HomeMy WebLinkAboutMinutes Water Resources Advisory Committee - 02/07/2008 Minutes
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�22g293037Water Resources Advisory Committee
February7, 2008
Water DepartmentConference Room !'s JUS 20n�
Members Present: Carola Serrato, Chair, Leland Johnson, Mark Stroog Franlg8` aii" utku
Blake, Mary Fant and Michael Cox. �' ‘0
Members Absent: Lena Coleman } ` 'LsLv`£ti
Staff members present:
Assistant City Manager Oscar Martinez
Acting Water Director Gustavo Gonzalez
Max Castaneda
Ivan Luna
Yolanda Marruffo
The meeting was called to order by Carola Serrato at 11:40 a.m.
Approval of Minutes
The minutes of July 19, 2007 meeting were reviewed. A motion was entered to adopt minutes of
July 19, 2007 meeting as presented. A second motion was made. The minutes were approved
unanimously.
II. Update presentation on the City's Utility Rate Study
Mr. Oscar Martinez-Assistant City Manager for Administrative Services for City of Corpus Christi
provided information as presented to the City Council on January 19, 2008. In addition, he
provided information submitted by the Stakeholders Group on the proposed water rate changes as
well as the re-evaluation of the storm water rates.
On December 18, 2007, the City Council passed a resolution directing staff to proceed with
activities leading to the establishment of a separate source of storm water funding and revision to
the design of the City's water rates structure. The genesis of the whole idea came nearly two years
ago when an industry representative asked the City to review the structure of water rates.
The City Council did give some very clear direction in regards to the resolution that required the
City staff to look at rates and how individuals are charged based on their usage of the system.
Customers benefiting from the system should be paying for the portion of the system used. The
basis of the study has been focused on appropriate charges based on usage. Meetings with inside
city limits (ICL) and outside city limits (OCL) stakeholders were broken into two sections; one with
storm water and OCL customers. The new rates are expected to be implemented during the
Spring/Summer of 2008. On February 12, 2008, the City Council is expected to include a
resolution to confirm policy assumptions in the creation of the new Storm Water Utility. Public
hearings will be held specifically for the creation of the Storm Water Utility, as required by State
Bond. Any changes made to the utility rate are subject to change and further policy discussion
because we are making the assumption as if they existed today. We are aware that issues may
change after we begin to prepare the budget for the next year, such as cost factors and
consumption patterns.
Some of the factors affecting class and rate distinction are based on the cost of service, stated Mr.
Martinez. The pattern of water usage is based on consumption and types of customers. We are
also examining the different types of facilities used based to our extensive water system. Part of
SCANNED
the system is treatment, raw water, and distribution. We try to look at the portion of the system
being used to aggregate the cost of the system as being used by the customer, and then create a
rate structure that recovers the cost for the use of that particular portion of the system depending
upon the customer, as well as the jurisdiction involved.
Every customer that utilizes the water system uses the raw water system. ICL retail customers use
every component of the system. Therefore, the rates are being developed based on the usage of
the system, as well as consumption. Considerations being made for the rate restructuring are that
all classes will be charged based on the facilities used and how useful it is to the system of the
jurisdiction. Outside city limit (OCL)water customers will see some benefits due to the removal of
storm water and unbilled City water expenses from their rates. The current rate structure is
uniform where storm water cost was embedded in the Water Fund back in 1989. OCL customers
are not benefiting from our Storm Water System; thus staff has been directed by City Council to
remove that cost. There is also some added cost for OCL customers which is cost recovered for
interim construction financing. The City has the capability to borrow from itself instead of issuing
bonds to fund capital projects. In doing so though, it ties up our capital and certain interest
earnings that are not collectable as a result of our capital being tied up. The City is losing money
by not being able to invest those dollars or earn interest. Anytime the City takes on a water debt,
the City's credit is at risk; therefore, a return on equity has been added which allows the City to
calculate the net equity within the system assuming that we earn by investing those dollars in
another way. The minimum charge for OCL and ICL retail customers will be examined. Currently,
the deviations of the different meter sizes are not tied to AWWA standards. In addition, the City
will revise the residential block pricing tiers to reflect patterns of use and to capture minimum
indoor water use. We tried to create a block schedule that is more comparable to the patterns of
water usage for peak areas of water use such as for irrigation. Mr. Martinez stated that the
structure is an inclining block rate and encourages water conservation.
OCL retail rates will be based more on cost of service. OCL wholesale and feasible minimum
charges are based on objective capacity reservations required from the system.
Summary: Outside City Limits
• OCL customers will not be charged for Storm Water costs, which is about$18.6 million that
is embedded in the Water Fund.
• Unbilled City water meaning when the City consumes water that it is not billed back to us.
