WRAB Complete Packet 2016-2-22WATER RESOURCES ADVISORY BOARD MEETING
MEETING DATE: Monday, 22 February 2016
MEETING TIME: 7:00 p.m.
MEETING LOCATION: Municipal Services Center, 5050 E. Pearl St., Boulder, CO 80301
Agenda Highlights:
1. Call to Order (7:00 p.m.)
2. Approval of Jan. 25, 2016 Meeting Minutes (7:01 p.m.)
3. *Public Comment (7:05 p.m.)
4. Information Item – Utility Financing (7:15 p.m.)
5. Matters from Board (8:00 p.m.)
• WRAB Operating Agreements/Roles
6. Matters from Staff (8:25 p.m.)
7. Discussion of Future Schedule (8:35 p.m.)
8. Adjournment (8:45 p.m.)
* Public Comment Item
Agenda item times are approximate.
Information:
• Please contact the WRAB Secretary email group at:
WRABSecretary@bouldercolorado.gov
• Packets are available on-line at: http://www.bouldercolorado.gov – A to Z, Water
Resources Advisory Board (WRAB), Next Water Resources Advisory Board Meeting
WRAB Minutes
25 January 2016
Page No. 1
CITY OF BOULDER, COLORADO
BOARDS AND COMMISSIONS MEETING MINUTES
Name of Board / Commission: Water Resources Advisory Board
Date of Meeting: 25 January 2016
Contact Information of Person Preparing Minutes: Rene Lopez 303-413-7149
Board Members Present: Vicki Scharnhorst, Dan Johnson, Mark Squillace, Lesley Smith, Mike
Barnes
Board Members Absent: None
Staff Present: Jeff Arthur, Director of Public Works for Utilities
Douglas Sullivan, Acting Principal Engineer for Water, Wastewater and Stormwater
Bret Linenfelser, Water Quality and Environmental Services Manager
Eric Ameigh, Projects Coordinator for Public Works.
Ken Baird, Utilities Financial Manager
Annie Noble, Acting Principle Engineer for Flood and Greenways
Chris Douville, Wastewater Treatment Manager
Russ Sands, Watershed Sustainability and Outreach Supervisor
Tom Settle, Water Treatment Manager
Steve Buckbee, Engineering Project Manager
Joe Taddeucci, Water Resources Manager
Michelle Wind, Drinking Water Quality Manager
Rene Lopez, Board Secretary
Consultants Present: None
Meeting Type: Regular
Agenda Item 1 – Call to Order [7:00 p.m.]
Agenda Item 2 – Approval of the 14 December 2015 Meeting Minutes [7:01 p.m.]
Motion to approve minutes from 14 December 2015 as amended.
Moved by: Johnson Seconded by: Barnes
Vote: 5:0
Agenda Item 3 – Public Participation and Comment [7:02 p.m.]
Carl Norby – Flood prevention. Back flow preventer from city street to your house, not recommended
by plumbers. Asking the city to use caution in recommendations. Provided a demonstration of the back
flow preventer not working as designed.
Agenda Item 4 – Information Item – 2015 Year in Review [7:08 p.m.]
Eric Ameigh, Ken Baird, Douglas Sullivan and Annie Noble presented this item.
Executive Summary from the Packet Materials:
A significant portion of the work performed by the Utilities Division relates to the day-to-day operations
and maintenance of existing infrastructure. While the WRAB’s official role in these activities is
minimal, recommendations on capital improvements, master plans, and policy issues have a significant
impact on operations. This memorandum contains an overview of 2015 operations to provide the
WRAB with additional context for upcoming agenda items where the board will be asked to make
recommendations, as well as highlights of the 2015 capital improvements program.
WRAB Discussion Included:
• Discussions regarding shortfalls of billed consumption revenue and reserves
• Questions regarding future estimates of plant investment fees (PIF’s).
• Questions regarding costs for lining of pipes
• Comments regarding mapping and mitigation work prior to the 2013 flood compared to actual
damages in mapped areas.
• Comments regarding higher than estimated costs for capital improvement projects
WRAB Minutes
25 January 2016
Page No. 2
Agenda Item 5 – Information Item – Betasso Design Update [8:12 p.m.]
Tom Settle and Steve Buckbee presented this item.
