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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 08/16/2016 - RESOLUTION 2016-061 AUTHORIZING THE CITY MANAGERAgenda Item 17 Item # 17 Page 1 AGENDA ITEM SUMMARY August 16, 2016 City Council STAFF Lucas Mouttet, Utilities Customer Accounts Manager Carol Webb, Water Resources/Treatmnt Opns Mgr SUBJECT Resolution 2016-061 Authorizing the City Manager to Execute an Agreement Between the City of Fort Collins and New Belgium Brewing Company, Inc. Regarding Temporary Authorization to Use a Portion of Pretreated Wastewater in a Cooling Tower. EXECUTIVE SUMMARY The purpose of this item is to temporarily authorize New Belgium Brewing Company (New Belgium), as a customer of Fort Collins Utilities (Utilities), to use a portion of the pretreated wastewater from its brewery in an onsite cooling tower. Utilities has reviewed the request and recommends that temporary authorization for New Belgium’s use of pretreated wastewater be granted, subject to various terms and conditions. This temporary authorization will help Utilities evaluate whether a permanent program involving the use of pretreated wastewater by New Belgium and other similarly-situated customers can or should be pursued. STAFF RECOMMENDATION Staff recommends adoption of the Resolution. BACKGROUND / DISCUSSION New Belgium is a Fort Collins Utilities customer that receives water and wastewater service. New Belgium pretreats a portion of the wastewater from its brewery at an onsite facility, with the pretreated wastewater then being sent to Utilities’ water reclamation facilities for further treatment and (ultimately) discharge to the Poudre River, pursuant to the City’s various permits (such as National Pollutant Discharge Elimination System Permits issued pursuant to the Clean Water Act). New Belgium’s wastewater pretreated onsite includes brewing process water, spent yeast, out-of-specification beer, and used cleaning chemicals, and is not domestic wastewater from the facility. New Belgium has proposed a project whereby a portion of this pretreated wastewater would not be delivered back to Utilities’ water reclamation facilities, but instead be used in an onsite cooling tower and for onsite irrigation. New Belgium has indicated the goal for this project is to manage utility costs, as well as meet corporate goals pertaining to water conservation at its facility. New Belgium has been in discussions with various governmental agencies regarding this project, including the Colorado Department of Public Health and Environment (CDPHE), to address water quality, and the Colorado Division of Water Resources, which administers water rights, including the City’s water rights used to serve New Belgium and other Utilities’ customers. City staff met with New Belgium on May 19, 2016, to understand project needs, uses, and long-term goals. New Belgium originally requested City authorization to move forward with a permanent approval of the project. However, New Belgium has modified the proposal to request authorization for temporary operation of the cooling tower portion of the project, which would last up to 30 days and utilize up to 250,000 gallons of pretreated wastewater. Agenda Item 17 Item # 17 Page 2 Currently, City Code does not authorize the use of pretreated wastewater by Utilities customers, nor does the cost of service study, i.e., rates, which is why staff recommends a temporary project in order to understand key cost of service data, and to evaluate other aspects of the project. If City Council allows the temporary project to proceed, Utilities staff plans to investigate the possibility of a permanent program involving the use of onsite, pretreated wastewater by New Belgium and other similarly- situated customers. Because such a program would be a shift in operations, Utilities staff requires extended time to fully analyze the various impacts of such a program as it relates to water rights, water quality, operation costs, and other considerations in the regulatory landscape. Authorizing New Belgium’s temporary use of pretreated wastewater onsite will provide Utilities with valuable data. The Agreement with New Belgium would grant temporary authorization for New Belgium’s use of the onsite, pretreated wastewater subject to various terms and conditions that are required to protect Utilities’ interests, as well as to ensure Utilities is able to fully benefit from the data acquired through this project. CITY FINANCIAL IMPACTS The financial impacts from this temporary authorization would be approximately $1,305 in Utilities lost revenue from fees associated with the 