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HomeMy WebLinkAboutWater Board - Minutes - 11/16/1990• 0 Water Board Minutes November 16, 1990 3:00.- 4:30.p.m. Light and Power Conference Room 700 Wood Street Members Present Henry Caulfield, President, Neil Grigg, Vice President, Tom Sanders, Marylou Smith, Tom Brown, Tim Dow, Tom Moore, Terry Podmore, Dave Stewart (alt.) Paul Clopper (alt.) Staff Mike Smith, Dennis Bode, Linda Burger, Webb Jones, Wendy Williams, Jim Clark, Molly Nortier Guests John Bigham, Agency Coordinator, Northern Colorado Water Conservancy Dist. Dorothy Huff, Observer, Larimer County League of Women Voters Members Absent Mark Casey, Ray Herrmann President Henry Caulfield opened the meeting. The following items were discussed: Minutes The minutes of October 19, 1990 were approved as distributed. Update Northern Colorado Water Conservancy District John Bigham distributed the lastest snow precipitation update from the SNOTEL sites. He reported that the District finished the year by delivering over 120,000 AF of water which is 73.7% of the 50% quota that the Board issued. Because of the 50% quota it is anticipated that there will be better storage in Granby than if the Board had issued a 70% quota, for example. Approximately 40,000 AF of water will probably be carried over, which will be in the carryover program for those who want to call for it in the spring. "Our combined active storage is down to 47% and Granby is at 45% right now," he said. "Of course we are moving water across." Horsetooth and Carter will be filled during the winter, he concluded. He went on to say that there is a great deal of pressure for lease and purchase of Windy Gap water. In addition, there are many CBT units being traded. At the District board meeting a week ago, the Board approved a temporary lease for the City of Erie for Windy Gap while they develop a permanent supply. There are other towns on the edge of the District that are having water quality problems and/or supply problems. He suspects that in the coming months, there will be a number of different proposals from those towns. Water Board Minutes November 16, 1990 Page 2 The District is continuing to finalize several studies. The South Platte study will be coming along rather slowly because of the Reserved Right Case and the Thorton situation. These cases have taken up the majority of the time of the District's attorneys and engineers. They ...hope to complete the regionalization study. by.the end of.the year.. Neil Grigg asked what Erie's water supply is. Mr. Bigham didn't know, but he said they will be getting water from Left Hand Water District on a temporary basis. They have some surface water rights, but their problem is lack of storage. How is Nunn going to get water? Mr. Caulfield asked. "From North Weld," Mr. Bighman replied. Board members were provided with a copy of the draft agreement. Mike Smith related that in the past couple of years the Water Board has reviewed two agreements with the Fort Collins -Loveland Water District. In 1989 there was a fairly sizeable agreement involving the exchange of treated water between the City and the District using a 16 inch water line. When the Board discussed this agreement, there was considerable concern about water quality issues. This year the City and the District entered into an agreement on May 31st which involved the sale of up to 3 mgd of drinking water to the District. This agreement was fairly straight forward and seemed to be a better approach than the 1989 document. The District has returned with some preliminary results of the regional study and, as a result, have asked to increase the quantity of water and the time frame of the second agreement. Specifically, they are asking: (1) to increase the quantity of water which the City would sell them from 3 mgd to 5 mgd (They don't intend taking the 5 mgd for awhile.) and (2) to extend the agreement until December 31, 1999. Mike Smith said that the City and District have agreed to terminate the first agreement. The water quality issues would have continued to be troublesome with that agreement. Moreover, Mike DiTullio, Director of the Fort Collins -Loveland Water District, has said that if in their long range plans they can negotiate agreements to purchase enough water from the Cities of Fort Collins and Loveland, they may consider getting out of the water treatment business. Henry Caulfield pointed out that the District supplies the City with raw water which we treat. "That's in the original water sale agreement," Mr. Smith explained. Mr. Caulfield asked about ELCO. Mike Smith explained that they and North Weld are saying to Fort Collins -Loveland: "If you can guarantee us that you have another source of supply for awhile, and you don't need additional capacity out of the Tri-district Plant, we don't see Water Board Minute r November 16, 1990 Page 3 the need to expand that plant." "So essentially that plant will be increasingly used for ELCO and North Weld," Mr. Caulfield added. Mr. Smith suspects that the Tri-district will still go ahead with some modifications at the treatment plant to handle the corrosion control problem and.other treatment issues. .. . What percentage of their total water supply does this