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HomeMy WebLinkAboutWater Board - Minutes - 01/22/1998WATER UTILITIES BOARD MINUTES January 22, 1998 3:10 - 5:17 p.m. Light and Power Training Room 700 Wood Street MEMBERS PRESENT Paul Clopper, Chair, Alison Adams, Vice Chair, Howard Goldman, David Lauer, John Morris, Joe Bergquist, Tom Brown, Robert Ward, Dave Frick STAFF Mike Smith, Wendy Williams, Gale McGaha Miller, Dennis Bode, Ben Alexander, Bob Smith, Dave Agee, Beth Voelkel, Molly Nortier Guest John Bigham, Northern Colorado Water Conservancy District MEMBERS ABSENT George Reed, Dave Rau, Tom Sanders Chair Paul Clopper opened the meeting. The following items were discussed: M[NUTES John Morris moved that the minutes of December 4, 1997 be approved as distributed. Alison Adams seconded the motion. The Board unanimously approved the minutes. John Bigham reported that the total reservoir space available for storage in Carter, Granby, Horsetooth and Boulder was 97,467 ac-ft. If the space in Granby is subtracted there is only about 32,000 ac-ft of potential storage on the east side and 65,000 on the west side. With normal run-off of about 150-200,000 ac-ft, there won't be enough storage, so the District anticipates that there will be spills and releases from Granby and Willow Creek. Water Utilities Board Minutes January 22, 1998 Page 2 The snow report showed that the percentages have been going up and down which means that it is too soon to predict the snow pack. The Upper Colorado is currently at 90% and the South Platte at 98%. Mr. Bigham said this year appears to be similar to 1982; a dry spell followed by heavy snows the latter part of February and March. He went on to say that Carter is filling up and the pump is performing well at the power plant. The District anticipates that Carter should be full by March. Horsetooth should be ready to be topped off at any time. Introduction Michael Ozog began by reminding the Board of his presentation in August on the Wastewater Plant Investment fees. Today we will discuss the Water Plant Investment Fees (PIFs), he said. Staff held off the discussion until now because there was some question about the capacity of the system. "We had to wait for the consultant to review everything," he said. The delay also gave staff an opportunity to have an outside review of the work on the water PIFs, since there are some significant increases. Staff hired Black & Veatch to conduct that review. In general PIFs are charges to new customers for the facilities required to serve them. The philosophy behind this in the City Code is that "growth pays its own way." New customers have to pay for the capacity required to serve them. 1997 Residential PIFs Mr. Ozog showed a chart that compared the City's current PIFs with four area water districts and several front range cities. Fort Collins compared favorably, coming in third from the bottom with a water PIF of $2,392. Louisville was the highest at $8,175 and Loveland was the lowest with a $2,030 charge. Water PIF Needs to be Revised Mr. Ozog said it is clear that the water PIF needs to be revised. It has not been updated since 1991. Capital costs alone have gone up 19% and with metering coming on during that time period, consumption patterns have changed. And we have a better understanding of our customers' consumption patterns. Consumption Changes The relationship between commercial and residential has also changed. Commercial peak day demand is approximately 40% higher than residential for a 3/4 inch meter. PIFs are currently the same for both 3/4 commercial and residential, and that is not equitable. Essentially, residential is subsidizing commercial. Water Utilities Board NImutes January 22, 1998 Page 3 History Mr. Ozog continued by saying that at one time, PIFs were based solely on tap size. In 1981, this was changed to capture the irrigation size, and also to account for the number of multi -family units. In fact, although this approach makes a lot of sense, it is somewhat unusual. He related that the Denver Water Dept. recently visited to learn about that approach. Denver bases their PIFs on tap size. For single family, we want to retain the approach of tying the PIF to lot size. Methodologies There are basically two methodologies for determining PIFs: (1) Incremental Cost and (2) Equity Buy -In. Both have the same philosophy: • Have growth pay its way • Have it based on cost -of -service The distinction is how your system works. Incremental Cost New customers pay for the new capacity required to serve them. For example, if you have to build a new water treatment plant to serve some new sub- divisions, than those customers get charged the incremental PIF. Generally you expect it to be more expensive. It is more appropriate when you have to build capacity. Equity Buy -In • New customers pay for existing capacity required to serve them. They buy into the existing system. • This approach is more appropriate when there are no substantial plans for new capacity. Which Approach? • For the most part, the water treatment facility is adequate for near -term growth. • The Master Plan includes capital construction to optimize the existing facility by eliminating bottlenecks. We are increasing capacity. Even though we are adding capacity, it's clear that the incremental approach is not appropriate. • The Buy -in approach is appropriate. Computing Water PIF Unit Charge Computing the Water PIF unit charge is relatively simple, Mr. Ozog said. • Determine water system equity or value • Estimate system capacity • Divide the two and that's the charge for peak day demand (Calculate PIF unit charge) Water Utilities Board Minutes January 22, 1998 Page 4 System Value • Base it on the book value (as contained in City books) of the backbone system (transmission lines, etc.). • Escalate it to capture the replacement value. "Here we use construction costs," he explained. • Subtract assets paid directly by developers or through rates. (avoids double -charging) "When you say escalated to capture replacement value, are you expressing the value of the system in today's dollars?" Tom Brown asked. "Yes, today's dollars," Mr. Ozog replied. "So the escalation is to adjust for inflation?" David Lauer wondered. "It's