Executive Summary from the Packet Materials:
This agenda item is intended to provide an update on the upcoming Betasso Water Treatment
Facility improvements project. City staff and its engineering consultant, HDR Engineers, are in the
process of completing design improvements for a major facility upgrade. The Betasso facility was
originally constructed in 1964 and has a number of aging treatment process facilities. The
Betasso facility requires significant treatment process upgrades to ensure that it can continue to meet
current and future drinking water regulations.
The current design project has progressed past the 60 percent design milestone. Final design drawings
and bid documents are scheduled for an April 2016 completion. City staff will bid the project’s
construction phase at that time. The design engineer’s 60 percent construction cost estimate is
approximately $28 million. An estimated $3 million will be required in addition to the bid amount to
fund the project’s construction phase services component. This project will involve
relatively complex construction phasing to ensure that the treatment processes continue to operate and
effectively meet the city’s daily water demand and associated treatment regulations throughout the
project’s construction. The project’s construction phase is estimated at a 27-month duration.
The City of Boulder will fund this project through a Water Utility bond in the second quarter of
2016. The current bond amount is estimated at $35 million. The bond’s final amount will be set in the
second quarter of 2016 after city staff has received the project’s 90 percent design construction cost
estimate. At that time, City staff will decide if any other Water Utility projects will be included in the
bond.
The December 15, 2014 WRAB meeting was conducted at Betasso, which included a tour, and a
presentation on the upcoming improvements project. The Betasso project was also identified in the 2016
CIP overview which was presented to the WRAB at the April 27, 2015 meeting. The purpose of this
information item is to provide the WRAB a project design update.
WRAB Discussion Included:
• Discussions regarding upgrading accessibility to the plant
• Lead corrosion control discussed
o Setting the chemistry of the water to be non-corrosive
o Monitoring program for lead in home plumbing
Agenda Item 6 - Matters from Staff: [8:52 p.m.]
• Cater Lake Pipeline update
o Removing the Community environmental assessment process (CEAP) from this
project
Agenda Item 7 – Matters from Board: [9:20 p.m.]
• WRAB Operating Agreements/Roles
o Email the document for review at the next meeting
• Gate testing / replacement program update
Agenda Item 8 – Future Schedule [9:30 p.m.]
February meeting – Bob Eichem presentation on utility financing
March meeting – move meeting to March 28th
Adjournment [9:38p.m.]
There being no further business to come before the Board at this time, by motion regularly adopted, the
meeting was adjourned at 9:38 p.m.
Motion to adjourn by: Smith Seconded by: Squillace
Motion Passes 5:0
Date, Time, and Location of Next Meeting:
The next WRAB meeting will be Monday, February 22th 2016 at 7:00 p.m., at the City's Municipal
Services Center, 5050 East Pearl St., Boulder, CO 80301
WRAB Minutes
25 January 2016
Page No. 3
APPROVED BY: ATTESTED BY:
_______________________________ __________________________________
Board Chair Board Secretary
_____________________________ ___________________________________
Date Date
An audio recording of the full meeting for which these minutes are a summary, is available on the Water
Resources Advisory Board web page.
https://bouldercolorado.gov/boards-commissions/water-resources-advisory-board-next-meeting-agenda-and-packet
CITY OF BOULDER
WATER RESOURCES ADVISORY BOARD
INFORMATION PACKET MEMORANDUM
To: Water Resources Advisory Board
From: Jeff Arthur, Director of Public Works for Utilities
Ken Baird, Utilities Financial Manager
Eric M. Ameigh, Public Works Project Coordinator
Date: February 22, 2016
Subject: Information Item: Status Update for Utility Rate Study
I. PURPOSE
The purpose of this memo is to provide the board with an update on the status of the Utility Rate
Study, including a projected timeline of key milestones for 2016.
II. CONSULTANT SELECTION
Based on feedback and guidance from WRAB at the June meeting, staff developed a preliminary
scope of work for the analysis phase of the project. The preliminary scope of work informed a
request for consultant proposals (RFP) which was issued in early November. Staff received four
complete proposals and selected Denver-based Raftelis Financial Consultants (RFC) to assist
with the project. Staff is in the final stages of scope and contract negotiation.
III. SCOPE OF WORK AND PROCESS
The project is roughly divided into three phases, with key tasks and WRAB meetings, as follows:
Phase 1 – Investigation and Assessment (February – May)
RFC will assist the staff in comprehensively understanding what is happening within the rate
structures and the pros and cons of the current systems. The consultant team and staff will
present these preliminary findings to WRAB at the May meeting. WRAB’s feedback will help
determine which identified issues require a new approach within the rate structures. Key tasks in
Phase 1 will include:
• System Review: RFC will gather all relevant data to understand the financial operation of
the city’s utilities.
