04/21/1983 - Minutes PUBLIC UTILITIES ADVISORY COMMITTEE
Minutes
Meeting of April 21 , 1983
7 A.M. at 1530 South West Temple
Committee members present were Howard Dunn, Stephen Featherstone, Emanuel
Floor, Ralph Steenblik, Raymond Arnold and John Bonnett. Also in attendance
were Roger Bagley of the City Auditor' s office; Leigh von der Esch of the
City Council ; Dave Evans of CH2M Hill ; Wade Smith of Rockwell International ;
Earl Fillmore; Lee McQuivey of the Army Corps of Engineers; Nick Sefakis
of the Metropolitan Water District and Dave Schneider of the Deseret News.
Staff members present were LeRoy Hooton, Wendell Evensen, George Jorgensen,
Tim Doxey, Anna Wilson, Jim Lewis, Ray Ahlander, Maury Johnson and Jackie
Gillen.
Chairman Steenblik brought the meeting to order at 7:05 a.m.
Mr. Hooton introduced Mr. Jack Bonnett, manager of the Salt Lake County
Service Area No. 3 - Snowbird, as a new member of the advisory committee
to replace Mr. Clifford Ashton.
I. Approve minutes of March 24, 1983
Mr. Featherstone motioned that the minutes of the March 24, 1983, meeting
be approved as written; Mr. Floor seconded the motion with all voting
aye.
II. Financial Report
Mr. Ahlander summarized the water and sewer utility funds for the eight
months ending March 31 , 1983.
Water:
Mr. Ahlander said that the operating receipts are eight percent below what
is normal for this time of year, this was mainly in metered sales. We
estimated that by the end of the year we will be $1 ,200,000 short in our
metered sales. We are not in as bad shape, however, as the receipts
indicate. We have been cutting back on preventative maintenance to try
to avoid using the revenue for this purpose. It appears that we will
have to dip into the reserves in order to complete our capital program.
We have about $2 million in our operating reserves. Mr. Featherstone
felt that we should not be cutting back on our preventative maintenance
program because we will eventually have to play catch-up with that program.
It might be better to utilize our reserves to keep up with the maintenance
program.
Mr. Ahlander said on the non-operating receipts, the metered sales category
is where the Council has asked the department to keep the water rate increase
to be used for bond repayment only. The water redemption notes payable
-2-
are due in June. Mr. Floor said that he felt it would be helpful from
time to time to hear where we expect to be at the year's end. Mr.
Ahlander said that the staff could prepare this information for the Committee
to review.
Sewer:
Mr. Ahlander said the revenue picture is very bright for the sewer fund.
It is 14 percent ahead of what is normal for this time of year. An area
where there may be trouble, however, is the expenditures for the lift
stations. Non-operating receipts are ahead of what they normally are.
Receipts for charges to the customer include 201 money and water rate
increase money. This will generate between $6 and $7 million per year.
He said we collected a lot of money in the sewer connection fee which we
had not expected.
Mr. Floor said that the form used to prepare the department' s financial
reports has improved greatly since the Advisory Committee was first
formed.
III . Meter replacement proposal to finance and replace older, inaccurate
water meters over a one-year period
Mr. Hooton briefed the group on background information pertaining to the
meter replacement program.
Mr. Lewis then explained the proposal for financing and replacing older,
inaccurate meters. A handout was distributed describing an analysis
report prepared on the meter replacement program and which showed the
three options available. He said that we presently are in a current
meter replacement program (in the third year of a 10-year program) .
The options available are:
1 . Meter replacement of 5,000 meters per year for eight years
2. Meter replacement under eight-year lease purchase agreement at 9 percent
interest
3. Meter replacement under eight-year lease purchase agreement at 9 percent
including installation costs
He said in the current meter replacement program we are replacing all
meters. There is a 65 percent efficiency currently and new Rockwell
meters run at about 99-100 percent accuracy with 15 years of use. We are
trying to find a way to accelerate the program to generate new revenue.
The basic assumptions are:
1 . Revenue projected to increase at four percent
2. Interest on lease calculated at 9 percent
3. Increase in meter cost calculated at six percent
-3-
4. Revenue projections based on the following calculations:
Annual residential water bill ($110) less minimum
($54) $ 56.00
Annual residential sewer bill ($114) less minimum
($24) less county ($23.40) 66.60
Total annual water and sewer bill for study $122.60
5. Sale of scrap meter will stay constant at current price of
$3.61
6. Present meter accuracy is calculated at 81 .70 percent compared
to actuals of 65 percent
7. Installation costs are estimated at $10 per meter with eight
percent inflation rate
Mr. Lewis showed a chart illustrating the three options over an eight-
year period. It showed actual costs forecast under the revenue program.
He said an average of 81 .7 percent accuracy of meters was used in determining
the chart values. To install a new meter it costs $10 per meter. The
cost of replacing meters is about $2 million. The revenue generated is
$4.7 million. We can gain $144,000 from the sale of scrap meters.