construction costs, but it's essentially inflation," Mr. Ozog answered. Additional Elements • Added in the 5-year Water Capital Improvement Program (from Master Plan). • Subtracted the outstanding principle. "That's really not the system's value to the investors; in other words, it's the net value of the system," Mr. Ozog explained. • Divided by capacity PIF Charge The result is the dollar per peak day demand charge in gallons: 1988 1999 2M 2001 2= $3.00 $3.27 $3.38 $2.91 $2.93 Capacity 68 68 68 83 83 or average of $3.10 Note: Does not include inflation "As we did with the wastewater PIFs, we had the option of charging that figure each year or charging the average over 5 years," Mr. Ozog explained. The Board, at that time, decided to go with the 5- year average. The average for the water PIF charge is $3.10 for peak day demand per gallon. These figures do not include inflation as the Board pointed out when the wastewater PIFs were discussed. Each year the number will be revised based on the published inflation value so we don't have to make forecasts. The figures below the yearly PIF charge are for capacity. "Our best estimate for current capacity is 68 mgd. We will complete the master plan projects by 2001. At which time, capacity will increase to 83 mgd.," he said. At that time there will be a decrease in the PIF charge. Basically the system value hasn't changed too much but the capacity will have gone up. In that sense we basically are capturing the value of the new system. Water Utilities Board Minutes January 22, 1998 Page 5 Mr. Brown asked to go back to the "Additional Elements" section. He asked what "subtracted the outstanding principle" means. "Essentially, that is what is left of our bonds; in other words what is owned by the bondholders, so we are giving the net value of the system rather than the total value," Mr. Ozog replied. "So we are talking about capital improvements; things that are going to be built in the future that will cost so many dollars to build?" Mr. Brown clarified. "Right," Mr. Ozog answered, "and we are subtracting from the whole system value. I take the capital improvements and the value of the current system, and subtract off the remaining balance of the bonds. "Why do you subtract that?" Mr. Brown continued. "Once they become a ratepayer, they will be paying that along with all the other ratepayers, and that would be double hitting. That shouldn't be part of their one time capital offset cost," Wendy Williams explained. "Does that assume that this capital improvement is being used equally by everybody?" Mr. Brown asked. "What you are subtracting out is just your outstanding principle which the current ratepayers are paying for. Once they become a ratepayer they begin paying out that principle through their rates," Ms. Williams explained further. "But is the capital improvement necessary because of the new customers?" Mr. Brown wondered. "That is added in. The only piece that is subtracted is the outstanding principle on the bonds. For example, we have several different outstanding bonds; that's been subtracted out," Ms. Williams clarified. "But if those capital improvements that we are paying off were put in place because of new customers, then the payment for those new improvements should come from PIFs in the first place or the PIFs should be paying off those bonds," Mr. Brown asserted. "Capital projects are paid partly by new development and partly by the ratepayers depending on who is going to be benefitting from it," Ms. Williams stated. "How is that different from a previous slide that says `subtracted assets paid directly by developer or through rates?"' Alison Adams asked. "Wouldn't that be the existing bonds," she asked. "Yes, but this also deals with service lines, some distribution lines, and assets that have been eliminated with a life less than 10 years," Mr. Ozog replied. "You could roll the outstanding principle into that same concept. You don't want to hit them twice by charging them through the rates and the PIFs." he stressed. "As long as you are hitting the right people for the right costs," Mr. Brown remarked. "It's not really clear that that's happening," he added. "What I hear you asking," Mike Smith began, "is if the debt service we are subtracting out was for improvements for growth." "That's right," Mr. Brown responded. "These are all long term bonds," Mr. Ozog pointed out. "Mr. Brown has a good point. We have to go back and check all of those," W. Smith said. "The major outstanding bonds are: water rights we have purchased, some bonds from Anheuser-Busch and some issued to replace the old water treatment plant. There is one other that we need to check," he concluded. Residential Peak Day Demand Mr. Ozog said that staff looked at the billing history and determined that the average daily usage was 357 gallons. "What we have for system sales is also comparing with what AW WA uses. We came up with a peak day demand of 904 gallons, which is about a 2.5 load factor." The average winter quarter (indoor usage) is 180 gallons. When you subtract 180 from 904 you get a peak day irrigation usage of 724 gallons. Water Utilities Board Minutes January 22, 1998 Page 6 Next staff took the average of $3.10 times 180 gallons which would give us a base usage. An average lot size of 8500 sq. ft. was used to determine irrigation usage in gallons per square footage, which was then multiplied by $3.10. Recommended Residential PIFs worked out to be: Rec. PIF Change # `96 Single Family $558 + $0.271/sq.ft. 16% 735 Duplex $896 + $0.271/sq.ft. 16% 30 Multifamily $1,263 per unit 35% 136 For single family, the percentage of change is just about what you would expect given the construction inflation of about 19%. The base charge represents how much the indoor usage contributes to the peak day demand; the variable charge represents outdoor water use. That provides flexibility in response to requests from residents who irrigate with well water who would like City water for indoor uses. It's the same analogy for a duplex, and for multifamily units; it was the average usage per unit. The 35% was probably based on a previous assumption about usage. John Moms wondered if it would make a difference if a customer replaced his landscaping with rocks. "I