06/28/2012 - Minutes (3) RECEIVED
Salt Lake City OCT , $
Public Utilities Advisory Committee 2012
Minutes
June28, 2012 CITY RECORDER
The Public Utilities Advisory Committee meeting was held at 7:00 a.m. June 28, 2012 at 1530
South West Temple, Salt Lake City, Utah. Committee members present were Dwight Butler,
Larry Myers, Allen Orr, Roger Player Kent Moore and Christy Cushing. Committee member
Dixie Huefner was absent. Salt Lake City Public Utilities employees present were Jeff
Niermeyer, Tom Ward, Jim Lewis, Florence Reynolds, Chuck Call, Bob Sperling, Dale
Christensen, Joe Morgan, Giles Demek and Zee Smith. Also in attendance were Lehua Weaver,
SLC Council Office; Rusty Vetter, SLC Attorney's Office; Mike Wilson, MWDSLS; Keith
Larson, Bowen Collins & Associates; Jim Olson, HDR; Jessica Morley, Leland Myers CDSD,
Tania Datta and Jim Schwing, CH2MHILL; Walt Baker, DEQ; Christina Osborn, and Alan
Taylor, JUB Engineers; Michael D. Robertson LPP; and Mark Haik.
Introduce new Committee Members - Jeff Niermeyer
Roger Player, Kent Moore, & Christy Cushing
Mr. Niermeyer introduced three new Public Utilities Advisory Board Members. Mr. Roger
Player, is a county representative, and also is the President of the Big Cottonwood Tanner Ditch
Company. Mr. Kent Moore, is a representative of District 1 and has served on some sub-
committees for Public Utilities. Christy Cushing is from District 5 and works for Utah Public
Employees Association. Mr. Niermeyer welcomed the new members and thanked them for
joining the Public Utilities Advisory Board. Their terms will end 12-28-2015.
Approve Minutes of March 22, 2012 Meeting
Committee member Dwight Butler moved and committee member Larry Myers seconded the
motion to approve the minutes of the April 26, 2012, meeting as amended. All members present
voting aye.
Financial Report—Jim Lewis
Mr. Jim Lewis briefed the Committee on the financial report for the period ending May 31, 2012.
Mr. Lewis stated that all three funds are currently doing very well and are in good financial
positions at this time. He stated what a difference a couple of months can do for water sales. He
stated he hates the wind, but as a water agency you could not ask for better weather to sell water. r-I
In April our sales for the year were 6% behind last year, which was not the best water year.
However, with the change in weather at the end of May we are now 3% above last year. To
provide another point of view we were $3.7 million behind in water sales and now we are
expecting to end the year at least $1 million over budget. He presented the water conservation
chart showing the increase in water usage and stated that we will probably not make our
conservation goal this year due to the warm spring weather.
The next slide presented was a comparison of revenue for all three funds versus budget. Mr.
Lewis stated that two of the funds, Water and Storm Water, will end the year over budget while
Sewer will end the year slightly below last year.
The next slide presented was a comparison of operating costs, comparing last year with the
current budget amounts. Mr. Lewis stated that operating costs for the Water Utility are below last
year by $240,000. The Sewer is above last year by $38,000 and the Storm Water is below last
year by $129,000. The Department has been doing a very good job of controlling expenditures
over the last couple of years.
The last slide presented listed the capital improvements for each of the funds as compared to
budget. The Water Utility has expended $11.7 million in capital improvements with $5.4 million
encumbered at the end of May. The Sewer Utility has expended $19.7 million with $10.9 million
encumbered. The Storm Water Utility has expended$6.5 million with $5 million encumbered.
Total for all three funds equal $37.9 million expended and$21.3 million encumbered as of the
end of May 2012.
Health and Economics Reports on the Great Salt Lake
Leland Myers, Chairman Great Salt Lake Advisory Council
Background Information
The Great Salt Lake (GSL) is the largest terminal lake in North America. It is both an important
natural resource and an important economic resource to the region and to the State of Utah. In
addition to the Lake's unique ecosystem and rich biological diversity,the specific characteristics
of the Lake have given rise to a number of large industrial operations, including extraction of
salts and minerals, and it supports a unique commercial use in the annual aquaculture harvest of
brine shrimp eggs. Together these industrial and aquaculture uses of the Lake's ecosystem, along
with significant level of recreational use of the Lake, constitute a large base of employment and
income for the area and the state.
