HomeMy WebLinkAbout1993-037-03/16/1993-WATER CONSERVATION ZERO INTEREST LOAN PROGRAM RESOLUTION 93- 37
OF THE COUNCIL OF THE CITY OF FORT COLLINS
ADOPTING A ZERO INTEREST LOAN PROGRAM FOR
THE PURPOSE OF WATER CONSERVATION
WHEREAS, on April 7, 1992, the Council adopted Resolution 92-63,
establishing water demand management policies for the purpose of promoting water
conservation; and
WHEREAS, the Council hereby finds and determines that the promotion of
water conservation through the establishment of a Zero Interest Loan Program
would serve a valid public purpose; and
WHEREAS, a Zero Interest Loan Program would help to decrease the per capita
daily demand for water through the use of more efficient plumbing and fixtures;
and
WHEREAS, the City Council requested staff to prepare a Zero Interest Loan
Program for the purpose of promoting water conservation, and
WHEREAS, the Water Board has reviewed and recommended approval of the
program as set forth in the "Procedures for Obtaining Zero Interest Loans" dated
February 1993, attached hereto as Exhibit "A" and incorporated herein by this
reference (the "Zero Interest Loan Program") .
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS
as follows:
Section 1. That the Zero Interest Loan Program is hereby approved and
established for the purpose of promoting water conservation;
Section 2. That the Director of the water and wastewater utility is hereby
authorized to make such minor procedural adjustments to said program as may, from
time to time, be necessary in order to effectively administer the program.
Passed and adopted at a regular meeting of the Council of the City of Fort
Collins held this 16th day of March, A.D. 1993.
Mayor
ATTEST:
City Clerk
EXHIBIT A
PROCEDURES FOR OBTAINING ZERO-INTEREST LOANS
FROM WATER & WASTEWATER UTILITY
The purpose of this memorandum is to outline the process involved in obtaining a zero-interest
loan from the Water & Wastewater Utility, to pay for water service line replacements, repairs
to lealdng pipes or plumbing fixtures, or installing ultra-low flush toilets.
Resolution 90-147, approved by City Council on November 20, 1990, directed Utility staff "to
investigate the feasibility of a zero interest loan program for customers with an inferior or
corroded water service line that should be replaced at the time of the installation of the meter
pit." On April 7, 1992 Resolution 92-63 was also approved by City Council, directing Utility
Staff and the Water Board to "develop a zero-interest loan program for the installation of
qualified water conservation measures."
This zero-interest loan program is intended for metered customers who: (1) have galvanized,
inferior, or corroded service lines that are in need of replacement as determined by Water Utility _
representatives; (2) have lealdng pipes or plumbing fixtures in need of repair; or (3) wish to
reduce their water consumption by installing ultra-low flush toilets (51.6 gallons/flush).
This loan program is contingent upon appropriation of funds by the City Council. Loans will
be subject to the availability of funds.
PROGRAM GUIDELINES:
1. Funds for loans to replace service lines are included in the Water Capital
Project budget of the Transmission and Distribution Division, account
no. 502-066000-529960 64000. Funds for loans to repair lealdng pipes
or plumbing fixtures or to install ultra-low flush toilets are included in
Water Minor Capital account no. 502-014300-529290. Requisitions for
loan payments should be charged to these accounts.
2. Customers are eligible for a loan if the following criteria are met: (1)
the customer is the owner of the building which is a single family home
or duplex that receives both water and sewer service from the City of
Fort Collins, and (2) the building is metered or in the process of
becoming metered, and (3) the customer has during the last five (5)
years, had no delinquent charges due on any utility service provided by
the City of Fort Collins, and (4) it is determined by Water Utility
representatives that; (a) the customer's service line is galvanized,
inferior, or corroded, or(b) there are leaking pipes or plumbing fixtures
in the home, or (c) the existing toilet(s) use 3.5 gallons or more of water
per flush.
3. Loans to replace water service lines will be limited to the labor and
material costs associated with replacing the water service between the
curb stop and shut-off valve. The Utility will pay for replacing the
service line between the curb stop and main if it also needs to be
EXCERPT FROM WATER BOARD MINUTES
February 19, 1993
Zero Interest Loan Program Draft Ordinance
Wendy Williams reported that the information the Board received in their packets was reviewed
by the Conservation and Public Education Committee, and in fact was an outgrowth of some of
the work they had been doing. The Utility currently has a zero interest loan program in place,
but it is limited to service line replacement loans. We have been requested to look at expanding
that program to include some water conservation sorts of things, she said. We looked at a
number of water conservation measures and decided that at this time, the only one we wanted
to apply it to was replacing 3.5 gallon toilets with ultra low flush models, she explained.
She went on to say that the Utility has also expanded this program to include replacing leaking
pipes or plumbing fixtures. In the original zero interest program, you could only apply for the
loan in the process of being metered. We have since decided that it is in the best interest of the
Utility to make the program available to people who have a corroded service line, so they could
go back and replace it. Those are the major changes to the existing program.
In 1992 we processed 17 loans under this program, she continued. The average loan was for
about$900, and the Utility loaned a total of$18,000. Approximately $20,000 has been set aside
for replacement of service lines, and another $20,000 was set aside for repairing leaking
plumbing fixtures and upgrading toilets.
Ms. Williams explained that the draft ordinance will need to go to City Council because there
are enough changes to the original program that the Council needs to decide that there is a
broader public purpose served for a program like this, so we aren't considered to be making a
donation due to the loss of interest money.
