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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 06/01/2010 - FIRST READING OF ORDINANCE NO. 067, 2010, AMENDING DATE: June 1, 2010 STAFF: Bill Freeman Patty Bigner First Reading of Ordinance No. 067, 2010, Amending Section 26-279 of the City Code to Allow Additional Means of Determining Wastewater Volume as the Basis for Wastewater Service Fees and Charges. EXECUTIVE SUMMARY This proposed Code amendment allows Utilities to establish an alternate means for determining wastewater volume for typical applications used in manufacturing processes by some of the City's industrial and large commercial customers. Examples include cooling towers and other equipment or processes where a measurable reduction in wastewater discharge can be determined and metered. The reduction would generally be established for a specific process rather than facility as a whole. BACKGROUND / DISCUSSION Fort Collins Municipal Code,Chapter 26 establishes specific rates for customer classifications,including intermediate non-residential users and users who have been issued industrial discharge permits. Rates are based upon water use, measured wastewater flows, or winter quarter use, whichever is applicable. From a technical perspective, measurement ofwastewaterflow has proved to be difficult due to system design and reliability of wastewater metering. These changes to Chapter 26 of the City Code establish an additional means of determining wastewater volume as the basis for Wastewater Service fees. Because water use is the standard basis for determining the charges, the alternative approach would result in an adjustment for the difference in water volume received and wastewater volume discharged. This would apply to commercial customers who have facility or manufacturing processes that result in a significant difference between the volume of water delivered and the volume of wastewater discharged,and excludes water used for landscape irrigation. This Code change provides general guidelines for this specific type of adjustment. The Wastewater Utility would establish a program with specific requirements including qualified processes, meter installation, maintenance and calibration, cross connection control, and any necessary plumbing specifications. Chapter 26, Sections 278-280 of City Code describe the basis and establish charges forwastewater service charges and categories as well as service charges by categories. In addition, Code section 26-279 (2) specifies "If any metered water service customer connects to the wastewater utility or makes a change in the use of the premises or substantially expands such premises, the General Manager shall make an - estimate of the water consumption on such premises during an average winter month based upon a count of plumbing fixtures, consumption of similar customers or other information relevant to such determination; and such estimate,when made, shall be the basis for the wastewater service charge until the actual winter use for the premises can be determined." This section provides the means for changing a wastewater service charge based on winter water use but does not include provision for consumptive or evaporative loss. The amendment would add the following language to this section: ...the premises can be determined or until an alternative means of determining wastewater volume is established for the user in accordance with this Article." June 1, 2010 -2- ITEM 13 The following underlined language is proposed to.be added to City Code to describe the manner in which metered use could be established as the basis for wastewater charges: (4) In addition to the applicable base charge set forth in § 26-280, users in Categories D, E and F shall be billed upon the basis of metered water consumption except where they can show to the satisfaction of the General Manager that not all of the water going through the water meter is returned to the wastewater system but is instead consumed or otherwise diverted. In such cases,and with the approval of the General Manager, the wastewater charges may be based upon one (1) of the following methods: (a)a metering device of a type and installed in a manner approved by the General Manager may be used to measure the quantity of wastewater returned to the public sewer and the actual volume of wastewater discharged will be substituted in the formula for billing purposes;LL metering device of a type and installed in a manner approved by the General Manager may be used to measure one or more specific quantities of water consumed or processed in all or specified portions of the user's facility if the General Manager finds that such measured water quantities form a sufficient and reliable basis for determining the quantity of wastewater returned to the public sewer, in which event the actual volume of wastewater discharged will be substituted in the formula for billin purposes:or(c)when the user discharges only wastes reasonably and regularly corresponding to the winter quarter water use, said winter quarter water use may be substituted in the formula for billing purposes.Any metering device used to measure wastewater shall be installed and maintained at the user's expense. Sec 26-290 describes the manner in which special wastewater service agreement can be established, and specifies that this type of agreement is subject to adoption by City Council., Sec. 26-290. Agreements for special wastewater