HomeMy WebLinkAboutAgenda Packet 09/09/2008
Utility Advisory Committee
Public Works Conference Rom
Port Angeles, W A 98362
September 9,2008
3:00 P.M.
AGENDA
I. Call To Order
II. Roll Call
III. Approval Of Minutes For August 12,2008
IV. Late Items
V. Discussion Items
A. Water And Wastewater Utility Rates and Fees
B. Conservation Marketing Update
C. Utility Discounts and Conservation Programs
VI.
Next Meeting Date:
October 14, 2008
VI. Adjournment
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UTILITY ADVISORY COMMITTEE
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Utility Advisory Committee
Public Works Conference Room
Port Angeles, W A 98362
August 12, 2008
1 :00 p.m.
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I. Call To Order
Chairman Reed called the meeting to order at 1 :00 p.m.
II. Roll Call
Members Present:
Chairman Reed, Betsy Wharton, Dan Di Gui1io, Karen Rogers
Members Absent:
Orville Campbell
Staff Present:
Mark Madsen, Glenn Cutler, Yvonne Ziomkowski, Mike
Puntenney, Steve Sperr, Larry Dunbar, Phil Lusk, Cate Rinehart
Others Present:
Angie Sanchez - FCS Group
Sergey Tarasov - FCS Group
Shirley Nixon - Citizen
LaTrisha Suggs - Lower E1wha K1allam Tribe
Robert E10fson - Lower E1wha K1allam Tribe
III. Approval of Minutes:
Chairman Reed asked ifthere were any corrections to the minutes July 8, 2008. Councilman Di
Guilio moved to approve the minutes. Counci1member Rogers seconded the motion, which
carried unanimously with Counci1member Wharton abstaining due to absence.
IV.
Late Items
None
V. Discussion Items:
A. Utility Cost Of Service Studies
Larry Dunbar, Deputy Director of Power Systems introduced Angie Sanchez and Sergey Tarasov
ofthe FCS Group. Ms. Sanchez distributed a handout and gave a powerpoint presentation based
on that information. There was a lengthy discussion on system development charge updates, an
overview of the rate study process, fiscal policies, the rate study, and connection charge updates.
Councilmember Wharton moved to recommend City Council proceed with a public
hearing on the cost of service studies for the Water and Wastewater Utilities. Councilman
Di Guilio seconded the motion, which carried unanimously.
UTILITY ADVISORY COMMITTEE
August 12,2008
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B. Electric Utility Rate Study
Larry Dunbar, Deputy Director of Power Systems, distributed a handout regarding the issue. A
review of the study included replenishment of cash reserves, a proposal to increase electrical, :,
permit fees, and add a line crew III 2009, and rate and fee adjustments. The public h~aring will be
delayed because the Bonneville Power Administration is not expected to announce wholesale
generation rates until September 22,2008. A discussion followed.
Councilmember Rogers moved to recommend City Council proceed with a public hearing ,
on this year's rate study for the Electric Utility. Councilman Di Guilio seconded-the
motion, which carried unanimously.
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C. Electric Utility 2008 Resource Plan
Phil Lusk, Power Resources Manager, explained that the City's electric utility must comply with
a Washington State mandate to develop a Resource Plan. He also described the steps to be taken
such as a public notice and hearings, Council approval, have the plan published on the City
website, and comments received at the August 5, 2008 public hearing. There was a brief,
discussion.
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Councilman Di Guilio moved to recommend City Council approve the Electric Utility. 2008 '
Resource Plan. Councilmember Rogers seconded the motion, which carried unanimously.
D. Morse Creek Hydro Project Public Notice
, Phil Lusk, Power Resources Manager, noted that the City was required by the Washington State
, Department of Ecology to publish a public notice ofthe, draft Clean Water Act section 401
certificatIOn application and included a copy for review. A discussion followed.
Information only. No action taken.
VI. Next Meeting Date: September 9,2008 at 3:00 p.m. (Agenda may extend the meeting
to 6:00 p.m.)
VII. Adjournment:
The meeting was adjourned at 4:18 p.m.
Chairman Reed
Cate Rinehart, Admin Spec II
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~ORTANGELES
WAS H I N G TON, U. S. A.
