Utility Committee Agenda and Packet 2019 04 12

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City Council Utility Committee Meeting Minutes Friday, March 15, 2019 Page 2 of 4 VI. Agenda Items and Date for Next Meeting • Preliminary 2020 Rates • Water Supply Update (Drought Strategy if needed) • Windy Gap/Financing • CIP Update • Water Engineering Update • 3rd Quarter Financial Review (2019) • Next meeting date is April 12, 2019 at 1:00 p.m. Councilmember Stolzmann provided a work plan to be incorporated with the advance agenda. The new format will be included in the next committee meeting agenda packet. VII. Reclaim Rate Mr. Peterson gave an overview for the reclaim water system and explained the purpose for the reclaim system as risk mitigation for the entire water supply system. The recent cost of service analysis completed by utility staff was presented. Next, the Committee discussed the process utilized for the reclaim rate setting as part of the 2014 Water, Wastewater and Stormwater Utility Rate Study. Mr. Peterson went on to discuss the marginal cost determination and went through the two options of using a per unit rate of $0.85 per thousand gallons or a flat rate that would be $37,300 for an annual fee that would be split between the three reclaim users. The Committee provided direction to modify the existing reclaim water rate policy from 75% of the first tier residential potable rate to a new rate of $0.85 per thousand gallons for City -only reclaim customers beginning in 2019. VIII. Water CIPs Budget Adjustments Mr. Peterson explained the recent activities connected to the water fund and the trend in higher bid prices than those projected in the budget. Each of the anticipated budget impacts to the water fund were discussed in detail. Southern Water Supply Pipeline (SWSP) — Mr. Peterson outlined the intent of this project for an additional water line to increase the delivery capacity of the City's Northern Water supplies of C-BT and Windy Gap to the Sid Copeland Water Treatment Plant. Mr. Peterson continued discussing the project costs overages. Councilmember Stolzmann asked when the City will need the capacity. Mr. Peterson explained the capacity provided by this project is tied to buildout and future demands. In addition, the majority of the water is estimated from the Windy Gap Firming Project (WGFP) which has a 4 to 5 year construction time frame. Councilmember Maloney asked when would be a target date for needing this project. Mr. Peterson suggested as a minimum the SWSP should be constructed before WGFP is complete in 2024. Further, the project does have value in conducting the project as scheduled. The Committee asked for further details on the timing and supplies. Staff committed to providing this information prior to or at 4