Loading...
HomeMy WebLinkAboutDDW-2024-006095 195 North 1950 West • Salt Lake City, UT Mailing Address: P.O. Box 144830 • Salt Lake City, UT 84114-4830 Telephone (801) 536-4200 • Fax (801) 536-4211 • T.D.D. (801) 536-4284 www.deq.utah.gov Printed on 100% recycled paper State of Utah Drinking Water Board Kristi Bell, Chair Eric Franson, P.E., Vice-Chair Dawn Ramsey Justin Maughan Robert Rolfs Jeff Coombs David O. Pitcher Blake Tullis, Ph.D. Kimberly D. Shelley Tim Davis Executive Secretary SPENCER J. COX Governor DEIDRE HENDERSON Lieutenant Governor Department of Environmental Quality Kimberly D. Shelley Executive Director DIVISION OF DRINKING WATER Tim Davis Director DRINKING WATER BOARD MEETING June 27, 2023, 1:00 PM Via Zoom Webinar & In Person: Multi-Agency State Office Building 195 North 1950 West Salt Lake City, UT 84116 MINUTES 1. Call to Order Kristi Bell, Chair, called the Drinking Water Board (Board, DWB) meeting to order at 1:05 PM. 2. Roll Call – Michael Grange Board members present at roll call: Kristi Bell, Eric Franson, Justin Maughan, Robert Rolfs, and Blake Tullis. David Pitcher arrived after the roll call at 1:07 PM. Division of Drinking Water (DDW, Division) staff present: Michael Grange, Jessica Fitzgerald, Heather Pattee, Linda Ross, Aaron Holloway, Allyson Spevak, Cadence Hernandez, and Kjori Shelley. Tim Davis arrived at 1:57 PM. 3. Approval of Meeting Minutes A. May 16, 2023 ● Eric Franson moved to approve the May 16, 2023, Drinking Water Board meeting minutes. Blake Tullis seconded. The motion was carried unanimously by the Board. 4. Disclosure for Conflict of Interest There was no disclosure of a conflict of interest for this meeting. 5. Rural Water Association Report – Dale Pierson The reports of the three contracted RWAU employees, Terry Smith, Curt Ludvigson, and Janell Braithwaite are in the packet. Page 2 In Dale Pierson’s absence, Shannon Rasmussen, Rural Water Association of Utah (RWAU) Deputy Director, highlighted that the reports of the three (3) contracted RWAU staff, Terry Smith, Curt Ludvigson, and Janell Braithwaite are in the packet. Shannon reported on recent RWAU activities including working closely with DDW Director Davis on the earmarks situation and making progress. Shannon briefed the Board on the ongoing efforts to improve communication between the DDW and RWAU. The aim is to ensure that this information is promptly shared with RWAU and the Division staff to facilitate support for water systems. 6. Financial Assistance Committee Report A. Status Report – Michael Grange Federal SRF Program Michael Grange, Infrastructure Funding Section Manager, informed the Board that currently there is a negative balance of ($83,000,000) in the Federal program as of April 30, 2023. However, there is approximately ($36,000,000) expected to be received for project funding through the Bipartisan Infrastructure Law (BIL), interest and principal payments, and loans. The projected deficit for next year is estimated to be ($47,000,000). The limited subsidy available is reflected in the current extended status shown in the snapshot. Page 2 of the report are the projects that have been authorized by the Board for which SRF staff is in the process of closing loans and moving forward into construction. ARPA Grant Funds Approximately, there is $579,000 available for emergency funding requests. This funding needs to be allocated by December 31, 2024. Spent by December 31, 2026. If no further emergency projects arise, the Board aims to identify small projects eligible for ARPA funds by Summer 2024. Congress has expressed a potential rescission of unallocated funds by December 2024. Page 4 of the report outlines the ARPA project’s progress on various initiatives. Staff is making progress on the various ARPA projects. Lead Service Line Funds Michael informed the Board that the Lead Service Line Funds are being distributed for service line inventory projects. Efforts are aimed at expediting fund allocation and assisting systems with inventory completion and future replacement. Emerging Contaminants Grants Michael informed the Board that the Division is currently only engaged with the Green River project, which received authorization during the May meeting. It is anticipated that additional requests for funding from the Emerging Contaminants Grants will be forthcoming shortly. Page 3 State SRF Program The State SRF Program currently has a balance of $1.8 million. For the coming year, the Division expects a decrease in funding due to sales tax projections, and deductions that go out for state match and operating budgets. By March 31, 2024, the State Project Funds are projected to have a balance of approximately $4.8 million. Page 12 of the report lists the State SRF projects. B. Project Priority List – Michael Grange Michael reported that three (3) new projects are recommended to be added to the Project Priority List: 1. Roosevelt City scored 48.9 priority rating points. Their project is to install 12,000 ft of 12-inch transmission line and two pressure-reducing valves (PRV) stations to address low pressures and meet projected demands in the North Crescent area of the City. 2. Payson City - Christian Life Assembly Church scored 28.0 priority rating points. Their project is to connect the Christian Life Assembly Church to the Payson City system. The Church is a single connection and is currently a separate water system. This project will regionalize the Church into the Payson City water system, therefore eliminating a small single-connection water system. 