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HomeMy WebLinkAboutWater Board - Minutes - 04/17/2014Water Board Minutes April 17, 2014 1 Fort Collins Utilities Water Board Minutes Thursday, April 17, 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 Kevin Gertig, 221-6637 Roll Call Board Present Chairperson Steve Malers, Vice Chairperson Becky Hill, Board Members Liesel Hans, Andrew McKinley, Duncan Eccleston, Michael Brown, Phyllis Ortman, and Brian Brown Board Absent Board Members Lori Brunswig and Heidi Huber-Stearns Staff Present Jon Haukaas, Donnie Dustin, Adam Jokerst, Lance Smith, Kevin Gertig, and Harriet Davis Guests Jonathan Carnahan and Brett Bovee Meeting Convened Chairperson Malers called the meeting to order at 5:32 p.m. Public Comment Jonathan Carnahan expressed his concerns about the Foothills Mall development since the developer is asking City Council to alter the finance agreement. Mr. Carnahan had previously attended an Economic Advisory Commission meeting where this topic was discussed and the possibility of a meeting for board chairs may be scheduled. Approval of March 20, 2014 Minutes Board Member Hans moved to approve the minutes of the March 20, 2014, meeting. Board Member Ortman seconded the motion. Vote on the motion: It passed unanimously. * Board Member Brian Brown abstained due to his absence at the March meeting. Work Session Review Chairperson Malers provided a review of the topics discussed at the April Work Session: • Budget and Performance Measurement Manager Lawrence Pollack presented information on the Budgeting for Outcomes (BFO) process. Utilities Strategic Financial Planning Manager Lance Smith also participated in the presentation. • Senior Electric Engineer Dennis Sumner and Web Portal and Demand Response Project Manager Angel Anderson presented the Advanced Meter Fort Collins (AMFC) Web Portal Demo. Water Board Minutes April 17, 2014 2 Staff Reports Monthly Water Resources Report Water Resources Manager Donnie Dustin provided this report for the agenda packet. Water demands are slightly below average. Poudre River diversions have been shut down for the past two weeks and are at 68 percent of average. The Northern Colorado Water Conservancy District (NCWCD) set the Colorado Big Thompson (CBT) quota at 60 percent. Staff had assumed a 50 percent take off the river for this year. Snowpack is 130 percent of average. Highlights from the discussion: • A board member inquired if NCWCD can increase the quota. Mr. Dustin stated NCWCD reserves the right to increase the quota. An increase would usually happen before July. • A board member inquired about repairs to the diversion structure at Fossil Creek Reservoir. Mr. Dustin stated North Poudre Irrigation Company (NPIC) will make repairs in Fall 2014. Water Board Discussion on Public Trust Doctrine Chairperson Malers had previously e-mailed a set of questions to staff regarding the Public Trust Doctrine. Staff will review the questions and provide feedback at a later time. This has been added to the June meeting agenda as an action item for the board. Water Rate Increase History and Forecast Chairperson Malers introduced this item and introduced Strategic Financial Planning Manager Lance Smith. Chairperson Malers had previously requested this information as an educational tool for the board and to provide some context regarding previous rate increases since the board votes on increases and provides recommendations to Council. Water Fund/Wastewater Fund Mr. Smith presented a graph showing the water fund rate increases from 1990 through 2014. The average annual rate increase is 3.42 percent annually. He also presented a graph showing the rate increases from 1990 through 2014. The average annual rate increase is 4.80 percent annually. What drives rate adjustments? • From 10,000 feet o Increasing costs o Insufficient revenues • From the ground o Cost increases due to aging infrastructure, new regulations, inflation, community driven programs, natural disasters, etc. o Revenue shortfalls due to misaligned/insufficient rates, effective conservation efforts, new development cycles, weather, etc. Water Operating Revenue Mr. Smith presented a graph showing water operating revenue from 2003 through 2013. This has increased approximately 10 percent over the 10-year period. Water Board Minutes April 17, 2014 3 Water Revenues/Water Expenses Mr. Smith presented a graph showing revenues for residential and commercial customers for both variable and fixed costs. He also presented a graph showing water expenses for residential and commercial customers, including debt, capital, and variable and fixed operating costs. Wastewater Operating Revenue Mr. Smith presented a graph showing revenue from 2003 through 2013. Understanding Expenses Better • Better long-term expense forecasting including a 10 year Capital Improvement Plan and a 10 year Strategic Financial Plan • Better biennial expense budgeting including tracking and tightening the budget to actual expenses Alternative Revenue Sources • Excess capacity sales (raw water, treatment and transmission) • Development of the Water Right Utilization Fee Mr. Smith presented a graph showing the projected 10 year rate forecast for electric, water, wastewater, and stormwater. Highlights from the discussion: • A board member inquired about City Council’s thoughts on large rate increases