represent? Marylou Smith asked. "Right now their peak day is 8-9 mgd. They are anticipating in 10 years that it may be 15+. At that time the 5 mgd. will be about 1/3 of the peak day. Tom Sanders had a question about the $.50 per 1000 gallon charge for delivery. "That's okay today, but 10 years from now it's going to cost a lot more." Mr. Smith responded that the District's rate will escalate the same as City metered customers will. In their rate structure we have included the cost of treatment plant capacity, transmission line capacity, and 0&M costs for transmission, distribution, treatment, and water quality. Also, most of their system is residential customers. Mr. Caulfield pointed out that this whole thing is based on the notion that we have improved our capacity substantially with the last investment of approximately $3 million. Furthermore, because of the installation of residential meters, we are assuming for the next few years, some savings in water use. Staff had prepared and distributed a chart with peak -day water demand projections to the year 2000. It was very helpful in understanding what will be happening with water use. It showed the plant capacity now and in the future. Now we can treat about 74 mgd. If we can make a few more improvements, as a recent study indicates, we can expand to 80 mgd. Those improvements will be accomplished in the next couple of years. The chart also showed possible reductions of 10% and 20% in water demand due to metering. Mr. Smith said that the chart also indicates that by the turn of the century, if we continue with the District agreement, we will need to add more capacity to accommodate them. Dr. Sanders said that "we will have to think about adding capacity around the year 1995." Part of the regional study helps us to look at some of those options, Mr. Smith suggested. MaryLou Smith stated that the agreement is a good idea because it will help with the regional concept. Others agreed. The District Board has not approved the agreement yet, but they have approved of pursuing the idea, Mike Smith related. He also said that the District needs to have some kind of approval from the City by the end of the year so they can inform ELCO and North Weld that it won't be necessary to expand the Tri-district Plant. He added that the agreement needs to go to the City Council either the first or second meeting in December. Water Board Minutes November 16, 1990 Page 4 Dr. Grigg asked if the Board has to take action to terminate the first agreement. "Yes, and that is in the amendment," Mr. Smith replied. MaryLou Smith moved that the Water Board endorse the amendment as it has been presented in the draft agreement. Paul Clopper seconded the motion, The Board voted unanimously to approve the motion. Henry Caulfield directed the Board's attention to the last paragraph on p.5 of the October Water Intelligence Monthly, where it says: "The developer sold the units as a condition for receiving service from Fort Collins -Loveland Water District for a new development. Parties wanting service from Fort Collins -Loveland must either dedicate water rights to the District and receive credit for the value of the water, or sell water to the District for cash." Mr. Caulfield wondered if there might be an error. He thought that all the surounding water entities requried that water be furnished for the water they use, as Fort Collins does. In other words, any new developments must contribute the water. Dennis Bode believes Fort Collins-Loveland's method of obtaining water from developers is quite close to ours. The paragraph may be somewhat mis-stated, he said. Mr. Caulfield brought up this point bacause of a statement Water Board liaison Loren Maxey made at the last Board meeting about the importance of all the neighboring water entities having the same policies. Evenutally they will be serving many citizens of Fort Collins. 1991 Water Board Work Plan Each year in November, City boards and commissions are required to submit a work plan for the coming year to the City Clerk's Office. Staff provided a draft of a plan for 1991 for the Board's review. Tom Moore said it appeared to be a broad based plan which a number of items could fit into. Tom Moore then moved that the Water Board accept the work plan as submitted by staff. After a second from Tom Brown, the Board unanimously approved the motion. Linda Burger reported that the Demand Management Committee (DMC) has met and approved the recommended adjustments to the water PIFs. Webb Jones provided a one page summary of each of the recommended PIFs for both water and wastewater. Board members also were sent the same report that the DMC received. The single sheet summarized some of the proposed changes. Water PIFs paid by new customers were reevaluated during preparation of the City's metering program. The Water Demand Management Committee determined that changes to the water PIFs were necessary to more accurately reflect the cost of providing service to new customers. The proposed PIFs are based on the peak day water use of existing customers in each category. Water Board Minute November 16, 1990 Page 5 Mr. Jones said that essentially what is being proposed is a more equitable PIF system --one based more on customer