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Mayor's Board Room
Monday, January 24, 2011, 10:00 AM
Book: 65, Page: 1

Special Meeting

Called To Order The meeting was called to order by Seth Fleetwood at 10:12

Roll Call
    Michael Lilliquist, Council Member, Sixth Ward
    Seth Fleetwood, Council Member, At Large
    Gene Knutson, Council Member, Second Ward
    Barry Buchanan, Council Member, Third Ward




Seth Fleetwood, Chair.

Staff present: Ted Carlson, Clare Fogelsong. Other Participants: Bill McCourt, Chip Anderson.

Seth Fleetwood noted that there are two items on the agenda today, one is the update on the cost-benefit analysis comparing Lake Whatcom initiatives, and the other is a discussion of the proposal to increase the watershed acquisition surcharge.

Ted Carlson reviewed immediate background on these issues. On December 6, 2010 potential Lake Whatcom initiatives were presented to Council, including the WAB proposal, recommendations of the Lake Whatcom Technical Review Task Force, as well as staff recommendations that were not currently in the 2010 budget.

Bill McCourt provided an overview of the Watershed Advisory Board (WAB) proposal to increase funding for Lake Whatcom acquisition. The new Lake Whatcom monitoring report from Dr. Robin Matthews will show that the Lake is undergoing continued decline. The TMDL has identified phosphorus as a key component of lake problems. The state will require over 80% reduction of phosphorus from current levels on existing development. The WAB believes that fixing the Lake will require infiltration on existing development, new measures as proposed by the Lake Whatcom Technical Review Task Force, plus further acquisition activities. A handout summarizes a proposal for 20% of acquisition funds to be allocated to infiltration projects over the next 5 years. If we had 50% removal of phosphorus on existing properties, that would be a great success. Since we need an 80% overall reduction, infiltration alone is not “the” solution. Land acquisition is the most effective means of slowing degradation. To date 600 building units of potential development have been removed inside the City and about 100 outside in County or Water District jurisdiction. The total spent has been about $20 million. Roughly half of developable property is in an undeveloped state. Not all would meet the criteria for acquisition. Acquiring all remaining developable properties would cost about $186 million total and under the rate in the WAB proposal would take about 45 years to purchase.

About 16% of Lake land is fully developed. Another 8% is protected by the City, Water District, and the County. We are targeting 15% of the total with this proposal. Commercial forestry lands (46% of land) also need greater review and protection.

WAB proposal:
    a. Right now 11.5% of acquisition money goes to the City general fund because of a utility tax. The board thinks this special-purpose fund should not have the money deducted. The proposal starts reducing the tax in 2011 and keeps it about revenue neutral until about 2014, and it will be phased out entirely by 2016. This would add about $600,000 per year from phasing out the utility tax on the land acquisition fee.
    b. Increase the flat rate to $12 per month from $7, and also increase the industrial and metered rate.
    c. The rate would be adjusted upward by the CPI.
    d. 20% is set aside for trial infiltration projects, or about $1 million per year. About $2 mil. per year would be set aside for new acquisitions.

We are currently getting about $2 million per year. This would increase to about $5 million per year under the proposal. Folks are concerned about the percentage increase and the impact that would have. To provide some context, the program is currently funded at $2 million per year. A 2008 water rate included a proposal for $20 million in bonds, to support $1.5 million in acquisition per year, for a total of $3.5 million. Another $1 million will be purchased for infiltration, and $5-600,000 will result from the reduction in utility tax.

To summarize: take current acquisition money, add in 2008 spending rates and the infiltration idea, plus $1 million for utility tax increase and then add in increases from the phased reduction of the utility tax. Some available funding is going to acquisition and maintenance for the water utility rather than land acquisition.

Michael Lilliquist asked that Bill McCourt summarize again what he had said.

Bill McCourt:
    a. $2 million - current intake from $5 per year surcharge.
    b. $1.5 million – additional if bond had been authorized for acquisition, paid for by general water rates.
    c. $1 million for infiltration projects for the next 5 years to purchase sites. (Stormwater utility would build and operate sites).
    d. $500-600,000 increase from utility tax phaseout on land acquisition fees.

Net increase: $1.5 million.

Seth Fleetwood asked if the WAB is seeing itself in a new role since additional duties have been authorized?

Bill McCourt noted that the WAB is looking at infiltration sites, reconveyance, and examining stormwater projects this year, not just land acquisition.

Seth Fleetwood asked staff to discuss the cost-benefit analysis (CBA) to help the Council in its deliberations on the WAB proposal.

Ted Carlson. Projects came out of the technical review task force and joint work program of the City, County, and Water District. This project came out of early budget discussions. Council wanted to know what projects could be added if there was additional money. We need to analyze what we should target spending on if we had additional money. The project will evaluate all possible projects against one another for effectiveness. We need to know where to put any additional investment. Capital projects v. education programs will be looked at. Infiltration, property acquisition will also be included. Pretreatment options for the water treatment plant will also be looked at because of issues we had in 2009 with our water system. The selected contractor is CH2M Hill. Public Works is currently identifying a scope of work on what is to be evaluated. Broad types of activity will be looked at. The project will be refined over the next two weeks.

Clare Fogelsong noted that staff has had some initial discussion with CH2M Hill on what activities will be evaluated. The initial list is from the task force and work plan. The plan is to try to represent type of activity and not the specific project. CH2M Hill wants to know what the parameters and variables are. We also want to evaluate broad types of education activities for effectiveness. We want to be able to connect action and phosphorus reduction from that action.

Seth Fleetwood. How do we arrive at the list? How confident are we that we have identified the most important items?

