HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 03/19/2019 - FIRST READING OF ORDINANCE NO. 050, 2019, AUTHORIZAgenda Item 8
Item # 8 Page 1
AGENDA ITEM SUMMARY March 19, 2019
City Council
STAFF
Liesel Hans, Water Conservation Manager
Abbye Neel, Water Conservation Specialist
Eric Potyondy, Legal
SUBJECT
First Reading of Ordinance No. 050, 2019, Authorizing an Annual Water Allotment Management Program by
Amending Section 26-129 of the Code of the City of Fort Collins to Authorize the Utilities Executive Director to
Waive All or Part of the Excess Water Use Surcharge for Certain Qualifying Customers in Limited
Circumstances.
EXECUTIVE SUMMARY
The purpose of this item is to consider an Ordinance that gives discretion to the Utilities Executive Director to
provide qualified customers a temporary waiver from Excess Water Use (EWU) surcharges for up to three
years, provided the customer participates in the proposed Allotment Management Program (AMP) to
implement a project that permanently reduces the customer’s water use by managing landscape water use to
an existing allotment. The Ordinance and supporting program create a solution for a specific group of
customers that were highly impacted by changes to the Water Supply Requirements (formally Raw Water
Requirements) adopted in September 2017 and implemented in 2018.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinance on the First Reading.
BACKGROUND / DISCUSSION
Water Supply Requirements and Water Allotments
Since the 1960s, the City has required Water Utility customers to meet Water Supply Requirements (WSR).
The WSR is a dedication of water rights or cash-in-lieu (CIL) of water rights to the Water Utility to provide
reliable water supply service to the customer.
Commercial taps that have met the WSR since 1984 also have received an equivalent annual allotment, which
is the annual volume of water a meter (tap) can use without being subject to an EWU surcharge (Code Section
26-129). If a tap uses more water than the annual allotment, the EWU surcharge is applied to water used over
the allotment for the remainder of the calendar year. This charge is in addition to the standard water use rate.
The EWU provides revenue to acquire and develop additional water supplies, such as through the purchase of
additional water rights and/or infrastructure projects to serve the customer beyond what was provided at the
time of development plus any additional allotment volume that has been purchased by the customer.
In September 2017, City Council approved modifications to the WSRs, including an increase in the CIL rate
and the EWU surcharge. (Attachment 1) As a result, the CIL price increased from $6,500 to $17,300 per
acre-foot and the EWU surcharge increased from $3.06 to $8.14 per 1,000 gallons over the allotment.
Agenda Item 8
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Customer Impact Related to EWU Surcharge Increase
Since 1984, about 34% (~1,200) of commercial water taps have annual allotments. In a given year,
approximately 11% of commercial taps exceed their allotment (~350 accounts), however, only ~150 accounts
are highly impacted (annual EWU surcharges over $2,000). Most highly impacted taps are irrigation taps
based on extensive landscaped acreage. Of these irrigation taps, over 70 are associated with homeowner
associations (HOAs) or multifamily complexes where residents, as opposed to businesses, are ultimately
responsible for paying the EWU surcharges.
At the previous rate of $3.06 per 1,000 gallons, customers averaged $1,500 in EWU surcharges. Now, with the
new rate of $8.14 per 1,000 gallons, customers are facing up to $40,000 in EWU surcharges, with the majority
paying about $4,000, and 30 paying over $10,000 annually.
Customer Response to EWU Increase
In 2018, staff estimates that over 1,200 hours were spent addressing customer concerns about the increased
EWU surcharges. Seven complaints were escalated to City Council members. In response, staff committed to
presenting a proposed solution to City Council in Q1 of 2019 (Attachment 2).
Feedback received from customers impacted by the increase in EWU surcharges are summarized as follows:
• Dramatic cost increase (166%)
• Not enough time to prepare or factor in a solution into their annual budgeting
• Significant concern in cases where the allotment is not sized correctly for the use type as depicted in
Figure 1. Customers in this situation have an allotment that is too small given the properties’ water needs.
Customers could be watering efficiently but will still receive EWU surcharges because the property simply
needs more water than the allotment. Solutions with significant upfront costs are needed to help a
customer reduce use enough to avoid facing EWU surcharges every year.
Figure 1 - A customer’s Annual Water Use is larger than its allotment resulting in EWU surcharges (depicted in blue
hatching). However, the customer’s water need (depicted in green) is larger than the allotment. Because the customer’s
need is larger than the allotment. the property will always receive excess water use surcharges unless a large change is
made.
Rationale for Ordinance and Proposed Allotment Management Program (AMP)
Existing water conservation programs can help customers who receive EWU surcharges due to inefficient
water use. Resources are not available, however, to assist customers with an allotment that is not sized
correctly, as depicted in Figure 1, which are often HOAs with irrigation taps that support significant landscaped
acreage. To avoid paying surcharges, customers must either 1) pay the EWU surcharges, or the current CIL
rates to increase their allotment or 2) implement water conservation projects to reduce their water use.
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Example: An HOA in Fort Collins has a 2-inch tap with an allotment of 3.1 million gallons. Analysis shows that
the current landscape needs a minimum of 6.7 million gallons. The HOA can:
1. Pay the excess water use surcharges, $25,000 per year; or
2. Pay the CIL rate to permanently increase their allotment, $367,000; or
3. Implement a conservation project to reduce use to or below allotment, $75,000 over the course of
three years to reduce landscape need to 2.8 million gallons.
On average, highly impacted customers face $7,500 in annual EWU surcharges. The cost for these customers
to increase their allotment is ~$100,000 or more. Most HOAs do not have the reserves available to fund the
yearly EWU surcharges long-term or to pay to increase their allotment. Through stakeholder outreach, staff
has identified that many of these customers would like to implement a water conservation project, but
customers stress they cannot finance water conservation projects and pay EWU surcharges at the same time.
The proposed AMP would support these customers by providing a temporary exemption from EWU surcharges
while customers implement water savings projects to reduce their water use permanently.
Proposed Allotment Management Program (AMP)
Staff proposes a change to City Code that would give the Utilities Executive Director the discretion to provide a
customer a temporary exemption from the EWU surcharges for up to three years if they meet specific
requirements and subject to certain limits. During the exemption period, customers will be able to redirect
funds that would have been used to pay EWU surcharges into a water conservation project.
Customer enrollment in the AMP is proposed as follows:
• Customers with commercial rate codes (including irrigation taps) are eligible to apply with a plan for
permanent reduction in outdoor water use.
• Staff determines and recommends to Utilities Executive Director if customer and project qualify.
Qualifications include:
o Customer demonstrates need (e.g., customer’s water tap is undersized as depicted in Figure 1).
o Project is reasonable and demonstrates long-term reduction in outdoor water use.
• If the project qualifies, the customer receives a temporary exemption from EWU surcharges for up to three
years depending on project scope. If granted, a multi-year project, exemption will be tiered (e.g., 100%,
then 50% for a 2-year exemption).
• Customers who do not complete a project or meet project milestones outlined in a customer agreement will
be billed for any applicable EWU surcharges.
A sample draft application with detailed requirements can be found in Attachment 2. If approved, customers
will be able to complete and file an application for exemption with the Utilities Executive Director on or before
December 31, 2022. Throughout the program, staff will provide Council with quarterly updates on participants’
progress.
