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WATER/WASTEWATER TASK FORCE MEETING 1) CALL TO ORDER
Citizens in attendance included Mark Fields (Suburban East Salem Water District). Staff present included Frank Mauldin (Public Works Director), Tim Gerling (Assistant Public Works Director), Steve Downs (Utilities Planning Engineer), Paul Eckley (Chief Utilities Engineer), Pat Dodge (Management Analyst II), Randy Pecor (Sewer Collection Superintendent), Mark Siegel (Finance). 3) CITIZEN INPUT None at this time. 4) MINUTES Minutes of February 10, 2000, were not approved as the following revisions were noted. 1) Steve Travis and Ed Davis were shown as both “in attendance” and “absent” while, in fact, neither was in attendance at the meeting. 2) Delete duplicate wording in the last sentence at the bottom of page 4 of the minutes. 3) Tim Gerling requested a change to the wording in the last paragraph on page 3 to more accurately reflect his response to Councilor Bennett's question. These changes are shown in the revised draft minutes to be approved at the next Water/Wastewater Task Force meeting. 5) REVIEW OF STORMWATER FINANCING POLICY PAPER Tim Gerling, Assistant Public Works Director, introduced Steve Downs, Utilities Planning Engineer, to present an overview of the Stormwater Financing Policy Paper. The overview included background information (Where have we been?), where we are today, and where we are going. The City currently has three basic components of its stormwater management program that require annual funding including Operations and Maintenance (O&M) funded from sewer rates, Perpetual Life Funding Program funded from sewer rates, and the Construction Bonding Program funded from sewer rates. Details of these components are covered in the policy paper distributed to Task Force members. Where we are going section of the policy paper included: Discussion of A) The “Growth” component of our stormwater capital improvements; B) The “Fair Share” distribution of future stormwater rates; C) Credits for both the SDC fees and the monthly charges; and D) Master plan policies to be considered. During this overview, Councilor Wulf asked what the Salem “standard” is. We look at where we are today, where we should be, what our counterparts are doing and then 10 years down the road. There is no standard defined for Salem yet. There is no (Total Maximum Daily Load) TMDL yet and there are no federal stormwater standards yet. We do not have real strong direction from the federal government as to exactly what you have to do. They just say that you have to be doing something. Steve Downs stated that even if our plan is correct, somewhere down the road somebody is going to say we are wrong, or it is not enough. Frank Mauldin stated that the National Marine Fisheries Service (NMFS) 4(d) Rule is a most complex and onerous rule. We can't make heads or tails out of it yet, but we know we are going to have to take action. We have to struggle forward as these things develop and see what the impacts are. JB Summers stated that this implies that now is not the time to throw money at it, it is the time to plan it very carefully. Now is the time to be going slow because there are so many unknowns. Steve Downs pointed out that the COSA long-range utility financing strategy has already assumed a certain level of annual stormwater operations and maintenance costs - initially $2 million a year, with an annual adjustment for inflation. JB Summers stated that we are looking at keeping the Stormwater Master Plan separate from the Wastewater Master Plan and you can't really do that because many of the products in the wastewater management plan are related to stormwater objectives because if you reduce your sewer overflows, you reduce the contaminants going to the river. So those are related and not even covered in this document. Frank Mauldin stated that a tradeoff is being proposed: taking the $750,000 in pay-as-you-go money and wrapping those projects into the bond projects and use the $750,000 to increase the O&M. There is a rough match there. For the next eight years, we are expecting $20 million to be spent, not just from rates, but total. Page 6 of the Policy Paper shows the Bond Issues/year and amount to be spent, to equal $20 million through 2008. Tim Gerling continued the presentation beginning with growth - who benefits and who pays? There is a large growth component - we are not only dealing with where we are today, but with sins of the past and also future growth. Today's new development is tomorrow's customer who pays. SDC fees by law can only be charged on new development. The state allows the right to two components: the improvement fee for the future facility which is going to increase future capacity, and the reimbursement fee where the community can get back some of its investment in existing facilities. The strings that go with an SDC approach are that development can be charged no more than its proportionate share - growth-related