250,000 gallons of water not delivered to New Belgium, and the approximately 125,000 gallons wastewater that would not be treated. BOARD / COMMISSION RECOMMENDATION New Belgium uses the cooling tower mainly during the summer months (June through September) when cooling requirements are at the highest for the year, and thus, has a short window to manage the project’s execution. Staff plans to manage the analysis of the temporary project with Water Board prior to providing City Council a recommendation on a permanent program. PUBLIC OUTREACH Outreach for this temporary project is singularly focused with New Belgium. If the temporary project recognizes a benefit that warrants a rate ordinance, staff will then plan public outreach to customers that would qualify. -1- RESOLUTION 2016-061 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT BETWEEN THE CITY OF FORT COLLINS AND NEW BELGIUM BREWING COMPANY, INC. REGARDING TEMPORARY AUTHORIZATION TO USE A PORTION OF PRETREATED WASTEWATER IN A COOLING TOWER WHEREAS, the City owns and operates Fort Collins Utilities (“Utilities”), which includes a water utility and a wastewater utility that provide water and wastewater service to customers pursuant to Fort Collins City Code and other applicable law, rules, and regulations; and WHEREAS, New Belgium Brewing Company, Inc. (“New Belgium”) is a water and wastewater customer of Utilities that owns and operates a brewery in Fort Collins; and WHEREAS, New Belgium owns and operates a process wastewater treatment plant (“New Belgium PWTP”) at the brewery that discharges pretreated wastewater into the City’s sewer system; and WHEREAS, New Belgium has requested authorization to use up to 250,000 gallons of its pretreated wastewater in a cooling tower at the brewery over a 30 day period; and WHEREAS, City Code does not authorize Utilities customers to use pretreated wastewater from process wastewater treatment plants; and WHEREAS, the City is willing to authorize New Belgium’s temporary use of pretreated wastewater from the New Belgium PWTP as described herein in order to acquire data, information, and practical experience related to whether a Utilities-wide permanent program concerning the use of pretreated wastewater onsite from process water treatment plants is desirable, feasible, and otherwise consistent with the prudent management and operation of Utilities in light of all concerns including, but not necessarily limited to, financial considerations and all applicable law. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the City Council hereby makes and adopts the determinations and findings contained in the recitals set forth above. Section 2. That the City Manager is hereby authorized to execute an Agreement substantially in the form of the attached Exhibit “A”, with such additional terms and conditions as the City Manager, in consultation with the City Attorney, determines to be necessary and appropriate to protect the interests of the City or effectuate the purposes of this Resolution. -2- Passed and adopted on at a regular meeting of the Council of the City of Fort Collins this 16th day of August A.D. 2016. __________________________________ Mayor ATTEST: _______________________________ City Clerk Page 1 of 6 AGREEMENT BETWEEN THE CITY OF FORT COLLINS AND NEW BELGIUM BREWING COMPANY, INC. REGARDING TEMPORARY AUTHORIZATION TO USE A PORTION OF TREATED WASTEWATER IN A COOLING TOWER This Agreement is entered into by and between the following Parties: the City of Fort Collins, Colorado, a home rule municipality (“City”); and New Belgium Brewing Company, Inc., a Colorado corporation (“New Belgium”). RECITALS A. The City owns and operates Fort Collins Utilities (“Utilities”), which includes a water utility and a wastewater utility that provide water and wastewater service to customers pursuant to Fort Collins City Code and other applicable law, rules, and regulations. B. New Belgium is a water and wastewater customer of Utilities. New Belgium owns and operates a brewery in Fort Collins, on Lots 1 and 2 of the Final Plat of the New Belgium Brewery Fourth Filing, reordered with the Larimer County Clerk and Recorder at Reception No. 2006-0045463 on June 19, 2006, the address of which is 500 Linden Street, Fort Collins, Colorado 80524 (“New Belgium Site”). C. New Belgium owns and operates a process wastewater treatment plant (“New Belgium PWTP”) at the New Belgium Site that discharges treated wastewater into the City’s sewer system pursuant to Industrial Discharge Permit No. 16002, revised April 15, 2016. The wastewater sent to the New Belgium PWTP comprises wastewater from the