City Council

MAY 11, 2015 The City Council of the City of Idaho Falls met in Special Council Meeting (Council Work Session), Monday, May 11, 2015, at the City Council Chambers in the City Annex Building located at 680 Park Avenue in Idaho Falls, Idaho at 3:00 p.m. There were present: Mayor Rebecca L. Noah Casper Councilmember Michael Lehto Councilmember Thomas Hally Councilmember Sharon Parry Councilmember Barbara Ehardt Councilmember David Smith Also present: Michael Kirkham, Assistant City Attorney Brad Cramer, Community Development Services Director Chris Fredericksen, Public Works Director Craig Rockwood, Municipal Services Director Melanie Marsh, Human Resources Director Kerry McCullough, Public Information Officer Jackie Flowers, Idaho Falls Power Director Bryan Clark, The Post Register David Richards, Superintendent, Water Department Kathy Hampton, City Clerk Mayor Casper called the meeting to order and proceeded with Mayor and City Council Reports: Mayor Casper reminded the Council of the prayer gathering at the Courthouse on May 11, 2015, as part of National Police Week. She gave an update on Priority Based Budgeting (PBB) and felt the need to extend the date for the next PBB session due to current workload of the Division Directors. She indicated the budget calendar has been distributed. Mayor Casper stated she will be traveling to Boise on May 14 & 15, 2015, to attend board level strategy meetings for Association of Idaho Cities. She also shared the following items – Cayenta implementation team will be in Idaho Falls May 19-21, 2015; the State Transportation Board will be holding meetings and a tour in Pocatello on May 20 & 21, 2015; the Idaho Water Resources Board will be holding meetings in Idaho Falls on May 21 & 22, 2015; a new Council picture will be taken on May 28, 2015; Clean and Green Volunteer Day will be June 13, 2015, the Parks and Recreation Department will coordinate those groups willing to volunteer. A handout was distributed from Skyline High School describing the Art Students/IFPD Mural Project 2015 as part of Clean and Green 2015. Mayor Casper requested the Council’s feedback with participation of the Idaho Falls Parade as this year will include the IF150 celebration. Councilmembers Hally and Ehardt indicated they would be willing to participate. Mayor Casper briefly shared that Kerry McCullough had recently attended training in Reno, Nevada, related to social media and city branding. Councilmember Lehto had no items to report. Councilmember Parry stated she and Councilmember Ehardt visited Dora Erickson Elementary School as a follow up to the school’s Literary Lot Program. Part of this program included the submittal of letters from fourth-grade students to the Councilmembers and Mayor. Councilmember Ehardt stated a $1000.00 donation will be made to the Senior Citizens Center on behalf of Apple Athletic Club and some divisions of the INL. 1  MAY 11, 2015 Councilmember Smith had no items to report. Councilmember Hally stated a group of Hillcrest High School students approached the Parks and Recreation Department for a No Smoking Zones Resolution for portions of the City parks, including the shelters and the all-access playground. There may be a future presentation after further research from these students,. Mayor Casper stated Sage Lakes Golf Shop had been burglarized and vandalized. Councilmember Lehto would like have a budget discussion regarding placing cameras on City assets. The Human Resources Department Director and Idaho Falls Power Director presented the following item: MEMORANDUM Review and approve the Agreement between the City of Idaho Falls and International Brotherhood of Electric Workers (IBEW) Local #57. It is recommended that the Council approve the agreement with IBEW Local #57. The proposed agreement includes a 2.5% in wages for all classifications with an additional 0.5% for Journey Mechanic, Electrician, Meterman and Certified Distribution