Read meeting notes from the Utah Department of Water Quality Board

The Scene:

At 10:40am, Administrative Assistant, Clanci Hawks, starts the Zoom meeting for those attending virtually. The first to arrive is James Webb and Jill Jones at 10:54am. Very friendly and relaxed atmosphere. Shortly after, Skylar Davies is the first to join virtually. Ken Hoffman arrives in-person and discusses funding and rates with James Webb. Everyone is proactive and eager to start the meeting.

Meeting starts at 11:07 and they take roll calls.

Present in the room is

• James Webb, Vice Chair of the Water Quality Board, representing Agriculture and Livestock

• Jill Jones, representing Central Davis Sewer District

• George Meados, Environmental Engineer

• Ken Hoffman, Division of Water Quality Engineering Section Manager

• Clanci Hawks, Administrative Assistant

• John Mackey, Division Director

• Andrew Pompeo, Environmental Engineer.

Present in the Zoom meeting is

• Skylar Davies, Division of Water Quality Engineering Section

• Trevor Heaton, representing the Mineral Industry

• Michela Harris, representing Public Health

• Glen Lischeske, Environmental Engineer

• Matt Myers from the public

• Adriana Hernandez, Contract/Grant Analyst

• Emily Canton, Assistant Director for the Division of Water Quality

• Michelle Kaufusi, Mayor of Provo.

Two staff members are excused from the meeting and two other members’ names are not known.

Staff who attended in-person picked up a paper memorandum that was used throughout the meeting: https://documents.deq.utah.gov/water-quality/board/2023/DWQ-2023-123081.pdf

Community Perspective:

Myers mentioned, during public comment time at 12:58pm, that since the South Davis Project is pursuing funding from outside organizations, it will not be a problem to push the project until 2025.

Goals:

Provide feedback for the total amount of funds to authorize in the fiscal year of 2024. Discuss potential principal forgiveness and what funding projects should be prioritized. Since it is a public meeting, no action will be taken.

Discussion:

The Water Quality Board receives a Regular Cap Grant within 10% to 30%. Lewiston City refused those funds, which means the project will be pushed for another year. Lewiston is the only city that qualifies for principal forgiveness.

WQB prioritizes the rural communities, by sectioning the city projects into important tiers; tier one being highest priority, with tier two being lowest priority:

Tier 1 – Lewiston, Monticello, and Mount Pleasant City

Tier 2 – Lewiston

Tier 3 – Brian Head and Wolf Creek

Tier 4 – South Davis

“Tier 1 is rural communities unable to bond on their own, ready to process to design/bidding, and where there is not a substantial growth component. Tier 2 is rural communities unable to bond on their own, not ready to proceed to design/bidding, and where there is not a substantial growth component. Tier 3 is rural communities likely unable to bond with a growth component. Tier 4 is large utilities with bonding capacity.” (Page 4 of the Utah Quality Board Memorandum)

Projects discussed in the meeting:

1. Monticello City Project

2. Mount Pleasant City Project

3. Lewiston City Project

4. Brian Head Town Project

5. Wolf Creek Project

6. South Davis Project

Mount Pleasant has a project they want to proceed with, while Lewiston City is not ready to proceed with their project. The rural communities in tier 3 have a significant portion of the project related to growth, and the WQB board does not like to fund growth.

Brian Head is 12% completed with constructing more sewers in their community. Hoffman said if their homes in development were not subdivided, they would not receive funding because of the developmental pressure. Staff states that they cannot access affordability without knowing the community income.

Tier 4 is not in public detail. WQB will pursue funding their project up to 49%.

EPA will help with a large portion of the funding.

Staff has come up with three possible funding scenarios from page 4 to page 5 in the Memorandum. Funding scenario 1 totals up to $7.3 million, funding scenario 2 totals up to $20.4 million, and funding scenario 3 totals up to $30.1 million.

Scenario 1: This scenario prioritizes funding the cities that need the most help; may reserve their funding for Lewiston City. Staff is in strong support of funding for Mount Pleasant and Monticello, because they are rural communities. Staff is very willing to provide money for these projects

Scenario 2: Staff recommends the WQB reach out to the communities to see if they are ready to close on the projects.

Monticello Project: They requested $1,214,000 from the WQB. Skylar Davies, Division of Water Quality Engineering Section, explained the project through Zoom, listed on page 6 of the Memorandum, “This project would replace the most critical parts of the sewer system that have reached the end of their useful life. The City has set aside its ARPA funding as a partial match for this project the City currently has $233,032 set aside for this project. They also had applied to the Governor’s Office of Planning and Budget Local Assistance Matching Grant Program, but were unsuccessful. The City has completed a Master Plan and is preparing plans and specifications for bidding Spring 2024.” Staff agreed they are doing a good job in planning out the project. Davies said they will most likely get started on the project in Spring of 2024, and estimates to finish in a year and a half from then. The Monticello Project has other ways to get funding.

Mount Pleasant Project: Stated on page 6 of the Memorandum, “Mount Pleasant City is requesting funding from the Water Quality Board in the amount $2,670,000

for new construction and upgrades to their existing wastewater treatment facility per the conclusions and recommendations from their 2022 Master Plan. This request is for the following: Construction of a new headworks building, including mechanical fine screen ($1,150,000); installation of a septage receiving station at headworks ($270,000); and bringing cell #3 of the existing total containment lagoon system on-line to increase capacity ($1,250,000).” Mount Pleasant qualifies for a Hardship Grant. The community is currently dumping their waste in the lagoon. The whole staff fully supports funding 50% of the project. Staff is concerned about leaving The Permanent Community Impact Fund Board (CIB) as an option for funding.

