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HomeMy WebLinkAboutAgenda Packet 04/12/1999 UTILITY ADVISORY COMMITTEE ROLL CALL Call to Order: Members Present: Orville Campbell, Chairman Bill Myers Joe Michalczik, Vice Chairman Larry Doyle ~/ ~ Glenn Wiggins (Alternate) Members Absent: Staff Present: O~ers Present: UTILITY ADVISORY COMMI3-1'EE PUBLIC WORKS CONFERENCE ROOM PORT ANGELES, WA 9836;::' APRIL I 2, 1999 3:00 P,M. AGENDA ]. CALL TO ORDER II. ROll CAll III. APPROVAL Of MINUTES OF MARCH I 5, t 999, REGULAR MEETING. IV. DISCUSSION ITEMS A. WATER QUALITY REPORT B. UTILITY CAPITAL PROJECT INFORMATION C. 1999 NWPPA PROPOSED RESOLUTIONS D, DISCUSSION OF LANDFILL STATUS V. INfORMatION ONlY ~TEMS VI. LATE ITEMS VII. NEXT MEe~NG - MAY I O, 1999 VIII. ADJOURNMENT UTILITY ADVISORY COMMITYEE Port Angeles, Washington March 15, 1999 L Call to Order: Vice Chairman Michalczik called the meeting to order at 2:05 pm. Dra_fl: IL Roll Call: Members Present: Councilmen Doyle and W'flliams [2:16], Bill Myers and Joe Michalczik. Members Absent: Councilman Campbell. Stall'Present: J. Pittis, B. Titus, C. Knutson, C. Hagar, and D. Sawyer. IIL Approval of M~tnutes: Councilman Doyle moved to approve the minutes of the February 8, 1999, meeting. Bill Myer seconded the motion, which carried unanimously. IV. Discussion Items: A. Marine Drive Bluff Meetings Update At Mr. Michalcziks's request, Senior Planner Sawyer reviewed the information contained in the packet. There has been a series of four meetings over the past two months for property owners located along the top and bottom of the marine bhiffbetween Tumwater and Hill Streets. At the first meeting, residents discussed issues impacting their property. At the second meeting, a geotechnical engineer led discussion on marine bluffs in general and staffprovided handouts regarding what to watch for during and after storms. Tam Johannesen, a coastal geological engineer, gave a presentation and responded to questions at the third meeting. At the fourth meeting, the residents decided to send out letters specifically asking other property owners if they would be willing to participate in a cooperative effort to fund a geotechnical study of the bluff Mr. Mike Dean will lead this effort and statt'will provide him with a property owner mailing list to aid in this endeavor. It is staffs intent to relinquish its role as facilitator and let the group continue on its own. Mr. Sawyer responded to questions and provided clarification. No action was taken. A report will also be provided to the City Council. B, Wholesale Water Agreement with PUD Public Works Director Pittis reviewed the information contained in the packet. Staff recommends extending the Wholesale Water Agreement to December 1999, to allow time to conduct a cost of service study for the water utility. Should the results of that study prove a rate increase to be necessary, it is best to implement that increase during the winter months when consumption is lower. Director Pittis also noted that extending the contract to December 1999, would allow for a better opportunity to know what will be occurring regarding the issues of regional area of water supply, dam removal, etc. Discussion ensued, and Director Pittis responded to questions and provided additional clarification. Bill Myer moved to recommend the City Council approve the extension of the wholesale water agreement with the PUD with the same terms and conditions to December 31, 1999. Utility Advisory Committee March 15, 1999 Councilman Doyle seconded the motion, which carried unanimously. C. Extension of lnterlocal Agreement with Jefferson County for Use of Landfill Director Pittis reviewed the information contained in the packet. He stated it is hoped that our cooperation with Jefferson County will be remembered in the future, if the City goes to regional long hauling. Brief discussion followed regarding various methods of disposing of garbage after the landfill closes. Director Pittis and Deputy Director Titus responded to questions and provided clarification. Councilman Doyle moved to recommend the City Council extend the Interlocal Agreement with Jefferson County until April 29, 1999. Councilman Williams seconded the motion, which carried unanimously. D. lnterlocal Agreement with Port of Port Angeles for I~ddlife Management Director Pittis reviewed and explained the information contained in the packet. He reminded the Committee that the City had hired the U.S Department of Agriculture ~SDA) to perform a wildlife assessment of the landfill and airport. Part of that report included an outline of a W'ddlife Management Plan. The assessment describes and analyzes the risks, and this was the basis for submitting a report to the county which demonstrated there is no bird/aircraft hazard relating to the landfill's proximity to the airport. The Wildlife Management Plan is the step which ensures that the demonstration continues forward. This document describes numerous ways to address and deal with migratory birds, starlings, rodents, etc. It describes the responsibilities of the Port personnel and the City. The Plan also establishes a committee which will periodically review the program, assesses the available information, and makes necessary correction to address the issues of wfl'*dlife. Director Pittis then reviewed the necessary steps to reach implementation of the Plan and stated staff is pleased with the document. Discussion followed and Director Pittis responded to questions. Attorney Knutson explained that the FAA did not have legal control over the City's landfill. The County issued the City it's permit because the USDA developed this plan and assessment. As long as the City follows the Plan, the landfill is legal and the City can continue to operate it as long as necessary, unless the law is changed. Currently, the City has satisfied the County, Department of Ecology, and Environmental Protection Act regulations and there is no legal hold for the FAA over the landfill. Further discussion ensued. Councilman Doyle moved to concur with the Wildlife Management Plan and the Interlocal Agreement with the Port to implement the plan as presented and forward it to City Council upon its review and approval by the Port. Bill Myer seconded the motion, which carried unanimously. E. Letter to Congressional Delegation Supporting Private Use Legislation Deputy ]Director of Utility Services Titus reviewed the information contained in the packet. Director Pittis reminded the Committee that several years ago, there was some effort in Congress to eliminate tax exempt financing for wastewater and water facilif~es. This is another attempt. Deputy Director Titus explained that certain parts of the country are almost exclusively private power, and have been after public power for years. Discussion ensued and Mr. Titus responded to questions and provided clarification. He stated that if the delegation did not support private use legislation, the City's costs -2- Utility Advisory Committee March 15, 1999 would be increased not only for utilities but general city government costs. Following further limited discussion, Councilman Doyle moved to recommend the city Council approve sending the letters to the congressional delegation supporting H.R. 721 and S. 386. Bill Myers seconded the motion, which carried unanimously. F. Verbal Report on Regional Water and Electrical Issues Director Pit-tis stated CH2M Hill has been commissioned to perform a water resource review and study. It has been updated to reflect the possibilities based on whether one or both dams are removed, and how this might relate to water supplies. Discussions were then held between the City and the PUD to consider the value of the study as a joint City/PUD project, to look at water supply collectively rather than independently. At the same time, the City had a brief discussion with the Tribe regarding similar issues. The Tribe is developing a list of its issues, which will be forwarded to the City. One of the Tribe's ideas was to use the Ranney well water to augment the flow of the river for fish uses, reducing the highly turbid fiver flows during dam removal with the water from the Ranney well. This would mean the City would use the industrial line and place a treatment plant along it, or build another Ranney well, etc. Staffis hoping to obtain additional information which can be useful in developing a regional strategy that would satisfy the PUD, City, Tribe, and any other entity seeking to use water from the regional system. This will be difficult but worthwhile project. Director Pittis distributed Ennis Creek Cooperation, Vision of the Future, which is a draft vision statement for potential use of the Rayonier mill site and water facilities. He stated this is just a possible approach to this issue. Councilman Williams stated he attended Science, Technology and Manufacturing Association Open House. One of the presentations put on by a group of individuals, showed how to connect the downtown and all the water resources. East of Ennis Creek was a golf course and a tribal cultural center, west of the creek was offices and marinas, and the boat haven was turned into heavy industrial shipping. Discussion followed. Director Pittis distributed maps showing the Port Angeles water supply system and described the various water service lines. He stated that staff hoped to expand the scope of the study being performed by CH2M Hill to discover what would be necessary in order to connect a new treatment plant to the current water system, and how much it would cost to accomplish. This expanded study would provide the information necessary to bring to the PUD Commissioners and City Council so they can make a decision on the issue. The PUD, City, Tribe, etc., collectively, can agree on a regional water supply, then permission can be sought from the federal authorities to carry out the new program. Senator Gorton has indicated he would be supportive of reimbursing the City for some of its costs relative to protecting its own interests. Councilman Doyle stated that during the National League of Cities Conference, Council members met with Patty Murray's and Slate Gorton's representatives, as well as Congressman Dicks. Congressman Dicks informed that Secretary of the Interior Babbitt wishes to ensure there is a plan in place before money is paid out for the pumhase of the dams. He felt the federal government wanted to ensure they would have no liability regarding the dams, once they were purchased. Discussion ensued and Joe Michalczik felt that dam removal would be harmful to Port Angeles due -3- Utility Advisory Committee March 15, 1999 to the length of time it would take to accomplish flow down. Director Pittis described what he thought would happen if the dams were removed and what the Department of Health would mandate regarding water sampling, and explained why it was beneficial to the City to work in cooperation with the PUD and Tribe and on this issue. Councilman Doyle noted that the Elwha dam removal has been an issue for several years, but the list'mg of the salmon is going to affect everyone. Many entities will be seeking federal or state funds and working with other agencies will give the City its best chance of obtaining support for a water treatment system. Director Pittis spoke briefly on the possibility of reusing water in the future. Further discussion followed, and Joe Michalezik expressed concern over maintaining water quality and cost of water delivery. Director Pittis stated this issue will be returned to the UAC after CH2M Hill has been approached regard'mg adjusfmg the scope of work. VI. Information Only Items A. Lockbox Memo to Customers Finance Director Godbey reminded the Committee that the City Council had approved a contract with