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HomeMy WebLinkAboutWater Board - Minutes - 04/17/1987MINUTES Water Board April 17, 1987 Members Present Norm Evans, President, Henry Caulfield, Vice President, Neil Grigg, Tom Moore, Dave Stewart, John Scott, Jo Boyd (alt.), Jim Kuiken (alt.) Staff Rich Shannon, Mike Smith, Dennis Bode, Ben Alexander, Webb Jones, Andy Pineda, Paul Eckman, Assistant City Attorney Guests Laura Davis - Interested Citizen Members Absent Tom Sanders, Stan Ponce, Marylou Smith, Ray Herrmann President Evans opened the meeting. The following items were discussed: Minutes The minutes of March 20, 1987 were approved as distributed. Dr. Evans introduced and welcomed Jim Kuiken, the new alternate member of the Water Board. Mr. Kuiken is employed with James M. Montgomery; Consulting Engineers, Inc. Discussion of Water Supply Policy Report Rich Shannon prepared a presentation which eventually he will give to the City Council following revisions and suggestions from the Water Board. It was his hope that while the Board members were critiquing the report, they would do the same for his presentation. He said that much of the information for the report is lengthy, technical, and it relies on information based on previous studies. The dilemma is, "do you try to make a presentation to the lay people so they understand the technical nature of it or do you give them an overview that focuses on the policy implications and if their questions lead you to the details, so be it?" The staff has chosen the latter, he said, and that will be the nature of his presentation. The report that the Board received was built on several other reports that have been prepared in the fairly recent past: specifically they are the Water Rate Study completed in January of 1985, a Drought Study completed in July 1985, and a Water Demand Management study completed in February of 1986. Those three plus the current study represent a sizeable effort to do what should be done periodically in the Utility. That entails doing a thorough evaluation of where we are and where we are headed. The three prior studies have fed information into the water supply study. The executive summaries of each of those studies were included in the notebook distributed to the Board members. Page 2 Water Board Minutes April 17, 1987 Mr. Shannon stated that the intention today was not to revisit those studies unless questions lead us into areas where they would be helpful. These four studies collectively, in simplistic terms, have attempted to answer a variety of basic questions: How have our water acquisition policies served us in the past? How is the City going to fare during different periods of drought? What level of security do we want in Fort Collins with regard to our water supply? Are the customers paying their fair share and are rates based on a cost of service criteria? Are we acquiring the right mix of water? Do we think those same policies will serve us well in the future given what we now know and envision in terms of the metro -Denver area's intrusion into the water supplies of Northern Colorado? What should we be doing to promote conservation? Those questions and many more are the kinds of issues these studies were trying to address. The results are very positive, Mr. Shannon assured. The existing policies have served us very well. Our water position is very sound. Decisions made many years ago by Councils and Water Boards and those made more recently, have served us extremely well. As we look to the future, there are suggestions as to how we might change those policies so we maintain that same strong position in the future. Good decisions and long range planning lie at the heart of any utility. The plan that is being looked at is a 50 year time frame. The policies themselves can become quite detailed and technical, Mr. Shannon said. Pages 19-23 of the report reflect the current policies. The essence of those can be summarized in seven broad policy statements. These statements summarize the position from which other detailed policies come. The document given to the Board is lengthy, technical and it is meant to be an historic reference that explains in some detail what our logic has been, what our assumptions have been and what the calculations have been. Those seven policies can be summarized as follows: 1) Cooperation with Farming and Ranching There has been no change here. Fort Collins history has been tied extensively to the agricultural community. We should continue to be sensitive to what our water acquisition does to the farming and ranching interests whenever possible. 2) Reliability of Supply This is a fairly significant change. We are suggesting that the policy ought to be one of meeting or exceeding the demands of the 1 in 100 year drought. Currently our water supplies allow us to do that. Current policy states that we will meet the 1 in 20 year drought ten years ahead. Going to the 1 in 100 increases our security level. 3) Timing of Acquisitions a. Buy enough to stay ahead of the demands. b. Be aggressive when the market is right and when our financial resources allow. • 1 • Page 3 Water Board Minutes April 17, 1987 This is not particularly different from where we are -- perhaps a little more emphasis. 