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HomeMy WebLinkAboutWater Board - Minutes - 08/21/2014Water Board Minutes August 21, 2014 1 Fort Collins Utilities Water Board Minutes Thursday, August 21, 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 Carol Webb, 221-6231 Roll Call Board Present Vice Chairperson Rebecca Hill, Board Members Duncan Eccleston, Michael Brown, Lori Brunswig, Heidi Huber-Stearns, Alex Maas, and Phyllis Ortman. Board Absent Board Members Steve Malers, Brett Bovee, Brian Brown, and Andrew McKinley. Staff Present Carol Webb, Jon Haukaas, Donnie Dustin, Lance Smith, Norm Weaver, and Katherine Martinez Guests None Meeting Convened Vice Chairperson Rebecca Hill called the meeting to order at 5:30 p.m. Public Comment None Approval of July 17, 2014 Minutes Board Member Duncan Eccleston moved to approve the minutes of the July 17, 2014, meeting. Board Member Phyllis Ortman seconded the motion. Vote on the motion: It passed unanimously *Board Members Rebecca Hill and Heidi Huber-Stearns abstained due to being absent at the July meeting. Chairperson Steve Malers emailed comments on the July 17, 2014 minutes suggesting (1) the Monthly Water Resources Report include a brief reason for why demand is less than projected, to help readers interpret data (for example, “Precipitation was 3 inches, more than twice the average”) and (2) staff explain options and impacts related to Windy Gap water spill. Staff Reports Monthly Water Resources Report Water Resources Manager Donnie Dustin provided the information for the agenda packet. The Halligan Quarterly Report was provided in the meeting packet. Mr. Dustin summarized the monthly report. The water supply has been determined for the rest of the year. The City has plenty of water for this year and probably next year. Reservoirs are full. Demand was down due to rainfall of 3 inches last month; the average is 1.4 inches. We had 86 Water Board Minutes August 21, 2014 2 percent of projected water demands for July, and for the calendar year, we’re at 92 percent projected water demand due to wet and cool weather. Stream flows continue to be at or above average as they were in July. Flow at the mouth of Poudre Canyon is currently double the average, which could be from recent rains and the snowpack. Poudre River Diversions were 64 percent of average in July, and 88 percent of average by mid-August. Colorado-Big Thompson (CBT) storage: as part of the Reuse Plan, the City receives Windy Gap water from Platte River Power Authority (PRPA), which is used up for the year, and is discussing operations with PRPA for next year. Staff encouraged the Water Board to read the Water Supply and Demand Management Policy Report included in the meeting packet. It contains a lot of history of the City’s water supplies, background on water supply status today, and what went into developing the policy. There were no questions and no discussion. Riverside Community Solar Lease Review (Attachments available upon request) Norm Weaver, Senior Energy Services Engineer, presented a summary of the project, Fort Collins’ first community solar garden. The City purchased this six-acre parcel, which has been unused for about 20 years. The soil has sodium chloride contamination from the former pickle plant operations. The City attempted to determine uses for the site in 2008, including as a possible Art in Public Places project, but nothing was developed due to the budget and subsequent economic downturn. Advanced Energy considered using it for a solar site. A group of shareholders proposed a community solar project and in 2012, City Council approved a community solar garden for somewhere in the City. Phase I will produce 333 kw, and Phase II will produce192 kw. A development requirement is preservation of habitat along Riverside and the corridor between the site and the water treatment plant to the east. Some people like the visibility as a community solar project. There will likely be Art of Public Places pieces in two spots, a game fence, and xeriscape landscaping along Riverside for a walkway. State statute requires at least 10 percent of the City’s energy to come from renewables. If this community solar site doesn’t happen, the City would have to look far afield for a wind site, for example. Utilities can claim this project as part of its energy portfolio. It’s on par with other local opportunities this utility has for incentivizing and encouraging local solar: a $10 per year lease to CEC LLC, trying to improve the City’s gateway at Mulberry/Riverside, the creation of a sidewalk along Riverside, landscaping; it’s an exciting place to have a technology demonstration. Water Board Minutes August 21, 2014 3 Highlights of the Discussion  A board member inquired about the City buying the energy from Clean Energy Collective LLC and whether it will be comparable to costs from other sources. The City signed the power agreement in May. Staff stated that other than the long-term commitment for the City to buy power from this project, the subscribing customers are providing the capital; the project is 46 percent subscribed at this point.  