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04/01/2008 Strategic Planning MeetingCITY OF MONROE CITY COUNCIL STRATEGIC PLANNING MEETING ~'"~ 300 W. CROWELL STREET, MONROE, NC 28112 APRIL 1, 2008 - 4:00 P.M. AGENDA www.monroenc.org 1. Discussion of General Issues of Mutual Concern with Union County Board of Commissioners City Council Strategic Planning Meeting April 1, 2008 Page 120 CITY OF MONROE CITY COUNCIL STRATEGIC PLANNING MEETING APRIL 1, 2008 - 4:00 P.M. MINUTES The City Council of the City of Monroe, North Carolina, met in a Strategic Planning Meeting in the Fire Training Room, 300 W. Crowell Street, Monroe, North Carolina, at 4:00 p.m. on April 1, 2008 with Mayor Bobby G. Kilgore presiding. Present: Mayor Bobby G. Kilgore, Mayor Pro Tem P.E. Bazemore, Council Members John Ashcraft, Billy Jordan, Lynn Keziah, Dottie Nash, Robert J. Smith, City Manager F. Craig Meadows, City Attorney Terry Sholar, and City Clerk Bridgette H. Robinson. Absent: None Visitors: Union County Commissioners Allan Baucom, Lanny Openshaw, and Parker Mills, Union County Clerk Lynn West, Jim Cramer, Russ Colbath, Kim Hinson, Bruce Bounds, Jason deBruyn, Jim Fatland, Lisa Stiwinter, Wayne Herron, Debra Korb, Chris Plate, Mark Donham, Pat Beekman, Matthew Delk, Christy Putman, and others. Mayor Kilgore called the Strategic Planning Meeting of April 1, 2008 to order at 4:00 p.m. A quorum was present. Item No. 1. Discussion of General Issues of Mutual Concern with Union County Board of Commissioners. Water Resources Director Russ Colbath provided an overview of the Wastewater Treatment Plant (WWTP) Capital Improvement Study to City Council and members of the Union County Board of Commissioners. Mr. Colbath advised that Council previously directed staff to analyze the future capital expansion options for the City's WWTP, and funded a study in FY 2007 to evaluate viable alternatives for expansion. The study was delayed while the Land Development Plan (LDP) was undergoing analysis and re-approval. Mr. Colbath provided a project chronology for background: FY2007 -Funding authorized to study the future WWTP Capital Improvements; December 2006, study put on hold due to "service plan" request from the Land Development Committee, analyzing the North, South, and Southwest service areas; May 2007, Land Development Plan approved with only north service area, and the WWTP study was resumed using service area demands based on approved LDP; October 2, 2007 -Council presentation outlining status of Study including: scope of study, with two alternatives: 28 MGD (Meet LDP and existing contract for Union County), or 44 MGD (28 MGD plus additional 16 MGD Union County participation); legal obligation of flow City Council Strategic Planning Meeting April 1, 2008 Page 121 commitments, capacity commitment table given to Council showing all permitted commitments, commitments under consideration, and available surplus WWTP capacity. Available capacity was less than 1.0 MGD due to successful commitment made to recent industrial, commercial, and residential projects, WWTP Expansion timing driven by NCDENR 80/90 Rule, economic conditions and weather patterns, and schedule to permit, design, and construct WWTP expansion is up to 66 months; November 17, 2007 -Joint meeting of the City Council and County Commissioners. Both Boards directed Staff to work together on items of mutual interest including water supply and wastewater capacity. The City Water Resources Director and County Public Works Director have met multiple times since that date to discuss these issues; January 29, 2008 -Presentation of completed WWTP study Executive Summary to the Cit Environment and Water Resources Committee. Committee authorized distribution of study to Union County staff for consideration; February 18, 2008, Union County staff presented study concept to County Commissioners and were authorized to continue discussions/negotiations with Monroe __ for possible partnering on future WWTP capacity. Mr. Colbath next reviewed the Executive Summary. He stated that the City owned and operated one wastewater treatment plant located on Walkup Avenue. The WWTP was originally constructed in 1965 with a capacity of 3.5 mgd. The plant has been upgraded and expanded over the years and currently has a capacity of 10.4 mgd. The Comprehensive Capital Improvement Plan identifies the future wastewater treatment needs for the City of Monroe and provides alternatives to meet these needs. Mr. Colbath advised that the existing 10.4 mgd WWTP would continue to serve the City into the future with rehabilitation and replacement of aging facilities as required to maintain ~= performance. New