services. Special services or complex service arrangements that are beyond those required for basic wastewater service may be arranged by a written services agreementwhich the General Manager may negotiate and enter into on behalf of the wastewater utility. Said agreement shall establish the terms and conditions for any such special services or arrangements and shall incorporate by reference the requirements of this Chapter, as applicable. Any special services agreement modifying the rates, fees or charges for said services from those set forth in this Article shall be subject to approval by the City Council in accordance-with §6 of Article XII of the Charter. It is the expectation that Utilities would use this authority for special wastewater service agreements in order to establish and document the requirements and arrangements for particular customers under the proposed new metering authority. A customer requesting alternative metering arrangements to reflect the difference in water volume received and wastewater volume discharged will be required to meet the following conditions: • The reduction must be for a specific process. It is not for the industry as a whole. • The reduction must be measurable. In addition to the main water meter serving the property, meters must be installed at the influent side and effluent side of the specific process to be measured. • The additional meters must be purchased from Fort Collins Utilities. • The installation and maintenance of the additional meters will be the responsibility of the customer. • Meter installation must be inspected and approved by Fort Collins Utilities and is subject to additional inspections at least annually. • All meter installations must be readily accessible. • Any meter found to exceed specifications of age or total volume, or found to be out of calibration, shall be replaced at the expense of the customer. FINANCIAL IMPACT Staff anticipates that this City Code amendment will result in a significant reduction to Wastewater Fund revenue over the next several years. Staff will estimate the effects of this change in the Budgeting For Outcomes(BFO) process and make recommendations on any required rate changes as a part ofthe budget and rate-setting work later this year. June 1, 2010 -3- ITEM 13 SUSTAINABILITY: ECONOMIC, ENVIRONMENTAL AND SOCIAL IMPACTS This proposed Code amendment does not create an additional environmental impact in that it does not change the way water resources are used or impact the quality of wastewater discharge. It does provide a means for quantifying wastewater discharge in a specific commercial use as the basis for equitably allocating wastewater collection and treatment costs to those commercial customers that meet the requirements of the program. It allows the Utilities to adjusts the basis for determining charges by metering discharge flows rather than determining wastewater charges based on water volume delivered. The result is reduced cost to the commercial customer that more closely matches with the amount of wastewater service delivered. This has an economic benefit to the customer; however, it results in a short term reduction in revenue to the Wastewater fund until cost of service allocations can be adjusted. It is anticipated that the change in cost allocation will increase residential rates to some extent as the result of the shift in cost allocation. This shift and its associated economic impact can be managed by phasing the program. Since this change is a result of customer feedback on how wastewater service charges are determined,this amendment to City Code may support the ability of customers to influence factors that directly impact their business. It may also support the positive business relationship between these customers, Fort Collins Utilities and City government. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading. BOARD / COMMISSION RECOMMENDATION At its May 13. 2010 meeting, the Water Board voted unanimously to recommend Council approve the propose Code revision to allow for an additional means for determine wastewater volume. ATTACHMENTS 1. Draft minutes from the May 13, 2010 Water Board meeting ®AF ATTACHMENT 1 T Water Board Excerpt from Unapproved May 13,2010, Minutes Wastewater Adiustments for Evaporative Water Loss Customer and Employee Relations Manager Patty Bigner introduced this topic. The proposed change to City Code allows the Utilities Executive Director to enter into agreements for wastewater rate reductions for consumptive/evaporative loss with commercial customers who have facility or manufacturing processes that result in a significant difference between the volume of water delivered and the volume of wastewater discharged. Staff is requesting a Code change as a result of requests from our customers to provide a more fair allocation of costs, and the Wastewater Utility recognizes it as the right thing to do. How will we determine where the line is? The customer will be responsible for costs to change plumbing and meters, which should make these requests self-regulating. Costs depend on size of the plumbing project and the meter. Interested customers are convinced they will save thousands of dollars peryear. Will there be any restrictions on the meters? The meter has to be part of a specific process to measure reduction, so the meter may be inside the building attached to equipment used to produce a specific part of the manufacturing process. The