Mr. Lewis recommended that the department take Option No. 2. This
program would replace all the meters in a one-year period, and we would
need to hire an additional eight employees for this one-year period.
The meters would have to be in by November in order to use them to establish
sewer charges. The attorneys office said this program could be accomplished
through the regular bidding procedures.
Mr. Floor said he would not be opposed to adjusting rates downwards if we
build up enough surplus in the future.
Mr. Arnold motioned to adopt the lease option with Rockwell doing everything
during a one-year period. Mr. Featherstone seconded this motion with all
members voting aye.
VI. Performance Audit of Engineering Support - Administrative and
Fee Assessment Functions - Roger Bagley
Mr. Hooton said that we had an independent audit conducted on various
divisions within the department.
Mr. Bagley described the areas covered and the recommendations and
evaluations of the audit. He showed a flip chart illustrating the
the objectives addressed in the audit as follows:
Scope and Objectives:
1 . Determine if the Public Utilities Department can increase efficiency
and/or contractor convenience by combining the water and sewer permit
offices.
�%/ / f 31
V yf
-4-
2. Determine if the department can increase inspection efficiency by
eliminating excess personnel and/or combining the water and sewer
inspection offices
3. Determine if survey efficiency can be increased by eliminating excess
personnel and/or combining the water and sewer survey offices
4. Determine if Public Utilities is accurately and efficiently accessing
fees
5. Determine if the Sewer Division is accurately processing sewer bills,
billing all sewer users and efficiently resolving complaints. Also,
determine if sewer customer services should be combined with water
customer services
6. Determine if Public Utilities should continue to manage its own real
property or if the City's Fixed Assets Control Section should manage
it
Mr. Bagley said they felt that the two divisions should be combined,
however, there is no office space available at the present time. There
would be no savings in money, but there would be in supervisory time and
convenience.
On the water and sewer inspections, he said staffing levels were adequate.
One individual who was handling the area of material inspections should
be eliminated, as inspections have decreased 29 percent per year for the
last several years. They recommended:
1 . Combining water and sewer inspectors
2. Cross training to save travel time and duplicated inspections
The audit also recommended consolidating survey crews under one manager;
also, eliminating one surveyor position to save $28,000 annually. They
surveyed other cities and 33 percent of these cities were using three-man
crews with electronic equipment and 67 percent use two-man crews with the
electronic equipment.
In reviewing the water and sewer fees, they recommended that the fees be
adjusted for surveys from $70 to $100; for inspections from $30 to $35
and for special wyes from $50 to $75. (This will increase the annual
revenue by $10,000. ) They recommended that the Sewer Division and the
Building and Housing Division develop more accurate communications
regarding how many plumbing fixtures are to be included in each new
building. This is being implemented.
The audit determined that the sewer billings are being calculated
accurately; the billing system is complete and that 77 percent of the
customers are satisfied.
-5-
They recommended that the Public Utilities Department continue to manage
its own land--competitive bidding is not necessary.
Overall , with these recommended changes Mr. Bagley said that the department
would have available an additional $64,000 annually. Mr. Floor said that
with a $40,700,000 budget it is pretty remarkable that only $64,000 was
able to be saved.
Mr. Hooton mentioned that on an earlier audit we looked at automatic
meter reading devices and these have now been ordered and we should have
these systems on-line by July 1st. There will be a reduction in meter
readers and billing clerks. We are also looking into sending our bills
to the banks for them to process. Ms. Wilson mentioned that the $21 turn-
on fee implementation will be effective April 25, 1983.
V. Little Dell
Mr. Hooton said that the Little Dell Project was initiated in 1952. He
distributed copies of a memorandum sent to Mayor Wilson which described
the project. The project was approved through the Army Corps of Engineers
process and is ready to be authorized by congress. The original sponsors
were thee Metropolitan Water District of Salt Lake City, the County Flood
Control Division and the County Parks and Recreation Department. The
City donated the land to pay the costs for flood control .
He said that they had a tour last week with the County Commissioners and
members of the City Council , and they will be having meetings in the
future. He has been talking with the City Parks Department to see if
they would like to be involved.
Mr. Floor asked if the State had been approached to be involved in this
project.
Mr. Hooton said that the $87 million Little Dell Project is ten times
bigger than Mt. Dell , and when it is constructed it will eliminate pumping
on the east bench as well as controlling flooding. He said that there is
a lot of possibility in congress for the local share to be increased --
this will be our last shot at having the project approved under the old
cost-sharing ratio.
Mr. Floor made a motion requesting that a letter be written to the mayor
asking him to arrange for a task force to be organized by the governor, the
Board of County Commissioners and the City to get the Little Dell dam
built--to mobilize these local forces to pressure Congress to proceed
with the construction. Mr. Featherstone seconded the motion with all
voting aye.
