MINUTES OF THE REGULAR MEETING OF THE
KINGSBURY GENERAL IMPROVEMENT DISTRICT BOARD OF TRUSTEES
TUESDAY, SEPTEMBER 19, 2017
Call to Order - The meeting was called to order at the Kingsbury General Improvement District office located at 255 Kingsbury Grade, Stateline, Nevadaat 6:02 p.m. byCraig Schorr.
Pledge of Allegiance
Roll Call– Present were Trustees Schorr, Yanish, Nelson, Vogt and Norman. Also present were General Manager Cameron McKay, Business & Contract Manager Michelle Runtzel, Counsel Chuck Zumpft, Operations Superintendent Brandon Garden, Gerry and Aaron Harstineof Servline, and Matt Van Dyne of Farr West Engineering.
Public Comment– There was no public comment.
Approval of Agenda
M-9/19/2017-1
Motion by Nelson, seconded byNorman, and unanimously passed to approve the Agenda.
Approval of Minutes - Yanishrequested that her statement be amended to remove the portion indicating “there is no requirement to disclose” on Page 9, Paragraph 9. She felt the statement did not reflect what she was attempting to convey.
M-9/19/2017-2
Motion byYanish, seconded by Vogt, and unanimously passedto approve the Minutes of the Regular Meeting datedAugust 15, 2017 as amended.
Approval of Consent Calendar– Item A: List of Claims in the amount of $479,935.29 as represented by check numbers 55187 through 55357; Item B:Approve Payment to Cruz Construction for Emergency Patching for Lakeside Inn Leak; Item C: Purchase of Street Sign Hardware and Road Delineation with Snow Markers.
M-919/2017-3
Motion by Vogt, seconded by Nelson, and unanimously passed to approve Consent Calendar, Item A: List of Claims in the amount of $479,935.29 as represented by check numbers 55187 through 55357; Item B: Approve Payment to Cruz Construction for Emergency Patching for Lakeside Inn Leak in the amount of $5,449.00; and Item C: Purchase of Street Sign Hardware and Road Delineation with Snow Markersin the amount of $17,205.00.
There was no public comment.
UNFINISHED BUSINESS
NEW BUSINESS
Presentation by Servline on a Service Line Water Loss Protection Program–McKay reported in writing: This program is sponsored by the National Rural Water Association. Due to the timing of the National Rural Water Conference in Reno right now, we will have representatives Gerry and Aaron Harstine at our meeting to give us an insight to their service. I have been looking in to this for some time and was waiting for the specific opportunity to bring it to the board. This program pays the utility (KGID) for water used in excess of the average usage a customer would incur due to a leak on their service line.
McKay introduced Gerry and Aaron Harstine with Servline to give a presentation about an insurance program. McKay offered for Gerry to utilize as much time as needed to provide the information. Gerry provided a program brochure. He stated that their program covers waterloss for homeowners, waterline repair or replacement and sewer line repair or replacement. He explained that this programoriginally came fromanowner who had a leak in the front yard of his property who spent $5,000 to repair the line. The owner stated he wasn’t aware that it is his responsibility. In addition, he had friends that could not afford similar repairs and he was unaware these expenses are not covered under homeowners insurance. The information packet provided explains that many people are not aware it is their responsibility for water loss or to repair waterline. He provided statistics regarding this which may result in debt for many customers for emergency costs of $500. The program is designed to help these people. They met with 45 utilities who all say that help is needed and the program is aimed at helping both the utility and the customer.
National Rural Water has reviewed the program and they support it along with the states because the program supports the utility. Gerry questioned the location of the meters, to which McKay confirmed that most meters are right on the property line. Gerry confirmed that any water that goes from the property line toward the property is covered under this program which allows for coverage once per year. He explained that the customer calls Servline who works with the customer, investigates average bills with KGID and covers any overages due to KGID. Servline then pays KGID directly.
The program is structured based on the needs of the utilities, which varies. The limits on Page 9 are available for the utility to choose and coverage will be the same for all customers within the utility. The coverage costs indicated range from $1-$2 per month and the national average is $1.65. McKay explained that KGID’s leak policy is for a homeowner to apply for Board forgiveness of excess water charges once every 5 years. Gerry indicated this may need to be restructured to allow for coverage once per year. Gerry explained there is no deductible and that the limits are the amount of coverage over the average water bill. Norman confirmed the coverage currently being discussed is for water loss and Gerry added that two other coverages will be discussed next.
