LOUDOUN (iV WATERfile/2009.pdfMike Latham Matt McGowan Roddy Mowe Tim Coughlin Tom Broderick Craig...

I LOUDOUN (iV WATER

44865 Loudoun Water Way • P.O. Box 4000 • Ashburn, Virginia 20146 • www.loudounwater.org

Minutes of the Loudoun Water Board Meeting, January 08, 2009

The board meeting was held at 3:00 pm in the Boardroom of the Loudoun Water building located at 44865 Loudoun Water Way, Ashburn, Virginia.

Board Members: Chainnan Fred Jennings Ed Burrell-Absent Dimitri Kesari-absent Charies McKinney John Whitmore-absent Johnny Rocca Patti Psaris Hobie Mitchel Chuck Harris

General Counsel - Stanley Franklin

I LCSA Staff in Attendance: Dale Hammes-GM/ Treasurer Rick Thoesen/Deputy GM Jewell Lilly/Secretary Carla Burleson Dave Linski Mary Arnsbarger Tom Bonacquisti Samantha Villegas Liza Young Rick Jacobson Mike Beardslee Richard Hunt Kevin Wood Robert Holl Bruce Ringrose Mike Latham Matt McGowan Roddy Mowe Tim Coughlin Tom Broderick Craig Lees Mark Guanco Karen A mo Id

AGENDA ITEM 1 - CALL TO ORDER The meeting was called to order by Chairman Jennings at 3:00 pm.

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AGENDA ITEM 2 - GENERAL MATTERS 2A. Approval of Minutes Upon MOTION of Mr. Mitchel second by Mr. McKinney, the minutes of the meeting of December ! 1, 2008 were approved. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Absent, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Absent, Mr. Harris-Aye, Mr. Burrell-Absent.

2B. Public Speakers - There were no public speakers during this meeting.

January 2009

http://www.loudounwater.org

I 2C. General Manager's Report

9 The Board of Director's By-laws will need to be updated to reflect the Ashburn address. This will be an action item next month.

o The Articles of Incorporadon will also need to be updated by the Loudoun County Board of Supervisors to reflect the change of address, and lo extend the charter for another 50 years. The document is currently being reviewed by the County Attorney.

2D. Board Member Comments • Each Board Member expressed appreciation for the efforts of Mr. Wallace Owings during his

term and also wished staff a Happy New Year.

o Mr. Mitchel requested a resolution of appreciation for Mr. Owings for the February Board Meeting.

• Chairman Jennings announced that effective immediately, Mr. Mitchel would chair the Finance Committee and Mr. Rocca would chair the CIP committee.

AGENDA ITEM 4 - CONSENT AGENDA There were no items for approval on the consent agenda.

AGENDA ITEM 3 - ADOPTION OF AGENDA • Upon MOTION of Mr. Mitchel, second by Mr. Rocca, the agenda was approved as presented. Vote: ^M Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Absent, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. ^ ^ Mitchel-Aye, Mr. Kesari-Absent, Mr. Harris-Aye, Mr. Burrell-Absent.

AGENDA ITEM 5 - ACTION AGENDA 5A. Resolution to Act - Personnel Matters

Upon Motion of Mr. Mitchel, second Ms. Psaris, the Board acted to approve personnel matters related to salary adjustments for the General Manager and Deputy General Manager as provided by Mr. Harris during the closed session at the December Meeting. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Absent, Mr. McKinncy-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Absent, Mr. Harris-Aye, Mr. Burrell-Absent.

5B. Employee Salary Adjustments This item was referred to the Finance Committee and further information will be presented at the February Board Meeting. No Board action required at this time.

5C. Succession Planning Committee

Upon MOTION of Mr. Jennings, second by Mr. Rocca, the Board moved to create the Succession Planning Committee. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Absent, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Absent, Mr. Hams-Aye, Mr. Burrell-Absent.

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Chairman Jennings asked Ms. Psaris to chair the Succession Planning Committee, charged with the responsibility of developing a succession plan for the future of the Authority. Chairman Jennings appointed Mr. Harris, Mr. Rocca and Mr. Mitchel to the Committee.

At this fime. Chairman Jennings requested that the Personnel/Nominating Committee to meet and prepare a recommendation for Vice-chairperson of the Board.

AGENDA ITEM 6 - REPORTS Item 6A - Water and Sewer Agreements - signed by the General Manager on behalf ofthe LCSA Board:

VACATIONS and EASEMENTS 1. Easement - Goose Creek Village North. ESMT-2008-0004. 2. Easement - MMS One Loudoun Center, LLC for One Loudoun 30" Watermain. 2008-0078. 3. Easement - MMS One Loudoun Center, LLC for One Loudoun 30" Watermain. 2008-0068. 4. Easement - Treburg Lots one through forty one and parcels A through H. SBRD 2008-0022. 5. Easement - MMS One Loudoun Center, LLC for One Loudoun 30" Watermain. 2008-0078. 6. Easement - Glascock Field at Stoneridgc sanitary sewer Extension. 2006-0146. 7. Easement - Dulles South Water Tanks. 2007-0013.

AGREEMENTS 1. On-site agreement date October 31, 2008. Estates at Elk Run ID#N/A Blanket Agreement.

182 residential units with associated water and sanitar>' sewer facilities. Project is located -^ south of Edgewater Street, east and west of Elk Lick Road. • 2. On-site agreement date June 25, 2008. Evergreen Hamlets Secfion 2 - ID#03-0063. 24 single

family homes and related infrastructure located northeast quadrant of intersection of Route 772 and 621.

Item 7A. - Loudoun Water FY09 Planning (for discussion)

FY09 planning issues were discussed, along with potential Retreat topics, schedules, venues and dates. The Board Secretary will research dates and venue.

Mr. Mitchel made the motion to request staff to research financial programs, federal financing and projects for which the Authority might be eligible. Mr. Hammes responded that staff has been actively researching this information, and subsequently Mr. Mitchel withdrew the motion.

There being no further business, upon motion duly made, seconded and carried the meeting adjourned at 5:48 pm.

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January 2009

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Minutes ofthe Loudoun Water Board Meeting, February 12, 2009

The board meeting was held at 3:00 pm in the Boardroom ofthe Loudoun Water building located at 44865 Loudoun Water Way, Ashburn, Virginia.

Board Members: Chaimian Fred Jennings Ed Burrell Dimitri Kesari Charles McKinney John Whitmore Johnny Rocca Patti Psaris Hobie Mitchel Chuck Harris


I LCSA Staff in Attendance: Dale Hammes-GM/ Treasurer Rick Thoesen/Deputy GM Jewell Lilly/Secretary Caria Burleson Dave Linski Mary Amsbarger Tom Bonacquisti Samantha Villegas Liza Young Rick Jacobson Mike Beardslee Richard Hunt Kevin Wood Robert Holl Bruce Ringrose Mike Latham Matt McGowan Roddy Mowe Tim Coughlin Tom Broderick Craig Lees Mark Guanco Karen Arnold


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AGENDA ITEM 2 - GENERAL MATTERS 2A, Approval of Minutes Upon MOTION of Mr. Mitchel second by Mr. McKinney, the minutes ofthe meeting of January 08, 2009 were approved. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.


February 2009


2C. General Manager's Report • We are monitoring House Bill 1788, which would restrict a locality's authority to prohibit and

regulate altemative onsite sewage treatment systems. This bill is being opposed by VACO and has crossed over to the Senate. The major concern is the restriction, which would not require maintenance beyond manufacturer's recommendations.

• Letters signed by the Chairman to oppose the move of WQIF (Water Quality Improvement Fund) into the General Fund will be going out tomorrow to the General Assembly.

o The bid protest from a vendor regarding the bidding process for Brambleton Pump Station has been resolved.

• Members of our engineering team will be attending the Planning Commission Meeting tonight to present highlights of our Central Water Supply Plan.

2D. Board Member Comments o Mr. Mitchel mcnfioned the high foreclosure rate in Loudoun County, over 2,100 in 2008. We

need to be aware and monitor this. There is a revitalization effort for Sterling, Sugariand Run areas and the suggestion came up that may involve using Loudoun Water easements.

• Chairman Jennings, on behalf of the entire Board, presented Letters of Commendation to Dale Hammes and Rick Thoesen for their extraordinary efforts in 2008. The letters are included as part ofthe record ofthe meefing.

• The Chairman requested that Committee Assignments be moved from Action to Board Comments. Chaimian Jennings announced the following Committee Assignments:

o Finance Committee - Hobie Mitchel as Chair with Ed Burrell, Chuck Harris and Johnny Rocca. Mr. Jennings commented that he would like to see a longer term financial model.

d-' ' CIP Committee - Johnny Rocca as Chair with Hobie MitcheLand John Whitmore. Mr. Jennings stated that the level of preparedness for this meeting has gone up and he would like to see it conUnue.

o Audit Committee - Dimitri Kesari as Chair with Ed Burrell and Patti Psaris. Mr. Jennings would like to see the committee leverage more from extemal audit and internal control.

o Personnel/Nominating Committee - Charlie McKinney as Chair with Patti Psaris and Chuck Harris. Mr. Jennings sees the opportunit}' to refine the process of reviewing elected officers and defining the role and level of Board involvement in pay increases.

o Development and Succession Planning Committee ~ Patti Psaris as Chair with Chuck Harris, Johnny Rocca, Hobie Mitchel, Charlie McKinney (representing Personnel Committee) and Chaimian Jennings. This is an ad hoc, sunset committee.

AGENDA ITEM 3 - ADOPTION OF AGENDA Action Item 5C was moved from the Action Agenda and placed into Board Member Comments. Ms. Psaris requested that Consent Agenda Item 4B be moved to Action Agenda 5F.

Upon MOTION of Mr. Mitchel, second by Mr. McKinney, the agenda was approved with the above amendments. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

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AGENDA ITEM 4 - CONSENT AGENDA 4A. Approval of Construction Services Red Dot J9A&B, Phase II Brambleton Tank Water Booster Pump Station Upgrade - Presented by Bill Haase. The Brambleton Tank Water Booster Pump Station (WBPS) was placed in service in 2005. J'he Brambleton Tank WBPS currently has two pumps that serve the 538 and 600 pressure zones. The existing pump stafion was planned to be built in phases as part ofthe original design.

Water service demands within the 538 and 600 zone pressure zones now require an upgrade at the Brambleton Tank WBPS. Hazen & Sawyer conducted an assessment ofthe existing pumping station and recommended expanding pumping capacity from the 510 pressure zone to the 538 and 600 pressure zones, and other improvements at the facility, to meet peak summer water demands. This project is designated as Red Dot 19A and 19B, Phase II.

The upgrades include replacing the existing two pumps with three larger pumps to support the 538 zone, and two medium size pumps and jockey pumps to support the Evergreen Hamlets, Evergreen Village, and Woodlands Village in the 600 zone. In addition, piping, valves, flow metering, variable frequency drives, electrical and instrumentation upgrades, and a backup power generator will be provided.

On January 22, 2009 Loudoun Water bid the project and the apparent low bidder was Miller and Anderson. Four companies bid on this project and the Bid Tabulation is attached. Staff reviewed the bid documents and obtained a Dun and Bradstreet report for the low bidder. During the review process staff noted an informality with the lowest bidder's documents. After reviewing the bid documents with Legal Counsel and after review of a protest from the second low bidder, it was determined that the informality was minor and it could be waived by Loudoun Water. Staff recommends award of the construction contract to Miller and Anderson.

There is $1,000,000 allocated for construction of this project in the 2009 CIP. This project is a component ofthe Phase II Red Dot Program and is on the 2009 mission critical spending plan.

The Board moved to approve Miller and Anderson for the construction ofthe Brambleton Tank Booster Pump Station Upgrade in the amount of $982,850, with an approximate 10 percent contingency to be controlled by the General Manager, for a total authorized budget of $1,080,000. Additional costs will require further Board authorization.

AGENDA ITEM 5 - ACTION AGENDA 5A, Resolution of Appreciation for Mr. Wallace Owings

RESOLUTION OF APPRECIATION FOR

Mr. Wallace Owings

WHEREAS, Mr. Wallace Owings was appointed a member ofthe Loudoun Water Board of Directors from February 5, 2005 to January 1, 2009 and served with distinction tirelessly and continuously.

Febmary 2009

WHEREAS, Mr. Owings, served as Vice-Chairman of the Board, Chairman of the Finance Committee and consistently participated in the Capital Programs Committee and other committee meetings, providing important contributions.

WHEREAS, Mr. Owings, brought to the Authority invaluable professional experience in the areas of finance, audit and budget and generously provided knowledge, advice and expertise to the Authority.

NOW, THEREFORE, BE IT RESOLVED, that Authority members and its staff express to Mr. Owings their deepest appreciation for his leadership and highest esteem for the devotion he has so generously, effccfively and graciously given the Authority.

BE IT FURTHER RESOLVED, that this resolution be made a part ofthe Authority's minutes.

Dated this 12th day of February, 2009.

Upon lyiOTION of Mr. Mitchel, second by Mr. Kesari, the Resolution of Appreciation was approved as presented. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

SB. Election of Vice-Chairperson - Presented by Mr. McKinney The Board of Director's Personnel and Nomination Committee met on January 26, 2009 to recommend a Vice-chairperson to serve the remainder ofthe temi.

The Nominations Committee recommended Johnny Rocca to serve as the Authority's Vice-chairperson for the February 12, 2009 to June 11, 2009 tenn of office.

Upon MOTION of Mr. McKinney, second by Mr. Kesari, the Board moved to elect Johnny Rocca as Vice-Chairman. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Hams-Aye, Mr. Burrell-Aye.

5D. Potomac River Water Supply and Raw Water Storage Program Resolution - Presented by Stanley M, Franklin, Legal CounseL Mr. Franklin noted that the Resolution draft before the board was needed to ratify and confimi the MOU and related documents and specifically, to authorize closing of the Weslwood property. Mr. Franklin recommended the following resolution:

RESOLUTION OF THE LOUDOUN COUNTY SANITATION AUTHORITY

BE IT RESOLVED BY THE LOUDOUN COUNTY SANITATION AUTHORITY that the Board hereby confirms the approval of the Memorandum of Understanding and Master Real Estate Agreement between the Authority and Luck Stone Corporation and the transactions contemplated thereby, and hereby ratifies the execution ofthe Memorandum of Understanding and Master Real Estate Agreement by Dale C. Hammes, General Manager.

February 2009

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I RESOLVED FURTHER, that the Authority hereby accepts the assignment of that certain Real

Estate Purchase and Sale Agreement between Wildwood Farms, a Limited Partnership, and Luck Stone Corporation, dated June 9, 2008 (the "Wildwood Agreement") for the purchase of that certain parcel of real property located in Loudoun County, Virginia, consisting of approximately 168.3655 acres, identified as GPfN 153-35-5865 (the "Wildwood Property"), and the Authority is hereby authorized to purchase the Wildwood Property for the price of $6,734,620, pursuant to the temis of the Wildwood Agreement;

RESOLVED FURTHER, that Dale C Hammes, General Manager, is hereby authorized, in the name and on behalf of the Authority, to execute and deliver any agreements, amendments, instruments, certificates, affidavits, and such other documents and to take such other actions as the General Manager may consider necessary or appropriate to enable the Authority to accept the assignment ofthe Wildwood Agreement and acquire the Wildwood Property in accordance therewith.

Upon MOTION of Mr. Kesari, second by Mr. McKinney, the Board adopted the Resolution as presented. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

Absent during vote; None

Absent during meeting: None

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Seoretary of Loudoun County Sanitation Autholjty

5E. Community Systems Demand Management Program and Resolution of Intent - Community Systems Rates - Presented by Samantha Villegas and Todd Danielson In 2001, Loudoun Water (as LCSA) began operation of its first Community Water and Wastewater System, which was Lenah Run. Lenah Run, like many Community Systems that came after it, has shared groundwater wells and a packaged wastewater treatment plant. Homes at Lenah Run vary in size, but are generally between 3,000 and 5,000 square feet on 1/2 to full-acre lots. In its first summer, Lenah Run was only 20 percent occupied, but residents used 80 percent ofthe available water supply in order to establish their sod. Loudoun Water was concerned about the demand, though it was thought to be temporarily high due to sod establishment. Subsequent summers proved this was not a temporary problem, but rather a case of customer expectation umnatched to available water supply. A sustainability study we conducted in this time frame had recommended a target of 500 gallons per day (gpd) per connection to ensure sustainable use of the wells. Our immediate and tactical response to Lenah (and newer systems) was messaging and education about the vulnerability ofthe system and the need for the 500 gpd target. Staff also recognized the need for a more proactive and strategic approach, and convened an ad hoc committee that would explore demand management options for all Community Systems. The ad hoc committee comprised County staff, elected officials, LCSA Board members and staff, a Lenah resident, a developer, a hydrogeologist, and an irrigation contractor. The Committee's ideas were captured in the attached matrix and submitted lo the County Attorney and County staff for consideration and implementation in 2003. None ofthe ideas developed for the County were implemented. Loudoun Water adopted many ofthe suggestions that were within its ability to adopt, but not the conservation rate design.

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Five years and half a dozen Community Systems later, Loudoun Water continues to struggle with the dichotomy of urban demand expectations in a rural supply community. To date, our demand management approach has focused on education with some voluntary restrictions. The education-alone approach has not yielded success. Today, half the systems we operate are exceeding their permitted capacity each summer.

Staff will present a history of demand and demand management initiatives in the Community Systems, showcasing our progression of outreach. It will conclude with our latest recommended strategies, which will reach beyond education into the kind of financial incentives we had originally planned in the matrix, such as a new, proposed rate structure.

In May 2008, the Board adopted a uniform rate structure for all community water systems owned and operated by Loudoun Water. The adopted rates were a two-tiered, inclining block rate that was intended to recover costs and promote water conservation. These rates have not sufficiently promoted water conservation, and three of the six community water systems Loudoun Water owns and operates are experiencing excessive demands during warmer, dry periods. Already, some of these communities' demands are exceeding their permitted capacity and, if allowed to continue, will threaten the sustainability ofthe supply at buildout. In order to assure long-term sustainability ofthe water systems, demand must be brought to within permit limits. The water use profile study completed for Loudoun Water in 2008 indicated that the most effective way to reduce demand is to implement a multi-tiered inclining block rate structure. Staff is recommending (with Finance Committee support) the addition of third and fourth tiers to the rate structure for Community Water Systems. The third and fourth tiers would apply to usage greater than 150 percent and 300 percent, respectively, above individual customer winter quarter usage. The third tier would kick in at individual usage that on average exceeds 500 gallons per day (gpd), which staff has determined to be the long-term sustainable supply for each home within community water systems. The fourth tier would kick in for individual usage above an average of 800 gpd based upon winter usage of approximately 200 gpd.

Based upon 2008 data, more than 70 percent of community system customers will not be affected by the new rate structure. Of those that will see an increase, approximately half of them are using an average of 700 gallons per day (more than 300 percent above winter quarter), and would therefore experience a median quarterly water bill increase in excess of $150. This would send a strong conser\'ation message to these customers and help bring demand in line with supply. Any additional revenue is intended to fund further education and outreach as well as to help offset increased repair and replacement costs or portions of capital expenditures associated with excessive demand.

These third and fourth tiers are part of an overall demand management plan for Community Water Systems that includes outreach and education through mailings, meetings, and distribution of technology to help customers track usage; prohibition of additional systems to irrigate turf; and may eventually include implementation of mandatory limitations on irrigation.

Upon MOTION of Mr. Mitchel, second by Mr. Rocca, the Board moved to approve the Resolution of Intent in the form presented by staff to the Board. A general discussion ensued and the Board agreed upon an amended form, the AMENDED RESOLUTION.

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Upon MOTION of Mr. Kesari, second by Mr. Mitchel, the Board moved to approve the following Resolution of Intent, set a public hearing date, and advertise the amended rates as appropriate. Vote: Mr. Jennings-Aye, Ms. Psaris-Nay, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

RESOLUTION OF INTENT

BE IT RESOLVED, that Loudoun County Sanitation Authority (dba Loudoun Water) hereby signifies

its intent to adopt the following rates, fees and charges applicable to the Authority-owned public

community water systems at Beacon Hill, Village Green at Elysian Heights, Lenah Run, Raspberry

Falls, The Reserve at Rokeby Farm, Selma and all new subdivisions served by Authority-owned

community water facilities for usage on or after April 15, 2009 and hereby sets the date of Wednesday

April 29, 2009 at Loudoun Water's office at 44865 Loudoun Water Way, Ashbum at 6:00 P.M. for a

public hearing to receive comments regarding the same.

BE IT FURTHER RESOLVED, that the General Manager is directed to publish in a newspaper having general circulation in Loudoun County for two consecutive weeks, notice ofthe proposed rates, fees and charges and the day, place and time ofthe public hearing.

Water

This schedule shall apply to all customers located in Beacon Hill, Village Green at Elysian Heights, Lenah Run, Raspberry Falls, The Reserve at Rokeby Farm, Selma and all new communities receiving water from community water systems through permanently installed meters for continuing service:

Proposed Conservafion Charge per 1,000 gallons for usage more than 150% above Winter quarter usage (1) $7.65 Excessive Use Charge per 1,000 gallons for usage more than 300% above Winter quarter usage (1) $30.60

(1) For consumption in excess ofthe amounts identified above in the June through November billing periods by customers whose accounts were in existence during the whole ofthe preceding winter quarter billing period.

ALL OTHER RATES, FEES AND CHARGES CURRENTLY IN FORCE SHALL REMAIN UNCHANGED.

February 2009

5F, Approval of Engineering Services Approval of Task Order Amendment No. 1 to Black & Veatch Central Water Supply Program: Program Development and Permitting Phase - Presented by Beate Wright At the December 11, 2008 meeting ofthe Loudoun Water Board of Directors, the Board authorized staff to implement the Potomac River Water Supply and Raw Water Storage Program in accordance with the Central Water Supply Program prepared by Black and Veatch. On December 23, 2008, the Authority and Luck Stone Corporation signed the Memorandum of Understanding and the Master Real Estate Agreement. These actions established the foundation for taking the next step for further program development and permitting for the Potomac River water treatment plant and related facilities to be owned and operated by Loudoun Water.

Professional services are now required to begin the Program Development and Permitting Phase of the Potomac River Water Supply Program. Professional Services under this Task Order Amendment include program management services, preparation of application for a Potomac River water withdrawal permit, recommendations for alternative project delivery systems including packaging for design and construction, land use entitlement support, technical documents necessary to determine the magnitude and duration of pilot testing for water treatment technologies under considerafion, and other technical services to improve understanding of system hydraulics, configuraUon, reliability, and operational considerations.

The 2009 CIP allocafion for the Centra! Water Supply Program is $1.1 million. Black & Veatch has prepared Amendment No. 1 (the first Program Management Task Order) to the Central Water Supply Program; Program Development and Pemiitting Phase for an engineering services fee estimated not to exceed $480,000. Staff recommended approval of this amendment. ,c:;

The Chairman would like an independent assessment Irom someone other than Black & Veatch, and wished to explore creative risk sharing.

Upon MOTION of Mr. Kesari, second by Mr. Mitchel, the Board approved Task Order Amendment No.l to the Central Water Supply Program for Black & Veatch to conduct the Program Development & Permitting Phase in the amount of $480,000, with an approximate 10 percent contingency to be controlled by the General Manager, for a total authorized budget of $530,000. Additional costs will not be incurred without further Board authorization. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

AGENDA ITEM 6 - REPORTS Item 6A - Water and Sewer Agreements - signed by the General Manager on behalf of the LCSA Board:

VACATIONS and EASEMENTS 1. Easement - Dated .lanuary 6, 2009. East Gate Subdivision, Rollins Property. ESMT-2008-

0015. 2. Easement - Dated January 7, 2009. Five Star Plaza. STPL-2006-0066. 3. Easement ~ Dated January 6, 2009. Visa, USA. DEDI-2008-0019. 4. Easement - Dated January, 2009. Dulles Overtook, L.C. DEDI-2008-0009. 5. Easement - Dated January, 2009. Visa, USA. 2006-0175. 6. Easement - Dated January, 2009. South Riding, LP., Mandolin Street. SBRD-2004-0004.

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7. Easement - Dated January 12, 2009. 45360 Severn Way, LLC for Route 28/Nokes Boulevard Interchange. 2007-0009.

8. Easement - Dated January, 2009. Eugenia Investments, Inc. Route 28/Nokes Boulevard Interchange. 2007-0009.

9. Easement - Dated January, 2009. Eugenia Investments, Inc. Route 28/Nokes Boulevard Interchange. 2007-0009.

10. Easement - Dated January 15, 2009. Lansdowne Office Park Parcel N, Phase lA. STPL-2008-0014.

11. Easement - Dated January 23, 2009. Home Depot South Riding. 2006-0151. 12. Easement - Dated January 15, 2009. Dulles Industrial Park 2007-0057. 13. Easement - Dated January 23, 2009. Dulles Industrial Park W/S Improvements. 2007-0057. 14. Easement - Dated January 23, 2009. Moorefield Station. STPL-2006-0043.

AGREEMENTS 1. On-site agreement dated January 2, 2009. Little River Commons Childcare. Project ID#2007-

0117 and 2007-156. Construcfionof new childcare facility with 6,457 square ieet of building, play area for 155 children and 47 parking spaces located at the northeast quadrant of Gum Spring Road and Paradise Place.

2. On-site and Off-site agreement with reimbursement, dated January 13, 2009. 24" waterline extension to Dulles South Tanks. Project ID#2006-0203. Marwood at Stone Ridge Water Main Extension and Westport W-191 Water Main Extension.

The following quarterly-reports were presented for review: Item 6B - O&M Quarterly Reports Item 6C - Engineering Quarterly Report Item 6D - BOA Quarterly Report

Item 6E - CIP Report - Presented by Mr. Johnny Rocca The Capital Improvements Program Committee met on January 27, 2009 in the Broad Run WRF Conference Room. Those present were Board members Hobie Mitchel, John Whitmore and Ed Burrell; staff members Dale Hammes, Rick Thoesen, Kevin Wood, Tim Coughlin, Carla Burleson, Mike Latham, Mike Beardslee, Tom Bonacquisti, Tom Broderick, Susan Bour, Beate Wright, Karen Arnold, Bill Haase, and Bruce Ringrose; and one visitor in the audience. 1. Bill Haase requested approval of award for a construction contract for the installation of the

Brambleton Tank Booster Pump Station Upgrade. Mr. Haase explained that the original station design was planned for phased construction. Increased demand in the 538 and 600 zones that the station serves has created a need to increase the station capacity. The upgrade project is a component ofthe Red Dot Program and is considered Mission Critical. Mr. Haase reported that four bids for the upgrade of the existing station were received on January 22, 2009. Miller and Anderson, Inc. of Clear Brook, VA was the low bidder. During review ofthe low bid, staff identified an informality in the low bidder's documents. Staff reviewed the problem with Legal Counsel and determined the informality was riiinor and could be waived by Loudoun Water in accordance with the Bid Documents. The bid amount for construction is available in the 2009 Capital Spending Plan. Mr. Haase recommended award ofthe contract to Miller and Anderson, Inc. in the amount of $982,850, with an approximate ten percent contingency to be controlled by the General Manger, for a total authorized budget of $1,080,000. The CIP Committee, after discussing the need to track project

February 2009 - 9 -

financing, endorsed placing the request on the Consent Agenda for the February 12, 2009 Board meeting.