don't think we have a policy on that," Mr. Ozog replied. "We've had people say they were going to do something different with their lot because they don't want to pay the whole PIR It is usually an individual homeowner, not the developer," Mr. Smith pointed out. "We have no way to address that because they may put in rocks or hard surfaces, and the next owner may tear it all out and replace it with bluegrass," he explained. "How they control their real costs is by how much water they use," he added. "What do you do in the old part of town where there is a house in front of the lot and they add another one in the back?" Mr. Brown asked. "They aren't actually increasing their lot size. Do you charge them for irrigation again or just charge for that house?" "Our current system doesn't allow us to do that, but we do try to give them credit for that if we can," Mr. Smith replied. Commercial Peak Demand "Commercial is similar to residential except we aren't breaking it out by lot size," Mr. Ozog continued. For 3/4" Commercial > Average daily usage of 613 gallons > Total peak demand of 1,226 gallons Water Utilities Board Minutes January 22, 1998 Page 7 He pointed out that the average daily usage is significantly larger than for single family. He wasn't exactly sure why but that was what the data revealed. The total peak demand has a load factor of 2, so commercial has a lower load factor. They start off with a higher base, so they have a higher peak demand, which our previous PIFs did not capture. From all appearances, they were based more on average demand than on peak day demand. "In the past it was thought, without much data, that commercial customers had a low peak demand because they don't irrigate a lot," Mr. Smith explained. "That's why there wasn't a differential between residential and commercial. What we found when we looked at the data was that they don't have a high average to peak ratio. They don't use a lot more water for irrigation but they start out a lot higher, so their actual peak day demand is higher than a residential customer even though they have a very high peak ratio." Basically, commercial is using a lot more water internally than a house does per customer classification. "Some commercial customers have a separate irrigation tap," Wendy Williams pointed out. "Commercial also includes businesses like restaurants and laundromats," she said. "Do you have three or four years of data now from which you have developed these statistics?" Mr. Clopper asked. "Much more than that for commercial," Ms. Williams replied. "Commercial has been metered for many years." "We had the commercial data, we just didn't have the residential data," Mr. Smith noted. "Commercial peak demand is about 30% higher than residential, and that's comparing 3/4" taps; you're not comparing the larger taps?" David Lauer asked. Mr. Ozog bonfirmed that it's just 3/4". Dave Frick pointed out the difference in water use between a small carpet store that may have just one small bathroom and a restaurant next door that uses considerably more water, but they pay the same tap fee. Robert Ward said there are also a lot of commercial spaces being converted from one use to another. "You would run into the same problem of having to pay to monitor that; is it worth it?" he asked. "It's enough of a problem having to monitor for the wastewater surcharges," Ms. Williams stated. Alison Adams pointed out that you can use the same argument with residential where a family with no kids can say they should be paying less than a family with 10 kids. "The solution to that would be to put everybody on a demand meter," Mr. Smith remarked. "But, you would end up having very high bills." Recommended Commercial PIFs When you do the same procedure, it's a little easier to take the 1,226 x the 3.10 (total peak demand times the average dollar per peak day demand) and that gives us $3,800. You have the increase because of inflation and also because of the high peak demand." Sing Rec. PIF egg # Issued `96 3/4 $3,800 72% 25 1 $9,500 62% 10 1'/2 $19,000 50% 12 2 $30,000 50% 5 Water Utilities Board Minutes January 22, 1998 Page 8 The increase doesn't impact a lot of customers. In 1996, permits were issued for only twenty-five 3/4" commercial taps. Conclusion These revised PIFs: Capture the current cost of growth (growth pays its own way) Are equitable (don't have residential subsidizing commercial) > across customer classes > across existing and new customers Are responsive to customer needs (now have the ability to separate lots from the house) Residential PIFs and Commercial V PIFs Mr. Ozog reminded the Board that in wastewater there was actually a decrease in the charge. "They flip-flop, one goes up and one goes down in residential. Do you have the same for commercial," Mr. Smith asked. Mr. Ozog just looked at the 1" tap for commercial. "I thought it was more meaningful," he said. He pointed out that for both water and wastewater the City continues to be a little cheaper than most places. "It's still reasonable, and we are below Fort Collins -Loveland," he added. Water Wastewater Total Fort Collins Existing* $2,390 $1,600 $3,992 Fort Collins Proposed** $2,810 $1,100 $3,910 *Fort Collins is 6th on a list of 8 entities * * Fort Collins is 7th on the list Water Wastewater Total Fort Collins Proposed* $9,500 $6,491 $15,991 Fort Collins Existing** $5,867 $5,100 $10,967 *Fort Collins is 5th on a list of 8 entities ** Fort Collins is 6th on the list Water Utilities Board Minutes January 22, 1998 Page 9 Schedule Besides the Water Utilities Board, this will be presented to the City Council Committee. Water Utilities Board January City Council Committee February Public Outreach March Developers will be notified, there will be comments and an open house Mr. Ozog invited Board members to participate in the open house. Back to the Water Board April City Council May/June Dave Frick asked what effect this would have on revenues. "Would it be significantly different or does it just re -distribute the same amount of revenue?" Mr. Ozog said that there won't be much of an effect because single family drops a little. The only one that's going up is the commercial sector and there are only a few of those. "You might see a little shift from