Staff believes this is the optimal solution for customers and the Water Utility because:
1. As the cost of water supplies and infrastructure rise, the cost of WSRs and the associated EWU surcharges
will continue to increase, which may result in customers abandoning landscapes, as we’ve seen in other
Front Range communities, or have other impacts on residents. AMP provides a proactive solution that helps
customers adapt to increasing costs while increasing community resiliency to drought and a changing
climate.
2. AMP is a cost-effective way to reduce the additional water resources the Water Utility must develop to
compensate for use beyond what was initially provided at the time of development or otherwise provided by
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a customer since development. AMP helps the Water Utility avoid some future costs of developing water
supplies, costs which are expected to continually increase.
AMP also aligns with key City Strategic Objectives related to Environmental Health and High Performing
Government and with Council-adopted Plans, including the Water Supply and Demand Management Policy
and the Water Efficiency Plan.
CITY FINANCIAL IMPACTS
The program will decrease the revenue Water Utility collects via EWU surcharges. If projects are successful,
the revenue will not be needed because the Water Utility will not need to supply the customer with additional
water.
Based on the average number of customers that exceed their allotment (~350), the maximum financial
implication if every customer were to apply, qualify, and not complete a project with a long-term water
reduction would be $1.2 million. However, based on analysis of water use and the number of customers who
have expressed interest, staff expects around 50 customers to qualify and participate. If each of these
customers applied, qualified, and did not complete a project with long-term water reduction, the revenue
implication would be $370,000.
To mitigate the financial impact and ensure projects are successful:
• A decreasing tiered exemption will be implemented for multi-year projects to lower the risk of providing a
multi-year exemption (e.g., 100% then 50%) and encourage the proper establishment protocol.
• Customers will be back-billed if they do not complete their projects.
• The exemption is only for a limited period, i.e., up to three years.
• Customers will sign agreements to meet milestones and have regular progress check-ins to ensure
projects are completed. (see requirements in Attachment 2)
• Staff has a successful record in supporting customers in landscape change through the existing residential
program, the Xeriscape Incentive Program (XIP). Preliminary analysis estimates these projects reduce use
by 14 gallons per square foot per year. XIP was studied along with many other landscape transformation
programs across the nation as part of an Alliance for Water Efficiency study. The report shows a savings of
up to 39% and more if participants have access to education and support at the start of a project.
BOARD / COMMISSION RECOMMENDATION
On December 20, 2018, the Water Board unanimously recommended that staff develop the AMP.
(Attachment 3) Its primary recommendations were to: (1) ensure program was equitable to all commercial
customers, (2) customers had ample notification of the program, and (3) staff analyzed eligibility on a case-by-
case basis. Staff have incorporated these recommendations into the program.
On February 25, 2019, the Council Finance Committee unanimously approved the program and recommended
staff present the program at the March 19 Council Session due to current Council’s familiarity with the issue
and to ensure customers have ample time to plan. (Attachment 4)
Given the Council Finance Committee’s recommendation, staff’s planned visits to the following boards will
occur after the first Council reading. The boards were presented with a memo and opportunity to provide
Council with feedback prior to March 19. All feedback will be incorporated into the Second reading Agenda
Item Summary.
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• Economic Advisory Commission, March 21
• Water Board, March 21
• Natural Resources Advisory Board, March 27.
PUBLIC OUTREACH
Utilities staff presented AMP to key stakeholders, including property managers, HOA community members,
Utilities key accounts, businesses affected by the change, the landscape contractor community, and other
affected City departments (Forestry, Parks, Development Planning, Natural Areas, and Zoning). A detailed
summary can be found in Attachment 6.
Input has been very supportive of the proposed program. The following summarizes input followed by staff
notes:
• Ensure that the assigned annual water allotment matches the expected water use at the time of
development in the future.
o Via a separate effort, Utilities staff is researching and analyzing improvements to the
development review process in partnership with Development Review.
• Need a solution early in 2019 to allow affected customers time to plan prior to irrigation season.
o By moving up the first reading, staff will be able to notify customers in late April of the program
status. This will allow more customers to successfully develop plans in 2019 and implement in
2020.
• Need educational services and support for customers participating in programs.
o Staff has a successful record of supporting customers through existing programs like the
Xeriscape Incentive Program. Staff also is actively developing additional resources to support
this class of customer in conjunction with other subject matter experts across the City, within
our community (e.g., CSU), and in the region (e.g., Northern Water).
• Concerns from City departments (e.g., Forestry, Natural Areas, and Parks) regarding potential impacts
to vegetation and tree loss if customers stop watering landscapes.
o Staff has met with departments to ensure AMP requirements address their concerns. If
passed, staff will continue to leverage other departments’ expertise to address specific
customer situations as they arise.
ATTACHMENTS
1. 2017 Water Supply Requirment Update (PDF)
2. 2017 Memos in response to customer concerns (PDF)
3. Allotment Managment Program Application and Requirements (PDF)
4. Water Board minutes, December 20, 2018 (PDF)
5. Council Finance Committee minutes, February 25, 2019 (PDF)
6. Public Outreach Summary (PDF)
ATTACHMENT 1
ATTACHMENT 2
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Utilities
electric · stormwater · wastewater · water
222 Laporte Ave
PO Box 580
Fort Collins, CO 80522
970.221.6700
970.221.6619 – fax
V/TDD 711
utilities@fcgov.com
fcgov.com/utilities
M E M O R A N D U M
DATE: November 19, 2018
TO: Mayor Troxell and Councilmembers
FROM: Carol Webb, Deputy Director, Water Resources and Treatment Operations
THROUGH: Darin Atteberry, City Manager
Jeff Mihelich, Deputy City Manager
Kevin R. Gertig, Utilities Executive Director
RE: Concerns from Water Utility Customers re: Excess Water Use Surcharges:
Additional Information and Status
______________________________________________________________________________
This memo addresses concerns raised by some commercial account Water Utility customers
(primarily home owner associations “HOAs”) regarding an increase in excess water use
surcharges (“surcharges”) that are billed when they exceed their annual water allotment
(“allotment”). The surcharge increases followed Ordinance No. 116, 2017, which increased the
surcharge rate.
This memo follows a previous memo on these issues: Memorandum, RE: Response and Next
Steps Related to Concerns from Water Utility Customers Regarding Change to Water Supply
Requirements and Resulting Increases in Excess Water Use Surcharges, November 1, 2018. This
memo provides additional information and a discussion of the status of work on possible
solutions.
BOTTOM LINE:
Surcharges are intended to ensure that the Water Utility recovers enough revenue to provide a
reliable water supply (e.g. costs for water rights or storage). Surcharges were increased on
January 1, 2018 when City Council made modifications to Water Supply Requirements.
Some commercial account Water Utility customers have been particularly impacted by the
increased surcharge rates. Utilities staff is working to help these customers in several ways,
including developing a program to allow for a temporary waiver of the surcharges for certain
impacted customers that are taking steps to address the underlying issues causing use in excess
of their allotments. The program will require changes to City Code.
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DISCUSSION:
Rationale for Surcharge Rate
In Ordinance No. 116, 2017 (which was effective January 1, 2018), City Council approved
various changes to the Water Supply Requirements (formerly Raw Water Requirements) and the
surcharge rate. The surcharge rate increased from $3.06 per 1,000 gallons over the allotment to
$8.14 per 1,000 gallons over the allotment.
A commercial customer’s allotment is determined at the time of application for a water service
permit. For tap sizes between ¾” and 2”, the allotment is indicated in City Code Section 26-
149(b). For taps larger than 2” and for customers requiring two or more meters, the allotment is
calculated based on considering an approved estimate of peak annual use. Surcharges are to be
billed to commercial and irrigation tap customers when they exceed their allotment in a given
year.