Lockbox, Inc. about one year ago. Lockbox will process and deposit payments, then electronically upload the information to the City's computer system. This will free up the processing of approximately 400 payments per month. There was a delay in implementing the program as the software was ensuring all programs were Y2K cempliant. The program is currently being tested and it is hoped actual service will begin shortly. Director Godbey responded to questions and provided additional clarification on the program. No action was taken. VI.. Next Meeting: The next meeting will be April 12, 1999, at 3:00 VIl. Adjournment: The meeting adjourned at 3:55 p.m. Chairman i3eputy City Cierk -4- pORTANGELES WASHINGTON, U.S.A. PUBLIC WORKS DEPARTMENT DATE: April 12, 1999 TO: UTILITY ADVISORY COMMI 1 ! EE I~'ROM: Jack Pittis, Director of Public Works and Utilities SUBa-ECT: Water Quality Report In 1996 Congress passed amendments to the Safe Drinking Water Act that included a mandate for the Environmental Protection Agency [EPA] to require each community water system to provide each of its customers with a "Consumer Confidence Report (CCR)" every 12 months. The first report, using 1998 data, must be delivered to all City water customers by October 19, 1999. Each year thereafter the report must be distributed by July 1 st. The attached Water Quality Report has been developed in accordance with the EPA CCR Regulations, which must contain information on the quality of the water delivered by the system and characterize any risks fi-om exposure to any comaminants in the drinking water in an accurate and understandable manner. The report is intended to communicate to customers the quality of their system water in terms they can understand. Much of the topics covered are required and some of the actual language used is manditory. The City was also required to provide information to wholesale customers by April 1 st. Testing information was forwarded to the PUD on March 19th. After Utility Advisory Committee review, staffwill forward the Water Quality Report to the City Council for approval prior to distribution. Attach: Water Quality Report N:~PWK$\WATER\CC R\UACMEM.499 pORTANGELES Water Quality Report W A S H I N 13 T O N, U.S.A. 1998 Data In order to ensure that tap water is safe to drink, the Environmental Protection Agency (EPA) prescribes regulations which limit the amount of certain contaminants in water provided to the public water systems. Food and Drag Administration (FDA) regulations establish limits for contaminants in bottled water which must provide the same protection for public health. Water quality testing occurs daily by certified personnel. Drinking water, including bottled water, may reasonably be expected to contain at least small amounts of some contaminants. The presence of contaminants does not This report is provided by the City of Port Angeles to its necessarily indicate that water poses a health risk. More information about contaminants and potential health effects drinking water customers to provide information on their can be obtained by calling the Environmental Protection water supp& in compliance with the requirements of the Agency's Safe Drinking Water Hotline (800426-4791). Environmental Protection Agency and our State Health Department. Some people may be more vulnerable to contaminants in Source of the City's Water drinking water than the general population. Immuno- compromised persons such as persons with cancer undergoing chemotherapy, persons who have undergone The source for the City of Port Angeles Water System is a organ transplants, people with H1V/AIDS or other ilmnune Ranney Collector (well) located on the east bank of the system disorders, some elderly, and infants can be Elwha River at mile post 1.9 in Section 3, T 30 N, R 7 W. particularly at risk from infections. These people should seek advice about drinking water from their health care The river flows northward from the high peaks of the providers. EPA/CDC guidelines on appropriate means to Olympic Mountains in the heart of the Olympic Peninsula lessen the risk of infection by Cwptosporidium and other to the Straights of Juan de Fuca. The source of the river and microbial contaminants are available from the Safe Drinking most of the land through which it flows is contained within Water Hotline 800-426-479t. the boundaries of the Olympic National Park. Disinfection if the City's water supply is accomplished by Water from the Ranney Collector is tested following the dosing the water with chlorine at the Ranney Collector on guidelines established by the Washington State Department the Elwha River and at the City's five reservoirs. The of Health to detect potential contaminants that could chlorine concentration is monitored daily and is maintained reasonably be expected to be found in drinking water. As at a minimum of 0.10 rog/1 throughout the system. water travels over the surface of the land or through the ground, it dissolves naturally occurring minerals and, in some cases, radioactive material, and can pick up substances resulting from the presence of animals or from human activity.' Because most of the land through which the Elwha River flows is inside the Olympic National Park, there is limited opportunity for human contamination of the water. 'Contaminants that might be expected in untreated water include: biological contaminants, such as viruses and bacteria; inorganic contaminants, such as salts and metals; pesticides and herbicides; organic chemicals from industrial or petroleum use, and radioactive materials. Annual hydrant flushing improves water qualtly TABLE OF CONTAMINANTS FOUND IN SOURCE WATER DEFINITIONS: CONTAMINANT Detected Compliance MCL SOURCE Level MCLG Action level IAL] Thc concentration of a contaminant Conductivity 120 159 700 a which, if exceeded, triggers a treatment or other (umhos/cm) requirement which a water system must follow. Lead (rag/I) .003 .006 .015 b Maximum Contaminant Level [MCL] The highest level ora contaminant that is allowed in drinking water. MCLs MONITORING FOR NON-HEALTH are set as close to the MCGLs as feasible using the best RELATED COMPOUNDS available treatment technology. The contaminant is measured in milligrams per liter (mgm). INORGANICS Detected Compliance ] MCL SOURC Level MCLGE Maximum Contaminant Level Goal IMCLG1 The level of a contaminant in drinking water below which there is Hardness (rog/l)* 50 70 not set : c no known or expected risk to health. MCLGs allow for Magnesium (mg/l)* 1.8 1.8 nat set d a margin of safety. The contaminant is measured in milligrams per liter (rog/L). Calcium (rog/l)* 17 17 not set Milligrams per liter ling/I} or parts per million [ppm] Table Notes: Metric measurement of concentration ora contaminant or material. [one part per million and one mg/I = 1 penny in a. MHOS instrument to measure ION changes in water b. Erosion of natural deposits 10,000 dollars] ¢. Measure of materials shown below Micro mhos per centimeter jumbos/emi Measure of ions d. Occurs in surface water. Used to measure hardness of water in water For more information The City Council of the City of Port Angeles meets on thc 1st and 3rd Tuesday of each month at City Hall, 321 E. 5th Street. Information about the City's utilities may be found on the web site: www.ci.nort- aneeles.wa.us. If you have questions, City of Port Angeles water system managers may be reached at 360-4174855. Repair of waterline The Lead and Copper Rule does not have a Maximum Contaminant Level (MCL). Instead, it has an "action level" based on a statistical analysis of sample results. The City's source water complies with this "action level". Educational Information regarding copper in drinking water has been provided to City residents because water tested at the tap in some homes with copper plumbing did detect copper. Copper has not been detected in the City's source water. Calcium and magnesium are naturally occurring minerals in groundwater. These minerals are measured to determine water hardness. Hardness interferes with the sudsing of soap. The scale of hardness is: 0-60 mg/l = sofq 61-120 mg/l = Ranney Collector is located on the east side of the Elwha moderately hard; 12 ]-_] 80mg/l = hard. River west of the City W A $ H 1N (3 T O N, PUBLIC YVORK$ DEPAR?MEN? DATE: April 12, 1999 TO; UIILITY ADVISORY COIVI1Vu ITIiE FROM: Bob Titus, Deputy Director of Utility Services ScraJ~CT: 1999 Capital Projects Report For Information Only With the construction season fast approaching, now is a good time to update the UAC on the utility projects that are planned for 1999. What follows is a list of the projects with a project description and status. Project: Valley Fault Duty Correction Description: This project will replace approximately 115 cutouts (fuses) with units that have a higher interrupting rating. This is necessary to provide for the increase in available fault current close to the Valley Street substation that resulted from the new transformer installed a few years ago. This is a safety issue since the available fault current can exceed the rating of the cutouts (10,000 amps) which could cause catastrophic failures if lineman were to close in the cutout under fault conditions. Total cost of the project is estimated at $50,000 and was budgeted. This project will be done in-house without using consultants or contractors. No further UAC or Council review/approval is scheduled. Status: The engineering work has been completed and units that need replacing have been identified. New cutouts have been ordered and construction will begin as soon as the 16,000 amp rated cutouts are delivered. Project: Valley Service Reliability Improvement Description: This project will construct a new feeder out of the Valley Street Substation to provide service to K-Ply. It will also replace PCB contaminated voltage regulators in the substation with new booster transformers at K-Ply. This will improve reliability to K-Ply and other area customers (tight quarters often make outages on one feeder affect service on other feeders). Total cost of the project is estimated at $50,000 and was budgeted. This project will be done in-house without using consultants or contractors. No further UAC or Council review/approval is scheduled. Status: W~-are working with K-Ply and will be ordering the booster transformers soon. Project: College Substation Upgrade Description: This project will install a new underground feeder out of the College Substation to serve load growth around the college and Golf Course Road areas. The project was originally scheduled for 1998 but was delayed pending resolution of transmission line design issues between our College substation and the adjacent BPA substation. Total cost of the project is estimated at $20,000 and funding is available within our general construction budget. This project will be done in-house without using consultants or contractors. No further UAC or Council review/approval is scheduled. Status: A revised design has been completed now that transmission issues have been resolved with BPA. Construction will be scheduled for later this Spring once winter loads have gone down allowing loads to be switched to another substation during construction. Project: Decommission Surplus Substation Property Description: This project will test for and cleanup possible PCB contamination at the Albert, Race and Peabody substation sites. These three sites are no longer needed by City Light for substation or other purposes. They have been utilized as substations for many years and oil contained in equipment could have leaked into the soil. The environmental condition of each of these sites must be determined so that cleanup can be initiated and/or deed restrictions imposed. Total cost of the project is unknown at this time but testing costs are