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HomeMy WebLinkAbout01/28/1997 Adjourned Meeting / Study Session 281 CITY OF YAKIMA, WASHINGTON JANUARY 28, 1997 ADJOURNED MEETING /STUDY SESSION I/ The City Council met on this date at 8:00 a.m. in the First Floor Training Room at the Police Station /Legal Center, 200 South 3rd Street. Council Members present were Mayor Lynn Buchanan, Clarence Barnett, Ernie Berger, John Klingele (present after 8:20 a.m.), John Puccinelli, and Bernard Sims (present after 8:30 a.m.) Council Member Henry Beauchamp was absent and excused. Staff members present were City Manager Zais, Assistant City Manager Rice, John Hanson, Director of Finance and Budget; Dueane Calvin, Water /Irrigation Manager; Dave Brown, Project Engineer, and Deputy City Clerk Skovald. Mayor Buchanan welcomed the group and the meeting began. Glenn Rice noted that during Budget Review for the Water /Irrigation Division, the Council requested this study session be scheduled to discuss the issue of water rates. He explained that the Domestic Water 1996 Cost of Service and Rate Study is a`report developed in accordance with the 1994 Water Comprehensive Plan and the Five -Year Plan, a document created by the Water /Irrigation Division which defines and identifies the process of maintaining and upgrading the City's domestic , water system and is used as a guideline by the Division. Dueane Calvin described the process used to develop the proposed water rates which was submitted during the Budget Review Session on December 26, 1997. During that process they took into account consumption and demand levels, an allocation of appropriate costs to cut customer class, and calculated operational costs for the domestic water rates. Mr. Calvin asked for Council direction concerning the ongoing Capital Improvement Program and how the utility is to develop. He referred to the options included in the Water Comprehensive Plan and elaborated on the need to expand the Water Treatment Plant. He explained expansion is necessary because of accelerated demand (which was not anticipated to be reached for another five years) and the reliance on ground water supplies (wells) caused by that accelerated demand. There are three active wells -- the Airport, Kissell Park, and the Kiwanis Well -- and, depending on the system demand, there is also the Wright Avenue Well, which has been identified in the Plan for a 1997 upgrade or replacement. He then referred to a chart of the Fairview, Sumac, CBD, Railroad, and Castlevale areas all of which have experienced accelerated demand. Mr. Calvin reported the Northeast Area and the Airport Area have extremely low pressure and low volume which can affect system distribution necessary for fire suppression. These low I/ pressure areas need to be evaluated, as to engineering use and construction. Mr. Calvin then directed Council's attention to Capital Improvements and how mandates are impacting the cost of debt service. Since there is limited access to grants for system improvements, loans must be made to accommodate the mandates, although that may change to some extent with the advent of the New Safe Drinking Water Act. In addition, there 2 :8,2. ADJOURNED MEETING -- JANUARY 28, 1997 are new requirements essential to reporting to the public such as information collection and data base building. Growth in the last 10 years is another factor which has had a tremendous impact on the domestic water system. Annexation areas have caused accelerated demands, and it is a challenge to meet the demands of that new growth. Another problem is the very old cast iron piping in the Central Business District which is causing a tremendous red water problem and a decline in fire flow generation ability. Pilot programs are planned to clean and reconstitute the water mains in this area rather than pipe replacement. A corrosion control program is also necessary in conjunction with the pilot program. Mr. Calvin emphasized the necessity to identify all the options available to determine the most cost effective and beneficial option to utilize. Council Member Barnett directed attention to significant water rate increases implemented in 1994 as referenced in the Yakima Municipal Code. He pointed out that significant increases are again being considered, and at the time those water rates were increased, it was felt that rates would eventually decrease by two percent. There was a considerable amount of discussion about that two percent reduction in rates concept currently identified in that ordinance. The purpose of the two percent was to build reserves for a private main replacement program. The LIDs and additions to the system, which are comprised of expansions primarily, are driving some of the costs, plus there are some unanticipated costs from when the 1993 rate evaluation was being done. Dave Brown pointed out that it was anticipated that many customers would want to replace their private main immediately; however, that has not been the case. During his status report on upgrading the City's wells, Mr. Calvin explained why the domestic water system improvements are critical. He reported that the electrical capacities of the Kiwanis Well will be made this year, and improvements to the Airport Well will be done in 1997. For Wright Avenue