HomeMy WebLinkAboutMinutes - July 20, 2010 SSLODI CITY COUNCIL
SHIRTSLEEVE SESSION
CARNEGIE FORUM, 305 WEST PINE STREET
TUESDAY, JULY 20, 2010
A. Roll Call by City Clerk
An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held
Tuesday, July 20, 2010, commencing at 7:00 a.m.
Present: Council Member Hansen, Council Member Johnson, Council Member Mounce, Mayor
Pro Tempore Hitchcock, and Mayor Katzakian
Absent: None
Also Present: Interim City Manager Bartlam, City Attorney Schwabauer, and City Clerk Johl
B. Topic(s)
B-1 Presentation Updating Status of PCE/TCE Cleanup Program, Proposed Wastewater and
Water Rates, Status of Water Meter Program, and Status of Surface Water Treatment
Plant Facility (PW)
Interim City Manager Bartlam briefly introduced the subject matter of water and wastewater
related topics.
Consultant Phil Smith from Treadwell and Rollo provided a PowerPoint presentation regarding
the status of groundwater remediation program. Specific topics of discussion included an
overview of the five plumes, responsibility toward four of the five plumes, Central Plume, South
Central/Western Plume, Southern Plume, and the Northern Plume.
In response to Council Member Johnson, Mr. Smith stated they are not as far along with the
Northern Plume as the other plumes and there may be some natural progression with the
contamination. Mr. Smith stated they do not yet have the summary document showing data and
statistics for the Northern Plume argument to the Regional Board.
In response to Mayor Pro Tempore Hitchcock, Mr. Smith stated the additional work to be voted
upon tomorrow includes the information needed to build and present a case for the Regional
Board.
In response to Council Member Hansen, Mr. Smith stated that, while he is not sure of what
Lustre -Cal is doing right now, it is planning on doing some soil evaporation and similar remedial
work.
In response to Council Member Hansen, Mr. Smith stated one meeting was conducted with
Lustre -Cal and it did not appear to have much information to do the work on site. City Attorney
Schwabauer stated Lustre -Cal can continue doing incremental work for as long as the State will
allow.
In response to Council Member Johnson, Mr. Smith stated the $20 million savings will be
realized through the time that has lapsed since the original diagnosis of the situation, the
information that has come to light since then allowing for other means of remediation than
originally thought, the State Board's realization of what can be reasonably required, and the
actual savings from the active remediation and capital costs.
In response to Council Member Johnson, Mr. Schwabauer stated the original cost of clean-up
Continued July 20, 2010
was based on an estimate of the information known at that time and the State appears to be
more reasonable and may even allow watching the data for some time from the wells.
In response to Council Member Johnson, Mr. Schwabauer stated that, even if the City did obtain
an order, the order would not necessarily state when our efforts would be complete and the order
could change in the future.
In response to Mayor Pro Tempore Hitchcock, Mr. Smith stated each water board works a little
differently depending upon the geographical area and remediation orders are different as well.
In response to Council Member Hansen, Mr. Smith stated many cities have groundwater
contamination concerns and the approach of each may be different based on effects on drinking
water.
In response to Council Member Hansen, Mr. Smith stated contamination below 200 feet in the
Southern Plume is not expected, although they have not gone down that deep. Mr. Smith stated
the Central Plume has an extensive monitoring system near 200 feet.
In response to Council Member Johnson, Mr. Smith stated Lustre -Cal is responsible for soil
remediation, the City is responsible for groundwater remediation, and while the City can
proceed separately the source area could affect the City's efforts as well.
In response to Mayor Katzakian, Mr. Smith stated Lustre -Cal is responsible for answering to the
same State Board agency as the City.
In response to Council Member Hansen, Public Works Director Wally Sandelin stated the drinking
water is safe and the City will continue to monitor the situation well into the future.
In response to Mayor Pro Tempore Hitchcock, Mr. Sandelin stated new wells are also a possibility
to ensure safe drinking water into the future.
