HomeMy WebLinkAboutWater Board - Minutes - 01/17/1986Water Board
January 17, 1986
Members Present
Norman Evans, Chairman, Henry Caulfield, Vice Chairman, Neil Grigg, Jim
O'Brien, MaryLou Smith, Tom Sanders, John Scott, Dave Stewart, Ray Herrmann,
(alt.)
Staff Present
Mike Smith, Dennis Bode, Webb Jones, Ben Alexander, Andy Pineda, Linda
Burger, Paul Eckman, Assistant City Attorney
Guests
Linda Hopkins, Acting City Community Development Director
Eldon Ward, Consultant for Poudre Trust
Members Absent
Bill Elliott, Tom Moore, Stan Ponce (alt.)
Chairman Norm Evans opened the meeting. The following items were discussed:
Minutes
At the bottom of page six the last ccmplete sentence should read: "If a
metered customer use 24" for irrigation, his peak day water use is 13.0%
less than the flat rate customer." The next sentence ending at the top of
page seven (7) should read: "If he applies 20" per year, he uses 19.5% less;
for 16" he would use 26.0% less."
Business Related to Board Meeti*s
Dr. Evans reviewed the policy on attendance which was recently sent to Boards
and Commission Chairmen as a reminder. It is the staff person's (the Water
Board secretary in this case) responsibility to keep track of attendance.
Essentially, the policy states that "A member will be automatically
terminated if he/she misses three consecutive meetings not approved by the
chairperson or is absent from four regularly scheduled meetings in the
calendar year not approved by the chairman." This can be interpreted as
meanuig non -excused absences.
Next Dr. Evans referred to a memo from City Attorney John Huisjen on
"Findings of Fact." He summarized the memo by saying that the Board's
actions may become subject to legal action. At the least, the members should
place on record their reasons for voting yes or no on a particular issue.
Mike Smith explained that this issue has emerged with other Boards. He added
that it is far more critical for a Board like the P&Z Board which deals with
regulatory actions. The Water Board acts primarily in an advisory capacity.
Page 2
Water Board Minutes
January 17, 1986
MaryLou Smith stated that it appears to her the Water Board's minutes are so
extensive that when a vote is taken, the minutes reflect the opinions of
those who vote yes and no. She thinks the only time that it could become a
problem is if a particular member voted in the minority and did not state
his/her viewpoint. At that time the member could be directed to write a
paragraph explaining his/her reasons or be asked to present input at the
meeting-- either of which would be incorporated in the minutes.
Dr. Evans agreed that Ms. Smith's suggestion seemed logical and acceptable
and asked if anyone thought all members should be polled for their reasons.
The Water Board secretary stated that it was her understanding that the Water
Board minutes appear to be detailed enough that polling each member for an
explanation would not be necessary except in the instance which Ms. Smith
cited.
The staff prepared a revised preliminary report reflecting the suggestions
and corrections expressed by the Board. This revised document was
distributed to Board members prior to the meeting. The Chairman asked for
comments.
Neil Grigg asked about the cost allocations. Who would pay for each of the
metering situations? Dennis Bode replied that, after discussion at the last
meeting, it was decided that under any of the scenarios, plant investment
fees would be the mechanism used for any of the alternatives.
Dr. Grigg asked has that would work with the change of ownership on existing
homes. Mr. Bode said the approach being contemplated is to award a contract
to meter those homes that change ownership.
Dr. Grigg asked if everyone had a chance to read the letter submitted by
formes Board member Ray Anderson. Do we have a response to it? Mike Smith
said that Dennis Bode and Webb Jones have drafted responses to each of Mr.
Anderson's points. Mr. Anderson has not yet received a reply. (Note: Ray
Anderson's letter and staff responses are attached to minutes.)
Henry Caulfield suggested that staff explain the points that they think are
particularly important to clarify and discuss. Jim O'Brien proposed, on the
other hand, that since the Board has such a full agenda, and since the Board
has covered most of the issues and has already resolved where they are going,
and since all the issues raised by Mr. Anderson have been covered in the
minutes, there is no need to spend a lot of time going over all of these
points again. It was decided that the Board would confine their discussion
to specific questions.
Henry Caulfield referred to the first page, third paragraph, last sentence of
the letter in which Mr. Anderson states that flat rate customers will have
higher rates. Yes, we know that; that was one of the Board's
recommendations. The question, according to Mr. Caulfield, is, "Do you accept
the cost of service concept?" Mr. Caulfield's second question about Iaveland
has been covered on p. 7-4 and 7-5 of the revised report.
Mr. Caulfield raised a second question from Mr. Anderson's letter on p. 2
Page 3
Water Board Minutes •
January 17, 1986
under "Benefits of Meters," No. 1 where he says, "the value of water 'saved,'
i.e., reduced deliveries per customers, is valued at $4.00/1000 gallons which
yields a value of $1300/acre-foot. Elsewhere it is stated that raw water is
valued at $800 per acre-foot (p. 4-2 of the original report)."
Dennis Bode explained that the amount staff showed reduced is the amount of
average annual delivery. When the City acquires water rights they require
something greater than the amount that is delivered to account for supply and
demand variations. A factor in the equation that is used is 1.6 times that.
The $800 was used, but the price for delivered water is is 800 X 1.6 equaling
the approximately $1300 which Mr. Anderson came up with.
Henry Caulfield suggested that this information be documented in the form of
a footnote, for example, in the report so it can't be challenged again.
Mr. Caulfield's next reference in the memo was the third paragraph on page 2
under No. 1. From an economist's point of view (Mr. Anderson is an
economist.) having the excess water rights that we have, those are "sunk"
costs and therefore, should be valued as 0 in an economic analysis. The
Board may not agree with that because one could view the excess rights as
saleable, e.g. CBT water.
Mr. Bode responded that staff viewed the raw water differently from Mr.
Anderson when they did the benefit/cost analysis. They looked only at the new
customers and examined the difference between what is required for a flat
rate customer and a metered customer. The existing raw water supply was
"left" with the existing customers. The City would not want to stop
acquiring water from new customers, but in the future we would need fewer
acre-feet for metered customers than for flat rate customers. The value that
was placed on that was the difference between those two values times $800 per
acre-foot of water rights.
Mr. Caulfield went on to say that the question of Anheuser-Busch is going to
come up and it doesn't appear to be in this analysis. Riere is A-B in this
analysis; are they in the demand schedule?
Mr. Bode replied that when Ray Anderson referred to the big jump in water use
in 1988 he was looking at the A-B related increase. The raw water increase
for A-B is in the projections which reflect the raw water which the brewery
will turn in. Mr. Caulfield added, "what about the use of the existing
treatment capacity?" Mr. Bode's response was that those costs for treatment
capacity are included in some of the PIF analyses. Staff has taken a
conservative view on that.
Mr. Caulfield cautioned that staff should be prepared to answer the question
about treatment capacity; in effect that A-B is paying for their share of
capacity -- perhaps in a footnote, also.
Mike Smith explained that usually customers pay a PIF for that capacity. A-B
elected and the City agreed, to put that capacity into the rates. Above the
normal service rate they will have a surcharge for that plant capacity.
Tom Sanders asked when the Brewery becomes operational, will their additional
Page 4
Water Board Minutes
January 17, 1986
capacity speed up the time for another treatment plant? With and without
Busch, what is the time frame on that?
Mr. Smith responded that having A-B as a customer certainly does use up some
of the treatment capacity. They are paying for it and will use it. If Busch
were't coming, naturally, the capacity would last longer. This would be true
of any new water intensive industry.
Mr. Caulfield asked a corollary question. Is A-B included in the fact that
additional capacity would be delayed until 1991? Mr. Smith said that A-B has
been included in all the numbers. He added that staff doesn't consider A-B as
an option anymore, but something that will happen.
Mr. Caulfield stressed that he is not reopening the A-B issue. He. merely
wants to be clear where the A-B related figures are in the report.
Mr. Smith agreed that this needs to be well documented because there will be
those who claim that the City is proposing metering because of A-B.
Norm Evans stated that it could be said, however, that without A-B the
schedule of expansions could be stretched out somewhat.
Returning to Ray Anderson's letter, Mr. Caulfield admitted to some confusion
on p. 4, paragraph 2. What is he saying there and what is the staff s
answer?
