Loading...
12/02/2010 - Minutes /?1 //-�o RECEIVED FEB 2 22011 CITY RECORDER Salt Lake City Public Utilities Advisory Committee Minutes December 2, 2010 The Public Utilities Advisory Committee meeting was held at 12:00 noon on December 2, 2010 at Little America Hotel, 500 South Main Street, Salt Lake City, UT. Committee members present were Dick Gaddis, Michael Polacek, Jan Striefel, Dwight Butler, Dixie Huefner, Larry Myers and Allen Orr. Salt Lake City Public Utilities employees present were Jeff Niermeyer, Tom Ward, Jim Lewis, Chuck Call, Dale Christensen, Mark Stanley, Zee Smith, Karryn Greenleaf, Linda Jennings, Arlene Larsen, Bob Sperling, Stephanie Duer, Brad Stewart, Leon Peterson, Randy Bullough, Nick Kryger, Sybilla Dalton, Giles Demek, Robert Ririe, Marty Bright, John Haslam, Mike Gill, Kurt Spjute, Bill Meyer, Dennis Holland, Jeff Grimsdell, Laura Briefer and Mitch Ellis. Also in attendance were Lehua Weaver, Salt Lake City Council Office; Rusty Vetter, SLC Attorney's Office; Kirk Anderson, SLC Human Resource; Ross Youngberg and Cory Nielsen, Hansen, Barrett & Maxwell; Joe Novack, Shawn Draney and Scott Martin, Snow Christensen and Martineau; Mike Wilson, MWDSLS; Steve Clyde and Ted Barnes, Clyde Snow Sessions & Swenson; John Kirkham, Don Milne, Tom Godfrey and Cathy Loveless, MWDSLS Board, and LeRoy W. Hooton, Jr. Approve Minutes of October 28, 2010 Meeting Committee member Allen On moved and Committee member Larry Myers seconded the motion to approve the minutes of the October 28, 2010 meeting, which motion carried with all members present voting aye. Financial Report by Independent Auditors—Hansen, Barrett, Maxwell Ross Youngberg & Cory Nielsen Ross Youngberg, CPA, Audit Manager at Hansen, Barnett& Maxwell, stated that this is the sixth year of doing the audit for Salt Lake City and its entities. Mr. Youngberg reported that Hansen Barnett & Maxwell had rendered an unqualified opinion on the combined financial statements for the period ending June 30, 2010. He also covered the other required communications from the outside auditor to the Committee by reporting that there were no disagreements with management and management and Public Utilities provided excellent cooperation and assistance in performing the audit. He referenced the significant changes which have been required under the new governmental accounting standards and referenced the committee to Management's Discussion and Analysis, a new required section in the report that contains an excellent overview of financial highlights. Mr. Youngberg then discussed the responsibility of the City in relationship to the financial statements and stating the independence of the auditor. He stated that there were no matters involving the internal controls and its operation that they considered to be reportable conditions under standards established by the American Institute of Certified Public Accountants. There were no questions from the committee for Mr. Youngberg. Financial Report for Period Ending June 30, 2010—Jim Lewis Mr. Jim Lewis—Thanked the Financial Auditors for their remarks. He then stated that all three funds ended the year in good financial condition even after the wet spring and lower water sales last year. He presented a chart showing water deliveries by year for 1990 thru 2010. The chart depicted water deliveries have decreased each year since 2000 with only a small increase in 2007. The next chart showed the daily water deliveries for the prior two years 2009 & 2010. He stated both years had very wet springs, however the previous 2009 water sales were higher due to a warm period in April of that year which limited the effect of the wet spring. The next chart presented listed operating revenue for water, sewer and stormwater for years 1990 thru 2010. Mr. Lewis stated that water sales decreased slightly over last year due to the wetter than normal spring season, but lower water purchases helped soften the effect on the Utility. He stated that sewer revenue for last year was down slightly over the previous year. Stormwater revenues were up over last year due to the rate increase that was effective on January 1, 2009. The next slide presented operating costs by year from 1999 thru 2010. Mr. Lewis stated that all three funds continued to control costs; with costs below last year in both the Water and the Stormwater Utilities. However costs increased over the previous year in the Sewer Utility. The next chart depicted the amount of funding for capital improvements for the Water Utility. Mr. Lewis stated that the chart provided details on the amount of funds generated and disbursed by the utility each year. He stated the difference between the receipts and disbursements equals the amount of funding available to finance capital improvements. He stated that under the current forecast the Water Utility will not be generating enough funding to cover the depreciation rate in budget year 2013. Water rates will need to be increased in 2013 to continue a strong capital improvement program. The next slide