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HomeMy WebLinkAboutWater Board - Minutes - 03/15/2012Water Board Minutes March 15, 2012 1 Fort Collins Utilities Water Board Minutes Thursday, March 15, 2012 Water Board Chairperson City Council Liaison Steve Balderson, 223-7915 Wade Troxell, 219-8940 Water Board Vice Chairperson Staff Liaison Steve Malers, 484-1954 Brian Janonis, 221-6702 Roll Call Board Present Vice Chairperson Steve Balderson, Board Members Brian Brown, Liesel Hans, Lori Brunswig, Phil Phelan, Eric Garner, and Meagan Smith Board Absent Board Members Brett Bovee, Duncan Eccleston, Becky Goldbach, and Steve Malers Staff Present Brian Janonis, Jon Haukaas, Kevin Gertig, Lance Smith, Norm Weaver, Mike Beckstead, Donnie Dustin, Laurie D’Audney, Carrie Daggett, Ellen Switzer, and Robin Pierce Guests Lucy Dipboye Meeting Convened Vice Chairperson Balderson called the meeting to order at 5:31 p.m. Public Comment None Approval of February 16, 2012 Minutes Board Member Phelan moved to approve the minutes of the February 16, 2012 meeting. Board Member Garner seconded the motion. Vote on the motion: It passed unanimously with one abstention from Board Member Brown. Officer Elections Vice Chairperson Balderson opened the floor for nominations for the position of Board Chair. Board Member Brown nominated Vice Chairperson Balderson for Chair. Board Member Brunswig seconded the motion. No other nominations were received for the Chair position. Vote on the motion: It passed unanimously; Mr. Balderson will serve as the new Chair. The floor was opened next for Vice Chair nominations. Vice Chairperson Balderson nominated Board Member Malers. Board Member Brunswig nominated Board Member Brown and also asked whether any other board members with seniority were interested in serving as Vice Chair. No other nominations were received. Vote on the motion: It passed unanimously; Mr. Malers will serve as the new Vice Chair. Water Board Minutes March 15, 2012 2 Landscape Preference Survey (Presentation available upon request) Water Resources Manager Donnie Dustin informed the board that an online survey panel was established in 2011 to collect information from citizens on landscape preferences. The decision to survey customers on this topic relates to the update of the City’s Water Supply and Demand Management Policy. Panel participants were also queried about additional water conservation efforts. Board member questions: Is there any interest in finding out discrepancies between how panelists responded versus how they make decisions at home? The anonymous nature of the panel prevents this type of analysis. Is there a question related to landscaping and its relationship to water quality? The survey did not address water quality. Future surveys may delve into other specifics as needed. The survey was intended to get a general sense of how our customers feel about water conservation efforts. For the general public, do we think panelists were confident understanding the terminology and responding about the options, such as cool season turf grass and similar terms not known to everyone without that background? Staff should provide examples with future survey rounds. Utilities Executive Director Brian Janonis noted that Fort Collins Utilities serves about half of the City’s population for water. Are panel members being asked about residential or city property, such as parks? Questions were kept general. How does staff use this information to make decisions? Different things can be pulled out of the survey results to support program development. A board member expressed concern that panelists are not being asked to make choices, yet staff are taking this information and proceeding with programming. Staff uses the information to base some decisions with the Water Conservation Program, and future surveys can be more focused as desired. On-Bill Utility Efficiency Financing Program (Presentation available upon request) Chief Financial Officer Mike Beckstead and Energy Services Engineer Norm Weaver presented this agenda item on behalf of Customer and Employee Relations Manager Patty Bigner and Energy Services Manager John Phelan. $300,000 was set aside in the budget for this type of program (conditionally approved for 2012), but before staff can spend it, a program must be presented to Council. This is a residential “pilot” program and meant to integrate with our existing efficiency programs. The item went to Council Finance Committee in February, and staff has worked to respond to feedback given there. This program is about both energy and water efficiency. A group has been working on the concept for several months. Financing is key to getting a homeowner to move forward with efficiency upgrades. The home energy audit is the starting point for homeowners to know what is recommended for improving the efficiency of their home, and they receive a list of contractors who are trained in efficiency upgrades. Eligible project types would include renewable energy options (solar photovoltaic and wind). Loan repayments are designed to replenish the funding in order to continue offering more loans. Water Board Minutes March 15, 2012 3 Mr. Beckstead noted it will take a long time for the fund to become self-sustaining. This is not designed for low-income and low-credit-tier populations. A lien would be placed on the property to secure the loan, and the loan would be offered at a very competitive rate. The simplicity of the payment process is also very advantageous. Board member questions: Where do interest monies go? If the customer falls in arrears on their bill, can their utility services be jeopardized? Interest goes to replenish the fund for more loans. It’s also important to note that