only. There are built-in advantages in terms of credits and Tim explained credits by using a real example. The problem with SDCs is determining “what is growth's share?” Staff's recommendation is that the City needs a recommendation from a consultant. The City needs professional help. We need to go through and make a first cut that says we have a $20 million program. Here's a list of 100 or 200 projects. We would hand that to the consultant and they would need to go through it, project by project. What is the right percentage for fixing past sins, current needs, and future growth. The second thing that needs to happen is - we have capacity for a $20 million program. It makes sense to take care of today's problems first. That means a pretty small growth percentage and a pretty large past sins portion. What advantages are there for existing customers? The advantage is that existing customers don't pay SDCs, only new growth does. Staff recommends that the Task Force forward a recommendation to the City Council to approve retaining a consultant to complete a stormwater SDC methodology and proposed stormwater SDCs. Tim Gerling stated that in order to make room in our current budget to increase our O&M to $2 million, we are going to take the $750,000/year pay-as-you-go (PAUG) projects, pull them out and put them into our future rate projections and we are basically going to use the same - $3 million/year total. In the event that we are successful in adopting SDCs, some of that $20 million worth of bond sales that the sewer rates are paying for, we think are going to get shifted to SDC repayment, lowering the impact on rates. Eleanor Miller asked how much this is going to cost (the consultant) and where will the money come from. Tim stated that we don't know that. Councilor Scott - The $20 million - how did you arrive at that? Is it driven by prospective rate implications, or did you just sit down and say, well, 10 percent of the total looks fine. Why is it the amount it is? Tim Gerling - We don't just do stormwater. We do a streets program, water program, sanitary sewer, etc. We've got a combination of how much work we think we can legitimately handle the stormwater. On top of that, we've already got a fairly steep sewer rate increase due to wastewater projects. We can tell you with some certainty what we need to do is to mitigate flooding. We have no idea what will be needed to bring the salmon back. Or what it is going to cost us or what kind of projects. We need to deliberately go very slowly so we know we are spending the public's money in the right way. JB Summers - So the Stormwater Task Force Advisory Committee did not address the issue of needing a consultant to complete stormwater SDC methodology and stormwater SDCs? Tim Gerling stated no, except through issue papers, wet weather allocation studies, and a couple other things. There is an adopted policy that states if and when the City has a stormwater SDC it will be handled in the same way as the water and sewer. JB Summers asked if there was a need for a recommendation or had the Task Force already crossed that hurdle as far as the Council? Frank Mauldin stated that he thinks that is one of the charges of this Task Force - to review the financing of government services and that this is a real important part of that charge, so it is appropriate that the Task Force make a recommendation. Chairperson Councilor Wulf asked Wendy Kroger (a member of the Stormwater Advisory Committee (SWAC) in addition to this Task Force) for her reaction to this. Wendy said she was happy with the recommendation as stated here. SWAC did try to look at some of the issues. Councilor Bennett stated that he had spoken to Frank and would like have staff come up with cost per basin for SDCs and other charges. If people do not have very many problems, they should not pay the same rate. Councilor Bennett stated that Frank had indicated that this would not be a great problem. Tim Gerling stated that we had done something similar with water SDCs, looked at different rates in different areas, and ended up rejecting that approach because of the administrative complexity. Councilor Bennett would also like to look at separating the ESA costs out on the billing. Frank stated that Councilor Bennett had said that we could speak to the SDCs and could talk about each basin should pay a different amount. That is a tremendous departure. Is that going to be a recommendation to the Task Force? Councilor Bennett stated that it is something he would like to hear more about. Frank Mauldin brought forward what the exact recommendation to Council is going to be - certainly we want to hire a consultant to do the SDC methodology, but we also want to economize the whole effort as much as we can through administrative effort and the use of common, day-to-day sense, and the speed of getting it done and the only way we can accomplish that is to have CH2M-Hill do it as a change order to the existing COSA contract. That is going to be the