REAL BAD MEMORY or FENDING OFF another Trustee's factual remarks

At the IVGID Board of Trustee meeting on September 13, 2017, during discussion on Pinkerton's raise, Tim Callicrate had expressed concern about the $2,000,000 collected annually for the planned $23,000,000 Effluent Pipeline project, being used for other projects.
Out of the clear blue, Trustee PHIL HORAN stated: "I don't want to get into a back and forth on the Effluent Pipeline, I have looked at that , I don't see where we have repurposed the funds."( Live Stream at 1:40)
Really Phil, did you forget about the meeting on February 8, 2017 regarding the Utility Rate Study. (Item F.2 page 13 of Board Packet).
As stated in the packet "With the 2012-13 budget year, Public Works began accumulating $2,000,000 per year in savings for the construction of the Effluent Export Project. We expect to have accumulated a total of $10,000,000 by the early construction project date in spring 2017. The sewer CIP will not be accumulating the $2 million in capital for the export project in 2017-18 while we accomplish other CIP priorities and construct the effluent storage pond improvements as part of the export project."
The effluent storage pond in not part of the pipeline project budget. It has its own account number and had $415,000 budgeted in the prior year for construction this year. Of the $2,000,000 which was to be set aside for the Pipeline, $1,000,000 was re directed primarily for water projects.
Phil, too bad on that inappropriate statement, maybe you should have a better understanding of what you're approving.
#Utility

More Financial SHENANIGANS with the Utility Fund

Over the past year, several citizens have expressed concerns that the Board of Trustees is appropriating money for projects for which the District does not have money.
Particular attention was brought to the Board about our Dynamic Duo, Pinkerton and Eick, falsely representing that the Utility Fund had over $12,500,000 in UNRESTRICTED cash reserves. When, in fact, over $9,700,000 was collected over the past six years through large SEWER RATE increases and committed to completing Phase II of the $23,000,000 Effluent Pipeline Project. $2 million was to be set aside annually for more than ten years to finance this project.
According to Board Policy 19.1 and 19.2 the Utility Fund, which is an Enterprise Fund, should always have at least $4,700,000 in working capital. To lower that requirement, our Dynamic Duo decided to substitute the policy for Special Revenue Funds which would require less than half that amount, to soften the blow. Even that maneuver couldn’t solve the problem.
The dilemma is simple, the Board majority at the end of June 2017 had, together with the funds committed to the Pipeline, appropriated $12,993,000 for capital projects when there was only $12,536,210 in reserves to pay for them. As a consequence, the Utility Fund is upside down $457,000 in cash and there isn’t a single dime available for the $4,700,000 required for emergency reserves. To cover the planned expenditures for 2018, the Board majority also allocated $1,000,000 of the annual sewer fees collected for the Pipeline to be used for the construction of other utility fund capital projects.
Sadly, because Chair Wong and Trustees Horan and Morris don't have a clue or an interest in what's going on, they continued in June, to authorize another $399,000 for projects and cost over runs to be paid by NONEXISTENT reserves. Add all of this up, and the Utility Fund is short more than $6,500,000. This is not only irresponsible financial management, it is a direct violation of Nevada Law.

What to expect. Only one thing. More Utility Rate hikes next year and many years thereafter…
#Accounting #Utility

Rising Utility Rates for Water and Sewer Usage and the Utility Fund’s Inadequate Working Capital and Capital Project Reserves

Each year the Board of Trustees is required to set and approve rates for water and sewer usage. A Utility Rate Study was presented and approved by all members of the Board on January 24, 2018. Water rates will increase by 3.4% and Sewer Rates will increase by 2.7 %. There will be a public hearing on April 25, 2018 and the rates will go into effect on May 18, 2018. The Study provides 55 pages of data.

It also states rates will continue to increase by an average of 3.2% per year for the next five years. Rates have increased a total of 20.7% over the previous five years to cover escalating operating expenses, maintenance, multi-year capital projects and debt service. Average monthly residential rates in 2013 approximated $85.90. This year’s proposed rate increases brings the monthly bill to $103.67.

What we found particularly striking in this year’s Rate Study was that the Board Policy for the targeted reserve fund balance has been met. This statement was based on the June 30, 2017 fund balance and not on the projected June 30, 2018 fund balance. As a result, the District’s calculations do not reflect the massive spending taking place in the current year ending June 30, 2018. The consequences are significant as this improper accounting masks the Utility Fund’s inadequate working capital at the end of fiscal year 2018 and the reliance upon committed reserves for Phase II of the Effluent Pipeline to meet any and all operating shortfalls and other capital project costs and overruns.

So let's take a look…

The Study states there is $12,500,000 in reserves, of which $9,400,000 is set aside for the upcoming Effluent Pipeline project. This leaves an unrestricted reserve fund balance of $3,100,000. As the Board required targeted fund balance must be $1,800,000 –everything appears to be FINE. However, the Study further states: “THE EFFLUENT EXPORT PROJECT FUNDS CAN BE RELIED UPON.” So why make a statement like that?

The 2018 budget filed with the State provides clarity. Spending has been budgeted to EXCEED Revenues by $3,839,000. Additional authorized spending and other expenditures cited in the Study will add $1,399,000. As a result reserves will drop dramatically to only $7,262,000 and the funds committed to the Pipeline should be $8,305,000. UNRESTICTED RESERVES WILL BE NEGATIVE by $1,043,000. In order to replenish the negative amount and keep the $1,800,000 reserve fund balance target, $2,843,000 must be taken from the money already collected and committed to the Effluent Pipeline. This is a 34% reduction in the pipeline money. GONE! Popped like a balloon! Vanished into thin air!

In order to understand this in a simple way, the General Manager and the Director of Finance believes the District can raise our utility rates year after year to collect money for a project, spend that money on something else and say everything is fine. Truth is hard to come by. Shame on Mr. Pinkerton and Mr. Eick for creating another accounting scam and Board Chair Wong, a licensed CPA, for not exposing it.
#Utility #Violations

EFFLUENT PIPELINE PROJECT – WAY OVER BUDGET WITH NO END IN SIGHT, WITH MONEY BEING COLLECTED DIVERTED TO OTHER PROJECTS.

This Project is the remaining 6 miles of the 12 mile pipeline within the Tahoe Basin. When the first six miles was completed between 2006 and 2009, it was determined that the remaining segments were in good condition and were "not identified for replacement."

In 2012, HDR Engineering prepared an estimate of $23,000,000 to replace the Project and preliminary design work was initiated. THE ESTIMATE DOES NOT HAVE LINE ITEMS for lining the upper emergency pond or for investigative work.

Two pipe breaks occurred in 2009 and 2014 whereby consultants THEN determined the remaining 6 miles were "nearing the end of its service". The Nevada Environmental Protection Agency issued an Administrative Order to repair the pipeline.

IVGID immediately issued contacts for electromagnetic testing together with required design and construction contracts to find out the condition of the remaining six miles. Several problems arose and over the next 12 months ONLY HALF of the pipeline was tested. Tonight, almost two years later, the Board is being asked to approve an additional $605,000 to complete the testing. As we read the contract it appears the entire 6 miles will be tested.

Last year, a contract was issued to repair 13 breaks in the pipeline for an estimated cost of $1,322,000. We believe the work was completed which purportedly satisfies the requirements of the NEPA administrative order. This work only repaired 3.1% of the Project's length.

