HomeMy WebLinkAboutWater Board - Minutes - 12/11/1984Notes from .Join} ri}v (_niinri l LI,a4rr Board I;Iprk GoGtjnn
December 11, 1984
Board Present Norm Evans, Henry Caulfield, Neil Grigg, Dave Stewart,
Mort Bittinger, Tom Sanders, Bernie Cain, Tom Moore
John Scott (alt.)
Council Present: John Clarke, Gerry Horak:, Barbara Rutstein, Kelly Dhlson,
John Knezovich, Bill Elliott, Ed Stoner
Staff Present Bill Carnahan, Mike Smith, Dennis Bode, Molly Nortier
The consultant, Dave Stewart gave a summary of the Water Rate Study with
conclusions and recommendations. Alternative No. 3 was selected as the
recommended alternative. City staff, Council, and Water Board should
investigate further the advantatges and disadvantages of a phased metering
program taking into account water resources, possible changes in water use
patterns, and possible loss of water revenues.
John Knezovich --- How long would it take to realize a payback: from the
capital costs of converting our system to the rate structure the consultant
recommends?
Answer --- That question was removed from the scope of services. The
consultant was asked only to look at advantages and disadvantages of a metered
scenario vs. a flat rate scenario. This question will be part of the staff's
responsibility once the study is complete.
John K. --- No one is prepared to discuss the payback because no one has done a
simple calculation. It amazes me that we get all tied up in theoretical
numbers. I'd like to jump from the intuitive and get the facts. It doesn't
appear to me that the study gives us any of those facts.
Ed Stoner --- Reading meters for $14 - 15 per year seems low.
John Clarke --- We need a rate structure to plug into this program in order to
drive the model. What Council and Water Board need to do is to decide what
rate structure needs to be plugged in and start to drive that model to come
up with some numbers.
Neil Grigg --- Through computers we can look at more than one alternative.
Henry Caulfield --- There is enough material in the study in general terms to
react.
Clarke --- Council would appreciate the Water Board's guidance. We
rely heavily on your expertise and ability to analyze. Council is not in a
position at this point to say yes or no to a phased metering approach other
than seek the Water Board's advice based on the information in the report.
Ed Stoner --- What percentage of the revenues are fired and how much is
variable? Answer --- In 1984 the amount of revenues through rates was $5.8
million- All but about $1.2 million of that is essentially fixed. The Total
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cost of the system is around $17 million per year. Most is fixed. There are
variable costs in 08M.
Stoner ---Who needs to tie all of this together? Water Board. Council,
Consultant, Staff? Answer --- The Consultant, the Water Board, and the staff.
Stoner --- Do we stay with a flat rate with increased fees or go with phased
metering?
Clarke --- There may well he a couple of scenarios for phasing - one rather
rapid, the other rather slow; or possibly a third.
Stoner --- The study shows the City may lose dollars if we jump into a
program too quickly. The Water Board needs to come hack to the Council and
show that we won't lose any money.
Rutstein --- The Water Board should look at several things:
1) Go over the study. The Council should see the minutes so they will know
what questions were asked and how the discussion went.
2) Make recommendations.
3) It is possible we might put in meters_ and people would use less water, and
we would have to increase the rate -- That would not be good.
How can we keep a steady flow of funds to the Water Department, keep green
lawns, and use the 22-24 inches of water per year thereby reducing consumption
in order to put off expansion and the peak flow demand? If we can do that
without meters, that's okay; if we can't do it without meters, how do we do the
metering? This should he the goal. I would hate to penalize people for using
less water. We also need to look at capital expansion.
Dave Stewart --- The revenue requirements are set. Rates might go up but money
transacted would be approximately the same on an annual basis. We need to
recover that cost.
Neil Grigg --- Mike Smith has in mind to look at whether these things would
happen. Look at goals and how we would accomplish them with the least
unfavorable impact. With Dave Stewart's help and staff's help, Water Board can
come forward with some interesting observations on how that can he done.
John K. --- in the last couple of years two of our neighboring cities of
Loveland and Longmont have made conversions and neither water department has
dried up. Seek information from these departments and find out how much of a
change there was in water usage. Mr. Stewart has asked us to look at
alternative No. 3 and I guess I have a problem with it. You would need a CPA
to figure out how much you would save on your bill. We owe it to the citizens
of Fort Collins to institute a system that is simple, that each of us who
practices the conservation ethic would be able to measure our savings. I am
not a big believer in the green lawn syndrome that apparently exists in Fort
Collins. There should be a base charge but don't factor in the green lawn
charge. It seems that there should he easier water rates than are programed
in figure 4-8.
I would urge the Water Board to look at other alternatives; any alternative
that wouldn't require an accountant or a home calculator.
Green lawns have survived in Loveland and Longmont. There are a variety of
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ways to attack the problem. Make a capital investment of a sprinkler system.