Mr. Sandelin provided a PowerPoint presentation regarding the PCE/TCE status report. Specific
topics of discussion included PCE/TCE workplan, water and wastewater rates and utility financial
models, surface water treatment facility, water meter program, rate comparisons, superior water
quality, Delta protection, recharge being slow, Stockton benefits, recharge versus direct use
costs, timing issues, schedule, project budget, current activities, and Phase 1 of construction.
In response to Mayor Pro Tempore Hitchcock, Mr. Sandelin stated the 50/50 split between fixed
and usage components is common among cities.
Council Member Mounce and Mayor Pro Tempore Hitchcock requested a list of other
communities that have similar and differing rate models for Wednesday night's Council meeting.
In response to Council Member Hansen, Mr. Sandelin stated staff will be asking the Council to
consider a 25% reserve policy based on the standard of practice in other communities.
In response to Mayor Pro Tempore Hitchcock, Mr. Sandelin stated the revenues from separate
charges have all rolled into operations and a $2 million annual infrastructure program was
established.
In response to Mayor Pro Tempore Hitchcock, Mr. Sandelin confirmed the State law requirement
for 30/70 may be five to six years out, metering needs to be done first, and there is some
discussion about a conceptual plan, although there is not a specific deadline set by the State for
implementation of the 30/70 split.
N
Continued July 20, 2010
In response to Council Member Johnson, Mr. Sandelin explained that there may be some
changes in demand characteristics and it is important to understand what those are before the
30/70 split transition happens.
In response to Council Member Mounce, Mr. Sandelin stated the rates are designed to meet the
utility costs and reserve policy needs.
In response to Council Member Hansen, Mr. Sandelin stated the utilities operate on a revenue
neutral basis.
In response to Council Member Mounce, Mr. Sandelin stated the rates are adjusted on an
ongoing basis to ensure the City is not generating revenue since the utility must be revenue
neutral.
In response to Council Member Hansen, Mr. Sandelin stated a vacant rate would include the cost
of keeping the service available to the property.
In response to Myrna Wetzel, Mr. Sandelin confirmed there is no program where a vacant
property would not pay anything.
In response to Council Member Mounce, Mr. Sandelin confirmed the tenth of a cent charge per
gallon as proposed and illustrated on the chart.
In response to Council Member Hansen, Mr. Sandelin stated an average person uses 220
gallons per day and therefore a six person home could easily use 1,000 gallons per day.
In response to Mayor Pro Tempore Hitchcock, Mr. Sandelin stated the proposed model diverts all
PCE/TCE to a single revenue line from which funds will be directed to various activities and
programs such as operations and clean-up as necessary. Mr. Sandelin stated this will allow the
City to better monitor and track the expenses.
In response to Mayor Pro Tempore Hitchcock, Mr. Sandelin stated currently $2.6 million is
collected annually for PCE/TCE, there is $15 million total collected, settlement funds can only be
used for certain activities, and the water fund could go toward a variety of activities.
In response to Mayor Pro Tempore Hitchcock, Mr. Sandelin stated the rate increase is intended
to keep up with inflation and operating costs and does not include PCE/TCE monitoring.
In response to Council Member Mounce, Mr. Sandelin stated the base and usage rate cost
comparisons are based on existing rates and not proposed metered rates.
In response to Council Member Hansen, Mr. Sandelin stated the metering information will be sent
out to the public in August and will be available on the City website as well.
In response to Mayor Pro Tempore Hitchcock, Mr. Sandelin stated the $15 million will not go very
far even if the PCE/TCE original clean-up cost estimate of $70 million is reduced to $50 million.
He stated staff will look at restructuring options if the costs are reduced to $20 million.
A brief discussion ensued among City Council regarding the proposed rates and clean-up
estimates.
In response to Council Member Hansen, Mr. Sandelin stated staff is working with a 30 -year debt
structure model although it could be retired sooner.
Continued July 20, 2010
C. Comments by Public on Non -Agenda Items
None.
