 36th Avenue Pump Station (PS)

36th Avenue PS Pump Replacement

Replace three 200‐HP raw sewage pumps and motors at the end of 20‐year useful life, complete piping modifications for safer handling of pumps.

900,000$

4 117th Street Pump Station (PS)

117th Street PS Capacity UpgradeReplace five raw sewage pumps, motors and variable frequency drives, install second engine generator.

9,300,000$

5 36th Avenue Pump Station Force Main

No projects currently programmed 0$

6 117th Street Pump Station Force Main

No projects currently programmed 0$

7 Salmon Creek Treatment Plant & Outfall (SCTP, SCTPO)

SCTP Programmable Logic Controller ReplacementReplace Programmable Logic Controllers installed with the Phase 3 Expansion Project (1996 era) at the end of 20‐year useful life.

1,300,000$

SCTPO Columbia River Outfall Pipe Replacement

Replace in‐water and on‐shore portion of the existing outfall pipeline at the Columbia River to address bank stability and long‐term discharge configuration (approximately 1,000 linear feet).

3,400,000$

SCTPO Phase 5 Expansion (Effluent Pipeline)Construct a new 6,200' 48‐inch outfall pipeline from the plant to approximately Lower River Road.

13,000,000$

SCTP Dewatering Equipment ReplacementReplace one existing belt filter press with a screw press to improve dewatering performance and address equipment age.

1,500,000$

SCTP Influent Screen ReplacementInstall two mechanically cleaned influent screens to replace existing 1998 units.

500,000$

SCTP UV System Replacement Replace existing unit with a new, more energy efficient system. 3,000,000$

SCTP Phase 6 ExpansionPhased plant expansion ‐ influent screen 3, primary clarifier covers, odor control system, aeration blower, aeration basin 7, secondary clarifier 5, RAS/WAS pump station 2, UV disinfection channel 2.

24,700,000$

SCTP Primary Sludge Pump ReplacementReplace existing eight 1998 primary sludge pumps and associated air compressors with lobe or hose style pumps for increased efficiency.

220,000$

SCTP Phase 7 ExpansionPhased plant expansion ‐ primary clarifier 5, aeration basin 8, anaerobic digester 3.

15,400,000$

8 Ridgefield Treatment Plant & Outfall (RTPO)

Ridgefield Treatment Plant DecommissioningDecommission the existing treatment plant facility at the end of asset useful life.

2,500,000$

9 Battle Ground Force Main (BGFM)

BGFM Valve & Vault RepairReplace or repair combination air vacuum valves & vaults, decommission air injection system, repair isolation valve & pig launching stations and install corrosion protection.

490,000$

BGFM Parallel Force MainConstruct second (parallel) force main (24‐inch diameter) from Battle Ground to connection point at Klineline Interceptor.

22,700,000$

TOTAL 100,560,000$

Appendix E – 20-Year Capital Plan

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Asset # Description Historical Cost Net Book Value Debt1 Salmon Creek Interceptor 2,888,352$ 699,222$ 2 Klineline Interceptor 6,595,237 5,719,626 3 36th Avenue Pump Station 3,132,843 2,317,165 4 117th Street Pump Station (aka Klineline PS) 18,202,874 16,086,790 30,793,983$ 5 36th Ave Pump Station Force Main 368,331 136,835 6 117th Street Pump Station Force Main 23,894,622 21,672,423 7 Salmon Creek Treatment Plant & Outfall 95,791,979 73,089,577 8 Ridgefield Treatment Plant & Outfall 7,251,763 4,850,547 2,771,244 9 Battle Ground Force Main 3,843,080 1,441,155 -

Total 161,969,081$ 126,013,339$ 33,565,227$

Appendix F – Debt Migration Strategy

Memo To: Finance Advisory Committee

From: Ken Andrews, CPA

Date: September 11, 2014

Re: Debt Migration Plan

PURPOSE: To refresh the Board on all Regional Assets transferring to the Alliance effective January 1, 2015, highlight the debt outstanding on those assets, and propose a recommended debt migration strategy for the treatment of each outstanding borrowing both by the Alliance and each Member. Strategic and financial opportunities for the Alliance and each Member were considered as each debt instrument and its disposition was reviewed. Issues or constraints were also considered, and well as other considerations. Finally, a recommended action plan for migration of eight debt instruments from Members to the Alliance is offered for Board consideration, as well as servicing of the remaining two debt instruments that would not migrate to the Alliance under this proposal. SUMMARY OF REGIONAL ASSETS AND RELATED DEBT: Below is a summary of the Regional Assets and the related debt. Regional Assets Three Members (City of Battle Ground, Clark County and City of Ridgefield) will transfer to the Alliance a total of $162 million of Regional Assets at January 1, 2015. Below is an overview of those assets, historical costs, and net book values and associated debt. DRAFT

