Springfield City Council — April 26, 2021

0:03 all right i'm gonna pop nice chatting books with y'all see ya all right aj are you ready yes sir i'm going to call the uh springfield works at uh the workstation for the springfield city council to order with roll call mayor van gorden here councillors pitts here mo here bradley here here woodrow and pissionary missionaries here and councilor woodrow is excused for the evening um we have two items tonight so the first items wastewater and stormwater user fees for fiscal year 21-22 and i don't know

0:48 who's starting here all right matt you just popped up so we're going to turn it over to you all right welcome uh mayor and council with me is catherine bishop there she is environmental services program manager for the city i'll share my screen we have a little presentation here for you and we'll get can you guys see that [Music] okay all right um so the presentation outlined tonight we want to discuss a few things with you at a high level and really take the feedback that we get

1:34 from council tonight and incorporate that into a public hearing uh that's schedule for next monday night these are the things we're talking about in terms of the revenue goals we're looking to provide resources for o m programs having to do with local wastewater and storm water services also to fund the capital improvement program for both of those services and to maintain debt service requirements having to do with revenue bonds and loans and also to increase capital reserves to make sure that we have funding within our capital reserves to continue to build out the systems and

2:19 to meet permit requirements while also maintaining fiscal health and a good credit rating okay so we show this slider we have shown this slide several times in the past but i think it's important to keep in give council a perspective of the size of the systems we're talking about so um the wastewater and the stormwater systems in the city of springfield have an asset value of several hundred million dollars um there's two components to the wastewater system we have the local conveyance system which includes local pump stations that city of springfield owns and then there's a regional component that is managed by mwmc and we have over 240 miles of pipeline in town on the stormwater side

3:04 we have over 190 miles of pipeline numerous cash basis as you can see and every increasing number of public water quality facilities in addition to a large amount of private water quality facilities and and as well as numerous outfalls um to our local waterways so it's important important to note that user fees really are the sole source for funding operations and maintenance associated with these two systems the challenges to pay for clean water are many and this is really why we're here for you tonight so i won't go through these in detail but we have we have fixed operating costs basically you know regardless of customer usage the cost of owning and operating maintain the system

3:50 are the same we have infrastructure of various ages and not listed here actually is uh the additional infrastructure that we've been adding over the years that needs to be maintained we have regulatory requirements that are continually changing and becoming more stringent in fact we'll talk a little bit about the permit the stormwater permit in the next slide we have inflationary pressures which exist many times capital construction costs inflate at costs higher than your average cpi materials and services or construction for operating the system continue to increase as do personnel services for personnel associated with the systems and then we've seen significantly

4:37 reduced federal funding over the years to the point where at present basically the federal government no longer partners with the local communities to fund these systems it's exclusively the city's responsibility to fund the needed improvements and requirements associated with our systems and then lastly we we have uh debt service obligations to pay off payments and interest associated with bond sales that we have made in the past with respect to our our discharge permits um the council is aware we have a we have a currently operating under administratively extended um stormwater permit from deq we have a dequeue is issued a modified

5:23 permit march of 2021 the city has contested that permit the previous iteration of that permit however we expect that with this go around things are looking substantially improved and pending any any additional litigation from a different group we would expect this permit would become effective for us sometime approximately june of this year and that permit really lays the foundation for the programs that we have the requirements that we have to put in place to meet water quality standards and other obligations in the permit on the wastewater side the permit is issued to mwmc chiefly but cities of springfield and eugene are also named on the permit and we are expecting a new permit on the

6:09 wastewater slide at the end of this year we just got confirmation from deq today that they expect to issue it towards the end of september there'll be some requirements for the city as a result of that permit most of those will fall to mwmc and then i won't go through these in detail either but just to give the council an idea of some of the types of programs that the user fees fund they're listed here one of which that we always like to highlight is our education and outreach programs things like our upstream art campaign this this is a picture of our revised and revamped canines for clean water calendar contest where residents can put pictures of their take pictures of their dog and pledge to scoop the poop

6:54 and keep that stuff out of our waterways for a chance to be featured in the calendar so this is a way this is a required element of our stormwater permit it's the way we interact with the community it's one of the many programs that our user fees fund okay in terms of local wastewater services uh there's obviously the ongoing maintenance having to do with maintaining the system and keeping things flowing in the right direction next slide matt and in terms of factors rate factors on the wastewater side it's important to know that we're planning on 7.8 million dollars in user feed revenues with a 3 increase and that will help to

