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HomeMy WebLinkAboutWater Board - Minutes - 07/15/1994WATER BOARD MINUTES July 15, 1994 3:00 - 4:30 P.M. Water and Wastewater Utility Conference Room 700 Wood Street Council Liaison Gerry Horak Members Present Neil Grigg, President, Ray Herrmann, Paul Clopper, Tim Dow, Howard Goldman, Tom Brown Staff Mike Smith, Wendy Williams, Dennis Bode, Ben Alexander, Scott Harder, Molly Nortier Guest John Bigham, Agency Coordinator, Northern Colorado Water Conservancy District Members Absent John Bartholow, Marylou Smith, Dave Stewart, Dave Frick, (all excused), Terry Podmore (on sabbatical) President Neil Grigg opened the meeting. The following items were discussed: Minutes Ray Herrmann moved that the minutes of June 17, 1994 be approved as distributed. After a second from Paul Clopper, the Board voted unanimous approval. Northern Colorado Water Conservancv District John Bigham distributed information on storage, river flows, temperatures and precipitation as of July 13th. He began by saying that Granby, on June 26th, came within 6.15 ft. of being full. Since that time it has dropped by over a foot. The District has been bringing more than 550 cfs through the tunnel to keep up with the storage on the east side. "Most of you are probably aware that the District Board increased the quota by 10%; from 60% to 70%," he continued. We thank Fort Collins for putting 2000 Ac-ft out on the rental market. Dennis Bode told him that Fort Collins leased that water very quickly. Mr. Bigham doesn't think there is water anywhere else to be rented. All the water that was available has been rented, including all the Water Board Minutes July 15, 1994 Page 2 Windy Gap water that the District pumps. There are some people holding some back, "and I don't blame them for that," he added. It's tremendously dry on the western slope, he said. He talked to the project manager at the Uncompahgre at Montrose, and they put a call on the Uncompahgre River, which they don't do too often. There isn't enough flow to even match the senior rights. With the increase in the quota, plus the carryover water, essentially there is a 90+% quota in the Northern District. Mr. Bigham suggested the Board look at the river flow, temperature and precipitation data on their own. The reservoirs are at about 78.9% of the active storage capacity, he said. "We're in good shape this year, but what the situation will be next year is yet to be seen." He went on to say that the judge dismissed the Sierra Club suit that challenged the pipeline project. "We didn't stop construction, so no time was lost." There is no indication at this time if the Sierra Club will appeal. Neil Grigg said that the Board often discusses the Front Range Forum during meetings, but in terms of the District's involvement, is anything going on? The District representatives are participating in all the discussions, "but I'm not personally attending any of the meetings," Mr. Bigham responded. "Is there anything new on the pipeline?" Dr. Grigg asked. Everything is going according to schedule, Mr. Bigham replied. The only problem was when a slide occurred and crushed about 400 feet, and they had to patch it to go on. When construction is out of the rocky area, they should be installing about 1000 feet a day. "What's the estimated completion date and who is the project manager?" Dr. Grigg asked. "The project should be completed by the end of 1995, as I understand it," he said. The project manager is Karl Dreher, and Craig McKee is the engineer on the job, he added. Mike Smith asked about the contract. The present contract goes from here to Broomfield, and that covers just the main line, Mr. Bigham explained. "I don't believe they have started any right-of-way acquisitions yet for the branch lines." They are in the process of looking at the routes and working on the contracts for those. "The last word I heard is that they hope to be in Fort Morgan by 1999 if the demand is there, and if everything goes as planned." That will be the final stage. "We enjoyed having Eric Wilkinson here a few months ago," Dr. Grigg said, "and we would like to have him back sometime to continue that Water Board Minutes July 15, 1994 Page 3 discussion." Mr. Bigham replied that Mr. Wilkinson enjoyed being here also. Water Treatment Facilities Master Plan Follow-up Discussion Mike Smith reported that the Council/Water Board Water Planning Committee met yesterday morning and identified some issues that staff can focus on. Neil Grigg said that he and Tim Dow and Dave Stewart from the Water Board attended the meeting as well as all three Council members. "It was a good discussion and it's quite apparent that there are going to be a number of issues that we are going to have to deal with. It's in our best interest as a Water Board to become thoroughly familiar with that master plan," he stressed. Molly Nortier announced that the Engineering Committee plans to meet in August to begin studying the plan in depth. Mike Smith said the committees are going to be quite familiar with the master plan. He asked Dr. Grigg how he wanted to keep the Board as a whole up to speed. Is an occasional report adequate? "It seems to me that there are enough questions about the sequencing of the master plan in the consultant contract