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HomeMy WebLinkAboutWater Board - Minutes - 05/15/19876 MINUTES Water Board May 16, 1987 Members Present Norm Evans, President, Henry Caulfield, Vice President, Neil Grigg, Marylou Smith, John Scott, Tom Moore, Stan Ponce, Ray Herrmann, Tom Sanders, Jim Kuiken, (alt.) Staff Present Mike Smith, Dennis Bode, Ben Alexander, Andy Pineda, Paul Eckman, Assistant City Attorney Members Absent Dave Stewart, Jo Boyd (alt.) President Norm Evans opened the meeting. The following items were discussed: Minutes The minutes of April 17, 1987 were approved as distributed, rages rrom the report witn revisions that were suggested at the last meeting, had been sent to Board members with their packets. The president asked for comments. Norm Evans turned the Board's attention to the page headed, "Incre- mental Water Metering Strategy," He referred to the paragraph under the table. "Specifically, the amount of water the City would have to obtain would be less if more of the residences were metered. Similarly, the City would not have to build as much water treatment capacity if it were treating a lesser amount of water because of metering. Both of these would help reduce the cost of development in the future." Regarding these sentences, his first thought was there was nothing wrong with it because it does reduce peak hour demand. He also recognizes that the volume of water to be treated would be less, but the volume to be treated would continue to increase due to increased population regardless of what other demand management we use. He thinks the statement from the report may be misleading. Dennis Bode asked if he meant that it should say that it would increase at a slower rate. Mr. Caulfield agreed that he had to stop at the sentence and think about it before he decided it was Sat- isfactory. Mr. Bode said staff would review it to see if it could be made clearer. JUN 15 192 9:19 303 221 6593 PRGE.002 Page 2 Water Board Minutes May 15, 1987 Mr. Caulfield referred to page 3 of the same section. He would like to strike the last three sentences of the first paragraph beginning with "However and ending with concern." He believes that we should leave it to the meeting with the Council and in effect, not prejudice the question of whether there should be a faster or slower policy of metering. He would also like to make the conclusion consistent with that as well by adding, in the first sentence of the conclusion, "with the concurrence of the Water Board" after the word staff. In the second paragraph the words "the incremental approach" should replace the word it. Between the next to last and last sentence, we need a statement that says, that the 4 to 5% and the 3 to 4% overall increase for flat rate customers "will not be due to metering." His final suggestion concerns the "green lawn" concept which should refer to Dr. Danielson's study in summary form. "You talk about fixed costs," he said, "but you don't talk about the green lawn solu- tion." He wants this brought up either at the meeting with the Council or somehow put into the report. Mr. Caulfield wished to emphasize that it is important for the staff and Water Board to go before the Council with a combined recommendation. This has been traditional through the years, he said. Mike Smith asked Heil Grigg if it was his feeling that the report meets the Water Board's expectations since Dr. Grigg and his committee worked closely with staff on this. Dr. Grigg responded that he thinks the staff and Water Board are together an the thrust of the report. He added, however, that the only area where he sees a division "is how aggressively we would push meter- ing." He tends to support the more flexible approach that staff presented in the last draft of the report while understanding Henry Caulfield's desire to keep open the option of moving more aggressively. Henry Caulfield stressed that he wants Council to have the opportunity to go slower or faster as they see fit, without their having to tell us to go back and "do it over again." The Chairman agrees with Mr. Caulfield that the language of the report ought to be moderated to make it a staff/Board report and perhaps if we found ourselves in such a position that it couldn't go forward that way, that there be provi- sions for a possible addendum. Henry Caulfield also suggested that Rich Shannon, who is not here today, should be closely involved in the process since he was a major contributor to the direction and approach of parts of the report. Mike Smith said he would confer with Mr. Shannon when he returns. Tom Moore asked what is the perception of where the Council is on this issue. Mr. Smith related that, according to Rich Shannon's observations, the majority of the Council appears to be at the level of "meters on new construction and the rest voluntary." Marylou Smith pointed out that the Council has changed within the last few weeks. She has some major reservations about the direction that the Board is heading with regard to metering. At this point she alluded to the possibility JUN 15 192 9:20 303 221 6593 PAGE.003 • Page 3 Water Board Minutes May 15, 1987 of offering a minority report on this issue, She recited from the minutes what Neil Grigg had stated