HomeMy WebLinkAboutWater Board - Minutes - 05/16/1985Iilleln1*
Water Board
May 16, 198S
Members Present
Norm Evans, Chairman, Neil Grigg, MaryLou Smith, Tom Moore, Bill Elliott,
Dave Stewart, Bernie Cain
Staff Present
Bill Carnahan, Mike Smith, Dennis Bode, Andy Pineda, Curt Miller, Linda
Burger, Ben Alexander, Paul Eckman Assistant City Attorney, Roger Krempel,
Director Department of Natural Resources
Media
Mark Radtke, KCOL; Pete Simon, KCSU; Judy Harrington, Denver Post
Guests
Ward Fischer, Local Water Attorney for Anheuser-Busch; Jack Stein,
Director of Environmental Engineering Resources for A-B and Scott Reed,
Site Development Engineer for A-B; Carl Houck of Black 8 Veatch
Members Absent
Henry Caulfield, Mort Bittinger, Tom Sanders, Jim O'Brien (alt.), John
Scott (alt.)
Chairman Norm Evans opened the meeting at 9:05 a.m. The following items
were discussed:
Chairman Evans welcomed former Water Board Chairman Ward Fischer who
represents Anheuser-Busch as their local attorney for water related
matters. Mr. Fischer introduced Jack Stein and Scott Reed,
representatives from Anheuser-Busch.
Ward Fischer explained that the purpose for this morning's meeting was to
bring the Water Board up to date with regard to the plans that A-B has and
how they will implement those plans concerning the acquisition and the
transfer to the City of the 4260 a.f. of water which the Brewery is
expected to use. Under the master agreement between A-B and the City,
A-B agreed that it would turn over raw water rights equal to its
consumption in compliance with City policy. The Water Board examined the
agreement and reported to the Council as to the propriety of the concept.
Jack Stein reviewed the Water Acquisition Program. When A-B purchased the
1,133 acres of property for the Brewery, they acquired 1,341 acre feet of
water. That left them with 2,919 ac.ft, to acquire in order to turn over
water rights equal to their consumption.
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A-B and the City have investigated many development projects all of which
have turned out to be technically or economically unacceptable.
Subsequently, the City and A-B have reached an understanding that A-B
could acquire the water rights on its own but, the City would prefer:
1) North Poudre or C-BT water rights; 2) an orderly acquisition program to
minimize speculation; 3) the water acquired to be in excess of the
needs of the agricultural community -- no farmland is to be "dried up;"
4) no specific distribution, "balanced" distribution of newly acquired
waters is preferable. Busch also understands that they will purchase
water at their own risk and that the water will be turned over to the City
prior to the start-up of the brewery.
The results of the A-B/City understanding as of August 26, 1983, were that
even though it was allowed by the master agreement, the company was
excluded in a future acquisiton program to purchase Fort Collins water
Certificates or stock in "southside" ditch companies. Limiting the source
of supply has increased the costs for A-B.
The Brewery's current status is:
1) They have completed the acquisition of approximately 53% of the total
water required.
2) They are currently in the process of acquiring the remaining water.
3) A-8 had an opportunity to purchase Water Supply &.Storage Co. stock.
Knowledge of this opportunity was communicated to both the City and WSSC
via Ward Fischer for their review. This precipitated the revision of the
agreement between the City and WSSC which allows A-B to purchase up to 5
shares of stock to be used in satisfacion of the A-B water requirement.
With City staff knowledge and approval, A-B entered into contingent
contracts to acquire 5 shares of WSSC stock. Final execution of these
contracts is being withheld until formal approval by the Water Board and
the City Council of the revised WSSC/City agreement.
Bill Elliott commented that there is no "new" water involved. He was
hoping that there would be new water introduced to the area, something
that had been discussed early on. Ward Fischer answered that they tried
but were unable to acquire any.
Norm Evans asked about the revised agreement with the City and Water
Supply and Storage. Ward Fischer gave some background on the contract.
Historically, it has been the policy of the Water Board and the Council on
the Board's recommendation, not to obtain stock in ditch or reservoir
companies unless they consent. Years ago the City had the opportunity to
purchase shares of the WSSC. The City administration looks upon Water
Supply waters as excellent for the City because it is a storage system
in part, and a very dependable water supply because of the valuable early
priorities and water rights, as well as trans -basin diversions from the
Colorado River -- one of the earliest priorities on that river. When
Harvey Johnson, president of WSSC, was on the Water Board, his concern
was not the City's use of WSSC water, but the protection of the other
stockholders of the ditch on the one hand, and on the other hand, seeing
that the waters were useful to the City. To make them useful to the City,
the waters need to be those that are transported into the basin or held in
Chamber Lake or Long Draw where they can be released to Water Treatment
Plant No. 1 in Poudre Canyon. Part of WSSC rights are down in the valley
where they are diverted from the river which isn't particularly useful to
the City. Hence, an agreement was reached where Water Supply and the
City agreed that if the City would acquire up to 15 shares of WSSC and
would leave 20% of the water in the ditch to compensate for the shrinkage,
that would be the City's proportiionate share of it. The other 80% could
be used by the City. Water Supply, as an accommodation to the City, and
as part of the agreement, would consent to release that water whenever
Possible from its high mountain reservoirs to the City on demand. Water
Supply produces on the average about 105 ac-ft/share; the City gets credit
for 84. The reason it was limited to 15 shares was that Mr. Johnson
wasn't sure how much water he could deliver from the reservoirs just to
the City. He couldn't deliver 100% of the stock from those reservoirs
because some of it is below the mouth of the canyon. As it turned out,
Water Supply has always been in a position to deliver the 15 shares. The
arrangement worked so well that when Roger Krempel was Water Utilities
Director, he had the opportunity to acquire more Water Supply shares. He
and Mr. Johnson reached a verbal agreement that allowed the City to claim
3 more shares which the City has been using under the same plan but the
contract still says 15. Thus, the agreement required revision to reflect
the additional shares. When the opportunity came for A-B to possibly buy
some more and turn it in, the City indicated a desire to acquire more
shares with the consent of Water Supply. Water Supply Company thought if
it worked well with 18 shares, there was no reason why it couldn't work
with a few more. The understanding now is that the City could acquire up
to 25 shares, five of which would be A-S's water rights, so there would be
room for two more under the agreement. An amendment to the agreement has
been drafted and has been signed by WSSC. Assistant City Attorney Paul
Eckman explained the changes. Water Supply signed the agreement some time
ago, but Mike Smith did not want to bring it to the Water Board until A-B
was in a position to come and present the entire plan to the Board. Ward
Fischer will submit the original contracts to Mike Smith for consideration
by the Water Board. Mr. Fischer said that he would appreciate it, after
the Water Board has approved the contract, they would forward it to the
Council at an early time; he would hope in June, so that the contracts
won't be allowed to expire.