brewery, such as used process water, spent yeast, out-of-specification beer, and used cleaning chemicals. The wastewater sent to the New Belgium PWTP does not include domestic wastewater or other wastewater from the New Belgium Site. D. New Belgium has requested authorization to use up to 250,000 gallons of its treated wastewater in a cooling tower on the New Belgium Site over a 30 day period. Such use would be effectuated by pumping a portion of the treated wastewater from the New Belgium PWTP to the cooling tower. E. City Code does not authorize Utilities customers to use treated wastewater from process wastewater treatment plants. New Belgium’s various permits from Utilities likewise do not purport to authorize New Belgium to use treated wastewater from its PWTP. New Belgium thus requires authorization from the City to use any of its treated wastewater. F. The City is willing to authorize New Belgium’s temporary use of treated effluent from the New Belgium PWTP as described herein in order to acquire data, information, and practical experience related to whether a Utilities-wide permanent program concerning the use of treated wastewater onsite from process water treatment plants is desirable, feasible, and otherwise consistent with the prudent management and operation of Utilities in light of all concerns including, but not necessarily limited to, financial considerations and all applicable law. EXHIBIT A Page 2 of 6 AGREEMENT 1. INCORPORATION OF RECITALS. The foregoing recitals are hereby incorporated as if fully restated in their entirety. 2. APPROVAL FOR USE OF TREATED WASTEWATER. The City hereby authorizes New Belgium to use up to a total of 250,000 gallons of treated wastewater from the New Belgium PWTP in a cooling tower on the New Belgium Site over a 30 day period during the term of this Agreement, pursuant to the terms and conditions of this Agreement. No other use of treated wastewater from the New Belgium PWTP or otherwise is authorized hereby. New Belgium expressly acknowledges that this Agreement creates no entitlement or expectation of further analogous or similar authorizations. 3. TERMS AND CONDITIONS. The following terms and conditions shall apply to New Belgium’s use of its treated wastewater. 3.1. METERING. New Belgium shall continuously meter all treated wastewater delivered from the New Belgium PWTP to the cooling tower. Such metering shall be made with a totalizing flow meter acceptable to Utilities. The metering of the treated effluent delivered to the cooling tower shall be made before the remainder of treated wastewater is metered and delivered to the City’s water reclamation facilities pursuant to Industrial Discharge Permit No. 16002. Such metering shall, at minimum, measure and account for the continuous flow rate and the daily volume (in gallons) of treated wastewater delivered from the New Belgium PWTP to the cooling tower. 3.2. REPORTING. New Belgium shall deliver all metering data to Dan Clark at dclark@fcgov.com within five days of the completion of the 30 day period, as well as included with the monthly reports to Utilities Billing Group, and further reported to Utilities as may otherwise be requested by Utilities. Such data shall be delivered in the format in which it was collected, and shall also include any summaries of such data prepared by New Belgium. 3.3. INSPECTIONS. New Belgium shall allow Utilities staff to inspect any facilities associated with the use of the treated wastewater within 24 hours of when such a request is made. 3.4. INFORMATION SHARING. New Belgium agrees to cooperate, in good faith, with Utilities regarding the evaluation of the use of treated wastewater pursuant to this Agreement. New Belgium further agrees that any and all information provided to the City under this Agreement may be shared publically. 3.5. REPORTING LEAKS OR SPILLS. New Belgium shall report any leaks or spills of treated wastewater to Utilities immediately upon discovery irrespective of the size of the leak or spill. New Belgium shall prepare a spill response plan, which must be approved by Utilities in writing, prior to using treated wastewater pursuant to this agreement. Page 3 of 6 3.6. REVOCATION OF AUTHORIZATION. Utilities shall have the right, at its sole discretion, to revoke this authorization and require New Belgium to immediately cease any and all use of any and all treated wastewater. Notice of such revocation shall be provided to New Belgium pursuant to Paragraph 11, and to Nick Ampe, at the following contact information: 500 Linden Street, Fort Collins, CO 80524, (970) 494-7805, nampe@newbelgium.com. 4. REPRESENTATIONS. New Belgium hereby represents that it has acquired, or will acquire prior to the use of any treated wastewater pursuant to this Agreement, any and all approvals, authorizations, and permits needed to use treated wastewater pursuant to this Agreement including, but not necessarily limited to, those from the State of Colorado and its various agencies (such as, by way of example, the Colorado Department of Public Health and Environment) and the United States and its various agencies (such as, by way of example, the Environmental Protection Agency). New Belgium shall provide to the City copies of any and all approvals, authorizations, and permits as soon as practicable pursuant to Paragraph 11. 