4) Process of Acquiring Water Rights and Storage This is similar to our current policy but somewhat more aggressive. a. Actual water purchases b. Possibility of leasing water c. Looking at a variety of areas in water storage Currently our water supplies are very good, but for the future we want to determine if our portfolio is balanced the way we want it to be. 5) Raw Water Requirements This is the policy where development brings water to the City at the time the land is being developed. They either bring water or cash in -lieu -of water. If we go to the 1 in 100 year drought requirement, we need to look at increasing the raw water requirements by about 20%. Because our reserves are good we are not in a position where that 20% needs to be imposed immediately; perhaps phasing it in over a 4 or 5 year period. To put that 20% increase in perspective, development that is bringing us units of CBT water today is probably acquiring those in the market for $850 - $900 a unit. Those same rights sold for about $2,000/unit 5 years ago. While 20% looks like a lot, it is somewhat relative when put into this kind of perspective with the history of the region. Equally important in the approach to the change in the raw water requirements, is that we would like to encourage more cash being brought to the City rather than water. Part of what was realized through the Drought Study was that all water rights are not the same. We want to make sure we have the right balance of types of water and amounts of storage. We are suggesting that it is advantageous for the City to build up its cash reserves, so when we see an opportunity to buy water rights in large quantities, hopefully at smaller per unit price, we can do that. We would try to set our cash -in -lieu -of rate at a level where it encourages cash. If we are looking towards building some storage projects, we would also like to build up our cash reserves for that purpose. As you can see, this policy is a substantial change. 6) Regional Cooperation This is not new. We want to ensure viability of the water supply for all City residents. We want to make certain we are aware of what our two neighboring water districts are doing, so City residents are well served into the future. 7) Demand Management This is a major concept when trying to look 30 to 50 years down the road. At the heart of this concept is the question of metering. The philosophy that the City has maintained for some time is that green lawns are important. This would not change -- it would continue to be supported by the policies being suggested. The policy encourages conservation and discourages wasting of water. At the same time we are adamantly saying that everyone should be able Page 4 Water Board Minutes April 17, 1987 to use ample amounts of water to continue this concept which has been a strong point of the community. Mr. Shannon went on to say that as the City looks 50 years ahead, there are opportunities to save us sizable amounts in terms of water acquisition costs and water treatment costs through an incremental metering posture. In the past, discussions around metering have been very emotional. Frequently they end up in an all or nothing kind of conclusion. As you know, only single family residences are not metered unless an individual homeowner requests a meter. The specific proposal is that we promote an incremental metering strategy. What that would entail would be: a. All new construction of single family residences would be metered. b. Existing residences would be retrofitted on a voluntary basis. Those two components would be new in terms of our practices. We are suggesting that we would come back and review the implications of those two changes in 3 to 5 years. It gives us a chance in a few years to look at the new subdivisions and how they are faring in comparison with existing ones. It also allows us to see what the community reaction was to voluntary retrofit which would be paid by the City. In the report on p. 32, a chart shows close to $15 million in present value savings over the 50 year period if the entire City was converted to meters. The suggested strategy wouldn't allow us to realize all that savings, but certainly some of it would be realized by proceeding in an incremental fashion. Because of the 50 year time frame, when we revisit the program in 3 to 5 years, we may have reason to want to be more aggressive about encouraging retrofit of existing unmetered single family homes. The action that would be requested at the end of the presentation to City Council would be for Council to let staff know if it is comfortable with the issues. Following that, appropriate resolutions or ordinances in support of these policies could be developed. Or the Council might think there is need for more to be done; perhaps another Council work session. President Evans called for comments from the Board. Neil Grigg said that it should be made clear that the 20% increase in the raw water requirements would apply to what developers were required to turn over to the City. John Scott commented that essentially we are adding 20% more raw water to the City's supply. Dennis Bode clarified that it is just the new water that is collected. Mr. Scott referred to the recommendations in the report under reliability of supply; 20% is stated there. "It leads me to believe that 20% is the difference between 1 in 20 and 1 in 100." Make sure the 20% is reworded to mean only new supply received. (p ii of executive summary) Tom Moore asked when we hope to take this to Council. Mr. Shannon replied that we are hoping for the month of June. This would give the Water Board two Page 5 Water Board Minutes April 17, 1987 full meetings to discuss it. Neil Grigg commented that if he were a new Council member and listened to the presentation, depending on how much homework I had done, I would probably be thinking that it was too general a level to know what the issues are. "I would want to see, in addition to what you presented, distillation out of what the real changes are, including cost benefits and impacts." He realizes that is a lot for a short presentation. He also said that he can't see how there would be much controversy over this because it all sounds like such a good idea; but the controversy will emerge. Related to that, Henry Caulfield said, in talking about the Raw Water Require- ment, he