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HomeMy WebLinkAboutWater Board - Minutes - 09/18/2014Water Board Minutes August 21, 2014 1 Fort Collins Utilities Water Board Minutes Thursday, September 18, 2014 Water Board Chairperson City Council Liaison Steve Malers, 484-1954 Wade Troxell, 219-8940 Water Board Vice Chairperson Staff Liaison Becky Hill, 402-1713 Carol Webb, 221-6231 Roll Call Board Present Vice Chairperson Rebecca Hill, Board Members Michael Brown, Heidi Huber-Stearns, Phyllis Ortman, Brett Bovee, Brian Brown, and Andrew McKinley. Board Absent Board Chairperson Steve Malers, Board Members Lori Brunswig, Alex Maas, and Duncan Eccleston. Staff Present Carol Webb, Donnie Dustin, Lance Smith, Carrie Daggett, Eric Potyondy, Mark Kempton, Jason Holland, Steve Catanach, Matt Day, and Katherine Martinez. Guests Tom Mills, Joseph LeDuc, Clara LeDuc, Daria Mills, Brenda Yocum, John Albright, Terry Rasmussen, Bill Schwerdtfeger, Greg Koch, and Eric Sutherland. Meeting Convened Vice Chairperson Rebecca Hill called the meeting to order at 5:30 p.m. Public Comment  Clydesdale Park HOA President Tom Mills stated that the HOA supports the stormwater utility fee that will be imposed on residents once the neighborhood is annexed and is asking the Water Board to support a phase-in of the fee to prevent resident from having to be double-taxed. o Clydesdale Park residents voted in November 2012 for a Public Improvement District (PID) that levies a 16.258 mil property tax on all lots for road maintenance and repair. When the neighborhood is annexed, the City’s Streets Department will receive the PID’s $80,000 balance. o City Code permits City Council to temporarily reduce the storm water utility fee at the time of annexation to reduce economic impact on residents. Mr. Mills said residents support phasing in the fee so that reduced payments equal the $80,000 balance of the PID.  Fort Collins resident Eric Sutherland commented on Mr. Mills’ mention of being relieved of fees for Boxelder Basin Regional Stormwater Authority (BBRSA) and called BBRSA one of the most useless, illegitimate projects in Northern Colorado. He stated that engineering studies that predict the flow are ridiculous, that the City pays the stormwater fees for residents and businesses in Fort Collins, and that the only repercussion is to take farm land out of the plains to be developed, and in the process will condemn and destroy a 200-acre organic farm. He also commented on a statutory act passed by the legislature in 1993 (after the Taxpayer Bill of Rights (TABOR) was adopted in 1992) called the Water Enterprise Activity Act. One of the provisions was that a TABOR enterprise, which is exempt from TABOR’s provisions, must be wholly owned by a single TABOR district. He claimed BBRSA is wholly-owned by three districts, Water Board Minutes August 21, 2014 2 therefore it is in violation of the statute. Mr. Sutherland stated that’s what he’s going to argue in a lawsuit to shut down BBRSA. He stated that he came to the meeting to comment on the City claiming to own land it does not own, a special piece of property that is culturally and environmentally valuable due to its proximity to the Poudre River. He stated Greeley wants to build a pipeline through there and has requested an easement on land under the canal that the City claims to have owned for 120 years due to an 1883 decree it is misinterpreting. Approval of August 21, 2014 Minutes Board Member Ortman moved to approve the minutes of the August 21, 2014 meeting as presented. Board Member Huber-Stearns seconded the motion. Vote on the motion: It passed unanimously *Board Members Brett Bovee, Brian Brown, and Andrew McKinley abstained due to being absent at the August meeting. Staff Reports Monthly Water Resources Report Water Resources Manager Donnie Dustin reported that water demand was well below average in August: just 80% of projected demand due to cool weather and light yet frequent rains. The water supply looks good. Flows on the Poudre River were a little higher than average in August as measured at the mouth of the canyon. The written report mentions Windy Gap Project water stored in Lake Granby spilled. The City receives Windy Gap water from Platte River Power Authority as part of the Reuse Plan and City staff is discussing next year’s operations with PRPA. Mr. Dustin stated he will keep the Water Board updated. City Council Agenda Review  In a conversation to prepare for the board meeting, Chairperson Malers and Vice Chairperson Hill had asked Interim Water Treatment & Operations Manager Carol Webb to add a staff report on Council agenda review to board meetings, to give notice on upcoming water-related issues at Council meetings. Ms. Webb highlighted a few items of interest on the Council’s six-month agenda planning calendar. o Ms. Webb reported the City Council adjourned meeting on September 23 discussed next steps in the Oil & Gas Association litigation. o The City Council Work Session on September 23 will discuss Safe Community budget offers, including those related to water. Board members can tune in online. o Building on Basics (BOB) 2.0 and Commercial Water Allotments will be discussed at the September 30 Work Session. The Utilities Administration Building (UAB) appropriation ordinance will go back to Council for another reading scheduled for October 7. Council did not approve the appropriation ordinance at its last meeting and requested more information. o The Utility rate ordinance first reading is set for October 21. o A series of Work Sessions will cover adopting a revised Climate Action Plan. Ms. Webb mentioned that she would review Budgeting for Outcomes (BFO) offers later in the meeting under the “Other Business” agenda item, and discuss what was included in the City Manager’s recommended budget to Council.  