Paul Eckman added that the contract needs to be amended anyway to reflect
that the City has 16 shares instead of 15. If we are going to increase to
20, that needs to be put in the ammendment too. The amendment to the
agreement also contains a provision that the City thinks is beneficial
regarding the 20% shrink that the City would have to pay if the water were
used through the City system. This would not be applicable if the City
leased the water to shareholders in the ditch. There are also some
changes with regard to the notice that the City has to give to WSSC.
Norm Evans commented that A-B seems to have proceeded along the lines that
the Water Board had requested.
MaryLou Smith asked why we only go to a very few shares at a time with
WSSC. Is it better to amend the agreement each time? Mr. Fischer replied
that WSSC prefers to do it that way.
Roger Krempel asked Dennis Bode if, with our new modeling capabilities,
could we project larger amounts of WSSC and determine if it hurts the
City. Mr. Bode responded that he thinks the staff could take some looks
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at that.
Neil Grigg asked to what extent does the City's taking even one share of
Water Supply affect the amount that is available for irrigation. Are we
diminishing the irrigation water, or is it an incremental question?
Ward Fischer answered that with regard to the balanced supply, first A-B
will turn in the water on their land. On the remainder, approxiomately
half will be North Poudre water and the other one half will be a
combination of CB-T and Water Supply & Storage. On all of these, he said,
they tried to acquire waters from those who had water they didn't use for
irrigation. He gave some examples of specific acquisitions. For the
augmentation plan Mr. Fischer is gathering information on the history of
all the uses which he will be glad to share with the Water Board when it
is completed.
Neil Grigg reiterated that he wants the image of the Water Board to
reflect a real concern for agriculture by acquiring water responsibly.
When we do acquire irrigation water he thinks that there should be a
possibility of replacement of that water through better technology so we
are not seriously impacting the agricultural resources.
Roger Krempel commented that he has heard that the crops farmers are
growing, in general, use less water, particularly with the demise of the
sugar beet industry.
Norm Evans asked if the Board was prepared to take action on the
agreement. The attorneys do recommend the agreement as being proper and
in order.
Dave Stewart moved that the Water Board accept the agreement drafted by
City staff. After a second from MaryLou Smith, the motion passed
unanimously. It should be noted that Tom Moore abstained because of his
association with the Water Supply and Storage Co. Also, Bill Elliott was
assured that Water Board members would receive copies of the agreement for
review.
The final issue that Mr. Stein from A-B explained was the Augmentation
Plan. As the Water Board is aware, A-B has plans for a land treatment
facility for a large portion of their wastewater. As a result of this, a
plan of flow augmentation will be required. Ward Fischer and Scott Reed
are responsible for preparation, presentation and obtaining court
approval of the plan. They will be working very closely with the City to
pull that together. The firm of Leonard Rice Consulting Water Engineers
of Denver will. be working with Mr. Fischer and Mr. Scott to prepare that
plan.
Ward Fischer explained further the augmentation plan and land treatment.
He stressed that A-B is trying to be conscious of the points that Neil
Grigg mentioned about the agricutural community. When Busch first came
to Fort Collins, they knew they were going to a land treatment program.
It was at A-B's suggestion that the master agreement, in addition to
turning over the 4260 a.f., also state that if additional waters are
required to preserve the regimen of the River, the Brewery will be
responsible. In general terms, the water that the City will supply will
be used to make beer and there will be some consumptions and a portion of
that water will be taken to the land treatment site. Apparently, the A-B
people are so efficient in this that there is very little return flow from
that land application. If one looks at how the water that is being
acquired has been used historically and its return flow versus the way the
water will be used in the brewery and its return flow, the result is,
there is going to be less return flow. Obviously, that is not good, but
it isn't bad if you do something to make up that return flow for the
benefit of all the other appropriaters on the River. This was recognized
by A-B as being necessary. The details have yet to be worked out because
it is complicated. Busch must analyze how much water goes to land
treatment and exactly what the consumptive use is. Leonard Rice who has a
reputation for being excellent in the field of augmentation plans, has
been retained. He has been instructed not to see what he can get by with
but to see what is necessary to preserve the River absolutely. Where A-B
will get the augmentation water is being investigated. It will be
acquired under some means that will not be harmful to agriculture. Mr.
Fischer anticipates that any augmentation waters that A-B acquires will be
in close cooperation with ditch and reservoir companies of this area, as
well as the Northern Colorado Water Conservancy District.
Dave Stewart asked if there was any possibility of new water. Mr. Fischer
said that had been explored but doesn't appear, at this point to be
feasible.
MaryLou Smith asked how this augmentation would be satisfied. One way
would be to add to the amount of water that A-B is required to turn in.
Another way could be some arrangement where waters are leased on a long
term basis to A-B for the purpose of putting it in. There are many ways
to approach it.
Neil Grigg said that it is fascinating to think about all the water
management possibilities for that. Ward Fischer emphasized that when
these possibilites are discussed, the Water Board will be one of the
first to review whatever is developed. Among other people that must be
satisfied is the City of Fort Collins.
Norm Evans asked who has to satisfy augmentation. Is the water stock going
to be owned by the City? No, the master agreement does say the City will
cooperate with A-B in solving the augmentation situation, but at no cost
to the City. If augmentation waters were required it would be at the
Brewer's expense. The basic supply that will be used for the Brewery will
be owned by the City.
Dave Stewart asked what the estimated consumption is. Mr. Fischer still
has to get the answer to that. About 15-30% is used in the product and
evaporation, etc. How much goes back to the River depends on how much
they put through wastewater treatment Plant No. 2 and how much goes to
land treatment.