Well, the fundamental needs must be identified and a determination made as to whether or not water will be available. After those preliminary studies are done, the Council will decide whether a ground water monitoring program should be implemented before the well is rehabilitated or a new well is developed. Council Member Barnett explained he is apprehensive about drilling a new well in a shallow acquifer without first knowing the long -term ground water use capability of the basin and the hydraulics of the area. He questioned whether funding could be justified for the Capital Improvement Costs in the amount of $1.2 million plus $60,000 for designs or studies. Since the rate increases for 1997 and 1998 are based on projected costs for improvements to the Wright Avenue Well, Council Member Barnett feels the costs could be reduced if the capital costs were shifted as indicated in the Water Comp Plan. He asked, if the $1.2 million for the Wright 'Avenue Well refurbish is taken out of the Capital I/ Improvement Program, what impact would there be on the rate structure. He also requested the impacts be determined for the Wright Well as it relates to the recent decision of the Pollution Control Hearings Board and the Department of Ecology's de facto closure on ground water in the state. Specific knowledge is needed concerning what the hydraulics are in the basin. Mr. Calvin explained $60,000 is for a ground well monitoring program under the auspices of the City to consider possible contamination of the well. Legislation is being proposed regarding hydraulic continuity as it relates to confined acquifers. The Pollution 2 ADJOURNED MEETING' : '; - JANUARY 28, 1997 Control Boards' comments will ,probably„ be dealt with at that time. There was discussion about planning ahead to accommodate growth as it relates to proposed rate increases. Water rights, peak capacity and supplemental water use, the abandoned 16th Avenue well, and necessary improvements to the domestic water system were all discussed by the Council. John Hanson provided his financial perspective about the policy issue. He suggested the money be put in the reserve fund instead of increasing debt service for the Wright Well improvements and the Water Treatment Plant expansion project. Whether) a new well is drilled or the existing well is rehabilitated, reserves should be spent instead of debt service increased. There was discussion about the per -unit charges for each consumption group and the need to develop a rate block revision to reflect rate equalization while maintaining the projected revenue. Mayor Buchanan directed attention to the topic of subsidizing irrigation users by giving reduced rates for irrigation. He feels they ought to pay at least the costs it takes to produce the water because it costs the other ratepayers more. There was also discussion about the disparity in the rates charged small users who are subsidizing irrigation rates for the big users within the government agency customer class, such as schools and City parks. There was continued discussion about the water rate structure and using reserve funds to pay for expansion of the Water plant. City Manager Zais indicated a follow -up report will be prepared which will incorporate two or three options reflecting the Council's opinions discussed during this meeting on how the rate structure might be redone. That document will be available for public review to solicit citizen comments. Then from that public meeting, additional feedback will be included, incorporated, and reflected in the formal legislation. Mayor Buchanan requested the Cost of a Unit of Water be determined and the ready to serve cost should be defined, as well as what is included in that cost. Council members also discussed whether the rate increase should be displayed by a percentage or a dollar amount. Big increases are planned for large users of water such as laundries and laundromats and carwashes. Tables should reflect that also, and a minimum bill should be defined. New water saving technology and alternatives to save water were discussed, and there was a lively discussion about what to take into account when figuring the unit cost ratio to produce a unit of water. Staff is to provide the specific information to Council Member Puccinelli. Assistant City Manager Rice pointed out that the rate increase is not only important, but how that increase is spread among the rate payers is important as well. The impact on users should be clearly defined so the public can compare their existing water bill to the increase and then present their ideas during the public meeting. 3 2.8.4 ADJOURNED MEETING -- JANUARY 28, 1997 City Manager Zais directed attention to the Department Assistant II request for the Irrigation Operating Fund. Additional information was provided in the memorandum included in the Council packet. There was discussion about the high volume of calls in the Water /Irrigation Division and the need to fill this position. The meeting adjourned at 9:45 a.m. READ AND CERTIFIED ACCURATE BY: i/. /COUNCIL M MBER DATE A Ale. COUNCIL ME :E" DATE ATTEST: 2 /.�� ,�_ _/ • CITY CLERK ' ''� BUCH' ` , MAYOR L Minutes prepared by Deputy City Clerk Skovald. An audio and video tape of this meeting are available in the City Clerk's Office 4 .