you have to be a customer of the utility related to the type of repair being planned, i.e. a water customer in order to receive funding for a water efficiency project. What makes this program more attractive than other programs that had funds left over? The Utilities’ efficiency initiatives are a multi-year proposition. If the initial $300,000 in funding is not used, Utilities can continue to promote all types of energy and water efficiency projects. There was $30,000 left in the existing ZILCH Program, which will be rolled in with the $300,000. We anticipate that all funding for the pilot program will be used each year by linking it into the energy efficiency audits. What are the administrative costs to the City? The City incurs a cost of $150 for loan processing and $25 for the application fee. The third party’s processing fees will be within the $150 fee structure. This is not staffed by the City, and no FTEs will be added to support the program. However, managing delinquencies could create administrative costs. Is this financing option something that the private sector can do, and the City is considering doing this to get our message out about efficiency programming? The City’s focus is on conservation and trying to make it easier for homeowners to implement home conservation projects. Certainly, anyone can obtain a third-party loan at a bank. Are the suggested projects from the energy audit prioritized for the homeowner? To some extent, the suggestions are prioritized. Utilities hopes these audits offer a non-biased approach. Staff is still considering guidelines to influence using the loan for the priority projects. Are wind projects allowed in the city? Yes, they are allowed, with some height restrictions. Utilities recommends consulting the wind study before considering a wind system. “Payback” guidelines would be helpful. Service professionals can’t always speak to that. Mr. Beckstead believes that the savings calculation and impact on utility bills is included in the energy audit. What makes it more attractive to use this financing? How are standards established? It’s not compelling, other than 100 percent financing is offered and the interest rate is designed to be lower than bank financing. The ease of having it on your utility bill is also an advantage. There is also flexibility on the loan term, given what the savings are estimated to be. Home equity may not be available for traditional financing, so basing it on credit score apart from equity considerations widens the pool of eligible applicants. How will we convince a customer to use the contractors on our list? An inspection process post- completion would have been necessary, and we elected not to pursue that option. We have an approved and trained list of contractors. Water Board Minutes March 15, 2012 4 How will we audit that the contractors are giving a fair market price for the work? If someone is participating in the efficiency program, we hope the marketplace works and the customer seeks competitive quotes from more than one source. Our contractors have gone through mentoring and training, and specific, random follow-up quality checks are performed. If an issue is found, a contractor can be put on probation. Audits are subsidized. In many cases, residential efficiency progress is less expensive than investing in another coal plant, for example. Utilities is invested in insuring the contractors do quality work. The federal credits for home improvements were based on a do-it-yourself approach. It would be helpful to have contractors that could consult with “do-it-yourselfers” and check their work for a fee. A local rebate is offered by this Utility for specific incentives which are part of the home efficiency program. Our local utility dollars are at stake to get an optimal result. There are options in the community for energy conservation assistance such as the Extension Services, the Sustainable Energy Alliance, etc. Utilities staff also field questions and provide what information they can. Mr. Beckstead noted we may entertain something like that in the next version. The pilot program was designed to keep it simple. Is there a defined success or failure barometer that would negate the pilot becoming a permanent program? It will take a couple of years to determine if we have a delinquency issue. Meanwhile, success means the funding is used quickly and there is a citizen demand for it. Language may need to be more inclusive of water projects. There are also reductions in homes such as low-flow toilets or converting a lawn to xeriscape. Citizens may desire to amortize the costs of those types of projects. Replacing a water line has minor positive impact. How do we use this to focus on primary water conservation opportunities? We started this to be centric to structural improvements, but landscaping and other ideas are worth exploring in the future. Since this appears on the bill, it’s difficult to believe that there will continue to be third-party costs. Is there anything in place to ensure that the administrative costs won’t trickle onto all customer bills, including those who aren’t in a loan? Once the set-up is done, provided the bill is paid every month, it shouldn’t add any administrative costs to the system. Intent is not to add additional utility costs to other customers due to this program. This doesn’t assist small businesses. Small businesses are on the radar, and staff may go into that sector in the next version. Deputy City Attorney Carrie Daggett reviewed the wording of the public notice that has gone out to electric customers. Chairperson Balderson thinks a pilot program is a good idea and is willing to recommend the program to Council. Board Member Garner would like to