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HomeMy WebLinkAboutWater Board - Minutes - 06/18/20151 Water Board Minutes June 18, 2015 Fort Collins Utilities Water Board Minutes Thursday, June 18, 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 ROLL CALL Board Present: Vice Chairperson Rebecca Hill, Board Members Brett Bovee, Brian Brown, Michael Brown, Alex Maas, Phyllis Ortman, Andrew McKinley, and Lori Brunswig. Board Absent: Chairperson Steve Malers, and Board Members Duncan Eccleston and Heidi Huber-Stearns Board Member Alex Maas left the meeting at 7:30 p.m. OTHERS PRESENT: Staff: Carol Webb, Jon Haukaas, Jason Graham, Donnie Dustin, Matt Zoccali, Gregg Stonecipher, Mark Kempton Members of the Public: None Meeting Convened Vice Chairperson Hill called the meeting to order at 5:55 p.m. Board members toured Rigden Reservoir with staff prior to the board meeting. Public Comment None Approval of April 16, 2015 Board Meeting Minutes Board Member Alex Maas moved to approve the minutes of the April 16 meeting. Board Member Phyllis Ortman seconded the motion. Vote on the motion: It passed unanimously Staff Reports (Attachments available upon request) Monthly Water Resources Report Water Resources Manager Donnie Dustin reported that water demands were significantly lower in recent months due to the high precipitation. May and June demands were 69% and 65% of 2 Water Board Minutes June 18, 2015 average, respectively. It was the fifth wettest May in the 125-year record. Water supplies remain in good condition, with a good snowpack and reservoir levels reaching maximum storage capacities. There is a recent issue involving Michigan Ditch, wherein a natural landslide has moved the bed material around a piped section of the ditch and has caused the pipeline to fracture. The natural landslide periodically starts and stops, with recent rapid movement of about six feet this past year causing the recent pipeline problem. There have been recurring problems with this section of Michigan Ditch, with the pipeline installed in 2011 and repaired several times since then. The problematic section involves around two-thirds of the length of Michigan Ditch. Some possible remedies include: (1) constructing a retaining wall downslope of the pipeline to try to hold the landslide in place, (2) boring a tunnel through the bedrock underlying the landslide, and (3) placing flexible HDPE pipe in place of the pipeline (which might be more of a temporary solution). There is no concern this year, as Joe Wright Reservoir is full. In the coming years, the lack of a Michigan Ditch supply could impact the ability of Joe Wright Reservoir to fill, which would have implications for the City’s water supply agreement with Platte River Power Authority. City staff believes that Joe Wright Reservoir will fill in most years even without the Michigan Ditch, although the time to fill will be longer into the summer season. City staff will continue to evaluate the best action moving forward and will bring a recommendation to the Water Board and City Council. Drink Water Quality and Annual Consumer Confidence Reports (Attachments available upon request) Water Production Manager Mark Kempton and Technical Services Supervisor Gregg Stonecipher informed the board about the recent release of the annual Drinking Water Consumer Confidence Report and the related Drinking Water Quality Policy Annual Report. The Consumer Confidence Report is required to be available to all customers. The Policy Report is being distributed to the Water Board and City Council for their review. Intergovernmental Agreement with CSU establishing a Stormwater Utility Service Agreement (Attachments available upon request) Water Engineering & Field Services Operations Manager Jon Haukaas stated the purpose of this item is to approve an intergovernmental agreement to establish a Stormwater Utility Service Agreement between the City of Fort Collins Utilities and Colorado State University (CSU). Under this intergovernmental agreement (IGA), CSU will agree to follow the standards, requirements, and conditions related to stormwater management set forth in Chapter 26 of the City Code. The IGA establishes a baseline of impervious area above which an additional Plant Investment Fee would be required for an increase of impervious surface. Finally, CSU will be required to pay monthly Stormwater Utility Fees adjusted by a rate formula that reflects the benefits to the City system by the additional detention provided on the CSU campus and the costs associated with the operation of CSU’s own Municipal Separate Storm Sewer System (MS4). 