estimated at $5,000 and funding is available within our general maintenance budget. The UAC, Real Estate Committee and Council will be consulted prior to any substantiative cleanup or surplusing decisions are made. Status: Some testing has occurred but has not been completed at all sites. Once the testing is completed, staff will determine the extent of cleanup required and prepare year 2000 budget estimates for cleanup in 2000. Project: Jones Street Reservoir Cover Description: This project will provide a domed cover for the Jones Street Reservoir. This is the initial project of the bilateral compliance agreement between the City and the State Department of Health to cover all the reservoirs in the City. The project is being coordinated with the adjacent Fine Art Center to improve the aesthetics of the area. Primary improvements include removal of chain link fencing, addition of curb, gutter and sidewalks along Lauridsen, low profile dome, under grounding of power lines, and landscaping following construction. Total cost of the project is estimated at $290,000 and was budgeted. Bid results will be brought to the Council for contract approval. Status: The design of the project is completed and bid advertisement will be in April. Work on the project will commence in May and the time needed for fabrication of the low profile dome will delay final completion to Fall of this year. Project: Cov_ering Black Diamond and Peabody Reservoirs Description: This project will provide a domed cover for Black Diamond and a floating cover for Peabody. These are the final projects of the bilateral compliance agreement between the City and the State Department of Health to cover all the reservoirs in the City. Upgraded disinfection facilities will also be added to the Black Diamond Reservoir as a part of the work. Total cost of the projects are currently estimated at $856,000 (Black Diamond) and $405,000 (Peabody). Status: A Public Works Trust Fund Loan is being applied for this year to finance these projects. Design will take place in 2000 for Black Diamond and 2001 for Peabody Heights. The Council is scheduled to review the request to submit the loan application at their April 6th meeting. Project: Downtown Watermalns Phase II Description: This is the second project of a multi-phase program for replacement of the watermalns and sidewalks on the downtown area. This project will replace watermains in Front Street (South Side) west fi.om Lincoln Avenue and in Laurel between Front and First Streets. This project will be coordinated with the Gateway multi-modal project to maximize funding leverages. Funding for this project is through a Drinking Water State Revolving Fund (DWSRF) 3% loan of $1,030,000. The project was on the February 2, 1999 DWSRF approval list and final loan approval will be later this spring. The Council will review this project atier bids are in and prior to entering imo a contract. Status: Design will proceed this summer following loan approval and the project should be advertised and awarded at the end of 1999. Project: Ediz Hook Undergrounding Description: This project converts a short section of the power line serving the Coast Guard Base from overhead to underground. $50,000 was budgeted for this project. Status: An engineering design and cost estimate need to be prepared to determine how many spans of overhead line can be converted within the available funding. At this time this is not a high priority project and manpower has been focused elsewhere. The Council will review this project after bids are in and prior to entering into a contract. Project: Construct Transmission Line Description: This project constructs a new transmission line fi.om our existing College Substation to the site of a future new substation on Golf Course Road. The new line and substation are planned to serve growth in the southeast comer of the City and to serve possible new annexed areas. Total cost is estimated at $86,000 and was budgeted. The UAC and Council will review the policy issue of which utility will provide service to the area later in 1999 and the UAC and Council will review this project after bids are in and prior to ente_ring into a comract if the project proceeds. Status: The engineering design has been completed and right-of-way has been acquired. The next step is to clear the right-of-way prior to line construction. This project has been put on hold pending further discussions with the PUD concerning future annexations and which utility will provide service. Project: Landlocked Facilities Conversion Description: This project will relocate overhead power lines that are inaccessible to line crews. This project has been underway for more than 5 years and replaces overhead power lines on back lot lines with underground facilities in road right-of-ways. There are 10 areas yet to be completed. $180,000 was budgeted for this project. The UAC and Council will review the policy on how the work will be paid for later in 1999 and the Council will review individual areas at, er bids are in and prior to entering into a contract. Status: Staff is identifying options and their associated costs for relocating the remaining lines. Project: 13th Street Sewer Description: This project is to replace a 400 foot section of failing sewer line in 13th Street east from Oak Street. This is a budgeted Wastewater Utility Project with an estimated cost of $40,000. The Council will review this project after bids are in and prior to entering into a contract. Status: Design is currently underway and bid advertisement and award is scheduled in April 1999. Construction should be completed early this summer. Project: Landfill Cell #3 Expansion Description: This project is the final cell construction at the landfill. The next phases will be to construct final covers and a transfer station. The project is funded through the Solid Waste Utility and the current estimated cost to complete is $1,755,000. Status: The cell is permitted and in operation. The construction is 96% complete and construction should start when weather/ground conditions allow paving. Work was suspended last fall due to weather. Project: Storm Drain Repair at Cemetery/l 8th Street Pavement Repairs Description: These projects are proposed to be included in the Landfill Cell #3 Expansion construction as change orders. The storm drain project is to replace a failed storm outfall at the cemetery which was constructed with earlier landfill cell construction. The outfall failed during storms in 1996/1997 and the estimated cost of repairs ($155,000) will be partially, if not fully, funded through FEM_~ The 18th Street Pavement Repairs consist of an asphalt concrete overlay and shoulder widening and ditching at the landfill entrance which has been damaged by the heavy truck traffic. Estimated cost of the pavement repairs is $36,300. Both of these change orders, if approved by City Council, will be added to the Landfill Cell 3 costs funded by the Solid Waste Utility. Status: Both change orders have been sent to the contractor for initial pricing. Once a cost is agreed the change orders will be presented to the Utility Advisory Committee and City Council for approval prior to start of construction. Action to be taken: None. For information only. Estimated time: 10 minutes. N:\TEMPh°UPDATE. WPD pORTANGELES WASHINGTON, U.S.A. PUBLIC WORKS DEPARTMENT DATE: April 12, 1999 To: UTILITY ,~DVISORY COMMITIk, E FROM: Bob Titus, Deputy Director of Utility Services SUB. CT: 1999 NWPPA Proposed Resolutions For Information Only Each year the Northwest Public Power Association (NWPPA) prepares legislative resolutions dealing with issues of concern to public power and the northwest. The resolutions are prepared by the Legislative and Resolutions Committee, of which I am a member, and forwarded to the Board of D'trectors and eventual adoption by the membership at the Annual Meeting. The adopted resolutions are forwarded to our congressional delegation to firmly establish public power's position on various issues. Attached is a copy of the draft resolutions that have been approved by the Board of Directors. Utilities are provided the opportunity to comment prior to the resolutions being presented to the membership in July. Individual UAC members can review the resolutions and express any concerns as an an added agenda item on the May Board Meeting. Having gone over the resolutions during a full day of discussions, there are no positions that the City of Port Angeles cannot support. If anything, stronger positions could be taken on some issues but, because of the diverse membership of NWPP& compromises were sometimes necessary. In addition, the City has the opportunity to comment individually on these issues as necessary. Action to be taken: None, unless there are comments on any resolution Estimated time: 10 minutes N:~PWKS~LIG HTXDIRECTORRVIEMO~IWPpAKES.499 Northwest Public Power Association 1999 PROPOSED RESOLUTIONS March 17, 1999 9817 N.E. 54~ Street- P.O. Box 4576 - Vancouver; WA 98662 (360) 254-0109 {503) 289-9411 FAX (360) 254-5731 e-mall: nwppa@nwppa.org Web Site: http://www.nwppa.org/nwppa INDEX RESOLUTION 99-1 PREFERENCE CLAUSE RESOLUTION 99-2 LOCAL CONTROL OF CONSERVATION PROGRAMS & RETAIL RATE SErrlNG RESOLUTION 99-3 RURAL UTILITY SYSTEMS (RUS) PROGRAM RESOLUTION 99-4 COST EFFECTIVE WILDLIFE MITIGATION RESOLUTION 99-5 NORTHWEST IRRIGATED AGRICULTURE RESOLUTION 99-6 REGIONAL INTERNATIONAL COOPERATION RESOLUTION 99-7 TAX-EXEMPT FINANCING RESOLUTION 99-8 DEVELOPMENT OF INTksR-REGIONAL TRANSMISSION SYSTEM RESOLUTION 99-9 DISPOSAL OF HIGH LEVEL NUCLEAR WASTE RESOLUTION 99-10 REQUIRE SCIENTIFIC JUSTIFICATION FOR RESERVOIR DRAWDOWN OR BREACHING RESOLUTION 99-11 THE ECONOMIC BENEFITS OF HYDROPOWER AS A RENEWABLE RESOURCE RESOLUTION 99-12 FERC REGULATION OF HYDRO LICENSING RESOLUTION 99-13 FOREST SERVICE STRICT LIABILITY POLICY RESOLUTION 99-14 SALE OF THE PMAS RESOLUTION 99-15 PHASE OUT RESIDENTIAL EXCHANGE PROGRAM RESOLUTION 99-16 REAUTHOI~IVATION OF THE ENDANGERED SPECIES ACT RESOLUTION 99-17 RECONSIDERATION OF ROLE OF NORTHWEST POWER ACT AND REGIONAL COUNCIL RESOLUTION 99-18 EVALUATION OF PROPOSALS FOR ELECTRIC INDUSTRY RESTRUCTURING RESOLUTION 99-20 IN SUPPORT OF OPEN TRANSMISSION ACCESS AND INDEPENDENT GRID OPERATORS RESOLUTION 99-19 DISPOSITION OF THE NATION'S SURPLUS WEAPONS-USABLE FISSILE MATERIAL RESOLUTION 99-21 F-,-~I'I~JNDING FISH CAP MEMORANDUM RF~OLUTION 99-22 OPPOSITION TO DENY DISASTER RELIEF RESOLUTION 99-23 TRANSITION COST RECOVERY RESOLUTION 99-24 OPPOSITION TO KYOTO PROTOCOL RESOLUTION 99-25 SUPPORT FOR AVOIDING "COST CREEP" IN FISH FUNDING NORTHWEST PUBLIC POWER ASSOCIATION RESOLUTION NO. 99-1 IN SUPPORT OF THE PREFERENCE CLAUSE Northwest Public Power Association firmly endorses the federal power policy established by Congress to provide preference to public bodies and cooperatives in the purchase of federal power produced with resources owned by the public. We affh'x~ that such preference applies to all classes of electric energy and capacity of federal power systems both from existing facilities, from future acquired resources and those created by additions to federal facilities. The consumer-owned utilities should not be deprived of the direct benefits of resources by any diversion of those benefits. In addition, we further strongly support and further rent'tm the Northwest preference provisions contained in the Pacific Northwest Preference Act, dated 1964, as amended by the Energy and Water Appropriation biff for fiscal 1996. We encourage Bonneville Power Administration (BPA) to clearly support the expansion and creation of new PF customers (PUDs, Rural Electric Cooperatives, and Municipal Utilities). It is, and has been, this group that provides Bonneville with long-texxu stable load growth. We