water to wastewater," Mr. Smith said. Howard Goldman asked what would be the expected complaints at the open house. "Affordable housing," staff said in unison. "No matter what we do with these, developers as a group will say that the City is pricing them out of being able to provide affordable housing," Mr. Smith asserted. "They will say, 'when people complain about the cost of housing in Fort Collins, it's all because of your City fees,"' he related. He noted that other communities charge the same thing or more. "When you look at the increase in the cost of housing over a 20-year period, City fees are just a small part of that." "It seems to me that's a separate issue," Tom Brown began. "It may be a real issue but it's not this issue," he stressed. "But they may make it this issue," Mr. Smith explained. David Lauer pointed out that the greatest impact will be on commercial entities. Mike Smith agreed. Mr. Goldman asked about the effect on small businesses. "The greatest impact will be on new businesses or existing ones that expand," Mr. Smith said. "But they are going to have to argue that they want to be subsidized, which isn't an easy argument to make," Mr. Brown remarked. "The multi -family change is up significantly," Mr. Frick said. "Is that based on metered use?" "They have been metered for a long time," Ms. Williams replied. "Is the per day use different from a single family for in-house use?" Mr. Frick asked. "All the demand meters are based on actual use," Mr. Ozog replied. "Are you saying that the in-house demand for multi -family is nearly two times more per unit?" Mr. Frick continued. "The problem is that it has been artificially low," Ms. Williams said. Mr. Frick said that it doesn't make sense that a two bedroom apartment would be more than a four Water Utilities Board Minutes January 22, 1998 Page 10 bedroom house. "We don't have irrigation usage for that," Mr. Ozog responded. "For multi -family, the irrigation tap is included in the cost," Mr. Smith added. "For a commercial account, if they get an irrigation tap, they pay separately for it," Ms. Williams explained. "Is there no attempt to separate the irrigation tap for multi -family?" Mr. Frick asked. "We used to do it that way, but we changed," Mr. Smith said. He wasn't sure why it was changed, but as he recalled there was some motivation to have the irrigation tap included. Mr. Frick thinks the Utilities need to look more into acreage or somehow breaking that out; i.e. having the in-house charge similar to single family and the external based on the irrigated area. Mr. Brown suggested that it might have been changed because of insufficient data. Ms. Williams promised that staff would look into it and report back to the Board. Mr. Ozog said, as with the wastewater PIFs, staff will review the charges on a five year basis unless there is some major change in the master plan or something like that. Mr. Lauer asked about the substantially higher PIFs for Louisville and Westminster. Mr. Ozog said he doesn't know how they arrived at their charges. It's a function of how much their capacity is, etc. "Are they subsidizing their rates with their PIFs, is a question we might want to ask," Ms. Adams suggested. Mr. Smith said that different cities have different philosophies on development. "It becomes very political sometimes," he said. "Typically," he said, "you see smaller communities that are starting to experience growth, with high PIFs, because they don't have a good base. They may have an income of about $1-2 million a year and they have to spend $10 million on a facility. To get the money they have to show somebody that they will have fees coming in, so they raise fees dramatically. Many of these communities end up raising both their fees and rates to be able to make enough income to pay off the bonds." Ms. Williams asked if the Conservation and Public Education Committee wished to be involved in the open house in March. The Chair David Lauer said that he thought they would like to be involved. Mr. Smith said that staff will give the Board an update about the multi -family and the bonds questions at the February meeting. ACTION: Motion and Vote John Morris moved that staff proceed with the Water PIFs plan. After a second from Tom Brown, the Board passed the motion unanimously. RF901JRCE RECOVERY FARM CONCEPTUAL LAND USE PLAN Introduction During 1997, the City and CSU participated in a cooperative effort to develop a conceptual land use plan for CSU's Environmental Learning Center and the City's Resource Recovery Farm. The purpose of the cooperative effort was to ensure the development of an integrated plan that was consistent with the general theme of environmental learning and recover the City's investment in the Resource Recovery Farm. Water Utilities Board Minutes January 22, 1998 Page 11 Staff requested the Water Utilities Board recommend supporting the conceptual land use plan to Council. In their packets, Board members received a memo and a color -coded map of the Poudre River Environmental Leaming District Conceptual Master Plan. Mike Smith related that the City purchased the Resource Recovery Farm in 1979. A study indicated that the City should proceed with construction of an EPA funded innovative sludge disposal project; subsurface injection of wastewater sludge. The wastewater sludge was used as a nutrient for growing non-food chain crops. In the mid 1980s the Wastewater Utility conducted additional studies to evaluate other sludge disposal options to meet future needs of the City. After considerable study, the option of applying low concentrations of wastewater sludge on range land was endorsed by City Council. In 1989, the Council approved the acquisition of the Meadow Springs Ranch as the site for the City's future sludge disposal operations. After a thorough environmental assessment of the Ranch property, the Wastewater Utility initiated a full scale pilot project to evaluate the range land concept and develop operating procedures for effective and safe application of wastewater sludge. The pilot program has been very successful. Within the next five years, staff anticipates moving the remaining sludge disposal operations located at the Resource Recovery Farm to the Meadow Springs Ranch. The