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HomeMy WebLinkAboutMinutes 03/25/1996March 25, 1996 Vol. 29, Page 377 i MINUTES z OF A REGULAR NYE~TING s PETALUMA CITY COUNCIL a MONDAY, MARCH 25, 1996 s ROLI. CALI, 7:00 p.m. ~ Presevt: Hamilton, Stompe, Magtiire, Read, Shea, Vice Mayor Barlas, Mayor ~ Hilligoss 8 Absent: None ~ PI.EDGE OF ALLEGIANCE ~o Assistant City Manager Gene Beatty led the Pledge of Allegiance to the t1ag. 11 MOMENT OF SII.ENCE ~? COUNCIL COlVIlVIENT is Mayor Hilligoss called on the Councilmembers to comment: ~a Lori Shea - In 1993, she supported the Lafferty-Moon transaction, because it provided is for preservation of open space at no cost to the taxpayers of Petaluma. The i~ Councilmembers on this Council who have supported the land transaction have been i~ attacked because of their stand. Now, however, Supervisor Harberson's comments is indicate there are other avenues to explore to obtain a regional park for the south ~9 county. She would ask that the Council remove all items about Lafferty from the ao agendas. Let's give Supervisor Harberson a year to find a location for a south county zi park. 22 Nancy Read - Supervisor Harberson has been quoted as saying there are alternatives to a3 the land swap. Let's invite him to reveal these alternatives that he referred to in the ~a newspaper. Invite Supervisor Harberson to talk at the next available meeting to share zs the alternatives that all of us in Petaluma would like to hear from the supervisor. a~ Matt Maguire - the best place for Supervisor Harberson to talk to us is in the Council 27 Chambers on the 15th of April. Jane and I had lunch with him. He still thinks the ~s swap is the best thing, but he thinks other parts of the community think otherwise. I a~ recommend this body sit down and come to some agreement among ourselves. A lot of 3o people in the community are pretty sick and tired of the issue. He would like status 3i reports on the Petaluma Queen tloating storage and the noise ordinance. 3~ Mary Stompe - if Supervisor Harberson will seek other options, she would agree to 33 look at them. She still feels the swap is a good idea. She mentioned how she and her sa family had been harassed and vandalized over the swap issue. It is important not to 35 forget the pu~wic~process that has been involved in the swap. If there is an alternative 3~ without the -s~ she would like to see it happen. She would like a comment from s~ Harberson on "no cost to Petaluma." She wants ~~~ *^ ~~nppp ,I~~+'~;^ ~„P~r She 3s questions the access to Lafferty. This needs to be known now. She wants a onthly s~ report about progress on this issue on the Council agenda - scheduled in the evening. ao Invite the supervisor to make the progress reports at the Council meeting. ~ ~o~,~- 3`L3 Page 378, Vol. 29 March Z5, 1996 ~ If after a year nothing has happened, then the issue should come back to the Council z for decision. Let us, all sides, work together in harmony on this community project. s The death of an older person in her farnily reminded her how short life is and how a important it is to be positive in one's approach to everything. s Jane Hamilton - thank you. She would like Supervisor Harberson to work with the 6 Council and together the Council can come up with a solution. ~ Mayor Hilligoss - she agrees with the suggestion to hear Supervisor Harberson's a suggestions. We will follow this issue very carefully. 9 PUBLIC COMMEN'~ ~o Janice Cader Thompson - it was brought to her attention that 3 Councilmembers met ii with former Councilmen Michael Davis and Brian Sobel yesterday and she knows the 3 ~2 Councilmembers supported the trade (Moon-Latferty). She questioned Brown Act i3 compliance in connection with the meeting. She wants to know what they talked about. ia Jerry Price - he also questioned whether that meeting was in compliance with the is Brown Act. He invited any of the Council to call him to talk to him. IC is long past ~~ time for the public officials to pass legislation and say that Lafferty will never leave our i~ trust. is WASTEWATER - NEW SEWER PLANT - PUBLIC HEAR~G i9 This hearing was continued from February 12. Zo City Engineer Tom Hargis introduced Mike Ban, the newly hired Utility Engineer who Zi will be working with the old and new wastewater plant issues. Planner Jennifer Barrett z2 noted there are three documents the Council is considering three related actions in ?3 connection with these hearings: ?a 1. Certify the EIR which is a determination that the EIR adequately describes ?s potential impacts, mitigation measures and reasonable alternatives. ~6 2. Approve the tinal project report which contains recommendations on siting of z~ new facilities and the long range wastewater management program. zs 3. Authorize Request for Proposals (RFP) to initiate the proposal process z9 The hearing was reopened and the following persons spoke: 3o Dan Libarle - member of the Wastewater Committee - He said he addressed a letter