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HomeMy WebLinkAboutWater Board - Minutes - 02/19/1988WATER BOARD MINUTES February 19, 1988 Members Present Norm Evans, President, Henry Caulfield, Vice President, Neil Grigg, Marylou Smith, John Scott, Tom Moore, Jo Boyd, Tom Sanders, Jim Kuiken (alt.), Chester Watson, (alt.) Staff Mike Smith, Dennis Bode, Andy Pineda, man, Assistant City Attorney Linda Burger, Ben Alexander, Paul Eck - Guests John Bigham, Agency Coordinator, Northern Colorado Water Conservancy District Members Absent Ray Herrmann, Dave Stewart President Norm Evans opened the meeting. The following items were discussed: Minutes The minutes of January 15, 1988 were approved as distributed. John Bigham distributed NCWCD reports on snow pack, water reports and storage capacity of the reservoirs. In the future, since the District Board meets one week prior to the Water Board meeting, those reports will be approved and mailed to the Water Board secretary for distribution to the Board and staff. Mr. Bigham announced that the annual spring water users meeting sponsored by the District, will be held on March 22 in Greeley at the Raintree Inn. Addi- tional information on that meeting will be forthcoming. He urged Water Board and staff members to attend. He also welcomed attendance at District Board meetings held on the second Friday of each month. He reported that the District Board voted to file statements of opposition to all three Thornton filings. Norm Evans referred to the last District Board minutes in which a resolution with reference to the proposed exchanges between Boulder and Longmont with either Northglenn or Westminster was discussed. The resolution seemed to be oriented to the possibility that CBT water could be exchanged "down there some way." The resolution seemed to be designed to reaffirm that the Board would be judicious in allowing some kind of exchanges. Mr. Bigham believes Water Board Minutes February 19, 1988 Page 2 it could have been in the sub -district minutes where the Board was deliberating on boundaries. Dr. Evans pointed out that the Water Board has a concern about delivery of CBT water outside the District boundaries. The exchanges that were discussed in those minutes at least seemed to infer the delivery of CBT water outside of District Boundaries. Dr. Evans thinks the resolution was rather vaguely worded. Mr. Bigham said that he would look into it and if there is something to report, he will see that it is forwarded to the Water Board. Proposed Rental Rates Each year after the irrigation companies have established the annual assess- ment rates for their water, the Water Board recommends to the City Council the rental rates for the City's surplus water. The proposed rates are based on several factors including past rental rates in the area, current assess- ments, and anticipated supply and demand conditions. The rental prices for CBT, North Poudre, and Water Supply and Storage Company shares are based pri- marily on market rental rates since there is an active rental market for these shares. With the very limited rental markets for the southside ditches, the rental prices are based primarily on assessment rates. Dennis Bode, referring to a table with the proposed rates, explained that the rates that have been proposed are very similar to the ones that were compiled last year. The market hasn't changed significantly since then. The North Poudre rate has changed slightly. Last year at $65 per share, staff thought they were below what most of the others were renting North Poudre shares for, so they adjusted the rate up to $70 per share. The southside ditches were left at the assessment rate. "If they changed slightly, we adjusted them so they were equal to the assessment rates," Mr. Bode explained. Tom Sanders asked how much total revenue the City receives annually on this. Mr. Bode replied that last year the City received about $73,000. "Does that go to our water fund?" "It goes into operations," Mr. Bode said. "You don't use it for buying water," Dr. Sanders asserted. "No, it doesn't go into the Water Rights Fund." Tom Moore commented: "You are still paying the assess- ments on the ditch companies. Does it break even?" Mr. Bode replied that it is fairly close on the ones we rent. Upon approval, staff will take these proposed rates to the City Council, Mr. Bode concluded. Tom Sanders wanted to know why we don't charge more and make a profit. "We basically try to stay with the market Price," Mr. Bode responded. He explained that CBT water, North Poudre shares, Water Supply and Storage Com- pany shares and a few shares in Pleasant Valley and Lake Canal, are the main types of water rented. Henry Caulfield asked, "Can you assure us that we are not renting this below the market?" Mr. Bode believes that certainly with CBT, North Poudre, and WSSC that it's very close to the market --as nearly as we can determine." "That's all we can charge," Mr. Caulfield agreed. Jo Boyd wanted a rough estimate of how much it costs the City a year "to sit on" all the water it has procured since we aren't able to rent all of it. "Is that above and beyond the reserve for a 100 year drought, Mike Smith asked. "I'm talking about a 1-in-5 year drought reserve," she said. In other Water Board Minutes February 19, 1988 