Clare Fogelsong said that he is not confident we’re there yet. A set of initial activities will be examined given the dollars available for the project. They can evaluate about 50 activities within the budget we have. The project will include research and experience of other jurisdictions. Some activities have dropped off the list because they are required by other ongoing activities. The goal is to get unit costs per project. We will not be evaluating administrative activities.

Barry Buchanan. Does this list assume any increased level of funding?

Clare Fogelsong. No. We will look at unit costs for each activity to get total costs and benefit.

Michael Lilliquist. How do we keep the distinction between restoration and protection? Preventing future harm is different than reducing current levels of pollution. Also, we should note that the WAB proposal does include 20% for infiltration, which is restoration.

Clare Fogelsong. We are hoping the consultants can help us answer that question.

Ted Carlson. We won’t be able to fully answer everything on restoration and protection but the study should help. Land protection is working well and is the number one priority in our protection efforts.

Michael Lilliquist. Acquisition would also aid restoration under the WAB proposal.

Seth Fleetwood. The study should ask whether we should do more protection or restoration.

Bill McCourt. A cost-benefit analysis is good. Some activities will drop off. Land preservation is successful and will come out as a high priority. This study should not hold up having a good acquisition fund.

Seth Fleetwood. Should the 20% for infiltration be subject to the cost-benefit analysis?

Bill McCourt. There are some properties identified in the city for infiltration. That would cost about $5 million which we are currently targeting. At current funding it will take a long time to preserve available properties.

Seth Fleetwood. I struggle with differences between the WAB proposal and other Public Works projects in terms of setting priorities.

Ted Carlson. The cost-benefit analysis will be focused on new projects and not so much on property acquisition. Property acquisition is a great program and should be funded at as high a level as is feasible.

Seth Fleetwood. The question is how to spend any available money.

Ted Carlson. Out of new available funding some should go to restoration.

Bill McCourt. Other proposals for funding are also needed. The WAB proposal is one and is a good start.

Seth Fleetwood. Overall funds are limited. The question is how to prioritize overall spending. Getting more dollars is quite a task.

Michael Lilliquist. Property acquisition is only a fraction of infiltration costs, there are engineering and development costs.

Bill McCourt. No one wants to pay more for water. But in the utility he works for, which is one of the poorest in the county, water rates are twice what they are in Bellingham. People value water and they are willing to pay if they were going to get a benefit.

Seth Fleetwood. He is open to the proposal. But he wants to make sure it is the best allocation of dollars.

Michael Lilliquist. What is the timeline for the completion of the study?

Clare Fogelsong. It will likely be completed by mid-year. We still have a lot to work out with CH2M Hill before we start.

Michael Lilliquist. My preferences are that we get results that are good enough rather than perfect because there is haste on the lake.

Clare Fogelsong. Nothing is on hold right now. This should help us as we get into the TMDL process, and is something that the task force defined as a need. We have some future needs we are hoping to address with this CBA. A decision on acquisition does not depend on results of the CBA, we fully support the acquisition program.

Gene Knutson asked if the WAB proposal was accepted, what would be the overall affect on the sewer plus water bills?

Ted Carlson. The water bills are scheduled to increase through 2012 and sewer through 2013. They have been going up since 2008. By 2014 combined water and sewer will be about $80 a month. (Passed out chart presented in Dec. 6 meeting). Stormwater is not a part of that.

Bill McCourt. Land acquisition funds are under Council discretion for spending. A decision on the overall level would be good before we get too close to election season.

Chip Anderson. Doing this analysis may not be a straight cost-benefit analysis. This may be a comparison between oranges and chicken soup, with chicken soup the restoration and oranges the prevention. There are a number of variables that need to be reconciled. The County went through a process of comparing about 400 projects in its water resources program.

Michael Lilliquist. Will phosphorus be the main focus of the study? [Staff: yes]. The stormwater fund could be a good source of dollars for restoration especially in developed areas.

Ted Carlson. We haven’t raised the rate except there was about a $500,000 dollar gain per year in the stormwater fund from the recalculation method approved by Council earlier in the year. A cost of service study will be completed in 2012 and brought back to Council in 2013. There have been a lot of changes and it is likely the rates should be raised.

Michael Lilliquist. How is the stormwater fund set for funding pilot infiltration projects?

Ted Carlson. All dollars in the stormwater fund are committed to existing projects (e.g. a new culvert for fish passage). Grants are often sought, using local dollars for match.

Seth Fleetwood. What is the usual meeting schedule for this committee?

Michael Lilliquist. There is no set meeting schedule.

Seth Fleetwood. We should bring this back at the next meeting for a recommendation.

Michael Lilliquist. He has growing enthusiasm for the proposal.

Seth Fleetwood. More Lake Whatcom dollars are needed but he is not ready for a recommendation. That ends the formal agenda.

Clare Fogelsong gave a short update on the reconveyance. Currently DNR is swapping trust lands. Only Forest Board land can be reconveyed, not school land. In April 2011 this process will be completed. An official request for conveyance could be made by the County at that time. Public meetings will occur April thru July. In July the proposal will be presented to the State Board of Natural Resources. This is unlikely to derail the process. By the end of the year the entire process could be completed. The total land conveyed will be 8,700 acres. $1.5 million has been committed to manage the property within the County parks budget. Before this occurred, lack of specific funding for land management was a cause for concern by some.

There being no further business, the meeting adjourned at 11:14 AM.
Seth Fleetwood, Committee Chair

ATTEST: Mark Gardner, City Council staff

This is a digital copy of an original document located at Bellingham's City Hall. The City of Bellingham specifically disclaims any responsibility or liability for the contents of this document. The City of Bellingham does not verify the correctness, accuracy, or validity of the information appearing in this document.