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11/17/2011 - Minutes r? //- RECEIVED Salt Lake City Public Utilities Advisory Committee FED 2 2012 Minutes November 17, 2011 CITY RECORDER The Public Utilities Advisory Committee meeting was held at 7:00 a.m. November 17, 2011 at 1530 South West Temple, Salt Lake City, Utah. Committee members present were Jan Striefel, Dick Gaddis, Dwight Butler, Dixie Huefner, Allen On and Larry Myers. Salt Lake City Public Utilities employees present were Jeff Niermeyer, Tom Ward, Jim Lewis, Florence Reynolds, Chuck Call, Brad Stewart, Stephanie Duer and Zee Smith. Also in attendance were Holly Hilton, SLC Mayor's Office; Lehua Weaver, SLC Council Office; Rusty Vetter, SLC Attorney's Office; Mike Wilson, MWDSLS; Tim Harpst & Mike Barry, SLC Transportation; Jeff Baer, Liberty Wells Street Light Committee; Camille Winnie, Downtown Alliance; Karen Nichols, HDR and Rick Giardina, Red Oak Consulting. Approve Minutes of September 22, 2011 Meeting Committee member Dick Gaddis moved and Committee member Jan Striefel, seconded the motion to approve the minutes of the September 22, 2011 meeting as amended. All members present voted aye. Financial Report—Jim Lewis Mr. Jim Lewis briefed the Committee on the financial report for the period ending October 31, 2011. Mr. Lewis stated that all three funds are currently doing very well and are in good financial position at this time, even with the wetter summer. He stated that the Department had budgeted for a poor spring, but did not count on the wetter summer. Currently water deliveries are below last year by six percent and water revenues are below last year by $2.2 million. He also presented the water conservation chart for the current year, which shows water savings due to the wetter summer. The chart shows that due to the wetter summer we should meet our conservation goal for the calendar year. The next slide presented was a comparison of revenue for all three funds versus budget. Mr. • Lewis stated that two of the funds, Sewer and Storm Water, are higher than last year with water below last year due to weather. The Water Utility is currently $2.2 million below last year with Sewer $340,000 higher and Storm Water at $150,000 higher than last year. aA 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 $256,000, which relates to lower water purchases over the last year. The Sewer is above last year by $537,000 and the Storm Water is just slightly above last year by $135,000. 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 compared to budget. The Water Utility has expended $2.9 million in capital improvements with $5.9 million encumbered at the end of October. The Sewer Utility has expended $3.4 million with $21.4 million encumbered. The Storm Water Utility has expended $1.7 million with $5 million encumbered. Update On Water efficient Landscaping Ordinance, Landscape manual & Plant List Stephanie Duer Salt Lake City's Sustainable Code Revision Project is an administrative initiative aimed at incorporating sustainability provisions into zoning and subdivision ordinances. There are three phases of this project: 1. Policy and Goal Inventory 2. Diagnostics of Regulations 3. Code Revisions 10 Key Areas of Sustainability 1. Recycling and Waste Reduction 2. Climate Change and Air Quality 3. Energy Conservation and Renewable Energy 4. Mobility and Transportation 5. Open Space, Parks, and Trails 6. Urban Forestry 7. Water Quality and Conservation 8. Food Production and Nutrition 9. Community Health and Safety 10. Housing Accessibility and Diversity Chapter 21A.26.01 —Water-Efficient Landscape Regulations A. Purpose B. Applicability C. Submittal Requirements D. Review Procedures E. Standards F. Inspection, Maintenance, Enforcement G. Definitions Chapter 21A.26.01 Water-Efficient Landscape Regulations A. Purpose Highlights • Speak to future water supply challenges N • Short recitation of previous regulatory efforts a a - Watershed protection - Tiered rate structure - Earlier Landscape code revisions o Parkstrip o Redefining "landscape" - Water-wise plant list Reference to 2009 Water Conservation Master Plan - Development of Irrigation and Landscape Guide Identify goals to be achieved through the regulations - Establish procedures and Standards - Reduce water waste and use in landscape - Provide provisions for treasured landscapes and play spaces Chapter 21A.26.01 Water-Efficient Landscape Regulations B. Applicability Highlights • New Development - Residential; large subdivisions; triplex of greater; single-family w./landscape >1/2 acre - Non-residential; commercial; institutional; developments utilizing public funds • Existing development - Commercial and multi-family projects with improvements that result in an increase in assessed value of 25% or greater • Exemptions - New single family homes with<1/2 acre - Treasured landscapes - Plant collections as part of botanical gardens and arboretums open to the public - Community gardens and landscapes dedicated to edible plants - Cemeteries - Ecological restoration projects Chapter 21A.26.01 Water-Efficient Landscape Regulations C. Submittal Requirements • Water Efficient Landscape Worksheet - Hydrozone information - Tied to SLC Plant List - Water budget calculations o Tied to SLC Plant List and