next question was what to do with the Resource Recovery Farm after the sludge operations are moved. The City has a rather large investment in that property and it is hoped that development of a plan will help to recoup some of that investment. This led to a cooperative effort with CSU to develop a conceptual land use plan for both the Farm and CSU's Environmental Learning Center. The vision was an environmental learning corridor or district with the primary focus on open space/natural areas and environmental learning activities. As expressed in the Council's Policy Agenda, it would consist of a mixture of public and nonprofit "learning facilities" plus private sector development. The conceptual plan, developed by EDAW, consists of 58% open space and natural areas, 20% environmental education development, 15% research and development and 7% commercial. The conceptual plan is consistent with the City's Structure Plan adopted by Council in 1997. Mr. Smith pointed out on the map what each of the colors represented. He mentioned potential participants such as the proposed Horticulture Center, the Discovery Center (now located on West Prospect), the Geological Society of America (rock park), a fresh water aquarium, etc. "There may not be much return of investment in those areas," he admitted. The dark pink area (24 acres) would be for environmentally sensitive commercial development providing support for the environmental area; e.g. food services, gasoline service, etc. For the light pink area the City hopes to attract office space for environmental Research and Development (R&D). Both pink areas would be for sale or lease. "We would prefer a long term lease so the Utilities could derive long term income to recover our investment," he said. The value of that property continues to escalate. Water Utilities Board M'mutes January 22, 1998 Page 12 Mr. Smith said that staff considers this plan to be a good mix and supports the theme of an environmental learning district. "What we hope to have is the Board's endorsement and eventually a Council resolution that says they support the plan as a guideline for how this area should be developed," he stated. Dave Frick asked if the plan would be to sell the open space to Natural Resources. "We plan to work with them on that," Mr. Smith replied. He mentioned some specific trade possibilities or other arrangements to aid in that process. "It is not envisioned that all the green spaces would be sold as natural areas, but it's our long term goal to get reimbursements for the trades. If not, we should do fine with the commercial property." "It seems if we invested in the property as a water utility, and have a good incentive to turn it over to Natural Resources, somehow we should get that investment back," Mr. Frick commented. Mr. Lauer asked the purchase price of the Resource Recovery Farm. "It was about $1,276,000," Mr. Smith answered. "If we sold 24 acres, we would probably get most of that back. The EPA funded most of the improvements on the Farm, but the City purchased the property. We haven't determined what to do with our large composting building. That may be a structure somebody could use." Mr. Smith reiterated that staff would prefer to lease the pink areas because there would be benefits from the long term income instead of a big chunk of money all at once. "Our capital improvement program is slowing down and our service area for wastewater is slowing down, so we don't see a need for many large capital improvements. What we need is a steady income to help subsidize the rates," he stressed. "If that doesn't happen I guess we could always sell the property," he concluded. "Regarding the R&D area," Mr. Brown began, "there's an irrigation ditch running through the middle of it. Would that be a problem for that kind of development?" "No, because part of that can be piped and re -located," Mr. Smith replied. "As a matter of fact, it could be an attraction in the future." Howard Goldman pointed out that Boxelder Sanitation District is in the middle of all this. "Could that be an environmental problem?" Mr. Smith wasn't sure. Mr. Clopper said he imagines that Boxelder would be pleased with what is coming together here, "but have they been involved in any of this?" "We did not ask for their input on this," Mr. Smith said. "The issue with them is their existence and their expansion." "Is the Boxelder site inside the City?" Mr. Lauer asked. "I think they are excluded, but they are surrounded by the City," Mr. Smith replied. Questions and Comments Robert Ward asked about the section that is labeled private property. "That is land that is currently being mined for gravel," Mr. Smith answered. "So this plan incorporates City property, CSU property and private property," Mr. Ward clarified. "Our planners thought that the plan should show the private land that the City hopes to acquire," Mr. Smith explained. Mr. Lauer asked if the yellow was residential. Mr. Smith said it is indicated as low density neighborhood; he thinks that's optimistic. Mr. Goldman asked if HP is involved at all. "They haven't been involved in this plan. They are a mile r� Water Utilities Board Minutes January 22, 1998 Page 13 south," Mr. Smith replied. Mr. Clopper said he didn't see the floodplain/floodway designation on the plan. "That's not on there, but it was considered," Mr. Smith said. Joe Bergquist asked if this is the plan for Prospect Rd. that was mentioned in the City Master Plan. "Yes, it's consistent with that plan," Mr. Smith replied. "Is there talk of a visitor's center?" Mr. Ward asked. "Yes, it is at the top of the map where it is labeled Environmental Learning Visitor's Center. That's the one that CSU, State Parks, and the Visitors and Convention Bureau are working on together," Mr. Smith responded. "The Center is currently in the design phase." "How about the other green property that is private?' W. Brown asked. "That's Flatiron or Western Mobile. They have a proposed agreement with CSU for that property; CSU has long terms plans for it," Mr. Smith answered. "The Natural Areas people are trying to negotiate for the area to the south," he added. ACTION: Motion and Second David Lauer moved that the Board recommend to the Council, support of the Poudre