A board member inquired about decommissioning. Mr. Weaver stated it’s written into lease.  A board member inquired about energy cost. Mr. Weaver stated the average cost of a kilowatt hour (kWh) of electricity is 9.5 cents; through this project Utilities is offering it to the subscribing customers at 7.1 cents/kWh. If everyone’s utility rates go up, say 1 percent per year, likewise the rates for the community solar garden would increase.  A board member inquired about impacts. If a big rain occurs, would there then be a big flush of contaminated soil into the river? Mr. Weaver stated there have been environmental assessments by the City over the years. The salt in the soil is diminishing; the City repeated the assessment of ground water and soil samples a couple of months ago, and it will continue doing assessments. The project will drive pilings about 7 feet deep and the water table is at 20 feet deep, so there’s no conflict.  A board member inquired whether mitigation of the soil is required to be able to grow anything. Mr. Weaver stated there are salt-tolerant seed mixes included in the landscape plan. The board member commented that the site is in the River District Redevelopment Area and inquired whether any part would belong to Utilities. Mr. Weaver said the City bought the land 20 years ago with 50 percent paid by the Wasterwater Fund and 50 percent by the Parks (Natural Areas) Department. Ms. Webb stated she hasn’t heard anything about transferring the ownership. The main question is, “Is it in the best interests of the utility to use the land in this way?”  Mr. Weaver stated Fort Collins will be able to claim renewable energy credits for this project, as specified in the renewable energy standard created in 2004. Under the renewable standard, this project would get counted three times.  A board member inquired whether Great Outdoors Colorado (GoCo) funding is being used for the project. City attorneys have been in conversations with GoCO, and they’re okay with the project. The original intent was that the site would be natural for 20 years; that goal has been achieved. No additional GoCo funds are being requested.  A board member commented that in a practical sense, the project seems not to have a great chance of success. He can’t see anyone making use of that sidewalk along Riverside Avenue. Mr. Weaver stated the City is obligated to create a sidewalk there; it’s a weedy field. With plantings and art of interest, then a weedy field becomes a bit better than an eyesore for this gateway to the City.  A board member inquired about Art in Public Places. Could that money be used for art elsewhere? Mr. Haukaas stated that since the majority of utilities are underground, it’s difficult to find places for art. This project creates an opportunity to fulfill those obligations.  A board member inquired, when you say “we” have to add a sidewalk (along Riverside Avenue), who is “we”? Mr. Weaver answered that it’s Light & Power. Mr. Haukaas stated that the developer of any property has the obligation to install required facilities. The project is not a public park or a public trail, for example, so restrooms along the sidewalk wouldn’t be required.  A board member inquired whether the photovoltaic (PV) panels are the kinds that move. Mr. Weaver said no, they will be fixed solar panels. Water Board Minutes August 21, 2014 4  A board member inquired about other projects proposed in the past. Ms. Webb stated they included open space, a park, a solar farm; she believes the intent was to provide a buffer. It’s not a high-use site; there have been odor complaints in the area.  A board member inquired about impacts on the water treatment plant to the east of the site. Ms. Webb stated the plant manager is working with CEC on access and security to the site. The project will cause very low soil disturbance. One reason past projects didn’t advance was due to difficult access; another reason was issues with getting Council approval on uses. Vote on the motion: It passed unanimously. Building Appropriation Ordinance (Attachments available upon request) Lance Smith, Strategic Financial Planning Manager, presented information on appropriating capital project funding for the renovation of Utilities Service Center at 700 Wood Street and constructing the new Utilities Administration Building in Block 32 on Laporte Avenue. The project has been in the works for several years, and staff reviewed the details for City Council in a Work Session last November. The 700 Wood Street building is one of the city’s most energy inefficient