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Home My WebLink About01/21/2003 Special Meeting 258 CITY OF YAKIMA SPECIAL MEETING OF THE CITY COUNCIL JANUARY 21, 2003 - 7:30 A.M. COUNCIL CHAMBERS - CITY HALL 1. ROLL CALL Present: Council: Mayor Mary Place, presiding, Council Members Clarence Barnett, Lynn Buchanan, Paul George, Larry Mattson, John Puccinelli, and Bernard Sims Staff: Dick Zais, City Manager; Glenn Rice, Assistant City Manager; Dueane Calvin, Water /Irrigation Manager; Dave Brown, Water Engineer; Tim Jensen, Treasury Services Officer; and City Clerk Roberts 2. PRESENTATION OF UPDATED FUNDING OPTIONS FOR THE IRRIGATION CAPITAL PROGRAM • City Manager Gives Opening Remarks City Manager Zais provided Council with several historical and general facts: ❖ The irrigation system is one hundred years old ❖ Studies were done over the last fifty years on choices of whether to rebuild or convert to a single system ❖ The Acquavella lawsuit, which recently was settled, held up final determination of water rights until there was more certainty about our water rights ❖ State law restricted the city from building reserves or starting a capital reserve program • In 1995 we convinced the legislature to change the law and allow the City to build reserves The Acquavella settlement terms gave Yakima ten years to rebuild or convert the system and to fix the water leakage problem ❖ The amount of water we get is at risk if compliance with the settlement agreement is not accomplished, risking our ability to serve future customers ❖ In the late 1990s a citizen task force studied the irrigation issue and made specific recommendations, centering around the rebuild of the system • The task force was concerned that irrigation water rights might not be retained ❖ A dual system would ensure there would be a backup water supply • In 1997 an irrigation utility was formed to build reserves and then we would proceed with a pay -as- you -go plan • So far, $1.5 million was invested in irrigation infrastructure ❖ Approximately $1 million is now held in reserve • The focus is on Irrigation District 308, which is the oldest system and the one needing the most repair 259 JANUARY 21, 2003 — ADJOURNED MEETING • Staff looked at where the funds would come from to finance these improvements as well as the future of the domestic water system and other water- related requirements • Converting to a domestic water irrigation system increases the base customer size; grants are available for domestic water, but not for irrigation; and an irrigation utility can issue revenue bonds • To rebuild the 308 system is $14 million; the cost to rebuild the entire system is $20 million; and the cost to convert to a domestic system is about $21 million, which is a higher cost but shared by more people • Power Point Presentation is Given Dueane Calvin gave a Power Point presentation that focused on: The origin of the irrigation system and the law - important points: • system constructed during the early — mid 1900's funded by local improvement district • property owners assessed for operation and maintenance only • reserve fund limited to one -half annual assessment — not permitted to accrue capital reserves In 1995 State Legislature changed law to permit the LID districts to convert to one enterprise fund (Utility) and to establish a capital reserve fund ❖ A recent change in the law is the required metering of water at all diversion ' points He reported that since 1995, $1.5 million has been spent for actual rebuild of the system. The Process: In 1996 Council established a Citizen Advisory Committee to study irrigation issues. In March of 1997, the Committee transmitted their concerns and recommendations about the 308 System rebuild to the City Council, primarily, that a dual system was preferred over conversion. Major System Characteristics, as Identified in the Master Plan: There are 122 miles of piping that consist of a hodge -podge of woodstave, concrete, steel and plastic. The system is partially gravity and pump fed. Options to be Considered ❖ Create a single Utility ❖ Establish a single uniform rate for operation and maintenance charges ❖ Establish a rate for the Capital Improvement Program funding — pay as you go plan was selected at $550,000 per year ❖ Rebuild all of the systems or convert the General System to domestic and rebuild balance of systems •:• Financing the improvements — no known outside funding sources available for rebuilding irrigation infrastructure 2 26 0. JANUARY 21, 2003 — ADJOURNED MEETING City Manager Zais pointed out that the pay as you go plan does not generate sufficient funds to rebuild the system within the ten -year time frame. Mr. Calvin reviewed a chart on the Needs versus Contribution Analysis. Chronology of Development of 308 (General System) Rebuild Costs May 1986: CH2M Hill completed an Irrigation Evaluation Study that estimated the cost to rebuild the System at $8,692,000. ❖ July 1995: CH2M Hill completed the 1995 Water Comprehensive Plan for the Domestic System, including a section on the Irrigation System, and re- evaluated the cost to be $12,600,613. ❖ December 1999: Golder Associates completed the Master Irrigation Plan and concluded the costs to rebuild the System would be $13,098,450. ❖ February 2000: Golder Associates presented the Final Master Irrigation Plan, with a new estimate for the irrigation system's infrastructure at $20.7 million. Staff was directed to identify and investigate other potential options to consider. ❖ September 2000 Golder Associates completed a Supplemental Alternatives Analysis to the 1999 Master Irrigation Plan — estimated cost was then $14,490,000 ❖ July 2002: Golder Associates completed a cost update of the Supplemental Alternatives Analysis to the 1999 Master Irrigation Plan — the new estimate was $15,160,000. 