that came up at the meeting yesterday, and developing more information on some of those elements, that it might be good to have a couple of milestone presentations to the Board as we go along to help us keep informed about it, and also help staff schedule all the work." Dr. Grigg responded. Mr. Smith emphasized that there are important issues that the committees may be briefed on that other members may miss, so strategic briefings for the Board as a whole should be planned. Neil Grigg wanted to give the Board "a flavor" of a few of the major aspects of the plan. One is the question of financing, and another is whether the conservation program could cut into the water master plan. Another set of issues has to do with engineering things like: "Do we really need that expensive pipeline, and are there alternatives to it?" Staff listed a number of reasons why a new pipeline is needed; for example, it would provide more reliability and flexibility. Another interesting aspect of the proposed plan is the possibility of forming inter -governmental agreements with Larimer County regarding recreational use of Horsetooth Reservoir in order to provide long term protection of the raw water supplies. These issues provide "meat for the Board to chew on" in the coming years. He thinks that the issues could be covered quite well in the committees: water supply issues, financial issues, engineering issues and conservation issues. "However staff would like to do it, it's important that the Board be kept informed," Dr. Grigg concluded. Water Board Minutes July 15, 1994 Page 4 1995 Draft W&WW Utility Budget Presentation Wendy Williams said that staff had planned to meet with the Legislative and Finance Committee prior to the meeting today, but neither of the members was able to attend. "We had hoped that the Committee could examine the budget and make a recommendation to the Board," she said. Would the Board like to proceed without a recommendation from the Committee? Tim Dow, Chair of the Legislative and Finance Committee, suggested that staff go ahead with the presentation today as long as there is time on the agenda, rather than delay it. Board members received summaries of the recommended 1995 Water Fund and Wastewater fund Budgets. According to the memorandum attached to the summaries, the recommended 1995 budget includes revenue projections based on a 5% water rate increase and a 6% wastewater rate increase. It also includes a 3.49% increase in operation and maintenance (0&M) expenses in the Water Fund and a 4.32% increase in 0&M expenses in the Wastewater Fund. Budgeted funds for minor capital expenditures increased by 0.89% in the Water Fund and 0.72% in the Wastewater Fund. The proposed 5% water rate increase is primarily a result of increased O&M expenses due to inflation. Water rates did not increase in 1994, but Personal Services and Payment and Transfers charges did. The proposed change in water rates will increase the monthly water bill for a typical residential non -metered customer (lot area of 8500 sq. ft.) from $27.93 to $29.30, an increase of $1.37. The monthly water bill for a typical residential metered customer (annual water use of 160,000 gallons) will increase from $23.20 to $24.37, or $1.17 per month. The proposed 6% wastewater rate increase is consistent with the rate projections included in the Wastewater Treatment Master Plan adopted by City Council. The Master Plan included rate increase projections of 6% per year for 1992-1995. Approximately half of the proposed rate increase is needed to fund a portion of the debt service associated with the $25 million improvement/expansion project at the Drake Water Reclamation facility. Increased operations and maintenance expenses account for the other 3%. The proposed change in wastewater rates will increase the monthly wastewater bill for residential customers from $15.22 to $16.13, an increase of $.91 per month. Monthly wastewater rates for non- residential customers will also increase by 6%. Ms. Williams began the overhead slide presentation with the summary of the proposed 1995 annual budget for the water fund. The total budget for the water fund is going up 17.33%, she said. Of that 3.49% is in Operations & Maintenance. Minor Capital Outlay E Water Board Minutes July 15, 1994 Page 5 accounts for 0.89%, and the bulk of the 29.96% is in Payments and Transfers. The bulk of the increase in Payments and Transfers was in Capital Projects at 159.74%. Meter Reading expense is going up almost 10%. "You will notice that there is a slight decrease in both Bond Interest and Principal," she pointed out. On staffing, the permanent positions pretty much stayed the same. Seasonal positions are going down 15.47% There is a total of 0.79% reduction in staffing. Tim Dow asked for an assessment of the capital projects. About two thirds of that is related to the master plan, "and we'll get to that in a later overhead," Ms. Williams said. The next overhead was a graph that showed a comparison of the 1994 budget and the proposed 1995 budget for the water fund. Personal Services is going up somewhat, which is primarily cost of labor adjustments for two years. "Remember, we did not have a rate increase in water last year, so we have two years that we need to make up labor costs, costs of benefits