to 3i the City Council and asked if they had received it. (They had.) The committee has 32 worked very hard. The meetings have been open to the public. Privatization is just. 3s one avenue. The issue will have to go back to the State Public Utilities Commission 34 (PUC). The committee will be looking at costs of privatization vs. public operation of 3s the new sewer plant. The Council has the final say. You can accept their 3~ recommendation or reject it at the appropriate time. You will appoint the public utility 3~ commission for the city. Believe me, the rate payers will be protected. In the end we 3s will have a great project. March 25, 1996 Vol. 29, Page 379 i He read a letter from Bill White, a Wastewater Committee member. The letter said, 2"We should look at the potential of grapes that may be planted in our area. We will s need tertiary treatment of the wastewater for those crops. Effluent from the new plant a is going to be better, which is good for the environment." s Nita Miller, 585 Casa Grande Road (owns property at 4198 Adobe Road which is the ~ location of Higgins Creek) - she read her lett~r of March 25, 1996, which states that it ~ appears that her property would be part of the proposed Higgins Creek Reservoir. The s property owners of this land are opposed to the City using it as apart of the Higgins ~ Creek Reservoir site. The sites (Higgins Creek and Wheat Creek) have not been io studied equally. Their land is under the Willia~nson Act, which is legislation that was ~~ adopted years ago with the goal to maintain agricultural land. The letter asked about ~2 the size of the potential dam, noted the existing and potential irrigation areas are ~3 misleading and erroneous, said the phase out of the discharge to the Petaluma River ia would not be accomplished if the Higgins Creek reservoir site were used, and is questioned the possibility of using condemnation to accomplish this land acquisition. i~ They are outside of the City; they did not create the need for a new wastewater plant; ~~ they want to build a house on this land; and City staff told them to select an alternate zs site for their house. i~ Bill Kortum, Ely Road - suggested consideration of a joint use of wastewater sites with zo the City of Santa Rosa because that may result in a cost saving. Santa Rosa's tertiary 2i treated wastewater goes into Russian River both above the Russian River aqueduct Za (fresh water intake) atld below that water intake. (Tliczt is tlie source of the Petaluma ~3 drinking w~ter.) Gallo Winery plans to plant vineyards in the Cotati area, and they aa have offered to build a reservoir and to purchase Santa Rosa's treated wastewater. zs Petaluma should take a look at that as an option to utilize Petaluma wastewater in the ?~ local area in a similar manner. Phase the construction of the new sewer plant. Put ?~ money in the bank and let landowners borrow from that fund balance so they can zs construct their own reservoirs. 2~ Pamela Torliatt, 27 Townview Lane - asked what the status is of the Intlow and 3o Infiltration control project. What is the magnitude of the treated wastewater reservoir? si It should be reduced. You should do all your Intlow and Intiltration work before 32 building the wastewater plant. Look into acquiring property for wetlands. She feels 33 this did not get due diligence as an opportunity for treated ~vastewater disposal. She 3a wants more information on a pie chart "City of Petaluma Future Waste Water Rates at 3s Build-out" that was shown at the February 12 meeting, such as future rates, support 36 schedules, interest rates, and capital costs. The commercial rates and industrial rates 3~ were not distinguishable from the residential rates. Which type of user is bearing the ss brunt of the wastewater costs? Will there be an opportunity to make amendments to the s~ process after the RFP process is co-nplete? ao Ralph Sartori, 901 Palmetto - member of the Wastewater Committee - we need a new ai plant now. The current piant is bleeding and band-aids are not working well anymore. a2 Agribusiness uses much more water than they used to. We can no longer recycle water 43 at the milk cooperative pursuant to health regulations. Treated.wastewater in Petaluma 44 is more costly than it is in Turlock. It is important that we communicate more as information about this project to the people who did not attend sewer school. The a~ landowners, such as the Millers, want to keep their farms; he can understand their a~ position. The documents as presented to you now provide you with the best of both as wor(ds. It is wide open, look at the options, talk the whole thing out. But, he doesn't ~ a~ think that this can be delayed. It will make the costs, thus the rates, higher. •L.>;r. ~~~:~ Page 380, Vol. 29 March 25, 1996 ~:*s~., i David Richardson, CH~M Hill, a member of one of the proposed vendor teams - stay z the course. You have very good documents, you have a great committee. Get the RFP 3 completed and get it out. Don't put all the risk on the vendors. The "force majeure" a provisions will make the vendors' prices non-competitive, Don't delay. Vendors will s have to invest a lot of dollars to develop their proposals. We need to see the ~ community's will to move forward. Thank you very much. ~ Steve Klausner, 2361 Warm Springs Road, Glen Ellen - Sonoma County Taxpayers s Association - submitted a letter to staff. He reminded the Council the primary purpose 9 of this project is health and safety. He went on to say that the Council's responsibility io is to develop a project that meets public health and environmental standards in a ii manner that makes it affordable to the businesses and to the residents. The goals of ~a 100% reuse or zero discharge into the river sound nice, but those goals have nothing to i3 do with meeting standards. If kept, those goals could be the most costly elements of ia the project. Limit the plan to the real needs and avoid social engineering. Whether ~s you have privately operated wastewater plant or a public one has nothing to do with ~~ public safety. The same regulations apply regardless of type of ownership: He ~~ encourages the Council to pursue advanced treatment, because only with ad~anced is treatment can you provide the safety and tlexibility to meet wild swings in climactic i9 conditions. You did a good job on the EIR; it offers a broad range of treatment and Zo disposal options; including river discharge, reuse and wetland restoration. Don't get z~ too excited over lawsuits. Farmers are offering to pay Santa Rosa for water now. Best Zz of luck. I think you are on the right track. We urge you to certify this document. z3 David Keller, 1327 I Street - There is a question as to whether or not a decision has ?a been made on privatizing the new wastewater pla~~t or not. There is no discussion in ~s the tinal EIR of the differences between privatization and public ownership_ If you ~~ project the figures of Camp, Dresser and McKee out with the rest of their projections ~~ for the operation and maintenance over the next 30 years, and add that all together, Za you'll find that in their projections there is potent~al for 10% savings on public ?9 ownership. A recently completed Oxford Energy study that looked at privatization so around the globe, found that they could not make a clear statement that there were 3i benefits for privatization or not. We are still the guinea pigs for privatization. 3z Mr. Keller went on to say, risks that have been handed off to the contracted company 33 include force majeure, used to be known as Acts of God, improvements, future capital sa expenditures, taxes, tinancing without recourse to the City, holding harmless to the 3s City, transition from the existing plant to the new plant, any changes in costs, labor, 3~ utilities and supp}ies at the existing plant, tines, penalties, problems with the effluent, 3~ monitoring and making sure the industrial pretreatment program stays afloat and 3a complies with regulations, project scheduling requir~ments, labor disputes and 39 construction. The wastewater companies are going, to bid high in order. to build a ao cushion for potential downfalls that are unrecoverable. ,So you won't get the lowest ai bid, you will get the lowest of the high bids. March 25, 1996 Vol. 29, Page 381 i The contract structure is tlawed. This may make the ratepayers suffer. The process z depends entirely on where the competition will yield a good starting point. Restructure s the way that these contracts are bid. Use a cost basis for startup; provide for full rate a of return information for each of the bidding companies. Allow for regular review of s the profits for rate adjustments in the future . Allow comparisons with other privatized 6 wastewater treatment plants as they come on line over the next 30 years. Require clear ~ standardized accounting practices, and adopt appropriate industrial measures of s inflation, not for instance the CPI which is called for in this document. ~ One of the problems that companies will ~nd in these documents is that the only io change of what they get paid is based on intlation factors on a series of operating costs, ii and those are not even at 100% of inflation, they are based at usually 75% of inflation. ~? There is a chemical index that is used as one of the factors, but that is undefined and is is not necessarily appropriate to a wastewater treatment plant. This has a potential of ra making a competitive disadvantage for Petaluma businesses and residents. Revisions of is fixed costs in fixed rate tinancing somehow miraculousiy have an increase, an annual ~6 adjustment by the CPI. ~~ The ground lease is billed back to the rate payers at cost plus a percentage of profit plus ia a CPI multiplier. Why? This is entirely inappropriate. And that's done again as a ~9 discount percentage of cost, say 90% of the cost. 2o David Keller continued - Electricity should be a pass through cost. With this you help ?i provide incentive for efticiency. You need to allow for regulatory changes in utilities. zz Cost substantiation, on page 5 of the privatization agreement, is established only by z3 certification, not by an audit trail. It doesn't exclude purchases from aftiliated aa companies. 2s How can disputes or disagreements be dealt with? And here we move to the process of z~ the public utilities commission, or Petaluma Public Utilities Commission. how can 2~ disputes or disagreements be dealt with? How will the rates be set? What is the body zs that has the authority over rate setting. What is the process, who are the personnel, ~~ what is their expertise, how will it be set up, how will it be done? 3o This contract is written in such a way that it will affect rates for the next 30 years, 3~ based on the front end loading for the high risks assigned to the companies; some of 3z that is untouchable after the contract is started. And the rate commission will have no 33 leverage or authority to change the way rates are set up, because they are done by 3a contract. So we are asking for a rate setting authority that assures the rate payers and - ss their interests. What is the process for this local rate setting pursuant to the 36 Privatization Act of 1985? The company's lawyers will make $200 or $300 an hour. 3~ We don't have anyone who will watch out for the ratepayers. ss Disputes are to be settled out of the public eye and maybe even with no judicial review. 39 The public utilities commission is not required to have minutes of their meetings. This ao is outrageous. There needs to be a fully independent, separately elected public utilities ai commission with a full complement of staff. It would have independence and would let a2 the Council off the hook for rate decisions. Being the tirst privatized treatment plant in 43 the state or the country, there are a lot of considerations that are not within the realm of 44 the City staff. That's why you have rate experts. .r~~Wt ?1~R~~ ! 1 y . , f:.' .,.:.'. _ '~~ ~ ~hy~ C. ~'Y : . ~ 'I . . ' ' 1•'~},y 4~. ~~ Page 382, Vol. 29 March 25, 1996 i We sat down with a person who sets rates internationally and were told these contracts a were woefully defective in protecting the rate payer. You need complete reporting on s your return on investment every year from such a utility. Is the return within a a speciried range? The state specifies targeted ranges of return on investment with a s fudge factor of plus or minus 2%. That is not included in the. contract documents 6 either. Proper staffing and tinancing of this commission or district would inctude an ~ independent rate payers' advocate and a professional staff or consulting team available a on regular work to be able to evaluate rate requests. Right now what's in the contract 9 is essentially the city manager or staff. or the city council essentially gets into io micromanaging this company; because it can act on any request for changes as they i~ come up and essentially you wind up having to decide on the spur of the moment: Is ~2 this appropriate? Should we do this? Should we not do it? There are rate consequences i3 to a bunch of the foregoing. That's none of your business. ia There needs to be public access to all records so that all audits and all company is information are available for public observation. You need to be able to have a ~~ prohibition on any conflicts of interest, no revolving door personnel practiees. You ~~ need to protect whistle-blowers. There needs to be a provision for rebates for is overcharging. i~ David Keller conclusion - Headworks metering referred to in the contract may be zo impossible because the metering equipment was reported by EOS as not being in Zi service. How do we determine intlow accurately. Regarding compliance history, I 22 would suggest adding a comment that details criminal activity in all states; not just z3 California. The City should go on record saying it will not condemn land. You should aa look at the Martinez facility which uses a marsh treatment for effluent. Copy that idea. zs Trent Orr, 96 Manchester"Street, San Francisco - representing the Sewer Treatment and ~6 Impacts on Rates (STIR) a local citizens organization, the Petaluma River Council, the ~~ San Francisco Bay Keeper and Clean Water Action - Mr. Orr feels the EIR document zs does not meet the standards for CEQA, because there is insufficient information about 2~ impacts of privatization of a wastewater plant and little information on a public 3o wastewater plant. He said the document unsuccessfully claims to be a`project' EIR on 3~ a sewer treatment facility and furthecmore the document unsuccessfully claims to be a 32 `program' EIR. He states that staff and the EIR address a decision to make the 33 treatment plant private, yet recent newspaper and stafi' comments indicate that no sa decision has been made yet. He comments that a CEQA case law principle is the EIR _ 3s must be prepared and considered well before signiticant public expenditures are made 36 on that project. His second point was the long range wastewater management program 3~ that is contained in the EIR consists "almost entirely of continuing various programs, 3s source control, Inflow and Intiltration (I&I) control, irrigation and river discharge; 39 they are already in existence." These are already in existence. "The EIR has failed to ao identify, evaluate and compare any program alte.rnatives whatsoever." He has found ai no explanation for identitication of the Higgins Creek site as environmentally superior a2 "to the Wheat Creek site or the Tolay Lake site." And in spite of the "extremely a3 superticial analyses" of the fonner two, there is a complete lack of analysis of the 44 Tolay Lake site. This will not pass judicial muster. March 25, 1996 Vol. 29, Page 383 ~ Vasco Brazil, Lakeville Highway - representing himself and the Redwood Empire Tax ? Reform Immediately (TRIM) committee - regarding the estimated cost of "making a 3 new plant in Pond 4 to handle 6.7 million gallons per day at $35.1 Million," does that a cost figure include the costs of retrofitting the ponds for seismic safety standards and s pond leakage? He presented a number of photographs showing the pond leakage onto 6 his land. He recommends the City expand the present plant with a 2.7 million gallons ~ per day modular expansion, thus bringing the capacity to 6.7 million gallons per day s and saving the rate payers $21.6 Million. He quoted the consultants who said, "The 9 existing facility does not provide sufficient capacity for adequate secondary treatment io of all wastewater flows prior to discharge to the pond system." He asked if this is the 1~ reason the City "has been dragging its feet at reducing Inflow and Infiltration." Pea1c ~z wet weather t7ows still occur. So he feels that the EIR did not evaluate expansion of is the existing facility. ia He feels there should be a financial comparison of the lost income from industrial land is needed for Hopper Street expansion compared to the City expense of a modular plant ~~ expansion at Hopper Street and a new plant at another site. ~~ Regarding the recommendation for expansion of the irrigation program at the Jacobsen is Ranch and the Patocchi Ranch precludes using other disposal alternatives in the future. i~ A pilot marsh should be created now to gather information on this type of wastewater ao reuse. This pilot marsh should be at Wiseman Park, Prince Park and the proposed ~~ Cottonwood Golf Course. The marsh could discharge to that 200 acres of City owned ?2 land. The current cost of $1,325 per agricultural irrigated acre is used to grow fodder a3 with a$200/acre value. Usually the overriding factor on water use in crop ~a management is the cost of the water used, not the value of the crop grown. zs The consultant has failed to evaluate the long term savings of using tertiary water for a z~ higher and better use; such as golf courses, urban landscape, sod farms, sports tields, ~~ nurseries, and schools. This would eliminate all the current agricultural operations and ~s maintenance costs, except pumping. ~~ A hydrology and natural drainage study should be done on all waterways downstream so of wastewater irrigated lands to consider erosion and amount of winter runoff from 3i lands that have summer irrigation. There is a problem using irrigation on Reyes Soil 3z due to its compaction (Jacobsen Ranch) and the consultant recommendation should be 33 re-evaluated. sa Removing an oxidation pond, for the benetit of landowner over possible benefits to the 3s public, is grounds for legal challenge. This could reduce vendor technology options. 36 He questions whether or not the irrigation management is handled well or not. There 3~ should be a conservation and farm management plan in place. ss There was no one else wishing to speak, so the hearing was closed. The Council 3~ discussed when the next meetings on this subject would be. A brief recess, 9:50 p.m. ao to 10:00 p.m., was taken so that staff could determine which cnid-week evenings in ai April would be appropriate. ~. ., :.~, Page 384, Vol. 29 ~ 2 3 4 5 6 ~ March 25, 1996 ~~~•~: . ~~ It was moved by Nancy Read and seconded by Jane Hamilton, that the' Council would plan to meet both April 22 and April 29 to continue deliberation on the wastewater treatment plant. If possible the informal meeting will take place prior to April 22. - Ayes: Hamilton, Stompe, Maguire, Read, Shea, Vice Mayor Barlas, Mayor Hilligoss Noes: None Absent: None s Staff asked the Council if they could please identify any other critical topics that the ~ Council wants to bring up specifically and hold an-in depth discussion on. Several of io the Councilmembers said they have a list that would be forwarded to Assistant Manager ~~ Salmons. ia ADJOURN is At 10:25, the meeting was adjoun 14 15 16 i~ ATTEST: is 19 20 ~ ai atricia E. Bernard, City Clerk