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02/27/2014 - Minutes ,,7/q-6 • Draft RECEIVED Salt Lake City Public Utilities Advisory Committee APR 1 8 2014 Minutes February 27, 2014 CITY RECORDER The Public Utilities Advisory Committee meeting was held at 7:00 a.m. February 27, 2014 at 1530 South West Temple, Salt Lake City, Utah. Committee members present were Dwight Butler, Dixie Huefner, Allen Orr, Larry Myers, Roger Player, and Kent Moore. Committee member Jani Iwamoto was absent. Salt Lake City Public Utilities employees present were Jeff Niermeyer, Jim Lewis, Jesse Stewart, Laura Briefer, Stephanie Duer, Jason Brown, Chuck Call and Zee Smith. Rusty Vetter, SLC Attorney's Office; Mike Wilson, MWDSLS; Mike Collins & Keith Larson, Bown Collins & Associates; Jeff Denbleyler, CH2MHi11; Jim Olson, Water Works Eng; Jeremy Williams, Carollo; Tim Bardsley, Western Water Assessment; and Holly Hilton, SLC Mayor's Office. Approve Minutes of December 5, 2013 Meeting Committee member Kent Moore moved and Committee member Roger Player, seconded the motion to approve the minutes of the December 5, 2013, meeting as amended. All members present voted aye. Elect Chair and Vice-Chair for 2014 Committee member Allen On made a motion to elect Dwight Butler as the chair for 2014 and Roger Player as the vice-chair. Committee member Larry Myers seconded the motion, with all the members present voting aye. Financial Report—Jim Lewis Mr. Jim Lewis briefed the Committee on the financial report for the period ending January 31, 2014. Mr. Lewis stated that all four funds are in good financial condition. He stated that in spite of one of the hottest summers on record our water sales are below last year by 7% due to the weekly rain storms that passed thru with the hot weather. He then presented a chart showing water consumption by month for the past six years. He stated that you can see the increase in water sales in May and June of this year and how consumption changed as each of the storms that came thru during July and August. He then presented the water usage chart for last calendar year and compared it to the chart for the last two months of the year. The next slide presented was a comparison of revenue for all three funds versus budget. Mr. rl Lewis stated that revenues from the Sewer Utility are higher than last year due to the 6% sewer IDD cts rate increase effective July 1st of this past year. The Water Utility is below last year due to the wetter than normal summer season. The Stormwater Utility and Street Lighting are slightly below our expected levels for this time of year. It is expected that Street Lighting will be under revenue estimates at the end of this year by as much as $400,000 due to over estimating the new revenue potential of the new fund. 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 lower than last year by $2.3 million, which relates to a decrease in water purchases over the previous year. The Sewer costs are higher than last year by $400,000 as legal and professional consulting fees are higher than last year. The Stormwater costs are almost even with last year. Mr. Lewis stated that overall 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 chart was revised at the request of the Committee to show the anticipated capital projects to be compared to the total budget amount. This will help show projects that are multi- year projects and the related budget amounts. The Water Utility has expended $7.2 million in capital improvements with $6.3 million encumbered at the end of January. The Sewer Utility has expended $4.8 million with $4.8 million encumbered. The Stormwater has expended $1.9 million with $3.8 million encumbered. The Street Lighting Utility is just starting to upgrade some of the lights to energy efficiency lights in the amount of$223,462. Total for all four equals $14 million expended and $15 million encumbered as of the end for January 31, 2014. Mr. Lewis stated that the Department is currently working with HomeServe to implement the Lateral Warranty program in April of this year. Proposed Budget Presentation for 2014/15—Jim Lewis Mr. Jim Lewis briefed the Committee on the budget request for next year, 2014-2015. He stated that the Finance Sub-committee met and reviewed the budget on February 7, 2014, and made some suggestions for changes. They requested that the sewer rate increase be increased