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Related Debt Below is a table outlining the characteristics of each debt instrument outstanding on Regional Assets:

PWTF: Public Works Trust Fund (Department of Commerce) SRF: State Revolving Fund (Department of Ecology) LTGO: Limited Tax General Obligation

CONSIDERATIONS GIVEN TO DEBT MIGRATION: During the process of evaluating the debt migration, financial and strategic opportunities were considered, along with any issues or constraints relating to the transferring of the debt. Strategic and Financial Opportunities Overall, strategically it would benefit the Alliance to begin servicing debt from revenue collected from its own members and to begin establishing an Alliance credit history. In addition, financial accounting principles prescribe the matching of debt with related assets (if the Alliance owns the assets, it is best for the Alliance to also own the debt on those assets). By transferring the debt attached to the Regional Assets, this principle will be met. Specific strategic and financial opportunities unique to each of the types of debt instruments are given below. Loans. As noted above there are six Washington State Department of Commerce Public Works Trust Fund (PWTF) loans outstanding totaling $21 million and two Washington Department of Ecology State Revolving Fund (SRF) loans outstanding totaling $2 million. The transferring of these loans to the Alliance will allow the Alliance to begin developing a credit history, beneficial for possible future debt issuances, inherit the low interest rates currently being paid on these outstanding loans, and albeit minimal, earn interest on debt service reserves held until actually paid out. For the Members, benefits from transferring these loans to the Alliance include the removal of these loans from the financial statements of City of Battle Ground (CoBG), Clark Regional Wastewater District (District) and

1 - 7 CoBG PWTF 0.5% 7/1/2026 4,000,000 189,306 4,189,306 2,533,333 - 1 - 7 CoBG PWTF 0.5% 7/1/2025 10,000,000 476,201 10,476,201 6,064,757 - 1 - 7 District PWTF 0.5% 7/1/2028 8,000,000 439,756 8,439,756 5,894,737 - 1 - 7 District PWTF 0.5% 7/1/2023 1,000,000 51,733 1,051,733 473,683 - 1 - 7 District PWTF 0.5% 7/1/2024 10,000,000 487,097 10,487,097 5,367,216 - 1 - 7 District PWTF 0.5% 7/1/2025 1,000,000 53,545 1,053,545 578,947 - 1 - 7 District SRF 2.6% 1/1/2027 1,003,636 283,849 1,287,484 676,309 - 1 - 7 District 2005 Rev Bnds 4.5% (Avg) 12/1/2025 14,000,000 7,872,404 21,872,404 - 9,205,000

8 CoRF SRF 4.4% 1/30/2022 2,972,860 1,436,508 4,409,368 1,431,244 - 8 CoRF 2006 LTGO Bnds 4.38% (Avg) 12/1/2025 2,020,000 1,032,487 3,052,487 - 1,340,000 9 CoBG None NA NA - - - - -

TOTAL 53,996,495 12,322,886 66,319,382 23,020,227 10,545,000

* Over entire life of debt/loan since debt/loan inception.** District's revenue bonds are callable 12/1/15 and CoRF's LTGO bonds are callable 12/1/16.

