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Home My WebLink About2012-09-20 CC Minutes - SpecialCITY OF UKIAH JOINT CITY COUNCIL/UKIAH VALLEY SANITATION DISTRICT Special Meeting - AGENDA CIVIC CENTER COUNCIL CHAMBERS 300 Seminary Avenue Ukiah, CA 95482 September 20, 2012 5:30 p.m. 1. Roll Call Ukiah City Council met at a Special Joint Meeting of the Ukiah City Council and the Ukiah Valley Sanitation District on September 20, 2012, the notice for which having been legally noticed on September 13, 2012. Mayor Landis called the meeting to order at 5:31 pm. Roll was taken with the following Councilmembers present: Rodin (arriving at 6:02 pm), Thomas, Baldwin, Crane, and Mayor Landis. Councilmembers absent: None. City Staff present: City Manager Chambers, Director of Finance Elton, Director of Public Works/City Engineer Eriksen, City Attorney Rapport, Finance Controller Newell, and City Clerk Brown. Sanitation District Board present: Chair Ronco, McNerlin, Marshal, Pallesen, and Paige. Sanitation District Board absent: None. UVSD Staff present: District Manager McMichael, and Board Secretary Clark. 2. Approval Of Amendment #3 To Contract With GHD, Inc To Provide A Nitrate Engineering Study As Required By The NPDES Permit In An Amount Not To Exceed $372,296 Including Laboratory Testing Fees And Associated Budget Transfer. Public Works Director and City Engineer Eriksen presented the item. Mary Grace Pawson of GHD, Inc. gave a Powerpoint Presentation on Ukiah Wastewater Treatment Plant Nitrate Engineering Study and Preliminary Assessment Report (Slides handout are exhibit to these minutes.) Recommended Action: Approve amendment #3 with GHD to provide a nitrate engineering study and associated budget transfer from the 612 fund balance. Public Comment: J. R. Rose spoke to the item. After some discussion Vice Mayor Crane proposed we table this item for further discussion after the next item on Discussion, item 3., on the Sewer Utility Bonds, which may influence the decision. This topic was then tabled at 7:14 pm on that basis by General Consent. M/S Baldwin/Thomas to approve amendment #3 with GHD and the associated budget transfer from the 612 Fund Balance, with reports being provided by City Staff and GHD to the second meeting of each month with sufficient notice to the Ukiah Valley Sanitation District prior to reports being reported to Council. Motion carried by the following roll call votes: AYES: Thomas, Rodin, Baldwin, Crane, and Landis. NOES: None. ABSENT: None. ABSTAIN: None. Mary Grace Pawson of GHD was asked to check in with City Council on task to task regarding the money being expended. She indicated she was happy to do reports at the second meeting of each month. 3. Discussion regarding Moody's downgrade assessment of the Sewer Utility Bonds from the wastewater treatment plant upgrade. (Verbal Report) Finance Director Elton presented the item indicating the Moody's downgrade rating on the wastewater bonds was done as part of their routine look at different ratings that they do every two years. The last time they did this review was in 2010. When the bond was originally issued the rating was BAA2. Director Elton was not sure when it went from Al to A2 and could not find any notation in Moody's online records. The City is meeting and have met the bond covenants. Elton stated that nothing in Moody's report says that we have not met the covenants. What they are apparently saying is that on a future -looking credit marketability analysis they have down -graded the rating for investors. They have acknowledged we have strong reserves. The challenges they have pointed out are narrowing and debt service coverage for FY 12-13, which is below the covenant if we don't use the rate stabilization fund. One questions is do we want our focus placed on what could make the rating go up. But before we answer that, other questions that we may want to answer may include: is making the rate go up our primary interest or are there other things that should be considered alongside --asking the two bodies what are their primary concerns. For example, bond covenant compliance, because we have a legal contract, should be a very high concern; provide sufficient money for operations and expenses; capital should also be a high concern; concern for rates, effect on customer; Then, when does the bond rating come into