VI. Sewer utility bills and their effect on elderly people - Mrs. Nichols
Mrs. Nichols was unable to attend this meeting, but plans to able to come
to the May meeting.
-6-
VII. Earl Fillmore - Water Bill
Ms. Wilson explained that Mr. Fillmore owns a laundromat which had a high
water consumption reading for the months of July and August, 1982. His
water bill for this period of time amounted to $395.88 (his prior average
was between $90 and $100 per two-month billing period) . The meter was
registering 15,000 gallons per day. She said that an investigator had
checked the meter and had found it to be using so much water that it was
vibrating. The investigator was unable to find anyone on the premises to
report this to. The consumption for the next billing period was again
average. Ms. Wilson indicated that meters do not malfunction and then
return to normal ; she, therefore said there must have been a leak repaired
(or some other correction made to the system) . She said that when leaks
are detected and repaired on service lines, an allowance is made and the
department will split the water bill with the customer. At the present
time Mr. Fillmore also has an outstanding water bill on this account.
Mr. Fillmore said that there were not any leaks on his system and that no
taps were left running to explain the high bill . He claimed that no one
was contacted to explain the huge use of water through the meter.
Mr. Holton mentioned that the department's responsibility for the water
ends after it has passed through the meter and enters the customer' s
property. This is a difficult situation, because the meter indicates
that the water was used.
Mr. Floor felt that regardless of the question on the high water bill ,
Mr. Fillmore should keep his account current.
Mr. Featherstone motioned that the Water Department split the bills in •
question with Mr. Fillmore to resolve this matter (each would pay $202.34)
and Mr. Arnold seconded the motion with all voting aye. Mr. Fillmore
agreed with this decision.
***********
Mr. McQuivey came into the meeting and Mr. Hooton invited the committee
members to ask him questions regarding Little Dell .
VIII . Sewer Adjustments
Inasmuch as there were no adjustments, this item will be forwarded to the
May meeting for action.
The meeting was adjourned at 8:43 a.m.
GAK
04/18/83
SALT LAKE CITY CORPORATION
WATER UTILITY FUND
CASH RECEIPTS & DISBURSEMENTS - OPERATING
FOR EIGHT MONTHS ENDING MARCH 31, 1983
UNCOLLECTED &
MONTHLY YEAR TO DATE UNEXPENDED OF 75% OF BUDGET
PRIOR MAR. CURRENT MAR. JULY - MAR. JULY - MAR. CURRENT TO DATE
BUDGET 1982 1983 1981-1982 1982-1983 YEAR'S BUDGET 1983 AVG. 1982
OPERATING RECEIPTS
Metered Sales (For Operating) $10,735,060.00 $ 735,092.34 $ 535,186.71 $ 8,228,878.72 $ 7,517,957.41 $ 3,217,102.59
Rental Revenue 116,175.00 21,245.00 1,547.85 78,726.00 81,192.29 34,982.71
Repair & Relocation 149,400.00 50,357.53 8,883.53 95,791.25 101,525.68 47,874.32
Sewer Billing & Lease Pay 260,000.00 31,671. 0 -0- 95,013.00 161,490.00 98,510.00
Flat Rate Sales 32,460.00 7,245.91 998.00 42,265.05 19,529.38 12,930.62
Interest Received 314,730.00 108,542.27 57,643.38 514,880.67 520,022.35 (205,292.35)
Total Operating Receipts $11,607,825.00 $ 954,154.15 $ 604,259.47 $ 9,055,554.69 $ 8,401,717.11 $ 3,206,107.89 72% 80% 79%
OPERATING DISBURSEMENTS:
(INCLUDING ENCUMBRANCES)
Source of Supply $ 1,096,139.00 $ 54,484.00 $ 59,741.68 $ 997,309.12 $ 716,061.37 $ 380,077.63 65% 75%
Power and Pumping 1,214,070.00 85,332.00 54,617.00 860,834.49 725,472.77 488,597.23 60% 96%
Purfication 2,323,780.00 138,777.00 168,667.00 1,644,409.92 1,622,465.83 701,314.17 • 70% 77%
Transmission & Distribution 3,125,731.00 228,141.84 224,048.00 1,975,963.43 2,229,099.55 896,631.45 71% 68%
