City of Glendale Water Services Department Urban Irrigation

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1 City of Glendale Water Services Department Urban Irrigation

2 Introduction The Water Services Department was asked by the Water Services Advisory Commission to provide historical information to include operational expenses and revenues, benchmarking information from other local cities, and service alternatives for consideration regarding the City s urban irrigation program. Background The City of Glendale has provided urban irrigation water delivery service to residents since Ordinance Number 27 passed on January 8, 1912, and gave Glendale the responsibility to distribute all irrigation water throughout the town, and to repair and maintain the main ditches and branches running through city streets. The ordinance specifically referred only to the repair of the ditches, not construction, indicating the infrastructure was in place when the City took over the system in The service area when first implemented, consisted of those properties from approximately Orangewood to Maryland and 53 rd to 63 rd Avenues. As Glendale developed, additional service areas were incorporated into the irrigation system while other areas opted to receive service directly from Salt River Project. (See page 8 for current Urban Irrigation Service Area Map) Benefits were realized by both residents and the City. Residents received inexpensive water for irrigating and the City could better coordinate water delivery and minimize water damage to the streets as well as damages to individual property by providing the service. Since the initial enactment of Ordinance Number 27 in 1912, the Ordinance was amended twice in 1914, and Resolution 588 was passed in The first ordinance amendment, in 1914, required water payment to be collected in advance and on an annual basis. The second ordinance amendment also in 1914 allowed the City Council to adopt a schedule of rates to be charged. Resolution 588 passed in 1960, established a policy for the installation by the City of new irrigation systems for property owners. The property owner was required to pay for the cost of the ditch, tile and valve according to the length of their lot. It also required all construction to be completed by the City, and required the property owner to dedicate the irrigation system, as well as an easement for maintaining the system to the City. Salt River Irrigation (SRI), a private contractor, has provided basic irrigation services to the city since Basic irrigation services include opening and closing the gates, ordering water, and inspecting berms. In 1992, AGK Engineers completed an Irrigation System Rehabilitation Study and was tasked with providing recommendations for future capital improvements to the existing system. A representative ten percent of the total irrigation system was inspected by closed circuit television (CCTV) and recorded on video tapes. The study included costs for implementing corrective measures for the entire irrigation system. AGK Engineers then proposed five alternatives. The first three alternatives consisted of various methods and time frames for rehabilitating the system with projected design and construction costs ranging from $6 million to over $7.2 million. Alternative number four was to abandon the existing irrigation system, and alternative five was to take no action and continue with current practices. The report further stated The No Action 2

3 Alternative is not a viable option from the standpoint of system rehabilitation, which is what the study is supposed to address. At the conclusion of the 1992 study and as of this writing, no formal or official decision was made and current practices continued. Current practices still in place today include clearing irrigation lines of debris and make minor repairs to system. In considering inflationary factors from 1992 to present, the cost in today s dollars to rehabilitate the system based on the AGK Engineers study would be approximately $9.9 million to over $11.9 million. It should be noted since the AGK Engineers study is over 20 years old a new condition assessment would be needed to fully assess the current condition of the system. In 2012, the City contract with SRI to provide additional irrigation services to include repairs, system inspections, and 24-hour emergency response. This is in addition to the basic services previously provided. Operational Expenses and Revenues Today irrigation water is delivered during a seven-month irrigation service season from the months of April through October. The system is approximately 23 miles and includes mains, valves and other appurtenances with 348 customers receiving irrigation in The current annual fee for up to a 12,000 square foot lot is $ The FY 2014 total operating budget for Water Services is $49,002,059 and Urban Irrigation budget for this same time period is $201,096. Comparatively, the Urban Irrigation budget makes up less than 1% of the overall Water Services operating budget. Operational expenses only cover the on-going day to day operation of the system to include minor repairs. The expenses shown in the following graph do not include any major or capital improvement repairs to the system. Capital improvement repairs would require additional funding currently not budgeted. Irrigation Operating Expenses and Revenues FY 2012 FY 2010 FY 2008 FY 2006 FY 2004 FY 2002 FY 2000 FY 1998 $56,793 $55,284 $56,370 $43,358 $42,882 $42,831 $44,282 $44,572 $46,140 $47,393 $55,971 $56,134 $56,142 $61,554 $59,251 $63,423 $162,393 $245,025 $209,010 $187,921 $190,860 $223,065 $201,016 $208,846 $186,024 $186,827 $158,995 $171,473 $192,407 $188,484 $157,918 $147,371 Revenues Expenses $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 3

4 Over the past 15 years operating expenses and revenues have remained relatively consistent with operating expenses averaging $188,602 annually and revenues averaging $52,024 annually with an annual deficit averaging $136,578. In total for the past 15 years, operating expenses have exceeded revenues by over 73% or $2.2 million. Municipal Urban Irrigation Programs Currently, only three valley cities have city operated irrigation programs. These cities include: Glendale, Mesa, and Tempe. Peoria and Gilbert no longer provide this service primarily because of costs associated with an urban irrigation program. Phoenix does not provide urban irrigation for several reasons. Changes in development practices and street maintenance issues were the major contributing factors in Phoenix s decisions to no longer provide urban irrigation. Cost was a factor for Phoenix although not a major one. The chart below summarizes residential irrigation programs for Glendale, Mesa, and Tempe. City No. of Customers Cost Glendale 350 $169 per 12,000/sq ft Mesa 281 $46 per hour $46 X 1 hour X 12 mos=$552 Tempe 850 $325 per 13,000/sq ft Frequency of Delivery Staffing - Full Time Equivalents (FTEs) 15 runs per year None-use contracted service 21 runs per year 4 FTEs also do meter maintenance on off weeks 18 runs per year 8 FTEs to include a supervisor position Considerations Going Forward Since 1984, the number of urban irrigation users has remained relatively steady from 493 users to 350. The number of users has fluctuated slightly up and down over the past 30 years, but overall has been fairly consistent. Revenues have not supported expenses, and although a number of studies and recommendations have been proposed no formal decisions regarding urban irrigation have been adopted. The current system has areas that are no longer serviceable and would take significant financial commitment to get the entire system fully operational. As indicated in the 1992 AGK Engineers condition assessment study, repairing the entire system would be prohibitively expensive. 4

