Sunday, November 29, 2015

The Morning Star versus The Lottery

Three times a week the same feeling...
Anticipating what both the lottery ticket and the newspaper may contain and, scant minutes later, disappointment.

Both regularly end up in the firestarter box in the basement near the woodstove.

Disappointment in The Morning Star's perennial aversion to providing balance -- indeed coverage -- of Master Water Plan issues.  And this time, today's issue, printing only snippets of the Press Release from Citizens for Changes to the Master Water Plan.

No matter; the snippet dog can bite the hand that feeds, as it did today.

"They (CCMWP) become as guilty as staff in only wanting one direction," said Jim Garlick, stakeholders(sic) advisory committee chair."

Ahem. guilty as staff. only wanting one direction.

"It appears that Chair Garlick can step outside the circled wagons long enough to admit the truth," offers Kia. 


...don't really have to repeat his second blurp, but will anyway:  "I don't know who they think this independent body is...we already have engineers involved."

Engineering consultants on a contract Garlick et al issued.
Engineering consultants who were encouraged to issue 55 edits to 9 technical memoranda, presumably until text/tables suited politicians and in-house engineers.

Saturday, November 28, 2015

Nine Memoranda Shroud the Truth

Were 9 memoranda produced to hide the truth?

We do know that GVW staff manipulated water consumption and other information that led to the 2012 Master Water Plan, all the while strong-arming water consultants (who averaged between 5 and 7 revisions to each client memoranda), until text and statistical tables satisfied GVW engineers).

Yes, the memoranda hide the truth.

Residents' abhorrence to irrigating farms with chlorinated water from Duteau Creek Water Treatment Plant (DCWTP) resulted in their soundly rejecting the borrowing referendum last November.

the solution no longer throw good money
after bad.
  Chlorinated water will no longer irrigate farms and orchards.  Undiverted and undammed streams and creeks will flow as they were destined--to Kalamalka and Okanagan Lakes--
ensuring fish habitat.
Today's residents will not pay for future infrastructure.
             As population increases, new residents must pay
               their fair share via Development Cost Charges.  

Since then, Greater Vernon Water engineers--and the politicians they've misled--circled the wagons and spurned an independent professional MWP review.  Greater Vernon Water engineers and colluding politicians instead chose to appoint 18 laypeople to a Stakeholders Advisory Committee to conduct the review.  GVW engineers handed each appointee a tome of ~1,000 pages, and then "guided" each review segment, overseen by Committee chair Jim Garlick and GVAC chair Juliette Cunningham.

Do Cunningham and Garlick have vested interests in seeing the MWP proceed unchanged?
Sure they do.
They're two of a contingent of eight elected officials, the majority of whom approved the current Master Water Plan.

Back to the truth.

The tireless champion of truth is Gyula Kiss, whose membership on SAC was denied by the manipulators--GVW engineers--because he was deemed to be "biased".
So GVW are conducting a fixed horse race.

"By making the adjustments I recommend,
 Kalamalka Lake—with the transfer of upland licenses—
could supply domestic water well past 2052!"  G.Kiss

Gyula Kiss' analytical brain has found the solution to the Master Water Plan dilemma.  The public will support the solution because it no longer throws good money after bad.  Chlorinated water will no longer irrigate farms and orchards.  Unamended streams and creeks will flow as they were destined to flow--to Kalamalka and Okanagan Lakes--ensuring sufficient water for fish habitat.  Current residents will not bear the brunt of the area's future water costs. 

Grab a coffee, and learn the truth from the expert, Gyula Kiss:

"Re:  Greater Vernon Master Water Plan 2012

This plan does not produce the desired outcome of a cost effective solution of Greater Vernon’s water problems. Instead of maintaining the low cost agricultural water system the early settlers of the valley built and providing a cost effective separate domestic system, we maintain a significant, expensive mixed system that created the problems in the first place.

I would like to offer some alternate solutions which could reduce the immediate financial burden on the taxpayers and improve the chances of a positive outcome of an infrastructure financing referendum.

Technical Memorandum #5 states:

“Agriculture is an important industry in Greater Vernon whose on-going economic viability relies on access to an adequate supply of low-cost water. Currently, the Greater Vernon Water Utility (GVW) services domestic and agriculture users with treated water from the Mission Hill and Duteau Creek Water Treatment Plants. Most agricultural practices, however, do not require treated water; particularly irrigation or stock watering. The current agricultural demand averages (180 ML/d), significantly higher than the peak day demand for domestic use of 57 ML/d. A strategy within the 2012 Water Master Plan will be to implement capital projects that, in the long term, reduce use of potable water for agriculture, while maintaining a robust, reliable and cost-effective supply/distribution system.”