Mr. Bode explained that it appears he is comparing the cost of raw water with
the costs of metering. With the estimated water savings, the raw water would
be worth $1100 - $1400 an acre-foot. The benefit that he doesn't mention is
the delay in the expansion of the water treatment plants. Furthermore, he
doesn't include the 1.6 factor for the difference between raw water and
delivered water. Marylou Smith added that he also doesn't address the equity
issue.
Henry Caulfield expressed the thought that if we decide that the people
coming to town are going to pay for all the metering through the PIF and it
won't become a burden on the existing customers, Mr. Anderson doesn't
recognize that balancing of equity. In fact, he considers it to be the
reverse.
Ray Herrmann believes that the argument Mr. Anderson was making was that the
capital fees will be taken care of by new people in any event because they
will be paying for the new facilities, but that the existing non -metered
customers have, in effect, already paid for what they are using. Mr.
Anderson contends that you will be taking that away from them when they are
metered, because the intent is to reduce their use of water, whether they pay
for meters or not.
Mr. Caulfield thinks this goes back to the cost -of -service argument that flat
rate customers are not paying their fair share. Mr. Herrmann believes the
issue of whether urmtetered customers are paying appropriate service charges
is a separate issue.
Page 5
Water Board Minutes •
January 17, 1986
Dave Stewart believes that Ray Anderson is saying the the flat rate customer
shouldn't have to decrease his water use. Mr. Stewart stated that the flat
rate customer doesn't have to decrease his use, he just has to pay for what
he uses.
Henry Caulfield added, "and that is based on cost -of -service which you either
accept or not." He contends that the cost -of -service concept is critical to
this whole report. He also related that back of this is the green lawn
issue. The fact that you have a 20% decrease in the 32" -- the average
applied to lawns by flat rate customers — but you still have a "class 8"
which is an acceptable rating for a green lawn according to studies made by
CSU's Professor Danielson et.al. Since this information is not included in
the report, Mr. Caulfield asked Dennis Bode to compose a few sentences
relating to this to be inserted at the appropriate place in the report.
Mr. Bode suggested that this explanation be included on p. 6-1 where they
discuss green lawns. Following is his proposed language: "Researchers at
CSU have studied evapotranspiration rates for urban lawns and the effect of
irrigation on lawn quality. They concluded that there was a minimal reduction
in visual quality of lawns when irrigation was decreased to 70% of maximum
evaporation which is about 24 or 25 inches. In Fort Collins that means
approximately 18-20 inches per year of irrigation water is adequate to
maintain high quality lawns."
Mr. Caulfield thinks this explantion should include the 20% decrease in the
water use. It is in the next chapter where you talk about the 20%. Perhaps
the explantion may need to be inserted in both areas. Mr. Bode said that
staff will work this out.
Tom Sanders thinks that the cost -of -service concept is not palatable at this
time if we truly believe that we want to maintain green lawns. Mr. Caulfield
explained that this was his reason for raising the issue because "we are
basing conclusions on if you have a metered system, with the current metered
rate structure, not one of the more complicated ones. This will result in a
projected 20% decline in use of water by newly metered customers. That
cutback will put water use by metered customers in the range of the CSU
study." In Mr. Caulfield's opinion, "we are preserving the green lawns by
those facts."
Tom Sanders interprets cost -of -service as when the amount used increases, the
cost per gallon decreases. The cost -of -service, when applied to the green
lawn idea, is that there would be no penalty to meet the 2011, 17" or 16" of
water per year. Above that a different rate would apply or something of that
nature. From then on it is a truly cost -of -service concept. It was Dr.
Sander's impression that the Board agreed to this.
Mr. Bode interjected some thoughts at this point. The cost -of -service is a
concept, he emphasized. There are different ways that one can arrive at
those final figures, but the whole idea is to get those costs allocated
equitably. It depends on whether this is detemined by classes of customers,
etc. One of the major things that we are looking at with the current metered
rate structure, is that it is an in-between type of structure. It should not
overly discourage people from watering their lawns and it is hopedthat
Page 6
Water Board Minutes
January 17, 1986
relatively green lawns will be maintained as a result. The other part of the
question is, until we have more customers metered so water use
characteristics of a large group can be examined, it is difficult to do a
good cost -of -service analysis. We may determine after we have a number of
metered customers, that we may need to make some adjustments to that rate
structure.
Tom Sanders would like a definition in the report of the cost -of -service and
what it means. He believes there is a base rate to maintain green lawns, and
that the equity issue would evolve above that base.
Mr. Caulfield related that the base rate is not to encourage green lawns; it
is there to ensure a constancy in revenue. That rate coincides rather nicely
with the green lawn concept as well.
Neil Grigg thinks that Tom Sander's point about describing the
cost -of -service is a good one when we get around to explaining to people what
we've done and what we plan to do. After reading the recommendations on the
education program, he suggested that possibly this should be included here;
carefully articulated so people can understand what our recommendation is and
why we recommend it, and how we propose to pay for all of it.
Chairman Evans asked if there were further comments relating to Mr.
Anderson's letter.
Mr. Bode made a final comment on the cost -of -service. He sees three levels:
1) A need to generate the revenues to pay the total cost to the Utility, 2) A
need to look at the different customer classes and get those costs and rates
determined so they cover the costs for each of those classes, 3) Within the
class there needs to be a structure that looks at individual customers so
that those costs are allocated as fairly as possible and still have
reasonable rates that can be understood. He added that it is not an exact
science.
Norm Evans asked for a clarification on the base charge of $8.95 which he had
heard was above the cost -of -service. Mr. Bode explained that the existing
metered rates of $8.95, which was the base charge in 1985, includes customer
charges plus the cost for the first 2,000 gallons of water use. Currently,
that charge is on the high side according to the recent rate study. If you
did want the exact cost -of -service, you would probably have a smaller base
charge, and a larger volume charge. One of the problems with doing that is,
you probably encourage less lawn watering which discourages the green lawn
idea.
Henry Caulfield pointed out that he recalled the Board decided not to change
that rate because there are enough variables at this time without
complicating that rate.
Neil Grigg brought up the regional report which was in the Board's packets
and which the Board hopes to discuss later in the meeting. One part of that
report relates to the "Demand Managment report." How are we going to deal
with the linkage between these two studies? The regional report suggests
that by regional cooperation, we can share water and get more mileage out of
Page 7
Water Board Minutes
January 17, 1986
CA
water supplies and thus, delay the construction of additional treatment
capacity. The primary benefits of a metering program are to delay the
expansion of treatment plants and not having to acquire as much raw water.
It seems to Dr. Grigg that we need to be able to explain the savings by
regionalization at the same time we are using the same points to justify a
metering program.
Mike Smith explained that some of the savings in delaying water treatment are
temporary. For example, if one entity is running low on capacity, they may
use another's capacity for a short period of time, and pay for it until they
expand their own capacity. As far as long term capacity, if somehow you
could work out a system where everybody shared capacity, more benefits would
result, but that arrangement would be difficult to achieve.
Mr. Caulfield used the comparison of the electric supply industry. Those
with the largest capacity sell power to others. The water industry has not
yet moved very far in that direction.
Neil Grigg concluded that the metering program still seems to be the way to
go, especially with the current ideas for financing it. He stressed,
however, that we need to be able to answer the "what if" kinds of questions,
specifically in the case of regionalization.
Jim O'Brien wanted to acknowledge the time and effort that Ray Anderson put
into writing his response. He went on to summarize the Water Board's
present stand by saying that we haven't settled on a rate structure that we
would like to implement with a metering program. Neither have we settled on
a finance scheme and that is what the Board is in the process of doing in
giving our approval to the preliminary version of the final report, so that
it can be submitted to the City Council.
Mr. Caulfield suggested that the Board discuss Mr. O'Brien's points.
Regarding the rate structure, there appears to be nothing to indicate what
the rate increase would be for non -metered customers. Mr. Bode said that
information is on p. 7-55.
Neil Grigg pointed out that when the staff presents this report to the City
Council, and the Board has approved it, the Council will, in effect, be
approving of general strategy and not a rate increase or a schedule of rate
increases.
Mike Smith explained that following the last meeting, it was the staff s
intention to produce a summary kind of document which would represent the
recommended program; outlining how it would be implemented. It is hoped that
this is what the Council will examine and approve. The larger version of the
report will be reserved for those who want to look deeper into the details of
the program.