Dispatcher classifications. It also includes adding a Serviceman job classification at the Temporary Foreman rate for a one year trial period. Medical premium information updated to include the City paying an additional $53.94 per month to LineCo for union employees’ health insurance. Jackie Flowers briefly described the agreement and indicated there was a very positive conversation regarding the Code of Excellence. She also confirmed the electric bond was paid in full in March. Councilmember Lehto expressed his appreciation to those personnel involved regarding this agreement. After further brief discussion by the Council it was moved by Councilmember Lehto, seconded by Councilmember Parry to approve the Agreement between the City of Idaho Falls and International Brotherhood of Electric Workers (IBEW) Local #57. Roll call as follows: Aye: Councilmember Ehardt Councilmember Parry Councilmember Smith Councilmember Lehto Councilmember Hally Nay: None Motion carried. The Community Development Services Department Director appeared to review the following: Area of Impact Discussion: Sharing the numbers – comparison of fees and taxes. The cost comparison study was performed at the request of the 2014 Citizens Review Committee for fees and taxes of Idaho Falls, Bonneville County, and Ammon. Director Cramer stated all numbers were based on actual permits issued from the City of Idaho Falls, Bonneville County or the City of Ammon. He also explained how the calculations were determined with regard to power rates, tax rates and utilities. Part 1 – Commercial Projects-Permit Fees Comparisons: 2  MAY 11, 2015 Page 2, Case Study: Large Scale Office and Research Lab, 112,540 Sq. Ft., $9,476,000.00 valuation – Idaho Falls (Lowest Cost) $62,020.57 Bonneville County $99,078.42 Ammon (Highest Cost) $104,570.95 Page 3, Case Study: Large Retail Building, 68,890 Sq. Ft., $3,383,079.00 valuation – Idaho Falls (Lowest Cost) $21,678.91 Bonneville County $39,622.22 Ammon (Highest Cost) $47,213.28 Page 4, Case Study: Bank Branch, 4,794 Sq. Ft., $1,000,000.00 valuation – Idaho Falls (Lowest Cost) $10,010.00 Bonneville County $13,388.94 Ammon (Highest Cost) $17,594.05 Page 5, Case Study: Fast Food Restaurant, 2,763 Sq. Ft., $505,000.00 valuation – Idaho Falls (Lowest Cost) $10,099.04 Bonneville County $11,140.00 Ammon (Highest Cost) $15,890.86 Part 2 – Commercial Projects-Annual Cost Comparisons: Page 7, Case Study: Commercial Construction Supply Business Idaho Falls (Lowest Cost) $18,425.00 Bonneville County $21,798.00 Ammon (Highest Cost) $23,218.00 Page 7, Case Study: Large Retail Store Idaho Falls $486,216.00 Bonneville County (Lowest Cost) $446,340.00 Ammon (Highest Cost) $493,287.00 Page 8, Case Study: Primary Medical Center Idaho Falls (Highest Cost) $18,747.00 Bonneville County (Lowest Cost) $15,435.00 Ammon $18,024.00 Page 8, Case Study: Sit Down Restaurant Idaho Falls (Lowest Cost) $45,604.00 Bonneville County $53,544.00 Ammon (Highest Cost) $57,850.00 Page 9, Case Study: Fast Food Restaurant Idaho Falls $33,665.00 Bonneville County (Lowest Cost) $32,073.00 Ammon (Highest Cost) $36,309.00 Part 3 – Residential Projects-Permit Fee Comparisons: Page 11, Case Study: Small Home, $69,482.00 valuation Idaho Falls (Lowest Cost) $3,434.85 Bonneville County $4,103.00 Ammon (Highest Cost) $8,084.95 Page 12, Case Study: Medium Home, $80,028.00 valuation Idaho Falls (Lowest Cost) $3,593.46 Bonneville County $4,193.00 Ammon (Highest Cost) $8,205.95 3  MAY 11, 2015 Page 13, Case Study: Large Home, $136,587.00 valuation Idaho Falls (Lowest Cost) $4,096.68 Bonneville County $4,815.00 Ammon (Highest Cost) $8,779.20 Part 4 – Residential Property-Annual Cost Comparisons Page 15, Case Study: Small Home, $150,000.00 Value Idaho Falls (Lowest Cost) $3,044.15 Bonneville County $3,893.57 Ammon (Highest Cost) $4,166.76 Page 15, Case Study: Small Home, $250,000.00 Value Idaho Falls (Lowest Cost) $4,710.13 Bonneville County $4,823.63 Ammon (Highest Cost) $5,378.99 Page 16, Case Study: Small Home, $350,000.00 Value Idaho Falls $6,482.45 Bonneville County (Lowest Cost) $5,813.00 Ammon (Highest Cost) $6,668.61 Mayor Casper and Councilmembers concurred the study will be considered a ‘draft’ until review by the Council and will be shared within the community once completed. Mayor Casper recognized IE Productions as assisting with the graphics. The Public Works Department Director, David Richards, and presenters David Stangel and Cody Stanger appeared with the following item: Water Department Facility Plan – Executive Summary Director Fredericksen briefly explained the Water Facility Plan and stated he would like Council input, followed by a draft plan to the public, a review with the Department of Environmental Quality, and a final approval by the Council for this plan. Presentation Contents: Reasons to Develop a Water Facility Plan (WFP)  Last WFP completed in 1989 o Significant growth (demand and system expansion) has occurred o Legal & regulatory environments have changed  Ensure future summer demands can be met  Develop prioritized plan for upgrading facilities  Identify locations for new sources of supply  Identify distribution system weaknesses and associated improvements  Identify short-term (1-5 year) and long-term (6-20 year) capital plan  Ensure rates and fees can pay for improvements System Description  16 Water Division Employees o 14 O&M operators  314 miles of City-owned pipeline o 25 additional miles of private pipeline  19 groundwater wells  13 booster stations 4  MAY 11, 2015 o 22 booster pumps  16 water tanks o 13 chlorine contact tanks (30-315 Kgal) o 3 water storage tanks (0.5 to 3 Mgal) The system provides water to:  Approximately 58,000 people  24,000 accounts o 250 metered accounts Population and Demand Projections  Limited customer water use data  Bonneville Metropolitan Planning Organization data used for population estimates and location  Existing well production data indicates Average Day Demand of 455 gallons per capita per day  Projections include specific large industrial demands  Demand projections indicate a 100% increase in 40 years Water Rights  City must have adequate water rights to ensure future growth  3 Water Right Evaluation Options o Acquire new water rights o Use existing water rights more efficiently o Pursue conservation measures  12 Total Alternatives Evaluated  Water Right Initial Recommendations o Add points of diversion to existing water rights o Construct large storage tanks at well sites o Identify alternative irrigation sources for parks o Implement water conservation plan o Actively pursue aquifer recharge banking  Unknowns o Curtailment orders o Mother Nature System Design Standards  Supply o MDD with largest pump out of service (Well 5)  Storage o Provide peak demands and fire flow excluding dead and operational storage  Pumping o Redundant pumping adequate to serve PHD or MDD + fire flow (whichever is larger)  Pressure o 20 psi during MDD+fire flow o 40 psi during PHD o 40-80 psi under typical operations  Pipe velocity o 5 feet/second under MDD o 10 feet/second under PHD or MDD + fire flow  Fire Flow Requirements o 1,500 (residential) or 4,500 gpm (heavy industrial) 5  MAY 11, 2015 System Analysis  Water Rights and Supply evaluated for existing, 5, 20 and 40 year projections o Adequate yearly average water rights for 40 years o Adequate instantaneous water rights for existing and 5-year conditions o Instantaneous water right deficiency of 7.4 mgd in 20-year and 35.7 mgd in 40- year horizon (43.1 mgd total) o Adequate existing well supply o 10.8 mgd supply deficiency in 5-year horizon, another 11.7 mgd within 20-year horizon, and another 26 mgd within 40-year horizon  Storage, pumping and distribution piping evaluated for existing, 5 and 20 year projections o Storage Analysis  Adequate storage for existing and 5-year conditions  1.6 million gallon deficit within 20-year horizon o Backup Power  11.1 mgd existing deficit (due to revised regulations) and an additional 13 mgd within the 20-year horizon (24.1 mdg total) o Peak Pumping Analysis  Adequate pumping capacity for existing demand  PHD booster pumping deficit of 4.3 mgd within 5-year horizon, additional 17.4 mgd needed within 20-year horizon (21.7 mgd total) o Distribution System Analysis  Existing ADD, MDD and PHD pressures generally adequate  Currently a significant number of fire-flow deficiencies due to undersized pipes  Pressure problems at 20-year demand under PHD at north and south ends of system Operations and Maintenance O&M Program Recommends Implementation of programs to address:  Water storage tank inspection and cleaning  Pipeline replacement  Unidirectional flushing  Valve exercising  Water meter testing and calibration  Current safety plans and equipment  Asphalt and concrete flatwork at each facility  Asset management software Benchmarking results:  Staffing: o The City currently operates the system with fewer staff than most cities. This indicates a need to add staff to perform O&M tasks o Staffing needs will grow as system expands, flows increase and regulations become more strigent o Current recommendations include:  Hire two FTE’s and appropriate equipment in the distribution section to implement identified programs (valve exercising, unidirectional flushing, meter O&M, etc.)  Adding an additional FTE and appropriate equipment to the supply section to perform well site O&M work 6  MAY 11, 2015 System Condition & Code Evaluation Task Description:  Evaluate the City’s pumping facilities and distribution system with regards to operational and code compliance  Recommend specific facility improvements and provide facility rankings based on condition  Determine pipeline condition priority and recommend replacement program Facility evaluations and resulting improvements focused on the following areas;  HVAC  Electrical  Site/Facility Security  Site/Facility Safety  Piping Modifications  General Conditions  Wells  Reservoirs  Additional Items Each facility was ranked on the areas listed above, then compared with water production rates, risk of failure and relative cost for improvements. Facility Results:  Recommended improvement ranking was based on: o Risk of facility failure o Facility water production o Condition & Code ranking Highest to Lowest Priority Ranking Facility 1 Wells 9 & 10 2 Well 3 3 Well 1 4 Well 4 5 Well 8 6 Well 5 7 Well 12 8 Wells 11 & 14 9 Wells 13 & 13B 10 Well 6 11 Well 16 12 Well 17 13 Well 2 14 Wells 15 & 15B Pipeline Analysis and Results:  The water system is comprised of approximately 314 miles of public pipeline and 25 miles of private  The oldest pipe installed in 1902 (cast iron), with the majority of pipes installed from 1960 to 1979 (cast iron & ductile iron) 7  MAY 11, 2015  Ductile iron pipeline installed today  City pipeline break records indicate that 1902 – 1959 cast iron pipe accounts for 70% of the breaks and repairs  It is recommended that these pipelines be replaced first  Based on 100-year design life, it’s recommended the City replace approximately 3.2 miles of pipe a year. Capital Improvement Program  Major Project Categories o New and upgraded pipelines  Primary focus on hydraulic deficiencies  87 projects over 20 years o New and upgraded facilities  Wells, storage tanks and booster stations  24 projects over 20 years  3 yearly maintenance projects o Metering  $250,000 yearly – focused on metering large water users Cost of Required 2020 Cost of Required 2035 (1 to 5 Year) (6 to 20 Year) Improvements Improvements New and Upgraded Pipelines $7,000,000 $28,014,000 New and Upgraded Facilities $14,715,000 $28,328,000 Metering $1,250,000 $3,750,000 Total $22,965,000 $60,092,000 Annual Average $4.6 million/year $4.0 million/year  $83 million over 20 years  Annual 100 year pipeline replacement not fully funded in 20 year CIP CIP Funding Plan & Rate Impact Analysis Financial Planning Assumptions  Annual expense escalation, 4.5 – 5.0% o Consistent with historical trends o Reflects recent policy changes & increased maintenance activities  Customer growth, 0.75%  Capital cost inflation, 2.5%  Conservative forecast of connection fees o Average of last six fiscal years, includes recession Available CIP Funding Sources  Current operating revenues (PAYGO) o Expenses outpacing revenue growth o $1.0 million annually, without future rate increases  Connection fee revenues o Annual revenues of $200K  Existing operating reserves o Historical savings related to fiscal constraint o Water rate revenue reserves of $8.0 million  Long-term debt 8  MAY 11, 2015 Proposed Five-Year Funding Plan  Rate revenues primary funding source o Roughly half of CIP funded through rate increases  Draw down reserves, connection fee funds Annual CIP Expenditures and Funding by Source FY FY FY FY FY TOTAL Percent 2016 2017 2018 2019 2020 Projected Capital Expenditures $4.72 $5.09 $5.34 $4.43 $4.51 $24.09 100.0% Proposed Rate Increases 20.0% 5.0% 5.0% 5.0% 5.0% Operating Revenues 3.02 3.16 3.40 3.65 3.92 17.14 71.0% Connection Fee Revenues 0.45 0.45 0.45 0.45 0.45 2.25 9.3% Existing Reserves 1.27 1.54 1.50 0.25 0.18 4.74 19.6% Used (Unused) Balance (0.02) (0.06) (0.01) 0.08 (0.04) (0.05) Total Funds $4.72 $5.09 $5.34 $4.43 $4.51 $24.09 100.0% Reported in escalated dollars Community Rate Comparison Community Monthly Volumetric Rate Total Bill Charge (20 kgals) Butte, MT $26.84 Varies per hundred cubic feet, declining $83.53 block structure Bozeman, MT 14.65 Varies, inclining block structure 68.82 Malad, ID $43.00 $0.60/kgal after first 5 kgals $52.00 Pocatello, ID 7.55 $2.00/kgal for first 25 kgals 47.55 Boise, ID 10.40 Varies, inclining block structure 46.20 Meridian, ID 5.49 $1.90/kgal, no minimum 43.49 Logan, UT 16.00 $0.99/kgal for first 10 kgal, $1.60 beyond 41.90 that Twin Falls, ID 10.74 $1.70/kgal after first 2 kgals 41.34 St. Anthony, ID 27.13 $0.54/kgal, no minimum 37.93 Ammon, ID 37.25 Flat rate (some residential customers 37.25 charged $44.75/mo.) Nampa, ID 34.90 Flat rate 34.90 American Falls, ID 24.15 $0.89/kgal after first 15 kgals 30.50 Blackfoot, ID 21.90 $1.54/kgal after first 15 kgals 29.60 Burley, ID 18.70 $0.573/kgal after first 3 kgals 28.44 Rexburg, ID 15.87 $0.82/kgal after first 6 kgals 27.35 Idaho Falls, ID (proposed)* 25.20 Flat rate (incorporates annualized irrigation 27.20 charge and DEQ fee) Brigham City, UT 9.31 $1.31/kgal after first 7 kgals 26.34 Idaho Falls, ID (existing) 21.00 Flat rate (incorporates annualized irrigation 22.71 charge and DEQ fee) Rigby, ID 19.00 Flat rate 19.00 Shelley, ID 17.50 Flat rate 17.50 *Monthly rate after proposed FY 2016 increase of 20% Proposed 20-year Funding Plan 9  MAY 11, 2015  Annual rate increases of 3.9% to fund CIP  Reserves are replenished by year 20 o Residential water rate of $54.50 at end of forecast  Operating Revenues – 94.7%  Connection Fee Revenues – 5.3% Plan Notes & Recommendations  Follows standards of practice, conservative o Low revenues, CIP based on high growth  Continually update plan o Actual vs. forecasted CIP, financial performance o Adjust rate increases as necessary  Recommendation: establish new fund for CIP o Separate CIP expenditures from O&M budget o Provide mechanism for use of reserves, connection fees Conservation Planning  Review of 63 separate conservation actions  Conservation plan recommendations o 20 current actions to continue or augment o 27 actions to begin within 1-5 years o 10 actions not recommended o 6 actions involving metering deferred  Benefits of conservation o Water use reduction of 30%-40% (comparative analysis with Rexburg & Pocatello) o Extended water rights = continued City growth o Deferred future capital projects o Public perception  Drawbacks of conservation o Most effective actions require labor & money o Results marginal without installation of meters