Utility Advisory Committee Memo
Date:
September 9,2008
To:
Utility Advisory Committee
From:
Kathryn Neal, P.E, Engineering Manager
Subject:
Landfill Post-Closure Consultant Agreement
Summary: An agreement for professional services is being negotiated for Post-Closure activities
at the Port Angeles Landfill (P ALF). It is anticipated that a proposal to approve the Professional
Services Agreement will be brought to the October 7, 2008 City Council meeting.
Recommendation: For information only, no action requested.
Background/Analysis: Two landfill closure projects were completed in 2007, the Slope
Stabilization Project, and Port Angeles Landfill Closure Project. Subsequent monitoring and
maintenance of the closed landfill is now governed by two documents: (1) the March 2008 P ALF
Post-Closure Plan, approved by Ecology and Clallam County Environmental Health Services
Division of the Department of Health and Human Services (CCEHS), and (2) a Solid Waste
Handling Facility Permit issued by CCEHS on August 29, 2008.
The permit conditions defme monitoring and maintenance activities required of the City. In
general, the City is required to monitor and protect groundwater quality, air quality, and surface
water quality. This includes leachate sampling as part ofthe groundwater monitoring program and
monitoring the condition of the shoreline in front of the seawall, installing beach nourishment if
and when it is necessary. The permit expires at the end of2013, and subsequent permits will be
issued to cover the entire post-closure period, which is likely to be 30 years.
The scope of work for the professional services agreement is in support of City compliance with
the permit conditions. The required tasks include working with the City to produce biannual and
annual reports, certified by a registered hydro geologist, that address the following:
· hydrologic conditions, analysis of monitoring results, and calculations of groundwater flow
rates and direction
· summary of leachate analysis
· analysis of beach transects and recommendations for beach nourishment
· macro-algae survey is required in 2009
N:\UAC\Fmal\Landfill Post Closure consultant Agreement - for mfo only.doc
Landfill Post-Closure Professional Services Agreement
September 9, 2008
Page 2 of2
The City advertised for proposals from qualified engineering firms, and received 5 responsive
proposals on August 28, 2008. The selection committee met, analyzed the proposals, and selected
the best qualified proposal. City staff are now negotiating an agreement with the selected
consultant, including the scope of work and fee structure. Tasks will include work to be completed
before the end of2008, as well as for 2009. Tasks to be completed in 2009 will not be issued until
after the 2009 Landfill Post-Closure budget, as part of the overall 2009 City budget, is approved by
City Council. It is anticipated that a proposal to approve the professional services agreement will
be brought to the October 7, 2008 City Council meeting.
~ORTANGELES
WAS H I N G TON, U. S. A.
Utility Advisory Committee Memo
Date:
September 9,2008
To:
Utility Advisory Committee
From:
Larry Dunbar, Deputy Director of Power Systems
Subject:
Water & Wastewater Utility Rates & Fees
Summary: FCS Group completed comprehensive rate studies for the Water and Wastewater
utilities. The studies were presented to the Utility Advisory Committee last month including the
recommended retail rate and fee adjustments. It will be necessary to adjust retail rates and fees at
this time to maintain the funds in a financially prudent posItion.
Recommendation: Forward a favorable recommendation to City Council to proceed with
the proposed rate and fee adjustments for the Water and Wastewater Utilities.
Background/Analysis: Earlier this year, the City contracted with FCS Group to complete
comprehensive rate studies for the Water and Wastewater utilities. The scope of work included: a
cost of service analysis for each utility; review of water and wastewater system development
charges, review of water connection fees; and review of the wastewater permit fee.
On August 12,2008, FCS Group presented the rate studies to the Utility Advisory Committee. At
that time the Utility Advisory Committee recommended that City Council proceed with a public
hearing on the rate studies. The City Council public hearing was held on September 2, 2008. At
today's meeting staff will summarize the input received at the September 2,2008 public hearing
and any additional input received since then.
Staff recommends that the Utility Advisory Committee forwards a favorable recommendation to
City Council to continue the public hearing, close the public hearing, then adopt rate and fee
ordinance amendments. The proposed rate and fee adjustments would be effective January 1,2009.
N'\UAC\Fmal\Water & Wastewater UtIlIty Rate RecommendatIOns doc
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Review of the Water' and"Sewer
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Public Hearing Comments
1. Spoke in favor of a residential conservation rate for
the water utility.
