HomeMy WebLinkAboutWater and Wastewater Rate Advisory Committee minutes - 10-6-2016City of Colleyville Page 1
Water and
Wastewater Rate
Advisory Committee
Agenda
City Hall
100 Main Street
Colleyville, Texas 76034
817.503.1000
www.colleyville.com
Thursday, October 6, 2016
5:30 p.m.
Executive Conference Room
Third Floor – City Hall
1. CALL TO ORDER AND ROLL CALL
2. APPROVAL OF MINUTES
September 29, 2016
3.REGULAR AGENDA ITEMS
3a Presentation and discussion of rate design options to recover the
City’s costs and associated customer impacts
4.ADJOURNMENT
I hereby certify this agenda was posted on City Hall bulletin boards Friday,
September 30, 2016 by 5:00 p.m.
Amy Shelley, TRMC
City Secretary
A quorum of the City Council or any Colleyville Board, Commission, or Committee
may be in attendance at this meeting.
Any matter on this agenda may, at the discretion of the governing body, be
opened for public comment and discussion.
If you plan to attend this public meeting and have a disability that requires special
accommodations, please advise the City Secretary at least 48 hours in advance at
817.503.1130, and reasonable accommodations will be made to assist you.
City of Colleyville Page 1
City of Colleyville
Water and Wastewater
Rate Advisory
Committee
MINUTES
City Hall
100 Main Street
Colleyville, Texas 76034
817.503.1000
www.colleyville.com
Thursday, October 6, 2016
5:30 p.m.
Executive Conference Room
Third Floor – City Hall
Chair Susan Mathisen called the Water and Wastewater Rate Advisory Committee
meeting to order on October 6, 2016 at 5:30 p.m.
ROLL CALL: Chair Susan Mathisen, Vice Chair Gerald “Jerry” Gibson, and
Committee members Raymond Allee, Thomas Bauch, George Dodson, James
Dove, Jeff Gilstrap, Joe Moore, Jeff Pistor, Tim Raine, and Samuel van Bever were
present.
City Manager Jennifer Fadden, Deputy City Manager Chris Fuller, Strategic
Services Manager Adrienne Lothery, Public Works Director Jeremy Hutt, and City
Secretary Amy Shelley were also present.
2. APPROVAL OF MINUTES
2a September 29, 2016
Chair Mathisen outlined clarification amendments to pages 2, 5, and 7.
Vice Chair Gibson made a motion to approve the September 29, 2016,
meeting minutes as amended by Chair Mathisen. Committee member
Moore seconded the motion.
The motion carried with the following vote:
Aye: 11 – Chair Mathisen, Vice Chair Gibson, Committee members Allee,
Bauch, Dodson, Dove, Gilstrap, Moore, Pistor, Raine, and van Bever
3. REGULAR AGENDA ITEMS
3a Presentation and discussion of rate design options to recover the City’s
costs and associated customer impacts
Chris Ekrut, Director, Environmental Practice, NewGen Strategies and Solutions
provided a presentation and overview of rate design options to recover the City’s
costs and associated customer impacts.
Water and Wastewater Rate
Advisory Committee Minutes October 6, 2016
City of Colleyville Page 2
Vice Chair Gibson asked Mr. Ekrut if the General Fund’s water is metered. Mr.
Ekrut replied yes.
Chair Mathisen asked Mr. Ekrut if the General Fund includes the variable and fixed
costs. Mr. Ekrut replied yes.
Chair Mathisen asked Mr. Ekrut if the General Fund also includes wastewater. Mr.
Ekrut replied he believes it is just water.
Chair Mathisen asked staff if these numbers for the costs are broad estimates. City
Manager Jennifer Fadden replied there has not been an indirect cost study.
Chair Mathisen asked staff how the full time employee numbers were calculated.
Strategic Services Manager Adrienne Lothery replied those numbers are of the
employees in those departments, other than the employees already split funded
by the Utility Fund.
Chair Mathisen asked staff if the 12.4 percent of FTEs was used at the request of
Mayor Newton. Manager Lothery replied yes, and Mr. Ekrut added it is based on
Mayor Newton’s method, not his (Mayor Newton’s) percentage.