and any performance level increases," she pointed out. Under Contractual Services and Commodities, most of those increases are due to inflation. Minor Capital has stayed much the same. You can see a big increase in Capital Projects. Ray Herrmann asked if that has anything to do with debt. "We're not anticipating any additional debt in 1995, although we will probably be looking at additional debt in 1996 and ' 97 if the master plan is adopted," she explained. There is a slight increase in the PILOT, and a small increase in the General Fund Admin. Charges, and again a decrease in the Bond Interest and Principal. The next slide was a pie chart that showed a breakdown of different percentages that make up the water fund, and the bulk of it was Capital Projects at 24%. Personal Services was 18%, 11% Bond Principal and Minor Capital 10%, for example. The components of the 5% water rate increase for a typical metered residential customer will be $1.17 per month; 0&M is $.94 and Master Plan Improvements is $.23. For the non -metered typical residential customer the increase will be $1.37 per month--$1.09 for O&M and $.28 for Master Plan Improvements. Paul Clopper wanted to know what constitutes the Master Plan Improvements. It would be the '95 elements from the master plan, Ms. William replied. "We have plugged that in for budgetary purposes knowing that the plan has not been approved or adopted," Mike Smith explained. "We know that might change." "In the budget document staff included two scenarios for rate increases," Ms. Williams added. Mr. Clopper noted that the bulk of the increase Water Board Minutes July 15, 1994 Page 6 was for 0&M as opposed to the master plan improvements. "Yes, for 1995," Mr. Smith added. Ms. Williams moved on to the proposed 1995 Wastewater Fund Budget. The total increase for wastewater was 16.24%. That breaks down to 4.32% in 0&M. The same is true for Personal Services. "We're looking at a 6% increase again this year for wastewater." That is consistent with the Wastewater Treatment Master Plan which outlined rate increases of 6% from '92 through '95. Minor Capital Outlay percent change is 0.72. Payments and Transfers has an increase of 28.68%. Again the bulk of that is for capital projects with an increase of 133.56%. The staffing for the wastewater fund has a decrease of 3.02%; most of that is for seasonal positions. In the comparison of the 1994 and 1995 budgets, most of it is tracking pretty closely with last year. There is a slight increase in Personal Services, the bulk of it in Capital Projects. "In comparing this graph and the one for water, do the capital projects include expenditures covered by PIFs?" Tom Brown asked. "Yes, this is the total capital projects regardless of how they are financed," Ms. Williams replied. Ms. Williams went on to the break down of what goes into the 1995 proposed wastewater budget. Capital Projects is 19% of it, and Personal Services is 21%. Bond Principal is 12%, Bond Interest is 16% and Minor Capital is 9%. "A large portion of the rate increase falls under capital projects," Dr. Grigg remarked. "Does the master plan spell out which is funded with regular rates and what is funded through PIFs?" he asked. "In other words, would it have been possible to hold down the rate increase if we would spread that out a bit?" Almost everything on the wastewater side is debt financed and we debt finance PIF projects as well, Mike Smith explained. As a matter of fact we debt finance most major capital projects. That's where the bulk of the expense is. "So the debt financing is already being used for balance." Dr. Grigg remarked. Mr. Smith pointed out that the Capital Projects on the wastewater graph show an increase as part of the Phase I Master Plan Improvements. "We just finished a major expansion at the Drake facility, and the plan calls for some improvements at the Mulberry facility, and we're in the process of doing that," he said. We are concerned about some of the growth projections. They don't look like they are coming up to where the consultants said. In the current project at the Mulberry facility, we are being allowed the flexibility to delay and measure costs there for 4 or 5 years from now. The problem is we can't shut that facility down at the end of that time period, so we'll make some improvements at the Mulberry Water Board Minutes July 15, 1994 Page 7 Plant to divert water and wastewater 4 or 5 years from now, so we don't have to spend all the money now. That helps somewhat with the rates. Ms. Williams continued with the wastewater budget. Again we are looking at a 6% increase in wastewater fees, and that would increase the typical residential customer's bill by $.91. Tom Brown asked if staff takes some percent of the capital improvement and if some of it is paid for by existing customers and the rest by PIFs. Have you taken the part that is paid for by the existing customers and used that portion to help calculate the master plan part of the rate increase? "Not wholly," Mike Smith replied. Actually no matter what you do as far as whether it's PIFs or rates for existing customers, when you borrow money the impact is on existing customers to get coverage. The actual money to pay off the debt is from PIFs, but to get the bond coverage you must have a strong enough