was for the Sewer Utility showing the same comparison of receipts to disbursements. Mr. Lewis stated that because of the 2005 bond issue and related debt service payments the utility will only generate $5 million per year for capital improvements over the next five years. The Sewer Utility is currently in fair financial health, but the fund will also need to raise rates by 2013 to continue a strong capital improvement program. The next slide provided the same information for the Stormwater Utility. The Stormwater Utility since its inception has provided $3 million per year for capital improvements. Due to the issue of$8 million in revenue bonds in 2005 and related debt service payments, the amount of funds available for capital improvements went down in 2009. However, due to two rates, increases implemented this past year the fund will be able to generate over $2.5 million per year over the next five years. N bA a Mr. Lewis then presented slides showing performance indicators comparing our agency with 300 other major water and sewer utilities across the nation. Mr. Lewis stated that the information presented is the result of an AWWA Research Project which the Department has participated in over the last seven years. He stated that in most areas the Department compares exceptionally well compared to other similar agencies. Our debt ratio, return on assets, O&M cost per million gallons, Wastewater cost per account and per million gallons are better than the average of the study group. During the next two months the Department will be reviewing the cash flow plans and capital improvement programs for each fund as they prepare next year's budget. Presentation of Resolution for Michael Polacek- Jeff Niermeyer Director Jeff Niermeyer read a Resolution of Appreciation from Mayor Ralph Becker to Michael Polacek for completion o f his two terms (8 years) as a member of the Public Utilities Advisory Committee. He personally thanked Mr. Polacek for his service and said that the Department of Public Utilities has benefited from the Public Utilities Advisory Committee and it is a better organization because of their participation and input on issues and programs of the department. Closing Comments—Jeff Niermeyer Mr. Niermeyer noted that every year at his meeting, the director takes this opportunity to give a summary of the past year's activities. He noted that copies of the annual report were handed out, which provide statistical data. He thanked Stephanie Duer for preparing the Annual Report and a Water Stewardship Calendar, which was also handed out. Mr. Niermeyer said besides the data, he likes to take this opportunity to speak about some of the department's programs. As a city and a department for over 130 years, the leadership within Salt Lake City has striven to be to be safe, secure and sustainable. When looking back at the city's history, many of the choices that have been made are about the security and the sustainability of the community. It goes to protection of our watersheds. It goes to investments in our infrastructure through the commitments of our City Councils. Mr. Niermeyer acknowledged past City Council Member Tom Godfrey, now on the Board of the Metropolitan Water District of Salt Lake & Sandy. Many water systems managers across the country do not have the support of their elected officials in recognizing the need to invest in the infrastructure. It's tough, particularly during difficult financial times, to raise rates; but if investments are not made at some point it will be impossible to catch up. It has been a credit to the current and past City Councils for recognizing that there is value in maintaining the infrastructure—and the city has a large and older infrastructure (depreciated asset value of $527.5 million), which requires a large dollar investment to keep the infrastructure in good repair and optimally performing. One of the most important efforts that the city has undertaken is to protect its watersheds. Mr. Niermeyer referred to the first City Council Ordinance in 1851, which noted about the filthying of City Creek. The City has recognized that living on the edge of the desert, even though we as bA ccS have a great water supply from the Wasatch Mountains, It's a critical balance to protect this resource, because if it's lost (water supply and/or quality), the city would be in a world of hurt. Mr. Niermeyer continued to speak about the utilities' infrastructure by stating that in order to protect this critical resource, the city has made ongoing investment and expended organizational energy with legislative and legal efforts to protect its watersheds. This past year the city undertook another planning effort led by Laura Briefer (past board member and now staff) to develop another future vision of this wonderful jewel that we call the Wasatch Mountains; with the goal to balance all of the competing demands for great public water supply, great recreation amenities, development opportunities within the canyons and just the shear amount of people who