Loading...
HomeMy WebLinkAboutWater Board - Minutes - 08/23/2001r City Council Liaison Water Board Chairman Water Board Vice Chairman Chuck Wanner Tom Sanders - 491-5448 John Moms - 491-0185 Staff Liaison Secretary DeEtta Carr - 221-6702 Kim Vondy - 221-6383 ROLL CALL Board Present Tom Sanders -Chairman, John Morris -Vice Chairman, Paul Clopper, Joseph Berquist, Bill Fischer, David Lauer, Rami Naddy, Ted Brostad, Thomas Brown, Robert Ward Staff Present Dennis Bode, Wendy Williams, Dave Agee, Ellen Switzer, DeEtta Carr, Patty Bigner, Bill Switzer, Brian Janonis, Kim Vondy Guests Present Douglas Yadon, Sr. Geotechnical Engineer - Short Elliott Hendrickson, Inc. Board Absent David Frick MEETING OPENED/ROLL CALL Chairman Tom Sanders opened the meeting. The following items were discussed: MINUTES APPROVED Paul Clopper made a motion to approve the minutes; Bill Fischer seconded the motion. Motion carried. 2002-2003 BUDGET REVIEW Ellen Switzer noted that the Financial Statements have been included in packets. In November, Council will adopt the 2002-2003 Budget. Utilities have five funds. Appropriations can be transferred within a fund but can not be transferred between capital projects. Each of the utility funds is separate from each other. The four enterprise funds are Water, Wastewater, Storm Drainage, and Light and Power and one Internal Service Fund, (the Utility Customer Service and Administrative Fund). Costs of the Customer Service and Administration Fund are allocated to the four enterprise funds based on estimated cost of service. The allocation is Water - 23%, Wastewater - 15%, Storm Drainage - 10%, and Light and Power - 52%. Final transfers will be based on actual 2002 and 2003 expenses not budget. The Water Fund is projecting a 0% rate adjustment in 2004 and a 6% increase in 2002 and 2003. Ellen displayed on overhead a graph of the "Regional Annual Water Bill Comparison (2001 Rates) Based on Residential Use of 132,000 gallons" which shows the City water rates are at the median. Policy highlights for the Water Fund indicate that the projected revenue exceeds the debt service requirements. Debt service requirements are that we have water bond coverage greater than 1.1. FORT COLLINS WAT* PARD MINUTES • • PAGE 2 MAY 24, 2001 Ellen reviewed the Water Fund 2002 budget graph totaling $32.7 million in 2002 and increasing to $33.5 million in 2003. Operations are about $8.5 million of the full water fund budget with personal services making up a large portion for the O & M Budget. Water treatment plant has reduced their staff by two and those positions have been transferred elsewhere. No significant changes in O & M Budget. The Water Fund payment in lieu of taxes to the City's general fund equals 6% of the utility's operating revenue and totals $1.34 Million per year. The Utility also pays the City's general fund for services they provide to utilities which totals about $878,000 per year. A transfer to the Customer Service and Admin Fund equals about $2.7 Million per year and principal and interest on an outstanding debt totals about $9 Million a year. Average interest rate is less than 4%. The Minor Capital Budget for 2002 & 2003 is $2.4Million. Capital Projects is $7 Million per year and includes Meter Conversion, SW System Improvements, Halligan Reservoir, Gravel Pit Storage Ponds, Water Treatment Plant Facilities, and the Poudre Pipeline. Dave Agee noted that they were trying to be conservative in projections but are expecting a 2% growth. Anheuser Busch, in addition to paying for water, pays a supplemental user fee. Fort Collins has significantly invested in capital, which is driving the rate increase. Rates for Wastewater are projected to increase 2% for 2002 and 2003 and 2.5% in 2004. Projected revenue exceeds the debt service requirements and the fund reserve requirements are being met. Ellen reviewed the Wastewater Bond Coverage Chart noting that coverage of 1.15 is required to meet the bond requirement. Dave Agee noted that typically expenses are less than projected and revenue is higher, a conservative approach to budgeting. No study has been done to determine what a private utility would pay for pilots; the 6% is set by Council. Ellen pointed out that the Wastewater Fund Budget would be going down in 2003 from the 2002 budget. Of the $6.7 million for operations, two-thirds is for personal services. The Water Reclamation Plant has reduced staff by two. General Fund transfer pilot equals $720,000 per year and payment for administrative services is $615,000. The transfer to the Customer Service and Admin fund equals $1.8 million per year and the principal and interest payment totals $5.7 million. The Minor Capital is $1.8 million per year and the Capital Projects equals $2.1 million in 2002 and $1.2 million for 2003. Operating revenue is showing a 2% increase for the rates plus projected growth. Total wastewater revenues are estimated at $18 