[0:03] Okay, good morning. I'm Tommy Wells on the chair of DC Water, the District of Columbia Water

[0:12] and Sewer Authority. This is our 249th meeting of the Board of Directors. It's Thursday,

[0:17] January 3, 2019, and it is 937. So with that, let's call the meeting to order and we'll

[0:26] I have a roll call, Ms. Manley.

[0:28] Chairman Wells.

[0:29] Here.

[0:29] Washington Bond.

[0:30] Here.

[0:30] David Franco.

[0:31] Here.

[0:32] Ellen Boyman.

[0:33] Here.

[0:33] Crystal Brumphill.

[0:34] Here.

[0:35] Vivignia Baxter.

[0:36] Here.

[0:36] For River Cassieri.

[0:37] Here.

[0:37] Bonnie Kirkling.

[0:38] Here.

[0:39] And Jane Spenderson.

[0:40] Here.

[0:40] We have a call.

[0:41] Great.

[0:42] Thank you very much.

[0:43] And can I get a motion to approve the December 1st, 2018 and December 19, 2018, 16th, the 16th Special Meeting

[0:52] Minutes?

[0:53] Some moved.

[0:54] Second.

[0:54] Okay, move to second, any discussion?

[0:57] All in favor say aye.

[0:59] Aye.

[1:00] All opposed?

[1:00] Minutes are approved.

[1:02] All right, Chairman's overview.

[1:05] Just want to note that I'm not sure when we do this Ms.

[1:11] Manley, but we'll be saying goodbye to two of our board members.

[1:14] Do you want to do it now?

[1:16] All right, let's do it now.

[1:17] This is, again, you know, it's the nature of public service,

[1:22] the nature of boards and such that you have terms and there's elections and we come and go,

[1:29] but I want to say that I'm a special thank you and you'll join me in the well in a moment to

[1:35] James Paterson from Fairfax County and of course Nick Majet from Prince George's County that

[1:44] where is Nick? There he is. But there he is. That have service well. We are one of the premier,

[1:52] if not the premier water utility and sewer utility in the country, if not the world.

[1:57] And it really requires thoughtful leadership.

[2:00] And on behalf of the District of Columbia and our government that the way the governments

[2:07] have worked together is reflected in the manner in which the representatives from each jurisdiction

[2:16] conduct themselves and provide leadership.

[2:18] And I don't think you could have a better model anywhere of joint leadership in serving our joint interests.

[2:24] And we are so appreciative of your work and if you'll join us in the well.

[2:29] So I'm

[2:53] going to present you with this really beautiful water drop that I guess is long.

[3:02] I don't know if you want to work with it, if you see water is life.

[3:07] And that's not metaphorical, that's real.

[3:10] And that's one of the three times that you'll have that experience.

[3:14] And so I want to thank you.

[3:16] And we'll take a picture.

[3:19] Is

[3:24] there anything you want to say about your?

[3:26] I just, well, I want to say, you know what I had to say,

[3:30] with the reps we had to warm.

[3:32] But to, again, I like to reiterate that it's been a real honor,

[3:36] to sort of reward the people who have been here.

[3:38] And this is a more classic in front of us.

[3:42] And I think the bill or the bill is done a fantastic job

[3:45] with one of the protestors.

[3:48] So, I would just say, you know,

[3:51] I think it's important for players to move on to a different role somewhere that's been a pleasure to be back here for a little bit.

[4:06] Thank you.

[4:13] Now, often, when there's only a few of you, that is on the board at any given time.

[4:18] But when we have a civil engineer to share the expertise leadership, it really is quite a

[4:25] young idea that your jurisdiction shares with the rest of us and you really monitor that

[4:31] and the best of your profession.

[4:32] And certainly your leadership, your vice counsel, and as I don't know if the audience recognized

[4:38] it, but as Board Member Plot brought up, also, for some of you when you give your reports,

[4:43] which could otherwise be quite dry, so that's what we want to thank you very much.

[4:49] We'll do our picture.

[4:56] Then do anything you want to share.

[4:58] Lynn will share that.

[5:00] In January, it's always humorous. I'm just echoing what makes that it's been a pleasure serving with such talented board members around the city. Here's I've been on board for my first time. I just appreciate work with all of you all. It's a dedication of mine to serve the community. And then the staff, you see what I'm trying to think is. Being in the business for my whole career is still in the dedication at all.

[6:10] Okay. Next we will go through committee reports. Let's start with finance and budget committee.

[6:16] Board Member March.

[6:19] Thank you.

[6:20] The Finance and Budget Committee met on Tuesday, December 16, 2018, at 11 a.m., committee members and attendants included Sarah March and Chairman Wells.

[6:32] The meeting began with the November 2018 Financial Report, Mr. Brown, went over operating revenues, expenditures and capital disbursements.

[6:45] Approximately 16.7% of the fiscal year is completed.

[6:49] Operating revenues were at about 19.6% of the budget.

[6:53] Operating expenditures around 14.4% and capital disbursements were along the lines of 17.4% of the budget.

[7:05] Mr. Brown, note it, explain the favorable budget due to quarterly payments by the federal government and wholesale customers.

[7:13] He also noted that the district has paid the November Billing of 2.5 million in December,

[7:19] and the variance in personnel services which was partially attributable to the absence

[7:24] of the employee Marant and bonus payments, which will be reflected next month's report.

[7:29] Mr. Brown also noted that at this early stage in the fiscal year, except for the state

[7:34] at revenue and dispersement variances, there are no other significant variances to report.

[7:40] Next, Mr. Brown, a price committee of the fiscal year 2020 budget recommendations that

[7:46] will be presented for the board for review in 2019.

