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HomeMy WebLinkAbout1994-08-24; Ad Hoc - Water Commission; MinutesMINUTES MEmNG OF: WATER COMMISSION DATE OF MEmNG: August 24,1994 (Regular Meeting) TIME OF ME€ilNG: 2:OO p.m. PLACE OF MEmNG: 5950 El Camino Real CALL TO ORDER: Chairman Louis called the Meeting to order at 2:OO p.m. ROLL CALL Present: Commissioners Louis, Henley, Kubota, Maerkle and Melideo. Absent: None. PLEDGE OF ALLEGIANCE was led by Commissioner Kubota. COMMENTS FROM THE AUDIENCE: Margaret Bonas thanked the Commission for the expressions of sympathy extended to her recently due to the death of her husband. Mrs. Bonas restated her concerns with the construction companies using potable water, and added that the company working by her home is wasting the potable water on the sand by the lagoon where they are building the fish hatchery. NEW BUSINESS: 0824-1 Review of Metropolitan’s New Rate Structure Bob Greaney stated this new rate structure was approved by Metropolitan’s Board last December and will take effect next year, giving Metropolitan and Water Authority staffs time to work out the details. One of the conditions of approval from the Water Authority representatives at the meeting was that they wanted a nexus study done to show the relationship between what was being proposed and the effect on the retail agencies. Presently, the study only goes as far as the wholesale agencies and not as far as the retail agencies. Mr. Greaney stated the water rate will continue to be charged using the current basic commodity charge, accompanied with a Readiness-To-Serve charge that will be used to cover upgrades and maintenance of the existing system. The next charge is a New Demand Charge to recover the capital costs associated with accommodating new demands on the system. There will be two other charges: 1) a Treated Water Peaking Charge to encourage treated water agencies to not peak off of the aqueduct, or pay for extra facilities to meet the peak demands through the summer; and 2) a Connection Maintenance Charge, which is a charge the Water Authority will be paying because it relates to the connections they have with Metropolitan. August 24, 1994 WATER COMMISSION Page 2 Review of Metrooolitan’s New Rate Structure (Continued) Mr. Greaney stated there are certain connections from Metropolitan’s system that run to San Diego County, and those charges will be passed on when the charges are incurred. The nexus study only addresses the New Demand Charge. One item that the member agencies did not feel was refined sufficiently was the equating of capital costs to existing customers and what should be charged to new customers, and the difference between treated water customers and raw water customers. No differential was made between agencies in San Diego County on treated water and those on raw water and treat their own water. Why should those agencies on raw water have to pay any demand charge for Met’s treatment facilities if they are on raw water and would have to expand their own treatment. Mr. Greaney said there were other issues relative to when charges would be made and how. Metropolitan established a program during the drought called llCP Program, that requires water conservation efforts based on water availability. The base year used to establish new water conservation efforts was 1989 - ’90. The new proposed base year would be based on the New Demand Charge. Mr. Greaney said this is just an update for the Commission to review. In response to query from Chairman Lewis as to whether an analysis of what this means to Carlsbad has been made, Mr. Greaney stated that this has not gotten to the retail level as yet, and also it is not known what the Water Authority will pass along to the individual agencies. Mr. Greaney said he has some problems with the Demand Charge, as we can’t put that on the connection fees. The charge is based on a rolling four-year average of this agency’s water usage. That means CMWD would be billed a year after using the water. If usage goes over the average, it means $1,000 per acre foot over the old average. That could mean if there happened to be a higher usage one year, it could equate to Carlsbad receiving a $1 00,000 bill. The revenue for this bill, if placed only on connection fees, would be subject to the number of new units built over the next year. Mr. Greaney said the remainder of the charges would have to go on the water rate. However, if Carlsbad got that large bill, Met would provide a 15 to 20 year ability to pay it. It would be similar to a mortgage. Mr. Greaney said that the capital improvement program by Metropolitan needs a fixed income, and all Metropolitan had was the water rate. They could not charge connection fees through the member agencies and did not feel it was a political reality to go to Sacramento to get that; so this was the next best thing; to have a fixed income based on a rolling average of four years’ water use. In response to query regarding the Domenigoni Valley Reservoir, Mr. Greaney stated that 62 percent is for the present population and 38 percent for future population. Mr. Greaney said Metropoliian has re-evaluated some of their schedule and put off some of their capital projects due to the tremendous expense. Commissioner Kubota said that the Water Authority could go forward with emergency storage, but the question becomes, do we want or can we afford that level of insurance? August 24, 1994 WATER COMMISSION Page 3 Review of Metropolitan’s New Rate Structure (Continued) Jim Melton, Water Authority, stated over the last three and a half years they have done surveys, and found out that people are willing to pay significantly more for reliability as far as water supply is concerned. It ranges from willing to pay at least $5 a month more on the water bill, up to $1 5 a month more. Also, ten large Metropolitan water providers in the State did a survey and found people again stated they were willing to pay significantly more for water reliability. They remember the drought and don’t want to be in that position again, with jobs being lost because of lack of water. Mr. Greaney stated that recently the Water Authority sent out survey forms for what they call ‘Highly Reliable Water Supply”. One member agency is doing something similar to this, with a question of whether that business would be interested in a program for a surcharge added on to certain businesses’ water bills that would, for example, add a 10 percent charge for a reliable water source for those specific businesses or industries. If there were another drought and people were asked to cut back 20 percent, businesses with that surcharge would not be cut. The money from that charge would be put into a fund and if and when there was a drought, it would be used to purchase transfer water and keep those people at 100 percent. Residents of this particular agency feel they can cut back on their personal water use, but they do not want to lose jobs because certain companies that rely heavily on water do not have sufficient