The following statement was provided in the 2004 Addendum to the Master Water Plan:

Separation of the existing combined water system will provide the most cost effective water management in the long term. Portions of the existing water distribution system serve both domestic and agricultural irrigation customers (termed the “combined system”). On an annual basis, approximately 80% of this water is used for irrigation of agricultural land. With the increasing requirement for drinking water treatment, it does not make economic sense to treat the water going to irrigation. Separation of the existing combined system into separate domestic water and irrigation water systems will allow the appropriate water quality to be applied to the end use.

The newest version of the Greater Vernon Water Master Plan was summarized to the Stakeholders’ Advisory Committee, with plan objectives as follows: 

“Supplying domestic water quality to the domestic customers within the GVW service area is the primary issue driving the development of a regional water supply scheme review. Interior Health has stated that treatment improvements and a plan to finance the necessary capital investments need to be completed. The development of optional regional water supply schemes that result in the supply of Interior Health compliant drinking water to the existing customers is a critical outcome of this study.

As the appointed political representative on the Greater Vernon Water Technical Advisory Committee, I had an opportunity to assess the proceeding from a perspective that differed from that of consultants and staff.

One of my observations was that the existence of the $29 million Duteau Creek Water Treatment Plant (DCWTP) biased the decision-making process of the consultants and staff.

The other issue was the fact that significant funds were expended on trying to make the plant work.

The current plant at 162 ML/day was not large enough to satisfy maximum daily demands;other changes had to be made to the irrigation system at significant costs. The majority of the $68 million spent to date was spent on the DCWTP and altering the irrigation system.

Having made these huge investments it is understandable that there was a major effort to concentrate on solutions that would include the existing DCWTP in the final MWP 2013.

In spite of these efforts there is no denying that roughly $10 million was wasted on the oversized plant (the current plant was designed to produce 162 ML/d; the new plan calls for a plant size of 110 ML/d). 

Suggestions to investigate other options were not welcomed. Instead of considering ways of making alternate solutions work, there were arguments made why it would not work. As an example: when it was suggested that we could expand domestic water supply to the entire Greater Vernon Water system from the Mission Hill Water Treatment Plant (MHWTP), the first argument was that we did not have enough water licenses on Kalamalka Lake.

When it was pointed out that licenses from Coldstream Creek and Deer Creek totaling over 4,000 ML could be transferred to Kalamalka Lake, the response was that it would be very difficult if not impossible to achieve the transfer.

However, when the consultants proposed to transfer licenses from BX Creek to Okanagan Lake so we could pump clean Okanagan Lake water to Goose Lake for irrigation purposes the comment was that the transfer would be no problem.

The recommended solution of the 2002 MWP was to create an independent, stand-alone domestic system.
The 2013 plan will not do that.

"...Duteau is primarily for cheap water supply for agricultural purposes."  

One of the ramifications of maintaining the mixed system was demonstrated earlier this year. High turbidity at Duteau Creek rendered that treatment plant unusable. Thus, treated water had to be dispensed from the MHWTP through the existing co-mingled pipe. The irrigation system had to be shut down to allow this pipe to be used for domestic water distribution.

If total separation was done the two systems could have operated independently without interruption.

This kind of event could happen in the peak irrigation period with serious consequences.  The Duteau Creek water supply is treated as if it were free to use however the consultants pleased.

We must remember that the Duteau supply is primarily for cheap water supply for agricultural purposes.  There is no agricultural land in the North Okanagan without affordable irrigation water. All lands classified agriculture land should have the right to receive low cost water. Otherwise they should have the right to apply for removal from that classification.

"GVW's...proposed 2013 plan will cost about double 
what the first consultant group estimated for total separation
 yet the original problem will remain.
 Most of the filtered water produced by the new plant
 would still end up on agricultural crops."

According to the consultants of 2002 the major problem with the old Vernon Irrigation District model of delivering domestic water was that they did it through the irrigation system. Treating all the water regardless of use would be extremely impractical and very expensive. The recommended logical solution was total separation.

That recommendation was ignored in 2004 and the consequences are today apparent in cost and delivery problems.

The proposed 2013 plan will cost about double of what the first consultant group estimated for total separation yet the original problem will remain. Most of the filtered water produced by the new plant would still end up on agricultural crops.

There were hundreds of pages of reports produced with charts, tables, graphs, etc. with little chance that politicians would be reading—let alone understanding—them.

Indeed, some assumptions were illogical and appeared to be padded to support the recommendations.  For example, the domestic water demand forecast table, on which the whole plan is built, started with the 2011 forecast at 9,670 ML/a culminating in 2052 at 13,360 ML/a.
In reality the actual 2011 consumption reported by GVW was 6,359 ML/a and 5,720 in 2012.
By making the adjustments I recommend, Kalamalka Lake—with the transfer of licenses—could supply domestic water well past 2052!

