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HomeMy WebLinkAboutWater Board - Minutes - 07/17/2014Water Board Minutes July 17, 2014 1 Fort Collins Utilities Water Board Minutes Thursday, July 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 Carol Webb, 221-6231 Roll Call Board Present Chairperson Steve Malers, Board Members Andrew McKinley, Duncan Eccleston, Phyllis Ortman, Brian Brown, Michael Brown, Lori Brunswig, Alex Maas. Board Absent Board Members Heidi Huber-Stearns and Brett Bovee, and Vice Chairperson Becky Hill Staff Present Kevin Gertig, Carol Webb, Jon Haukaas, Donnie Dustin, Lance Smith, and Katherine Martinez Guests Hannah Smith and Trace Krausse Meeting Convened Chairperson Malers called the meeting to order at 5:30 p.m. Public Comment None Approval of June 19, 2014 Minutes Board Member Brian Brown moved to approve the minutes of the June 19, 2014, meeting. Board Member Lori Brunswig seconded the motion. A board member recommended revising one sentence on p. 8 under the Public Trust Doctrine agenda item from “water is a public property” to “water is a public resource.” Vote on the motion: It passed unanimously. *Board Member Alex Maas abstained due to his absence at the June meeting; he was appointed to the board on July 15. *Board Member Michael Brown did not vote; he arrived after the minutes were approved. Staff Reports Monthly Water Resources Report Water Resources Manager Donnie Dustin provided the information for the agenda packet. He reported that a lot of rain recently has dropped demands for water and has also resulted in not being able to take water from the Cache La Poudre River over the past week and a half. A lot of sediment is still coming out of the High Park Fire area. The sedimentation basin that was built was not shut down in time at the beginning of last week, so it filled up and sediment will be taken out. Turbidimeters will be installed at the front and back ends of the sedimentation basin to measure how well it’s doing and determine whether to take water from the Pleasant Valley Pipeline or the one near Gateway. Water Board Minutes July 17, 2014 2 Stream flows are decreasing but not quickly, and it’s still spilling at Halligan Reservoir. The Colorado- Big Thompson (CBT) in Granby started spilling yesterday. If it spills long enough, there will be a shortage of Windy Gap water next year, which is owed to the City under the Reuse Plan with Platte River Power Authority (PRPA). A board member inquired whether the completion of Chimney Hollow Reservoir near Carter Lake would eliminate this kind of problem, and Mr. Dustin replied that’s the intention. Windy Gap doesn’t have storage; it rides on top of the CBT system. Its two problems are if it’s dry, there’s nothing to pump, and if it’s wet like now, there’s no room in the CBT system to hold extra water. The Windy Gap project is being built to store water and have a more secure water supply. The Halligan Quarterly Report will be in the August meeting packet; a draft was distributed to the board via email. Mr. Dustin stated they continue to work on alternatives and have initial definitions of the alternatives, which include Glade Reservoir, gravel pit storage with slight reoperations at Joe Wright reservoir, and using capacity in North Poudre Irrigation Company reservoirs. These are still pre- decisional, and staff is focusing on modeling the alternatives. The Halligan draft environmental impact statement (DEIS) will probably be published in early spring 2016. Highlights of the Discussion  A board member inquired whether the City is tied to the City of Greeley in that process. Mr. Dustin stated we have an intergovernmental agreement (IGA) with them to do permitting together. They are two separate projects so there would be two separate permits. Greeley has not yet defined their alternatives, and the two cities have communicated about impacts to avoid or minimize any possible delays in the project.  A board member inquired whether staff has a sense of what the U.S. Army Corps of Engineers is looking at. Mr. Dustin stated the Corps provided the initial alternatives for the City to consider, and staff has refined the alternatives to make sure they will work with the City’s systems. The alternatives will likely be more expensive than enlarging Halligan Reservoir and they also require a permit because they involve building in a live stream, or crossing a wetland, etc. If everything moves forward as scheduled, the City is about four years away from beginning construction.  