thinks staff ought to characterize that more clearly but briefly. For example saying that now it is roughly 3 acre feet per acre that is required from developers. Probably the new members won't know that. Dave Stewart remarked that, under Regionalization, he thought at first staff was referring to Greeley and Loveland. Make it clear, he said, that it is the Districts that we must work with closely, but, of course, we also need to include the others. Dr. Evans added that it needs to be made clear that there is overlapping service between the City and the Districts. With regard to the policy relating to farmers and ranchers, Norm Evans read the current Board policy referring to that. He suggested that perhaps a modi- fication of that could be included. Neil Grigg said it seems to him that Mr. Shannon's presentation presumed a certain level of expertise about the existing water system. He believes that we should include at the beginning, a short review of where we began (supply sources, developer's contributions, etc.) Tell them because of that our supply today is "X" acre feet and our demand is "Y" acre feet. After the Thornton threat emerged, the ramifications of that could be explained. Henry Caulfield suggested some slides that would project that information rather quickly. Dr. Grigg added that one of those slides might show the service areas and the locations of the Districts as well as the regional picture; for example, Loveland and Greeley. Mr. Caulfield suggested also some projections of our different sources of supply. Neil Grigg believes that there is a need to highlight what the issues are and why they are important. Some of these may be controversial as well. The issues he listed were: metering, responding to Thornton, dealing with regional cooperation, maintaining a water supply to meet a 1 in 100 drought and increasing the raw water requirement. We need to ask what each issue will cost, what benefits there will be, what the various impacts will be, and what we risk if we don't do it. He compared it to a decision matrix type of format. Mr. Shannon thanked the Board for their very helpful suggestions and comments. Next the Board discussed the Executive Summary of the report. Page 6 Water Board Minutes April 17, 1987 1. Under Reliability of Supply, it was suggested that "1 in 100 drought" be explained. Dave Stewart proposed that the reader be referred to the body of the text for the explanation. Jim Kuiken believes that the summary does not state how we stand in Section B under Supply and Demand. Dennis Bode answered that, at one time, staff had a ratio included that said we have a reserve factor of "so much." There was a feeling that we didn't want to highlight that quite as much. He explained that staff thought the 26,000 acre feet safe yield used for a 1 in 100 drought, which compares to the City's average annual treated water demand, allows the readers to judge that relative safety factor. Mr. Kuiken doesn't think just that statement is adequate. Rich Shannon suggested that they add a sentence in the section on Supply and Demand that says we currently have more water than we need to meet a 1 in 100 drought, but we are beginning to eat into our reserves. Mr. Kuiken was satisfied with that addition. John Scott believes it should be left in the raw water requirements and left out of the Reliability section. In D-1 under implications, it was suggested that the last sentence be omitted. 2. Demand Management Henry Caulfield suggested that following the sentence, "A phased metering program should be adopted and implemented to reduce annual water use and peak day demands," in parentheses it should state; "see Tab 2 for details." With respect to Tab 2, page 2 the section on metering, Mr. Caulfield wanted to know why the Board's recommendation of about a year ago was changed from: (a) All new homes should be metered at the time of construction. (b) All unmetered residential homes which presently have a meter yoke should have a meter installed in 1986-88 or a 3 year period. (c) All other unmetered homes should have a meter installed when ownership changes. (d) The City should participate in paying for the cost of the program as outlined in this report. (The Demand Management Report) What is being proposed now is: (1) Meters in all new construction (2) The City would pay to convert an existing residence when a homeowner volunteered. (3) After 3 to 5 years, the City would review the experience with metering in new neighborhoods and make a comparison between these and existing neighborhoods as well as gaging the public reaction to metering. "The question," according to Mr. Caulfield, "is do we want a softer policy or do we want to stick with what was originally proposed?" In his opinion, for purposes of going to the Council, it would be preferable to go with a stricter policy with a possibility of moving back. Neil Grigg thinks the policy the way it is written now seems simple. We pre— serve our options by having the 3 to 5 year review. He feels comfortable with Page 7 Water Board Minutes April 17, 1987 it. He can see why Mr. Caulfield would want the approach as he suggested. However, Dr. Grigg is not convinced of the advantages of hardening the policy at this time. Mr. Caulfield responded that, in dealing with these matters politically, he doesn't feel it is wise to "pull back" before we go to the Council, unless we have reason to believe they aren't going to go for anything but the weakest metering policy. John Scott asked if, in the present policy, the City would pay for the entire conversion. It was his understanding, in the previous recommendation, that the homeowner would pay for lines that would require replacement from his home to the street. Mr. Bode recalled that this issue was not resolved. Mr. Caulfield agreed and