rate base to convince the bond holder that you can pay off the debt. "Bond holders don't care about PIFs," he stressed. Any time you borrow money for growth -related capital, you have some impact on the rate structure. Mr. Brown asked if the rate is higher than it would be without going to get your bond, then what do you do with the extra money you are collecting? It goes in the reserves and is used for non -growth related capital, so it does get used up, Mr. Smith replied. Scott Harder explained that many of the improvements for next year's capital projects will actually be funded, technically, from reserves. "Then aren't we mixing up what is supposed to be covered by PIFs and what is supposed to be covered by existing customers?" Tom Brown wondered. "We don't make that distinction clearly in our accounting, but we set our PIFs at a level that logically relates to that cost that we expect to be occurring on projects on behalf of those future customers," Mr. Harder explained further. "Fees are set based on what we are planning to do." Mr. Smith said that Mr. Brown brings up a good question. On the issue of development fees, some folks are saying they think our PIFs may be too high, and others are saying we might not collect enough, he related. Our accounting system keeps track of what is collected, but we don't keep track of how that's spent. However, in the last ten years we have tried to determine how much money we spend on growth related capital, and how much we have spent on capital for existing customers. Then we compare that to how much money we have collected from PIFs and it actually comes out very close, so over the long term it balances out, he said. By making those projections, we seem to be close; plus or minus 5-10%. We don't account for every dollar in terms of PIFs, etc. It would require quite an accounting system to do that. "Years ago we tried to do it and it became very complicated," he recalled. Water Board Minutes July 15, 1994 Page 8 Mr. Brown said that if growth related capital and capital spent for existing customers appear to be equal, "that's comforting, I guess." One of the reasons he brought it up is when he looked at the history of how the rates have changed over the years, they seem to have increased at twice the rate of inflation. It's been about an 8% increase per year if you use a compound interest for that 15-year history. Inflation has been about 4% a year over that period. "Part of that is because you've had increases in costs as you have explained before: more taxes, more water quality regulations, more sophisticated ways of keeping track of things, more chemicals, etc., but it's difficult to recognize what it's for." It's hard to know if some of the rate money has been used to subsidize growth. This is what some people worry about. "Someone could say that as rates are increased and provide bond coverage that that money is still put in reserves and used for capital," Mr. Smith suggested. "We have spent quite a lot of money over the past few years on capital projects that are related to just existing customers, and folks don't see that sometimes, and that part has quite an impact on rates too," he explained. Scott Harder pointed out that the coverage, if you only borrowed $10 million is much lower than the coverage requirements at $60 million. Also, "we're in pretty good shape in terms of fund depreciation; actually keeping up with the retirements and how quickly our equipment wears out." Mike Smith added that that's another cost that most folks don't see. "Every time we have a big capital expansion for growth, that equipment gets put on the books and gets depreciated. The minute you spend $10 million, and you began depreciating that, it's an 0&M cost." The more you grow the faster that goes up, and existing customers end up having to pay for that. "Related to that, it seems to me that the big rate increases generally began at the end of a growth spurt, e.g. in the 70s. It might be that we are doing catch-up," Dr. Grigg pointed out. There was one project that had a major impact on existing ratepayers. When the City decided to abandon the treatment plant in the canyon, and expand Plant 2, it was at a total cost to the ratepayers, and that was $14-15 million. "I think in general as long as the PIFs are high enough, and I guess the rates include many costs of service, we wouldn't be subsidizing growth through rates," Dr. Grigg observed. Paul Clopper conceptualized the response to Tom Brown's observation about the difference between interest versus our rate increases, by saying that some of it can be attributed to increased regulations, but there is also the level of service and the reliability aspects that have increased substantially over that 15-year period too. "So we can say in 1995, that 15 years down the road, the level of service and reliability will be greatly enhanced also." Mike Smith Water Board Minutes July 15, 1994 Page 9 pointed out that inflation rates have been high in that 15-year period, and "we have seen some pretty hefty increases in our costs as well." We had years when inflation was 7, 8, or 9 %. "We're a labor intensive organization," he emphasized. Tom Brown suggested that it could have been that wages went up faster than the general economy rate of inflation. "I just used a