03-13-17 Utilities - Laserfiche WebLink

Home Browse Search

need to raise rates to have a more sustainable rate. This will be an ongoing issue that we have to address in the future. But short term, it made sense to use TIF to shore up some of the immediate capital needs and it does two (2)things for us. It gets the stuff done right away and because this is delayed, the monies we will see with the increase will go into operation expenses and not capital expenses. The increase in 2019 will give more money to the capital expenses. We are using TIF as a short term mechanism to do some catch-up in areas that we are really concerned with in utility. Ultimately, I would like to have a sustainable rate that meets the needs of the utility. The ASC did their infrastructure report card every year that came out just last week. Nationally,the infrastructure received a D+ and drinking water received a D. We have a number of different pumping facilities and treatment facilities throughout the City, we have nine (9) total. Our focus primarily is on the supply side in the initial years because we have pumps going down and we are close to not meeting the needs right now. We are storage deficient in the City, meaning we have focused more on the supply side with all the well fields as opposed to storing the water. Putting elevated storage in, at this point, is a very expensive option,typically running around$7 million or$8 million for every 2 million gallons put up in the air. Those are capital projects we look at in future years. The distribution system is also in need of a lot of upgrade and repair. In our current system, max demand is 31.5 million gallons a day. Our peak hour demand is about 79 million gallons. Our system capacity 77.2 million gallons if everything is working to maximum capability. The problem is right now, only 42 million gallons are available to pump. We are going to have an issue if we aren't careful about getting some of this stuff back up into operation. This is where our priorities are in the next couple of years. The facility's condition in a number of areas are very poor because there was not money to fix them. There was a report on the 7 million gallon tank done in 2012 and it highlighted over$400,000 dollars of repair investment needed to be done.None of the repairs have been done because there were no funds available for it. For our distribution system,we have five hundred and eighty-three (583)miles of water main and 5,400 hydrants. The current rate of replacement for water mains is six hundred and thirty-four(634) years and hydrants every one hundred and sixteen(116) years. Obviously the water mains do not last that long and we will need to invest in water mains over a period of time. The reason we chose not to do that upfront is because we felt the supply issue was more important and critical right now. The budgets have been pretty conservative over time. It's not a matter of concern for operating costs raising as it is the demand that has increased, while the budget has remained the same. Of the five hundred(500) largest water users in the nation, Flint, Michigan has the highest water rate. South Bend is ranked four hundred and eighty-eighth (488) of the five hundred (500)which means we have a pretty inexpensive water rate for how much we produce. We are averaging a delivery of the equivalent of three thousand four-hundred (3,400) bottles of water to each household for one ($1) dollar. The most recent study by the Indiana Finance Authority puts South Bend at half of the average rate for large users in the state of Indiana. Mishawaka just recently had a rate increase that is generating approximately$57 million on capital side and $43 million on the sewer side. Mr. Horvath then briefly went over the hand-out he provided that outlined the six (6)year Capital Improvement Plan, which is on file in hard copy in the City Clerk's Office. He then went over a view of the Capital Projects in the presentation. The presentation is electronically filed and available in the City Clerk's Office. He also handed out a list of capital projects that will still be unfunded if this forty-four percent(44%)rate were to pass. This list is filed and is available in hard copy in the City Clerk's Office. 2