stated that the Board had discussed loan possibilities, etc. The current policy could be interpreted to mean the City would pay the whole bill. Jo Boyd contends that there needs to be an incentive for people to volunteer. Tom Moore commented that the City of Greeley found that people will volunteer if you make the metered rates far more favorable. Mr. Caulfield asked, "Do we want to take on the burden of changing the line to the street?" Dave Stewart recalled that the cost paid for by PIF's was based on $100 per meter. He cited an instance in Loveland where it cost about $4 to $5,000 in an old home where substantial repairs and changes were required. Mr. Shannon said that those who volunteer to be metered may be required to pay for repairs to the service line. Part of what would be learned over the next three years would be how many people volunteer, and what percentage also required service line repairs. President Evans tends to believe that is a good strategy. Neil Grigg asked if responsibility, according to the Clean Water Act, goes just to the water line or to the tap. Ben Alexander said, "We've always assumed it goes to the tap." In that respect, Dr. Grigg suggested, perhaps our responsibility for a deteriorating line to the house goes beyond metering. "If the situation was bad enough with those kinds of lines, where drinking water at the tap was impaired, should the Water Board undertake a study of how bad that problem is, and whether some kind of City assistance would be needed for people who would discover this along with the meter situation?" Mike Smith responded that the City could run into the problem of legal liability; who is liable for private property? "If their water service deteriorates because of their plumbing, our attorney's insurance carrier says it is not the City's responsibility," he stated. Mr. Caulfield modified the harder proposal by saying that meters be required in new construction, meters be installed in homes with yokes within 3 years, but not have the requirement of meters upon the sale of a home. Leave every thing else voluntary, he added. Since our yoke installation began in 1977, many houses with yokes have already been built and they are newer houses, so they don't raise the question of inadequacy of lines into the house, presum— ably, he concluded. Page 8 Water Board Minutes April 17, 1987 Tom Moore brought up the question of outside meter pits. He said that people he has spoken with from Loveland and Greeley are sold on them. He knows that staff here does not agree at all. Mr. Smith responded that staff does not favor the meter pit because they are convinced that automated meter reading will not take place in a pit outside the home, but it will happen automati— cally where there is access to the telephone line. Newer systems access the telephone line through a computer chip and the homeowner isn't even aware it is being done. Mr. Smith explained that Loveland and Greeley have experienced some problems with the current remote read-out system that is available. Apparently the system isn't as accurate as it should be. However, technology is changing so rapidly that recent problems with read-outs will soon be solved. Moreover, the advancements in meter reading is one of the arguments for not putting in a lot of meters quickly. Tom Moore asked how far do we want to take this? Isn't this a political decision for the City Council to make? Henry Caulfield believes that the staff and Board should present a technically sound alternative -- we could even present both alternatives, he added. He stressed that we can't be vague about this. Rich Shannon sees this issue being emotional enough that we may lose the rest of our policy document if the discussion "gets into meters or nothing." We also run the risk of placing the Council in a "Catch 22" where we force them to make a bad decision. Mr. Shannon suggests we give them a decision they can make reasonably comfortably. They can say, "We are making progress and we aren't wasting $15 million. Henry Caulfield contends that it may be entirely possible that the Council will see that we are the last City on the front range without meters, and they will determine that we need to go forward even more aggressively. He grants, however, that it could go either way. Jo Boyd believes that if the proposal is presented in the way staff has suggested the Council can take the option that they want "to go a lot tougher." Mr. Caulfield argued, "why not present both policies?" He believes if we just present staff's proposal, "Council will buy that even though they may be willing to go farther." Dave Stewart pointed out that a lot of the cost savings would only be realized if meters were installed by 1988. Dennis Bode clarified that a good part of it is based on trying to get meters in to try to delay the next water treatment plant expansion which is somewhat later than 1988. Mr. Caulfield added that our whole idea of the PIF paying for this, relates to that. Rich Shannon replied that he agrees, and that is why the $14 million savings was mentioned in the presentation. However, the slower phased metering approach won't allow us to realize all $15 million. Mr. Caulfield argued that this approach may mean that the City would be forced to charge for the metering and that is a poor result. To get the cooperation Page 9 Water Board Minutes April 17, 1987 of the citizens, it is highly desirable that we go ahead with our policy that the PIf will pay for the metering program and thus subdue resistance. President Evans summarized the two points of view that had been discussed. It appears to him that there is an alternative to include in the presentation that the homes with yokes be metered within a three year period and give that an opening to be discussed. Neil Grigg asked to look at