at the previous meeting: "We need to look at what each Issue will cost, what benefits there will be, what Impacts there will be, and what we will risk if we don't do it." She stressed that she believes in con- serving water. "I like the fact that we are currently on an incremental approach to metering by installing yokes in all new houses," she added. She believes that the overall financial resources in both our community and the world are less than is required to meet all of our needs. As a community we have many needs, many of which may have to be financed through plant investment fees. Ms. Smith is in favor of continuing the yoke program but not spending the money through the PIFs to fund metering of new homes. Instead, take care of our immediate needs within the next approximately 5 years for treatment plant expansion by restricting water on peak days. Many times we perceive that It is preferable to do something by means of technology. The more practical approach may be to limit watering on the peak days when we reach close to our capacity, or perhaps even investing money in pipes that would allow the use of raw water in new developments, so we wouldn't have to expand our capacity as quickly. She contends that we shouldn't be adding more expenditures for the new homeowner, since there is competition for those funds from other areas. Furthermore, she.firmly believes that we can wait in terms of the hardware costs. Moreover, the longer we wait the more likely we are to be able to take advantage of the new technology in metering. Regarding the argument of losing $10-12 million, she suggests that staff define graphically how much we could save by having perhaps 10 days a year of restrictions on peak days or two months a year of on and off restrictions. She isn't aware of any charts that say we could save $10-12 million in not having to expand if we imposed restric- tions. It is her contention that the figures would come very close. She con- cluded that the Water Board was headed in the direction of metering because the "writing was on the wall" with the previous Council. "Frankly, I don't think the same is true of our present Council." She added that she believes this Council is interested in conserving water but not by metering at this time. If we are not looking at other City needs such as street oversizing, etc., it is easy for us to assume that using PIFs for meters is the way to go. President Evans thanked Ms. Smith for raising excellent questions. "Perhaps you are not as much in the minority as you think," he added. We may have arrived at the assumption that restrictions are not acceptable without really investigating that option. Mike Smith said that there is probably enough data from other entities that have imposed restrictions as a means to cut down peak use, that we can explore it for ourselves. The question is, is it publicly acceptable to do a restric- tion program? Ms. Smith used the illustration of the family whose resources don't quite cover all of their needs. They may not necessarily think in terms of increasing the revenue for that month. They might instead decide to cut down in certain areas, she said. Though metering seems like a good way to cut back, 1n essence, another way to cut back which appears to be less palatable, is restrictions, although it may not be as objectionable as we think. If we look at the popu- lation as a whole, there may be a lot more support for restrictions than for metering, she concluded. JUN 15 192 9:21 303 221 6593 PRGE.004 • Page 4 Water Board Minutes May 15, 1987 It seems to Neil Grigg that there is a lot of merit in the recommendation as it Is written. With the 3 to 5 years evaluation, the City's investment is not going to be very much. Meters on new construction is not going to take any- thing out of the City's coffers, although it will add very slightly to the cost of a new home; under $100. Also, in his opinion , there would be a significant number of people who would volunteer. We could study homes that were metered under the new construction provision of the program. Then we could study con- versions, and compare those to people who didn't convert and generate a lot of valuable data at the end of 3 to 5 years. If we had about 200 homes per year metered, how much would that take from our PIFs? Mr. Bode estimated $80 to 90 per installation. Based on those numbers, Dr. Grigg estimated under $100,000 for a four year effort. MaryLou Smith asked how much the 20% increase in Raw Water Requirements would add to the cost of a new home. This may not be much in itself, but other areas of the City are in a "budget crunch ; Therefore, maybe there are some areas where we could defer spending, she believes. Neil Grigg agreed that if we cannot in turn reduce the PIF fee because we are deferring treatment plant expansion so that the cost of new homes not only doesn't rise, but may fall; then our economic analysis that metering is based on may be faulty. Ms. Smith concurred that we would be reducing costs to people by not expanding but why not reduce those costs by restrictions which would not cost anything? Tom Sanders asked if the Board had to approve the whole report. Dr. Evans replied, not necessarily. Dr. Sanders agrees wholeheartedly