Committee member Moore asked staff if there is a connection fee for new
customers. City Manager Jennifer Fadden replied yes, there is a deposit fee of $52.
Committee member Moore asked staff if the deposit is refunded. City Manager
Jennifer Fadden replied no.
Mr. Ekrut asked staff if there is a fee to set a meter. City Manager Jennifer Fadden
replied yes, there is a tap fee, and it is based on the meter size.
Committee member Moore asked Mr. Ekrut if that revenue is in its own account.
Mr. Ekrut replied these fees are the offsetting revenue for the cost of service, and
are very small numbers.
Committee member Moore asked Mr. Ekrut if no water is in the base in Scenario A.
Mr. Ekrut replied no water in the minimum charge.
Committee member Gilstrap asked staff how long the interim is to be in place. City
Manager Jennifer Fadden replied the intent is to adopt a new rate structure
effective December 1st, when the TRA rate increase is effective.
Committee member Bauch asked staff how long the tiered rate structure was in
effect. City Manager Jennifer Fadden replied since December of 2012.
Water and Wastewater Rate
Advisory Committee Minutes October 6, 2016
City of Colleyville Page 3
Committee member Moore asked staff if the software will handle more than just a
rate change. City Manager Jennifer Fadden replied yes, the utility billing software
can be updated to reflect the changes.
Committee member Bauch asked Committee member Dodson if the fixed costs
have been recaptured within their analysis. Committee member Dodson replied to
get fully funded the base rate would be $24.75 versus the current $13.55.
Committee member Raine asked staff what was the motivation for the tiered
structure, when it was known that the high volume users were going to be
subsidizing everyone else. City Manager Jennifer Fadden replied the policy
discussion was about an effort to induce water conservation as the driving
motivator in adopting that rate structure.
Committee member Raine asked staff if a surcharge, with a certain amount of
gallons over for each month, was considered. City Manager Jennifer Fadden replied
there was not this amount of analysis done at that time, and the base rate did not
account for TRA’s pass through rate.
Committee member Raine asked staff if there was ever a discussion on the larger
users relative to lot size. City Manager Jennifer Fadden replied no. Chief Financial
Officer Brian Hogan added the base tier was based on an average use of 20,000
gallons, (0-20,000) to try and capture the majority of the users.
Committee member Gilstrap asked staff if the tiers had no impact on water
conservation. City Manager Jennifer Fadden replied the other factor in place at
that time was watering restrictions because of the drought.
Committee member Raine stated he believed when the water restrictions were
lifted, the water usage was the same. City Manager Jennifer Fadden agreed.
Committee member Pistor asked Mr. Ekrut what is the current recovery
percentage. Mr. Ekrut replied 50 percent.
Committee member Moore asked staff if City Council will want one
recommendation or three options. City Manager Jennifer Fadden replied they will
appreciate the analysis of more than one option, but they will also appreciate one
recommendation.
Vice Chair Gibson asked staff if the $2 million is adequate to take care of the water
system. Director Hutt replied there are several needs for the system; however,
projects are allocated over a five year plan.
Committee member Raine asked staff about the life cycle plan for the roughly 200
miles of pipe. Director Hutt replied there is about two percent on a 50 year life
span, but there is also pipe in the ground that is much older than that.
Water and Wastewater Rate
Advisory Committee Minutes October 6, 2016
City of Colleyville Page 4
Committee member Pistor asked staff about real world maintenance costs.
Director Hutt replied about $1 million has been spent within the 2014 master plan,
and drastic steps have been made to increase those numbers to be able to get
those projects done.
Committee member Pistor asked staff what amount are they at now. Director Hutt
replied it is $2 million now. Vice Chair Gibson stated the $2 million for capital
expenses is much closer to where staff wants to be. City Manager Jennifer Fadden
agreed.
Committee member Gilstrap asked staff about the earliest date for rate
implementation. City Manager Jennifer Fadden replied December 1; City Council
will receive the committee’s recommendation on October 18; they will have the
first ordinance reading on November 1st and the second ordinance reading on
November 15 to adopt the ordinance and implement the rates so that the January
bills will reflect the new rate.