The surcharge rate is distinct from the user rate. The user rate is structured to recover costs for
operations and maintenance of the Water Utility system. The surcharge rate is structured to
ensure that the Water Utility recovers enough revenue to provide a reliable water supply (e.g.
costs for water rights or storage). The surcharge rate is based on the current cash-in-lieu rate
because that is the current cost for the provision of a reliable water supply. If this revenue is not
recovered through surcharges, the cost of service will be shifted to all customers through
increases in user rates.
Impacts to Certain Commercial Account Water Utility Customers with Allotments
Some commercial account Water Utility customers have been particularly impacted by the
increased surcharge rates. The circumstances of commercial account customers that have
regularly been exceeding their allotments generally fall into four categories:
• Category 1: Historically Paying Surcharges with Reduced Future Use. Some customers
have historically exceeded their allotments and paid surcharges but have appropriately
size taps and allotments. These customers have the opportunity to avoid future surcharges
by reducing their water use while still maintaining their current landscape.
• Category 2: Historically Paying Surcharges with Landscape Changes or Fee Payments.
Some customers that have historically exceeded their allotments and paid surcharges but
appear to have water taps and allotments that were undersized for their demand. These
customers will need to either make significant changes to their landscape to reduce their
use or pay a significant sum of money in additional Water Supply Requirement cash-in-
lieu fees to increase their allotment to their demand and avoid future surcharges.0F
1
1 Utilities Staff is working with staff from the Planning Department to address the issue of undersized taps going
forward (Categories 2 and 4), to help ensure that such irrigation taps are not undersized in future developments.
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• Category 3: Historically Not Paying Surcharges with Reduced Future Use. Some
customers appear to not have historically been billed for the surcharges they should have
incurred and thus are now subject to future surcharges. Most of these customers will be
able to reduce use to avoid surcharges, however may need time to make these changes.
• Category 4: Historically Not Paying Surcharges with Landscape Changes or Fee
Payments. Some customers that have not been historically billed and also have water
taps and allotments that are undersized for their demand. These customers will need to
make significant changes to their landscape to reduce their use or pay a significant sum of
money in additional Water Supply Requirement cash-in-lieu fees to increase their
allotment to their demand and avoid future surcharges.
Customer Outreach and Support
Utilities staff conducted outreach to potentially-impacted customers in the lead up to Ordinance
No. 116, 2017 to assist them in reducing their water use. However, a subset of existing Water
Utility commercial customer accounts that are expected to be impacted by the ordinance and the
associated increase in the surcharge rate were not notified of the changes through this pre-agenda
public outreach process in as timely a manner that Utilities staff would have preferred.
Several of these customers (particularly HOAs) have expressed concerns related to the impact
the changes in the Water Supply Requirements and the associated increase in surcharges will
have on their budgets.
Utilities staff are providing extensive support to these and other customers to help them
understand their watering needs and to consider landscape changes to reduce their use. As
discussed above, many customers may reduce their use and avoid surcharges by implementing
relatively small changes in their water use. Some customers, however, need to consider
significant changes (which may require significant investment) to reduce their water use.
The Utilities Executive Director has sought to delay the effective date of surcharge rate increase
for these customers until January 2019 to allow the customers an opportunity to reduce their
water use, however this may not be adequate time for some customers to implement the
necessary changes and to make strategic and budgeting decisions on these items. Staff is also
evaluating potential incentive programs (grants, rebates, on-bill financing, etc.) to help customers
make significant changes in their water use, with some options requiring additional funding.
Next Steps
Utilities staff is working to develop a program to provide certain customers with a temporary
exemption to surcharges provided that they meet certain criteria. The current draft criteria in
development and subject to change is as follows:
• The customer has historically never received excess water use fees but has been
identified as being eligible to receive excess water fees based on their original water
service permit(s).
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• The customer is expected to exceed their allotment based on their historical use.
• The customer submits a satisfactory plan to reduce their landscape water use (e.g. will not
overwater based on their landscape needs or will commit to converting to a lower water
use landscape).
• If applying for an extension to purchase more water, the customer must have an allotment
that is undersized for the property.
Under the draft program being developed, customers that meet the criteria could apply for a
temporary surcharge exemption by submitting a plan to address water use and/or plan to pay to
increase allotment. Staff would determine eligibility and the duration of the extension for each
customer based on the information submitted (not to exceed two years). Staff would provide
resources to participating customers and would perform a post-project assessment to confirm the
project has been completed. Customers would only receive exemption from surcharges if they
apply for the exemption. If a customer were to not complete any part of the application process,
surcharges incurred during the time of the extension would be back-billed to the customer.
Implementing the program above will facilitate water conservation as well as reduce the overall
cost of service to these customers.
In order to implement the proposed program outlines above, City Code would need to be
changed. Utilities staff is working with the City Attorney’s Office on the program and such
potential Code changes.
It should be noted that staff continues to provide significant support to all customers who are
receiving surcharges to help them reduce their water use.
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Utilities
electric · stormwater · wastewater · water
222 Laporte Ave.
PO Box 580
Fort Collins, CO 80522-0580
970.212.2900
V/TDD: 711
utilities@fcgov.com
fcgov.com/utilities
Proposed Allotment Management - Program Details and Application
A. Timeline:
March 19, 2019: first reading at City Council
April 16, 2019: second reading at City Council
May 2019: Begin outreach and communication to customers
June 2019: Application period opens
January 1, 2020:
first year of exemption available to customers
May 2020: first program update to City Council, ongoing throughout program
December 31, 2022: Application period closes
December 31, 2025: Last year of exemption available to customers
December 2025: Last program update to City Council
B. Allotment Management Program Application
All applications must include:
1. Customer information
• Date, property name, address, water utility account number, applicant name,
applicant email, applicant phone number.
2. Statement of purpose
• The statement of purpose provides a brief overview of the project. Problems and
needs and how the proposed project will address the problems should be
described. In addition, the Statement of Purpose should summarize the expected
outcomes and benefits of the project.
3. Project description
• The project description should include a detailed summary of the project’s
location and tasks. Depending on the project, applicable details include project
square footage, description of existing landscape, description of existing irrigation
equipment, technical details of landscape changes, technical details of equipment
upgrades, etc.
4. List of contractors/others involved in project
• Include name, phone number and email of contractors, facility mangers, property
managers, or other community members involved in the project.
5. Water savings estimated (can be aided by Water Conservation staff analysis)
• Project’s estimated annual water savings and evidence that it will help the
customer reduce water use to be closer to allotment.
ATTACHMENT 3
Page 2 of 5
6. Detailed project budget and timeline
• Itemized summary of project cost and expected project timeline. If the timeline
changes, the customer is responsible to notify staff and provide an updated
timeline with justification for the change.
7. Evidence of community approval
• Clear demonstration of community approval through various means (board
meeting, community surveys, etc.). Evidence community understands short- and
long-term benefits of the project.