Irrigation and Landscape Guide - Irrigation audit report - Plans o Planting o Irrigation o Grading - Soils Report - Certificate of Completion and Certificate of Completion according to packet • Chapter 21A.26.01 Water-Efficient Landscape Regulations Mcu D. Review Procedures Highlights a • Identifies SLCDPU as coordinating the development of an irrigation and landscape guide - To address irrigation and landscape design, installation and maintenance to enhance water efficiencies - Increase relevance of plant list - Identifies irrigation efficiency standard (80% of Eto) • Rules around certificate of occupancy - No certificate of completion issued until landscape is installed and irrigation system meets efficiency standard - Provisions for temporary co's for seasonal or weather delays Chapter 21A.26.01 Water-Efficient Landscape Regulations E. Standards Highlights • Specifies the use of SLC Plant List - Limits use of plants not tied to plant list or approved lists to 10% of landscape - Identifies limited use of specified hydrozones o Plants not in approved lists the highest zoned turf grass (as identified in SLC Plant list), and water features alone or combined shall not exceed 20% of landscapeable area • Rules on plant substitutions • Requires hydrozoning of landscape and irrigation • Recognizes water budgets as articulated in 17.16.670 (irrigation accounts) • Encouragement of utilization of rainwater and reuse, but no allowance • Definition of small spaces and imitation on sprinkler type in small places • Soil amendment and structured soil requirements • Mulch requirement • Reference to containment and code • Preservation of existing trees; but no water or stormwater allowance • Water features as oasis-zone landscape elements • Irrigation systems standards; references SLC BMPs for the Conservation and Protection of Water Resources - Also contains technical language on efficiencies; smart controllers; rain sensors; irrigation of small spaces; pressure regulators Chapter 21A.26.01 Water—Efficient Landscape Regulations Next Steps • Reconcile staff and consultant drafts • Present draft to Planning Commission for approval • Begin public comment phase • Make adjustments and edits as necessary • Submit to Mayor's Office for review and approval • Submit to City Council for review and approval • Adoption of Code Chapter 21A.26.01 Water-Efficient Landscape Regulations 171' Parallel Documents in construction • Water-wise Plant List (SLC Plant and Turf Guide) - Establishment of hydrozones - Assignment of plants to appropriate hydrozones - Development of hydrozone calculations Development of BMPs for conservation and Protection of Water Resources - Identify best management practices in irrigation and landscape design to enhance water efficiencies - Development of Water Efficient Landscape Worksheets o Hydrozone Table o Water Allowance Calculations o Certificates of Completion Development of Plant guide as web-based data base Chapter 21A.26.01 Water- Efficient Landscape Regulations PUAC Action • Option A: motion to support the draft as presented by consultant • Option B: motion to support draft as amended by staff • Option C: support draft with following provisions • Option D: no action or recommendation on water efficient landscape regulations • Option E: oppose water efficient landscape regulations Project Calendar January-September: Peer and Stakeholder Review USU Utility Divisions: Drinking Water, Stormwater, Backflow, Construction Review Department of Parks and Open Space Red Butte Garden Utah Nursery and Landscape Assoc. Industry Experts September: Submitted to Mayor's Office Ordinance with Consultant's Edits Ordinance with SLCDPU's Edits SLC BMPS for the Conservation and Protection of Water Resources SLC Plant and Turf List October: forwarded to City Council with Support December-March: Public Outreach and revisions/corrections Spring 2012: City Council Calendar (These minutes reflect a more extensive presentation, from Stephanie Duer, the committee was given the condensed version) Street Lighting Update—Rick Giardina Red Oak Consulting At the direction of the City Council the Department of Public Utilities (Utility) formed a Committee in August 2011 comprised of residential, commercial and other community stakeholders. The Committee's purpose was to evaluate and recommend a sustainable funding solution for street light services in Salt Lake City. Red Oak Consulting (Red Oak) served as the lead facilitator for the meeting. There were 4 meetings held. In the final Committee meeting held on October 26, 2011, six policy options and questions were put forth to the Committee members present during this meeting. Question #1: Does the Committee favor funding an expanded or enhanced street lighting service level option ($4.0 million annually) or funding a status quo street lighting service level ($2.4 million annually)? The expanded service level option ($4.0 million)provided for funding of annual operation and maintenance (O&M) expenditures as well as additional annual capital replacement expenditures for existing infrastructure and phased energy efficiency retrofits (over an eight year period). The status quo service level provides funding for annual O&M expenditures without a dedicated capital funding source; capital requirements would