Debt Remain Member Books

Debt Transfer to AllianceAsset #

Original Principal*

Original Interest*

Original Payments*

Debt/Loan Type

Maturity Date**

Debt/Loan Interest Member

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City of Ridgefield (CoRF), improving debt coverage ratios, overall financial position, and leveling out the cash outflows as debt service costs will now be included in Regional Service Charges (RSC) paid to the Alliance at a flat monthly fee. Bonds. As noted above, there are two bond series outstanding. The District has 2005 Revenue bonds outstanding with a principal balance at January 1, 2015 of $9.2 million, and CoRF has 2006 LTGO bonds outstanding with a principal balance at January 1, 2015 of $1.3 million. It has been determined that these bonds are not transferable to the Alliance due to restrictions in each bond’s authorizing documents and/or Official Statement (OS) language. Ideally, it would be recommended to transfer these bond series and achieve the same strategic and financial opportunities as the loans discussed above; however this is not legally possible. Issues or Constraints Loans. The research concluded, through our efforts and communications with legal counsel and external agencies, that the $21 million in PWTF loans and $2 million in SRF loans are fully transferable to the Alliance. The transferring of PWTF loans is relatively common. SRF loan transfers are not as common, and are handled on a case by case basis. The research did not indicate any complications that would arise from the transfer of either the PWTF loans or the SRF loans. Based on communications with the Department of Commerce and the Department of Ecology, as well as bond counsel, the related assets appear to be fully transferable. Bonds. Both the District’s revenue bonds and CoRF’s LTGO bonds are not transferable under each bond issue’s authorizing documents and/or OS. The bond resolution for the District’s Revenue bonds does not restrict the transfer of Regional Assets to the Alliance, as long as the source of revenue to service the debt is still in place (District sewer service rates). However the bond resolution does restrict the transfer of the revenue bonds to another entity because the bonds are backstopped by the District and its sewer service rate revenues to the bondholders holding the debt. Per legal counsel, the bond ordinance and OS for the CoRF’s LTGO bonds does not restrict transfer of the Ridgefield Treatment Plant & Outfall (RTPO) to the Alliance, but does restrict the transfer of the LTGO bonds to the Alliance because the debt is a general fund obligation of CoRF, backstopped by CoRF’s general revenues. Other Considerations Conduit Debt. Much consideration was given to whether the action of transferring debt to the Alliance would create a “conduit debt” obligation for the transferring Members. Conduit debt exists when the debt service obligation on one government’s debt is also a legal debt service obligation of another government, and thus the debt remains reported as a liability on both governments’ financial records. Review was performed, therefore, to ensure that the debt transferred to the Alliance would not also be required be reflected as debt on the transferring Member’s financial statements. First, the

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matter was reviewed with Alliance legal counsel, including review of like debt held by other municipal alliances and their member agencies. Next, the matter was reviewed with the Governmental Accounting Standards Board (GASB) where we obtained a verbal recommendation regarding proper treatment. Finally, the matter was reviewed with the local Washington State Auditor’s Office team. The consensus reached was that the transferred debt would not need to be accounted for both by the Alliance and by the Member transferring the debt. The SAO team also expressed appreciation that the Alliance and each of the four Members would treat the transferred debt consistently. RECOMMENDED ACTION PLAN: The Finance Advisory Committee (FAC) recommends the transfer of all low-cost state loans from Members (CoBG, District and CoRF) to the Alliance, fulfilling the matching principle of accounting, matching transferred debt with the transferred regional assets. Debt service on all these 8 low-cost state loans will be included in the RSCs billed monthly by the Alliance to the Members (CoBG and District). Funds will be restricted monthly in the Alliance’s Debt Service fund to pay the debt service on all loans timely at the due dates. Debt service on the District’s 2005 Revenue bonds will continue to be serviced directly by the District to the bondholders, consistent with debt service since issuance. The District will continue to restrict funds monthly in its Debt Service account to pay principle and interest on these bonds at the due date. Debt service on CoRF’s 2006 LTGO bonds, the sewer service portion only, will be serviced directly from the District to CoRF. Prior to scheduled due dates, the District will transfer to CoRF the debt service funds, with CoRF ultimately being responsible to pay all debt service to its LTGO bondholders. The District will continue to restrict funds monthly in its Debt Service account to pay principle and interest on these bonds at the due date. ACTION REQUESTED: Provide policy level direction regarding the recommendation to transfer eight low-cost Washington State loans (six PWTF and two SRF loans) totaling $23 million to the Alliance from Members at January 1, 2015, and going forward, include in monthly RSCs billed to Members the future debt service funding required for these loans.