[7:50] And he also mentioned that the fiscal year 2018 is not audited as underway and expect

[7:54] to be completed in December 2018,

[7:59] moving to the next page.

[8:03] So in terms of the capital improvement program, Mr. Brown provided an overview of the various

[8:09] were completed by the board committees, there were three scenarios that were presented,

[8:13] the current baseline of 4.1 million, a modified baseline ramp up of 5.0 million and full asset

[8:19] management of 6.5 million.

[8:22] He went over the financial plan scenarios that were developed by running each capital

[8:27] scenario through financial plan models so that we could understand the impact on customer

[8:32] rates and other financial matters.

[8:35] He discussed, Mr. Brown discussed, the value of the AAA rating and the impact it has on

[8:39] customer rates. He quantified that the approximate value of a AAA rating would save DC water

[8:45] customers about $19 million over a 10-year period when compared to the next highest rating

[8:49] of AA+. He showed a table that discussed how DC water compares to other AAA and AA

[8:58] rated companies within the water and sewer industry using various metrics, including debt ratio,

[9:03] outstanding debt levels, coverage ratio, debt service as a percent of total revenues, days

[9:07] on cash on hand, an average bill as a percent of medium effective buying income.

[9:17] Ms. Match, I guess I question why these utilities were chosen for comparison to DC water.

[9:26] Mr. Brown explained these utilities are also on the higher end of the credit rating like DC

[9:29] water, and Mr. Gattis added that the utilities were chosen are some of the finest run utilities

[9:36] in the U.S. and since we consider ourselves within that same light, it was fitting that

[9:41] we compared ourselves to them.

[9:45] So, I also then asked if the services provided by the Selected Utilities Included Stormwater

[9:49] drinking water in sewer since the DC water rates included all three, Mr. Ran responded

[9:54] that he would provide that information to the committee.

[9:58] and Ms. Maatchaf.

[10:00] I also, or I asked also if there were other factors such as cost of energy that influences the affordability in various areas and what their impact might be. Mr. Brown suggested the closest metric would be customer's average bill is a percent of median household income. The next item discussed, Mr. Brown noted that a number of days of cash on hand, which is the number of days that an organization can continue to pay its operating expenses given the amount of cash available, has been at approximately 260 days from fiscal year

[10:29] 15 through 17. The total cash on hand for these fiscal years were between $192 million to $209 million

[10:38] and included the REIT Stabilization Fund. Mr. Brown explained that 250 days is considered

[10:43] a best practice for triple-lay rating agencies and that the current DC water policy is to keep

[10:48] 120 days of cash on hand. Mr. Brown shared that management anticipates

[10:54] recommending that the board adopt a policy that holds DC water to the 250 days of cash

[10:58] on hand. He noted that this could be accomplished either through hearing contributions or

[11:04] plan contributions that do not include the rate stabilization fund. Mr. Brown stressed the

[11:09] importance of the days of cash on hand and caution that if we hold the ending cash balance

[11:16] at 140 million per the court for the policy as operating expenditures, the days of cash on hand

[11:25] and will fall and may result in additional funds that are drawn from the rate stabilization fund.

[11:31] Mr. Brown used, went over how the DC water retail rates within without district fees and

[11:37] the DC water cap customer rates compared to other large utilities.

[11:41] Mr. Brown reviewed the projected annual water and sewer rate increases and

[11:44] customer impacts for each of the three scenarios from fiscal year 19 to 2018.

[11:49] You know that fiscal year 19 and 20 rates of 13% and 5% respectively are the same for all three scenarios.

[11:55] The annual rate increases for the remaining future years range from 5 to 8 percent for

[11:59] the baseline, 6 to 10 percent for the modified and 9 to 13 percent for asset management.

[12:05] E for the review, the related impacts on the average residential, multi-family, and commercial

[12:10] customer categories.

[12:17] Regarding the average customer bill under each scenario, I required as to whether the different

[12:21] scenarios would have potential impact on DC water's bond rating, just to round explain

[12:26] that they could in that additional debt would mean more debt service and this would drive

[12:30] up the cost of the water and the sewer bills. Should that impact affordability then there

[12:36] could then be further impact on our bound rating. Mr. Brown highlighted DC Water's commitment

[12:42] to its community in various strategies and initiatives undertaken to ensure public outreach

[12:47] and customer engagement. He acknowledged that the district's water and sewer infrastructure,

[12:51] which has served as well for over 100 years is now showing its age.

[12:55] You know that the need for DC water to invest more than $4 billion in utility systems

[13:00] to meet federal mandates and suggest that this may still not be enough.

[13:05] While these investments require rate increases, they will also boost the local economy

[13:09] and provide jobs in other quality of life benefits.

[13:12] An example was given of, where you can see these benefits,

[13:17] benefits at the Wharf and on the Anacostia River front.

[13:22] Mr. Brown shared the strategies to engage the customer and highlight what DC Water has been

[13:27] doing to benefit residences and educate them on the consequences of not investing in infrastructure.

[13:35] Excuse me.

[13:38] Mr. Wells inquired on how DC Water accounts for the variability in drinking water charges.

[13:42] Mr. Brown shared that DC Water tries to anticipate and mitigate those risks by making assumptions

[13:47] in the financial plan. He noted that DC Water's plan assumes an increase in overall cost

[13:52] and a 1% reduction in consumption each year as that has been the trend over the past several years.

[13:58] Mr. Well, Chairman Welles asked if the U.S. Army Corps of Engineers is planning

[14:02] any substantive changes in their rates since that is what they used to fund capital investments.

[14:07] Mr. Brown responded that there will be an increase in investments based on conversations with the

[14:11] adquaduct. Mr. Gatt has said that DC Water is in concert contact with Washington,

[14:16] in Ecuador and the U.S. Army Corps of Engineers, and that DC water has a pretty good handle

[14:20] on what is going on with their capital program.