3. Foothill Water Users Association scored 23.7 priority rating points. Their project is to construct a new 250,000-gallon tank, resolve well, wellhouse, and electrical deficiencies, and install water meters and fire hydrant risers. The Financial Assistance Committee (FAC) recommends that the Drinking Water Board approve the updated Project Priority List as presented, with the addition of these three (3) projects. David Pitcher inquired about the inclusion of the Foothill Water Users Association project. Michael clarified that the association is facing managerial issues due to the transfer of their water rights to other entities, resulting in a lack of collateral for a loan. The Division is currently collaborating with them to determine ownership of the infrastructure and the loan's recipient before presenting the project to the Board ● David Pitcher moved that the Drinking Water Board approve the updated project priority list. Justin Maughan seconded. The motion was carried unanimously by the Board. C. Cashflow – Michael Grange Federal SRF Program According to the report, the available Federal Program balance for Fiscal Year (FY) 2023 is approximately $93 million. This results in a surplus of approximately $10 million compared to the current deficit of $83.4 million. As the projects progress into construction and reimbursement requests are made, the funds will be available to meet those requests. Looking ahead to FY2024, the Cashflow projection indicates approximately $126 million in available funds to support more projects. Page 4 Michael reported that there are approximately $10 million in SRF funding requests being presented today, indicating adequate Cashflow to meet reimbursement requests through FY2024. Michael gave an update on the projections starting from FY2025. The Cashflow report does not include any base grant or BIL funds due to the uncertainty surrounding earmarks and Congress's decision regarding them. The Division has chosen to exclude these funds from the Cashflow until there is more clarity on the future cash influx from the Safe Drinking Water Act and Capitalization Grant by Congress. Over the next two years, the Cashflow analysis shows that the Division can handle the current projects and likely those through the rest of this year. The specific Capitalization Grant for the Base Program remains unknown. State SRF Program The State SRF Program projections on Page 2 indicate approximately $23 million for FY2023, $16 million for FY2024, and $11 million for FY2025. Despite the decrease in funding over the next few years, it is worth noting that the State program is primarily utilized for smaller municipalities and projects. D. SRF Applications i. Federal a. Payson City - Christian Life Assembly - Cadence Hernandez Representing Payson City were Payson City Public Works Director, Travis Jockumsen and Cameron Phillips. Cadence Hernandez informed the Board that Payson City is requesting financial assistance in the amount of $343,000 to connect the Christian Life Assembly Church to their system. The Church is a single connection and is currently a separate water system. This project will regionalize the Church into the Payson City water system, therefore eliminating a small single-connection water system. This project scored 28 points on the Project Priority List. The total project cost is $343,000 and they are requesting the full amount from the Drinking Water Board. Christian Life Assembly Church approached staff for help connecting to Payson City Water System. Staff suggested the church apply through Payson City for a streamlined evaluation, as the church was recently included within city limits. As this is a consolidation endeavor, Payson City will be held harmless from the consolidation. The local MAGI for Payson City is $45,100, which is 97% of the State MAGI. The current average water bill is $63.90/ERC, which is 1.7% of the local MAGI. The estimated after-project water bill at full loan would be $64.87/ERC or 1.73% of the local MAGI. The Financial Assistance Committee recommends that the Drinking Water Board authorize a construction loan of $343,000 with $343,000 in principal forgiveness. Page 5 David Pitcher raised questions about the origin and transfer of the single connection to the city and its alignment with the annexed areas' master plan. Travis reported Christian Life Assembly Church's well faces water quality problems. The church plans to use it for irrigation until future development requires both culinary systems. The area expansion matches ongoing development, and Payson City is building a new well for increased demand. Eric Franson expressed concerns about Payson City's funding considering added water line and system expansion benefits. Travis noted current focus is Christian Life Assembly; benefits for Payson will come, but it's not a top priority now. Kristi Bell inquired about the IPS points, and Heather Pattee clarified that the IPS points will be addressed once Payson City takes over the water system, those IPS points will disappear. ● Eric Franson moved that the Drinking Water Board authorize a construction loan of $343,000 with $343,000 in principal forgiveness. Blake Tullis seconded. The motion was carried unanimously by the Board. b. Kane County WCD - Michael Grange Representing Kane County Water Conservancy District was Michael Noel. Michael informed the Board that Kane County Water Conservancy District (KCWCD, the District) is requesting financial assistance to complete the Lead Service Line Inventory for the entire District as required by the Lead and Copper Rule Revisions. The