2. Suggested the City ,consider changing the
residential wastewater rate, design that charges a based
charge fo~ either under or over 430 cubic feet of water
consumption,. He shared that the City ~f Sequim uses 800
'cubic feet and that the Clallam County PUD uses 1,000
cubic feet~
3 Spoke in favor of th~ new irrigation rate and if City
parks could take advantage of siphoning water into an
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aquifer. '
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Public Hearing Comments
4. Concerned that the proposed water base charge
discourages water conservation, and 'when combined with
the proposed wastewater base charge ~ould total a "
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minimum of $73.93 ,before any water consumption. ,',
5. Spoke in favot of the connection and system
development charge increases.
6. ,Suggested that the City consider use of the Tse-
whit-zen reserve fund to help the ~ater utility with an '
anticipated ,future bond issue. " " ' I '
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Existing Rate Structures
22.70 .32.15
24.65, 34.30
1" 27.50 37.85
1 1/2" 50.95 66.70
2" 79.70 101.50
3'.' 182.20
4" 297.80
,6" 586.65
8" and 10" 933.05
Flat Meter Charge 48.95
Variable Charges / ccf
Residential! Irr $1.82
COlmnercial / Irr 1.4 7
Industrial 1.3 5
Wholesale - Gales According to the wholesale contract
Wholesale - Baker ' Accprding to the wholesale contract
<430cf
>430cf
CSO <430cf
CSO >430cf
Commercial $
CSO Commercial
Volume Fee
Single Family Residential
$ 37.55
41.70
7.95
8.90
N/A
N/A
N/A
N/A
Commercial
9.80 $
2.05
2.80
0.70
Septic Hauler ($/gallon)
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0.11
Proposed Rate Structures
5/8" $ 24.63' $ , 34.88 $ 30.04
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3/4" :, 26.75 37.22 32.05
1" 29.84 41.07 35.37,
1 1/2" 55.28 72.37 62.32
2" 86.4 7 ' 110.13 94.84
3" 197.69 170.24
4" 323.11 278.25
6" , ' 636.'52
8" and 10" 1,012.36
Flat Meter Charge
Residen tial
Commercial
Irrigation
Industrial
Wholesale - Gales
Wholesale - Baker
1.59
1.71
1.46
According to the wholesale contract
According to the wholesale contract
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Single Family Residential '
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CommercIal' $
CSO Commercial
Commercial
10.75, $
2.65
3.07
0.90
Septic Hauler ($/gallon)
VolumeFee ' $
0.12
Notes:
1. Proposed fixed charges to be rounded to
nearest nickel.
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2. Irrigation fixed charge does not include
state excise tax or fire flow protection
3. Residential customer Distribution:
0-1 Occf - 82%
10-15ccf-11%
15+ccf - 7%
Proposed Connection Fees
Water Service Conne'ctio,n Fees Current Fee 2009 Fee 2010 Fee 2011 Fee
:
New Residential , \
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1" Service Size' 5/8" Meter* $ 770 $ 980 $ 1,190 $ 1,395
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1'~ Service Size; 3/4" Meter* I $ 805 $ 980 $ 1,190 $ 1,395
1" Service Size; 1" Meter* $ 8~0 $ 1,060 $ 1,290 $ 1,515
New CommercIal/industrial
1" SerlJice Size; 1" Meter $ 1,390 $ 1,515 $ 1 ,515 $ 1,515
1-1/2" Service Size; 1-1/2" Meter* $ 2,085 $ 2,700 $ 3,315 $ 3,930
, , Based on actual cost; Based on actual
2" Service Size; 2" Meter* $' 2,785 Based on actual cost;
$2,700 min. $3,315 min. cost; $3,930 min.