7:42 the revenue bonds in terms of capital investments as well and customer usage it's important to note on the customer usage for local wastewater it's fully volumetric so there isn't a base fee or a change in fee based on strength the strength components are on the regional side so this is this is a per unit customer usage and as you know there's been more water efficient fixtures and low flow devices and so that does kind of reduce the amount of flow from time to time and of course water conservation so local rates for waste water sprinkled wastewater are flow-based next slide this is a rate comparison and we're

8:28 really looking back at rates that were adopted as of january 15th so we're really looking back at um at the beginning of this fiscal year and this this is also in your packet on uh attachment three in terms of your ais packet and as you can see we have several uh communities here we when we do the rate analysis we're looking at 5 000 gallons because it's just easier to set it that way and be consistent but it's important to know that in springfield in terms of single-family residential it's really about 4 300 gallons so this this somewhat overstates what some

9:13 customers might use but we do have customers that would use the 5000 as well you can see in the about the center where there's the blue on the top that's springfield the blue component is the regional wastewater and the green component is the local springfield wastewater collection system you can see that um the average of these communities is about 54 almost 55 a month that assumes that you're using 5 000 gallons so but if we look back and we look back at this and think of that customer for springfield at 4 300 gallons it's 45.70

10:05 next slide is just a transition slide um moving into stormwater surfaces just one of the note um really cool art graphic here from our upstream art contest that occurred last year and then some storm drainage ditch maintenance that's occurring by our operations group both of these are required elements of our stormwater permit okay and now looking at stormwater funding and sources the user fees are currently projected at 7.5 million in revenue for the upcoming year one thing about stormwater is it is pretty much a fixed fee so when it's a residential customer it's a fixed amount single-family residential any other commercial or or industry type accounts those would be

10:50 based on impervious surface and so that would change based on their development of impervious service surface and also redevelopment other funding sources for storm water in addition to the user fees our system development charges at about 300 000 in the upcoming year and land alteration permits about 100 000. next slide and then here's the chart uh for the storm water fees and you can see they're kind of a little bit all over the place uh portland on the far left has a significant uh fee the average of these fees is 11.94 you can see over to the left where springfield is uh currently at 15.24

11:37 that's for a single family residential account and then eugene is right next to us at 15 um and and you can see you can go all the way down to veneta at 2.59 so each community has its own unique circumstances in our case here in springfield we happen to be nestled between two rivers so it's the willamette river and the mackenzie river and we're responsible through our permit to make sure and run off to take care of runoff and not allow for those rivers to be impacted in the negative way and the aquatic habitat so next slide i'll just add here to you that springfield had the first ms4 phase two permit issued in the state one of the reasons for our rate being

12:23 higher than several of these communities for example albany their rate has increased substantially in the last couple of years they're not actually yet a permittee due to the way the census was done ten years back they will be getting their first permit um shortly and will be catching up to us as time goes on so just additional info okay and this is looking um back at the adopted rates so we're showing two years here um the fiscal year 1920 you can see that we had two percent across the board uh for local wastewater services storm water services and then combined of course it's two percent um in this current fiscal year that we're in um the you know the decision was made for

13:09 uh user fees to remain level and you can see that those those monthly residential bills have just carried forward in this current year and when we're in so next slide so when we're looking forward here at proposed option one is the option that is three percent for both local waste water services and storm water services it ends up being if you assume the 5 000 gallons it ends up being 72 cents for the wastewater component the local wastewater component and 46 cents for storm water when combined it's 1.18 so this is the higher of the two i would point out that the local wastewater has a three percent in both scenarios

13:54 um it's not one that can go lower than that but given that the impervious surface in stormwater is somewhat fixed if we go to the next option you'll see that the stormwater is reduced to 2.5 percent so that's a 38 increase monthly for a single family residential and when we combine those two it ends up being a 2.8 percent or one dollar and 10 cents now this does assume on the wastewater side that the customer is using the 5 000 gallons but we do know that we have customers that use much less than that as well next slide so really our our rate options are one of the two the first being a full three percent at

14:41 one dollar and eighteen cents and the proposed option is number two at two point eight percent combined and one dollar and ten cents for a customer that would use five thousand gallons of wastewater and then next slide um we did have our rates adopted uh by the metropolitan wastewater management commission having to do with the regional component and that was a 3.5 percent adjustment uh resulting in 95 cents if you are that customer that has a 5 000 gallon usage and with that okay with that i think we're ready for entertaining discussions all right questions in our discussion and