[14:24] I asked with regard to consequences of not investing adequately if DC water does not

[14:29] implement the full capital asset management pack, the financial impacts, or potential failures

[14:35] might be missing ground acknowledge that, well, it's difficult to quantify, in most cases,

[14:39] it's cost avoidance.

[14:41] And he added that the budget and engineering teams are working to include information for

[14:45] discussion with the committees as part of the budget review process.

[14:49] Mr. Wells wanted to know the plan for community outreach and whether there is anything different

[14:53] being done with the city administrator's office and the mayor's office regarding the budget

[14:57] presentation and D.C. Waters capital needs.

[15:00] Mr. Brown responded that D.C. Water is planning to do outreach to the city, specifically regarding the condition of D.C. Water's assets. You noted that D.C. Water has heard a lot from the stakeholder alliance regarding clean rivers and pervious area charge, and the district's right away acknowledging that, in most cities, there isn't such a charge. Mr. Ramsey, the community outreach has not been finalized, and that D.C. Water's marketing communications department, in association with the customer service department, are working to determine the most effective and appropriate way to reach

[15:29] the community.

[15:32] Hearing no further business, the meeting was adjourned at 11.59.

[15:36] That completes the report.

[15:39] Thank you very much.

[15:40] Any questions for board?

[15:42] Mr. Chair, I have a question if I might for our CFO and that is, do you anticipate that

[15:48] the current federal shutdown will impact our quarterly federal payment?

[15:52] Thank you for asking that.

[15:54] I actually had some materials that I wanted to share with the board.

[15:57] We received an email message Wednesday, January 2nd, which was yesterday, from an individual at the Bureau of Fiscal Service with the Treasury, and it states in part, the DC water and sewer payment will not fully be remitted as planned for the second October, I'm sorry, excuse me, the second quarter of 2019 due to the shutdown of the federal government and the potential creation of anti-deficiency act violations, the Department of Treasury and capacity of collector and remitter for the federal government will only collect and remit approximately

[16:27] 10 and a half million of the 16 and a half million owed to DC water and sewer authority.

[16:33] The collection of the charges is legislatively mandated, excuse me.

[16:38] However, it's the opinion of the council that the Anti-Deficiency Act supersedes this reimbursement directive.

[16:44] So of the approximately 16 and a half million dollars that we anticipated to receive,

[16:49] we will only receive 10 and a half million dollars.

[16:51] I don't think that that will have a significant impact on our cash flow.

[16:54] So obviously it does affect us.

[16:58] Thank you.

[17:00] It brings up the interesting question, is there a time from non-payment when we cut someone's water off?

[17:13] I'm not trying to make news today, but I don't know in terms of what's-

[17:27] In terms of how long we carry non-payment, let's go to the absurd or the furthest out, how long can we carry the federal government before it creates a fiscal weakness to the enterprise?

[17:46] I mean, if it's $5 million, a quarter, $15 million by the end of the year, I mean, it would probably be a stop at the top of my head, I mean, approximately a year before it begins to be a real problem.

[18:02] I mean, that would be a shortfall of about $20 million and then we'd have to have a conversation on how to move forward.

[18:09] Is that included there in previous service charge, everything altogether?

[18:13] It does, yeah, there are group bill and that includes all of their charges.

[18:17] Okay, but board member Franco?

[18:20] Are we entitled to late payment fees in the federal government?

[18:26] Like the District of Columbia University payments, the federal bill is what's called a group bill.

[18:33] Because the federal government pays for multiple locations under a group bill.

[18:38] Well, as practice, we have not charged late payments for group bills that are late, including the District of Columbia.

[18:48] By we reconsider that practice with the federal government, in this particular instance.

[18:53] We certainly will, thank you.

[18:54] Frishburg, small comments on the written report under the achievement, achievement management.

[19:02] I think it's asset management, is a missing word in there.

[19:06] And then I think the numbers you have should be billions, not millions, I'm hoping, right?

[19:14] Our baseline, 4.1 million, yes, excuse me.

[19:21] And more significantly, the conversation that you had about the board policy with respect

[19:28] to cash on hand and the bond rating expectation of 250 days.

[19:34] Is that a proposal that's coming back to the board or is that or so what's the timeline that you're thinking about bringing that to the board?

[19:45] It will be the spring likely with the budget.

[19:48] I mean, I think what I wanted to do is start the conversation with the board with the committee and then the board about days of cash and how the great stabilization fund plays into that.

[20:00] We're working on the budget proposal now and working to ensure that we have 250 days cash, and ideally that would be reflected in board policy that is aligned with the budget. So I anticipate that's a February or March timeframe. And then a similar question on the outreach plan, if I know it's not your domain, but it was noted that that plan is coming. And what's the timeline there?

[20:29] and that, I guess it's particularly sensitive with respect to the sort of February, March timeline for the budget consideration.

[20:39] Sure, so we're roughly coincide with the budget.

[20:44] We have had conversations about outreach to, particularly the District of Columbia.

[20:51] I mean, I have a meeting next Thursday with the budget director, with the Council budget director.

[20:58] So, we have begun some initial conversations.

[21:01] I think this is going to be a, this is not something that's just one and done.

[21:07] This is something that we have to engage in daily and weekly.

[21:11] And so, we've begun that process and I anticipate that that will be ramped up as we release

[21:16] the FY20 proposed budget.

[21:19] I just want to reiterate the previous conversations about engagement, particularly at the council

[21:27] level on some of the core infrastructure issues and even separate from the price tag.