Setting aside the interlocking agreement with the Tahoe Transportation District to potentially locate a portion of the pipeline in future phases of the Shared Use Bike Path which requires continuous grants, we make the following observations:

At the end of fiscal 2018, over $4,029,000 was spent on this Project. With this new testing contract and the $300,000 to complete the 2018 repairs, the costs will be about $5,000,000 – 22% of the estimate. Last year, $705,000 was included and listed as the Upper Pond lining. No lining was actually done nor are we aware of any contracts issued. This is a bogus charge to the pipeline project. With this new testing contract, almost $3,000,000 alone will be spent on just investigating what we have.

WHILE delaying completing this Project we have incurred enormous costs as none of this additional work was actually in the budget estimate! Waiting to relocate a portion of the Project in the Proposed Bike Path for the touted millions in savings appears to be a "pipe dream".

Two months ago, we asked and have not received a transaction register listing all charges for the Project. We believe this Project has become a dumping ground for other unrelated projects because, after all, this is where the money is. Could a Trustee request a transaction register so we together can determine if the charges assigned to this project are appropriate?

Our recommendation is to remove the administration of this project from IVGID staff and use a competent third party management firm.
#Utility

IVGID's Chairman unauthorized commitment of $7,500,000 – Part III
The venture with the Tahoe Transportation District ("TTD") – major problems, risks and uncertainties.

In 2013 the two agencies believed a cooperative effort could be made to combine IVGID's second phase of the effluent pipeline replacement within the planned extension of TTD’s Stateline Bikeway Project. This Project covers an 8 mile stretch from Sand Harbor to Spooner Junction. Our pipeline would be contained within 6 miles of TTD’s project.

The perceived advantages for IVGID would predominately be cost savings as certain construction costs would not be necessary if the pipeline was no longer within the State Route (“SR”) 28 right-of-way. The advantages for TTD would be a large local match of funds for any Federal grants providing more "points" for the Federal Government’s consideration of TTD’s grant applications.

An agreement was executed on April 1, 2013 to jointly conduct an initial scoping and fatal flaw analysis to determine if combining the two projects was feasible. Engineering studies were completed and it was determined the project was feasible. However, about 15% of our pipeline would have to remain in the SR 28 right-of-way. An amended agreement with TTD was executed in October 2014 to move forward with an Environmental Analysis to satisfy the requirements of the National Environmental Protection Agency (“NEPA”) and the Tahoe Regional Planning Agency (“TRPA”). The estimated cost for the Environmental Analysis was $1,045,000 of which IVGID funded $300,000. This process is still underway.

AFTER and ONLY AFTER the Environmental Analysis was completed would the Boards of both agencies consider the report along with recommendations from staff and officers to develop a future agreement to pursue final design, permitting and construction. NO future agreement was initiated because the Environmental Analysis has not been completed.

MAJOR PROBLEMS WITH THE VENTURE

As is often said: "TIMING IS EVERYTHING" and "PUTTING ALL YOUR EGGS IN ONE BASKET IS DANGEROUS." These two sayings reflect IVGID's dilemma. TTD is totally dependent upon grants to develop their projects. TTD does not even generate enough revenue to support their operations. According to Russ Nygaard, Senior Engineer of TTD, the Stateline Bikeway Project from Sand Harbor to Spooner Summit is estimated to cost $51,000,000 and will require two or three phases to complete. Nothing can get started unless a grant can be obtained. Simply put NO GRANT NO PROJECT.

IVGID, on the other hand, has six miles of a 60 year old crumbling pipeline where 50% is known to need immediate repair and the condition of the remaining 50% is unknown. Yet IVGID must wait for TTD’s success in obtaining a grant. When? Who knows?
IVGID also has an emergency effluent overflow pond which is used to store waste water in the event the pipeline needs to be closed for maintenance or repair. Two years ago, Washoe County would not issue a use permit for the overflow pond until a new pond lining was installed. IVGID has done nothing to rectify their non-compliance with County safety standards, other than trying to obtain a grant from the US Army Corps of Engineers. In the event the use of the pond is necessary, IVGID will be subject to fines by the County.

So what is IVGID's backup plan? None that we know of as nothing has been presented.

IVGID SEEKING COVER BY PRODUCING MORE PIPELINE INSPECTIONS

IVGID needs time and money so several attempts at scoping the pipeline, to determine its condition, were made on 3 miles of the 6 miles. The results: It's on its last leg. Another scoping was just authorized for the remaining 3 miles in order to produce an estimate of how long that segment might last before it totally collapses. The estimate will be loaded up with assumptions, which, if any assumption is not met, the timetable changes. This scoping is not cheap. The authorization was for $605,000. Results will be reported late this year.

THE CURRENT TTD APPLICATION FOR A "BUILD GRANT" FROM THE U.S. DEPARTMENT OF TRANSPORTATION

On July 19, 2018, TTD filed an application for $25,000,000. This is the maximum allowed under the program. The application included IVGID's $7,500,000 of public funds as a local matching grant for an approximate $32,500,000 project to complete 3.75 miles of the 8 mile Bike path. After several requests, we have been unable to obtain the actual grant application from TTD or IVGID.

The $1.5 BILLION Federal BUILD Grant Program states that no more than $150,000,000 can be awarded to any one state and rural areas must receive 30% of the grants.

Projects will be evaluated based on MERIT criteria that include safety, economic competitiveness, quality of life, environmental protection, state of good repair, innovation, partnership, and additional non-federal revenue for future transportation infrastructure investments.

According to Howard Hill from the US Department of Transportation, 887 applications were submitted and awards will be issued in late December of 2018.

On a side note, the BUILD program is the successor to the TIGER program. Over the last 10 years, under this program, the State of Nevada received 4 grants totaling $36,500,000 of which $29 million was for rapid transit.

Anyone want to handicap this one?

IVGID’s SAVINGS PREDICTIONS

The pipeline replacement in SR 28 was estimated in 2012 to cost $23,000,000 with a construction start date of 2021. IVGID began collecting $2,000,000 per year from utility rate payers to finance the project. When the venture with TTD was developed a relook at costs which could be saved suggested that the pipeline could be placed in the Bike pathway for $7,000,000 to $10,000,000 less than placing it in SR 28. The relook estimate was not signed off by anyone but we will assume it to be legitimate. $10,000,000 is a BIG number so why not pursue the venture. We would agree.

The problem is that costs are being run up day by day for repairs, testing studies, EPA studies, and some other dubious charges yet to be identified and validated. Through fiscal year 2018, $4,028,000 has been spent and with the addition of completing emergency repair contracts and new testing studies almost $5,000,000 will be spent before the end of this year. None of these costs were considered in the original $23 million estimate. Thus, savings could exist, but not to the extent touted by IVGID. Consider a revised estimate of the REAL costs and our bet is ALL OF THE PROJECTED savings will vanish.

CONCLUSION

How about a Public Meeting with complete and accurate information where questions can be asked of independent experts and addressed. Let’s find out the actual condition of our 6 miles of pipeline and the prudent steps our District should take to protect the health, welfare and safety of our community. The Effluent Pipeline is a critical part of our infrastructure. THIS IS A BIG DEAL… Too big a deal to place all of our chips on a game of Inter-local Agreements without defined terms and Federal BUILD Grant Roulette. Unless, of course, we just get lucky.

Written by Cliff Dobler and Linda Newman
#Utility #Violations

IVGID General Manager Steve Pinkerton, where is our $705,369?

At the May 23, 2018 Board of Trustees Meeting, a report was presented on the costs of the previous year’s capital projects. In the Utility Fund, $705,369 was listed as being spent on the Effluent Export Line – Pond lining. The Board of Trustees has not approved any contract nor was any money spent and no lining was installed at the Pond. So what was the $705,369 spent on?