adjustment would not be applied campus-wide. A program with an application is being developed, so a significant amount of information will be applied to arrive at these agreements. Are there any concerns about impact to City revenue? Yes. As we look across the 6-12 commercial customers this will affect, it could cost the Utility $1.6-1.8 million per year, which has been built into our latest budget projections. Does this mean rate increases for the rest of the customer base? Everything being equal, it will affect our cost of service. Would this intent new businesses to develop processes that are less consumptive? Staff is not certain whether it will provide those types of incentives. The customer still pays for what they use, so it's not viewed as a driving factor. Motion: Board Member Connor moves that the Water Board recommend that City Council approve the proposed Code revision for wastewater rate reduction for consumptive/evaporative loss, consistent with staff s recommendation. Board Member Phelan seconded the motion. Vote on the motion: It passed unanimously. ORDINANCE NO, 067, 2010 OF THE COUNCIL OF THE CITY OF FORT COLLINS AMENDING SECTION 26-279 OF THE CODE OF THE CITY OF FORT COLLINS TO ALLOW ADDITIONAL MEANS OF DETERMINING WASTEWATER VOLUME AS THE BASIS FOR WASTEWATER SERVICE FEES AND CHARGES WHEREAS , rates, fees and charges for wastewater utility service are determined as set forth in Division 4 of Article IV in Chapter 26 of the City Code; and WHEREAS , the methods for measuring and determining wastewater volume for the purpose of billing wastewater customers the applicable rates, fees and charges for wastewater service; and WHEREAS , in some circumstances the volume of wastewater discharged by wastewater customers with complex or unusual processes or plant configurations can be more accurately determined using more refined methods than are currently provided in City Code; and WHEREAS , City staff has proposed that Section 26-279 of the City Code be amended so as to allow Utilities to develop and approve on a case-by-case basis methods for measuring one or more specific quantities of water consumed or processed by nonresidential wastewater customers, in order to determine more accurately the volume of wastewater discharged by such customers ; and WHEREAS , the City Council has determined that it is appropriate and desirable for Utilities to have the authority to evaluate and establish such methods of measuring or determining wastewater discharges by nonresidential wastewater customers . NOW THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS that Section 26-279(c) of the Code of the City of Fort Collins is hereby amended to read as follows : (c) The rate determination by category is as follows : (2) The user shall be charged this calculated amount and the applicable base charge as set forth in § 26-280 . If any metered water service customer connects to the wastewater utility or makes a change in the use of the premises or substantially expands such premises , the General Manager shall make an estimate of the water consumption on such premises during an average winter month based upon a count of plumbing fixtures, consumption of similar customers or other information relevant to such determination; and such estimate, when made, shall be the basis for the wastewater service charge until the actual winter use for the premises can be determined or until an alternative means of determining wastewater volume is established for the user in accordance with this Article . (4) In addition to the applicable base charge set forth in § 26-280, users in Categories D, E and F shall be billed upon the basis of metered water consumption except where they can show to the satisfaction of the General Manager that not all of the water going through the water meter is returned to the wastewater system but is instead consumed or otherwise diverted. In such cases, and with the approval of the General Manager, the wastewater charges may be based upon one ( 1 ) of the following methods : (a) a metering device of a type and installed in a manner approved by the General Manager may be used to measure the quantity of wastewater returned to the public sewer-and, in which event the actual volume of wastewater discharged will be substituted in the formula for billing purposes ; (b) a metering device of a type and installed in a manner approved by the General Manager may be used to measure one or more specific quantities of water consumed or processed in all or specified portions of the user' s facility if the General Manager finds that such measured water quantities form a sufficient and reliable basis for determining the quantity of wastewater returned to the public sewer, in which event the actual volume of wastewater discharged will be substituted in the formula for billing purposes ; or (cb) when the user discharges only wastes reasonably and regularly corresponding to the winter quarter water use, said winter quarter water use may be substituted in the formula for billing purposes . Any metering device used to measure wastewater shall be installed and maintained at the user's expense. Introduced, considered favorably on first reading, and ordered published this 1 st day of June, A . D . 2010, and to be presented for final passage on the 15th day of June, A.D. 2010 . Mayor ATTEST : City Clerk -2- Passed and adopted on final reading on the 15th day of June A.D . 2010 . Mayor ATTEST : City Clerk -3 -