versus small increases. Mr. Smith stated Council has not taken a position on this; however, staff supports a gradualism approach to rate increases. • A board member inquired about the rate of inflation over the past 25 years. Mr. Smith stated he did not know the rate of inflation. • A board member feels it would be useful to have population history and the increase in the number of water taps. • A board member feels there should be a bigger window for planning beyond the two-year timeframe. Interim Utilities Executive Director Kevin Gertig stated that vendor costs fluctuate. These costs are hard to predict. Mr. Smith also reminded the board the current Council cannot obligate a future Council to a rate increase. • A board member is interested in seeing the debt per fund. • A board member suggested showing that the rate increases are driven by capital projects, debt, etc. • A board member inquired about the rate change effect on fixed charges versus variable charges. Mr. Smith stated Council is not interested in discussing changes to fixed charges; therefore, staff has not looked at this ratio. • A board member inquired about capital improvements and how far into the future these are predicted. Mr. Smith stated both the 10 year Capital Improvement Plan and the Strategic Financial Plan are based on the Master Plans. This planning forecast is acceptable to Council. Mr. Haukaas reiterated that this adds justification to rate increases. • A board member suggested adding alternative revenues to the presentation. • A board member suggested adding background information on significant events to the rate increases, such as the High Park Fire. Water Board Minutes April 17, 2014 4 • A board member suggested publishing the cost of service study. The board member feels this would be helpful for maintaining transparency. Staff will consider this. Code Change to Allow Private Common Service Lines for Water and Wastewater (Attachments available upon request). Water Engineering and Field Services Operations Manager Jon Haukaas presented information on this item. Staff recommends amending Chapter 26 of the City Code to revise the requirements for how separate water and sewer services are provided to individual properties. The current code requires individual service lines for each building. The proposed change would allow for a “Common Private Service Line” that would be owned and maintained by a Homeowner’s Association (HOA) and could serve up to 6 individual properties. Mr. Haukaas showed diagrams for the different options: • Multiple service lines as currently defined in the City Code • Extension of City-Owned Mains • “Common Private Service Lines” owned and maintained by a common legal entity such as a HOA Proposed Code Language Change the conditions under which the Executive Director may authorize multiple services: • City separation valve at the right of way line • Limit of 6 single family attached dwellings • Separate shut off valves outside (curb stops) • The common private service line beyond the City curb stop and all branch service lines including the private service curb stops shall be owned and maintained by the HOA. Staff supports this proposed code change, especially with the increase of higher-density developments in Fort Collins. Highlights from the discussion: • A board member inquired if staff has considered line diameter and length and the impact of residual chlorine. Mr. Haukaas stated this can be designed for based on the number of service lines required. • A board member inquired about the conversion of an apartment building to condos and the potential change to the infrastructure. Mr. Haukaas referred to City Code Section 26- 94 requiring individual service lines for each building. No subsequent division of ownership shall be permitted until separate service lines have been installed to each building. • A board member inquired about the typical number of service lines in Fort Collins. Mr. Haukaas stated this is typically driven by the lot size. • A board member inquired about the possibility of using this approach for detached dwellings. Mr. Haukaas stated this would require additional land-use controls. • A board member inquired about the advantage of increasing the number from 6 to 8 individual properties. Mr. Haukaas stated staff feels 6 is a manageable number. • A board member inquired how HOAs deal with failures. Mr. Haukaas stated HOA management has to make decisions regarding this in each particular situation. Annual HOA dues can cover this type of event, or a special assessment may be required. Water Board Minutes April 17, 2014 5 Discussion on the motion: There was no discussion on the motion. Vote on the motion: It passed unanimously. Budget Re-appropriation to Fund North Shields Sewer Interceptor Construction (Attachments available upon request). Mr. Haukaas presented information on this item. The purpose of this item is to re-appropriate funds previously approved for a northwest trunk sewer extension to be used for the construction of a similar project on North Shields Street. Background Mr. Haukaas presented a map showing the Sewer District Service Areas. Unserved areas north of the City include the area along US 287 near Jax, a neighborhood to the south of US 287, and the area along Shields Street north of the Poudre River. Every property is on an individual septic system. The Larimer