• Cost of Service Analysis: RFC will review cost of service components of existing water,
wastewater, and stormwater/flood management rate models. The analysis will include all
customer classes and will be consistent with American Water Works Association and
Water Environment Federation standards.
Rate Study Update Informational Item Page: 1
• Water Budget Rate Review: RFC will complete a comprehensive evaluation of the water
budget rate structure, including:
o A review of historical consumption and revenue to evaluate the effectiveness in
meeting the rate structure goals.
o A detailed comparison of rate policies, practices, and procedures against water
budget best practices.
o A discussion of legal risk of challenges to the rate structure.
o An evaluation of alternative assessment schedules which may better meet stated
goals.
• Revenue Stability Analysis: RFC will summarize the “current performance” of the
utilities (with a focus on the water utility) regarding the revenue stability principle. The
analysis will provide for:
o A review of advantages and disadvantages of adjusting the ratio of fixed to variable
charges.
o A review of both water and wastewater service charge revenues for existing and
alternative rate structures.
o A review of historical annual billed wastewater volume and volume-based revenues
reflecting AWC and/or monthly water use since 2000.
• Analysis of Stormwater Fee Calculation Methodology : RFC will analyze the current
methodology and alternatives with the goals of:
o Facilitating the ease of communicating the rate structure to customers and
simplifying presentation of rates.
o Maximizing equity for different customer classes.
o Updating cost recovery and pricing policies (including development of credits and
incentives) to improve incentives for development of green infrastructure and
adoption of best practices for onsite stormwater management.
Phase 2 – Analysis of Potential Alternatives (June – September)
Based on WRAB feedback at the May meeting, and staff direction, RFC will develop and
analyze options to address issues identified in the first phase. Alternatives will be developed and
tested across all three utilities and all customer classes. Bill impacts will be calculated for a
single test year. Staff and RFC will present the results of the options analysis at the September
meeting and offer draft recommendations as appropriate. Depending on the results of this phase,
staff may update council within the context of the 2017 budget process and, if feasible, any
simple and/or non-controversial changes may be recommended for adoption in the budget.
Phase 3 – Recommendations (October – December)
Based on the results of the second phase and WRAB discussion in September, staff and RFC will
refine the analysis and draft recommendations and present a final report for WRAB’s acceptance
and recommendation to council.
Rate Study Update Informational Item Page: 2
IV. NEXT STEPS
February, 2016 – By the end of the month, staff will execute a contract with RFC and work will
begin on the first phase of the analysis. Staff will be available to answer questions at the
February 22 WRAB meeting.
May, 2016 – Staff and RFC will present preliminary findings and seek WRAB feedback at the
May 16 meeting.
Rate Study Update Informational Item Page: 3
CITY OF BOULDER
WATER RESOURCES ADVISORY BOARD
AGENDA ITEM
MEETING DATE: February 22, 2016
AGENDA TITLE: Information Item – Utility Financing
PRESENTERS:
Jeff Arthur, Director of Public Works for Utilities
Bob Eichem, Chief Financial Officer
Ken Baird, Utilities Financial Manager
EXECUTIVE SUMMARY:
This memo serves as a brief introduction to the presentation at the February 22, 2016 meeting
which will give an overview of financing of the Water, Wastewater, and Stormwater/Flood
Management Utilities. This presentation is being provided as context as WRAB prepares to
make recommendations on items such as the annual Capital Improvement Program (CIP) and the
upcoming rate study. The following areas will be discussed:
Enterprise Funds: Each of the three utilities operates as a separate enterprise, which was
defined in the Colorado constitution through the Taxpayer’s Bill of Rights (TABOR) passed by
Colorado voters in 1992. TABOR defines an enterprise as “a government-owned business
authorized to issue its own revenue bonds and receiving under 10% of annual revenue in grants
from all Colorado state and local governments combined.” In any given fiscal year, no more
than 10% of revenues can come from state and local grants, which includes utility funding
provided by the state or a district - such as the Urban Drainage Flood Control District. This also
includes any City of Boulder tax revenues, and currently the enterprises receive no subsidy from
other City funds. It is also important to note that Federal grants do not count towards the 10%
rule. For more details about TABOR, see Attachment A which is an excerpt from the most
recent utility bond issue.