play: alongside, or after those? Our obligation is multiple and could be identified as parts of things we should be considering. Additionally, when should the next rate plan be considered and be completed? There are significant differences between the way rates are established by the District, and by the City. Do we want to re-examine whether to have a uniform rate structure going forward? Public Comment: John Sakovicz spoke to the item. After some discussion, the Council returned to tabled item 2a to take action, at 7:32 pm. 4. Public Comment 5. Adjournment There being no further business, the meeting adjourned at 7:45 p.m. Lfndat. BrowriXA-y Clerk Exhibit to Minutes of 9/20/12 1 Agenda 1. Benefits of the new permit 2. New permit and nitrogen limits 3. Required schedule for the managing nitrogen species 4. Plan of study 5. "Stop -loss" provisions 6. Potential outcomes of the study 7. Concurrent activities 1 Benefits of the New Permit New NPDES Permit has a five year term and several clear benefits for the City • The permit includes a new limit for copper based on a specific analysis of the City's effluent — this should eliminate mandatory minimum penalties for copper violations • The permit includes a "reopener" that will allow the City to apply for an increased discharge rate once nutrient issues are resolved • New permit is accompanied by a "Cease and Desist Order' that provides a time schedule for managing nutrients and helps the City avoid mandatory minimum penalties for nutrients New Permit and Nitrogen Limits 1. Like the old permit, the new permit has nutrient limits that were not communicated to the City when the treatment plant upgrades were designed • New permit has limits for both ammonia and nitrate, which are different forms of the same "pollutant' 2. The time schedule provides the City with the opportunity to come into compliance without incurring penalties for violating final limits 3. The proposed study provides us with the opportunity to understand: • Can we modify the WWTP operations to meet the new limits • Will minor capital improvements allow us to meet the new limits • Can we modify regional board policies to make compliance more practical 2 1 1 1 1 "Practical check" on these pollutants • Ammonia is toxic to aquatic species making it a legitimate concern for dischargers • Nitrate can be toxic to humans but Ukiah's discharge is very far removed from drinking water supplies • Most treatment plants can "nitrify" or convert ammonia to nitrate • Nitrate removal often requires the addition of process infrastructure 1 Required Compliance Schedule 1. Nitrogen Study Workplan October 1, 2012 2. Submit Pollution Prevention Plan December 31, 2012 3. Begin Enhanced Monitoring Program November 15, 2012 4. Submit Preliminary Assessment Report June 30, 2013 1 3 Plan of Study Data Collection and Modeling i Operational Changes Workshop -- Operational Changes not Sufficient Sufficient Identify Offsets Submit Report Offsets Sufficient Submit Report Offsets not Sufficient Identify CIPAlternatives Workshop on CIPAlternatives Submit Report M 1 1 1 1 i°Stop Loss Provisions" If operational modifications achieve compliance, City does not pay for Tasks 8 through 11 • Total savings =$100,000 2. If nutrient offsets achieve compliance, City does not pay for Tasks 9 through 11 • Total savings = $89,000 1 Potential Outcomes of Study 1. Operational modifications reduce ammonia and nitrate 2. Operational modifications reduce ammonia but more work is required for nitrate • Offsets allow for nitrate compliance • Basin Plan changes allow for nitrate compliance • CIP improvements required for nitrate only 3. CIP improvements required for ammonia and nitrate 1 5 Concurrent Activities • A Basin Plan Amendment to allow mixing zone credits for nitrates could allow the City to achieve compliance for nitrates • This Amendment has been proposed by Santa Rosa but not acted upon by the Regional Board because of workload • This policy change would benefit a number of dischargers with nitrate compliance issues • Russian River Watershed Association is well-placed to advocate for this amendment, which has the potential to save the City significant costs • Our compliance strategy assumes that the City will use its advocacy resources to compliment the technical studies with a goal of the most affordable compliance strategy 9 1 1 1