Citizens' Advisory Committee
Meeting Minutes
August 25, 2005

CAC Members in Attendance: Myrna Poticha (Chair), Michael Buchenau, Theresa Jehn-Dellaport, Tim Flynn, Larry Keesen, Jim Legas, Rick Sackbauer, and Roberta Simonton
DW Staff: David LaFrance, Greg Fisher, Linda Firth, and Joe Sloan
Guests: Doug Snyder

Agenda & Minutes

Agenda – Agenda was approved after the addition of the topics Irrigation Rates and Web Site issue regarding public meeting notice.

Minutes – Minutes of July 27, 2005 were approved as presented.

Public Comment:

Mr. Doug Snyder presented the CAC with documents regarding his request for a hearing at Denver Water. His request has been denied by DW staff. He would like the CAC to advocate for a hearing. Mr. Snyder believes his HOA is watering areas with a tap which is not designated for irrigation. Denver Water should enforce its tap rules or change their Operating Rules. Myrna supports customer's rights to speak with staff on any issue of interest; however, this topic is beyond the scope of the CAC and would require hours of research before the members of the CAC would have a complete understanding of the topic. She requested Mr. Snyder meet with staff and thanked him for attending the meeting. Linda Firth offered to speak with Mr. Snyder after the meeting.

Proposed 2006 Revenue Increase

David LaFrance gave the presentation, Preliminary Findings 2006 Water Rates and Rate Design, which he had given to the Board on August 24, 2005. The goal is to increase revenue by $12 Million for 2006. Cash reserves, cuts to the budget and hiring freeze will continue. Three options were presented but there are five options the Board has discussed. No matter which option is selected by the Board the amount of revenue generated will be the same.

Larry asked if a review of irrigation rates and customer classes could be included in proposed changes to 2006 rates. There are HOAs with similar housing and open areas but one is classified as a commercial property ( summer & winter rates) and the other is classified as a residential property. David stated he does not have staff available to explore this topic at this time. He agreed it was an area which needed to be reviewed. David offered to meet with Larry after September 14, 2005 to review the accounts. A review could result in the commercial account be reclassified as a residential account.

After discussion the following motions were presented

Motion – Endorse Option 1; follow the current rate structure, no additional blocks or changes in the consumption thresholds within the exiting blocks
   3 - in favor   4 - opposed   1 - abstain

Motion – Endorse Option 3; create an additional block and change the consumption thresholds within the blocks.
   4 - in favor   3 - opposed   1 - abstain

Myrna requested that each member present give their individual opinions on the proposed options.

Larry – Maintain the existing rate structure. Increase the rates as necessary to maintain the system and fund effective conservation programs.

Myrna – Supports option 3 which encourages a conservation climate and urges the Board to select an option which will continue to further the conservation message.

Roberta – Concurred with Myrna on alternative three as the best. Roberta said, "We need to seize the moment and let rates help support the conservation behaviors currently realized by our customers." Rates should support the conservation and promote the policy direction set by the Denver Water Board. There are a few issues within the third alternative that Roberta would like to see addressed, including the current regressive nature of the rate structure especially for the low volume users. Those using less than 5,000 gallons pay 70% more per gallon than those consuming 35,000 gallons.

Theresa – The public is aware of water issues and water use due to the drought. Denver Water should take advantage of that awareness and continue to support the conservation message. Denver Water should also try and reward customers that continue to conserve and the fifth block would help to realign the rates so that customers who use very little are not paying as high a rate as those who do. Any rate increases should promote and encourage conservation behavior.

Rick – Favors whatever option will keep more water in the streams flowing through the West Slope. Water in Denver is amazingly low priced and will have to increase in cost. Make customers aware of the value of water and the inevitability of higher prices.

Tim – To avoid creating the perception that the Board has already made a decision regarding matters that are to be referred to the Rate Task Force, do not make changes to the current block structure at this time. Allow the Rate Task Force, which currently is being formed, to study the various options. Let that process move forward and not confuse the customers with changes to the existing rate structure. Opposed to the heavy emphasis on rates as a conservation tool when reservoirs are full and believes that maintaining consumption at drought levels is unrealistic. The Board should expressly recognize that rates will be needed to find expansion and replacement of Denver Water's collection, treatment and distribution facilities and should not run the risk of rate resistance solely for conservation purposes. Also, questioned when there was not adequate time for public comment and review and without allowing the Integrated Resource Plan process to be completed. What is needed is a more open process that obtains input from all stakeholders and not just those who focus solely on conservation.

Michael – Maintain the existing structure and increase rates within that structure if absolutely necessary in the short-term. There would be less public confusion if the Rate Task Force is allowed to explore all options of rate design, and propose the major changes it deems appropriate at the time the process is complete. A major change in rate design at this time would appear as if something is being pushed through without proper input from the public.

Jim – Favors the option which would narrow the gap between suburban and Denver customers. This is alternative two in the presentation. However, staff has commented this option would be difficult to defend if approved. Therefore, support alternative three which creates an additional block and changes the thresholds.

Roberta asked if Linda Firth had any opinions of the options as they related to the work which will be done by the Rate Task Force. Linda stated that two members of the Rate Task Force had called asking if they had missed a meeting as the proposed changes to the current blocks appeared to be something they would be discussing.

CAC Business

The Update on the Rate Design Group was tabled until the September meeting. Linda agreed to attend the September meeting.

Myrna stated two members of the environmental community traveled to Keystone to attend the Board meeting on August 10, 2005. The Denver Water web site listed the location of that meeting as Keystone. The meeting was in Denver. Joe stated DW staff was made aware of that error on the morning of August 10, 2005. He apologized and will convey Myrna's comments to staff responsible for that web site posting.

The meeting was adjourned at 7:10 p.m.