River Environmental Learning District Conceptual Master Plan. Joe Bergquist seconded the motion. Mr. Clopper asked if there was further discussion. Further Discussion Mr. Clopper asked about the process from here on out. "The next activity will be a study session with the Council in a month or two; then a formal resolution from the Council endorsing the plan. After that, it will probably sit for awhile until there are ideas for development that would be appropriate to the proposed plan," Mr. Smith explained. "Furthermore, in some of the'areas, we aren't ready to do anything yet." "What's the time frame on this?" someone asked." We will probably see some action within the next 4-5 years," he said. "The only question is the composting building and what we plan to do with it. One idea is that natural resources might use it as a composting site. The down side of that is potential odor problems." "If for some reason a satisfactory commercial property deal doesn't work out, would the City consider some kind a demonstration farm?"Mr. Lauer asked. He also asked if the soil is better because of the infusion of sludge? "It's good soil," Mr. Smith replied. "We still grow crops there." "I'm talking about high value crops like Piedmont Farms," Mr. Lauer continued. "I don't know," W. Smith replied. "You probably wouldn't get the pay -back you do with something else." Mr. Smith assured the Board that the City will keep farming the property until there is a decision to do something else; it will be zoned agricultural use until then. "In the meantime, we will continue to lease it to farmers." ACTION: Vote Mr. Clopper called for the question. The Board voted unanimously to recommend support of the conceptual plan to the City Council. Water Utilities Board Minutes January 22, 1998 Page 14 Treated Water Production Summary Dennis Bode reported that for 1997 the City used 26, 907 ac-ft of treated water, approximately 92% of what was projected for an average year. He noted that the precipitation for the year was 24.81 inches according to the official reading. "It was definitely one of the wetter years that we've had," he said. The precipitation measurement was taken at CSU s gauge. Mr. Clopper noticed that the daily demands were included on the attached graph. "We do that at the end of the year," Beth Voelkel said. Mr. Clopper was interested in that information as were other Board members. Mr. Bode pointed out the extremes from dry to wet on the graph. Regional 201 Study Gale McGaha Miller reported that the 201 study consultant performed a sensitivity analysis on the work that they had done so far. "We asked them to check out the assumptions. We have to use assumptions on these in terms of what the growth rate will be, how the regulations might change, and what the wastewater discharges are likely to be. In the end you get a little nervous about those assumptions so we asked the consultant to double check them and take a look at what might happen to the findings if the assumptions are wrong. "Taking the worst case scenario, if the growth is a lot faster, if the wastewater discharge is a lot higher, what would that do to the time line for when facilities need to expand; and would that shift the alternatives? It could result in several facilities needing to expand at the same time," she explained. "In terms of cost, it still turns out to be six of one and half dozen of the other whether each plant expands individually or whether they find ways to cooperate." Regionalization is in the top four alternatives, but there is not much difference in cost among the top four alternatives. The consultants prepared a draft on management alternatives (which Ms. McGaha Miller just received today), with different structures if we were to coordinate or cooperate. The alternatives are things that could be done in terms of authorities, or agreements between two entities, etc. The group will discuss that next week. The public meeting is set for February 26, 1998 and will be held at CSU in the Student Center Senate Chambers from 7:00 - 9:00 p.m. The entire project will be reviewed at that meeting. They will look at existing facilities, water quality considerations, population, flow projections, existing capacity, future needs and all the alternatives. They will go over what was used to screen the alternatives and what was concluded as the bottom line. Notice of the meeting was included in Utility bills, newspaper articles, a notice on the cable TV bulletin board and on the City's web page. "Is it the City of Fort Collins that purchased the site east of Ptarmigan?" Mr. Lauer asked. "Yes," Ms. McGaha Miller replied. "Is the City's intention to use that site for a wastewater treatment facility no matter what?" Mr. Lauer continued. W. Smith explained that it was purchased, based on earlier Water Utilities Board Minutes January 22, 1998 Page 15 studies, that there was a good likelihood the site would be needed. It was one of the few sites along the River that would work, and the Water Board and the Council recommended that it be purchased. "The feeling was that even if we didn't use it for a regional wastewater facility, nothing would be lost because the value wasn't likely to go down." "Do you know how much the value has appreciated?" Mr. Lauer asked. Mr. Smith couldn't remember exactly how much the City paid for it, "but it probably was about $500,000. (He will look it up.) "We bought the property (160 acres) in May of 1989." Mr. Ward pointed out that no matter where you end up building eventually, the fact that you have the site is important; "it continues to increase in value, and you can always trade." Mr. Clopper agreed that it's the City's responsibility and obligation to identify and preserve those kinds of sites. Mr. Ward also commented that the City bought enough land so that it could be buffered from development. There is a golf course and considerable residential development near the site already. Regional Cooperation Mr. Smith explained that the Council asked the Water Utilities Board to develop a policy statement on regional cooperation. They are asking other boards and commissions to do that as well. At the last WUB meeting it was suggested that Paul Clopper and Alison Adams meet with Mike Smith to draft