A board member inquired about a new water resources employee starting in August. Mr. Dustin stated the City Attorney’s office is in the process of hiring a water attorney. In addition, Interim Water Resources and Treatment Operations Manager Carol Webb stated that a new water resources engineer position has to be approved before the hiring process begins. Introduction of New Board Member Alex Maas Chairperson Malers introduced new Board Member Alex Maas, and board and staff briefly stated their work experience and number of years on the board. Mr. Malers mentioned that an organizational chart will be provided to Mr. Maas as part of the onboarding process. Update from New Utilities Executive Director Kevin Gertig Executive Director Kevin Gertig stated he has worked for the City for 32 years, has served 38 years in the field, and this is tenth position with the City. He gave a high-level overview of challenges facing the City. Water: The number one problem is water storage. The City’s annual demand is 26,000 acre-feet. Competing needs are a challenge; a lot of people don’t want storage, but modeling and data show the City needs storage and has a reputation for high quality reliable service. It would not be able to sustain a Water Board Minutes July 17, 2014 3 significant drought. Meanwhile, even though Fort Collins has a billion dollars in water rights, other cities along the Front Range don’t have storage problems. The second challenge is asset management; the City is upgrading its aging underground infrastructure (four-inch cast iron pipeline). Wastewater: Nutrients is one of our key motivations. Phosphorus and nitrogen regulations will require the City to add two more stages to the process used at its wastewater plants, at the cost of about $20 million to $40 million. This will impact customers. On the positive side, the City spent $32 million on the Mulberry Plant (6 MGD), which is totally automated, uses biological filtration, has no chemicals on site, and uses geothermal energy and variable blowers; and has reduced power use by 30 percent. Stormwater: Utilities has more than $150 million in projects on the books now. Mr. Gertig stated he is proud of the engineers who predicted – within inches – the areas that would be impacted the most when the 2013 floods occurred. For example, Cache La Poudre Middle School (in Laporte) was going to open, but Utilities told them they shouldn’t. They predicted the flow would lap the doors of that elementary school; that’s how good Utilities’ modeling is. With proactive planning and continuous improvement, most areas are doing well. Light & Power: The biggest issue is what the portfolio will be and what rate increases will customers have to pay. Although renewable energy is on the rise, it has its limitation, such as having to turn off the wind turbines during high winds, and the lack of ability to store solar power. The City of Fort Collins Utilities has the fourth lowest rates in the state, and if we’re going to switch from clean-burning coal to more alternative energy, customers will have to pay the price, and the key is to not shock them. Mr. Gertig stated he is concerned about how retirees and other low-income residents would foot the bill. Mr. Gertig stated the City has a fundamental need to diversity its portfolio. A community solar garden is planned to be constructed by December, and Utilities recently launched advanced metering infrastructure (AMI), which allows customers to check their energy usage in real time using an app on their phone or online at home. The question is how responsive customers will be; will supplying this data to customers motivate them to reduce their energy consumption? It will for some, and not for others. Reduction of greenhouse gas is the focus. Mr. Gertig finished by stating the City of Fort Collin has the finest staff in the country and it’s an exceptional organization. Utilities must be aligned with the City’s strategic plan. Highlights of the Discussion  A board member inquired about employee retirements and automation. Mr. Gertig stated recruiting is not an issue because of Fort Collins’ high quality of life. His concerns are onboarding, retention, and professional growth plans; he noted the maximum salary is not at the top anymore.  A board member inquired about tension between water storage need and ecological values, what kind of coordination occurs to address? Mr. Gertig stated he and Natural Areas Director John Stokes are good friends, the City has very talented individuals who are passionate about their disciplines, and everyone will facilitate compromise and work together; we have a limited resource and competing needs.  A board member inquired whether politics affects discussions. Mr. Gertig stated he doesn’t think politics works in Fort Collins because it has very bright minds who use good data that is vetted by others; if people try to play politics, others will call them on it. Water Board Minutes July 17, 2014 4  A board member inquired when the smart meters will be online. Mr. Gertig stated they’re online now across the entire city except one area in water. He stated Light & Power Operations Manager Steve Catanach can give the board a presentation on Advanced Metering Infrastructure (AMI).  