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HomeMy WebLinkAboutWater Board - Minutes - 09/17/2015Water Board Minutes September 17, 2015 1 Fort Collins Utilities Water Board Minutes Thursday, September 17, 2015 Water Board Chairperson City Council Liaison Steve Malers, 970-484-1954 Wade Troxell, 970-219-8940 Water Board Vice Chairperson Staff Liaison Becky Hill, 970-402-1713 Carol Webb, 970-221-6231 PRESENT ON ROLL CALL: Chairperson Steve Malers, Vice Chairperson Rebecca Hill, Board Members Brett Bovee, Duncan Eccleston, Kent Bruxvoort, Alexander Maas, Andrew McKinley, Phyllis Ortman, and Brian Brown. Board Absent: Board Members Michael Brown and Lori Brunswig. Others Present Staff Jon Haukaas, Kevin Gertig, Donnie Dustin, Liesel Hans, Lance Smith Randy Reuscher, Justin Fields Guests None Meeting Convened Chairperson Malers called the meeting to order at 5:35 p.m. Public Comment None Introduction of New Water Conservation Program Manager Dr. Liesel Hans Dr. Liesel Hans introduced herself and briefly described her relevant experience. Approval of September 3, 2015 Special Meeting Minutes Board members requested the following revisions to the draft September 3, 2015 minutes.  In the proposed floodplain variance motion, CLOMAR should read CLOMR  In the proposed floodplain variance motion, item 2 should read “b”  The friendly amendment to the proposed floodplain variance motion should be identified as item 5.  Under Staff Reports, “design and infographic” should read “design an infographic”  Additional recommended edits were identified in the transcript of the discussion of the floodplain variance agenda item. o On page 30, line 5, “Traxtell” should read “Troxell” o On page 60, line 5, “elevated” should read “elevated or floodproofed” Board Chair Malers moved to approve the minutes of the September 3, 2015 special meeting, contingent upon these revisions. Board Member Ortman seconded the motion. Water Board Minutes September 17, 2015 2 Vote on the motion: It passed unanimously, 8-0, with one abstention *Board Member Brian Brown abstained due to his absence at the September 3 meeting. Staff Reports (Attachments available upon request) Monthly Water Resources Report Tony Spencer, Water Resources Division reported:  Higher than normal temps, lower than normal precipitation  above projected demands, 107%  Poudre River diversions 109% of pre-fire average  Poudre River flows lower than average  Colorado-Big Thompson (C-BT) 85% full  National Oceanic and Atmospheric Administration (NOAA): above average precipitation, average temperature  El Niño strengthening Discussion Highlights  A board member inquired about storage protocols and why levels in Granby are high whereas Horsetooth is low. Staff explained it was an operational issue and offered to invite Northern to a work session or a meeting.  A board member inquired about a footnote on the Halligan Quarterly Update that stated that reimbursement from prior partners had not been appropriated to the project. Staff responded that reimbursements went into the water fund, but must be appropriated by council to a specific project. Staff plans to do a single appropriations request once costs have been firmed for the project.  A board member inquired about total costs. Staff responded that permitting has been $13 million to date; construction costs will be closer to $25 million. Permitting costs are ongoing, estimated at about $1 million per year. Executive Director Report Fort Collins Utilities Executive Director Kevin Gertig described work on geotech studies in support of a proposed tunnel on the Michigan Ditch slide area; Utilities wishes to begin tunneling after snowmelt. Slide is currently highest priority; Ditch water is re-usable and a critical component of the City's water portfolio; $7 million project to maintain delivery of Michigan Ditch water. This is long-term mitigation for a problem that has been ongoing.  A board member inquired about Northern Integrated Supply Project (NISP) status and steps forward after substantive comments to the Supplemental Draft Environmental Impact Statement (SDEIS). Staff responded that regulatory agencies plan to continue to meet.  A board member inquired about lessons learned from the NISP National Environmental Policy Act (NEPA) process and wondered whether a Supplemental Environmental Impact Statement (SEIS) could be avoided. Mr. Gertig replied that Fort Collins has been proactive regarding data collection and that Halligan is a good project with a strong purpose and need. Halligan could support instream flows. Impacts will be minimized.  A board member inquired about agency staff availability. Mr. Gertig agreed this could be an issue, especially where specialized skills are required. Water Board Minutes September 17, 2015 3  A board member inquired about the proposed no-action alternative for Halligan, which includes re-operating Joe Wright Reservoir. Mr. Gertig responded that he did not have the technical expertise to answer, but mentioned there would be constraints in any operational adjustments.  Mr. Gertig offered to provide objective performance metrics selected by the board. A board member suggested water supply, snowpack, year-to-date water use would be of general interest to the public.  A board member inquired about availability of a map of Front Range aquifers. Mr. Gertig responded Fort Collins does not have a current need, and water quality would be a step down. It could be useful as a trade. 