Huge effort was expended on ways to enlarge the Duteau reservoir capacity to increase our water supply.  Yet the potential of Okanagan Lake was totally ignored with the comment that we do not have enough licenses on Okanagan Lake. 

As a matter of fact, the total volume of the licenses we hold on Coldstream Creek/Deer Creek, BX Creek, Kalamalka and Okanagan Lakes exceeds 23,500 ML/y.

If all these licenses were transferred to Okanagan Lake—into which all these sources flow—we would have sufficient water supply for 80-100 years.

These options should have been investigated at the outset as Okanagan Lake water would be cheapest domestic source without interfering with the perfectly functional irrigation system.

In addition, there would be environmental benefits (e.g. fish spawning) from allowing the tributaries to complete their flow to Okanagan Lake.

"...instead of financing various projects for the agricultural separation ...  charged cash on top of the finance charges for the $35 million borrowed.

   It would be totally unfair
to domestic customers to continue with the practice."

"Current customers never recover the funds they expended." 

The huge treatment costs at the DCWTP are basically recovered from domestic customers. In 2011 the total treatment cost at the plant was over $1.7 million. Billed domestic consumption was about 1,500 ML.  Thus, the cost per cubic meter for domestic consumption was around $1.13. That does not include the amortization cost of the borrowed $29 million ($2 million plus).

At the same time treatment costs at the MHWTP amounted to $625,577 and the billed consumption was 5,000 ML. Cost per cubic meter: $0.13, a significant difference.

In the 2013 plan actual treatment costs are not quantified. Financial information is limited and mainly deals with estimated costs of various projects.   When one compares the estimated costs of the 2004 Amendment with reality ($35 million estimates, $68 million spent) one must be excused for having doubts about the accuracy of these estimates.

There is no reference to how the plan is financed. Water customers have been heavily charged in the last few years for water quality they have not received. The main reason for this burden was the fact that instead of financing various projects for the agricultural separation they were charged cash on top of the finance charges for the $35 million borrowed. It would be totally unfair to domestic customers to continue with the practice.

Currently the annual budget of GVW includes $8 million for Master Water projects. We cannot carry out any plan based on an annual $8 million charge. It is obvious that the plan must be financed over 20 years and must be completed as soon as possible so customers can reap the benefit of their investment while they are still alive.

Fifty-year life cycle analyses were carried out which are of little consequence for current customers. Financing infrastructure is based on a 20-year loan. Once the loan is repaid those costs disappear and only operation and maintenance costs carry on. Current customers never recover the funds they expended.

Another financial error is that all costs are assigned to the current customer base. No mention of how development cost charges will affect cash flow in the future.

The need for additional water supply is necessitated by growth. Developing these additional supplies should be covered by Development Cost Charge funds.  Supplementing water supply once the Kalamalka license is fully utilized should be paid for by DCC’s and should be supplied from Okanagan Lake (OL).

One of the curious proposals is to pump OL water to fill Goose Lake (GL), ostensibly to reduce costs.

Filling GL from DCWTP costs between $129,000 to $270,00 annually. The proposed cost of filling GL from OL would require a pump station at OL for $2.6 million (amortization over 20 years would be $180,000 per year) and $160,000 pumping cost annually for an annual total of $340,000.
This is between 1.25 and 2.63 times more than filling Goose Lake from Duteau Creek Water Treatment Plant. 

click table to enlarge
MWP 2013 proposes to have a filtration plant built at DC with a capacity of 110 ML/d in 2017. The overwhelming majority of treated water would be produced during the 92 days of peak demands at which time likely 90% of the water would be used for irrigation.

Thus, we would have filtered water for agricultural crops while the 80% of customers using MHWTP water would not receive filtration until 2022.

There is something wrong with this picture if the main aim of Interior Health's requirement is to provide highly-treated water for domestic customers.
A better alternative to this plan would be to dedicate the DC water supply to irrigation as it was intended at the outset. It cannot be overstated that affordable water is paramount to our agriculture industry. 

"We currently budget $8 million annually
for MWP projects.
That could finance a loan of up to $114 million. 
Treatment cost savings from DCWTP could finance
 an additional $20 million"

The current DCWTP should be gradually removed from operation as the domestic system expands. Untreated water should be provided to all agriculture classified lands with allocation and allocation fees.

Domestic water supply should be obtained from the Okanagan Basin water sources (Okanagan Lake, Kalamalka Lake, Coldstream Creek/Deer Creek and BX Creek) by way of license transfers.

It appears that the most affordable plan would be the utilization of Option 7 - Complete System Separation - Centralized Treatment at Mission Hill - Additional Flow from Kalamalka Lake (license transfers). Proposed revisions to Consultants’ plans are shown in Table 1 and Table 2 below.

