Get ready to pay, Ogden residents!
By Dan Schroeder
Tonight’s city council agenda is a busy one. First comes a special session to approve the mayor’s appointment of a still-unnamed individual as Ogden’s new Chief of Police. Then comes an RDA meeting to approve the development agreement with Boyer Company for the new IRS building. (The agreement basically pledges $500,000 in tax increment, to be collected over the next five years, to Boyer.)
After these formalities, the council will hold yet another work session to discuss the utility systems. Readers will recall that last week, council members held a public hearing on utility rates and got an ear full from unhappy citizens. Tonight, the council will hear the administration’s pitch for funding $180 million in utility infrastructure upgrades. Needless to say, this cannot be done without raising utility rates even higher.
Since the work session agenda packet weighs in at a whopping 120 megabytes, I’ve extracted its most important parts and packaged them as two smaller files. The first piece includes the council staff summaries of the water and storm sewer “master plans,” along with the administration transmittal letters and the draft council resolutions that would approve these plans. The second piece is the water system master plan itself, minus the lengthy appendices and some large maps (removed to keep the file size below 10 megabytes).
The most expensive piece of the proposal by far is a systematic replacement of the city’s water pipelines over the next 40 years, at a total estimated cost of $129 million. Fortunately, this replacement doesn’t have to be done all at once. In fact, the replacement program can be postponed several years with little harm. But it cannot be put off indefinitely, and the city absolutely needs to start planning now.
More urgently, the proposal includes three major water system upgrades over the next five years: a major upgrade to the water treatment plant near Pineview Dam ($9.8 million); replacement of the pipeline in Ogden Canyon ($9 million); and a long list of “distribution and fire flow” improvements throughout the city ($12.3 million).
The council has known for years that the treatment plant upgrade would soon be necessary, but chose in 2007 to postpone this project and leave it unfunded at that time. It’s perplexing, though, that the minutes of the council meetings in 2007 don’t mention any other urgent, unfunded water projects. I’m trying to learn more about why these needs are seemingly coming out of nowhere.
Also perplexing is the cost of the treatment plant upgrade. The new master plan puts the cost at $9.8 million, but the staff summary puts it at $13.1 million. I’ve been told that the difference represents additional work in or near the plant that the city engineer has requested. Let’s hope the council will scrutinize this additional request carefully. Perhaps, though, the council will be relieved that the request is still far less than what they were apparently told in 2007, namely $46.6 million.
After the first five years, the biggest proposed expense becomes pipe replacement. But there is one other line item that merits extra scrutiny: a $3.7 million request for digging some new wells to augment Ogden’s water supply. The master plan clearly states (on page 60) that these wells won’t be needed for 20 years, yet includes this line item in the budget for years 6 through 10.
The timing of projects is important, because it determines the extent to which the city must borrow money to pay for them. Over the long term it’s much cheaper to pay cash, but there may be no way to raise enough cash for the short-term needs. That’s why the city borrowed $50 million for water and sewer projects in 2008, and we’re now paying about $2 million per year just to cover the interest on those bonds. The city’s consultants are now proposing another $34 million in bonding and a corresponding increase in interest paid.
Will the city council go along with the consultants’ proposal to borrow another $34 million? Or will they work to fund more of the needed projects with cash and thus lower Ogden’s interest payments—and residents’ utility bills—over the long term? The answer will depend on whether they hear from more of their constituents:
Update 3/13/12 6:55 p.m.: Heads up, people. Dan S. is now live blogging from the City Council Chamber. Click "comments" to follow his real-time remarks.
31 comments:
A explanation of why Ogden needs to borrow such a vast amount of money for water systems is needed. I, along with most people, understand the need to upgrade and maintain our water and sewer system. What I do not understand is why lease revenue from BDO was not used to help pay for this items. The city, under Mayor Mecham, told Ogden residents that lease revenue would pay for improvements. Where has that money gone? What explanation or justification was made to divert lease revenue to other less worthy project. How much, if any, was taken by Mayor Godfrey for other pet projects. Many of the same people involved in the diversion are either stillo on the city payroll or availoable for answerering questions. Lets ask questions and find answers.
The answer is quite simple, and I think you know it. Godfrey decided to spend the lease revenue on his own pet projects (mainly the Junction) instead, and the council went along. It's all documented in city council minutes which are posted at http://ogdenethics.org/councilminutes.html. The more important question is what are we going to do about it now?
Hmmm... Perhaps the City Council could simply apply the profits from the Junction to fix the dilapidated water infrastructure... Ha-ha... just kidding...
A coupla additional thoughts, Dan:
First, I'd like to publicly thank you for this morning's most excellent article submission. And speaking on behalf of our WCF readers, I'm sure that everyone is grateful for your dogged persistence in following these water infrastructure issues.