want to enjoy this resource. Mr. Niermeyer asked, "How do you deal with this almost crush of interest - essentially loving the resource to death?" There are many stakeholders and many voices; and trying to strike a balance requires tremendous effort. At the end of the day, the final document is really a beginning of a dialog point. It creates a vision for how these canyons, which we all enjoy as a community, can be protected. That both gives us subsistence (or life shed), but also for recreation wellbeing and just shear aesthetics that the beauty and joy that the mountains provide this community. Also, coupled with this is the additional wilderness Designation within the watershed. A bill has been prepared and sponsored by Congressman Matheson. Mr. Niermeyer spoke about past and future legal challenges; noting that just 2 days ago, the Big Ditch case was argued before the Utah Supreme Court. He noted that Jim Barnes and Steve Clyde (Clyde Snow Attorneys at Law) represented the City. Also there is ongoing litigation regarding the Albion Basin. Again it's a commitment of Salt Lake City and a recognition of the value of this resource and what its brings to the economic well-being of not only the City, but the community and that the fights are important and are necessary to expend the resources required to protect the watersheds. Mr. Niermeyer said looking to the future it is certain that the population will continue to grow and climate change will have some effect on the city's water resources. Water conservation is a core policy and part of the fabric of the department. Even though water conservation creates financial challenges, it's necessary in order to make the City sustainable. Since the year 2000, the department has sustained a 16 percent reduction in overall water usage. This reduction has been made possible through a number of programs, which are included in the calendar. During the next 6-months, the department will be developing, through a grant from the U.S. Bureau of Reclamation, a web base, water-wise landscape and plant data base program. This will provide a two-prong water conservation program, rather than just depending on price signals to encourage wise water use. This information will provide the public the necessary tools and knowledge to make sound decisions on the use of their water. During the past year, 2 water conservation demonstration gardens have been completed. One on the corner of 11 th Avenue and the other is the Washington Square Garden outside the City and County Building. Mr. Niermeyer noted that conservation does not necessary equate to ugly, as there are very attractive efficient water—use landscaping options. He expressed his appreciation for the leadership of Stephanie Duer in developing water conversation programs; and the support of all the employees of the department. Mr. Niermeyer said that Salt Lake City has been selected by FEMA as one of the most likely regions that could suffer from a significant earthquake, resulting in wide spread damages. The 71' training began earlier in the year and will end in 2012 when there will be an exercise entitled an "shakeout." This past June, the City had the opportunity to use this training when the Chevron pipeline in Red Butte sprung a leak. He noted that again this morning there was another leak near the original one. This spill was about 500 feet from the first one. It was smaller and did not reach Red Butte Creek. Also, as part of the original oil spill to determine if oil had contaminated the water supply, a naturally occurring petrochemical was found in the groundwater. There will be follow-up with EPA and the State DEQ on this matter. The Chevron incident does point out the necessity of emergency preparedness. It's a compliment to the Salt Lake City staff on their willingness to accept this training. But when we have these events, the training is invaluable. Mr. Niermeyer said the department is continually searching for new technologies to replace its aging infrastructure. He showed a slide of the 60—inch Beck Street Interceptor sewer pipe that collects nearly all of the sewage from the city's east side and conveys it to the water reclamation plant. When it was new, the pipe was close to 6-inches thick, but through age and wear it has been reduced to about 1-1/2 inches. Replacing the pipeline was not possible because it passed under 2 railroads, light rail, and the freeway; and was under the groundwater level. Now the replacement is nearly completed by inserting a pipe within the old one. Another challenge was replacing the two digester tanks at the water reclamation plant. The city received a $6 million, no interest loan, as part of the Obama stimulus money. In this project it was necessary to build new digester tanks within the old tanks. By leveraging the loan and innovative technology, the department was able to rehab a major facility. Niermeyer thanked the department's engineering division led by Chuck Call for meeting the many challenges in maintaining the utilities' infrastructure. Mr. Niermeyer