the chart that justifies the City's investment in meters by saving on water treatment plant expansion. That chart is in the Demand Management report, he was told. Dennis Bode explained that the projected demand in 1990 is 62.1 mgd. We will have a capacity of 64 mgd after our current expansion. In 1991-92, we will start to get to the point where we will be reaching capacity based on these projections. Dr. Grigg asked if these projections are based on any growth rate. Mr. Bode replied that it is a declining growth rate. It is based on the City Planning Department's projection of about 134,000 by the year 2000. Does it look like a realistic growth projection, Dr. Grigg asked. Mr. Bode thinks it is fairly realistic. Dr. Grigg stated that the economic news is quite different from when the Board began discussing this question. He thinks this argument will probably come up. He emphasized that he is trying to determine the kinds of strong points to use to implement Mr. Caulfield's more aggressive metering program. The whole program hinges on growth projections and that makes him rather nervous. Dr. Evans reminded the Board that he had asked for reactions to his proposal to include in Mr. Shannon's presentation, the metering of all homes with yokes within three years. Mr. Caulfield said he would like the words in part C of the Incremental Water Metering Strategy report to reflect that this has been added rather than just being reviewed. It should appear that they have some alternatives now, not later, he added. Hearing no objections, Dr. Evans presumed that Rich Shannon received a sense of what the Board would recommend. The Board continued with the remainder of the sections in the Executive Summary. On No. 3, Timing of Acquisitions, Jim Kuiken commented that it is a direct conflict with the argument of metering. You can either conserve water or acquire more and we are recommending both, he said. Dr. Boyd suggested that Mr. Kuiken look at it this way: "You conserve water to avoid capital investment by having to build new water treatment facilities. You acquire water, which if your are lucky, you can lease back to agriculture, etc. for the future. You protect your backside by acquiring water, but if the meters fly, certainly the reason for metering would be to cut down on the investment in larger treatment facilities. Although you may say you are just putting them off for a few years, you take any prolonged time period and your investment will be lower over that period in staff, labor costs, as well as physical things. Therefore, you can have an avid acquisition program at the same time that you have conservation in the homes; which is the meter." Jim Kuiken thanked Dr. Boyd for her "eloquent" observation. Page 10 Water Board Minutes April 17, 1987 4. Process of Acquiring Rights and Storage No changes were suggested. Mr. Shannon asked, however, if anyone objected to staff placing emphasis on acquiring storage in the next few years. This doesn't necessarily mean building new dams, but also improving existing reservoirs and buying someone else's existing storage facilities: 5. Raw Water Requirements There was discussion but no changes were suggested. 6. Regional Participation/Cooperation Dr. Evans proposed that this section should say: "The City should continue to work with water suppliers throughout the region (originally said the Districts) to assure that adequate supplies are maintained in this area and that maximum use is obtained from supplies available." (changes in italics) There were no objections to this change. It was suggested that instead of making a recommendation at today's meeting, that this be an item on the agenda for the next meeting so that Board members absent today could voice their opinions and objections at that time. The Board was agreeable to that suggestion. Staff Reports Rich Shannon announced that in the orientation package that was sent to new City Council members, regional planning and cooperation was mentioned. In the sense that the phrase has been a Council goal for some time but with little definition, "we've planted the seed with the new Council." If they should choose to keep that goal as a priority, we should collectively try to put some expectations to that area that might help us in our goal setting too. Dr. Evans agreed that it would be very good "to all be on the same wave length." Molly Nortier announced that the date set for the Water Board/Staff workshop would have to be moved up to one of three dates in July because of various conflicts. The month of June is out because the consultant will be out of the country. Ms. Nortier will call the Board members about a new date. President Evans distributed a letter from the Northern Colorado Water Conservancy District announcing the date of April 30 for the joint meeting with several northern Colorado cities as well as the Windy Gap Committee. Board members were asked to hold that date open. Molly Nortier will inform the Board about further details when they are available. Molly Nortier announced May 6 and 13 as dates that Greeley is considering to host a joint meeting with Fort Collins and Loveland. Ms. Nortier has polled the Board and will let them know what the final choice will be. Other Business Henry Caulfield asked staff to give the Board an update on Anheuser-Busch with 0 Page 11 Water Board Minutes April 17, 1987 regard to the following issues: 1) acre feet of water; 2) the question stand on the pretreatment questions agenda item for the next meeting. where we stand with respect to the 4200 of the augmentation plan; 3) where we Mike Smith proposed that this be an John Scott also asked that the Rockwell situation be put on the agenda for the next meeting. Since there was no further business, the meeting was adjourned at 5:10 p.m. Water Board Secretary