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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 04/21/2009 - RESOLUTION 2009-041 AUTHORIZING THE CITY MANAGER T ITEM NUMBER: 31 AGENDA ITEM SUMMARY DATE: April 21, 2009 FORT COLLINS CITY COUNCIL STAFF: Lisa Voytko Kevin Gertig SUBJECT Resolution 2009-041 Authorizing the City Manager to Investigate Options for a Cooperative Arrangement That Would Provide Water Treatment Services to the Tri-Districts and to Negotiate a Related Agreement for Future Council Consideration. RECOMMENDATION Staff recommends adoption of this Resolution. The Water Board unanimously supported this resolution at its March 31, 2009 meeting. FINANCIAL IMPACT Staff time,including finance and legal,will be required. The agreement will incorporate a one-time capital investment, plus negotiation of annual shared operation and maintenance fees, and sharing of capital and replacement funding. EXECUTIVE SUMMARY The Tri-Districts (owner of the Soldier Canyon Filter Plant) must expand its facility or, as an alternative,purchase treatment capacity in the City of Fort Collins Water Treatment Facility(WTF). The WTF has underutilized capacity, due to water conservation efforts citywide, and could realize debt service repayment,and more efficient operation,with the Tri-Districts' involvement. The Tri- Districts would provide raw water through its own water decrees for treatment through the City's WTF. BACKGROUND The City's Water Treatment Facility(WTF),located at 4316 LaPorte Avenue,has a current capacity of 87 million gallons per day(mgd). The plant currently operates at capacity levels well below this design. In response to the drought of 2002, the conservation program and tiered fee rates, per capita water usage has decreased to a level that appears to be sustainable, resulting in as much as 20 mgd of excess treatment capacity through the year 2035 (projected build out). April 21, 2009 -2- Item No. 31 The Tri-Districts (collectively East Larimer County Water District, Fort Collins-Loveland Water District and North Weld County Water District) owns the Soldier Canyon Filter Plant, located directly to the west of the Fort Collins WTF. The City and the Tri-Districts have an existing intergovernmental agreement that allows for water sharing at various locations in the water transmission system,and for water selling(through Fort Collins-Loveland Water District).The Tri- Districts serves approximately18,000 customers that reside in the City of Fort Collins.Therefore, a working relationship with the Tri-Districts is already in place. The Tri-Districts is currently evaluating options to increase treatment capacity at its plant in order to serve its growing customer base. One of its alternatives is to enter into a long-term agreement with the City for the use of its excess treatment capacity. This is a regional solution, benefitting the City by maximizing the use of the idle treatment capacity, reducing debt load on its rate payers and benefitting the Tri-Districts by delaying capital expenditures. This capacity could be provided by the City through a wholesale contract agreement (similar to West Fort Collins Water District) or through a sale of treatment capacity. The Tri-Districts desires to purchase treatment capacity,rather than purchase water through a contract agreement. There are several benefits to the City in arranging a sale of treatment capacity to the Tri-Districts: 1. Efficient use of unused constructed capacity. 2. Potential accelerated repayment of debt service. 3. Enhanced (continued) cooperation with Tri-Districts. 4. Less environmental impact on region due to no construction of facilities at Soldier Canyon. 5. Increases City's minimum water treatment levels,which have been declining,allowing more efficient operation during low winter flow rates. ATTACHMENTS I. Tri-Districts and City current service area map. 2. Water Board memo, April 7, 2009. 