Lewiston City Project: Requesting a total of $10,547,000 on page 7 of the Memorandum, “to upgrade the sewer system and connect its collection system to the Richmond treatment plant. It will address current and future treatment needs by pumping sewer flows to the Richmond City mechanical treatment plant, thereby eliminating the current Lewiston treatment lagoons. The City feels that this regionalization of treatment will be a long-term solution for the community.” The city will complete their analysis of the project by Spring 2024. The impact fee will be about $2.5 million and will not be completed until January. Staff recommends the WQB board to consider including non-traditional conditions. Hoffman will further discuss with the city on where they are with the project and what they want to do.

Brian Head Town Project: George Meados, Environmental Engineer, said the project will increase the quality of water by reducing septic density in the area. The project will initiate the building of more septic systems. The Brian Head community is currently a Category 1 water, meaning their water is clean. But, they have no septic systems at all. Their sewer build is $42 a month and the loan would increase it to $2.5 to $5 a month.

Wolf Creek Project: Andrew Pompeo, Environmental Engineer. described the project. The city asks for $6,588,000 for construction of a reuse storage pond and distribution pipeline and pump station. They would use the Type 1 reuse water to water the golf course, which would help increase their storage capacity and keep them from using their Rapid Infiltration Basins (RIBs) to discharge the groundwater. Staff did not discuss long about this project, as they currently have many developments taking place already.

South Davis Project: The city requests $49,237,000 to install a moving bed biological reactor. This project would reduce phosphorus and ammonia discharge at the North Plant by September 1, 2026. The total price would be $54,237,000. Since they are requesting a large amount, staff stated they may not be able to help fund. They did not discuss the project further.

Meeting ended at 1:01pm.

The Debate:

WQB is currently tight on money, so they are looking for ways to be conservative with their money. WQB member, James Webb, and staff members, Jill Jones and Michela Harris strongly support money conservation.

Staff discussed the potential authorization of scenario 2 and 3. Spending $30 million is risky for fy24, since they may not have much funding left for fy25. Webb strongly advocated for setting aside at least $5 million for rural communities as an emergency, considering sewer breakdowns in the past.

Not pointing out specific cities, Webb said, “We’ve got a lot of cities on here that are not, you know, way below what their affordability criteria is… I’d love to fund some of these guys, but, to me, it’s almost like they’re not doing what they can, what they should be doing as well, you know, which is charging a little more for their sewer rates.” In response, Ken Hoffman, Division of Water Quality Engineering Section Manager, told Webb that he should look at the community more and consider that they may actually be capable of charging low rates.

Staff considered increasing the average rate, including those in rural communities, to ensure the cities continue their project.

Staff is not comfortable spending the max amount of money the Monticello City Project is requesting, and they recommend they have a more realistic money request.

Regarding the Brian Head Town Project, staff expressed major concerns. They dislike the idea of spending $2 million on 40 people alone, and they have a hard time funding rental properties. They also are concerned about how Brian Head Town handles their future projects, since this project is about 30% of their problems. Staff agreed that they would like to make a greater impact on septic systems if they are going to provide funding. Harris still has a lot of concerns for the project.

Outcomes:

Staff is confident to receive the incoming cap grant from the EPA for fy23 and the General Supplemental Cap Grant. WQB is keeping the fy24 cap grant out of the financial report, because they cannot predict what the amount will be. Strongly recommend there be no preauthorization for future General Supplemental Cap Grants.

Staff agrees that maximum total authorized funds for city projects should not reach over $30.1 million, but estimates the amount to be around $30 million with a minimum of $8.9 million.

If WQB does not authorize the project funding for the upcoming fiscal year, the project will be pushed for the next year.

Lewiston City was moved from tier 1 to tier 2 because the major project components for the Lewiston City project have not been evaluated with Richmond City, mainly on the discussion of funds.

Currently unsure of what the rates are for the Monticello Project, so they are leaving the decision to the WQB board meeting in October.

Staff agreed they would have to increase their rate for the bond payment, and they would need to demonstrate their ability to make bond payments.

Staff realized the importance of knowing the other ways cities are receiving funding for their projects.

Staff discussed the possibility of combining all three funding scenarios or setting aside $5 million for emergencies and not spend $30 million.

Staff will change the prices for South Davis to in-between scenario 1 and 2, and will discuss the project more in another board meeting.

No action will be taken until the October board meeting.

Policy/Outcome:

• WQB staff suggested increasing the average rates for future projects.

• Brian Head Town could face major long-term improvement in their quality of water if the project funding is approved, since they will be constructing septic systems they originally never had.

• The WQB Board plans to discuss the rates for the Monticello Project this upcoming October.

• The Lewiston City Project for the upgrade of the city’s sewer systems will further evaluate their funding with the WQB staff and their potential partners.

Follow-up Question:

• How will the cities demonstrate their ability to pay for bond payments?

• How would the increased rates affect the rural communities?

• Why is the Lewiston City project the only city eligible for principal forgiveness? Will consideration for principal forgiveness in other rural cities be discussed in the October board meeting?