Use aeration, apply fertilizer, etc. for a better lawn. It should be a
structure that allows citizens to conserve to whatever degree they want to
and yet come up with an end product of which they are proud. It might mean
some will turn their yards into rock: gardens. I don't have a problem with
that, but I do have a problem with a bifurcated water structure.
Caulfield --- With Alternative 1 you could have rock; gardens if you wanted to
and be exempt from the green lawn charge. Alternative 3 is complicated. 50%
of that green lawn charge is 1/2 of the ET rate. There are alternatives that
are simpler.
John K. --- If you are truly in a conservation mode, you would design a system
that would reward the people who would conserve and show them the dollar
savings. ,
Caulfield --- Alternative 1 has a charge for any water in excess of ET rate,
a conservation element.
John K. --- Going into the watering season, we wouldn't know ET rate for that
particular season.
Caulfield --- It would be a fixed average number . Figure 3-3
Stoner --- Likes No. 1 better too.
Horak: --- I thought we had been charging CSU a surcharge.
Dave Stewart --- The charges in the report are raw cost of service charges.
They do no include any surcharges existing or not. Those costs need to be
applied to cost of that service. CSU does not participate in water rights or
plant investment fees.
Horak: --- Make sure of what we actually do in practice.
Mike Smith --- In contract modifications that we approve each year the
surcharge is referred to as a sewer surcharge. CSU rates have always been
higher than normal rates for the City. We researched all the agreements with
CSU back to 19S0; nowhere is there a justification of why the rates were higher
for CSU than the City. In the 1984 contract they don't provide water rights
and we have allowed for that, but there is no documentation of that.
Horak. --- Regarding the cost of service for the Poudre Fire Authority -- To me
it would make more sense instead of straight service charge to the Fire
Authority, to break it off to areas of the City for service provided if there
is a differential for cost. The Fire Authority uses the water to fight fires
in those areas. Proximity to fire hydrants ---It's the people's property you
are protecting not the Fire Department's.
Caulfield --- The people through their water rates are paying for their water
for fire protection in general.
Horak. --- It is the same for our parks. Even if it isn't treated water. There
is still a. _e=_t for providing that water. One could argue the same case for
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the Fire Authority_
Caulfield --- It is conceivable you might want the Fire Authority to pay the
Water Department out of its budget for the water it gets.
Horak --- What we are creating is an accountant's dream. We should have the
same standards throughout the community.
Caulfield --- The Parkas & Rec. Dept. doesn't pay for their water either.
Horak --- I would be pleased if the Water Board is going to take some time to
go through this. What did we really try to find and what did we come up with?
How does that direct us for decisions that Water Board and Council have to
make? That is probably in the report, but I don't think the Council should
have to spend days reading through it to get these answers. This is not the
responsibility of the Council. Let's let the Water Board and staff tell us
where we go from here.
Dhlson --- I object a little to Barbara's comments. She painted a pretty bad
scenario of what would happen with water meters. I don't think, as John K.
said, that we are breaking any new ground here. We have a lot of precedence for
water meters throughout the country. It could be, but I don't see people
paying a lot more for using less water.
I think; we need to bring up the equity issue. This is one of the main reasons
we are looking at water meters and people mentioned it in the survey. They
want to be paying for the water they use. They do not want to pay for water
that other people are using in excess. It becomes more complicated when you
actually get to the idea of installing meters. People have a misconception of
what meters do. They simply measure the water, they do not set rates. They
obviously can affect the rates by the cost of installation, the reduction of
water revenues etc. Possibly the rates could be higher, but my bill could be
lower because I am using less. Even if rates per 1,000 gal. went up, some
people could be paying less because they are conserving. Look at the equity
issue. Be clear on what meters do.
Elliott --- I want to know more about the public's reaction to meter
installation. I want to hear how the Water Board is going to deal with that
because there are a lot of people who have a negative response to having the
installation, and yet seem to favor the consumption technique of charging for
water. How is that going to be addressed? The whole concept of equity is
intertwined with conservation. Also I will be anxious to hear if it is more
cost effective to go to metering. I feel like I'm taking the same approach as
the rate study, raising lots of questions. As far as the Poudre Fire
Authority; I'm not sure how that would take place. It seems like a cost shift
to me. With regard to CSU, how would it impact the Water Department in
providing a service.
Stewart --- There is a cost associated with the peaking factor for the Fire
Department. Policy decision would have to be made on how that peaking factor
'is allocated, whether to the Fire Dept. or to the customer which keeps his
insurance rates down. That is a question that needs to be asked.
Clarke --- We need to bring together the massive information generated in this
report. Water Board has ind_cated a willingness to do that. Also, we will
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call upon the consultant for additional information, clarification, and
recommendations. Council would like to see this brought together as an
executive summary along with some recommendations which talk about things such
as a phased metering program, what scenarios may be available in that program;
also rate scenarios and how they apply to that program. Additionally, the
equity question needs to be addressed.
Evans --- The Board feels that what has been outlined is their responsibility.
We feel good about it, we want to do it, and we shall do it.
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