a statement. Mr. Clopper asked Molly Nortier to research the Utilities' policies to find areas where regional cooperation is mentioned. Mr. Ward pointed out that regional cooperation is a key part of the current Water Supply Policy. After Ms. Nortier compiles the information from the policies, Mr. Clopper, Ms. Adams, Mr. Smith and Ms. Nortier will draft a statement that will be presented to the Board in February for approval. Flood Update In their packets Board members received a memo from Mike Smith, addressed to the City Manager, summarizing changes in the Stormwater design criteria and scheduling the master plan improvements. In 1997, WRC Engineers, Inc. was hired to assist the City in reviewing Stormwater design criteria. The primary issues being reviewed were related to water quality, hydrology modeling and the rainfall intensity defining the 100-year storm. It is expected that the consultant will present recommendations regarding the 100-year storm definition sometime late this month. During February, the staff, along with other regulatory officials, and the Water Utilities Board will review the recommendations. The other issues will be addressed during the next few months. Bob Smith said that the definition of the 100-year storm is a significant issue, especially if the rainfall intensity numbers increase dramatically. If that occurs, we will need to re-evaluate the various master plans to see if the new criteria impact any of the proposed improvements. This could be a major effort. Evaluating and adopting changes to the Old Town and Canal Importation Basin Master Plans could take 8-12 months. We may also need to re-evaluate the Spring Creek Basin Master Plan if the flows from the Canal Importation Basin are significant. Eventually, all of the master plans will need to be updated. In the memo, Mike Smith also reported that staff had held a number of meetings with residents from the neighborhoods which were impacted most severely by the flood. The general themes of concern Water Utilities Board Minutes January 22, 1998 Page 16 expressed by residents were funding and constructing master plan improvements at a faster rate than currently planned, and questioning what the "appropriate" level of flood protection should be (design criteria). There was also some concern about the impact of development on storm drainage. Mike Smith continued by saying that the primary issue related to accelerating the construction schedule for the master plan improvements is the impact on financing. The various master plans were adopted with a "pay as you go" philosophy. As such, according to the memo, schedules were based on fee projections. In some cases this resulted in improvements being scheduled over a twenty year period. Changing the schedule will require fee adjustments to support additional debt service; something that residents have mixed feelings about. This will be discussed at the February and March Water Utilities Board meetings. It is anticipated that a review with Council will occur in April or May. Bob Smith mentioned that he and Mike Smith will be at an open house tonight at Fairbrooke, one of the neighborhoods most severely hit by the flood. This was one of the residential areas that was most concerned about the impact of development on storm drainage. Staff will be presenting a proposal about stormwater fees to that neighborhood. Bob Smith also brought up the study session with the Planning and Zoning Board on Stormwater management. It was scheduled for February 27th from noon to 3:00 p.m. at 281 North College. Molly Nortier will confirm that and inform Board members. "There is a perception on the P&Z Board that nobody oversees the criteria for stormwater management, so staff thought a study session with selected WUB members and P&Z Board members would be appropriate," he said. Mike Smith pointed out that the Stormwater Utility has been in existence for nearly 17 years. "I'm surprised that the P&Z Board doesn't realize that there has been a lot of work going on," Mr. Ward said. "However, I think the flood has suddenly created considerable awareness among residents of the City and it's nice to be able to capitalize on that," he remarked. Bob Smith related that the P&Z Board has a number of other issues they will be discussing including transportation and natural resources. "They appear to have a rather ambitious work plan for the year." Mike Smith said that they have a fairly new Board which might account for their lack of awareness on some of these items. He mentioned that Board Member Tom Sanders is on the Design Criteria Committee for Stormwater and might be a logical person to participate in the study session, as well as someone who was on the former Storm Drainage Board. Introduction of Dave Agee Mike Smith said he neglected to introduce a new employee, Dave Agee, at the last Board meeting. For many years, Mr. Agee has been the controller for the City. He is now transitioning to the Water Utilities. He is going to be the finance manager working with the Customer and Administrative Services Division. "Currently he is working half time as the City's controller and half time as our finance manager. We are very fortunate to have him on our staff," Mr. Smith said. Water Utilities Board Minutes January 22, 1998 Page 17 Water Supply Tom Brown reported that the Water Supply and Liaison Issues Committees met on December 16, 1997 to discuss a possible revision of the Water Supply Policy. The group spent their time reviewing a draft outline prepared by staff. It's a full page outline listing the major headings of this future review and update. It has eight sections, the first seven contain information leading up to the articulation of the new recommended policy. The 8th section depends on if there will be a revised Water Supply Policy resolution to be considered by the City Council. Essentially what the seven sections do is describe the current policy which was adopted by resolution in 1988. "We are taking a second look at the existing policy in light of what we know now and what we expect for the future," he said. The outline takes a look at several policy issues. The Committees spent considerable time discussing those issues reflecting the group's earlier discussions and