believe that such a position is in the best interest of all BPA customers. We oppose any sale of electric power resources by federal agencies through arrangements which do not recognize the right of any consumer- owned utility to exercise preference and priority to federal power. We also oppose proposals to pe~x~lt private entrepreneurs to bid competitively to perfox'~ operation and maintenance activities at federal dams or to add capacity and receive a share of the increased generation. We further oppose proposals to require federal power to be sold at market rates or through competitive bid, without regard for the preference clause and principles of cost-based pricing. NORTHWEST PUBLIC POWER ASSOCIATION NORTI'IWF~T PUBLIC POWER ASSOCIATION RESOLUTION NO. 99-2 IN SUPPORT OF LOCAL CONTROL OF CONSERVATION PROGRAMS AND RETAIL RATE SETTING One of the major historical features and benefits of consumer- owned electric utilities, whether they are cooperatives, municipalities, or public utility districts, is the advantage of being locally regulated utilities. These utilities are governed, regulated and administered by local boards, city councils and/or commissions elected from the service area of the specific consumer-owned electric utility. The local public accountability for these consumer-owned systems has always existed. Through the efforts of local control, consumer-owned utilities in the Pacific Northwest have established themselves as leaders in providing equitable retail rates, and in developing conservation programs for their consumers. Consumer-owned utilities have been involved in conservation standards in this region for over 20 years. Also, each utility in this region through its own rate studies and socioeconomic studies has been able to determine the fair share of costs for each class of customer. The Northwest Public Power Association is strongly opposed to any effort, either nationally, regionally or by states, that would change the regulating of these utilities from traditional and historical local control. For all types of consumer-owned utilities, these elected officials are responsible for the proper functions of their own utility and are directly accountable to the rate payers. The Northwest Public Power Association believes rate making should be left to the authority of the locally elected board of consumer- owned electric utilities. We oppose the imposition of retail rates or rate design mandated by state, federal or regional bodies upon publicly owned electric utilities. NORTHWEST PUBLIC POWER ASSOCIATION NORTHWF~T PUBLIC POWER ASSOCIATION RESOLUTION NO. 99-3 IN SUPPORT OF RURAL UTILITY SERVICES (RUS) PROGRAM RUS loans provide substantial benefits for a relatively sw~l! federal investment. Interest rates on RU$ loans have an important impact on the lives and livelihoods of rural people. For that reason, it is important that rural electric distribution cooperatives have access to adequate funding for the insured loan program at rates comparable to those available to local public agencies. In view of proposals to restructure the electric utility industry, adequate RUS loan funds are especially necessary if rural electric cooperatives are to continue to provide a competitive force in the industry, and if adequate electric service is to be assured for rural consumers whose loads might not be attractive to other utilities. NWPPA urges Congress to appropriate s~fl~cient funds to meet member systems' financial needs through the Rural Utility Services at rates comparable to those of local public agencies. NORTHWEST PUBLIC POWER ASSOCIATION NORTHWEST PUBLIC POWER ASSOCIATION RESOLUTION NO. 99-4 IN SUPPORT OF COST EFFECTIV~ WILDLIFE MITIGATION PROGRAM.~ Wildlife is an important natural resource to the Northwest. The Northwest Public Power Association acknowledges the responsibility of the users of MULTI-PURPOSE dams within the following guidelines: · Costs of mitigation should be faJrly apportioned among all the beneficiaries of multi-purpose projects. · Bonneville Power Administration {BPA) ratepayers should pay for only the hydroelectric power related impacts of federal projects constructed within the Bonneville service · BPA ratepayers should have a direct voice in determining the scope, cost and implementation of mitigation and enhancement within the BPA service area, including representation on the Northwest Power Planning Council Wildlife Advisory Committee. · Mitigation plans should place major emphasis on publicly-owned lands, rather than the purchase of private lands. · BPA's obligation for wildlife mitigation must take into account lands that were previously set aside for wildlife mitigation as a result of construction of the dams. · The aim of mitigation should be pursued while minimizing the cost to regional customers. Program accountability measures and evaluation of the effectiveness of the program should be built-in to ensure that ratepayer funds are being used in the most cost-effective manner. · Any mitigation analysis must include provisions for crediting wildlife enhancement resulting from the construction and operation of dams and reservoirs targeted for mitigation or enhancement. NORTHWEST PUBLIC POWER ASSOCIATION J NORTHWEST PUBLIC POWER ASSOCIATION RESOLUTION NO. 99-5 SUPPORT FOR NORTHWEST IRRIGATED AGRICULTURE Irrigated agriculture is an important and significant economic base for communities and utilities within the Bonneville Power Administration (BPA) service area. Irrigated crop production accounts for cash receipts of over $5 billion and provides for 7 percent of Pacific Northwest employment. Over 8 million regional acres are irrigated. BPA sales to irrigaUon customers account for approximately 5 percent of its regional load. Also, including secondary effects, irrigation accounts indirectly for 10 percent of BPA's regional load. Recognizing the importance of the regional rural economies and summer loads to the operation of its hydro electric system, BPA has historically designed rates and programs to maintain irrigation and cooperatively the region's utilities have worked to keep the electric rates paid by irrigators stable and at their lowest possible level. Energy and water efficiency improvement programs have also been offered to irrigators focusing on education, cost sharing of hardware retrofits, and irrigation water scheduling, All of these efforts underscore the importance irrigated agriculture has to local eommumties, utilities and the regional economy of the Pacific Northwest. NWPPA strongly encourages the agriculture industry, its utilities and BPA to aggressively pursue and implement measures to conserve water and electricity. In addition to these efforts strengthening the economic viability of northwest irrigated agriculture, benefits can be derived in our regional effort to preserve and enhance salmon stocks. NWPPA supports and encourages efforts by BPA, the region's utilities, and others to maintain the economic viability of this important industry. NORTHWEST PUBLIC POWER ASSOCIATION NORTHWEST PUBLIC POWER ASSOCIATION RESOLUTION NO. 99-6 SUPPORT FOR CONTIlVUED REGIONAL INTERNATIONAL COOPERATION There are vast untapped energy resources located in the Pacific Northwest states, the provinces of British Columbia and Alberta, the Yukon and Northwest Territories and the State of Alaska. To date, the development of energy resources in this region has been symbolized by a characteristic of cooperation in both planning and development. While political boundaries are arbitrary, energy knows no boundaries. Energy needs dictate that the energy potential of this vast region be integrated to benefit all sections of this region. Therefore, we urge a continued spirit of harmony among the states, provinces and territories, between the United States and Canadian goverm-nents and between the people of both nations to be sure this region of North America meets the energy requirements of the future in a continued atmosphere of regional international cooperation. NORTHWEST PUBLIC POWER ASSOCIATION NORTHWEST PUBLIC POWER ASSOCIATION RF_~OLUTION NO. 99-7 SUPPORT FOR TAX-EXEMI~T FINANCING Public policy has long peimltted local governments to issue bonds, the interest from which ls exempt from federal taxation, to finance the furnishing of necessary local services, such as electricity, water, and waste treatment. Recent actions by Congress and the Supreme Court have eroded the rights of local governments to issue tax-exempt municipal bonds, and have eroded the traditional market place for these bonds. By the efforts to reduce both grants and revenue sharing, Congress and the federal administration have forced local agencies to absorb more of the cost of government. Loss of tax-exempt financing would further undel'~ne the ability of local governments to provide essential services and rebuild and improve America's infrastructure while resulting in negligible enhancement to the Federal Treasury. Although the 1986 Tax Refo,m Act reduced the ability of all state and local government entities to raise capital required to meet their public service needs, the 1986 act imposed additional, specific limitations only on public power issues of tax exempt bonds, such as the $15 n~illion private use restriction and the arbitrage/rebate requirements. These limitations made public/private partnership development of electric generation resources very difficult, ff not impossible, and restricted the ability of publicly owned utilities to bttild transmission facilities required to provide regional needs most efficiently. Further, these restrictions pose a significant barrier to the abRlty of local publicly owned electric utilities to compete in a restructured or deregulated electricity market. Because of the tax subsidies that continue to be received by investor owned t~ttlttJes and the fact that they issue a significant amount of tax-exempt debt (despite not being tax-exempt entities) loss of tax- exempt financing for publicly owned utilities will unde~ udne the competition between public and investor owned utilities. Similarly, the availability of s~,fficient loan funds for the Rural Util{ties Service is needed to maintain a competitive electric utility industry. Northwest Public Power Association {NWPPA) deplores and opposes all efforts to further limit the rights of local governments to use tax- exempt financing, or to curtail the market place for public power bonds. NWPPA urges that Congress relax restrictions imposed on the use of tax-exempt financing, and eliminate the barriers to the ability of local Page 2 - Resolution No. 99-7 publicly owned electric utilities to compete in a restructured or deregulated electricity market. Municipal electric systems that have financed generation, distribution and transmission facilities with tax-exempt bonds are hindered in their ability to participate in a competitive electricity market by current private use restrictions. These restrictions impede public power's ability to open transmission lines under the reciprocity provisions of FERC Order 888, participate in an Independent System Operator ISO and negotiate tailored energy supply contracts with existing or replacement customers. NWPPA supports passage of legislation like that sponsored by Sen. Slade Gorton (S. 386). Legislation has been introduced in the Senate that would require a public power system to defease its bonds at the earliest call date ff it participates in direct access and has a facility whose existing bonds are threatened with impe~udssible private use. Under the legislation, bonds issued after November 30, 1997, would be called at the earliest date or within 10 years after enactment of the legislation. No future tax exempt bonds would be allowed to be issued by these systems. Bonds issued by systems that do not