Salt Lake City Public Utilities Advisory Committee Meeting of December 12, 2002
Director's Remarks
LeRoy W. Hooton, Jr. recognized Rocky Fluhart, Deputy Mayor, and Councilperson Carlton Christensen. He thanked them for the administration's and City Council's support over the past years.
I don't plan on taking a great deal of time, but I would like to give a brief overview of the past year. Everyone has a copy of the Annual Report, and I'd like to commend Stephanie Duer and Jim Lewis for their work on the report. It's a very nice document that will leave a record of the department's activities during the past year. As pointed out in the report, this past year has been an extraordinary year. Major events have overshadowed most of the things we normally do.
There were three such events that consumed much of our time this past year. The first was the terrorist attack on September 11 that totally changed the way we viewed our jobs in protecting the public health and safety of water, sewer and stormwater systems. As we're preparing for the second major event, the 2002 Winter Olympics, we felt that we had done everything necessary to ensure that our systems were secure. After 9/11 we had to take a deeper look at security matters, particularly the drinking water system to protect public health. This effort has continued as subsequently Congress passed legislation requiring public water suppliers to conduct vulnerability assessments and take security measures as part of the nation's home security effort.
The third major event was the drought. With three years of less than normal precipitation, last year we only received a 55 percent allocation of Deer Creek water supply. We were very fortunate that the local canyon watersheds were near normal, and in fact, Little Cottonwood's snowpack was above normal, or we would have had very serious problems. With only the 55 percent allotment from Deer Creek it was necessary to get budget authorization from the City Council to purchase spot market water on the Provo River. This water ensured an adequate water supply, even with conservation, to make it through the summer and still have enough water in the reservoir until we receive next year's allocation. The snowpack at Trial Lake, which is the indicator for predicting runoff flow into Deer Creek Reservoir, was extremely low last year. Even though some of the state's northern watersheds were better, that particular watershed was very, very low. As everyone can recall, the summer was hot and dry. On page 3 of the Annual Report is a picture of Deer Creek Reservoir taken late in the season, showing that the reservoir level dropped 43 feet over the last several years. The amount of water remaining in the reservoir owned by the Provo River Water Users Association is at an all time low. What will happen this coming year will depend on what kind of winter we have. I'll touch on this a little later.
Despite the overwhelming events of the year, our customer satisfaction ratings increased; our employees continued to do an outstanding job; and our capital improvements program moved forward as planned by meeting our goals of replacing over 58,000 feet of watermains, 26,000 feet of sewermains, and 11,000 feet of stormwater pipe. We were able to meet all of our goals, including all requirements of the Clean Water and Safe Drinking Water Acts.
Briefly touching on the major issues this coming year, the first challenge the Advisory Board will have in January is to deal with the water rate study and restructuring the rates. If we are going to move this forward and give the Mayor and City Council time to adequately consider the recommendations, we will have to make a decision during January. The citizens committee prioritized the goals of the rate study with water conservation their top choice; so the product from the study will be a stronger water conservation rate that will be forwarded to the Advisory Committee for further action.
Also, right out of the chute, will be the 2003 Legislative session. There will be a number of water related-issues. The governor is at odds with sales tax revenues being used to finance the state's water programs, that includes endangered species, dam safety and loan programs. The Boards of the Division of Water Resources, Safe Drinking Water and Water Quality divisions administer the loan programs. At this point the governor is considering a $0.10 per 1000 gallons surcharge on retail water sales. This is something we should oppose. It's taking revenues from a user charge that people are paying for water service, based on a cost of service, and redistributes this revenue to subsidize agriculture, cities and small communities, dam safety and endangered species that benefit the entire state. Salt Lake City has not traditionally received state loan funds, except for some dam safety funds. We will become a cash register, or a money generator to fund water projects across the state. The debate early on was to eliminate the subsidy for water projects; but now it's twisted to keeping the subsidy, but charging someone else for it. I believe this is blatantly unfair. Everyone pays sales tax. As with all taxes, the governor and legislature can reapportion general tax revenues in any way they want and everyone pays their share. If the surcharge is successful, in the long run local government will be unable to adequately fund its water and sewer programs. In the future, mayors and city councils are going to feel political pressure from their constituents that water rates are too high. The state is always going to get its first, ultimately choking off our ability to raise rates to finance security measures, more stringent standards, aging infrastructure and public health improvements. We will be competing with the state for our own revenue. Once this precedent is set, I believe the state will continue to come back for more of this revenue, as well as others. For example, several years ago the Salt Lake Valley Health Department wanted to assess a $0.10 per 1,000 gallon surcharge on water and sewer bills, and a few years before that there was state legislation to add a $0.03 per 1,000 gallons for endangered species. With these proposals, we could have $0.23 per 1,000 gallons tacked on our water bills if all of them had been successful. In the long run, adding a new tax (called a surcharge) will undermine the quality of service at the retail level. There is not support for this from the state's water establishment. Certainly the small communities throughout the state do not support it. They do need help, but this is not the way to finance it.
The drought is still a concern. According to the SNOWTEL data, the Provo River - Utah Lake - Jordan River drainage is only 50 percent of normal as of this morning. Trial Lake is only 50 percent of normal. Certainly things can change; but it hasn't turned around as of today. We still could have problems this coming year. Surplus water in Deer Creek Reservoir is depleted, and if the drought continues, we will have serious problems next year.
An emerging issue is in our county service area. The City of Holladay, County Council and Mayor, a proposed incorporation in the Cottonwood area and a new township in the Mill Creek area have produced new governmental entities within the city's water service area. The first thing to surface is the fire flow issue. Several months ago I was asked by the County Council to give an overview of the water system and fire protection. The County has increased the fire flow standard from 1,000 gallons per minute to 1,500 gallons per minute. This automatically puts a lot of the old 4-inch mains out of compliance. The standard change makes a big difference. Also, many of the mains were constructed in the 1930s, 40s and 50s under exchange contracts in which we feel that the mutual irrigation companies have some responsibility to upgrade these lines under their contacts. Most of the areas outside of the exchange agreement areas meet and exceed fire flow standards.
Another major item we want to do in the budget process is increase the planned replacement program from 0.6 percent to 1.0 percent per year to keep ahead of our aging infrastructure.
In closing, we have a number of challenges facing us, but as an organization with the Mayor and City Council's support, we can deal with all of them.
Mr. Hooton thanked everyone and wished them a happy holiday season.