million per year. The Storm Drainage Fund shows a 45% rate adjustment increase in 2002, 10% increase in 2003 and 10% in 2004, 7% in 2005 and 6% in 2006. Council preferred a combination of pay-as-you-go and a $15 million bond issue in 2002 to jump-start capital construction. Ellen reviewed the Rate Comparison graph for the front -range showing Fort Collins at the highest rate. Revenue projections will exceed the debt service requirements. In the storm drainage fund, the bond coverage is 1.25, which is slightly higher than water or wastewater. The Storm Drainage Fund 2002 budget shows $9 million, which does not include the $15 million bond issue planned for 2002. Stormwater Fund does not pay a payment in lieu of taxes. The operations portion of the Storm Drainage Budget, $1.1 million per year is for personal services. No additional employees will be added. The admin transfer to the general fund is $272,000 per year. The Customer Service & Admin transfer is $1.1 million per year and the principal totals $1.7 million and interest $1.9 million per year. The Minor Capital equals $1.2 million per year and the capital project budget for 2002 is $905,000 and $530,000 for 2003. Ellen noted the $15 million bond issue planned for 2002 and that the associated capital projects are not included in this budget, so those appropriations will have to be made FORT COLLINS WATOPARD MINUTES • • PAGE 3 MAY 24, 2001 separately. The 2002 Operating Revenue includes the 45% rate increase that has been projected and the 10% increase for 2003. In review, if adopted by Council, rate increases will be 6% per year for water for 2002 and 2003, 2% per year for wastewater, and 45% in 2002 for stormwater and 10% in 2003. The projections are to maintain all bond coverage requirements, to maintain adequate reserve levels and make no significant change in current policy direction. Dave Agee noted that a lot of communities handle stormwater through public works so we do not have their figures to compare. Thomas Brown noted that it would be helpful if information was summarized in cost per capita. Dave Agee agreed trying to include this in future budget presentations. David Lauer would like to see closer comparisons to other municipalities including types of services for their dollars. Motion John Morris made a motion to recommend approving budgets and proposed rate increases as presented. Ted Borstad seconded the motion. Discussion Paul Clopper noted he liked the conservative budgeting approach. Tom would like to see about suggesting an upper limit for principal and interest in the future. Dave Agee agreed that it was a good idea, and he could possibly bring information to the board during off year for discussion. Dave Agee noted that the separate Customer Service and Administrative fund budget has made for more direct accounting of overhead expenses. Reorganization has helped with staff reduction. Vote Approved unanimously. Staff Reports • Treated Water Production Summary - Dennis Bode referred the Board to handout "Treated Water Monthly Summary." He noted that in June, 3,874 acre-feet of water was used, which is about 10% above the average projections for an average month. July is currently close to the average. Dennis pointed out on the graphs in Boards packet that year-to-date, the city is close to 94.5% of average. Committee Reports • Water Supply - Tom Brown: Committee met and reviewed the draft of the water supply policy for the City. Committee addressed issue of rental water, specifically the letter sent to the Mayor from the County Commissioners. The letter proposes the use of a point system for deciding priorities among potential entities that wish to rent our surplus water. Committee members seemed to be sympathetic to the goal of preserving agriculture land and open spaces in Larimer County. The committee noted five concerns with the suggested point system: 1. The system of points doesn't do much to effectively preserve open space because it gives very few points for conservation easements or other long term decisions to set land aside. It focuses mostly on farming issues. FORT COLLINS WAT*0ARD MINUTES • • PAGE 4 1 MAY 24, 2001 2. The system of priorities will be perceived as favoritism. This system will certainly favor some farms over other farms. 3. Ignores other potential uses of surplus water. 4. It would be a cumbersome system to administer. 5. It would restrict the Citv'$ flexibility to manage surplus water in the future. Next meeting is scheduled for SepLemb9t-7'" at 3 p.m. Should have more information for the board at the next meeting. • Conservation & Public Education - David Lauer - Next meeting is scheduled for September 270' at 1:30 p.m. Other Business • A facilitator should be selected next week for the fluoridation task force. • Joseph Berquist would like to suggest reviewing future budgets earlier, to possibly help keep rates down. Meeting adjourned at 4:50 p.m.