A board member inquired whether many citizens are using rebates, such as for energy efficient washing machines and other appliances. Mr. Gertig stated Water Engineering & Field Services Operations Manager Jon Haukaas is doing a study now at CSU on dual water systems. Utilities’ goal is to reduce water usage down to 140 or 120 Gallons Per Capita Day (GPCD) (the amount of water one person uses in a typical day). Rebate is just one avenue of a multi-prong effort to conserve water; you need money to do it and you can’t keep doing it forever. Most people in the community want to do the right thing. Ms. Webb stated she can provide statistics on rebates at the next meeting.  A board member inquired whether the board should do anything differently. Mr. Gertig stated the board should run meetings efficiently, use its Work Plan to guide it, but also be ready to jump in. Regarding the BFO process, Mr. Gertig stated he feels City Council must take the board’s recommendations under serious consideration, and staff must make sure the board is supported at that level.  A board member commented that he participated on the Utilities Executive Director interview panel, and noted that his main comment was that Mr. Gertig is a public servant. Budgeting for Outcomes (BFO) Discussion (Attachments available upon request) Mr. Malers briefly summarized the goal of Budgeting for Outcomes process: to make sure the City’s budget is spent on outcomes that are measureable and have value; some are ongoing expenditures. City Council is interested in feedback from the boards and commissions due to the expertise of the citizens who serve on these boards. He asked Ms. Webb to provide background and information on priorities regarding the budget offers in the meeting materials and listed on the poster-sized printouts hanging on the wall for water, wastewater, stormwater, and customer service/administrative support funds. Ms. Webb stated Utilities’ asset management program helps identify needs and priority of capital projects based on numerous criteria. Highlights of the Discussion A board member inquired about the definition of “enhancement.” Ms. Webb stated that it’s anything we weren’t doing before. For FTE employee slated to be converted to classified status, the expenditures will continue; if the position was contractual and not continuing, it will come off the books. The replacement budget allows for equipment replacements planned over time.  Strategic Financial Planning Manager Lance Smith distributed three updated documents on water, wastewater, and stormwater. He noted the only rate increase is in the Wastewater Fund, 3% in 2015 and another 3% in 2016. No rate increases are planned for water and stormwater. The rate increase proposed for 2015 is part of the anticipated revenue, and Council will be asked to approve it a month after they approve the budget.  A board member inquired about rate increases being tied to certain items. Ms. Webb pointed out that the board, based on members’ expertise, may state in a memo to Council their reasons for supporting or not supporting items, then staff will go to Council’s Work Sessions to discuss the offers, and will be able to give reasons why board members support or don’t support these items, Water Board Minutes July 17, 2014 5  Wastewater Fund Round 2 Offers. Mr. Smith summarized the list. The top section anticipates revenue, the next section covers budget offers, followed by a list of capital projects, which means non-lapsing appropriations. Next are enhancements that would become ongoing if approved. The list shows the total without enhancements and the total with enhancements.  About $25.7 million revenue is projected for 2015, with $25.7 million in expenditures without enhancements or $25.8 million with enhancements; $153,000 will come from reserves.  A board member inquired how much can come from Wastewater reserves. Mr. Smith explained $25 million is in reserves and the minimum required is $5 million.  A board member inquired how full-time equivalent (FTE) is determined. Ms. Webb explained that some conversion cases are due to a program that will continue, and therefore it makes sense to convert the employee from contractual to classified because they’re doing the same type of job as other classified employees. In other cases, it’s better to keep them hourly or contractual. Mr. Smith stated the desire by the City to treat everyone fairly; classified employees received medical benefits. Citywide, about 95 people are scheduled to be converted to classified.  A board member inquired about the line item for Wastewater Art in Public Places. Ms. Webb stated it’s because all capital projects must contribute to that program. Mr. Smith stated that 1% of all projects are required to be set aside for Art in Public Places, and that Utilities provides most of the funding for that program.  A board member inquired why Utilities must participate in this if it operates as an enterprise fund. Mr. Smith said it was made clear that the City wants Utilities to participate.  