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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) an a 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 a. 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 bA cd 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 ago ct a