Dr. Evans reiterated Mr. O'Brien's question of, will we reconm-nd a specific
rate structure? Mr. Smith referred the Board to p. 7-55, table 7-25. On the
left side is the equity adjustment. We can see that is what we intend to do.
However, the figures on the right side may be different. Those figures are
Page 8
Water Board Minutes
January 17, 1986
difficult to pin down, he stressed.
Mr. Caulfield asked, what is the Board committed to? Are we going to be
committed to the short version which will express the general scheme of
things?
Mike Smith said that staff would like the Board's agreement on the larger
document. When the short version is completed, it will be reviewed by the
Board before it is taken to the City Council. He added that with regard to
the Board's commitment to rate increases, the public must be told that there
will be rate increases, but at this time it is difficult to commit to them
because of unknown conditions in the future.
Jim O'Brien was asked if the points he addressed were clarified.
Essentially, yes, he said. He was merely trying to be certain of the points
the Board had voted on.
MaryLou Smith asked about what the policy is for responding to a citizen's
letter such as Ray Anderson's. She thinks that the Board and staff should
acknowledge his effort.
The chairman answered that there is no policy so he asked the Board what they
would like to do about this specific one.
Jim O'Brien suggested a brief letter of acknowledgement and copies of minutes
pertaining to the discussion on the subject. Henry Caulfield added that Mr.
Anderson should also receive a copy of the revised version of the report.
Mike Smith said that Mr. Bode and Mr. Jones have responded to each point from
Mr. Anderson's letter. He suggested that these also be included.
The staff will prepare a response which the chairman will sign.
Dr. Evans stated that Mr. Anderson's letter indicated there are others who
hold the same perspective of the metering issue and we can expect these
viewpoints to emerge, particularly at the time when this issue is discussed
with the Council, and begins to receive more publicity.
Henry Caulfield indicated that one other point from Mr. Anderson's letter
which.may be important to discuss is the possibility of substituting various
kinds of lawn watering restrictions for a metering program. He presumes that
restrictions have the same effect in that they cut down on the maximum day
use to a degree.
Dennis Bode thinks you can structure restrictions in many different ways to
achieve different goals, but they don't achieve many of the other aspects of
a metering program that we wish to accomplish.
Mr. Caulfield informed the Board that for whatever reason, Greeley has the
every other day restrictions and a metering program as well. It would be
interesting to know why they have both.
Ray Herrmann offered the following viewpoint: He thinks the importance of
answering Ray Anderson's letter is that reasonable people who are somewhat
Page 9
Water Board Minutes
January 17, 1986
knowledgeable about the use of water, can read this report and reach
different conclusions, and in answering that, it will help the staff
understand how people can read the same document and come up with different
conclusions. He agrees that the Board should approve the report in principle
but that doesn't mean that all members agree with everything in the report.
Mr. Herrmann contends that there are areas in the report that support the
argument against meters. Perhaps consideration should be given to review some
of the ambiguous language in some places in the report.
Norm Evans wanted to pursue the matter of temporary restrictions to help
reduce peak day consumption. He asked Mr. Bode to explain the rationale of
why restrictions aren't that practical.
Mr. Bode explained that one factor is that a metering program normally allows
people the freedom to choose when and how much they water and still achieve
the result of lower peak days. Also, there are benefits you don't achieve
with a restriction program that you essentially achieve with a metering
program. Most important is the equity question. Another factor is in
managing the water Utility; such as monitoring system losses and implementing
a leak detection program to help maintain an efficient system.
Tom Sanders thinks the issue Mr. Anderson was raising, was that at one time,
the metering program was being sold primarily as one to reduce peak days.
The other advantages of metering are more valid because, in Dr. Sander's
opinion, peak days can easily be reduced with restrictions. He also pointed
out that the leak detection program to which Mr. Bode alluded, should be
included in the report for better management of the system.
Mr. Bode said that the subject of leak detection certainly could be included
in the report. Webb Jones pointed out that it was mentioned on p. 7-2 when
reasons for metering were discussed. He quoted the phrase. Some members
suggested that the words "leak detection" be used.
Mr. Caulfield called the Board's attention to two guests who had been waiting
patiently to participate in their part of the agenda; namely the Poudre River
Trust Land Use Policy Plan. He suggested that in their interest, the Board
recess on this issue and move on to their item. Discussion on the report can
be reopened later in the meeting. The Chairman concurred.
Poudre River Trust Land Use Policy
Mike Smith introduced Linda Hopkins, the acting director of Community
Development. She thanked the Water Board for allowing them to be on the
agenda and said that it is important for Boards and Commissions to look at
the Poudre River Trust, an item which the Planning Department has been
working on for quite some time. Her Department has been helping the Trust to
develop a land use plan which will assist the Planning Department primarily
in the way they view development along that river corridor. It is a plan
that is viewed similarly to open space policy plans, and master street plans.
She then introduced Eldon Ward who was hired by the City on behalf of the
Trust to help with the development of the land use policy plan and has worked
on that with the Trust and property owners for over a year. Nearly every
Board has reviewed this plan. When input is generated from all the Boards,
the plan will be taken to the City Council. The P&Z Board has already
Page 10
Water Board Minutes
January 17, 1986
reviewed it and has suggested Council approval. Water Board members received
copies of the plan about two weeks before tcday's meeting.
Eldon Ward presented a slide show which highlighted the plan. In discussing
the concept Mr. Ward emphasized that one of the things that this plan
addresses is a balance among the various interests, such as natural
resources, historic preservation, educational and cultural policies,
recreation and mixed use development.
One of the things they looked at which was of particular interest to the
Water Board was the creation of storage ponds to help provide something of a
more permanent water body. The suggestion for maintaining a minimum flow
would be very expensive or cause the Trust to get in the middle of the
"damming the Poudre" issue.
Norm Evans brought up the controversery surrounduig gravel pits and the
losses of water by evaportation which are said to be waste losses that
perhaps ought to be replenished or repaid through augmentation plans. Dr.
Evans wanted the Trust to be aware of this issue in considering their plans
for ponds.
Assistant City Attorney Paul Eckman suggested that what they might do with
these ponds is get a decree, call the ponds reservoirs, and fill them when
they are in priority, otherwise they could be filled under an augmentation
plan. Mike Smith said the Water Utility would be willing to work with the
Trust on this issue.
Mr. Caulfield wanted to clarify a statement which implies that the Water &
Sewer Utility would somehow subsidize the development in this area. There is
a statement to the effect that private development would like to be
encouraged by the fact that they would not be charged for water or sewer
lines to make whole their proposed development. In other words, some kind of
a break. He is not aware of any situation where the Utility would use its
accounts for this purpose. Would this be unprecedented? Mr. Smith responded
that it would..
MaryInu Smith asked if this would not be similar to the Utility not charging
Parks & Recreation for the water they use for parks. Mike Smith said there
are some exceptions that have occurred throughout the years, but it is not a
policy.
Mr. Caulfield said he is merely presenting this as an issue, although it
would not be an issue if the City Council wanted to do this and found the
money to reimburse the Utility accounts. Moreover, he said he is not raising
this to block this kind of a break, but that the Utility accounts should not
be the source of a subsidy.
Jim O'Brien pointed out that the basis for the incentive to which Mr.
Caulfield was referring, was in the adopted land use policy plan in which the
City could provide incentives such as utility infra -structure and
improvements, streets, power etc. in order to direct growth in desired
directions. If the City Council were to determine that this was a desired
area for growth, there is some policy direction for doing that.
Page 11 0
Water Beard Minutes
January 17, 1986
•
Ray Herrmann contends that in the area of the proposal for the Poudre, the
first thing the City would probably be giving up is the water replacement
requirements which could be serious for long term planning since that area is
mostly zoned industrial-- if you assume industrial high water use
development. Mr. Caulfield clarified that they are contemplating commercial.
Neil Grigg stated that this is an interesting concept. He moved that the
Board approve the plan in concept with the stipulation that the details the
Board has raised today should be taken into consideration and looked at again
as the plan progresses. Henry Caulfield seconded the motion and asked at the
same time that Linda Burger, Environmental Regulations Specialist for the
Water and Sewer Utility and member of the Colorado Water Quality Control
Commission, address the 208 study and the water quality classification
questions.