3 Water Board Minutes June 18, 2015 This issue has been a point of disagreement between the City and CSU for about 35 years. Recent internal reviews by City staff as well as a court decision in United States v. City of Renton (2012) prompted this issue to be revisited. City and CSU staff worked cooperatively to develop the proposed methodology for calculating a fair and equitable stormwater fee for CSU. Discussion Highlights  A board member inquired about the apparent over-watering of CSU turf, causing less infiltration and more runoff during a storm event, and whether this would have any effect on the calculation of stormwater fees. Mr. Haukaas replied that only detention volumes for storage of stormwater runoff factor into the proposed methodology.  A board member inquired if this was new money for the Utility. Mr. Haukaas responded that the proposed IGA would result in about $500,000 in new revenue to the Utility. Mr. Haukaas added that this IGA sets a framework for dealing with large landholdings within the City that have over-detention on their property.  A board member inquired about the City’s efforts and expenses following the 1997 Spring Creek flood event, and whether these have played into the CSU stormwater program and how we should be viewing this IGA. Mr. Haukaas responded that these factors were considered. Board Member Brian Brown made a motion that the Water Board recommend approval to execute an Intergovernmental Agreement with CSU as presented to establish a Stormwater Utility Service Agreement. Board Member Michael Brown seconded the motion. Vote on the motion: It passed unanimously Stormwater Basin Consolidation Budget Ordinance (Attachments available upon request) Water Engineering & Field Services Operations Manager Jon Haukaas stated the purpose of this item is to transfer and consolidate previously appropriated funds from the nine individual stormwater basin capital projects and the Drainage System Replacement Project into the citywide Stormwater Basin Improvement Capital Project. All appropriations will continue to be used for stormwater basin management improvement projects, while improving transparency and flexibility to fund and construct the highest priority stormwater improvements that are required citywide. Ordinance No. 168, 1998 changed the collection and use of monthly stormwater fees from the individual basins to a consolidated uniform and citywide basis. With the change in funding, prioritization of stormwater capital improvements is done on a citywide basis for the safety and well-being of all citizens. The funds in the individual stormwater basin accounts are not receiving new money, but are not being depleted due to a lack of stormwater projects in the respective basin. Currently, the balance of the idle stormwater capital project funds is approximately $3.3 million. This is equivalent to about one year of citywide capital improvement funding within the $14 million stormwater fund. 4 Water Board Minutes June 18, 2015 Discussion Highlights  A board member inquired how this affects the prioritization of stormwater projects. Mr. Haukaas responded that this would not cause any change in the City’s prioritization list for stormwater projects, but would result in more money being available for such City projects.  A board member commented about the public perception of dedicated funds for a specific locality within the City being used for other areas. The general concern was one of equity or the perception of equity for those residents in stormwater basins that currently have a surplus in the individual fund. The City could hear negative feedback about this. Mr. Haukaas acknowledged the concern.  A board member expressed concern about the transparency of Utility funding for stormwater projects. The board member was concerned that shifting the funds into the City’s stormwater budget and priority list would make the use of these funds less transparent than they would be if kept in the individual stormwater basin accounts. Mr. Haukaas disagreed and stated that moving the funds into a single account would make the use of such funds more transparent under the Master Plan process underway at the Utility.  A board member inquired about situations in which one project overspends and uses more money than anticipated and budgeted. Mr. Haukaas replied that projects continue to be funded in priority to the full extent to finish the project, such that one project could delay and impact the availability of funds for a subsequent project.  