A board member inquired about Eric Sutherland’s comment, asking whether staff is gathering information in response to a Water Board request about Boxelder and the City owning property Water Board Minutes August 21, 2014 3 and the canal right of way. Interim City Attorney Carrie Daggett replied that there are materials already available on the website that might answer those questions; staff is providing Council with materials regarding the Greeley pipeline project easement and additional information for the Sept. 23 meeting. Introduction of New Water Rights Attorney Ms. Webb introduced Eric Potyondy, a new attorney in the City Attorney’s Office who will advise water and wastewater utilities, and assist with other water-related legal matters. He started with the City on September 2. Mr. Potyondy grew up in Fort Collins, graduated from Rocky Mountain High School, and was a Parks seasonal employee for the City for three years during his school years. He earned his B.A. in Political Science from University of Colorado, his J.D. from CU School of Law in 2006, and was a law clerk for Water Court Division One Judge Roger Klein for two years. He comes to the City from the Boulder/Arvada law firm of Buchannan and Sperling, P.C. where he has practiced water law, focusing on water rights, since September 2008. Ms. Webb stated that since the staff member presenting the Clydesdale Park HOA agenda item was not in attendance yet, the meeting would move on to Item #7. Poudre River Downtown Project (Attachments available upon request) Senior Landscape Architect Matt Day reported that the master plan has been presented to all boards, and will be brought to City Council in October. Staff was asked to soften some of the hardscape. Conceptual drawings show gathering spots along the Poudre River. Bridge improvements on College Avenue were included. A diagram to be added will show a cost estimate and a list of Phase 1 improvements. Mr. Day stated the presentation is intended to update the Water Board on revisions and seek their recommendation to Council for approval of the master plan. Highlights of the Discussion  A board member inquired about the request to soften the hardscape. Mr. Day replied that it was requested to provide more balance.  A board member inquired about the connection between these sketches and what will actually get built. Mr. Day stated the concept plans are used to communicate ways that the City could show a relationship between people and water and then take those ideas to the design development phase.  A board member inquired whether the conceptual drawings were purely for aesthetics. Mr. Day stated that the drawings are solution to problems and are pretty strong concepts, such as whether the kayak park works with the drops, and can staff solve some of the hydrology issues.  The board member asked how different these revised concepts are compared to the originals. Mr. Day stated the concepts were revised to reduce the hardscape elements. The place for people to view the kayak park for was changed to a more boulder-type field instead of a concrete seating area, for a more natural, rather than urban, feel.  Board members commented that this project was discussed at the June Water Board Work Session. Natural Areas Director John Stokes presented. Water Board Minutes August 21, 2014 4 Vote on the motion: It passed unanimously. Clydesdale Park HOA Annexation – Stormwater Fees (Attachments available upon request) Strategic Financial Planning Manager Lance Smith and Civil Engineer Mark Kempton presented information. Slides 2 and 3 of the PowerPoint show the first and second annexation areas. To ease the economic impact, the HOA is requesting a phase-in of Fort Collins’ stormwater service fees over five years. The $80,000 balance in the Public Improvement District (PID) will be transferred to the City but not to the Stormwater Enterprise Fund. Phasing in stormwater service fees is not normally done. The City approved it only once, in 2006 for the Southwest Annexation, which was not supported by the neighborhood, so the City conceded to a phase- in of the stormwater fees. Slide 10 shows annual Boxelder Basin Regional Stormwater Authority (BBRSA) fees that Larimer County currently collects from the neighborhood and forwards to BBRSA. Once annexed, the City would collect stormwater service fees from the Clydesdale Park neighborhood and forward a portion of those (approximately $75 per lot) to the BBRSA. The stormwater fees are not just for protecting homes if the area floods; it also pays for protecting them in case of emergency, for emergency vehicles access, and stormwater improvements and maintenance throughout the City. Depending on lot size, each resident will pay between $210 to $240 dollars per year. Slide 11 lists Financial Considerations: a three-year phase-in of fees (starting at $75) would result in a loss of stormwater service fee revenue of approximately $61,845. A five-year phase-in would result in a loss of stormwater service fee revenue of approximately $92,225. Highlights of the Discussion  A board member inquired about the road cross section. City Planner Jason Holland replied that neighborhood streets have about a 51-foot right-of-way; Carriage Parkway is 70 feet; standard City cross sections. Stormwater runoff is collected in catch basins that discharge into ponds. The ultimate outfall is Boxelder Creek to the west.  