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Home My WebLink About06/14/2011 Study Session 13 YAKIMA CITY COUNCIL STUDY SESSION JUNE 14, 2011 — 9:00 — 10:30 A.M. COUNCIL CHAMBERS — YAKIMA CITY HALL 1. RoII CaII Present: Council: Mayor Micah Cawley, presiding, Assistant Mayor Kathy Coffey, Council Members Maureen Adkison, Dave Edler (until 9:45 A.M.), Rick Ensey, Dave Ettl and Bill Lover Staff: City Manager Zais, City Attorney Cutter and City Clerk Kloster ' City Manager Zais spoke about the City's history related to wastewater rates as well as the impact of the Clean Water Act passed in 1972. Major investments have to be made in the facilities to meet the increasing mandates. Industry in the area depends on the capacity and growth to serve wastewater treatment needs. We need to continue looking ahead as to what we can do to support industry growth. It is a federal mandate to do a rate study every two years. It is a rate - based system. This is not a decision meeting but an introduction of what is coming as a major policy issue for the 2012 budget. 2. Wastewater Rate Study, Wastewater Connection Charge Revision and Stormwater Rate Study Scott Schafer, Wastewater Manager, advised that the Wastewater Division treats approximately 13 million gallons of wastewater a day. They maintain approximately 335 miles of collection pipe serving approx 128,000 residents. It is imperative we meet full compliance with our discharge permit. Each year compliance becomes more stringent and costs increase due to mandates. Compliance is not an option, nor is cost an acceptable reason for not meeting compliance. A video entitled "Liquid Assets" was shown clarifying the necessary infrastructure to deliver water in the volume and quality necessary. Mr. Schafer commented that infrastructure failure is usually due to financial neglect. We need to reinvest into our systems. They create a facility plan identifying all of the improvements needed for 10 -20 years. It needs to be continuously updated as new mandates are authorized. Improvements worth $81 million have been identified as necessary, and this does not take into consideration any necessary repairs. There was a handout listing the projects that were a $12 million policy issue last year. Funding the projects puts us in a good position to possibly have some operational savings. He spoke in detail about the bioreactor. Without an appropriate rate structure, we cannot accommodate future growth or economic development, nor continue current service levels. They are trying to simplify the rate structure and contracted with FCS Group to find a simpler calculation. Also discussed was the impact on existing and potential industry resulting from a lack of capacity. Council Member Coffey asked for records of industry needs that we are not able to meet. 14 June 14, 2011 Study Session Wastewater Rate Study Karen Johnson, FCS Group, gave a Power Point presentation on the study they performed for the City of Yakima. The period of evaluation is 2010 -2020 with a proposed three -year adoption for 2012 through 2014 for wholesale charges, • pretreatment and strong waste charges. Ms. Johnson listed and reviewed the five financial policies: 1) Financial reserve 4) Debt service coverage 2) Capital reserve 5) Debt management policy 3) System reinvestment funding. The presentation covered the following areas (handout material attached to the file packet): Capital program Funding Strategy Revenue Requirement Forecast Retail Rate Forecast Capital Connection Charges Wholesale Customer Charges Miscellaneous Charges During Council discussion, Council Member Lover asked for more information on planned capacity increases. Mr. Schafer advised that the map supplied addresses that issue. The bioreactor, when installed, will give instant growth potential. The rate study and proposed changes will be a 2012 policy issue. 3. Audience Comments No one came forward to speak. 4. Adjournment ENSEY MOVED AND ADKISON SECONDED TO ADJOURN TO JUNE 21, 2011 AT 6 :00 P.M. FOR THE CITY COUNCIL BUSINESS MEETING. The motion carried by unanimous voice vote. F READ AND CERTIFIED ACCURATE BY / NCIL MEMBER DATE A ! c/ " COUNCIL MEM: - _ ' ATE ATTEST: tly J. CITY CLERK MICAH CAWLEY, AYOR Minutes prepared by Linda Watkins. A CD and DVD of this meeting are available in the City Clerk's Office 2 •