A board member inquired how quickly the reallocated funds would likely be spent under a citywide program, and whether it would be prudent to wait to utilize the new funds until the stormwater master plan has been refreshed. Mr. Haukaas agreed that waiting for a revision to the master plan would make sense, but also stated that there were immediate needs and project for the funds. Board Member Brian Brown made a motion that the Water Board recommend consolidation of the remaining stormwater basin budgets as presented by staff. Board Member McKinley seconded the motion. Vote on the motion: Motion passed with a vote of 7 to 1 (Nays: Lori Brunswig) Dissenting vote was due to concerns about the lack of transparency that would result when the stormwater funds are consolidated into the single citywide stormwater capital projects fund. Appropriation of Prior-Year Reserves for Water Distribution Infrastructure Replacement Program projects in 2015 and 2016. Re-appropriation of existing funds in the Wastewater Fund for Drake Water Reclamation Facility Replacement projects (Attachments available upon request Jon Haukaas, Water Engineering & Field Services Operations Manager stated the purpose of this item is to approve Ordinances for the following reasons: 5 Water Board Minutes June 18, 2015 1. Appropriating $745,000 in prior year Reserves to be used for unanticipated water distribution system infrastructure replacement project expenses and escalating construction costs in 2015. 2. Appropriating $1,000,000 in prior year Reserves to be used to fund additional water distribution system infrastructure replacement projects in 2016. 3. Re-appropriating $300,000 in existing funds in the Wastewater Fund from the Collection System Replacement Project Fund to the Water Reclamation Replacement Project Fund. This transfer would be used for unanticipated equipment replacement at the Drake Water Reclamation Facility. In 2014, plant investment fee revenues were $5 million over budget adding to reserves which can be utilized for this purpose. The Wastewater Collection System Fund has prior appropriations above what is needed for projects in 2015. The unanticipated projects that are the subject of these funding requests are the result of unforeseen project changes, and projects outside of the Utility (such as road projects) which impact the Utility infrastructure and for which the Utility is billed by the constructing entity. Discussion Highlights  A board member inquired about the planned costs of the Mountain Avenue pipeline replacement project versus its current costs. Mr. Haukaas responded that the project was initially estimated to cost $800,000 and is now estimated to cost between $1 and $1.2 million.  A board member inquired if funds had been taken out of the Utility budget for water distribution line repairs and replacement. Mr. Haukaas responded that the modification of the water distribution line capital projects funding from $2 million annually down to $0.5 million annually was an internal decision within the Utility to draw down reserves.  A board member inquired what would happen if this proposed appropriation measure did not pass. Mr. Haukaas responded that the City would still have to pay its billed charges for these unanticipated expenses, and the effect would be to delay other projects that have been scheduled for 2015.  A board member inquired what lessons could be learned by the Utility moving forward. Mr. Haukaas responded that the Utility has learned the value in improving communication between various City departments regarding planned projects, and that more detailed analysis (beyond conceptual) would greatly improve budget estimates for projects.  A board member inquired how the proposed appropriation of $1.75 million compared with the total funds available in reserve. Mr. Haukaas and Ms. Webb responded that the Water Fund currently has $61 million, most of which is dedicated to the Halligan expansion project, a minimum reserve balance ($4.6 million), and other approved projects. Within the Water Fund, approximately $5 million is free to spend on projects and initiatives such as the one proposed. Mr. Haukaas also clarified that this appropriation would be an expansion of the existing funding request under the Budgeting 6 Water Board Minutes June 18, 2015 for Outcomes (BFO) process, and would proceed to a budget lead team, and then require City Council approval.  A board member inquired about Phase 3 of the Mountain Avenue water line replacement project, and whether the unanticipated increased costs for Phases 1 and 2 had been incorporated into the budget projection for Phase 3. Mr. Haukaas replied that it had been taken into account.  A board member asked if the use of $5 million from Plant Investment Fees (paid by new development) to fund replacement projects in areas outside of the new development was an unsustainable model. The concern is that when development within the City service area slows, that funding will not be available to fund necessary water infrastructure replacements. Mr. Haukaas responded that historically there has been an effort to segregate the use of revenues, with water rates used to fund operation and maintenance activities and Plant Investment Fees used to fund capital projects, such as replacements. There was additional discussion on this topic. Board Member Phyllis Ortman made a motion that the Water Board support the request for budget adjustments and recommend approval of the Ordinances by City Council. Board Member Michael Brown seconded the