[21:34] I think starting engagement at the moment where you're having a conversation around the

[21:40] price tag is undermines the ability for folks to fully absorb some of the underlying infrastructure

[21:47] issues and so sequentially it would be ideal if we were in a position to be already having

[21:54] that conversation at a much richer level so that people have that as a foundation before

[21:59] we get to the budget conversation.

[22:03] So if I could add, your point is well taken and you're exactly right.

[22:09] We have, and as Matt stated as well and he's correct as well, we have started those conversations

[22:14] internally.

[22:15] Here in the month of January we will begin that engagement with a number of different stakeholders,

[22:22] which does include council members, the mayors, the mayor and so forth and so on.

[22:30] So this is going to be a campaign and it will be one that will be ongoing.

[22:34] So as Matt stated, we don't want it to be a one and done.

[22:38] This is about relationship building as well and everyone understanding

[22:42] what we have to deal with on a day-to-day basis and what our challenges are,

[22:47] but also just overall.

[22:48] We do this every single day already, but we will now be what our team calls being more

[22:58] surgical about it as well and pinpointing the different things, but we're constantly

[23:04] in contact and building those relationships and so forth and so on.

[23:09] But we will now make it a full-blown campaign where we are targeting different stakeholders

[23:14] for different reasons and so forth and so on.

[23:17] And so your point is well taken and that does start here in January.

[23:21] Thank you.

[23:21] You're welcome.

[23:26] Yes.

[23:27] I want to note that we've been joined by Tony Giancola.

[23:30] By phone.

[23:30] Tony, you have a question?

[23:32] I do.

[23:33] I should

[23:39] have on the amount of cash on hand we should maintain.

[23:43] I like to know

[23:48] the fact that we have not really drawn from the late stabilization fund.

[23:52] And yet our cash on hand has been going up.

[23:55] So determining a appropriate level for the cash on hand I think is a discussion we need

[24:01] You do need to pursue and give as much time as possible to do that.

[24:06] I think the concern I have is that since we haven't drawn from the rate stabilization

[24:10] fund, and in fact we've had high ratings in our bond market for at least two years as I

[24:16] recall, you know, maybe as to 16 number is something that's a little weak and could be lower,

[24:23] which is of course dealing with the issue of eventually reducing our rate structure certainly

[24:29] in our water rates. The second item has to do with the federal government, a water cut-up.

[24:36] Obviously, we don't want to cut up federal government. We want to get more, but it may be

[24:40] proven for us to develop some sort of press release that we're discussing that, and then

[24:46] when we would consider shutting out water to the federal government because of non-payment

[24:51] of their water bill. Clearly, I would personally like to see the White House cut-up, but that's

[24:57] my own personal time.

[25:00] Let me reflect it in a minute. That's just dictum.

[25:08] So thank you, Mr. Jenkola. Let me note that. I think the issue of the amount of cash on hand has come up a couple of times. Let me ask the, I think the budget finance committee should, should visit that as an agenda item, if not, also the

[25:29] The governance committee is a policy item to work together on that.

[25:35] I'm not sure overlap there, but in terms of policies that come out often is the governance committee that comes out of the policy.

[25:43] So I think first it should be the Finance and Revenue Committee, the Finance Budget Committee to just

[25:53] Just visit that to see what it ought to be and then potentially see if we need to make

[25:58] a policy change.

[26:00] Sure.

[26:00] So we provided some information to the Finance Committee at the last meeting and it's

[26:05] the same information that was provided to retail rates committee.

[26:08] We can review that again, just briefly 250 days of cash is at the low end of our highly

[26:14] rated peers.

[26:15] So we're already at the low end of days of cash, including the rate stabilization fund.

[26:19] And then secondly, I've provided a scorecard from a rating agency, and if we are to maintain our AAA rating,

[26:25] it's my strong belief that we need to maintain at least 250 days cash.

[26:29] That's really the floor.

[26:31] If you look at our other financial metrics, and again, a bond rating isn't made or broken on a single metric.

[26:38] But if you look at all of our financial metrics with the exception of the strong regional economy,

[26:43] and this board's willingness and ability to raise rates to meet the capital needs,

[26:47] all of our financial metrics are at the low end of our peers.

[26:51] So I'm happy to have that conversation.

[26:53] So Mr. Brown, what I'm suggesting is not any further research,

[26:57] but take the work that you've already done.

[26:59] See what the policy is in terms of what's the policy of DC water

[27:04] in terms of a cash on hand requirement,

[27:10] and how many days rather than how much,

[27:12] and to review that and see if that should be reflected

[27:16] within our policy as a board.

[27:18] I will, and it will also contain a recommendation of how we get there.

[27:22] There are multiple ways to get there, whether it's allocation of year-end surplus, if it's available,

[27:27] whether it's included in the rates or some combination of those two, but the recommendation will also,

[27:33] and the discussion, of course, with the board committees will include not only a target, but

[27:39] also how we get there.

[27:40] Right, I've got that and that could come from the financial revenue or rates, but in particular the policy would just probably state a number of days rather than how.

[27:54] I agree with you, that's the, that's the way to do it, it's the number of days.

[27:58] Okay.

[27:59] Okay, Mr. Jean-Coli, you had a second question.

[28:02] Oh, no, you hit both issues.

[28:05] Yeah, I already have to.

[28:08] All right, thank you, anybody else?

[28:11] Mr. Franco, two things to one that's very minor.

[28:16] I'm looking at the date of this committee meeting Tuesday, December 16th, and I think Tuesday was the 18th.

[28:26] It was a check.

[28:29] Tuesday, December 16th, this Saturday, the second point was Mr. Brown, do we rely on the federal government for some appropriations?

[28:42] The, well, the, the big one is for the clean rivers programs, about $14 million a year, their discretion, it's appropriated and I'm not sure if we've received this year's payment, I will find out we have not yet received that payment for this year, the $14 million.

