Adopt Resolution #18-029 Approving Participation in Metropolitan Council Water Efficiency Potential Project

Purpose:
The purpose of this case is to adopt Resolution #18-029 approving the City of Ramsey’s participation in the Metropolitan Council Water Efficiency Potential Project.

Background:
Per the attached email from the Metropolitan Council received November 27, 2017, a Water Efficiency Potential Project has been commissioned to assess the economic potential of whether an aggressive water conservation program could reduce a community’s expansion of water supply to meet future residential needs.
 
Based on current water use data and projected population growth, Ramsey ranks #19 out of all Twin Cities metro cities as a potential candidate community for economic analysis of potential peak water demand reduction.  The Metropolitan Council therefore believes the City of Ramsey can potentially benefit from such an analysis, and would like to know if the City is willing to be included in the study.
 
The study generally seeks to answer three questions regarding residential water use:

1. What overall peak reduction would a community need to achieve to avoid (or delay) installation of a new well?
2. What amount of total water savings could be realized, and how many years of delay for a new well (or wells) can be achieved?
3. What is the total cost to reduce peak demand through residential efficiency, and how does this cost compare with the cost of a new well (or wells)? 

 
The first step in the analysis was an exercise to determine which of the 94 metropolitan communities with groundwater supplies and a large residential sector have the most potential to benefit from this analysis.  The Metropolitan Council considered total population growth through 2040, residential water demand, peak summer to winter ratio, and estimated number of new wells through 2040.   Based on these factors, Ramsey ranks #19 (just breaking the top 20) of the 94 communities reviewed.  See page 6 of the attached memo from CDM Smith, Met Council’s consultant on this project, which details the analysis used to identify the communities with the greatest potential for residential water efficiency.
 
There is no cost to participate in the study, but if a City agrees to participate the City must provide the following specific information for the next part of the analysis:

• Well yield data for each well
• Annual operational costs for treatment and for well operation
• Description, program costs, and number of staff for current water conservation programs
• Unit cost per 1,000 gallons of raw water (before treatment, if any)

This information can be generated by Staff within several hours if Council approves participation in the project.
 
The Metropolitan Council originally requested a response by December 8, 2017 as to whether the City of Ramsey was willing to participate.  City Staff asked for an extension to allow Staff to present this information to advisory boards and committees before requesting City Council approval on January 23rd, 2018 to participate in the project.  The Met Council approved the extension.
 
On December 18, 2017, Staff provided an update on this project to the Environmental Policy Board (EPB).  The EPB provided some generalized feedback on this potential opportunity.  There was general consensus supporting the ‘survey’ portion of the project, but a concern was raised regarding the results of the survey.  More specifically, the EPB raised the issue of equitable application of results.  They would not want to see the results only applied to Ramsey or the other communities that participated as this could create an unfair burden on water users in Ramsey, such as increased water costs.
 
On January 16, 2018, the Public Works Committee (PWC) discussed the Metropolitan Council’s request to participate in the Metropolitan Council Water Efficiency Potential Project, and discussed the feedback received from the EPB.  After some discussion as to whether this project would ultimately be beneficial for the City, the PWC ultimately recommended City Council approval to participate in Metropolitan Council’s Water Efficiency Potential Project by a vote of 2 (for) to 1 (against).  However, this vote was contingent on confirmation by the Metropolitan Council that the results of the project will not adversely impact the City of Ramsey, including its businesses and residents.
 
On January 17th Staff received the following response to the concerns discussed by the EPB and the PWC via email from Brian Davis with the Metropolitan Council;
 
“The Metropolitan Council has no statutory authority regarding water use restrictions or water supply capital improvements for any municipalities.  Our work is conducted under the auspices of Minnesota Statute 473.1565 (a copy of this statute is attached to the case).  We cannot impose any water use restrictions or water supply capital improvements on any municipality.  Furthermore, this project is not intended to support any such restrictions.
 
Many communities have raised the issue of revenue reductions resulting from water conservation.  This project assesses the economic potential of whether an aggressive water conservation program could reduce the community’s expansion of water supply wells to meet future residential needs.  The focus on “economic potential” is a critical point.  If the summer peaking factor is reduced, will the existing wells be sufficient to meet the future water demand as population increases?  If so, how much money would be saved by not having to install and maintain additional water supply wells?  Such savings could translate to lower water rates over the long run, which is a “win” for all parties.  Conversely, if the costs of an aggressive water conservation program exceed the financial savings resulting from a reduction in the number of new wells needed, then it would not make financial sense for a community to pursue such a program.
 
We recognize that communities are not all the same.  Instead of a one-size-fits-all approach to water conservation, a more practical approach is to tailor such activities to the characteristics of each community.
 
Our project will help growing communities make financially sound long-term decisions regarding water supply management.  The information gained from this project could be useful for a utility when deciding whether or not to pursue an aggressive water conservation program.”

Notifications are not required for this case.

Observations:
Staff is hopeful that the response provided by Brian Davis with the Met Council will adequately address the concerns raised by EPB and PWC members, and will allow the City Council to approve City participation in the project.  Based on the information provided to date, Staff is hopeful that the project may yield results that will allow the City to save costs on future water supply infrastructure.
 
Alternatives:
Alternative #1 – Motion to adopt Resolution #18-029 approving the City of Ramsey’s participation in the Metropolitan Council Water Efficiency Potential Project.
 
Alternative #2 – Motion to deny adoption of Resolution #18-029 at this time.

No costs are associated with this request, other than the time it will take Staff to gather and provide the requested water supply system data.

Based on the response received from the Metropolitan Council confirming that the study results will not adversely impact the City of Ramsey, and the potential for the study to result in future cost savings for water supply infrastructure, Staff recommends alternative #1.

 

On January 16th, the Public Works Committee recommended City Council approval to participate in the Metropolitan Council Water Efficiency Potential Project by a vote of 2 (for) to 1 (against), contingent on confirmation by the Metropolitan Council that the results of the project will not adversely impact the City of Ramsey, including its businesses and residents.

 

As noted earlier, the consensus of the EPB was to support the ‘survey’ portion of the project after ensuring that the results of the study would not adversely impact the City of Ramsey by creating an unfair burden on City water users.

Motion recommending City Council approval to participate in a Metropolitan Council Water Efficiency Potential Project.