Great Salt Lake Economic Activity
This report has brought together in one document both newly collected and previously published
data on the economic significance of the Great Salt Lake and its surrounding ecosystem to the
economy of the state of Utah. Economic significance is a measure of the amount of total state
economic activity output, income, and employment tied to uses of the lake ecosystem.
Economic uses of the Great Salt Lake and its ecosystem can be categorized into five general
groups. Each of these groups is responsible for economic benefits to the State of Utah. Lake
harvest is the aquaculture harvest of brine shrimp eggs from the unique lake environment. The N
mineral group includes the extraction, processing or production of salt, magnesium chloride, ton
magnesium metal, titanium sponge, and sulfate of potash. The recreation group includes hunting,
bird watching, boating, swimming, and general recreation. Waste assimilation refers to the use of
the lake to dilute and process effluent from both public sewage treatment plants, as well as
industrial uses. Finally "adjacent ecosystem services"refers to a mix of uses of Utah State land
leases that are not captured within the other groups.
Regional Economic Significance of the Great Salt Lake Ecosystem
This report presents two different measures of economic contribution by the Great Salt Lake
Ecosystem. First is a `regional economic significance" estimate of the contribution of the lake's
industry, aquaculture and recreational use of the total economic output employment and labor
income of the State of Utah. Overall these uses account for an estimate $1.32 billion in total
economic output, $375 in total labor income, and 7,706 full and part-time jobs, annually within
Utah.
Net Economic Value of the Great Salt Lake Ecosystem
A second measure of economic value can be described as the "net economic value" of activities
tied to uses of the lake ecosystem. These "net economic value" represent value that is not traded
in traditional marketplaces. For example the net economic value associated with recreational use
of the lake is a measure of what recreational users are willing to pay to use the ecosystem (for
hunting or general recreation) if they were asked to (such as through an entry fee).
A significant additional source of net economic value to the state is associated with discharge
from publicly owned works (POTW) into the lake system. The unique characteristics of the lake
environment process this nutrient discharge while a typical Western freshwater riparian system
would likely require the POTWs to meet higher, more expensive treatment standards prior to
discharge. This avoided cost of water treatment represents real value to the state and users of the
POTWs. For recreational and POTW use of the lake ecosystem, it is estimated that the total new
economic value of GSL is in the range of$46 million to $95 million annually. These figures
include General Recreation at $26.3 million, Waterfowl at $9.6 million; Publicly-owned
treatment works discharges ranging from $10.3 to $58.9 million, and other Industrial /Municipal
Discharges not estimated but positive.
Passive Use Values of the Great Salt Lake Ecosystem
In addition to the contribution of economic activity tied to the Great Salt Lake in terms of output,
income.jobs and net economic value, the lake ecosystem likely also has tremendous value both
within the state and nationwide for its unique contribution to bird habitat as well as its other
geologic and ecological characteristics. These values, referred to as "passive use values" are not
tied to direct economic uses of the lake, but are a measure of the value people place on simply
preserving the resource. Studies of passive use values associated with protection of other unique
resources in the Western U.S., such as Mono Lake in California, have shown these resources to
have very high value to households. Any "passive use values" associated with the Great Salt
Lake Ecosystem would be in addition to the regional economic significance and net economic
values presented above. No passive use valuation studies have been done for the Great Salt Lake
Ecosystem. However, using the inflation adjusted value per household estimated for Mono Lake
of$125, and the approximately 830,000 Utah households, suggests the passive use value C`r)
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associated with preservation of the Great Salt Lake Ecosystem could be in the range of$100
million annually for Utah households.
Summary
In addition to its well known natural and ecological values, the Great Salt Lake support industrial
and aquaculture use, significant levels of recreational use, and provides a large base of
employment and income for the State of Utah. Using a variety of metrics its annual economic
value is estimated as follows.
Total Economic Output $1,323,000,000
Total Labor Income $ 375,100,000
Total Employment 7,706 (jobs)
Net Economic Value $462.2 to $94.8M
Passive use Value $100,000,000
For more information go to http://www.gslcouncil.utah.gov
Great Salt Lake Water Quality Strategy
Walt Baker, Director, Utah Division of Water Quality
Mr. Baker informed the committee about a water quality strategy to ensure Great Salt Lake
continues to provide its important recreational, ecological, and economic benefits for current and
future generations.
Currently, there are few clearly defined water quality benchmarks for Great Salt Lake that can be
used to interpret the potential impacts of existing or proposed pollutant impacts to the lake. This
lack of clearly defined water quality protections for Great Salt Lake potentially leads to
regulatory decisions that are either over or under protective of the lake's important uses. Over
protective water quality regulations are needlessly costly for industry and municipalities. Under
protective regulations are potentially illegal and would be detrimental to the lake's ecosystem,
which supports millions of birds, not to mention a multimillion-dollar brine shrimp industry.