• Pay for facilities used
• Return on equity
• Interim financing cost
Summary: Inside City Limits
• ICL customers will be seeing a separate Storm Water cost
• Taking out return on equity calculations
• Cost for unbilled City water
• Taking out paid for facilities used that may be only applicable to OCL customers
Provided that an individual is below a lower socio-economic background and that they don't own
an extensive amount of property, there has been some revisions to provide relief to those
individuals. The City is looking into a policy that will address lower socio-economic individuals and
elderly so that they will not be hit with the added cost or any to the new storm water rates.
Mr. Martinez was asked if storm water exemptions would be passed to educational institutions. He
stated that the issue had come up and State law has some mandatory exemptions such as state
agencies and higher educations institutions. Other exemptions include churches, schools, other
governmental units and so forth. Corpus Christi plans to apply for the same exemptions used by
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other utilities. The Naval Air Station is exempt from the charges due to the fact that they have their
own drainage system.
The storm water rate will be calculated by the square footage which is the equivalent residential
unit to break down a standard unit of charge. The City will apply a run-off coefficient that will be
used in the Storm Water Master Plan based on the type of land being used.
Storm Water Management
• System Operations
• Flood Control
• Pumping Stations
• Storm Water Surge Levy gate installation
• All the infrastructures that is needs to be maintained such as the ditches, inlets, and the
underground pipes
• The cost and burden associated with the NCDES permit administration
• Capital improvement program
Storm Water funding is basically an inside city expense of which $18.6 million has been embedded
in the Water Fund annually. The breakdown is per 1,000 gallons at$0.84. If the cost is removed
from OCL customers and charged to ICL customers, it equates to $1.49 cost that will be passed to
the ICL customers.
The City is taking steps to institute a source of funding for storm water.
If an industrial customer has the ability to self-contained or limit storm water run-off, the City
consider a credit to those entities. In the case of Berry Contracting, they have a large track of land,
classified as industrial/commercial. Their run-off coefficient is greater; however, their property is
relatively a green space. The property will need to be classified to equitably charge a new storm
water rate.
Carwash facilities have a relatively small foot print; however, they contribute a large volume of
storm water runoff. Their water rate may decrease; however, their storm water rate may replace
that decrease in cost.
The City is following the chapter in the State - Local Government Code on Municipal Drainage
Utility Act, Chapter 402, which empowers municipalities to form and fund a drainage utility to
establish a more equitable process for allocating storm water services.
The Storm Water Utility rates are structured as such: residential has three tiers.
1. 5,446 sq. ft. - 10, 890 sq. ft. = 1 equivalent residential unit = $6.50 per month
2. If you are less than 5,446 sq. ft. have been tiered down to $4.75 per month
3. If you are above 10,890 sq. ft. the rate would be $10.08 per month
The commercial is calculated slightly different in that $6.50 is used as the basis, but consideration
is also given to the run-off coefficient and overall lot size.
Credits will be considered for facilities that go beyond regulation requirements such as privately-
owned or commercial areas that may have retention ponds.
Customers will be required to apply for their credit or adjustment so that records are kept. The
requests will be reviewed annually. The rate adjustments are expected to be completed by August
1, 2008
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Credits are being considered for customers that implement storm water educational programs.
Mr. Martinez was asked if weather patterns affect storm water expenses. He responded that
heavy rain runoff impacts the cost and derogates the system.
It also requires additional maintenance to the system. It does not impact the revenue side. Storm
water rates will not be susceptible to weather patterns but the expenditures will be.
Mrs. Serrato asked if Storm Water funds would be put away for"rainy days".
Mr. Martinez stated that the City should practice fiscal discipline with enterprise funds and that
specific strategic revenues will be set aside for maintenance requirements and long-term capital
finance projects. In addition, the City will keep at least 90 days of operating capital available for
emergencies.
Concern was raised on the storm water rate for churches and vacant property with no house or
structure on site. Mr. Martinez stated that churches will be charged for storm water just as they do
for any other City service. Any land that has an improvement value less than $10,000 will not be
charged a storm water rate. So basically, an undeveloped land will not be charged storm water
rate.
The reason this issue is so important is:
1. The alignment of cost of service to the customer
2. The alignment of the cost of service to the revenue structure
3. Setting up a structure where there is a clear source of revenue to protect the system now
and moving forward
The biggest challenge is to ensure our source of revenue is fair and secure.
Gustavo Gonzalez-Interim Director of Water Operations
Mr. Gonzalez reported on the City Council's request to update them on the progress of the
department. The Council's request was based on the two boil water events of July and August
2007.
The department has sought to resolve all TCEQ compliance issues ahead of schedule. In addition,
progress is being made on implementing an internal Water Quality Program to identify problems
ahead of schedule. A system as large and diverse has to have redundant liability to ensure that all
our customers have water 24/7.