15:27 any feedback we can take to the public hearing next week leonard uh thanks sean thanks for that presentation it was uh really informative um so let me ask what would the sacrifice be to the stormwater system in terms of services and infrastructure were we to adopt the 2.5 instead of the 3 percent we're actually recommending the the option two which is the two point five percent right but if if we were to adopt the two point five percent what would the difference be from the three percent in terms of services and infrastructure in other

16:12 words would we be replacing less pipe um for instance in the stormwater system no what we would be doing is just slightly reducing the you know the capital reserve it's a fairly nominal amount um we're talking less than a hundred thousand dollars that would be that would not go or not be transferred to our capital reserve okay well i'm i'm going to take what may be an unpopular position here which is that i i always try to err on the side of better maintenance just to avoid the necessity of greater expenditures later further down the road and so i i would like to just advocate

16:59 for number one which would be fully funding the wastewater and the stormwater systems thanks anybody else joe that's that's pretty amazing uh leonard actually it's we we actually uh you know in on a commission i sit on that commission and um we go through this really in depth and i can i can vouch that that nothing's going to suffer we would definitely not have landed on 2.5 recommendation if anything was going to suffer and and i think there's a lot of and catherine you can probably chime in but we we forecast quite a ways

17:45 into the future to make sure that that our systems are up to date and um you know and frankly our the whole system that we have here in this region is is uh well-renowned and probably one of the better systems in the west as far as i'm concerned so as part of the commission i would never advocate suffering you know the system suffering to try to keep the rates low we try to keep the rates low but but we're not going to recommend those those those particular rate increases if it's going to um pull away from our the quality of service and the in our equipment for sure i appreciate that too i really do that's pretty cool

18:30 steve i i i think this this budget is fine but i would look at the projected future and it's never steady it's going up from 3 to 5 on local wastewater and you know it's compounded that's i i i'm just worried about the future we're worried about now now but as we look out there i'm concerned so and i would point out that um the city did restructure some revenue bonds over the last year and was able to bring them down to a much lower interest rate and so that's allowing for you know if if you want to choose option one or two either way it's good but just to add that the revenue bonds were

19:15 restructured with a very low interest rate and so there's been some savings there and then also given the street bond there's going to be plenty of street work and you know curb cuts and things like that but within those projects there's fewer stormwater elements you know so so those are just a few things to consider getting to council councillor mo's point you know our projections are based on um best known information on what's going to be contained in the permits that we're getting from deq uh one is part of the reason that we the council chose to contest the last permit given some of the things that were in there the costs associated with potentially not being able to meet those obligations

20:01 and then this is not necessarily unique just as it's happening in the it's a national issue with respect to water quality permits and infrastructure we were fortunate enough to sit on a panel with um representative defazio last week and a half ago talk about this but really i think in the long term it's trying it's being addressed in a couple of ways but there's not a whole lot of progress but looking at getting the federal government back to being a partner with the local agencies to help pay for some of these needs and then looking at some ratepayer affordability issues for low-income residents i'm just concerned about the future that's all thank you

20:48 all right anybody else um i have just a couple of questions here so when you when we talk about the permit right and i think we ask this question every single year there it probably 15 years ago we'd go years without any sort of increase in these fees whatsoever right but like when you think about the when we think about the future there's always like we're always going to have to be investing in the system the years of zero percent increases are essentially gone is that correct that's that's correct counselor i mean we have multiple challenges increasing water quality requirements with new standards and more people moving to the state um aging infrastructure new infrastructure

21:33 you know the list goes on and so it's we're trying to adhere to a philosophy of small incremental land rate increases over time so we can avoid rate spikes and defer taking on future debt but it's basically um the foreseeable future that's what we're what we're looking at yeah and um yeah i and i appreciate us talking about that five year window right and trying to keep these as level as possible for folks i know that you know on the out years they always look a little bit higher and then we kind of sharpen our pencils as we get a little bit closer so um yeah i i really appreciate how flat like getting to something a little bit more consistent all right so corey yeah and i appreciate you you talking about

22:19 that um so i'm sort of seeing this combination of what counselor mo said and what he said and i think that there's some of you know i also sit on the budget committee for um sub so so that's real in that you know those data i mean things are changing in terms of how we need to manage water and and how we need to invest in our infrastructure but i think that there's there's some storytelling that we could do around that um because i don't think that people necessarily understand that so i think we have an opportunity to sort of talk about that and talk about why it is that it's so important that we meant that we invest in this and we manage it and i also am hearing that to sort of get people to understand and