[29:00] It should be sensitive to that.

[29:03] Okay, thanks.

[29:06] Okay.

[29:07] All right, everybody.

[29:09] Next, we'll hear from the Environmental Quality and Operations Committee.

[29:13] Mr. Patterson.

[29:15] Good morning.

[29:17] We met on Thursday, December 20th.

[29:19] The meeting started with Mr. Achilles Tesspe, providing an update on the blue plane's treatment

[29:24] and plants performance.

[29:26] And he noted that with record participation levels

[29:29] were recorded in the DC Metro area,

[29:32] the performance of the plant was excellent

[29:33] and that effluent quality and parameters

[29:36] were below the EPA permit limits.

[29:39] During the month, the Washington Metro region received record

[29:44] rainfalls total of 7.57 inches

[29:47] versus a normal of 3.17 as measured at national airport.

[29:51] In a total of 735 million gallons of CSS captured in the tunnel system were pumped and treated at the...

[30:00] We do enhance clarification facility. And since the commissioning last March, the facility has captured a total of, and this is significant, a total of 4.14 billion gallons and 800 wet tons of screenings and grit that will remove that otherwise would have been discharged into the Anacostia River. So that's quite an accomplishment. At our committee, we really recommended that the enterprise

[30:29] find a way, you know, we talked about in the retail rates, there's a lot of talk about

[30:34] what the system will do, this is actually what the system has done, and we need to find

[30:38] a way to really get that out in front of the public more.

[30:43] And that concludes it, Mr. Testphase report.

[30:46] Next, Mr. Chris Piot, the Matt Scientist of D.C. Water, gave us a really interesting presentation

[30:53] and it's kind of wrong in the lines of what Chris has talked about a lot in the waste industry

[30:58] is there's no such thing as waste only wasted resources and the enterprise did a RFI looking

[31:05] at for partners to partner with the enterprise to look at ways to use waste that DC water

[31:13] produces. I present an interesting energy map that looked at things like hydro power,

[31:19] thermal recovery from the wastewater systems and pipes solar, wind, micro grids,

[31:26] It's a lot of different possibilities that could be found.

[31:32] In the purpose of the RFI, RFI was really to look at those partners and what interests

[31:38] were there in pursuing in these different elements.

[31:42] They met their 11 respondents to the RFI.

[31:46] They met with three firms and outlined a draft approach to pay for services through revenues

[31:51] that would be generated.

[31:53] So the whole concept is this wouldn't come.

[31:54] These would be self-supporting activities and they're actively searching for partnership

[32:00] to help with some of the higher priority projects.

[32:04] Some of the potential projects that were identified was, I don't know if I'm saying this right,

[32:11] die gas, RNG for vehicle fuel, solar, offsite solar, co-digestion, bloom storage and processing,

[32:20] housing, blue planes, thermal recovery, biosolids drying, secondary blower upgrades,

[32:27] sewer heat recovery, and district heating, where some of the elements and the goals of

[32:32] the presentation is really to inform the committee of the concepts who are not seeking any

[32:36] kind of decisions from the committee at this point or be future RFPs, depending upon how

[32:42] the discussions go forward.

[32:45] And with the goal of realizing under leveraged resources at the facility, there's also a presentation

[32:52] on the difference between biogas versus generating fuel and wrecks versus rins and the value difference

[33:04] between the two.

[33:05] So these are all exciting things that the enterprise is exploring and we'll be brought back

[33:09] to the committee as those discussions proceed.

[33:13] There are several joint use action items present.

[33:16] The first one was for supply and delivery of fair chloride.

[33:19] The second was repair rehab of various process assets,

[33:24] electric motor and contracting company.

[33:27] There was a nine joint use change order item recommended forward

[33:32] to the full board with spring valley main rehab and replacement.

[33:37] The principal cause of the change order was really in the operation of a liner cutting.

[33:43] So when you line a pipe, a liner cutting tool is routinely used throughout the wastewater

[33:48] industry to reinstate service connections.

[33:52] The water quality department in DC water alerted the project management team of the possibility

[33:57] that lead particulates from all lead service lines may seep into the drinking water during

[34:02] operation of this cutter tool.

[34:03] So, DC water then elected to replace all known suspected lead service lines and conjunctions

[34:11] of REAP project resulting in this change order.

[34:15] This conservative measure avoid any issues that may arise from known or suspected lead service

[34:20] lines and provide protection to the customer.

[34:23] So the three action items were all recommended for approval by the full board.

[34:30] Next we had an update, Mr. Carlton Ray, and the Clean Rivers Project, quarterly update.

[34:38] And again, I will restate the 4 billion gallons that I remember last March as we're heading

[34:46] towards March, the criticality of meeting that consent to order date, and the years and

[34:50] years, decade of work to get that project done, and now to see the results of that in terms

[34:56] of grit and CSOs, not...

[35:00] We're going in the Anaconda City of River. The enterprise is to be congratulated on that result. Mr. Gray gave an update regarding the Clean Rivers projects. And the first phase of the Anaconda City River Tunnel System was commissioned in the March 20th. The Northeast boundary tunnel, and there's a lot more detail in the report, but that's continuing under construction. The Green Infrastructure Project and Rock Creek is nearing completion. While the Green Infrastructure Project is in Potomac River Basin,

[35:29] will be completed in the spring of 2019.

[35:33] And the Potomac River Tunnel Facility Plan is on track

[35:35] and being submitted to EPA by the end of 2018.

[35:39] So I'm assuming that was done.

[35:42] Mr. Ray also stated that the Clean Rivers project

[35:45] has expected to meet the fiscal year 2019 spending goal

[35:50] and concluded the quarterly report by mentioning a recent song

[35:53] that was played for us in the committee.