buildings, has space issues, and needs facilities to accommodate female members of the Light & Power (L&P) crew. It is actually seven buildings that were constructed separately and later connected over the past 45 years. Its antiquated HVAC system needs immediate attention. Renovations will cost $9.3 million and include a water source heat pump to replace the HVAC system, L&P women’s restroom and lockers, renovated entrance area, security enhancements, extensive envelope improvements, window replacement, skylight repair and solartubes, additional roof insulation, using existing walls/offices, and 1percent for Art in Public Places as required by law. Utilities is currently leasing the 117 N. Mason building from the City’s General Fund; it has inadequate parking for utility customers, and there are future plans to use the building for other purposes. Employees in that building would move to the new Utilities Admin Building. Construction costs are estimated at $14.1 million, paid by the following funds: Light & Power (50 percent), Water (25 percent), Wastewater (12.5 percent), and Storm Drainage (12.5 percent). Features include a water source heat pump system, adequate space for growth to 2028, a photovoltaic (PV) system on the roof for a Net Zero building, and 1 percent for Art in Public Places. A January 23, 2014 memo to the City Council Finance Committee outlined the reasons for recommending appropriation of cash reserves from the four utility Enterprise Funds rather than a debt issuance as previously discussed with City Council: a collective healthy balance of the reserves, relatively low yield (0.9 percent) of the cash reserves compared to the current borrowing rate (approximately 5 percent), and the complication of issuing debt across the four utilities. Board Member Eccleston moved that the Water Board, having reviewed and discussed the community solar project proposed on City property at 500 Riverside (the “old pickle plant site”), support the authorization of a 25-year operating lease to Clean Energy Collective LLC. Water Board Minutes August 21, 2014 5 Highlights of the Discussion  A board member inquired about energy cost savings because this would help convince City Council. Mr. Smith stated that staff did run the numbers, but he didn’t have them to share at the meeting. The Utility Service Center (700 Wood Street) pays approximately $100,000 per year in energy costs and would save roughly $50,000 after renovations. The new Utilities Administration Building’s solar panels would produce enough energy to offset consumption.  A board member asked several questions to clarify which building was getting renovated (700 Wood Street, which would maintain the vehicle storage) and where employees at 117 N. Mason would go (to the new Utilities Administration Building one block north, along with senior Utilities staff).  A board member inquired about the need for improved customer access at 117 N. Mason. Jon Haukaas, Water Engineering & Field Services Operations Manager, stated that the City’s General Fund intends to use the building for another purpose, and that Utilities would have to find another site even if the new administration building were not constructed. Mr. Haukaas stated the entire block is under consideration for redevelopment. Carol Webb, Interim Water Resources & Treatment Operations Manager said multiple factors were involved in the decision to proceed with this capital project.  A board member inquired whether customers visit 700 Wood Street. Ms. Webb stated yes, for various reasons. After the renovations and new building are completed, 700 Wood Street would house mostly crews.  A board member inquired why the City is not constructing a new building at 700 Wood Street.  A board member inquired about the studies, assessments, and details that led to the decision to renovate one building and construct a new administration building. He said he wants more specificity (why the decision was made) in addition to the general information staff is presenting to the board (project costs and funding).  Mr. Smith stated an assessment detailed space requirements for 700 Wood Street through 2028 and that energy modeling and forecasts for building efficiency were done as part of the process.  Mr. Haukaas stated there wasn’t a single study covering the big picture; studies included the space constraints of 700 Wood Street, which led to discussions of administrative staff downtown, and another study of customer service. Strategy discussions by staff and the Executive Lead Team led to the drafting of the Downtown Civic Center Master Plan. Mr. Haukaas said discussions and the process have been going on since 2005 starting with the study of deficiencies for L&P at 700 Wood Street. In addition, 117 N. Mason is the second leased home for the customer service staff, which was previously house in the 300 block of College Avenue; Mr. Haukaas stated the City should own the facilities that it houses staff, and that would solve the customer service issue; he said he understood the frustration about the project not being part of the Budgeting for Outcomes (BFO) process; one reason is that this project has been a much longer process than the two-year BFO cycle.  