A board member inquired about the BBRSA’s responsibility to maintain the stormwater facilities throughout the area. Will it still maintain them after annexation, and what is the City’s responsibility? Mr. Kempton stated there are two big flood control reservoirs; one has been constructed, and one is in the design phase; fees are collected to build those projects. That’s the limit of the district’s scope. They don’t maintain stormwater facilities in the City drainage basins.  A board member inquired what staff means by “year” regarding when the stormwater fees are charged: calendar year or a year from the time the neighborhood is annexed. Mr. Smith replied the stormwater fees are charged per anniversary year, such as October 2014 to October 2015. Board Member Michael Brown moved that the Water Board recommend Council adopt the Poudre River Downtown Master Plan as presented with the updates seen at the meeting tonight. Board Member Heidi Huber-Stearns seconded the motion. Water Board Minutes August 21, 2014 5  A board member inquired about the $80,000 balance in the PID. What was the intent of that fund? Mr. Smith explained the intent was to provide adequate funding to maintain, repair, and improve the streets.  Mr. Mills stated that the City didn’t annex Clydesdale Park in 2005, therefore residents were concerned the roads would not be maintained and decided to set the money aside for all public improvements for the road right of way. Interim City Attorney Carrie Daggett stated she believes the City’s policy is to not accept streets for maintenance if they’re not up to City standards. Because the Clydesdale Park roads meet City standards, the City will accept the responsibility of maintaining them.  A board member inquired whether the $80,000 PID balance is how much they happen to have or would the City normally required this amount for the purpose of maintaining roads? Mr. Mills stated he was told by the chairperson of the PID board that $80,000 is the current balance as of fall 2014.  A board member inquired that since the roads are in good shape, must the $80,000 be spent in this way? Ms. Daggett replied yes. Mr. Mills commented that since Larimer County has stated it can’t go back and determine exactly who paid the taxes, they’re not going to try to refund the money to residents.  A board member inquired whether stormwater and roads are the only two categories the board is discussing for annexation regarding how the $80,000 can be used. Mr. Holland confirmed that the money is to be used only for road maintenance; it was earmarked for public improvements for Clydesdale Park public infrastructure. Examples of how to use the money include bike lane striping along Carriage Parkway and traffic signage.  A board member inquired if Clydesdale Park is in a flood plain? Mr. Kempton replied no.  The board member commented that other developments will come into the City eventually: what precedent are we setting and how will that affect the City over time? Ms. Daggett stated that the prior instance of phased-in fees involved a forced annexation of the Southwest Enclave, because the City had grown to surround the neighborhood, and after three years the City was entitled to force the annexation regardless of residents’ support.  A board member commented that if the $80,000 is going to stormwater, they support phased in fees, but if not, they would deny the phase-in fees. Mr. Holland stated the money will definitely not go to the Stormwater Enterprise Fund. The money is not refundable, and it can’t be comingled; staff can’t turn it over to a different department. The PID money will go to the City’s Streets Department and be managed by it; it can’t be transferred to Utilities. It’s earmarked specifically for that neighborhood. Ms. Daggett stated there’s an existing General Improvement District (GID) in the City because it was in an annexed area. It functions as a separate taxing entity and continues to collect taxes and use that revenue to build streets up to City standards so the City can accept those streets for maintenance. The GID would be eliminated at that time.  Ms. Daggett stated the issue is driven by state law. There’s not a lot of flexibility on Larimer County’s end, but there may be options the City can consider, i.e. how it can offset the funds it receives. If the Water Board wants to encourage Council to consider fairness, the board can ask Council to pursue and investigate options to make the Stormwater Fund whole if there’s a phase- in of stormwater fees. Water Board Minutes August 21, 2014 6  A board member inquired if there’s no phase-in, would the fee be prorated? Mr. Smith replied no; the stormwater fees are collected monthly. The board member asked about when the City pays the BBRSA. Mr. Smith stated payment is made once a year. Ms. Daggett stated fee payers to the BBRSA pay once per year. Mr. Mills commented that residents paid Boxelder in the spring, six months ago.  A board member inquired whether the Streets Department can write an $80,000 check to Stormwater. Ms. Daggett stated that might not work because Streets doesn’t spend $80,000 in a particular neighborhood. The board member replied Streets would have to work on roads in this neighborhood eventually.  