* Larger increases phased-in over: t~ree years
Sewer Connection Current Fee Proposed 2009
Single-family houses $ 120 $ 135
Multi-family $ 120 $ 135
All Other Structures * $ 135
* based on gross sq feet
Water Drop-In Service Connection Proposed 2009
Fees \ New Fee
New Residential ,
1" Service Size; 5/8" Meter , $ 240
1" Service Size; 3/4" Meter , $ 255
,
1" Service Size; 1" Meter I $ 340
1-1/2" Service Size; 1-1/2" Meter $ 585
Street Cut'Fees Current Fee Proposed 2009
Fee
With Traffic Control $6.72 per Sq. Ft. $15 per Sq Ft
Without Traffic Control $4.53 per Sq, Ft. $13 per Sq Ft
* average street crossing 2' X 32'
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Proposed Temporary Service Fees
Water Meter Current fee 2009 fee 2010 fee 2011 fee
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Temporary $50 $100 $150 $200
Hydrant $50 $150 $300 $450
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Summary of Proposed Rates
· Water Utility
~ 8.5% rate increase in 2009
- Conservation based rate for residential
- Separate Irrigation class
· Sewer Utility (no CSO)
- 4.0% rate increase in 2009
- 2.0% residential and 9.74% commercial. .
· Public -Ptility Tax
- 2.0% increase in 2009
· Sewer UtilityCSO
- $2.30 - $2.60 in 2009 for residential customer
· Water & ~ewer SDC to $2,OOO/ERU ^over 3 years
· I Connection, permit, street cut, temporary charges
SHIRLEY NIXON
PO Box 178; Port Angeles, WA 98362
(360) 417-0850
shirleynixon@olympus.net
September 9,2008
City Council & Utility Advisory Committee
City of Port Angeles, Washington
98362
Re: Comments on Proposed Rate & Fee Adjustments for Water & Wastewater Utilities
Dear Mayor Braun, City Council Members, and Members of the Utility Advisory Committee,
I have been a resident of Port Angeles and utility rate-payer since 1997. Because of my
professional background working with Washington water law and municipal water law issues, I
am familiar with some of the financial and management challenges facing public water utilities
today, and offer these comments against this backdrop and perspective.
I. Establish better rate-payer equity among customer classes. It appears that Port
Angeles's long-standing water & sewer rate & fee structures have burdened and are burdening
residential customers with an unfair share of operating, capital, debt, and system replacement
expenses. It will take a greater overhaul of the rate/fee structure than is presently proposed in
order to establish a more equitable balance among rate classes. It also appears that this 2009
rate proposal is likely on too fast a track to accomplish the needed changes before the end of
this year. Steps that the Council could immediately consider include:
A. Immediately adjust cost of service rates to reflect actual costs for each customer
class, rather than phasing-in the adjustments over time.
B. Immediately update connection charges and fees to reflect actual costs, rather than
phasing them in over three years.
C. Begin negotiations with Nippon to update the rate it pays for the water used in its
industrial processing. The monthly "industrial" rates charged to the mill itself appear not to
reflect "industrial" water use in the traditional sense. Those rates, the smallest of all customer
classes, appear to be tied to water uses that are incidental to the industrial paper-making
process itself. In other words, these rates are more like commercial uses than industrial uses,
and should be charged at commercial rates. The Industrial water rates paid by the Nippon Mill
apparently have not substantially changed since 1929. According to the terms of a contract
negotiated between the city and the waterfront mills that year, the Nippon Mill pays the City
the flat rate of a mere $15,500 per year for the use of up to 20 Million Gallons of industrial
process water a day. This translates to under $1300/month; yet the mill is entitled to use a
whopping 600 million gallons a month. Compare this rate structure to that of a typical
residence using 5000 gallons a month. The residential customer will pay well over $75/month
in water/sewer charges just to be connected to the public water/sewer system. My calculator
figuratively "choked" when I tried to calculate what the mill would pay for 600 million gallons a
month at the proposed new residential rate of $1.92 for every 100 cubic feet (750 gallons) of
water use. Needless to say, I doubt that the city's water utility would be facing such a severe
financial crisis if the mill were being charged for its industrial water use at rates anywhere near
those charged to residential or commercial customer classes.
II. The City should adopt a conservation rate structure across all customer classes
in order to encourage water conservation.
III. Suspend irrigation rates until the Council and public clearly understand and
endorse the policy reasons and criteria for assigning them. The rate/fee proposal calls for
encouraging the expansion of the "irrigation class" rate structure, but the policy reasons for this
are unclear to me. Perhaps if the city code more clearly spelled-out who is entitled to
"irrigation rates" and the criteria for awarding them, I would better understand this. As I
understand it, persons or entities paying "irrigation" rates pay a lesser rate for the quantities of
water used, and they pay no wastewater rates tied to their water usage. My research into the
types of irrigation-rate customers revealed a puzzling (to me, at least) mixture of persons and
entities paying these rates.