with MaryLou Snith on the metering issue. He thinks a metering program is premature. He also contends that the phased in approach is 'ridiculous." "Somebody's got to pay for it and I'd rather buy new water for the money,* he argued. Regarding delaying plant expansion,. he doesn't think we will even hope to do that when we don't know exactly what Thornton intends to do. The eventual movement of industry to Northern Colorado where there is relatively cheap water, is going to put more pressure on the rate of plant expansion; more than the possible savings we could derive. Furthermore, if Busch doubles the size of their plant, that would also impact capital expansion. He brought up the point of leak detection. He thinks there are other ways than to justify metering, to pursue leak detection. He went on to say that research throughout the country has shown you do save water through metering perhaps the first few years, but after that it moderates. He is totally opposed to metering and will register his opposition by voting no. Neil Grigg commented that capital expenditures was one of the big issues with the more aggressive metering recommendation, but with the gradual approach that is now being proposed, the policy would require meters in new homes only with an approximate cost of $50 per new home. Hopefully, people would save enough money on water that it wouldn't mean a net increase in their cost of living. Also, the City would pay to convert a residence when they volunteer. The unknown is how many will volunteer. We would have to shape 1t so we wouldn't have too many volunteers, he believes. If it were about 200 per year and if we JUN 15 '92 9:21 303 221 6593 PRGE.005 • Page 5 Water Board Minutes May 15, 1987 re-evaluate after 3 to 5 years, we would be talking about an investment of about $100,000, but we are not talking $12 million. (Staff note: Estimated long term savings of metering all homes is $10-12 million; estimated cost of metering all unmetered homes is about $4 million.) There may be $12 million invested over a 20 to 30 years period, if after a 3 to 5 year test period we decide to go for an expanded program, but the current recommendation doesn't do that. Jim Kuiken commented that we are assuming that PIFs will be recovered by delaying or deferring a plant, but in the initial 3 year period if we are only talking about 200 meters; in reality we aren't going to defer or delay any- thing, he contends. The difference in water consumption with 200 homes is insignificant. It makes a lot more sense to develop additional raw water sup- ply while it still exists, and you can conserve later to increase that supply. It doesn't make sense to conserve now in order to make more available to go to Denver. Marylou Smith wanted to clarify that her stance is quite different from Tom Sander's on several points, and one of them is she likes the report very much. It is a well thought-out approach so the City doesn't have that capital cost. Her concern is more of a philosophical one. That resource comes from somewhere and all the various City programs needed add up quickly. In the long run, it hurts the economy of our City when we propose things that aren't necessary. She asked if she is correct in surmising that the PIF on new homes would cover the cost of voluntary conversion. She thinks we may be facing some litigation here because we are charging different groups of users for the benefit of some other group. Specifically, she believes we may have problems with using money we get from new users to spend on existing residences. Attorney Paul Eckman explained that the plant belongs to our current water users and the new water users ought to pay a PIF to buy into that existing plant. Mike Smith commented that except for the issue of equity, he believes the physical benefits associated with metering --the monetary benefits you can iden- tify --accrue to the new people. Delaying the cost of treatment expansion is not seen by the existing customer; it is the new people who see it. Paul Eckman raised a point to ponder. "If we meter these houses for a few years and we decide we don't like it and make a decision not to meter anyone else, what are we going to do with the houses that are metered? "Just simply stop reading the meter," Ray Herrmann replied. There are many arguments for delaying our consideration of metering, Neil Grigg stated. Those that have been discussed are good arguments, but there are also many more reasons for going to meters beyond those that have been "put on the table." The water service industry is managed far better than the wastewater Industry. One of the reasons is that it has relied less on subsidies than any of the other water services. It is basically operating an the utility basis; it Is self supporting for the most part and well managed. Now if it is going to remain well managed, it needs to have certain things, one being the capability to,measure water. "We don't want to put our management on the back of the consumer, however." We don't want to make the consumer pay for meters just so JUN 15 '92 3:22 303 221 6593 PAGE.006 • Page 6 Water Board Minutes May 15, 1987 we can measure water in order to manage better if there is not a benefit to managing better. There are