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HomeMy WebLinkAbout4751 Ordinance - Amending PMC Titles 3 & 13 Related to Process Water Reuse FacilityOrdinance – Amending PMC Titles 3 & 13 FG: 102860186.5 CITY OF PASCO, WASHINGTON ORDINANCE NO. 4751 AN ORDINANCE OF THE CITY OF PASCO, WASHINGTON, RELATING TO THE CITY’S WATER/SEWER UTILITY; CONFIRMING REQUIREMENTS FOR PROPERTY CONNECTION TO THE CITY’S UTILITY; REVISING RATES AND CHARGES FOR THE CITY WATER REUSE FACILITY; AMENDING THE PASCO MUNICIPAL CODE; AND PROVIDING FOR RELATED MATTERS. THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON, DOES HEREBY ORDAIN as follows: Section 1. RECITALS AND FINDINGS. The City Council of the City of Pasco, Washington (“City”) takes note of the following facts and makes the following findings and determinations. 1.1 The City established and maintains a combined Water/Sewer Utility (“Utility”) under RCW 35.67.010(5) and Pasco Municipal Code (“PMC”) 13.10.010. The Utility contains the City’s water system, irrigation system, sewer (wastewater) system, storm water system, and process water reuse system (for wastewater from certain food and agricultural processors). The Utility maintains separate books and records for each system itemizing system costs, revenues, assets, liabilities, deferred inflows, deferred outflows, and fund balances. All revenues of the Utility are managed through the City’s Water/Sewer Utility Fund. PMC 3.240.010. 1.2 The City’s process water reuse system operates a Process Water Reuse Facility (“PWRF”) to treat industrial wastewater influent from certain food and agricultural processors (“Processors”) in the City. The current PWRF system reached its design life and capacity, such that repair, replacement, upgrades, and expansion are necessary to accommodate current and expanding Processor wastewater. The City planned for and received approval from the Department of Ecology (“Ecology”) for the facility plan to upgrade and expand the PWRF (“Project”). 1.3 The City acted under Chapter 70A.140 RCW, the Water Quality Joint Development Act, to solicit proposals from private vendors for the PWRF, a water pollution control facility. Burnham SEV Pasco, LLC (“Burnham SEV”), a developer of renewable natural gas (RNG) projects was selected as the City’s service provider through processes outlined in Chapter 70A.140 RCW. Pursuant to an agreement with the City, Burnham SEV is privately developing the new PWRF Project, using a low-rate anaerobic digester and nitrogen removal system along with a renewable natural gas plant at the City’s PWRF property. 1.4 City and Burnham SEV entered an agreement (November 24, 2021) to allocate responsibility for the cost of initial engineering for the System. Pursuant to RCW 70A.140.040(9) and prior to execution of the Wastewater Treatment Agreement (“Agreement”) with Burnham SEV, the City submitted a draft of the Agreement as the form of a “proposed service agreement” to Ecology to review for consistency with Chapters Ordinance – Amending PMC Titles 3 & 13 FG: 102860186.5 90.46 and 90.48 RCW as a condition precedent to the City’s authority to execute the Agreement.; Ecology determined the Agreement form to be consistent with the referenced statutes. 1.5 A public hearing concerning the proposed Agreement was conducted by the City Council on February 6, 2023. On April 11, 2023, the City Council met and adopted Resolution No. 4335 approving the Agreement. Following adoption of Resolution No. 4335, Burnham and the City executed the Agreement. 1.6 To provide for economies of scale and for uniform application of its Utility systems, the City mandates use of the Utility except in limited circumstances. See, PMC 13.70.090; and PMC 13.55.010 applicable to Processors (“Industrial users” of the PWRF system). The City has provided for regular review of its rates and charges to meet anticipated expenditures of the Utility, including but not limited to debt service, operating, replacement, upgrading, and expansion requirements, and that the Utility has the adequate functional capability of providing a desirable level of service to the community and the service area. This Ordinance provides necessary support for the PWRF and Project, and to provide for continuing and improved service to Processors and the community through better management of wastewater treatment and disposal. 1.7 The PWRF capital infrastructure investments, accompanied with a renewable natural gas system, required long term debt issuances to fund improvements as well as long term contractual service agreement to fund improvements. Consequently, the City with its consultant FCS, Inc, prepared a cost-of-service analysis (“Rate Study”), including a blended unit cost structure for services to any customers of the PWRF. The rates in this ordinance do not include a risk premium to account for the long-term debt and contractual obligations A 30-year cost recovery timeframe is used to develop unit charges for the costs associated with capital improvements and other PWRF obligations. This rate structure intends to meet the City’s long-term debt commitments and obligations, all consistent with RCW 35.67.020(2).The Project and development of the Rate Study was conducted by the City with regular communications and meeting with Processors over the past 6 years. Section 2. CHAPTER 13.55 PASCO MUNICIPAL CODE AMENDED. 