5 In addressing urban irrigation there are several alternatives that could be considered going forward. Outlined below are four alternatives for consideration. Alternative One: Keep current practices Currently the city contracts with Salt River Irrigation who is responsible for water purchase and delivery, delivery line/lot inspection and maintenance, and providing a dedicated system maintenance coordinator and customer service representative. The current practice limits the addition of users based on the condition of the system. While the current system can service approximately 400 users the system will continue to have significant maintenance issues. The current practice maybe practical in the short term but over the long term, issues surrounding the system will continue. Adding additional users does not help in supporting the system. As noted previously, expenses are out pacing revenues. Statistically not enough new users can offset the additional expenses that will be incurred from using a system that is over 100 years old. Moreover, the cost to the users would be so high the appeal of using urban irrigation would be negated. Alternative Two: Rehabilitate the entire system The cost to rehabilitate the entire system is costly and urban irrigation serves a small portion of the overall population of the city. According to the 1992 AGK Engineers condition assessment study the cost to rehabilitate the system would range from $6 million to over $7.2 million. In today s dollars this cost would range from $9 million to over $11.9 million. Furthermore, a new condition assessment would be needed since the AGK Engineers study is more than 20 years old. Alternative Three: No longer provide irrigation services The city, from a legal standpoint, can divest itself from providing irrigation service in totality. The city does not own the irrigation system and current legal obligations and responsibilities are in providing irrigation water, irrigation service, and maintaining irrigation distribution lines. All of these obligations and responsibilities may be discontinued through ordinance. Staff is not recommending this alternative at this time and suggests there are other alternatives that could meet mutually beneficial goals. 5

6 Alternative Four: Hybrid Approach A hybrid approach could effectively address three main issues impacting the current irrigation system to include the system size, revenue generation, and on-going maintenance costs. System Size The current system is functioning and providing irrigation to a steady group of urban irrigation customers. Maintaining this current size could be manageable for the foreseeable future. In addition, to reduce the financial exposure to all ratepayers the city could prohibit expansion of the system. Once a property owner decides to discontinue urban irrigation the city may elect to make the discontinuance permanent and thereafter require the lot to take water from the potable water system only. At the city s discretion and given cost considerations, the city may elect to discontinue urban irrigation service to any lot or group of lots. The decision to continue or discontinue service to specific lots within the current distribution system will be made on the basis of cost and reasonableness. Where it is reasonable to continue or reinstate service to a particular lot based on cost and effort required the city may elect to continue or reinstate service. For those lots where it is not considered reasonable to allow service or to allow a reconnection once service has been discontinued, those lots will receive water from the potable system only. These decisions shall be at the sole discretion of the city; however, property owners may appeal such a decision to the Water Services Director or his designee. Revenue Generation The cost of maintaining the system and delivering water is not covered by revenue the system generates. Over the past fifteen years, revenues have covered approximately 27 percent of costs. In order to reduce the burden on ratepayers that do not directly benefit from the system, the city should gradually increase urban irrigation delivery fees until they reach 50 percent cost recovery within five years. On-going Maintenance Costs Because the system is low-pressure and gravity-fed major emergency repairs are not anticipated. However, because the system will require both major and minor repairs in the future it is recommended that the city immediately institute a capital improvement charge on each account and establish a capital improvement fund for major repairs (those over $15,000). The purpose of this charge (sometimes called a sinking fund ) is to protect non-irrigation ratepayers from unanticipated major repairs to the urban irrigation system. An appropriate amount to maintain in this reserve would need to be determined. 6

7 Summary An additional consideration is to allow the City to levy emergency assessments on property owners in the urban irrigation area should there be a need for extraordinary repairs. Urban irrigation is a complex topic, and can be considered an asset to the community as a whole from historical, cultural, environmental, and aesthetic perspectives. Some valley cities no longer have an urban irrigation program because of the costs involved or because of changes in development practices. Tempe, like Glendale, is currently in the process of evaluating their current irrigation program and is considering service alternatives. There is no easy answer to this topic and there are many issues to consider in making policy recommendations. Economic considerations are only part of the equation and the environmental and aesthetic value urban irrigation provides to the green landscaping of the historic districts and older neighborhoods is another. Glendale is faced with meeting two separate and possibly conflicting goals with urban irrigation: preserving a traditional practice that adds to the ambiance of the community and protecting ratepayers from costs for a system that directly benefits comparatively few property owners. 7

8 55 th Ave. 59 th Ave. 63 rd Ave. Urban Irrigation Urban Irrigation Service Area N Northern Ave. Orangewood Ave. Glendale Ave. Grand Ave. Maryland Ave. 8

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