[35:55] I don't know if we're gonna get the whole board

[35:56] I have to listen to that, but I think that song, that link to that song maybe should

[36:01] be forward at all board members, but it referenced the Clean River project and congratulated

[36:07] the team for their accomplishments on the Anacostia River.

[36:10] It was a very nice song.

[36:13] Under other business, I would just note that DC Water, CEO and President, David Gattis,

[36:20] on behalf of the board of the directors, and employees of DC Water, presented at the

[36:24] committee chairman and the reason I'm pointing this out is they present the award to David

[36:28] Paterson and my brother who's a year older than me is David and my whole life growing

[36:34] up I was always James David David James so I respond to either James or David but I'll

[36:40] make sure I share this award with my dear brother and richman David Paterson thank you and

[36:55] For the committee regarding the committee report, okay, none are there any issues to be brought up of general interest by board members?

[37:08] There being none, we will move on to our CEO General Manager's report, David Gettis.

[37:15] Thank you very much, Mr. Chair, and happy new year to everyone as well.

[37:18] Now, before I go into my report, I do have two employees that I would like to honor.

[37:27] Even though it's only two today, I will tell you that what I'm about to read to you from

[37:33] a letter I received from one of our customers is truly tells you who DC water is and who

[37:39] we want to continue to be by the actions of these employees and the great men and women

[37:45] of this utility do a fantastic job on a day-to-day basis and work with the residents in the

[37:53] district and really supply a service that is truly something that we need on a day-to-day

[38:01] basis, and that's water, so I appreciate what our employees do on a day-to-day basis.

[38:08] The letter reads as follows, I want to compliment two of your workers, Mr. Kenneth Bass and his

[38:14] associate Earl Cruz. They came to my house in response to an emergency call I made

[38:20] about water a water backup on my property. Though it turned out to be that the

[38:26] problem was not that of DC water Mr. Bass offered to come to the back of my

[38:31] property and try to unclog a drain for me. I accept it. And he was able to unclog the

[38:38] I am 72 years old. I'm a 72-year-old lady and had been unable to do the job myself when I try.

[38:47] As you can imagine, I was anxious and also rising water was rising within my cell or well-drained and much relieved to have the problem solved.

[38:59] I thank Mr. Bass for his help, and he said that that is what we do at DC Water.

[39:08] And I really looked at Mr. Bass and said to him, I know that I appreciate the help, but despite that response, I knew that what he had done was above and beyond the call of duty.

[39:22] So I just wanted to pass this information on to Mr. Bass and Mr. Earl's supervisor or whoever would appreciate it.

[39:31] They did me a kind term.

[39:34] Any more general comment? I want to say that I love DC water.

[39:39] You're my favorite utility.

[39:41] I didn't make that up. She actually wrote this.

[39:46] There are a lot of water problems on Arkansas Avenue, Northwest, flooding on the street,

[39:52] Clawed street drains plus my own problem with tree roots in the sewer well in the sewer line and

[40:00] And I found that all of my calls that I make from an emergency standpoint on your emergency line to operators, your operators are polite and responsive, and the men and women who respond to the call are prompt, accommodating and solve the problem one way or another, one way or another. So I thank you, DC water, one appreciative customer, Lynn, make that it.

[40:26] That's a touching letter that we received. And so I would love to

[40:31] We present to you these two employees, Mr. Wells, if you'll join me in the well for the

[40:36] picture, I would appreciate it.

[40:38] Thank you.

[41:44] I briefly read from, just summary from my report, as you know, December was a short month

[41:51] for some of us, but here at DC Water, we are 24-7.

[41:57] And so we really took no time all.

[42:01] A lot of us here at DC Water, and that's something that is unique.

[42:06] but it does come with the work and what we do on a day-to-day basis.

[42:10] In the month of December, our group spent a lot of time preparing for the 2020 budget.

[42:16] Matt and his team have done a fantastic job of, I guess, some would say, herring cats.

[42:27] But they have done a fantastic job of beginning to really bring us together

[42:31] So that we can have a true understanding and attack the affordability issue that we have here in the district.

[42:38] We're looking at many ways to try and solve that affordability issue.

[42:42] We're looking at going to volumetric a part of our fee being volumetric, allowing those customers to control their

[42:52] create charge to a certain extent and to have more control than what they have today.

[42:57] Matt's group is also taking a look at increasing the 4% credit to a different number.

[43:05] So I won't say what that number is, me and Matt are going back and forth on what that

[43:09] number is.

[43:11] But we are doing all that we can with the stakeholders alliance group, with the board,

[43:18] work with the district and so we are bringing everyone that we can to the table to understand

[43:24] what the issues may be and we're taking in new and innovative ways that we might be able

[43:30] to solve the problem that we have here in the district regarding the CREAC charge.

[43:37] So that is ongoing.

[43:38] We spent a lot of time in the month of December on that issue alone.

[43:44] Also in the month of December, for the George H.W. Bush State Funeral, I want to commend

[43:51] the number of our employees that were up in the middle of the night working with Secret

[43:55] Service, also with Homeland Security, H. Seema, and others to prepare for that funeral.

[44:04] There is a lot of preparation are in for this type of event in the district, and so I want

[44:10] to commend those employees for working with other agencies here in the district through

[44:17] the middle of the night.

[44:18] It was when a lot of our work has to be done.

[44:20] It cannot be done during the day, during the event.

[44:24] Also solar installation at the Brentonwood Reservoir in December, we did sign a development

[44:31] agreement with urban ingenuity and the National Housing Trust.