demand characteristics than "how much water you can get through your meter." Staff also looked.at.demand characteristics expected of.metered customers.to develop the single family PIF. "The numbers that were developed are, in most cases, slightly higher than what we currently pay, but not substantially higher." Neil Grigg asked if there is a reason for the differential between the increases. Is it based on cost of service? Mr. Jones replied that the PIFs are based on a unit cost of capacity and the peak demands of the average customer in each customer category. Mr. Caulfield referred to a sentence that states: "Since the last adjustment, there have been a number of changes to the variables used to calculate PIFs." Besides inflation, he asked, what other variables are involved? Water use characteristics of a single family customer will be less since they will be paying for metered water, Mr. Jones explained. Also the peak day demands are anticipated to be lower because of metering. In the past the Utility based commercial PIFs on the capacity of the water meter. What they have done now is look at the average peak day demand of customers with that size meter. Staff presumed that future customers will have similar demands. Do you have a fair amount of data on 1 112" and 2" Meters? Neil Grigg asked. There are quite a number and variety of customers in that category, Mr. Jones replied. What staff did was develop a PIF based on the peak day demand of an average 1 112" and 2" customer. There are certainly some that should be more and some that should be less, he acknowledged. The increases in PIFs for those size water taps are primarily the result of a lot of irrigation taps that size being installed. They seem to require more water at the worst times. Tim Dow asked how the increases will be implemented. "We anticipate increasing them on Jan 1," Mr. Jones stated. Linda Burger clarified that it probably will be a little later than that because of the delay in the wastewater PIFs. It may be Feb. 1 when the increase is implemented, because staff would like to take both water and wastewater PIFs to the Council at the same time. With the Board's action today the water PIFs will be ready to go. Will there ever be a time when existing users will be affected by the change in the PIFs, e.g. if the property is sold? Mr. Dow wanted to know. "Only if they were to change the size of service they needed for another use," Mr. Jones responded. Mr. Caulfield referred to the top of p. 3, where a disadvantage was listed which said that "developers may be discouraged from including common areas irrigated with treated water in new residential developments if they are required to pay a PIF for irrigation services." How does the the Planning Water Board Minutes November 16, 1990 Page 6 Dept. react to this? He contends that it has been the policy of the City to encourage green belts, etc. Has that changed? he asked. Mr. Jones responded by saying that we need to look at what we do currently. There is actually a dual system of PIFs for single family development. Each home in a development with.common areas,.pays $420 more than if the.development did not have common areas. So PIFs for greenbelts are currently being paid by each new homeowner rather than the developer. Developers may be a little more careful in the way they design the irrigation systems and landscape common areas if they pay the PIF," Mr. Jones added. Mr. Jones said that staff will be talking with the Planning staff about that specific issue. Marylou Smith, a member of the DMC, didn't think the Committee would have approved this adjustment to the PIFs if they felt it would be a major disadvantage. Is this a situation where the total fee would be about the same? Tom Brown asked. Is it just shifting who is paying it from the home builder to the original developer of the area? "In some cases that is true," Mr. Jones replied, "although there are situations where we collect far more than we should for an irrigation tap." For example, there might be 100 homes in a development that has one irrigation tap, so we collect $42,000 for 1 tap. On the other hand, there may be 10 homes in a development, for which we collect only $4200 when we should have collected perhaps 2-3 times that. Another member of the DMC, Tom Moore agreed that, "it is a pretty strange system." He wasn't sure how it evolved. He thinks this proposal should be more equitable. Terry Podmore pointed out that in the disadvantage that was stated, treated water was stipulated. This may encourage the use of raw water, he said. Mr. Caulfield added that the City will probably be pursuing that when those circumstances arise. Mr. Caulfield recalled that it has only been in the last 20+ years that developments have included open areas in their designs. It has since become a policy, and "I would hate to see this discouraged," he asserted. Mr. Jones related that over a week ago, staff sent letters to developers and contractors telling them of the intent to change the system. "I haven't heard yet from anyone personally," he said. Mr. Caulfield proposed that there ought to be a real consideration of this issue with the planning people; especially since the point system is up for review at this time. Neil