MaryLou Smith wondered if once this is all worked out, do the City staff
and the City Council have to agree to the method A-B proposes for
augmentation? Mr. Fischer replied that he doesn't think they have to,
but he wants them to. The master agreement simply states that the
augumentation is the Brewery's problem, but the City will cooperate. The
staff to tour their pilot facilities in the Canyon. Ben Alexander offered
to take Board members through as a group or as individuals any time they
could make arrangements.
Roger Krempel commented that many of the suggestions that have been
offered would be compatible. He added that the white water groups are
also very interested in the area. His other comment was that the water
treatment plant is unique because it is a "blend of old and new
technology."
Bill Carnahan wanted to assure the Board that as soon as a draft document
is ready regarding the South.Plant Wastewater complex, Water Board members
will receive copies. He isn't certain when the proposal will go to the
Council. Draft copies could be ready prior to the next regular Water
Board meeting.
Bill Elliott asked if, in that sense, should the Board approve or reject
the South Plant option in concept?
Dr. Evans said it was up to the Board to express some ideas that might be
useful to the Council for any decisions they need to make; for example
as was mentioned at the Council meeting regarding the sole source idea.
It was decided that a recommendation on the sole source question is not
a part of the Water Board's role. Or. Evans asked if there were any
comments relative to the South Plant Complex.
Bernie Cain moved that the Water Board support the South Plant Complex in
concept. Neil Grigg provided a second.
As part of the discussion, Neil Grigg urged that the Board approve it in
concept based on what he has seen in the documentation and the staff
working with it. It has been carefully thought through. Carl Houck and
A—B have worked through it as well. He added that he is certain the staff
and A—B will continue to look at it and evaluate it and there will be
checks and balances along the way.
Bernie Cain complimented the staff on looking at the City's best benefits
long range. They have come up with some very good options, he said.
Norm Evans reiteratead that the Board feels comfortable with the staff
analysis of the technical issues involved in the South Plant Complex.
Following this discussion the motion was voted upon and it carried
unanimously.
Since there was no further business, the meeting was adjourned at 11:10
a.m.
Water Board Secretary
ti •
a
A-B Wastewater Treatment
Question & Answer Session
May 16, 1985
Chairman: Well, we're open for questions now. We decided that everyone was
at the Council meeting. We don't need a recap of that and we'll
just go right into a period of questions. So we'll open with
questions and comments.
Bernie: Norm, I asked Bill after the meeting a little bit more on the
Cain extended use of the Sludge Farm by looking at composting, and I'd
like that addressed a little bit more because I see that as a real
benefit.
Bill We have been looking at the compost option very closely with regard
Carnahan to the treatment of the sludge from A-B. As you know, we do have a
sludge farm but that farm does have a finite life to it. We
approached the original discussions with A-B by saying that it is
not appropriate to look at the sludge farm as the ultimate disposal
of their waste. That whatever sludge is created by their process
must be taken care of some other way. The Sludge Farm was not
developed with a consumer that large in mind and given that it has
a finite life, we need to do something else. Parallel to that, we
have been looking, both our staff and Roger, at composting as a
potential option to land application, like the farm and quite
honestly, we're all quite excited about those prospects. Our
feeling was that if we could develop a compost facility of
sufficient size to handle the A-B sludge, with the potential to
expand that facility,that it would allow us to get into the compost
business for the Busch sludge at really no cost to the City. If
composting appeared to be better than the farm, we could expand and
do more of that. But even to the extent that we are able to do
Busch waste only in a compost facility, it does extend the life of
the farm and it does give us a lot of flexibility. We could use
the farm and we could use composting. It would give us a number of
options with regard to disposal of the sludge so the compost option
is one of the real exciting parts of not just the South Plant
scenario but with A-B coming in general. It will allow us to get
into it and we think there's a real potential there in the future.
It would extend the farm just that much longer and give us another
option and give us some back up that we're real excited about. It
works out real well for us.
Bernie With the pricing, we realize that composting is fairly experimental
Cain at this point in time, but do you have a feel for composting vs.
sludge farm in terms of operation costs down the road.
Bill I might mention one other quick item in relation to that, the
Carnahan compost portion of the A-B scenario is not going to be included in
the scope of work that goes to Council Monday. We feel as a staff,
and we've talked to Carl about it also that we feel we need to look
at all the options. There are different types of composting
techniques, different types of facilities, and different ways of
financing those kinds of things, and we think we need to look at
all this in more detail. Plus the construction time is less than
it would be on the plant, so we do have a little more lead time on
that. We'll keep you posted on where we are on that because we
just really started to broach the subject enough to know that it's
very interesting and looks like it has some potential. We want to
investigate it further, and we think that's the way we're going to
go.
Neil Did you say what the disposition of the compost is going to be when
Grigg you finish. Is it going to be given away or marketed?
Carl That's part of the marketing plan. Generally with larger
Houck communities that Black & Veatch has worked with such as Metro
Denver and Philadelphia, they end up having some give away programs
and some small distribution programs, but a large portion of this
diposition is to actually recover some significant costs. They're
able to charge somewhere in the range of $10-$15 per dry ton. It
goes to large landscaping contractors, state highway departments, -
large land reclamation type things that need a good soil amendment
or soil conditioning. I think probably that that seems to be the
way that other communities have gone and it's easier if you've got
a contract at home for a big bunch of it and then you've only got a
small amount that you can deal with. I suspect it will be in that
framework.
Mary Lou Is EPA the industry that regulates sludge and composting and
Smith wastewater and that sort of thing?
Carl No. EPA started many years ago, but in 1972 P.L. 92-500 was the
Houck act that we all reacted to recently and subsequent amendments. EPA
was charged with setting a framework for water pollution control
and management across the country when there were big federal
dollars for grants and that sort of thing. EPA was very active in
the 70's. In the past 5-7 years a lot of their authority has been
transferred to the states in terms of regulatory control. There's
a current disagreement which Ward is probably very well aware of
between EPA and the state on how that transfer is to be
administered in Colorado. For the most part, Colorado has assumed
the responsibility. The State Health Department assumes the
responsibility of the administration of all water quality matters
including the regulation and disposition of the sludge that's
coming from wastewater treatment plants. In January of this year,
after years and years of problems, Colorado Department of Health
adopted a new regulation on land application for beneficial uses of
sludges, including compost materials. That has not yet gone into
effect. It will go into effect October 1 of this year, but the
regulation is now in place.