2.1 Pasco Municipal Code Section 13.55.010 is amended to read as follows: Industrial users shall connecting to the City’s process water reuse facilities. For purpose of this Section, “industrial users” are those food and agricultural processors producing effluent that is better treated by the City’s process water reuse facilities and not by the sewer (wastewater) system. The City shall determine the system of the Utility to which an industrial user is required to connect. Industrial users shall also be required to connect to the City’s municipal water system. Industrial Users are shall further be required to secure all necessary permits prior to connection to the process water reuse facilities. In addition, industrial users shall install at their Ordinance – Amending PMC Titles 3 & 13 FG: 102860186.5 sole expense, City-approved monitoring stations, including meters and automatic samplers on their wastewater discharge lines for purposes of monitoring the volume, strength, and characteristics of their plant discharges into the City’s system. The meters shall be connected to the City instrumentation and control system. Industrial users may be required to provide screening, pH control, and/or pretreatment of user’s waste. The monitoring stations and acquired data shall be open to City employees at all times for their inspection and the data obtained from the monitoring stations shall be used by the City to determine the actual variable operating costs as set forth in contract PMC 13.55.020 (2) or as otherwise provided in this Code, based upon the actual volume, strength and characteristics of the user’s discharges., as well as anticipated expenditures of the Utility, including but not limited to debt service, operating, repair and replacement, upgrading, and expansion requirements. 2.2 A new section, Pasco Municipal Code 13.55.015, entitled Definitions, is added to the Pasco Municipal Code, as follows: PMC 13.55.015 DEFINITIONS 1. “Agreement means the Wastewater Treatment Agreement between the City and Burnham SEV Pasco (2023), as may be subsequently amended. 2. “MG” means millions of gallons. 3. “MGD” means millions of gallons per day. 4. “Rate Study” means that study prepared by the City and FCS, Inc. (2024), including narrative recordings of background meetings with processors, all on file with the City Clerk. Provided, however, any application to processor rates from revenue received by the City under the Agreement for renewable natural gas (RNG) payments are to be based on a processor’s actual BOD contributions (not permitted amounts) in the prior year. 5. “PPD” means pounds per day. 6. “PWRF” means the Process Water Reuse Facility, including facilities under the Agreement. 2.3 Effective January 1, 2025, Pasco Municipal Code 13.55.020 is repealed and a new section, Pasco Municipal Code 13.55.025, entitled Pricing Schedule – Systems and City Facilities Costs, is added to the Pasco Municipal Code, as follows: 13.55.025 Pricing Schedule – Systems and City Facilities Costs. The City Manager or designee, upon consultation with the Utility and Processors, shall calculate and adjust rates and charges for Processors users of the PWRF as needed but no less than on an annual basis at the beginning of each year following 2025. Rates and charges shall be based on costs allocated among PWRF users based on factors assigned in the Rate Study. These costs include, but are not limited to: Ordinance – Amending PMC Titles 3 & 13 FG: 102860186.5 1. Fees associated with the Agreement, a. System Base Fee, as adjusted annually in conjunction with the Agreement. b. System Pass-Through Costs, with 10% markup under the Agreement: i. Solid waste disposal (including anaerobic sludge: periodic digester scrapes and clean-outs and any algae or biomass removed from the Gross Wen Process) ii. Consumables (including replacement parts & associated rental equipment) iii. Major maintenance expenses c. System Pass-Through Costs, no markup, i. Electricity ii. Potable water iii. Purchased natural gas for system heating use iv. All City, state, and local taxes with the exception of income taxes (e.g., sales tax, B&O tax, property tax, as applicable v. Rental payments made to the City under the site lease vi. Any costs and fees associated with securing and maintaining an Agreement performance bond 2. Cost for City Facilities a. Rate calculation includes: i. Evaluation of annual anticipated operating and maintenance expenditures, ii. Support for debt service including legally required reserves and set aside for debt service coverage, iii. Capital charges unsupported by debt financing. 1. Budgeted and Council-approved capital improvements, including new asset purchase or construction, replacement, upgrading and expansion requirements. 2. Cash flow required support of capital improvements awaiting reimbursement from loan, bond or grant funding, if temporarily necessary iv. Special projects 3. Annual adjustment. Based on the Rate Study methodology and actual allocation elements from each Processor, the City Manager or designee shall recommend adjustments following the close of the prior year or as otherwise determined in the best interest of the Utility. Prior to any annual or other adjustments to the rates and charges under this Chapter, the City shall convene a meeting to which processors are invited for processor input and comment to the City on the proposed adjustment. The adjustment accounts for Processor wastewater permitted contribution, flow and constituents to the PWRF. Additional adjustments in each subsequent year shall be based on a processor’s BOD