In August 2007, TCEQ issued a notice of 13 violations, with 10 those violations presently
corrected. The remaining three violations are in the process of completion. They include the Holly
Road Pump Station modification, which requires an inlet separate from the outlet pipe for better
circulation. The contract was awarded on December 18, 2008; and we have secured the
insurance from the vendor out of Austin. The vendor is expected to complete the work two months
ahead of schedule.
We have also received TCEQ approval for a new sampling 98. In the past, the City has taken
sampling from households. It will allow the City to have designated sampling points strictly with
locked boxes.
The City has completed 100% of its dead end main flushing program. The program will be
continued to capture residual data that can be reported back to TCEQ so that we can ratchet back
the number of dead end mains flushed. Crews are finding that the data from cul-de-sacs are not
as big a problem as thought to be.
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The most significant point of the City Council presentation is that a Water Quality Section was
created within the department. This section is responsible for managing the department's water
quality. The City has held meetings with USGS officials and other entities regarding surface water
treatment through the distribution system. They are using science, technology and engineering
strategies to develop protocols to improve the efficiency of the system.
Mr. Gonzalez introduced Ivan Luna, Water Quality Manager, who is completing his Chemical
Engineering degree from Texas A&M University in Kingsville. He will be hiring a chemists and
water quality specialists to assist him in capturing data to fully understand our complex water
system.
Water samples are being collected six days a week. They samples taken to the laboratory are
placed in incubation to obtain results within 24 hours that are reported to TCEQ.
Dead-end main flushing program was also part of the TCEQ requirement. Currently we have
counted 2,241 dead end mains. Staff has been assigned to flush them. It is a costly program, but
it is essential in order to better understand our system. We are also doing a unit directional pilot
system program at Padre Island.
Mr. Gonzalez, reported that staff was utilizing ARCinfo or ARCview technology to provide visual
graphic images to identify specific issues in our system. He stated that it allowed staff to obtain a
robust analysis to support departmental decision making.
The staff has completed prioritizing pipe replacement based on the pipe material. Utilizing
software and technology will better allocate our resources and capital expenditures to remove and
replace those inferior mains. The City Council has allocated $9 million for the next three years to
do just that. Staff is convinced that old cast iron mains are giving us problems and we aim to
replace them.
As part of our construction activities, contractors must pay a deposit to take a fire hydrant meter
and hook it up for their construction activities. After conducting an inventory of construction
meters, the City plans to issue specifications to require pressure back-flow on meters. The City will
no longer allow contractors to install fire hydrant meters.
Mr. Gonzalez reported that the Water Department was behind the power curve on its SCADA
automation. Part of the plan is to automation and the other part is distribution control system.
Software will need to be updated. Currently, there are thirty SCADA points and roughly need 200
to capture pressure and chlorine residuals to better manage the water system. This will allow for
better management of water storage, water age, and tank maintenance especially during winter
months when less water usage occurs.
An alarm screen has been developed to allow plant operators to identify alarms and deactivate
them as needed. In addition, large motors and pumps were replaced at the 0. N. Stevens Water
Treatment Plant. The pumps were unserviceable, thus they were replaced.
Mr. Gonzalez reported that repairs would be made to Clear Well No. 2 which was leaking and
costing us the loss of water. Staff is working very hard to make aggressive improvements and
repairs where needed. Staff is looking at all opportunities to contain cost and improve reliability to
operate the system more effectively. The City Manager authorized the addition of four positions,
i.e. Water Plant Manager, Superintendent of Distribution, instrumentation personnel and
technicians.
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Mrs. Marruffo stated that Kimberly Stockseth had submitted her resignation from the Committee,
thus the Mayor would make a selection to appoint someone to serve as a residential
representative.
In addition, she stated that the City Council had approved an ordinance on January 22, 2008 that
prohibits members of any board, committee or commission from serving more than six consecutive
years. Those who fall under the new policy have to wait twelve months to reapply for another City
board or committee.
Mrs. Marruffo stated that the City Secretary's Office was requesting the Committee's approval to
be designated as its Public Information Coordinator. The City Secretary's Office is responsible for
meeting the requirements of the Open Meetings Act to post agendas and serve as the central
clearinghouse for Committee minutes. Staff recommended approval and that a motion must be
recorded in the minutes to approve the designation. Mrs. Serrato requested a motion and so
stated by Mr. Brogan and seconded by Mr. Stroop to appoint the City Secretary's office as the
Water Resources Advisory Committee's Public Information Coordinator. The motion was approved
unanimously by the members of the Committee.
With no further business, the meeting was adjourned at 12:55 p.m.
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