Committee member Pistor asked staff if they can operationally handle this. City
Manager Jennifer Fadden replied yes. Chief Financial Officer Brian Hogan added
December 1st was chosen because that is when TRA’s rates go into effect, and the
same thing was completed for the interim rate.
Committee member Gilstrap asked staff what the average bill difference is from
November to December. City Manager Jennifer Fadden replied that is a good
question, and it depends on the weather; however, staff can look at the last 10
years to look at the average bills.
Committee member Bauch asked Chair Mathisen if they will present two options at
a minimum, and then something less. Chair Mathisen replied she wants to provide
one option to City Council. She stated two options can be presented with one
recommendation.
Committee member Moore asked staff if the base rate is based on the needs of the
department. City Manager Jennifer Fadden replied it would have to be evaluated
just like any other additional requested increase in expenditures. She added if
additional expenditures were justified in the Utility Fund, City Council might look to
adjust the base.
Chair Mathisen stated if we were to recommend full cost recovery in the base rate,
there are two options, A = $24.75/$4.17, optimal; and option B = $24.75/$4.40
which includes the 1,000 gallons.
Committee member van Bever stated there is nothing much gained with option B.
Water and Wastewater Rate
Advisory Committee Minutes October 6, 2016
City of Colleyville Page 5
Committee member Dove asked Mr. Ekrut if a reserve is included. Mr. Ekrut
replied no, that is another decision point.
Committee members stated they will only consider option A ($17.84/$2.31) on
wastewater.
Committee member Pistor asked staff about the types of commercial uses in
Colleyville. City Manager Jennifer Fadden replied most commercial consists of
office uses with very little industrial and no manufacturing.
Chair Mathisen asked the committee members if they are good with the differential
between commercial and residential uses. Committee members agreed. Mr. Ekrut
replied the current ordinance allows for a $6.00 differential, and right now the
optimal scenario is $5.13. Vice Chair Gibson stated being good with that.
Committee member Moore asked Mr. Ekrut if the utility contingency would be in
addition to the reserve. Mr. Ekrut replied yes.
Committee member Moore asked staff about how the reserve is currently funded.
City Manager Jennifer Fadden replied the 90 day reserve is purely for a
catastrophic event, and already in fund balance.
Vice Chair Gibson asked Mr. Ekrut if this contingency fund would have designated.
Mr. Ekrut replied yes, for unbudgeted utility projects.
Vice Chair Gibson asked Mr. Ekrut if there should be a maximum amount in this
fund to get to, such as one percent. Mr. Ekrut replied yes. Committee member
Pistor added like a target of one percent.
Committee member Bauch asked Mr. Ekrut if it would be one percent of the
revenue. Mr. Ekrut replied yes, of water and wastewater. He added the key would
be to adjust or readjust annually.
Committee member Bauch suggested this not be implemented in this first year,
but maybe in years to come. He added the second year this would be another step
that City Council could consider. Mr. Ekrut stated this could be a future point of
transparency on the municipal accounts.
Committee member Moore asked staff if this would be $120,000 above the 90 day
requirement. Manager Lothery replied no. City Manager Jennifer Fadden replied
the 90 day reserve is about $5 million.
Committee member Pistor asked staff if you could access the reserve fund for this.
City Manager Jennifer Fadden replied you should not, as there are restrictions on
the fund balance use.
Water and Wastewater Rate
Advisory Committee Minutes October 6, 2016
City of Colleyville Page 6
Committee member Pistor asked staff what is done now if there is a catastrophic
event. City Manager Jennifer Fadden replied an emergency rate adjustment could
be made.
Committee member Bauch asked staff if there is a history of any emergency
expenditures relative to water and wastewater. City Manager Jennifer Fadden
replied not catastrophic, only major breaks.
Committee member Raine stated he thought there was a break which caused
water to be lost to a part of the City. Director Hutt replied TRA had a main break,
but it was not on our side. He stated most are line breaks so the costs are not
astronomical.
Chair Mathisen asked staff when the probability would be that we would actually
need it. Chief Financial Officer Brian Hogan replied currently we are making up the
shortfall from TRA from $75,000 to $120,000 for O&M. He stated separate funds
could be set up to use for certain events.