Gerry explained that the program guidelines will be decided by the board, etc. Their experience is that it is beneficial for many customers to be automatically enrolled for water loss coverage. Gerry suggested to sign all customers up initially for a month or two allowing time for customers to call Servline for questions. This protects customers who may forget or delay enrollment. Customers can cancel at anytime and renew again after 30 days. His experience is that most people do not notice they are on the program until coverage is needed. They offer reimbursement for up to 1 year of fees for any reason a customer wants to cancel. The average national participation is 97% as customers love the program.
Norman confirmed that the $1-$2 is paid by the customer as included in the KGID bill. McKay confirmed a hearing would be held before any charges could be added.
Schorr confirmed the coverage is excess water use and not leak repair. He provided a scenario where a customer pays a plumber $500 to fixa leak, and later receives a bill for excess water usage and then contacts Servline. Gerry explained Servline would contact KGID for average bill information and then pay KGID for amounts over the average usage. Schorr confirmed the program coverage is for excess water usage and not plumbing bills. Gerry added that the program will also educate the customers of their responsibility to cover the costs. Customers tend to utilize the coverage claiming more leaks because the coverage is available.
Norman questioned if the program can be sustained in an area for primary second homes which may be unoccupied and are more prone to excessive leaks. Gerry stated that he is familiar with the type of area; it is not an issue and will be structured into the pricing of the program. Norman elaborated that approximately 50% of the homes are primarily vacant and unattended, and these homes account for most of the leaks in the district. He questioned if this will raise the fee structure in this community or is it factored in the nationwide rate structure. Gerry stated that it factors into the nationwide rate structure, however, the KGID leak history will also be reviewed. They have three different companies that support Servline and they are the only company providing this insurance in the country. Any risk is spread across the country.
Vogt explained that the benefit would be less customers requesting relief from their excessive water bills resulting in saved time. She added that she anticipates the cost of water to increase as supply decreases. Gerry stated the timing of emergencies is unknown and the cost of coverage to the customers is minimal. He added that he has a background in water treatment plants, and explained that leaks on homes aren’t as common as car incidents, andmonthly rates costs hundreds plus deductibles. This coverage is for a minimal $1-$2 with no deductible. Vogt confirmed her questions were answered.
Schorr questioned if it matters if there is fault in an incident, for example a customer doing their own plumbing. Gerry confirmed it doesn’t matter if there is fault, unless they cut the line or a neighbor boy turned on the hose and left the water running. He added there are accidental clauses for digging and almost all incidents are covered. Norman questioned if leaving irrigation on would be covered. Gerry confirmed with McKay that irrigation is part of leaks and runs through the meters, therefore is covered. Vogt confirmed that rates will be determined based on our district’s leak history.
Runtzel confirmed that a neighbor turning on the water hose would not be covered. Gerryexplained that they are regulated, and that scenario is not break, an incident or insurable event.
Gerrystated that line coverage is another added benefit to be discussed next. He explained that they prepare the literature for mailings and handle the calls from customers. He mentioned that it takes time and staff to address calls regarding leaks and the burden will be reduced by KGID. Customer service, education and claims are all handled by Servline.
He referred to Page 14 of the brochure regarding the waterline and sewer line. The customer is not automatically enrolled like the water loss coverage. He stated that the waterline is their responsibility to enroll, there no cost to the utility and no deductible to the customer. It is similar billing process as water loss. He added it is the same as the water loss program, and KGID can add an additional fee for administrative costs for the Servline program.
Gerry explained that the waterline and sewer line protection is for $10,000 per incident, with no yearly limit. He added that for a small fee, frozen line protection can be added. Sewer line also covers up to $10,000 per incident, at an approximate cost of $5-$7 per month.
Norman questioned when the sewer line ends and starts, which McKay and Gerry confirmed the sewer line covered is from the main to the foundation. Gerryexplained they do not go under the foundation as most homeowner’s are covered within the foundation under homeowner’s insurance and double coverage is generally not desired. McKay questioned if it covers only breaks, or if a rude intrusion and blockage are covered. Gerry answered that rude are break-ins and covered, but there may be a grey area to be determined by a plumber.
Norman confirmed that the leak covers excess water loss from outside the meter and the sewer line protection is for outside the foundation to the connection point. Gerry confirmed that is because water cannot be measured past the meter. McKayreiterated that this coverage must be signed up by the customer whereas the water loss has an option to opt out. Gerryadded that the road cut is also covered which is why the limit is higher at $10,000. McKay confirmed that water line and sewer line costs are paid to the customer and not KGID. Gerry provided an example where a plumber suggests a line be replaced which would be covered by Servline. There is generally a discussion with minimal paperwork.