be funded annually by general fund based sources. It should be noted that even at $2.4 million per year this would be an increase over the funding amount provided over the recent 2-3 years. Both service level options fully fund the City's street light maintenance contract as well as billing costs (as allocated to the street lighting function), under the fee based funding option. Outcome: 12 Committee members voted in favor of the status quo ($2.4 million service level); no one opposed and one member abstained. Discussion: The Committee had strong reservations about moving immediately to the $4.0 million funding level given current economic conditions in the City. However, the Committee also fully supported the energy efficiency initiatives and pro-active capital replacement elements that are a part of the $4.0 million level program. As such,the Committee recommended, as part of this question, that the $4.0 million service level be implemented within the next five years in order for the community to benefit from the cost savings associated with the planned eight-year energy efficiency program and migrate to a pro-active capital replacement program. Question #2: Does the Committee favor funding the desired service level through tax based sources or fee based sources? Tax and special assessment area based funding sources are the historical street lighting funding sources. If selected the tax funding of the street light program would continue to compete with other general fund needs and would be subject to annual appropriations that would, like in prior years, be subject to material reductions. Fee based funding sources would provided a sustained level of funding while freeing up previous general fund street light appropriations for other purposes (upwards of$2 million per year) and generating funds from tax-exempt properties that currently do not contribute to the funding of the street light program. Outcome: 8 Committee members voted in favor of a fee based funding source and 4 members voted in favor of a tax based funding source; one member abstained. a) an a Discussion: The votes were generally split along the lines of residential (favored a fee based approach) vs. business (favored a tax based approach). Those opposed expressed concern that the impacts on individual businesses (generally, small locally-owned businesses) could be significant and contribute to an already difficult economic situation. Concern was also expressed that it was not a given that these costs (a fee) could merely be passed-on to consumers; there was a feeling that some of these costs might have to be absorbed by the business owner. At the recommended funding level ($2.4 million) the resulting monthly cost per residence was illustrated at $1.94 and this was not viewed as being unduly burdensome. Those voting in favor saw the impacts as being indicative of the benefit received and that this nexus was not achievable under a tax based funding approach. Question #3: Does the Committee favor the City's privately funded lighting program or an assessed area based program to fund an enhanced service level program? The privately funded lighting program provided one mechanism to fund future enhanced service level requests and is a program that is well liked by citizens. As used to fund enhanced service levels under a fee based program, the private light program could be used and the enhanced costs would continue to be directly funded by private contributions. Assessed area based funding provides a second mechanism to fund future enhanced service level requests that may be incorporated into either tax (assessment) for fee (surcharge) based funding approaches. Under a fee based funding program an approach similar to as assessed area approach can be used to fund enhanced service levels; however, the initial capital requirements would be subject to the availability of funds. Outcome: 4 Committee members voted in favor of the privately funded lighting program and 8 members voted in favor of an"assessed area"type program to fund future enhanced service level programs under a fee based funding approach. Discussion: The detailed elements of this question will require development, i.e., how can an assessment-type program be used to fund enhanced service level requests under a fee based program? The current proposed fee based program would have four fee categories: 1. a base fee paid by all accounts 2. a surcharge (in addition to the base fee) for accounts in the current central business district and industrial Special Assessment Areas (SAAs) 3. a surcharge for account in the current Rose Park SAA 4. a surcharge for account in all the other current SAA's A mechanism to exempt or reduce the base fee for properties will be developed as recommended by the Committee under policy question 6. One approach would be to use the current SAA "formation process" as the mechanism for neighborhoods to request enhanced service levels and then be placed in one of the three "surcharge" fee categories and pay a surcharge for the enhanced service. As previously noted, the "formation process" would require further development L� a) a Question #4: Does the Committee favor allowing or not allowing the creation of future privately funded lighting programs? The privately funded lighting