from 6% to 8% and the water rate structure be changed to provide a more stable revenue source. Mr. Lewis stated that the major budget issues for next year are: Summarization of the current budget proposal: • Department Budget Totals for O&M Budget is $74,700,055. Capital budget $53,256,000 the budgeted Debt servicing is $6,949,000 —grand total of $134,904,055. This is a 0.5% increase, or $717,192 higher than last year. • Proposed Rate Increases are forecasted for both Water and Sewer over the next eight years. Currently the Stormwater Utility has adequate funding to cover their capital N needs. Forecasted rate increases are as follows: b1p Years Water Sewer Storm water Street Lights 2014-15 4% 8% 0% 0% 2015-16 4% 10% 0% 0% 2016-17 4% 10% 0% 0% 2017-18 4% 15% 0% 0% 2018-19 4% 15% 4% 0% 2019-20 4% 20% 0% 0% 2020-21 4% 20% 0% 0% 2021-22 4% 20% 0% 0% Average Water resident bill will increase$18 a year or$1.50 per month. Average Sewer resident's bill would increase$11.75 a year or.98 cents a month. Larger Sewer organizations will see an increase of 8%over previous years. • Future Bond Issues will be needed to continue a strong capital improvement program. Forecasted future bond issues are as follows: Years Water Sewer Storm Street Lights 2014-15 2015-16 $13 million 2016-17 $20 million 2017-18 $20 million • Personnel Changes remain small considering a Department of nearly 400 employees. The entire Department is asking for 2 FTEs in the Sewer Utility. The Sewer is asking for 2 additional full time positions to assist with the inspection of sewer lines to decrease the number of overflows and litigation claims. Metropolitan Water District The District is proposing to raise rates by 12%this year. It is proposed that the rate will increase from $232 to $260 per acre foot for total estimated increase in costs of$1,470,286 (annually). The District is planning on raising • costs each year by the following amounts: Metropolitan Rate Increase Proposed Rate Cost to Department Water Rates to Offset 2014-15 12% $ 1,470,286 2.4% 2015-16 11% $ 1,509,486 2.3% 2016-17 10% $ 1,523,211 2.3% 2017-18 7% $ 1,172,872 1.7% 2018-19 4% $ 717,128 0.9% 2019-20 4% $ 745,813 0.9% Cr) Major Projects Most of the Departments focus for specific significant projects center ao around the Sewer Reclamation Plant. m a a. Upgrades to the Sewer Plant of$3.6 million that will work well with future changes expected from the State and EPA nutrient removal requirements. b. Reclamation Plant Motor Control System for $1.4 million to ensure that electrical pumping won't fail and cause major sewer backups to residents. c. Waste Active Sludge Thickening Project for $5.7 million which is the second year of work on this project. This ongoing project is needed to reduce solid waste drying time and reduce volume by 33%. d. Parley's Canyon oil spill protection project for $800,000 that is partially paid for by Chevron Oil. e. Water treatment plant intake structure at Big Cottonwood Plant and hypochlorite generation system upgrade at Parley's Water Treatment Plant for a total of$3.9 million. f. Oil Drain Phase IV of$4.5 million for EPA contamination removal. This project is reimbursed by the local oil companies for $3 million. This remediation project has been going for many years but is expected to be completed during the budget year. g. Riparian Corridor Projects are on the Stormwater capital improvement plan at $825,000. h. Street lighting efficiency projects are expected to cost $950,000 and will be part of the planned replacement of inefficient lighting fixtures. The committee then reviewed water and sewer increase proposals. All three water options generate the same 4% increase in water revenue for next year. The Committee discussed the benefits of each option. Option A increases all the different rate tiers and service fee by 4%. Option B was requested by the Budget Sub Committee in their February 7th meeting and increases the service fee higher than the 4% and reduces the increase in tier 2. Option C was presented by management to increase the tier 1 rate higher than 4% and keep the service fee at the current level. City Water Service Fee Proposal Meter Size Existing Option A Option B Option C 3/4 & 1 Inch $9.14 $9.51 $9.89 $9.14 1 1/2 10.80 11.23 11.66 10.80 2 11.72 12.19 12.66 11.72 3 19.67 20.46 21.24 19.67 4 21.06 21.90 22.75 21.06 6 30.40 31.62 32.83 30.40 8 54.65 