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Appendix G – 20-Year Planning Horizon – Capital-Related Regional Service Charges

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Appendix H – 20-Year Planning Horizon - Total Budget Regional Service Charges

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Staff Report

Board Meeting of September 26, 2014 6b. Operator Report - Clark County Second Quarter 2014


Heath Henderson, P.E., Public Works Director 360-397-6118 ext. 4358 [email protected]

PURPOSE: This report covers the Salmon Creek Wastewater Treatment Plant operations through June 30, 2014. The attached Monitoring Report shows the monthly values for the key process parameters that are tracked. The report shows data for the period ending June 30, 2014. No permit violations occurred during this reporting period. The financial documents attached include the Operating Fund Second Quarter Budget Summary and the Repair and Replacement expenses through June 30, 2014. The Operating fund is at 74.7% spent through 75.0% of the budget period. The financial performance is as planned and no budget issues are anticipated. The breakdown of expenditures to budget by area is:

Lab 44.5% spent Maintenance 74.8% spent Biosolids 76.5% spent Operations 84.9% spent General Administration 68.2% spent

The Repair and Replacement fund is approximately 50% expended through the second quarter of 2014. Although the expenditures appear low, the projects are proceeding as planned. During the second quarter, construction contracts were awarded. All work is on schedule. ACTION REQUESTED: None, information item.

0

4

8

12

16

Influ

ent F

low

, MG

D

Salmon Creek WWTP

Influent Flow 2013

2014Design Flow 14.95 MGD

7.91 6.83 7.25

0

5

10

15

20

25

30

35

BO

D, m

g/l

Effluent BOD 2013

2014Permit limit 30 mg/l

7.8 5.7

11.3

0

5

10

15

20

25

30

35

TSS,

mg/

l

Effluent TSS

2013

2014Permit limit 30 mg/l

6.5 6.1 6.6

2013 2014 2013 2014 2013 2014 2013 2014 2013 2014January 8.04 7.32 6.9 8.0 7.1 8.0 6.5 5.8 3.2 3.8February 7.56 8.45 5.9 8.7 5.0 6.7 18.8 5.3 3.7 3.6

March 7.13 8.77 5.0 13.3 4.9 8.5 5.8 15.7 1.4 4.8April 7.13 7.91 7.0 11.3 6.3 6.5 11.6 9.3 1.3 3.2May 7.13 7.25 5.6 7.8 7.5 6.1 19.2 13.5 1.4 1.8June 6.94 6.83 5.7 5.7 6.2 6.6 33.5 10.4 1.4 0.3July 6.40 8.7 8.4 18.9 3.2

August 6.29 5.1 4.8 18.6 0.3September 6.89 4.1 4.6 16.3 0.4

October 6.83 5.3 6.5 7.0 0.4November 7.08 6.3 6.2 4.7 0.8December 7.29 5.8 6.0 5.6 1.0

BOD5 = Biochemical Oxygen Demand (5-Day)

TSS = Total Suspended Solids

Total Ammonia Monthly

MGD average, mg/l average, mg/l average, CFU/100ml average, mg/l

Influent Flow, Efflluent BOD5 Monthly Efflluent TSS Monthly Fecal Coliform Monthly

0

50

100

150

200

Feca

l Col

iform

, CFU

/100

ml

Fecal Coliform

2013

2014 Permit limit 200 CFU/100ml

10.4 9.3 13.5

0

4

8

12

16

20

Tota

l Am

mon

ia, m

g/l

Total Ammonia (as NH3-N) 2013

2014

Permit limit 18.7 mg/l

1.8 0.3

3.2

Jun-14 75% of biennium

9/17/2014 % Actual % Remaining % Actual % RemainingBudget Budget Term Expenses Spent Budget Budget Budget Term Expenses Spent Budget

Consolidated Fund 4580 Consolidated Fund 4580

Salaries and Benefits 2,595,995 75.0% 2,073,859 79.9% 522,136 Laboratory 535811 627,871 75.0% 279,422 44.5% 348,449Supplies 892,388 75.0% 621,088 69.6% 271,300 Maintenance 535812 1,704,075 75.0% 1,274,857 74.8% 429,218Services 2,851,059 75.0% 2,077,338 72.9% 773,721 Biosolids 535814 1,531,433 75.0% 1,170,882 76.5% 360,551Intergovernmental 213,676 75.0% 122,839 57.5% 90,837 Operations 535815 2,008,865 75.0% 1,705,385 84.9% 303,480Capital 0 75.0% 0 0.0% 0 General Administration 535819 680,874 75.0% 464,577 68.2% 216,297

Total $6,553,118 75.0% $4,895,123 74.7% $1,657,995 $6,553,118 75.0% $4,895,123 74.7% $1,657,995