what was written up in the "white paper" by Robert Ward. Those six issues are: (1) Supply to meet municipal needs - Are we meeting established goals and do we have the supply to meet those goals? (2) Regional Cooperation - Focuses on water issues concerning the NCWCD, water districts, etc. (3) Agriculture economy and open space - Spent time talking about North Poudre Shares and how purchase of those shares might not only improve our water supply picture, but also do something positive for future agriculture in the area (4) Quality of raw water sources - Looks at our watershed upstream (5) Instream flow and ecosystem protection (6) Recreational or aesthetic flows Those are the policy issues, some with more than one part. They will be analyzed carefully in the course of preparing this review and update. He continued by saying that the timing of this was not specified. Eventually staff will propose a schedule. It is obviously going to take considerable time and work and the speed with which it is done will depend on how much else is going on with staff. The audience for the report is staff and the Board. Essentially, it is our document. It is not intended to be written for the public. Mr. Clopper asked for questions and comments. Mr. Lauer asked if the intention is to eventually take this to City Council and recommend that they approve a policy that appears to be a broadened mandate. "I think the process is to go through with this to see if we end up at step number 8, a new water supply policy. If so, we definitely would take it to City Council," Mr. Brown responded. Water Utilities Board Mmutes January 22, 1998 Page 18 Legislative and Finance, Conservation and Public Education and Engineering Committees No reports Liaison Issues Met with Water Supply Committee. Larimer/Weld Water Issues Group Robert Ward reported that the Larimer/Weld Water Issues group met recently. Jim Sullivan, County Commissioner from Douglas County, came to the meeting to describe how Douglas County is approaching its water problems. They created a water authority which intrigued a number of people on the Water Issues Group. "It's a coalition of 8-10 different water organizations, water suppliers, etc. It sounds like they are trying to leave everybody with their own purposes, but to meet regularly and cooperate where it makes a lot of sense for everybody," he explained. "They are actually trying, with cooperative projects, to deal with water supply issues in Douglas County. We are going to get some information about their charter and try to understand exactly what they are doing, with the idea of examining the potential of trying something like that here," he concluded. Northern Regional Water Coalition Alison Adams said the Coalition has not met recently. Dennis Bode said there is a meeting scheduled in February. In related regional water matters, Joe Bergquist said he attended an ASCE/AWRA meeting recently. He provided a FAX that included articles from the Denver Post about regional cooperation and water supply. The articles were written by Chips Barry of the Denver Water Dept., Lee Rozaklis, a principal engineer for Hydrosphere Resources Consultants, and Jim Sullivan, Douglas County Commissioner. Copies of this will be distributed to WUB members. A Board member asked about the Metropolitan Water Supply Investigation Study. Robert Ward said, as far as he knows, it hasn't been released. "Lee Rozaklis basically believes that there really is no water crisis. That may be part of his metropolitan water supply investigation. They must have surveyed a number of water plans from water providers up and down the front range. By looking at their planning horizons and how much water they now own, he basically says there is enough water in the metro areas, under their control right now, to meet the needs out to 2030," Mr. Ward related. "Mr. Rozaklis didn't get into a lot of other areas, such as growth," he added. Jim Sullivan believes there are solutions to water supply issues; it's just a matter of getting together and working out the problems. Ms. Adams asked if they are saying there are enough water rights owned or there are enough built projects to have enough water through 2030. "I get the impression it is water rights owned," Mr. Ward replied. "Of course there are enough water rights owned; the whole issue is how to develop them," Ms. Adams asserted. After further discussion, W. Ward concluded that different groups will look at this issue differently. 0 Water Utilities Board Minutes January 22, 1998 Page 19 John Bigham mentioned that he had been over on the western slope for the last few days at a metropolitan water study meeting. The apparent results of that study were discussed thoroughly. "In essence, I would say the discussion on the western slope points out that the metropolitan water study shows that there is enough water on the east slope, so they are saying, `don't come over here for more."' Secondly, they say that Northeastern Colorado has lots of water, "so Douglas County come and get it!" He added that they are quite happy with some of the alleged conclusions of the metropolitan study, whether we are or not. Mr. Bergquist pointed out that the study has not yet been published. Board Commitment Paul Clopper announced that he had asked Molly Nortier to put together Water Utilities Board attendance records. He emphasized that this was not meant to be punitive in any way. "I did not want anyone to feel uncomfortable," he said. The point he did want to make is that in a couple of months, the City Clerk's Office is going to be issuing the annual call for membership on various boards and commissions. "In June, we need to lose one more person on the WUB according to our attrition policy. Barring any resignations, we will lose either Dave Frick or Howard Goldman and the other may or may not be reappointed." What he intended to do with the list of absences was simply call it to everyone's attention. "Please think about the commitments you have coming up; look at your calendars for 1998, and evaluate your own situation as far as making a commitment to attend WUB meetings," he advised. ADJOURNMENT Since there was no further business, the meeting was adjourned at 5:17 p.m. Water Utilities/Board Secretary