56.84 59.02 54.65 City Water Rate Proposal Description City Existing City Proposed County Existing County Proposed Block 1 - $1.01 $1.05 $1.05 $1.08 1-10 ccf Block 2 1.55 1.60 1.56 1.61 11-30 ccf Block 3 2.14 2.24 2.24 2.23 31 -70ccf Block 4> 2.25 2.35 2.34 2.34 71 ccf a) a4 Sewer Rate Proposal Account Type Average Winter Current Rates Proposed 8% Water Usage (ccf) $1.53 ccf Rate Increase Difference $1.65 ccf $0.12 ccf Small Residential 4 $73.44 $79.32 $5.88 Average 8 $146.88 $158.63 $11.75 Residential Commercial Based on BOD $729.91 $788.30 $58.39 and TSS Mr. Lewis stated that all three funds are proposing a strong capital improvement program for next year. The water utility is proposing over $21.9 million, sewer at $21.2 million, stormwater at $4.9 million and street lighting at$950,000. Mr. Lewis then asked that the budget be approved as submitted with approval for one of the water rate options A, B or C. Committee member Allen Orr made a motion to approve the budget with water rate Option C. Committee member Larry Myers seconded the motion, with all members present voting aye. Annual Municipal Wastewater Planning Report-Jim Lewis Each year, the Department of Environmental Quality sends out a request for the completion of the MWPP by all wastewater operators. The report's individual sections are to be filled out by the staff and the finalized reports reviewed by the program's governing board or council. Purpose of Report 1. Meets the reporting requirements under the Utah Sanitary Management Program 2. Gives communities points under the Utah Wastewater Project Priority List Report Summary There have been no major changes in comparing the 2013 report to the 2012 report.Areas receiving points against the system are as follows: Finance Sections Question: Are projected funding sources sufficient to cover all projected capital improvement costs for the next ten years? (25 points) The Department does not project 10 years into the future. Projecting capital needs that far out will usually require a bond issue or rate increase to cover the costs. Capital needs change rather quickly and sometimes we require less increases or we simply modify priorities. The Department projects 5 years out. Question: Has a dedicated sinking fund been established to provide for future capital improvements? (25 points) The Department technically does not have sinking funds. However, the Department does restrict assets each year, and to some extent into the future years, that will ensure that we have adequate resources to anticipate capital for the next 5 a years. Collections System Section Question: How many days last year was there an overflow event? (25 Points) 6 overflow events (down from 11 from the previous year). Most events were a result of roots in the line. Crews have made major strides in cleaning and CCTV inspection, but have a ways to go. Mechanical Plant Section (Water Reclamation Plant) Age of Major Process Units? (20 Points) Points per year, not to exceed 20. Headworks— 12 years old Primary, Treatment— 18 years old Secondary Treatment— 5 years old Solids Handling - 1 year old Disinfection - 12 years old Committee member Dixie Huefner made a motion that the contents of the Municipal Wastewater Planning Program Report were reviewed with the PUAC Board on February 27, 2014. The Committee believes the City has taken appropriate actions to remain in compliance with its UPDES permit requirements. Committee member Kent Moore seconded the motion, with all members present voting aye. Mountain Accord Update—Laura Briefer An update of the ongoing Mountain Accord process was provided to the Public Utilities Advisory Committee (PUAC) by Laura Briefer. The timing for Mountain Accord is one year with completion in January 2015. Mountain Accord has established a website (www.mountainaccord.com); there is a lot of information about the process and an area to provide comments. Comments are accepted throughout the process, but it is a good idea to submit input before the end of March since the initial comments will help shape the process moving forward. Laura also updated PUAC members about the governance and system group structures for Mountain Accord. A draft charter is being reviewed by the Executive Board. The Environment, Transportation, Recreation, and Economic System Groups have been established, and Co-Chairs have been appointed by the Executive