treatment facilities will be needed to accommodate projected growth and changes in treatment requirements. Some of the key factors and assumptions used for the study are: Monroe's proximity to the Charlotte area will continue to provide growth pressures and corresponding need for expanded wastewater treatment capacity; the existing 10.4 mgd plant is aging and will ultimately need to be replaced; the existing 10.4 mgd plant has been expanded in piecemeal increments since 1965 and it will not be feasible to continue to expand the current plant configuration to meet the future wastewater flow needs or to meet stricter environmental regulations; recommendations contained herein focus on maximizing the remaining useful life of the existing 10.4 mgd plant and providing a phased WWTP expansion plan that will meet the future wastewater treatment needs at the lowest reasonable cost; and, the study examined both the existing site and property owned by the City acid also surrounding. properties, to ensure that the ultimate WWTP size could be properly accommodated. Mr. Colbath stated that a plan was presented for two major alternatives for future WWTP configurations. Alternative 1 would involve the construction of a new WWTP that could ultimately be expanded to 28 mgd. This would serve the build-out needs of all lands currently contained in the Monroe Land Development Plan, and the existing contract obligation to provide Union County with 2.65 mgd of flow capacity. The construction of the new plant would be completed in phases to increase cost effectiveness, and the new plant would operate in parallel with. the existing 10.4 mgd plant. The existing 10.4 mgd plant will continue to operate until growth, facility failure due to age, or stricter environmental regulations require expansion of the new plant to replace the existing 10.4 mgd plant. The plan also includes capital improvements at City Council Strategic Planning Meeting April 1, 2008 Page 122 the existing 10.4 mgd plant to maintain reliable performance and maximize its remaining useful life, until the existing 10.4 mgd plant is replaced. Mr. Colbath stated that Alternative 2 would involve the construction of a new WWTP that could ultimately be expanded to 44 mgd. This would serve the build-out needs of all lands currently contained in the Monroe Land Development Plan, the existing contract obligation to provide Union County with 2.65 mgd of flow capacity, and an additional capacity of up to 16 mgd for Union County if approved by Monroe City Council via re-negotiation of existing water and sewer contracts and agreements. Similar to Alternative 1, the construction of the new plant would be completed in phases to increase cost effectiveness, and the new plant would operate in parallel with the existing 10.4 mgd Plant. The existing 10.4 mgd plant will continue to operate until growth, failure due to age, or stricter environmental regulations require expansion of the (~ new plant to replace the existing 10.4 mgd plant. Alternative 2 also includes capital improvements at the existing 10.4 mgd plant to maintain reliable performance and maximize its remaining useful life, until the existing 10.4 mgd plant is replaced. Mr. Colbath advised that the construction costs for the first phases of both Alternative 1 and Alternative 2 are relatively high due to the cost of facilities that must be built in the first phase to accommodate the future build-out WWTP capacity of either a 28 mgd or 44 mgd plant. Mr. Colbath discussed the two alternatives. He stated that if the City chose to implement Alternative 1, then the City should proceed with planning for the first 4 mgd phase.of the 28 mgd WWTP. This 4 mgd expansion will be required to accommodate the new NCDENR regulation that requires wastewater service providers to demonstrate they have capacity to accommodate all ~- flows and on-paper commitments, prior to permitting these commitments. This will be required to ensure that the City can continue to issue sewer main extension permits for desired industrial, commercial, and residential developments once the capacity in the existing 10.4 mgd plant is fully committed. Mr. Colbath stated that if the City chose to delay construction of the new WWTP due to financial or other reasons, the next plant expansion will be triggered by the NCDENR 80/90 rules which require the plant expansion be fully designed, permitted, and under construction prior to flows reaching 90% of capacity. Delay is not recommended because it would limit the City's ability to make on-paper flow commitments and attract additional economic development and tax base. For Alternative 1, the City should