Before Ms. Burger talked, Mike Smith asked the Trust to make a change in a
statement on p. 67 of the document under 3.1.3, item 3, which directs the
Department of Natural Resources staff to work with the 208 Water Quality
Management Committee to recommend water quality standards for Fort Collins.
Mr. Smith thinks that the appropriate entity to recommend those 208 standards
along with other water quality standards referred to, is the Fort Collins
Water Utility staff since the Department has maintained an ongoing
quality monitoring program for quite some time.
Jim O'Brien addressed the following issues: In incorporating this into a
master drainage plan, there are significant problems which must be dealt
with. If you are going to change the master drainage plan in some manner and
provide for recreational and/or fish and wildlife enhancement, and storm
runoff into the stream, which is a severe water quality degradation, it is
critical that you look at a master drainage plan for the corridor. Also if
You put any ponds or major storage facilities into flood plains, you confront
all kind of problems because you need to look at what the potential liability
would be for failure. Regarding recreation, Mr. Ward said in his
presentation that boating activities should be limited on urban sections of
the fbudre. That prohibition exists because of the various structural
facilities that are not conducive to safe boating. Rather than look at it in
terms of prohibitive measures, he thinks that the Trust should look at
modifying the structures themselves, because a restrictive measure doesn't
necessarily remove the liability from the City. Mr. O'Brien contends that it
could be a viable boating corridor for lesser kinds of boating such as
tubing, etc. His neat point concerned vegetation. He asked, in looking at
vegetative species etc., what is happening as far as encroachment of non
endemic vegetative species as we have changed the minimum stream flow in the
corridor itself? What kind of alien species is going to grow rampant in this
situation? He also asked how the different groups stand who are connected
with Wild & Scenic as far as classifying the river through the City corridor
as recreational?
Henry Caulfield said at one time it was going to be in Congressman Brown's
bill. He doesn't think it is now. John Scott thinks there was a
recommendation to make it recreational, not as a part of Brown's bill
however. Mr. Ward related that in one of the bills there was an attachment to
Page 12
Water Board Minutes
January 17, 1986
at least promote a study in the area. He said further that Congressman Brown
is an honorary member of the Trust and the group has been in touch with him
by sending him drafts as they have evolved. From the comments they have
received there don't appear to be any clear conflicts. The policy plan here
largely restricts development to outside the floodway. Exactly what happens
in the flood fringe might be somewhat of a question.
Jim O'Brien stressed that the key is access and not necessarily the purchase
of land to go along with the recreational classification.
Linda Burger who was introduced earlier, related that there are a few new
developments in the regulation of water quality that should be seriously
considered for the plans of developing the Poudre. She doesn't think that
these regulations would necessarily stop plans from going forward, but they
need to be considered. EPA is in the midst of developing a comprehensive
storm water runoff regulation. The proposed Clean Water Act amendments
define storm runoff as point source discharges, and if that law passes, they
will be regulated just as wastewater plants are. This has enormous
implications in terms of costs to the storm drainage system and to the
control of water quality in the Poudre. Development plans along the Poudre
need to take into account those costs and how to deal with the whole
regulatory system frcm•EPA and the State. In addition, there were changes to
the state Water Quality Control Act in 1985 which include wildlife that is
protected by the act. Previously, it was aquatic life, now it is fish,
shellfish and wildlife. The fact that there is considerable wildlife along
the Poudre may have implications for classification by the state Water
Quality Control Commission. Furthermore, there is a renewed effort on the
part of the EPA to place more pressure on communities of Colorado to go to
advanced treatment for ammonia removal. Changes in the river upstream of the
treatment plants from Shields Street down to Boxelder Creek, changes in the
quality of the life that exists in and around the river above the treatment
plants could have impacts in terms of the standards and classifications
attached to the river. Ms. Burger doesn't think those problems are
insurmountable, but they could be very costly and are very important to be
considered as plans for the Poudre are developed.
Henry Caulfield added that if the storm drainage system is being considered,
and taking into account Ms. Burger's point about that being a point source,
in designing for Poudre development, the non -point source also needs to be
considered. You could overcome a lot of pollution from above the treatment
plants by doing something about the non -point source; the way the water flows
off the streets etc. but could bypass that pond that is being proposed.
Ms. ,Burger explained that golf courses, for example, are notorious sources of
non -point source pollution because of the fertilizer they have to use.
Mr. Ward stressed that without looking at these things beforehand, the golf
course just happens, for example; the general industrial zoning is there. He
believes that there are more chances for abuse by just allowing things to sit
rather than in trying to get a handle on what we ought to be looking at now.
Ms. Burger added that the Utility, in conjuntion with Kodak Colorado,
Greeley, Loveland, Longmont, and Hewlett-Packard has funded a study that is
Page 13
Water Board Minutes
January 17, 1986
11
headed by Dr. Kurt Fausch of CSU called "An Index of Biotic Integrity." What
it does is identify the fish life in various places along the whole segment.
In addition, it attempts to identify the limiting factors to that aquatic
life population. The study should be completed by the end of 1986 and it
will provide better information than we now have on the limiting factors. We
will know when flow is a problem or where poor habitat or water quality is a
problem. The results of the study would be very helpful in further
development of the Poudre Trust Plan.
Jim O'Brien asked what the water quality classification is for the river now.
Ms. Burger replied that the Poudre has a class 2 warm water aquatic life use,
a class 2 recreation use and agricultural use from Shields Street to Boxelder
Creek.
Chairman Evans reminded the Board that there was a motion on the floor.
Henry Caulfield stressed that the motion is in the spirit of cooperation and
not meant to be in any way, negative about the project itself.
Mr. Ward thanked the Board for the time they spent and for their constructive
comments.
Dr. Evans called for the question and restated the motion which was that the
Board approve the plan in concept, taking into consideration water quality
issues and other comments. The motion passed unanimously.
Chairman Evans observed that since it was 5:00, there would not be time for
finishing the discussion on the report nor completing the remainder of the
agenda.
MaryiOu Smith asked if the Board would be meeting with the Council prior to
the February Board meeting. Mike Smith responded that the Interim City
Manager Rich Shannon suggested that the Board be completely prepared before
joining the Council at a work session, and stressed that the Board should not
feel compelled to recommend anything with which they are not entirely
comfortable. Take plenty of time for discussion and preparation, then meet
with the Council, he said.
Tom Sanders asked what is the chance of this issue being put on the ballot.
Mike Smith said that we must wait to see what the proposed program will look
like.
Norm Evans thinks that Dr. Sander's concern is worth keeping in mind, but in
this case, it is probably premature.
Henry Caulfield recalled one more point which Ray Anderson mentioned to him
personally and was not in the letter. If meters are instituted, one of Mr.
Anderson's colleagues raised this question: With all the savings of water,
are we going to have enough effluent to pump to the Rawhide Power plant? Mr.
Bode doesn't think it would be a problem.
Mr. Caulfield stated that we have an obligation to provide that water to
PRPA. Attorney Eckman added, "to the extent that we produce it."
Page 14
Water Board Minutes
January 17, 1986
After Marylou Smith's motion to adjourn, the meeting was adjourned at 5:10
p.m.
Water Secretary
CITY OF FORT COLLINS
WATER UTILITIES
January 29, 1986
Raymond L. Anderson
1301 Luke
Fort Collins, Colorado 80525
Dear Ray,
The Water Board and staff read with interest your letter
regarding the proposed recommendation for a phased metering
program in Fort Collins. Your letter generated significant
discussion at the Water Board meeting on January 17. Several
Board members commented that you obviously had spent considerable
time and energy preparing and writing your response and they
wanted you to know that it was appreciated.
The Water Board and staff are grateful for your continued
interest and thank you for taking the time and effort to present
your viewpoint on this important issue.
Enclosed is a brief reply to each segment of your memo and copies
of recent Water Board minutes relating to this subject. We have
also included a copy of the revised report which may answer some
of your questions. The minutes from the January 17 meeting,
which contain the discussion of your letter, will be sent to you
at a later date. If you have further questions or comments
please feel free to contact a staff member or a Water Board
member. We welcome your input.
Sincerely,
Norman A. Evans
Water Board Chairman
Encl. 4
WATER UTILITIES
700 Wood Street . P.O. Box 580 • Fort Collins. Colorado 80522 • (3031221-6681 221-6685
Utility Staff Responses to Ray Anderson's Letter of Jan 7, 1986
(Numbered paragraphs correspond to numbered paragraphs on attached letter)
1. The recommendation for a metering program is not because the City
is short of water supplies. Metering allows customers to freely choose
how much water they use, but pay for what they use. It has been
shown that metering will reduce annual water use and peak day use.