2016 Water Utility Rates (Attachments available upon request) Utilities Rate Analysts Randy Reuscher and Justin Fields presented proposed changes to Utilities rates and Plant Investment Fees (PIFs). A first reading of this item is scheduled for City Council on November 3; staff requests the board make a recommendation to Council. Staff proposed no increase in 2016 rates for water and stormwater, and a 3% increase for wastewater, relative to 2015. Staff proposed 2016 PIF increases for water (5.2%), stormwater (5.1%), and wastewater (13.0%). The proposed increase in the water and wastewater PIF is designed to partially offset the loss of revenue from decreased base-level and peak demand. The proposed increase in the stormwater PIF reflects increased equity in the system since the 2013 valuation. The proposed 3% wastewater rate increase would be distributed among four customer classes. Staff presented two options, Option A Smoothed and Option B Cost of Service. Option A is preferred by staff because it captures the underlying trends in the cost of service for each customer class, whereas Option B reflects year-to-year variability. Under Option A, rate increases would be 2.5% for all customer classes except commercial, which would be 4.5%. Under Option B, rates increases would range from 1.3% (single-family residential) to 6.3% (commercial). The overall 13.0% increase in the per gallon wastewater PIF reflects the valuation performed by Utilities’ asset management program. A different methodology was previously used for valuation. The recommended PIF adjustment would vary among customer classes. Duplex and multi-family would be 2.0%. Commercial would range from 1.0-12.0% depending on connection size. The charge for connections >2” is calculated based on flow and water quality parameters biochemical oxygen demand (BOD) and total suspended solids (TSS). Discussion Highlights Water  A board member inquired why there is a distinction between a duplex and multifamily for the PIF. Staff explained it was data-driven. Staff replied that there isn’t a difference in the PIF charge between the two classes, but there is for the monthly billing charges, so it is kept separate in the PIF model for consistency and to monitor potential differences in customer usage patterns. Wastewater  A proposed rate increase would maintain reserves. Two options (see explanation in summary above.)  A board member inquired whether there was consistency between previous Cost-of- Service (COS) studies and the most recent study. Staff responded that there is not a high Water Board Minutes September 17, 2015 4 level of consistency. The COS is a guideline or a template, and the lack of consistency is not a surprise. Staff prefers Option A.  A board member inquired how the consumption numbers mesh with numbers in the conservation plan, which indicate decreased use. Staff responded that this analysis was conducted using peak day use.  A board member inquired about use for specific homes that may not meet modeling expectations. Staff explained that models account for typical situations but are not perfect.  A board member commented that the big message is that customers are using less, so the per-unit cost must be higher.  The other key point is that Utilities is investing in infrastructure, which has value and must be paid for. A timeline associating rate increases and drivers would be helpful. A running average of rate increases would help explain the key issues and provide a basis for the smoothing performed in Option A).  A board member inquired about the impact of greywater on rates. Staff agreed that they would need to look at impacts, but suspect the impact would be small in magnitude.  A board member inquired about steep wastewater rate increases in the last several years and wondered how the City compares to its peers. Staff quantified rate increase since 2000. Staff explained that the rapid increase beginning around 2008 can be attributed to the failure of the Mulberry plant. The City's current approach is designed to avoid drastic rate increases.  Stormwater: PIF increase due to capital investments and inflation.  A board member inquired if, when tap fees and PIFs for other services are combined, how Fort Collins compares with its peers. Staff explained that most comparisons include water and wastewater but not stormwater. Staff pointed out that one of the reasons the land outside the city limits is cheap is the lack of City services. Fort Collins and Longmont are much cheaper than any other northern Front Range community. Fort Collins is an outlier because of its strong water rights portfolio, infrastructure, and capacity.  A board member inquired about the 0% increases for water and stormwater. Staff anticipates increase in 2017-18, but cannot justify a 2016 increase based on current numbers.  A board member inquired about the driver for stormwater PIF increases. Staff identified capital projects as the primary driver.  Rate increases (or lack thereof) affect the speed at which capital projects can be accomplished and financing decisions.  A board member inquired about the unanticipated PIFs received this year and asked what the City will do to ensure that there is adequate funding to carry out projects, even during an economic downturn when there are fewer PIFs? Staff asserted that they are planning for a downturn, and that proper engineering for new work will minimize future repair work. Board Member Alex Maas excused himself from the meeting at 7:05 p.m.  A board member inquired why the waterwater PIF increase is shown at 13% when that is only the proposed change for one class of use. Staff explained that the gallons per day for all customer classes is being multiplied by this number to achieve the appropriate rate increase across all classes of use.  A board member inquired about the schedule impacts associated with 0% rate increases. Staff responded that the city will have additional debt capacity as they pay off existing bonds. Staff is having those discussions now for long-term planning.