large index when I figured the rate," he said. Mr. Smith recalled a chart, prepared a few years ago, that illustrated this. He said he will bring it to the next Board meeting. Dr. Grigg suggested that perhaps our rate increases lag the consumer price index somewhat. Tim Dow noted that under the master plan, as far as the effect on the budget, one of the assumptions there was that the service area was not going to significantly increase. "If the service area expands, that budget in the master plan is going to go up a lot." Mike Smith pointed out that the way the current Council addresses growth issues is going to impact us too. At this point there is significant growth outside our service area, and if the Council adopts a heavy density infill strategy, that will affect the Utility. It may slow growth, but it's still going to have an impact, he said. Wendy Williams continued the budget presentation with a look at Capital Projects for the Water Fund for 1995. Automated Mapping, a project that has been going on for several years, is budgeted at $20,000; Harmony Transmission Line, $100,000; Meter Conversion Program is funded at $550,000; South Taft Hill Rd. Water Lines, $100,000, Circle Drive Water Line at $470,000; Southwest System Improvements $100,000; Drake Rd. & C.R. 9 Waterlines, $170,000 The major one there is the Master Plan Facilities at $3,390,000. Water Supply Development is an ongoing item funded at $100,000. The total proposed is $5 million which is a significant increase over '94. The main item in the Wastewater Fund Capital Projects is Mulberry WRF Improvements, which Mike Smith talked about earlier, funded at $2,265,000. There will be some improvements to handle sludge disposal, and some expansions to the Drake Treatment Plant. The flow monitoring stations are being constructed to identify possible infiltration and capacity problems. The Alum Sludge Transmission line will allow us to discharge the alum sludge from the Water Treatment Plant and take it down to the Drake facility where it can be treated. A Wetlands Treatment Study will be funded for '95. All of those items are budgeted at $3,410,000. When looking at the graph with the yearly percentage increases, Dr. Grigg observed that if you look at the cumulative increase like this, you see it a different way. "When we were looking at this Water Board Minutes July 15, 1994 Page 10 earlier, I was wondering if we were keeping ahead of inflation. This makes it look like we haven't been keeping ahead." Tom Brown also found it hard interpreting that graph. "The visual impression, for wastewater, for example, indicates that prices are rising faster than the wastewater charges. For water since about 1980 they're about the same." Also the numbers in the schedule show that both water and wastewater rates have been on the average up by 8%, and the consumer price index has increased over the same period typically by 4% a year." "We could conclude that the annual percentage is greater than the water service charge," Dr. Grigg said. "The thing that staff looks at is when things aren't tracking very well," Mr. Smith related. Mr. Brown contends that one could play games with the chart by just changing the scales. Dr. Grigg stated that had the Legislative and Finance had the opportunity to review the budget they would have made a recommendation to the Board, and the Board would vote to endorse or not endorse their recommendation. Since the Board is essentially acting as the committee as the whole, he sees the same action coming from the Board. Tim Dow moved that the Water Board recommend to the City Council approval of the Water and Wastewater Fund 1995 budget. Paul Clopper seconded the motion. President Grigg asked for questions. Paul Clopper doesn't see the need to discuss anything but capital improvements, because everything else "tracks exactly where we ought to be tracking. Do I understand correctly that the wastewater capital improvements, even though we have a large increase, are already following the wastewater master plan that was approved a few years ago? "That's right," Ms. Williams replied. "I am not uncomfortable with that either," Mr. Clopper stated. Therefore, he thinks the discussion would be more fruitful if the Board concentrated on the water capital improvements. Mr. Clopper was confused when he saw the huge increase for the water capital improvements versus the pie charts Ms. Williams explained earlier which seem to indicate that only 1% of the 5% increase is attributed to capital improvements. "That's just the master plan," Ms. Williams responded. "But in the table it is a huge piece of the pie, and in the pie chart the master plan wasn't a large piece; can you help me understand that better?" Mr. Clopper asked. "That is confusing," Mr. Smith acknowledged. What we tried to do was start from a base saying: "if we didn't have the master plan, what would our five year sequence look like? Then we superimposed the master plan on top of that to determine how that would change it. To get the pie chart number, it takes a 1% more rate increase in 1995 to fund the master plan. That's how we got the split between the water capital improvements and the pie chart; 20% of the increase is the master plan, the other is due to O&M," Water Board Minutes July 15, 1994 Page 11 he