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HomeMy WebLinkAbout061013 CITY OF PORT TOWNSEND MINUTES OF THE WORKSHOP MEETING OF JUNE 10, 2013 CALL TO ORDER AND PLEDGE OF ALLEGIANCE The Port Townsend City Council met in workshop session the tenth day of June 2013 in the City Council Chambers at 540 Water Street. Mayor David King called the meeting to order at 6:30 p.m. ROLL CALL Councilmembers present at roll call were Robert Gray, David King, Kris Nelson, Catharine Robinson, Michelle Sandoval, Deborah Stinson, and Mark Welch. Staff members present were City Manager David Timmons, Public Works Director Ken Clow, Public Services Director Rick Sepler, City Engineer David Peterson, City Clerk Pam Kolacy, and Water Quality Manager Ian Jablonski. CHANGES TO THE AGENDA No changes to the agenda were proposed. NEEDS ASSESSMENT/ CAPITAL PROJECTS City Manager David Timmons gave an overview of the staff presentation concerning upcoming capital projects needs. He noted that some projects are necessary because of legislative mandates and some are related to deteriorating conditions. Capital projects reviewed are City Lake outfall, automated meter interface, Long Term 2 Secondary Disinfection Compliance and reservoir replacement. Mr. Timmons gave an overview of the water system. Public Works Director Ken Clow reviewed the scope of the City Lake outfall project as well as the estimated project cost and sources of funding. The project scope includes replacement of a failing 24" outfall pipe, installation of new pipes and valves to facilitate City Lake bypass and replacement of existing City Lake drain and control structures. Estimated project cost is $4.5 million dollars with funding from a FEMA grant ($1.2 million), Public Works Trust Fund Loan ($1.0 million) and a $2.3 million revenue bond. Mr. Timmons introduced Mike Taylor from Honeywell to discuss the automated meter interface (AMI) project. He noted that this project will help with cost stabilization on operations and maintenance, better system performance, and improved customer service. He stated that the new "low lead" water rules to be implemented in July 2014 may require full meter replacement which could double the cost of the project and preclude any cost benefit, therefore action on this item is timely. City Council Workshop Meeting June 10, 2013 Page 1 of 3 Mr. Taylor reviewed the materials on AMI and answered questions from the Council. He noted the project is considerably less expensive since the City has already had a water meter replacement program in place and the meters are relatively new. Honeywell has conducted the bidding process and will work with staff to see which provider makes the most sense for the City. He elaborated on many aspects of the project including a key element which is the guarantee of system performance (by Honeywell) that warrants the proposed system will perform as specified and will yield savings as shown in the materials. Mr. Timmons discussed a potential partnership with the PUD if they wish to initiate this program as well. He also noted that financing for utilities and the general fund are completely separate. City Engineer Dave Peterson reviewed the Long Term 2 Enhanced Surface Water Treatment Rule (a Federal law with regulations adopted in 2006). The state has adopted rules for remaining unfiltered; this requires removal of Cryptosporidium. It must be done with two disinfectants so the proposed UV system will be the second disinfectant with chlorine the first. There is no variance from the requirement. He reviewed prior Council actions and decisions, as well as project cost and funding. He said the bid will probably be awarded at the end of this month. Construction is currently scheduled for completion by October 2015 (slide showing October 1, 2016 is outdated). Public Works Director Ken Clow reviewed the information on the 5 million gallon reservoir replacement project including location, project scope and estimated cost. He added that the old tank will be kept as long as feasible but that it could fail at any time, particularly in a seismic event. Mr. Timmons then reviewed various steps that the City has taken to bring down the utility costs to the ratepayers. He reviewed the information in the presentation noting that the current raise in rates is less than the 2010 projection. Actions taken to mitigate the rate increase include selection of UV over sand filtration to comply with LT2, elimination of General Fund overhead charges on utility services, stabilization of operations and maintenance through the automated meter interface, and reduction in chlorine usage. Mayor King declared a recess at 8:05 p.m. for the purpose of a break. The meeting resumed at 8:15 p.m. UTILITY RATE ANALYSIS Mr. Timmons introduced Chris Gonzalez of the Financial Consulting Services Group (FCS) to review the utility rate study. He noted the current study has modified the original full study done in 2007. He reviewed the methodology and findings of the study. He noted that originally the rates did not include capital costs. He discussed system development charges and the out-of-City multiplier and answered questions from the Council. City Council Workshop Meeting June 10, 2013 Page 2 of 3 Recommendations from the study include adoption of proposed 2013/2014 rates as shown including operations and maintenance and capital surcharges; re-evaluation of rate needs in 2014 prior to adopting 2015-2018 rates, adopting updated system development charges to be phased in over two years, and increase the outside-city multiplier from 1.10 to 1.20. Recommendation Mr. Timmons stated that action should come soon so that citizens can be informed of the totality of the rate impacts prior to the August election. He said that increases are not optional and those utility customers most affected are not individuals, but entities such as Fort Worden, the schools, etc. He suggested that the AMI be dealt with separately since it is a revenue neutral project and there may be immediacy because of a potential need to replace meters due to "low lead" rules. He recommended that the reservoir project costs be added to the capital surcharge but not the sewer outfall which can be excluded for separate future consideration when the projected is defined. He added that the capital surcharge was formerly embedded in the rate but will now be separated out for purposes of transparency to the ratepayers. Rates were originally scheduled to go into effect on July 1 but that date has been delayed. It is also an option to discuss payment options for System Development Charges. There was some discussion about options for surplusing designated City assets that belong to the utility to defray some capital costs. There was discussion about information to the public and plans for flyers and brochures to be available in the Finance Department. Ms. Nelson expressed apprehension about moving forward on the AMI project before seeing further information. ADJOURN There being no further business, the meeting was adjourned at 9:50 p.m. Attest: Pamela Kolacy, MMC ` J City Clerk City Council Workshop Meeting June 10, 2013 Page 3 of 3