Grigg moved that the Water Board endorse the water PIFs subject to review by the planning staff. After a second from Tom Moore, the motion was approved unanimously. • Water Board Minutes November 16, 1990 Page 7 Recommended Adjustments to Wastewater Plant Investment Fees According to the information that staff summarized for the Board, during preparation of the Wastewater Master Plan, it was determined that changes were needed to the City's wastewater plant investment fees (PIFs) to fund the proposed expans.i.on.alternative. Based upon recommendations by.James M.. Montgomery (JMM), the consulting engineers who prepared the Wastewater Master Plan, increases in the non-residential PIFs are being proposed. Webb Jones explained that some of the increases in the wastewater PIFs for non-residential customers are more dramatic than those for water. The reason for that is they are based on the amount and strength of the wastewater discharged by an average customer in each commercial category. Currently, non-residential wastewater PIFs are based on the flow capacity of the water meter obtained by the new customer. The proposed PIF schedule includes a strength surcharge for customers who discharge high strength wastewater. A negotiated PIF is also proposed for new customers with water meters 3" and larger since the amount and strength of their wastewater could be far greater than other customers with the same size.water service. Tom Sanders contends that wastewater PIFs have not been equitable and these proposed adjustments would help remedy that. Neil Grigg asked if the restaurants all have 1" meters. We don't have an absolute PIF for a restaurant. There may be a restaurant with a 3/4" meter or a restaurant with a 1" meter, he explained. There are 33 customer categories that are currently surcharged. They pay a surcharge on their monthly bill for the strength of their wastewater. With the proposed system we are going to ask them to contribute to some of the capital costs to treat those wastes, he concluded. Is this capital cost increase a fixed ratio to the surcharge on the monthly bill? Dr. Grigg asked. The surcharge is based on fixed values listed in the City Code for BOD and Suspended Solids, Mr. Jones answered. What's the relationship of this to the obligation of a customer to clean up their own wastes? Mr. Caulfield wanted to know. Most of the customers who are obligated to do that are monitored industries, Mr. Jones began. What we are proposing is that we will negotiate the PIFs for larger customers who discharge high strength wastewater. In the past, we had predetermined PIFs for larger customers, he continued. After looking at the history of existing customers with large water meters, it was found that there was significant variability. In the future, by determining what their characteristics are, staff will be able to decide what their PIFs should be. "Are these just organic wastes?" Mr. Caulfield asked. "Right, the parameters were based on the organics of a natural rather than a chemical variety." Water Board Minutes November 16, 1990 Page 8 "Is all this based on some objective data that we have?" Mary Lou Smith asked. We have, in the code, specific values assigned to each of the 33 customer categories, Mr. Jones explained. Is .there some.objective data.that these customer characteristics are based on or is it just our general knowledge? Ms. Smith reiterated. "I believe those categories were established with the EPA guidelines," Mr. Jones responded. Linda Burger explained that the values that are in the Code are those generated by EPA for purposes of the Industrial Pretreatment Program. Those values are standardized for those industries throughout the United States. Ms. Smith said it surprises her that a restaurant would generate more demand on waste treatment system than a service station. There is a very high BOD in a restaurant from all the vegetable matter and grease. A service station would not have such a large volume, Ms. Burger explained. Do we have a provision that allows for that commercial or industrial user to reduce the strength of their waste," Dave Stewart inquired, "and thereby prevent that surcharge?" "We have offered that option to industries in the past, but I'm not sure that any of them have taken advantage of it." Mr. Jones replied. Are we able to test for the strength of the waste? Tom Moore asked. Have we been doing that with CSU? Mike Smith replied that CSU waste is being tested and it looks like the City is going to have to issue them a permit this year because they are discharging a variety of things. Tom Moore believes that if someone is capable of cleaning up their own wastes, they should have a right to do it. Is the reason for the large increase because we didn't use the strength parameters before? Neil Grigg asked. "I believe it is," Mr. Jones replied. If you look at the ratio of the PIFs commercial people have paid in the past to say a single family, a MacDonald's might come to town and pay $2700 if they have a 1" meter, Mr. Jones pointed out. So we never have pegged the PIF to the strength of the waste? Dr. Grigg reiterated. "Yes that's the major policy change," Mr. Smith said. However, we actually began doing that with Anheuser-Busch. The