2. Beate Wright requested approval of Task Order Amendment No. 1 to the Black & Veatch professional services contract for the Central Water Supply Program. Ms. Wright reported that Luck Stone and Loudoun Water signed the Memorandum of Understanding and the Master Real Estate Agreement in December 2008. This acfion sets the foundation for beginning the next phase ofthe program. Professional engineering services are now required to develop the next phase of the program and to obtain the necessary water supply pemiits and approvals for the project. Black & Veatch has prepared a task order for the proposed work with an estimated fee not to exceed $480,000. The allocation in the 2009 Capital Spending Plan for the Central Water Supply Program is $1,100,000. Ms. Wright recommended approval of Task Order Amendment No. 1 in the amount of $480,000 with an approximate ten percent contingency, to be controlled by the General Manager, for a total authorized budget of $530,000. The CIP Committee, after asking questions regarding the existing contract with Black & Veatch, the method of payment, and the deliverables, endorsed placing the request on the Consent Agenda for the February 12, 2009 Board meeting.

3. Roddy Mowe made an infomiational presentation to the CIP Committee on the status ofthe upgrade and expansion to the Operations and Maintenance Facility. Mr. Mowe explained tliat the facility opened in December 1993 and that in 2000 the increase in staff levels, caused by system growth, led the O&M staff to conduct a needs analysis that resulted in both long and short term recommendations. One recommendation was to increase space in 2010 to accommodate projected increases in staff Confinued staff growth resulted in staff numbers reaching the 2010 level by 2006. In August 2007, following a competitive procurement process, a design contract for professional architectural services was awarded to Wiley & Wilson (W&W) for the upgrade and expansion. W&W conducted an extensive space and needs analysis with O&M staff .and completed the design effort in 2008. The project will renovate 14,000 square feet of existing building space and add 2,500 square feet of new space. The architect's cost opinion for the proposed work was $3,500,000. No acfion was required ofthe CIP Committee.

4. Mike Beardslee made an infomiational presentation on the establishment of administrative fees for record drawing preparation and a fee schedule. Mr. Beardslee explained that staff has developed a schedule of administrative fees to fund the recently created Loudoun Water program for preparing record drawings for new infrastructure installed by private development. A consultant has been retained, through competitive procurement, to prepare the record drawings on an as-needed basis. The fees are established on a unit cost basis ($/foot of installed pipe) so that the dollar amount collected will increase or decrease with the amount of pipeline construction activity and will thus be self-supporting and revenue neutral. The fees will be expense neutral for developers, since record drawing costs are normally included in development proposals. The collected fees will provide revenue to the 2009 Capital Spending Plan. Mr. Beardslee reported that outreach efforts have been made with the development community to explain the program and determine if there are any negative impacts. Staff have reviewed the fee proposal with Legal Counsel and determined that, since the fees are small and expense neutral, and are specific to the Loudoun Water business process, a public hearing and Board action are not required to implement. Mr. Beardslee recommended that the fees be incorporated into the next Loudoun Water rate increase. The CIP Committee asked questions regarding the ability ofthe consultant to meet the work demand when developers become more active. No action was required ofthe CIP Committee.

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5. Susan Bour provided a quarterly update to the CIP Committee on the status ofthe Red Dot Program. Phase 2 is the focus at the present time and work is progressing with no major issues. Ms. Bour reviewed with the CIP Committee a map depicting the Phase 2 projects. The Committee requested that a quarterly map be included in the Board meeting packet. No further action was required ofthe CIP Committee.

6. Kevin Wood and Tim Coughlin made a presentation to the CIP Committee on the methodology for tracking and reporting on the 2009 Capital Spending Plan. Mr. Wood explained that the Spending Plan was created from the draft 2009 update ofthe 10-YR CIP to maintain the $60M cap developed as part ofthe Revenue Based Approach for funding the Capital Financing Plan. The draft 10-YR CIP contained 112 projects for possible funding in 2009 with a total dollar allocafion of $106M. Staff reviewed the 112 projects and organized them according to a priority ranking system of Contractual Obligation, Mission Critical, High Priority, and Annual Allocations & System Improvements. Using this process staff reduced the number of projects in the Capital Spending Plan to 78 and the required funding for the Plan to $59.6M. Mr. Coughlin explained that approval of projects for spending will be tracked and updated monthly on a spreadsheet. Revenues and project expenditures will be captured and presented monthly in graphical fomi to the CIP Committee and to the Finance Committee. The graphical presentation will allow observation of trends in revenues and expenditures that will highlight to the Committees the need for mid-course corrections in the Capital Spending Plan. No action was required ofthe CIP Committee.

7. Tim Coughlin made a presentation to the CIP Committee on the concept for a proposed Pipeline Constmction Plan for Contractors. Mr. Coughlin explained that the program would be designed to take advantage ofthe favorable bidding climate and, at the same time, support pipeline contractors to insure a pool of qualified contractors to bid on Loudoun Water work when the economy improves. There are several pipeline projects that are Mission Critical that could be included in this program. The program would allow Loudoun Water to take advantage of possible stimulus funding from the federal govemment. The Committee discussed the priority for such a program and the extent of pipelines included in the 2009 $60M Capital Spending Plan. The Committee requested that Mr. Coughlin continue to work on the details and procurement issues for such a program and to come back to the Committee at a future meeting. No further action was required ofthe CIP Committee.

8. The CIP Committee deferred setting future meetings until the Committee chairman could be consulted.

Item 6F. - Finance Committee Summary - Presented by Mr. Hobie Mitchel The Finance Committee met at 7:00 a.m. on January 22, 2009 at the Administration Building. Those present were Committee chairman Hobie Mitchel, Committee member Chuck Harris and Board members Johnny Rocca and Ed Burrell; staff members Dale Hammes, Rick Thoesen, Jewell Lilly, Kevin Wood, Todd Danielson, Samantha Villegas, Carla Burleson, Debbie Leuck and Brian Games; and financial advisors Jaime Traudt and Mitch Brigulio with Davenport and Company.

Quarterly Investment Review - Mr. Traudt reviewed the investment portfolio as of December 31, 2008. Investments are well diversified in agency and treasury securities. We continue to avoid the commercial paper market, Fannie Mae and Freddie Mac. Recommended agency purchases are Federal Home Loan bonds (not to exceed 35%) of holdings) and Federal Farm Credit bonds (not to exceed 15%) percent of holdings) and the utilization of other short term investment vehicles such as ovemight repos. Collateralized CD's and taxable municipal bonds (currenfiy yielding more than agency securities) should also be considered as addifions to the investment portfolio; however, these opportunities are not as plenfiful from dealers so they account for only 10%) ofthe overall target holdings. Staff will have to seek out opportunities to invest in these types of securities with the investment dealers. The weighted

February 2009 --11--

average yield on the investment portfolio at the end ofthe year was 4.00%) with an average maturity, in days, of 537. Mr. Traudt mentioned that our portfolio is defensive, but our yields will continue to come down slowly. In light of this fact, there was discussion regarding the need to reposition ourselves by examining our yields on investments versus borrowing, the feasibility of finding investors that would be willing to invest in our infrastructure endeavors, and the possibility of defeasing or refinancing current obligations. In addition, it was noted that there may be potential savings by doing construction now while costs are down versus reinvesting our cash at lower interest rates. Mr. Hammes expressed the need to take the time to determine the best way to use our cash now and in the future so we can continue to make good decisions, which is why we are in good standing now. Mr. Traudt noted that our investment decisions need to be balanced with our spending plan by looking at where things are today along with the market changes and predictions. Mr. Harris expressed his concern that we may be overestimating our investment revenue/funds by focusing too much on now and not looking at projections further out into the future. Management and Davenport will meet to further examine our options, come up with a plan and report back to the Finance Committee.

During the next quarter, purchases will be focused on treasury notes, FHLB securities (FFCB holdings have reached the target holding of 15%) and opportunities for invesfing in collateralized CD's and/or taxable municipal bonds. We will continue to avoid reinvestment in FHLMC and FNMA securifies until their situations are stabilized.

Approval of Resolution of Intent to Adopt Third Rate Tier for All Community Water Systems -Mr. Danielson brought forth the action for approval of Resolution of Intent to set a third tier water rate for the community systems of Beacon Hill, Village Green at Elysian Heights, Lenah Run, Raspberry Falls, the Reserve at Rokeby Farm, Selma and all new Community Water Systems. It was noted that the proposed third tier will apply to usage greater than 150%) above individual customer winter quarter usage. Based on 2008 usage patterns, more than 50% of the community would not see an increase in their water bills; however, of those that do exceed the usage threshold, the increase ranges from $10 per month to $60 per month for water service. Ms. Villegas noted that the primary purpose ofthe third tier is to send a strong message to conserve water and help bring demand in line with supply and that the additional revenue will be used to fund further education and outreach projects as well as offset increased repair and replacement costs. In addition, she noted that customers using 700 to 1,000 gallons per day will be most affected. Most of these customers reside in 4,000 to 5,000 square foot homes (4-5 bedrooms) on '/2 to 1 acre lots. However, internal use does not account for the over use; irrigation systems are the main culprit. Mr. Harris expressed his concern that the amount proposed for the third fier penalty is not high enough to slop the excessive use of water.

Preview of 2009 Financial Summary Report to the Finance Committee - Ms. Burleson presented the 2009 Financial Summary Report (Draft) which will be distributed on a monthly basis. The report focuses on the following areas; financial statements, customer growth and ERC's, operating budget revenues and expenses, capital program revenues and expenditures and investment activity in the form of text, charts and graphs. Ms. Burleson asked the committee and board members present to provide feedback as to whether there is anything else they would like to see added to the report. Mr. Harris suggested an additional legend to the Capital Program Revenues (Monthly Basis) graph depicting the various sources of revenue, i.e. Fairfax County Grant, etc. The final version of the report will be distributed at the next Finance Committee meeting.

Development of Finance Committee Charter and 2009 Work Plan- Mr. Hammes noted that he will develop a plan and calendar that will be emailed to the committee members for review.

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Miscellaneous - Mr. Mitchel discussed the potential need for removal of the large dirt pile located on Loudoun Water's properly. He noted that at some point this pile will need to be removed and may be costly. He mentioned that Shirley Contracting may be in the market lo purchase dirt in the near future and the polenfial for Loudoun Water to generate revenue from the sale ofthe dirt. Jn addition, Loudoun Water could give the dirt away, at some point, as long as the recipient hauls the dirt away at their expense. Mr. Rocca agreed that if we can make a reasonable amount of money on the dirt pile, then we may want to consider removing it; otherwise, it can remain where it is for now.

Next meeting date/time - Thursday, February 26, 2009 at 7:00 a.m. There being no further business, the meefing adjoumed al 9:15 a.m.

Item 6G. - Personnel/Nominating Committee Report - Presented by Charlie McKinney The Personnel/Nominating Committee Meeting was held on Monday, January 26 at 4:00 pm in the Loudoun Water Boardroom. Board Members in Attendance: Committee Chairman Charles McKinney, Patti Psaris and Chuck Harris Staff in Attendance: Dale Hammes, Rick Thoesen and Mary Amsbarger Secretary: Jewell Lilly

Nomination of Board Vice Chairperson • The committee agreed to recommend Johnny Rocca at the February Board Meeting to fill the

vacant posifion of Board Vice Chairperson until the next elecfion, scheduled for June 2009.

Committee Protocols • Minutes will be taken by the Board Secretary. • Action items will be confirmed at the end of each meefing and by email. • Minutes will be emailed in draft formal for the input ofthe Committee members. • Meetings will be held monthly, lo be canceled if no business is required that month. • Meetings will be held the fourth Monday of each month at 4:00 pm. i he next meeting is

scheduled for February 23rd. A meeting invite will be sent out to get this recurring meeting on attendee calendars. Action: Jewell Lilly-Completed.

Charter • A draft charter was presented and reviewed. • Changes will be made as suggested during this meeting and another draft will be sent to the

Committee. • A final draft will be presented in the Board Package to the full Board for approval, Jewell to put

charter into draft Board write-up fomiat. Action: Jewell Lilly.

Role of Board Secretary • The Board Secretary will attend committee meetings as the official record keeper and to provide

clarity for documents and materials. A full explanation of these duties is forthcoming.

General Manager and Deputy General Manager Evaluation Process

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• Effort to gel the committee on a schedule to discuss the process annually, and to provide the opportunity for input from the Board.

o Purposes ofthe process include tying the infrastructure framework to discussion of various elements, i.e. incenfives, deferred compensation, etc... In addifion to discussing items of importance to the GM and DGM.

o Ms. Psaris would like to put a process in place and take the evaluation process to the Board. She will send out as a working draft to the Board, and would also like to hear from the GM and DGM with their ideas on goal-setting. Action: Patti Psaris to complete draft form. Action: GM and DGM lo submit goal-setting ideas by the next meeting.

• Ms. Psaris would like lo review executive packages from other authorities to compare with our GM/DGM package. Action: Dale Hammes to get packages Irom industry peers for Committee review.

• Ms. Psaris will incorporate committee comments to the evaluation by this Friday, and then send a working draft to the Board Secretary for inclusion in the Board Package for comment. This will be a living document and can be edited by the Committee as needed. A final draft will be approved by the committee at the February 23rd Personnel Meeting. Action: Palti Psaris to provide working draft. Action: Jewell Lilly for inclusion in Board Package.

o Dale Hammes mentioned that most GM/DGM posifions are employed under contract and the committee may want to consider this option. If so, legal counsel could be of assistance. The GM and DGM will begin working on their goals, focusing on organizational goals as opposed to individual goals. Further direction from the Committee will be required if additional individual goals are in mind. Action: Dale Hammes and Rick Thoesen to bring goals to the next committee meeting.

Committee Work - FY 09

• Annual work will include the GM/DGM packages • Create timeline for evaluation process • Provide direction for how the personnel services budget goes to the Board; think about how to do

this belter. • Mr. Harris requested a 12 month event calendar showing deadlines at both the Board and

Committee levels to develop and internal time phase. Action: Mary Arnsbarger to bring draft calendar lo next meeting for review.

o Mr. Hammes asked if there were any topics the Committee would like to learn more about. • Mr. McKinney would like to talk about what the policy side for the Board and what the policy

side is for Management to avoid mixing of roles and responsibilities. Addifionally, would like to talk about what the GM and DGM do on a typical day-to-day basis.

• Mr. Hanis would like lo know 1) what are our personnel policies 2) How do we manage our personnel retention 3) What do we do lo develop our work force 4) What does staff need from the Personnel Committee, please define the roles and responsibilifies ofthe Committee and 5) How do we encourage the efficiency of workers?

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• Mary Arnsbarger mentioned that persoimel policies are reviewed by legal counsel every three years.

• Mr. Harris wants lo ensure that the Committee is giving management the tools they need to empower employees. Action: Mr. Harris would like to hear comments from the GM, DGM, Mary Arnsbarger and Jewell Lilly al the next meeting.

• Ms. Psaris would like to have an informafional overview ofthe Human Resources department, as well as an exchange on the information and leaming parts. Action: Mary Arnsbarger to provide.

• Mr. Thoesen commented that validation.of staffs efforts is important to personnel. • Mr. Hammes requested that the Committee think about what the Board needs from staff in terms

of outcome?

Miscellaneous • The Loudoun Water Perfomiance Assessment, conducted by Red Oak Consulting, was

distributed for review by the Committee members. A presentation is planned to the full board -date to be determined.

The Personnel/Nominafing meeting adjoumed at 5:30 pm.

Item 6H. - Development and Succession Planning Committee Report - Presented by Patti Psaris The Development and Succession Planning Committee met on Monday, February 2"' at 4:00 pm in the Loudoun Water Boardroom. In attendance: Fred Jennings, Charlie McKinney, Committee Chairperson Patti Psaris, Johnny Rocca, John Whitmore, Hobie Mitchel, Dimitri Kesari. Legal Counsel: Stanley Franklin "'' Secretary: Jewell Lilly

Committee Protocols Ms. Psaris provided opening remarks, stating the purpose ofthe committee.

Type/Charter • Dufies ofthe committee will change as needed or as directed by the Board. • This is an Ad Hoc Committee that will sunset when its mission is completed.

Ground Rules • Act as a committee, not individuals. • Be mindful of sensitive issues and confidentiality. • Provide input. • Stay focused on agenda and issues.

Minutes The Board Secretary will attend the committee meetings, take minutes and keep the official records. Minutes will be reviewed by the committee for comment and clarificafion prior to inclusion in the Board Package.

Schedule

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• Outcome ofthe committee is to set the framework on how the Authority moves forward organizationally and within the office ofthe General Manager. "

• A schedule for the committee work will be set for short-temi and long-term goals.

Background Information « A packet of reference material provided for background information included:

o SHRM Case Study: Establishing a Succession Plan o Organizafion Charts o Loudoun Water Business Management Team List • •

Committee Discussion o All present provided comments regarding the objectives ofthe committee and succession

planning for Loudoun Water. o Committee objectives and goals discussed included: Succession planning for the GM and DGM

positions; defining what the organizational structure will look like in the future; evaluating the structure ofthe General Managers Office that best supports the iiiture mission ofthe organization and helps Loudoun Water achieve its goals; begin succession planning that supports that future organizational structure and goals.

o fhe process lo move forward with decisions, how decisions will be made and the recognition that these decisions will impact the organization and staff

• Staff development including how the Authority is developing staff and staff development responsibility.

• The role ofthe Authority's Business Management Team • The Red Oak Assessment. ^-l

There being no further business, the Development and Succession Planning Committee meefing adjoumed at 7:00 p.m.

Item 7A. - Town of Hills boro - Presented by Todd Danielson Mr. Danielson provided a brief update on requests presented by the Town of Hillsboro.

Item 7B - Litigation Update - Presented by Stanley M. Franklin - Legal Counsel Mr. Stanley Franklin, Legal Counsel, read the appropriate code to enter into Closed Meeting.

Upon MOTION of Mr. Kesari, second by Mr. Mitchel, the Board moved to enter into Closed Meeting pursuant to Section 2.2-3711(A) Subsection 7. The items lo be discussed are: Consultation with legal counsel and briefings by staff members or consultants pertaining to actual or probable litigation and consultation with legal counsel regarding specific legal matters requiring the provision of legal advice by such counsel. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye. Upon MOTION of Mr. Mitchel, second by Mr. Kesari, the Board voted unanimously to retum to Open Meeting.

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upon MOTION of Mr. Kesari, second by Mr. Mitchel, the Board adopted the following Certification for Closed Meefing. Pursuant to Secfion 2.2-3711(d) of the Code of Virginia the Loudoun County Sanitafion Authority hereby certifies that, to the best of each member's knowledge, (i) only public business matters lawfully exempted from open meeting requirements by Virginia law, and (ii) only such public business matters as were identified in the motion convening the closed meeting were heard, discussed or considered by the Loudoun County Sanitation Authority. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinncy-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

Upon MOTION of Mr. Rocca, second by Mr. McKinney, the Board approved potenfial litigation payment up to the limits discussed during closed meeting. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

There being no further business, upon motion duly made, seconded and carried the meeting adjoumed at 5:53 pm.

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S= Chairman

i Secretary

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I LOUDOUN (iV WATER


Minutes ofthe Loudoun Water Board Meeting, March 12, 2009

The board meefing was held at 3:00 pm in the Boardroom ofthe Loudoun Water building located at 44865 Loudoun Water Way, Ashburn, Virginia.

Board Members: Chaimian Fred Jennings •A Burrell Dimitri Kesari Charles McKinney John Whitmore Johnny Rocca Patti Psaris Hobie Mitchel Chuck Harris


I LCSA Staff in Attendance: Dale Hammes-GM/ Treasurer Rick Thoesen/Deputy GM Jewell Lilly/Secretary Carla Burleson Dave Linski Mary Arnsbarger Tom Bonacquisti Samantha Villegas Liza Young Rick Jacobson Mike Beardslee Richard Hunt Kevin Wood Doug Shoop Bruce Ringrose Mike Latham Malt McGowan Roddy Mowe Tim Coughlin Tom Broderick Craig Lees Mark Guanco Karen Arnold Lola Stith

AGENDA ITEM 1 - CALL TO ORDER The meefing was called to order by Chairman Jennings at 3:00 pm.

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AGENDA ITEM 2 - GENERAL MATTERS 2A. Approval of Minutes Upon MOTION of Mr. Mitchel second by Ms. Psaris, the minutes ofthe meeting of February 12, 2009 were approved. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Absent for the vote, Mr. Harris-Absent for the vote, Mr. Burrell-Aye.


March 2009


2C. General Manager's Report • Norair - a verbal agreement has been reached wiihin the established guidelines. • The Shay Allen case has been nonsuited due lo a technicality. o Land Use Update - Potomac Radio Incorporated has filed a Commission Permit and Special

Exception Application with Loudoun County to construct WAGE towers on Loudoun Water's Ashburn property.

• Kincora also filed for SPEX for a major league ball field and plan a community development authority.

• A $20 million grant has been received for Broad Run water quality improvements. • Loudoun Water will be settling on the Wildwood (Parcel 15) property by March 20, 2009. • We are working on updating Loudoun Water policies into a re-written statement of policy. We

will be emailing a few at a time to Board Members for comment and will bring the final document to a future Board Meeting.

2D. Board Member Comments • Ms. Psaris thanked Mr. Thoesen for the invitation to the Strategic Plan workshops. She also

presented a book to employees entitled ''What Would Google Do'''. (At this point in the meeting Mr. Harris arrived).

• Mr. Mitchel mentioned the Raspberry Citizen concems that winter usage will impact the summer charges and requested that staff be prepared to address the concems at the Public Hearing. Staff responded that they have been conducting ongoing meetings with citizens and have an infomiational meeting scheduled after the Board meefing tonight.

• Mr. Jennings made comments about the Board setting Raspberry rates at the last meeting. He also requested that Board Members requests for information be sent directly to the General Manager, copying the Chairman, as this is the Loudoun Water policy. He also requested that concems be raised at the Board Meeting for assignment to the appropriate committee. This will allow thorough vetting at the committee level.

(At this point in the meeting. Mr. Kesari arrived) • Mr. Rocca asked that Board Members please attend committee meetings instead of vetting

informafion at the Board Meeting.

AGENDA ITEM 4 - CONSENT AGENDA There were no consent items.

AGENDA ITEM 5 - ACTION AGENDA 5A. Resolution of Intent to Set User Rates for Central System Water Reuse - Presented by Liz Sitter

The Broad Run Water Reclamation Facility was designed with the intent of producing reclaimed water for distribution in Loudoun Water's water reuse system. This promotes the beneficial use of our highly treated water and reduces the wasteful use of drinking water. Reclaimed water can be used for many commercial applications, including irrigation, toilet flushing, and cooling water for "green" development, including data centers. The use of reclaimed water will help reduce peak summer potable water demands for new construction within the service area.

For planning of the water reuse system, Loudoun Water's consultant, CDM (Camp, Dresser, McKee), conducted a rate evaluation over a nine month period and made a rate recommendation. During this

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time, CDM collected infonnation about our planned water reuse system and about the water reuse rates charged in other areas. Other resources were used as benchmarks, including the AWWA/WEF study on water reuse rates and the WaterReuse Foundation Economic Framework documents. Also factored into CDM's analysis was the understanding that, unlike water and wastewater service, water reuse is an optional service for our customers identified in the initial service area (see attached map). The water reuse rale needs to balance the systems cost with being attractive to potential customers.

As Loudoun Water began to present the concept of the water reuse system to developers, the feedback we received was that the combinafion of initial capital cost, availability fees and meter fees would cause the initial costs for water reuse to be too high. The wastewater availability fee will include the water reuse main as shown in the 10 year CIP. CDM recommended a minimum uniform rate of 70 percent of the current drinking water rate ($1.82/ 1000 gallons).

Based on feedback from the CIP Committee and Finance Committee, the rale for the central system water reuse was proposed to be 75 percent ofthe base potable rate:

Rate per 1000 gallons for reclaimed water usage $1.36

As-built fees for "water" will apply for water reuse

The goals of the water reuse system are to reduce non-potable demands on the drinking water system and support "green" infrastmcture. This is in alignment with Loudoun County Economic Development and supports the policy of integrated water systems.

PATH FORWARD: '-^ Once the Board adopts the resolution of intent, staff will advertise the public hearing within a week, running the advertisement for two consecutive weeks. The pubUe hearing will be scheduled for at least 60 days after the date of the second advertisement. Public opinions that are received at the public hearing will be considered when a rate is adopted by the Board.

Upon MOTION of Mr. Mitchel, second by Mr. Kesari, the Board adopted the Resolufion of Intent as presented. Mr. Rocca called to question. Further discussion followed and Ms. Psaris called to quesfion. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Hams-Aye, Mr. Burrell-Aye.

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RESOLUTION OF INTENT

BE IT RESOLVED, that the Loudoun County Sanitation Authority (dba Loudoun Water) hereby

signifies its intent to adopt the following rates, fees and charges applicable to the water reuse system for

usage on or after April 1, 2009 in the central system and hereby sets the date of May 28, 2009 at

Loudoun Water's Administrafivc Services Facility at 6:00 P.M. for a public hearing to receive

comments regarding the same.

BE IT FURTHER RESOLVED, that the General Manager is directed to publish in a newspaper having general circulation in Loudoun County for two consecutive weeks, notice ofthe proposed rates, fees and charges and the day, place and time ofthe public hearing.

The proposed rate fbr the central system water reuse is:


As-built fees for "wat er" will apply for water reuse

All other rates, fees and charges shall remain unchanged.

AGENDA ITEM 3 - ADOPTION OF AGENDA Mr. Jennings requested that Infomiafional Item 7A "Red Oak Consulting Succession Planning Presentation" be placed after the Action Agenda items.

Upon MOTION of Mr. Rocca, second by Mr. Kesari, the agenda was approved with the above amendments. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

5B. Resolution for Approval for Staff to Proceed with VDH Funding Applications - Presented by Kevin Wood The purpose of this communication is to update Board members on the status of Loudoun Water applications to VDEQ and VDH for federal stimulus funds.

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I For wastewater project applications, the following items can be noted:

Total dollar amount of submitted applicafions - $8,354,072

VDEQ appiicafion deadline was March 9, 2009

Water reuse and other "green " projects were singled out for emphasis in the application fbrms

Staff prepared and submitted six project applications for funding

Applications were submitted for the following projects:

North Water Reuse Main - 3,900 Feet - $670,000

East Water Reuse Main - 4,900 Feet - $1,441,000

Water Reuse Main-South of Waxpool Road- 2,600 feet - $650,000

BRIPPI Phase 3N - Interceptor and Water Reuse Main - Each 2,700 Feet - $3,573,000

Aldie Sewer System - Bond Principal Forgiveness - $206,072

Sewer Rehabilitafion - 16,360 Feet of Trcnehless Sewer Reeonstmction - $1,814,000 Four of the projects had major portions of cost deferred under the 2009 CIP Revenue Based Approach

I For water project applications, the following items can be noted:

• Staff is planning to submit at least five applications worth $16,000,000

• Staff is evaluating one addifional project for submittal ;• ^

• Ofthe five projects to be submitted, three are Red Dot projects, one project is part ofthe Central Water Supply Plan, and one is for Community Systems

• Three of the five projects to be submitted are included in the 2009 Capital Spending Plan for $3,760,000

Upon MOTION of Mr. Rocca, second by Mr. McKinney, the Board directed staff to proceed with the VDH Funding Applicafions. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Absent for the Vote, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

Informational Item Item 7A - Red Oak Consulting Succession Planning Presentation - Presented by Bob Bolton and Judy Bedard. Mr. Bolton and Ms. Bedard, representatives of Red Oak Consulting, presented a Performance Assessment Overview. Copies are available from the Board Secretary.