3
Marylou My question was going to be related to that. Since composting is
Smith somewhat experimental, if we were going to find that we were going
to run into problems down the road about Federal agencies, or in
this case, the State Department of Health coming up with
regulations that didn't match our system. Is there a timing
problem? Are we a little bit ahead?
Carl First, I'd comment that I don't think that composting is really
Houck experimental. I think it's more in the development and
implementation stages that there's various systems that Bill
referred to. There's various financing systems, third party
agreements, those types of things. I think the technical knowledge
of composting is fairly well established. There are new systems
being developed and new ways to accomplish it that probably will
continue to develop, but I don't think composting is a new process.
I think it's receiving quite a bit of play right now in the press
and in the public's eye just because it's now being recognized as a
very reasonable and ecological way to deal with the solids.
Chairman MaryLou, composting has been going on for many decades. The
problem has been with marketing the product. I think that's going
to be the real question.
Neil This is kind of a blue sky question, it -probably doesn't have any
Grigg practical value at all, but it occurs to me that if the economy of
scale is a factor in finding a way to get rid of compost that there
might be some advantage in looking at a regional approach to this
thing... Loveland, Longmont, Greeley, Fort Collins, etc., together
with A-8. That was my first blue sky thought. The second one is
that with the demise of the sugar beet industry which had a lot of
waste products themselves, if we need a replacement industry for
that in northern Colorado, and if we're looking into economic
development for the region whether there'd be any kind of a
synergistic way to approach the handling of all this sludge
together with creating capacity for new industries to replace the
sugar beet industry or any other agriculturally based industry.
That's kind of a blue sky thought, but it just occured to me.
Carl I could address your first question maybe not quite as well as the
Houck second.
In the Metro Denver case, a marketing research plan was developed,
and indicated that if Denver composted IUD% of it's sludge, which
it's not going to do, (as I said, they've got that dual
utilization,) but if it did, it could only satisfy at the time that
the study was done about two years ago, 8% of the demand. So there
is a tremendous demand for this material. I suspect the same would
be true here in Fort Collins.
Dave Then how do you get over the stigma of having it being wastewater
Stewart sludge?
Carl It's not really a stigma in terms of the demand that Bill Martin
Houck tells you about when you go down and talk to him in Metro Denver.
CI
MaryLou
Smith
Carl
Houck
MaryLou
Smith
I wouldn't mind using it in my garden.
I think those days are almost behind us.
That's great, I think that's exciting.
Carl In terms of a regional approach, I think the biggest problem with
Houck compost is the same fact that you face when you handle a large
material or a large quantity of material; it's transportation
costs. I'm not sure it pays to centralize that so that then you
can go and distribute it back out over the same area you collected.
You might be better off just handling it in smaller centers and
having smaller distribution systems associated with that. I happen
to know that the City of Greeley is very strong in considering
compost and very likely to be going that way soon. They have a
tremendous market potential right in that area. That's probably,
just from a materials handling standpoint, a more reasonable
approach.
Neil What occurs to me, and it's another blue sky thought, with all
Grigg the publicity about privatization that's going around, if we wanted
to try some of that, we could issue a call for proposals, where any
company who wanted to enter business in northern Colorado would
look at possibilities for composting with subsidies from the City,
subsidies coming from the foregone sludge handling costs, but with
innovative proposals for other industrial development that could
take place here as a result of such a facility. It would be
interesting to see what we'd get.
Dave What's the possibility of using this composted material at the
Stewart land application site?
Carl At the sludge farm?
Houck
Dave No. At the land application site?
Stewart
Carl Why would you want to do that?
Houck
Uave Well, you're going to be growing turf, right?
Stewart
Carl It has very little nutrient value. It's a soil building situation.
Houck I think if Busch takes their waste out there they're going to get
all the nutrients that they need. I wonder why you would want to
take compost there also. I think that if you go to the effort of
composting you probably would be better off looking towards
recapturing some of your costs in the area of $1U-$15 per ton.
There's probably a much larger demand than if you need to try and
put it on Anheuser Busch land.
5
Bill I have a question or maybe a thought that kind of dovetails with
Elliott this whole compost option, but it really relates to the bigger
picture of the whole south complex option. That is, in the
original agreement there was a discussion about the supplemental
user fee. I am really curious to see how, if anything, is it
possible to talk about that in these new agreements, or is that
going to be necessary? How would a supplemental user fee be
incorporated into this option that includes a change in the water
pretreatment facility, and how the City could in fact be reimbursed
for costs over and above what could be identified in the
pretreatment costs and supplemental user fee. And now we're going
to a whole new option. I don't even know if the supplemental user
fee is going to be discussed.
Carl I think I understand what you're saying. Busch is committed to
Houck build facilities for the contracted amount of BOD and suspended
solids and flow that they proposed to give to the City. They're
committed to pay for those facilities the City will build and Busch
will pay for it through tax increment financing. But in addition
to that Busch is also committed to pay for the actual operating
costs of operating the facilities of those components that it
supplies waste to. I think the south complex option adds a
significant degree of capability to the City to be able to strictly
identify what those costs are. As you heard the other night, the
City is not presently operating the south complex. It plans to
start operating the south complex.when the Busch waste starts
coming down. Probably for the first four or five or maybe longer
years, it will only need to operate the south complex for Busch's
waste and it will take Busch's waste only into the south complex.
That's not to say that during peak times it couldn't divert City
waste in there because there's that provision too, but if it's only
treating Busch waste in the south complex, all of the power, all of
the labor, all of the maintenance, all of the accounting for that
can be very easily identified and will serve as a very good basis
for the actual charges back to Busch for the waste it has
discharged to the City.
Bill Not to answer too simplistically, but if you look at the capital
Carnahan cost of the facility, the modifications that are being talked about
in the south plant as they were in the north plant, whether it was
pretreatment or not, Busch is responsible for paying those capital
costs through the supplemental user fee which is a line item that
is computed based upon the capital costs. The 0 & M cost, the
operation and maintenance costs, of whatever those facilities
happen to be, north plant or south plant, is a part of the rate
structure. They will, in effect, be a seperate rate category. We
will be able to identify those costs. There will be a different
place on the monthly bill, but it will be in the rate charge to
them.