D. Adjournment
No action was taken by the City Council. The meeting was adjourned at 8:30 a.m.
ATTEST:
Randi Johl
City Clerk
E
AGENDA ITEM S
CITY OF LODI
,. COUNCIL COMMUNICATION
AGENDA TITLE: Presentation Updating Status of PCE/TCE Cleanup Program, Proposed
Wastewater and Water Rates, Status of Water Meter Program and Status of
Surface Water Treatment Plant Facility
MEETING DATE: July 20, 2010 (Shirtsleeve Session)
PREPARED BY: Public Works Director
RECOMMENDED ACTION: Presentation updating status of PCE/TCE Cleanup Program,
proposed wastewater and water rates, status of Water Meter
Program, and status of Surface Water Treatment Plant Facility.
BACKGROUND INFORMATION: At the July 21, 2010 City Council meeting, a number of actions may
be taken by the City Council. The Shirtsleeve presentationwill
provide background information relative to these action items.
Task Orders No. 21 and 22 of the Treadwell and Rollo Master Services Agreement will implement new
direction from the Regional Water Quality Control Board regarding the remediation activities for the
Southern, South Central/Western, and Northern Plumes. A presentation by Phil Smith of Treadwell and
Rollo will be provided regarding this new direction and the task orders.
The City Council will hold a public hearing July 21, 2010 to consider raising wastewater rates 12 percent
and water rates two percent, as well as setting usage -based wastewater and water rates. The usage -
based wastewater and water rates are an integral element of beginning the usage -based billingsfor
approximately 2,800 customers on January 1, 2011. Information regarding various elements of the rate
increase and examples of future customer charges will be provided.
Approval to proceed with bidding of the Surface Water Treatment Facility project will be requested at the
July 21, 2010 meeting. Background information regarding the history of this project and the future
actions to be requested of the City Council will be presented by staff.
FISCAL IMPACT: Not applicable.
FUNDING AVAILABLE: Not applicable.
Aoulj'�"o
F. Wally Sa elin
PublicWorks Director
FWS/pmf
APPROVED:
Knnrarlt Rnrtlam, interim City Manager
K:\WP\Water\CWaterMatters.doc 7/14/2010
City Council
City of Lodi
20 July 2010
Status of Groundwater
Remediation Program
Central Plume
■ Source Area Remediation to begin
September 2010
■ Groundwater monitoring program continues
■ RWQCB and Corrective Action Order
(CAO) status
South Central/Western Plume
■ RWQCB agrees in principle to
monitored natural attenuation (MNA)
■ Scope of work submitted to City
includes 4 nested monitoring well sets
(2-4 wells per set)
Southern Plume
■ RWQCB accepts in principal MNA
■ Scope of work submitted to City includes
additional plume definition and installation
of 3 nested monitoring well sets (3-4 wells
per set)
Northern Plume
■ City has met with the technical representative
of LusterCal to exchange information
■ LusterCal to remediate soil contamination and
the City to remediate groundwater
■ The Northern Plume likely exists in the vicinity
of the eastern edge of the Central Plume
Northern Plume
■ Questions remain whether Central and Northern
Plume remedial activities will intersect
■ Scope of work submitted to City for work in
Northern Plume includes:
- Assess condition of monitoring wells and need
for additional monitoring wells
- Assess whether additional groundwater
modeling runs are needed for plume definition
and well location
- Installation of additional monitoring wells
Summary
and
Q&A
r
44
The City of Lodi
Public Works
Engineering
Shirtsleeve
July 20, 2010
Outline
• PCE/TCE Workplan
• Wastewater Rates & Utility Financial
Model
• Water Rates & Utility Financial Model
• Surface Water Treatment Facility
• Water Meter Program
Wastewater Usage Based Rates
• Revenue Neutral
• 50/50 Split Between Fixed and Usage
Components
• Billings Begin Concurrent With Metered
Billings
• Revenue Neutrality Confirmed by
Experience
• Vacant Unit Rate Coming Soon
Wastewater Rates
• Recommend Increase of 12% instead of 20%
• Inclusive of 1.05% ENR Increase
• Effective Immediately
• Flat Rate Increase Not Subject to Proposition
218
• Usage Based Rate Increase Subject to
Proposition 218
1 1111
jot
.�._.
