HomeMy WebLinkAboutAgenda Packet 10/09/2007
Utility Advisory Committee
Public Works Conference Room
Port Angeles, W A 98362
October 9, 2007
3:00 P.M.
I. Call To Order
II. Roll Call
III. Approval Of Minutes For September 11, 2007
Approval Of Minutes For September 17,2007
IV. Late Items
V. Discussion Items
A. DOE CSO Loan Application
B. BP A Power Sales Contract Revision
C. BP A Delegation Agreement
D. CFL Markdown Promotion Agreement
E. Water Rates
VI.
Next Meeting Date:
November 13, 2007
VII. Adjomment
Utility Advisory Committee
Public Works Conference Room
Port Angeles, W A 98362
September 11, 2007
3:00 P.M.
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L Call To Order
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Chairman Reed called the meeting to order at 3:00 p.m.
IL Roll Call
Members Present:
Chairman Reed, Karen Rogers, Larry Williams, Betsy Wharton,
Orville Campbell
Members Absent:
Grant Munro
Staff Present:
Bill Bloor, Glenn Cutler, Mike Puntenney, Yvonne Ziomkowski,
Scott McLain, Larry Dunbar, Steve Sperr, Kathryn Neal, Amanda
Roberts, Tom McCabe, Terry Dahlquist, Cate Rinehart
Others Present:
Brian Gawley (3:24) - Daily News
Paul Lamoureux - Citizen
IlL Approval of Minutes:
Chairman Reed asked ifthere were any corrections to the minutes of August 14,2007.
Councilmember Wharton moved to approve the minutes. Mayor Rogers seconded the motion,
which carried unanimously.
IV.
Late Items:
Lease For Interim Light Operations Facility
V. Discussion Items:
A. Transportation Benefit Districts
Glenn Cutler, Director of Public Works and Utilities, briefed the committee on the modification
ofESHB 1858 noting the ability for cities to impost a vehicle registration fee of up to $20 per
vehicle. There was a brief discussion.
Information only. No action taken.
B. DOE Storm water Grant Application
Steve Sperr, City Engineer, explained that the City intends to apply for one or several grants
UTILITY ADVISORY COMMITTEE
September 11, 2007
under the Department of Ecology's Stormwater Management Implementation Grants Program for
FY2008. The grants would be for 75% ofthe total project cost, with a required 25% local match.
Applications for this new program are due October 15, 2007. A discussion followed.
Mayor Rogers moved to recommend City Council authorize the Mayor to (1) sign up to two
grant applications, in a total amount not to exceed $600,000, and (2) if either or both grants
are approved, authorize the Mayor to execute the grant agreement(s). . Councilman
Williams seconded the motion, which carried unanimously.
C. Power Line Tree Trimming
Terry Dahlquist, Electrical Engineering Manager, noted that due to a shortage of people the cost
per hour has increased substantially this year and less trimming would be accomplished than in
2006. There was a brief discussion.
Councilmember Wharton moved to recommend City Council award and authorize the
Mayor to sign a contract for the Power Line Tree Trimming with Asplundh Inc., in an
amount not to exceed $45,000, including tax. Orville Campbell seconded the motion which
was passed on a vote of four to one with Councilman Williams in opposition.
D. Conservation Funding
Larry Dunbar, Power Resources Manager, pointed out that the energy savings from self-funded. .-
conservation programs can increase the high water mark by 25% more than BP A funded
programs. Notification reservations need to be submitted by September 17,2007. There was a
brief discussion.
Information only. No action taken.
E. Energy Conservation Loans
Larry Dunbar, Power Resources Manager, reviewed the terms and conditions of the loans noting
that the proposed ordinance amendment would establish a separate conservation fund and allow
its surplus to be used for them. A discussion followed.
Staff was directed to return to a future meeting after further research had been done.
F. Solid Waste Rate Adjustments
Larry Dunbar, Power Resources Manager, distributed a handout and gave a presentation based on
that information. Recommendations include a 7 1/2% rate increase for the transfer station and a
7% rate reduction for solid was collections. There was a lengthy discussion.