Background: The Pond is a holding basin where sewage wastewater can be temporally stored in the event the 20 plus mile effluent pipeline, which carries the wastewater down into the Carson Valley, fails or repair work is required. Five years ago the Nevada Division of Environmental Protection – Bureau of Water Pollution Control ("NDEP") issued a violation for the improper use of the Pond because it lacked lining. Lining is required to protect against any seepage of wastewater into the underground. Since then, the pond has been decommissioned. IVGID was required to submit plans to the NDEP for the reconstruction and lining of the Pond by August, 2015 before any work could commence. No Plans have ever been submitted.

In the 2018-2019 Utility Rate study and the budget, $1,000,000 was repurposed from restricted funds collected to construct phase 2 of the Effluent Export Line in order to get the pond operational. Nothing has happened.

We made a public records request to IVGID on June 4, 2018 for the transactions which make up the $705,369. In return we got a series of STONEWALL emails. The first stonewall on June 7, 2018: "We will provide an update on June 29, 2018.” The second stonewall on June 29, 2018: "We will provide an update on July 31, 2018.” The third stonewall arrived on July 17, 2018 after we requested just a list of the transactions: "Thank you for this clarification – we have no `record responsive to your request, however you may do this work yourself using our weekly check listing which is available on our website; the CIP Project # is listed in the description section of this listing." We did just that and found no checks written to anyone for lining the Pond. On two occasions, we asked the 5 members on the Board of Trustees for help. No response.

Over 100 days and no response.

What was $705,369 spent on? It was not lining the Pond.

Attached are pictures of the unlined pond taken 12 days ago.
#Utility #Violations

IVGID continues to "Cook the Books"

Over the past two months we reported that the Utility Fund financial condition has been put in shambles and the restricted funds for the Effluent Pipeline Phase II "pipeline" has been raided to take care of other projects.

In early 2017, IVGID staff told the Board of Trustees that $1,000,000 was needed to reconstruct and replace the lining on a wastewater storage basin " the Pond" which was shut down by the Nevada Division of Environmental Protection ("NDEP") in 2014 because of wastewater seepage into the ground water. IVGID was to take immediate action and submit a plan to NDEP for the reconstruction and lining of the Pond. No plan was ever submitted and the Pond has laid fallow for over four years.

Of course, the IVGID Staff in order to "butter up" the Board, told them that the Pond reconstruction and lining was part of the pipeline budget and no new funds or additional increases in sewer rates were required. The Pond was NEVER part of the pipeline's $23,000,000 budget. Thus, another raid on the restricted funds of the pipeline took place.

SO WHAT COOKING IS GOING ON?

On May 23, 2018, IVGID stated in the budget reports that $705,369 had been spent on the Pond lining. We immediately knew something was awry. No contracts were ever issued and no lining was ever installed at the Pond. In addition, construction could not be done until the NDEP approved a plan for the reconstruction and lining.

So what was the $705,369 spent on? We needed to know. After making several public records requests and being stonewalled for 108 days, we finally received 66 invoices from various vendors and contractors which unfortunately totaled only $242,686. A little short, like $462,683. Yet IVGID stated that the invoices submitted completed the records request in its "entirety".

Remarkably, not a single invoice was for anything remotely related to the Pond. Instead the invoices consisted of two major repair items: replacing 35 air pressure relief valves on the pipeline flowing from Spooner summit down to Carson Valley and consultants employed to inspect the $1.3 million repair of 13 breaks in the pipeline mandated by the NDEP. Both projects were not for installing Pond lining and are also not part of the Phase II pipeline. For mercy sake, there were also charges for replacing a pump on Lakeshore and a pump at the Spooner pump station.

SO WE REMAIN IN SEARCH OF THE ADDITIONAL $462,683 IN MISSING FUNDS. ANYONE WANT TO TAKE A GUESS? IS IT OTHER PROJECTS OR POCKETS?

This accounting and false reporting is getting really bad and you as Utility ratepayers will pay in the end. When one starts to "rob Peter to pay Paul" it is known as FRAUD.
#Accounting #UtilityFund

IVGID Chair Kendra Wong Commits $7,500,000 from the Utility Fund Without Holding a Public Meeting and Obtaining Board of Trustees Approval
Part I

At the tail end of the July 24, 2018 Board of Trustees meeting Chair Wong advised the Board that she sent a letter dated July 6, 2018 to the US Department of Transportation asserting the availability of $7,500,000 of public funds as a match for the Tahoe Transportation District’s (“TTD”) application for a Federal grant under the BUILD program. This $25,000,000 grant application is for the next phase of the State Route 28 Shared Use Bike Path and the IVGID match is to allow co-location and construction to replace a 3.75 mile segment of IVGID's 6 mile effluent pipeline.

Trustee Callicrate immediately questioned why this large dollar commitment was not brought to the entire Board for review and discussion. Without being addressed, Director of Asset Management Brad Johnson, who is leaving IVGID, immediately chimed in that the letter was urgently needed to be included in the grant application and the July 16, 2018 submittal deadline did not allow Chair Wong the time to follow the proper protocol of placing this in the Board packet for full Board discussion and approval. He then indicated that the $7,500,000 commitment was covered under the District’s October 2014 Inter-local Agreement with the Tahoe Transportation District. THIS STATEMENT IS ABSOLUTELY INCORRECT. The 2014 agreement was limited to a $300,000 funding commitment for an Environmental Analysis.

At that point, Counsel Guinasso intervened to shut down further conversation stating that this letter was not on the agenda for discussion or action and would have to be brought back to the Board for further deliberation. Ms. Wong continued to speak and falsely stated that she did not commit the District to spending any funds. This statement is clearly contradicted by her July 6th Letter which can be found on page 766-767 of the July 24th, 2018 Board packet.

The Nevada Revised Statutes provides that the Board can hold a special meeting by providing 3 days notice. This grant application had been in the works for at least 60 days and there was plenty of time to develop a comprehensive presentation for the public and Board of Trustees to deliberate on a $7,500,000 commitment of public money.

So what do we have here?

1) TWO open meeting law violations for Chair Wong’s failure to agendize this item and have the Board approve the expenditure of public funds in a public meeting. These violations prevented all of our Trustees and the public from weighing in on an important IVGID decision.

2) The Chair’s unauthorized commitment of public funds to the Tahoe Transportation District which in turn is being used as a condition to obtain a grant from the Federal government.

3) No agreement between the Tahoe Transportation District and IVGID on the design and construction of the pipeline within the Bikepath and no understanding of the rights and obligations of both parties in the event the Federal grant is obtained in December of 2018.

4) No Backup plan for the District’s replacement of the Second Phase of the Effluent Pipeline if the grant is not obtained.

5) Another case of “We Can Do Whatever We Want and If We Get Caught We Can Retroactively Fix It.”

STAY TUNED FOR PART II – Is IVGID Playing Roulette With Our Health and Safety?

Written by Cliff Dobler & Linda Newman
#Utility #Violations

VGID's Chairman unauthorized commitment of $7,500,000 – Part II

Is IVGID Playing Roulette With Our Health and Safety?

Sixty year old infrastructure is failing cities around the world. The pages of our newspapers are filled with the consequences of their neglect. Here in Incline Village/Crystal Bay six miles of our sixty year old effluent pipeline is in dire need of replacement. Last year alone, the Nevada Environmental Protection Agency (“NEPA”) demanded that IVGID issue a contract to repair 13 breaks in the pipeline for an estimated cost of $1,322,000. This work only repaired 3.1% of the pipeline’s length. This was a very expensive band-aid as the entire pipe will still need to be replaced.