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AGENDA ITEM 6 - REPORTS Item 6A - Water and Sewer Agreements - signed by the General Manager on behalf of the LCSA Board:

VACATIONS and EASEMENTS 1. Easement - Dulles Industrial Park. 2007-0057 ' " ,-2. Easement - Hampton Inn Suites. STPL-2005-0089 3. - Easement - Wal-mart Dulles. ' ' 4. Easement - Winchester Homes Ibr Stratshire Crossing, Phase 1. SBRD-2006-0041 5. Easement - Goose Creek Village North, Retail Center. STPL-2007-0005 6. Easement - East Severn Way, Lot 2. STPL-2008-0019 7. Easement - Dulles District, Canan Property. 2008-0129 8. Easement - Goose Creek Village North Sycolin Road, Phase 1. DEDI-2008-0007 9. Easement- Rockbridge Secfion 1. BLAD-2008-0091 10. Easement - Potomac Green Section 12. 2005-0110 11. Easement - Lizzio Property Townes at Eastgate. DEDI-2007-0010 12. Easement-Dulles 28 Honda. STPL-2008-0016

Item 6B - CIP Report - Presented by Mr. Johnny Rocca The Capital Improvements Program Committee met on February 24, 2009 in the Broad Run WRF Conference Room. Those present were Board members John Rocca, Hobie Mitchel, and Ed Burrell; staff members Dale Hammes, Rick Thoesen, Kevin Wood, Tim Coughlin, Carl^ Burieson, Todd Danielson; Mike Latham, Tom Bonacquisti, Tom Broderick, Susan Bour, Liz Sitter, Beate Wright, Karen Arnold, and Bruce Ringrose.

1. Liz Sitter requested approval of a Resolution of Intent to Set User Rates for Central System Water Reuse. Ms. Sitter reviewed the background and development ofthe Water Reuse System with the Committee and explained the benefits provided to Loudoun Water and the environment by the program. Ms. Sitter reported that the recommended rate of $ 1.27 per thousand gallons was derived from a study prepared by Loudoun Water's consultant. Camp, Dresser & McKee, Inc., and comments on the program provided by the development community. The rate is selected to strike a balance between recovering a reasonable portion ofthe system's costs, and recognition that, since water reuse is optional, the rate must provide reasonable savings to the development community when compared to potable water use. The CIP Committee, after asking questions about the cost of potable water and the interest level in the development community, recommended increasing the rate to $1.46 per thousand gallons, and endorsed placing the request on the Acfion Agenda for the March 12, 2009 Board meefing.

2. Susan Bour made a presentation to the CIP Committee on the status ofthe federal govemment's stimulus funding tbr water infrastructure. Ms. Bour explained that the state would have about $20M for funding water projects. These funds would be available as loans through the Virginia State Drinking Water Revolving Fund administered by the Virginia Department of Health (VDH). Ms. Bour reported that a VDH meefing was scheduled for February 25, 2009 at which more details about the program would be made available. Applications will be due by March 27, 2009 with major ranking criteria based on project readiness, address existing health issues, and economic hardship. No action was required ofthe CIP Committee.

March 2009 - 6 -

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3. Liz Sitter made a presentation on the status of federal stimulus funding for wastewater infrastructure. Ms. Sitter reported that the funds would be made available through the state's Virginia State Clean Water Revolving Loan Fund as administered by the Virginia Department of Environmental Quality (VDEQ). About $78M will be made available as loans to local govemments with project applications due March 9, 2009. Ofthe $78M, a total of $I6M will be available for "green" infrastructure, including water reuse. Staff has assembled a list of potential projects with focus on water reuse, to be evaluated for submittal. As with water projects, project readiness, addressing environmental issues and economic hardship are major criteria. No action was required ofthe CIP Committee.

4. Beate Wright reviewed with the Committee the February 2009 Report on the Central Water Supply Program: Program Development and Permitting Phase. Ms. Wright presented a report form that will be used to document progress made and identify upcoming milestones as well as present budgets and expenditures. During February, weekly meetings were held with Luck Stone to move the land acquisition and permitting proeess forward. On February 12, 2009, a major presentation was made on the overall program to the Loudoun County Planning Commission. The team Charter meeting was held on February 20th. Upcoming milestones include holding a permit pre-application meeting with Loudoun County, meeting with VDH to review the Pilot Plant Approach and meeting with the Interstate Commission for the Potomac River Basin regarding a water supply coordination agreement. The CIP Committee reviewed the report form, discussed progress, and asked that the budget portion of the form be modified to incorporate reporting on the overall water supply program costs and the allotted CIP funds. The Committee requested that a presentation be made at the March 12, 2009 Board meeting. No action was required ofthe CIP Committee.

5. Tim Coughlin made a presentafion on the monthly update ofthe 2009 Capital Spending Plan. Mr. Coughlin reported that Equivalent Meter Unit (EMU) numbers for January 2009 were tracking similar to 2006 and 2007, but cost data were still too limited to reliably indicate any trends. The CIP Committee requested that staff prepare cash flow scenarios that look at the possibility that the BRWRF grant from the state, or the Fairfax County purchase of capacity in the BRWRF, might be significantly delayed, and establish a list of projects from the 2009 Capital Spending Plan that could potentially be deferred. No action was required of the CIP Committee.

The CIP Committee set their meeting schedule for upcoming regular meefings on March 24, 2009, April 28, 2009 and May 26, 2009.

Item 6C. - Finance Committee Summary - Presented by Mr. Hobie Mitchel The Finance Committee met at 7:00 a.m. on Febmary 26, 2009 at the Administration Building. Those present were Committee chairman Hobie Mitchel, Committee members Chuck Harris, Johnny Rocca and Ed Burrell; staff members Dale Hammes, Jewell Lilly, Kevin Wood, Todd Danielson, Samantha Villegas, Liz Sitter, Tim Coughlin, Tom Broderick, Carla Burleson, and Debbie Leuck.

I March 2009

Resolution of Intent to Set User Rates for Central System Water Reuse -Liz Sitter presented the draft for the Resolution of Intent to set water reuse rates for the central system. She noted that the Broad Run Water Reclamafion Facility was designed with the intent of producing reclaimed water for distribution; therefore, Loudoun Water wants to promote the use of this highly treated water. Reclaimed water can be used for many commercial applications, including irrigation, toilet flushing and cooling water for "green" development, including data centers. Loudoun Water's consultant, CDM, evaluated the rates and recommended a flat rate that was 70 percent of the current drinking water- rate ($1.82/ 1000 gallons). This equates to a proposed rate of $1.27/ 1,000 gallons for reclaimed water usage. In addition, the basic monthly charges and as-built fees for "water" will apply for water reuse. Liz discussed the use of an 80%) rate for reclaimed water with our first customer, a data center off of Russell Branch Parkway. They responded that an 80%o rate is higher than what they expected, and thus they would not have decided to use it; however, since they already have the infrastructure in place, they would probably go along with the 80%. The board members present had several comments and questions.

Mr. Mitchel suggested looking at the use of reclaimed water for geothermal heating and cooling for potential commercial and residential customers. He also asked Liz to look at the total absorption cost at the rate we are advertising and determine how long until we breakeven. He mentioned that he would be willing to offer his time and assistance with the analysis. Mr. Hiuris inquired as to the return on investment and risk for assumption (demand on the system). Liz responded that at approximately seven years it balances out and that our current customer uses approximately 300,000 gallons per day. However, the plant is capable of producing up to 200 million gallons per day. Mr. Harris recommended looking at the cash outflow and a performance analysis in light of today's economy in order to make pmdent priority decisions. He also asked how often the rate will be evaluated and Liz responded that it will be evaluated on a yearly basis. Mr. Hammes commented that most reuse systems are'nbt profitable within the short-term and Mr. Rocca mentioned the need to consider the long-term value to future generations. Mr. Burrell requested information as to how the rale was determined and the economic model that was used in the reuse analysis for review. Mr. Mitchel recommended advertising the reclaimed water at a 75%o rate of the current drinking water rate, rather than the 70%o suggested. Mr. I-iarris seconded. A public hearing on the rate set is scheduled for May 28, 2009, 6:00 p.m. at the Administrative Services Facility (ASF). Mr. Mitchel suggested that letters to potential customers of reclaimed water be distributed.

Review of Finance Committee Draft Charter and Draft of FY09 Work Plan -Ms. Burleson distributed the Draft Charter and Draft FY09 Work Plan for the Finance Committee to review. This is an attempt to let the committee know what has been planned in the past and to use for future planning purposes. The work plan is dynamic; therefore, items listed may be subject to change. Ms. Burleson commented that she is working with Davenport and Company, LLC on the draft for the 5-year financing plan that is scheduled to be presented at the April Finance Committee meeting. Mr. Hammes mentioned the need to increase rates sufficiently by 2019 and that the rate study is still ongoing. He also reminded everyone that the FY09 Budget is based on no rate increase. Board members and staff agreed that all future Finance Committee Meetings would be scheduled for every 4' Wednesday ofthe month at 7:30 am.

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Update/Feedback on Proposed Community Systems Rates -

Ms. Villegas reported that she and Mr. Danielson will be hosfing three informational meetings (March 12, March 23 and April 1, 2009; 7:00 p.m. at the ASF) prior to the Public Hearing scheduled for April 29 2009, 6:00 p.m. at the ASF.

The question of faimess involving the system rates has been brought up by several customers. Ms. Villegas noticed that there was one comment in, common regarding the winter quarter rate usage calculation, i.e. "If you want me to open my faucet(s) over the winter so I can use more water over the summer, I will." This type of response negates the promofion of water conservafion. In addition, there was one customer who has several college students that do not live at home during the winter (away at school); however, they come home in the summer. As a result, she ends up paying more in the summer because her water usage is too low in the winter.

Mr. Mitchel quesfioned whether the focus ofthe community systems rate should be on irrigation.

Mr. Rocca suggested several options to the winter quarter usage issue; 1) apply a 95%) rule and make decisions on it since you can't please everyone or 2) use the community average and the percentage of growth (for FY2008) as the base and change this rate over time based on future growth.

Mr. Harris suggested setting a gallon per day threshold to keep the lower end users and others content.

Mr. Hammes commented on the need to decide if Loudoun Water is going to get rid of the current winter quarter usage.calculation soon so that MUNIS can be changed to reflect the new bilfing calculafions. He noteclthat the process to update MUNIS takes time. Mr. Hammes suggested further analysis and recommended that the data be presented at the March meeting for discussion.

Review of January Financial Summary Report -Ms. Burleson briefly reviewed the report noting a few highlights. In addition, she briefiy discussed the customer growth statistics and charts (ERC's). Mr. Mitchel commented that he is not seeing much in the pipeline at this time. Ms. Burleson mentioned that she and Mr. Wood are reviewing what is currently in the pipeline. Mr. Hammes mcnfioned the possibility of a Bond Defeasance with a new bond issue. This will be reviewed further and discussed at the March meeting.

Meefing was adjoumed at 8:15 a.m. Next meeting was scheduled for Thursday, March 26" at 7:30 am.

Item 6D. - Personnel/Nominating Committee Report - Presented by Charlie McKinney Mr. McKinney had no further ciarificafions.

I March 2009

Item 6E. - Development and Succession Planning Committee Report - Presented by Patti Psaris Committee Mission Statement and Goals

• Ms. Psaris presented the Committee Mission Statement and Goals based on discussions from the previous meefing. She explained that the committee is clarifying the parameters.

• In future discussions, the Committee will discuss roles and responsibilifies ofthe Board, GM and DGM and seek a consensus for the process to which these roles will be defined (By-laws, policy)

• The Committee adopted the Mission Statement as presented, and directed the Board Secretary to include the statement in the March Board Package.

Red Oak Consulting Presentation - Bob Bolton and Judy Bedard • Red Oak Consulting provided an overview ofthe Loudoun Water Perlbrmance Assessment (a

copy of this document is available from the Board Secretary). • A presentation on Succession Planning and various organizational structures for comparison was

provided by Red Oak Consulting. • Ms. Psaris asked if Red Oak had any recommendations about the GM stmcture from the

Performance Assessment. Mr. Bolton responded with the following recommendations: • There needs to be better clarify ofthe GM and DGM roles and responsibilities and how that

flows through the organization; and: • Loudoun Water needs asset management, a sustainability plan through proactive approach that

balances long term cost objectives.

The Development and Succession Planning Meeting adjourned at 6:10 pm.

Item 7 A. - Red Oak Consulting Presentation - Bob Bolton and Judy Bedard • Red Oak Consulting provided an overview ofthe Loudoun Water Performance Assessment (a

copy of this document is available from the Board Secretary).

Item 7B. - Central Water Supply Program - Presented by Beate Wright Ms. Wright provided an update on the progress, milestones and budget on the Central Water Supply Program, along with a graph which charted program development and permitting phase. Copies are available from the Board Secretary.

• Mr. Jennings stated that he expects a comprehensive reflection ofthe State ofthe Industry, going well beyond only Black & Veatch, Loudoun Water needs to take ownership of altemative product delivery.

Item 7C. - The 2009 Strategic Planning Approach and Schedule - Presented by Richard C. Thoesen Background The Loudoun Water staff developed the 2002 Strategic Plan and the 2006 Strategic Plan Update in-house. Both plans have served as road maps for continuous improvement as well as defining our Mission, Vision, and Values over the past seven years.

With Ihe objective of creating a fresh look at our strategy, the Business Unit Managers invited three management consulting organizations to interview during the final quarter of 2008. Ofthe two firms responding, the Haines Centre for Strategic Management was selected to provide strategic planning services.

March 2009 ^10-

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I System Thinking The Haines Centre promotes the concept of "Systems Thinking" based on the belief that strategy is not an activity to be pursued periodically, but is a continuous endeavor for the organization. As such, the concept of "Strategic Managemenf is pursued as three goals; development, successful implementation; and commitment to sustain change over time. In effect, being strategic becomes the culture of the organization. The "Systems Thinking" framework is presented below:

Systems Thinking Framework - "A New Orientation to Life"

C - Inputs D -Throughputs A - Outputs

TODAY

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"THE SYSTEM" FUTURE

B-FEEDBACK LOOP FUTURE ENVIRONMENT

STAKEHOLDER INPUT

Staff Ownership Knowing that "people support what they help create", the planning effort was organized using two separate parallel teams ("Parallel" meaning independent of the chain of command); the Strategic Steering Committee appointed by the Deputy General Manager and the Strategic Development Team composed of a cross-secfion of employees of the organization who volunteered to participate in the process.

I March 2009 11

The Process The strategic planning process is composed often steps best summarized as follows:

Step 1 Overview of Systems Thinking; organizing the parallel teams; scheduling; and commencing the Communications Plan.

Step 2 Environmental Scan - Expectations of the future.

Step 3 Formulation and prioritization of challenges to be faced and achieved for Loudoun Water.

Step 4 Parallel feedback meetings with key stakeholders; defining Mission, Vision and Values.

Step 5 Develop Key Success Measures for the organization and current state assessment.

Step 6 Develop detailed action plans by subject matter using mufti-disciplined focus groups.

Step 7 Update and briefing ofthe Strategic Steering Committee and the Strategic Development Team. Invitations to work on acfion plan initiatives.

Step 8 Finalize the Strategic Plan; allocate resources for achievement and the Communicafion Plan. Assign the Strategic Management Coordinator for the life ofthe Plan.

Step 9 Develop Business Plans (per Business Unit).

Step 10 Ongoing Strategic Management with Quarterly Reporting.

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Schedule

I Step^^ Day Month Involvement January Steering Committee February Steering Committee and Development feam February Development Team March Steering Committee March Steering Committee April Development Team May Steering Committee May Development Team June Development Team

10 June Steering Committee with Sub group Reps II June Steering Committee with Sub group Reps

July-August Business Units 10 November Strategic Management Coordinator 11 May, 2010 Steering Committee

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Recommended Board Participation 1. Staff recommends the Board fully participates in Step 4 and Step 7; each as dedicated workshops

with the consultant and the Strategic Steering Committee.

2. Staff recommends the Board approve the Strategic Plan during the regulariy scheduled Board meeting in September.

3. The General Manager's Office will review and approve the supplemental Business Plans developed by each ofthe Business Units.

• Chairman Jennings thanked committees, noting there was an abundance of material reflecting their hard work in the Board Package.

• Mr. Jennings and Vice-Chairman Rocca will accompany staff to Richmond to meet Luck Stone.

Item 7D. - Closed Meeting l- pon MOTION of Mr. Mitchel, second by Mr. McKinney, the Board moved to enter into Closed Meefing pursuant to Section 2.2-3711(A) Subsection 1. Discussion, consideration or interviews of prospective candidates for employment, assignment, appointment, promotion, performance, demofion, salaries, disciplining or resignation of specific officers, appointees or employees.

Vote: Mr. Jemiings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

Upon MOTION of Mr. Mitchel, second by Mr. Kesari, the Bolifcl voted unanimously to return to Open Meeting.

Upon MOTION of Mr. Kesari, second by Mr. Mitchel, the Board adopted the following Certification for Closed Meeting. Pursuant to Section 2.2-3711(d) of the Code of Virginia the Loudoun County Sanitation Authority hereby certifies that, to the best of each member's knowledge, (i) only public business matters lawfully exempted from open meeting requirements by Virginia law, and (ii) only such public business matters as were identified in the motion convening the closed meeting were heard, discussed or considered by the Loudoun County Sanitation Authority.

Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

There being no further business, upon motion duly made, seconded and carried the meeting adjoumed at 5:35 pm.

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I Cnairman \ secretary

March 2009 -13-

I LOUDOUN «iV WATER


Minutes ofthe Loudoun Water Board Meefing, April 9, 2009


Board Members: Chairman Fred Jennings Ed Burrell Dimitri Kesari Charles McKinney John Whitmore Johnny Rocca Patti Psaris Ffobie Mitchel Chuck Harris

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General Counsel - Stanley Frank 1 in

I LCSA Staff in Attendance: Dale Hammes-GM/ Treasurer Rick Thoesen/Deputy GM Jewell Lilly/Secretary Carla Burlesdh Dave Linski Mary Amsbarger Tom Bonacquisti Samantha Villegas Liza Young Rick Jacobson Mike Beardslee Marc Schwartz Kevin Wood Bill Haase Bruce Ringrose Mike Latham Matt McGowan Roddy Mowe Tim Coughlin Tom Broderick Sue Bour Mark Guanco John Huston Lola Sfith


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AGENDA ITEM 2 - GENERAL MATTERS 2A. Approval of Minutes Upon MOTION of Mr. Mitchel second by Mr. McKinney, the minutes ofthe meeting of March 12, 2009 were approved. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.


April 2009


2C. General Manager's Report • Mr. Hammes introduced Kevin Wood, who provided an update on the Stimulus grant from the

Virginia Department of Health. Mr. Wood distributed a handout ofthe Draft Project Priority List for the 2009 Stimulus Funds (available from the Board Secretary).

• Mr. Hammes distributed a draft agenda for the Board Retreat scheduled Monday, May 11 and Tuesday, May 12 at the National Conference Center (available from the Board Secretary).

2D. Board Member Comments • Mr. Whitmore thanked Tom Broderick for presenting to his Farmer's Association. • Mr. Mitchel requested an update on the Loudoun Water property and on where we stand with

Fairfax. • Ms. Psaris requested that Mr. Flammes help explain what is needed from the Board with regard

to the policy review. Mr. Hammes hopes to send small batches ofthe policies for comment prior to each Board Meeting.

• Mr. Burrell thanked Dale Flammes and Carla Burleson for meeting with him and answering his quesfions.

• Mr. Rocca provided to staff a description and explanation of his Nafive American formal attire. • Mr. Jennings commented favorably on the outstanding community pieces that were mailed to

customers. He stated that Luck Stone meeting was cancelled and will be rescheduled. He also mentioned that Dominion Electric is working with advance metering and automated reading with a two-way communication connection and perhaps Loudoun Water could look into similar opfions.

AGENDA ITEM 3 - ADOPTION OF AGENDA ;-Mr. Kesari requested that "Current Contracting" be added as Agenda Item 5B. Mr. Jennings requested that "Surplus Land" be added as Agenda Item 7B.

Upon MOTION of Mr. Mitchel, second by Mr. Kesari, the agenda was approved with the above amendments. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

Upon MOTION of Mr. Rocca, second by Mr. Kesari, the Board approved the following Consent Agenda Items: Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

AGENDA ITEM 4 - CONSENT AGENDA 4A. Approval of Task Order No. 2 with Dewberry and Davis for Record Drawings and GIS Data Production, Phase II - Presented by Mike Beardslee In 2008 Loudoun Water contracted with a consultant (Dewberry) to provide surveying. Record Drawing (as-built) plan creation, and GIS data development services for each water and sewer construction project that is completed. This contract was the result of a competitive procurement process, and was awarded with one base year and two option years to be exercised solely at Loudoun Water's discretion. The contract and first Task Order were approved by the Board on July 10, 2008. J he newly adopted program provides higher accuracy data and quality products in a timelier manner, resulting in significant benefits to Loudoun Water.

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Task Order #1 included Record Drawing creation for some construction projects, plus additional startup costs. Dewberry has completed Record Drawings and GIS Data for seven construction projects as part of Task Order #1, and has made significant progress on six additional construction projects. The production process is now well-established and fully documented. Dewberry is also providing monthly cost tracking informafion. Task Order #1 is 71%o spent ($177,636.44 to date), and at the current rate of expenditure, will meet or exceed the Task Order #1 ceiling of $250,000 in May, 2009.

J'ask Order 2 will authorize Dewberry to continue processing Record Drawings for newly completed construction projects using the methodology and procedures established in Task Order 1. Task Order #2 is for $400,000. It is expected that this amount will carry the program through approximately February 2010, at which fime authorization for additional funds will be sought. It should be noted that this forecast is an approximafion based on development activity. The actual cost incurred will be linked to the level of development activity. Altemative approaches to further encourage competition and share the work with the surveying community will also be evaluated at that time.

Loudoun Water recovers the cost of these Record Drawings ser\ices through administrative Record Drawing fees. These new fees provide significant financial support to the Record Drawings and GIS data program, as described in Attachment A - Record Drawing Fees. Approximately 85%o ofthe cost of Record Drawing services is recovered through these fees, and this figure is expected lo improve as the process matures.

This program is vital to the continued delivery and management of high-quality Record Drawings and GIS data. Approval will allow this work to proceed without interruption, providing significant benefits to both internal and extemal stakeholders.

The Board approved Task Order No. 2 for Dewberry and Davis LLC for a fee not to exceed $400,000 and authorize an approximate 10 percent contingency lo be controlled by the General Manager, for an authorized budget ceiling not to exceed $440,000 without further Board approval. Deauthorized $50,000 contingency for Task Order # 1.

Attachment A - Record Drawing Fees

Record Drawing fees were put in place on January 27, 2009 after an informational presentation to the CIP Committee. These fees are $1.50 per linear foot for wateriines, and $2.00 per linear foot for sewer lines, with a $1,000 minimum per project. Record Drawing fees in the amount totaling $185,800 have already been charged between the time of adoption on January 27, 2009, and the dale of this report preparation (March 20, 2009). Record Drawing fees in the amount of SI 1,151 have been paid to date. This lag is expected due lo the timing between when the fees are assessed, and the nature ofthe permit appiicafion and beneficial use processes. Fees are paid before costs are accrued.

These new fees provide significant financial support to the Record Drawings and GIS data program. Approximately 85%) of the cost of Record Drawing services is recovered through these tees, and it is expected that this figure will improve as the process matures. The table below illustrates the cost ofthe program, the CIP allocation, the offselfing revenue collected through these fees, the net impact to the CIP, and resulfing cost savings over the 2009 and 2010 CIP forecast.

April 2009

Item Cost of Record Drawings Program (estimated)

2009

$437,000

2010

$450,000 I Offsetting Record Drawing Fee Revenue (estimated) $318,000 $382,000

Net Impact to CIP $119,000 $68,000

CIP Allocation $250,000 $250,000

Cost Savings $131,000 $182,000

4B. Approval of Construction Phase and Specialty Inspection Services - Red Dot 19A & B, Phase II Brambleton Tank Water Booster Pumping Station Upgrade- Presented by Bill Haase On February 12, 2009 the Loudoun Water Board approved award ofthe construction contract for the Brambleton Tank Water Booster Pumping Stafion Upgrade in the amount of $982,850. The Notice-to-Proceed was issued to the contractor on March 18, 2009. This Task Order is for Hazen and Sawyer to provide supporting engineering services during construction.

The Brambleton Tank Water Booster Pumping Station was placed in service in 2005 and serves the 538 and 600 pressure zones. The existing pump station was planned to be built in phases as part of the original design. The upgrades include installing a standby power generator, replacing the existing two pumps and installing seven pumps. Three larger pumps will support the 538 zone, and two medium size pumps and two jockey pumps will support the 600 zone that includes Evergreen Hamlet, Woodland, and Evergreen Village.

Flazen and Sawyer designed this project and will remain involved in the project throughout the constmction period. They will provide construction administration services including reviewing shop drawings, constmction schedules, payment requests, responding to construction related issues, attending project meetings, reviewing changes to the contract and developing record drawings. Hazen and Sawyer will also provide regular site visits and specialty inspection services with personnel that have expertise in the electrical aspect of the construction. Key items that require specialty inspections include the electrical distribution system, control panels, power panels, automatic transfer switch equipment, and standby power generator connections. The new electrical service will be upgraded from 400 amps at 480 volts to 1200 amps at 480 volts.

Hazen and Sawyer has prepared a scope and budget for the constmction phase and specialty inspection services in the amount of $98,400 and $28,900 respectively for a total sum of $127,300. Staff has identified sufficient funds in the capital spending plan for these services. This project has been identified as Red Dot 19 A and B and is on the 2009 mission critical spending plan for capital projects.

The Board approved Hazen and Sawyer for construction phase and specialty inspection services for the Brambleton Tank Water Booster Pumping Station Upgrade for a fee not to exceed $127,300, with an approximate 10 percent contingency to be controlled by the General Manager for a total authorized budget of $140,000. Additional costs will require further Board authorization.

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AGENDA ITEM 5 - ACTION AGENDA 5A. Cancellation Notice - Public Hearing for Community Systems Tiered Rates - Presented by Todd Danielson

On Febmary 12, 2009 the Board of Directors adopted a Resolution of Intent to establish third and fourth tier rates for community systems customers. A public hearing date of April 29, 2009 was established and advertised as appropriate.

On March 12th and March 23rd staff held outreach meefings with community systems customers to provide information regarding the proposed rates and receive feedback prior to the public hearing. Approximately 35 different customers have attended the information meetings to ask questions and raise concems. A third meeting is scheduled for April 1st.

After thoughtful commentary and consideration of valid questions and concems raised by the customers, staff has determined that there may be other alternatives and approaches to consider with respect to the community water systems. Therefore, staff is recommending that the public hearing be canceled and further evaluation of system structures and rate designs be performed prior to submission of a revised Resolufion of Intent.

Customers of community systems will be notified ofthe cancellation through letter correspondence and the cancellation notice wil] be posted on Loudoun Water's web site.