UTILITY ADVISORY COMMITTEE
September 11, 2007
Continued to September 17, 2007.
G. Lease For Interim Light Operations Facility
Continued to September 17, 2007.
VL Next Regular Meeting Date: October 9,2007
VIL A djornment: The meeting was adjourned at 5:06 p.m.
Chairman Reed
Cate Rinehart, Admin Spec II
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Utility Advisory Committee - Continued From September 11, 2007 ~ ~^
Public Works Conference Room #'It ~ ~
Port Angeles, W A 98362 ,-
September 17, 2007 ,;
3:00 PM
L Call To Order
Chairman Reed called the meeting to order at 3:00 p.m.
IL Roll Call
Members Present:
Chairman Reed, Betsy Wharton, Richard Headrick, Orville
Campbell, Larry Williams
Members Absent:
Karen Rogers, Grant Munro
Staff Present:
Mark Madsen, Bill Bloor, Glenn Cutler, Mike Puntenney, Scott
McLain, Larry Dunbar, Tom McCabe, Terry Dahlquist, Cate
Rinehart
Others Present:
Brian Gawley (3:11) - Daily News
IlL Discussion Items
A. Solid Waste Rates
Larry Dunbar, Power Resources Manager, distributed a handout and gave a presentation based on
that information. There was a lengthy discussion on State refuse collection tax exemptions and
City utility taxes.
Councilman Headrick moved to support the staff recommendation to proceed to a public
hearing and to increase the utility tax collection that entities must pay so that the 2008
utility tax revenues are neutral. Council member Wharton seconded the motion which was
passed on a vote of four to one with Chairman Reed in opposition.
B. Lease For Interim Light Operations Facility
Terry Dahlquist, Electrical Engineering Manager, reported that as a result of the sale ofthe
Public Works and Utilities Light Operations building, the City had been negotiating with the Port
of Port Angeles to lease space at the Airport Industrial Park for an interim Light Operations
facility. Councilmember Wharton left at 5: 11 p.m. There was a brief discussion.
Councilman Williams moved to recommend City Council authorize the City Manager to
sign a lease with the Port of Port Angeles for leasing space for the Light Operations
UTILITY ADVISORY COMMITTEE
September 17, 2007
function at 2007 South 0 Street, and to negotiate minor modifications, if necessary, and
reject bids for the Light Operations Building Modifications, Project 06-37. Councilman
Headrick seconded the motion, which carried unanimously.
IV.
Next Meeting Date:
October 9,2007
v.
Adjornment: '
The meeting was adjomed at 5:17 p.m.
Chairman Reed
Cate Rinehart, Admin Spec II
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WAS H I N G TON, U. S. A.
Utility Advisory Committee Memo
October 9, 2007
Utility Advisory Committee
Stephen Sperr, P.E., City Engineer
Combined Sewer Overflow Loan Application for FY2009
Summary: The City has committed to completing the Phase 1 Combined Sewer Overflow (CSO)
Projects by the end of2009. While the City has several Public Works Trust Fund loans associated
with these projects, to fully fund all the work an additional loan is needed. The Department of
Ecology's funding cycle for fiscal year 2009 includes a deadline for submission of applications by
October 31, 2007.
Recommendation: Forward a favorable recommendation to City Council to authorize the
Mayor to sign the Fiscal Year 2009 Funding Cycle Application certification, in an amount
not to exceed $5,000,000. In addition, if a grant or loan is approved, authorize the Mayor to
execute the agreement.
Background/Analysis: The City is pursuing a Department of Ecology State (DOE) Revolving
Fund loan to assist in fully funding $19M in Combined Sewer Overflow (CSO) Phase 1 Projects.
The deadline for submission of applications for Washington State fiscal Year 2009 (which begins
June 1, 2008) is October 31, 2007. Table 1 below includes a breakdown of the costs.