Landscape Project Details:
1. Clear map of current irrigation system and landscape
• Map of existing landscape and irrigation system to aid staff’s understanding and
feasibility of proposed project. Map should include:
o Property name, address, date, scale, and north arrow
o Legend, including irrigation controller, backflow device, water meter,
existing sprinkler equipment layout
2. Minimum of two wide-view photos of proposed project area
• Photos must be in color and include:
o A wide view of project area
o Comprehensive views of each area to be renovated, clearly showing
existing landscape
o Date and time of capture
3. If applicable, a landscape plan of area to be renovated
• Landscape plans should detail landscape changes and include:
o Property name, address, date, scale, and north arrow
o Legend, including identification of individual plant types
o Outline of area proposed for renovation
o Location of new landscape elements and plants, including edging, boulder,
types of mulch, etc.
o An outline of phasing, if applicable
4. If applicable, irrigation plan and/or equipment upgrade schedule of area to be renovated
• Irrigation plans should detail irrigation upgrades and include:
o Property name, address, date, scale, and north arrow
o Legend, including irrigation controller, backflow device, water meter,
proposed sprinkler equipment layout
5. Maintenance plan that outlines establishment and maintenance schedules
• Maintenance plan should outline methodology for turf removal, equipment
installation, establishment plan (e.g., seeding rates, water schedule, etc.) as well as
details for future management (e.g., water schedule, mowing, etc.).
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C. AMP Implementation Process
Phase 1 – Outreach and communication
• Finalize application and related materials including administration processes and
methodology for evaluating applications.
• Continue collaboration with City departments and regional partners to ensure accepted
projects are successful (e.g., Forestry, Natural Areas, CSU Extension).
• Develop and initiate Outreach and Communication Plan to inform applicable customers.
Phase 2 – Application Review and Customer Agreement Development
• As needed, answer questions and meet with any interested customers to discuss program
and project prior to application submittal.
• Review all submitted applications. Criteria may include but is not limited to:
o Allotment analysis: Evidence that the customer is expected to exceed its annual
allotment for its current uses and landscaping even when employing practices to
efficiently manage water use.
o Water savings potential: Demonstration project will help customer reduce water
use closer to annual allotment.
o Community approval: Clear demonstration of community approval through
various means (board meeting, surveys, etc.). Evidence community understands
short- and long-term benefits of the project.
o Project feasibility: Timeline and materials are reasonable and achievable for the
project size and budget.
o Justification: Clear demonstration that there is a community need and support to
complete the project. Explanation for how project goals align with community
goals and interests.
o Methodology: Detailed installation, establishment, and long-term maintenance
plan that demonstrate that the community has thought about short, immediate, and
long-term implications and requirements of its project.
o Exemption length: If qualified, determine length of exemption based on water
savings potential, project feasibility, and methodology. Potential exemption
lengths may be:
1-year exemption – All irrigation equipment only projects
2-year exemption – Small landscape transformation projects
3-year exemption – Large landscape transformation projects
• Inform unqualified applicants with justification and information of applicable Water
Conservation programs that can aid customers.
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For qualified applications, recommend participation in program to Utilities Executive
Director. Upon Executive Directors acceptance:
• Develop Customer Agreements, which may include but are not limited to: exemption
timeline, schedule for inspections and check-ins, monitoring agreement, progress
report schedule, agreement to enroll in Water Conservation monitoring programs, and
adherence to minor amendment process.
• Host project launch meetings. Meeting should include customer and, as applicable,
landscape contractor, property manager, community manager, facilities manager, etc.
and other applicable City staff (e.g., Forestry, Natural Areas). At the meeting, review
details outlined in Customer Agreement and update Customer Agreement as needed.
• After project launch meetings, inform Billing of customer’s exemption period and
document in Utilities billing system.
Phase 3 – Customer Support and Monitoring
• All participating customers will be required to comply to details outlined in their
Customer Agreement.
• In the event a project is delayed or a detail in the Customer Agreement changes, the
customer is responsible to inform staff with justification of the change. Depending on
circumstances, staff reserves the right to remove the customer from program and/or back-
bill the customer for exempted EWU surcharges.
• Staff will perform a mid-project site visit halfway through a customer’s project and may
perform additional site visits as determined by customer and staff.
o During site visits, staff will (1) identify if project is following the timeline, (2)
ensure project is following plans and/or that plans are being updated appropriately
as needed in the Customer Agreement and (3) answer customer questions.
o In the event a project does not comply, and the customer is not willing to realign
project as described in the Customer Agreement, staff reserves the right to remove
the customer from program and/or back-bill the customer for exempted EWU
surcharges.
• As needed, staff will provide updates to City Council on customer projects.
Phase 4 – Project Completion and Long-Term Support
After a customer’s exemption period has elapsed and/or after a customer’s project is complete,
staff will:
• Inform Billing department to reactive customer’s ability to receive EWU surcharges and
document in billing system.
• Ensure customer project is complete and is equipped with tools to ensure long-term
success of project.
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o Staff will perform a site visit post-installation to evaluate project’s success,
answer any customer questions, and ensure project matches details outlined in the
Customer Agreement. If inspection reveals the project has not been properly
installed, per the Customer Agreement, staff reserves right to back-bill the
customer for exempted EWU surcharges.
o Customers will remain enrolled in existing Fort Collins Utilities services like the
Landscape Water Budget program and the WaterSmart notification services to
continue to get information on progress, water savings and detect any leaks or
abnormalities.
WATER BOARD
REGULAR MEETING
12/20/2018 – MINUTES Page 3
x Regular Items
o Excess Water Use (EWU) Fee Waiver Program
(Attachments available upon request)
Presentation Summary: Water Conservation Manager Liesel Hans
and Water Conservation Specialist Abbye Neel summarized the
proposed ordinance, which gives the Utilities Executive Director the
ability to allow a waiver on EWU fees for eligible customers, given
that they comply with specific program requirements and
accomplish milestones to reduce their use. With the change to the
Water Supply Requirements, the EWU fee increased, and staff
conducted significant outreach.
The 2018 changes to the EWU fee went from $3.06 per 1,000
gallons to $8.14 per 1,000 gallons. Some reasons why customers
are exceeding their use are inefficient use of water, change in use
type (e.g. gas station converted to a restaurant), or inadequate
funds turned in at the time of development resulting in an allotment
that is “undersized” for the use type.
One option (purposed ordinance) would allow eligible customers to
apply with a plan for long-term, permanent water reduction. Staff
would determine if the project qualifies and what the appropriate
length/amount of exemption would be. Customers who do not
complete the project would be billed for an applicable EWU fee for
the time that had passed. The benefit is that it would lessen the
financial burdens for customers and it could improve drought
preparedness. The risk is there would be revenue loss with the
exemption, and customer concerns regarding eligibility.
Discussion Summary: Board members inquired and commented on
various related topics including how the EWU fee was calculated (it
is based on cash in lieu rate to increase allotment size from
$6,500/acre foot to $17,300/acre), the importance of keeping things
equitable, the suggestion of granting all customers eligibility for the
exemption, providing customers timely information on EWU fees,
whether tap size can be changed to the correct size (can be
changed at any time if paid for), and the proposal of project-based
fee waivers on a case-by-case basis or a pay-back plan for those
who wish to increase tap size/allotment.
ATTACHMENT 4
WATER BOARD
REGULAR MEETING
12/20/2018 – MINUTES Page 4
o Municipal Separate Storm Sewer System (MS4) Annual Update
(Attachments available upon request)
Presentation Summary: Senior Environmental Regulatory
Specialist Susan Strong shared that she will have a comprehensive
Program Description Document (PDD) completed in early January.
The PDD serves as a road map for all MS4 permit-required
program documentation and will be available to the public for
review and comment.
