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C1TY OF BOULDER
C1TY COUNCIL AGENDA 1TEM
MEETING DATE: April 1, 2008
AGENDA TITLE: Consideration of a motion to accept the February 12, 2008 Study
Session summary regarding Water Budgets.
PRESENTER/S: Robert Williams, Director of Public
Carol Linn, Utilities Financial Ma
Branwvn Wev~andt, Utilities B~ n~
EXECUTIVE SUMMARY: '
The purpose of this agenda item is to accept the sur
session on water budgets. The purpo e ~f the study
information about water budgets and~t~ d~~cuss the
upon 2007 data. The study session was~~l~ ~~~`, ~~
feedback on potential changes to the wa~~~-r bu
steps.
: City Coun~il study
to provide council with
s of water budgets based
cil to provide
discuss possible next
Attached is a sur
study session. T~
staff indicated it
identified in
the questions that were asked at the
~tions asked at the study session that
o council These questions are
osal for how the questions will be
imm was p ted to the Water Resources Advisory Board
17, 2 The RAB feedback and comments were: (to be
Staff recommends th ity Council accept the summary of the Feb. 12, 2008 study
session on water bu ~ets.
Approved By:
Frank W. Bruno,
City Manager
ATTACHMENTS:
• Attachment A- Feb. 12, 2008 Study Session Summary on Water Budgets
AGENDA ITEM # PAGE 1
ATTACHMENT A
Feb. 12, 2008
Study Session on Water Budgets Summary
PRESENT
City Council: Mayor Shaun McGrath, Deputy Mayor Crystal Gray, City Council
members Matt Appelbaum, Macon Cowles, Angelique Espinoza, Lisa Morzel, Susan
Osborne and Ken Wilson.
Water Resources Advisory Board: Chair Jim Kopf, membe the udience: Bill
DeOreo and Kelly DiNatale.
Staff members: City Manager Frank Bruno, Deputy ~t anage hanie Grainger,
Acting City Attorney Jerry Gordon, Bob Eichem, a illiams, n Weygandt,
Carol Linn, Erin Kintzle, Jody Jacobson, and Jo a Crean.
Consultant: Todd Cristiano, Red Oak Consulting
PURPOSE
The purposes of the Feb. 12, 2008 stu ~ n were to:
¦ Provide an overview of the new a t billing odology;
¦ Discuss the effectiveness of the er bu m sed upon 2007 data;
¦ Receive feedbac council on r eva s related to 1) potential
changes to wa and 2) fina ial/reven impacts; and
¦ Discuss po next s
OVERVIEW OF THE DISCUSSION
The prese wit ning re made by City Manager Frank Bruno. The
city ma er point that water budgets were first approved by City Council in
Dec 2004, it was ovule at the Commercial Industrial Institutional (CII)
budgets d need to be here uated and potentially changed. The city manager
acknowle at there a desire to change the CII (and other customer classes)
budget metho in ear 2007; however, he felt that while he had the authority as
city manager to e t ethodology, he wanted council to be involved in the
proposed changes b e council had given the original policy guidance on the water
budget methodology or customer classes and because there could be significant revenue
impacts. Mr. Bruno emphasized that the city staff are supportive of making changes to
the water budget system.
Director of Public Works for Utilities Robert (Ned) Williams introduced the team that
has been involved in the water budget implementation, including the Water Resources
Advisory Board (WRAB); staff from the Public Works, Information Resources,
Information Technology, City Attorney's Office, and Finance departments; and Red Oak
Consulting. Mr. Williams then explained the new water budget rate structure that was
implemented in January 2007, and Utility Billing Supervisor Bronwyn Weygandt
AGENDA ITEM # ['AGE 2
reviewed how water budgets are calculated for each customer class. Mr. Williams
continued the presentation by summarizing the data that was collected from the first year
(2007) of water budgets and highlighted that the water budget system performed as
projected in terms of water use and revenue.
The concerns and suggestions staff received throughout the first year were summarized.
To address these concerns, staff and WRAB together developed the following options for
changing budgets:
¦ Multifamily Residential Budgets:
o Adjustments for number of bedrooms (up to S be s)
¦ CII Budgets:
o Allow customers to choose from a "menu" budget types:
¦ Average Monthly Use (AMU)
¦ Historical Monthly Use (HMU
¦ Indoor-Outdoor
¦ Efficiency Standard
¦ Irrigation-Only Budgets:
o Include public right-of--way (RO
¦ Looped Water Systems:
o Combine water meter budgeting an ~ g purposes
To make all of the above changes woul e ongoing al revenue reduction of
$1,272,000. There are several options to fset ~ ue duction, including reduce
capital projects, reduce Hance proje uce o .tonal programs, decrease
reserves, increase rate ombination fall opti s.