benefits to managing better and saving water; one of them, water conservation, is a good thing to do, not just for the sake of saving water, but to give us more options for the future. We can always adjust our rate structure with meters in place, so people can use as much as they want to use. The foundation of this metering program, as Dr. Grigg understands it, should be one where costs drop; the PIF will eventually drop because construction of new water treatment plants will be deferred, and the net cost to new homes should drop even if they do put in a $50 meter because they can choose to use less water and pay a lower monthly water bill. He concluded that we are looking at something that should have positive benefits for everybody; "otherwise, I would vote against it too," he added. Jim Kuiken responded to Neil Grigg's comments. "If what you say is true, there would be a rate structure that is attractive and nowhere in this policy is that stated." Dr. Grigg explained that this has been discussed extensively and that the rate structure would be adjusted to give the metered customers an opportunity to save money by conserving. In an earlier report it was proposed that the flat rate be increased to bring the flat rate customers closer to the rate being paid by the metered customers. This is because of an existing inequity where the flat rate customers are being subsidized by the metered customers. MaryLou Smith asked what the percentage of metered versus flat rate customers is. Mike Smith replied that there are 5,000 metered and 17,000 flat rate. He went on to say that the next time a rate increase is needed, it is staff's intention to raise the flat rate but not the metered. Neil Grigg reminded the Board of the reason for the Raw Water Requirement increase. The approximately 3 acre feet per acre was based on a certain den- sity of land use. The density is becoming higher than that so the developer is making more per acre of land than they were in the past. MaryLou Smith said she thought the reason was to have enough water for a I in 100 drought. Dr. Grigg explained that it is actually so we don't fall below the 1 in 100 protection. Ms. Smith has problems with that too. She thinks we ought to be looking at how much it costs us to be coveringg all of our risks. Dennis Bode commented that if we were to adopt the 1 in 100 reliability without a metering program or restrictions, the RWR would have to increase even more than the proposed 20%. Mike Smith.made an additional clarification regarding the PIFs. "These are rather tricky," he began. They will increase due to inflation. It costs more to put pipe in the ground, etc. What we are anticipating is that the rate of increase will be less with the installation of meters. we don't want to get ourselves in the bind of saying PIFs won't go up if we have meters because they will continue to go up to meet inflation. Neil Grigg added that we should be able to show that the adjusted PIF would fail. Mr. Smith related that in the Demand Management Report, figures were given with and without meters. JUN 15 '92 9:23 303 221 6593 PAGE.007 Page 7 Water Board Minutes May 15, 1987 Marylou Smith believes that we need to look at the public relations view of all this. The customer continues to have rate increases without benefit of our deliberations regarding the reasons. Then we start talking about meters. Can we get across to them that only the new home buyers will pay for a meter? Other areas of the City will be talking about raising taxes and all of these things are going to hit at the same time. It is important for us to see that we are not operating in a vacuum. The way the public perceives the issue is sometimes more important than the reality. As a matter of fact, it is her opinion that the metering issue will go to a vote. Henry Caulfield pointed out that as future annexations occur, and with the present policy, ELCO and Fort Colins-Loveland Water Districts will serve inside the City. In the future we will have about 1/3 of the City fully metered, because ELCO and Fort Collins -Loveland now meter. The customers served by the City will only be metered to the extent of what happens with our current pro- posal. The Council needs to be informed that this is part of the picture. President Evans asked the Board how they would like to handle the report con- sidering the points that have been raised today. "When we began to develop this policy study," Neil Grigg explained, "the idea was we would basically bring some coherence into our general water supply pol- icy, so when it comes to questions like acquiring water --whether we buy certain water rights or not --or buy these reservoirs or not, or any other question that comes before us, we would have a policy in place to allow us to respond to that." In making estimates about how much water we will need in the future, we concluded that we would need to have an idea of what the demand was going to be in the future. There are different scenarios for demand; without any meters or restrictions or with meters and restrictions. The origin of the metering rec- ommendation contained within the latest report was that we needed to predicate this report on a demand management strategy. "We thought, as a committee, that