23:04 be used to you know what can they expect in terms of arrays because i think once people start to like understand that oh yeah this is the world we live in the more that we can tell that story so that people understand what's coming the less it's going to be like every year like what the heck so joe cory and i both sit on subs water or on the budget committee and water is going crazy out there so that's not our problem but we should see that every year so councillor robbie's point that you're right on right on point we've done quite a bit of public opinion research in the past and folks really value their water systems and their recreational opportunities and we've done some quite a bit of outreach to tie you know what we're doing to the values that they

23:50 have but it's it's there's always room for for more to continue to do that work joe so um yeah cory actually and i'll even expound a little bit further on what matt had just said is that there's that we have a really robust uh we meaning mwmc have a very robust uh program now that is um i don't know matt has it been in the last three years how much resources we put into that to to help the citizens realize that oh yeah hey by the way we've got a big old plant in north eugene has taken care of a lot of stuff um but they're we're doing a really good job and but we've done a real poor job you know

24:35 at least historically on getting that word out to the citizens um but you'll see um in fact i think i just did a video a couple a week or so last week or something that we're going to be rolling out more and more that public relations piece the social media piece and potentially even some you know television type stuff but we really you're right and it's we need to meet people aware but it's just not a fun subject and a lot of people just don't give a rip as long as when they go kapoosh it disappears and not stays there you know so it's a tough subject to to really get people interested in but but i get it and so does the commission and there's a lot of effort a ton of effort to do that so you're on

25:20 point it's just trying to get that saturation level with the citizens so i'm really proud in case you can't tell i'm really proud of that commission and it really it's they're doing a great job and and we're looking at all aspects of it and and treating this region the way it should be treated in our rivers and you know the fish everything is so important and it's it's they're just doing a great job i don't know how else to say it but thank you for those comments that's true we just just got to get that word out and people just don't want to really listen too much but we'll keep trying i think you guys have enough direction so if unless anybody's got any other comment then i think we're good here all right

26:05 i appreciate it thank you all right so second item tonight's the santa pact user fees and it looks like it's with sam hello sam hi good evening man council so for those of you haven't met yet my name is sam kelly quatrocky i'm a finance analyst in our finance office here uh so i am here tonight much like catherine and matt seeking guidance from our standard pack partner proposed rate increase for solid waste recycling so looking at about 2.1 percent increase this year briefly looking ahead i will be back here next week to talk about the rest of the master fees and charges and then again in two weeks after that can we i'm sorry can we just hang on a second because i forgot about the next thing so

26:52 yeah um yeah you you know what i'm going to say um i represent members of santa pack for the teamsters union and so i'm going to have to recuse myself with this item thanks okay thank you yes thank you for that yeah um so after uh speaking with stan at pack on this uh i felt the 2.1 in 2.1 percent increase was reasonable um especially considering they didn't adjust their rates last year due to covet 19. this 2.1 increase is a combination of two factors it is a 2.1 percent cpi for standard packs operational costs and then a 2.1 increase in the lane county tipping fee so on the most commonly used 35 gallon container be about a 40 cent increase from 19 19 and 40 cents

27:37 um happy to run through some of the attachments if you all wanted to i kind of want to keep a little more open and kind of discuss any questions or concerns you might have about this corey thanks sam um so my only question because i don't want to do the math myself is does it and so it's sort of asking you for some opinion and you've done the math is i just sort of glanced at the proposed rate adjustment and i didn't i wanted to know if it's an equitable rate adjustment is it like down the way across the board or is there any any like is it a toucan or three is there any place where people are um are more or less affected by the rate

28:23 increase is what i'm trying to ask yeah as far as i've been known it's an equal increase across all the races no changing or kind of management across there thank you all right anybody else okay sam it seems pretty easy so i'm seeing head nods i hope that to go ahead and prep this for a public meeting okay wonderful all right joe i'm sorry i can do it just a quick question if you could sim it shows the the fuel rates is getting apparently it looks like it's being passed on but it shows december of a

