July 24, 2000 Meeting Notes of Petaluma City Council by the Board Watcher Roll Call: Jane Hamilton, Matt McGuire, Clark Thompson, Pam Torliatt, David Keller, Michael Neely present. Janice Cader Thompson absent. The Pledge, a moment of silence, and public comments followed: One member of the audience wanted clarification regarding agenda items. Is public comment going to come before or after your discussion? Please tell us so we know when we're going to get the opportunity to speak. My suggestion is that the public be allowed to speak before. And other people would like to comment on your discussion. To speak before and after would accommodate a greater range of people. Mayor Thompson: I try to have public comments after the staff report. I think we'll probably open it up toward the end. First speaker: I wish you would give an option to people. Some comments are more pertinent to what's already taken place. I'm not sure why that distinction exists for you. Mayor Thompson: I think people typically do have an opportunity to speak. Geoff Cartwright: I just want to remind you that Rohnert Park will be discussing its General Plan tomorrow night at 6 o'clock. They are expanding into the Petaluma watershed. As you know we have a flooding problem in Petaluma so anyone who wants to have input come on down tomorrow night. Mr. Keller: We received a memo on the proposed contract with Lok/Sheraton hotels. I really encourage counsel to look over those questions very carefully. We are requested to have a professional banker look over those agreements to make sure our interests are protected. Next followed a discussion and approval of previous minutes. Mayor Thompson: The next item: a discussion of a previous item carried over from a week ago [July 17th] and we do apologize to you, sir. We begin the discussion and possible action on the11th Amended Agreement for Impaired Water Supply, and Memorandum of Understanding Regarding Water Transmission System Capacity Allocation During Temporary Impairment and Operating Procedure for South Petaluma Aqueduct/Operational Memorandum of Understanding. Mr. Hargis, Water Manager for Petaluma: Back in January, we started discussions with Sonoma County Water Agency about water supply and watershed issues. It was clear the focus was on water supply issues. The list of topics is growing. There are three major components. One is the 11th Amendment Agreement which is shorthand for the expansion of the water supply and delivery system servicing the contractors of the Russian River water supply. The second component is the Memorandum of Understanding developed by that group of the consumers of water off the Russian River Aqueduct looking at a pipeline that doesn't supply all our needs with a source of delivery that doesn't meet all our demands. How are we going to share that resource over the next 5 to 10 years? That agreement that you have in your packet has gone through 20 variations. The third component was the pipeline serving Petaluma, North Marin, Marin Municipal is one of the most severely constrained elements of the water delivery system, and working with the Water Agency we've developed some operating criteria that would apply here in the summer months and ensure periods whereby the resources would be allocated maintaining the assurance that Petaluma does not run dry. We joke about being at the head of the system and being able to take everything out. The people downstream also have pumps. We get into a pumping contest. We want a system so certain events happen. We want to set some criteria to ensure that all our needs are taken care of. As part of tonight's discussion also set for the agenda is the Water Agency's proposed 6.6% rate increase as well as differing rates to different contractors was set to go into place in July. There's a rather extensive set of points in your packet - the Water Agency - and go through those. My suggestion would be that you state that rather than a presentation your asking any questions. That rate increase has gone into effect. And then supposing that the city raised its rates to its customers by 18% and that's been happening since 1995. You as the city council are aware of this issue through the sewer rates. We think you're in the same position with water rates. In order to fund the General Plan and quit taking money out of reserves, it's time to raise the rates and in smaller increments rather than getting stuck behind the 8 ball. The Water Agency can do a presentation of most any length. I can go into any detail you like. I anticipate there are people from the public you'd like to hear from. I would be willing to go through my recommendations and the reasons if you would like. We can have Randy and Pam Jeane from the Water Agency do their presentation if that's what you'd like. Jane Hamilton: Let's clarify this process for everybody. We're the last city to approve this and to hear and make the decision on Amendment 11? Mr. Hargis: You reminded me. I skipped over the discussion about the Potter Valley Project. That's not been before the council for a very long time. I have a handout that I got at the Water Agency Contractors' meeting this morning that I put up there for you. Other copies I'll put here for the public. Randy Poole of the Water Agency is prepared to address that. I thought maybe we would open that and then continue discussions for our future meetings. So the priorities for tonight are discussions of Amendment 11, the pipeline and water system expansion, the Memorandum of Understanding for Impaired Water Supply. Less critical is the direction to staff on the operating procedures and the rate increases. Jane Hamilton: My understanding is that we're the last city, and if we don't approve this, it's going to be terrible for us. And so we should just go along with it, and I want to be really clear, that's not really our only choice. Mr. Hargis: The other contracting agencies that are party to the 10th [11?] Amended Agreement have all approved. The last one was late last year. The city has some options. Petaluma by participating in the aqueduct expansion gets Russian River water to meet its present General Plan population projections. We have an entitlement now of 17 million gallons per day. The city has some alternatives. Water conservation means there's more of that resource available.Water recycling means that you can offset potable water by using highly treated reclaimed water. You can expand our groundwater utilization.You can look at water efficiency, at how wisely we use the resources we have. And we can look at storage and recovery of winter flows from the Russian River to supplement that groundwater. There will be some point in the not-so-distant future where there is water desalinization. There are alternatives that are going to be available to us in the future. There are some uncertainties