3. Powerpoint presentation. ATTACHMENT 1 Water Service Providers Area Map W DOUGLAS RD E DO UGIAS RD E COUNTY ROAD li 1 `t z 0 OUNTY ROA 5 EC(UNTJROAJ 52 O 001 NtestFoit oll sIAI- rSlstrid R MOUNT N VISTA = 0 w _ CO Water DI ict - Soldier Canyor t wl f l_ - WTP r-- 2$ E C OAI 48 Sunset Water District q,ORTE_A_ LJI�,,fOLN v� `- -- ^-- 4 Fort Collins WTF L!L '. F9 �\ 1 EMULBERRY T t 5' fort Collins Utilities (Water) yRRo i a _ � � I J I t a W DRAKE RD DRAKE ZC 0 o 21 -`v^� u Jtl K jI fal V�' 0 J �, �n E HO RS ET TH RD � O � J , A0 3 E I y 0.0 t E ARMONYRb - t __J / � KEC TER RD _r-I" _1 z Fort Collins Loveland Water Distnct.��^i n 0 RI BY Lj t`-�!E1'Rl BY R ej CA ?ENTER `Y, 0 r u --� o = La x LCOU Y AO 30 (]Uben Gluu�Nw � N Fwt ATTACHMENT utilities—Water Board p ,' _J. .. 700 Wood St. Fort Collins 97 Box0 Fort Collins,CO 80522 970.22t.6.6702 970.416.2208-fax y.. fcgov.com MEMORANDUM DATE: April 7, 2009 TO: Mayor Doug Hutchinson and City Council Members FROM: Gina C. Janett, Chair, Water Board CC: Brian Janonis, Utilities Executive Director RE: Water Treatment Capacity Discussion with Tri-Districts A presentation was made to the Water Board by Lisa Voytko, the City's Water Production Manager, about the possibility of offering a portion of the water treatment plant capital facility capacity to the Tri-Districts to treat water for their customers. The Tri-Districts are collectively made up of the East Larimer County Water District, Fort Collins-Loveland Water District and North Weld County Water District. This issue has come up because the City now has excess treatment capacity in its facility due to water conservation by its customers. As a result, the City is in the position to possibly"sell" a portion of its plant's capacity to the Tri-Districts. A resolution proposed by staff would authorize staff to investigate options for water treatment service and to negotiate an agreement with the Tri-Districts. The Board asked various questions as the issue was discussed. It was clarified that the Tri- Districts would be purchasing treatment capacity, and the City would continue to operate the facility. A question was also asked about the Tri-Districts and the City doing joint purchasing of chemicals or supplies for both the City's and Tri-Districts' separate facilities. Staff responded that the City would probably not receive much benefit from such an arrangement due to the large economies of scale they currently enjoy. The benefits of selling a portion of treatment capacity to the Tri-Districts were discussed. The benefits of accelerating debt repayment, and increasing the efficiency and cost effectiveness of treating water during the long winter flow rates were viewed as especially beneficial to Utilities' rate payers. A motion was made by Board Member Brian Brown to support of resolution authorizing the City Manager to investigate options for water treatment service and to negotiate a cooperative agreement with the Tri-Districts. The motion was seconded by Board Member Johannes Gessler, and the vote was unanimous in favor of the recommendation. The Water Board would appreciate the opportunity to review any resultant agreement prior to formal action by Council. ATTACHMENT 3 C Request to Investigate Options for a Cooperative Agreement to Provide Water Treatment Services with the Tri-Districts City Council — April 21 , 2009 Presented by: Water Resources & Treatment Kevin Gertig, WR&T Manager Lisa Voytko, Water Production Manager C^Crcy of II RJI� t Collins v _ C Action Requested Resolution authorizing City Manager to investigate options for a cooperative agreement that would provide water treatment services to the Tri-Districts and to negotiate a related agreement for future Council consideration 0tvt ollins C Benefits to City • Recovering of Capital Costs • Blending for Raw Water Quality • Operation and Maintenance Efficiency • Sustainability & Environmental Impact • Continued Relationship with Tri-Districts • Cost Efficiencies Fo t�l`s 6=0—I \Cmr Sirlr Prorinon free\lay i Tri- - District Soldier Service Canyon —� WFPX -- Areas Fort �- Collins WTF a. -s 2 !P fir• ��:_'. i --h_' _ j'- I WWMMyy��PP rr I "• '1 • i4 f '1s". _ l �j I : C. 2008 Monthly Average Water Production eo a Highest day 500 of production 9 ,oO = 51 mgd g wo �c 3 20.0+ — 0. 