explained. "But the dollars don't match. The problem is that most of the dollars are going to be spread out to various areas. In essence that money you see spent in '95 will be determined by debt service, and that debt service has an impact on the rates. "In theory we are saying, if we do the master plan, and if we borrow the money as we should, we have to get ready for that, and that's why it takes another 1% increase in '95. You can see the impact of the master plan on the rates." "Has the rate of inflation been about 3% a year?". Mr. Brown asked. "Basically," Mr. Smith replied. Capital improvements have a significant impact on the rates. There will also be some substantial impacts throughout the U.S from the Drinking Water Regulations and the Clean Water Act. Ray Herrmann said he didn't have any questions or problems with this year's budget, "but next time we see a budget, I would like to see some sort of analysis, particularly with relation to cost of service of this apparently greater than inflation rate increase. I would like to see how much is due to growth as opposed to what's due to current capital." President Grigg called for the question. Tom Brown wanted to emphasize that it should be very clear that we are voting on a rate increase that assumes approval of the water treatment master plan. "That's right," Mr. Smith said. "Without the master plan, the rate increase would be less." The vote was unanimous for acceptance of the proposed budget taking into consideration that the master plan has not yet been approved. Mike Smith made one more point. He showed the group something that is easy to gloss over, but it is important to recognize in both water and wastewater. He pointed out the increases of 4.32%, and said that's close to the inflation increase. "We're not talking about one year here." The 1994 budget was the same as the '93 budget. What the division managers did was try to build two year's increases into one. "There is some belt tightening going on." The managers were requested to cut 3-4% out of the budget, and they did it. He emphasized that finding ways to cut the budget is an on- going process. Dr. Grigg asked if there was a better way to show that in the budget presentation, "so you don't have to call people's attention to it." Mr. Herrmann noted that it's pretty graphic at the bottom of the page when you look at staffing. Mr. Smith said it was rather difficult to try to show that in a meaningful way. "What if on the right hand side you added one column with the average percent change over the last five years; just some way to show the history. Mr. Smith said that they could show the '93 budget as a comparison; perhaps grouping 193, '94 and '95. Water Board Minutes July 15, 1994 Page 12 Paul Clopper asked about the status of the cost of development study that apparently was being prepared a couple of years ago. "That sort of fizzled," Mr. Smith replied. There still appears to be a lot of interest in it, he said. He understands that the emphasis has changed from the cost of development to growth management issues. Staff'Reports Treated Water Production Summary Dennis Bode reported that for June the use was 16% above an average June. It was a much warmer than normal month, but surprisingly precipitation was about average. July appears to be matching our average projection even though it's been fairly dry. So far the weather has been comparatively cool. For the year we are running about 6% above projections for an average year. Financial Status Report Scott Harder said that above average water use has resulted in an above average June in terms of water revenue. One thing to report on the Plant Investment Fees (PIFs) side is that we had a June on the wastewater side that was two and one half times what it was last June. The wastewater fees are 70% above what they were last year. In water we continue to be about 50% above. "We're issuing a lot of permits!" How are those increases going to affect future rate increases? Dr. Grigg asked. "I think we are seeing the high point in the curve," Mr. Smith responded. We're seeing what we saw in the late 70s, and we think it's going to average out eventually. However, it helps the reserves. Mr. Harder added that the more we have in reserves the more we can buy down the cost to borrow money. Forest Service Special Use Permit Update The Forest Service supervisor still hasn't made a decision as of this hour, Mike Smith reported. He seems to be struggling with what to require with regard to the bypass flow and the joint operations plan. If we are required to do releases at Joe Wright, we think that Water Resources staff have figured out a way that we won't lose water. The release requirement will probably be less than a second foot of water in the winter, which is very minimal. Water Supply & Storage Company told the FS that they can't make bypasses because of dam safety, etc. We can do it at Joe Wright, but it may not be possible at Long Draw." The FS introduced a new wrinkle a few days ago by suggesting that they may issue an easement instead of a permit. This suggestion took us by surprise; it would require a long process too. At any rate, "we hope to have their answer to this long drawn -out situation soon," he concluded. Water Board Minutes July 15, 1994 Page 13 Neil Grigg