Bill The only reason I was curious about that is that I know that that
Elliott was language in the original agreement and I knew that that was
part of the pretreatment program, and I was afraid that somehow it
might get lost in the shuffle.
Bill No, it's still there.
Carnahan
9
Mary Lou You said that Busch would pay for this with tax incremental
Smith financing? Did I get that?
Jack Stein There are a number of items that are covered in the master
(A-B) agreement that are to be funded by tax increment financing and to
the extent that TIF money is insufficient, it will be funded
through supplemental user fees. At this point in time, we don't
have a good enough idea of what the capital costs are going to be
on all these because they haven't been designed. We don't know
the amount of tax revenue that's going to accrue as a result of
construction since we don't know what our project is going to cost
yet. We're just going to have to wait and see what the difference
is. The whole concept of the master agreement is that the City is
made whole. Whatever tax increment financing doesn't cover is
covered by the supplemental user fee.
Mary Lou I'd like to ask a question about that that others in the room may
Smith understand and I may not, but probably there are others who don't
understand. When you use tax increment financing does this mean
that the tax money that you normally would be paying to the City
because of the capital improvements and the taxes on that becomes
the fund from which you pay for this other? So that means that
we'll get the money. You guarantee we get the money because you
owe it to us in terms of taxes, but does that lessen the pool of
money we will get from you for taxes?
Jack Stein No. As I understand it, and Paul here will want to correct me if
(A-B) I'm wrong, we will pay taxes as though we were like any one else
in the City. The only difference is that there's an accounting
treatment of those tax revenues once they come to City Hall. The
City, then, takes those taxes and accounts for them and puts them
into this "tax increment fund" to retire the bonds associated with
the capital projects under the master agreement.
Mary Lou So it's a cash flow thing? We get the whole thing in the long
Smith run, it's just that we allow you to use some of your tax money up
front to meet those bonds?
Jack Stein The City agrees to make certain improvements and the revenues from
(A-B) that can pay off the bonds that are used to finance those
improvements. Once those are paid up, the tax monies will still
be flowing, and so that would be a net increase once the
improvements are paid for.
Marylou OK. So it isn't a matter of a certain amount of taxes are due and
Smith we allow you to use part of what you're paying us to do this so
that if we decide not to make this agreement we get more in the
long run.
Jack Stein No. The taxes are not forgiven. The taxes are the same regard-
(A-B) less. It's just that the City has agreed to earmark certain U.S.
Bonds in the earlier years for public improvements that will allow
the project to be built.
7
Roger And the City doesn't lose any tax money because it's only the
Krempel increment. It's only the increase in taxes as a result of the
improvements that goes to pay the bonds. The base tax still goes
to the City, and then after the bonds are paid the City gets all
the tax which is a benefit to the City.
Bill And from the sewer fund, in this case, what you're really looking
Carnahan at is the sewer fund doesn't get general tax dollars, so the flow
of funds is actually the tax increment, which goes to a fund and
those dollars then come to the utility to pay off the utility debt
at the plant. So without that mechanism, those dollars would, in
fact, the tax dollars, at least would go to the general fund and
would have no way of getting back to the utility except unless we
were to use a supplemental user fee entirely. It's the only way we
have to collect money directly from Anheuser Busch. It's sort of
complicated and I think we'll probably end up with a combination in
the case of wastewater. The tax increment, I think, will not cover
all of this. It will probably be a combination of both.
Chairman That's a good question, Mary Lou, because it is a puzzle to many.
Roger I might ask whether the Water Board has ever seen the video tape
Krempel that was used when the City Manager and Anheuser Busch and the
Finance Director went to New York to talk to the bonding people.
There is an excellent video tape that explains the financing
structure very eloquently, and I would suggest that that be brought
down here and shown to the Water Board.
Chairman I think we'd all enjoy seeing that, yes.
Mary Lou It's specific to the entire A-B project or just the water?
Smith
Roger Yes, the entire project.
Krempel
Chairman I've got a question from one of the members who's not present who
wrote a little set of questions and it's related to the subject.
And that is, the potential for reduced operating costs with the
south plant concept vs. the north plant concept. I guess he's
understanding that there was an expression of reduced operating
costs to the City with the south plant going into operation. I
take it, that is what he understands.
Mike Yes.
Smith
Chairman If that's the case, aren't we to have some numbers, some estimates
of what's involved.
Mike We haven't made any estimates. the general concept is that
Sinith basically with Anheuser Busch utilizing most of the south complex,
the cost of staffing for that is borne by Anheuser Busch.
n
Roger User fees.
Krempel
Mike That cost will be recovered basically by user fees. As the City
Smith grows, most of that growth will be taken care of by plant #2
north, which is already staffed and we'll just be optimizing that
as we go along. So, really, the cost to the general public will
not increase by Anheuser Busch coming here. Anheuser Busch's cost
in the long run with their land treatment in the south complex is
also, I believe, a lower cost option for them.
Bill We have not itemized specific dollar amounts. Conceptually it
Carnahan would tell you that it is a lower cost option, but we just don't
know how much it is.
Norm That's a good enough answer for that question, I think.
Mike The best economy comes when you're just at the point of utilizing
Smith all your capacities when you build something new, then you go back
in the red again.
Chairman The second question here that I raise right now concerns the life
span of the land treatment installation, whether there's any
estimates on that, whether it's short or long. The life span is
somehow related to the load we get here, I guess.
Jack Stein To the best of our experience, there is no point at which the
(A-B) facility becomes used up. We're continually applying material and
then harvesting a crop such that we are continually recycling
material and removing the crop, the turf, or the grass crop, such
that the facility should be used indefinitely.
Chairman OK. Thank you.
Mary Lou Is that different than our sludge farm then, because our concen-
Smith trations are so much heavier in metals? We've been told that our
sludge farm has a finite life.
Mike We'll let Carl answer that.