Page 3 words, in an average year, haw much does it cost the City to sit on it? In terms of operating costs, Mr. Bode thinks our total assessments for all of our water supplies is approximately $300,000 annually. Is that the total water supply? "Yes," but most of that we do use," Mr. Bode said. "What would the estimate of the loss on unrented water be?" It's fairly low, Mr. Bode assured Dr. Boyd; probably less than $50,000 if you consider New Mercer, No. 2 and Arthur shares which is most of it. "Would your guess be that we have about $40,000 in losses a year in water we have acquired but we aren't able to let anyone use for a fee?" "It's in that general area," Mr. Bode replied, "but I'm not sure it's a loss; more an expense of owning it." Dr. Boyd's point was to estimate the cost of aggressively acquiring water as an annual cost of doing business. Mr. Caulfield added, "and having our capital tied up there." He thinks we must recognize that. MaryLou Smith compared it to the cost of the insurance. Mike Smith explained that one of the things the City did last year when it procured that large block of CBT water was enter into a 10 year mandatory lease back "where we were going to lease it back for 10 years, because we didn't need it." Dr. Boyd proclaimed that plan to be "absolutely brilliant!" "Let's look at it in another way," Mr. Caulfield began. "We received $73,000 on leasing. What judgement do you have as to the percentage that that water bears to the total that's available for lease? Mr. Bode said it varies quite a lot from year to year, although "we leased most of what we were comfortable with leasing last year in terms of North Poudre and CBT water." In that sense, what Jo Boyd is talking about is really a small number, Mr. Caulfield stated. "I think it is," Mr. Bode agreed. Henry Caulfield moved that the Water Board approve the proposed rental rates as listed in the table. After a second from Jo Boyd, the Board passed the motion with a unanimous vote. Report on Water Supply Policy Action Mike Smith reported that at the Council work session on Tuesday, they voted to appoint a three member Council committee to work with a three member com- mittee of the Water Board to discuss the issues relating to the Water Supply Policy Report. Examples of the kinds of issues they will address are: What kind of drought insurance do we want: 1-in-50, 1-in-100 or 1-in-20? What kind of policy do we want to adopt as far as acquiring water? Do we want to main- tain the status quo? Do we want to be more aggressive? How much do we pro- pose to acquire if we choose to be more aggressive? Do we want to use restrictions as a management tool? Those issues and possibly others, will be the topics the sub -committee will discuss. Their first meeting will be Wednesday, February 24 at 4:30. The Council committee members are Gerry Horak, Bob Winokur and Loren Maxey. The Water Board members are Henry Caul- field, Neil Grigg and MaryLou Smith. Tom Sanders wondered if the Council is usurping the direction setting and decision making functions of the Water Board. Mr. Smith believes that the Council wishes to work towards a solution or compromise to get something accomplished. They don't know if they have enough information to make that decision themselves. They are interested in input from the Water Board, and Water Board Minutes February 19, 1988 Page 4 they want to see what can be worked out in terms of a water policy. MaryLou Smith asked if the Council discussed the Water Policy at great length. Mr. Smith said there wasn't a whole lot of discussion; perhaps a half hour. Committee Reports Program Evaluation Committee Water Board members received a revised version of the committee's recommend- ations. Neil Grigg, chairman of the committee, said that the revisions pro- vide more focus. There is a list of three recommendations and a list of recommended goals along with some discussion. What is the role of the Water Board and what is the role of the Program Review Committee? Following a lengthy discussion at the last meeting, the Board decided that there is an undefined area somewhere between policy and operations which the Board at least needs to be informed about. As a result of that, the Committee recommends that the Board request from the staff, an annual presentation where operational and capital plans and programs are reviewed. This would not mean that the Board would be making judgements about what staff ought to be doing. After full discussion of its role, the Committee determined that its strategy development function is essential to the functioning of the Board at this time, and that its role in program evaluation might be better handled by the President, working with an ad hoc committee. The Committee recommends its charge to be as follows: The Committee will prepare goals, objectives, strategies and plans for con- sideration by the full Water Board. Because of this recommended change in the Committee's charge, the name of the Committee should reflect its charge. The Committee recommends its name be changed from "Program Evaluation Committee," to "Strategic Planning Commit- tee." Implicit in these Committee recommendations is the concept that it is the role of the president to work with the full Board and the committee chairs to set committee goals, agendas