After completing 6 miles of the first phase of the effluent pipeline, at the end of 2011 IVGID identified the need to plan for Phase II to replace the remaining 6 miles. According to IVGID’s Engineering Estimates, this Phase would cost approximately $23 million. The then seated Board directed the District to collect $2 million per year beginning in fiscal year 2012/13 from utility customers to fund this phase with construction scheduled for fiscal year 2021. The District also retained a $55,000 -$60,000 per year lobbyist to attain grants from the Army Corps of Engineers to help with the financing. That was the Plan. But like many plans, stuff happens, like the likelihood of Grants failing to materialize or our failing infrastructure failing on its own timeline and requiring unbudgeted and expensive emergency repairs. The District also began dipping into the $2 million collected annually to cover cost overruns on other utility fund projects, using these funds to finance new projects, and covering revenue shortfalls for escalating utility fund operating expenses.

If the District had followed its own funding strategy, the Utility Fund would currently have $10 million in reserves committed for the pipeline. It doesn’t. We also have a slim to none chance of receiving any money from the Army Corps of Engineers. What we do have is a 2014 Inter-local Agreement with the Tahoe Transportation District (“TTD”) limited to our $300,000 funding for an Environmental Analysis that still has not been completed and Chair Wong’s unauthorized and unilateral commitment of $7.5 million of our public money as a local match for TTD’s $25 million Federal BUILD Grant Application. If luck is with us, the Tahoe Transportation District will receive the $25 million Grant, 3 ¾ miles of our pipeline will be replaced in TTD’s planned bike path on TTD’s timing and our costs will not exceed our $7.5 million commitment. Then we need that luck to become a streak as IVGID will have to count on TTD receiving a second $25,000,000 Grant to complete their Bike Path in order for us to incorporate the remaining 2 ¼ miles of our pipeline. And, that 2 ¼ miles cannot fail while we wait. Based on current estimates, IVGID’s costs would be around $5,000,000 to replace this final segment of our pipeline. These funds would have to be collected from our utility ratepayers and made available, when and if, the Federal Government appropriates funding for additional grants and TTD’s future application is submitted and approved. The time frame and availability of additional Federal grants is unknown. The time frame for the remaining life of our pipeline is also unknown. What IVGID plans to do if TTD doesn’t get the first grant is another unknown. At this point, there are too many unknowns to list and count on.

HOWEVER, IF EVERYTHING WORKS OUT and our 6 miles of aging pipeline stays steadfast and does not fail, we can feel like big winners in a high stakes game of roulette. Are you feeling lucky?

Stay tuned for Part III – The venture with the Tahoe Transportation District – major risks and uncertainties.
#Utility #Violations

Where are the FACTS Behind TrueBlueFacts?

After OVV and two well respected women in our community disclosed IVGID Chair Kendra Wong’s Unauthorized Commitment of $7.5 Million of our Public Funds, True Blue Facts attempted to make the FACTS vanish. Their anonymous “ghostwriters” launched a menacing email campaign attacking us with allegations of False Statements, Slander, a Cabal, and a Conspiracy.

Contrary to their name, there is nothing TRUE or anything resembling FACTS on their website, attacks ads and emails. Their messages are political graffiti designed to vandalize the integrity of IVGID Trustee Candidates Tim Callicrate and Sara Schmitz along with other honest and hardworking members of our community.

Here are the FACTS:

Phase 2 of the District’s Effluent Pipeline Replacement Project with an estimated budget of $23 million and slated to begin in 2021 is the largest capital improvement project IVGID has ever undertaken. Beginning in fiscal year 2013, the Board directed the collection of $2 million annually from utility ratepayers for a ten year period to fund the replacement of 6 miles of the effluent pipeline in State Route 28. There has never been any decision by the Board of Trustees to relocate the pipeline in the Tahoe Transportation District’s (“TTD’s”) proposed $60 million Bike Path project or anywhere else. The existing Board approved agreement with TTD, which supersedes all previous agreements, is dated October 1, 2014. It is limited to IVGID’s contributing $300,000 to an Environmental Analysis and gives IVGID and TTD the option, depending upon the outcome of the Environmental Analysis, of agreeing at a future date to co-locate the pipeline in the bike path. To date, this Environmental Analysis has not been completed and according to TTD will not be finalized until late 2018 or early 2019.

At the tail end of the July 24th, 2018 Board of Trustees Meeting under Agenda Item J “Board of Trustees Update (No Discussion or Action)” Chair Wong advised the Board that she had sent a letter dated July 6, 2018 to the US Department of Transportation stating “IVGID has $7.5 million dollars available as a match” for TTD’s Stateline Bikeway Project “Build grant to allow co-location and construction of the replacement 3.75 mile pipeline segment.” This letter was provided on pages 766-67 of the Board Packet and included with TTD’s $25 million Build Grant application for the next phase of their Bikeway Project.

Chair Wong’s unilateral action violated more than a trifecta of Nevada laws and opened the District to a myriad of known and unknown liabilities. See our Facebook OVV three part series posted on 8/26/18, 8/31/2018 and , 9/2/2018 or go to our Website at www.ourivcbvoice.com and look under ISSUES – Utility Fund or Rules Violations

Now, TrueBlueFacts would like everyone to believe that because $7,500,000 had been collected from ratepayers and set aside to replace the pipeline, it was automatically approved by the Board to be used to co-locate the pipeline in TTD’s proposed Bike Path. As we know from the actual facts, NOTHING COULD BE FURTHER FROM THE TRUTH. Have any doubts? Check out the Project Summary on page 213 of the July 24th Board Packet which states “the export line will be replaced using open-cut construction, moving the pipeline to the center of the Southwood travel lane.”

TrueBlue’s construction of an alternative narrative with irrelevant links to IVGID Board packets does not meet the test for accurate reporting. Insulting and threatening other people while hiding behind the cloak of anonymity further undermines their credibility.

The authors of TrueBlueFacts certainly know how to run a protection racket for Kendra Wong’s unauthorized and unlawful actions. In doing so, they harm ALL THE CITIZENS our Trustees are elected to serve.

NEXT: Who Are the People Behind TrueBlueFacts? Stay Tuned For Part II
#Utility #Violations

UPDATE: No longer "Pond Lining". Now $788,137 for "Effluent Pipeline Phase II"

Part IV – More Financial Shenanigans And The Latest Cover-Up

As of today, MORE THAN THREE QUARTERS OF A MILLION DOLLARS OF OUR PUBLIC MONEY HAS NOT BEEN ACCURATELY ACCOUNTED FOR! Over the past two months we issued three posts requesting our GM tell us where the $705,369 listed as spent on the emergency wastewater storage pond lining ("POND") was actually spent. No contracts were ever issued. No work was started, much less completed, on the POND. After a harrowing four month ordeal with multiple follow-ups to receive a response to our public records requests, the only records we received were the delivery of 67 invoices totaling $257,000. Not only did IVGID come up short by $448,369 they could not provide a single expense related to the POND. Instead, we learned that a portion of our money was spent on the installation of 35 air release valves on the eastern section of the effluent pipeline. This section is not part of the future 6 mile Pipeline Replacement Project Phase II (“Phase II”). The remaining invoices covered the consultants the District hired for the repair work mandated by the Nevada Division of Environmental Protection (“NDEP”) on 13 breaks in various locations of our aging pipeline. All of these segments will eventually be replaced or abandoned when the new 6 mile pipeline is installed. Bottom Line: Nothing was provided that related to any work on the POND.

THE COVER-UP

The GM got caught and he knew it.