Smith
Carl I think there is a difference. Probably the difference comes down
Houck to the fact that the Anheuser Busch wastewater going out to their
land application site, and their wastes in general are very low in
heavy metals. I suppose you could state that nothing has an
infinite site life but I think it's a very long site life just
because there are no heavy metals. Heavy metals, at least with
our knowledge of what's going to happen regulatory wise to date,
seem to be the final basis of regulation. If you apply the
materials, whether its sludge or liquid waste to the land in
agronomic rates to satisfy the nitrogen and phosphorus
requirements, and you don't overload it so that what you put on in
E
nitrogen and phosphorus you can take off in nitrogen and
phosphorus for the crops, the site has an indefinite life. In our
case, we have some heavy metals in our sludge. The City has done
a good job of contacting the industries involved and getting them
through pretreatment programs to reduce heavy metals. But there
are certain heavy metals that are concentrated in the sludge and
they come out to the sludge farm. The latest numbers that I saw
with the current regulations is about a 35-year life based on one
particular heavy metal, and my understanding is that this has been
under study for seven or eight years now by EPA. The new
regulations that are going to come out are going to provide a
higher level allowance, so that 35 year life will probably be
extended in the future. I think in Anheuser Busch's case it's
really an indefinite period of time.
Neil Which metal is that is limiting us?
Grigg
Carl Copper turns out to be the one. There's a couple of issues here.
Houck Copper has been contributed to our sludge from everybody in the
City through their house service water pipes. We've had a very
aggressive water in the City water supply. The water coming down
from the mountains is very soft, very low alkalinity, and it does
attack metals, copper is one of the ones that is most attacked.
When that's dissolved out of people's pipes, then it ends up down
at the sewer plant where the biological process concentrates it as
a component of sludge. With the City's new water treatment
stabilization process which has gone into operation just last
year, that should drastically reduce the attack on the natural
system, so I think copper will turn out not to be a problem and it
will be one of the other metals somewhere along the line.
Tom Moore While we're on this, Tom Sanders brought up at the Council meeting
that the City had a heavy metals problem, and someone said "you're
kidding".
Carl When you say you have a heavy metals problem, I think you have
Houck to put that into persepective. Cleveland has a heavy metals
problem. Any time you can talk about a site life in terms of
copper being your heavy metal concern rather than something like
cadmium, you really don't have a heavy metals problem. Instead of
say seven years away that you're going to exhaust the site life
with cadmium, you're talking a 35-year site life.
Chairman Mentioning Cleveland, I can just tell you for a matter of
secondary information that I designed a land treatment system for
the Cleveland -Akron basin which is very high in cadmium. It would
take 35,000 acres for it, right in the bottom of a lake plane
basin where you can irrigate and you can drain in spite of what
the geologists tell you you can't do. But the point I wanted to
make is that the cadmium is so strong there that you think it
would be the limiting factor. With solid field experimental data
we determined it would take far more than 100 years to build up
enough cadmium in the soil where it would begin to show up in the
plants in concentrations that would be of any concern of all. So
you can see that the heavy metals, I would say, represent
10
relatively little hazard. That's my experience, anyway. I think
your 35 years is a very conservative figure.
Carl That's very conservative because of the conservatism built into
Houck the regulations that EPA initiated. Now I think they're backing
off.
Eer": c a,n
So, for the record, we don't really have a heavy metals concern.
Roger I think we need to add that the City of Fort Collins has an
Krempel excellent pretreatment program. One of the first and one of the
few that's really. an effective industrial pretreatment program.
The impact of that is is that we have control of the introduction
of the heavy metal into the waste stream. Cadmium is an example.
Prior to the industrial pretreatment program our cadmium levels
were about 100 mg. per liter of the waste coming into the plant.
But because our program has been effective, it's reduced it to
right around 20 mg. per liter coming into the waste treatment
plant. The Cities like Cleveland and Milwaukee, those cities
have such a heavy metals problem in so many industries that they
can't even have an effective pretreatment program. They're
supposed to have them, but it's so complicated. Denver can't even
get a handle on industrial pretreatment. Fort Collins has control
of that.
Bill I just wanted to mention that that program's expanding this year.
Carnahan
Neil Did you say 100 mg. per liter in wastewater strenth?
Grigg
Carl 100 mg. per kilogram in dry sludge. That's the dry sludge
Houck concentration, what it used to be, but it's been reduced.
Bill Can we get into increased BOB levels? You know, that was one of
Elliott the things that stood out in the position that was presented and I
know that Tom had some questions the other day, and I thought it
was something that we could review real quickly.
Mike I'm not sure the questions have ever been answered totally. Since
Smith the A-B waste is so concentrated we don't have to do something
special to treat it. Maybe Carl would like to answer that now,
about how can we treat this substance that's so concentrated.
Carl I think there are a couple approached to answering that. One is
Houck that in general one of the tenants of sanitary engineering process
design is the more concentrated you can get the material, the
easier it is to handle and treat it within the capability of that
treatment process. Certainly 900 mg. per liter of concentration
of BOD which is the waste stream strength that Busch is going to
give the City is not a high concentration compared to some
strenths that are presented for waste treatment. As I indicated,
the City's domestic strength is somewhere between 150 and 200,
depending upon the season of the year and whether there's
infiltration. 900 is certainly not an inordinately high strength
waste. 20 to 30 thousand mg. per liter would be considered a
11
high strength waste and would require specialized treatment. The
whole issue of treating a waste of 900 mg. per liter is to make
sure you can satisfy the oxygen demand that's created when the
biological activity occurs. Whatever the oxygen demand of those
microbes, if you can satisfy that with reasonable types of
aeration systems, then you have no difficulty in treating the
waste. All of the modeling and process design that we've been
working on with Anheuser Busch and the City over the past three
years indicates that we don't have to go to any specialized
aeration systems such as pure oxygen or such like that. We could
easily meet that type of oxygen demand with conventional diffused
aeration systems.
Jack Stein I would like to add to what Carl has said that the concentration
(A-B) issue shouldn't be a concern as long as it's designed into the
facility. A problem comes in when you introduce highly
concentrated waste into a system that wasn't designed for it.
There are examples around the country of facilities treating
proportions of brewery waste anywhere from 10 to 90 percent and
doing it very successfully. We operate our own facility in New
York state that treats 100 percent and consistently beat our
discharge limits. It's purely a function of recognizing those
concentrations when you design, and design appropriately.