Shops & Maintenance 1,436,742.00 98,228.00 122,022.03 951,548.43 974,669.68 462,072.32 68% 73%
Customer' s Accounting & Collection 1,257,548.00 109,653.00 112,207.00 884,394.00 901,202.30 356,345.70 72% 75%
Administrative & General Expense 389,377.00 40,265.00 43,543.00 298,810.57 295,906.69 93,416.31 76% 78%
Administrative Service Fee
(Payment to General Fund) 615,000.00 147,050.00 123,071.00 441,150.00 335,806.00 279,194.00 55% 75%
Contingency Fund 149,438.00 -0- -0- -0- -0- 149,438.00 0% 0%
Total Operating Disbursements $11,607,825.00 $ 901,930.84 $ 907,916.71 $ 8,054,419.96 $ 7,800,738.19 $ 3,807,086.81 67% 74% 76%
Operating Receipts Over Operating
Disbursements $ -0- $ 52,223.31 $ (303,657.24) $ 1,001,134.73 $ 600,978.92 $ (600,978.92) 5% 6% 3%
GAK
04(18/83
SALT LAKE CITY CORPORATION
_ WATER UTILITY FUND
CASH RECEIPTS & DISBURSEMENTS - NON-OPERATING
FOR EIGHT MONTHS ENDING MARCH 31, 1983
UNCOLLECTED &
UNEXPENDED OF
CURRENT MAR. JULY - MAR. CURRENT 75% OF BUDGET
BUDGET 1983 1982-1983 YEAR'S BUDGET 1983 AVB. 1982
OPERATING RECEIPTS
Metered Sales (For Capital) $ 4,257,260.00 $ 197,945.77 $ 2,739,820.03 $ 1,517,439.97
Sale of Land & Material 48,425.00 44,729.16 111,313.06 (62,888.06)
Contributions 565,020.00 2,734.00 91,681.58 473,338.42
Transfer From Restricted Funds 1,256,900.00 196.98 1,008,284.41 248,615.59
Bond Interest -0- 1 7,872.56 478,589.16 (478,589.16)
Bond Proceeds 9,950,000.00 -0- 9,950,000.00 -0-
Total Other Receipts $16,077,605.00 $ 253,478.47 $14,379,688.24 $ 1,697,916.76 89% 73% 58%
OTHER DISBURSEMENTS
Repayment of Watermain Redemption
Mains $ 90,000.00 $ -0- $ -0- $ 90,000.00
Purchase of Water Stock 10,000.00 4,500.00 4,500.00 5,500.00
Additions to Inventory -0- (103,688.68) 282,053.59 (282,053.59)
Debt Service (Payment To Trustee) 2,368,250.00 164,376.37 1,692,178.95 676,071.05
Total Other Disbursements $ 2,468,250.00 $ 65,187.69 $ 1,978,732.54 $ 489,517.46 80% 100% 100%
CAPITAL DISBURSEMENTS
(LNCLUDING ENCUMBRANCES)
Land $ 6,500.00 $ 5,930.00 $ 12,569.00 $ (6,069.00)
Buildings 75,000.00 4,352.96 49,514.52 25,485.48
Improvements Other Tan Buildings 12,825,420.00 167,745.84 10,661,553.25 2,163,866.75
Machinery and Equipment 370,060.00 6,571.22 351,833.42 18,226.58
Total Capital Disbursements $13,276,980.00 $ 184,600.02 $11,075,470.19 $ 2,201,509.81 83% 73% 54%
Total Non-Operating Disbursements $15,745,230.00 $ 249,787.71 $13,054,202.73 $ 2,691,027.27 83% 73% 60%
Other Receipts Over Non-Operating
Disbursements $ 332,375.00 $ 3,690.76 $ 1,325,485.51 $ (993,110.51) _8% 0% (2%)
Total Receipts Over Disbursements $ -0- $ (299,966.48) $ 1,926,464.43 $(1,594,089.43) 7% 2% 1%
i BD
04/18/83
SALT LAKE CITY CORPORATION
SEWER UTILITY FUND
CASH RECEIPTS & DISBURSEMENTS - OPERATING •
FOR NINE MONTHS ENDING MARCH 31, 1983
UNCOLLECTED &
MONTHLY YEAR TO DATE UNEXPENDED OF 75% OF BUDGET
PRIOR MAR. CURRENT MAR. JULY - MAR. JULY - MAR. CURRENT TO DATE
BUDGET 1982 1983 1981-1982 1982-1983 YEAR'S BUDGET 1983 AVG. 1982
OPERATING RECEIPTS
Charges (For Operation) $ 4,318,700.00 $ 269,874.75 $ 417,957.67 $ 2,428,353.32 $ 3,040,548.96 $ 1,278,151.04
Sewer Surcharge 695,000.00 67,135.11 46,209.29 445,378.76 532,144.38 162,855.62
Sewer Connection Fees 230,000.00 5,757.50 10,102.00 241,407.50 401,509.50 (171,509.50)
Repair & Relocation 162,700.00 23,441.04 6,472.21 195,580.06 150,640.51 12,059.49
Grants and Other Related Revenue 105,000.00 -0- -0- -0- 366,696.28 (261,696.28)
Interest Income 200,000.00 69,479.14 72,816.39 385,516.91 383L808.93 (183,808.93)
Total Operating Receipts $ 5,711,400.00 $ 435,687.54 $ 553,557.56 $ 3,696,236.55 $ 4,875,348.56 $ 836,051.44 85% 81% 79%
OPERATING DISBURSEMENTS
(INCLUDING ENCUMBRANCES) i.