Upon MOTION of Mr. Mitchel, second by Mr. Rocca, the Board formally canceled the public hearing regarding rates fpr community systems scheduled for April 29, 2009. • - '-" " Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

5B. Current Contracting - Presented by Dimitri Kesari The Board requested that staff review current contracts and rebid wherever there is an opportunity to save money. All contracts approaching expiration should be considered for rebid and not automatically extended. The Board would like staff lo detail with whom we have contracts, for how long and include rationale if we chose not to bid. Upon MOTION of Mr. Kesari, second by Mr. McKinney, the Board directed staff to assess the inventory of possible contracts. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Flarris-Aye, Mr. Burrell-Aye.

AGENDA ITEM 6 - REPORTS Item 6A - Water and Sewer Agreements - signed by the General Manager on behalf of the LCSA Board: VACATIONS and EASEMENTS

1. Easement - Towns at Autumn Oaks. 2009-0018. 2. Easement - Dulles 28 Motorplex. 2007-0016.

AGREEMENTS 1. Easement - S-269 Canan Property.

Installafion of sanitary sewer to (he parcel located on the north side of Waxpool Road adjacent to the Dulles Little League Field and the Village of Waxpool Community. 2008-0129.

April 2009 ~~5-~

Item 6B - CIP Report ~ Presented by Mr. Johnny Rocca The Capital Improvements Program Committee met on March 24, 2009 in the Broad Run WRF Conference Room. Those present were Board members John Rocca, Hobie Mitchel, John Whitmore and Ed Burtcll; staff members Dale Hammes, Rick Thoesen, Kevin Wood, Tim Coughlin, Caria Burleson, Mike Beardslee, Mike Latham, Tom Bonacquisti, Tom Broderick, Samantha Villegas, Craig Lees, Beate Wright, Karen Amold, Thom Lipinski, Bill Haase, and Bruce Ringrose.

1. Mike Beardslee requested approval ofthe second phase of a professional services contract with Dewberry and Davis for Record Drawings and GIS Data Production. Mr. Beardslee reviewed the background and objectives of the contract with the Committee and explained that Dewberry and Davis was selected through a competitive RFQ process. The contract was for one year, with an option based on performance, to annually renew for up to two additional years. Program administrative fees have been established which are revenue neutral and have no significant impact on developer's costs. Mr. Beardslee reported that Dewberry and Davis has completed or nearly completed record drawing and GIS data tasks for 13 construction projects as part of Phase 1 ofthe contract, and that $177,636, or 71 percent, ofthe approved first phase budget of $250,000 has been spent. At the current rate of effort all budgeted funds, except for contingency, would be expended by May 2009. The second phase of services is a confinuation ofthe contract and is projected to provide funding for the program through February 2010. Mr. Beardslee recommended that Phase 2 services for the contract be approved in the amount of $400,000, with an approximate ten percent contingency to be controlled by the General Manager, for a total, not-to-exceed, budget of $440,000. The CIP Committee, after asking questions about the fee collection process, the status of the contingency associated with.,the Phase 1 services, and the plan for future phases, endorsed placing the request on the Consent Agenda for the April 9, 2009 Board meeting, with the understanding that the contract may be renegotiated if a third year is to be awarded, and that alternative approaches to increase private sector participation will continue to be evaluated.

2. Bill Haase requested approval of a task order for Hazen and Sawyer to provide construction phase engineering services during the construction ofthe Red Dot 19A & B Brambleton Tank Water Booster Pumping Station Upgrade. Mr. Haase reviewed the background and need for the project and explained that the task order would be invoiced on a time and expenses basis and involved two separate acfivities: construcfion administrafion and specialty inspecfion services. Construefion administrafion would include performing shop drawing review, general observafion of construction, change order review, record drawing preparation, and addressing miscellaneous construction issues. Specialty inspection services are required for the complex modifications to the electrical system of the existing pumping station. Mr. Haase recommended that a task order be approved, for $98,400 for construction administration and $28,900 for specialty inspecfion services for a total of $127,300, with an approximate 10 percent contingency to be controlled by the General Manager, for a total, not-to-exceed budget of $140,000. The CIP Committee, after asking quesfions regarding the scope of services endorsed placing the request on the Consent Agenda for the April 9, 2009 Board meeting. Mr. Mitchel abstained from voting due to a possible conflict of interest regarding potential developments to be served by the pumping station improvements.

3. Rick Thoesen reviewed with the Committee the March 2009 Report on the Central Water Supply Program: Program Development and Permitfing Phase. During March, regular meefings were held with Luck Stone to move the land acquisifion and permitting process forward. On March 10th, a pre-applieation meeting was held with Loudoun County Planning staff On March 17th, a meeting was held with the Interstate Commission for the Potomac River Basin (ICPRB) to discuss a water supply coordination agreement. On March 18th, the Loudoun Water purchase ofthe water treatment plant

April 2009 ~6-

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site (Parcel 15) was completed. Upcoming milestones include the first staff workshops for project delivery education and water treatment technology. The CIP Committee discussed the report and program progress, and asked that the report be submitted to the Board each month, with presentations to be made as determined by the General Manager. The Committee also requested that the report be forwarded to the Finance Committee for review. No action was required ofthe CIP Committee.

4. Tim Coughlin and Caria Burieson made a presentation on the March update of the 2009 Capital Spending Plan (CSP). Mr. Coughlin reported that the Equivalent Meter Unit (EMU) total for January-February 2009 was 161 which is below the CSP projecfion of 250. Eariy March numbers, however, indicate an increase in the total EMU connections such that the overall EMU total may be much closer to projections by the end of March. Cost data were still too limited to reliably indicate any trends. Mr. Coughlin also reported that a state grant of $20.3M for nutrient technology at the BRWRF was received during March. No acfion was required ofthe CIP Committee.

5. The CIP Committee set their meeting schedule for upcoming regular meetings on April 28, 2009 and May 26, 2009.

Item 6C. - Finance Committee Summary - Presented by Mr. Hobie Mitchel The Finance Committee met at 7:30 a.m. on March 26, 2009 at the Administrafion Building. J^hose present were Board Chairman Fred Jennings, Committee Chairman Hobie Mitchel, Committee members Chuck Harris and Ed Burrell; staff members Dale Hammes, Rick Thoesen, Jewell Lilly, Kevin Wood, Mike Beardslee, Bill Haase, Todd Danielson, Samantha Villegas, Caria Burleson and Debbie Leuck.

Rate Hearing/Community Systems Tiered Rates-Cancellation Notice (action item) -Ms. VilJegii's presented the action to formally cancel the established-and advertised public hearing scheduled for April 29, 2009 regarding the proposed rate tiers for community systems. To date, two public outreach meetings have been held with community systems customers. Approximately 35 different customers have attended the informational meetings to ask questions and raise concerns. A third meefing is scheduled for April 1 ^ As a result of these meetings and the valid questions and concems raised by the customers, staff has determined that there may be other altematives and approaches to consider with respect to the community water systems. Therefore, staff is recommending that the public hearing be cancelled and further evaluation of system structures and rate designs be performed prior to submission of a revised Resolufion of Intent. The committee discussed the Raspberry Falls situation and resident's concerns. The committee encouraged staff to stress conservation and to lake their time to create the right plan for community systems. Ms. Villegas stated that Loudoun Water is updating materials such as the bill stuffer to provide outreach directly to community system customers. In addition, a letter will be sent to each home to communicate where we are in the process and how we will educate and reach out to homeowners. Chairman Jennings mentioned that the Board received two letters regarding Raspberry Falls and that he will acknowledge and respond on behalf of the Board, copying ail members. Chairman Jennings requested that Mr. Danielson and Ms. Villegas ensure that we deliver a final product that is complete and contains accurate information which has been reviewed with appropriate approvals before any revisions are brought forth. Mr. Harris commented that this experience should be looked upon as a success and not a failure.

Upon motion of Mr. Mitchel, seconded by Mr. Burrell, with a unanimous vote ofthe board members present, the Finance committee agreed to recommend that the full Board cancel the April 29 Public Flearing.

April 2009 ~~1-

Agreement with Loudoun Golf «& Country Club to Operate and Maintain Community System -Mr. Danielson presented the proposed agreement to operate the Loudoun Golf and Country Club community wastewater system and provided a handout with background infomiation. He stated that the Loudoun County Zoning Ordinance requires rural retreats and golf clubs not served by central systems to be served by community water and wastewater systems. Loudoun Golf and Country Club, near Purcellville, needs to expand their tacilities and as a result, must upgrade their current wastewater system to adequately treat additional flow. In order lo do so, they need a design from Loudoun Water and the Health Department's approval on the project. Chairman Jennings and Mr. Hammes both agreed that we have an obligation to serve them. Mr. Hammes suggested that Loudoun Water begin working on the design and a policy statement that would appropriately address the situation lo be brought back to the committee and for final approval by the Board at the May meeting. Chaimian Jennings agreed that a policy should be developed since the need for this type of service will likely increase in the future. He also requested that this issue be addressed in the Strategic Plan as well.

CIP Committee Information Items - Brambleton Water Booster Station Upgrade and Record Drawings and GIS Data Production -Ms. Burleson commented that in the future, the CIP Committee infomiation will be brought to the Finance Committee in a lump sum format. Finance is tracking the $60 million allocated for the CIP and is working with CIP staff to tie projects in and determine the impact on CIP. Mr, Mitchel agreed with the approach and stated that the primary purpose of the Finance Committee, in this case, is to monitor cash flow. Mr. Hammes stated that Fairfax is issuing a bond in June and our money is included in the proceeds from that issue. He also commented that Loudoun Water has some contractual obligations that will be dropped next year and that staff maintains an ongoing plan that projects various financial options, opportunities and flexibility. ... i

Mr. Haase distributed a handout with background information conceming the Brambleton Water Booster Station Upgrade (Red Dot 19A&B, Phase II). He requested approval ofthe construction phase and specialty inspection services and for Hazen and Sawyer to remain involved in the project. Mr. Haase mcnfioned that this is a "not to exceed contract" with a \0% contingency to be controlled by the General Manager. Any additional costs will require further Board authorization. Mr. Mitchel suggested that in the future constmction and inspection services should be brought forth for approval/motion together. The committee requested staff to work on comparing the actual work to the projected budget and bring back a report to the Finance Committee.

Mr. Beardslee distributed a handout which provided background information and requested approval for professional services for surveying, record drawing creation and GIS data for new construction projects (CIP Project P8.3 - Task Order #2) and to retain the consultants from Task Order #1, Dewberry and Davis. Mr. Beardslee mentioned that record drawing fees were put in place on January 27, 2009. These new fees provide significant financial support to the record drawings and GIS data program. Approximately 85%) of the cost of record drawing services is recovered through these fees, and it is expected that this figure will improve as the process matures. To date, record drawing fees in the amount of $185,800 have been charged and $11,151 of this amount has been paid. Mr. Mitchel suggested reviewing these numbers as it would impact the CIP and cautioned staff to monitor the bond market. Mr. Burrell advised staff to de-authorize the confingency for Work Order #1. Mr. Beardslee agreed to make this suggestion part of the general policy statement. Mr. Mitchel requested a more thorough review of 2009 and 2010 as to what is being billed versus collected and further evaluation of the process from that point. Staff was requested to bring their findings to the next Finance Committee meeting.

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Review of February Financial Summary Report — Ms. Burieson briefly reviewed the report noting a few highlights. In addition, she briefly discussed the customer growth statisfics and charts (ERC's). Mr. Mitchel commented that he is not seeing much in the pipeline at this time. Mr. Harris cautioned against spending with the assumption that we will receive the money from Fairfax County. Mr. Hammes mentioned that we may have to defer the start date of some projects. Ms. Burleson commented that she is monitoring cash fiow and spending on a monthly basis'and adjusting as we go. Mr. Harris requested a change to the Capital Spending Plan graph, page 8 ofthe report. He would like to see how much is discretionary versus how much was actually spent. Ms. Burieson commented that she will supply supporting documentation that should be helpful.

Overview of Loudoun Water Financing Plan -Ms. Burleson provided a PowerPoint handout explaining the financing plan and briefly discussed it in order to provide a background for Committee members prior to Davenport's presentation in May or June. Chairman Jennings requested a copy of Loudoun Water's rate model. Ms. Burieson mentioned that a rate workshop is planned to share financial information with the Board. Mr. Burrell had several questions but did not want to slow down the presentation, so he agreed to set up a meeting to go over his questions with Ms. Burleson and Mr. Hammes at another time. Mr. Harris had to leave prior to the presentation, so he will also be invited.

Meeting was adjoumed at 9:23 a.m. The next Finance meeting was scheduled for Wednesday, April 22, 2009 at 7:30 a.m. in the Boardroom.

Item\6D. - Development and Succession Planning Report - Presented by Patti Psaris The Development and Succession Planning Committee met on March 24, 2009 in the Boardroom. Upon MOTION of Mr. Rocca, second by Mr. McKinney, the Board moved to enter into Closed Meefing pursuant to Section 2.2-3711 (A) Subsecfion 1. Discussion, consideration or interviews of prospecfive candidates for employment, assignment, appointment, promofion, performance, demotion, salaries, disciplining or resignafion of specific officers, appointees or employees. Vote: Mr. Jennings-Absent for the vote, Ms. Psaris-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Harris-Aye.

(Mr. Jennings arrived during the Closed Meeting)

Upon MOTION of Mr. Harris, second by Mr. Jennings, the Board voted unanimously to retum to Open Meefing.

Upon MOTION of Mr. Harris, second by Mr. Jennings, the Board adopted the following Certification for Closed Meefing. Pursuant to Section 2.2-3711(d) ofthe Code of Virginia the Loudoun County Sanitation Authority hereby certifies that, to the best of each member's knowiedge, (i) only public business matters lawfully exempted from open meeting requirements by Virginia law, and (ii) only such public business matters as were identified in the motion convening the closed meeting were heard, discussed or considered by the Loudoun County Sanitation Authority. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Harris-Aye.

The Development and Succession Planning Committee will plan to meet in May.

April 2009

Item 6E. -Audit Committee — Presented by Dimitri Kesari The Audit Committee met on Monday, March 23, 2009 at 4:00 pm in the Boardroom.

2007 Audit Findings, Recommendations and Suggestions for Improvement

• Mr. Garber provided background and discussed the typical process for the Audit program.

• The Committee may call or email Mr. Garber directly with questions.

• At the end ofthe Audit, a management letter will be provided.

• Mr. Garber reports that in early 2009, PBG&Fl came in and tested the 2007 recommendations that were made to staff and were safisfied with the implementations.

• Additionally, Customer Service has added some reports and quality checks which have reduced the possibility of errors.

• The Committee agreed to meet with PBG&H again after the completion ofthe Audit and CAFR and review draft information near the end of April.

• The Board Secretary will send an email to inform the full Board ofthe Audit and request that issues or questions be directed to the Committee Chairman, Mr. Kesari. Acfion: Jewell Lilly

• Board Secretary to obtain Letter of Engagement and original 2004 Contract for Committee. Acfion: Jewell Lilly

Audit Committee Charter • Thetcommittee reviewed and revised the Audit Committee Charter.

• The charter will be included in the next Board Package.

The Audit Committee will be meeting with the Auditors at the end of April. The Board was requested to notify Mr. Kesari with questions and concems relating to the Audit.

Informational Item Item 7A - Update to Statement of Policy Concerning Community Systems - Dale Hammes and Todd Danielson

Attachments:

Statement of Policy Concerning Community Water and Sewerage Systems dated December 12, 2002, ("Statement of Policy"), Attachment I

Position Regarding Operation and Maintenance of Water and Wastewater Systems Serving Three to Fourteen Residential Lots dated December 11, 2003 ("2003 Position"), Attachment II

VDH Water Works Regulafion (12VAC5-590-10) ("Water Works Definition"), Attachment III

Water Supply System, Communal, (Loudoun County Revised 1993 Zoning Ordinance Arficle 8 Definifions, page 8-57) and Sewer System, Communal (Loudoun County Revised 1993 Zoning Ordinance Article 8 definitions, page 8-44), ("Zoning Ordinance Definition") Attachment IV

Community Water and Sewer Systems Served, Attachment V

April 2009 ~ 10~

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I BACKGROUND: Loudoun Water according to "2003 Position" has not and does not agree to operate systems meeting the "Zoning Ordinance Definition" (more than two lots) unless those systems also selectively meet the "Water Works Definifion, Attachment 111." - serve 15 or more residential lots or serve non residenfial facilities serving an average of 25 individuals for at least 60 days out ofthe year.

Following that practice and process over the years, Loudoun Water'has determined that certain systems meet the Water Works Definition. Loudoun Water now operates nineteen water and sixteen wastewater facilities listed on Attachment V. Staff considers these to be "public systems" even though some of them serve privately owned facilities.

As discussed hereafter, facilities serving three through fourteen connections remain uncertain in terms of Loudoun Water's obligation and willingness to provide water and sewer service.

Loudoun Water has two matters pending which bring focus on the policy question.

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These matters involve:

1. Operation ofthe community wastewater facility at Loudoun Golf and Country Club which meets the "Water Works Definifion" and the Zoning Ordinance Definition and

2. Language which has been proposed to the draft Loudoun County Limestone Overiay District which references ownership by Loudoun Water of communal water and wastewater systems which would be required to serve any subdivision of eight or more residential lots. Water systems serving eight residential lots meet the Zoning Ordinance Definition and the Water Works Definition but Loudoun Water ownership and/or operation of these systems is inconsistent with Loudoun Water's 2003 posifion.

ISSUE:

Should the Loudoun Water Policy for community water and sewer systems be clarified not only to address the issues raised in the current matters but to address further and future issues of communal water and sewer systems with three through fourteen residential connections?

DISCUSSION:

Loudoun Water has been operating community sized water and wastewater treatment systems since the early 1970's, primarily to serve areas where on site systems had failed and a community solution was called for. See Attachment V.

In the late I980's, Loudoun County considered service to new rural development with community water and/or wastewater systems. On December 15, 1989, Loudoun Water adopted the Statement of Policy, Attachment I. This Statement of Policy does not require or in any way hold out that Loudoun Water will own or operate these three to fourteen residential connection systems or any other systems for that matter. It does, however, establish useful and practical conditions under which service may be provided and it provides the basis of the conditions for that service which are incorporated in appropriate service agreements with developers of community systems.

Addifional policy development occurred in 2003 with the adoption of the 2003 Position, (Attachment II). Loudoun Water will not accept operation or ownership of these systems but will agree to provide certain technical assistance to Loudoun County related to the design, construction and operation of these small systems. The basis of this policy (excluding consideration of systems serving less than 15 residenfial lots) was derived from the VDFI Water Works Regulation definition as follows: "Water Works " means a system that serves piped water for drinking or domestic use to (i) the public, (ii) at least 15 connections, or (Hi) an average of 25 individuals for at least 60 days out of the year. The 2003 Posifion acknowledged that (a) the VDH Water Works Regulafions provide a sound regulatory framework for compliance with the Safe Drinking Water Act, including VDH oversight and requisite design and construction standards and operational requirements such as sampling, testing and reporting, it is important to note that the 2003 Position does not apply the ''an average of 25 individuals for at least 60 days out of the year'^ portion ofthe Water works Definifion to residenfial subdivisions but staff has applied this part of the definition to non residential facilities which are not addressed in the 2003 Position.

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While no parallel definifion exists for wastewater systems Loudoun Water has also used the aforeinenfioned Water Works definition for guidance in considering ownership or operafion of wastewater systems primarily to enhance economy of scale.

Recommended Motion:

Option 1: Reaffirm Loudoun Water's LCSA STA TEMENT OF POLICY CONCERNING COMMUNITY WATER AND SEWERAGE SYSTEMS, (Attachment I) and LCSA 'S POSITION REGARDING OPERATION AND MAINTENANCE OF WATER AND WASTEWATER SYSTEMS SERVING 3-14 RESIDENTIAL LOTS (ATVACUMNET 11) and continue to address requests for service in a ease by case basis.

Opfion 2B: Reaffirm Loudoun Water's LCSA STATEMENT OF POLICY CONCERNING COMMUNITY WATER AND SEWERAGE SYSTEMS, (Attachment I) and direct staff to redraft LCSA '5 POSITION REGARDING OPERATION AND MAINTENANCE OF WA TER AND WASTEWA TER SYSTEMS SERVING 3-14 RESIDENTIAL LOTS (ATTACHMENT II) to address ownership and/or operation of systems serving nonresidenfial facilities

Opfion 3C: Direct staff to redraft the exisfing policies to affirm that Loudoun Water will own and operate community systems as defined in the County's General Plan and Zoning Ordinances.

Be it Further Resolved that staff will review final draft policy language with the Finance Committee prior to presenting the final draft ofthe new policy to the full Board.

April 2009 -13'

ATTACHMENT I

LCSA STATEMENT OF POLICY CONCERNING COMMUNITY WATER AND SEWERAGE SYSTEMS

Loudoun County Sanitafion Authority (Loudoun Water) hereby adopts as its Statement of Policy the following position conceming Community Wat^r and Sewerage Systems:

1. Definitions: A. Community Water Systems. For purposes of this policy, a community water system shall be defined as a system to be owned and/or operated by Loudoun Water which is intended to supply potable water for domestic and other needs wherein the system is freestanding (i.e., not connected to the LCSA central system located in Eastern Loudoun County.)

B. Community Sewerage Systems. For the purposes of this policy a community sewerage system shall be defined as any system to be owned and/or operated by Loudoun Water that is intended to provide sewer service wherein the system is freestanding (i.e., not connected to the LCSA central system located in Eastern Loudoun County.)

C. Service Area^ The service area of any Community Water and Sewerage System to be owned and/or operated by Loudoun Water shall be as recommended by Loudoun Water and approved by the Board of Supervisors. Routine service extensions within service areas shall be as determined by Loudoun Water.

2. Community Water and Sewerage Systems to Meet Loudoun Water Policy Standards

Except in response to a resolution by the Board of Supervisors, Loudoun Water will not consider accepting ownership, maintenance or operation of any Community Water or Sewerage System which does not meet the policy provisions herein.

Design Approval Required.

A. Before agreeing to accept any Community Water or Sewerage System, Loudoun Water shall review and approve the design and construction standards and details applicable to that system. Loudoun Water's review and approval shall be in addifion to any review, approval or standards which may be adopted and enforced by county, state, and federal regulatory authorities including approval of effluent discharge permits.

B. Loudoun Water's design standards may require distribution piping and collecfion systems within Community Water and Sewerage Systems to be of a standard configuration, capable of being compatible when connected to future public water supply system and sewerage systems, including conformance with requirements for fire fiow of water associated with public systems.

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C. The design of any Community Water and Sewerage System shall make acceptable provision for necessary easements and maintenance access rights-of-way to reach all facilities and planned extensions ofthe systems. The systems shall be conveyed along with all necessary easements, rights-of-way, equipment manufacturer's warranties, by general warranty deed with title satisfactory to Loudoun Water.

D. -A hydrologic study (at no cost to Loudoun Water) shall be made of each proposed Community Water System in accordance with standards adopted by L^oudoun Water. J'he study shall identify appropriate impoundment and/or well sites and the design of the Community Water System shall include reservation and preservation of replacement sites and sites for development of future services if indicated.

E. Community wastewater systems using soil for final effluent disposal (surface or subsurface disposal) shall be designed, constructed and operated in a manner to assure that effluent does not migrate by aerosol or overland fiow beyond the designated disposal area to be operated by Loudoun Water. For such systems, Loudoun Water may require increased disposal area; treated storage volume and/or buffer areas; vegetation or other barriers; and/or other design and construction measures to provide operational flexibility to assure effluent does not migrate beyond the designated disposal area.

Financial Considerafions.

A. Community Water and Sewerage Systems shall be constructed at no cost to Loudoun Water, in accordance with construction and design criteria approved by Loudoun Water and cognizant regulatory authorities.

B. Prior to acceptance of any system, Loudoun Water may adopt a mandatory connection resolution applicable to that system. If adopted by Loudoun Water, such mandatory connection resolution shall be submitted to the Board of Supervisors of Loudoun County for concurrence and shall be fully enforceable and in effect prior to acceptance of the system(s). Rates associated with the system(s) shall be such as to permit the system to be financially self-sustaining, with all operation, maintenance and replacement costs being paid by the owners of all properties in the service area served by or capable of being served by the system(s) and as noted in B.2 below.

The rates shall be subject to review and revision periodically by Loudoun Water, and payment of all rates shall be secured by a lien upon properties to be served or capable of being served by the system(s) as permitted by the Virginia Water and Sewer Authorities Act. (Chapter 28, Tifie 15.1, Sect. 1239etseq., Code of Virginia, as amended.)

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In addition Loudoun Water may require a contractual arrangement with the developer to subsidize the maintenance and operation ofthe systems until such fime as 90% ofthe units in the development are sold and are using the system(s).

Covenants and Nofice Provisions

Loudoun Water will cause to be recorded on the official record plat for the subdivision or development and in the deed of record of each parcel of property to be served by Community Water and Sewerage Systems a notice conceming the following:

A. J'hat all operafing and maintenance costs ofthe system(s) will be borne by the users and/or owners of property which can be served by the systeni(s) in accordance with rates, rules and regulations to be established by Loudoun Water and

B. The adequacy of water capacifies, quantities and pressures at all times will depend upon the Community Water System^ independent of any other water source or system.

/ipproved December 15, 1989 Reaffirmed June 10. 1999 Revised December 12, 2002

ATTACHMENT II

LCSA'S POSITION REGARDING OPERATION AND MAINTENANCE OF WATER AND WASTEWATER SYSTEMS SERVING 3-14 RESIDENTIAL LOTS

LCSA does not accept ownership or operation of water or wastewater systems serving 3-14 residential lots. If requested by the County, LCSA agrees to provide technical services to the County by approving acceptable technologies, reviewing and approving system design and construction specifications, providing constmction inspecfion and conducting semi-annual audits of system operation and maintenance. LCSA expenses for these services will be subject to reimbursement by the County.

Adopted December 11, 2003

ATTACHMENT HI

Water Works means a system that serves piped water for drinking or domestic use to (i) the public, (ii) at least 15 connections, or (iii) an average of 25 individuals for at least 60 days out ofthe year.

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ATTACHMENT IV

Water, public: A central communal or municipal water supply system serving more than two (2) lots owned or operated by a municipality or the Loudoun County Sanitation Authority (LCSA) or a public water utility as defined in Chapter 10.1 or 10.2 of Fifie 56 ofthe Code of Virginia for the purpose of furnishing potable water.

Water Supply System, Communal: A water supply system owned or operated by the LCSA or a public water utility as defined in Chapter 10.1 or 10.2 of Title 56 ofthe Code of Virginia that is designed to serve small-scale development, including clusters, where permitted by this Ordinance. Such system may serve only one lot, where a communal system is required by this Ordinance for a specific use.

and,

Sewer, Public: A central, communal or municipal wastewater treatment system serving more than two (2) lots owned or operated by a municipality, the Loudoun County Sanitation Authority (LCSA), or a public sewer (wastewater) utility as defined in Chapter 10.1 or 10.2 of Title 56 ofthe Code of Virginia, for the collection, treatment and disposal of sewage.

Sewer System, Communal: A sewage treatment system for the collection, treatment and/or ' disposal of sewage operated and/or owned by_the LCSA, or operated by a public sewer (wastewater) ufility as defined in Chapter 10.1 or 10.2 of Tifie 56 ofthe Code of Virginia that is designed to serve small-scale development, including clusters, where permitted by this Ordinance.