recommendation we make to Council. It will give us the authority to negotiate a sole source contract with CH2-M-Hill. Councilor Bennett - The consultant that Frank has recommended is very good and the City will save money by going thru them. Steve Travis - Go to the consultant and say “we want to spend $_, and then his responsibility as a consultant is to do what? Tim Gerling - The assumption would be that we would successfully hire a consultant to develop for us SDC methodology that fairly allocates growth percentage of projects and that fairly indicates who pays what share of costs. JB Summers made a motion to approve staff's recommendation to forward a recommendation to the City Council to approve retaining a consultant to complete a stormwater SDC methodology and proposed stormwater SDCs; the motion was seconded by Wendy Kroger. Ross Peterson asked about stormwater component being identified on the sewer bills. Frank Mauldin said yes, but not sure how at this time. I think on the Commercial and Industrial billings that you will see a separation. We may not want to do that on residential - that is still a decision that needs to be made. Mayor Newton - There is some substantial federal money available to assist cities who have a plan - in this consultant is there going to be any consideration given - is there another way of doing this? There is another endangered species down river called the Cities of Tigard, and Wilsonville, and some other places who are now talking about the river as their source of drinking water. Is the study going to look at expanding to the east or even look at moving the sewer plant? Tim Gerling - Not on study that is strictly charged with the scope of work that says what is growth's share. Councilor Scott - Who decides the projects within this $200 million list? Is staff going to decide or is that part of what the consultant is deciding? Tim Gerling - Probably the City will decide the highest priority projects before the consultant looks at the list. Councilor Scott - with regard to the bills and the stormwater component. Is that going to be part of the COSA? To determine which bills, if any, get the stormwater charge? Is the consultant going to look at whether a 12,000 ft. residential lot should have a charge that is different than a 4,000 ft. mobile home space. Will we get a recommendation on that part of it from the consultant? Frank Mauldin - It could be. We have always thought that each residential unit would be charged the same amount. The direction we are headed on residential is that each residence would be charged the same amount only because there is a huge administrative cost of maintaining such a system of determining exactly what impermeable area every residential unit contains. Councilor Scott - So with regard to non-residential, we will be looking at a recommendation from the COSA study - from the consultant? Frank Mauldin - Yes. Those will be very specific. The commercial and industrial will be specific. Ross Peterson - Since we don't know what some of these steps may be, I presume the consultant will focus on developing methodology? And that methodology would be applied to detention basins, etc.? Tim Gerling - Yes. Discussion closed at this time and a vote was taken on staff's recommendation. No opposition and the motion was carried unanimously. Councilor Scott said that maybe this kind of balances out the concern he had early on about the water supply and the cost of serving various parts of the City. (In reference to Councilor Bennett's suggestion that different basins pay different rates.) Chairperson Councilor Wulf stated that this would be addressed another time. Ross Peterson - What is the real question - should we have a stormwater utility? And if we have floodwaters, are we going to have SDCs? 6) RESPONSE TO CITY OF KEIZER Steve Downs stated that this is more information for clarity. He reviewed the response to the City of Keizer that each member received a copy of in their materials packet. He stated that we are looking at 88 cu. ft /second increase, not 400. So the magnitude will decrease. Going to continue to work with staff. We were advised yesterday that Keizer has adopted a new ordinance and new standards for their detentions - for their critical basins. 6) OTHER Next meeting will be April 13. Will either cover the sewer lateral policy - we have been working diligently on this - or bring back some COSA information. 7) ADJOURN Meeting adjourned at 12:50 p.m. These minutes are transcribed from notes and the tape recording of the Task Force meeting on March 9, 2000, as an overview of the meeting. They are not verbatim. The tape recorded meeting is available for review in the Office of the Public Works Director. The attachments are to the file copy only. Copies of the attachments were distributed at the meeting and by mail to those unable to attend the meeting. Linda Nelson, Staff Assistant II February 16, 2000 Attachments:
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