A board member inquired why the project wasn’t part of the BFO process so that citizens could comment on it and expressed concerns about the need for more accountability. Mr. Haukaas stated the deadline for BFO offers was in April and therefore too early for the staff to prepare all the information. Another issue is that the project is continually evolving, and its large scope deserves a separate process.  A board member pointed out that this project hasn’t been written about in the newspaper. Mr. Haukaas stated that the editorial board and the reporter who covers the City know Water Board Minutes August 21, 2014 6 about the project. He stated that once funds are approved, Utilities will begin a targeted outreach to the public to explain it.  A board member inquired about the length of the lease for 117 N. Mason. Mr. Haukaas stated he believes it is year-to-year. Mr. Smith stated the Mayor commented in the City Council Work Session last November that she remembered plans for the civic center from when she served on the Planning Board  A board member inquired whether staff believes City Council will approve the Building Appropriation Ordinance. Mr. Smith stated that if it doesn’t, Utilities still must address the needs at 700 Wood Street.  A board member inquired whether the Board could approve appropriation for one building and not the other. Mr. Smith stated the two buildings had been planned together. Mr. Haukaas stated the two projects can’t be disengaged; to do one or the other would cost different dollar amounts; this is most economical way to gain space and use funds. A consultant told staff the HVAC at 700 Wood Street building is not salvageable.  A board member inquired about the timeline between approval of the appropriation (City Council first reading is September 2) and building construction. Mr. Smith stated the demolition of Block 32 Mason Street would happen in the next two to three months, and it would be 12 to 18 months before employees of the new Utilities Administration Building would move in. Occupancy in planned for spring 2016.  A board member read the emailed concerns of another board member who was unable to attend the meeting. The concerns included whether it was really necessary to appropriate funds for both buildings at the same time; the fact that the request being addressed outside of the BFO process; and the lack of time to consider the request.  A board member inquired about reserve levels and whether it varies greatly from year to year? Mr. Smith stated it doesn’t; staff tends to understate revenue and expect expenses to be higher than they are; if staff’s conservative assumptions hold up, it’s likely reserves will be in a better position than the Board is reading in the attachments. Reserves are gradually increasing. Three of the utility funds increased in 2013; only the Water Fund decreased.  A board member inquired whether the project can wait two or three years. Mr. Smith stated the HVAC system at 700 Wood Street requires immediate attention, and the L&P crew needs space, including the women’s locker room. The board member stated that the HVAC can limp along, and Utilities could bring trailers in to house employees. Mr. Haukaas stated this is not possible because trailers would be considered the same as development, which has requirements for hookups, etc. Ms. Webb stated there would have to be some analysis of where to put employees. Mr. Haukaas stated that Utilities is making some teleworking arrangements, but because of the customer service required, this is just a short-term solution.  A board member reiterated concerns that the appropriation should be discussed in a more widely publicized process, such as BFO, for more accountability and to understand how these decisions were made; also, did consultants forfeit the right to be hired for construction of building, to ensure an impartial assessment? Ms. Webb stated that staff might be able to provide some of that information.  A board member expressed the desire for a presentation from the building study group and the space assessment consultant, because staff has done the job of stating how much it will cost and what funds will pay it, but wants to know what we’re buying and why we’re buying it. Mr. Smith suggested watching the video of the City Council’s November 2013 Work Session, in which they discussed building needs and the new downtown city civic center plan.  