and the allocation of assignments. Dr. Grigg also drew the Board's attention to the attachment which listed the workshop goals on the left and the Committee's recommendations on the right. The Committee identified which of the items suggested at the workshop pro- perly ought to go to which committee for consideration. The Committee made no judgement about which of the goals are appropriate for the Water Board. Henry Caulfield moved that the Board accept the Committee's report and approve the three recommendations. After Tom Moore's second, and a vote of the Board, the motion carried unanimously. MaryLou Smith asked if it is now necessary to adopt the Committee's version of the goals that emerged from the workshop, or to determine if those are indeed the goals of the Water Board for 1988-89, "or do we want to let these goals guide us in an informal way?" Water Board Minutes February 19, 1988 Page 5 Henry Caulfield pointed out that the Committee determined that the President has asked each of the committee chairmen to prepare goals, responsibilities, duties, programs etc. for their committees. .The President, in consultation with the chairmen, would match what the committee chairmen come up with regarding these goals and objectives and, in effect, decide what the program is, guided by the list of goals and what the committee's choose as their duties and responsibilities. It seems to Mr. Caulfield, at this point, to keep it flexible, subject to formalization after there has been a consulta- tion with the committee chairs. The Engineering and Utilities Service Committees had no reports. Mary Lou Smith, chairman of the Conservation and Public Education Committee, said they would have a report in March. Henry Caulfield, chairman of the Legislative and Finance Committee, announced that Linda Burger will meet with the Commit- tee on March 3 at 3:00 to inform them about how the City currently handles issues that arise in the legislature that are pertinent to the Water and Wastewater Utility. (That meeting has since been changed to Monday, March 14 at 3:00.) Jo Boyd reported that her committee on Regional Supply Coordination has met twice. At one of the meetings, Mike Smith presented an information update. The Committee has decided to have a meeting in the near future involving a limited number of people form the Water Board and from various Districts and staff "to discuss a topic of interest to all of us and yet non -threatening." The Committee would like to invite two people from the state: a regulatory person and an engineer to speak to the group about what new water regulations will mean and from the engineer what small and larger districts can do to implement these regulations. "Mr. Smith will help us with the guest list," she said. It will be a dessert type function using a hotel meeting room. Henry Caulfield believes that the City of Fort Collins, because of its out- standing water quality laboratory, "has something to offer in the context of cooperation." Dr. Boyd related that our lab has always been willing to help when the Districts "have been stuck on something." She added that obviously it isn't possible to do this too frequently. Mike Smith agreed that the lab is not staffed to perform much extra testing. Mr. Caulfield'asked if the Districts are equipped to do some testing. Mr. Smith said that some of the testing goes to the State; other tests are contracted out. Mary Lou Smith stated that over the years, the Board has received reports of staff meeting with these other entities. Not only is she confused about whom the staff is meeting with but how does what Dr. Boyd's committee is doing correlate with what staff has already begun? Mr. Smith responded that when he met with Dr. Boyd's committee, they talked about that. He related that there hasn't been a meeting of the regional group for more than a year, because of various other commitments. To get it started again, he believes the Committee's approach will work fine. He men- tioned, however, that recently one of the consultants sponsored a seminar to which he invited the staffs from the Districts and Greeley, as well as repre- sentatives from the State. It was a half day session where all the new regu- lations were discussed. "Perhaps our meeting would be superfluous," Dr. Water Board Minutes February 19, 1988 Page 6 Boyd remarked. Mr. Smith said, not necessarily; the Board members weren't there. "The staffs have been informed. It probably would be good for the Boards to hear it too," Dr. Grigg asked if the "regulations" refer to the new revisions to the Safe Drinking Water Act. "Yes," Mr. Smith replied, "the 1986 amendments." Dr. Grigg asked Dr. Boyd if her committee was considering raw water. "We had a list of things and raw water was certainly one them," she said. They had to start some place and they looked for a place that was non -threatening. "In this way, we could learn some information ourselves," she added. "Water quality can be a touchy issue among the Districts if it is approached in cer- tain ways," Mike Smith warned. Giving it a "common enemy" kind of approach might be more acceptable. "We are all faced with this issue, so let's get together to deal with problems," kind of approach. Let's not get into comparing water quality because the Districts are very