Lift Stations $ 184,638.00 $ 14,089.54 $ 15,621.91 $ 105,672.08 $ 154,510.93 $ 30,127.07
Collection Lines 1,316,021.00 79,783.56 94,455.85 890,349.69 948,390.30 367,630.70
Waste Water Reclamation 3,295,982.00 272,718.04 225,541.57 2,300,591.30 2,434,716.74 861,265.26
Customer Service 328,313.00 36,431.03 83,992.63 155,258.69 287,940.37 40,372.63
Sewer Administration 211,339.00 24,070.36 21,826.50 100,434.06 107,540.65 103,798.35
Public Utilities Administration 42,307.00 1,592.57 3,737.51 13,972.30 33,844.73 8,462.27
Administrative Service Fee
(Payment to General Fund) 222,800.00 50,625.00 19,470.00 151,875.00 129,718.00 93,082.00
Contingency Fund 110,000.00 -0- -0- -0- -0- 110,000.00
Total Operating Disbursements $ 5,711,400.00 $ 479,931.10 $ 464,645.97 $ 3,718,153.12 $ 4,096,661.72 $ 1,614,738.28 72% 75% 77%
Operating Receipts Over Operating
Disbursements $ (43,622.56)$ 88,911.59 $ (21,916.57)$ 778,686.84 $ (778,686.84) 14% 6% 3%
BD
04/18/83 .
SALT LAKE CITY CORPORATION
SEWER UTILITY FUND
CASH RECEIPTS & DISBURSEMENTS - NON-OPERATING
FOR NINE MONTHS ENDING MARCH 31, 1983
UNCOLLECTED &
UNEXPENDED OF 75% OF BUDGET
CURRENT MAR. JULY - MAR. CURRENT TO DATE
BUDGET 1983 1982-1983 YEAR'S BUDGET 1983 AVG. 1982
OTHER RECEIPTS
Charges (For Capital) $ 2,066,800.00 $ 266,849.23 $ 1,430,846.58 $ 635,953.42
Sale of Equipment 5,000.00 -0- 691.22 4,308.78
Loan Repayment (Chesterfield) 2,150.00 1,092.84 2,914.24 (764.24)
Transfer From Restricted Fund 1,938,000.00 133,236.13 1,568,176.02 369,823.98
Bond Interest -0- 6,475.71 458,495.09 (458,495.09)
Bond Proceeds 4,000,000.00 -0- 4,000,000.00 -0-
$ 8,011,950.00 $ 407,653.91 $ 7,461,123.15 $ 550,826.85 93% 73% 83%
OTHER DISBURSEMENTS
Additions to Inventory $ -0- $ 11,563.32 $ 80,886.06 $ (80,886.06)
Debt Service (Payment to
Trustee 775,000.00 69,146.78 726,288.63 48,711.37
• Total Other Disbursements $ 775,000.00 $ 80,710.10 $ 807,174.69 $ (32,174.69) 104% 0% 0%
CAPITAL DISBURSEMENTS
(INCLUDING ENCUMBRANCES)
Land $ -0- $ -0- $ -0- $ -0-
Buildings 430,000.00 308.46 444,936.61 (14,936.61)
Improvements Other Than
Buildings 5,539,400.00 ' 24,911.59 4,325,634.79 1,213,765.21
Machinery and Equipment 1,036,650.00 731.00 906,046.52 130,603.48
Total Capital Disbursements $ 7,006,050.00 $ 25,951.05 $ 5,676,617.92 $ 1,329,432.08 81% 71% 73%
Total Non-Operating Disbursements $ 7,781,050.00 $ 106,661.15 $ 6,483,792.61 $ 1,297,257.39 83% 71% 73%
Other Revenue Over Non-Operating
Disbursements $ 230,900.00 $ 300,992.76 $ 977,330.54 $ (977,330.54) 13% 2% 10%
Total Receipts Over Disbursements $ -0- $ 389,904.35 $ 1,756,017.38 $(1,756,017.38) 13% 2% 8%
t MO R A ND U-- — -
TO: Mayor Ted L. Wilson FROM: LeRoy W. Hooton, Jr.
DATE: March 9, 1983 - - -
SUBJECT: Little_ Dell Briefing
Project Description
- -- A U. S. Mmy.Cbrps Engineer flood control project known as the
Little Dell- Project which willprovide flo-o-d-Lontrol, LeeLed- -
and water supply features located on Dell Creek, a
------ -- - h diversiUits- from Emigration
and Lamb' s Canyons. The proposed earth-fill dam structure
is 253 feet high and has a length of 2250 feet, forming a
30, 000 acre foot -lake at an investment cost of $87, 500, 000.