Board to facilitate each System Group. The appointed Co- Chairs are the following: • Environment System: Joan DeGiorgio and Ann Ober • Transportation System: Andrew Gruber and Leslie Crawford • Economic System: Natalie Gochnour and Jeff Edwards • Recreation System: Brad Barber and Michael Barille Finally, Laura reported that Salt Lake City Public Utilities and Salt Lake City remain very engaged in the process, participating on the Executive Board, Committee, and each of the Management System Groups. Mayor Becker is very engaged and serves on the Executive Board and the Management Committee for Mountain Accord. Laura urged participation in Mountain Accord, particularly in providing comments and feedback. cu ccl Water Conservation Plan Update Milestones — Stephanie Duer Background: Utah Code 73-10-32 establishes the requirement of submitting a water conservation master plan to the Utah Division of Water Resources every five years. This is our year. Below is a proposed schedule with critical milestones. I Task Milestone Activity Description End Date Review UC 73-10-32 Review Utah Water Jan Conservation Master Plan Update Code for amendments/requirements Establish milestones Identify critical tasks necessary Feb 21 to complete WCMP Present milestones to PUAC Present milestones; level of Feb 27 PUAC involvement? Subcommittee? Establish calendar with Work with Lehua Weaver March Council Office Introduce WCMP to Council Lehua send email/memo to March Council describing project/process Draft plan Identify chapters and outline March - content to form basis of master July plan. Work with other city departments on developing internal plans Present final draft to PUAC Provide draft to Zee in time for Aug 28 packets. Send transmittal and master Packet to include:Transmittal, Sept 16 plan package to Mayors WCMP, Draft Council Resolution Office Council Briefing Submit Plan to Council; set date Oct 7 for WCVP adoption, establish public comment period Council Approval Need signed resolution and copy Oct 21 of minutes from Cindy Submit plan Executive summary,required Nov components including meeting minutes and resolutions, completed document For PUAC consideration: You are scheduled to review/approve the plan draft in August. Do you want to be involved in review prior to that meeting, either directly or through a sub-committee? Stephanie asked the board members what level of involvement they would like to have in this process. Some of the board members commented that they had reviewed it and found it very acceptable. Also they would like to be kept up to date and any issues arise. It was also suggested a an outline for conservation tips. a. Hive Pass —Jeff Niermeyer Jeff informed the Committee that the City will be launching a program selling discounted Hive Transit Passes for City residents. The Press release stated that in another move to improve air quality by strengthening access to public transit, Mayor Becker and UTA General Manager Mike Allegra will officially launch sales of the new Salt Lake City Hive Pass March 1, 2014. The new (Hive Pass) transit pass is a pilot program created through a partnership between SLC and UTA that will initially only be available to SLC residents. The one-year pass is good on all UTA TRAX, Frontrunner, bus and S-line Streetcar services and available for an up-front payment of$350 or for $360 in12 monthly installments. The Hive Pass is available for essentially what a rider would spend on six round-trips a month. In person purchase is necessary, as the pass requires a photo of the user as well as proof of residency. For more details visit the website http: //www.ridewithhive.com/. Acknowledgment of Dixie Huefner for Her Service—Kent Moore Committee members Allen Orr and Kent Moore and the other member of the Committee wanted to thank Dixie Huefner for her service as chair of the Public Utilities Advisory Committee for the year 2013. It was stated how much they appreciate Dixie and her service to the committee. They also welcomed Dwight Butler as the new chair and Roger Player as the co-chair for the year 2014. Receipt of Anonymous Mailing Regarding Water Reclamation Plant—Kent Moore Committee member Kent Moore wanted it noted as a matter of record that the Board Members had received an anonymous mailing regarding a report about the Water Reclamation Plant. Meeting Adjourned at 8:40 a.m. 00 . au to