also praised all of the employees of the department for their dedication and willingness to rise to the challenges facing the department. He used the example of the employees of the water reclamation plant. The plant will receive its 17the NACWA Platinum Award this coming summer for total compliance (no violations) of its NPDES permit requirements. (the plant has not had a permit violation since March 1993). NACWA is a national peer review organization and there are only a handful of treatment facilities in the county that have achieved this level of performance. Mr. Niermeyer recognized Wastewater Facilities Manager, Dale Christensen, Marty Bright, Giles Demeke, Rob Ririe and the reclamation plant employees for their outstanding performance under difficult conditions resulting from construction activities on the plant site. Mr. Niermeyer, noted the department employees that provide public drinking water supply were recognized by another outside peer review organization, the EPA partnership for Safe Water. He said that it takes a huge effort to provide good quality water, through protected watersheds, great water treatment, water distribution and cross connections operators in the distribution system. Mr. Niermeyer presented the "Partnership for Safe Water" plaques to Bill Meyers, Mitch Ellis, Mike Gill and John Haslam for the City Creek, Parley's and Big Cottonwood Water Treatment Plants. Process Analyst Leon Peterson was recognized for his contribution to the success of the water treatment program. Mr. Niermeyer continued, noting that once the treated water leaves the treatment plants, it goes through 1,500 miles of distribution pipes and 21 reservoirs en route to the customers' tap. During this last year, the Intermountain Section of the American Water lf) Works Association recognized the water distribution employees by presenting them the AWWA b Phase II, Peer Review under the G-200 Standard for "Implementation of Water Distribution System Operation and Management Best Practices." Randy Bullough, Jeff Grimsdell, Dennis Holland and Mark Stanley received a plaque on behave of the employees of the Water Distribution Division with the gratitude of Mr. Niemeyer. Mr. Niermeyer said that the department has a dedicated group of employees within the safety recognition and safety programs that are tasked with taking care of nearly 400 employee's well- being who do incredible tough jobs, very physical, out in the cold and working in very dangerous environments. This group brings safety from the bottom up. Its management's job to provide the resources to this group because they're the ones out in the field doing the hard work and they know what is needed. The organization of the safety group falls into two groups; 1) An employee safety committee, and 2) a management—employee committee chaired by the director of the department. The department also has organized an overall wellness program. Nearly 3 years ago, Linda Jennings recommended a Wellness Council to provide information to employees on how to adopt a healthy life style. Incentives are provided with recognition and awards. There is the Biggest Looser contest encouraging employees to manage weigh by providing exercise and good eating tips. This program is becoming common in many organizations that are looking at employee health. This past year the department's Wellness Council placed 4t1' in the state's "Work Well Challenge." Mr. Niermeyer thanked Linda Jennings for her efforts. Mr. Niermeyer spoke of the department's Awards and Recognition Program. The department's do a great job and like most individuals, like to be recognized for their efforts. For many years the department has had an employee-run Awards and Recognition Committee, now chaired by Arlene Larsen. The Committee is responsible for conducting recognition activities and new ideas to recognize the great work that the employees do. For example an Employees' Picnic is held every year. Mr. Niermeyer thanked the Committee for its important work. Mr. Niermeyer read the following closing statement: Today we ask even more of our staff The issues seem more complex, and the stakes seem higher. Fortunately, we have a strong foundation from which to work. Public Utilities, with the support of our city leaders and the community, has always taken a long view and taken those extra steps to identify not only the obvious issues but also those unanticipated and unintended outcomes that can have such devastating effects. The words "sustainability" or "security" weren't in our vernacular a hundred years ago, but those ideas drove our efforts and fueled our mission then,just as those concepts define our work today—ensuring a safe and secure water environment for our community now and for the future. Mr. Niermeyer wished everyone a Happy Holiday season and a Happy New Year. Adjourn Committee member Larry Myers moved to adjourn the meeting. Committee member Allen Orr seconded the motion, with all members present voting aye. Meeting adjourned at 1:46 p.m. a� bD ct