total project cost is estimated at $389,300 and the District is requesting the full amount from the Drinking Water Board. The District and its consultant will collect and consolidate existing data on culinary water distribution systems and services. This data will be mapped in GIS format. Once this is done, areas with potential lead service lines will be highlighted, and additional field investigations may follow if needed. These investigations will update the lead and copper inventory in the GIS database, potentially involving potholing. The District will also devise a public outreach plan, a sample site & mitigation plan, and a replacement strategy in case further funding for physical line replacements becomes necessary. The KCWCD service area spans several municipalities and ZIP codes, and a single MAGI for the District is not available. The District calculated a weighted MAGI of $31,000 for its service area and staff concurs with the methodology the District used and with the MAGI it calculated. The weighted MAGI of $31,000 is 66.7% of the State MAGI. The current average water bill is $53.68 per ERC, which is 2.08% of the weighted MAGI. The estimated after-project water bill at a full loan is $78.54/ERC or 3.04% of the weighted MAGI. Based on the weighted MAGI and after- project water bill, the District qualifies to be considered for additional subsidy. Page 6 The Financial Assistance Committee recommends that the Drinking Water Board authorize a planning loan of $389,300 with 100% principal forgiveness to Kane County Water Conservancy District, from the Bipartisan Infrastructure Law’s Lead Service Line Replacement Fund. ● Eric Franson moved that the Drinking Water Board authorize a planning loan of $389,300 with 100% principal forgiveness to Kane County Water Conservancy District, from the Bipartisan Infrastructure Law’s Lead Service Line Replacement Fund. Robert Rolfs seconded. The motion was carried unanimously by the Board. c. Roosevelt City - Allyson Spevak Allyson Spevak informed the Board that Roosevelt has postponed their project. d. Stockton - Additional - Heather Pattee Representing Stockton were Mayor Nando Meli and Ted Mickelson with Jones and Demille Engineering. Heather Pattee informed the Board that Stockton Town was authorized financial assistance to drill a new well in the amount of $3,000,000 with $600,000 in principal forgiveness at 2.0% for 30 years. After an in-depth conversation between the town and staff, it was determined that the financial evaluation had some incorrect numbers and did not accurately reflect the financial status of the Town. There was also discussion about adding radio read meters to the project cost to help with water conservation and leak detection. This project scored 31.4 points on the Project Priority List. The total project cost is $3,200,000 and they are requesting the full amount from the Drinking Water Board. The local MAGI for Stockton Town is $50,576, which is 109% of the State MAGI. The current average water bill is $35.71/ERC, which is 0.85% of the local MAGI. The recent loan that was authorized did increase their water bill to $41.51, and the Town has been proactive in raising rates to $58 right now. The estimated after-project water bill at full loan would be $95.08/ERC or 2.26% of the local MAGI. Based on the after-project water bill, Stockton Town qualifies to be considered for additional subsidy. Heather directed the Board toward the table displaying the options for the project. Option 1 was the original authorization made by the Board, while option 2 is the current recommendation by the Financial Assistance Committee. The Financial Assistance Committee recommends the Drinking Water Board de-authorize a construction loan of $3,000,000 with $600,000 in principal forgiveness to Stockton Town, for a repayable loan amount of $2,400,000 at 2.50% for 30 years. The Financial Assistance Committee recommends that the Drinking Water Board authorize a construction loan of $3,200,000 with $960,000 in principal forgiveness to Stockton Town, for a Page 7 repayable loan amount of $2,240,000 at 1.0% for 40 years, and an advance of $450,000 from the principal forgiveness amount for engineering design and to purchase the meters. Eric Franson raised concerns about the discrepancy in the table, noting that Option 2 had a smaller loan amount, longer term, and lower interest rate, yet a higher after-project water bill compared to Option 1. He further sought clarification that the after-project water bill under option 1 was much higher than the stated $73.21. Heather confirmed the accuracy of the table and explained that Option 1's previous debt calculations were incorrect, resulting in distorted figures in their previous presentation to the Board. She also confirmed the accuracy of Eric's statements regarding the after-project water bill. Option 2, with an after-project water bill of $75, a 40-year term at a 1% interest rate, and a 70/30 split, aligned with the revised calculations. ● David Pitcher moved that the Drinking Water Board de-authorize a construction loan of $3,000,000 with $600,000 in principal forgiveness to Stockton Town, for a repayable loan amount of $2,400,000 at 2.50% for 30 years. Justin Maughan seconded. The motion was carried unanimously by the Board. ● David Pitcher moved that the Drinking Water Board authorize a construction loan of $3,200,000 with $960,000 in principal forgiveness to Stockton Town, for a repayable loan amount of $2,240,000 at 1.0% for 40 years, and an advance of $450,000 from the principal forgiveness amount for