We have some maximums set on the extended program which we didn't have in the earlier loan
program, she related. The maximum loan amount for service line replacement is $1,500; for
interior plumbing it's $1,000; and $500 is the maximum for the installation of ultra low flush
toilets.
While it is a zero interest loan program, she continued, we are proposing to collect an
administrative fee, but that would be only on loans greater than $500, so that's basically just the
service line replacement loans.
Ray Herrmann moved that the Water Board recommend approval of the draft ordinance to
extend the zero interest loan program. Terry Podmore seconded the motion. President Grigg
asked for discussion.
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Dr. Grigg reviewed how the zero interest loan program came about. In April of 1992 the
Council approved the Demand Management Resolution and directed the Water Board
Conservation and Public Education Committee to develop a water conservation zero interest loan
program, a draft of which we are reviewing today. The next step for the Council will be to
approve the loan program with the guidelines included in the information distributed in the
packets. Ms. Williams again reviewed the changes from the original ordinance.
Dr. Grigg asked how much interest the City has lost. Ms. Williams said that staff estimates if
we had to borrow the $20,000 for 12 months, that would be a discounted interest cost to the
City, assuming 5.5%, of about $850. Dr. Grigg observed that our cost for implementing this
program is not overwhelming when you consider everything that's going into it.
Tom Brown asked who is eligible for a loan; are there any financial qualifications? The only
financial qualification, and it isn't truly that, is that you can't have been delinquent on paying
monthly utility bills for the last five years, Ms. Williams replied. Income level is not a
consideration, she added. MaryLou Smith added that "staff's and the Committee's presumption
was that the amounts are low enough that those who will want to take advantage of this are
primarily those who are low income and really need to have a loan in order to do this." Staff
reported to the Committee the need for a loan program to repair leaking pipes and plumbing
fixtures.
Mark Casey asked if the loans last year were all for service lines or leaky plumbing fixtures.
Ms. Williams said the program last year was limited to service line replacements. On leaky
plumbing fixtures, what does that include? he asked. There really aren't any limitations for
interior plumbing, she said.
"What happens if you get requests above the$20,000 you have set aside?" Mr. Dow asked. Ms.
Williams said the ordinance states that it is limited to the availability of funds, "but we can
certainly transfer money between the two zero-interest programs.
Since this is going to the Council, Mr. Podmore began, one of the things we need to be aware
of, in terms of what's eligible, is that it does not include some of the expressed views of some
of the Council for some of the conservation measures that could be included, but that we have
elected not to include, so we may get some discussion on that when they take it up.
"What was the rationale for not having a maximum income level?" Mr. Dow asked. The City
could take some heat for loaning money with no interest to someone who has a large income,
he said. When the Committee discussed it, they saw it as a conservation incentive, and so it
didn't matter what your income level was; it still benefitted the system as a whole to promote
conservation, Ms. Williams responded. "And from a practical point of view," MaryLou Smith
added, "we felt like the amounts were going to be low enough that there would be very few
people who would bother with this loan if they had a high income. Also, considering the
process of having to get financial information from each applicant, it would cost us so much
time, we thought it wasn't worth it," she explained.
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Ms. Smith wanted to explain a little more about what Terry Podmore brought up: the
conservation measures that aren't included in the zero interest loan program. She said the
Committee had looked at several ideas for other kinds of improvements that would perhaps help
us to conserve more water, and "it isn't that we didn't think those weren't worth looking at, but
we wanted these first; later we may look at some others," she said. We are doing some things
in the other areas of the demand management resolution that we think are more important, and
will save more water than some of the items that came before the Committee for zero interest
loans. Paul Clopper mentioned that someone who removes their blue grass lawn and puts in
water conserving grass or plants is an example. "That's a good example," Ms. Smith
responded, "and we certainly are open to looking at those possibilities later."
Ms. Smith also commented that another good example would be someone who might want to
amend their soil to increase the water retention capabilities. "We put that one off because we
are studying that right now to determine, from a practical standpoint, if that really does help to
conserve water."
Tim Dow had a question about the third sentence of paragraph three on page two: "Payment to
a licensed plumber will be made after meter is set, but not later than 45 days after work is
completed if utility is unable to schedule installation before that time." Does the actual
distribution of the funds go to the contractor that actually does the work or is it to the
homeowner? It goes directly to a licensed plumber, Ms. Williams replied.
Mark Casey asked if the repayment is included in the customer's monthly bill. "That was the
intent when the program was first set up, but unfortunately our utility billing system currently
is not able to do that; that is a long term goal," Ms. Williams explained. Customers are
currently issued payment coupons.
Mr. Casey thinks the program is well thought through and he wondered if in addition to
foregoing the interest or the cost of capital, there certainly must be some administration charge
in terms of the time involved in processing these loans. The administration fee is set at $25.00,
Ms. Williams replied, and it's probably ; little low. "We were concerned that the fee not be
so high as to negate the zero interest concept."
Mr. Casey also had a concern about the loan for leaky plumbing fixtures. He thinks it is more
broadly construed than is necessary. For example, would a hot water heating system qualify?
No, Ms. Williams answered. The fact that's it's leaking would not mean that we would replace
your hot water heater; the pipes to it, but not the heater.
President Grigg called for the question. The motion to recommend approval of the zero interest
loan program, as extended, passed unanimously.
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