In order to cover-up the false reporting of expenditures for a non-existent pond liner, IVGID posted on their website a final Capital Projects Report on October 5, 2018. Absent from this report was any mention of a Pond Lining Project. In its place, the catchall “Effluent Pipeline Phase II” description was substituted. We also noted that in the final report, the amount expended was increased to $788,137 against the $1,000,000 budgeted for this unknown project. In their haste to cover up their malfeasance, they forgot to check their math and the unused portion of the budget remained at $294,631. This would be impossible as only $211,863 of the budget could be available if the project cost $788,137. We are currently waiting for someone to explain what the new $788,137 was spent on as none of it was ever budgeted.

Now let's be clear about the GM’s intentional financial shenanigans:

The 2017-2018 Utility Rate Study stated that the $2 million collected annually for Phase II would be redirected aka “repurposed” for other Capital Improvement Project (“CIP”) priorities (sewer pump stations) and the lining for the POND.

The 2017-2018 Budget, presented 4 months later, stated that $1 million was for Phase II. However, the Budget did not indicate that this $1 million was for the POND.

*Although the Budget document contradicts the information provided in the Utility Rate Study, we will make the assumption that the $1 million in the Budget was for the POND as delineated in former Director of Asset Management Brad Johnson's June 16, 2017 memorandum seeking approval for another project.

Stay with us. We know this is confusing…

Two months later, the Board approved a $1,322,000 project to repair 13 breaks in the pipeline after Staff stated there was $1 million available in the budget. Staff failed to mention that this was the same $1 million the Board had already budgeted for the POND. Yes, you guessed it, $2 million of spending was approved against the $1 million actually available in the budget. We couldn’t make this stuff up! IVGID did not want to disclose that no budget was actually provided for this mandated repair project. Instead, the $955,028 reported as having been spent through June 30, 2018 was drawn from reserves accumulated for Phase II. Remember, these repairs have no future value and our costs will not be recovered as these sections of the pipeline will be abandoned once the replacement pipeline is completed. The expenses incurred are operating repair expenses, NOT capital project expenditures.

Neither the POND, the repairs of the 13 breaks in the pipeline or the invoices relating to the 35 air release valves have anything to do with the future project of replacing 6 miles of the Effluent Pipeline between Sand Harbor and Spooner Pump Station.

In 2016, Staff unilaterally decided the POND would become part of the Phase II project. It is important to note that funding for the POND was never part of the original $23 million budgeted for Phase II and the Board does not appear to have had any input in adding its funding to the future project. So why would an additional project be added? Or as GM Pinkerton might say privately, “WHY NOT? After all, we’ve been accumulating all this money, why not use it for this new expense and say it is part of Phase II.”

Our $2 million of ratepayer money accumulated each year should be restricted for the successful completion of Phase II. This money should not be siphoned off to fund other projects. This is being done to avoid the embarrassment to IVGID's management for their mismanagement and inability to properly set utility rates at an appropriate level to fund required projects. IVGID may look good in the short term by restraining utility rate increases but as we will report in a later post, the Utility Fund does not have adequate working capital to support our $600 million infrastructure. Operating and capital expenses are rapidly outpacing revenues. The Utility Fund is severely upside down and will need to be replenished. And we will add –the Utility Fund is in desperate need of Board oversight and New Management.

#Utility #Violations

IVGID's CLAIMS OF TRANSPARENCY LACKS TRANSPARENCY – We have been lied to twice so we continue to ask and wait for an answer on what the entire $788,137 was spent on. It was not Pond lining and it was not Phase II of the Effluent Pipeline. So what was it spent on?

IVGID continues to state how transparent they are in providing citizens with information. Believe that if you want.

So here we have $788,137 originally stated as being spent on lining for a waste water pond (which it was not) and later stated as being spent on Phase II of the Effluent Pipeline (which it was not). We received only $257,000 in invoices for work completely unrelated to either claim. We never received any more invoices to support the entire amount. So what was the remaining $531,000 spent on? Apparently IVGID does not care to tell us. We had a response from Peter Morris telling us nothing is missing. Missing, we hope not. If money was spent how could it be missing? Talk about deflection.

We started this request for information on June 4, 2018. Almost 5 months ago. Can't get an answer. Do you feel comfortable with the current chairwoman Kendra Wong and her claim of being transparent?
#Utility #Violations

The Utility Fund – is literally "in the toilet"

On December 11, 2018, the US Department of Transportation announced the Federal BUILD Grant awards. The Tahoe Transportation District (“TTD”) did NOT receive a Grant for their proposed Bike Path Project. As a consequence, IVGID’s ability to co-locate a small portion of the Effluent Pipeline Phase II ("Pipeline") in TTD’s proposed project will not occur and Kendra Wong's unauthorized commitment of $7,500,000 of our public funds as a local match will not be required. This revelation was not mentioned at the BOT meeting the next day. It should have been! With no potential SAVINGS to be realized from co-locating a portion of the Pipeline in TTD’s Shared Use Bike Path, IVGID will have to "develop next steps relative to overall scope.” In other words, the District will need a REAL PLAN to design, finance and implement the replacement of 6 miles of our vital infrastructure.

As we have reported many times, the Utility Fund is broke! The Fund has no reserves and a portion of the $2 million collected annually from ratepayers for more than 5 years to fund the Pipeline, rather than being set aside, has been used for other purposes and projects.

Now, the immediate problem is the projected 2019/2020 Utility Fund budget and what the new Utility Rate Study will reveal when it is presented within the next 6 weeks. The 2018/19 Utility Rate Study, adopted last May, projected for the 2019/2020 capital budget: $4,960,000 of revenues collected from customers for capital “expenses” and $4,881,000 to be spent. After allocating $640,000 for debt payments, $2,000,000 to be set aside for the Pipeline, and $191,000 for vehicles, only $2,169,000 remains. There is $980,000 budgeted for eight water projects, of which, 47% is to replace a water main on Alder Avenue.

There is $823,000 for 8 sewer projects. One of these projects, the Aeration Upgrades at the sewer plant, was budgeted for $350,000 but the recent estimate is $1,179,000. So the shortfall on this project alone, is $828,000. The “infamous" wastewater Pond Lining which was reported as being completed, but was not even initiated, isn’t even in the budget. To actually accomplish this vital project, there are 4 options with estimates ranging between $500,000 and $3,200,000. It appears the engineering consultant is leaning towards one of two options estimated between $900,000 and $1,100,000. The Nevada Division of Environmental Protection (“NDEP”), which shut down the Pond for non-compliance with regulations, was to receive a plan by March, 2015. It has yet to receive one. The contract to design the Pond Lining was not even issued by IVGID until March of 2018. Talk about stalling.

With these two "must do projects,” the budget will be short close to $2,000,000. Since no reserves exist, IVGID will have to tap the Pipeline money again or raise utility rates by approximately 20%. Our bet is there will be another "Cock and Bull Story" about a potential Federal Grant and the GM will continue the fiction that the Pond was part of the Pipeline, which it was not, and the Pipeline set aside money will again be raided.

In addition, the $4,000,000 necessary to achieve an appropriate level of working capital as required by Board policy, will remain at almost ZERO. If the proper level of working capital was established, another one time increase of 40% in customer rates would be necessary.

Let's see what happens!
#Utility

What was the $788,000 of our ratepayer money claimed to be spent on the Wastewater Pond Lining Actually Spent On? The Mystery Continues…

Remember the quest to find out what $788,000 reported as being spent on the Utility Fund Wastewater Pond Lining, which it was not, and later reported as being spent on the Effluent Pipeline Phase II ("Pipeline") which it also was not? Beginning in June of 2018, IVGID staff simply shrugged off several public records requests and after 4 months ended up producing 81 invoices for only $259,000. Our requests to examine ALL of the charges still has not been fulfilled.