sensitive about that. Dr. Boyd said that the Committee would appreciate staff's guidance in selecting speakers and planning the format of the meeting. Neil Grigg related that he has a graduate student who is doing his thesis on possibilities for regional cooperation. "We are using the Fort Collins and Loveland drought studies as tools," he said. They have contacted Greeley to learn about their facilities. Dr. Grigg is not certain about the practical use of the results because of the constraints of the study: namely, no fund- ing and a foreign graduate student who is unfamiliar with the local situa- tion. He went on to say that they will be theorizing about things like: what if you located a regional treatment plant here and what if you shared raw water from the Thompson and Poudre, and what if Greeley decided to change some of their operational schemes and left raw water high in the basin during periods of drought? The study will be released in a few months and will be a resource for the committee. Dr. Grigg said that one thing became clear immediately when looking at the Fort Collins and Loveland drought studies; during a drought both the Thompson and the Poudre would be dry. As a result, there isn't a benefit to sharing raw water from those two sources. "Those are the kinds of results we are seeing already," he added. He explained that this study will not look at the cooperation between cities and agriculture, an approach which Henry Caulfield is advocating. However, Dr. Grigg believes that this will be one of the more promising cooperative activities rather than cooperation among the cities on raw water or treated water. President Evans stated that the Board will depend rather heavily this year on the standing committees, "so we look forward to receiving further commit- tee reports." Staff Reports Henry Caulfield, with the concurrence of the Board, thanked Paul Eckman for his excellent memorandum on conflicts of interest. "It was clear, succinct and unambiguous," he stressed. Tom Moore thanked the staff for the Water Board Annual Report. It was a nice r • • Water Board Minutes February 19, 1988 Page 7 Tom Moore thanked the staff for the Water Board Annual Report. It was a nice overview of the year and he appreciated it, he said. Others agreed. Tom Sanders asked if Anheuser-Busch "is on tap full speed now with 4.5 mgd." "They are getting there," Mr. Smith replied. They are just starting the pro- cesses. He added that the wastewater treatment expansion is nearly completed operationally. He also reported that the composting project is close to being finished. Other Business Neil Grigg asked the Board to discuss the subject of strategies if time is available, particularly in light of the committee that the Council has created. Dr. Grigg's committee had a productive session at a meeting yester- day and the committee could lead the rest of the Board into a discussion. Tom Sanders asked if there was anything new on Excalibur. Mike Smith reported that staff has asked the City Council to meet with them in an execu- tive session on Tuesday evening. If Council agrees to meet, Attorney John Carlson will bring them up to date on the Excalibur issue and suggest what actions we should be pursuing. To this point, Council has been informed about this situation on about the same level as the Water Board. The only things Council and Water Board are not aware of are some highly confidential issues "which we would be happy to share with you if you would want to go into an executive session," he said. Since John Bigham was about to leave, Norm Evans asked him about something he read in the NCWCD minutes. He noticed that Greg Hobbs reported on the Wild and Scenic Reserved water issue. According to his report it appears they are heading for some kind of settlement of the issue with the Forest Service on the Cache La Poudre River. Mr. Bigham said yes, they are hoping for a set- tlement. Henry Caulfield asked, "what does that mean?" Mr. Bigham said he is not privy to those negotiations so he can't answer that. Mr. Caulfield persisted: "On Joe Wright, for example, is he settling for us?" Mr. Bigham said he doesn't think it affects anything except what the District is pro- tecting on the Poudre Project. Dr. Evans said that it seems the fluvial stream bed issue is the central pivot point. Chester Watson, whose company is involved with this, agreed that it certainly is the central pivot point. "I think they realize that they don't have a very strong position on the scien- tific question," he said. Norm Evans asked Linda Burger to give an update on some of the major activi- ties coming before the Water Quality Control Commission that she thinks would be of interest to the Water Board. "I heard that you aren't going to con- tinue on the Commission," he said. She confirmed that she has decided not to seek reappointment by the Governor, but she will continue to serve on the Commission through the month of May. Ms. Burger reported that the Commission has been extremely busy the last few months. They recently revised the State 401 certification regulations of fed- eral 404 dredge and fill permits. We now have a regulation which applies to the operation phase of reservoirs as well as the construction phase, which was a very controversial issue because the EPA was