When given the new permit in 2016 there was a five-year time
frame to comply with new permit requirements, recordkeeping and
documentation practices. The PDD is meant to be a living
document that is always updated and available to the public. The
public can send comments to MS4permit@fcgov.com. In addition
to meeting the requirements, staff is pursuing opportunities to
become a partner to internal and external customers.
Discussion Summary: Board members commented on various
related topics including in-stream monitoring technology, the spill-
response tracking tool, and the state’s forthcoming E.coli Total
Maximum Daily Load (TMDL).
o Park Planning & Development Lease Agreement for Rental of
Irrigation Shares to Agricultural User
(Attachments available upon request)
Presentation Summary: Park Planning & Development Civil
Engineer III Suzanne Bassinger summarized the agreement, which
would lease back two-and-one-quarter shares of the Water Supply
and Storage Company (WSSC) shares to the seller as early in the
year as possible to allow the leasee to develop water use
projections and planting plans for his agricultural land for the 2019
growing season.
Ms. Bassinger shared a map of the Park Master Plan showing the
inset of future parks planned for North of Mountain Vista. These
four parks (three future parks and one existing park) comprise 100
acres that Parks prefers to irrigate with non-potable water. The
development and construction of these parks will not take place for
five to 15 years.
Finance Administration
215 N. Mason
2nd Floor
PO Box 580
Fort Collins, CO 80522
970.221.6788
970.221.6782 - fax
fcgov.com
Finance Committee Meeting Minutes
2/25/19
10 am - noon
CIC Room - City Hall
Council Attendees: Mayor Wade Troxell, Ross Cunniff, Ken Summers (absent) Gerry Horak
Staff: Darin Atteberry (absent), Kelly DiMartino, Mike Beckstead, Kevin Gertig,
Lisa Rosintoski, Lance Smith, Travis Storin, Jennifer Poznanovic, Andres Gavaldon,
Sue Beck-Ferkiss, Adam Molzer, Laurie Kadrich, John Duval, Noelle Currell,
Tyler Marr, Joe Wimmer, Jennifer Poznanovic, Lawrence Pollack, Jackie Thiel,
John Duval, Zach Mozer, Jo Cech, Katie Ricketts, Carolyn Koontz
Others: Dale Adamy, R1ST.org, Kevin Jones, Chamber of Commerce
Patrick McMeekin and Landon Hoover from Hartford Homes
_______________________________________________________________________________
Meeting called to order at 10:03 am
Approval of Minutes from the January 28th Council Finance Committee Meeting. Mayor Troxell moved for
approval. Ross Cunniff seconded the motion. Minutes were approved unanimously.
D.Water Allotment Management Program (AMP)
Abbye Neel, Water Conservation Specialist
Liesel Hans, Water Conservation Manager
Carol Webb, Water Resources and Treatment Operations Manager
EXECUTIVE SUMMARY
The purpose of this item is to seek input from the Council Finance Committee regarding the proposed
Allotment Management Program to assist customers in reducing their Excess Water Use Surcharges by
reducing their landscape water use. The proposed program targets a specific group of customers
impacted by the changes to the Water Supply Requirements (formally Raw Water Requirements) and
the related increase to the Excess Water Use Fee as outlined in Section 26-129 of City Code.
To support Utility goals and customer needs Utilities staff recommends the following:
• A change in City Code that gives discretion to the Executive Director to provide a temporary
exemption from the Excess Water Use fees while a customer implements a project to
permanently reduce the customer’s landscape water use.
ATTACHMENT 5
2
Through the proposed program, customers can apply funds toward implementing water
conservation projects to lower their demands and reduce Excess Water Use fees in the future.
Projects will help customers convert to more resilient landscapes and will also lower the Utilities’
need to develop additional water supplies to compensate for use beyond what was provided for
these customers at the time of initial development.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. What questions or feedback does the Council Finance Committee have regarding the proposed
Allotment Management Program?
2. Does the Council Finance Committee support the proposed program and recommend bringing
the item to City Council for adoption?
BACKGROUND/DISCUSSION
Water Supply Requirements
Since the 1960s, The City has required that all Water Utility customers meet Water Supply Requirements
(WSR). The WSR is a dedication of water rights or cash-in-lieu (CIL) of water rights to the Water Utility to
provide reliable water supply service to the customer. From 1965 to mid-1984, WSRs were determined
only by the total acreage developed (e.g. a one-acre development would be required to meet a WSR of 3
acre-feet of water). In March of 1984, the methodology for determining WSRs changed to including both
the acreage developed and the estimated water use for the development type (e.g. brewery vs. an office
building). This methodology was adopted to ensure reliable water use for all customers.
Commercial Water Allotments
Commercial taps that have met the WSR since 1984 have also received an equivalent water allotment,
which is the annual volume of water a meter (tap) can use without being subject to an Excess Water Use
(EWU) fee. If a tap uses more water than the established annual allotment, the (EWU) fee is applied to
all water used over the allotment for the remainder of the calendar year. This charge is in addition to
the standard water rate. The EWU provides revenue to the Water Utility to purchase additional water
rights and/or infrastructure to serve the customer beyond what was provided at the time of
development.
For customers with a meter (tap) size less than 2”, the WSR and equivalent water allotment are
largely determined by the amount of typical water use within a meter (or tap) size. Table 1
summarizes historical CIL and corresponding allotments for specific tap sizes.
Tap Size (inches) Minimum WSR
(acre-feet)
Equivalent CIL
Payment at $6,500 per
acre-foot
Minimum Annual
Allotment
(Gallons/Year)
¾ 0.90 $5,980 293,270
1 3.00 $19,500 977,550
1 ½ 6.00 $39,000 1,955,110
3
2 9.60 $62,000 3,128,170
3 and above Based on use
All water taps installed prior to the change (pre- March 1984) were grandfathered into the system and do
not have an allotment unless the property has applied for a new water permit.
In September 2017, City Council approved various changes to the WSRs, including an increase in the CIL
rate (Code Section 26-129). As a result, the CIL price increased from $6,500 to
$17,300 per acre-foot of water (a 2.66 factor increase). The EWU fee also increased by the same factor:
from $3.06 to $8.14 per 1,000 gallons over the allotment. Methodology for determining this increase
can be found in ATTACMENT 1.
Customer Impact related to EWU Changes
About 34 percent (~1200) commercial water taps have annual water allotments. In a given year,
approximately 10 percent of all commercial taps exceed their allotment (~350 accounts with an
allotment). Most taps that exceed their allotment are irrigation taps. Of these irrigation taps, over 70 are
associated with HOAs or multi-family complexes where residents, as opposed to businesses, are
responsible for paying the EWU fees.
At the previous rate of $3.06 per 1,000 gallons, customers paid up to $20,000 in EWU fees, with the
majority paying an average of $1,500. Three customers experienced EWU fees over $10,000. With the
new rate of $8.14 per 1,000 gallons, customers paid up to $40,000 in EWU fees, with the majority paying
$4,000 and 30 paying over $10,000.
Customers who exceed their allotment currently have four options related to EWU Fees:
1. Make no changes and pay the EWU fees at rate of $8.14 per 1,000 gallons over the
allotment.
2. Pay the CIL rate to permanently increase their allotment. With the 1.92 supply factor1
included, the cost is $33,216 per acre-foot2
increase.
3. Implement a conservation project to reduce use to or below allotment.
4. Stop using water to reduce use to or below allotment (e.g. abandon or stress the landscape to avoid
excess water use fees).