Table 1 - Summary of Phase 1 CSO Project Costs
Project Pre-design Cost Detailed Design Estimated
Cost Construction Cost
Francis Street Sewer Main $2,930,000
Storage Tank Modifications $3,500,000
Force Mains from Pump Station 4 $425,000 $1,320,000 $5,060,000
Front Street Sewer Main $2,550,000
WWTP and Outfall Modifications $1,730,000
Subtotals: $425,000 $1,320,000 $15,770,000
Property Purchase Cost + $1,625,000
Total Cost, Phase 1 $19,140,000
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DOE CSO Loan Application
October 9,2007 UAC Meeting
Page 2 of2
Table 2 outlines the proposed funding of the Phase 1 CSO Projects. The City has obtained three
Public Works Trust Fund (PWTF) loans, and anticipates receiving a fourth one for $10,000,000.
The City still (1) needs $3.4M to fully fund the projects, and (2) would like to use the DOE's State
Revolving Fund (SRF) loan program as the local match for the two PWTF construction loans.
The PWTF loans are for 20 years at 0.5% interest rate, and the SRF loan will be for 20 years at
2.2%.
Source Amount Local Match * Total
A. Loans Obtained
PWTF Pre-Construction Loan $590,000 $110,000 $700,000
2nd PWTF Pre-Construction Loan $885,000 $160,000 $1,045,000
PWTF Construction Loan $1,875,000 $340,000* $2,215,000
Subtotal: $3,960,000
B. Additional PWTF Requested May 7
PWTF Construction Loan $10,000,000 $1,800,000* $11,800,000
C. Additional Fundin2; Needed ($19.14M - A - B) $3,380,000
D. DOE FY2009 SRF Loan $4,705,000* $835,000 $5,540,000*
E. Total Funding
Loans + Local Matches = $19,160,000
Loans = $18,055,000
Local Match from Reserves = $1,105,000
Table 2 - Funding
* The intent is to use $2,140,000 ofthe proposed $4,705,000 DOE SRF loan as the local match
needed for the 2 PWTF construction loans ($340,000 + $1,800,000 = $2,140,000).
In order to submit the application an authorized representative of the City must sign the
application. We are recommending to the UAC that they forward a favorable recommendation to
the City Council as stated in the recommendation above. The $5,000,000 authorization allows the
City to adjust the actual requested loan amount if project costs are further revised in the next few
weeks.
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~ORTANGELES
WAS H I N G TON, U. S. A.
Utility Advisory Committee Memo
October 9,2007
Utility Advisory Committee
Scott McLain, Deputy Director for Power Systems
Revision to Exhibit E, Bonneville Power Administration Power Sales Contract
Summary: Some minor housekeeping changes are necessary in our BP A power sales contract.
These changes are necessary due to the recent disconnection of the Elwha and Glines transmission
lines from their interconnection to the City's points of delivery.
Recommendation: Forward a favorable recommendation to City Council to authorize the
Director of Public Works and Utilities to sign Revision 1, Exhibit E to the Power Sales
Contract between the City of Port Angeles and the Bonneville Power Administration.
Background/Analysis: On August 14,2007 the electrical transmission lines from the Elwha
and Glines Canyon hydroelectric generation were disconnected from the transmission system
serving the Nippon mill in Port Angeles. The Elwha generation is now connected to Clallam
PUD's system at Laird's comer and is delivered to BP A through the PUD's transmission system.
This revision to Exhibit E of our power sales contract removes these points of delivery and points
of measurement from our contract. This revision will also revise the name of the point of delivery
from Daishowa to Nippon.
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FORTANGELES
WAS H I N G TON, U. S. A.
Utility Advisory Committee Memo
October 9,2007
Utility Advisory Committee
Scott McLain, Deputy Director for Power Systems
Delegation Agreement with Bonneville Power Administration for NERCIWECC
Requirements
Summary: The City is a registered entity under the North American Electric Reliability
Corporation (NERC) and the Western Electricity Coordinating Council (WECC) and is responsible
for certain electric reliability standards that became effective in June of2007. This delegation
agreement transfers responsibility for some measures that are now responsibilities of the City
undefthe NERCIWECC requirements, back to BP A.