choose to participate in open access would remain tax exempt. NWPPA opposed this legislation because it would be extremely expensive for public power customers, prevent millions of consumers from participating in direct access and disadvantage existing bond holders. NORTHWEST PUBLIC POWER ASSOCIATION NORTHWEST PUBLIC POWER ASSOCIATION RESOLUTION NO. 99-8 SUPPORT FOR DEVELOPMENT OF INTER-REGIONAL TRANSMISSION SYSTEM Historically, preference customers in the Pacific Northwest have supported inter-regional exchanges and sales of surplus hydroelectric power which have helped maintain adequate supplies of electricity at the most reasonable cost. Discussion is taking place on enhancement of the regional transmission system to include other regions and Canada. Opportunity exists to enhance the Federal storage capacity of Bonneville Power Administration (BPA) by interconnecting the transmission systems of BPA and Western Area Power Administration (WAPA). The Federal Columbia River System owns or controls approximately 36 million acre feet of storage capacity at 30 dams with approximately 22,000 megawatts of capacity. The Federal Missouri River Eastern System plan alone is comprised of 77 million acre feet of storage capacity behind 8 Federal dams which furnishes WAPA with 2,200 megawatts of capacity. If adequate transmission existed, watershed diversity between these two huge federal systems could benefit preference customers in both regions. Sales from other utilities to meet regional needs would also be enhanced at a time when hydroelectric power is being curtailed because of environmental concerns. The Northwest Public Power Association believes that cost-effective additional transmission capacity should be constructed in Montana to interconnect the BPA and WAPA transmission systems. This development would maximize use of existing and future resources to meet current and future needs of preference customers. NORTHWEST PUBLIC POWER ASSOCIATION NORTHWEST PUBLIC POWER ASSOCIATION RESOLUTION NO. 99-9 SUPPORT FOR DISPOSAL OF HIGH LEVEL NUCLEAR WASTE Northwest Public Power Association recognizes that a sound national energy policy must include a program to effectively and safely store high level nuclear waste created by the generation of electricity from nuclear power plants. The Nuclear Waste Policy Act of 1982 provided that the federal government assume responsibility for storage of high level nuclear waste in 1998. The act also required utilities that operate commercial nuclear power facilities contribute 1 mill per kilowatt-hour for ali electricity generated by nuclear power to a Nuclear Waste Fund administered by the Department of Energy to provide government storage of high level nuclear waste. Pursuant to this Act, utilities have already contributed more than $13 billion to the Nuclear Waste Fund, and the Department of Energy has initiated site characterization at Yucca Mountain, Nevada, to detect,tine whether this site is suitable as a permanent repository for storage of high level nuclear waste. However, ff a repository is built at Yucca Mountain, it would not be ready to accept waste before 2010. The solution to this problem is the authorization of an interim storage facility to store spent nuclear fuel until a permanent site can be constructed. An interim facility would provide utilities and consumers with the solution for which they paid, and would enable the federal government to fulfill its obligation under the 1982 law to accept high level waste. The House and Senate both approved in 1997 legislative measures to create such an interim storage site, and the two bills are now pending before a conference cowrntttee. Although President Clinton has vowed to veto legislation that designates an interim storage site before the viability of Yucca Mountain is determined, congressional advocates of an inter/m facility are determined to override a presidential veto. NWPPA urges DOE and the Congress to develop a viable program whereby DOE can accept responsibility for storage of nuclear waste, as required by the Nuclear Waste Policy Act of 1982. Since DOE was and is not able to provide storage for nuclear waste by 1998, NWPPA urges that the fee which utilities contribute to the Nuclear Waste Fund be adjusted to compensate them for continuing to bear the responsibility of storing nuclear waste until such time as the government assumes this responsibility. NWPPA also urges DOE to proceed as expeditiously as possible with site characterization at Yucca Mountain. NORTHWEST PUBLIC POWER ASSOCIATION NORTHWEST PUBLIC POWER ASSOCIATION RESOLUTION 99-10 SUPPORT OF SCIENTIFIC JUSTIFICATION FOR RESERVOIR DRAWDOwI~/OR DAM BREACHING PRACTICES Breaching of the lower Snake River dams, and drawing down the reservoir behind the John Day D~m is being considered as a way to help rebuild the declining salmon populations. Adoption of a drawdown or breaching strategy is not warranted at this point for the following reasons: 1. There is no credible biological evidence that drawdown or breaching would help the salmon and sturgeon. In fact, drawdown or breaching could produce several major impediments [ e.g. gas supersaturation and elhnination of adult passage} to salmon survival and wind up harming rather than helping the listed species. 2. Drawdown or breaching would 1Lkely cause serious impacts to resident fish and shellfish, public and private property along the river, navigation, recreation, irrigation, and power production. With estimates of the total cost of drawdown or breaching as high as approximately $5 billion and estimates of the time needed as long as 15 or more years, it is clear that drawdown or breaching deserve careful scrutiny, including NEPA analysis, prior to being given serious consideration. A report by the prestigious National Research Council issued in Nov., 1995 confirmed the questionable value of drawdowns. The report, which was requested by the U.S. Congress, stated, "The committee is unaware of any scientific data that unequivocally support drawdown to a level above river grade as the best available dam-rattigation option for the Columbia River or the Snake River. Based on limited info~u~ation, transportation appears to be the most biologically effective and cost- effective approach for moving smolts downstream." Since then preliminary studies on both the Snake River and John Day Dams have indicated that drawdowns would be economically infeasible. The Northwest Public Power Association requests the U.S. Congress and the federal government acknowledge that breaching dams on the main stem of the Columbia or Snake rivers or operating these dams under a natural river operating system would not be more effective than other options for enhancing anadromous fish runs and that these other options can be implemented without the staggering costs to the region caused by dam breaching or drawdown options. NORTHWEST PUBLIC POWER ASSOCIATION NORTHWEST PUBLIC POWER ASSOCIATION RESOLUTION NO. 99-11 IN SUPPORT OF THE BENEFITS OF HYDROPOw~R AS A RENEWABLE RESOURCE The Northwest Public Power Association (NWPPA) supports hydropower as a renewable, clean, economically beneficial, cost~effective and safe resource. Our western water resources belong to the people. Our water resources are for the greater common good of the people and the environment. As a renewable energy resource, hydropower generation reduces the need to bum about one billion barrels of off per year. As a clean energy resource, hydropower keeps our air and water clean by reducing the contamination from burning off. Hydropower reduces the nation's balance of payments by using a domestic energy source that reduces the need to import foreign off. Hydropower serves our nation's economy and people by controlling floods, developing navigation systems, irrigating our fa~us, supporting fish hatcheries and developing recreational opportunities. Hydropower is a cost-effective resource because it eliminates the need to buy fuel of any kind. Once a hydroelectric facility is built and amortized the project costs include just operations and maintenance. Hydropower is a safe energy resource. The by-products of generation do not create a hazard for the environment or the people operating or living near the facility. NWPPA wants sensible, balanced approaches to the construction, modification and operation of hydropower facilities. Hydropower is the foundation of our Northwest region's energy supply. It aids our businesses and industries in being a viable and competitive force that enhances the strength of the country. Hydropower is a renewable, clean, economically beneficial, cost- effective and safe energy resource. NWPPA urges Congress and the Executive Branch of the United States to weigh the value of our western water resources in light of the enormous benefits of hydropower to our environment and economy. From flood control to robust irrigation to cost-effective navigation to viable fish hatcheries to dynamic recreational opportunities, hydropower keeps our region's water resources working for America. Because hydroelectric power is a renewable energy resource, NWPPA urges the Congress and the Executive Branch of the Federal government to be consistent in recognizing hydropower as a renewable energy resource in all actions taken by these branches of government. Any credits or other incentives provided in electric industry restructuring legislation to encourage the use of renewable energy resources should regard hydroelectric power as a renewable resource. NO--ST PUBLIC POWER ASSOCIATION NORTHWEST PUBLIC POWER ASSOCIATION RESOLUTION NO. 99-12 SUPPORT OF FERC REGULATION OF HYDRO LICENSING The Northwest Public Power Association recognizes the interrelationship between energy and environmental policies, especially in connection with water resource development. This interrelationship has been acknowledged, with respect to hydroelectric power projects, in the Federal Power Act (FPA) and other acts of Congress, which recognize the role of the states but at the same time delegate to the Federal Energy Regulatory Commission {FERC) the responsibility for balancing environmental and energy interests in licensing water resource projects on interstate navigable streams. The FPA also requires FERC to give state and federal resource agency recommendations thorough consideration in the licensing process, and FERC has adopted the vast majority of these recommendations. Additionally, under the Clean Water Act, a hydropower license applicant must obtain a water quality certification {the so called 'Section 401 permlC) from the relevant states before it can issue a license for a hydroelectric power project. The U.S. Congress has considered amendments to the Clean Water Act which would expand the authority of the states in the licensing process, especially with regard to Section 401 pe~l~its and watershed management programs. Likewise, the Environmental Protection Agency would be granted expanded authority regarding anti degradation policy, including the designation of waters as outstanding national resource waters, as well as expanded authority with respect to nonpoint source pollution. On the other hand. the House of Representatives, in considering amendments to the Clean Water Act, has ;~fl~rmed FERC's role as f'mal arbiter over hydro project licensing where Section 401 conditions conflict w/th FERC's responsibilities under the Federal Power Act. Although NWPPA supports a strong role of FERC in balancing environmental and energy interests, NWPPA is concerned about the steadily increasing complexity of the hydro relicensing process and the time required for acting on such applications. Representatives of the hydropower industry therefore recommended to FERC procedures to reform the licensing process and reduce the