Customer Outreach for EWU Changes
Staff conducted outreach to impacted customers throughout 2017, prior to adoption of changes to the
WSR. Early stakeholder outreach focused on the development community, as this was the primary focus
of the WSR changes. Outreach to current commercial customers impacted by the increase in the EWU
Fees was initiated in mid-2017 and to date has included postcards and letters, targeted outreach via
phone calls, emails, and in-person meetings, informational sessions, workshops, and free education-
based services (e.g. the Landscape Budget Program). However, even with the significant outreach, staff
recognizes that impacted customers need additional time to understand the financial impacts of the
4
EWU increase and reduce their excess water use to avoid the additional costs noted above.
Customer Feedback on EWU Changes
Feedback received from customers impacted by the increase in EWU fees are summarized as follows:
• Dramatic cost increase (166%).
• Not enough time to prepare or factor in a solution into their annual budgeting before prices were
raised (no customer was notified more than six months prior to implementation in January
2018).
• Significant concern in cases where the allotment is not sized correctly for the use type as depicted
in Figure 1 (e.g. tap’s allotment is not large enough given the property’s efficient water need).
Customers in this situation often express frustration with the City for allowing the developer to
satisfy a WSR with an allotment that was not large enough for the property at the time of initial
development.
Rationale for Proposed Allotment Management Program (AMP)
Staff have identified three primary reasons customers exceed their annual water allotments:
1. Inefficient water use (e.g. overwatering)
2. Change in use type (e.g. a building that was originally a gas station changes to a
restaurant)
3. Allotment is not sized correctly for the use type as depicted in Figure 1 (e.g. tap’s allotment
is not large enough given the property’s efficient water need).
Staff have tools available (e.g. Water Conservation programs) to assist customers with inefficient water
use and changes in use type (#1 and #2 above). Resources are not available, however, to assist
customers with an allotment that is not sized correctly (#3 above), which are typically HOAs with
irrigation taps. To avoid paying fees, these customers must either pay the EWU fees, the current CIL
rates to increase their allotment, or implement water conservation projects to reduce their water use.
Management Program targets these customers by providing a temporary exemption from EWU fees
while customers implement water savings projects to reduce their water use.
Proposed Allotment Management Program (AMP)
Staff proposes a change to City Code that would give the Utilities Executive Director the ability to
provide a customer a temporary exemption from the Excess Water Use fees if they meet specific
requirements. During the exemption period customers will be able to redirect funds that would have
been used to pay EWU fees into a water conservation project.
Customer enrollment in the Allotment Management Program (AMP) is proposed as follows:
• Eligible customers submit an application with a plan for long-term permanent reduction in
outdoor water use.
• Staff determines if customer and project qualify.
• If project qualifies, customer receives a temporary exemption from excess water use fees for a
5
predetermined period of time.
• Customers who do not complete a project will be billed for any applicable water use fees.
If approved, the customers would be eligible for an exemption starting in 2020. The program will be
available through Dec 31, 2022. Additional program details include:
• Eligibility
• All customers with commercial rate codes (includes commercial customers and all irrigation
taps).
• Qualifications
• Customer demonstrates need (e.g. customers water tap is undersized) and is quantified
with support from Water Conservation Staff.
• Project is reasonable and demonstrates long-term reduction in outdoor water use.
• Program Details
• Up to 3-year exemption depending on project type and scope.
• If granted a multi-year project status, amount of exemption will be tiered (e.g. Year 1 –
100% waived, Year 2 – 50% waived).
• Customer must meet project milestones outlined in a customer agreement to stay enrolled in
the program. If deadlines are not met customer will be back billed any EWU fees and asked to
leave the program.
Customers will be able to redirect money that would have been used to pay EWU fees into a
project that will reduce the customer’s water use to better align with their allotment.
Staff believes this is the best solution for customers and the Utility because:
1. As the cost of water supplies and infrastructure rise, the cost of WSRs and the associated EWU fee
will continue to increase, which may result in customers abandoning landscapes, as we’ve seen in
other Front Range communities, or have other impacts on residents. AMP provides a proactive
solution that ensure customers can adapt to increasing costs while increasing community resiliency
to drought and a changing climate.
AMP is a cost-effective way to reduce the volume of water the Utility must provide to compensate for
use over what was initially provided at the time of development by avoiding additional water storage
projects beyond the Halligan Water Supply Project.
The proposed AMP also aligns with key City Strategic Objectives related to Environmental Health and
High Performing Government and with Council-adopted Plans, including the Water Supply and
Demand Management Policy and the Water Efficiency Plan.
Potential Risks associated with AMP
The primary risk associated with AMP is the unrealized revenue associated with waiving EWU Fees.
Based on the average number of customers that exceed their allotment (~350) the maximum revenue
implication if every customer were to apply, qualify, and not complete a project with a long-term
6
water reduction would be $1.2 Million. However, based on analysis of water use and the number of
customers who have expressed interest, staff expects around 50 customers to participate. The
expected revenue implication is $370,000.
Staff is mitigating risks associated with AMP in the following ways:
• Requiring customers sign agreements to meet milestones and have regular progress check-
ins to ensure projects are completed.
• Staff has a successful record in supporting customers through programs like the
Xeriscape Incentive Program.
• Back-billing customers who do not complete projects.
• Implementing a decreasing tiered exemption for multi-year projects to lower the risk of providing
a multi-year exemption (e.g. 100% then 50%).
AMP Outreach
Utilities Staff have presented AMP to key stakeholders including property managers, HOA community
members, Utilities key accounts, businesses affected by the change, the landscape contractor community,
and other affected City departments (Forestry, Parks, Development Planning, Natural Areas, and Zoning).
In addition, staff completed a work session with the Water Board and will present AMP to the Natural
Resource Advisory Board, Economic Health Advisory Board – see dates below.
Input received has been very supportive of the proposed program. Concerns are primarily related to the
following:
• Ensuring that the assigned annual water allotment matches the expected water use at the time of
development in the future (note Utilities staff is developing improvements to the process in
partnership with Development Review staff).
• How customers who have already implemented solutions will respond if AMP is approved.
• The proposed program’s adoption timeline and if they will have enough time to respond in 2019.
• Other City Departments (e.g. Forestry, Natural Areas, and Parks) regarding impacts to
vegetation and tree loss if customers stop watering landscape
•
Next Steps
Staff is proposing to present the program for consideration by City Council on April 16th. Staff will
consider CFC input and conduct any additional outreach or analysis before presenting to City Council.
Upcoming schedule:
• 3/20/2019: Natural Resources Advisory Board
• 3/20/209: Economic Health Advisory Board
• 3/21/2019: Water Board – action item
• 4/16/2019: 1st reading City Council
7
Discussion / Next Steps:
Anheuser Busch arrival was the driver for this change in water allotment – a brewery uses water much
differently than residential development
9
Ross Cunniff; who decides when the project is complete?
Abbye Neel; we decide - we are watching project progress closely - make sure they meet milestones
Scheduled to go to Council on March 19th or in April – going in March would be helpful as this is a complicated
issue and we would be able provide an answer to our customers earlier. Going to Council in March would mean
we would not have an opportunity to present to all of the advisory boards prior to 1st reading at Council.
Mayor Troxell; what was response from the Boards and Commissions?