2003- Updated Irrigation Utility CIP Financing Options ❖ Alternative I: Rebuild Original 308 Irrigation System ❖ Alternative II: Convert 308 General Irrigation System to Domestic Water Dueane then reviewed a chart on the costs and funding availability for the two alternatives. Alternative 1: Completed Available Net Cost to Total Cost Project ImprovementsTo Funding Complete Date $ 6,500,000 Rebuild non -308 0 ($660,000) $ 5,840,000 $15,200,000 Rebuild 308 ($1,450,000) ($300,000) $13,450,000 $21,700,000 Total Costs ($1,450,000) ($960,000) $19,290,000 Alternative II Completed Available Net Cost to Total Cost Project ImprovementsTo Funding Complete Date $ 6,500,000 Rebuild non -308 0 ($660,000) $ 5,840,000 Convert 308 to $21,100,000 Domestic 0 ($300,000) $20,800,000C $27,600,000 Total Costs 0 ($960,000) $26,640,000 The final presentation provided a map depicting the 308 General System as well as maps showing the locations of larger capital projects that have been completed since the inception of the Irrigation Utility. 3 26 JANUARY 21, 2003 — ADJOURNED MEETING • • Acquavella — Water Rights Litigation ❖ January 2000: the Court allowed Mediation of water rights ❖ November 2002: the Court issued conditional final order on City of Yakima water rights claim as follows: ❖ Quantity established at 8,030 acre foot • Old Union / Glaspey right — 6,530 acre foot became City municipal water rights • USBOR contract — 1500 acre foot diverted at Nelson Dam • ❖ After ten years it must be reduced by 4,741 acre foot • Old Union / Glaspey right — 3,824 acre foot • USBOR contract — 917 acre foot ❖ Instantaneous quantities established and confirmed Purpose of use declared to be municipal for all water rights ❖ Place of use confirmed and verified ❖ Points of diversion confirmed Council Member Puccinelli asked, and was granted permission, to interrupt the staff presentation to allow Gordon Kelly from the Yakima Health District to speak at this time. Gordon Kelly, Director of Environmental Health at the Yakima Health District, stated his concerns are about public health. He said that he has no documentation about health problems caused by a domestic or irrigation system, but shared several anecdotes that would cause a person to think the problem was caused by drinking water from a non - potable system. Upon questioning, he emphasized that he was sharing anecdotes and could not provide any studies with facts and figures. The staff presentation continued; Dueane Calvin and Dave Brown responded to Council's questions concerning: ❖ Increased cost estimates to rebuild the 308 General System - Answer: Inflation and refined estimates; some of the costs would be there no matter which alternative is chosen • Nob Hill Water Customers — Answer: About one -half of our customers are on Nob Hill Water, and they would not be included in this. ❖ Details on how the cost estimates were derived — Answer: It would take too long to respond at this meeting; appropriate to be considered at a separate meeting To help answer the fundamental question of whether to rebuild or convert to domestic water, Council stated they need to know which alternative is cheaper, which one does the public want , what are they willing to pay, and still comply with the conditions of the Acquavella settlement. Council members agreed that prior to hearing public testimony, they would schedule another study session to discuss the financial aspects of these alternatives. Maud Scott stated that the citizens would need copies of the report, including the PowerPoint presentation, available in English and Spanish. Council Member Sims asked staff to meet with the citizens in the audience to ascertain their questions and incorporate them, and the answers, into a report before the next study session. It was 4 262 JANUARY 21, 2003 — ADJOURNED MEETING • the consensus of Council to meet in a study session next Tuesday morning, January 28, 2003, at 7:30 a.m. and hold a hearing on February 4 in the evening. Following discussion regarding a location for the hearing, City Manager Zais stated that staff would do some research and come back with options. Betty Gaudette asked for a written copy of Mr. Kelly's report to Council. Council Member Sims commented that he didn't see any value in Mr. Kelly's remarks. Council Member Buchanan said that he wanted Mr. Kelly's presentation transcribed, and Mr. Puccinelli stated that he felt that the cost to do that probably wasn't warranted. 3. ADJOURNMENT GEORGE MOVED AND BUCHANAN SECONDED TO ADJOURN THE MEETING. The motion carried by unanimous voice vote. The meeting adjourned at 9:00 a.m. z READ AND CERTIFIED ACCURATE BY: ems,,_ _ 4 'JUN!'' MEMBER 0AT' e "OUNCIL MEMBER JAT' ATTEST: • CITY CLERK MA Y PLACE, MAYOR Minutes prepared by Karen Roberts. An audio and video tape of this meeting are available in the City Clerk's Office 5 •