the Board was on record already on the metering issue, which we are." He con- siders the present recommendation about metering to be an implementation to the recommendation on our previous position on metering as a Water Board. If we want to overturn the previous position, we can entertain that and that would be preferable "to tearing up this whole report," he contends. He concluded that we must deal with metering or not metering as a building stone before we can deal with anything further. Ray Herrmann recalled that the Board did not take a position on metering or no metering; they merely voted to recommend the report which included the metering proposal. On the other hand, Stan Ponce recollects that the Board did take a vote on metering and it was at a time when "the handwriting was on the wall" with the previous makeup of the Council. Now that may not be the case. Neil Grigg reiterated that the position staff recommends is a very slow and cautious policy, and that is why he is favorable to it. Henry Caulfield moved that the Board vote for or against the strategy for Incremental Metering, P. 2, A through C-3 and the first two sentences on p. 3 of the report. Tom Sanders seconded Mr. Caulfield's motion. Henry Caulfield JUN 15 '92 9:24 303 221 6593 PRGE.008 Page B Water Board Minutes May 15, 1987 clarified his motion. "If you want meters according to the strategy in the report, vote for the motion, if you are against that language, vote against it. Then we could modify it, he added." President Evans asked for a vote on "Meters in all new homes, meters for those who volunteer and a review of the program in 3-5 years." Marylou Smith is an advocate of compromise she said, and she favors leaving the language as is but adding that there is a segment of the Board that doesn't agree. Mr. Caulfield thinks if you are in the minority, you could write a minority report and say that. Dr. Evans stated that if this motion is approved, Marylou Smith would like to be assured of a minority statement in the report. Ray Herrmann stressed that he is uneasy about voting today until he is assured of what the Board voted on previously: Mr. Caulfield contends that it really isn't germane to what we think today. Mr. Herrmann countered that he thinks it is germane to the action that the Board takes as a whole today. Dr. Grigg proposed that there are some hard facts and analysis that could be included in addition to what is there now: 1) Does the net cost of living for a new homeowner go up or down when he is required to have a meter? His answer is that it can be shown that the net cost (assuming zero inflation) goes down because of the new rate structure we want to implement due to equity needs, the opportunity to conserve and the low cost of adding a meter to a new house. MaryLou Smith added that it could go down with restrictions as well. 2) Dr. Grigg stated that it could be shown that the adjusted PIF fee (assuming zero inflation) will decline as a result of this overall strategy. That was the basis for all the calculations in the report. 3) With the Safe Drinking Water Act we may be responsible for water quality all the way in to the tap where as before that has been handled rather loosely by water supply utilities. With meters we'll start to learn more about the condition of that plumbing from the street to the house, and we will repair many of these at the cost to the consumer and we'll also find leaks. There will be benefits to both of these. 4) We can put the restrictions idea in the report, but that is a politically volatile idea even more than meters, in his opinion. "I'd rather have a meter and use as much as I want and when I want, rather than being subjected to arbi- trary restrictions," he added. Tom Sanders repeated his opposition to the phased metering program as a choice at this time. With the Doctrine of Appropriation system in this state, it doesn't pay to save water, he concluded. MaryLou Smith requested that the motion be amended to include the statement that a minority report be part of the document. Henry Caulfield agreed to JUN 15 192 9:24 303 221 6593 PRGE.009 Page 9 Water Board Minutes May 15, 1987 accept Ms. Smith's friendly amendment if it is made clear what the minority position is. For example, he pointed out that MaryLou Smith's and Tom Sander's positions are not very close. In that case the minority people would be required to get together to compose a minority statement. Paul Eckman ques- tioned. 