Abbye Neel; Water Board was supportive - we did a work session with them and took some of their ideas to
shape what we are proposing to you today. Community members also very supportive of the program – we
think this is a good balance
10
Mayor Troxell; different funding mechanism - Scale Investments in the projects tend to be a lot larger than the
city participation component
Most of the 48 Engaged Customers (see above) are HOAs - there are a few other large properties that are key
accounts that are included in that group as well
Ross Cunniff; AMP Risks (slide above) I understand the cost side - the idea is that we are imposing these fees for
future water supply - If this succeeds, we wouldn’t have to spend any money but if for reason we failed, this is
the worst-case scenario - we could mitigate that risk
Mayor Troxell; landscape is a good analogy based on the improvements and going back to actual measurement
of usage - What is the success rate there? by taking out the grass
Liesel Hans; we provide a rebate up to 1000 square feet - we are seeing in terms of water use that it takes a
couple of years to show up in landscape development - we are showing savings of approximately 14 gallons per
square foot when folks go from high water use landscape to a lower water use landscape (like xeriscape)
Impacts - we are feeling very confident that we can support these customers well. Customers who face
challenges with their allotments we provide educational support and can help them understand where they are
at – work really well with their landscape contractors so everyone is on the same page and there are there are
no bad guys at the table.
Mayor Troxell; thoughts regarding dealing with a household that might be totally dialed in versus a household
that may not be.
Liesel Hans; In that case we have realized that having some of these other tools in place – we have
different requirements for the residential scale program = Landscape changes - we help them with some
education -we are also putting some requirements in place regarding long term maintenance fees - so they have
thought through initial change and impact and the long term maintenance - than they have typically done as an
HOA – having a point person the HOA board -
Abbye Neel; When customers first felt the impact – communities reacted viscerally – we went into problem
solving mode - have to figure something out
11
Mayor Troxell; different from what water utilities have been doing - Engage with Neighborhood Services?
Abbye; We have reached out to HOAs and property managers as they see the bills - tapping into Neighborhood
Services would be a good idea.
Ross Cunniff; Some HOA owners in my district have contacted me
Ross Cunniff; If we bring this forward to Council on March 19th there would be 3 boards we would not have time
to reach out to
Action Item: Ross Cunniff; send a memo between readings - a specific targeted communication to the boards
telling them you will be taking this to Council and ask them if they have specific concerns to please let us know -
I agree this is a complicated thing to bring in if someone is not familiar with water utility and fee structure.
I support moving forward on March 19th with those caveats. This is a great idea – this program was never about
punishing people for using water – always about protecting the financial interest of shareholders -
Ross Cunniff; question in area of general sustainability - what are we doing with respect to similar concerns with
the other water utilities? Is there a role that the city plays in providing ideas / feedback. We haven’t had a
meeting in a long time - they are also facing escalating costs
Carol Webb; ELCO has residential allotments on every account – they have a process up front which is what we
are doing - at the time of development to ensure that the developer turns in adequate supply to the customer -
we are learning from ELCO’s best practices. Loveland doesn’t use allotments – they have a different way of
recovering their costs. That is how they mitigate those issues – for us the biggest process improvement was
catching that at time of the development and reaching out to development staff
Gerry Horak; I sit on the Land Conservation Stewardship Board - How are you coordinating with the County land
and small grants program and the Nature in the City program? How are we working with those?
12
Liesel Hans; with Nature in the City – because of the nature of the scale as well as the type of landscaping they
would probably switch to – environmental planners have expertise in this area to help these customers
understand what the options are and make the right choice - we are working with other departments to
ensure their expertise is incorporated into program development.
Action Item: Gerry Horak; I would suggest that you reach out to the County Open Lands Program
Was on a sub-committee - met with one of the HOAs having these issues and I think that is a good way for the
County getting involved
Gerry Horak; I agree with Ross that this is an elegant solution to a difficult problem - Maybe when this comes to
Council there will be some information - particulars work – the detail - would ease concerns some people have
Mike Beckstead; is there any budgetary revenue implications in 19 and 20 given the assumption we used?
Lance Smith; we budgeted at $400K for excess water use charges and have collected over $1M
Meeting adjourned at 11:38 AM
Page 1 of 3
Utilities
electric · stormwater · wastewater · water
222 Laporte Ave.
PO Box 580
Fort Collins, CO 80522-0580
970.212.2900
V/TDD: 711
utilities@fcgov.com
fcgov.com/utilities
Proposed Allotment Management Program - Public Outreach Summary
Staff conducted outreach to impacted customers throughout 2017, prior to adoption of changes to
the Water Supply Requirements (WSR). Early stakeholder outreach focused on the development
community, as this was the primary focus of the WSR changes. Outreach to current commercial
customers impacted by the increase in the Excess Water Use (EWU) surcharges was initiated in
mid-2017 and has included postcards and letters, targeted outreach via phone calls, emails, and
in-person meetings, informational sessions, workshops, and enrollment in existing Water
Conservation program.
Via these outreach efforts staff recognized that some impacted customers needed additional time
to understand the financial impacts of the EWU increase and implement a plan to avoid EWU
surcharges in the future. In response, Staff has developed the Allotment Management Program
(AMP) to help customers implement solutions. Through AMP’s development Staff has presented
to customer stakeholders, landscape contractors, and other effected City Departments to gather
feedback, summarized below.
A. Customer Stakeholder Session
Staff hosted an informational and feedback session with property managers, HOA community
members, and businesses that have been affected by the increase in EWU surcharge to receive
feedback on AMP.
Session Information:
January 18, 2019
8:30 – 10:00 AM
222 Laporte Ave
Number of invitations sent: 71
Number of registrants: 40
Number of attendees: 30 (13 HOA Members, 13 Property Managers, 4 Business Representatives)
Key Points:
• Many feel they have allotments that are not sized correctly for their taps (42%)
• Majority are interested in completing a project (96%)
• Majority would implement a landscape project (75%)
• Majority are likely or very likely to participate in the Allotment Management Program
(AMP) (69%); 17% would be committed to participating in the AMP
• Majority feel AMP would enable them to complete a project (83%)
• Top three barriers to participating in AMP: (1) Financial (2) Finding a contractor to
complete the work (3) Time
ATTACHMENT 6
Page 2 of 3
• Majority feel an AMP application could be completed in late 2019 or 2020 (60%)
Important comments or suggestions:
• “Could be extremely helpful and serve the community in meeting water conservation
goals.”
• “Please implement this!”
• “Great information.”
• Multiple comments on need for a solution early in 2019 to allow ample planning time.
B. Landscape Contractor Stakeholder Session
Staff hosted an informational and feedback session with landscape contractors to receive
feedback on AMP.
Session Information:
February 21, 2019
8:30 – 10:00 AM
222 Laporte Ave.
Number of attendees: 11 contractors representing 8 different companies
Key Points:
• All were supportive of the program.
• All felt that it would benefit at least one of their clients.
• Majority felt there was a need for public education and City Staff support to ensure.
Participants understand details of completing landscape transformation projects.
Important comments or suggestions:
• “If there is no solution some of these communities will be crippled. It would cause an
issue between contractors and our clients possibly resulting in the loss of the client.
Something needs to happen.”
• “When a customer does not have enough water allotted it creates a challenge for me. I
have to let the turf suffer or have them purchase more water, neither of which they want
to do.”
• “It would be nice to have this option to present to our clients.”
• Multiple comments about the need for customers to better understand best practices for
irrigating landscapes and how to convert to low-water use landscapes.
C. City Department Feedback
Throughout AMP’s development Staff received feedback from relevant City Departments via
phone calls and email correspondences. Additionally, Staff hosted one in-person meeting to
gather feedback.
