BOISE PUBLIC WORKS COMMISSION REVISED MEETING MINUTES March 10, 2016 Commission: Public Works: Legal: IT: City Council: Connor Skibeness, Don Reading/Chairperson, Jake Nink, Julia Hilton, Larry Crowley (phone), and Renee Quick/Co-Chairperson (Absent: Judy Thorne) Catherine Chertudi, Haley Falconer, Heather Buchanan, Janine Renberg, John Tensen, Jon Williams, Kate Harris, Marcia Schmelzer, Neal Oldemeyer, Shawn Wilson, Steve Burgos Doug Strickling, Abbey Germaine Dick Bonnet (Absent: TJ Thomson) The meeting was held in the Ancell Conference Room in Public Works at City Hall. Call to Order The Public Works Commission Chairperson, Don Reading, called the meeting to order at 4:00 PM. 1. Approval of the February 16, 2016 Minutes Renee Quick moved to approve the amended minutes from the February 16, 2016 meeting. Jake Nink seconded and the motion carried unanimously. 2. Wastewater Branding Steve Burgos and Haley Falconer presented the issue and backup for Wastewater Branding. As a City, we recognize that the public has a limited understanding of the work we do and that our previous model of citizen understanding and engagement can be improved. We want our name and messaging to reflect the services we provide the community. In September, 2015 staff began a process to identify current and future services as well as other wastewater program efforts with a goal to reframe wastewater as a precious, reusable resource. A presentation was shown that identified the process that the group pursued led by our consultant, the Oliver Russell Agency. The next step is to confirm the name that conveys our services and benefits to the public. The name proposed to the Public Works Commission is Water Renewal Services and the purpose statement is To Give New Life to Used Water. The positioning statement is [Name] is a nationally recognized innovator in the field of water treatment. Our forward-thinking solutions foster the economic activity and environmental quality that Boise needs to remain lasting, innovative, and vibrant. After confirmation the next steps will be to 1) finalize messaging materials for the public; 2) develop a strategic communications plan; 3) develop campaign concepts for outreach materials; and 4) initiate the reintroduction of the utility as Water Renewal Services. After the name and messaging is tested in public forums, staff will return to the Public Works Commission with a request and motion to rename the utility. 1
The Commissioners agreed that the name is consistent with the objectives other Public Works programs (Reduce, Renew, Reuse) and commended staff for recognizing an opportunity to change the verbiage that has been used for years to define services provided. Renee Quick added that the term Treasure Valley s Water be used in the messaging, as well. 3. Solid Waste Franchise Agreement Heather Buchanan provided the background regarding the Republic Services Franchise Agreement and associated reimbursement rate. The franchise agreement is reviewed annually in the fall to determine appropriate reimbursement rates. This year s process was much the same as prior years with Republic Services incorporating business changes that affect cost and revenues into its projections followed by City staff verifying the assumptions and impacts. The franchise agreement allows for a target gross profit margin of 19.8% to cover net profit, taxes, corporate overhead, and cost of capital. For calendar year 2015, Republic Services actual profit margin was 19.2%. Heather identified the renewal assumptions incorporated into Republic Services projected gross profit margins for calendar year 2016. Staff recommends approval of no change in reimbursement rates for residential and roll-off, a 4% increase in reimbursement rates for commercial services and reduction in the diesel fuel target of $3.00 per gallon. Renee Quick made a motion to forward to the City Council a recommendation of a 4% increase in Republic Services Commercial franchise reimbursement rates and a reduction in the diesel fuel target to $3.00 per gallon. Jake Nink seconded and the motion carried. 