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CAC members in attendance: Russell
Burton(Chair), Tim Flynn, Theresa Jehn-Dellaport, Larry Keesen, Jim Legas, Myrna
Poticha, Roberta Simonton DW staff: Marie Bassett,
Steve Schmitzer, Kerry Kuykendoll, Margaret Medellin, Joe Sloan Guests: Doug Christ Agenda and Minutes The
agenda was adopted as presented. The
minutes were approved as presented, although Russell will not be able to attend
the Staff Update
-- Marie Bassett, Director of Public Affairs The
Board added an extra day for lawn watering.
This was done to allow customers some flexibility on when to water, but
the Board stressed that two days of watering was sufficient.
The surcharges remain in place. The
new sod & seed rule and the rebate program has been extended.
Rain sensors and specific irrigation controllers that have rain sensors
connected to the system were added to the list of rebates. DW
has come to an agreement with the City on fees for street closures.
The City’s main concern is to keep the streets open. Instead of paying
fees for each day the street is closed, DW will negotiate the closure then pay a
daily fine if the street is closed longer than the negotiated time.
DW anticipates this will save over a million dollars a year.
DW
has also come to an agreement with Metro Wastewater to treat the solids from the
Recycled Water treatment plant. This
agreement will be reviewed periodically and DW will explore other options to
dispose of the solids in the future. There
are several federal court cases pending which could effect how DW operates the
raw water collection system. Chips
and DW Legal Division are closely following the proceedings.
DW is working with other large water utilities and American Water Works
Association to respond to these cases. Marie
suggested the CAC be briefed at a future meeting on these cases.
The
Board received an information item from staff suggesting the expansion of the
recycled water distribution system be delayed by one year, incorporating that
delay in the 10-Year Plan. Primarily
this is being done as a cost saving measure since revenues are down. RFPs
for the new CIS system were sent to three vendors.
These three have already been studied by staff at DW.
DW had selected a vendor then learned that the vendor had been acquired
by another company. DW decided to
revisit the selection process but limit it to those vendors who had already been
reviewed by staff. Notices
have been sent to the development community that a 5% to 10% increase on SDCs is
expected for 2005. A copy of the
notice was made available to the CAC. Marie
asked Russell if the process of advance notice, new this year, was acceptable to
the HBA. Russell believes that DW complied with negotiations that occurred
last year. Developers need as much
notice as possible of increases so those costs can be included in the project. A
new bill design will be rolled out next year, and Customer Care will solicit
input on the new bill from groups of customers.
The CAC requested an opportunity to comment on the new bill. Action:
Joe will request that the CAC have an opportunity to review new bill. The
CAC has been discussing rate design and received a memo from David LaFrance on
the subject. Marie suggested
the CAC continue to discuss rate designs at future meetings with the intention
to see changes in the design in two to three years when the new CIS system is
available. Theresa
asked if the new CIS will include the use of water bu Roberta stated
the CAC should comment to the Board on water bu Tim stated
a change in rate design would be a very complex undertaking for the CAC.
At this time it should be more of an intellectual exercise to get the CAC
up to speed on rate design. Roberta requested
that the CAC also discuss surcharges. There
has been a fundamental change is how the surcharge revenue is being used this
year. Last year it was used to fund
rebates and there may be a perception from the customers that the same is
occurring this year. It had been
used to encourage conservation and now it is being used in the general fund.
The discussion on surcharges and rates was tabled until the second half
of the agenda. Raw
Water Resources - Steve
Schmitzer, Chief Water Resource Analysis Steve
showed a presentation on current water sources and potential sources in the
future. Much of the information
covered in the presentation came from the Integrated Resource Plan (IRP).
The IRP is a tool used by the Board to discuss future water resources.
The Board has set the following priorities for new raw water resources:
1) conservation and improvements to the existing system; 2) recycled water; and
3) construction of new storage facilities. Additional
water for the near-term will come from: 16,000 af Conservation, 13,000 af System
Refinements, 17,000 af Recycled Water, 10,000 af Cooperative Actions, and 15,000
af from new supply sources. Jim
requested that each member of the CAC receive a copy of an appendix to the
IRP on Raw Water Resources. Action:
Joe will send a copy of the appendix and Steve’s presentation to
members of the CAC. Jim asked
why DW would spend so much money on the recycling plant for only 17,000 af of
water. In his opinion, a reservoir
could be built for the same amount of money and would produce three times that
amount of water. He also
questioned DW’s figures for storage capacity versus firm yield.
During the presentation, Steve stated a 72,000 af expansion of Gross, for
example, would result in an additional 15,000 af firm yield.
Jim believes that number is too low and DW strategy is too risk adverse.
Steve
and Margaret responded that the level of risk and calculation for firm yield had
been set by the Board. Steve
suggested that he meet with Jim after to meeting to discuss the issue further. CAC Business Rates
Discussion – Margaret Medellin, Planning & Kerry Kuykendoll,
Rates Margaret and Kerry gave a presentation of post-drought water usage which was given to the Board on Russell stated that last year Kerry described a “new-normal” for
customer usage after the drought. He
asked if these were new projections are similar to the new-normal projects of
last year. Kerry
responded there will be a longer shadow of lower usage after the drought.
This shadow was not part of the projection of last year.
Consequently, revenues will be lower for a longer period of time.
The longer the drought lasts, the longer the shadow or memory of the
drought will last. This will affect
customer usage, which will in turn affect revenue.
Some
members of the CAC suggested that the Board lift the restrictions and the
surcharges. Usage will still be low
as the memory of the drought, surcharges & restrictions will stay with
customers. Tim asked Kerry if the rate increase would be a double digit (more
than 10%) increase to cover the projected revenue shortfall.
Kerry
responded that no numbers were available. Roberta stated that the recent Service Charge increase was in fact a
double digit increase for those who use less than 10,000 gallons per billing
cycle. Those that use this amount
saw a 21% increase in their overall bill when the Service Charge was increased.
Those customers that use very little water, 10% to 15% of the customers,
saw double digit (percentage) increases in their bills.
That is the wrong message to send to those who conserve water. A
double digit increase should not be a surprise to the rest of the customer base
as those using little water have already seen a double digit increase. Kerry
responded there was more to discuss on the topic of the Service Charge increase.
Cost allocation went into the decision to increase the Service Charge. Theresa raised the issue of how Denver Water manages raw water
sales. New revenue can be created by
additional raw water sales. Instead
of spilling water from reservoirs DW should sell that water.
As part of her work she has brokered raw water deals that have benefited
water providers with income and those seeking water with additional resources.
Even if the sale is a one time event it can be beneficial to both
parties. Some agencies have sites
where interested parties can bid on available raw water.
She would also like to hear more about Denver Water’s possible use of
ground water resources. Margaret
responded that all the water in the system is used to benefit DW.
She suggested Theresa speak with Marc Waage, Raw Water, on this subject. Action:
Joe will ask Marc Waage to contact Theresa regarding the sale of raw
water.
West Slope Jim Legas
requested that staff provide all CAC members with the DW Report on Future Water
Projects (Water for Tomorrow IRP). Future CAC Involvement at Board Meetings Roberta Simonton will
attend the Board meeting on Russell Burton will attend the Board meeting on Future CAC Agenda Items Direction
of Denver Water and federal court cases which could impact raw water operations
at Denver Water – Chips Barry,
Manager of Denver Water, August 19. Public
comment on the proposed rate increase: August 19 and September 16. Visit
Cheesman Reservoir in September or October. The
date will be determined at a future meeting.
The
meeting was adjourned at CAC Meeting Actions for Next Meeting –
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