'Isn't it the intent of the motion to determine what is the majority and the minority with regard to water meters.?" Ms. Smith responded that "it might be cleaner ndt to have my amendment." Ray Herrmann stated that he is against meters but still would be willing to "buy the language in the report." Ultimately in the future we will have meters, he stressed, "but right now I think it's a bad idea,' he added. Mr. Herrmann suggested that the Board should vote for or against the acceptance of the languagge as it appears in the report. Neil Grigg believes it isn't that the Board is for or against meters. There are basically three positions on meters that have been expressed: 1) For meters now as fast as we can go; 2) On the opposite end is "meters never; 3) In the middle is generally for meters, but not now; 4) Henry Caulfield added "and meters on new construction now." Ray Herrmann explained that he understands it this way: the staff has come forward with what could be considered a compromise on the metering issue as a statement for the Council. What we are voting on is whether we accept this compromise. "I'm wiling to vote on that --but whichever way I vote, I don't want anybody to mistake that as a.vote for or against meters." President Evans agreed to that clarification. Next Ms. Smith suggested that Mr. Caulfield's motion be removed from the table and a new motion offered in its place which would also state a further position of merely maintaining the current level of metering with yokes on new construc- tion. Mr. Caulfield respectfully declined Ms. Smith's suggestion. Instead, he said, let's assume that we have a vote and the position in favor of the lan- guage as he stated it, is not a majority. The people that reject it are in the majority. At that point someone could make a motion to amend that language and say we don't want new construction to have meters, but continue with the cur- rent policy of yokes on new construction. This suggestion was accepted and the secretary polled the Board on the motion with the following results: Tom Sanders, no; Stan Ponce, no; Jim Kuiken, no; Ray Herrmann, no; John Scott, yes; Norm Evans, abstained; Henry Caulfield, yes; Tom Moore, no; Neil Grigg, yes; and MaryLou Smith, no. The vote failed with 5 no votes, 3 yes votes and 1 abstention. The Chairman announced that the floor was open for further action on this question. Mike Smith stated the staff position. They would modify the report to include Henry Caulfield's suggested language which he had proposed earlier in the meet- ing. The staff would probably present what that is to Council, and if the Water Board chooses to take a different position, the staff would also forward that. Tom Moore asked: "The staff would present a position to the Council that is not approved by the Water Board?" Mr. Smith replied, "yes." MaryLou Smith responded that she appreciates that position. It is fair and upfront. Ray Herrmann moved that the Board accept the staff recommendation as written with the exception of the bold language on p 3, which says: "For example, JUN 15 192 9:25 303 221 6593 PRGE.010 Page 10 Water Board Minutes May 15, 1987 Council may prefer to implement some of the measures listed under paragraph C now rather than addressing them later." Neil Grigg seconded the motion. Mr. Herrmann was asked to clarify his motion further. Basically, he is saying that the staff recommendations were adequate. However, they were amended to give the implication that the Board wanted the Council to be stronger than the recommendations. He thinks the recommendations should remain as they were originally written by staff. Jim Kuiken asked for Mike Smith's reasons for why meters are called for now. Mr. Smith replied that the staff believes that there have been sufficient studies on metering for the past at least 8 years, to warrant recommending the Incremental metering program now. He added that staff would have accepted Henry Caulfield's proposal if they thought the Council would have accepted that. Currently the recommendations are a straight forward approach. The pro- gram doesn't cost a lot, and we are going to meter someday anyway- why not get into it now? Furthermore, he doesn't think the staff can sit by and allow the debate to go on endlessly on the metering question. Chairman Evans asked the secretary to poll the members. The vote was recorded as follows: Marylou Smith, no; Neil Grigg, yes; Tom Moore, no; Henry Caulfield, yes; Norm Evans, abstained; John Scott, yes; Ray Herrmann, yes; Jim Kuiken, yes; Stan Ponce, no; and Tom Sanders, no. With 5 yes votes, 4 no votes and 1 abstention, the motion carried. The Chairman then asked for a motion to accept the policy report. Tom Moore moved that the Board accept the report. Ray Herrmann provided a second. Mr. Moore explained that there is a great deal of value to the report besides the metering section; especially the proposal to increase the amount of water brought in. Henry Caulfield explained that from the minority standpoint, they can produce a minority report with respect to the metering issue and so state it before the Council. Paul Eckman stated that even in the absence of a minority report, the minority viewpoint is well represented in the minutes. Henry Caulfield proposed that there be an understanding that accepting the report does not negate the previous vote on the metering issue. Once again the members were polled with the following results: Tom Sanders, no; Stan ponce, yes; Jim Kuiken, yes; Ray Herrmann, yes; John Scott, yes; Norm Evans, yes; Henry Caulfield, yes; Tom Moore, yes; Neil Grigg, yes; and MaryLou Smith, yes. The motion passed 9 to 1. When Tom Sanders was asked if he wished to make a statement regarding his negative vote, he replied that his viewpoint is already clearly in the record. MaryLou Smith wished to make it clear that she is voting yes with the clarification that she favors delaying meters on new construction, and simply continuing with yokes. JUN 15 '92 9:25 303 221 6593 PAGE.011 • Page 11 Water Board