Secondly, what are the odds that you might be live blogging from tonight's work session?
You're welcome!
I do plan to attend tonight's work session, and those things are too boring to merely sit and listen, so yes, I'll probably do some live-blogging.
I don't plan to get there in time to report on the appointment of the new police chief, however.
"I don't plan to get there in time to report on the appointment of the new police chief, however."
Mike Wayment!
You read it here first!
Mike Wayment? Will he officially retire as a career OPD officer, thereby qualifying him to draw an Ogden City "retirement pension?"
Will he then be now "appointed" to to OPD Chief's post tonight, so that he can still live of his "retirement," and nevertheless soak the taxpayers with a $100 k plus "salary," even though he's "retired," technically at least, but still occupying his old job, more or less?
I work in that horrifically placed IRS building.. The whole thing should have been scrapped from the beginning, unfortunately we have to suffer to make downtown Ogden look a little more pretty...
Live from the city council chambers...
Despite my best intentions, I DID get here in time for the appointment of the new police chief. The council has just returned from its closed session and the mayor is now introducing the nominee, Mike Ashment.
Council members Blair and Van Hooser have been excused so only five council members are present. I predict the vote to approve will be unanimous.
Wicks makes the motion to approve; Stephens seconds. Indeed, the vote is unanimous.
The new police chief steps up to the podium as the audience applauds. He begins his speech by thanking former chief Greiner. Secondly he acknowledges Asst. Chief Tarwater who has been interim chief. Ashment has been with the department for over 26 years. He is dedicated to further reducing crime. Excited about the opportunity to work with the city council, community, business leaders, citizens, other law enforcement partners. Thanks his family (in the audience) for their support.
Concluding his speech, he steps up and shakes the hand of each council member and then the CAO and mayor.
Council meeting has adjourned; RDA meeting is about to begin. CAO Johnson steps over and whispers something into the ear of council member Wicks, and she laughs. The uniformed police in the audience leave.
RDA meeting has now begun with approval of some minutes. Then Tom Christopulos steps up to the podium to discuss the development agreement with Boyer for the new IRS building.
Christopulos is discussing the tax increment collection and quotes various statistics to assure the council that this is a good deal for the city. I won't try to transcribe all the details. But I have little doubt that the benefits are real.
Christopulos: There's a lot of soil contamination in the area of the new IRS building, so that's been part of the challenge of redeveloping that area.
Gochnour makes the motion to approve the development agreement; Hyer seconds; approval is unanimous.
No public comments; no comments from administration, staff, or council members. Now they have another closed session, this time for discussing real estate.
The closed session has finally ended and the work session, on the water and storm sewer master plans, is now beginning. City Engineer Justin Anderson is at the head of the table along with consultants Cliff Linford and Kevin Brown from Sunrise Engineering, the firm that prepared the water master plan.
Mr. Brown compares the water system to a person's house, with a lot of hidden infrastructure that people don't think about until something goes wrong. He then turns the time over to Linford.
Linford stands to deliver his slide presentation. Says this has been a "real fun project". Ogden's water system is one of the largest in the state, with every possible facet. To build the system from scratch today would cost an estimated $550 million.
Linford: The city has plenty of water rights and some of the highest priorities in the area. (Wells at airport have been abandoned due to poor water quality and high cost of treatment.)
Sources: Pineview well field, Taylor Canyon well, treatment plant, and Weber Basin. Well capacity has been increased by recent projects. Treatment plant operates only during warm seasons and one of the two plant structures is seismically unfit and needs replacement.
Ogden Canyon transmission lines (2 of them) can transport 30 million gallons per day, which is somewhat less than the combined capacity of the wells and the treatment plant.
Water storage facilities are generally in excellent shape with a couple of minor issues.
Distribution system includes 1.9 million feet of pipe, and accounts for most of the operations and maintenance costs.
For the master plan, the consultants built a computer simulation of the entire water system.
The consultants made projections 40 years into the future, assuming 0.8% annual growth. But only a small portion of the recommended upgrade cost comes from growth-related needs. The recommendation is to drill two new wells within Ogden City limits, at a cost of $3.675 million. Even though current sources are adequate through 2030, consultants recommend drilling these wells sooner to provide redundancy in the case of an outage at other sources.
Southeast and southwest portions of city are served by Weber Basin instead of the well fields and treatment plant.
Contracts with Weber Basin are basically fixed costs, whether we use all the water or not. (He doesn't say what the contract duration is or what would happen if we needed more Weber Basin water.)