time necessary to obtain a license. In view of the importance of FERC's role in connection with hydropower projects, NWPPA commends the House o.f Representatives for affirming FERC's role as final arbiter over hydro project licensing cases and urges the Senate to take similar action. NWPPA also supports reform of the hydropower licensing process to (1) streamline regulations; {2) provide for early and meaningful involvement of all stakeholders; (3) promote competition; {4) facilitate settlement opportunities and the timely resolution of interagency conflicts; (5) reduce post-flltr~g disputes and additional info. mation requests, and (6) maintain the economic viability of hydroelectric projects. NORTHW'E, ST PUBLIC POV~ER ASSOCIATION NORThwJ~ST PUBLIC POWER ASSOCIATION RESOLUTION NO. 99-13 U.S. FOREST SERe'ICE'S STRICT LIABILITY POLICY Northwest Public Power Association (NWPPA) members remain al~umed with the U.S. Forest Service's {USFS) imposition of a strict liability clause for fire suppression in utility easement agreements. Such a standard holds the utility responsible for all fires. Despite repeated meetings with the USFS regarding this onerous policy, they refuse to modify this restrictive standard in favor of a standard of ordinary negligence for assigning fire suppression liability. Congressional intervention has not proved to be effective. Questions posed to USFS regarding the strict liability standard have gone unanswered. In light of the USFS's intractable position, NWPPA actively seeks the introduction and passage of legislation to change the current unreasonable liability standard to one of ordinary negligence and to enhance the right for utilities to maintain right-of-way. Even though the National Electric Safety Code is considered by some to cover utility liability NWPPA supports corrective legislation. To effect the changes necessary. NWPPA will work closely with national electric utility associations and the Northwest Congressional Delegation. NOKIIqWF, ST PUBLIC POWER ASSOCIATION NORTHWF~T PUBLIC POWER ASSOCIATION RESOLUTION NO. 99-14 OPPOSITION TO THE SALE OF POWER MARKETING ADMINISTRATIONS Bills continue to be introduced in the Congress callirlg for the sale of the federal power marketing administrations (PMAs). Yet, the capital costs of the federal hydroelectric power facilities whose output is marketed by the PMAs are being repaid to the Treasury with interest. The operations and maintenance costs of these projects also are paid by the customers. These projects therefore are valuable revenue producing assets, and in the long run their sale would not contribute to reduction of the federal deficit, but may cause the deficit to increase. Furthe~uore, the sale of these facilities would result in increased electric rates which would seriously disrupt the economies of certain regions. The loss of this power would deprive many customer owned utilities of an economical wholesale power supply, thereby reducing competition in the electric industry. Although the U.S. Government and PMA customers would not benefit from the sale of the PM_As, improvement can be made in the management of these agencies, especially with regard to operation and maintenance and replacements. NWPPA opposes the sale of the PMAs as not being in the best long- term interests of the U.S. Government or the PMAs customers. NWPPA also urges continued improvements in the management and operation of the federal power production facilities. NWPPA also believes that customers should work together and with the PMAs to assume a larger share of responsibility for operation, maintenance and replacements. If the federal hydroelectric power projects are to be sold, preference in the purchase should be given to existing customers, and the price should be based on net present value. NORTHWEST PUBLIC POWER ASSOCIATION NORTHWEST PUBLIC POWER ASSOCIATION RESOLUTION NO. 99-15 IN SUPPORT OF PHASING OUT THE RESIDENTIAL EXCHANGE PROGRAM At the time the Northwest Power Act was adopted in 1980, there was a substantia! differential in wholesale power rates between those of the Bonneville Power Administration and the investor owned utilities. In order to bring about more parity in the rates between public and private utilities, the Act provided for investor owned companies to obtain lower price BPA power for their residential and small fa~ui customers, in exchange for BPA's right to purchase an equivalent amount of power from the companies at their average system costs. BPA has paid the IOUs more than $2 billion during the past 10 years through the residential exchange program. More recently, the gap between BPA's rates and companies' average system costs has narrowed considerably. BPA's expenses have escalated {due largely to fish mitigation programs) while the companies have had access to new, lower cost power supply. Some companies, in fact, have successfully competed with BPA for customers. Another factor affecting the residential exchange program is Section 7(b)(2) of the Northwest Power Act. This section states, in effect, that the rates chin-ged by BPA to its preference customers (public agencies and rural electric cooperatives) shall not be higher, as a result of the Northwest Power Act, than they would be in the absence of the act. Because of the IOUs' opposition to the reduction in the residential exchange, the Congress, in the Energy and Water Appropriation bill for fiscal 1996, directed BPA to provide $145 wfllton in residential exchange payments for fiscal year 1997. However, the conference report issued in connection with the appropriation bill recognized BPA's authority to implement in lieu transactions, among other actions, which could effectively te~'~nate the residential exchange after 2001. The conference report also noted that consistent with the regional review of BPA and the Northwest Power Act, "Bonnevi~e and its customers should work together to gradually phase out the residential exchange program by Oct. 1, 2001.~ BPA is proposing a replacement for the residential exchange program in its subscription proposal. However, NWPPA believes that the amount of power BPA is offering to the IOUs is excessive, and believes that offering an additional financial payment to the IOUs over and above the offer of power to the IOUs is detrimental to BPA and its customers. NWPPA believes that the competitive environment now existing in the electric utility industry and the narrowing gap between BPA's wholesale power rates and the rates of competing sources make the residential exchange program obsolete. NWPPA therefore agrees with the recommendation of Congress that the residential exchange program should be gradually phased out, and urges Congress to take appropriate action in this regard. In the interim, NWPPA believes that BPA should strictly abide by the provisions of Section 7(b)(2) of the Northwest Power Act. NORTHWEST PUBLIC POWER ASSOCIATION NORThw~ST PUBLIC POw~;R ASSOCIATION RESOLUTION NO. 99-16 IN SUPPORT OF REAUTHORIZATION OF THE ENDANGERED SPECIES ACT The Endangered Species Act is subject to reauthorization and amendment during the 105th Congress. The Northwest Public Power Association supports the Act's goal of preserving species that are endangered or threatened by human activity. However, NWPPA believes that the Act should be amended to clarify certain provisions, to provide for greater public input into the administration, to improve efficiency in implementing the Act and to achieve a proper balance in considering economic factors. In order to attain these objectives, NWPPA recommends the following amendments: · After a species is proposed to be listed, ff a written request containing an adequate basis for questioning the proposed listing is received by the Secretary of the appropriate federal agency, the proposed listing should be reviewed by a panel of independent and qualified scientists. · The definition of "species" should be clarified to provide greater certainty as to which populations should be considered as species under the statute. · Decisions to list, as well as decisions not to list, should be subject to judicial review. * Critical habitat should not be designated prior to the development of a recovery plan. except when appropriate as a temporary emergency designation. The Secretary should be required to measure and fully consider the impacts, including the economic implications, of designating and specifying a particular area or areas as critical habitat. * Recovery plans should identify measures that benefit candidate species as well as listed species. Priority should be given to multi- species recovery plans. * The recovery plan should identify {1) the actions necessary for recovery of the listed species; (2) the cost of recovery; (3) the probability of recovery ff the recommended actions are taken; (4) the types of activities that will be subject to Section 7 consultation as a result of the listing; (5) the consultation; (6) the potential economic impacts of listing or not listing (7) the quantities of the same species found elsewhere and (8) the degree that major natural conditions deplete the species. Page 2 - Resolution 99-16 · Section 7 consultations should be designed to ensure compliance with recovery plans. · The Secretary of the appropriate federal agency should be required to prepare and publish a detailed decision document containing all data and scientific analysis, sociological and economic impacts concerning the designation of species, sub-species or critical habitat, or finding of jeopardy from a proposed project or action. · Customers of federal agencies involved in consultations should be permitted to participate in federal consultation proceedings. · The Act should provide for standing and intervention by citizens or organizations suffering economic injury as a result of a listing, a critical habitat designation or recovery plan adoption. Legislation has been introduced in the Senate that deals satisfactorily with many of the N'WPPA recommendations. NWPPA commends the bill's sponsors for their constructive approach and supports the legislation as a viable solution to many of the problems with the Endangered Species Act. NORTHWEST PUBLIC POWER ASSOCIATION NORTHWEST PUBLIC POWER ASSOCIATION RESOLUTION NO. 99-17 RECONSIDERATION OF ROLE OF TI-I~ REGIONAL POWER ACT AND THE REGIONAL COUNCIL On December 5, 1980 the United States Congress enacted Public Law 96-501 known as the Pacific Northwest Electric Planning and Conservation Act (Northwest Power Act). The Act provided for establishment of the Northwest Regional Planning Council (Council) to develop a Power Plan and a Fish and Wildlife Progranl; and, while well- intentioned, the Act has served the Northwest poorly; its administration has been dismal. We support cost-effective conservation and renewable resource acquisition as well as actions which assure an adequate, efficient, economical and reliable power supply. We likewise support reasonable science-based measures to reduce the adverse impact of federal hydropower development on fish and wildlife in the Pacific Northwest and to protect and enhance fish and wildlife resources where feasible without jeopardizing the assurance of reliable power supply. The Power Plan developed by the Council and implemented by the Bonneville Power Administration (BPA) has failed to provide an adequate, efficient, economical and reliable power supply as envisioned by the Act. The Council's Fish and Wildlife Program as implemented by BPA is currently costing BPA ratepayers over $1 million per day. This program has attributed more cost to the federal hydropower system than the evidence can support. Mandating higher water flows to benefit fish with no scientific basis for these increases has resulted In unreasonable reductions in federal hydropower production, In reviewing the recommendations of the Regional Review, the Congress should consider means by which to relieve the ratepayers of the Northwest of the excessive costs of fish and wildlife measures. These measures also unnecessarily limit the amount of power produced from the region's hydropower system. NWPPA also urges Congress to reexamine the role of the Regional Council in light of the new competitive environment in the electric utility industry. NORTHWEb-q' PUBLIC POWER A$$OC/ATION NORTHwl~ST PUBLIC POWER ASSOCIATION RESOLUTION NO. 99-18 EVALUATION OF PROPOSALS FOR ~J.