The chair of the ate ourc Advisory Bo WRAB) Jim Knopf explained
WRAB's thoughts and i r gets and emphasized that no customer
class shou anot r be s ed and that all customers should pay the
cost of ice. He lai 's support for the proposed changes to the water
bud
Mr. Willia ncluded th resentation by recognizing that Council, the city manager
and the co has to d the right balance between the cost of additional
enhancements to r b ets and the added value to the water budget program.
COUNCIL RESP SES
Following the presentation, council members were asked to provide feedback on:
¦ Options to change the water budget program as presented at the study session.
¦ Feedback on ideas for addressing the projected $1.2 million reduction in revenue
(if all changes are made).
Overall, there seemed to be general support for making changes to the water budgets. The
areas where there appeared to be general agreement from the council included the
following:
¦ Looped Water Systems: combine water meters for budget and billing purposes.
AGENDA ITEM # PAGE 3
¦ Irrigation-Only Accounts: include public ROW.
The areas where there appeared to be general agreement from council to proceed with
changes, but where there were some concerns expressed include:
¦ Multifamily Residential Changes to Budgets:
o Concerns about this class being subsidized by other classes.
o Concerns about vacancy rates.
o Concerns about zoning allowance regarding the number of unrelated
persons in a dwelling.
The area where there did not appear to be clear agreement wa the
commercial/industrial/institutional (CII) class and include
¦ CII Changes to Budgets:
o Concerns about the class being subsid~ other es.
o Concerns about not encouraging or ` c ~vizing" w onservation
goals of water budgets by allowi istorical use to Conti
There seemed to be general support for moving fo . ~th some ch ge to this
CII class, but with the caveat that a better solution or oach should be considered in
the future. Under the "Next Steps" s ~on of the memo m, staff has outlined a
proposed approach to start this proces
Regarding how to handle the $1.2 millio even 11 ~ 11 the proposed changes
were made, council did ~ icate intere crease onthly water rates in 2008.
Council generally see ort adopti a "wait a d see" approach to the potential
revenue impacts a king a ision in the xt year or two after actual impacts, if
any, are realized. he s als nterest in ha the Utilities Division undertake a
review of expenses and o onsidering raising rates.
Additio issues a rai uring the study session and that staff will further
cons' nd analyze a of it plan for 2008 and beyond include the following:
¦ to real-time potr piration (ET).
¦ Int the result the Plant Investment Fee (PIF) study.
¦ Ratch wn the er application rate as the irrigable area increases, for all
custome es t just single-family residential).
¦ Include pub W for all accounts (not just irrigation-only).
¦ Require CII counts to have irrigation-only meters for all large outdoor irrigation
areas.
¦ Fix "common sense" issues now.
¦ Concerns about subsidizing customers if changes are made.
Questions that were asked by council members during the presentation but were not
answered in the study session are identified below. Staff will provide the answers to these
questions in upcoming Weekly Information Packet (WIP) items or at a future study
session.
AGENDA ITEM # PAGE 4
¦ Do municipal accounts have water budgets? Do we subsidize city departments'
water use? A project is currently underway to develop and report departmental
water use budgets. More information will be provided in a WIP.
¦ How will Carter Lake Pipeline, replacing water meters, Town of Nederland's
Wastewater Treatment Plant, and buying non-Colorado River water supplies
impact rates? (WIP)
¦ How will the Plant Investment Fee (PIF) Study, Source Water Master Plan, and
water budgets come together? (April 22 study session on PIFs.)
NEXT STEPS
Based on council feedback at the study session, staff is procee g to nplement water
budget changes as noted below. In response to council fee staff is also further
evaluating the relationships between the Raw Water Ma Pla ater Budget and Plant
Investment Fees to determine if refinements to optio an or pot hasing of future
changes to water budgets, particularly for CII Gust r , ay also a e goals and
objectives. All computer billing system progra ing changes and pub ormation
notices will take approximately 45-90 days t ete. y of the chap ay be
implemented in time for the June utility bill, whic ~ c the beginn~ of the
three-month (June, July and August) peak irrigation .For any changes which are
not implemented until later, staff wil ke the changes active to the June bill and
provide a credit, if applicable, for thos es requested 0 y each customer.