0.0 — Jan Fed Atlr fpr NUy Jun Jul °ar9 Sep Od Nov Dec 3 WTF Water Production History 100.0 90.0 Plant peak capacity = 87 mod w.° Peak 00 Highest average production production in is about 600 2001 = 52.2 mgd 20% more n 50.0 than 00.0 average 30.0 monthly E 20.0 production 10.0 0.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nm Dec i� J Projected Future Water Demand 10001Peak Plant Production Capacity 700 aep p � 500 Projected Demand 400 € x° E Z0.0- 100 - 00 2010 M15 2020 2025 2030 2035 _From Water Resources,2009t dhns 4 Proiected Demand with Tri-Districts moo 900 Peak Plant Production Capacity AO 70 Q 60 0 u 500 - 41 Projected Demand 30.0 including Tri-Districts E 00 20.0 i00 2010 2015 2020 2025 12030 2035 C Benefits to City • Recovering of Capital Costs • Blending for Raw Water Quality • Operation and Maintenance Efficiency • Sustainability & Environmental Impact • Continued Relationship with Tri-Districts • Cost Efficiencies 1 1'v C 5 Action Requested Resolution authorizing City Manager to investigate options for a cooperative agreement that would provide water treatment services to the Tri-Districts and to negotiate a related agreement for future Council consideration ` t Coons Questions? Ma FortCoUns 6 RESOLUTION 2009-041 OF THE CITY COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE CITY MANAGER TO INVESTIGATE OPTIONS FOR A COOPERATIVE ARRANGEMENT THAT WOULD PROVIDE WATER TREATMENT SERVICES TO THE TRI-DISTRICTS AND TO NEGOTIATE A RELATED AGREEMENT FOR FUTURE COUNCIL CONSIDERATION WHEREAS, three area water districts, the Fort Collins-Loveland Water District ("FCLWD"), the East Larimer County Water District and the North Weld County Water District, referred to as the Tri-Districts, cooperatively own and operate the Soldier Canyon Filter Plant(the "Plant"), which is located near the City's Water Treatment Facility; and WHEREAS, the Tri-Districts provide drinking water service to customers within portions of Fort Collins, the Fort Collins growth management area, Larimer County, Weld County and the surrounding region,including the towns of Windsor,Eaton,Ault,Timnath,Pierce and Nunn,as well as the Sunset Water District, and portions of the Northern Colorado Water Association; and WHEREAS, the Tri-Districts will need to expand the existing Plant at its current site to continue to comply with applicable regulations and to meet future capacity needs; and WHEREAS, as an alternative to expanding the Plant, the Tri-Districts, through FCLWD, which already has intergovernmental agreements with the City for water sharing and water selling, desire to confer with the City regarding possible arrangements under which the City might provide for the treatment of a portion of its water flows to meet the Tri-Districts' near term and future needs; and WHEREAS,the City has unused treatment capacity at its Water Treatment Facility that was constructed prior to water conservation efforts; and WHEREAS, if such water treatment arrangements were made, the Tri-Districts would remain independent from the City and the City will assess only those charges directly or indirectly related to the use of its treatment capacity for the Tri-Districts' water flows; and WHEREAS, the Tri-Districts would provide their own raw water to the City for treatment; and WHEREAS, consolidation of water treatment services would eliminate construction at the Plant and increase efficiencies that could benefit the City, the Tri-Districts and the region; and WHEREAS, the City is authorized to enter into intergovernmental agreements to provide ' any function, service or facility, as provided in Article II, Section 16 of the Charter of the City of Fort Collins and Section 29-1-203, C.R.S. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS that the City Manager is hereby authorized and directed to investigate options for a cooperative agreement to provide drinking water treatment services to the Tri-Districts, and to negotiate a related agreement for future presentation to and consideration by the City Council. Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 21 st day of April A.D. 2009. Mayor ATTEST: City Clerk