proceed with financial planning for the estimated $70.6 million cost for a new 4 mgd Plant, expandable to 28 mgd. Mr. Colbath advised that if Alternative 2 was implemented via re-negotiation of existing water and sewer contracts and agreements with Union County, it offered the same benefit to Monroe in providing the ability to continue issuing sewer main extension permits as well as meeting flow requirements as existing and future service commitments come on-line. There is also a significant cost advantage to Monroe in sharing the relatively high cost for the first phase of the new plant between the City and County. Sharing costs and capacity in a new 5 mgd plant will be more affordable for both the City and Union County than constructing separate new treatment _ plants to serve growth in their respective service areas. Sharing large capital project costs will help mitigate rate increases to existing customers. The State of North Carolina also gives bonus City Council Strategic Planning Meeting April I, 2008 Page 123 points on applications for SRF Loan funding for entities that have pursued and implemented regionalizing of WWTP infrastructure. Mr. Colbath advised that for both Alternative 1 and Alternative 2 the study evaluated construction of the new WWTP on the existing WWTP site owned by the City and on a new X100 acre site across Richardson Creek from the existing plant. Construction of the new plant on the X100 acre site across Richardson Creek will require an additional x$4.5 million for purchase of the property, site development, and for construction of a bridge across Richardson Creek for access between the new and existing plants. Although the f 100 acre site provides greater usable area for the new plant and possible future facilities, construction of the new plant on the existing Plant site is recommended to avoid the additional $4.5 million cost for locating the new plant on the ~ 100 acre site across Richardson Creek. The cost estimates shown above assume the new WWTP, regardless of the alternative selected, will be constructed on the existing WWTP site. Mr. Colbath reported that the City requested speculative limits from the State Division of Water Quality (DWQ) for a future discharge of up to 44 mgd from the Monroe Wastewater Treatment Plant. The State provided speculative limits in a letter dated January 2008 that is included in the Appendix for reference. Speculative effluent limits were based on stream modeling by DWQ which indicated no degradation in water quality at expanded flow. The State will issue a discharge permit for flows of up to 44 mgd to Richardson Creek unless the expanded flow causes unexpected degradation of water quality in Richardson Creek. If the expanded flow does cause degradation of water quality in Richardson Creek, then DWQ will require that additional flow from the Monroe Wastewater Treatment Plant be pumped for discharge to the Rocky River. Additional construction costs for facilities for pumping and discharge to the Rocky River at State Road 200 or at the confluence with Richardson Creek could range from $30 million for a design peak flow of 22.8 mgd to $68 million for a design peak flow of 70.8 mgd. Clearly, it will be to the City's advantage to avoid this future requirement if possible by effectively negotiating with regulators and carefully evaluating stormwater permit commitments and conditions that may impact the WWTP as a point source discharge to Richardson Creek. s Mr..Colbath advised that it was recommended that improvements be made to maximize the remaining useful life of the existing 10.4 mgd plant. Capital improvements are needed at the existing 10.4 mgd plant to rehabilitate and replace structures and equipment for reliable operation and performance until the plant is replaced. He advised that a capital improvement project was recommended prior to 2010 with a budget of $3.03 million for miscellaneous improvements including a new ultraviolet disinfection system at the existing 10.4 mgd plant. A second capital improvement project was recommended prior to 2015 with a budget of $1.55 million for replacement of equipment at the existing 10.4 mgd plant. Consensus of City Council and the Union County Board of Commissioners was to develop a draft formal agreement for partnership of Alternative 2. There being no further business, the City Council Strategic Planning Meeting of April 1, 2008 adjourned at 5:20 p.m. City Council Strategic Planning Meeting April 1, 2008 Page 124 Attest: c~rivfvre~Ey ~-1: ~4o~iMSav~ Br gette H. Ro inson, City Clerk 04-01-08stp G~ ~ , obby G. gore, Mayor City Council Strategic Planning Meeting April 1, 2008 Page 125