Meter Implementation Analysis Metering: Impact on Demand  Assumed 30% reduction in average demand and 40% reduction in peak demands due to metering  Peak 20-year demands below current levels Meter Installation Assumptions  Cost of city-wide meters: $77.7 million o Ten-year implementation period o Customers charged volumetric rate, demand reduced  Capital improvement project deferrals o $20.8 million, mostly over last 15 years  Debt in two issuances o $40 million in year 1, $25 million in year 6 o Assumes availability of low-interest state loans  Substantial rate increases during first 5 years o 20% per annum first 5 years, but none thereafter 10  MAY 11, 2015 Meters: Suggested Funding  Five-Year Funding Plan o Long-term Debt – 60.4% o Operating Revenues – 25.2% o Existing Reserves – 11.0% o Connection Fee Revenues – 3.4%  20-Year Funding Plan o Operating Revenues – 57.2% o Long-term Debt – 39.4% o Connection Fee Revenues – 3.4% Feedback and Next Steps  Incorporate Council Feedback  Develop Draft WFP Document o DEQ Review o Conduct Public Open House  Incorporate final comments and deliver final WFP  City implements rate changes and capital improvement plan A lengthy discussion was held regarding the Water Facility Plan which included the possibility of there being no residential metering, grandfathering the current no-metering system, the installation of new meters for any new subdivisions, and the use of water by City facilities. A policy discussion would need to be held with the Council prior to deciding any future impacts. The Public Works Department also discussed the following: IF Ammon Subcommittee – Hitt Road/Target Access Director Fredericksen stated the main issue regarding the Ammon Townsite Mall is the access in and out of Target. The Woodbury Corporation previously paid for a study for installation of an additional traffic signal onto Hitt Road but due to the proximity of the 17th Street and Hitt Road signalization, it was not recommended. Former Councilmember, the late Dee Whittier, had proposed the frontage road in front of Target as an alternate access point. It has also been proposed to allow two-way traffic access from 25th Street to the east side of Target, which the current Target management team is now willing to consider. Director Fredericksen stated if Ammon and the City of Idaho Falls could work together for this project, the construction would need to happen in a timely manner. Councilmember Lehto stated the City of Idaho Falls has a vested interest in the intersection for the signalization and the intersection is soon slated for preventative upgrade. He would like the engineers, construction personnel, and the administration from both cities to come together and discuss the project at which the cost would be divided equally between the two cities. Director Fredericksen stated the overall total cost of this project would be approximately $236,000.00. Councilmember Parry believes there is no benefit to the City of Idaho Falls residents to change the stop light. Councilmember Ehardt believes the City of Idaho Falls would have minimal cost to the project but would in turn make a huge impact to both communities. Mayor Casper commended Councilmember Ehardt for her continued effort on the Ammon Subcommittee. After further discussion, it was decided by the Council to proceed forward with the project. Mayor Casper briefed the Council regarding Annual Contributions and Gifts. She requested the Council’s input regarding contributions and gifts for future budget discussion. There being no further business it was moved by Councilmember Ehardt, seconded by Councilmember Hally, that the meeting adjourn at 6:10 p.m. Roll call as follows: 11  MAY 11, 2015 Aye: Councilmember Parry Councilmember Ehardt Councilmember Hally Councilmember Smith Councilmember Lehto Nay: None Motion carried. _____________________________________ _____________________________________ CITY CLERK MAYOR 12