At the 12/12/18 BOT meeting, GM Pinkerton finally decided to issue a report on the capital projects for fiscal year 2017/2018. He included a summary of the $788,000 expenditure which he now labeled as being spent on the Effluent Export Line – Phase II. From his report we found out that $272,500 was claimed as salaries for IVGID's CIP staff. (CIP is an abbreviation for Capital Improvement Projects.) We asked for a list of the personnel employed as the CIP staff and were informed a CIP staff does not exist. Instead, the Public Records Officer smugly sent a directory of the entire IVGID staff. Next, $190,148 was reported as being sent to the Tahoe Transportation District ("TTD") for a portion of the costs to produce an Environmental Impact Statement (“EIS”). This was required to obtain the necessary regulatory approvals for TTD's Shared Use Bike Path which is being processed by the US Forest Service. Our total commitment to TTD for the EIS is $300,000. TTD did not obtain the necessary Federal grant to fund this project so we doubt our $300,000 is worth a plug nickel. Next, there was $81,461 in consultant charges for work to repair 13 breaks in the Pipeline scheduled to be replaced. This $1,300,000 project was mandated by the Nevada Environmental Protection Agency and is being managed by the Nevada Department of Transportation. Lastly, there was $244,028 paid to outside vendors for a potpourri of materials. Of the invoices we received, over 20 amounted to less than $50.
As for the more than $500,000 remaining, the GM claimed it was for labor and materials to "perform construction work to improve and replace aging infrastructure." GM Pinkerton also decided to mislead the Board and our citizens by stating that the Pond Lining Project was carried forward from a previous year and that the earlier "description was not meant that the current year expenditures were focused on the Pond Lining element of the overall project. It was merely to note that the Pond Lining was part of the overall project." Anyone want to buy into that statement? Just think about it. More than $700,000 was first reported as being expended on the Pond Liner. After our citizens discovered there was no “pond liner” and the District was unable to provide invoices to support any expenditure for this project, Pinkerton came up with another false narrative. These are lies and he knows it.

Now let's be clear about this. In the original cost estimate of $23,000,000 for the Effluent Pipeline – Phase II, which was the basis for collecting $2,000,000 annually from rate payers for ten years to be set aside for replacing 6 miles of the aging effluent Pipeline in State Route 28, NONE of the spending described above was included in that estimate. Apparently, this money that was to be set aside for this future project has now been determined by Pinkerton to be “up for grabs.” Now, any and every sewer related expense or project can be considered part of the Effluent Pipeline – Phase II at Pinkerton’s discretion, with or without Board knowledge, approval or oversight.

Since the Utility Fund has no money, other than the Pipeline set aside funds, any project which must be done and not budgeted is being drawn from the Pipeline set aside funds. This is truly shameful! It makes for real bad government and can only lead to more abuses in the future. When a majority of our Board of Trustees do not follow their own policies, drain all the Utility Fund reserves and do not rein in the GM’s unchecked spending it demonstrates a brazen disrespect for their statutory duties and fiduciary responsibilities to our citizens.

We will not close the file on this until IVGID discloses how $272,500 of salaries was spent on yet to be identified projects. We find it more than coincidental that the reported actual 2017/2018 salaries and benefits for the Utility Fund operations was under budget by $149,000 or 5.7%. Maybe those expenses were not really under budget but just happened to migrate, via a journal entry, to the Effluent Pipeline – Phase II. This needs to be looked at a lot closer.
#Utility

2019/2020 Water and Sewer Utility Rate Study – A DISGRACE

At the January 23, 2019 Board of Trustees meeting, Director of Public Works Joe Pomroy presented the 2019/2020 Utility Rate Study. This Study provides the foundation for the Board to approve the District’s annual water and sewer rates and other utility customer charges. Mr. Pomroy provided Staff’s estimates of Revenues, Expenses, Capital Costs and Debt Service for the next five years. Based upon those estimates, he recommended a 4% increase in the Water and Sewer rates effective May 20, 2019. He also recommended that these rates continue to increase by 3.5% annually for the next four years. Additional customer charges for backflow testing, service calls and inspection will also be raised by an unstated amount along with a 5% increase to water and sewer connection fees.

According to the District, this Study is prepared to ensure fiscal responsibility and sustainability of service capacities by maintaining EFFECTIVE FINANCIAL POLICIES. If that is the dominant objective, this Study falls short.

For some time, we have been reporting that the Utility Fund is dangerously underwater and the appropriate maintenance and replacement of our vital infrastructure is in jeopardy. We have pointed to the District’s inadequate working capital, the use of ratepayer money set aside to fund Phase II of the effluent pipeline being siphoned off to fund other projects and dare we say it: fraudulent accounting and reporting practices. The Board Packet Memorandum and the Study presented does not provide corrective measures to our concerns. In fact, with the addition of too many false statements to count, it raises more alarms.

First, the District has failed to comply with the appropriate level of working capital as required by Board Policy 19.1.0 and Board Practice 19.2.0. For your reference, the Policy and related Practice has two parts:

The first part is to have working capital in an amount that will cover 45 to 90 days of operating expenses; one year of interest on debt; and one year of depreciation, based on the average of the past three years. Based upon the 2018 audited financial statements calculations for working capital should range between $4,000,000 and $4,900,000.

The second part is the accumulation of other resources. These other resources are the $2 million of ratepayer money collected annually to accumulate $23 million to fund the replacement of 6 miles of the effluent pipeline in State Route 28. This project is Phase II of the Effluent Pipeline. The Practice states: The Utility Fund may have "resources accumulated in support of Debt Service or the Multi-Year Capital Plan IN ADDITION to Working Capital since these needs extend beyond the measurement period of one year." According to Note 19 of the 2018 audited financial statements the commitments for Multi-Year projects approved by the BOT is $9,765,603 with the largest being $8,765,603 for Phase II of the Effluent Pipeline.

To be in compliance with both parts of the Practice would require the Utility Fund to have between $13,703,000 and $14,665,603. However, the working capital plus the cash equivalent long term investments reported in the 2018 audited financial statements amount to only $9,703,020. This means the Utility Fund is short between $4,061,000 and $4,962,000. There isn’t even adequate money to fund the previously approved capital projects.

At the Meeting, Trustee Dent asked Mr. Pomroy if Board Policy and Practice 19.1.0 and 19.2.0 were being followed. Pomroy fielded the question to Director of Finance Eick. Mr. Eick stated the Utility Fund has $7,000,000 of working capital and it is more than ample. He apparently decided to pick and choose only the working capital portion of the Board practice and did not disclose any thing about the reserves required for multi-year projects. Mr. Dent asked for the calculation Staff used to comply with Policy 19.1.0 and Practice 19.2.0. Mr. Eick said he could not get it done until February 26, 2019. This calculation would take less than one hour to complete. Trustee Horan stated that the calculation must be done before the February 6th Board meeting. GM Pinkerton said it would be. Now let's face it, Mr. Eick was attempting to get this pushed off until after the February 6th meeting when the Board is scheduled to make changes to the Rate Study before approving new rates and setting the date for a public hearing.

Now, for a brief summary of the Study’s incomplete and misleading information on the Utility Fund’s projected capital project needs. The Capital Improvement Projects (“CIP”) and the costs for these projects are taken from the 5 year budget adopted last May of 2018. These expenses total $4,217,000 and consist of $2,000,000 for Effluent Pipeline – Phase II; $249,000 for six equipment purchases; $815,000 for two large projects; and $1,153,000 for 19 other maintenance projects.

Trustee Dent asked Mr. Pomroy for the estimate to complete the WRRF Aeration System Upgrade and the reply was $1,000,000. The actual engineer estimate is $1,179,000. Despite this estimate, the Study only budgets $350,000 for this project. This Upgrade is scheduled to be done this fall.