amount that they put in the system for the PIF was $15 million and that was based on strength. After that the City began to realize that there were other industries that weren't being treated properly because of the strength characteristic and the residential customers were picking up too much. Tom Moore wants the system to be equitable, but he also does not want to see small businesses getting hit too hard. "They supply a lot of employment for the area," he maintains. Mary Lou Smith wondered if it might be worthwhile to try to implement the adjustments gradually. "If we undercharged in the past, I think we should change, but I'm not sure we should do it so rapidly." • • Water Board Minutes November 16, 1990 Page 9 If we take an example of a very small business, Dr. Grigg began; let's say someone wants to open a small restaurant --a mom and pop operation --would they have a 1" meter, or a smaller one? "Probably a 3/4", Mr. Smith replied, "but it really depends on the size of the operation." Tom Moore asked if it is feasible to monitor strength, and how much it costs to set up a monitoring system. Tom Sanders replied that it very expensive. You can take a grab sample to see what the strength is, but you can't continuously monitor and then change the fee, he explained. Dave Stewart pointed out that in the comparison tables with other front range cities, Fort Collins appears to be higher. Why is that? Webb Jones acknowledged that we are higher, but he said that we are probably further along in the process than a lot of other cities. "We are about to embark on a $40 million expansion, whereas most communities are not that far into the process," he emphasized. Boulder, for example, hasn't had an expansion for some time. Their PIFs reflect the fact that they are still buying into a very old system. Tim Dow wondered if we are comparing apples to apples. Do all of these utilities have the same financing philosophies etc., and help finance the general fund as we do? Mr. Jones added that another variable is the water the utilities discharge into. It may be they are not required to have the effluent as clean. As far as other potential variables, staff isn't aware yet of what they are. Dave Stewart contends that if you were a member of the Chamber of Commerce, for example, and looked at this table, you would be inclined to think something was wrong. "If the other communities are taking some of the monthly charges and applying them towards the PIFs--which they shouldn't do --but that action lowered their PIFs and encouraged development, they could still meet the same costs at the end of the year," he insisted. Mr. Jones indicated that Loveland is looking at abolishing their PIFs for certain large customers and doing it the way Mr. Stewart described; the reason being that it will make them look more attractive for commercial customers who are shopping for a place to relocate. Mr. Caulfield believes it will be necessary for the Water Board members on the Wastewater Committee to bring this to the attention of the Council members. He also thinks the Committee needs to take another look at the data that this is based on. Dave Stewart agreed and he also suggested that it be looked at over the long term. "We just lost Woodward Governor's expansion to Loveland," he announced. "Was that a factor that made an impact on the decision?" Webb Jones said staff anticipates quite a lot of discussion about this. Notices have been sent to Fort Collins, Inc., the Chamber of Commerce; everybody that might have an interest in this. "We are looking for input," Mr. Jones stressed. Water Board Minutes November 16, 1990 Page 10 MaryLou Smith thinks that the Water Board's endorsement could have a caveat that recommends that Council look closely at what its philosophy is about encouraging or discouraging development. Although we think these fees are appropriate for covering costs, they may be discouraging to development, and if C.ouncil.is.concerned about.that, they may want to come up with another way to recover costs. Tom Brown observed that the philosophy in recent years has been that growth should pay its own way. Ms. Smith said that has been the philosophy in the past, but it always must be reviewed because Councils change, and community ideas change, etc. Mr. Caulfield asked if there is any way to stagger these payments. Mr. Smith said that they could be staggered, and there are a number of different ways that it could be done. Mr. Caulfield observed that the Council could have some strong feelings along the lines that were discussed today. "Is there any way to stagger this as an alternative to putting it in the regular charges?" he asked. "I would like to see us keep the policy we have had for a long time of having the PIF cover the investment," he added. He maintains that we need to find a way to hold to that policy if we can. However, it is not something the Board has to decide today, he said. Linda Burger wanted to clarify that this new PIF may apply to only 20 or 30 customers per year, so she was curious about what people mean by "staggering" it. Dr. Sanders explained that staggering it means spreading the fee out for new individual commercial customers into smaller increments, rather than one large payment. In