29:10 buck 88 and this last month a couple months goes at 238 i'm sorry where are you seeing fuel rates my apologies oh i apologize i'm actually i'm actually looking at the solid waste haulers and where elaine county is kicking and they're showing their costs so did anybody look at their materials they handed off to you i mean it sounds like this is just a handoff pass through money cost thing but is anybody questioning the numbers they're providing you as opposed to okay that's fine let's pass it off to the users but i'm looking at some other numbers that they're using for those increases and i question those did anybody question those uh i don't believe so in my end um i can reach back out to our santa pac

29:55 partners and ask them about that uh but you are correct this is sort of the pass through from lane county's tipping fee increases yeah right so here so here we are on the end you guys are in the middle and you're taking information from the person with a handout and so or the entity that has their hand out and so is there you know what was there any kind of robust conversation or questioning or challenging the numbers they're using as opposed to okay those look fine to us we'll just pass them on uh no on my end there was not a robust competition with lane county this sort of came down through the haulers as a cost that lane county imposes on them to tip at the tipping fee um so i had not heard of it or been a part of any discussions on that um up until this question though so so

30:40 maybe it's a broader question not to put you on the spot but who's advocating for us uh i think part of that is gonna be santa pac we really use them as our partners to have these negotiations um really look at the numbers financially um and then meet with myself to kind of go through what these impacts are gonna be like on their bottom line uh and then the impacts on the rates for users yeah i mean i mean well maybe i'm not expressing it very well i've looked at this and and i understand that santa pac is looking in within them you know yourselves the entity saying okay well what all do we have to pass through to our customers and you're basing that decision on the numbers that are provided by lane county and so i would like to know is there any

31:27 advocacy towards us the um towards lane county saying okay hey lane county we want to we want to really look at these numbers and challenges as opposed to okay here's our here's our marching orders so now we've got to figure out how to raise rates as opposed to who's challenging or is there any way to challenge those marching orders from lane county even though i guess it's because they're the only their only entity and they've got sole control and they got the market so um you know there's a lot of different ways to look at that is there's the commissioners etc and the commissioners apparently i believe will probably approve you know approve those rates before they get handed down to us so is there anybody from the hauling industry at that level of meetings

32:12 and advocating for us users excellent yeah i i understand your point your question now and you are correct that last line lane county has already proved this and sort of passed that down as sort of the market control right no as far as i know there was no one from our side negotiating this or talking with lane county i'm not sure uh aaron dooley was going to attend from santa pack he might be on the list okay we could bring up if we wanted to ask what santa pat's relationship was like with this hauler fee um but no to your point no there were no negotiating or meetings on our side with lane county over this do we um but we have to put passes off to a public hearing anyway so what i want to maybe ask if joe's good with this is that we just prep that and ask aaron to you know comment about their actual process when when we get to the public hearing

32:59 right no i'm fine i mean i'm i'm okay with doing this but i just want to raise the point that i want to see some stronger advocacy or at least some sort of documentation or something that um some sort of proofing as opposed to because they're the only dog in the fight so to speak and they can name their price and and i don't like that position so to speak it's not i don't i don't know if it has and i may be wrong i just want to see if there is some advocacy for us ratepayers as citizens as opposed to being at the at being at the mercy of a pass-through when we really don't have any control whatsoev really whatsoever i mean we could tell you no and then then we're gonna have a problem we don't want to we understand you've got a higher cost but i'm just questioning the higher costs

33:45 and and it's a bigger picture i get it but it's something i think is worth some effort on the uh local uh cities and agencies to step forward and say okay we need to start looking at these and we need to have some people advocate for us rate payers excellent yeah i will take that guidance now i'll run with that after this meeting and start looking into that i could hazard a guess that even with this 2.1 percent increase the next closest dumping site is still more expensive for standard pack caller to go out there and i'd like but i will look into that for you for sure and make sure i get an answer back to you right they've got the corner of the market i get that so but they also have a public and you know public process and the commissioners must approve those rates so i just want to know at what level is

34:30 there someone going to be sounding off saying okay we don't necessarily believe those rates are in line with what's happening well and you have a good point that we don't like the the county hands it off to the haulers right and they don't actually impact the public when they make their decision we're the one that is actually making the decision that impacts the public so right they get to be the nice guys so to speak yeah and we we just have to look at our nod and bump the rates up for our citizens and i just don't like that all right any other questions all right so um aj are we on hold until 6 30 for the cwd no sir

35:15 that is a separate link so you we can close out of this meeting and then everyone will need to log in um on your separate link that was sent to you on your um for your calendars um just before the seven o'clock perfect all right then that is the last piece of business then we will see you on for the sita meeting and we are adjourned thank you