Y �
Wastewater Usage Based Rates
• Fixed Monthly Service Charge
— $21.22 Per Month Effective July 1
— Based Upon Winter Water Usage - Monthly
Average of December, January, February
— Recalculated Each Year
• Usage Based Charge
— $2.41 per hundred cubic feet (748 gallons)
- � Wastewater Utility Model
• New Model Created
• Assumptions Reviewed
• White Slough Operating Cost Experience
Water Rates
• Recommended Increase 2% Effective Jan.
2011
• Projected ENR Increase is 2.10% for Dec.
2008 through Dec. 2010
• Flat Rate Increase Subject to Proposition 218
• Usage Based Rate Increase Subject to
Proposition 218
Water Usage Based Rates
• Revenue Neutral
• 50/50 Split Between Fixed and Usage
Components
• State Law Requires Ultimate 30/70 Split
• Billings Begin Jan. 2011
• Revenue Neutrality Confirmed by
Experience
• Vacant Unit
Rate Coming Soon
Water Usage Based Rates
N
• Fixed Monthly Service Charge - $21.22
• Usage Based Charge
❑Tier 1
❑Tier 2
❑Tier 3
0 — 7,480 gals
7,481 — 37,400 gals
More than 37,400 gals
$0.0012/gal
$0.0018/gal
$0.0023/gal
EOY Balance
Operating
Reserve (25%)
DS Reserve
COP Proceeds
Rate
Stabilization
PCE/TCE
15,056,000
1,551,000
IC
55,088,000
11536,000
47095,000
22,295,000
2)283,000
47095,000
17,782,000
2,756,000
41095,000
0 34, 341, 000 2)204,000 0
0 0 0 0
3,090,000
761,000
Available 1074157000 1473557000
Reserve
722,000
12,291,000
1,286,000
91645,000
50
40
30
20
10
0
m
mm
w
48.28
49 48. S8 40.28 40.28
40.28
40.28
27.04
�26.3
26.5
Aug -09 Sep -09 Oct -09 Nov -09 Dec -09 Jan -10 Feb -10 Mar -10
0 Metered Charge ■ Flat Charge
60
48
36
24
12
0
r
w
56.7 58.44 59.81
55.04 53.08
33.61 33.61 33.61 33.61 33.61
0w
w w
51.86
53,12 55.5 54.08 46.11 44.63
33.61 33.61 33.61 33.61 33.61 33.61
Apr -09 May -09 Jun -09 Jul -09 Aug -09 Sep -09 Oct -09 Noy -09 Dec -09 Jan -10 Feb -10 Mar -10
Metered Charge 0 Flat Charge
60
48
36
24
12
0
w
0w
w w
47.28 47.32 47.04
41.51 52.06 41.08 3366 55
gggg 33.;"61 33.61 33.61 33.61 33.61 33.61 33: I 33.61 33.61
Apr -09 May -09 Jun -09 Jul -09 Aug -09 Sep -09 Oct -09 Nov -09 Dec -09 Jan -10 Feb -10 Mar -10
Metered Charge 0 Flat Charge
70
56
42
28
14
0
m
mm
w
54.39 67.92 57.14
49.39 60.2 61.42 47.31
40.28 .28 40.28 40.28 40.28 40.28 40.28 4 40.28 40.28 40.28
31.1 30.37
24.88 24.56
Apr -09 May -09 Jun -09 Jul -09 Aug -09 Sep -09 Oct -09 Nay -09 Dec -09 Jan -10 Feb -10 Mar -10
0 Metered Charge 0 Flat Charge
w
0w
w w
a a 44M 4:6 484 484 :43 48 a
3E vv a- ca
Metered Charge 0 Flat Charge
48 4
32, S
90
72
54
36
18
0
w
0w
w w
74.88 71.55
64.6 79.95 81.26 78.35