Department Contacts:
Page 3 of 3
Natural Areas
Parks
Forestry
Planning and Development
Customer Accounts
Meeting Information:
November 8, 2018
12:00PM – 1:00PM
222 Laporte Ave
Number of attendees – 10 attendees from Natural Areas, Forestry, Planning and
Development, Customer Accounts
Important comments or suggestions:
• Since EWU surcharges were implemented all departments have received an increase in
calls from affected customers seeking advice on landscape conversion projects.
• Concern from Natural Areas and Forestry that if a solution is not created, customers will
abandon landscapes to the detriment of existing plants and trees.
• If adopted, program should leverage other department’s areas of expertise to ensure
project success.
For more information or if you have questions contact Abbye Neel, Water Conservation
Specialist at aneel@fcgov.com or 970-416-4371.
-1-
ORDINANCE NO. 050, 2019
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AUTHORIZING AN ANNUAL WATER ALLOTMENT MANAGEMENT
PROGRAM BY AMENDING SECTION 26-129 OF THE CODE OF THE CITY OF
FORT COLLINS TO AUTHORIZE THE UTILITIES EXECUTIVE DIRECTOR
TO WAIVE ALL OR PART OF THE EXCESS WATER USE SURCHARGE FOR
CERTAIN QUALIFYING CUSTOMERS IN LIMITED CIRCUMSTANCES
WHEREAS, the City owns and operates Fort Collins Utilities, including a water utility
that provides treated water service to customers pursuant to the City Code and other applicable
law, rules, and regulations; and
WHEREAS, water service permits are issued to customers of the water utility for either
residential service or nonresidential service, which nonresidential service includes water service
for commercial, irrigation, and other purposes, as indicated in City Code Section 26-149(a); and
WHEREAS, water service permits applied for since March 1, 1984 by nonresidential
users are to have received an annual allotment, as set forth in City Code Section 26-149(d); and
WHEREAS, as set forth in City Code Section 26-149(d), when a nonresidential user uses
more water than its annual allotment, as determined by monthly billing records in a given
calendar year, an excess water use surcharge in the amount prescribed in City Code Section 26-
129 will be assessed on the volume of water used in excess of the annual allotment; and
WHEREAS, funds acquired from the excess water use surcharge are used to acquire and
develop water supplies, an underlying policy goal of which is to manage and equalize the
supplies and demands for treated water from the water utility; and
WHEREAS, certain customers of the water utility for nonresidential service for irrigation
purposes with annual allotments have experienced challenges with the excess water use
surcharge, in particular, being customers who have and are anticipated to exceed their annual
allotments for current uses and landscaping when employing practices to efficiently use water for
irrigation purposes; and
WHEREAS, some of these customers may be able to reduce the amount of water they use
for irrigation purposes, including by modifying landscapes, but require adequate time to plan and
budget for such projects in their annual planning and budgetary processes, and would benefit
from being able to fund such projects with money that would otherwise be spent on paying
excess water use surcharges; and
WHEREAS, water conservation and efficiency are tools that are used by the water utility
to manage and reduce the demand for treated water, which is beneficial to the water utility and
its ratepayers by, among other reasons, helping to ensure that the demand for treated water does
not exceed supplies, which could result in more shortages and other adverse impacts; and
-2-
WHEREAS, a temporary waiver of the excess water use surcharge for certain such
customers will be beneficial to the water utility and its ratepayers by managing and reducing the
long-term demand for treated water by such customers through allowing such customers to spend
the money that would have been spent on the excess water use surcharge on other means to
reduce their demand for treated water out into the indefinite future, thus achieving the same
underlying policy goal of the excess water use surcharge of balancing the supplies and demands
for treated water from the water utility; and
WHEREAS, such long-term benefits to the water utility and its ratepayers outweigh any
short-term reductions in foregone excess water use surcharge revenues; and
WHEREAS, staff of the water utility and the City Manager have recommended to the
City Council that the City Code be amended as described below in order to address the issues
described above.
NOW, THEREFORE, BE IT ORDAINED 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 Section 26-129 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 26-129. - Schedule D, miscellaneous fees and charges.
[…]
(h) Notwithstanding the provisions of this Section or § 26-149, the Utilities Executive
Director may waive payment of all or portions of the excess water use surcharge of Subsection
(c)(2) pursuant to this Subsection (h).
(1) A customer of the water utility with nonresidential water service seeking such a
waiver shall, on or before December 31, 2022, complete and file with the Utilities
Executive Director an application accompanied by any required filing fee as
determined by the Utilities Executive Director. The Utilities Executive Director
shall prepare a form of such application identifying for the applicant all of the
necessary information for the Utilities Executive Director to evaluate the
requested waiver.
(2) The Utilities Executive Director may, following any appropriate investigations
including requests for additional information from the applicant, waive payment
of the excess water use surcharge by the applicant if the Utilities Executive
Director finds that the following conditions are met:
a. The application was timely filed and complete;
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b. The applicant is expected to exceed its annual allotment for its current
uses and landscaping when employing practices to efficiently use water
for irrigation purposes without waste;
c. The applicant has an adequate and detailed plan to reduce the use of water
for irrigation purposes for the indefinite future as determined by the
Utilities Executive Director;
d. The applicant and the Utilities Executive Director have executed a written
agreement consistent with this Subsection (h) setting forth such plan and
other related matters, with such agreement being approved as to form by
the City Attorney.
(3) Any such waiver shall be set forth in the written agreement and shall be subject to
the following:
a. A finding by the Utilities Executive Director that the waiver will be
beneficial to the water utility and its ratepayers by implementing the
applicant’s approved plan to manage and reduce the demand for treated
water by the applicant through allowing the applicant to spend the money
that would have been spent on the excess water use surcharge on the
actions set forth in the approved plan to reduce the applicant’s demand for
treated water out into the indefinite future.
b. Such a waiver may only waive all or part of the excess water use
surcharges for up to three (3) years. A one (1) year agreement shall waive
one hundred (100) percent of the excess water use surcharges. A two-year
agreement shall waive one hundred (100) percent of the excess water use
surcharges in year one (1) and fifty (50) percent of the excess water use
surcharges in year two (2). A three (3) year agreement shall waive one
hundred (100) percent of the excess water use surcharges in year one (1),
sixty-six (66) percent of the excess water use surcharges in year two (2),
and thirty-three (33) percent of the excess water use surcharges in year
three (3).
c. Such a waiver shall include a detailed plan to reduce the use of water for
irrigation purposes for an indefinite period as determined by the Utilities
Executive Director.
d. Such a waiver shall be revocable, in whole or in part, by the Utilities
Executive Director at any time due to: a failure of the applicant to comply
with the terms of the waiver; customer agreement; or other good cause as
determined by the Utilities Executive Director. Such a revocation shall be
in writing and set forth the reasons for the revocation and, if the waiver is
revoked in part, any new or modified terms. Upon such revocation, the
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Utilities Executive Director may bill the applicant for any excess water
use surcharges that were to be waived.
e. Such a waiver shall have no effect on the annual allotment or Water
Supply Requirement for the subject premises.
(4) If an application for such a waiver is denied, the Utilities Executive Director shall
notify the applicant in writing of the denial and state the reasons therefor.
Introduced, considered favorably on first reading, and ordered published this 19th day of
March, A.D. 2019, and to be presented for final passage on the 16th day of April, A.D. 2019.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
Passed and adopted on final reading on the 16th day of April, A.D. 2019.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk