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05/10/1982City Council Minutes Monday, May 10, 1982 - 12:10 p.m. Page _2 Councilman Settle questioned: 1) the possibility of having two 12" vs. a 24" penstock using the same turbine generator; 2) did staff see any complications from the County in pressurization of the line; and 3) what problems would be involved with the City using excess water from spilling. Bob Mote explained that two 12" penstocks did not equal one 24" as the 24" line was four times the capacity of the 12" penstock. The cost difference of a turbine between one sized to fit a 12" or 24" penstock. He saw no problems receiving authorization to pressurize the line. Although there should be no engineering problem to receive the excess water from the spilling of Salinas Dam there were a lot of other entities involved who might feel that the City was stealing their water. Councilwoman Dovey questioned the cost differences between the 12" and 24" penstock line. Paul Lanspery, Administrative Officer, gave a rough breakdown of costs as follows: Penstock Generator (Installation 8 Equipment) TOTAL EXPENSE Annual Revenue Payback 24" 12" $500,000 $ -0- 500,000 500,000 $1,070,000 $500,000 $220,000 $150,000 4.86 years 3.25 years Councilman Settle questioned if these figures included the interest that would be lost as a result of expending these monies. Rudy Muravez, Finance Director, referred to his pay -back analysis sheets made a part of Mr. Mote's report which broke down the investment, interest rate, annual expense, pay -back, etc. He added that this was an investment for the entity, not for the City. He added that all additional revenue would go to the water fund. Councilman Dunin made the observation that the City would be in a position to reduce the water rates in the future as a result of increased revenues from the hydroelectric project. Upon question from Councilman Dunin, Bob Mote replied that excess water (spill) would go into Sterner Creek. Councilman Dunin questioned if any entity would lose as a result of the City's having access to the spilled water. Bob Mote explained there would be no loss by any entity. This was excess water and there should be no problem with the City's use of it. Mayor Billig mentioned that when the 12" line was checked by staff, it was questionable whether the line could handle the extra pressure. Bob Mote explained that tests were done and, although not extensive, did prove that the 12" line would operate for at least a short period of time. He felt the existing line might be good for as long as 8, 10 to 15 years. He explained that staff, when first looking at the project, considered continuing with the 12" with the idea that the City could go to the 24" line later. However, the turbine generator would need to be designed to handle both lines which would not be efficient or cost effective. Mayor Billig questioned that if we could not pressurize the Army line, how would this affect the City in both projects. 1 City Council Minutes Monday, May 10, 1982 - 12:10 p.m. Page 3 Bob Mote explained that whether the City had the 12" or the 24" penstock would make no difference insofar as pressurizing the Army line is concerned. We would not be able to develop as much hydroelectric power with the 12 ". A 24" penstock would result in the loss of 1 /6th of head of a 12" penstock. The County would have no way of knowing either way. He would propose to have an agreement with the County before the City awarded any contracts. After discussion with County representatives he feels that we could receive such an agreement within a week or two. He stated the only reason he hadn't asked them for permission yet was because we did not have the construction plans in hand. . Mayor Billig questioned whether the permit would allow the hydroelectric plant without prior permission. Bob Mote explained that it did. However, we would need approval of a minor nature which should not be difficult to'obtain. Mayor Billig stated that she would not want to go further on the project until all required permits had been received from both the County and State Water Resources Board. She felt another sensitive issue was that other entities would look at diversion of excess waters as a threat and this must be handled in the most delicate way and timing was extremely critical. Upon question, Bob Mote explained the friction loss in the flow rate was between 15 and 20% using the old pipe. Councilman Settle stated he was not prepared to make a decision today. However, he was supportive of the 24" line as being the most efficient in giving a constant source of revenue.. The problem areas were: 1) receive written understanding from both State and County regarding pressurization of the line;.2) dealing with the excess capacity issue; 3) necessary approvals for the hydroelectric project; 4) update analysis of a comparison between the 12" and 24" penstock lines; and 5) analysis of the loss of interest: Councilman Dunin- stated he was•.prepared�to make a decision. He had no problem with the 24" line. The keyword here was "efficiency ". No matter how you compare it, the 24" line was more efficient as we will be losing 20% due to the friction in the old pipe. He felt both the State and County and Corps of Engineers should be contacted as soon as possible to get the necessary approvals in writing. Councilwoman Dovey agreed with getting the various written approvals and a detailed cost analysis of the differences between the 12" and 24" lines. She would also like a look taken at the environmental impact and what kind of savings would be realized in electricity bills. She wanted the analysis to include the net income, including what we have to pay for electricity now. Mayor Billig also felt there were still many unanswered questions. She felt the City was attempting to make a decision without knowing what the supplemental water situation really was. She questioned the facts and figures staff used to arrive at its conclusions. We should be using conservative figures in any case. She had no problem with the 12" line in the new turbine generator. On motion of Councilman Settle, seconded by Councilwoman Dovey, to 1 direct staff to answer the questions raised at today's meeting, receive County and State clearances, prepare revised figures for both the 12" and 24" penstock, including any likely changes to the rates from PG &E, and bring back by the June 1 Council meeting. Motion carried on the following roll call vote: AYES: Councilmembers Settle, Dovey and Mayor Billig NOES: Councilman Dunin City Council Minutes Monday, May 10, 1982 - 12:10 p.m. Page 4 ABSENT: Councilman Griffin 2. WASTEWATER TREATMENT PLANT Council considered and discussed the Wastewater Treatment Plant project. Dave Romero, Public Services Director, submitted a lengthy status report on the history of discharge requirements, and general.discussion on the Wastewater Treatment Plant improvement project. (See file no.5/21/82 -04) As part of his general discussion comments, he stated that the current wastewater treatment plant was expanded to 5.0 MGD in 1962. This is a trickling filter plant which requires very little energy and relatively minimal maintenance in operation efforts. The design is one which gives stable operation with little risk of major upset. The plant provides secondary level treatment and, except for the phosphorous requirement and problems caused by by- passing, it very well meets current discharge requirements and EPA guidelines. The plant must be improved to meet requirements which would be imposed July 1, 1983 and greatly improved if the phosphorous requirements were not reduced. Compliance dates estab- lished by the Board were November 1, 1982 for completion of Unit 1 and July 1, 1983 for completion of Unit 2. The City would not meet either date but would expect little problem if we were under active construc- tion with each unit when those dates become due. With the exception of the phosphorous and ammonia limitations, he felt the requirements were now reasonable and should be complied with. The Regional Water Quality Control Board had taken a position that the City must meet the adopted discharge standards whether or not grants were available. He felt a good case could be presented that the•City must have.grant funding to meet the phosphorous and ammonia requirements,.requiring a major increase in level of treatment and very capital intensive. However, the City could present only weak arguments for not meeting requirements for the remainder of the project which primarily improves reliability. He felt the City had an excellent waste water treatment plant which was well run. It was being maintained and operated with fewer than the 1 recommended number of operators and, on a per gallon basis, fewer than other plants on the Central Coast area. The problems stem primarily from the inability of the City to handle infiltration during storms, and from some antiquated and outdated equipment. This would be corrected by the two projects proposed. The general consensus was that the report was a good one and was ordered received and filed. (4 -0 -1) There being no further business.to come before the City Council, Mayor Billig adjourned the meeting at 4:30 p.m. to Tuesday, May 11, 1982. ' /Pamela Voges City Clerk APPROVED BY COUNCIL: 6/1/82 1