This means that treatment plant expansions can be delayed and less
raw water is needed to serve new customers. Both result in significant
savings to future customers. Another primary argument for metering is
to enable the utility to charge customers equitably based on their water
use. Also, it provides the mechanism to manage system demands,
monitor losses and maintain a more efficient system.
2. The large increase of water use in 1988 is due to the projected use
of water by the Anheuser-Busch brewery. It will provide for its water
needs and thus does not affect the metering recommendation.
Regarding the increased cost of water to homeowners, Table 7-25 in the
revised report shows the projected increases for both flat rate and
metered customers. We expect very little. increase, if any, in the total
cost of operating and maintaining the system. This means that the
average annual cost per customer for 0&M costs will remain virtually
unchanged from what it would be without a metering program.
Loveland is not a good example because of other factors involved at
the same time they instituted a metering program. In the late 1970's
their rates were extremely low. In the early 1980's they installed
meters and had a large capital improvement program at the same time.
This resulted in the need for large rate increases.
3. The last revision of the report contains considerable analyses of the
financial effects of a metering program. Under the recommended
program, flat rate customers will have slightly larger rate increases
than metered customers (see Table 7-25). They can continue to use any
amount of water they choose. If a customer becomes metered, he can
regulate his use and thus control his annual cost.
The physical effects of a metering program are discussed in Chapter
VI on the "Preservation of Green Lawns." It is not meters alone that
cause people to water less, but also the accompanying rate structure. It
is believed that the existing metered rate structure will provide a good
balance between reducing water use and maintaining green lawns and
other vegetation. If it does not, the rate structure can be adjusted in
the future. In the study, it was estimated that metered single family
customers will irrigate 20 inches per year which is in addition to
approximately 15 inches of natural precipitation.
4. Table 7-1 on page 7.3 is not intended to suggest that Fort Collins
should implement a metering program. The table is included to
respond to questions about what other cities in Colorado are doing, and
to show that the metering policy in Fort Collins places it in a minority
among Colorado communities. The table also shows the type of
conversion programs that have been implemented by Cities converting
their flat rate customers.
5. The Fort Collins Water Utility neither approves or dissaproves of
the metering program implemented in Loveland. It is not believed that
a metering program in Fort Collins would have the same effect as
Loveland's program. The method and type of meter installation used
in Loveland are not recommended in the report.
Water rates paid by residential customers in Loveland increased
dramatically between 1979 and 1982. The reason for these increases
and the amount paid by a typical single family customer is discussed
on pages 7-4 and 7-5 of the report.
One of the reasons for the rapid increase in Loveland's water rates is
evident from examining the average revenue per acre feet received by
Loveland during the 19701s. The table included in R. L. Anderson's
memorandum to the Water Board indicates Loveland collected $219 per
acre foot in 1976; their revenues declined to a low of $118 per acre
foot in 1978. It seems that Loveland, unlike other communities
surveyed in Anderson's study, did not raise their water rates during the
late 1970's. Loveland's failure to adjust water rates during this period
of rapid growth and inflation contributed to the abrupt increase in
rates between 1979.and 1982. A $30 million capital improvement
program initiated during the same time period also contributed to
Loveland's rate increases. Now, the average annual bill for a single
family home in Loveland is more than in most other Front Range
communities.
6. The cost of meter installations in Loveland was obtained from an
article from the June, 1983, edition of the "Public Works" magazine.
The article was written by Todd Rogers, the engineer who supervised
the metering program in Loveland. A copy of that article is attached.
Todd has indicated that "no more than 50" of the 9,500 meter pit
installations required the homeowner to install a new service line. The
recaamiended program in Fort Collins should require few service line
replacements since meters will be installed in a basement or crawl
space whenever possible.
7. The reduction in raw water shown in Table 7-13 refers to the
average reduction in water delivered to a metered customer as
compared to a flat rate customer. However, in order to deliver one
acre-foot of water, an estimated 1.6 acre-feet of water rights are
required because of supply and demand variations. The price of
$4.00/1000 gallons takes this into account. The price of $800 per
acre-foot is used as shown on the following page.
Price = 800 x 1 Ac-ft x 1.6 Ac-ft Water Rights = $3.93
AC-ft 325.8 Th Gal 1.0 Ac-ft Delivered Th Gal
The $3.93 per Thousand Gallons was rounded off to $4.00 and the
present worth of $188.40 should be a close estimate.
8. The benefit referred to is for new customers because the raw water
requirements can be lower than what would be necessary if customers
stayed on a flat rate and used more water.
9. In the benefit analysis, it has not been assumed that the existing
water supply will be used by future customers. Instead new customers
are required to continue to turn over the water that is needed to
satisfy the deliveries to metered customers. Although the City
presently has an adequate supply, the amount of "surplus" is a function
of annual supply and demand conditions. If conditions were extremely
severe for several years in a row, then the "surplus" would be quite
small
10. The projected difference between peak day demands of metered
and flat rate customers is from Table 7-10 on page 7-29. The last row
of that table shows the total peak day water use for metered and flat
rate customers; the difference is 377 gallons per day (1,936 - 1,559 =
377). The basis for this reduction is discussers on page 7-28.
The "Fort Collins Water Rate Study" compared the peak day . water
demand of metered and flat rate customers currently served by the
Utility. Table 7-6 on page 7-13 s„mmarizes the findings of that study.
The difference between the peak day demand of metered customers
and flat rate customers inside the City was estimated to be 791 gallons
per day per customer (1,709 - 918 = 791) . Because there are presently
few single family metered customers and because of some of the
reasons listed on page 7-13, this reduction is not believed to be typical.
Implementation of alternate day watering has the potential to reduce
peak day water demand. A brief discussion of usage restrictions
begins on page 4-5 of the report. The Utility believes existing
customers would not welcome watering restrictions that prevent lawn
watering at their convenience. Also, other objectives of a metering
program would not be achieved.
11. The annual cost of meter reading and maintenance ($13.50 per
year) is capitalized in Table 7-15 on page 7-40. This amount ($151.98)
is deducted from the benefits shown in the table to determine the net
present worth of the costs.
12. Mr. Anderson is correct in stating that future customers would
benefit from metering existing customers. Under the recommended
program, future customers would bear the entire expense of metering
existing customers.
The installation of meters is not viewed as a reduction of service; for
many customers, meters will be viewed as an improvement in service.
Flat rate customers do not have the opportunity to affect the amount
they pay for water service. Under a metered rate, a customer has the
ability to save money by reducing his water use. Such an opportunity
should be welcomed by budget- conscious customers.
13. The recommended program is designed to meter mostly new
customers. Long-time flat rate customers would not be metered unless
they moved to another residence in the City. Existing single family
homes required to be metered will be those built since 1977, and those
which change ownership. Most home buyers are new residents, or
residents moving from metered rental property to their first home in
Fort Collins.
The recommended program will not require a significant increase in
the total amount of revenue collected by the Utility. The Utility's
annual cost of operation will essentially be the same with or without a
metering program. Adoption of equitable metered rates may increase
the annual water bill of certain metered customers. Such an increase
will not be a result of lawn watering, but instead, a result of watering
more than necessary to maintain an attractive landscape.
In economic terminology, a customer who pays the same amount for
less water does experience an increase in the price per unit of water.
However, the annual water bill of such a .customer is not necessarily
increased.
14. The projected water rate increase for flat rate and metered
customers is summarized in Table 7-25 on page 7-55. Adjustments to
overcome inequities are spread over four years from 1987 to 1990.
15. The installation of meters is not viewed as a reduction of service.
The annual water bill paid by a metered customer who waters his lawn
efficiently (15 to 20 inches per year) will be less than the annual water
bill paid by a flat rate customer.
16. The term conservation can mean different things to different
people. It's use in the report, in context as a reason for metering, is to
indicate the wise use of water. Often water is "over -used" resulting in
unnecessary costs or making it unavailable when needed by others. It
is not the intent to discourage the use of water actually needed to
maintain a green lawn or meet indoor domestic needs.
