Adopt Resolution #18-217 Supporting Metropolitan Council Funded Study for Northwest Metropolitan Area Regional Surface Water Supply System

Purpose:
The purpose of this case is to adopt Resolution #18-217 supporting a Metropolitan Council funded study to explore alternatives and costs for a regional surface water supply system in the northwest metropolitan area.

Background:
Over the years, the City of Ramsey has explored the use of surface water to augment, or possibly replace, our current groundwater wells as a supply source for our municipal water supply system.  Prior to 2016, the City’s Capital Improvement Plan included a 9.6 million gallon per day surface water supply facility.  However, due to the high capital cost (nearly $20,000,000) the decision was made to remove this item from the CIP until other cities showed interest in working with Ramsey to construct a regional surface water supply facility so costs could be shared and spread among numerous cities.
 
Over a year ago, Metropolitan Council Staff informed City Staff that they could use Clean Water Funds to conduct a study to explore the feasibility of constructing a regional surface water supply facility in the northwest metropolitan area, but in order to do this we would need to find at least two other cities willing to commit to the study.  Staff then reached out to neighboring cities in Anoka County to see if any had an interest in studying a regional surface water supply facility study, but none showed interest.
 
Recently, the City of Dayton informed Staff that they were interested in studying the use of surface water as a municipal water supply source given pending development and the need to expand their water supply system.  Then the City of Rogers indicated they would also be interested in studying the use of surface water as a supply source for their municipal water supply system. Then the City of Corcoran also showed interest in participating in a study.
 
Staff informed Metropolitan Council Staff that the four cities were interested in completing a surface water supply study.  Metropolitan Council Staff then asked each City to adopt a resolution supporting the study so Metropolitan Council Staff could then request the use of Clean Water Funds to pay for the study.
 
The primary objective of the study will be to explore and understand the relative costs and implementation considerations of different surface water use approaches to long-term water sustainability within the study area.  The study will support future planning of local area water supplies and water sustainability practices.  Cities will continue to face increased demands on their water supplies in the future so this study will provide concept/planning level options for consideration.
 
The City of Rogers Public Works Director plans to request City Council approval of the draft resolution on October 23rd.  Dayton’s City Engineer plans to request Council approval of the draft resolution on October 24th.  The City of Corcoran’s Public Works Director plans to request City Council approval of the draft resolution on October 25th. Each partner city will submit a copy of their executed resolution to the Ramsey City Engineer, who will then share all executed resolutions with Met Council Staff as a package with a request to fund the study in its entirety using Clean Water Funds.

Notifications were not required for this case.

Observations:
The City of Ramsey is currently participating in the Metropolitan Council’s Water Efficiency Potential Project.  The Metropolitan Council selected Ramsey to participate in the project based on current water use data and projected population growth that showed Ramsey ranked 19th in water use per capita out of 94 metropolitan communities with groundwater supplies and a large residential sector.  Staff will meet with Metropolitan Council Staff in November to review and discuss the study results, and will then share the results with the Environmental Policy Board, Public Works Committee, City Council, and the public.
 
While discussing whether to participate in the Water Efficiency Potential Project, concerns were raised by the Environmental Policy Board, and echoed by the Public Works Committee, as to whether participating in the Water Efficiency Potential Project would benefit the City.  In the end, the City Council voted to participate in the Water Efficiency Potential Project, though the vote was not unanimous.  In summary, the concerns focused on whether the Metropolitan Council could use the results to force the City to implement water conservation practices that could then result in higher water rates and increased taxes for City businesses and residents.
 
In response to the concerns raised, Staff shared the following response 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 this 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.”
 
Staff wanted to share this response again to address similar concerns that may result from this request. Per the first paragraph of the above response, the Metropolitan Council has no statutory authority regarding water use restrictions or water supply capital improvements for any municipalities and therefore cannot impose any water use restrictions or water supply capital improvements on any municipality.
 
Alternatives:
Alternative #1 – Motion to adopt Resolution #18-217 supporting a Metropolitan Council funded study to explore alternatives and costs for a regional surface water supply system in the northwest metropolitan area.
 
Alternative #2 – Motion to deny adoption of Resolution #18-217 at this time.

No local cost contributions are associated with this request, other than the time Staff will spend participating in the study.  The Metropolitan Council will cover all study costs using dedicated Clean Water Funds.  The City Engineer will serve as the City’s technical advisory team member for the study, and other key Staff will be required to provide input into the study.

Staff recommends alternative #1.
 
On October 16, 2018, the Public Works Committee reviewed the draft resolution and adopted a motion to pass the resolution on to City Council for review without a formal recommendation from the Public Works Committee.  One Committee member questioned why the cities would lead the study and not Met Council, and whether Met Council could use the results to require future conversion to a surface water supply system.  Discussion followed regarding the Department of Natural Resources requirement to conduct a pilot study at the City’s expense to explore the potential use of surface water as a supply source at the time the City applied for a permit to construct its last groundwater well.  
 
Staff noted that the Metropolitan Council has no statutory authority over municipalities regarding water use restrictions or water supply capital improvements, and that Minnesota Statute 473.1565 directs their work as noted in the resolution.  Staff also noted that the Met Council wants the cities to assume control over the study to ensure that the results are applicable to the needs of each of the cities. It is therefore Staff’s position that the results of the study cannot be used by the Metropolitan Council to commit the City to using surface water as a water supply source.  Instead, Staff believes the study will provide valuable information to the cities for guidance in future water supply planning efforts.

Adopt Resolution #18-217 supporting a Metropolitan Council funded study to explore alternatives and costs for a regional surface water supply system in the northwest metropolitan area.