Such system may serve only one lot, where a communal system is required by this Ordinance for a specific use.

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ATTACHMENT V I Lucketts Community Center Lovettsville (Operated by Loudoun Water) SkillsUSA

Elysian Heights Waterford

/ Selma Estates (Wastewater is Treated at Raspbeny Falls)

i Loudoun County Animal Shelter

690

297

' S -

Raspberry Falls e€s Mountain view Elementary School

North Spnng at Whisper Ridge ^ O-

i r " r^ ^ Franklin Park g

Beacon Hill ^ Bluemont Community Center Goose Creek V/astewater

Treatment Plant ^ ^ (Owned and Operated by ^ ^ Loudoun Water) Philomont

Community Center

267

G

G21

/ ^ 734

^ ^ r i ' ' e (6111 L Claude

Moore Park

S07 / - ' 267

^ 6S9

Willlisville (Wastewater Only)

606 !5> Rokeby Hamlets

M . ^ ^ i V N:

N \ Banshee Reeks

Nature Preserve Saint Louis

610

Courtland Middleburg (Operated by Loudoun Water) ^

Areola Elementary School Property Aldie

Lenat) Run

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I April 2009

I Item 7B - Use of Surplus Land Loudoun Water has received interest for a potential high school on property behind the Broad Run Plant. Mr. Hammes asked for Board thoughts and comments on this topic.

• Mr. Harris - objects to the tenn surplus and would like addifional information. • Mr. Mitchel - would like to know if we need this land in the future. • Mr. Harris - needs to see future projections of sewer increase, density of future needs.

Staff will provide further information at a future meeting.

There being no further business, upon motion duly made, seconded and carried the meefing adjoumed at 5:00 pm.

^ irz

Chairman a

Secret i^Md^

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I LOUDOUN (iV WATER

44865 Loudoun Water Way • P.O. Box 4000 • Ashbum, Virginia 20146 o www.loudouiiwater.orj

Minutes ofthe Loudoun Water Board Meefing, May 14, 2009


Board Members: Chairman Fred Jennings Ed Burrell Dimitri Kesari Charies McKinney-Absent John Whitmore Johnny Rocca Patti Psaris Hobie Mitchel Chuck Harris-Absent


I LCSA Staff in Attendance: Dale Hammes-GM/ Treasurer Rick Thoesen/Deputy GM Jewell Lilly/Secretary Carla Burleson Dave Linski' M ary Arnsbarger Tom Bonacquisfi Samantha Villegas Liza Young Rick Jacobson Beate Wright Marc Schwartz Kevin Wood Matt McGowan Bruce Ringrose Mike Latham Tom Broderick Roddy Mowe Mark Guanco Craig Lees Sue Bour Todd Danielson

Mike Garber of PBG&H and David Rose of Davenport were also in attendance.


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AGENDA ITEM 2 - GENERAL MATTERS 2A. Approval of Minutes Upon MOTION of Mr. Mitchel second by Mr. Rocca, the minutes ofthe meeting of April 9, 2009 were approved. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Absent for the Vote, Mr. McKinney-Absent, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Absent, Mr. Burrell-Aye.


May 2009

http://www.loudouiiwater.orj

2C. General Manager's Report • Mr. Hammes reminded the Board ofthe Public Hearing set for 6:00 pm on May 28. • Mr. Hammes introduced Kevin Wood, who provided a stimulus update. Loudoun Water received

$1.78 million for water reuse programs. Two additional projects are in the queue for possible funding.

• Mr. Hammes noted that Loudoun Water would also be participating in Energy Savings Programs.

(At this point in the meeting Mr. Whitmore arrived)

• The Luck Stone meeting in Richmond is on Thursday, June 4. • Met with Van Metre to develop a budget and workplan to determine a safe yield for groundwater

and altemative irrigation. The CAG (Citizens Advisory Group) ofthe community is working with us.

• The Pros and Cons ofthe plant were discussed at the Board Retreat. More informafion will be provided at the June Board Meeting.

2D. Board Member Comments • Chairman Jennings announced the retirement of Deputy General Manager Rick Thoesen

effective July 2, 2009. Mr. Thoesen has accepted a challenging opportunity with the City of Fairfax. Chairman Jennings and the Board thanked Mr. Thoesen for his contributions over the past ten years. The Board and staff gave a standing ovation in recognition of those efforts.

• Vice Chairman Rocca complimented Rick's success at Loudoun Water, and thanked staff for the successful Retreat. yu

• Mr. Burrell was also pleased with the success and informafion at the Retreat. • Ms. Psaris thanked Rick Thoesen for his service and commented on his motivational speaking

abilities. Liked the venue for the Retreat. • Mr. Whitmore thanked staff for the Retreat and liked the location. • Mr. Mitchel thanked Mr. Thoesen and commented that the Retreat was the best ever. Mr.

Mitchel mentioned that he and Vice Chairman Rocca have agreed to hold the CIP and Finance meetings consecutively in the future and asked the Board Secretary to schedule accordingly.

• Chairman Jennings noted that the Retreat was very effective and reviewed several continuing topics from the Retreat upon which the Board will be working.

AGENDA ITEM 3 - ADOPTION OF AGENDA Mr. Mitchel asked that Consent Item 4B be moved to the Action Agenda as 5D. Mr. Hammes requested that Inibrmation Item 7A be moved before the Consent Agenda.

Upon MOTION of Mr. Kesari, second by Ms. Psaris, the agenda was approved with the above amendments. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Absent, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Absent, Mr. Burrell-Aye.

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AGENDA ITEM 7 - INFORMATIONAL ITEMS 7A. 2008 Audit Results - Presented by Dimitri Kesari and Mike Garber of PBGH. Mr. Kesari introduced Mike Garber of PBGH Auditors. Mr. Garber presented the 2008 audit results to Ihe Board. He discussed the Independent Auditors' Report that includes an unqualified opinion on the financial statements which contained in the 2008 comprehensive annual financial report. The Audit Committee met with representatives from PBGH on May 5, 2009 to review the results of the 2008 annual audit. Copies ofthe auditors' reports are available from the Board Secretary.

During the Audit Committee Meeting, the SAS 61 letter that outlines the auditors' responsibilities in conducting the audit was reviewed. The letter also highlights management's judgments and accounting estimates, audit adjustments, as well as accounting policies adopted during 2008 and future pronouncements that will affect Loudoun Water.

In addition, the Audit Committee was presented with the management letter that identifies matter relating to internal controls that should be addressed by staff There were no significant deficiencies addressed in the letter.

No action required was required ofthe Board on the above informational Item.

AGENDA ITEM 4 - CONSENT AGENDA Upon MOTION of Mr. Kesari, second by Mr. Rocca, the Board approved the following Consent Agenda Items: Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Absent, Mr.,Rocea-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Absent, Mr. Burrell-Aye.

4A. Approval of Employee Medical/Dental Benefits Contracts for Plan Year July 1, 2009 to June 30,2010- Presented by Mary Arnsbarger Loudoun Water's contracts for medical and dental insurance benefits expire on June 30, 2009. Our current medical insurance provider is Anthem BC/BS and Guardian Life provides our dental coverage. A Request for Proposal (RFP) was publicly advertised during from February 13 through March 20, 2009. Three proposals for medical benefits were received and five proposals for dental insurance. Proposals received to provide group medical were Anthem BC/BS (renewal). Kaiser Pennanente and United Health. Offerors group dental were Guardian Life (renewal), MetLife, Delta Dental, Ameritas and United Concordia.

Proposals were evaluated by a committee of three employees and one extemal party (employee benefits specialist). Criteria included premiums, benefits levels, availability of service, provider network (doctors, hospitals etc.) and references. After a comprehensive evaluation of all proposals, staff recommends we renew our contracts with our current providers' Anthem BC/BS (medical) and Guardian Life (dental).

In order to contain costs and work within the FY09 budget allocation, the level of benefits under our renewal contract with Anthem is slightly lower than our current plan offering. The new plan increases employees' out-of-pocket expenses (eo-pays and facilities fees) thereby reducing monthly premium costs. By initiating this change, Loudoun Water's cost is reduced by approximately $150,000 and we're able to maintain our monthly premium contribution schedule at an 80% / 20% split between the organization and employee respectively.

May 2009 ^ 3 -

We anticipate Loudoun Water's medical/dental group plan will cover approximately 476 individuals during the plan year (group includes employees, dependents, retirees).

The FY09 Operafing Budget allocates $1,840,000 toward the cost of providing group medical and dental benefits and the annual expense approximates al $1,840,354. If an overage should occur, funding is available through the Personnel Services budget contingency.

The Board approved renewal of contracts with Anthem BC/BS and Guardian Life to provide group medical and dental benefits to employees at cost of approximately $1,840,354 to be funded through the FY09 Operating Budget, Personnel Services.

4C. Approval of Engineering Design Services for Phase 3 Broad Run Interceptor - Parallel Potomac Interceptor (BRIPPI) - Presented by Bruce Ringrose Loudoun Water is currently utilizing 86 percent of its available capacity in the Potomac Interceptor (PI). Based on the latest Loudoun County population projections and flow records for the BRIPPI service area, the average flow discharged to the PI will reach 100 percent of Loudoun Water's available capacity in 2013. This projection establishes a fimeframe for eonstrucfing Phase 3, the crifical link ofthe BRIPPI because it connects to the Broad Run WRF, so that flow can be diverted away from the PI by 2013.

The BRIPPI is presently proposed for design and construction in five phases as shown on the attached map. Phases 1 and 2 were authorized and constructed from August 2005 to May 2007. Based on lessons leamed from Phases 1 and 2, it is projected that about two years will be required to design, pennit, bid, and construct the 5,700 feet in Phase 3. Additional phases will be designed and constmcted in sequence in later years so that by 2013 the flow from the Upper Broad Run Interceptor can be diverted from the PI to the BRWRF. The estimated timeframes for the phases of BRIPPI design and construction require that design of Phase 3 begin in June of 2009.

Michael Baker, Jr. was the design engineer for Phases 1 and 2. Baker has prepared a scope of work and an estimated fee to complete the detailed design of Phase 3. This work includes about 5,700 feet of 72-inch gravity sewer, 5,900 feet of 16-inch water reuse main, and two crossings of Broad Run, Baker's previous experience with the project will allow them to start design immediately and complete the project in a timely manner. Their ability to reuse substantial portions of the Phase 1 and 2 contract documents, has allowed them to prepare an esfimated fee that is 8 percent less, on a per foot cost basis, compared to the design fees incurred for Phases 1 and 2. Baker's estimated, time and expense fee is $184,300. The 2009 Capital Spending Plan has $250,000 allocated for the design portion of Phase 3; no construction funds are allocated at this time. The task order for this work will include a requirement to evaluate the project, when the design reaches the 60 percent level, for possible complefion through a design-build partnership approach, such as that allowed by Virginia's PPEA Act. Based on an evaluation of the fee, and the constraint for timely completion of the design effort, staff recommends award of this task order to Michael Baker, Jr.

The Board approved a task order for Michael Baker, Jr., Inc. for an estimated, not to exceed, fee of $184,300, and authorized an approximate 10 percent confingency, to be controlled by the General Manager, for a budget ceiling not to exceed $202,000 without further Board approval.

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AGENDA ITEM 5 - ACTION AGENDA 5A. Adoption of Resolution - Refunding Portions of Outstanding Revenue Bonds, Series 1998 and Series 1999 - Presented by Carla Burleson

Mr. David Rose of Davenport & Company, Loudoun Water's financial advisor, presented a financing altemative whereby portions of outstanding revenue bonds could be refunded through a Bank Qualification mechanism.

A Request for Proposals was issued to qualified banks and feedback is expected no later than May 8, 2009. Depending on the results ofthe proposals, Loudoun Water may opt to disregard the bank qualified financing mechanism and move forward with a typical public sale.

The attached resolution allows for a maximum bank qualified refunding or a public sale refijnding of $30 million with a net present value savings threshold of 3%).

l- pon MOTION of Mr. Rocca, second by Mr. Mitchel, the Board adopted the attached Resolufion authorizing the refunding of portions of outstanding Series 1998 and Series 1999 Bonds to include a maximum principal amount and percentage savings threshold criteria. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Absent, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Absent, Mr. Burrell-Aye.

(Resolution attached)

I May 2009

5B. Loudoun Water's Position Regarding Operation and Maintenance of Small Community Water and Wastewater Systems - Presented by Dale Hammes/Todd Danielson On April 21, 2009, an ad hoc Policy Committee ofthe Board met with staff to discuss revisions to LCSA 's Position Regarding Operation and Maintenance of Water and PVastewater Systems Serving 3-14 Residential Lots. This policy was revisited by the Board because the proposed Limestone Overlay District (LOD) regulafions at Loudoun County would require subdivisions with as few as eight homes to be served by community systems, which confiicts with this policy, if Loudoun Water is to be the public utility serving these systems. The proposed revisions to the policy emphasize the importance of efficiency and economy of scale to protect public health and the environment with the customer in mind. A caveat is included, indicating Loudoun Water will own and operate facilities serving fewer than 15 residential connections if there is a known timeframe for interconnection with another communal system or to address public health issues. Finally, the proposed revisions address non-residenfial systems, indicafing that Loudoun Water will not provide services to publicly-owned or commercial needs if the facilities do not meet the definition of a public system (i.e., serving 25 or more people at least 60 days per year). The old policy and the proposed new policy are presented on the following page.

This is one of several policies concerning community systems and required the Board's involvement earlier than the other policies so that staff could respond to a referral by the County regarding the proposed LOD regulations. (The response to this referral is the subject of a separate Board Item.) The other community systems policies will be reviewed during the overall Board policy review during the next several months.

LOUDOUN WATER'S. POSITION REGARDING OPERATION AND MAINTENANCE OF SMALL COMMUNITY WATER AND WASTEWATER SYSTEMS

Loudoun Water operates community water and wastewater systems to protect public health and the environment and does this with the customer in mind. In doing so, Loudoun Water must strive for efficiency of operafions. Economies of scale are generally realized as facilities are expanded. To this end, it is in the customers' interests for Loudoun Water to maintain minimum system size standards and interconnect or combine systems. Therefore, Loudoun Water does not accept ownership or operation of water or wastewater systems serving fewer than 15 residential lots unless there is a known or expected timeframe to interconnect with another communal system or Loudoun Water is requested by Loudoun County to serve those lots in order to address a public health issue. Regarding community systems to serve non-residential facilifies, Loudoun Water will not provide services if the definition of a public system is not met (i.e., serving 25 or more people at least 60 days per year). If requested by the County, Loudoun Water agrees to provide technical services lo the County for smaller systems to the extent of approving acceptable technologies, reviewing and approving system design and construcfion specifications, providing construction inspection and conducfing semi-annual audits of system operation and maintenance. Loudoun Water expenses for these services will be reimbursed.

Upon MOTION of Mr. Mitchel, second by Mr. Rocca, the Board adopted Loudoun Water's Position Regarding Operation and Maintenance of Small Community Water and Wastewater Systems as it appears above. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Absent, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Absent, Mr. Burrell-Aye.

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5C. Proposed Limestone Overlay District Regulations - Presented by Todd Danielson Loudoun County has proposed to implement the Limestone Overlay District (LOD) in the limestone conglomerate area of Loudoun County and the Loudoun County Planning Commission has requested comments on the draft LOD from Loudoun Water. The Planning Commission has invited Loudoun Water to present comments at its June 3, 2009 meeting.

The proposed LOD includes several items that have the potential to affect groundwater quality and, hence, Loudoun Water's current and future community system operations and customers in the LOD. Because a requirement in the draft LOD conflicts with Loudoun Water policy, staff presented draft referral comments at an April 21, 2009 Loudoun Water Policy Committee meeting in conjuncfion with discussing the policy (the subject of a separate Board item). These comments have been revised based upon Board input and are attached. Loudoun Water Board approval ofthe comments is requested prior to staff providing written comments to Loudoun County.

The most significant item in the proposed regulations that relates to Loudoun Water and conflicts with policy is the requirement for all subdivisions of 8 or more homes to be served by communal systems. The comments reiterate our policy not to provide service to communifies of fewer than 15 homes. While many provisions of the draft LOD address the principles of prevention, detection, and response to potential surface water (contaminants) influence on ground water, the attached Loudoun Water comments arc important additional provisions that provide practical tools and solutions to support these principles.

Upon MOTION of Mr. Rocca, second by Mr. Burrell, the Board adopted the attached Loudoun AVater posifion on the proposed Limestone Overlay District as it appears below: Mr. Rocca called to question. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Absent, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Absent, Mr. Burrell-Aye.

Attachment to Loudoun Water May 14, 2009 Board Agenda Item 5C

Loudoun Water is guided by three policies that relate to the draft LOD. The first policy is Loudoun Water's Obligation to Protect Drinking Water Resources and Public Health, which states that we protect public health by developing and implementing effective and efficient systems that provide for the needs ofthe community while protecting water resources. The second is Loudoun Water's Position Regarding Operation of Small Water and Wastewater Systems, which states we will not operate systems serving fewer than 15 residential lots unless there is a known timeframe for interconnection with another communal system or we are addressing a known public health issue. The third is our Policy for Integrated Water Resource Planning, which states that we ensure protection of public health and welfare by providing services in a professionally responsible and co.st-efficient manner that also plans for the future through cost effective and reliable facilities that provide for the needs ofthe community, protect the environment, and honor the land-use planning decisions of the County. These policies point to financial, environmental and system sustainability and have direct relationship to the limestone karst section of Loudoun, the proposed LOD, and our provision of services in this area and the following comments:

May 2009

Loudoun Water has reconfirmed its policy not to own or operate systems serving fewer than 15 residenfial lots. This policy is in conflict with the draft LOD requirement for communal systems to ser\'e 8 or more residenfial lots unless the system was interconnected with another communal system.

Loudoun Water should have blanket approval to interconnect communal systems within the LOD once the proposed communal system has met all requirements for a stand alone communal system.

Communal systems should not be required for the base density, 1 house per 10 acre (grid) development.

Loudoun Water supports the draft LOD requirement for a developer prepared and County and Loudoun Water approved water budget for proposed development to help assure that well supplies are sustainable. The water budget should establish a sustainable source water yield and included provisions for demand management. In short, the proposed community design and allowable water uses must be compatible with its available, sustainable water supply. Demand management provisions could include permanent water use restrictions, low water use and drought tolerant plantings and landscaping. A community water budget should also evaluate use of reclaimed water and other nonpotable water sources (such as cistems for the collection and later use of rainwater) for irrigation and other non potable uses. The nonpotable sources must not compete with the communal water system water sources. Dual water systems that pipe reclaimed water for reuse, rather than disposal would be required.

The County should establish wellhead protection zones to reduce risks associated with the potential for groundwater impacts from surface pollutants. The size ofthe zone can vary based on well characteristics and may include offsite properfies. The proper enforcement of an effective wellhead protection program on offsite properties would likely require powers of the.Cpunty and may require enabling legislation.

Loudoun Water already requires a backup well for community systems within the karst because the risk of failure or contaminafion impact is higher. The FSM should also incorporate this requirement, along with the requirement for developers to conduct prescribed water quality testing during hydro geologic investigations. An example would be performing pumping and quality tests during both "wet" and "dry" eondifions.

5D. Approval of Basic Ordering Agreements with Bowman Consulting Group, Ltd., Urban Engineering and WilUam H. Gordon Associates, Inc. for Professional Civil Engineering, Surveying and Related Services- Presented by Kevin Wood To supplement Loudoun Water staff resources, a "Request for Proposals" (RFP) was publicly advertised on February 11, 2009 to select engineering firms for a Basic Ordering Agreement (BOA) for Civil Engineering, Surveying and Related Services. The BOA Process is a continuation of the Authorifies procurement for basic Civil Engineering and Surveying work since 2001. It has been proven to be an effective method to obtain these types of professional services and has provided to be cost effective.

Twenty one firms submitted proposals to perform the work. The procedures outlined in VA Code §11-37-3.a for compefitive negofiation are being followed. As such, the submitted proposals were reviewed by a six-member Loudoun Water Selection Committee and scored based upon evaluation criteria provided in the RFP. The seven highest ranked firms were selected for interviews. The selection committee interviewed these firms on April 2" * and April 3* , 2009. After the interviews, the selecfion committee completed their final evaluation and ranked the seven interviewed firms to identify those firms whose professional qualificafions, performance and proposed services were deemed most meritorious.

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I The selection committee elected to enter into contract negotiations with the three top ranked firms comprised of Bowman Consulfing Group, Urban Engineering and William H. Gordon Associates. Negotiations for a contract agreement with these firms are nearly complete.

Upon MOTION of Mr. Rocca, second by Mr. Kesari, the Board approved a one-year basic ordering agreement with Bowman Consulting Group, Urban Engineering and William H. Gordon Associates with the option of two one-year extensions for Civil Engineering, Surveying and Related Services subject to final approval by Loudoun Water Counsel. Future Task Orders related to the agreements will be presented to the Board in concert with Loudoun Water Board Policy Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Absent, Mr. Rocca-Aye, Mr. Mitchel-Abstained from the vote, Mr. Kesari-Aye, Mr. Harris-Absent, Mr. Burrell-Aye.

AGENDA ITEM 6 - REPORTS All reports were presented for review by the Board.

Upon MOTION of Mr. Mitchel, second by Mr. Burrell, the meeting adjoumed at 4:50 pm. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Absent, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Absent, Mr. Burrell-Aye.

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I L O U D O U N %V WATER


Minutes ofthe Loudoun Water Board Meeting, June 11, 2009

The board meeting was held at 3:00 pm in the Boardroom of the Loudoun Water building located at 44865 Loudoun Water Way, Ashburn, Virginia.

Board Members: Chairman Fred Jennings Ed Burrell-Absent Dimitri Kesari-Absent Charles McKinney John Whitmore Johnny Rocca Patti Psaris Hobie Mitchel Chuck Harris

General Counsel — Stanley Franklin

I LCSA Staff in Attendance: Dale Hammes-GM/ Treasurer Caria Burleson Tom Bonacquisti Rick Jacobson Kevin Wood Mike Latham Mark Guanco Todd Danielson Lola Stith

Rick Thoesen/Deputy GM Dave Linski Samantha Villegas Beate Wright Matt McGowan Tom Broderick Craig Lees Tristan Delpopolo-Mills Liz Sitter

Jewell Lilly/Secretary Mary Amsbarger Liza Young Marc Schwartz Bruce Ringrose Roddy Mowe Mike Beardslee Tim Coughlin Karen Amold


2C. General Manager's Report • Mr. Hammes outlined the details ofthe LOD (Limestone Overlay District) discussion from the

Loudoun County Planning Commission Meeting. No progress has been made at this time on interconnectivity.

• Reminded the Board ofthe Farewell Reception for Rick Thoesen immediately following the Board Meeting.

I June 2009


2B. Public Speakers - There were no public speakers at this time (see reference at the end of minutes).

2D. Board Member Comments • Vice-chairman Rocca shared that he is mourning the loss of an important friend and explained

the significance ofthe eagle feather related to the loss. (at this point Mr. Whitmore arrived)

• Chairman Jennings mentioned that he is always pleased with the how well we are represented by staff at public events.

o The Chainnan and Vice-chaimian commented on the Luck Stone visit and indicated the Luck staff may be visiting us.

AGENDA ITEM 2 - GENERAL MATTERS 2A. Approval of Minutes Upon MOTION of Ms. Psaris second by Mr. McKinney, the minutes ofthe meeting of May 14, 2009 were approved. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitehel-Abseni for the vote, Mr. Kesari-Absent, Mr. Harris-Absent for the vote, Mr. Burrell-Absent.

AGENDA ITEM 3 - ADOPTION OF AGENDA

Lfpon MOTION of Mr. Rocca, second by Ms. Psaris, the agenda was approved as presented. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Absent for the vote, Mr. Kesari-Absent, Mr. Harris-Absent for the vole, Mr. Burrell-Absent.

AGENDA ITEM 4 - CONSENT AGENDA There were no Consent Agenda Items in May 2009.

AGENDA ITEM 5 - ACTION AGENDA 5A. Board Elections - Presented by Charles McKinney The Board of Director's Nomination Committee met to select a recommended slate of officers to present to the full Board at its regularly scheduled meeting on June 11, 2009.

The Nominations Committee hereby recommends the Ibllowinu persormel to serve as the Authority's officers for the July 1. 2009 to July 1. 2010 term of office:

Chainnan: Fred Jennings Vice Chaimian: Johnny Rocca Secretary: Jewell R. Lilly Treasurer: Dale C. Hammes Assistant Treasurer: Vacant

Upon MOTION of Mr. McKinney, second by Mr. Whitmore, the Board moved to accept the recommended slate of officers as presented with the exception ofthe Assistant Treasurer position. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Absent for the vote, Mr. Kesari-Absent, Mr. Harris-Absent for the vote, Mr. Burrell-Absent.

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5B. Adoption of User Rates for Central System Water Reuse - Presented by Liz Sitter A Public Hearing on the proposed rates was held on May 28 at which hearing Ms. Sitter presented the following information and restated the same to the board: Fhe Broad Run Water Reclamation Facility was designed with the intent of producing reclaimed water for distribution in Loudoun Water's water reuse system. This promotes the beneficial use of our highly treated water and reduces the wasteful use of drinking water. Reclaimed water can be used ibr many commercial applications, including irrigation, toilet flushing, and cooling water for "green " development, including data centers. The use of reclaimed water will help reduce peak summer potable water demands for new construction within the service area.

For planning ofthe water reuse system, Loudoun Water's consultant, CDM, conducted a rate evaluafion over a nine month period and made a rate recommendation. During this time, CDM collected information about our planned water reuse system and about the water reuse rates charged in other areas. Other resources were used as benchmarks, including the AWWA/WEF study on water reuse rates and the WaterReuse Foundation Economic Framework documents. Also factored into CDM 's analysis was the understanding that, unlike water and wastewater service, water reuse is an optional.service for our customers identified in the initial service area (see attached map). The water reuse rate needs to balance the systems cost with being attractive to potential customers.

As Loudoun Water began to present the concept of the water reuse system to developers, the feedback we received was that the combination of initial capital cost, availability fees and meter fees would cause the initial costs for water reuse to be too high. The wastewater availability fee will include the water reuse main as shown in the 10 year CIP. CDM recommended a minimum uniform rate of 70 percent of the current drinking water rate ($1.82/ 1000 gallons).

Based on feedback from the CIP Committee and Finance Committee, the rate for the central system water reuse was proposed to be 75 percent ofthe base potable rate:



The goals of the water reuse system are to reduce non-potable demands on the drinking water system and support "green" infrastructure. This is in alignment with Loudoun County Economic Development and supports the policy of integrated water systems.

Following the presentation by Ms. Sitter, the Board asked for public comment. Receiving no further comment, the Chairman officially closed the Public Hearing.

Upon MOTION of Mr. McKinney, second by Mr. Whitmore, the Board adopted the water reuse rates for the central system as outlined on the attached Resolution with an effecfive date of April I, 2009. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. MeKinney-Aye, Mr. Roeea-Aye, Mr. Mitchel-Absent for the vote, Mr. Kesari-Absent, Mr. Harris-Absent for the vote, Mr. Burrell-Absent.