[44:37] This agreement allows DC Water to continue exploring the development of solar capability

[44:43] capacity at Brentwood Reservoir just across the street from Gallaudet University, which

[44:51] would provide direct revenue to DC Water to offset operations but also position DC Water

[44:56] as a champion for low income residents.

[45:00] By supporting the capacity of the DC community solar for all programs. This is a very important,

[45:10] I think, move on our part as an organization, so I commend the different parts of an organization

[45:17] that worked on making this happen. Green infrastructure, DC water has been

[45:22] granted substantial completion for the first green infrastructure project in Rock Creek,

[45:27] which comprises of approximately 24 acres that will be managed with green

[45:33] infrastructure during the 1.2 inch storm event. So we know that green

[45:39] infrastructure is very important to us not only as a district but to us as a

[45:43] utility and it is great that we've gotten to the point of substantial completion

[45:48] of that. Winter preparation continues. We have been fortunate knock on wood thus far

[45:55] that the temperatures have not dropped, but the men and women of this utility have really

[46:00] prepared for this winter as they do every winter, but it has been a great focus this winter

[46:07] for us to make sure that we're all of our equipment is up and running. I think Mr. Fitzgerald

[46:14] and his group for the work that they do on the fleet side to make sure that we have

[46:19] operable units and equipment for us as an organization.

[46:23] So the men and women, there's a lot of preparation for the winter and there's a lot of good work

[46:30] done during the winter.

[46:32] So I get to see every single one of the calls that are made from the emergency standpoint

[46:38] and the main breaks and so forth and so on and so we have a dedicated people out there making

[46:44] sure that these main breaks are resolved on a day-to-day basis.

[46:47] We received also an award Blue Plains did, DC Water received the Nakhwa Platinum Peak

[46:53] Performance Award for six years of 100 percent compliance.

[46:58] Blue Plains is definitely the gold standard in the industry and it continues to receive

[47:04] awards and will continue to receive awards as well.

[47:08] The financial group received also the 22nd consecutive clean unmodified audit opinion on

[47:20] the financial statement for the fiscal year ended in September 2018 so that group should

[47:26] be commended as well for the work that they've done from an audit standpoint or from a financial

[47:31] at this point. And last but not least, which we are very, very proud of, and Cory Gray

[47:40] and his work and his group have done. We will be in 2019 introducing an apprenticeship

[47:48] program here at DC Water. We know that we have an aging workforce. We have a number of individuals

[47:57] in DC that do want to work, and it's an opportunity for us to bring them in, in an apprenticeship

[48:05] capacity, and begin, and for them to begin to learn what goes on at the utility, what

[48:11] happens at this utility, and for them to begin to move into those roles at a different

[48:18] period as we continue to develop our employees.

[48:22] So, this is part of our whole team blue development program.

[48:26] So, the apprenticeship program is part of that driven by Mustafa Dozier and his team,

[48:32] as well so it all begins to come together for us as an organization and bringing people

[48:37] into the organization and training people up to become those next leaders in the organization.

[48:44] Mr. Chair, that concludes my report and thank you very much.

[48:47] Thank you very much.

[48:48] Next questions for the general manager regarding his report, board member March.

[48:52] I had a question about the, I'll come back to you Mr. Giancola.

[48:58] All right, thank you.

[48:59] About the employee lost time accidents, can you provide some background on that information?

[49:04] We, you know what, we had to talk, is who's in the room, they can give an explanation on that, Roger, please.

[49:11] We talked about this yesterday, so and Roger gave a great explanation for it.

[49:19] Well, Roger Brown, executive vice president for people in talent.

[49:22] You may be asking about the increase in the number or the cost as it relates to lost time.

[49:27] There's two factors that come into play there.

[49:30] One is, we recently just had an accident that involved three employees, so that number is going to increase

[49:35] because those individuals have yet to return to work.

[49:38] And there's also two or three employees that have had a previous accident that had it flare up.

[49:43] And so they've returned out of duty to get that taken care of or

[49:47] So we seek additional medical treatment so that counts as that's fine.

[49:51] So the numbers as we have either previous accident with a flare up or additional accidents that happen will cause that number to rise.

[50:00] The more recent accident are the employees going to be okay? I mean, I guess I was curious about. To my understanding, the last report I received is they're doing fine, they're doing well. They're just receiving additional therapy and treatment to get themselves back to full operational. And I guess I'm wondering about just follow up in terms of preventing or what we need to do to ensure that doesn't happen again. Yeah, so it's my understanding. I don't know the specifics. I do know that there's a current investigation.

[50:29] and undergoing. Our employees were in my opinion, did the right thing. They just happened

[50:35] to be the recipient of the accident. And so our staff does a phenomenal job of trying

[50:41] to do preventive measures through trainings, through stretch and flex in the mornings,

[50:46] through a proactive measures and discussions that they have in their huddles before they go

[50:52] out for the day. So as these things happen, we do an after-action of the investigation

[50:58] and go back to that group of employees who has been involved.

[51:02] Her staff members have been involved so they understand what happened

[51:04] and then how we prevent that from going forward.

[51:07] Thank you.

[51:08] Welcome.

[51:09] Thank you, Roger.

[51:10] Yes.

[51:11] Mr. Giancola.

[51:13] Thank you.

[51:15] Mr. Gattas, on page 42 of the briefing,

[51:19] recruitment activity.

[51:20] I noticed that we're still pretty high vacancy.

[51:23] I would call, we have 1,200 or so employees, 131 vacancies, or so to start a December,

[51:33] that's over 10%.

[51:34] So I'm just kind of curious, is there some effort to reduce that to a more manageable

[51:39] level like 5%, 7%.

[51:41] There is, we are addressing that as we speak, we, I don't know exactly how to say it, but

[51:51] But we are addressing that.