Changes to Methodologies for Custom Clas
¦ Multifamily Resi ~ 1- Adjustm ill be ed for number of bedrooms
(up to 5 bedro
Use door a ation of 4, gal/living unit, up to and including a
two-be un as the basis. omers could apply for an adjustment
if the nu ing unit exceeded two, in which case, an
al b m wou ive an additional 1,000 gal/unit/month.
The ont door allocation per unit would not exceed 7,000
gallons nit, the indoor allocation for single-family
residentia tome .All adjustment requests for bedrooms would need to
e submitte y the property owner, and the city would accept the owner's
ature as lidation of the number of bedrooms.
¦ Commercia strial Institutional (CII) -CII customers will be allowed the
choice of on f the following options. A customer would only be able to change
options one time per calendar year:
o AMU (Average Monthly Use) -This is the current methodology used for
all CII accounts. It is defined as the historical average annual use divided
by 12 so that every month has the same budget. The AMU will be the
default methodology unless a customer requests to switch to one of the
other three approved options.
o HMU (Historical Monthly Use) -This option is defined as the historical
monthly water use for each month (January three-year historical average
AGENDA ITEM # PAGE 5
¦ HMU will result in monthly wastewater charges based on all water
used, which could include water used for irrigation (this is not a
change to the current practice).
Staff agrees with the concern expressed by some council members at the
study session that moving to the HMU approach does not encourage water
conversation as it uses historically monthly use as basis on the water
budget. If a commercial account has had an in cien ater system/use
this use will form the basis for the HMU an not encourage
conservation.
To address this issue, staff will loo o ys to fort courage water
conservation for the HMU optio well as for all the of
"methodology" options for al asses will return t cil with
this information. Staff will assess t and revenu mpacts from
the HMU changes for the remainder o 8 and for 2009, will analyze
this data and provide cil with conse ~ n options in 2009 during the
development of the 20 t. If counci is ome additional
conservation options to i ese than could be implemented
in 2010.
o Indoo This opti is define as an indoor allocation based on
the recent rage Wint Consumption (AWC) and an outdoor
alloca ased irrigable are ~ cluding public ROW), using an
a plicatio s square foot (gpsf) per irrigation season
ed on his monthly Evapotranspiration (ET) with an
ad i one t allocation in the winter months.
¦ r/Ou ill result in wastewater charges based on AWC
on us a iding wastewater charges on outdoor water use.
(Thi a change from current practice for wastewater charges on
CII ounts but is similar to single-family residential accounts).
o Effi -Standard Budget -This option is determined by a specific
revie of the customer's indoor and outdoor uses based on reasonable and
documented efficiency standards, as determined by a registered
professional engineer's evaluation and audit of the customer's water use,
facilities and practices. The professional engineer's recommendation of
the Efficiency-Standard water budget to be used will be reviewed and
approved by the city prior to its implementation and use. During 2008, the
city will use the Planning and Development Services Schedule of Fees to
recover costs associated with its review and approval process for this
option. During 2008, the city uses a billing rate of $131lhour for these
AGENDA ITEM # PAGE 6
N
types of services and there will be a one-hour minimum charge to review
the professional engineer's report and recommendation.
¦ Irrigation-Only -The public right-of--way (ROW) will automatically be included
and added to the irrigable area for all irrigation-only accounts, as this area is often
a large area for this account type.
¦ Looped Water Systems -Water meters will be combined for budgeting and billing
purposes.
Some customers in the multifamily, CII and irrig ~ -only customer
classes have a "looped" water system in which tip water meters are
used in an effort to increase reliability and t ~de redundancy to their
water system.
Revise the Water Budget Rules
The city manager has authority to approve and se Water Budget Ru order to
implement the changes listed above, except rdinan changes desc in the
following "bullet." As with all rule changes, the p w~ an opport ity to
comment before the rules are finalized. It is anticipat t the revision process will
begin in early April.
¦ An ordinance to change the city resente council for first reading
in April. An ordinance is require o th n r-Outdoor option can
result in wastewa arges based Con us avoiding wastewater
charges on the ter use.
Water Conserva ion side fions and As ent
As was mentioned abov ~eI ss changes, during 2008 and 2009, staff
will monit ate t ective ~ water budgets and its impact on water
conserv on. Pote ang water budgets to all classes (single family,
mul ~ ~ y, CII and i ~on-o twill further encourage water conservation will
be i en in 2009 for idera n during the 2010 budget process.
AGENDA ITEM # PAGE 7