Laboratory 535811 Operations 535815

Salaries and Benefits 408,785 75.0% 215,550 52.7% 193,235 Salaries and Benefits 415,895 75.0% 356,604 85.7% 59,291Supplies 57,204 75.0% 22,383 39.1% 34,821 Supplies 89,072 75.0% 113,852 127.8% (24,780)Services 161,882 75.0% 41,489 25.6% 120,393 Services 1,290,222 75.0% 1,112,091 86.2% 178,131Intergovernmental 0 75.0% 0 0.0% 0 Intergovernmental 213,676 75.0% 122,839 57.5% 90,837Capital 0 75.0% 0 0.0% 0 Capital 0 75.0% 0 0.0% 0

Total $627,871 75.0% $279,422 44.5% $348,449 Total $2,008,865 75.0% $1,705,385 84.9% $303,480

Maintenance 535812 General Administration 535819

Salaries and Benefits 1,075,934 75.0% 887,506 82.5% 188,428 Salaries and Benefits 280,178 75.0% 247,678 88.4% 32,500Supplies 329,166 75.0% 139,831 42.5% 189,335 Supplies 21,126 75.0% 21,302 100.8% (176)Services 298,975 75.0% 247,519 82.8% 51,456 Services 379,570 75.0% 195,597 51.5% 183,973Intergovernmental 0 75.0% 0 0.0% 0 Intergovernmental 0 75.0% 0 0.0% 0Capital 0 75.0% 0 0.0% 0 Capital 0 75.0% 0 0.0% 0

Total $1,704,075 75.0% $1,274,857 74.8% 429,218 Total $680,874 75.0% $464,577 68.2% $216,297

Biosolids 535814

Salaries and Benefits 415,203 75.0% 366,521 88.3% 48,682Supplies 395,820 75.0% 323,719 81.8% 72,101Services 720,410 75.0% 480,642 66.7% 239,768Intergovernmental 0 75.0% 0 0.0% 0Capital 0 75.0% 0 0.0% 0

Total $1,531,433 75.0% $1,170,882 76.5% $360,551

Clark County Public WorksSalmon Creek Wastewater Treatment System

2013/2014 Budget and Expense Summary (Operating Fund 4580)January 2013 through June 2014

Page 1 of 1

DESCRIPTIONReporting Category Amount Budgeted

Expenditures through

June 30, 2014Remaining

Budget Status as of Sept. 8, 2014Weishauf Burner Replacements for Boilers 003414 $50,000 $38,420 $11,580 Project complete.

Influent/Effluent Sampler Replacement/Redundancy 003415 $20,000 $19,356 $644 Project complete.

Biennial SCADA Update/Upgrade Package 003416 $20,000 $48,044 -$28,044Fanless computer panels purchased; Consultant is assisting with reprogramming (minor amount of consultant services is pending)

36th Ave PS PLC Upgrade/Replacement 003417 $30,000 $25,636 $4,364 All major equipment purchased; county staff currently installing.

Replace Air Piping (PVC) and Diffusers 003447 $12,000 $13,604 -$1,604 Project complete.

Repair Gardner-Denver Blower 003448 $12,000 $11,572 $428 Project complete.

Upgrade Interior Lights w/LEDs for Effieciency 003449 $30,000 $30,000Project cancelled due to increased material costs; no longer cost effective.

Misc. Small Projects 003418 $26,000 $26,000No activity at this time. Minor projects completed within the plant's operating budget.

Electrical System Backup 003419 $630,000 $265,142 $364,858Contractor working on installation. Generator delivered and is set in-place.

HVAC System Repair and Replacements 003420 $120,000 $0 $120,000Contractor completed work the week of Sept. 1; final invoice pending ($93,836).

Outfall Pipe survey Monitoring 003421 $30,000 $8,273 $21,727Consultant and county survey staff preparing for another survey in Sept 2014.

Repair SC Interceptor Pipe 003422 $100,000 $43,837 $56,163Condition assessment work completed; consultant design contract ($29,700) will soon start.

Service Turblex Blowers 003425 $50,000 $49,988 $12 Project complete.