[51:53] I think that you will see a lower number in the future.

[51:58] We do recognize that as something that does jump off the page for us.

[52:04] And so we are reckoning.

[52:05] We are addressing that, Mr. Jekola.

[52:09] All right.

[52:10] Thank you.

[52:10] You're welcome.

[52:13] Ms. Much?

[52:14] I had a quick follow-up to the discussion about open positions.

[52:19] Are we finding that there are particular areas or disciplines?

[52:22] or what's the cause of perhaps the vacancies?

[52:26] Is it just the time that it takes for the process?

[52:30] The best way that I can answer that,

[52:33] being the new guy at the table,

[52:35] is this is a budgeting exercise at the end of the day

[52:40] when you get done with it.

[52:42] We have a number of positions that have remained open

[52:46] for a long period of time,

[52:48] and as we developed the 2020 budget,

[52:50] We're addressing a number of these issues, and I think when you see the 2020 budget,

[52:58] you will see that the vacancies have been addressed at that point in time.

[53:03] Matt, you want to add something to that?

[53:05] No, I'm just echoing your comments, pardon me.

[53:07] Just echoing your comments.

[53:08] As part of the budget, we've looked at every single vacancy.

[53:10] We've sat down with the executives across the organization and have evaluated every single open position.

[53:17] and as the General Manager said, you'll see a recommendation in the budget next month.

[53:22] And if I could add, the other piece that is, this is the vacancies that you see are

[53:27] partly my fault as well, so I will take the blame in that before we fill a position,

[53:35] I am asking that we justify, and so I am looking at every single action, I have to sign

[53:42] I don't want every single position before we actually go out in the crew.

[53:48] And so I think that's the fiscal, the responsible thing that we should do, especially in the

[53:54] crunch that we are from an affordability standpoint.

[53:57] And so that is part of it is my fault.

[54:00] So we are slow to fill them, not on purpose.

[54:03] But there is a detailed process that I am asking our leadership team to go through before

[54:11] or we actually ask for a position to be filled.

[54:20] So, Gattas, can you speak about the apprenticeship program, who are some of your partners and

[54:25] how are you marketing in the community?

[54:26] It's Corey.

[54:27] It's Corey here today.

[54:29] Corey, you want to step up and talk about that program, and Mr. Brumfeld's question wants

[54:37] to know who are some of the partners that we have,

[54:42] and if you want to give anything else

[54:43] about the program, because it is an exciting program, so thank you.

[54:45] So good morning. So we have been working pretty closely with our Department of Employment Services

[54:52] Both we have to register the program. So that was done through

[54:55] DC Financial Council. The target is to hire district residents

[55:00] So much like we did with Water Works, we've identified our strategic partners. Most of high schools, D.C.

[55:06] ideal school, Wilson school, a few others, as well as D.C. D.A.S. itself as a referral

[55:12] source. So the idea would be that the city would identify candidates, sympathy to D.C.

[55:17] Water for consideration through our HCM process, we would then return them. The training itself,

[55:23] we've identified five areas to start for our apprenticeship.

[55:27] The first is, in no particular word, I guess, plumbing, mixes heating, ventilation, and air

[55:32] conditioning.

[55:33] Quality assurance with our fleet department, wastewater, water services, and sewer services

[55:39] utilities.

[55:39] And so the idea would be we would have two to three apprentices per each of those areas.

[55:45] They were followed the standards, 2,000 hours of LJT, coupled with 144 out of them.

[55:49] And I think, actually, 150 hours of classroom training

[55:52] that they'll do after they've completed their two,

[55:54] after their work day, we are working

[55:57] to identify the classroom provider.

[56:00] There will be an RFP, there will be issues to secure that.

[56:04] But we're looking to, partner, it's part of that

[56:07] with the University of the District of Columbia

[56:09] and Howard University to help deliver the classroom training.

[56:13] The team here, they'll be supervised by a trained form

[56:17] and supervisor, the managers and directors are also

[56:20] be trained because it's more than just kind of a job.

[56:23] At this point, we're trying to make, we're making sure

[56:25] that we're taking on members of the lung folk,

[56:28] the folk who are not necessarily used to working

[56:30] in this environment, but we're providing

[56:32] with them the necessary wraparound services in addition

[56:34] to their job and a clash and training.

[56:37] And that's also where the city is going to provide support

[56:40] for some of the wraparound services that they may need.

[56:45] Thank you, Mr. Gering.

[56:46] Appreciate it.

[56:49] Any other questions for the general manager?

[56:56] Okay, moving along, next on to our contracts, consent items, joint use, approval to exercise

[57:04] option year three for Carter and Carter Enterprises, and then number two, second one is to exercise

[57:11] option two of contract with the electric motor and contracting MC.

[57:16] Can I get a motion to approve the consent items, joint use?

[57:19] So moved.

[57:21] Is there a second?

[57:23] Any discussion?

[57:25] All in favor say aye.

[57:26] Aye.

[57:27] All opposed?

[57:28] Motion passes.

[57:31] Consent item non-joint use.

[57:33] Approved to execute a change order with the Fort Meyer Construction Corporation.

[57:37] Can I get a motion from a district member to approve the consent item?

[57:41] So moved.

[57:42] Second.

[57:43] Second.

[57:44] Any discussion?

[57:46] All in favor say aye.

[57:46] I opposed, no opposed, the consigned item for joint use is approved.

[57:53] On our agenda is an executive session, but I don't believe we're going to, that's needed today.

[57:58] So with that, I want to thank you, thank everyone, and especially again, Mr. Majep, and

[58:05] then Mr. Paterson with your last meeting.

[58:08] Thank you for your service, and everyone have a great week.

Board of Directors

Agenda

Transcript