Clearly, a strategy is needed to fill key knowledge gaps to generate appropriate water quality
protections for Great Salt Lake in the most efficient and scientifically defensible way possible.
Great Salt Lake (GSL) Facts:
4th largest terminal lake (no outlet) in the world
Remnant of Lake Bonneville - a prehistoric lake that was 10 times larger than the GSL
Average 75 miles long, 35 miles wide and 14 feet deep
Primary sources of water are from precipitation and the Bear Jordan, Ogden and Weber Rivers
Salinity varies throughout the lake and ranges from freshwater to 7 times saltier than the ocean
Mostly fish free, the keystone species are bring shrimp and brine flies
Causeways divide the lake into four distinct bays, (Gunnision, Gilbert, Bear River, and
Farmington)
80% (360,000acres) of Utah's wetlands are adjacent to the lake
7 to 12 million birds, 250 species, visit the lake every year
$1.3 billion in total economic output to the State of Utah is generated by GSL industry,
aaucculture and recreation. 71'
The entire report This Great Salt Lake Water Quality Strategy is available on the interne at: t
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http://www.waterquality.utah./gov/greatsaltlake
Sewer Lateral Warranty Program—Jim Lewis
Mr. Lewis stated that the City and the Public Utilities Committee has been analyzing this issue
for a number of years. It started from a request by the City Council back in 2009 for information
related to water and sewer lateral replacement programs. The City retained Red Oak Consulting
to conduct a comprehensive evaluation of some program options in 2009. Based on input from
citizen's committee and city staff Red Oak evaluated four program options. In 2010 the Public
Utilities Advisory Committee could not agree to send any of the options reviewed to the City
Council for approval for some of the following reasons:
1. The City would be raising rates substantially to fund a private, for profit program.
2. The City would have little control of costs, quality control, and consumer protection.
3. The additional charges on the bill would compete for other needed increases for
infrastructure improvements.
4. The level of service provided by a third party could affect our current high customer
service rating.
5. The City would incur additional costs and liability if the definition of private/public
ownership was changed.
Mr. Lewis then presented slides showing what the customers are currently responsible for under
current policy such as for water services from the house to the meter and for sewer customers
from the house to the sewer main in the street. He then presented a slide showing a comparison
of largest agencies providing this service.
Pr" in Resources
Water Home Service USA National League of
Resources Corp Cities -NLC
Contract Renewable Annually Renewable Annually ,, - Renewable Annually
Period
Water—$4.50-$5.50 Water—$5.40/month Water-$4.00
mo
Monthly Fee Sewer I$8 00-$9.00 Sewer—$8.90/month Sewer-$4.00 to$5.00
/month (Palm Bay,FL) /month
Opt-In I Opt- Only Opt-In
Out Only Opt-In OnlrOpt-In
Coverage Water-$5,000 Tailored to utility options Water -$4,500
Sewer-$8,000 Sewer—$8,000
City Income Based on LineSaver 10%of gross revenues None
Generation net revenue can be shared
$13 billion in assets $800M in assets $5.6 million in assets
Capitalization/ $47.5M In annual $25.5M in annual revenues $15 M in annual revenues
Customers revenues 400,000 customers 255,000 customers
680,000 customers
Boise,ID Englewood CO
Customers- United Water Company Phoenix AZ
Private and Believed to be all Portland,MN Midland TX
private utilities
Public Utilities Downingtown,PA Cottage Grove OR cu
Jackson Township.NJ Abilene TX
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He stated that the City Council has requested that the Department prepare a request for proposal
or a request for qualifications for a water and sewer line warranty program. The committee
discussed the benefits and issues with an opt-in and an opt-out program. Larry Myers stated that
he preferred an opt-in program allowing the customer to choose to participate. The committee
discussed how important it was that the agencies have a strong financial strength and experience
in the warranty service area. After a long discussion with many pros and cons on issues related to
City contract period coverage amounts and claim processes used in the business it was decided
that a subcommittee should be established to provide more information to the Committee.
Sub Committee
Mr. Lewis requested a sub-committee be established for a proposal for a RFP. Larry Myers,
Roger Player and Christy Cushing volunteered for the committee. The committee will be
meeting on Tuesday, July 3 at noon.
Meeting Adjourned at 8:56
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