A board member inquired that if energy efficiency is a main driver, why isn’t energy- efficient windows included in the new Utilities Administration Building? Mr. Smith Water Board Minutes August 21, 2014 7 stated that staff told Council the project would cost $20 million, so they’re trying to stay as close to that amount as possible. The total project is estimated at $23 million.  A board member inquired how Utilities is overseeing the project. Mr. Haukaas stated a Utilities staff member will be the project manager. Ms. Webb stated there has been a rigorous process followed including a City Council Work Session, two readings of the appropriation ordinance are coming up before Council; and that staff should have done a better job of keeping this Board informed.  A board member inquired what would happen if the Board didn’t move on this agenda item in this meeting. Ms. Webb said it’s on the public agenda for Council’s September 2 meeting, and can proceed without the Board’s support; the board can support it with qualifications, and board members can attend the Council meeting and comment on it as a board member or as a citizen.  Board members discussed concerns about the process and that they would have liked to have been more informed of the details and reasons for the decisions. The perception is that City Council will probably approve the Building Appropriation Ordinance and it’s not fair to employees working in the two buildings on Wood Street and Mason Street to have to wait longer for improvements. Mr. Haukaas stated staff has put together the best package, the level of effort and level of scrutiny is high, and the project presented is the best, most efficient option. Discussion of the motion:  A board member suggested adding language about the process, transparency, and accountability, public perception. Board members discussed other possible language for a friendly amendment to capture their concerns. Board Member Brown agreed to the amendments. Discussion of the amended motion:  Board members commented on their discomfort on recommending approval without more information on the process and reasons for the decisions. Vote on the motion: 1 yea, 5 nays, 1 abstention. The motion failed. Board Member Michael Brown moved that the Water Board support the Utilities Building Appropriation Ordinance being presented to City Council for first reading on Sept. 2, 2014. Board Member Phyllis Ortman seconded the motion. Board Member Michael Brown moved that the WB support the appropriation ordinance No. 114, 2014, regarding the Utility Buildings Appropriation Ordinance being presented to City Council on Sept. 2, 2014. The Water Board is however concerned about the lack of time and information provided to the Board and the public to consider the needs, costs, and implications of this project. In addition the Water Board does not support this not being in the BFO process. Water Board Minutes August 21, 2014 8 Discussion on the motion: None. Vote on the motion: It passed unanimously. Budgeting for Outcomes (BFO) Discussion (Attachments available upon request) Board member commented on the draft BFO memo to City Council. Ms. Webb mentioned that some of the offers they see on the memo will not be in the budget sent to Council by the Budget Lead Team. Highlights of the Discussion  A board member inquired why the City Council wouldn’t see some offers listed in the memo that the Board is recommending for approval. Ms. Webb stated that the Budget Lead Team considers needs across the entire City; she doesn’t know yet which budget offers were not recommended for funding. Vote on the motion: It passed unanimously. Other Business Board Member Ortman inquired about the “super issue” meeting of all Boards and Commissions on August 25. Ms. Webb stated board members could participate if they choose; there is still time to register. Future Agenda Items None were discussed. Board Member Ortman moved that the Water Board recognize this memo as our recommendation to City Council for their consideration for the budget needs for 2015-16. Board Member Alex Maas seconded the motion. Board Member Eccleston stated, “In response to the Staff’s request for the Appropriation Ordinance No. 114, 2014, regarding the Utility Buildings Appropriation Ordinance, being presented to City Council on Sept. 2, 2014, I move that the Water Board communicate to City Council that the expenditure proposed does not appear to compromise Utilities’ financial position. Based on the lack of information provided to the Board regarding needs, alternatives, and implications, a lack of time to consider what has been presented, the Board cannot comment on the wisdom of the course forward despite their trust in staff. Because this appropriation was not part of the Budgeting for Outcomes process, the Water Board is concerned about the lack of transparency in the public process.” Board Member Huber-Stearns seconded the motion.