Cosponsors_
Metropolitan Water District of Salt Lake City; Salt Lake
County Parks and Recreation and Salt Lake County Flood Control
Chronology of Events
1952 Salt Lake City flood - 13th South, Jordan River flood
plain -1956 Army Corps of Engineers submitted a report to control
flood waters from Parley' s Canyon specifying an 8, 000-
acre foot reservoir.
1968 The Flood Control Act was enacted by congress
1968 The project was enlarged and authorized at 50, 000
acre feet of water - - -
Mayor Ted L. Wilson
Page 2
March 9 , 1983
1970 The Army Corps of Engineers prepared environmental
working paper for the project
1974 Project was_- reduced from 50, 000 to 30, 000 acre feet
1974 Letters of support were prepared by the participating
-- per-sor in-g-age c-i e s
------ - -----
____ = 1974_ _Dra L managemrent=contracts-_or the op-eration oft -- - -
Del-1 and Li-t-tle Deli- Reservoirs--were-n-egot-iatcd
1976 -Water Resources Development Act - - -
- _ -1976 The project was ready for approval and funds appropri--
a-t-i_on - --
- 1976 The City Commission passed Resolution 80 of 1976
expressing the City' s intent to dispose of certain
- watershed properties- to- pay- for County Flood--Eon tro-1
first posts
1979 Evaluation of water quality impacts from disposal of
dredge was prepared by the Army Corps of Engineers
- 980= =Salt= Lake" City-=Co-unc il, Salt Lake-County -Commission , -_
—Metropolitan--Wa-ter -D-ist-rict-of- Salt -Lake -City and--Utah
-_- —__Wa ter _Resa.urc-e_-Division passed resolutions in support
of Little Dell Project
- 1982 New cost benefit analysis prepared by the Army Corps of
Engineers
Discussion
Recently the Army Corps of_. Engineers completed its cost_
benefit ratio analysis on---the--Little Del-i- Project. This ---
_analysis was requested by Senator Jake Garn as a means of
deciding whether the federal government should be further
- involved in the project or allow it to be built by others.
The cost benefit ratio using the 7-7/8 percent interest rate
amounts to 1. 3 to 1. The project is in the advanced planning
stage and plans and specifications are now ready for the
-first phase of work consisting of all pipe and road reloca-
tions at the site.
It appears that local support will have to be brought to-
gether soon as the President' s proposed cost sharing program
will all but drive--the cost of the project beyond the means__
ofthe cosponsors. According to Mr. Lee McQuivey, District
Manager of the Army Corps of Engineers, the new cost-sharing
policy will go into effect after October 1, 1983, however,
Mayor Ted L. Wilson
Page 3
March 9 , 1983
if the project is authorized before this date under the
current jobs bill the project will be eligible for traditional
federal funding. For example, under the traditional funding
program the flood control first costs amount to -$-2, 820, 0-00 , --
however, under the new cost-sharing program this will rise
-t-o -'$-12 ill-HI-ion and the-recreational cos-t---s-ha-i-n g-would rise
from- $3, 787, 500--to $15 million .
____ _ --_even he--Sh6rt_time _frame, the._sponsoring_agenc iesare in -the= __
- - process of work-ing__out the details and -organizing local support _ --
------ to_bring_ this project to fruition. -- -_--
SALT LAKE CITY' S INVOLVEMENT
1. Donate City Land
In 1979 when the project was ready for construction Salt
Lake City agreed to donate approximately 950 acres of City-
owned land outright to the Corps of Engineers, plus 11 acres
of required _easments. In 1974- the value of this land was-- - - -
_- estimated at $1, 880,000 and would cover the flood control
first-time costs of the project. This is a key condition to
- --_- -the succ-ess of the- project and it--appears--that the- City will
have to follow through on this commitment if the project is --
to be built. Other than the Corps° estimated land appraisals
there has never be_en_offin ial_ ac tian-_tn determin _the City' s
land value; therefore, a MAI appraisal is needed to find the
true value of City lands. In the event that the recreational
aspect of the project cannot generate its first costs
($3, 787,500 ) it has been suggested that if there are any
wand values in excess--of the flood c.ucitrol f-i-r-st-c-osts---that- -
the City also donate this to cover the recreational- first
costs.
It is recommended that we proceed with land appraisals to
determine the actual value of the land involved .
2. Water Financing - -
The Aetropoiitan Water District of Salt Lake City is the-
cosponsor for the water supply aspect of the project. The
water supply costs amount to $15, 350, 000. This can be paid
in full during the four years of construction or on an annual - - -
repayment basis at a 10. 051 percent interest rate at $1, 606, 000
per year for 50 years. The Metropolitan Water District board
of directors has discussed a mill levy to pay the project
off during the four-year construction period. The levy would
be added to the property tax assessment in Salt Lake City.
If the 50-year repayment plan is adopted then the cost would
be passed through for water purchased from the Metropolitan
• Mayor Ted L. Wilson
Page 4
March 9, 1983
Water District. The director would like to avoid the interest
payments by paying the district' s share up front.