4. Proposed Residential Curbside Organics Collection and Diversion Program Steve Burgos and Catherine Chertudi introduced a concept for recycling a valuable material, which will result in a reduction to the landfill. Since 2008 the Solid Waste Strategic Plan has been successfully implanted in Boise. The plan outlines management of solid wastes and recyclable materials. In 2009 the Curb-It Program was launched and to this date has a successful participation rate of 97%. In 2014 Ada County hired a consultant to complete a waste stream analysis for all wastes delivered to the landfill. Two trends emerged: 1) because patrons are recycling, less recyclable materials were identified; 2) there was a substantial amount of yard debris and food waste (45.79%). In pounds this is equivalent of 389.9 lbs. per year per person. Further evaluation finds that Boise can recycle nearly 42,000 tons of organic materials each year if it can be diverted to a food and yard waste facility. The City and Republic Services approached Ada County about constructing a composting facility at the Ada County Landfill; however, concerns from neighbors halted the plans. Therefore, staff is proposing to develop a composting facility at the Twenty Mile South Farm on nine acres of unused land. Steve and Catherine discussed the characteristics of a Curbside Organics Collection Program. Discussion followed regarding the options of continuing only with the current program for leaves and Christmas tree collection vs. initiating a year-round Residential Curbside Organics Collection and Composting Program. Renee Quick raised a concern that the City should not be accepting organics that had been treated with chemicals. Connor Skibeness asked about voluntary or mandatory participation and concepts for multi-family residences. Jake Nink recommended that the test results be available to the public. Jake Nink made a motion to direct Public Works staff to proceed with initiation of a Residential Curbside Organics Collection and Composting Program for Mayor and Council review and approval. Renee Quick seconded and the motion carried. 2
5. Budget Heather Buchanan and Jon Williams presented background, explanation, and cash flow projections for the proposed O&M budget for each of the funds: General Fund, Sewer Fund, Solid Waste Fund, Geothermal Fund, and Municipal Irrigation Fund. General Fund: O&M costs are increasing by $999,300 due primarily to a citywide policy decision to reflect the full indirect cost allocation plan in the General Fund Budget. In prior years, the General Fund share of the indirects was not included in the budget. Slight changes in minor repair and maintenance (R&M) accounts and 1% inflation in most other O&M costs are also included. Budgeted revenues for FY 2016 are anticipated to be $68,800 more than FY 2015 actuals due to increased indirect reimbursement revenues for Government Buildings. This leaves the fund at net zero with the base intergovernmental revenue (IGR) surplus. Additional funding will need to be requested to fund additional project needs for the Sustainability Program. Sewer Fund: The Sewer Fund encompasses the two treatment plants, maintenance of the pipeline, operation of the Twenty Mile South Farm, engineering, pretreatment and water quality, education and outreach, and administration. FY 2017 base operating revenues are budgeted at $43.3 million, reflecting an annual system growth of 3%. FY 2017 base expenses are budgeted at $43.7 million. FY 2017 personnel costs are increasing over FY 2015 actuals by approximately $2.1 million due to 3% base salary and 1.25% onetime goal achievement increases, 4.5% health insurance increase. Budgeted O&M costs are increasing by $2.1 million, 16.7%, over FY 2015 actuals due to: 1) indirect cost allocation increases; 2) chemical costs and construction inflation for the Dixie Drain; 3) increase in utilities at all facilities; 4) increase from general inflation; 5) increase in minor repair and maintenance; 6) increase in depreciation; and 7) NPDES related capital costs. Two FTEs are being requested: a Plant Operations Supervisor and an Environmental Data Analyst. A 7.5% rate increase will bring the fund to a net surplus to cover the aforementioned increases. Solid Waste Fund: The Sewer Fund Solid Waste Fund operations include the Republic Services contract, landfill expenses, household hazardous waste, and education and outreach. With the 3% base salary, 1.25% onetime goal achievement, and 4.5% health insurance increase, FY 2017 personnel costs are anticipated to increase $298,000 over FY 2017 actuals. O&M costs for the FY 2017 base budget are generally status quo after incorporating the 4% increase to the Republic Services contract for commercial trash services in mid FY 2016. Changes to the City s indirect cost allocation plan resulted in a $500,000 increase in indirect costs for the Solid Waste Fund. Otherwise, all other factors have remained the same with costs increasing only for inflation and customer growth. Proposed changes include: 1) one FTE to support the proposed Curbside Organics Composting Program; 2) required ongoing monitoring at the Esther Simplot Park; and 3) the Curbside Organics Composting Program. For the purposes of rate analysis, the Curbside Organics Composting Program costs have been considered. After incorporating these additions, the Solid Waste fund will have a deficit of $1,774,100. If the Curbside Organics Composting Program moves forward, staff is proposing a 17% residential rate increase effective October 1, 2016. With that rate increase, the fund will have a surplus of $434,900. If not approved, the residential rate increase recommended will be 3.0% effective October 1, 2016. Geothermal Fund: Geothermal service is provided to 80 buildings in the downtown core. Service to 10 buildings at Boise State University has been completed. The Geothermal Fund is anticipated to have a net gain of $31,100 in FY 2017. The FY 2017 revenue budget assumptions reflect a $36,100 reduction from FY 2015 actuals (FY 2015 was a fairly cold winter, so revenues were higher than normal. The proposed budget reflects a more moderate winter). The FY 2017 expenditure budget is a $143,100 increase over FY 3
2015 actuals. The increase reflects the 3% base salary, 1.25% onetime goal achievement, and 4.5% health insurance increases for personnel. Also included is a $25,000 equipment budget for replacement parts, a $36,000 increase in cross charges expenses for repair work done by sewer fund employees, $22,300 increase in minor R&M, and $40,400 difference for an inventory accounting entry. No rate increase is currently proposed. Staff is working on a rate proposal that will be brought to the Commission within the next few months. Municipal Irrigation Fund: The Municipal Irrigation Fund provides for irrigation service for five subdivisions. The Municipal Irrigation Fund budget is balanced with total expenditures and revenues each budgeted at $58,900. Rate recommendations will be brought forward in January 2017 as required by State Code. At the end of the Budget presentation, Heather provided a summary of the proposed customer rate increases. For the Solid Waste Fund, effective June 1, 2016, a 4% commercial (perm services) increase and a 2% roll-off (temp services) increase are requested. The commercial increase is made up of 2% to cover the 4% increase in reimbursement to Republic Services for commercial services and an additional 2% to fund the Esther Simplot Park remediation. The 2% for roll-off service is for the Esther Simplot Park. Effective October 1, 2016, a 17% increase for residential customers is proposed. This consists of 15% for the proposed organics program and 2% related to Esther Simplot Park. For the Sewer Fund, a 7.5% increase is proposed for all customers effective October 1, 2016. Larry Crowley made a motion for approval of the budget recommendations for the FY 2017 for the General, Sewer, Solid Waste, Geothermal, and Municipal Irrigation Funds. Renee Quick seconded and the motion carried. Director s Report Neal updated the Commission on the larger projects: City Council Visit: In April, Elaine Clegg and TJ Thomson will be on the Public Works Commission agenda to address the City s goals and directives. Four-Star City: Boise was recently recognized as a 4-STAR city (5 being the highest) under the STAR communities framework. This program helps determine how a community is doing with respect to sustainability from a social, economic, and financial perspective (equivalent to our LIV). Only a handful of other U.S. communities have been able to obtain four or five star ratings. LIV-ability Report: This report will be complete in the next few months and then will be brought before the Public Works Commission. Dixie Drain: Construction soon will be complete. The City will host a ribbon-cutting with attendees including the Mayor, Congressmen, and an EPA representative. Retirements: In 2017 John Tensen and Neal Oldemeyer will be retiring from the City of Boise. This announcement was made early so that the combined institutional knowledge can be passed on to staff. 4
Adjournment Renee Quick moved to adjourn the meeting. Julia Hilton seconded and the motion carried. The meeting adjourned at 7:00 PM. Neal S. Oldemeyer, Secretary Don Reading, Chairperson 5