Committee member Moore asked Chair Mathisen if the $.02 (contingency) is not
included in the base rate. Chair Mathisen replied no.
Committee member Bauch asked Mr. Ekrut if the rate would go from $4.17 to
$4.19 with $.02 going to contingency. Mr. Ekrut replied yes.
Vice Chair Gibson suggested the committee not take an opinion on the
contingency, at this time.
Committee member Pistor asked Mr. Ekrut where the one percent came from. Mr.
Ekrut replied he is trying to match the current financial policies in the General
Fund.
Committee member Pistor asked Mr. Ekrut what his recommendation would be.
Mr. Ekrut replied 360 days of reserves would be a strong utility, under Fitch.
Manager Lothery added in combination of the standard 90 day policy. Mr. Ekrut
agreed.
Committee member Bauch asked Mr. Ekrut if the data, which has caused the
surprise factors of the past, could be provided. Mr. Ekrut replied often times, there
is a refund on the TRA side; however, this past year, there was an actual true-up.
Chief Financial Officer Brian Hogan added most of the time, there are TRA cost
adjustments.
Committee member Bauch suggested taking the refunds received and place those
in the proposed contingency fund. Mr. Ekrut stated that would be fine, as long as it
is fully funded, and there is a true cost recovery. Chief Financial Officer Brian
Water and Wastewater Rate
Advisory Committee Minutes October 6, 2016
City of Colleyville Page 7
Hogan also added the only time a refund is given is when the City accurately
projected.
Committee member Pistor asked staff what is the cost to fix a break. Director Hutt
replied you can reach about $50,000 pretty quickly depending on the location and
the placement of the repair, materials, concrete, and staffing hours.
Committee member Allee asked Chair Mathisen if the contingency will be held off,
for now. Chair Mathisen replied yes.
Committee member Allee asked the Committee if it will be discussed on the next
agenda. Committee member Pistor asked Committee member Allee if he believes
there will be additional information to discuss. Committee member Allee did not
believe so.
Committee member Moore suggested if there was a refund from TRA, then the
contingency could be discussed at that time. City Manager Jennifer Fadden stated
a refund is received because of an overpayment, so that amount is credited back
to the expenditures.
Committee member Allee stated he believes it should then be included. Chair
Mathisen stated she disagreed; otherwise costs would be overstated. Committee
member Bauch concurred, and stated if we put it in there, it should be a line item
that would eventually go away.
Committee member Dove explained he understands the need to cover the bases,
but the contingency could be complicated.
Committee member Pistor asked staff how breaks and such have been covered in
the past, given there is no contingency fund. Chief Financial Officer Brian Hogan
replied a repair and maintenance account has been created.
Mr. Ekrut asked the committee what they would like to see from him for next
week. Committee member Bauch suggested having a summary of some sort to be
able to show citizens. Committee member Dodson stated they need to be able to
tell their story in about 10 slides, and maybe Mr. Ekrut could work on that. City
Manager Jennifer Fadden asked the committee if they would like to see a draft.
Committee member Moore suggested having something in this about
conservation. Committee member Allee stated once the framework is decided,
then conservation can be discussed, and how to insert it. Chair Mathisen stated we
are to make a recommendation to City Council about the rates and be able to
communicate that rate structure to the citizens; however, conservation is not the
committee’s charge. Committee member Moore respectfully disagreed, and stated
rates are directly related to water use.
Water and Wastewater Rate
Advisory Committee Minutes October 6, 2016
City of Colleyville Page 8
Committee member Pistor asked Mr. Ekrut about the state’s position on
conservation. Mr. Ekrut replied if you are to apply for state funding, conservation
is an element with which you must comply, have tiered water rates. He stated
there are a number of ways to promote conservation. Chair Mathisen stated she
did not believe that was the committee’s charge, and if City Council would like for
that to be handled, they can put together another committee to do so.
4. ADJOURNMENT
The Water and Wastewater Rate Advisory Committee meeting adjourned at 8:35
p.m.
APPROVED BY A VOTE OF 10 AYES, 0 NAYS, AND 0 ABSTENTIONS ON THIS THE
12TH DAY OF OCTOBER 2016.
Minutes taken and prepared by:
Amy Shelley, TRMC
City Secretary