water. The goal of the Water Authority is to provide a more reliable source of water. Mr. Greaney said he felt that a more reliable source of water for everyone, and not just for those who could afford to pay their way out of a drought, was Met’s and CWA’s responsibility. Chairman Louis inquired whether agriculture water, because their costs would not go up, would be cut off in the event of a drought. Mr. Greaney added that if they sign an agreement with the member agency that they are taking water at a discount and they must recognize that in a drought they would be the first to be cut back. In the event of a 5 percent cutback, agriculture would be cut back 30 per cent. If they don’t sign up, agriculture customers have to pay a premium price, but then would be cut back when residential users are cut back. The percentage cut back would be equal to the residential user. 0824-02 Update of Metropolitan’s Revisions to the llCP The Incremental Interruption and Conservation Plan established by Metropolitan during the drought was used to determine what water was available and what cutbacks should be proposed. The draft revisions were provided to the Commissioners, and are not to be quoted, as they may not stay in the present form. Mr. Greaney stated that they are revising the base to the base year of the New Demand Charge. The base year for the drought was 1989-90, and, for example, with Carlsbad using 15,000 acre feet, we would get 80 percent of the 15,000 before the penalty charges. The proposal now is to take years 1989, 90, 91, 92 and 93 as base years and add the water usage together and take the average for a new base year for the New Demand Charge. If we used less than 90 percent of that average, we would not have to cut back water usage. That remains the base year until the agency goes over that average. Commissioner Kubota asked what the relationship was with this and with those agencies with a local supply of water, and Mr. Greaney replied that the relationship creates an issue with them on how it will be handled and this affects Carlsbad to some extent. It brings up the question of getting consideration for reclaimed water in the future. If an earthquake occurred, and there was no consideration for using reclaimed water, that would mean less drinking water. August 24, 1994 WATER COMMISSION Page 4 Update of Metropolitan’s Revisions to the llCP (Continued) Commissioner Maerkle said the San Luis Rey weUs should be looked at for water. Mr. Greaney said it is a payment issue--if Carlsbad went 100 percent on a well field--would we want anything to do with the Water Authority? We are going to have to pay for the capital program, and if we have to pay for that, why should we go with a well field? He said that if there was only enough water in the wells to supply one half of the water needed in Carlsbad, the other half would be from the Water Authority. The questions would be how much would that cost and how would you charge that to the customers. You will have to pay and the cost would not be reduced by going local--you might get reliability, but won’t avoid the cost if you want insurance. Commissioner Melideo stated that we must save the potable water and need a necessary tool to enable us to save that water and use reclaimed water. ADDITIONAL EMS AND REPORTS: Report from District Ennineer on Santa Fe I Tank Bill Plummer, District Engineer, distributed copies of his report to the Commissioners, and explained the findings of staff. The tank is empty and dry and has dirt on the bottom. Some repairs would need to be made to put the tank to use. Mr. Plummer recommended the following: 1. Convert tank storage to a non-domestic system. The water could include reclaimed water and untreated imported water. A pipeline would need to be constructed from Santa Fe Road to the tank to obtain the untreated water. 2. Convert tank to storage building for material. 3. Sell the property to the Palomar West Mobile Home Park. Commissioner Maerkle stated the tank should be kept for water storage rather than leave it to rot. Commissioner Henley concurred he wants to keep it for reclaimed water or mixed water. He said the elevation is perfect. Commissioner Kubota stated this is similar to several properties that the District owns. He said that when staff has time, there needs to be an inventory of the real property the District owns, and the facility that exists on the property and the usefulness. Then the Commission and Board could choose what to do with the property. If it has functional purposes, it should be kept. Otherwise, it should be sold and put back on the tax rolls. This should be included in the study to be done this year. Mr. Greaney stated that at the present time, the City policy is not to sell any City property. Chairman Louis stated he agreed that a survey should be made with. an inventory list compiled. Commissioner Melideo suggested the tank be converted for reclaimed water. August 24, 1994 WATER COMMISSION Page 5 WATER COMMISSION: Presidents & Manaaers Meeting Commissioner Maerkle reported on the recent meeting, and stated that the work being done on desalination is very interesting and gives you things to think about. He said the entire program was very interesting and the meeting was a sellout. GENERAL MANAGER'S REPORT Disclosure of Reimbursements (AB 1542) Bob Greaney reported that this bill affects the District, in that the District will be required to have a report done and available to the public at City Hall, here at the District Offices, or in the newspaper, to list all reimbursements made to the Board of Directors, Commissioners and staff for any travel, etc. Commissioner Kubota inquired about the action of the Board of Directors on the award of bids for the covering and lining of the Maerkle Reservoir. Mr. Greaney stated that the Board decided to award the contract to the low bidder. Nothing has been heard from the second low bidder, who was questioning the bids. Commissioner Kubota inquired about the water needs study for Leg0 that the District was to provide and Mr. Plummer stated the City is submitting reports and maps on a weekly basis for Water District comments. Reclaimed water will be used in the project and utilized to the max' !mum. Chairman Louis inquired about the progress on the covering of the Maerkle Reservoir, and staff indicated the papework has gone to the Planning Department to start the environmental process. Mr. Plummer stated that a Negative Declaration was wanted for the project, and he thought that would be possible. The plans for the work are to be submitted this month, with the permits to be obtained and the financing secured. APPROVAL OF MINUTES: On motion by Commissioner Maerkle, the Minutes of the Regular Meeting held July 27, 1994, were approved as presented. AYES: Louis, Henley, Kubota, Maerkle and Melideo NEXT MEmNG DATE: The next regular meeting of the Water Commission will be September 28, 1994. ADJOURNMENT: By proper motion, the Regular Meeting of August 24, 1994, was adjourned at 3:18 p.m. / Minutes Clerk