~-CTRIC INDUSTRY RESTRUCTURING In recent years, deregulation of several major industries - such as natural gas, telecommunications and airlines - and the increased competition in the wholesale supply of electricity have stimulated a number of proposals for restructuring the electric utility industry. A major objective of these proposals is to offer all electric consumers an opportunity to choose their supplier. The interest in "customer choice" has resulted in introduction of major bills in Congress and consideration of electric industry restructuring by 48 state utility commissions and/or state legislatures. Some states have already adopted bills aimed at offering customer choice; others have initiated experiments on this subject. Many initiatives have been undertaken on the assumption that customer choice would result in increased efficiencies and substantial savings to electric consumers. However, some groups have questioned the assumptions on which such savings have been calculated, and whether all customer groups would share in the benefits. Concerns have also been expressed about the possible effect of industry restructuring on reliability, quality and safety of electric service, maintenance of competition in the electric industry, and other aspects of electric utility service. The electric industry in the United States - comprising investor owned, publicly and cooperatively owned utilities, and more recent entrants such as independent power producers, cogenerators, and marketers - is generally regarded as one of the finest in the world. The industry has an impressive record of providing universal, reliable service at generally reasonable rates. In recent years, legislation providing access to transmission has enhanced competition on the wholesale level, and has brought additional benefits to consumers. The Northwest Public Power Association believes that all proposals leading to restructuring and customer choice should be evaluated in light of the following principles: * State and local decision making must be preserved. · All classes of customers should share equitably in the benefits and related costs, ff any, fi:om restructuring. · All consumers, including those in sparsely settled areas, should have access to a fair and competitively priced source of electricity. Page 2 - Resolution 99-18 · The competitive influence of consumer-owned electric utilities should be maintained if not strengthened. · Competition within the electric industry should not be retarded by mergers and acquisitions which might be stimulated by industry restructuring. · Reliability, safety and quality of service should not be jeopardtTed. · Low income consumers should not be disadvantaged. · The public benefits of energy efficiency, renewable resource technologies and research and development should be maintained. · Restructuring should not result in degradation of the environment. · Consumers must be protected against unscrupulous service providers. · Claims to recover net verifiable, and non-mitigatable costs should be decided by states on a case-by-case basis. · All energy providers should be subject to the same standards. · Repeal of the Public Utility Holding Company Act (PUHCA} should only be undertaken in the context of comprehensive federal restructuring legislation that includes appropriate replacement consumer protections. Legislation has been introduced in the Senate, and draft bills are circulating in the House. that deal specifically with the Bonneville Power Administration and Northwest regional issues. In developing a Northwest title in federal legislation. NWPPA recommends that any bill: · ·recommend functional separation of BPA's generation and transmission businesses, rather than legal separation; · include a stranded cost recovery mechanism, if needed, after BPA has implemented all practicable cost containment measures; · ensure participation by all customers who have benefited from BPA's power and transmission system ff stranded cost recovery is needed; · remove barrier to BPA participation in Independent Grid Organization; and · pen~fit FERC jurisdiction of BPA transmission facilities for the purpose of ensuring open access. NORTHWEST PUBLIC POWER ASSOCIATION NORTHWEST PUBLIC POWER ASSOCIATION RESOLUTION NO. 99-19 IN SUPPORT OF DISPOSITION OF THE NATION'S SURPLUS WEAPONS-USABLE FISSILE MATERIAL A landmark agreement was reached in 1993 when the United States and Russia agreed to reduce their nuclear weapons arsenals and committed to render significant mounts of plutonium and highly enriched uranium non- usable for weapons purposes. The Department of Energy (DOE) and the National Academy of Sciences concur that the presence of stockpiled weapons- usable fissile material presents a clear and present danger to national and international security, and that timely treatment of this material is desirable. In January, 1997, the U.S. Department of Energy completed its Storage and Disposition of Weapons-Usable Fissile Materials Environmental Impact Statement (EIS). In the Record of Decision for this EIS, DOE determined that two disposition options should be fully developed for the disposition of more than 50 metric tons of surplus weapons-grade plutonium. DOE will determine at a later date, after plans for each of these options have been fully developed, whether one or both options will actually be used. The first option would combine oxides of weapons plutonium with uranium oxides, to form a mixed oxide fuel (MOX) for use in reactors to generate electricity. After use in the reactors, the spent fuel would be stored by the utilities, in the same manner as the current spent fuel is stored, before ultimate placement in a national waste repository. Because of the highly radioactive nature of the spent fuel, and because technologically complex processes would be required to both physically and chemically separate the material in order to extract the plutonium from the spent fuel, the material will effectively be unusable for weapons or terrorist purposes. The use of mixed oxide fuel in nuclear power plants is a proven technology, as several reactors worldwide currently use mixed oxide fuel, with more plants slated to use the fuel by the turn of the century. The second option will rely on vitrification, where weapons material will be immobilized in glass or ceramic foxu~s. The pursuit of both options, described by DOE as a dual-track approach, ensures that the U.S. will fulfin its commitment to reduce its stockpiles of nuclear weapons. The Northwest Public Power Association supports the use of the U.S. commercial light water reactors as the most effective and timely method for disposition of the nation's surplus weapons-grade plutonium. The Northwest Public Power Association also supports the timely testing of mixed oxide fuel in a commercial U.S. nuclear power plant to collect needed data for licensing MOX fuel in the United States, such as the testing program that has been proposed by the Washington Public Power Supply System at its Plant 2 boiling water reactor located on the Hanford Reservation near Richland, Washington and/or the Idaho National Engineering and Environmental Laboratory. NORTHWEST PUBLIC POWER ASSOCIATION NORTHWEST PUBLIC POWER ASSOCIATION RESOLUTION NO. 99-20 IN SUPPORT OF OPEN TRANSMISSION ACCESS AND INDEPENDENT GRID OPERATORS Utilities in the Northwest are dependent on the transmission system for access to the deregulated wholesale power market. Recent Federal Energy Regulatory Commission (FERC) Orders 888 and 889 provide that utilities shall have open, non-discr/minatory access to the transmission system. Regional Independent grid operators (IGOs) are being formed to ensure that transmission utilities comply fully with the requirements of these orders. These IGOs provide for equitable access to the system, manage transmission scheduling, disseminate capacity and pricing information, and furnish a means for resolution and/or arbitration of conflicts. Bonneville Power Administration {BPA), like other transmission utilities, has functionally separated its power marketing and transmission operations to comply with the spirit of FERC Orders 888 and 889. However, BPA has proposed legislation that would go beyond functional separation and would create separate transmission and power marketing authorities. However, the legislative separation of the BPA transmission system presents a number of complex issues, such as the security for the bonds of the Washington Public Power Supply System. The Northwest Public Power Association supports open non- discriminatory access to the regional transmission system as provided by FERC Orders 888 and 889. We support the fo~'~ation of regional IGOs to implement these orders. The Northwest Public Power Association supports BPA's efforts to participate in a regional IGO as long as BPA's customers are not harmed. The functional separation of BPA into transmission and power marketing operations is helpful in the creation of an IGO for the Northwest region. However, we question the necessity for legislation that would create separate transmission and power marketing authorities. Other means not requiring legislation should be considered in order to accomplish the same objectives as a legislative separation of the transmission and power rnarketing functions. NORTHWEST PUBLIC POWER ASSOCIATION NORTHWF~T PUBLIC POWER ASSOCIATION RESOLUTION NO. 99-21 SUPPORT FOR EXTENSION OF THE "FISH CAP" MEMORANDUM OF UNDERSTANDING Discussions are currently underway among federal agencies to extend the current fish cap memorandum of agreement (MOA) beyond 2001. It is critical that certainty be attached to the fish and wildlife cost of the Federal Base System. The uncertainty about future fish costs has also caused fear and apprehension among the purchasers of BPA's transmission semces. If no cap is placed on these fish and wildlife costs, these costs will unde~udne the certainty and viability of BPA's cost structure. This uncertainty translates into an unquantifiable and unpredictable financial exposure for any entity that signs a contract with BPA beyond 2001. It is not an economically rational act for any entity to sign such an open- ended contract, and this uncertainty will preclude many of BPA's traditional customers from subscribing for new purchases. If this becomes the case, the subscription process will fail. This would be a sad irony given that the Regional Review recognized that a successful subscription process was critical to BPA's financial health and future survival. The region's fish and wildlife services, funded by BPA's customers over the last 17 years, have a dismal track record. This lack of progress has been due to strategies and solutions based on weak science, and a lack of accountability by the parties proposing and executing the strategies. This history of poor results has left BPA's customers with little interest in subscribing to an open-ended fish liability. Because successful resolution of the subscription process rests in part on achieving an extension of the MOA, we urge you to lend your support to these interagency discussions, and to communicate to the appropriate federal agencies your desire