June 2009

RESOLUTION OF WATER REUSE

BE IT RESOLVED, that the Loudoun County Sanitafion Authority (dba Loudoun Water) at its June 11, 2009 Board Meeting, adopted the following rates, fees and charges applicable to the water reuse system for usage to become effective on or after April 1, 2009 in the central system.

The proposed rate for the central system water reuse is:



All other rates, fees and charges shall remain unchanged.

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ewell R. Lilly-Board Secretary ( ^

5C. Adoption of 2008 Comprehensive Annual Financial Report - Presented by Carla Burleson An unbound copy ofthe 2008 comprehensive annual financial report (CAFR) was included in the June Board Package. Staff made a presentation to the Board and distributed the final 2008 CAFR at the June meeting.

fhe report describes financial operations during 2008 and confirms that those operations were conducted in accordance with the policies and guidelines established by the Board. Financial highlights from fiscal 2008 include:

• Assets exceeded liabilities $1.04 billion o Net assets increased by $78.8 million primarily due to the addifion of deeded lines and mains • Operating revenues decreased 2.9% from FY07 due to a reduction in the amount of water

sold and a decrease in peak use charge revenues • Operating expenses increased 36%» due to an increase in depreciation and the initiafion of

operations at the Broad Run facility

Loudoun Water remained in full compliance with all covenants ofthe Revenue Bond Master Indenture of Trust.

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Upon MOTION of Mr. McKinney, second by Ms. Psaris, the Board moved to adopt the 2008 comprehensive annual financial report as presented and authorized staff to distribute. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. MeKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Absent for the vote, Mr. Kesari-Absent, Mr. Harris-Absent for the vote, Mr. Burrell-Absent.

June 2009

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I 5D. Approval of Water Treatment Technology, Task Order Amendment No. 2 to Black & Veatch - Central Supply Program: Program Development and Permitting Phase - Presented by Beate Wright

(At this point in the meeting Mr. Harris arrived)

On February 12, 2009 Task Order No.2 relative to the Central Water Supply Program for Black & Veatch to provide engineering services for the Program Development & Permitting Phase was approved by the Board. This task order includes preparation of a memorandum and coordination with the Virginia Department of Health (VDH) to address treatment technologies that Loudoun Water will consider and determine VDH requirements for pilot tesfing those technologies.

Staff participated in two treatment technology workshops, prepared and presented by Black & Veatch on April 17 and 24, 2009. These treatment tecfinology workshops targeted existing raw water quality conditions, established finished water quality goals, and the applicable technologies to treat the raw water to dependably meet and exceed the finished water quality goals, as well as keeping mindful of potential future regulations and contaminants of emerging concem. The treatment technology workshop process was outlined and presented at the Loudoun Water Board Retreat on May 11, 2009.

(At this point in the meeting, Mr. Mitchel arrived)

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The consultant, in conjunction with staff, identified two viable treatment options for Loudoun Water's future Central System Water Treatment Facility: (1) Treatment with Ozone and Biofiltration (same processes as Fairfax Water), and (2) Treatment with Membranes, Ozone, and Biofiltration or Granular Activated Carbon (GAC) Filtration. A comparison of the qualities and characteristics evaluated is presented in Attachment A. Both treatment options will meet current drinking water regulations with fiexibility to meet expected future regulations.

The additional benefits of membrane treatment include: - Best available technology - Physical barrier to particles and microorganisms, independent of pretreatment and raw water

quality, - Can significantly reduce the water treatment plant footprint, resulting in capital cost savings - Enhanced performance with low turbidity water - Particulate removal independent of pretreatment

In order for staff to determine if membrane treatment is the right treatment for our fiature Central System Water Treatment Facility, we must pilot the membrane treatment. Piloting membrane treatment on our raw water source is important due to the following reasons:

- Required by the Virginia Department of Flealth - Determine specific design criteria - Determine pretreatment processes and chemicals required - Ensure finished water quality goals are met - Evaluate and determine residuals management - Evaluate and determine capital and life-cycle costs - Will likely result in significant cost savings on upfront infrastructure, sizing of processes and

equipment, solids handling, and chemicals

June 2009 -5--

Piloting is included in our Capital Financing Plan and there is $500,000 allocated. It is not necessary to conduct pilot testing for process Option 1, since Fairfax Water treats Potomac River water with these exact processes, proving the capabilities and effectiveness of this treatment train for this raw water source. Staff has evaluated the estimated cost lor design and construction of these two opfions, and the}' are both within the CIP Concept Level Estimate of $104,100,000, prepared by B&V, September 2008.

Staff recommends approval ofthe above two treatment technology options for Loudoun Water's future Central System Water Treatment Facility as viable options and to proceed with the plan to further evaluate membrane technology through a pilot program.

NEXT STEPS: Upon Board approval of the two treatment technology options as viable options for Loudoun Water's future Central System Water Treatment Facility, staff will pursue evaluating through pilot testing the additional benefits and any impact membrane technology has on finished water quality, operability, reliability, pretreatment requirements, capital and life-cycle cost. We will work with VDH on pilofing and delivery system requirements, consider the most advantageous delivery mechanism, and present to the Board our recommendations for engineering support and the delivery mechanism for conducting the piloting, which may include design and construcfion of the Water Treatment Facility depending on the delivery system selected and approved.

Piloting the membrane water treatment process proposed will provide critical information and data on performance specific to our raw water quality that will allow us to make an informed determination of membrane technology for our Water Treatment Facility. Costs associated with the pilot study will require Board approval at a later date.

Upon MOTION of Mr. Rocca, second by Ms. Psaris, the Board approved two treatment technology opfions for Loudoun Water 's future Central System Water Treatment Facility [(1) Treatment with Ozone and Biofiltration (same processes as Fairfax Water), and (2) Treatment with Membranes, Ozone, and Biofiltration or Granular Activated Carbon (GAC) Filtration,] that will meet our water quality goals for our future Central System Water Treatment Facility and authorize staff to proceed with the plan to further evaluate membrane technology through a pilot study. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Absent, Mr. Harris-Aye, Mr. Burreil-Absent.

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I June 2009

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5E. Policy Review- Board of Director's General Policies - Presented by Dale Hammes The Loudoun Water Board has an adopted Statement of Policy and 25 policy statements in the categories of:

Board Policies (General) Board Policies (Additions to Statement of Policy) Board Policies (Intemal Fiscal Policies) Board Policies (Miscellaneous)

The General Manager has requested Board review ofthe Statement of Policy and the policy statements. A process to review the policy statements (followed by review ofthe Statement of Policy) began May 1, 2009 by electronic transmittal of the General Policies to the Board members for review and comment. The process is to send an additional section of policy statements prior to each Board Meeting for comment by Board Members. The purpose of this action is to be in a posifion to discuss or act on the policy as the Board may determine.

Attached is the first section of policies, the General Policies, sent out on May 1, 2009. Board member comments received to date are noted in red. The Board may chose to reaffirm, delete, approve as revised or continue for further work on each policy statement.

Chairman Jennings created a Policy Committee comprised of Charles McKinney, Patti Psaris, Chuck Harris and Hobie Mitchel. The Committee was asked to review and update the entire policy manual. The Chairman directed the Committee to invoke the assistance of David Rose for Financial Policies, if needed and requested to have the revisions complete by September 2009.

AGENDA ITEM 6 - REPORTS All reports were presented for review by the Board.

AGENDA ITEM 7 - ACTION AGENDA 7A. Loudoun Water Bond Refunding - Presented by Dale Hammes Mr. Hammes provided an update on the completed Bond Refunding.

At this point in the meeting, approximately 4:00 pm, two members ofthe public, Ms. Laura Maschler and Ms. Holly Krauss requested the opportunity to speak.

Ms. Maschler and Ms. Krauss each expressed concems related to Raspberry Falls. The Board thanked them for their comments.

There being no further business, this meeting adjourned at 5:04 pm.

v.. £ N.^^^ 5h airman Secretary

'^M

June 2009

I LOUDOUN (iV WATER

44865 Loudoun Water Way • P.O. Box 4000 • Ashbum, Virginia 20146 • www.Ioudounwater.org

Minutes ofthe Loudoun Water Board Meeting, July 9, 2009

The board meeting was held at 3:00 pm in the Boardroom ofthe Loudoun Water building located at 44865 Loudoun Water Way, Ashbum, Virginia.

Board Members: Chairman Fred Jennings Ed Bun-ell Dimitri Kesari Charles McKinney John Whitmore Johnny Rocca Patti Psaris Hobie Mitchel Chuck Harris


I LCSA Staff in Attendance: Dale Hammes-GM/ Treasurer Jewell Lilly/Secretary Carla Burleson Karen Amold Dave Linski Mary Amsbarger Tom Bonacquisti Samantha Villeeas Liza Young Rick Jacobson Beate Wright Marc Schwartz Kevin Wood Matt McGowan Bmce Rinerose Mike Latham Tom Broderick Roddy Mowe Mark Guanco Craig Lees Mike Beardslee Todd Danielson Tim Coughlin Liz Sitter

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Mr. Franklin introduced his associate Mark Viani, who was in attendance.

AGENDA ITEM 2 - GENERAL MATTERS 2A. Approval of Minutes Upon MOTION of Mr. Mitchel, second by Mr. McKinney, the minutes ofthe meefing of June II, 2009 were approved. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Absent for the vote, Mr. Harris-Absent for the vote, Mr. Burrell-Aye.

(At this point in the meeting, Mr. Harris arrived)

July 2009

http://www.Ioudounwater.org

2B. Public Speakers - There were no public speakers at this time.

2C. General Manager's Report

(At this point in the meeting, Mr. Kesari arrived)

• Mr. Hammes gave a brief overview of various groups that have taken tours ofthe Loudoun Water facilities over the past few weeks.

• Loudoun Water is working with the County on a community energy plan. • The Potomac Water Supply Plan is moving forward, transitioning to Tim Coughlin as program

manager with the departure of Rick Thoesen.

2D. Board Member Comments • Mr. Harris will be unable to attend the September meeting. He would also like to see the

meetings scheduled later in the evening. • Mr. Mitchel mcnfioned that Loudoun Water needs to protect our bond rating and that we must

look at infrastructure costs. • Mr. Whitmore noficed that children are fascinated with the small "house" in the lobby and

suggested that staff add some interactive animals or figures. He recognized the sudden and untimely passing of Mr. Mike Lunsford of LCPS, who will be missed by so many in Loudoun County.

• Ms. Psaris addressed Mr. Harris' comment and requested that staff look into whether the public would be interested in attending meetings if they were held later in the day or evenings.

• Mr. McKinney suggested better advertising our current meeting time on our bills and the website.

• Mr. Rocca noted that staff has held numerous public hearings and community events during evening and weekend times which are poorly attended by the public and he is not in favor of changing the meeting time to later in the evening.

• Mr. Jennings asked staff to look into possible ideas to promote the current Board meeting to the community.


Upon MOTION of Mr. Mitchel, second by Ms. Psaris, the agenda was approved as presented. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. MeKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

Upon MOTION of Mr. Rocca, second by Mr. McKinney, the following Consent Agenda item was approved. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. MeKinney-Aye, Mr, Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

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AGENDA ITEM 4 - CONSENT AGENDA 4A. Award of Services for Hansen Project Tracking System Integration and Upgrade - Presented by Mike Beardslee In 2005 Loudoun Water implemented a Project Tracking System (Hansen PTS) to support the Engineering and Inspections departments for their core daily business processes. Key functions of this software include tracking all facets of constmction projects including plan submission, review, and approval, constmction inspection and approval, bond tracking, and tracking of all associated fees (including plan review fees, inspection fees, and availability fees).

Hansen PTS was initially implemented.using "Hansen 7", a software solution that has been widely used in our industry. This software is at the end of its lifecycle, and the vendor, Infor Global Solutions (Michigan), Inc. (Infor) is replacing it with "Hansen 8". Hansen 8 is based on industry-standard web-based technology, and represents a major change in software architecture. It offers significant improvements in customization, security, and performance. Many elements of the current Hansen PTS must be re-engineered in order to operate on the Hansen 8 platform. Hansen PTS was identified in both the 2007 and 2008 audits as having control deficiencies. Approved employees are able to waive fees in Hansen PTS without making a log entry describing the waiver. Hansen PTS does not offer the flexibility to address this deficiency, and it also does not meet industry standards for information security. This upgrade will also merge Loudoun Water's two Hansen systems into one unified platform, providing significant workflow automation benefits.

Loudoun Water has received a sole-source proposal from Infor for $286,100 to accomplish this upgrade. The sole source Basis for Determination is shown as Attachment A. Infor is the vendor ofthe Hansen 8 software, and is uniquely qualified to perform this work. Infor has implemented and upgraded all previous versions of Loudoun Water's Hansen solutions. The scope of work includes design and development of interfaces, migrating all data to the new Hansen 8 platform and merging with the existing Hansen 8 system, testing, deployment, training, and support. This project is listed as Critical on the 2009 Capital Financing Plan, and is within the CIP allocafion ($200,000 in 2009, and $150,000 in 2010). $22,500 has been spent ofthe 2009 allocation on a needs assessment and scope development project with Infor, for a remaining 2009 allocafion amount of $177,500. The project schedule is designed to fit within the remaining allocation. This project will offer significant improvements to organizafional efficiency and effectiveness through enhanced software functionality and workflow automation.

The Board determined that only one source is practicably available for contractual services in concert with the attached Basis for Determination.

And ftirther, awarded a service contract to Infor Global Solutions (Michigan), Inc. for an estimated, not to exceed, fee of $286,100, and authorized an approximate 10 percent contingency, to be controlled by the General Manager, for a budget ceiling not to exceed $315,000 without further Board approval.

I July 2009

Basis for Determination

Sole Source Procurement

Infor Global Solutions (Michigan), Inc. Hansen Project Tracking System Integration and Upgrade

In 2005 Loudoun Water implemented a Project Tracking System (Hansen PTS) to support the Engineering and Inspecfions departments for their core daily business processes. Key functions of this software include tracking all facets of construction projects including plan submission, review, and approval, construction inspection and approval, bond tracking, and tracking of all associated fees (including plan review fees, inspection fees, and availability fees).

Hansen PTS was initially implemented using the Hansen 7 software suite. This software is at the end of its lifecycle, and the vendor, Infor Global Solutions (Michigan), Inc., is replacing it with "Hansen 8". Hansen 8 is based on industry-standard web-based technology, and represents a major change in software architecture. It offers significant improvements in customization, security, and performance. This upgrade will also merge Loudoun Water's two Hansen systems into one unified platform, providing significant workflow automation benefits.

Loudoun Water requires implementation services to perform this upgrade. The scope of work for this upgrade includes: design and development of user and data interfaces and application types, migrating all Hansen PTS data to the new Hansen 8 PTS database platfomi and integrating with the existing Hansen 8 Maintenance Management System (MMS) system, testing of all interfaces, web configuration, deployment (go-live), train-the-trainer and application administrator training, and post implementation support.

As the developer and vendor for both the Hansen 7 and Hansen 8 software suites, Infor Global Solutions (Michigan), Inc. is uniquely qualified to provide these services. Infor Global Solutions (Michigan), Inc. has implemented and upgraded all previous versions of Loudoun Water's Hansen solutions. This includes the inifial implementation of Loudoun Water's Hansen MMS in 2003, the subsequent upgrade to Hansen 8 MMS in 2007, and the inifial implementation of Hansen PTS in 2005. Infor Global Solutions (Michigan), Inc. also prepared a needs assessment and a detailed requirements analysis in 2009 as part of a "Readiness Assessmcnf' for Loudoun Water's Hansen PTS upgrade. Infor Global Solutions (Michigan), Inc. also provides confinued support services, including minor upgrade support services, for both Hansen implementafions on an on-going basis.

The Hansen PTS upgrade requires integration of two existing, disparate Hansen platforms. This complexity, coupled with Infor Global Solufions (Michigan), Ine.'s overall experience with Hansen 8 upgrades and specific experience with Loudoun Water, as well as the ability to leverage their capabilities as developer ofthe software source code, makes Infor Global Solutions (Michigan), Inc. uniquely qualified to provide these services.

The Authority hereby determines that only one source is practicably available to provide services for the Hansen Project Tracking System Integration and Upgrade and therefore this will be a sole source procurement to Infor Global Solutions (Michigan), Inc. and will be issued in accordance with the Virginia Public Procurement Act.

July 2009 -4--

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I AGENDA ITEM 5 - ACTION AGENDA 5A. Award of Construction Contract for North Water Main on Commonwealth Center Property -Phase 2 - Liz Sitter Loudoun Water received bids on June 25, 2009 for the constmction ofthe North Water Reuse Main on Commonwealth Center Property, Phase 2. This main is to serve the office building for a data center that is a top economic focus of Loudoun County. This main will also provide future connections for two other developments (One Loudoun and Commonwealth Center). This project involves the construction of 4,100 linear feet of 16-inch reclaimed water main, and appurtenances, including valves, and other miscellaneous work and materials. DEQ selected this project to receive $580,000 of Stimulus funding. As part of the requirements to receive stimulus funding, Loudoun Water and the contractor have to document solicitation of Disadvantaged Business Enterprise (DBE) firms. The following attached table presents the bid results.

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Staff has reviewed Tessa Constmction and Tech Co., LLC 's Bid and other information required by the Contract Documents. This review process includes input from Loudoun Water's legal counsel and DEQ. Staff recommends award to Tessa Construction and Tech Co., LLC, contigent upon DEQ approval. DEQ needs to review and approve the bidding process to confirm that the Stimulus fiind requirements are met both by Loudoun Water and the apparent low bidder. Award of the contract will be to the lowest, responsive and responsible bidder. Upon Board approval, staff will submit documentation of the bid process to DEQ, including the DBE solicitation by Loudoun Water and Tessa Constmction and Tech Co.

There is fiinding in CIP WW28.6 to address the cost in excess ofthe DEQ funding amount because the contractual obligation for the existing work have been less than anticipated.

Project: North Water Reuse Main on Commonwealth Center Property, Phase 2 Virginia DEQ Project Identifier VCWSTG 500 - Project ID 20090041

Bid Opening Date: Thursday, June 25,2009 at 2:00 p.m. Loudoun Water Administrative Services Facility

BID TABULATION

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BIDDER CONTACT INFORMATION Tessa Construction and Tech Co., LLC

Mo Pourkiani - mofajtessacon struct ion, com 43149-101 John Mosby Hwy Chantilly,VA 20152-4263 Ph 703.327.448I/Fax 703.327.4486 vvww.tessaconstruction.com

General Excavation, Inc. Jack Tucker - [email protected] 9757 Rider Rd Warrenton,VA 20187 Ph 540.439.2202/Fax 540.439.3795 www.gei-va.com

WilHam A. Hazel Mike King - [email protected] 4305 Hazel Park Court, P.O. Box 600 Chantilly,VA 20151 Ph 703.378.8300/Fax 703.378.7623 www.waliazel.com

BID

$584,000.00

$692,540.00

$779^00.00

July 2009

http://703.327.448I/Fax

mailto:[email protected]

http://www.gei-va.com


http://www.waliazel.com

H.G. Buracker Construction, L.L.C Tom Newman - [email protected] 12150 Tac Court Manassas, VA 20109 Ph 703.393.4985/Fax 703.393-2711

R.L. Rider & Co. Donnie ttall - [email protected] 30 John Marchall St Warrenton,VA 20186 Ph 347.1611 or 1612/Fax 540.349.4770

Teague Enterprises, Inc dba: Teague Utility Contracting, Inc. VA

Bonnie Teague, President - teipipe(fl)com cast .net 5305 Jefferson Pike, Unit C-8 Frederick, MD 21703 Ph 301.473.7473/Fax 301.473.7476 www.teipipe.com

Martin & Gass, Inc. Jack Lane - martingass(a),martine.ass.com 6433 General Green Way Alexandria, VA 22312 Ph 703.256.4900/Fax 703.256.2315 www.martinsass.com

Shirley Contracting Company, LLC Sean J. Maloney, Estimator - [email protected] 8435 Backlick Road Lorton, VA 22079 Ph 703.550.3547/Fax 703.550.7899 www.shirlevcQntracting.com

Total Development Solutions Ed Doucette - edoucette(a),totaldevelopmcntsolulions.com 7805 Progress Court Gainesville, VA 20155 Ph 703.222.0497/Fax 703.753.5781 www.totaldevelopmentsolutions.com

Engineer's Opinion of Cost (DEQ STIMULUS FUND AMOUNT)

$799,980.00

$815,455.00

$864,518.40

$972,632.00

$978,650.00

$1,109,200.00

$580,000.00

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Upon MOTION of Mr. Mitchel, second by Mr. ICesari, The Board moved, contingent upon DEQ approval, to award the contract for construction of the North Water Reuse Main on Commonwealth Center Property, Phase 2 to Tessa Construcfion and Tech Co., LLC for $584,000.00 with an approximate five percent contingency to be controlled by the General Manager for a total authorized budget of $613,000.00. Additional expenditures will require further Board Approval. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Abstained, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye

I July 2009



http://www.teipipe.com

http://ine.ass.com

http://www.martinsass.com


http://www.shirlevcQntracting.com

http://www.totaldevelopmentsolutions.com

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5B. Authorization to Execute Certain Documents - Dale Hammes On June 10, 1988 the Loudoun Water Board passed a resolution authorizing the General Manager to execute Water and Sewer Agreements to provide for developer and landowner installation of onsite and offsite water and sewer facilities. At that meeting, the Board also authorized the General Manager to execute Deeds of Easement and Vacation on behalf on the organization. Since that time, all such executed documents are reported at regular Loudoun Water Board meetings and listed in the official Minutes ofthe Board meeting.

The Loudoun Water By-Laws authorize the Deputy General Manager to act on behalf of the General Manager in the General Manager's absence so a second member of staff is available to execute these documents if necessary.

Although execution of Water and Sewer Agreements is not normally time sensitive, prompt review, approval and execution of a Deed of Easement and Vacation is often warranted because most of these documents are executed by landowners and Loudoun County as a part ofthe subdivision process. This document must be recorded in the land records of Loudoun County prior to County subdivision approval. Loudoun Water's Engineering Division is tasked with the document review and Engineering Division approval is documented prior to execution by the General Manager.

While the Deputy General Manager position is vacant it is recommended that the Director of Engineering be authorized to execute Deeds of Easement and Vacation. This action will maintain our current level of assurance that important documents can be processed efficiently.

Upon MOTION of Mr. Rocca, second by Mr. Harris, the Board authorized the Director of Engineering to execute Deeds of Easement and Vacation on behalf of Loudoun Water. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Abstained, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye

5C. Cancellation of August Board Meeting - Dale Hammes Mr. Hammes explained that Loudoun Water historically follows the practice of the Loudoun Board of Supervisors and cancels the August Board Meeting.

Upon MOTION of Mr. Rocca, second by Mr. Mitchel, the Board moved to cancel the August Board Meeting. Mr. Rocca called to question. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Roeca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Absent, Mr. Harris-Aye, Mr. Burrell-Aye.

AGENDA ITEM 6 - REPORTS 6A. Water & Sewer — Presented and reviewed Dale Hammes. 6B. CIP Committee - Presented and reviewed by Vice Chairman Rocca. 6C. Finance Committee - Mr. Mitchell invited all members to the next Finance meeting to discuss rate issues and policy implementation. The Finance and CIP Committees have "switched" times. In the future, the Finance Meeting will begin at 8:00 am and the CIP will begin at 9:00 am. 6D. Personnel/Nominating Committee - Presented and reviewed by Mr. McKinney.

July 2009 ~7~

6E. Policy Committee - Ms. Psaris stated that the Policy Committee is moving through the information and the next meefing is on July 23^ .

Mr. Jennings thanked the Board Members for their committee work.

AGENDA ITEM 7 - INFORMATIONAL ITEM 7A. Central Water Supply Program Monthly Update - Tim Coughlin Mr. Coughlin presented and reviewed a tiiree page handout on the CWSP (available from the Board Secretary).

AGENDA ITEM 8 - CLOSED MEETING 8A. IDENTITY THEFT PREVENTION PROGRAM - Stanley Franklin, Mark Viani of McGuire Woods Upon MOTION of Mr. Mitchel, second by Mr. McKinney, the Board moved to enter into Closed Meefing pursuant to Section 2.2-3711(A) Subsecfion 4. The items to be discussed are: Protection ofthe privacy of individuals in personal matters not related to public business. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

Upon MOTION of Mr. Rocca, second by Mr. Kesari, the Board voted unanimously to retum to Open Meefing.

Upon MOTION of Mr. Kesari, second by Mr. Rocca, the Board adopted the following Certification for Closed Meeting. Pursuant to Secfion 2.2-3711(d) of the Code of Virginia the Loudoun County Sanitation Authority hereby certifies that, to the best of each member's knowledge, (i) only public business matters lawfully exempted from open meeting requirements by Virginia law, and (ii) only such public business matters as were identified in the motion convening the closed meeting were heard, discussed or considered by the Loudoun County Sanitation Authority. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinncy-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

Upon MOTION of Mr. Mitchel, second by Mr. Kesari, the Board approved the updated Identity Theft Prevention Program document as presented. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.


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Chairman Ml

Sacretary

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I L O U D O U N §V WATER

44865 Loudoun Water Way • P.O. Box 4000 • Ashbum, Virginia 20146 • www.loudounwater.org

Minutes ofthe Loudoun Water Board Meeting, September 10, 2009

The Board.Meeting was held at 3:00 pm in the Boardroom ofthe Loudoun Water building located at 44865 Loudoun Water Way, Ashburn, Virginia.

Board Members: Chairman Fred Jennings Ed Burrell Dimitri Kesari Charles McKinney John Whitmore - absent Johnny Rocca Patfi Psaris Hobie Mitchel Chuck Harris - absent


LCSA Staff in Attendance:

I Dale Hammes-GM/ Treasurer Jewell Lilly/Secretary Lola Stith Carla Burleson Dave Linski Mary Amsbarger Tom Bonacquisti Samantha Villegas Liza Young Sue Bour Mike Beardslee Bmce Ringrose Kevin Wood Robert Holl Todd Danielson Thom Lipinski Liz Sitter Roddy Mowe Brian Games Mark Schwartz Craig Lees Mike Latham Tom Broderick Beate Wright Tim Coughlin Mark Guanco Karen Amold


AGENDA ITEM 2 - GENERAL MATTERS 2A. Approval of Minutes Upon MOTION of Mr. Kesari, second by Mr. Mitchel, the minutes ofthe meefing of July 9, 2009 were approved. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. MeKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Burrell-Aye, Mr. Whitmore-Absent, Mr. Harris-Absent.

I 2B. Public Speakers - There were no public speakers during this meeting.

September 2009


2C. General Manager's Report • Mr. Hammes acknowledged the passing of former Board member and Chairman, Col. Frank

Gilchrist. • Loudoun Water received the official letter from the April VA DEQ meeting for the grant funds. • Raspben'y Falls Update - Todd Danielson

o Staff will continue active discussion with the developer. A tentative meeting planned in early October.

o VA Department of Health determined that the source groundwater in Raspberry is not under the influence of surface water.

o Mr. Danielson described the pipe corrosion concern and Loudoun Water has partnered with Virginia Tech to evaluate the matter and should have a determination by the end of October.

• CAG Update - Samantha Villegas o Staff has met with the CAG three times so far this year. The first meeting was an

orientation; second was to discuss central rates; third was to discuss sustainable yield.

