Water Committee Agenda and Packet 2010 10 22

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City Council Water Committee Meeting Minutes Friday, October 8, 2010 Page 2 of 3 water right may be a reasonable means of funding the purchase of more functional water rights. VII. Legal Mr. Hill provided a brief summary of the Marshall Lake and South Boulder & Coal Creek Ditch transfer case to date. As is typical with Water Court Cases, obtaining responses from Objecting Parties is slow, other priorities. This can be sped up with re- additional costs. If the water is needed prior to obtaining a Decree, the State Engineers Office has a procedure which allows the water to be temporarily used under a Substitute Water Supply Plan. Staff will continue discussing the Case with Objectors and review progress to determine if it would be ases are following a similar slow path. VIII. Utility Enterprise Funding Mr. Mathes presented two charts showing the general decline in demands over several years. The first chart showed annual water demands at the treatment plants along with population. Since a peak in 2000 the annual demand has dropped off significantly even with a modest increase in population. The second chart shows the gallons-per-capita-per-day (gpcd) usage over time. While individual years can vary widely a running 5-year average of gpcd shows decline in demands include: 2002 drought shadow, conservation, rate structure, mature landscaping, economic factors, and weather. Mr. Watson presented a financial overview of the combined and individual Utility Enterprise Funds (water/wastewater/storm water). The three utilities operate as a single Enterprise with individual funds used to track revenue/expenditures. Under existing assumptions, the Water Fund could see a deficit in 2011, while the Wastewater and Storm-water funds retain strong reserves. A discussion ensued on the effects of the decline in demands on revenues, projected expenditures (5-years), expenditures beyond the 5-year CIP process, current rates and user fees, and how to address these items for the long term. It was suggested that a Facilities Plan coupled or followed by a Rate Study could be a method for determining and budgeting for the long range needs of the water utility (further discussion below). Mr. Watson continued his presentation showing more detailed data on revenue (user fees, tap fees) and expenditures (operational, capital) trends. Based on existing assumptions, three charts showed the relative effects of percentage increases in user fees on combined fund reserves. The presentation lead to a discussion that suggested that a longer timeline (10-20 years), in regards to larger capital expenditures and funding, may be necessary to more effectively manage the long range needs of the Utility Enterprise in a cost effective manner. Long term planning for user fees (rates) is also important. Such planning allows for the accumulation of needed funds over time at a sustainable rate as opposed to abrupt rate increases to cover large capital outlays.