3 . Interloc-a--1- Agrcc-men-t-s Ncodcd - — --
-I-nasmuc-h -as this project ha-s t-h-r-ee cosponsoring -agencies it
is recommended that interlocal agreements between all parties
be negotiated and executed in order to clearly define the
responsibility of each agency in the construction and on-going
operation of of this project. Included in the-agreements
should be ample_control -_for___the-_Cityto_manage_its watersheds
and protect water quality of both Little Dell and Mt. Dell
Reservoirs. -
A draft contract providing for modification of Mt. Dell Reser-
voir in conjunction with Little Dell Lake was negotiated
with the Corps in 1974, however, this agreement needs to be
reviewed and amendments made where necessary and executed so
- the City' s interests can be protected in the operation of
Mt. Dell Reservoir.
4 . City Support Needed --
As -the details are worked out relative to the land trans-
action, interlocal agreements and operational agreements
with the Army Corps of _Engineersi_the sponsoring agencies
are planning to communicate with the state' s congressional
delegation for support to construct the project. The City' s
full support is needed in communicating with the state' s
congressional delegation if the project is to be approved by
congress and funds appropriated.
5. Advantages and Disadvantages
The advantages and disadvantages of the project for Salt
Lake City are as follows:
Advantages:
a) Will provide flood control protection to Salt Lake City
and prevent a repeat of the 1952 flood
b) In the long run Little Dell would -be a replacement for
Mt. Dell Reservoir should it become structurally unsound
( this is a remote possibility and many years in the
future) . In the short run it will compensate for the
underdesigned overflow structure at Mt. Dell.
c ) Provide additional 5500 acre feet of culinary water to
the City on an firm annual basis through the Metropolitan
water District of Salt Lake City and, in years of drought,
•
Mayor Ted L . Wilson
Page 5
March 9 , 1983
additional water could be made available from the project.
This water is located in a good position to supply Salt
Lake City by gravity flow.
_ _ _d ) Storage _always provides for late-season water when the
- streams are drying up .
Disadvantages: - -
a )-- -rhe- City will have to donate land for the project valued
between S2 and $4 million .
b) The facility will create watershed management problems
as it is expected to be a very popular recreational
area. The City may experience additional costs in
protecting its watershed.
c ) Based on - the water developed in the project and if
the Metropolitan Water District decides to fund its
share of the project on a 50-year payback, it is
estimated that the cost of water will be $300 per
acre foot. However, this water will be blended with
lower cost water and will not have a significant
impact on water rates. Also, it is estimated that
- this water will be cheaper than Central Utah Project
water or other proposed new water development projects.
Recommendation
The time frame to put local support -together and have con-
gressional approval is limited. As previously mentioned
after October 1st the president' s new cost-sharing program
will go into effect significantly changing the cost to the
cosponsoring agencies. It is recommended that necessary
City action both administratively and legislatively be
expedited in order to meet the time limit and that authori-
-a-t i-on-b e- g 4-v e --to- proceed with t-h-e -land a pp-ra i s-a l- -a-n d- drafting
--
of the necessary interlocal agreements. Furthermore, if the
City supports the project it should take an active role in
_ seeking federal approval .
LWH: jg
cc : Albert E. Haines
Roger Cutler
16 : 46
•
PUBLIC UTILITI,E$
ANALYSIS REPORT PREPARED ON
METER REPLACEMENT PROGRAM
MARCH 28, 1883
OPTION:
#1 Meter replacement of 5,000 meters per year for eight years
#2 Meter replacement under 8 year lease purchase
agreement at 9% interest
#3 Meter replacement under 8 year lease purchase
agreement at 9% interest including installation costs
BASIC ASSUMPTIONS:
1. Revenue projected to increase at 4%
2. Interest on lease calculated at 9%
3. Increase in meter cost calculated at C%
4. Revenue projections based on the following calculations:
Annual residential water bill $110.00 less minimum
($54.00) $ 56.00
Annual residential sewer bill $114.00 less minimum ($24.00)
less county ($23.40) = 66.60
Total annual water & sewer bill ,for_ $122.60
study
5. Sale of scrap meter will stay constant at current price
of $3.61
6. Present meter accruacy is calculated at 81 .70% compared
to actuals of 65%
7. Installation costs are estimated at $10.00 per meter with
8% inflation rate.