Ms. Webb commented that one option is to recommend phased-in fees but investigate options to make the Stormwater fund whole.  A board member commented that the Water Board is responsible for discussing issues pertaining to new residents when an annexation occurs.  A board member commented just because the PID was set up with an inflexible focus on roads it should not disadvantage the Stormwater Fund. The community wanted to be annexed, and took proactive action to make sure streets were kept up to City standards.  A board member commented this discussion highlights the fact that trying to address fairness is not black and white.  A board member commented the PID money is not something the City would normally expect to receive.  A board member inquired whether a PID can be set up for two purposes so that people don’t run into this issue again. Ms. Daggett stated the PID purposes are broad, to be used for public improvements in this district area, but funds are limited and need to be used in that area. She doesn’t believe the county collects stormwater fees.  A board member commented that he doesn’t want the Stormwater Fund to foot the bill.  Ms. Daggett stated that from what she hears board members saying, they might want to consider a two-part motion: if stormwater fees are not phased in, then ask Council to evaluate ways for the annexed area to be reimbursed for the fees they’ve paid.  A board member suggested language for a motion, and board members and Ms. Daggett discussed whether the language accurately reflects their opinion. Water Board Minutes August 21, 2014 7 Vote on the motion: It passed unanimously Vote on the motion: It passed unanimously Advanced Metering Infrastructure (AMI) Presentation Light & Power Operations Manager Steve Catanach summarized AMI to date. Implementation has been over the past four years and the project is now moving from deployment to operations; customer phase- in is almost finished. The project is 98% complete; meter-to-cash (billing) is operational, and staff has deployed the web portal. A mobile application is being tested and will be ready in fall 2014. Expansion of Demand Response is in the test phase. A major rollout is scheduled for the fourth quarter this year. Expected benefits (cost savings or increased revenue) were projected at $2.86 million. The electric side of the project budget is nearly $32 million; the remaining $270,000 will be spent as the projects finishes. The $179,690 remaining in the water project budget of $5.1 million will be spent on finishing the project. Ongoing annual costs will include software licenses and an addition of 2.5 FTE: $250,000 for database analyst, systems analyst (manage and troubleshoot all the complex systems), and half-time business systems analyst (manage web portal and content). Ongoing actual costs: $475,000 (total of software maintenance & support, and Utility Labor) Highlights of the Discussion  A board member praised staff for the project coming in at budget and inquired how this was accomplished. Mr. Catanach explained the water side was reallocated in the last budget cycle to complete it; on the electric side, staff experienced lower costs and was fortunate the project went smoothly.  A board member inquired whether meter reader employees were laid off. Mr. Catanach replied that because they’ve known about the project for five years prior, they were able to plan and help employees find new jobs. He’s proud of how they managed this: staff provided exceptions to the city’s educational policy to help employees hone their skills for different work, and coached them on resume and interviewing skills (personally and through the Larimer County Workforce Center). As employees left, staff hired contract employees.  Project benefits include meter accuracy, because some of the meters were 40 years old and slowed down (Utilities standards for acceptable readings are plus or minus 2%). Savings were projected at $350,000. Based on one year of data, the actual savings (added revenue) is nearly $1 million due to meter accuracy. In the past, meter readers logged 30,000 trips per year, which included trips to switch service on and off. Now, the meters have switches that can be turned off Board Member Brian Brown moved that the Water Board recommends City Council consider other means to reimburse the homeowners of the Clydesdale Park HOA for the balance of the PID funds accepted by the City during annexation. Board Member Huber-Stearns seconded the motion. Board Member Bovee moved that the Water Board, having reviewed and discussed the Clydesdale Park HOA annexation request, support the staff recommendation to deny the request for a “phased in” stormwater fee unless the Stormwater Fund is reimbursed. Board Member Ortman seconded the motion. Water Board Minutes August 21, 2014 8 and on remotely. Whereas staff used to send meter readers to homes to answer questions, those conversations with customers can be handled over the phone. And meter reading and billing can now occur on the same day.  Mr. Catanach mentioned Utilities is recognized as an industry leader by peers, and the AMI project has received awards and been recognized nationally by the Department of Energy (dream team for proactive communications with customers), CS Week (Best Small Utility Project), and others. *Brett Bovee left the meeting at 7:38 pm during the AMI presentation.  