Retrofit 117th St PS Pumps 003423 $60,000 $65,788 -$5,788 Project complete.TOTALS $1,190,000 $589,660 $600,340

9/17/2014

Fund 4583 Repair and Replacement Expenditures for 2013-2014

Clark County Public Works SALMON CREEK TREATMENT PLANT

2013-2014 REPAIR AND REPLACEMENT FUND EXPENSES through June 30, 2014

Page 1 of 1


6c. Operator Report – Ridgefield Second Quarter 2014


Kirk Johnson, Finance Director 360-887-3557, x 220 [email protected]

PURPOSE: This report covers the Ridgefield Wastewater Treatment Plant (WWTP) through the second quarter of 2014. The attached graphs show the monthly values for the key process parameters that are tracked per the City’s NPDES Permit for the WWTP. The report shows data for the period ending June 30, 2014. Routine operation of the WWTP occurred throughout the reporting period and the WWTP operated within all Permit parameters. The financial document attached includes the WWTP Fund Budget and Expense Summary for the second quarter of 2014. The operating expenses, including capital outlays and debt service payments for the quarter, ended under the budgeted amount at a combined 39.5% of budgeted expenses. Ridgefield staff would be happy to answer any questions the Board may have or provide additional information as requested. ACTION REQUESTED: Discussion regarding operation of Alliance facilities.

0.29 0.39

0.41

0.33 0.27

0.25

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

Influ

ent F

low

, MG

D

Ridgefield WWTP Influent Flow 2014

Design Flow 0.700 MGD

4.20

4.85

4.71

5.04

6.84

7.43 0

5

10

15

20

25

30

35

BO

D, m

g/l

Effluent BOD Monthly Average

2014

Permit limit 30 mg/l

5.80

6.25

5.73 6.98

11.53

13.36

0

5

10

15

20

25

30

35

TSS,

mg/

l

Effluent TSS Monthly Average

2014

Permit limit 30 mg/l

January

February

March

April

May

June

July

August

September

October

November

December

BOD5 = Biochemical Oxygen Demand (5-Day)

TSS = Total Suspended Solids

Total Ammonia Monthly

MGD average, mg/l average, mg/l average, CFU/100ml average, mg/l

Influent Flow, Effluent BOD5 Monthly Effluent TSS Monthly Fecal Coliform Monthly

2014 2014 2014 2014 20140.290.390.410.330.27

4.204.854.715.046.847.430.25

5.806.255.736.98

11.53

2.004.008.004.0015.0010.0013.36

0.370.300.300.300.300.32

2.00 4.00

8.00

4.00

15.00 10.00

0

20

40

60

80

100

120

Feca

l Col

iform

, CFU

/100

ml

Fecal Coliform Monthly Average

2014

Permit limit 100 CFU/100ml

0.37 0.30 0.30 0.30 0.30 0.32

00.20.40.60.8

11.21.41.61.8

22.22.42.62.8

33.23.43.63.8

4

Tota

l Am

mon

ia, m

g/l

Total Ammonia (as NH3-N) Monthly Average 2014

Permit limit 1.4 mg/l

Salaries and Benefits 182,871$ 50% 101,532$ 55.5% 81,339$ Supplies 34,850$ 50% 12,119$ 34.8% 22,731$ Utilities 41,107$ 50% 17,439$ 42.4% 23,668$ Operations and Maintenance 20,450$ 50% 11,435$ 55.9% 9,015$ Services 85,000$ 50% 22,320$ 26.3% 62,680$ Intergovernmental 258,707$ 50% 111,847$ 43.2% 146,860$ Capital Outlays 355,000$ 50% 3,563$ 1.0% 351,437$

WWTP Debt Service (P&I) 384,200$ 50% 258,046$ 67.2% 126,154$

Total 1,362,185$ 50% $538,301 39.5% 823,884$

2nd Qtr 2014 Budget and Expense SummaryRidgefield Wastewater Treatment Plant

Ridgefield Public Works

WWTP Fund Description Budget Remaining Budget% SpentActual

Expenses% Budget

Term

Page 1 of 2


6d. Transition Work Program Update


John M. Peterson, P.E., District General Manager Ken Andrews, CPA, Alliance Treasurer

Tammy Lecomte, District Senior Admin Assistant

360-993-8819 360-993-8824 360-993-8823

[email protected] [email protected] [email protected]

PURPOSE: The goal of the transition work program is to address all of the transition activities needed to prepare the Alliance for its “go-live” date of January 1, 2015. Administrative Lead (District) staff continues to develop the transition work program in close coordination with the Standing Committees and Alliance legal counsel, reviewing all work in meetings twice per month. This staff report provides a monthly Board of Directors update for the ongoing activities. Work is ongoing for the transition activities in all areas. Highlights of major tasks include the following: Asset Transfer and Franchise Agreements

• All asset transfer and franchise agreements are approved and executed. • Recording of all real property-related documents from the asset transfer agreements is complete.