17. In the analysis presented, only raw water is considered. Even
then, one should multiply the water "saved" by 1.6 to account for the
raw water rights needed. Mien this is done you have $4.2 million
divided by 2930 x 1.6 which equals $896 per acre foot. The major
savings, however, which are not mentioned here, are because of
delaying treatment plant expansions.
18. The equity for flat rate users can be irproved by changing the
rate structure so that the charges do vary with lot size. This is needed
regardless of whether a metering program is instituted. Even then,
substantial inequities can exist because of large differences in water
use for two customers having lot sizes exactly the same size. Because
of the number of people in a household and because of different
watering habits, water use can vary by 2 to 3 times. This situation, as
illustrated in Table 4-2 of the report, can mean large differences in the
price per 1000 gallons.
TODD B. ROGERS, P.E.
Water/Wastewater Engineer,
Loveland, Colorado
TER meter retrofitting so that
users can be charged for the
water they actually use as opposed to
a flat rate may seem to be virtually
devoid of pitfalls. Visions of easy, un-
complicated installation and greatly
increased revenues may be tempting,
but there are few caveats to keep in
mind.
In July, 1979, the city council of
Loveland passed an ordinance re-
quiring all new residential construc-
tion and ownership transfers to install
water meters. In June, 1980, the
council passed a subsequent ordi-
nance requiring all water service to
be metered. This same ordinance
provided for city funding of those
meter installations on residences re-
ceiving water service before July,
1979, and for reimbursement of an
amount to those customers who paid
the cost of providing said facilities
prior to July, 1979. The amount was to
be determined after receipt of bids to
install water meters on all remaining
unmetered properties.
In an effort to encourage smaller
contractors to bid on the job, the city
was separated into six geographic
areas. Four of the areas contained an
estimated 1,065 meter installations
each, and the remaining two areas
contained an estimated 2,130 meter
installations each. The great majority
of these installations were to be be-
hind the curb in a fiber pit. There was
one additional contract prepared
which provided for the installation of
remote meter readouts on all existing
installations throughout the city.
About 1A years were allowed to com-
plete the work.
The contract documents were pre-
pared on a unit price basis since the
number of installations in each area
was an estimate; the city did not have
time to determine the exact quantities
involved. Estimated quantities for
each bid item were identified in the
contract documents. The bidders
were warned in the instructions to
bidders that those quantities could,
and probably would, vary considera-
bly.
The bidding documents were set up
so that a bidder could bid one or more
of the geographic schedules, but ac-
cept only up to what his bonding
capacity would allow. This provided
more competiton and gave the
smaller contractors a better chance.
We also allowed a deductive alterna-
tive for award of more than one
schedule. As it turned out, the smaller
local contractors had to form a
partnership to meet bonding re-
quirements thereby increasing their
overhead, and were still not competi-
tive with the larger contractors bid-
ding the job. Furthermore, this ar-
rangement made evaluating the bids
a very tedious process which de-
served a computer program.
In December, 1980, bids were re-
ceived. It was determined that one
large contractor would install the
meters in the two larger areas or
schedules and two of the smaller
ones. Another smaller contractor
would take the two remaining geo-
graphic schedules and a third would
place the readouts on all existing
meters.
The city council awarded the con-
tracts in December, 1980. At the same
meeting, it passed a resolution allow-
ing customers to pay their own plumb-
ers to install their meters and then
receive a refund from the city. This
continued for a few months until
growing pressure from the contrac-
tors which had been awarded the con-
tracts forced the council to rescind its
earlier resolution and disallow any
further installations by anyone else.
In February, 1981, all three con-
tractors were under way, installing
approximately 60 to 70 meters per
day. This "accelerated" schedule
caused the first problem. The city was
supplying all materials, and the rate at
which the installations were made ex-
ceeded the delivery schedule for
meters by a large margin. As a result,
continual requests of the manufac-
turer were made to accelerate deliv-
ery. The manufacturer obliged to the
best of its ability, but the city did get
caught short a few times. On these
occasions the contractors were given
rebuilt meters that were on hand;
when those ran out jumpers were
supplied to put in the yokes in place of
meters. In addition to the delivery
problem, there were considerable
amounts of defective materials. Al-
though the manufacturer stood be-
hind his product admirably, it was a
tremendous hassle for the city. The
moral? Require the contractor to pro-
vide all materials and let him deal with
the problems.
In Colorado underground sprinkler
systems are plentiful. Damage to
sprinkler systems was covered in the
specifications; however, it was not an-
ticipated that sprinkler taps would
have to be moved due to their prox-
imity to the curb stop. In many cases
there was not sufficient room to install
the meter pit; therefore, the contrac-
tors were paid to move the tap. To do
this, a unit price was established for
the work. It worked out well but did
get expensive.
Older Installations
Serious problems were anticipated
on some of the older installations and
we were not disappointed. Many of
the older lines in town were gal-
vanized steel. Some of these were in
such poor condition that just disturb-
ing the soil near them caused them to
fail. It was anticipated that replace-
ment of the service fine from the main
to a point five feet beyond the meter
pit might be necessary. However, it
became apparent that failures were
not going to confine themselves to that
area. Since the Municipal Code re-
quires that homeowners maintain
their service lines in good condition
from the property line to the house, it
was not considered appropriate or
eonomical for the city to repair or re-
place that portion. Therefore, if the
contractor uncovered a service line
which he felt was in such poor condi-
tion that it would fail if disturbed, a
release was obtained from the prop-
erty owner. The release stated that if
the service line did fail, the property
owner would have it replaced im-
mediately at his cost. This was not
popular but for the most part it
worked well.
The meters which were purchased
included a removable ball check
valve inserted in the inlet side of the
meter. It was felt that this would be a
defirdte advantage to the city and we
were pleased that the installation of
check valves on all of the service lines
would be so simple. It was not long,
however, before numerous calls were
received that pressure relief valves on
hot water heaters were constanity
opening. Most of these were only
plumbed to the floor, not to a drain or
outside the building as the Uniform
Plumbing Code (IAMPO 1979)
suggests. Worse yet, it was discov-
ered that many of the older water
heaters did not even have pressure
relief valves. Apparently before the
ball check valves were installed into
the service line, the pressure built up
in the hot water tank, exceeded the
pressure in the main, and allowed the
water to back up into the main. With
the check valve this was not possible,
and created a potentially dangerous
situation. Through a strong desire to
keep those check valves in the service
lines, the cost of installing pressure
relief valves on hot water tanks was
investigated and found to be prohibi-
tive. Therefore, the 1,000 meters in -
PUBLIC WORKS for June, 1983 79
stalled to that point were remov '.
the_ check.. valves pulled, and(
meters reinstalled.
Last Problems
The last two major problems en-
countered related to billing. There
were quite a few instances of multiple
properties on one water tap. This
practice is no longer allowed unless it
is a townhouse arrangement with a
Homeowners' Association, but many
years ago it was common. Prior to
having water meters, each of these
properties paid a flat rate water
charge. Now with meters, someone
had to be responsible for that bill. The
city did not want to have sub -tract
meters on a service line. Therefore, if
they desired, the owner on whose
property the meter was installed was
designated as the one responsible for
the bill. The owners could also elect to
get a new service line of their own. If
they chose the first option, they had to
get a new service line when the prop-
erty was sold.
When the project was started, it
was intended to convert customers to
metered rates as their meters were
installed. However, it was soon dis-
covered that in many instances the
remote readout and the meter did not
agree. Due to a defective gear in the
remote readout, it was not reacting to
all of the electric pulses that the
generator on the meter was sending,
and the actual water usage was
greater than the remote readouts in-
dicated. The meter readers were
reading only the remote readout and
customers were billed for the amount.
When it was determined there was a
problem, the meter readers read the
meter and the computer started send-
ing out some rather large bills. Al-
though the city allowed extra time to
pay these bills, the billing clerks were
the objects of a considerable amount
of verbal abuse by some disgruntled
customers. Anyone considering a
water meter retrofit program should
not attempt to convert anyone to a
metered rate until all of the meters are
installed and "debugged."
The costs of the metering program
did run considerably more than proj-
ected, which was about $2.7 million
for materials and installation. How-
ever, when salaries of city employees,
refunds to those who had already in-
stalled their own meters, and miscel-
laneous materials were added, the ac-
tual cost came to about $3.66 million.
The city employee salaries and mis-
cellaneous materials were charged to
the job for capitalization purposes.
