08-16-17 Personnel and Finance (#1)

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have a hearing date set for the very beginning of 2018 so we anticipate this rate increase will take place,probably quarter two (2) of 2018. About 5.3 billion gallons of water were delivered in 2016. There were 43,000 customer accounts. We are going to try and update our billing and customer service program which is badly needed. It is a really old program and very difficult to manage. A good example of this is when we moved our recycling off of our bills, we had to individually change each and every one (1) of those bills. There was no button to push to take them all off. We will be updating that software this year. He then went on, In Fund#620, we see an increase in the revenue side which is twenty-two percent (22%) starting quarter two (2). The expense side decreased a little over$400,000. Our Capital Expenses went up about $300,000 but in addition to that, if you recall, we subsidized a few of those expenses by using TIF dollars. Overall we are pretty flat on the water works expenses as we've gone from $19.1 million to $18.4 million, approximately $700,000 less overall on the water works side even though our Capital Expenses are going up. There has been a lot of deferred maintenance on capital equipment and that is why we are only able to do forty (40) million gallons when we should have seventy (70)million gallons. We are pumping less water than we can but overall we have conserved more water. The majority of our work has been finishing Phase One (1) of our Long-Term Control Plan which consisted of a lot of work to our Wastewater Treatment Plant, as well as finishing East-Bank Phase Five (5). Those projects are either complete or almost complete so we will be completely done with Phase One (1) of our Long-Term Control Plan. We have also reassessed our Long-Term Control Plan and have taken a new approach by saving upwards of$700 million. I thank the Council for pushing us to do that, as well as their support. We are still going to meet the water quality requirements of the EPA. So now our job is to convince IDEM and EPA that it, in fact, does what it says it does. We are holding off on the EPA meetings in hope they will appoint a new Region Five (5) director but with that uncertainty, we are going to move forward without the EPA and lay out our plan. We feel very comfortable with what we have regarding the data and science behind it. With the recent upgrades to our primary and secondary channels, we think we could actually pump more than seventy-seven(77) million gallons through here which would be very helpful as we move into Phase Two (2) of our Long Term Control Plan. We still have half of the City on combined sewers which creates issues for us so we will be doing some stress-testing of the plant to see if we can get that capacity higher. We are also adding generators to our system. We are now also producing very good compost because of our ability to remove the plastic. Jitin Kain, Deputy Director of the Department of Public Works with offices on the 13th floor of the County-City Building, stated, The triple bottom line is taking into account the social, economic and environmental impact that all of our projects have. The three (3)top goals in sustainability are to increase efficiency by reducing our operating costs, creating a culture of sustainability to become business as usual, and finding ways to incorporate sustainability into the culture and practices of all work in the area. You may be aware the costs for electric are expected to rise. AEP has started a process to change the rates and, in fact, IURC is going through a process for public hearings for the AEP rate increase. These are expected to occur by the third or fourth quarter of 2018, so our budget does not reflect any of those changes because we are not sure where the rate case goes,but we do expect to come back for an additional appropriation. On the natural gas side, we do expect some small increases but expect the usage to be generally flat. We are also,through the practice of hedging, able to secure the rate of natural gas. There are a 7