Most of the city's pipes are 6 inches in diameter, below the current state standard which is 8 inches. Depending on the geometry of the connections, 6-inch pipes can provide plenty of fire flow but on a long dead-end, for example, a 6-inch pipe often isn't adequate.
Anderson: Someday in the future, maybe 30 years from now, it may be necessary to rehab the 36-inch pipeline in the canyon. No such project is included in the master plan, nor is there any recommendation to increase the size of either line. The 24-inch line is the one that urgently needs work.
The two proposed new wells would probably be somewhere along the east bench. The water quality there is better and the elevation is advantageous. But they don't have any specific sites in mind.
Treatment plant replacement cost: $9.8 million to replace with a similar facility (but with year-round operation). Another $3.3 million for new intake from Wheeler Creek and fancier "membrane" technology which would reduce O&M costs. They'll do a comparative cost analysis to judge between the two options.
Linford says "we" (Sunrise?) recommends that the treatment plant upgrade be funded by a bond, to push the cost out over a longer time period. [So the engineering consultant is suddenly a financial expert as well?]
Minor storage issues: Two small areas, fed by Weber Basin, have no city-owned storage. Laws used to permit this but not any more. Recommended solutions are not to build new storage tanks but rather to connect to existing storage and contract with a neighboring city. Estimated cost is a little over $1 million, and consultant recommends this be done within the next three years.
Distribution system issues: First issue is under-sized pipe and resultant lack of fire flow. Cost is $18 million.
Garner asks if we can prioritize these projects and extend them over a longer time period. Anderson concedes that this could be postponed, but he wants to get started on the larger program of replacing old pipelines.
This replacement program is massive, proposed over a 40-year time period. The long-term cost is $3.8 million per year.
Pipe replacement program would prioritize replacement based on where leaks are occurring and also based on the number of customers served by a given pipe.
This concludes consultant Linford's slide presentation.
Eller-Smith mentions that the CIP (Capital Improvement Plan) that's coming up for approval, which covers the next 5 years, does not include all the distribution projects that are in the consultants' master plan.
Council discusses the relationship between the CIP, the master plan, bonding, and rate structures.
Cook says if the council chooses to postpone some needs, he wants that done consciously and documented--especially if there are safety issues.
[Mitch Shaw from the Standard-Examiner, who has been here throughout, finally leaves at 9:08.]
Cook is also concerned about sticking to the planned schedule for completing the water rate revision.
Intermission. In response to a question from yours truly, Public Services Director Jay Lowder confirms that Craig Frisbee, head of the water department, no longer works for the city as of some time during the last week. (No wonder he hasn't returned my calls!)
Now they're going on to the storm drain master plan. The good news is that this entails only about $10 million in proposed projects.
Paul Taylor of JUB (engineering consultant) gives this presentation.
Taylor: We didn't analyze the condition of the existing system, or estimate any costs of replacement. Nor did we analyze water quality issues, because of changing EPA requirements.
Analysis considered a "10-year 2-hour storm event" for pipes and a "25-year 1-hour storm event" for detention facilities. Focused on the larger collector pipes.
They looked at both historical backups and computer model results. There were some discrepancies in both directions.
They found six problem areas, listed in a table.
Hyer says he's aware of problem areas that aren't listed. Taylor says perhaps nobody has complained so city staff aren't aware of it. There seems to be agreement that the list is incomplete because the methodology was imperfect.
First storm drain priority: 5-points area (2nd to 4th, Washington to Wall). $1.3 million.
Second priority (in three parts): Harrison Blvd., from the river south to Ogden High School. This is a fairly extensive and expensive project; $4.9 million. [Is this the area that they diverted funding from to pay for the river restoration?]
Third priority: 9th Street from Liberty to Clover, $1.2 million.
Fourth priority: Downs and West Oaks Drive, $260,000.
Fifth priority: 2nd Street from Harrison to Monroe, $540,000 to $720,000.
Sixth priority: Pennsylvania Ave. from 33rd Street to railroad tracks, cost not yet determined.
Another storm drain project, at 900 N and Jackson, will be needed if more of the property above is developed. In that case, the developer should help share the cost. [Does the city have a mechanism to charge these costs to a developer?]
Anderson says they still need to do a study of the condition of the existing storm drain pipes. Nobody has yet budgeted for such a study. The engineers don't seem to anticipate huge problems with the conditions of the pipes, given that storm sewer pipes aren't in continuous use like water and sanitary sewer pipes. So a study of pipe condition doesn't seem especially urgent.
That seems to be the end of tonight's festivities, so I'll sign off.
Awesome reporting, Dan. Many thanks!
There was lots of discussion during the Godfrey years about the headaches that any successor mayor would inherit once Godfrey left office.
Looks like Mike Caldwell is getting a taste of that already.
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