06-24-02 Utilities Committee - Laserfiche WebLink

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Qommittu *oat: Comm Wu ltepor t: tiiitigs 1Ommittte The June 24, 2002 Utilities Committee meeting was called to order by its Chairperson Council Member Al `Buddy"Kirsits at 4:15 pm in the Council Informal Meeting Room. Persons in attendance included Council Members: Kelly, Varner, King, Aranowski, Coleman, Pfeifer,Ujdak, Kirsits and White; Mayor Stephen Luecke, Citizen Member Khadijah Muhammad, City Controller Rick 011ett, Director of the Division of Environmental Services John J. Dillon, Assistant City Attorney Aladean DeRose, Community and Economic Development Director Jon Hunt, Mr. John Mountsier, Mr. John Skomp, Attorney Ann Bruneel, Lou Nanni, William Hoye and Paul Keiniff of the University of Notre Dame, Terry Bland of the uo volt' trihutt , and Kathleen Cekanski-Farrand, Council Attorney. Council Member Kirsits noted that the first item on the agenda was to review Substitute Bill No. 43-02 which would amend Chapter 17, Article 2, Section 17-21 of the South Bend Municipal Code by establishing new sewer rates both inside and outside of the city limits. Mayor Stephen Luecke stated that it has been a long time since the sewer rates have been changed. Major investments are being made to the plant and its facilities which have added expenses to the overall operations. Mayor Luecke requested that Bill No. 43-02 have public hearing tonight, and requested that the third reading and vote on the Bill take place at the July 22, 2002 Council meeting rather than the July 8, 2002 Council meeting. The Mayor stated that the additional time will allow the City Administration to have discussions with various customers and perhaps recommend a phase in of the proposed rates. Mr. John J. Dillon, Director of the Division of Environmental Services, continued the formal presentation for the Administration. He noted that it has been fourteen(14) years since there was a rate increase. $ 13 million were received in revenues in year 2001. All monies would be used for operations and maintenance of the wastewater treatment plant and sewers. Approximately $50 has been spent on improvements since 1988. Mr. Dillon noted that $ 8 million is allocated to debt service reserves as required. Mr. Dillon explained that there is a"fixed factor" based on the size of the water meter and a"flow amount"which are taken into consideration. Most customers have a 5/8" water meter which impacts the fixed charge. The flow change will go from $0.74 to $2.07. per month, plus a surcharge 50% higher for municipal sewer users located outside the City of South Bend. Mr. Dillon presented two (2) handouts with the first providing examples of monthly charges for residential users only, and the second being a copy of a page setting forth the proposed rates from Bill No. 43-02. The overall outcomes will result in an emphasis on flow. Fifty percent (50%) of the seniors who are customers may see their bills go down. Mr. Dillon stated that customers can control their bills by controlling the amount of water usage and gave the example of turning off the water when brushing one's teeth, as just one cost saving measure. Mr. Dillon concluded his remarks by requesting that the "Cost of Service Study" dated May 20, 2002 and prepared by Crowe Chizek be added to the record(copy attached). Council Member King stated that based on his analysis of the proposed rates that "it looks like some users will get a real wack in the head". Council Member King stated that according to his calculations Allied Signal would see their bill doubled and it would reflect an increase of$350,000 in one year. Memorial Hospital's bill would double. I/N Tech and I/N Kote would have their bill triple, with their cost going from $600,000 to $2 million. Council Member King noted that all of