Bonding: Each utility has current and future anticipated debt to finance large capital projects.
Attachment B is a list of current outstanding debt in each utility. The February WRAB
presentation will include discussion on the process for issuing debt and considerations when
deciding to bond. An important part of the process is getting the debt issue rated, and the City
does this through Standard & Poor’s and Moody’s, which rated the most recent utility bonds as
AAA and Aa1, respectively. The most recent rating from Standard and Poor’s in included in
Attachment C.
Grants and Other Funding Options: Because of more attention on funding for flood projects
following the Sept. 2013 flood event, there has been interest in other ways to fund these
improvements, including grants or special districts. The presentation will include information
about grant funding, and funding for utilities through other methods.
Agenda Item IV Page 1
Current Utilities Financial Picture: A general overview will be provided of the current state of
the three utilities, with information on future anticipated bonds and rate increases.
Attachments:
A: Excerpt from Water and Sewer Bonds Series 2015 Official Statement related to TABOR
B: Utilities debt outstanding
C: Standard & Poor’s Boulder, CO Water/Sewer Bond Rating 2015.
Agenda Item IV Page 2
Attachment A
Excerpt from Water and Sewer Bonds Series 2015 Official Statement related to TABOR:
Certain Constitutional Limitations
General. At the general election on November 3, 1992, the voters of Colorado
approved Article X, Section 20 of the Colorado Constitution (“TABOR”). In general, TABOR
restricts the ability of the State and local governments to increase revenues and spending, to
impose taxes, and to issue debt and certain other types of obligations without voter approval.
TABOR generally applies to the State and all local governments, including the City (“local
governments”), but does not apply to “enterprises,” defined as government-owned businesses
authorized to issue revenue bonds and receiving under 10% of annual revenue in grants from all
state and local governments combined.
Some provisions of TABOR are unclear and will require further judicial
interpretation. No representation can be made as to the overall impact of TABOR on the future
activities of the City, including its ability to generate sufficient revenues for its general
operations, to undertake additional programs or to engage in any subsequent financing activities.
Voter Approval Requirements and Limitations on Taxes, Spending, Revenues,
and Borrowing. TABOR requires voter approval in advance for: (a) any new tax, tax rate
increase, mill levy above that for the prior year, valuation for assessment ratio increase,
extension of an expiring tax, or a tax policy change causing a net tax revenue gain; (b) any
increase in a local government’s spending from one year to the next in excess of the limitations
described below; (c) any increase in the real property tax revenues of a local government from
one year to the next in excess of the limitations described below; or (d) creation of any multiple-
fiscal year direct or indirect debt or other financial obligation whatsoever, subject to certain
exceptions such as the refinancing of obligations at a lower interest rate. The City’s Water
Utility and Wastewater Utility are considered “enterprises” under TABOR, and therefore the
2015 Bonds may be issued without an election.
TABOR limits increases in government spending and property tax revenues to,
generally, the rate of inflation and a local growth factor which is based upon, for school districts,
the percentage change in enrollment from year to year, and for non-school districts, the actual
value of new construction in the local government. Unless voter approval is received as
described above, revenues collected in excess of these permitted spending limitations must be
rebated. Debt service, however, including the debt service on the 2015 Bonds, can be paid
without regard to any spending limits, assuming revenues are available to do so.
At the November 2, 1993 election, City voters authorized the City to collect,
retain, and expend without regard to the revenue and limitations imposed by TABOR, the full
proceeds of the City’s sales and use tax, admission tax, accommodations tax, and non-federal
grants. At the November 8, 1994 election, City voters approved an increase in the City’s trash
tax and an education excise tax and allowed the City to collect and spend the full proceeds o f
such taxes and any interest thereon.
Attachment A: Excerpt from Water and Sewer Bonds Series 2015 Official Statement related to TABOR
Agenda Item IV Page 3
Attachment A
At the November 5, 1996 election, City voters authorized the City to remove
TABOR restrictions on all revenues (except property tax) and expenditures of the City, and
authorized the collect, retention and expenditures of all revenues of the City free from current
revenue and expenditure limitations and from any limitations that may be enacted in the future
without the amendment of the City’s Charter by the electors of the City.