•
OPTION #1
METER REPLACEMENT OF 5,000 METERS EIGHT YEARS
REVENUE PROJECTION:
PRESENT PRESENT REPLACEMENT TOTAL
WATER & METER METER PROGRAM SALE OF REVENUE REVENUE
YEARS SEWER BILL ACCURACY ACCURACY WATER BILL SCRAP INCREASE INCREASE
1 $122.60 81 .70% 83.98% $125.39 $ 18,050 $ 111 ,600 $ 129,650
2 127.50 81 .70% 86.25% 133.30 18,050 232,000 250,050
3 132.60 81 .70% 88.51% 141 .63 18,050 361 ,200 379,250
4 137.90 81.70% 90.78% 150.42 18,050 500,800 518,850
5 143.41 81.70% 93.01% 159.62 18,050 648,400 666,450
6 149.14 81 .70% 95.25% 169.34 18,050 808,000 826,050
7 155.10 81.70% 97.45% 179.52 18,050 976,800 994,850
8 161.30 81 .70% 99.65% 190.25 18,050 1 ,158,000 1 ,176,050
Total Revenue Generated $144,400 $4,796,800 $4,941 ,200
COST PROJECTION:
NUMBER TOTAL
METER COST OF TOTAL METER INSTALLATION PROJECTED
YEARS 6% INCREASE METERS COST 8% INCREASE COST
1 $29.70 5,000 $148,500 $50,000 $ 198,500
2 31.48 5,000 157,400 54,000 211 ,400
` 3 33.37 5,000 166,850 58,320 225,170
4 35.37 5,000 176,850 62,986 239,836
5 37.50 5,000 _ 187,500 68,024 255,524
6 39.75 5,000 198,750 73,466 272,216
7 42. 13 5,000 210,650 79,344 289,994
8 44.66 5,000 223,300 85,691 _ 308,991 -
Total Costs $2,001 ,631
Cost savings over eight year period $2,939,569
OPTION #2
METER REPLACEMENT UNDER 8 YEAR LEASE
PURCHASE AGREEMENT AT 9% INTEREST
REVENUE PROJECTION:
PRESENT PRESENT REPLACEMENT TOTAL
WATER & METER METER PROGRAM SALE OF REVENUE REVENUE
YEARS SEWER BILL ACCURACY ACCURACY WATER BILL SCRAP INCREASE INCREASE
1 $122.60 81 .70% 99.90% $144.91 $ 144,400 $ 892,400 $1 ,036,800
2 127.50 81 .70% 99.90% 150.70 -0- 928,000 928,000
3 132.60 81 . 70% 99.80% 156.60 -0- 960,000 960,000
4 137.90 81 .70% 99.80% 162.85 -0- 998.000 998,000
5 143.41 81 . 70% 99.60% 169.08 -0- 1 ,026,800 1 ,026,800
6 149. 14 81 . 70% 99.60% 175.83 -0- 1 ,067,600 1 ,067,600
7 155.10 81 .70% 99.30% 182.39 -0- 1 ,091 ,600 1 ,091 ,600
8 161 . 30 81 .70% 99.30% 189.68 -0- 1 ,135,200 1 ,135,200
Total Revenue Generated $ 144,400 $8,099,600 $8,244,000
COST PROJECTION:
TOTAL
9% LEASE INSTALLATION COSTS PROJECTED
YEARS PURCHASE BY PUBLIC UTILITIES COST
1 $ 160,265 $400,000 $ 560,265
2 213,687 -0- 213,687
3 213,687 -0- 213,687
4 213,687 -0- 213,687
5 213,687 -0- 213,687
6 213,687 -0- 213,687
7 213,687 -0- 213,687
8 213,687 -0- 213,687
9 53,422 -0- 53,422
Total Costs $1 ,709,496 $400,000 $2,109,496
Cost savings over eight year period $6,134,504
•
OPTION #3
METER REPLACEMENT UNDER 8 YEAR LEASE
PURCHASE AGREEMENT AT 9% INTEREST INCLUDING
' INSTALLATION COSTS
REVENUE PROJECTION:
PRESENT PRESENT REPLACEMENT TOTAL
kAATER' .& METER METER PROGRAM SALE OF REVENUE REVENUE
YEARS SEWER BILL ACCURACY ACCURACY WATER BILL SCRAP INCREASE INCREASE
1 $122.60 81 .70% 99.90% $144.91 $ 144,400 $ 892,400 $1 ,036,800
2 127.50 81 .70% 99.90% 150.70 -0- 928,000 928,000
3 132.60 81 .70% 99.80% 156.60 -0- 960,000 960,000
4 137.90 81 .70% 99.80% 162.85 -0- 998,000 998,000
5 143.41 81 .70% 99.60% 169.08 -0- 1 ,026,800 1 ,026,800
6 149.14 81.70% 99.60% 175.83 -0- 1 ,067,600 1 ,067,600
7 155.10 81 .70% 99.30% 182.39 -0- 1 ,091 ,600 1 ,091 ,600
8 161 .30 81 .70% 99.30% 189.68 -0- 1 ,135,200 1 ,135,200
Total Revenue Generated $ 144,400 $8,099,600 $8,244,000
COST PROJECTION:
YEARS 8 YEAR LEASE PURCHASE WITH INSTALLATION
1 $ 285,635
2 285,635
f 3 285,635
4 285,635
5 285,635
6 285,635
7 285,635
8 285,635
$2,285,080
Cost savings over eight year period $5,958,920