motion. Vote on the motion: It passed unanimously Water Supply Planning (Attachments available upon request) Water Resources & Treatment Operations Manager Carol Webb and Water Resources Manager Donnie Dustin explained City Council had asked the Utilities to look into some recent issues of concern related to development fees for water infrastructure and the future of maintaining various water service providers within the city limits. The concerns from residents and developers have included: (1) the cost of new housing development and particularly water fees is too high, (2) the inability of affording housing projects to pay for high development costs, including water development fees, (3) future use of the City land banks, (4) a general confusion from residents about water service providers, (5) a lack of integrated water planning across the city, and (6) the influence of disparate water providers on proposed regional water projects, such as the Northern Integrated Supply Project (NISP). A board member inquired if there was interest from East Larimer County Water District (ELCO) and Fort Collins-Loveland Water District (FCLWD) in re-opening these types of discussions. Ms. Webb said that they had recently gone to board meetings for the two water districts and there did seem to be a willingness to discuss the issues. As background, the City attempted to take over water service within the FCLWD service area in 1979-1980, resulting in a series of lawsuits. These lawsuits eventually led to many of the cooperative agreements in place between Utilities and FCLWD today. A board member inquired about the policy of Northern Water to require a certain base water supply separate from the Colorado-Big Thompson project units, and how ELCO and FCLWD 7 Water Board Minutes June 18, 2015 seem to be in violation of this policy requirement. Ms. Webb and Mr. Dustin replied that the districts may have received an informal waiver from Northern Water but that it was unclear. A board member inquired about the vulnerability of the two districts to wildfire due to reliance on a single source, and City staff responded that it was indeed a concern. A conversation took place between the Water Board and City staff about the presentation of water supply yields as shown in the presentation slides. A board member recommended that the “average year” yield information be removed, leaving the focus on the policy goal of yield in a 1-in-50-year drought. These graphs are meant to illustrate several points, which include:  That Utilities has a firm yield (defined by the 1/50 year drought water supply) of about 31,000 acre-feet per year (afy) without Halligan expansion and 38,600 afy with Halligan expansion.  That current water demands are 25,000 afy and are expected to increase to 35,200 afy by 2040. Thus, the Utilities can’t meet its projected 2040 water demands without a water supply project such as the Halligan Reservoir expansion.  That current water demands within ELCO and FCLWD are about 6,200 afy and are expected to increase to 13,200 afy by 2040. This means that the projected increase in water demands within the ELCO and FCLWD service areas of 6,000 afy cannot be met by the estimated firm yield surplus of 3,400 afy available after the City constructs the Halligan expansion project.  That the unfirmed, average year yield of the City water rights is 55,000 afy, which is calculated as the maximum diversion of Poudre River water rights and CBT shares including times during the spring runoff when the river flow far exceeds any current or estimated water demand within the city. Reservoir storage would be required to make the full extent of this 55,000 afy actually useful to meet water demands within the City.  The City Council has asked how the Utilities “surplus” Poudre River rights could be used to help provide a water supply to the ELCO and FCLWD water districts. These graphs were intended to illustrate that Utilities’ water rights in the Poudre River will not be very useful to meeting firm yield within the neighboring water districts. Another conversation took place about the participation of ELCO and FCLWD in the various regional water supply projects. FCLWD and ELCO (referred to as part of the Tri-Districts) were initially part of the Halligan-Seaman Reservoir expansion project but withdrew support in 2009, due to costs and lack of progress. FCLWD is currently a participant in NISP, while ELCO is not. Discussion Highlights  A board member commented that encouraging affordable housing in certain geographic areas of the City could cause a disproportionate impact on these areas in terms of infrastructure overuse.  A board member inquired about the total development cost comparison between areas within Utilities’ service area, and those areas within the ELCO and FCLWD service areas. Mr. Haukaas stated that there is a perception that land costs are higher within the