Neil Does Coors have it's own sepaLrate facility in Golden?
Grigg
Carl Yes, they do, but it's to a degree tied into the City of Golden.
Houck Actually, there are two treatment facilities there and they have a
similar type system to what we're going to have here, and it works
fine.
P:,,'.. Nei+ They have a Unox System?
3'tC kt d ribe'y-1»
Carl Well, they have one Unox and they have another system too.
Houck
Nei4 Their Unox system handles all their brewery waste?
Carl I think it does, yes.
Houck
Neil That just means they have smaller basins?
GrHn
Carl That's right. They didn't have the land area to build a conven-
Houck type system.
Chairman I have another question from an absent member, let me raise that
right now. If the Anheuser Busch waste is nitrogen deficient how
will the activated sludge process be changed to accommodate the
waste?
12
Carl I guess we're fortunate in that aspect in that the City's
Houck domestic waste is not nitrogen deficient. In fact, it's been a
source of real concern for us over the years with the proposed
ammonia standards that have been pushed upon us. As Mike
indicated last Tuesday night, I think we've got that issue at
rest, at least for the time being. We don't have an ammonia
standard that we can't meet with conventional secondary treatment.
But, in the course of treatment of our sludge through the
anaerobic digestion process which is going to be expanded when we
bring in the Busch load, the supernatant you decant off the top is
very nitrogen rich. It's very ammonia rich. If we need a
nutrient source to supplement that waste which is coming in from
Anheuser Busch we plan to use the side stream in our own process
to supply some of the nitrogen that's necessary for the process.
Dave Maybe Linda can shed some light on the fact if whether the
Stewart Commission will ever go back to stronger nitrogen standards than
what we have now.
Carl I answered that the other night too. We have alternate discharges
Houck as an answer to that.
Dave Really, our only other alternate discharge would be Platte River
Stewart because if Fossil Creek goes to a higher discharge, which is what
is proposed now, then that limits that one also. Isn't Fossil
Creek Ditch going to be reclassified?
Linda That proposal has not been made yet.
Burger
Dave But isn't the Department of Wildlife looking at that?
Stewart
Linda They may be, but there has been no formal proposal to that
Burger effect yet.
Dave What I'm saying is that we need to plan ahead for that. If that
Stewart happens...
Linda
I agree.
Burger
Carl
We do have several
contingency plans in that
regard. I don't
Houck
think it's appropriate
to discuss some of the
possibilities that
we might pursue at
that time, but there is some
planning for that.
Dave
I don't want to be
caught short if we've got
a real nitrogen rich
Stewart
source and we can't
treat it, I would hate to
be caught in that
situation.
Carl We're handling it right now. We don't use it other than putting
Houck it back in the process, some of the nitrogen is oxidized and some
of it is not.
13
Bill I have a question, a real quick one for Jack, and that is one
Elliott of the things the pretreatment dealt with was temperature. Is
there going to be any temperature problems of the product coming
into the plant... what was it, 300C. Is it going to be cooled to
that level? Is that still going to happen at the plant or is that
still going to be part of the south option?
Carl That's going to be a benefit to us, Bill. Going through the
Houck the pretreatment process before, there'd be some cooling at least,
and in fact, especially in the winter months, that would be
detrimental. There's a range of temperatures, somewhere in the
range of 200C that is optimum to the biological process. It's 20
to 250C. We, in'fact, are going to, now, in our own treatment of
those wastes, enjoy those types of temperatures. Whereas before,
if you go through the pretreatment process which is basically a
bio tower, there'd be significant air cooling of that waste.
Bill So is that going to reduce the cost? Is there a savings there,
Elliott then?
Carl I think that's a hypothetical question. The system is
Houck conceptually designed for the waste temperatures and waste
strengths that Anheuser Busch has projected, again with heat loss
calculations in the transmission of that waste down to our plant.
It's been designed to handle that. You could hypothetically say
if it was 10 degrees warmer or 10 degrees colder would it be more
costly to treat it? I'm sure we could design for that, and I
don't know the answer to that.
Bill I got my question answered about the temperature concern so I
Elliott don't want to take any more time.
Chairman Are there any other questions? We've pretty well exhausted this
subject. I think we've probably finished if there are no other
questions.
Roger Norm, I don't have a question but there are some comments we
Krempel could offer. The question came up on the financing about how we
would be paid and Jack responded by saying that they's pay taxes
just like anybody else. That's a very true but a very modest
statement. They won't be taxed like anybody else in the respect
to the magnitude of their taxes. The taxes from the brewery once
it's built will be equal to our 10 top tax payers all added
together at this time so that's a significant tax payment. On the
financing and the use of the tax increment, the tax increment used
for these improvements is only the tax increment for the City.
The school, the hospital, the vocational district, the county's
.their tax increment is not affected at all. They will enjoy
the full benefit of those taxes; only the City won't when the
increment is used. The other thing is that during the three year
construction period, all of that increment will be used towards
these costs due to the fact that there are regular full time
employees out there demanding City services, so to speak. They're
not using the Library, the school system, and all of those
14
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CITY OF FORT COLLINS
WATER UTILITIES
MEMORANDUM
To: City Clerk
From: Molly Nortier, Water Board Secretary M n.
Re: Chanqe of Water Board meetinq Date and Time
Date: May 13, 196s
The Water Board meetinq scheduled for Friday, May 17 at 3:00 P.m.
has been channed to Thursday. May 16 at 9:00 a.m. in the Light
and Power Conference room, 700 Wood Street. The maJor aqenda
item will be a presentation from Anheuser--Busch.
WATER UTILITIES
700 Wood Street . P.O. Box 580 . Fort Collins, Colorado 80522 . 1303) 221-6681 221-6685
Water Judge of Water Division No. 1 will have to approve the plan. Mr.
Fischer would not want to go into a plan that the City was unhappy with,
so he will come back to the City and ditch and reservoir people and the
Northern Colorado Water Conservancy District when the plan is developed
to make sure that nothing has been overlooked, and that everyone is happy
with it.
Wastewater Treatment Discussion
At this point the discussion on wastewater treatment began. A transcript
Of the questions and answers was requested by City Council and staff.
That transcript is attached.