include conservation language. Board Member Brown feels it’s too premature to mention the other alternatives such as coaching, funding for xeriscaping, and other types of efficiency projects. This program gives a mechanism to accomplish the projects. Water Board Minutes March 15, 2012 5 Board Member Garner suggested a friendly amendment to remove the word “Efficiency” from the title of the program. Board Member Phelan approved the friendly amendment. Vote on the motion: It passed unanimously. Board members considered the draft memorandum to Council and provided suggestions for edits to Chairperson Balderson around the inclusion of conservation language and removal of the term “efficiency” throughout the memorandum. A statement will be added encouraging the application of this program to water-related projects in addition to the focus on energy-related projects. Vote on the motion: It passed unanimously. Fort Collins-Loveland Water District 24” Waterline Agreement (Presentation available upon request) Water Engineering and Field Services Manager Jon Haukaas presented an Interim Agreement (“Agreement”) with Fort Collins-Loveland Water District (“District”) for water service. The City of Fort Collins Utilities has had intergovernmental agreements for cooperative water delivery with the District for many years. The Agreement addresses the significant changes that have occurred in the resources and needs of the parties to the existing Agreement since the last revision in 1999. Such agreements help to avoid duplication of expensive pipelines. The Agreement provides for additional sharing of water and clarifies operational components of the exchange of water between the two systems. Compensation will also be addressed to more clearly charge for the costs involved to the City. The City does not currently need water from the district, so the timing and volume of water when it is returned per agreement has created water quality issues in our system. The City would like additional control over where it returns, how much water returns, and when it returns through enhanced communications between the plant operators at the City and the District. The water quality issue is minor, but it does surface at times. Board member questions: Which delivery points exist and which are new? The existing Agreement mentions three delivery points, and there are actually six delivery points. The Eastern Delivery Point is an additional delivery point, originally installed on the assumption that Fort Collins would expand its distribution area. The District does have a need, so the Agreement will allow them to use this point. Motion: Board Member Phelan moves that the Water Board endorses the proposed pilot program and will transmit a memo to Council encouraging the Council to adopt the On-Bill Utility Efficiency Financing Pilot Program and to adopt Chapter 26 Municipal Code updates to enable the Program. Board Member Garner seconded the motion. Motion: Board Member Brown moved that the Water Board approve the memorandum as adjusted. Board Member Brunswig seconded the motion. Water Board Minutes March 15, 2012 6 Does this affect the Windy Gap project? Neither the City nor the District is part of Windy Gap, so it won’t have a direct relationship to this Agreement. Are there any sticking points in the negotiations? Staff feels our proposal will meet the needs of the District. How much water will we sell? The Agreement allows for up to 9 million gallons per day. It will depend on the delivery details. At a million gallons per day, the annual target would represent about $2.3 million per year. The increase from the 1999 rate represents a full spectrum cost. Are we competing with anyone else for the sale of the water? There will probably be a better market in the future when it’s more competitive. They may buy our excess water through the raw rental rates and give it back to us. Will this affect the level of the Poudre River? No, it doesn’t change anyone’s water rights or draws. Board members expressed support for the collaborative nature of the Agreement and sought to understand whether there were any controversial issues prior to the vote. Vote on the motion: It passed unanimously. Committee Reports Conservation and Public Education (Board Member Phelan): The committee met yesterday to discuss rate structures. Committee Chair Phelan will send out notes. Engineering Committee (Board Member Brown): The committee met last week on capital projects prioritization; projects total $240 million. How is $2.5 million per year allocated to the various projects? A formula was developed and will be discussed at the next meeting. Staff will have a 10-year plan and additional details to support the discussion. The item goes to Council at their April 24 th Work Session. Legislative, Finance, and Liaison Committee (Board Member Goldbach): The committee is deciding on a meeting date. Water Supply Committee (Board Member Bovee): The committee meets on March 26. Staff Reports Monthly Water Resources Report: Mr. Dustin noted the South Platte Basin is at 80% capacity. Reservoirs are full, and there is discussion of the Colorado-Big Thompson basin “spilling” if we maintain the current percentage. Community Rating System (FEMA) State Profile: Our CRS rating is maintaining at a 4 level, which continues to validate a discount to property owners on flood insurance. Motion: Board Member Brown moves to support the continuation of a cooperative Intergovernmental Agreement for the sharing and sales of potable water, and recommends the City Council approve the Intergovernmental Agreement for Interim Water Services between Fort Collins Utilities and the Fort Collins-Loveland Water District. Board Member Smith seconded the motion.