contributions (not permitted amounts) in the prior year and revenues to the City from RNG payments to the City under the Agreement for RNG sales. Where appropriate, necessary reserve balances will be amended or established as part of the rate adjustment. Ordinance – Amending PMC Titles 3 & 13 FG: 102860186.5 4. Overage Charges/Effluent Characteristics. The PWRF has a fluctuating and finite capacity to accept process wastewater. Therefore, the base monthly charge has been calculated to include a capacity and limitation allowance for effluent volumes, strengths and characteristics (collectively, “characteristics”). The characteristics for each processor are set forth in the City of Pasco-issued Wastewater Discharge permits of each processor. Each processor shall be monitored for compliance to the approved characteristics. Based on the usage limitations in each processor’s permit, consecutive 15-day allowances for the permit characteristics will be monitored for and enforced against each processor. See Chapter 13.90 PMC. 5. Latecomers. Processors not connected to or otherwise permitted by the City to discharge to the PWRF at the time of adoption of this Ordinance shall not connect until a latecomer charge, system development fee, or other charges are established by the City to equitably account for the additional flows to the PWRF. 2.4 A new section 13.55.050, entitled Process Water Reuse Fees Controlling, is added to the Pasco Municipal Code as follows: PMC 13.55.050 Process Water Reuse Fees Controlling This Chapter 13.55 PMC shall apply to customers of the Utility’s Process Water Reuse Facilities, notwithstanding provision of the Code that may conflict with this Chapter 13.55 PMC. In the event of a conflict between a City contract with food or agricultural processor for wastewater treatment, including for the water reuse facilities, this Chapter or another part of the Pasco Municipal Code shall be subordinate to such a contract. 2.5 A new section 13.55.060, entitled Process Water Reuse Facility Minimum Fees, is added to the Pasco Municipal Code as follows: PMC 13.55.060 Process Water Reuse Facility Minimum Fees 1. All users of the Process Water Reuse Facilities shall pay rates charged under PMC 13.55.025, and beginning January 1, 2025, shall pay minimum rates charged under PMC 13.55.060(2). 2. PWRF Minimum Rates. Except for the fixed charge, the below rates are calculated on a calendar year basis, and charged monthly (one-twelfth) based on permitted characteristics applicable to each processor: Description Unit Cost Fixed Charge (monthly cost per user) $ 8,488 Storage, per MG $727 Flow, per MG $541 Nitrogen, per ppd $91 Ordinance – Amending PMC Titles 3 & 13 FG: 102860186.5 Description Unit Cost TSS, per ppd $1.11 Max Monthly Flow, per MGD $21,295 BOD, per ppd $4.16 3. Annual Adjustments. These minimum rates shall be subject to adjustments under PMC 13.55.025(3). Section 3. CHAPTER 3.35 PASCO MUNICIPAL CODE AMENDED. Pasco Municipal Code Section 3.35.210 is hereby repealed. Section 4. CHAPTER 13.75 PASCO MUNICIPAL CODE AMENDED. Pasco Municipal Code 13.75.060(1) is amended to read as follows: Rate. Septic tank waste discharged into the wastewater treatment plant will be charged on the basis of a full truck tank load at $0.24 a per gallon rate as set forth in Chapter 3.35 PMC times the capacity of the truck’s tank in gallons; provided, however, any firm discharging septic tank pumpings at the wastewater treatment plant during the months of September through February shall be charged on the basis of a full truck tank load at $1.44 a per gallon rate as set forth in Chapter3.35 PMC, times the capacity of the truck’s tank in gallons when the gallons discharged exceed the average volume discharged by the firm at the wastewater treatment plant during the months of March through August. Section 5. CHAPTER 13.90 PASCO MUNICIPAL CODE AMENDED PMC 13.90.100, PWRF POTW local limits, is amended to read as follows: Conventional Surcharge. 6.0 minimum pH in standard units 12.0 maximum pH in standard units Standards and rates applicable to processors discharging to the PWRF are governed by Chapter 13.55 PMC. In the event of a conflict between Chapter 13.90 PMC and Chapter 13.55 PMC, Chapter 13.55 PMC controls. Section 6. SEVERABILITY. If any one or more section, subsections, or sentences of this ordinance are held to be unconstitutional or invalid, such decision shall not affect the validity of the remaining portion of this ordinance and the same shall remain in full force and effect. Ordinance – Amending PMC Titles 3 & 13 FG: 102860186.5 Section 7. CORRECTIONS. Upon approval by the city attorney, the city clerk or the code reviser are authorized to make necessary corrections to this ordinance, including scrivener’s errors or clerical mistakes; reference to other local, state, or federal laws, rules, or regulations; or numbering or referencing of ordinances or their sections and subsections. Section 8. EFFECTIVE DATE. This ordinance shall take effect and be in force five (5) days from and after its publication as required by law. PASSED by the City Council and APPROVED by the Mayor of the City of Pasco, Washington, at a regular open public meeting thereof, this 9th day of December, 2024. ________________________________ Pete Serrano, Mayor ATTEST: APPROVED AS TO FORM: __________________________________ Debra Barham, MMC City Clerk Published on: December 15, 2024 ____________________________________ P. Stephen DiJulio, Special Counsel