other words, could they pay on this over time? Mike Smith related that the Wastewater Committee members from the Council have also expressed interest in looking at other options. Tom Moore believes there is a case for having PIFs for both water and wastewater paid monthly without any up front charge and that means that everybody is always buying into the freshest, newest technology; in other words the newest plant. Tom Sanders pointed out that it may be more difficult to pay the PIFs on a monthly basis; the initial investment would probably be money borrowed from a bank, whereas the monthly payment would probably be from the company revenues. Marylou Smith asked if it would be enough for Water Board members to make their concerns known to the Wastewater Committee since the Water Board won't be meeting again before this is scheduled to be taken to the Council Ms. Burger thinks that it would be useful to have a recommendation from the Water Board as to whether they believe that the strength of the waste should be appropriately given the emphasis in the PIFs as opposed to basing it purely on volume, as we have in the past. Clearly strength is a Water Board Minutes November 16, 1990 Page 11 big factor in designing wastewater treatment plants and in the cost of building those plants. In that sense, it is equitable to charge those who have high strength waste with the cost of treating their waste. .,Dr. Sanders.related that it is now.conventi.onal wisdom.to base charges on strength rather than volume. "As sophisticated as our plants are going to be, change in strength is as catastrophic as a change in hydraulics," he contends. Dave Stewart asked how the plant is different based on strength versus flow. Strength affects the whole operation, Dr. Sanders replied. Why not pay the surcharge for strength in your monthly charge? Mr. Stewart proposed. "It really doesn't matter whether it is front end or monthly," Dr. Sanders remarked. Mr. Caulfield reiterated Dave Stewart's proposal to take the strength PIF and put it in the monthly surcharge. Ms. Burger asked over what period of time. You would need a period of time to recover the capital costs for that customer --perhaps a five year period, or whatever time is appropriate, she suggested. Tom Sanders, as a member of the Wastewater Committee, said he will raise this issue at their meeting. Dave Stewart clarified his proposal. We would base the initial PIF on volume, he said. Then we would take the PIF based on strength and spread that over a period of time as a monthly surcharge. In other words, it would be divided into two parts. Mr. Caulfield summarized that the Board has discussed this matter, and that there will be 3 Board members at the Wastewater Committee meeting. They will bring up these matters at the meeting and hopefully everything will be satisfactorily resolved politically, technically and professionally. If it is not resolved satisfactorily, the Water Board will be meeting on December 21 and will consider the matter further. Staff Reports Treated Water Production Summary Treated Water Production Summaries were provided at the meeting. Dennis Bode reported that to date, we are about 97% of what we projected. That is largely due to above normal precipitation. October was close to normal and our water use reflected that, he concluded. Status of Thornton Case Mike Smith announced that yesterday, November 15th, at a status conference for the Thornton Case, the judge set the trial date for July 29, 1991. "So he didn't accept the Northern District's idea of another year? Mr. Caulfield asked. "The judge was basically opposed to it," Mr. Smith stated. "We are proceeding with our case with our lawyer, aren't we? Mr. Caulfield continued. "Yes," Mr. Smith responded. Water Board Minutes November 16, 1990 Page 12 Committee Reports Legislative and Finance Mr. Caulfield said that he read that the State Legislative Interim Committee has reported 4 bills. He suggested that the Water Board committee plan to meet sometime soon to consider these. Conservation and Public Education Chairperson Mary Lou Smith said that the Demand Management Committee will be meeting eventually to address broader issues related to water conservation. Is staff preparing some material on that? Mr. Caulfield asked. Jim Clark, Water Conservation Specialist, replied that staff has a whole list of ideas ready for discussion. However, there still is a question about the timing of the meeting, he said. Other Business Tom Sanders suggested that staff plan some tours for Board members, perhaps in the spring, or whenever the weather is favorable, to Halligan Reservoir and the Sludge Farm, etc. Mike Smith also proposed a trip to the Meadow Springs Ranch, the new sludge disposal site. He added that the closing date for that property will be November 29th. Dr. Sanders also suggested a trip to the new wastewater treatment plant site near Ptarmigan Golf Course. At 4:15 p.m., President Caulfield called for an executive session to discuss a potential water acquisition. If action is necessary for the water purchase, it will be placed on the agenda for the December meeting in open session. After the executive session, the meeting was adjourned at 4:40 p.m. 7'7'1t% Water Boa d Secretary