5. TERM. This Agreement shall be in effect from the date it is last signed by the Parties through October 31, 2016. Any use of treated wastewater shall thus cease on or before October 31, 2016. 6. INDEMNIFICATION. New Belgium agrees to indemnify the City (which includes Utilities), its officers, agents, employees, and representatives, from all claims and liability, including but not limited to the City’s reasonable legal fees and costs, including attorneys’ fees, for any and all claims made by third persons (including, but not limited to, administrative and other actions brought by governmental agencies) associated with New Belgium’s activities under this Agreement and for any and all actions or omissions by New Belgium in violation of this Agreement. 7. REMEDIES. If either Party fails to comply with the provisions of this Agreement, the other Party may seek all such remedies available under Colorado law. 8. NO THIRD-PARTY BENEFICIARIES. This Agreement is entered into between the Parties for the purposes set forth herein. It is the intent of the parties that they are the only beneficiaries of this Agreement and the Parties are only benefitted to the extent provided under the express terms and conditions of this Agreement. 9. GOVERNING LAW AND ENFORCEABILITY. This Agreement shall be construed in accordance with the laws of the State of Colorado, insofar as any matter is not regulated by applicable laws of the United States. Whenever possible, each provision of this Agreement shall be interpreted in such a manner so as to be effective and valid under applicable law. 10. WAIVER. A waiver of a breach of any of the provisions of this Agreement shall not constitute a waiver of any subsequent breach of the same or another provision of this Agreement. Page 4 of 6 11. NOTICES. All notices or other communications hereunder shall be sufficiently given and shall be deemed given when personally delivered, or after the lapse of five (5) business days following mailing by certified mail-return receipt requested, postage prepaid, addressed as follows: To the City: City Manager City Hall West 300 LaPorte Avenue; P.O. Box 580 Fort Collins, Colorado 80522-0580 With copy to: Fort Collins City Attorney 300 LaPorte Avenue; P.O. Box 580 Fort Collins, Colorado 80522-0580 epotyondy@fcgov.com and: Fort Collins Utilities Attn: Water Resources Manager 700 Wood Street P.O. Box 580 Fort Collins, Colorado 80522-0580 To New Belgium: New Belgium Attn: Nick Ampe 500 Linden Street Fort Collins, CO 80524 12. CONSTRUCTION. This Agreement shall be construed according to its fair meaning as it was prepared by the Parties. Headings in this Agreement are for convenience and reference only and shall in no way define, limit, or prescribe the scope or intent of any provision of this Agreement. 13. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of the Parties regarding the matters addressed herein. Covenants or representations not contained in this Agreement regarding the matters addressed herein shall not bind the Parties. 14. REPRESENTATIONS. Each Party represents to the other Party that it has the power and authority to enter into this Agreement and the individual signing below on behalf of that Party has the authority to execute this Agreement on its behalf and legally bind that Party. 15. ASSIGNMENT. No Party may assign any rights or delegate any duties under this Agreement without the written consent of the other Party. [Remainder of Page Left Blank Intentionally] Page 5 of 6 CITY OF FORT COLLINS, COLORADO, a Colorado home rule city By: ______________________________________ Darin A. Atteberry, City Manager ATTEST: By: ______________________________________ City Clerk APPROVED AS TO LEGAL FORM: By: ______________________________________ City Attorney’s Office Page 6 of 6 NEW BELGIUM BREWING COMPANY, INC., a Colorado Corporation By: ______________________________________ ATTEST: By: ______________________________________