going to step in and issue Water Board Minutes February 19, 1988 Page 8 401 certification for the operation phase if the state wouldn't do it. It's a very critical issue on projects such as Two Forks. The Commission recently adopted the regulations for industrial pre-treatment programs to be adminis- tered by the State. At this point it is not known whether or not any funds will be available either from the State or EPA to implement that program; we have regulations that will go into effect when funds become available. The 1987 amendments to the Water Quality Control Act require that states take over pre-treatment programs within a period of 5 years, "so within the next few years we will see that happening." The most controversial issues that are on the immediate horizon are the hear- ings scheduled in March that are a revision of the basic standards. The major issue is anti -degradation: What kind of an anti -degradation policy the State of Colorado should have; how much of an anti -degradation policy the State must have in order to be in compliance with Federal law? There is a law suit currently pending --the Environmental Defense Fund vs. the EPA. EDF is asserting that the EPA has failed in its responsibilities to oversee the State of Colorado's program in not disapproving the State's current anti - degradation policy and issuing a more stringent policy in its place. "We have this law suit taking place on the one hand, and on the other hand, the Commission is attempting to make modifications in the anti -degradation policy that will come closer to meeting the federal requirements, but not place all the facilities in the State in a position of having to build advanced waste treatment facilities." The primary issue involved there is what constitutes a high quality stream, and therefore is not subject to any degradation. In the past, high quality streams have been primarily those in wilderness areas or national parks, etc. There is definitely pressure from Region VIII to classify any stream where the quality is higher than the standards as a high quality stream, and that would apply to the Poudre in Fort Collins. That will be a very controversial hearing. Ms. Burger will inform the Board within the next month or two how that comes out. Some parties are taking the position that there is insufficient federal authority in the federal act for the anti -degradation policy, so they express the "we don't have to do any- thing" attitude. Some environmental groups want anti -degradation on nearly every stream in the state. Ms. Burger related that the other major changes that are in the process, have to do with control of toxic pollutants. The Commission will be considering a regulation on bio-monitoring in April. This is a requirement that all facil- ities run tests on their effluent by placing water fleas and minnows in their effluent to see if they survive. If they don't, "you would have to do a major analysis of your system to find out where toxins are coming in and cor- rect the problem." After a three year period, if you have an instance where the animals are killed by the effluent, that's a violation of the discharge permit and carries a $25,000 a day fine. She thinks the City can expect to see a requirement for bio-monitoring in its permit renewal which comes up next year. That takes care of those pollutants that are toxic to aquatic life. The other issue is those pollutants that are toxic to human beings, carcinog- ens, etc. Ms. Burger thinks we can expect to see requirements for the priority pollutant scan in wastewater for the EPA Priority Toxics list. There Water Board Minute • February 19, 1988 Page 9 are 60 to 80 of them. In addition to that, there probably will be an addi- tion to the basic standards of the priority toxic list with standards that can be applied to streams on a case by case basis. Norm Evans thanked Linda Burger for the excellent impromptu report. "We appreciate your taking the time to keep us informed," he said. Henry Caulfield moved that the Board go into executive session in order that Mike Smith and Paul Eckman can apprise the Board on the confidential elements of the Excalibur matter. Mr. Caulfield noted that everyone in the room was a member of either the Board or the staff. John Scott seconded the motion. Norm Evans asked if Mike Smith and Paul Eckman were willing to do this. Marylou Smith was concerned about how comfortable the staff is about discuss- ing this highly confidential information. "It worries me that it's such a large group," she stressed. Mr. Smith and Mr. Eckman admitted that some of the issues could be explained better by John Carlson, chief counsel for the Excalibur matter. Mr. Eckman added that "if we get some direction from the Council during the executive session with them, we will have more of a sense of where they want to go and report that to you." Henry Caulfield asked: "Why can't you report to us what the options are?" "We can do that," Mr. Eckman agreed. The question was called. Nine of the 10 members who were present voted yes to hold an executive session. Mary Lou Smith voted no because of the reasons she stated earlier. The Board went into executive session. After the session, since there was no further business, the meeting was adjourned at 5:05 p.m. Water Board Secretary