In addition, at the November 4, 2008 election, the City voters authorized the City
to remove TABOR restrictions on property tax revenues collected above the limits imposed by
TABOR. The election specified that retention above TABOR limits will not rise more than .5
mills annually for tax collection years 2009 and beyond up to the maximum allowable level of
property taxes and that any tax monies that are collected above those that the City may retain
will be credited to property owners as an offset against the subsequent year’s taxes.
Emergency Reserve Funds. TABOR also requires local governments to establish
emergency reserve funds. The reserve fund must consist of at least 3% of fiscal year spending.
TABOR allows local governments to impose emergency taxes (other than property taxes) if
certain conditions are met. Local governments are not allowed to use emergency reserves or
taxes to compensate for economic conditions, revenue shortfalls, or local government salary or
benefit increases. The City has set aside emergency reserves as required by TABOR.
Other Limitations. TABOR also prohibits new or increased real property transfer tax rates and
local government income taxes. TABOR allows local governments to enact exemptions and
credits to reduce or end business personal property taxes; provided, however, the local
governments’ spending is reduced by the amount saved by such action. With the exception of K-
12 public education and federal programs, TABOR also allows local governments (subject to
certain notice and phase-out requirements) to reduce or end subsidies to any program delegated
for administration by the general assembly; provided, however, the local governments’ spending
is reduced by the amount saved by such action.
Attachment A: Excerpt from Water and Sewer Bonds Series 2015 Official Statement related to TABOR
Agenda Item IV Page 4
City of Boulder, Colorado
Revenue Bonds
Summary of Debt Outstanding for Utility Bonds
Water Fund Water Fund Water Fund
Wastewater
Fund Wastewater Fund
Wastewater
Fund
Stormwater
Flood Fund
Stormwater
Flood Fund
Fiscal Year
Ends Dec. 31
Boulder
Reservoir WTP
Silver Lake
Pipeline/Betasso
WTP
Lakewood
Pipeline
WWTP UV,
Digester,
Headworks
WWTP Ammonia
and other
upgrades
WWTP
Nutrient, WW
Collection
Goose
Creek/Elmer's
Two Mile
Wonderland
Creek Total
2016 861,125 2,524,688 2,071,400 674,938 3,206,150 678,631 381,675 1,589,188 11,987,794
2017 - 2,532,088 2,071,000 672,038 3,185,750 675,731 386,138 1,592,338 11,115,082
2018 - 2,532,831 2,078,000 673,838 3,162,250 677,731 380,175 1,589,588 11,094,413
2019 - 1,379,656 2,087,000 675,188 3,154,750 679,531 1,591,088 9,567,213
2020 - - 2,087,800 671,088 3,142,250 676,131 1,591,688 8,168,957
2021 - - 2,095,600 671,688 3,124,750 677,631 1,591,388 8,161,057
2022 - - - 671,838 3,127,250 678,931 1,590,188 6,068,207
2023 - - - 671,538 3,128,500 680,581 1,588,088 6,068,707
2024 - - - 670,788 3,108,250 676,781 1,590,088 6,045,907
2025 - - - 674,588 3,092,250 677,681 1,591,038 6,035,557
2026 - - - 672,788 - 678,131 1,590,938 2,941,857
2027 - - - 670,538 - 678,131 1,589,788 2,938,457
2028 - - - 672,248 - 677,681 1,587,588 2,937,517
2029 - - - 672,728 - 676,781 1,589,338 2,938,847
2030 - - - 671,938 - 675,431 1,589,888 2,937,257
2031 - - - - - 678,631 1,589,238 2,267,869
2032 - - - - - 675,506 1,590,644 2,266,150
2033 - - - - - 676,913 1,588,844 2,265,757
2034 - - - - - 676,925 1,588,725 2,265,650
2035 - - - - - 676,288 676,288
Total 861,125 8,969,263 12,490,800 10,087,763 31,432,150 13,549,781 1,147,988 30,209,670 108,748,539
Attachment B: Utilities debt outstanding
Agenda Item IV Page 5
Attachment C: Standard and Poor's Bond Rating
Attachment C: Standard and Poor's Bond Rating
Attachment C: Standard and Poor's Bond Rating
Attachment C: Standard and Poor's Bond Rating
Attachment C: Standard and Poor's Bond Rating
Attachment C: Standard and Poor's Bond Rating
Attachment C: Standard and Poor's Bond Rating