Minutes May 15, 1987 President Evans had to leave because of another commitment, so Vice President Henry Caulfield presided for the remainder of the meeting. MaryLou Smith proposed that Agenda Item 4, Update on Anheuser-Busch and Item 5, Update on Rockwell, be tabled because there wasn't enough time left in the meeting to cover these subjects adequately. It was the consensus of the Board to delay these items. Mike Smith announced that the cash in -lieu -of water rights rate has not been adjusted for a long time and staff thinks it is time to adjust the rate again. The current rate is $1,000 per acre foot. Dennis Bode distributed a graph that showed the historic pattern of the prices: the price of CRT water, the price of North Poudre Irrigation Company shares and the in -lieu -of rate. Historically, the City has tried to "lag the market" but keep the in -lieu -of cash rate fairly close to the going market price. When a developer comes in, he has the choice of turning in water or cash. One of the things staff would like to encourage is obtaining more cash. To do that, we need to be more competitive with the going price on the market. For the last two years the rate has been $1,000 per acre foot for the in -lieu -of price. Dur- ing that time, prices of CBT water and other waters have gradually declined and it appears to be leveling out at this point; and perhaps even beginning to rise. In order to get in line with CBT water, we need to lower that price somewhat, Mr. Bode concluded. Tom Sanders asked why we want cash instead of CBT water. Mike Smith replied that we aren't getting much CRT water. He explained that we list waters we accept. We don't get much CBT water compared to North Poudre, for example. When Dr. Sanders suggested we only accept certain water, Mr. Smith said that would cause problems. We have established good relationships through the years with the various ditch companies and do not want to jeopardize that. Tom Moore explained further that we are overgrowing the south area so we must accept their water. Dr. Sanders asked what the staff is recommending for the rate. Mr. Bode replied, that the going price of CBT water is in the area of $750 to $775, He suggested that $800 would be appropriate for the cash in -lieu -of rate. MaryLou Smith wanted to know if this action might cause some groups to read this dif- ferently from our intention. Mr. Smith replied that it is hard to say. How- ever, the emphasis on cash would probably help the development community. Those who don't have water to turn in save about $200. Dr. Sanders asked how development is going. Mr. Smith responded that there isn't much going on at this point, although that could change. JUN 15 192 9:26 303 221 6593 PAGE.012 Page 12 Water Board Minutes May 15, 1987 Tom Moore moved that the Board recommend the in -lieu -of rate be changed to $800. After a second from Stan Ponce, the Board unanimously approved the proposed rate. t Re ort Treate Water Production Summary Board members were given copies of the treated water production summary. Henry Caulfield surmised that due to the low snow melt situation, the City must be receiving a number of inquiries about leasing water. Dennis Bode responded that there have been more calls since people are beginning to realize how dry it really is. However, there haven't been a great many at this point. Tom Sanders warned staff not "to cut it too close by leasing, because we are bound to get pretty dry this summer." Mr. Bode assured the Board that staff is approaching it cautiously. He went on to say that stream flow is estimated to be only about 50% of average on the Poudre, so it could be a dry summer. Mr. Caulfield added, "but the reservoirs are full." Mr. Bode said that this year won't be a problem because of the good situation with the reservoirs. MaryLou Smith asked if staff has an explanation for the poor quality of the water in the wastewater effluent line that ruptured recently. The account given in the newspaper was not good publicity for the City, she said. Mike Smith explained that the line that broke was not the City's. It is PRPA's pipe- line from Wastewater Treatment Plant No. 2 to Rawhide. It carries effluent from our wastewater plant to Rawhide. It is their water after they take it from us, he explained. They shut down to December and let the water sit in the pi e. What they had was a nutrient rich water anyway, but you let it sit in a closed pipe for 5 months and it becomes anaerobic (what occurs when there is no oxy- gen). Ms. Smith asked if we are treating the water to a secondary level before we send it through the pipe to Rawhide. Mr. Smith said yes, the water is clean when it enters their pipe --it is clean enough to go back into the Poudre. If PRPA had run the pump to keep it moving the water would have been fine. Mr. Smith added that he hasn't heard the reason for the break. There have been some speculations. Tom Sanders announced that CSU is having a Waste Management Conference -- Focus on the West, on June 1 - 3. He invited staff and Board members to attend and offered informational brochures to anyone interested. Since there was no further business, the meeting was adjourned at 5:00 p.m. Water Boa d Secretary JUN 15 '92 9:27 303 221 S593 PAGE.013