County Health Department approached Utilities about providing sewer service to these areas. They are working with the properties to create an Improvement District. The most feasible connection is on the Northwest Trunk near Shields Street. There is no Utility obligation; however, this area has recently been accepted into the service territory. Staff feels there will be an environmental benefit in removing the septic systems from the Poudre River watershed where possible. Existing capital funds could be redirected. A conceptual project in the 1990’s to address future development and inflow and infiltration issues to expand capacity northwest to Laporte did not happen. Further study showed this project was not necessary and $2 million was appropriated but has been unused since. Proposed Re-appropriation • Use the $2 million sitting in reserves to construct a new Sewer Interceptor from the south side of the Poudre River north to US 287. • There will be Plant Investment Fees (PIF) from the development. Larimer County Support and Coordination • Larimer County is planning to replace the Shields Street Bridge in January 2015. • Shields Street from the new bridge to Willox Lane will be reconstructed in Spring 2015. • Larimer County is very supportive and willing to coordinate the projects. Staff will request City Council approval for the re-appropriation in May. Highlights from the discussion: • A board member inquired if grant money is available through the Environmental Protection Agency (EPA). Mr. Haukaas stated state grant money is available. Larimer County is pursuing these resources. • A board member inquired about the timing of the project. Mr. Haukaas stated the project will be voted on during the Fall 2014 regular election. Board Member Eccleston moved that the Water Board recommend that City Council approve an ordinance amending Chapter 26 of the City Code to revise the requirements for how separate water and sewer services are provided to individual properties. Board Member Ortman seconded the motion. Water Board Minutes April 17, 2014 6 • A board member inquired about the land use code regarding new developments and the sewer system. Mr. Haukaas stated new developments will be required to connect to the sewer system once it is in place. • A board member inquired if there is a good relationship between the Larimer County Health Department and the residents living in the area. Mr. Haukaas feels there is a good relationship between these two parties. • A board member inquired as to how much of the $2 million staff expects to spend. Mr. Haukaas stated rough estimates are at $1.8 – $2 million. • A board member inquired how often the septic systems are tested. Mr. Haukaas does not know this exact number. • A board member inquired if any new developments are planned in the area. Staff is not aware of any new developments; however, there is the possibility of new developments in the future. • A board member inquired about a provision in the code that required the City to require a property owner to connect to the sewer system even if their septic system was functioning properly. Mr. Haukaas stated a property owner may be required by code to connect to the sewer system if such a public sewer is within 400 feet of the property line (reference City Code Section 26-236). • A board member inquired about the cost for connecting to a sewer system. Mr. Haukaas stated this depends on the particular property, and if it is single service. • A board member inquired about water service in the area. Mr. Haukaas stated there are several water providers in the area. • A board member inquired how wastewater rates will be calculated for the area. Mr. Haukaas stated there is a provision for properties on a well. Also, the water service providers have metered service. • A board member asked for clarification on the re-appropriation of $2 million. Is this only to address the potential water quality issues on the Poudre River and the associated environmental impacts? Specifically, will there be payback on this investment? Mr. Haukaas stated there will be payback because every connection will have to pay a PIF. Also, the investment costs can be recouped. • A board member inquired about the types of properties in the area. Mr. Haukaas stated the area is a mix of residential and commercial properties. • Chairperson Malers invited a comment from an audience member. The individual inquired about sewer connections for properties along the Northwest Trunk if their septic system fails. Are these properties required to connect to the sewer system? Mr. Haukaas stated these properties would have to weigh the costs of connecting versus upgrading their septic system since they would pay a PIF and the cost to connect. Mr. Haukaas stated community outreach is being planned for the area to address these types of questions. The audience member also inquired about the unused funds. Does staff feel there will be pushback from Laporte property owners regarding this since the money was allocated for a specific purpose? Mr. Haukaas stated new technologies have allowed other fixes and the existing sewer capacity has been sufficient. • A board member inquired about other uses for the $2 million. Mr. Haukaas stated the funds can be used to accelerate other improvements in the system; however, the funds can only be allocated for wastewater improvements.