with each of these elements. There are uncertainties with the Russian River water supply. It's certainly an expensive source of water. Jane Hamilton: Is it an either or choice? Mr. Hargis: There will be a time when there is an either or. The other contracting agencies and the Water Agency are getting anxious to proceed with the pipeline project. There's going to be a point where they're going to say, To heck with Petaluma. We'll rewrite the agreement and go build the pipeline project ourselves. Jane: Can we make the changes we'd like to see? Mr. Hargis: The city council can make...and there's some flexibility in our allotment in the future.The fact that we don't sign now doesn't preclude us from signing sometime in the future if the contracting agencies agree with that. Jane Hamilton: [Much is inaudible] We can contribute to making it a better amendment. Matt McGuire: I've heard that Santa Rosa still has issues with wells and has signed the MOU but not Amendment 11. I'd like to see us decouple these issues. There's the water supply allocation. How much water does this council want to see head south? Our cost in that? The Potter Valley Project, the lawsuit against the Agency. The huge increase in take in the Russian River? Conservation practice so that we don't have to continue to exploit our resources. I would hope that the rest of the council would like to approach it that way because each item has a significant number of questions and decision points. Pam Torliatt: My understanding is that we can approve Amendment 11 with changes. What that will do is have Randy go back to the other contractors to see if the other contractors are willing to abide with those changes. Mr. Hargis: I believe that's correct. We can ask Mr. Poole to address that at the microphone. Randy Poole, General Manager of the Water Agency: This process has taken nearly a year, and at this point, we're really not prepared to accept changes to this memo, you know, this Amendment No. 11. We're looking for your vote tonight or this week in which case we'll then proceed with another option. ?: "We" means who? Randy Poole: The cities and the agency. Understand that this process started in 1991. This isn't just something that you go back to eight other entities to change overnight. We've spent a fair amount of time and effort on documents including the environmental process to look at those ___?__ you folks have asked for or if you do not want that __?__ it's fine. But this amendment is pretty much "as is." If you want something new and different we're starting the process of looking at Amendment No. 12. We think that would be an appropriate place for these kind of changes. ?: So the answer to my question is Yes, if we approve it with changes is that you would be going back to the other contractors to... Randy Poole: No, I would not. I'm not prepared to go back to the other contractors with these changes. You're welcome to do that yourself, but I'm not prepared to do that. Jane Hamilton: So the contract is Take it or Leave it? Take Amendment 11 or leave it? Randy Poole: Amendment 11: If you like it, go for it. If you don't, fine. ?: Is that the decision of the board of supervisors acting as the Water Agency? Randy: The board of supervisors acting as the directors of the Water Agency have been reviewing this option for the last 8 years. They feel comfortable with this document. ?: Have they discussed the "take it or leave it" proposal? Randy Poole: Whether or not they do that, I'm not prepared to recommend changes to them for amending this document. David Keller: I understand that's your position as manager of the Agency. I'm just wondering if the directors of the Agency expressed similar policies. Randy Poole: As directors of the Water Agency, they've not taken a policy on that. David Keller: So none of the other contractors has proposed any changes in the amendment? Randy: That's correct. All the changes have been made over the last several years. David Keller: I have a question for both of you. The cost increase indicated in Amendment 11 shows a cost increase of 6.6% for 5 to 7 years. 5 years would be about 38% of where we are now. In 7 years it would be approximately 56% over the cost where we are now. So the first question to you, Tom, in terms of us... [hard to follow here] Seeing costs increase as projected, you would see us having to come back each year and raising rates? Mr. Hargis: Yes David Keller: And I guess responding to the amendment under discussion, I haven't seen a single page listing the projects that are entitled or mandated under Amendment 11, their associated costs, when they come on line, annualized cost of those, and how they would be distributed to contractors. Looking at the Amendment itself, I have a rather open-ended list of improvement projects to the system without a corresponding bill of __?__. Randy Poole: In the water part of the EIR of December 1998, they laid out all the projects, their timeline and their estimated costs. That was available. David Keller: Do you have that available? Do we have that here? Rather than having a discussion about the amendments to the amendment, I suggest that we go forward here. I did have a question about the water issues, but I'll wait for now. Pam Torliatt: Just a minute. Under our alternatives, it states: one of our alternatives for amending the agreement is not to approve it or suggest revisions which will require other contracting agencies to approve any modifications. So I don't understand the answer we just received from Randy. Mr. Hargis: I probably misspoke or miswrote. This council has the prerogative to make recommended changes to Amendment 11 just like any __?__. That triggers those amendments going back to all those other agencies. Any board's action would trigger the need for uninimity. Years have been spent on Amendment 11. The Technical Staff is getting to the point where we're comfortable working with the wording. Pam: So maybe we should ask the city attorney, Do we have the right to make amendment to this agreement? And we [inaudible] fax it to the other contractors to review it for amendment. City Attorney: I think you certainly have the right to make whatever sugestions you think appropriate through the Water Agency. Whether or not the board of superisors will entertain those suggestions is another question. Mr. Poole has indicated that he's not prepared to make those recommendations. If there are changes at this point they'll have to be agreed on by all 8 contractors. Pam: So are we sending the amendment to the board for changes or to the contractors? Attorney: The choices are to approve it, disapprove it or recommend changes back to the Water Agency. Mr. Hargis: I thought it had to go back to everybody for approval. _____________________ At this point the discussion turns to a discussion of the Potter Valley Project.