program has provided one mechanism for neighborhoods to obtain additional street light coverage without forming an SAA; it is a program that is well liked by citizens. Under this program, the City approves the lighting options and property owners are responsible for the upfront costs. The on-going O&M expenses and capital replacements remain the responsibility of the neighborhood group. Owners are not always aware of these responsibilities after the initial creation and hence, one of the criticisms or concerns with this program is the on-going upkeep of the privately-owned street lights; the City has no responsibility or authority regarding these lights. Outcome: 11 Committee members voted in favor of and 1 member voted against allowing future privately funded lighting programs. Discussion: The Committee felt that the program, in spite of the on-going O&M and replacement concerns, served a needed demand and should be continued regardless of the tax vs. fee funding question. Question #5: Does the Committee favor or not favor funding an energy efficiency lighting program to retro-fit available lights over eight years? Under the enhanced service level option, energy efficiency retro-fits are funded over an eight- year period. The program includes annual fixture replacement in addition to a dedicated energy efficiency program within assessed and non-assessed areas. The benefit of the program is a projected reduction n annual energy use and costs with more efficient fixtures. Not all lights and fixtures can be converted. The retro-fit includes existing high pressure sodium, mercury vapor, and metal halide fixtures (approximately 80% of the assessed and non-assessed systems). Florescent and incandescent fixtures are not included because these fixtures do not lend themselves to upgrades. LED and induction fixtures are high efficiency and would not need a change. By not directly funding the program, the City would more gradually retro-fit lighting fixtures as they fail and as alternative funding sources become available; the program would be implemented over many more years than if the pro-active, eight-year program is adopted. Outcome: 12 Committee members voted in favor of energy efficiency fixture replacements, but under a delayed program subject to funding sources being identified. Discussion: Because of the Committee's vote on question#1, there was no discussion on this topic— start with the status quo but move to the expanded-enhanced service level, including energy efficient fixtures within five years. Question #6: Does the Committee favor the City exploring a policy to provide full or partial exemptions for the large properties with no or limited street lights? CO a) bA a. There are large non-residential properties with no or limited street lighting service. Should such properties pay the full fee based on the front footage of the property or receive a full or partial street lighting fee exemption? Outcome: 11 Committee members voted in favor of the City exploring a policy to provide for full or partial exemptions for large properties with limited or no street lighting service when such exemption requests are initiated by the customer; 1 Committee member voted against exploring such a policy. Rick explained that the proposed rates have changed from the original committee recommendations to cover additional salary costs and add to needed catch up maintenance costs • which were not included in the committee recommendation. This raised the base fee up from $1.94 to $2.29. The Committee members then discussed questions regarding this issue. - Is there going to be a downstream ripple effect that we are not really addressing at this time? - Is pre-existing lighting getting a discount for private lighting? - Does cost reflect the size and scope of businesses? - Is SAA being phased out? - Is this a special fund? - This does not appear to be a valid comparison, on how it will impact the community? - If it is an enterprise fund, does the city have to pay some of the cost? - Are tax exempt properties going to be exempt? - Does the tax savings go into a pool for future use? - Is the fee dedicated? The Board discussed whether the proposal was a fee or really a tax. Camille Winnie of the Downtown Alliance stated that the downtown business district was very concerned on how this new fee will affect each of their businesses. The Board discussed how much of this fee will be passed on to the resident from exempt organizations and businesses and is it really cheaper to implement a new fee rather than an increase in property tax to fund the system improvements. Jeff Blair who represented City Council District number 5 on the Citizens Committee said that he has informed his community of the proposals and his Community Council recommend the fee approach to improve the street lighting in the City. Dixie mentioned, at the last Street Lighting meeting, there were 9 members not there to vote, so the entire committee did not get to vote on the process. She was concerned that the voting did not represent the entire group. The Board agreed that this will be a political issue and should be decided by the City Council. They recommended that the Committee results be passed on to the Mayor and City Council for their review. Meeting Adjourned at 8:46 a.