recalled that last month the Board discussed responding to a somewhat disturbing letter in the newspapers by former FS employee Austin Condon. "I think we left it that staff was going to think about it." Mr. Smith recalled that two options were suggested: one was to send a note to Council stating that the letter contained erroneous information, and the other was to write a "soapbox" letter to the Coloradoan with the same purpose. Staff is luke warm about the idea because the facts of the situation aren't very clear. None of us were around when it occurred, and there doesn't appear to be any concrete evidence that we can lay our hands on. Also, "it becomes a mud slinging contest after a while," so staff felt there wasn't a lot to be gained by following either of the suggested options. If the Board still feels strongly about this and would like to advise Council, "it's your choice to do that, or you can write individual letters to the newspaper," Mr. Smith advised. Mr. Clopper recalled that there was discussion about whether or not there was factual misrepresentation in some of the things Austin Condon said. "I think that is what bothered the Board more than anything else. What you're saying is that it's not easy to find out." Neil Grigg related that Ward Fisher took some action. He recently wrote a letter to the Coloradoan, and he was president of the Water Board at the time these things took place. "It was my thought that his actions combined with what staff is saying, is an adequate response to Mr. Condon's remarks," Dr. Grigg said. "However, if the Board thinks a response is needed, I'm willing to do that," he added. "Do you have any reason to believe that what Mr. Condon wrote has negatively impacted the Utility?" Howard Goldman asked. "We haven't heard anything from anyone about what was written," Mr. Smith replied. "I think the people who were involved in this process know the history, and seem to know the recent history about how Fort Collins is approaching this issue." Tom Brown asked for further clarification on the Joe Wright issue. "Mike Smith said that the impact of making these releases wouldn't be a large financial impact," he said. "Relatively speaking, yes," Mr. Smith stated. "Does that mean that the structural change to the dam wouldn't be too substantial?" Mr. Brown continued. "Frankly, it's still a pain in the neck! We can do it and it will work, but even operating it is going to be difficult at that time of year," Mr. Smith asserted. Mr. Brown remarked that by bringing up the cost factor he didn't mean that the Utility shouldn't do it. There are larger issues here that one could certainly quarrel with about keeping flow in that little creek." "That's true," Mr. Smith agreed. Water Board Minutes July 15, 1994 Page 14 Committee Reports Water Supply No report Legislative and Finance No report Conservation and Public Education No report Engineering No report Cost of Service Ad Hoc Conmtittee Neil Grigg reported that the Cost of Service Committee met today. Next month the Committee will be giving a presentation. The issues are complex, and there are some major changes in philosophy. What the committee did today was look at the water side, and basically there are two items: one is residential, looking at the impact on the rate structure of a conservation rate structure, and a change in the way of doing business. On the commercial side there is the change in the base charge, and also some impacts of conservation charges which are quite interesting. At our next meeting we will look at the wastewater side, and that will also be on the agenda. Regional Water Supply Strategy Update Dennis Bode attended two Technical Committee meetings of the Front Range Water Forum. They have been in the process of attempting to develop their scope of work. At the last meeting there was agreement that the scope of work would be what has been drafted. Now they will begin working on the tasks that are outlined. There probably will be certain areas that receive most of the initial work, and one of those will be an inventory of water supplies with a focus on the metro area. They will look at exchange possibilities, groundwater and how that plays into the big picture, the potential for interuptable supplies, and there is also a task that examines the integrated system. The emphasis essentially will be in the metro area, at least at first. There are a number of consultants involved in those tasks. "I expect that this first phase will last about six months," he said. The State will be watching this closely. Who is directing the technical work and writing up the scopes of work? Dr. Grigg asked. Leo Rozoklis from Hydrosphere is the primary lead person, along with several sub contractors. Who does the lead person report too? Doug Robotham from the State Department of Natural Resources, Mr. Bode replied. .1 0 • Water Board Minutes July 15, 1994 Page 15 Regional Wastewater Service Issues Update No report Other Business Molly Nortier reported that three Water Board members have been re- appointed to the Board for additional four-year terms. They are Dave Frick, Howard Goldman and Terry Podmore who will return from a sabbatical leave in August. Adj ourn Since there was no further business the meeting was adjourned at 4:30 P.M. Water Board Secretary