Another project to replace 13 ladders on the Water Reservoirs was budgeted at $418,600 in prior years and continued on as a carry-over. The actual engineer's design and construction estimate is $612,000. Again, this project and the actual cost is absent from the Study.

These two projects alone exceed the Study’s CIP projected capital project costs by over $1,000,000. Since the Utility Fund does not have one thin dime of reserves to cover the actual costs of these projects, the set aside money for Effluent Pipeline – Phase II will have to be used OR other maintenance projects cancelled.

The preliminary design is completed on the Water Pump Station 2-1 Improvements which has an $800,000 carry-over from previous budgets. It is scheduled for construction in January 2020. We could not obtain an engineer’s estimate but the bids are expected to be far in excess of the carry-over money.

This deliberate concealment of complete and accurate information is uncalled for and can no longer be tolerated.

Trustee Dent asked Mr. Pomroy why the estimate for the Effluent Pipeline – Phase II had jumped from $23,000,000 to $27,300,000. The reply was the bar chart in the Board packet was incorrect and Mr. Dent had a keen eye for "bar charts". Pomroy then stated he would have the "bar chart corrected and Staff is sticking with the $23,000,000 estimate.” The estimate was done six and one half years ago with a 4% annual inflation rate and a start time of 2021. We can rest assured that construction cost inflation has far exceeded the estimate, yet Staff has not commissioned a new estimate.

However, Mr. Pomroy states Phase II could cost less than the $23,000,000 budgeted. He cites potential Grant support from the US Army Corp of Engineers (“USACE”) or some savings from co-locating the pipeline with the Tahoe Transportation District’s (“TTD”) proposed bike path or "savings" if we don’t have to replace ALL six miles of the PIPELINE.

Now for the Facts. The USACE 595 program has some remaining funds to be shared with six other states. IVGID lobbyist Marcus Faust has been on retainer for many years to secure this funding. Results have not materialized. At the meeting, we learned that perhaps a million dollars could be thrown our way. There, however, is a possibility that a USACE Grant may be obtained to assist in funding the wastewater pond lining which is not part of the Phase II pipeline. The lining for the wastewater pond, which is crucial to providing effluent storage in the event of pipeline failure or replacement, is also omitted from the Study. And so are the costs which according to engineering estimates range between $500,000 and $3,200,000. The TTD bike path co-location project will likely go nowhere as TTD’s BUILD Grant application to the US Department of Transportation was not accepted. TTD must now wait for some future unknown funding program to surface. As for having savings of between $2,000,000 and $4,000,000 per mile of pipeline by not replacing it is quite a spectacular statement. Yes, you read that right. For every mile we don’t replace, we will save money.

This brings us to what exactly is the condition of ALL six miles of pipeline and an informed timeline for replacement. The PICA contract to "scope out" the condition of the 6 miles of pipeline scheduled to be replaced was completed last October. However, according to Mr. Pomroy, he does not have the skill set to read the submitted information; PICA does not have an engineering license to produce an analysis; and a US engineering firm must be hired to read PICA’s data and determine the condition of the entire 6 miles of Pipeline. We will have to wait for these results until this fall. Pomroy did state that 13,700 linear feet is in bad condition but after two "scopes" we currently know nothing about the viability of the remaining 17,000 lf.

Now for the two big whoppers that should claim your attention. First, over the past few months the General Manager has come up with a new project called the Effluent Project. There are no project summaries for this invention, nor Board approval or discussion. According to GM Pinkerton, every expense he deems related to the entire effluent pipeline can be considered part of this Effluent Project. You will be surprised to learn that this Effluent Project has the same project number as Effluent Pipeline– Phase II. So, with a keystroke, any new or existing capital project can be labeled with the Phase II project number and be considered eligible for using the money collected from our ratepayers to specifically replace the remaining 6 miles of aging pipeline in SR 28.

For those who like to have accurate and complete cash flow statements this Study will leave you disappointed. There are three sheets which separately report the Budgeted Revenues and Expenses for the Water System, the Sewer System and the combined amount for both Systems. These pages provide ALL revenues along with expenditures for operations and debt service BUT EXCLUDE expenditures for capital projects. As such, any reader would assume that each system and their total are anticipated to have large excess cash flows of almost $5,000,000. Including capital projects of $980,000 for the Water System, $2,800,000 for the Sewer System and the $414,000 for shared projects would provide an accurate cash flow budget and be similar to the reporting in the State Budget. This appropriate and all-inclusive reporting would provide the reader with the actual cash flow or lack thereof planned for the new fiscal year. A reader could immediately see excess cash flow is less than $200,000. Considering there are no contingencies for unanticipated expenditures or any reserves or working capital to draw upon on, a contingency of only 1.6% on a Budget of $12,470,000 is fiscally irresponsible.

Was a rate study really done or was there a quick decision to raise water and sewer rates by 4% and then create numbers to back into a justification?

If this Rate Study is ultimately approved without addressing the working capital necessary to support a $600,000,000 infrastructure, then we are all worse off. AND when it ultimately comes time to replace the aging 6 miles of effluent pipeline, neither our ratepayer money collected to fund Phase II nor adequate reserves will be there. Trustees willing to approve this flawed Study and ignore its fallacies would be both negligent and irresponsible.
#Utility

The Effluent Pipeline – Another Failure

Once again there has been a failure of the (over 50 year old) effluent pipeline that runs under highway 28 between Sand Harbor and Spooner Summit. IVGID has been collecting approximately $2,000,000 per year since 2012 to replace this failing piece of our infrastructure. Apparently, the highway was completely closed on Thursday afternoon and evening to facilitate the emergency repair by Granite Construction. The highway was also operating with controlled one way traffic on Thursday evening and Friday morning. This failure was 100% avoidable, and due solely to mismanagement by IVGID's board majority and the feckless GM Pinkerton.

A little history: The effluent pipeline transports treated sewage from Incline Village and Crystal Bay out of the Tahoe basin to wetlands in the Carson Valley. The 50+ year old pipeline runs approximately 22 miles, but the critical portion runs under highway 28 from the sewage treatment plant on Sweetwater Road to Spooner summit. This gets the treated wastewater out of the Tahoe basin and protects our pristine lake from contamination. Four (4) miles of the pipeline between the sewage treatment plant and Sand Harbor was replaced about 10 years ago so that portion of the pipeline is ok. Six (6) remaining miles of deteriorated pipeline remain to be replaced.

IVGID started collecting the $2 million per year in 2012 with the promise to use those funds to complete the remaining six (6) miles to Spooner Summit. Like Nero fiddling while Rome burned IVGID's board and former GM Pinkerton have dragged their tails on this important piece of infrastructure for seven (7) years. They have lied to the public and diverted at least $5 million of the over $12 million that they have collected for the pipeline to other projects. They have attempted to "milk" more life out of this old and rusted/corroded pipe though money wasting inspections and repairs. The effort has obviously failed.

Fact 1 – The pipeline presently has 12 additional potential points of failure

Fact 2 – IVGID needs a place to store the treated wastewater while they replace the pipeline and the State says that they need to have a lined storage pond to put that treated water into. IVGID has the pond, but it is not lined. The state forced IVGID to close the unlined pond in 2014. The pond remains unlined. Last year GM Pinkerton lied and told the public that IVGID had spent $788,000 to line the pond when they had not done the work.

Fact 3 – Rather than just replacing the entire pipeline, IVGID spent $1.4 million to repair 13 breaks on the pipeline in 2017. You probably remember the traffic stops on SR 28 that summer. Well, that was probably a waste of money because those same areas will have to be torn up again to facilitate a full replacement.