to implement an extension of the fish cap MOA in the near future. NORTHWEST PUBLIC POWER ASSOCIATION NORTHWEST PUBLIC POWER ASSOCIATION RESOLUTION NO. 99-22 IN OPPOSITION TO EFFORTS TO DENY DISASTER RELIEF TO STATE AND LOCAL GOVERNMENT AGENCIES In the 105th Congress, legislation has been introduced to amend the Stafford Act to prevent municipal electric utilities and rural electric cooperatives from being eligible for Federal Emergency Management Agency disaster assistance. Throughout 1997, the Northwest was hit by several severe storms that created widespread power outages and caused millions of dollars of damages to essential utility facilities. Receipt of federal disaster relief payments was critical in helping a number of public utilities restore electric service for their customers. Under the proposed legislation, however, the full burden of the costs associated with future storms or other disasters to facilities like these would become the responsibility of state and local government agencies. This shift in responsibility would come at great cost to the infrastructure and ability of public utilities to repair damaged facilities expediently and restore essential electric service to customers. The Northwest Public Power Association opposes any effort to deny municipal and cooperative electric systems from receiving federal disaster relief. Excluding public utility systems from eligibility for FEMA disaster assistance would severely hinder their ability to restore essential electric service to thousands of customers. The NWPPA urges Congress to continue to make disaster relief payments through FEMA available to municipal and rural cooperative electric systems. NORTHWEST PUBLIC POWER ASSOCIATION NORTHWEST PUBLIC POWER ASSOCIATION RESOLUTION NO. 99-23 TRANSITION COST RECOVERY The United States Department of Energy has stated that a prerequisite for the BPA subscription process and/or a Northwest title to federal utility restructuring legislation is resolution of the stranded or "transition' cost issue. DOE insists that a mechanism be developed to ensure treasury repayment of BPA debt in the event that sales of power and transmission services do not cover that debt. A number of key Northwest congressional leaders also believe recovery of these transition costs must be assured. Northwest investor-owned utilities and industrial customers are advocating a surcharge on power sales that would place a disproportionate cost burden on public power customers. A fairer approach is to recover transitions cost, ff any, through a fee on transmission service which would apply to all users of the BPA system. All users have benefited from the integrated BPA Power system in the past; all users should pay a reasonable share of any transition costs. To maintain pressure on BPA to reduce costs in order to be a competitive supplier of energy, the transition cost mechanism should be temporary and should impose annual and overall "caps" on the amounts that can be recovered. NWPPA supports the use of a "wires" charge to recover transition costs and urges the Northwest congressional delegation to incorporate such a provision in the Northwest title of federal restructuring legislation. NORTHWEST PUBLIC POWER ASSOCIATION NORTIIw,~ST PUBLIC POWER ASSOCIATION RF_~OLUTION NO. 99-24 OPPOSITION TO THE ADMINISTRATION'S ADVANCEMENT OF THE KYOTO PROTOCOL The Northwest Public Power Association recognizes the interconnected relationship between energy and environmental policies. The Clinton Adm/nistration has unilaterally and without the consent of the U.S. Senate embraced what has been known as the "Kyoto Protocol. ~ This policy was begun with the Administration's participation at the Third Conference of the Parties of the Framework Convention on Climate Change in Kyoto, Japan in December 1997. Under the ~Kyoto Protocol," the U.S. would be required to reduce national ~greenhouse gas' emissions 7 percent below the 1990 baseline by 2008-2012. Developing nations, however, would not have such stringent requirements. These restrictions would shackle economic growth in the U.S, hurt the American utility industry in its restructuring efforts and undm'n~ne our ability to compete in global marketplace. When it comes to the reduction of greenhouse gases we do support a global solution, however, not one that reduces the competitiveness of the U.S. Any proposed, to reduce greenhouses gases should be international in scope, but be fair to all parties. This approach was outlined by the resolution offered by Senators Robert Byrd and Chuck Hagel in 1997. We also believe that the Administration should cease its implementation of the Kyoto Protocol's objectives until the Senate has exercised its treaty- ratification responsibilities. In the meantime, the Northwest Public Power Association supports national and international actions that: · Provide incentives for power production systems that do not produce greenhouse gasses. · Develop ways to make energy production and consumption more efficient. * Foster continuing public education programs that objectively address the issue of global climate change. NORTt-rwE~ PUBLIC POWER ASSOCIATION NORTHWEST PUBLIC POWER ASSOCIATION RESOLUTION NO. 99-25 SUPPORT FOR AVOIDING "COST CREEP" IN FISH FUNDING The Northwest Public Power Association commends BPA Administrator. Judi Johansen, for recognizing that "cost creep" in fish mitigation expenses imposed on BPA by other federal resource management agencies has the potential to undermine BPA's competitiveness in the electricity market. It is in the best interest of the agency, the customers and the region to have ce~ainty attached to the fish and wildlife costs of the Federal Based Columbia River System. Uncertainty about future fish costs and 'cost creep" has caused fear and apprehension among the purchasers of all BPA products and ser~ices. The unmet Memorandum of Agreement (MOA) among federal resource agencies does not provide a specific ~cap' on fish costs as the first MOA did; it merely establishes guidelines for future agency actions. The absence of a true "cap,' compounded by ~cost creep" threatens to expose BPA customers to unacceptable f'mancial uncertainty and risk. Additionally, 'cost creep' is likely ff and when decisions by other Federal agencies require BPA to make changes in river configuration. A number of other measures relating to spills and flows have already been pushed upon BPA by other Federal agencies. Individually these measures are small in scale, but cumulatively they result in a major revenue loss for BPA. The region's fish and wildlife services, funded by BPA's customers over the last 18 years, have a dismal track record. This lack of progress, in large part, has been due to strategies and solutions based on weak or non-existent science, and a lack of accountability by the parties proposing and executing the strategies. This history of poor results may ultimately jeopardize the successful completion of the subscription process because BPA customers do not want to assume open- ended fish liabtltty further complicated by the threat of 'cost creep." In light of these concerns over increased fish costs, NWPPA supports efforts by BPA, DOE and Congress to ensure that 'cost creep" is minimal and that fish funding is capped. NORTHWEb~I' PUBLIC POWER ASSOCIATION w A s H i N G T O N, U.S.A. PUBLIC WORKS DEPARTMENT DATE: April 12, 1999 TO: UTILITY ADVISORY COMMITTEE FROM: Jack Piths, Director of Public Works and Utilities SUI~ECT: Landfill Status Concerns regarding the City's plans for continued landfill operations were discussed at the Solid Waste Advisory Committee (SWAC) on January 14. City Manager Ibarra indicated that the City's plan would be provided to the SWAC in April 1999. City staff evaluated three landfill closure options and illustrates the financial impact on the cash reserves of the Solid Waste Fund in the graph on page three. A brief stunmary of the three clo- sure options are: Option gl provides for City landfill operations until cell number three is nearly full at the end of 2006. Landfill operations remain at status quo, with no change in rates. Closure and post-closure is fully funded and the unreserved cash balance is estimated at $8.2 million. Option #2 provides for landfill closure at the end of 2001 with a City operated transfer station on the landfill property. Long hauling, transfer station operating costs and debt service on the trans- fer station facility raise total expenses by $2~4 million in the first year of operation. Cost esti- mates to fill the cell are not included. With no change in rates, projected deficit cash reserves grow from -$141,165 in 2002 to -$6.3 million in 2006. Option #3 provides for landfill closure at the end of 2001 with a County operated transfer station east of the City limits. Long hauling, transfer station operating costs and debt service on the County transfer station are higher than City estimates due to the cost of land and improvements. City landfill costs decrease by $2.4 million because of landfill closure and corresponding reduc- tions in operating expenses. Landfill closure and post closure is fully funded. With no change in rates, cash reserves plummet ~om $572,257 at the end of 2002 to a negative $2.7 million at the end of 2006. Caveat: County refuse accounts for approximately' 50% of the landfill's waste stream. Diverting the county waste stream to a county facility decreases solid waste utility taxes in the General Fund by $160,000 a year. The five-year impact to the General Fund amounts to an $800,000 loss of revenue. Please keep in mind that the Federal Aviation Administration (FAA) wants the landfill closed by the end of 2000. This is their policy and they will hold fast to it. Our approach would be to con- tinue to maintain a very active wildlife hazing program as identified in the Wildlife Management Plan. The County has indicated that the hazing satisfies the requirement for the FAA's demon- stration program. Assumptions relative to the forecast model follows. Assumptions: Basic inflation rate is 4.0% All solid waste rates have been held at current rates for entire period (no inflation) Growth rate for refuse and revenues is 0.5% per year No new capital outlay projected after December 1999 Interest rate on reserves is 6.0% Debt Service costs for City construction of the transfer station costs is estimated at $191,000 per year for twenty years; County construction is $274,000 per year for twenty years In options 2 and 3, there are no City landfill operating costs other than those associated with post closure. Transportation and final landfilling of long haul refuse begins at $48 in 1999 and inflates at 2½% per yr. ~' Transfer station O&M is estimated at $650,000 in 2001 and inflates at 4.0% per year. ~' Assumes that City recycling costs remains the same with inflation added. Conclusions: · :,Existing rates will not allow City to accumulate the required closure/post closure funds by the end of 2000. olo Keeping the landfill open as long as possible is the best financial option for the utility. · :,City ownership of a long haul transfer station is thc best fmancial option for the General Fund, unless other agreement~ are made. · :, Some landfill volume will be available for demolition debris disposal, if landfill is closed in 2006 or sooner. Closure of the landfill in 2006 will allow for adequate planning of a transfer station and long haul methodology. - 2 Option One: City operates landfill until 2006. Option Two: City closes landfill on 12/31/01 and builds transfer station. Option Three: City closes landfill on 12/31/01. County builds transfer station on County property. Landfill Closure Options 20,000,000 15,000,000 10,000,000 ·e ,Option 1] 5,000,000 IOpfion 2j ~ OOpfion 3I 0 -5,000,000 -10,000,000 Year 3