Recommendation: Forward a favorable recommendation to City Council to authorize the
Director of Public Works and Utilities to sign the Delegation Agreement with the Bonneville
Power' Administration.
Background/Analysis: The Energy Policy Act of2005 included language that mandated
increased reliability and accountability of the bulk power system, and directed oversight to the
Federal Energy Regulatory Commission (FERC). FERC designated and certified the North
American Electric Reliability Corporation (NERC) as the "Electric Reliability Organization"
(ERO) in July of2006. NERC has passed responsibility for entity registration and compliance to
the regional reliability coordinators, which for western North America is the "Western Electricity
Coordinating Council" (WECC).
The City has been registered as a "Load Serving Entity" (LSE), and as a "Distribution Provider"
(DP) through WECC. At the current time, LSE's and DP's are required to comply with 26
standards containing 43 different requirements. The City is either compliant with the requirements
or is completing mitigation plans to become compliant with all of the 43 requirements.
Many of the requirements for which the City is responsible rely on the Bonneville Power
Administration for performance of tasks to maintain compliance. These requirements are outlined
in the delegation agreement between BP A and the City. Bonneville has provided a bridge letter
taking responsibility for tasks they are currently providing to meet the standards for which the City
N :\U AC\Final\delegation agreement.doc
CityIBP A Delegation Agreement
October 9, 2007
Page 2
is ultimately responsible until the time that this delegation agreement could be finalized. Exhibit A
to the agreement describes requirements for which BP A will be responsible, and Exhibit B
describes requirements for which the City will be responsible. The delegation agreement will also
contain an Exhibit C, to be negotiated by December 31, 2007, which will describe in more detail
the operational and other technical obligations to facilitate the parties' compliance with the
standards.
At this point in time, the delegation agreement is a fairly generic document. During the coming
months, Exhibit A, B, and C will be revised to more accurately depict the operations relative to the
City and BP A.
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WAS H I N G TON, U. S. A.
Utility Advisory Committee Memo
Date:
October 9,2007
To:
Utility Advisory Committee
From:
Larry Dunbar, Power Resources Manager
Subject:
CFL Markdown Promotion Agreement
Summary: The City was offered a change-a-light compact fluorescent lamp (CFL) promotion
agreement by Fluid Marketing Strategies, Inc. All City expenses under the agreement are eligible
for reimbursement under the Bonneville Power Administration's Conservation Rate Credit
program.
Recommendation: Forward a favorable recommendation to City Council to authorize the
Public Works and Utilities Director to sign the Change-A-Light CFL Promotion Agreement.
Background/Analysis: The City has participated in several compact fluorescent lamp (CFL)
markdown promotional programs. The term of the proposed agreement is through December 15,
2007 and is anticipated to result in City payment of up to $18,000 to Fluid Marketing Strategies,
Inc. City payments to Fluid Marketing Strategies, Inc. will be used to markdown prices at local
retailers, which will ultimately reduce the cost of compact fluorescent lamps purchased by Port
Angeles electric utility customers. All City expenses under the proposed agreement are eligible for
reimbursement under the Bonneville Power Administration's Conservation Rate Credit program.
Staff requests that the Utility Advisory Committee forward a favorable recommendation to City
Council to authorize the Public Works and Utilities Director to sign the Change-A-Light CFL
Promotion Agreement.
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WAS H,.' N G TON,. u. S. A.
Utility Advisory Committee Memo
October 9,2007
Utility Advisory Committee
Larry Dunbar, Power Resources Manager
Water Rate Adjustments
Summary: HDR and City staff completed a comprehensive financial analysis of the water and
wastewater utilities in 2003. A water rate adjustment is needed to support the increased costs of
operating the water utility.
Recommendation: Forward a favorable recommendation to City Council to proceed with a
public hearing on the updated rate study and proposed rate adjustments.
Background/Analysis: HDR and City staff completed a comprehensive financial analysis ofthe
water and wastewater utilities in 2003. As a result of that study wastewater rate adjustments were
adopted by ordinance through year 2008 and staffhas annually updated the water rate study during
the last three years. Earlier this year the utility advisory committee reviewed water rate design
goals and confirmed that the current rate design should be maintained. The proposed rates are still
under development and will be provided at the Utility Advisory Committee meeting.