2D. Board Member Comments • The Chairman requested that a Committee be assigned to review the Raspberry Falls issue.

Charles McKinney, Dimitri Kesari, Chairman Jennings have volunteered. • Chairman Jennings asked that Committee Chairs submit committee charters. • Mr. Burrell asked if we plan to publicize the stimulus money received for water reuse.


Upon MOTION of Mr. Mitchel, second by Ms. Psaris, the agenda was approved as presented. Vote: Mr, Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Absent, Mr. MeKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Absent, Mr. Burrell-Aye.

AGENDA ITEM 4 - CONSENT AGENDA Upon MOTION of Mr. Kesari, second by Mr. Rocca, the Board approved the following Consent Agenda Items: Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Burrell-Aye, Mr. Whitmore-Absent, Mr. Harris-Absent.

Item 4A. Approval to Conduct Hillsboro Water and Wastewater Infrastructure Study for Loudoun County - Thom Lipinski. The Town of Hillsboro is located along Route 9, approximately six miles northwest of Leesburg.

The Town of Hillsboro has a water supply consisting of a spring and a drilled well serving approximately 30 customers. The Town reports that the water yield from both sources has been diminishing and the water supply situation is deteriorating. The waterworks infrastmcture was installed in the 1940's and the on-site septic systems that serve residents have had failures that contaminated surface water and have potential for contaminating groundwater.

The Town is working on a plan to immediately replace the spring water source to its customers. The Town has received a planning grant from the State and emergency funds from the County to be used for drilling a new water supply well. Addifionally, the County recommended that a comprehensive water and wastewater infrastructure study be initiated for the Town. The goal of the study would be to identify the infrastructure deficiencies, September 2009 --2-

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system needs and system operating models to ensure a plan to correct the deficiencies ofthe Town is put into action.

The Town of Hillsboro and County staff conducted preliminary meetings with Loudoun Water earlier this year and requested technical assistance from Loudoun Water for this project. Loudoun Water has successfully partnered with the County to develop community water and wastewater solutions for other communifies (i.e., Aldie, Broad Run Farms, Willisville, etc.).

The County notified Loudoun Water in June 2009 that sufficient funds have been appropriated to cover the cost of engineering services for the study. A copy ofthe letter from the County dated June 10, 2009 is attached. The County will reimburse Loudoun Water for actual expenses incurred throughout the study complefion for an amount not to exceed $150,000.

The Board provided approval for staff to complete a Water and Wastewater Infrastmcture Study for the Town of Hillsboro on behalf of Loudoun County; subject to the Town's guidance regarding designation of the utility service areas. The study will be funded by the County in total. Staff shall provide quarterly project status updates to the Board.

Item 4B. Award of Construction Contract for East Water Reuse Main to NRUCFC - Liz Sitter. Loudoun Water received bids on August 27, 2009 for the constmction ofthe East Water Reuse Main to NRUCFC. This main is to serve the national headquarters for the National Rural Utilities Cooperative Finance Corporation. This main will also provide fiature connections for two other developments (Kincora and Dulles Town Center). This project involves the construction of 4,230 linear feet of 16-inch diameter PVC/DIP water reuse main, approximately 246 linear feet of road bore, approximately 75 linear feet of concrete encasement, one stream crossing or bore, approximately 3,400 linear feet of conversion of existing 12-inch potable water main to reuse water main and associated appurtenances. DEQ has allotted $1,196,330 of Stimulus funding for this project; DEQ will adjust this amount, based on the bid amount and other project costs. As part of the requirements to receive stimulus fianding, Loudoun Water and the contractor have to document solicitation of Disadvantaged Business Enterprise (DBE) firms. The following attached table presents the bid results.

Staff has reviewed the H.G. Buracker Constmction, LLC bid and other information required by the Contract Documents. This review process includes input from Loudoun Water's legal counsel and DEQ. Staff recommends award to H.G. Buracker Construction, LLC, contingent upon DEQ approval. DEQ needs to review and approve the bidding process to confirm that the Stimulus fiind requirements are met, both by Loudoun Water and the apparent low bidder. Upon Board approval, staff will submit documentation ofthe bid process to DEQ, including the DBE solicitation by Loudoun Water and H.G. Buracker Constmction, LLC.

The Board, contingent upon DEQ approval, awarded the construction contract for the East Water Reuse Main to NRUCFC to H.G. Buracker Construcfion, LLC for their lump sum bid of $598,000 with an approximate ten percent contingency to be controlled by the General Manager, for a total authorized budget ceiling of $657,000. Additional expenditures will require further Board Approval.

September 2009

AGENDA ITEM 6 - REPORTS Item 6A — Water & Sewer — Presented and reviewed Dale Hammes

The following quarterly reports were presented for review: Item 6B - O&M Quarterly Reports Item 6C - Engineering Quarterly Report Item 6D - BOA Quarterly Report Item 6E - CIP Report - Presented and reviewed by Mr. Johnny Rocca Item 6F. - Central Water Supply Program: Program Development and Permitting Phase - Presented by Mr. Tim Coughlin Mr. Coughlin informed the Board that upon his appointment as the Project Manager, he has changed the focus ofthe program to the permitting task with B«&V and-.Ioint Permit Pre-application meetings with regulatory agencies which are scheduled for October 29, 2009. The Technical Report for Treatment Process Evaluation and Piloting Recommendations is finalized and this report was derived from the Project Delivery Approach Workshops attended frorh April to June. Staff plans to prepare a "buddy" program with existing water treatment plants of similar size/processes to share O&M costs and other information. Item 6G. - Finance Committee Summary - Presented and reviewed by Mr. Hobie Mitchel Item 6H. - A udit Committee Report - Presented by Dimitri Kesari Mr. Kesari will provide a detailed report to the Board next month. Item 61. - Policy Committee Report - Presented by Patti Psaris The Policy Committee has met twice and will now become more involved in working with the other Committees. Item 6J. - Personnel/Nominating Committee Report - Presented by Charlie McKinney Mr. McKinney had no further clarifications.

AGENDA ITEM 7 - INFORMATIONAL ITEMS 7A. Mid-Year Review Presentation - Dale Hammes At its meeting on August 25, 2009 the Finance Committee received the results ofthe mid-year review. The mid-year review is one ofthe first steps towards complefion ofthe Five-year Financing Plan that will be presented lo the Board in December for approval.

In preparing the review, staff evaluated revenues, expenses and capital expenditures through June 30 and projected results through the end of FY09. The primary findings from the review include:

• Cost overmns in wholesale expenses due to rate increases from providers • Identification of "savings" in discretionary spending to offset cost overruns in non-discretionary

spending

Key factors driving the results ofthe FY09 review include growth, the economy and the efforts taken by staff to contain costs in discretionary expense line items. With respect to growth, through June 700 equivalent residential connections (ERCs) were added to the system which is 7 percent below the budget projection. In July, however, an additional 227 ERCs were added which brought the straight-line projection through year end more in line with the budget projection.

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Economic conditions have impacted wholesale rates due to increases in power and chemicals. The economy may also play a role in decreased water sales. Staff is projecting that sale of water revenues will come in slightly below budget projections.

With respect to the Capital Plan, revenue received through June exceeds actual expenditures by about $7.0 million. The primary revenues sources are a portion ofthe grant fiinding received from the Water Quality Improvement Act for the Broad Run facility, availability charges and three percent of cash reserves.

Based on mid-year review results, staff is not requesting any additional funding for the FY09 budget. Cost containment measures will continue as we begin preparing the FYl 0 budget.

There being no further business, this meeting adjoumed at 4:25pm.

yf r /^ Chairman

M l ^ x-kp on S^retary

September 2009

I LOUDOUN (iV WATER


Minutes ofthe Loudoun Water Board Meeting, October 8, 2009

The Board Meeting was held at 3:00 pm in the Boardroom ofthe Loudoun Water building located at 44865 Loudoun Water Way, Ashbum, Virginia.

Board Members: Chairman Fred Jennings Ed Burrell Dimitri Kesari Charles McKinney John Whitmore Johnny Rocca Patti Psaris Hobie Mitchel Chuck Harris


I LCSA Staff in Attendance: Dale Hammes-GM/ Treasurer Jewell Lilly/Secretary Carla Burleson Karen Amold Dave Linski Mary Amsbarger Tom Bonacquisti Samantha Villegas Liza Young Rick Jacobson Beate Wright Roddy Mowe Kevin Wood Matt McGowan Mike Beardslee Tom Broderick Craig Lees Bob Canham Mark Guanco Lola Stith Sue Bour Todd Danielson Tim Coughlin

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AGENDA ITEM 2 - GENERAL MATTERS 2A. Approval of Minutes Upon MOTION of Mr. McKinney, second by Mr. Kesari, the minutes ofthe meefing of September 10, 2009 were approved. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel- Absent for the vote, Mr. Kesari-Aye, Mr. Harris-Absent for the vote, Mr. Burrell-Aye.

2B. Public Speakers - There were no public speakers at this time.

October 2009


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2C. General Manager's Report • Mr. Hammes acknowledged the passing of Chip Harwood. Chip Harwood dedicated 22 years to

Loudoun Water and he will be missed. • Mr. Hammes reminded the Board ofthe Rate Workshop scheduled on Tuesday - Oct. 13 at

4pm. • A report from the County Task Force on failing drain fields is expected. Loudoun County is

expected to ask Loudoun Water to work with the County and communities to address the problems.

(At this point in the meeting, Mr. Harris arrived)

• Staff met with the Town of Hamilton regarding the possibility of operafing the Town's water and wastewater systems. Additional information to follow if Loudoun Water receives a formal request.

2D. Board Member Comments Mr. Harris expressed concem about the Board meefing being held at 3pm. He felt that this time may be inconvenient to the public and to consider holding the Board meeting later in the day or evening. Chairman Jennings recapped the open meeting held Monday, October 5 with the Raspberry Falls residents. The objective of this meeting was to hold a forum for comments and explore the Raspberry Falls history and chronological timeline of events. He stated that key attendees included media representatives and a several Raspberry Falls residents. The minutes from the meeting and a copy of the presentation will be circulated. Chairman Jennings thanked Todd Danielson and staff involved in this meeting and applauded their efforts in making it a good session and successful meeting. He stated that the outcome is to identify a pathway that will best serve all stakeholders and he looks forward to the planning ofthe next meeting. Chairman Jennings mentioned the Board Retreat will be held in the early spring of 2010. He asked Board members to formulate a different format for the meeting and submit suggestions to the General Manager or the Chairman.


Upon MOTION of Mr. Kesari, second by Mr. McKinney, the agenda was approved as presented. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel- Absent for the vote, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

(At this point in the meeting, Mr. Mitchel arrived)

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AGENDA ITEM 5 - ACTION AGENDA 5A. Contract Award for Auditing Services - Carla Burieson At the Audit Committee's request, staff prepared and advertised a Request for Proposal (RFP) for Auditing Services in May with proposals due June 25, 2009. Loudoun Water received six proposals and an intemal evaluation committee was formed to independently review the proposals. The top three ranked firms were identical for each independent reviewer. Those firms are Yount, Hyde & Barbour, PBGH and KPMG.

At its August 13, 2009 meeting the Audit Committee directed staff to request non-binding cost estimates, with staff category and hours, from each of the top three firms by way of written communication. Legal counsel assisted staff in drafting the letter and responses were requested by August 21, 2009. The Audit Committee was informed ofthe results on August 25th.

The Audit Committee met at 2:00 p.m. on October 8, 2009 to discuss contract award. Their recommendation is to award an auditing services contract to Yount, Hyde & Barbour for an initial contract period of three years to cover the audits for fiscal years 2009, 2010 and 2011. Two one-year renewal options will also be available as part ofthe contract.

The estimated costs associated with the audit for each year is as follows:

2009 $59,500 2010 62,600 2011 65,700

The proposed audit fees include year-end audit work, single audit work associated with the receipt of federal funds, technical report review as well as issuance of compliance letters and opinions.

Upon MOTION of Mr. Burrell, second by Mr. Kesari, the Board moved lo award auditing services contract to Yount, Hyde and Barbour for an initial period of three years to perform audits for fiscal years 2009, 2010 and 2011. Two one-year renewal opfions will also be included in the contract. Mr. Rocca called to quesfion, Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel- Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

AGENDA ITEM 6 - REPORTS 6A. Water & Sewer - Presented and reviewed by Dale Hammes. 6B. Finance Committee - Mr. Mitchell reminded the Board and staff of the Rate Workshop scheduled for Tuesday - October 13th. 6C. CIP Committee - Presented and reviewed by Vice Chairman Rocca. 6D. Policy Committee - Ms. Psaris congratulated staff on keeping focused and described the process used in updafing the policies. Chairman Jennings thanked staff for their effort. 6E. Central Water Supply Program Monthly Update - Presented and reviewed by Tim Coughlin. ICPRB will be hosting their annual meeting at Loudoun Water on October 20' .

Johnny Rocca and Charles Harris commended the look and design ofthe Central Water Supply Program brochure.

October 2009

AGENDA ITEM 7 - INFORMATIONAL ITEM 7A. Broad Run WRF Report - Bob Canham Mr. Canham described the start-up process ofthe BRWRF. In regards to the Notice of Violation (NOV) received from DEQ about the phosphorus limit, Mr. Canham said staff will be going to Richmond on Tuesday to explain and does not expect serious repercussions.

Chairman Jennings stated that the Board would support the creation of a program for a violation-free incentive.

Mr. McKinney stated that a new process for the GMO performance evaluation has been created. Board members will receive a package from Ms. Amsbarger via U.S. Mail. The contents are to be completed and returned to Ms. Arnsbarger's attention.

AGENDA ITEM 8 - CLOSED MEETING 8A. Consultation with Legal Counsel Pertaining to Actual or Probable Litigation - Stanley Franklin Upon MOTION of Mr. Rocca, second by Mr. Burrell, the Board moved to enter into Closed Meeting pursuant to Secfion 2.2-3711(A) Subsection 7. The items to be discussed are: Consultafion with legal counsel pertaining to actual or probable litigation. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

Upon MOTION of Mr. Rocca, second by Mr. Mitchel, the Board voted unanimously to retum to Open Meefing.

Upon MOTION of Mr. Kesari, second by Mr. Rocca, the Board adopted the following Certificafion for Closed Meefing. Pursuant to Section 2.2-3711(d) of the Code of Virginia the Loudoun County Sanitation Authority hereby certifies that, to the best of each member's knowledge, (i) only public business matters lawfully exempted from open meeting requirements by Virginia law, and (ii) only such public business matters as were identified in the motion convening the closed meeting were heard, discussed or considered by the Loudoun County Sanitation Authority. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

Upon MOTION of Mr. Mitchel, second by Mr. Kesari, the Board resolves to authorize a petition lo the Attorney General to support jurisdictions. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.


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I LOUDOUN 4v WATER


Minutes ofthe Loudoun Water Board Meeting, November 12, 2009

The Board Meeting was held at 3:00 pm in the Boardroom of the Loudoun Water building located at 44865 Loudoun Water Way, Ashbum, Virginia.

Board Members: Chairman Fred Jennings Ed Burrell Dimitri Kesari Charles McKinney John Whitmore Johnny Rocca Patti Psaris Hobie Mitchel Chuck Harris


I LCSA Staff in Attendance: Dale Hammes-GM/ Treasurer Jewell Lilly/Secretary Carta Burleson Karen Amold Dave Linski Mary Amsbarger Tom Bonacquisti Samantha Villegas Liza Young Rick Jacobson Beate Wright Roddy Mowe Kevin Wood Matt McGowan Jack Jadryev Tom Broderick Craig Lees Bob Canham Mark Guanco Jay Horstman Sue Bour Todd Danielson Thom Lipinski Mark Schwartz

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AGENDA ITEM 2 - GENERAL MATTERS 2A. Approval of Minutes Upon MOTION of Mr. Rocca, second by Ms. Psaris, the minutes of the meeting of October 8, 2009 were approved. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel- Absent for the vote, Mr. Kesari-Absent for the vote, Mr. Harris-Aye, Mr. Burrell-Aye.

Vice Chairman Rocca requested that the Public Speak portion ofthe agenda be limited to a total of 15 minutes.

November 2009


2C. General Manager's Report • Mr. Hammes reminded Board Members that the Rate Workshop would be held on November 19

from 4:00 pm to 6:00 pm. Ms. Burleson would provide a white paper and information would be emailed/available in advance.

• Mr. Hammes received an update that the County's report on failing drainfields had been delayed. More information will be provided as it is received.

2D. Board Member Comments • Mr. Harris thanked staff for their extra work and time on budget, finance and personnel. • Ms. Psaris asked the Board to think about ways to focus on the failing drainfields issue. (At this point in the meeting Mr. Mitchel arrived) • Vice Chairman Rocca requested that the Boardroom set up with the tables and chairs continue

for the audience and staff. • Chairman Jennings would like to auger into details at the Rate Workshop along with cost of

service. Mentioned that more time may need to be devoted and an additional session scheduled. • Mr. Mitchel suggested that the Board Members give thought to possible suggestions for the

upcoming legislative season. • Mr. Harris requested that the Board Members be provided with as much advance information as

possible on the Rate Workshop.

2B. Public Speakers-Several people were in attendance to speak. Chairman Jennings stated that the Public Speaking period would be contained to 15 minutes. He asked speakers to state their name, issue and organization they were representing.

The record of speaker \s comments below is summarized and is not presented verbatim:

Karen Saunders of Raspberry Falls representing an unofficial committee of Raspberry Falls - Ms. Saunders expressed that she had concems about the quality of her water. She stated that children in the community had experienced health issues. In her capacity on the unofficial committee, they have spoken with doctors, scientists and hydrogeologists and have contacted and attomey. The committee requests a thorough evaluation of data.

Mary Ann Chalmers of Raspberry Falls (did not state issue or representation) - Ms. Chalmers distributed copied of emails from Loudoun Water staff as back up to her talking points (handouts are available from the Board Secretary).

Dr. Edward Slack of Raspberry Falls represenfing the unofficial group and also himself - Dr. Slack thinks the County and Loudoun Water Board should be concerned about Raspberry Falls water. Residents are concerned with Loudoun Water's speed of resolufion. Loudoun Water should close problems caused by delays and settle the issues.

Laura Maschler of Raspberry Falls stated she is a resident and member of the CAG group - Ms. Maschler asked the Loudoun Water Board to ensure that no more Community Systems are put in Loudoun County. Ms. Maschler also provided quotes from a report that Emory and Garrett did several years ago.

November 2009 ~2~

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(At this point in the meeting Mr. Kesari arrived)

AGENDA ITEM 3 - ADOPTION OF AGENDA Vice Chairman Rocca requested that Raspberry Falls be placed on the Agenda as Action Item 5C.

Upon MOTION of Mr. Kesari, second by Mr. McKinney, the agenda was approved with the requested addition. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel- Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

AGENDA ITEM 4 - CONSENT AGENDA Upon MOTION of Mr. Rocca, second by Mr. Kesari, the Board approved the following Consent Agenda Items: Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Burrell-Aye, Mr. Whitmore-Aye, Mr. Harris-Aye.

Item 4A. Approval of Amendment No. 2 for Task Order No. 35 Site Plan, Special Exception and Commission Permit for Dulles South Water Tanks - Jack Jadryev. On September 14, 2006, Loudoun Water approved Task Order 35 to Hazen and Sawyer (H&S) for the preparation of the Site Plan, Special Exception (SPEX) and Commission Permit (CMPT) for the Dulles South Elevated Water Tanks for $115,934 with a budget ceiling of $125,000.

On December 11, 2008, Amendment No.l for Task Order 35 was approved by Loudoun Water to address Loudoun County comments on the Site Plan. This amendment increased the budget by $11,434, for a total authorized budget ceiling of $136,434. This amendment was for complefion of all remaining work in the Task Order. The work has been completed and Loudoun County has approved the Site Plan.

This Amendment No. 2 is for final design revision to the civil constmction drawings for preparation for the bid package. These changes were made to the plan and profile sheets ofthe site plan to avoid field changes during constmction.

Staff recommends approval of Amendment No. 2 in the amount of $5,916 to H&S. Adequate funds are available in the 2009 Capital Financing Plan project allocation to cover Amendment No. 2.

The Board approved Amendment No. 2 to BOA Task Order 35 with Hazen and Sawyer, P.C. to increase the budget by $5,916, for a total authorized budget ceiling of $142,350.

Item 4B. Approval of Amendment No. 1 for Task Order No. 55 Design of Dulles South Elevated Water Tanks and Booster Pumping Station - Jack Jadryev. On March 13, 2008, Loudoun Water authorized award of Task Order 55 to Hazen and Sawyer (H&S) for the preparation of the final design of the Dulles South Elevated Water Tanks and Water Booster Pumping Stafion (WBPS) for $ 184,000 and a budget ceiling of $202,000.

During the design phase the capacity ofthe Dulles South Water Booster Pumping Station was reduced, requiring a new design report to meet Virginia Department Flealth (VDH) requirements. This work was outside the original Scope of Work. A technical memo was prepared for the new design capacity and a surge analysis ofthe station. This technical memo was critical in order to receive VDH approval.

November 2009

Loudoun Waters goal for the project was to create competitive bids and provide mulfi-bid options to take advantage of market price on materials. The bid allowed a steel tank versus a composite tank. The composite tanks floor area is half the size ofthe steel tank. Due to the booster pumping station located in tank No. 1, Loudoun Water requested a composite tank layouf to be designed before the bid. This layout demonstrated adequate space for the pump station, proving to be an equal altemative to the steel tank. As a result of this work, the bid for one composite tank was $924,000 less than one steel tank.

Loudoun Water also requested additional work on the project outside the scope. This work enhanced the security ofthe site to meet Loudoun Water standards, upgraded water quality monitoring, and improved piping layout to increase functionality ofthe system.

Staff recommends approval of Amendment No. 1 in the amount of $40,700 to H&S. The authorized contingency of $18,000 for Task Order 55 has not been ufilized, resulting in a net budget ceiling increase of $22,700. Adequate funds are available in the project's 2009 CIP allocafion to cover Amendment No. I.

The Board approved Amendment No. 1 to BOA Task Order 55 with Hazen and Sawyer, P.C. to increase the budget ceiling by $22,700, for a total authorized amount of $224,700.

Item 4C. Approval of Loudoun Water's Employment Policies - Mary Arnsbarger. Loudoun Water's Employment Policy Manual is continually reviewed and updated according to changes in federal, state and local employment law. Every three years, the entire manual undergoes a comprehensive review by legal counsel. During the summer of 2009 the policy manual received legal review and it was found to be compliant to federal, state and local law. Staff presented the results ofthe legal review to the Personnel/Nominating Committee at their October 22, 2009 meefing.

The recommendations from legal counsel were mostly in the form of text and punctuation edits without affecting content or intent. However, two policies are affected by the recommendations as follows:

Policy Tifie: Organizing and Goveming Principles Recommendation: Eliminate in its entirety. Information is outdated and unnecessary. Action: Policy Eliminated

Policy Title: Compensatory Time Recommendation: Add the word "overtime" to the policy tifie. Action: Policy title revised to "Compensatory Time & Overtime" (See note on the next

page)

Recommendation: Add language clarifying that all FLSA exempt employees are paid on a salary basis.

Action: Language incorporated per recommendation.

Recommendation: Eliminate the provision which allows exempt employees to accrue compensatory time under certain circumstances.

Action: Provision eliminated.

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Note: Previously, all eligible Loudoun Water employees accrued compensatory time off in lieu of overtime pay for hours worked beyond 40/week. The BRWRF operation is 2 4 / 7 requiring plant operators to work rotating 12 hour shifts. To ensure adequate staffing, plant operators ore paid for overtime worked rather than accruing compensatory time off.

Loudoun Water's employment policies have been updated according to the recommendations made by legal counsel.

The Board approved Loudoun Water's Employment Policy Manual which incorporates the revisions recommended by legal counsel as well as those policies directed from the Policy Committee as a result of their recent Board Policy review.

AGENDA ITEM 5 - ACTION AGENDA 5A. Award of Construction Contract for Dulles South Elevated Water Tanks and Water Booster Pumping Station - Jack Jadryev In 2006, Virginia Department of Health (VDH) notified Loudoun Water that due to increases in the water demand, Loudoun Water does not meet the minimum storage requirements, according to the Waterworks Regulations. This storage deficiency needs to be addressed immediately by construction of the first Dulles South Tank. The second tank is needed in the next four years to increase Loudoun Water's total storage and meet VDH minimum requirements.

The Dulles South Tank project consists of ultimately two 3.0-MG elevated water storage tanks and a 4.0-MGD water booster pumping station located inside the base of Tank No.l to pump into the 600 zone. The project was advertised, to construct one 3.0-MG elevated water storage tank with the booster pumping station and an option to constmct the second 3.0-MG elevated tank. The contract schedule called for completion of Tank No. 1 by summer 2011 and Tank No. 2 by summer of 2012.

BID RESULTS: The bid opening for tl he project was held on September 18, 2009. The bid documents were prepared to create competitive bids and provide multi-bid options to take advantage of market price changes on materials for the 3.0-MG water tanks. Contractors were given four Altemative Bid Items. They could submit prices on one or any combination of Altemafives.

Alternative Bid Item A was for one, 3.0-MG steel column tank Altemative Bid Item B was for one, 3.0-MG composite column tank Alternative Bid Item C was for two, 3.0-MG steel column tanks Altemative Bid Item D was for two, 3.0-MG composite column tanks

Three contractors submitted bids, and Caldwell Tanks, Inc. of Louisville, Kentucky is the lowest, responsive, and responsible bidder for the project on all four bid altematives A thm D. (See Attachment A - Bid Tabulation).

EVALUATION: The difference between Caldwell's price for the one steel tank versus the price for one composite tank is $924,000, or 12.8 percent less than the steel tank price. The difference between Caldwell's price for the two steel tanks versus the price for two composite tanks is $1,921,000, or 15.7 percent less than the steel tank price.

November 2009

Loudoun Water has good experience with five steel tanks and no experience with composite water tanks. This will be the first elevated composite tank in our system. In the past, staff has recommended paying a slight premium (one percent) to go with the steel tank over the composite. For this project, the price difference is $1.9 million more for two steel tanks, which is significanfiy greater.

Staff recommends the construction of the composite elevated water tank over the steel tank to take advantage ofthe savings of $924,000 for one tank and $1,921,000 for two tanks. Since the steel bowl is 3.0-MG for both tanks, the cost savings are produced by the smaller diameter column with the composite tank. This cost difference will more than offset the smaller area for the pump station, and additional specialty inspection services needed for the composite tank.

The bid price for one composite tank was $6.2 million and the bid price for two composite tanks was $10.3 million or approximately $4.0 million more than the one tank option. The projected cash flows for the construcfion ofthe one tank and two tank alternatives are shown in the table below:

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Projected Cash Flow for One & Two Composite Tanks 2010 201 2012 2013 Totals

Tank 1 $3.9M $2.2M $ 0.1 M $6.2 M Tank 1 & 2 $4.9M $4.2M $ 1.1 M $0.1 M $10.3 M

Staff recommends construction of both tanks to take advantage ofthe favorable bid price and meet VDH minimum storage requirements. Adequate funds are available in the 10-YR CIP Financing Plan project allocafion to cover the construction of Tank 1 and 2.

Staff has invesfigated the quafifications of the Caldwell, the contractor has demonstrated good performance on similar tank projects for other water ufilifies. The contractor is currently complefing construction of a 1.5-MG composite tank for the Town of Leesburg.