55.82 55.18 58.92
48.4 48i4 48.4 48.4 48.4 48.4 48.4 5418. 4814 48'.4 X4
Apr -09 May -09 Jun -09 Jul -09 Aug -09 Sep -09 Oct -09 NOV-09 Dec -09 Jan -10 Feb -10 Mar -10
Metered Charge 0 Flat Charge
50
40
30
20
10
0
w
0w
w w
48.4 44�a ��,� 48.4 �;� 48.4 48,4 '48.'4 48,4 48.4 48.4 48.4
34.53 44.76 45,1 43.96 43.58 36,73 33.66 32.35
31.17
Apr -09 May -09 Jun -09 Jul -09 Aug -09 Sep -09 Oct -09 NOV-09 Dec -09 Jan -10 Feb -10 Mar -10
Metered Charge 0 Flat Charge
Surface Water Treatment Facility
• Background
• Timing
• Schedule
• Budget
TDS (mg/1)
Superior Water Quality
Hardness (mg/1)
Alkalinity (mg/1)
Copper (ug/1)
Turbidity (NTU)
PCE (ppb)
DCE (ppb)
TCE (ppb)
DBCP (ppb)
Groundwater Mokelumne
254
Jr)
131
14
163
QO
320
TDS (mg/1)
Superior Water Quality
Hardness (mg/1)
Alkalinity (mg/1)
Copper (ug/1)
Turbidity (NTU)
PCE (ppb)
DCE (ppb)
TCE (ppb)
DBCP (ppb)
Groundwater Mokelumne
254
35
131
14
163
QO
320
<5
0.06
2.4
0.09
0
0.07
0
0.12
0
30 0
14A Delta Protection
Total Dissolved Solids (current)
Total Dissolved Solids (reduced)
Avoided Capital Cost
430 mg/I
300 mg/I
$8.6 million
• Avoided Annual Operations Cost $948thousand
Vegetation
Uptake
3-5%
Recharge Is Slow
50 Pet
1700 eet
14 ` ;ars
250 Feet
35 Years
Evaporation
Losses
6-8%
Recharge:
Recharge
WIReeovery:
Direet Use;
Recharge yrs. Direct Use Capital Costs
Low Range
6,013,000
S11,013,000
$29,500,000
leased land
$350/acre for 40
gears
above plus
transmission
system
latest esti m ate
Note: All
W! mates are
very preliminary
High Rance
$ 30,301,000
$ 3,301,000
$ 36.700,000
purchased land
$300,000facre
above plus
transmissiGn
system
2004 estimate
Timing Issues
LJ Banking Option Ends Oct. 2010
LJ Cost of Indecision = $100,000 per month
LJ Favorable Bid Climate
LJ Creates Local Jobs
Schedule
• Prequalification of Contractors
• Notice Inviting Bids —August 5, 2010
• Financing Approvals — September 2010
• Award Contract — October 20, 2010
• Construction Period 18 — 24 Months
Water Meter Program
• Prepaid Meter Class — 2,882 total
• Usage Based Bills Jan. 2011
• Breakdown
2,405 SFR Owner Occupied
427 SFR Tenant Occupied
12 SFR Uncertain Occupancy
27 Condo Owner Occupied
9 Condo Tenant Occupied
2 Vacant Lots
I
N
6M Current Activities
• 490 Information Requests
• 16 Eligible Private Installations
• 11 Pending or Complete Installations
• 5Non-Eligible Properties
N
Construction Phase 1
• 4,353 Meters to Install
3,405 Single Family
208 Duplex
13 Triplex
10 Fourplex
37 Condominium
2 Apartment
678 Other or Not Typed Yet
• 4,500 Feet of New Pipe
Questions?
I