Other Business
Norm Evans received a letter form the CSU Vice President of Research and
Professor David Hendricks in Civil Engineering asking that the City
consider their request to use Water Treatment Plant No: 1 for water
quality research when the facility is abandoned by the City as a water
treatment facility. Dr. Evans explained that Dr. Hendricks has carried an
a giardia research program with some pilot scale facilities at the site
for the past few years. An added incentive for CSU to use the facility,
would be its availability for emergency use by the City since CSU would
maintain it to conduct their research.
Bill Carnahan said that the City is aware of CSU's desire to use the
facility. He and Mike Smith have established an ad hoc City committee to
begin exploring some opportunities for the site; they have met twice.
Other members of the committee are: Roger Krempel of the Natural
Resources Dept., Curt Smith of the Planning Dept. and H.R. Phillips of the
Parks and Recreation Dept. Thev have received interesting suggestions
such as a nature preserve, a park, and a wildlife area etc., as well as
the request from CSU which Dr. Evans just mentioned. They have come up
with some ideas and will be soliciting ideas from other sources outside
the City. At some future time they will bring many of these ideas to
the Water Board for their comments and suggestions.
Neil Grigg wanted to offer a suggestion for consideration. He thinks that
we need something in this area that he would call a "water Museum." Dave
Stewart jokingly commented that "you wouldn't even have to do anything to
it!" Mr. Grigg continued by saying since water is so important to our
economy in Northern Colorado, a facility like that would be of interest to
all kinds of people.
Dave Stewart suggested that the facility could be used by Voc-Tec as well
as CSU since they have an operator's school there. He also asked if
anything has been done about a student intern program at Wastewater
Treatment Plant No. 1. Mike Smith responded that the staff has not had
the time to pursue it, but they will certainly consider the possiblity
for the future. Mr. Smith added that Ben Alexander has had a successful
student intern program at Water Treatment Plant No. 1 for a few years.
Bill Elliott asked if the CSU proposal has any fee involved in it. Dr.
Evans said it hasn't been mentioned in any of the communications. Mr.
Elliott asked if the research would be connected to some kind of grant.
Norm Evans said it would be general research, but the Giardia research has
been financed by grant money for a number of years. CSU has invited the
Bill Carl may be able to respond to that. There's a fairly large
Carnahan facility in Denver Metro. In fact their pilot facility is about
the size of the facility we'd be building. They've operated it for
three years and are getting ready to make a very big expansion.
They seem very pleased with their operation and have developed
quite a lot of numbers that they have shared with us. Maybe Carl
could relate the relative dollars.
Carl It's very difficult when you start comparing costs like that and
Houck where you start costs. The Denver Metro area has a system quite
similar to the City of Fort Collins that Bill was describing in
terms of flexibility. They have a land application program. They
also have a composting program and they call this a dual
utilization approach, which I think is a name we could possible
adopt here in the same situation. It gives them quite a
flexibility to go either way, dual utilization. The benefits are
that at certain times of the year it's less expensive and more
environmentally sound to take the sludge to the land such as our
sludge farm, and at other times of the year when climatic
conditions are such that it's better to have a system that you can
operate without weather constraints. Their experience in Metro
Denver is that the cost of the land application program, after the
sludge has been thickened or processed at the plant, is somewhere
in the neighborhood of $60-$70 per dry ton of solids. After taking
the water out, the sludge has various constituents, but really
you're concerned about the pounds of solids. I suspect that the
City of Fort Collins and operation of it's sludge farm is probably
in that same range at that point. Composting at this time is
probably in the $80-$90 per ton range, at least in Metro Denver's
experience. There are a number of other communities across the
country that are doing composting, and various types and systems of
composting. I think those dollars are probably on the low end of
what other communities are experiencing with composting. Some of
the more sophisticated mechanical systems, which are totally
enclosed vessels, are basically European designs. A number of
these are starting up in the mid -west right now. A number of those
are more costly, but they've been forced to go to that kind of
system because of the proximity to residential communities. They
have a very large system out in California, in Los Angeles County,
a composting system which again, just operates during the dry
period of time. They shut it down during the winter. It's not
covered, so when they have their rains in the winter they don't
operate it. It's probably less costly, I think it's $40-$50 per
ton, but it doesn't operate year round, and it's not a system that
we could plan on using here because it's only a fair weather
operation. Really, the benefit of talking about composting for
Fort Collins is that it is in fact a method of sludge handling and
preparation for ultimate disposal that you can use when you can't
use any other kind of system.
6
other things that cause City services to go up. So during the
construction period all of the increment is used but after the
brewery starts operating, its only a portion of their new tax
increment that's applied against these improvements. A
substantial part of that tax increment will go for utilization
toward the City government. So it's a ratio there, after the
operation starts. Two other factors that enter into the picture
is that due to their proprietory nature of the brewery business,
they have a very tight security system out there. They don't need
a lot of police services like other places to the same degree.
They have their own fire security. They don't need the fire
system on the same level. There's a lot of rationale that has
gone into this tax increment thing that hasn't been on the surface
an awful lot and hasn't been explained an awful lot.
Chairman Fine. Thank you, Roger. Well, I think we'll stop on this subject
right here and we want to thank you Bill, Jack and Scott for
coming and bringing this to us, and Carl as well.
Marylou Norm, I'd like to make a comment. I was frustrated from the other
Smith night with the press account regarding that meeting because I
think that it didn't come out that the City is benefiting from
this change, and so, for my own satisfaction I would like to say
that I just find it very exciting that our staff is innovative
enough to figure out some ways that we can, so to speak, ride on
the coat tails of a major industry coming into town. We can say
that gee, we have this opportunity, let's really be innovative and
see what we can get out oof it that will help us plan for our
future. I think that's a message that's real important for the
community to know. This whole process of changing to the south
plant should be looked at as what is the City getting out of it,
and it should be looked at very positively. I 'd like to
compliment the staff for their innovative thinking and A-B, too,
for working with us on this. But, particularly the staff for not
only looking out after our needs on the short range, but really
thinking of how can we use this opportunity to build for our
future.
Chairman Thank you, Mary Lou. Your comments certainly point out what we
know and continually are reminded ... we have an outstanding staff.
We want to acknowledge that in positive ways, thank you.
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