Utility Committee Agenda and Packet 2020 09 08

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City Council Utility Committee Meeting Minutes Tuesday, August 11, 2020 Page 3 of 5 not as critical and could be postponed to a time when the tanks reached the end of useful life in approximately 5-10 years. • Page 15 — Water CIP Overage Estimates, Mr. Peterson explained 2020 projects tabled and highlighted the project overages in red. Mr. Peterson noted that the Raw Water Quality Study item has an error. It shows $175,000 when actually should be $75,000 but the total number at the bottom is correct. Members discussed the list and Councilmember Lipton asked if the SWSP Transmission Capacity item is for Design in 2021 and construction in 2022. Mr. Peterson said the Design started in 2019, continuing in 2020 and we want to go to bid later in 2020 then construction in 2021. • Page 16 are new requests for 2021-2016 and Mr. Peterson said they added the reference page for the requests that were presented to Finance Committee. Councilmember Lipton wanted to confirm the large one here is the Windy Gap for 2021 and projected yearly payments for financing. Mr. Peterson agreed and said the amount of cash payment you decide or if we want to go that way will impact the Financial Rate Model. Councilmember Lipton asked next about the meter replacement project and why we don't do a percentage of these each year. Mr. Kowar explained that we replaced all of them at the same time and the life cycle comes up at the same time. They were replaced 2010-2011 and said they recommend they be replaced every 10-15 years. Then stated we could spread that project out but would lose some revenue. Councilmember Lipton then asked about the Lateral Ditch Piping. Mr. Kowar explained the project and said that it will allow us to push water from north to south and vice versa. Right now the Windy Gap and CBT water only goes north. If we had a plant go down and we had to switch our water supply around then this is a critical project. Mr. Peterson added that 70% of all our drought years when we run our historical models we need the use of this conveyance and in dry periods this will be a critical component. • Page 17-18 — Cost of Service, Mr. Kowar said we did a cost of service study in 2013 and did a onetime adjustment then we updated the cost of service in 2019 and made calculated adjustments. He stated this reflects usage and behavior over time and the amount of money they generate versus the amount of money we should collect in each of these classes. Mayor Stolzmann added that the analysis we were going to look at was instead of customer class we'd look at meter size. Committee discussed and directed staff to table the cost of service adjustment until the 2022 rate process in 2021. • Page 19 — Mr. Kowar described this as the final slide for water where it shows the last go around of 2020 rates that were approved and frozen, the last analysis we did in May and staff's recommendation at 4%. Mr. Peterson said it includes the $835,000 reduction, the overage of the 6 water projects and fully funding the 2021-2026 CIP request. The major decision points were determined as the following: 1. Do we want to change how we recognize tap fees in the model 2. Carve harder on CIP 11