The breakdown on this is: contractor
payments, $2.31 million; materials,
$.76 million; and city salaries and mis-
cellaneous, $.59 million; for a total of
$3.66 million.
Table 1 — Effects of Wa1. 'Meter Installation
1981
1982 N
Maximum Day (mgd)
19.5
15.0 -23.0
Low Day (mgd)
1.6
1.9 + 18.8
Average Day (mgd)
7.18
6.04 -15.9
Total Year Production (mg)
2,620.4
2,203.8 -15.9
Total Year Precipitation (in.)
12.51
13.64 +9.0
Typical costs for basic meter instal-
lation, various extras, and average
reimbursements to homeowners are
as follows: typical outside meter set
with remote readout, $351.50; typical
inside meter set with remote readout,
$188.40; place generator on existing
meter and install readout, $66.50; and
replace existing meter and install re-
mote readout, $84.00. Typical extras
encountered were moving of sprink-
ler taps, unanticipated saw cutting of
concrete, and hand digging due to
proximity of installation to fences,
hedges, etc. These extras were as-
sociated primarily with outside meter
sets and increased the average price
to $356.50.
Several large meters from IIA to 4
inches were installed, totalling
$132,630; readout installations on
existing meters cost an additional
$125,000. In addition, the total
number of inside and outside sets var-
ied from that originally projected due
to the reimbursements to home-
owners. The total number of inside
and outside sets was 419 and 7,679,
respectively.
Using these figures, the following
calculations apply: outside sets, (7,679
x $356.50), $2,737,250; inside sets, (419
x $188.40), $78,950; large meters,
$132,630; and salaries, reimburse-
ments, miscellaneous, $590,000; for a
total of $3,663,830.
The figure for both the inside and
outside sets includes materials and
labor. Materials supplied for outside
set include meter, meter pit, bonnet,
lid, yoke, and readout. Materials
supplied for inside set include meter
and readout, and vertical meter set-
ter.
The average reimbursement for
homeowners was determined by av-
eraging the approximate items from
the successful bidders and came to
$216 for inside sets and $380 for out-
side sets. The discrepancy between
these figures and those given earlier
arises from differences in assumed
quantities of materials required.
Results
The results of the metering pro-
gram were better than expected from
a water conservation standpoint.
Table 1 illustrates the effect on water
use that the installation of water
meters had on Loveland. The
maximum day usage corresponds to
491 gallons per capita per day
(GPCD). The average daily usage
corresponds to 198 GPCD. Further-
more, in 1981, lawn watering restric-
tions were in effect which allowed wa-
tering only every third day. In May,
1982 no water restrictions were put
into effect.
With this considerable amount of
water conservation, the negative side
effect is less revenues. Utilities should
be careful to estimate conservatively
their revenues after a retrofit pro-
gram until a history can be developed.
In summary, those contemplating a
water meter retrofit program need to
be aware of problems that can arise
during such a program. Some sugges-
tions are:
♦ Require the contractor to supply
all materials. Otherwise the utility will
be responsible for delivery and mate-
rial problems.
♦ Beware of the proximity of un-
derground sprinklers as well as other
utilities. It may be impossible to install
a meter pit without moving them.
♦ Old galvanized or lead service
lines may be prevalent in older parts
of town. They fall apart very easily.
♦ Be careful of check valves. Their
drawbacks may outweigh their bene-
fits.
• Have all of the meters installed
and debugged before converting
anyone to a metered rate. This will
alleviate billing hassles and possible
legal action by customers on the basis
of selective enforcement of regu-
lations.
• Be prepared to deal with multi-
ple properties on the same service
line.
♦ There can be a considerable
amount of direct labor involving utility
personnel. Be sure there is adequate
staff to handle inspection, locate curb
stops, and replace or repair service
lines to the curb stop. If there is not
adequate staff to perform these
duties, make sure they are covered in
the contract documents.
• Do not over -estimate revenues
after a retrofit program. Water usage,
and therefore, revenues will be re-
duced significantly unless the flat rate
being charged previously was too
low. Be conservative with those reve-
nue estimates until a history is de-
veloped. OOO
80 PUBLIC WORKS for June, 1983
0
January 7, 1986
TO: Dr. Norman Evans and Fort Collins Water Board
FROM: Raymond L. Anderson, resource economist and former Water Board member
1, It was with some astonishment that I read that the Water Board is con-
templating recommending a water meter program to the City Council. This comes
as quite a surprise so soon after the drought hazard report indicated that
the city has adequate water supplies to withstand even very severe droughts.
If this is the case, why would the city want to restrict water use during normal
years when water is plentiful? Given the capital requirements of the city in
many different areas, it would seem unwise to invest large sums of money in
such a nonproductive, low -return enterprise as water meters.
2. Two things seem to be clear from examining the new water use projections
developed by the water utility engineers. City water use is to expand rapid-
ly between 1987 and 1988 and the way to meet this expected jump in demand is
to restrict current water users' demand by metering and raising the price of
delivered water. The report gives some attention to the cost of installing
meters on various classes of users, but no analysis is made of the increased
cost of water to homeowners. If Loveland is a good example of a metering
program, homeowners can expect water bills to jump up to 400 percent unless
they severely limit water use. See graph and table atta.-hed to this memo.
3 I have read through the report by Bode and Jones on "Evaluation of Water
Demand Management" and would like to make specific comments on various parts
of it. This report does not appear to have been rigorously reviewed by the
board. The whole report appears to be aimed at installing meters and does
not examine the negative effects, both financial and physical, that restricting
water use will have on the residents, particularly flat -rate homeowners. The
flat -rate homeowners are the largest group of water users,and they will be
forced to pay much higher prices for water service at the same time they will
receive much less water.
Metering Policies of Front Range Cities
4 . Page 7.3, Table 7-1. Lists cities with metering and metering programs.
Fort Collins is the only city listed without a metering program. The impli-
cation seems to be that because every other city has a metering program,
Fort Collins must have one also. Otherwise there is something wrong with
US. We are not going along with the crowd. This is the same type of rea-
soning used by lemmings or teenage kids.
J. Then on page 7.5 the report discusses Loveland's recent metering pro
gram with obvious approval. It shows in Table 7-2 the dramatic reduction
Loveland made in water delivery as a result of installing meters. What
this report doesn't tell is the rapid rise in the price of water delivered
to the citizens of Loveland. In 1979 water retailed for an average of $121/
AF or 37 cents/1000 gallons; in 1981 it went to $373/AF or $1.14/1000 gal-
lons; by 1983 the price was $564/AF or $1.73/1000 gallons. The increase
-2-
between 1979 and 1983 was 467 percent. I do not have data on the 1984 price
of water. As a result of price increases and metering, water use per cap-
ita fell from 238 gallons/capita/day in 1979 to 162 gallons/day in 198L. 1/
Water became so expensive people simply had to quit using it, with devastat-
ing results to the yard and gardens of many homes in Loveland. If you doubt
this, go to Loveland next summer in July and August and see what it looks
like.
6. The cost of metering in Loveland does not include the cost to homeowners
who must replace the water line from the meter into the house. On older
homes, the old pipe frequently must be dug up and replaced at considerable
cost to the homeowner.
Benefits of Meters
Table 7-13, p. 7.34, presents several analytical and philosophicalproblems:
7. 1. The value of water "saved," i.e., reduced deliveries per customer, is
valued at $4.00/1000 gallons which yields a value of $1300/acre-foot.
Elsewhere it is staled that raw water is valued at $800 per acre-foot (p. 4.2).
This change reduces the so-called present worth from $188.40 to $115.39.
8. However, this "benefit" is to the city water utility and not to the cus-
tomer because the customer's water supply is reduced 47,100 gallons per year.
Very few customers will regard this as a benefit. The rationale seems to be
that fewer water rights will need to be purchased to serve new users.
9. Currently the city uses approximately one-half of its annual water sup-
ply. So it doesn't seem reasonable that the city should be buying additional
water, when it already has more than it can use. Thus no purchases will be
made until much of the surplus is commited to use. Therefore, the capital
cost of water cited in Table 7-13 should be zero.
10. 2. The water treatment capacity is projected to be reduced by 377 gallons/day/
customer. No explanation of why or how. Is this peak -day reduction in
treatment capacity? If so, this could be reduced by instituting alternate
day watering during summer months, with much less effect on customers.