Based on this year's water rate study a retail rate adjustment is necessary beginning January 1,
2008. A retail rate adjustment is needed for the following reasons: budgeted wholesale water
revenues are not being realized; rebuilding financial reserves is necessary; significant capital costs
are being incurred for replacing aging infrastructure; increased debt service, taxes, and chemical
expenses; increases are anticipated in personnel expenses and to cover inflation of other expenses.
It will be necessary to adjust retail water rates at this time to maintain the fund in a financially
prudent position. Staff will provide a presentation on the need for the proposed rate adjustments
and the proposed ordinance amendments at the meeting.
The City Council set a public hearing date on October 16, 2007 for a presentation of the study and
to allow public input to the process after the presentation. The public hearing will be continued to
November 7,2007 at which time the public hearing will be closed and City Council will be
requested to consider adoption of a new rate ordinance.
N:\UAC\Final\Water Rate Adjustments.doc
Water Rate Adjustments
October 9,2007
Page 2
The proposed timeline for consideration of the propo:5ed adjustments is as follows:
October 9,2007
October 16, 2007
Utility Advisory Committee consideration.
Presentation of the proposed rates followed by a public hearing to receive
input; continue public hearing to November 7,2007.
Close public hearing; consider adoption of new rate ordinance.
November 7,2007
Staff recommends the Utility Advisory Committee forward a favorable recommendation to City
Council to proceed with a public hearing on the rate study and proposed rate adjustments.
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City of Port Angeles
Water Rate Study Update
Utility Advisory
. Committee
October 9,2007
Larry Dunbar
Power Resources Manager
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Presentation Agenda
1. Looking back
2; Rate study update
3. RecQmmendations
Looking Back
· Comprehensive rate study
completed in 2003
· Prior rate adjustments:
- 2003 - 4.00/0
- 2004 - 4.00/0
- 2005 - 3.00/0
-2006 -19.00/0
- 2007 - 19.00/0
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Rate Study Update
· 2008 Revenues
- Rate revenues based on 2007 revised budget
- Residential growth 0.6%
- Commercial gro'wth 1.8%
- WUGA dry creek
- Unrealized water sales & revenues
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Rate Study Update
· 2008 Operation & Maintenance
- Cost of service analysis
- Inflation
- Increased chemicals
- Rebuilding rate stabilization reserves
- New water use efficiency program
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Rate Study Update
- Capital Facilities Program
- Prior fund,ing from rates below
deprecic:itioh .
- 2008 Debt .Service
.;..;. Existing
~ Aqditional
-2008 Taxes & Transfers
..::... Increase with rate adjustments
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. CFP Projects ($OOO's)
Capital Facilities Plan 2007 2008
. Elwha Dam Mitigation 60 110
Directed Services 50 50
Water System Plan - 250
McDougal Pump - 40
Downtown Water Mains 1,200 1 ,400
UGA Water Customers 5 5
Dry Creek Water Settlement 150 -
Bi-Annual Replacements - 320
Corrosion Facilitv 30 35
Total 1 ,495 2,210
Capital Facilities Plan Funding Sources 2007 2008
CFP Beginning Cash 724 1 ,400
Other Note Proceeds 1 ,430 330
Cash/Rate Financed Contribution 682 370
Elwha & Timber Sales 59 110
CFP EndinQ Cash 1,400 -
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Revenue Requirement ($QOO's)
Without Rate Adjustment~
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Description 2007 2008
Residential Sales 2,612 2,628
Commercial Sales 1,326 1,348
PUD Wholesale Sales 243 243
, Elwha & Industrial Sales 66 66
Other Fees 211 216
Investment Interest 75 75