For the plan to work, we would need license transfer to Kalamalka Lake from Coldstream and Deer Creeks, both of which are natural tributaries to Kalamalka Lake.  We anticipate this plan could achiever filtration deferral until 2042.

Estimated capital costs to 2042 would be $98.1 million. If needed, a filtration plant could be built in 2034 using DCC’s and debt financing.  By then earlier debts would have been retired.

Once capital cost debts are retired, significant cost savings occur.
For example, the 2011 treatment costs are compared at the two treatment plants:  In 2011, treatment costs at Duteau Creek Water Treatment Plant were $1.7 million and 1.7 ML was used by domestic customers (about $0.99 per cubic meter).
At the same time, treatment costs at the Mission Hill Water Treatment Plant were $625,577 and billed volume was 4.6 ML ($0.13 per cubic meter).

If all of the domestic water was treated at Mission Hill, the savings in treatment costs would have amounted to $1.5 million.

Trihalomethane levels from Duteau Creek Water Treatment Plant
 are up to four times higher than those at the Mission Hill plant.

Furthermore, the MHWTP water ultraviolet treatment and chlorination produces an additional benefit with a significantly lower Trihalomethane (THM) content (40-50 ug/l), while the treatment at DCWTP was only DAF treatment and chlorination, where the THM content was 100-200 ug/l.

How would we finance the plan?

We currently budget $8 million annually for MWP projects.

That could finance a loan of up to $114 million.

Treatment cost savings from DCWTP could finance an additional $20 million if needed.

The benefit of this system would be huge and total separation would be achieved.

The 2002 MWP was reviewed by a peer group. It would be wise to have the proposal reviewed by another independent professional review group to ensure that we are getting the best plan for our money.

It appears that financing would require that we must seek assent from the taxpayers to borrow the needed funds.

The promise of total separation of the domestic system from the agriculture system would greatly increase taxpayers’ support."

                                                           compliments of  G. Kiss

                                                           Councillor, District of Coldstream

                                                           Greater Vernon Advisory Committee
Tables (click to enlarge) follow:

(ignore incorrect reference to Option 4 Capital Costs)

(ignore incorrect reference to Option 4 Capital Costs)

The following are what SAC members will consider at their Dec. 3 meeting:

Note:  the yellow highlighted area, referring to the 2014 winter residential demand at 286 L/ca/d and the July per capita demand at 1,779 L/ca/d. If we use 31 days in July and 55,000 users the total consumption would be 3,033 ML just for that one month. Let's say we would be using only 286 L/ca/d for the rest of the year (a very charitable assumption) it would amount to an additional 5,253 ML for the rest of the summer months the total sum of the consumption would be 8,286 ML for the year. While GVW admits they had some troubles with their software that would be a significantly higher consumption than what was published in their 2014 Annual Report (5,819 ML).

Click table to enlarge

The following table shows the actual consumption in Coldstream for the years 2013, 2014 and 2015 partial.  Using a conservative population figure of 10,000, G. Kiss estimated the quarterly water demand for all of the quarters as presented (consumption/91.25/10,000*1,000). Note the 3rd quarter per capita at 599 L/d.

click table to enlarge
If you used the average daily consumption value in the Coldstream data at 300 L/d and multiplied it by 55,000 (GVW population) x 365 you will get an annual consumption of 6,022 ML, somewhat closer to reality. 

And SAC will consider Water Conservation:

Click table to enlarge

1.  Some comments regarding the Regional Water Authority, 1991.  G. Kiss
2.  Greater Vernon Master Water Plan 2002
3.  Addendum to the Greater Vernon Master Water Plan 2004
4.  TM#9 System Separation Option Analysis 2013.
5.  Greater Vernon Water Annual Report 2011.
6.  Greater Vernon Water Annual Report 2012.

7.  Mike Stamhuis' letter in 2013, comparing Options.
The most important segment of Stamhuis' letter is this:  "For example, full separation would permit the option of a separate sub-regionally governed agricultural distribution utility which would have a substantial rate impact on the different jurisdictions in a devolved utility.  Independent of devolution, a separated distribution system provides many administrative benefits in that it simplifies decision making around farm classifications, sale of non-potable water, new allocations, and use designation.  In addition, there could be economic benefits with expanded use of non-potable water."

8. This from Trafford Hall, head of RDNO in 2012: 


"The public will realize that $98 million will solve all the Water Plan's problems," says Kia, adding "which $70 million would not have done...current domestic customers would've paid, virtually forever."

Separating agriculture water from potable for domestic customers should've been the plan all along.

Greater Vernon domestic customers find themselves in an ongoing mess, with no thanks to GVW engineers.
A huge thanks to Gyula Kiss.

We should've listened to him back in 1991.