Fact 4 – Our Board Chair, Kendra Wong, unilaterally, illegally, and without IVGID Board approval promised $7.5 million of our pipeline funds to the Tahoe Transportation District (“TDT”) to put the pipeline under a proposed new bikeway from Sand Harbor to Spooner Summit. The big lie behind this move is that the remaining 6 miles (in a best case scenario) only 2.65 miles of the pipeline can be put under the bikeway. The remaining 3.35 miles still needs to be put under SR 28. Furthermore, there exists no environmental impact study or funding for TDT’s project – so, even in the best case scenario, no construction could take place before 2023.

Fact 5 – IVGID's federal lobbyist has promised us Federal government funding for the pipeline replacement and the pond liner. The latter is estimated to cost $2.5 million. He needs to make these flowery promises to keep his job. So far nothing is happening… Staff thinks there might currently be $1 million available for design of the pipeline and another $2.3 million for the emergency pond liner. We were told 75% of the $23 million dollar project would be federally funded.

Fact 6 – Because we do not have an operative emergency wastewater storage pond, IVGID had to spend $675,000 of the taxpayer/ratepayer funds to buy land from NV Energy so a truck turning area could be built. This enabled IVGID to truck our wastewater down to Carson Valley when they did the pipeline repairs in 2017. IVGID also had to upgrade our cement storage tanks to hold the wastewater during repairs. The actual staff time and trucking expenses for this endeavor were again concealed from public scrutiny.

Fact 7 – To hope against time and the failure of the pipeline, IVGID has spent $1.2 million on electromagnetic remote field testing of the failing pipeline and an additional $1.0 million to install air pressure relief valves in the failing pipeline.

If this sounds like a comedy of errors and a failure of government then you are correct. Our 3 member BOT majority, GM Pinkerton, and our Public Works Director Joe Pomroy have facilitated this folly of errors and fraud. IVGID had imposed massive rate increases on our community with the PROMISE that the failing pipeline would be replaced. We cannot risk any more pipeline failures nor can we jeopardize the clarity of our lake. We need to demand that the interim GM and the Board take action NOW to:

1. Engineer, permit, contract and install a pond liner early next year.

2. Use the remaining funds to begin replacing the remaining 6 miles of pipeline in 2020 and 2021 UNDER SR 28. There is not enough money currently to complete the entire 6 miles. If the costs are now $30 million that is $5 million per mile plus $2.5 million for the pond liner. The District had $9.68 million at the end of June. This means that the District will have to collect MORE than the $2 million annually from utility ratepayers for this Capital Improvement Project as well as bond a portion of the project to cover the replacement of our vital infrastructure.

By Mike Abel
#Utilities

Budgets, Bids and Fairy Tales – Reporting to the IVGID Board.

About two years ago, we heard an IVGID staff member tell the Board of Trustees that most bids received for capital projects fall within 5% of the budget. Nothing could be further from the truth. A project currently underway is the installation of new ladders , rails, fencing and climbing apparatus on 13 water tanks which hold 7,500,000 gallons of our fresh water supply. The tanks are on average 53 years old.

Design started in 2017 with a project budget of $295,000 and in 2018, the budget was increased by 44% to $425,000. In early 2019, two contractors submitted bids with the low bid being $473,000. Adding engineering costs, IVGID staff time and a 6% contingency the total costs was $536,000 which was over budget by 26%. However, in IVGID's world, and to keep with staff's prophecies , three tanks were removed from the bid and the budget was met. A Fairy Tale of dishonest reporting.

The bid for the three tanks which were removed was $111,000 and are scheduled for rebid in 2021 with a budget of $260,000 which is 225% higher than the actual bid. Why skip a year and why increase the budget so much? Figure that out. We have a few ideas. Why wouldn't the required Utility Fund reserves be used for the budget overrun and continue with one contract? In case anyone may not remember there are no reserves in the Utility Fund . It operates on a shoestring.

We see these budget gymnastics go on constantly and the Board of Trustees receive this type of twisted information to try and make prudent decisions. The staff, under Pinkerton, did whatever he said. Maybe Indra Winquest can change this ugly culture.
#Utility

The Effluent Pipeline replacement – A staggering revelation from IVGID staff

One year ago, Joe Pomroy, Director of Public Works, told the IVGID Board of Trustees that the Effluent Pipeline Phase II replacement would only cost $23 million dollars and he was "sticking to it"

This year, on January 29, 2020, we all received the startling revelation that the costs will now be $38 million. Only an increase of $15 million or 65% in one year.

Now for worse news. In 2017, $1.5 million was spent to repair 13 leaks in the pipeline under the assumption, the pipeline would last another 10 years and we could just forget about it and go back to doing nothing. A standard government job. In late 2018, another conditions assessment of the pipeline was done and guess what? There were 16 more deficient areas because the lousy assumptions used in the phony HDR Engineering report, a year earlier, were pure nonsense. The pipeline is like a round of Swiss cheese.

Now, IVGID must immediately replace 5,000 LF of pipeline at an estimated cost of $5 million and spend another $2.7 million relining a wastewater pond which was required by the Nevada Department of Environmental Protection in 2014, a mere six years ago. Next year another 8,100 LF of pipeline is planned to be replaced at an estimated cost of $8.1 Million. There will barely be enough funds to do it. Expect some borrowings to take place.

So after collecting $16 million over eight years, we got $5 million spent recklessly on several items, another $7.7 million will be needed immediately leaving only $3.3 million remaining to replace 26,000 LF (which will cost $26 million). The solution by IVGID staff is to have rate payers continue paying $2 million per year for the next 11.5 years and then somehow get this pipeline done by 2031. Like we have a choice. The pipeline was scheduled to be completed by 2023. Expect more leaks and more money spent on repairs over the next decade thus escalating the costs.

Also the Utility Fund required reserve balances have been stripped to the bone as a spending spree took place over the past 5 years to buy new trucks, equipment, a truck storage building and new crew quarters. The reserve balance should always be at least $4 million for emergencies. We only have $300,000. Now think how scary this is if a major emergency is needed on the $600 million infrastructure.

We will continue to hear Staff beat the drums that the USACE will drop some money in our lap and the Tahoe Transportation District will save us several million if the pipeline is co located in their Bike Path. No agreements exist, the pipeline keeps on leaking and the consultants keep getting paid. The latest news is maybe the USACE will provide a grant of $2 million for the wastewater pond lining. Beyond that additional money would be similar to a "prays chance in hell". Miracles may happen but we must admit we have never seen one.

Interim Manager, Winquest, concluded that the Engineering Staff does not have the bandwidth for the pipeline project. That sure doesn't sound like a vote of confidence. He will seek an outside manager to administer the project. We hope everyone feels real good about wasting $5 million of the pipeline money (includes almost $1 million of salaries for the engineers) on lousy decisions made by a group of inept engineers. We don't. This entire charade was to hide their inabilities. One engineer was smart enough to find another job.

To get the reserves back up to $4 million it has been suggested to raise rates by $1 million per year for the next four years which will get us back to even. Five years to run reserves into the ground and four years to build it back up. How old will your children be in 2024? Keep this in mind. Wong, a CPA allowed this fiasco to take place while she was our illustrious Chairwoman of the Board of Trustees. Citizens spoke loudly on this collision course over the past three years. She ignored the comments. Her agenda was creating litigation, limiting public comment and denying public records. Thanks Kendra.

Too bad we hire the worst, waste a ton of money, sole source contracts to all outside consultants, have to pay $2million per year for another decade and the engineers get to keep their jobs. What a racket.
#Utility