A board member inquired about how stormwater money is divided into three categories, existing stormwater, current and future development, and natural resources. Mr. Haukaas said it’s an administrative approach to how staff looks at capital projects. Of the $3 million to $4 million in capital funds, Utilities is directing $700,000 to stream water restoration projects annually, some goes to Council priorities, and the remainder goes to general stormwater needs. The projects that we have up here come straight from that priorities list.  A board member inquired about the details. Mr. Haukaas said some are priorities because they’re considered a gateway to the community (access), such as Harmony Road for example.  A board member inquired about how much of current infrastructure for future development. Mr. Haukaas stated Utilities is not funding future development. Northeast College Corridor Outfall (NECCO) storm drainage project is a spine that replaces the old Dry Creek, which has been paved over, it has strong property protection, personal protection and flood mitigation that relates to that project. It’s managing a floodplain; it’s an important project to the City because we know growth will happen and we want to make sure the area is safe. That’s the only item that’s future focused, it’s a large project so no one developer can manage all that. Utilities requires reimbursement from developers for this, over and above the standard fees.  A board member inquired about the timeline for the project Boxelder Basin Regional Stormwater Authority. Mr. Haukaas said it’s unknown. If the loans are obtained, the $330,000 estimated for 2015 and $350,000 for 2016 would be for 20 years, and then maintenance costs would be determined. Water Board Minutes July 17, 2014 6  Stormwater Fund Round 2 offers. Mr. Haukaas gave a summary explanation of capital projects, including the following: Stormwater basin master plan updates covers the 13 basins in Fort Collins; Boxelder is on the eastern edge of city, parallel to I-25; for stream rehabilitation, the highest priority is Fossil Creek and the second highest priority is Spring Creek; establishing an Emergency Operations Center is for interacting with other agencies, and space to set up computers for operations and hourly updates.  The Hoffman Mill land purchase is a 22-acre area in the heart of Fort Collins (near Riverside and Lemay) leased by Streets department where they grind up material to use in asphalt for new roads. The property owners could have sold the land to developers, but chose to give the City first dibs because of the good relationship; the City has been using that land for 30 years, and this is a rare opportunity. The land cost would be split equally among four different departments: Streets, Utilities, Parks, and Natural Areas. Utilities will use the land for soil screening, etc., and we’ve saved more than a $100,000 in repairs. Purchasing the property will result in huge savings; having to find another property would cause significant impact on operations.  A board member inquired whether the money is separate from the General fund since Utilities operates as an enterprise fund. Mr. Haukaas confirmed that the money can only be used for Stormwater.  A board member inquired where Federal Emergency Management Agency (FEMA) reimbursements go. Mr. Haukaas stated that it depends on where the money was spent. For example, if the money went toward bank restoration, the reimbursement would go to the Stormwater fund; if money was for bridge replacement, the reimbursement would go to the bridge fund.  Wastewater Fund Round 2 offers: Ms. Webb summarized the Capital projects, which includes the following. UV Disinfection System: High-level ultraviolet light (UV) is replacing chlorine gas for safety issues; a chlorine leak would be disastrous, and the main issues happen while changing the tanks. There are also a lot of regulations related to chlorine gas that requires the involvement of the Risk Management Department. Fort Collins has the only major wastewater plant along the Front Range that still uses chlorine gas for wastewater.  The DWRF South Process Train BioNutrient Removal line item is for converting the south train to a three-stage bionutrient removal (BNR) process, which regulations require. Water Reclamation Replacement is to replace blowers, pumps, fences, etc. The new asset management system will play a big part in fine-tuning the replacement program.  Full-Time Equivalent employees (FTE) are required to manage some of the capital projects. Water Resources Engineer: a billion dollars in water rights, staff hasn’t changed, need this position.  Water Fund Round 2 Offers. Ms. Webb stated the Chlorine Contact Basin is the main capital project, a $9.7 billion investment in 2016. Utilities currently uses the finished water reservoirs to meet the contact time required by regulations.  Customer Service & Admin Fund. This funds safety and security. as well as Kevin’s office, etc., billing, this building that board room is in, protecting data, water conservation and audits,