IV. Use some of the $7.5 million graving-yard settlement money for updating
water/sewer utility infrastructure, rather than relying so much upon bonded indebtedness.
To say that the City's utility system is suffering ill effects from too-long deferred maintenance
expenditures is an understatement. And, the present proposal budgets too little money for
utility capital infrastructure and emergency accounts. Millions of state taxpayer dollars are now
lying in a City fund account, awaiting expenditure for ???? It's time to begin a public
discussion of how best to apply these funds for the good of the community. I believe a strong
argument exists for applying a substantial portion of the money toward upgrading our
water/sewer utility infrastructure.
Thank you for considering my comments.
,,/
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Shirley Nixon ~
~ORT ANGELES
WAS H I N G TON, U. S. A.
Utility Advisory Committee Memo
Date:
September 9,2008
To:
Utility Advisory Committee
From:
Phil Lusk, Power Resources Manager
Subject:
Conservation Marketing Update
Summary: Staff recently renewed its marketing efforts for the City's energy conservation
program. Current efforts include a multimedia awareness campaign targeting residential customers
to participate in the conservation program.
Recommendation: For information only, no action requested.
Background/Analysis: Staff is renewing its efforts to market the City's energy conservation
program. Current efforts focus on an awareness campaign for residential customers using radio
(KONP) and print media (Peninsula Daily News), with a particular focus on promoting the new
low-interest conservation loan (currently 4.25%) for qualified home and business improvements.
Utility bill inserts have also proven to be an effective and efficient way to promote conservation.
Staff is also updating the marketing plan to target six specific utility customer classes including: I)
single-family homeowners; 2) low-income customers; 3) manufactured homeowners; 4) small
commercial customers; 5) larger commercial customers, and; 6) primary and industrial
transmission customers.
The marketing plan will schedule activities and advertising campaigns for the last year of the
Bonneville Power Administration's Conservation Rate Credit program. The marketing plan will
address the anticipated obstacles that need to be overcome to increase customer participation in the
conservation program.
N.\UAC\Final\ConservatlOn Marketmg Update. doc
FORTANGELES
WAS H I N G TON, U. S. A.
Utility Advisory Committee Memo
Date:
September 9,2008
To:
Utility Advisory Committee
From:
Phil Lusk, Power Resources Manager
Subject:
Utility Discounts and Conservation Programs
Summary: The City provides a utility discount to qualified low-income senior and low-income
disabled citizens receiving utility services. The City's energy conservation program can provide
conservation home improvements at no cost to many customers receiving a utility discount.
According to the Port Angeles municipal code, customers can maintain the utility discount if they
participate in City conservation programs.
Recommendation: For information only, no action requested.
Background/Analysis: The City provides up to a 30% discount to qualified low-income
senior and low-income disabled citizens receiving utility services. During the last year a total of
337 customers received discounts for electric service, which totaled about $50,000. While it is
important that utility discounts continue, it's in the best interest of all ratepayers for customers that
receive a discount to use energy and water as efficiently as possible.
The Bonneville Power Administration's Conservation Rate Credit (CRC) program offers
conservation home improvements at no cost to many customers that receive a utility discount. One
of the Port Angeles municipal code (P AMC) qualifications is that the discount recipient agrees to
participate in all of the City's available conservation or consumption reduction programs. Under
Section 13.20.50A.B of the PAMC, "Failure of the applicant to participate in an available
conservation or consumption reduction program, after receipt of a utility discount, shall constitute
a basis for denial by the City of participation in the utility discount program during the ensuing
years. "
While most customers that currently receive a utility discount are potential conservation program
participants, staff estimates that the initial target audience will be the 100-150 customers now
occupying single-family homes. Owner-occupied single-family homes will be the starting point,
followed by tenants of single-family homes after receiving the owner's consent to participate.
As part of the 2009 utility discount application process, in cooperation with the Finance
Department staff plans to determine if any conservation home improvements are available at no
cost to customers requesting the utility discount, which would be required to be installed in order
to maintain the discount.
N.\UAC\Fmal\Utlhty Discounts and ConservatIOn Programs. doc