A board member inquired about the new meters’ life expectancy. Mr. Catanach stated that Utilities purchased the meters with a 20-year warranty.  A board member inquired about the Peak Partners program. Mr. Catanach stated that is the Demand Response program. Staff has deployed 166 programmable thermostats as a test; some issues need to be resolved. Mass deployment is planned by October 1, and staff will begin marketing in November. 2015 Utility Rates (Attachments available upon request) Lance Smith, Strategic Financial Planning Manager summarized the wasterwater rate increase for 2015. Cost of service was updated in 2013 with a 3% increase. The proposed increase for 2015 is 3% for all rate classes. The typical residential customer monthly bill increase will be $2.11 in summer and $1.99 in winter. There are no 2015 rate changes for water and stormwater. Mr. Smith showed the 10-year rate adjustment forecast and stated the objective is to limit any rate increase to less than 5% from one year to the next. Every other year, staff will conduct a cost-of-service study for electricity, and do the same for wet utilities on the off years.  A board member inquired if there is an assumption of inflation pressures on expenses. Mr. Smith replied yes, the budget models have a number of assumptions about revenues; one is a rate increase; another is increased demand for wet utilities as new developments are constructed, for example.  A board member inquired whether the 3% increase for next year is driven by inflation. Mr. Smith replied yes, it’s entirely driven by inflation.  The board member inquired why wastewater would increase by 3% and water would not. Mr. Smith replied that in 2013, the High Park fire drove a 4% increase in the wastewater rate due to water treatment costs. In 2014, rates increased by 4% (1% for the High Park Fire and 3% for inflation), but the City has now wrapped up fire remediation efforts and we’re carrying forward the 4% from the past two years.  A board member inquired whether the City is losing revenue because it’s been a wet year and therefore demand for water has decreased. Mr. Smith stated that although demand is down about 9% year-to-date through August, revenues are slightly above target through August. The reason is staff, who worked on the 2013 budget in the summer of 2012, wasn’t counting on additional revenue from leasing water, but the additional revenue occurred this year. Water Board Minutes August 21, 2014 9 Vote on the motion: It passed unanimously BOB 2.0 Interim Water Resources & Treatment Operations Manager Carol Webb stated she had sent the board a link to a video on the proposed quarter-cent sales tax known as Building on Basics (BOB) 2.0, and that Light & Power Operations Manager Steve Catanach had attended the City’s August 25 super-issue meeting on this topic for all boards and commissions. (BOB 2.0 is the working name for the renewal of the Building on Basics dedicated capital expansion tax.) Chairperson Steve Malers drafted a memo for board members to discuss. Board members discussed the memo content, and Vice Chairperson Hill asked board members to send their feedback to her via email. Ms. Webb stated City Council will meet in an Oct. 11 special session, so the Water Board has time to discuss the topic further at its Oct. 2 Work Session. Ms. Daggett stated that the board would be able to take action on the memo on that date if they schedule a special meeting (before or after the Work Session). Board members decided to postpone this agenda item and discuss it at the October 2 Work Session. Other Business  Board members commented that the motion regarding the Utilities Building Appropriations Ordinance from the last meeting didn’t clearly communicate the board’s opinion. The City Council saw only the vote in the main part of the meeting packet, and the motion and minutes were listed in the appendix. Council did not approve the ordinance. It will be on the agenda for October 7. Ms. Webb stated staff can include the motion language in the Agenda Item Summary (AIS) they’ll send to Council. o Board members inquired why Council didn’t approve the ordinance. Staff explained that Council wasn’t necessarily against it; they asked for more information and had questions about why this project was a priority above other Utilities capital projects. o Board members discussed crafting motions that more clearly communicate their opinion and help Council understand the bottom line. Ms. Webb suggested that staff provide examples of motions and memos from the City Clerk’s office. o A board member inquired when a memo is appropriate. Ms. Webb stated that the Council did see the minutes that were included in their packet, and they’re interested in the board’s advice on utility matters. Ms. Daggett asked the board to keep in mind Council is receiving a thick stack of material every week, and that the more clear the motions are, the easier council can understand the main point. A board member suggested discussing this topic in the October 2 Work Session. o The Water Board directed Vice Chairperson Hill to contact council liaison Wade Troxell to communicate the board’s opinion and wishes. Board Member Ortman moved that the Water Board recommend to City Council to adopt the proposed rate change of 3% for 2015 for the Wastewater Utility. Board Member Brian Brown seconded the motion. Board Member Brian Brown moved that the Vice Chair connect with the Council Liaison and communicate the board’s wishes regarding the motion. Board Member Huber-Stearns seconded the motion.