Gerryquestioned if Warranty Cards are common in the area and provided a comparison on Page 15. He confirmed that warranties are not insurance and since they are not regulated, they have a lot of latitude. He explained that the Servline program covers more items than a warranty and warranties cannot cover water loss. He addressed defective or recalled materials which are also not covered under warranties, but are included with Servline.
McKay requested clarification regarding late bills and Gerry explained as long as the account is active it is covered, but if KGID terminates service, coverage is also terminated with Servline.
Nelson questioned what are considered pollutants andGerry explained that pollutants may be toxic chemicals that come up through the sewer into the house. This could be covered under homeowner’s and is not covered under this program.
Gerry and Aaron played audio of a video of two water utility customers in Indiana who were hesitant to join the program, but affirmed they were thrilled with their decision to enroll. Gerry stated that it is possible to improve customer relations because it reduces water leak complaints, etc. One utility customer stated that her utility is small with 550 customers and her job duties includes calculating water loss and making adjustments to customer’s bills. She stated that the program has reduced her workload andthe process is simple to provide customer billing history to Servline via email. Her utility had 20 claims of so far with Servline and explained that they added an administrative fee to the program fee also helped improve revenue. She explained that they have had a customer on a payment plan for several years for a $3,000 leak expense that would have been covered under the Servline program if it was offered sooner. She stated that the program provides an option to the customer that is not available elsewhere and that leak adjustments were reduced. She explained that her utility was struggling financially prior to the program, but an administrative fee was added which recouped administrative costs and helped keep rates lowbenefitingcustomers. The utility is no longer paying for customer leaks as they are covered by the program which benefits the utility. The second utility customer stated that the option of the program has improved customer relations and she encouraged any boards considering the service to consider their bottom line and the customer’s best interest. She advised that customer’s like low rates and leak adjustments result in rate increases and conscientious board should be looking out for their customers.
Gerry offered for additional videos if the board is interested. He added that a utility can exit the program at any time, but so far no utility has left the program. He offered to answer any questions.
Schorr questioned if it is mandatory for customers to sign up. Gerry explained that initially all customers are enrolled by KGID in water loss, but they can call and cancel. Gerry stated customers have a two month introductory period without charge, and they can cancel for any reason within the first 12 months for a full refund of fees paid. Schorr confirmed that answered his questions. Gerry added that customers have to sign up for the line coverage, if desired.
Nelson requested clarification of how the information is disbursed. Gerry explained that their program information packet is provided to the customers with the KGID bills so the customers are aware the program is offered by KGID. He stated that some utilities add Servline to their phone system for a transfer option. He explained that the program fee plus any administrative fee would be paid to KGID and included on the bill. McKay explained that a $0.10 (for example) could be added as an administrative fee to cover service fee collection costs. Gerry stated that billing statements are reviewed monthly for active accounts and reminded the board that 97% of customers stay enrolled. Nelson confirmed that line fees also must be collected through KGID adding to administrative costs.
Vogt addressed the subsequent agenda item which was a request for relief of water charges. McKay confirmed that the customer has had a second leak within 5 years, and under the Servline program the excess charges would be covered within that time period.
Norman questioned how often a sewer line breaks from the house and the connection. McKay confirmed that approximately 3 or 4 per year are cleaned out and a plumber is called, but actual breaks are infrequent. Nelson speculated that roots would result in a plumber and KGID would not necessarily be called. Runtzel explained if a customer calls with this situation, KGID instructs them to call a plumber.
Runtzel questioned how shared laterals with multiple units would be addressed. Gerry stated that they could design it based on the fairness of the customer. Runtzel estimated there are a few in Summit and Tahoe Village. She explained a scenario with 4 units on the same lateral and the lowest property could be flooded out by the other units. Gerry explained that would be a homeowner’s insurance issue. He explained that this scenario is residential and they also have commercial coverage available which was not presented.
Runtzel questioned the percentage to opt out of leak coverage which he responded was average 3% nationwide, now most have 99% of customers covered.
Nelson questioned how the program will work with commercial customers. McKay explained that a timeshare is master metered. Runtzel confirmed with Gerry that a duplex would be considered commercial and subject to a higher rate. McKay confirmed that a complete list of service lines would need to be provided to Servline for calculation.