Upon MOTION of Mr. Rocca, second by Mr. Kesari, the Board awarded construction of the Dulles South Elevated Water Tanks and Booster Pump Stafion to Caldwell Tanks Inc. for $10,305,000 with an approximate seven percent confingency of $695,000 to be controlled by the General Manager's office, for a total authorized budget not to exceed $ 11,000,000 without further Board Approval. Mr. Mitchel made a friendly amendment to the mofion to limh the confingency to $500,000. Mr. Rocca called to question. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel- Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

5B. Approval of Purchase of Phase IB Membranes from GE/Zenon for Broad Run WRF - Tom Broderick The Broad Run WRF includes processes to treat 11 million gallons per day (mgd) of wastewater with the exception of the membrane filtration proeess which was designed to be installed in two 5.5 mgd phases (A and B) in order to defer the cost associated with second half of membranes until they were needed to accommodate future flows. The Broad Run WRF is therefore currently permitted for a capacity of 5.5 mgd. Phase lA ofthe membranes was installed as part ofthe constmction completed in 2008.

Action by the Virginia General Assembly in 2006 tying nutrient allocafion to a facility's permitted capacity in 2010 (regulafion 9 VAC 25-720-50) necessitates the purchase and installation of Phase IB membranes in 2010. The cost impact of a nutrient cap is potentially significant, and it is in Loudoun

November 2009 - 6 -

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Water's best interest to have the BRWRF permitted at 11 mgd in 2010 in order to realize the nutrient allocation associated with 11 mgd.

The Phase IB purchase of membranes will be a sole source procurement. Current industry practice is such that membrane technology is incorporated into a reclamation facility's design in a manner that accommodates each membrane vendor's unique configuration. They are not uniform in design, and cannot be interchanged. The initial vendor, GE/Zenon, was selected in 2003 through a competitive negotiation process under the Virginia Public Procurement Act. For the Phase IB membranes, the ZeeWeed 500d ultrafiltration membrane by GE/Zenon is the only source practicably available. Appropriate notification required for sole source procurement will be made in accordance with the Virginia Public Procurement Act.

Loudoun Water staff has negofiated a price of $3,210,000 with GE/Zenon to provide 24 full cassettes of ZeeWeed 500d ultrafiltration membranes required to achieve 11 mgd capacity at the Broad Run WRF along with the associated necessary programming changes and start-up services. The Phase IB membrane purchase is part ofthe 2010 Capital Financing plan, and is scheduled for the first quarter of 2010. The Phase IB membrane purchase is eligible for $483,000 in Virginia Water Quality Improvement Fund g rant reimbursements. Therefore, the net cost ofthe Phase IB membranes (taking into account the grant reimbursement money) will be $2,727,000.

Upon MOTION of Mr. Mitchel, second by Mr. Kesari, the Board approved the purchase ofthe Phase IB membranes from GE/Zenon in the amount of $3,210,000. Mr. Mitchel made a friendly amendment directing staff to apply for grants/reimbursements as applicable. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Roeea-Aye, Mr. Mitchel- Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

5C. Raspberry Falls Discussion Upon the advice of legal counsel the Raspberry Falls discussion was moved to Closed Meeting, Agenda Item 8B.

AGENDA ITEM 6 - REPORTS Item 6A - Water &. Sewer - Presented and reviewed Dale Hammes

The following quarterly reports were presented for review: Item 6B - O&M Quarterly Reports Mr. Harris requested a clarification and addition to the ERCs on pages 6 and 14. Item 6C - Engineering Quarterly Report Item 6D - BOA Quarterly Report Item 6E - CIP Report - Presented and reviewed by Mr., Johnny Rocca Item 6F. - Central Water Supply Program: Program Development and Permitting Phase - Presented by Karen Arnold, for Mr. Tim Coughlin Item 6G. - Finance Committee Summary - Presented and reviewed by Mr. Hobie Mitchel Mr. Mitchel reminded the Board ofthe Rate Study workshop. Item 6H. - A udit Committee Report - Presented by Dimitri Kesari Chairman Jennings asked Committee Chair Kesari to look into what processes the Auditors control and what the auditors look at.

November 2009

Item 61. - Policy Committee Report - Presented by Patti Psaris The Policy Committee was distributed as a handout and reviewed by Ms. Psaris. Item 6J. - Personnel/Nominating Committee Report - Presented by Charlie McKinney Mr. McKinney had no further clarifications.

AGENDA ITEM 7 - INFORMATIONAL ITEMS 7A. None

AGENDA ITEM 8 - CLOSED MEETING 8A. Consultation with Legal Counsel Pertaining to Personnel Matters - Stanley Franklin Upon MOTION of Mr. Rocca, second by Mr. McKinney, the Board moved to enter into a Closed Meeting pursuant to Pursuant to Section 2.2-3711 of the Code of Virginia, I move that the Board of this Authority enter into a closed meeting. The authority for this closed meeting is found in Section 2.2-3711(A), Subsection 1. The item(s) to be discussed are: Discussion, consideration or interviews of prospective candidates for employment, assignment, appointment, promotion, performance, demotion, salaries, disciplining or resignation of specific officers, appointees or employees.

Upon MOTION of Mr. Mitchel, second by Mr. Kesari, the Board voted unanimously to retum to Open Meefing. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel- Aye, Mr. Kesari-Aye, Mr. Hartis-Aye, Mr. Burrell-Aye.

Upon MOTION of Mr. Kesari, second by Mr. Mitchel, the Board adopted the following Certification for Closed Meefing. Pursuant to Section 2.2-3711(d) of the Code of Virginia the Loudoun County Sanitation Authority hereby certifies that, to the best of each member's knowledge, (i) only public business matters lawfully exempted from open meeting requirements by Virginia law, and (ii) only such public business matters as were identified in the motion convening the closed meeting were heard, discussed or considered by the Loudoun County Sanitation Authority. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel- Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

8B. Consultation with Legal Counsel Pertaining to Actual or Probable Litigation/Raspberry Falls Discussion - Stanley Franklin Upon MOTION of Mr. Rocca, second by Mr. Kesari, the Board moved to enter into Closed Meeting pursuant to Secfion 2.2-3711(A) Subsection 7. The items to be discussed are: Consultafion with legal counsel pertaining to actual or probable litigation. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

Upon MOTION of Mr. Mitchel, second by Mr. Kesari, the Board voted unanimously to retum to Open Meeting.

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upon MOTION of Mr. Rocca, second by Mr. Kesari, the Board adopted the following Certificafion for Closed Meefing. Pursuant to Section 2.2-3711(d) of the Code of Virginia the Loudoun County Sanitation Authority hereby certifies that, to the best of each member's knowledge, (i) only public business matters lawfully exempted from open meeting requirements by Virginia law, and (ii) only such public business matters as were identified in the motion convening the closed meeting were heard, discussed or considered by the Loudoun County Sanitation Authority. Vote: Mr. Jeimings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

Mr. Franklin commented upon his understanding ofthe Board's discussion:

In the Closed Meeting with Counsel and staff, the Board discussed its concern over the difficult and complex legal issues that surround the Raspberry System. The Board Members stressed the importance of management of the Developer's responsibility to fund the payment of necessary system improvements. It is important to coordinate an orderly process to communicate with stakeholders.

The Board indicated its intention to place more direct involvement and responsibility with General Counsel for these matters, including the coordination of activities associated with the leak problems. Board members emphasized that acfion taken by the Authority is specifically not intended to assume a legal responsibility where none exists.

The Authority's primary mission is to continue to assure provision of safe, healthful water service to its Raspberry Falls customers.

Upon MOTION of Mr. Rocca, second by Mr. Mitchel, it was RESOLVED: Staff will coordinate with General Counsel to reach a resolution and recommended agreement with the Developer to present for consideration by the Authority for the Developer to finance and construct necessary improvements to the Raspberry Water System. Counsel further is to coordinate activities and communications associated with the water supply system and the pin hole leak problems in certain Raspberry Falls residences, with an emphasis upon cooperation and facilitating information for use by Raspberry Falls.

Authority staff is directed to continue its ongoing communication regarding rate methodology with the Community Systems Advisor}' Group (CAG). Counsel and Authority management will continue to report to the Raspberry Falls Special Committee ofthe Board.

Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Roeca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Aye, Mr. Harris-Aye, Mr. Burrell-Aye.

There being no further business, this meeting adjoumed at 4:28 pm.

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November 2009

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Minutes ofthe Loudoun Water Board Meeting, December 10, 2009

The Board Meeting was held at 3:00 pm in the Boardroom ofthe Loudoun Water building located at 44865 Loudoun Water Way, Ashburn, Virginia.

Board Members: Chairman Fred Jennings Ed Burrell Dimitri Kesari - Absent Charles McKinney John Whitmore Johnny Rocca Patti Psaris Hobie Mitchel Chuck Harris


I LCSA Staff in Attendance: Dale Hammes-GM/ Treasurer Jewell Lilly/Secretary Carla Burleson Karen Amold Dave Linski Mary Amsbarger Tom Bonacquisti Samantha Villegas Liza Young Rick Jacobson Todd Danielson Roddy Mowe Kevin Wood Matt McGowan Thom Lipinski Tom Broderick Craig Lees Bob Canham Mark Guanco Jay Horstman Sue Bour Tim Coughlin Bruce Ringrose Christina Williams Lola Stith Mike Beardslee Mark Schwartz


I AGENDA ITEM 2 - GENERAL MATTERS 2A. Approval of Minutes Upon MOTION of Mr. McKinney, second by Mr. Rocca, the minutes ofthe meefing of November 12, 2009 were approved. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr, Whitmore-Aye, Mr. MeKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel- Aye, Mr. Kesari-Absent, Mr. Harris-Aye, Mr. Burrell-Aye.

2B. Public Speakers There were no public speakers at this meeting.

December 2009


2C. General Manager's Report • The County's report on failing drainfields will be available and distributed to Board members in

January 20l0. • The WAGE radio tower is active. A public hearing may be scheduled sometime within the first

or second quarter of 2010. • The town of Hamilton is in active discussion with Loudoun Water regarding their wastewater

system. Loudoun Water expects to receive formal request from their Council soon and a meeting is scheduled next week.

• Loudoun Water continues to work with Hillsboro. • Described Loudoun Water's role and brief overview of procedure in the tracking of water

legislature primarily through association with VWWAA.

2D. Board Member Comments • Each Boai-d member thanked staff for all their effort in 2009 and wished everyone a happy

holiday and wonderful year. • Chainnan Jennings thanked staff for their work in the budget, rates and other initiatives. • Chairman Jennings has directed the Board Secretary to poll members on the retreat and board

meeting date and time. The surveys will be distributed soon. • Chairman Jennings on behalf of all Board members thanked Mr. McKinney and Mr. Whitmore

for their work, contribution and participation.

AGENDA ITEM 3 - ADOPTION OF AGENDA Upon MOTION of Mr. Mitchel, second by Mr. McKinney, the agenda was approved as presented. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel- Aye, Mr. Kesari-Absent, Mr. Harris-Aye, Mr. Burrell-Aye.

AGENDA ITEM 4 - CONSENT AGENDA Upon MOTION of Mr. Rocca, second by Mr. Burrell, the Board approved the following Consent Agenda Items; Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Absent, Mr. Burrell-Aye, Mr. Whitmore-Aye, Mr. Harris-Aye.

Item 4A. Approval of Write-off of Uncollected Accounts - Mark Guanco. Staff is requesfing Board Approval to write off utility billing customers that have an outstanding balance of greater that $100. Collection efforts, which included reminder nofices, telephone calls, searching the Loudoun Water and the County's database, have been exhausted.

The $26,344.37 in write-offs for the year is composed of:

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$ 6,595.56 for bankruptcies $15,295.82 for general billing accounts $ 4,452.99 for uncollectible residenfial & commercial accounts I

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In the effort to reduce the write-offs we have increased our effort to file liens and continue to be assertive in our tum off and collection proeess. Since joining the State of Virginia Set^Off Program, which allows us to gamish state tax refunds, we have seen an increase in payment of past due final bills after sending nofificafion of possible gamishment of tax refunds.

Effective immediately, invoices related to Loudoun Water property damage will be reported to our insurance carrier. If the responsible party defaults on the amount due, Loudoun Water will receive reimbursement through an insurance claim.

The total operating revenues for service charges for 2009 totaled approximately $36.7 million through November. The amount of write-offs represents 0.07% ofthe revenue.

The Board authorized the write-off of uncollecfible accounts totaling $26,344.37.

Item 4B. Approval of Task Order No. 3 with Dewberry and Davis for Record Drawings and GIS Data Production - Michael Beardslee. In 2008 Loudoun Water contracted with a consultant (Dewberry) to provide surveying, record drawing creation, and GIS data development services for each new water and sewer construction project. This contract was the result of a competitive procurement process, and was awarded with one base year and two option years to be exercised solely at Loudoun Water's discretion. The contract and Task Order No. 1 were approved by the Board on July 10, 2008. Task Order No. 2 was approved on April 9, 2009. This program provides higher accuracy as-built products and digital data in a timelier manner, resulfing in significant benefits to Loudoun Water. Loudoun Water recovers the cost of these Record Drawings services through administrative Record Drawing fees. These fees provide significant financial support to the Record Drawings and GIS data program, as described in Attachment A. Approximately 85% of the cost of Record Drawing services is recovered through these fees.

Task Order No. 1 for $250,000 included Record Drawings and GIS data for some constmction projects, plus startup costs. Task Order No. 2 for $400,000 included Record Drawings and GIS data for additional projects. Dewberry has completed 52 projects, with 9 additional projects currently underway, as part of these two task orders. The production process is now well-established, fully documented, and is an essenfial part of Loudoun Water's business process. Dewberry has provided excellent service to date, and provides monthly cost tracking information as part ofthe program. Task Order No. 1 is 100% spent. Task Order No. 2 is 75% spent ($300,597), and will meet or exceed the authorized ceiling of $400,000 in December, 2009. The $40,000 confingency for Task Order #2 will not be exercised.

Task Order No. 3 will authorize Dewberry lo continue processing Record Drawings for new constmction projects using the procedures previously established. Task Order No. 3 is for $300,000. It is expected that this amount will carry the program through approximately July 2010 (completing two full years of Dewberry's contract performance, and one full year of supporting Record Drawing fee collection), at which time staff recommends open advertisement and competition for these confinued services, and consideration of multiple awards. It should be noted that this forecast is an approximation based on development activity. The actual cost incurred and revenue generated will be linked to the level of development activity.

December 2009

Record Drawing fees were put in place on January 27, 2009 after an infonnational presentation to the CIP Committee. These fees are $1.50 per linear foot for wateriines, and $2.00 per linear foot for sewer lines, with a $1,000 minimum per project. Record Drawing fees for 26 projects in the amount of $104,244 have been paid to date. Additional Record Drawing fees for both approved and permitted projects in the amount totaling $292,514 have been assessed but not yet paid between January 27, 2009, and the date of this report preparation (November 13, 2009). This lag is expected due to the timing between when the fees are assessed, and the nature of the permit application, beneficial use, and bond reduefion processes. Some projects have also been grandfathered and fees will not be collected. Grandfathered projects are not part of the $292,514 in unpaid fees. No future projects will be grandfathered; only projects for which Loudoun Water expects to collect fees will be cycled through this Record Drawings process.

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These fees provide significant financial support to the Record Drawings and GIS data program. Approximately 85% of the cost of Record Drawing services is recovered through these fees, and it is expected that this figure will continue to improve as the process matures. The table below illustrates the cost ofthe program, the ofl^etting revenue collected through these fees, and the net impact to the CIP.

Item

Cost of Record Drawings Program (estimated)

Offsetting Record Drawing Fee Revenue (estimated)

Net Impact to CIP

2009

$500,000

$150,000 $350,000

2010

$500,000

$425,000

$75,000

This program is vital to the continued delivery and management of high-quality Record Drawings and GIS data that are used to plan, manage, and maintain our assets. This program also aligns with the asset management objective in Loudoun Water's Strategic Plan. Approval will allow this work to proceed without interrupfion, providing significant benefits to both internal and extemal stakeholders.

The Board approved Task Order No. 3 for Dewberry and Davis LLC for an estimated fee of $300,000 and authorized an approximate 10 percent contingency to be controlled by the General Manager, for an authorized budget ceiling not to exceed $330,000 without further Board approval.

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AGENDA ITEM 5 - ACTION AGENDA Item 5A. Strategic Plan Adoption - Dale Hammes. In January 2009 Loudoun Water began the process of developing a new five year Strategic Plan. The Haines Center for Strategic Management was engaged to facilitate the development process which included formation of two Loudoun Water teams, the Steering Committee made up of 11 senior staff members and the Development Team consisting of 42 diverse employees (people support whaFthey help create) from all Loudoun Water departments. The Development Team and Steering Committee sought to develop a meaningful, practical and achievable plan.

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Through a series of workshops the Steering Committee and Development Team:

• Established/clarified Loudoun Water's Vision and Mission;

• Conducted an Environmental Scan to project our desired Future State to identify influence on the strategic planning process and our path forward;

• Conducted a Current State assessment followed by development of core strategies that led to Guiding Principles to create alignment and balance;

• Developed Strategic Goals and Objectives, an implementation and tracking system and;

• Prepared'the attached final draft Loudoun Water Strategic Plan 2010-2014 document.

The Strategic Plan development process, draft Vision and Mission Statements, draft core strategies (later changed to Guiding Principles) and path forward were presented to the Loudoun Water Board at the May 11 retreat and Board input from the retreat was incorporated into the final document. Board comment focused on community engagement, which was added as a Guiding Principle supported by high level objectives; and levering technology to improve performance by optimizing IT systems and business practices.

Upon approval of the Strategic Plan, staff will conduct a formal roll out to the organization and begin the implementation process through further definition ofthe Goals and Objectives (project work plans and task development), preparing Department Actions Plans, and assignment of employee Performance Objectives designed to complete task and projects.

Progress will be tracked by the Personnel Committee.

Upon MOTION of Mr. Rocca, second by Ms. Psaris, the Board approved the Loudoun Water Strategic Plan 2010 -2014 as presented. Mr. Mitchel called to quesfion. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel- Aye, Mr. Kesari-Absent, Mr. Harris-Aye, Mr. Burrell-Aye.

Item 5B. Resolution of Intent to Revise Central System User Rates - Carla Burleson. Rate workshops were held on September 2V\ October 13 "", and November 19" to discuss the results of a rate study conducted by Public Resource Management Group (PRMG). Changes to existing rates and rate stmcture are proposed. The Finance Committee continued discussions at its December 3" meeting. The attached Resolution of Intent reflects the most recent recommendation of implementing revenue increases of 12% in 2010 and 10% in both 2011 and 2012. If the final rate recommendafion from the Board differs from the attached, a revised Resolution of Intent will be distributed at the Board meeting.

Key assumptions in the rate model include projected growth of 1,500 equivalent residential connections (ERCs) in 2010, 1,800 in 2011 and 2,000 in 2012. The average yield on investments is assumed to decline over the next three years and it is assumed that two borrowings will be necessary over the next ten years. The primary drivers in the model include increases in wholesale costs, increased debt service requirements and operation and maintenance expenses at the Broad Run Water Reclamation Facility (WRF).

December 2009 - 5 -

The rate study indicates a need for a 12% revenue increase in 2010 and 10% annually for 2011 and 2012. In addition, a change in rate stmcture is proposed. It is recommended that the basic, or fixed, charge be increased so that approximately 30% of revenues are received from this charge. This creates revenue stability and predictability. In addition, volume charges will change. The design recommendation is a three-tiered structure for single family residential customers and includes a conservation rate. All other customer types are subject to a two-tiered stmcture.

The Committee recommends adopfion of a final Resolufion of Intent to change rates and establishment of a public hearing date to receive comment on the proposed changes. At the March 11, 2010 Board meeting, the Board will be presented with the comments and infonnation from the public hearing to detennine if approval is appropriate at that time.

Upon MOTION of Mr. Mitchel, second by Mr. Rocca, the Board adopted the final Resolution of Intent to revise user rates and rate structure; set a public hearing date of February 25, 2010 to present proposed rates to all interested parties; and advertise the proposed revisions as is required and implement the customer communication plan as presented. Mr. Rocca called to question, (withdrawn) Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Roeca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Absent, Mr. Harris-Aye, Mr. Burrell-Aye.

Upon MOTION of Mr. Burrell, second by Mr. Harris, and with a friendly amendment by Mr. Mitchel, the Board directed staff, through the annual budget proeess, to continue the annual review of current and any proposed rates to assure that they remain fair and reasonable and to present the results of that review to the Board on a time schedule that will allow the Loudoun Water Board to thoughtfully consider any recommended changes which may be deemed necessary. Mr. Mitchel called to question. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Absent, Mr. Harris-Aye, Mr. Burrell-Aye.

Item 5C. Adoption of 2010 Budget- Carla Burleson. The Personnel Committee met on October 22, 2009 and forwarded their recommendation on the Personnel section ofthe budget to the Finance Committee. The Finance Committee met on October 27, 2009 to review the operating portion of the budget. The CIP and Finance Committees reviewed the capital section ofthe budget at their joint meefing on November 18, 2009.

Total operating expenses for 2010 (net of depreciation and amortization) are estimated at $39.6 million or $365,000 more than the 2009 adopted budget. Despite increases in wholesale costs, the 2010 operating expense budget can be maintained at the same level as 2009 as a direct result of cost containment efforts initiated by staff in 2009.

Total operating revenues for 2010 are projected at $47.1 million due to the incorporation of proposed rate increases that the Board is currently considering. An adjustment to the operating budget may be needed if the approved Resolution of Intent to change user rates is different than that currenfiy proposed. In the current projections availability charges are assumed to be maintained at existing rates. Those rates will be reviewed by the Finance Committee at its meeting on December 15th. Any changes in those rates would effective after April 1, 2010.

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A funding target of $60 million has been established for capital expenditures for 2010. This target is based on projected revenue sources available to fund capital expenditures such as availability charges, a contribution from existing users and interest income. Also included as a revenue source is the receipt of additional grant funding from the Water Quality Improvement Act (WQIA) for capital costs associated with the Broad Run WRF as well as receipt of payment from Fairfax County for the purchase of 1 MGD of capacity at the WRF.

Staff will monitor the budget and perform reviews to determine if adjustments are necessary.

The 2010 proposed annual budget will allow Loudoun Water to remain in full compliance with all covenants ofthe Revenue Bond Master Indenture of Trust.

Upon MOTION of Mr. Mitchel, second by Mr. Rocca, the Board adopted the 2010 annual budget, as presented. Mr. Rocca called to question. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Aye, Mr. Mitchel-Aye, Mr. Kesari-Absent, Mr. Harris-Aye, Mr. Burrell-Aye.

AGENDA ITEM 6 - REPORTS Item 6A - Water & Sewer - Presented and reviewed Dale Hammes Item 6B - Joint Finance and CIP Committee Report - Presented by Hobie Mitchel / Johnny Rocca Mr. Mitchel and Mr. Rocca had no further clarifications. Item 6C-Finance Committee / Continuation of Rate Workshop Report - Presented by Hobie Mitchel Mr. Mitchel had no further clarifications. Item 6D - Succession Planning Committee Report - Presented by Patti Psaris Ms. Psaris asked applicable members to review notes and please share comments. The committee will be meeting in January. Item 6E - Central Water Supply Program Monthly Report - Presented by Tim Coughlin Mr. Coughlin provided a verbal monthly update and noted that the current main focus is public outreach.

AGENDA ITEM 7 - INFORMATIONAL ITEMS Item 7A. None

AGENDA ITEM 8 - CLOSED MEETING Item 8A. Consultation with Legal Counsel Pertaining to Personnel Matters - Stanley Franklin Upon MOTION of Mr. Mitchel, second by Mr. Harris, the Board moved to enter into a Closed Meeting pursuant to Pursuant to Section 2.2-3711 of the Code of Virginia, I move that the Board of this Authority enter into a closed meeting. The authority for this closed meeting is found in Section 2.2-371UA). Subsection 1 . The item(s) to be discussed are: Discussion, considcniUon or intcn'ic\vs of j)rosj3ec(ivc cmididalcs lor cinplojmcnl, a.ssignnicnt, ai)i)oinUncnl, i)i()molion, pcrfonnancc, deniolion, s;d;uics, disciplining or resignation ol spccilic ofliccrs, ai)i>ointccs or cini)loyccs.

(Let the record show that Mr. Rocca excused himself for the remainder ofthe meeting.)

December 2009

Upon MOTION of Mr. Mitchel, second by Mr. Harris, the Board voted unanimously to retum to Open Meefing. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Absent, Mr. Mitchel- Aye, Mr. Kesari-Absent, Mr. Harris-Aye, Mr. Burrell-Aye.

Upon MOTION of Mr. Mitchel, second by Mr. Harris, the Board adopted the following Certification for Closed Meeting. Pursuant to Secfion 2.2-3711(d) of the Code of Virginia the Loudoun County Sanitafion Authority hereby certifies that, to the best of each member's knowledge, (i) only public business matters lawfully exempted from open meeting requirements by Virginia law, and (ii) only such public business matters as were identified in the motion convening the closed meeting were heard, discussed or considered by the Loudoun County Sanitation Authority. Vote: Mr. Jemiings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Absent, Mr. Mitchel- Aye, Mr. Kesari-Absent, Mr. Harris-Aye, Mr. Burrell-Aye.

Item 8B. Consultation with Legal Counsel Pertaining to Actual or Probable Litigation/Raspberry Falls Discussion - Stanley Franklin Upon MOTION of Mr. Mitchel, second by Mr. McKinney, the Board moved to enter into Closed Meefing pursuant to Section 2.2-3711(A) Subsecfion 7. The items to be discussed are: Consultation with legal counsel pertaining to actual or probable litigation. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Absent, Mr. Mitchel-Aye, Mr. Kesari-Absent, Mr. Harris-Aye, Mr. Burrell-Aye.

Upon MOTION of Mr. McKinney, second by Mr. Harris, the Board voted unanimously to return to Open Meefing. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. MeKinney-Aye, Mr. Rocca-Absent, Mr. Mitchel- Aye, Mr. Kesari-Absent, Mr. Harris-Aye, Mr. Burrell-Aye.

Upon MOTION of Mr. Mitchel, second by Mr. Harris, the Board adopted the Ibllowing Cerfification for Closed Meeting. Pursuant to Secfion 2.2-3711(d) of the Code of Virginia the Loudoun County Sanitation Authority hereby certifies that, to the best of each member's knowledge, (i) only public business matters lawfully exempted from open meeting requirements by Virginia law, and (ii) only such public business matters as were idenfified in the motion convening the closed meeting were heard, discussed or considered by the Loudoun County Sanitation Authority. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. MeKinney-Aye, Mr. Rocca-Absent, Mr. Mitchel-Aye, Mr. Kesari-Absent, Mr. Harris-Aye, Mr. Burrell-Aye.

Upon MOTION of Mr. Mitchel, second by Mr. McKinney, the Board moved to authorize the General Manager to proceed to resolve the Raspberry Falls issue. Vote: Mr. Jennings-Aye, Ms. Psaris-Aye, Mr. Whitmore-Aye, Mr. McKinney-Aye, Mr. Rocca-Absent, Mr. Mitchel-Aye, Mr. Kesari-Absent, Mr. Harris-Aye, Mr. Burrell-Aye.


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