engineering design and to purchase the meters. Justin Maughan seconded. The motion was carried unanimously by the Board. e. Beaver City - Additional - Heather Pattee Representing Beaver City was Jason Brown, the city manager. Heather informed the Board that Beaver City was authorized financial assistance to replace 10,000 feet of old and inadequate distribution line, 2,200 feet of deteriorating pipeline, construct a well house over an existing well, and replace the roof of a well building on July 21, 2022. This project scored 45.4 points on the Project Priority List. Original project funding as authorized by the Drinking Water Board was a loan of $2,652,620 with $1,330,620 in principal forgiveness at 0% for 40 years. Beaver City opened bids in May 2023 and the apparent lowest bidder’s bid came in slightly above the probable cost estimate. Therefore, Beaver City would like to request an additional $150,000. The local MAGI for Beaver City is $33,300, which is 72% of the State MAGI. The current average water bill is $42.68/ERC, which is 1.54% of the local MAGI. The estimated after-project water bill at full loan would be $63.33/ERC or 2.28% of the local MAGI. Based on MAGI and the average monthly water bill, Beaver City qualifies to be considered for additional subsidy. The Financial Assistance Committee recommends the Drinking Water Board authorize an increase in funding of $150,000 for a total loan amount of $2,802,620 with $1,405,620 in Page 8 principal forgiveness, for a repayable loan amount of $1,397,000 at 0% interest for 40 years to Beaver City. Heather provided an update that Beaver City is nearing the closing stage, and upon authorization, they anticipate closing the project in mid-July. ● David Pitcher moved that the Drinking Water Board authorize an increase in funding of $150,000 for a total loan amount of $2,802,620 with $1,405,620 in principal forgiveness, for a repayable loan amount of $1,397,000 at 0% interest for 40 years to Beaver City. Eric Franson seconded. The motion was carried unanimously by the Board. 7. Directors Report – Tim Davis A. New Employees; Aaron Holloway Aaron Holloway has joined the Administrative Services section as a Contract/Grant Analyst. B. Comprehensive Rule Update Tim Davis provided an update to the Board on the progress of updating the R309 100 Rules that will impact water systems across Utah. A comprehensive rule rewrite effort has been undertaken in collaboration with small and large districts. A draft of the revised rules, encompassing all ten sections of the R309 100 Rules, including pump rules, water protection rules, and changes to source water protection rules, has been sent to all water systems and stakeholders across the state. Informal comments on the draft have been requested by July 17, 2023. The objective of this rewrite is to ensure the consistent application of rules and statutes across all water systems in the state, promoting connection to existing systems in locally designated service areas and discouraging the establishment of new water systems within existing service areas. The Director will have the authority to grant exemptions based on risk levels. Low-risk systems, if equipped with a master meter and an operator, will only need to provide annual notification of their status, operator contact, and administrative contact details. The new rules empower the Division to apply regulations to small water systems operating within distribution-only systems to ensure compliance. Eric Franson raised a question regarding the apparent reversal of concern levels between regulations on master meters in the past. Tim clarified that the Division's primary concern is identifying existing master meter systems throughout the state, where the type and activities taking place behind the meter are often unknown. The proposed rules aim to address this by giving water systems two years to identify their master meters serving a public water system. The focus initially is on identifying the locations and assessing the level of risk associated with each master meter, considering factors such as the number of connections and people served. This process will set the groundwork for implementing appropriate regulations. Additionally, any new master meter systems connecting in the future would need to provide annual identification. Historically, the Division has typically Page 9 become aware of these water systems only when issues arise, such as breakages or public health concerns. Tim offered to share the draft of the rules with the Board, clarifying that there may be changes to the rules before they are officially presented. C. Enforcement Report (Board Packet Item Only) The Enforcement Report can be found in the Drinking Water Board Packet. D. Other – nothing today 8. Public Comment Period No public comments were made. 9. Open Board Discussion Tim shared with the Board that today was Robert Rolf’s final Board meeting. Eric Franson proposed that the Board consider visiting projects funded by the Division ahead of a board meeting. The Board expressed interest in such visits. Tim agreed to compile a list of potential visits, with consideration for timing and coordination with the next Board meeting at the RWAU conference. 10. Other No other items were discussed. 11. Next Board Meeting Date: August 30, 2023 Time: 9:00 AM Place: Davis Conference Center / Zoom Webinar 1651 North 700 West Layton, Utah 84041 12. Adjourn ● David Pitcher moved to adjourn the meeting. Justin Maughan seconded. The motion was carried unanimously by the board. The meeting adjourned at 2:12 PM.