Administrative Framework

• All administrative framework items have been developed and are presented in the current Board agenda. Three of the items were approved at the August Board meeting and three final items are presented for approval at today’s meeting.

Insurance Requirements

• A staff report was presented to the Board on August 15 to depict the overall Alliance insurance framework.

Capital Plan

• The draft Capital Plan has been presented to the Board in a five touch process from March through July. The Capital Plan will be updated and finalized after Board review and direction regarding the Capital Budget.


G:\DCWA\Board Meetings\2014\092614\6d 092614 Board Staff Report - Transition Work Program Update.docx Printed: 9/17/2014 12:30 PM

Page 2 of 2

Permit Transfers • WSDOT. The transfer of WSDOT permits and franchise has been completed. • Ecology. The transfer of Ecology NPDES waste discharge permits is in progress. Requests for

transfer of both the Ridgefield and Salmon Creek permits have been submitted. District staff met with Ecology on August 19 to facilitate update of the permits.

• DNR. Requests to transfer the aquatic lands easements for both the Salmon Creek and the Ridgefield treatment plant outfalls have been submitted.

• SWCAA. Research is ongoing with SWCAA to understand the form and process for transfer of the air discharge permits associated with the two treatment plants.

• BNSF. Staff will engage BNSF in the coming weeks to transfer the easement related to the Clark County outfall crossing of the railroad, immediately west of the treatment plant site.

Capital Budget

• The Capital Budget document will incorporate the work required to deliver the projects from the Capital Plan. The Capital Budget will also include revenue and expenditures related to debt service on existing assets and financial policy compliance in order to provide a complete Capital Budget meeting all financial requirements related to management of capital assets. Board engagement on the Capital Budget will be important in determining the level-of-service, risk and cost profile that is acceptable to the Alliance.

Operating Budget

• Staff has been working to define the basic approach to the 2015-2016 Operating Budget with the understanding that several changes from historical practice will need to be incorporated under the new Alliance framework. A separate staff report is provided for the Board this month, which includes the first full draft for the Operating and Capital Budget. Board engagement on the overall budget will be important in determining the level-of-service, risk and cost profile that is acceptable to the Alliance.

Public Works Assistance Account Funding Appeal • Based on direction provided at the August Board meeting, Administrative Lead staff has updated

the attached letter for Board review regarding funding of the Public Works Assistance Account. Staff will plan to make progress on all activities required to be in place for the January 1, 2015 Alliance “go-live” date. Substantial progress has been made and important work must be completed in the remaining months of 2014 to complete the transition work program. ACTION REQUESTED: Discussion and policy level guidance for the various transition work program activities.

8000 NE 52nd Court Vancouver, WA 98665

360.993.8823 www.DiscoveryCWA.org

September 26, 2014 Governor Jay Inslee Office of the Governor PO Box 40002 Olympia, WA 98504-0002 Senator Don Benton Representative Monica Stonier Representative Paul Harris 17th Legislative District 17th Legislative District 17th Legislative District PO Box 40417 PO Box 40600 PO Box 40600 Olympia, WA 98504-0417 Olympia, WA 98504-0600 Olympia, WA 98504-0600 Senator Ann Rivers Representative Brandon Vick Representative Liz Pike 18th Legislative District 18th Legislative District 18th Legislative District PO Box 40418 PO Box 40600 PO Box 40600 Olympia, WA 98504-0418 Olympia, WA 98504-0600 Olympia, WA 98504-0600 Senator Annette Cleveland Representative Sharon Wylie Representative Jim Moeller 49th Legislative District 49th Legislative District 49th Legislative District PO Box 40418 PO Box 40600 PO Box 40600 Olympia, WA 98504-0418 Olympia, WA 98504-0600 Olympia, WA 98504-0600 RE: Public Works Assistance Account Critical to Local Residents in Your District Dear Honorable Governor and State Legislators: The Discovery Clean Water Alliance is a newly formed, Governor’s 2013 Smart Communities Award-winning regional partnership designed to provide reliable wastewater transmission and treatment service at an affordable price to the approximately 100,000 residents of our service areas and your legislative districts. As the Alliance Board of Directors, we are writing to request your support to reinstate funding of the Public Works Assistance Account (PWAA) in the 2015 legislative session. This is a critical component of our ability to maintain and expand regional wastewater infrastructure to cost-effectively meet the needs of current and future generations of local residents in the communities you represent. We are the team charged with on-the-ground delivery of this vital service, and the following factors form the basis of our request:

September 26, 2014 Page 2

• No Funding Program More Effective. The PWAA is the preferred capital funding program in our state. The combination of low-interest rates and reasonable security requirements allows us to best leverage every dollar paid by local residents through their sewer bills. See the comparison below of a $20 million project funded by PWAA vs. a sewer revenue bond at market rates. The PWAA option allows us to deliver the same project at a cost $11 million lower than bonding. To be sure, PWAA makes local government more efficient and effective.

• Funds Put Our Community to Work – Local Success Story Before Funds Diverted. The $20 million PWAA funding of the Discovery Corridor Wastewater Transmission System allowed a critical regional infrastructure project to move forward. This funding was secured in 2011 and 2012, immediately before the diversion of funds in 2013. This project is currently in construction, providing jobs to local residents employed by Battle Ground contractor Tapani, Inc. and opening up hundreds of acres of employment lands for development along the critical I-5 corridor.

Construction crews at work on the Discovery Corridor Wastewater Transmission System project

• More Priority Projects Waiting for Funding. As a Board, we are currently developing the first Capital Plan for the Alliance and have identified a base of over $100 million of investment needed for repair and expansion of the regional sewer system. Our ability to cost-effectively deliver this work will depend on the availability of the PWAA as a viable program going forward. On behalf of the residents we jointly serve, your help is needed to restore funding for this essential program.

Salmon Creek Interceptor Repairs Two vital projects are essential to maintain the integrity of the Salmon Creek Interceptor regional pipeline. One project will replace a damaged section of the interceptor pipe, reducing the potential for environmentally harmful failure in this location. Another will re-line approximately 2,500 feet of pipe originally installed in 1975 that is showing advanced corrosion.

Rebar Showing at Failure Location


Raw Sewage Pumps – End of Life

Battle Ground Force Main Valve and Vault Repairs This project will ensure the Alliance’s ability to continue providing reliable and predictable service to the Battle Ground area by addressing extensive deterioration of valve and vault structures along the nine-mile length of the Battle Ground force main.

36th Avenue Pump Replacements This critical work will ensure reliable and effective transmission of flow to the Salmon Creek Treatment Plant with the replacement of primary raw sewage pumps and motors. Existing pumps were installed approximately 20 years ago and are now at the end of useful life. The pumps have experienced accelerated deterioration due to chronic vibration and related operating difficulties, and failure could ultimately cause damaging overflows of raw sewage.

Columbia River Outfall Pipeline Replacement and Expansion Significant bankside erosion is affecting the long-term stability of the Columbia River outfall from the Salmon Creek Treatment Plant. This essential project will replace the in-water and on-shore segment of the outfall pipeline to address the condition of the 40-year-old pipe. Additional future work is also necessary to install approximately 7,200 feet of new outfall pipeline and a new in-water diffuser assembly.

Valve Corrosion

Existing Outfall Installation – Low Water Aerial View of Outfall Area – 1994 Aerial View of Outfall Area – 2010


We understand that balancing the needs of state government is difficult and we appreciate your dedication to public service. We also understand the significance of addressing critical needs locally, and the importance of PWAA funding to serve our residents. Your leadership in this area is essential to the environmental health and economic well-being of our community. Sincerely, Ron Onslow Tom Mielke Chair, Board of Directors Vice-Chair, Board of Directors Discovery Clean Water Alliance Discovery Clean Water Alliance

Mayor Commissioner City of Ridgefield Clark County Shane Bowman Neil Kimsey Board of Directors Secretary, Board of Directors Discovery Clean Water Alliance Discovery Clean Water Alliance

Mayor Commissioner City of Battle Ground Clark Regional Wastewater District C: Kendee Yamaguchi, Public Works Board Executive Director

Documents

Special Board of Directors Agenda · September 26 Consent Agenda. 7. Draft 2015-2015 Capital Budget Discussion: Ken Andrews presented an overview of the draft 2015-2016 Capital Budget