The capitalized value of this is put at $282.75. Reduced transmission
lines are valued at $15.08 present worth. If alternate day watering were
instituted, the $282.75 value would be meaningless.
1 1. 3. The savings in 0 S M costs from not processing 47,000 gallons per customer
are priced at $13.19 per year with a present worth of $148.49. This entry
should be offset by the cost of meter reading and maintenance, which is esti-
mated to be $13.50/meter per year. This is 31 cents higher than the filter
plant 0 6 M savings. Present worth of capital cost savings is essentially
1/ Anderson, R.L. Expansion of Water Deliveries by Municipalities
Special Districts, Northern Front Range. Colo. Water Resources Rese
Institute, Tech. Report 46, Oct. 1984, p. 4.
E
9910
a fiction because the water treatment plant and transmission line capacity
savings could be offset by alternate day watering, leaving metering 31
cents per customer higher than not metering.
12. 4. The real effect of metering is stated in the last paragraph of p. 7.34.
"Future customers benefit from a metering program since their demands may
be partially satisfied by existing system capacity made available by re-
ducing the water use of flat -rate customers."
In other words, this is a direct transfer of water service from those
who have already paid for water supplies, filtering capacity and transmis-
sion lines to the new users who move in and attach to the system. Service
to existing customers is cut to provide water to the new users. For years
the city policy has maintained that growth should pay its own way. The
metering program reverses this policy by making current residents share the
resources they have paid for with new users.
Basically, this policy manifests itself as a lawn tax. Flat -rate cus-
tomers, some of whom have been here for nearly a hundred years, will be
forced to pay a much higher price for a service they have traditionally en-
joyed. This from a water utility, that up until now, has always operated
with a surplus of revenue.
13 On paF.es 7.48 and 7.49 the report discusses the effect of water meters
on customers' charges. The report says, "A misconception shared by many
utility customers is that the installation of meters will increase the
amount they pay for water. The amount a customer pays will only increase if
they retain the water use habits of a flat -rate customer"(i.e., continue to
water their lawns).'those who alter their habits to use water more effi-
cient),/'(a value judgment)"should see little change in their average monthly
water bill."* Thus these customers pay the same but get much less water.
This is, in fact, an increase in the price of water.
14. On page 7.49, a table is presented showing a 16 percent increase in
water rates to flat -rate customers to overcome inequities caused by high
rates to metered customers. This is in the face of a projected 9 percent
increase to meet increased revenue requirements.
Reduction of Peak and Annual Use
Page 4.1. The Water Demand Management Options report lists 3 principal rea-
sons for installing water meters: 1) reduce system costs, 2) encourage con-
servation, and 3) provide equity to customers.
1 5. 1. It is always well to reduce system costs but the other side of the coin,
the effect of reduced services, must also be considered. The water users are
also the owners of the system and so far they have always provided plenty of
money to acquire new water supplies and to expand the system. They may not
be ready to take less service, particularly when they find how high water
rates will have to be raised to get them to use less water. This is
*Underlining added.
-4-
essentially a lawn tax to cut water use; as such it should be voted on just
as recent proposed tax increases have been voted on by the people.
16 2. The second issue, conservation, is essentially an ideology based on a
misunderstanding of the nature of the resource. Conservation is not nonuse,
it is concerned with the when of use. In the case of a flow resource such
as water, it has to be used when it flows down the river or it is lost (un-
less there is a very large reservoir to store it in). Because of the large
number of water rights filed on the Poudre River, whenever Fort Collins does
not use its water, someone else uses it. This is true with direct flow
rights as well as irrigation water owned by the city. The bulk of C-BT
water not used is cancelled at the end of the season. Too much conserva-
tion on the part of the city gives this valuable resource to other water
right holders free of charge. It is not saved in any sense.
17. In table 7-11 water meters are expected to reduce water use in 1990 by
from 4.3 percent to 10.6 percent, depending on alternative selected. The
largest reduction should come from total metering which is expected to cost
from $3.3 million to $4.2 million dollars. The amount of water "saved" (not
used) is 2,930 AF. The cost of this water is $1,126/AF at the $3.3 million
estimate or $1,433 AF at the $4.2 million estimate. By the year 2000, the
savings are 3,785 AF at a cost of $872/AF at $3.3 million and $1,162/AF at
$4.4 million cost.
All of these costs exceed the current price of purchasing new water,
which is about $800/AF or less.
18. 3. The third point of equity is overblown. The report says a flat -rate
user with 9,000 square feet of yard pays the same as one with 6,000 square
feet. Therefore, this is inequitable. This inequity could be solved by
charging more for each square foot or 100 square feet over 6,000 square
feet. This is an administrative matter that could be easily handled as
suggested in the report.
E
-5-
Table 1 (cont'd.)
• Annual :
• : 1/: water
Citv :Year:Population- :deliver,:per
System
delivery2/:
capita-
City
water,:
delivery:
City
per capia
delivery-/
Average
revenue
ner A.F
•
A.F.
Gal./dav
A.F.
Gal./dav
Dollars
Fort Collins :1980
70,000
17,339
221
16,707
210
177
:1981
72,500
16,280
200
15,748
190
237
:1982
74,000
15,594
188
14,176
171
283
:1983
75,330
16,865
200
15,332
182
306
Loveland '1972
19,710
5,876
266
5,582
253
135
'1973
21,570
6,367
264
6,049
250
147
'1974
23,425
7,508
286
7,132
272
115
'1975
25,280
7,056
249
6,703
237
133
1976
27,520
6.925
224
6,579
213
219
1977
(29,760)
7,134
214
6,777
203
190
1978
(31,222)
7,884
222
7,489
210
118
1979
29,738
7,654
230
7,271
238
121
:1980
30,244
8,940
264
8,493
251
195
:1981
30,758
8,317
241
7,901
229
373
1982
31,765
6,706
188
6,371.
.179
456
1983
32,500
6,489
178
6,165
169
564
Greeley :1972
45,800
15,674
305
11,755
229
69 '
:1973
48,550
16,175
297
12,131
223
74
:1974
50,975
16,758
293
12,570
220
87
:1975
(53,500)
17,626'
294
13,220
220
85
:1976
(54,595
18,081
295
13,455
222
85
:1977
(56,230)
19,063
303
14,297
226
86
:1978
(60,200)
19,255
286
14,873
220
97
:1979
(64,580)
18,584
257
15,271
211
.121
:1980
53,006
20,339
343
16,401
276
137
:1981
54,000
19,186
317
16,233
268
177
:1982
55,933
20,094
321
16,982
271
193
:1983
55,977
20,244
323
17,005
271
253
l/ City estimates
of population may exceed census of
population
figures during
some years.
2/ Water delivery
divided by city population. It includes industrial, commercial,
municipal uses (i.e.,
street
washing, park
use, etc.) in addition
to residential
use..
3/ City delivery
subtracts
water delivered outside the corporate boundaries.
So+!rce: Anderson,
R.L. Expansion
of Water
Deliveries
by Municipalities
and
Special
Districts,
Northern
Front Range.
Colo. Water
Resources
Research Institute,
Tech. Report
46, Oct. 1984, p. 4.
Source:
Anderson, R.L. Expansion of Scheer Deliveries by Municipalities
and
Special Districts, Northern Front Range.
Average Revenue and
Per Capita Water Use
Loveland
1972-1983
500
Ave Rev/A.F.
500
400
u"
T
Q
300
300
0
200
�-
\
��
200
r
Use/Capita/Day
a
100
100
1972 1973 1974 1975 1976 1977
0
1978 1979 1980 1981 1982 1983
500
Average Revenue and
Per Capita Water Use
Soo
Longmont
1972-1983
400
_. -
400
_.......Ave Rev/A.F.
u:
T
co
Q
300
-
300
200
200
c
o
Use/Capita/Day
m
100
100
0f
f I I 1
0
1972 1973 1974 1975 1976 1977
1978 1979 1980 1981 1982 1983
650
Average Revenue and
Per Capita Water Use
650
600
Broomfield
1972-1983
too
5o0
Ave Rev/A.F.
500
u
>
Q
400
400
p
N
In
f0
300
300
2
O
0
�
200
Use/Capita/Day
200
100
100
0
0
1972
1973 1974 1975 1976 1977 1973 1979 1980 1981 1982 1983