Miscellaneous Revenues 172 131
Total Revenues 4,705 4,707
O&M 1,688 1,697
Administration & General 1,084 1,065
Utilities 187 198
Chemicals 30 53
Taxes 564 580
Transfer Payments 943 539
Debt Service 745 834
Total Expenses 5,242 4,965
Revenues [e~Exp9nses;:--.' :,){") .~ , " '\'(531) ~''1',~;i(259)
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Ending Fund Balances ($OOO's)
Without Rate Adjustments
Type of Reserve 2007 2008 Target
Operating 1,252 993 1,250
Rate Stabilization - 114 500
CFP 1 .400 - -
Total Reserves 2,652 1,108 1,750
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Revenue R~quirement ($000'5)
.With 7.00/0. Rate Adjustment
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Description 2007 2008
Residential Sales 2,612 2,811
Commercial Sales 1,326 1,440
PUD Wholesale Sales 243 260
Elwha & Industrial Sales 66 69
Other Fees 211 216
Investment Interest 75 75
Miscellaneous Revenues 172 131
Total Revenues 4,705 5,003
O&M 1,688 1,697
Administration & General 1,084 1,065
Utilities 187 198
Chemicals 30 53
Taxes 564 617
Transfer Payments 943 539
Debt Service 745 834
Total Expenses 5,242 5,003
Revenues Less,Expenses,;:;;1Z:;'} , '~ ~..;,.. ':~C. ;(537) :: -~~~~~-: >-:~";:
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Ending Fund Balances ($000'5)
With 7.00/0 Rate Adjustment
Type of Reserve 2007 2008 Target
Operating 1,252 1,250 1,250
Rate Stabilization - 116 500
CFP 1 ,400 - -
Total Reserves 2,652 1,366 1,750
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Rate Adjustment Recommendations
- Residential 5/8" Meter
., Proposed $1.50 monthly customer charge increase -
new rate $22.70
· Proposed $0.15 per hundred cubic feet (HCF)
consumption charge increase - new uniform rate
$1.85
· $2.60, estimated average monthly increase
(assumes 7.4 HCF)
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Rate Adjustment Recommendations
- Commercial 5/8" Meter
· Proposed $2.10 monthly customer charge increase -
new rate $32.15
· Proposed $0.10 per hundred cubic feet (HCF)
consumption charge increase - new uniform rate
$1.47
· $5.40 estimated average monthly increase
(assumes 33.1 HCF)
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Rate Adjustment Recommendations
- Industrial
. Prop()sed $O.O!:} per hundr~d cubic feet (HCF) consumption
charge ihcrease::-new,ul1iform rate $t.35
· $309.35 estimated average monthly increase (assumes 3,437.2
HCF) ,
- PUD Wholesale
. Proposed $0.14 per tOO CF consumption charge increase
.;. Gales Addition Reservoir
. Proposed $0.12 per 100 CF consumption charge increase
-Baker Street Intertie :
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Proposed Uniform Rates
Residential (inside City) Current 2007 Proposed 2008 Change
Service with 5/B-inch meter $ 21.20 $ 22.70 $ 1.50
Service with 3/4-inch meter 23.00 24.65 1.65
1-inch service 25.70 27.50 1.80
1 1/2-inch service 47.60 50.95 3.35
2-inch service 74.45 79.70 5.25
For each 100 CF $ 1.70 $ 1.82 $ 0.12
Commercial (inside City) Current 2007 Proposed 2008 Change
Service with 5/B-inch meter $ 30.05 $ 32.15 $ 2.10
Service with 3/4-inch meter 32.05 34.30 2.25
1-inch service 35.35 37.85 2.50
1 1/2-inch service 62.30 66.70 4.40
2-inch service 94.85 101.50 6.65
3-inch service 170.25 182.20 11.95
4-inch service 278.30 297.80 19.50
6-inch service 548.25 586.65 38.40
B-inch or 1 Q-inch service 872.00 933.05 61.05
For each 100 CF $ 1.37 $ 1.47 $ 0.10
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Recommendation Summary
· 7.0% uniformrateadjustment needed
· Beginning January.1 , 2008
· Recommendation to City Council to
proceed with public hearing .
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Recommended Schedule
October 16,2007
City Council Presentation
Open public hearing
November 7, 2007
Continue & close public hearing
Adopt ordinance amendments
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