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HomeMy WebLinkAbout01-14-19 Utilities ��O�SpUTH 4,� w a PEACE, 1865 OFFICE OF THE CITY CLERK KAREEMAH FOWLER, CITY CLERK UTILITIES JANUARY 14, 2019 4:20 P.M. Committee Members Present: Jake Teshka, Oliver Davis, Sharon L. McBride, Regina Williams-Preston(late) Committee Members Absent: None Other Council Present: Jo M. Broden, John Voorde, Karen White, Gavin Ferlic, Tim Scott(late) Other Council Absent: None Others Present: Bianca Tirado, Graham Sparks, Bob Palmer Presenters: Eric Horvath, Kara Boyles Agenda: Bill No. 61-18- Amending the South Bend Municipal Code to add a new Article 14 Establishing Interim Storm Water Utility Rates Committee Chair Jake Teshka called to order the Utilities Committee meeting at 4:20 p.m. He introduced members of the Committee and stated,I would first(1st)like to recap where we've been because there have been holidays in between and I know this is the third (3rd) time we've heard this in Committee. (Addressing the presenter) When you touch on your presentation, would you please harken back on the commitments you made? For example, the timeline for getting an income-based rate system, and so forth? Committee Chair Teshka proceeded to give the floor to the presenters. Bill No. 61-18- Amending the South Bend Municipal Code to add a new Article 14 Establishing Interim Storm Water Utility Rates Eric Horvath, Director of Public Works with offices located on the 13th floor of the County-City Building, stated, Thank you and yes, it has been some time. In fact, I was scratching my head and trying to remember back to all the outstanding issues. I will try to address them all and if there are more, please feel free to ask questions. I think we've done the presentation a number of times (available in the City Clerk's Office) and I'm not going to bore you with that again unless you want me to go over any parts of it, I would be happy to. He continued, One(1)thing that was brought up was going to the Assessor and looking at property cards.We had some communications with the County and it looks like that information is probably INTEGRITY! SERVICE'ACCESSIBILITY JENNIFER M.COFa AN BIANCA L.TIRADO JOSEPH R.MOLNAR CHIEF DEPUTY/DIRECTOR OF OPERATIONS DEPUTY/DIRECTOR OF POLICY ORDINANCE VIOLATION CLERK EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 1227 W.Jefferson Blvd.I South Bend,Indiana 46601 I p 574.235.9221 I f 574.235.9173 I www.southbendin.gov CITY OF SOUTH BEND I OFFICE OF THE CLERK there. After reviewing some of those myself, I'm not completely comfortable with it. All the information we need is there but subsequent with that, we were also having dialogue about using GIS and, honestly, I think it will be easier for us to use GIS rather than pulling those cards. So, that is the direction we are headed while we move toward those pervious and impervious rates long-term. I do appreciate you bringing that up because it does look like most of the information they are tracking, particularly on the commercial and not so much the residential, they are. The other issue was the lifeline rates. We have started a group and Dr. Boyles is leading that effort for us. We will have a regular cadence of meetings. We've had some initial discussion with our financial advisor but also with some service providers in the area. It looks like REAL Services is already doing a lot of the legwork in terms of income verifications for some of their energy assistance programs. They do that for more than just the senior care stuff. They do it for a broad spectrum of folks, so, it made sense to us to try and work in that direction where we are trying to almost have a one(1)-stop-shop for services where people can come in and they can assess multiple breaks and have a place where if they come in for help, we can look at other services they qualify for. That will be a venue in which we can get them signed up for assistance on a waste water rate as well. Committeemember Regina Williams-Preston arrived at the meeting at 4:25 p.m. Mr. Horvath continued, So, that is the direction we are going right now. It looks like we were looking at something that is related to poverty and they're doing something similar. I think they do sixty percent (60%) or seventy percent (70%) of household income until it gets to a certain point and then they do one hundred and fifty percent (150%) of poverty level, which, those two (2) numbers are actually really close to each other when you actually look at them. Councilmember John Voorde interjected, That's why I thought the Auditor's Office might have a piece of the puzzle or some of the information that might be needed because some of those exemptions are income-based rated. Mr. Horvath replied, Ok, could you explain that to me? Councilmember Voorde followed up,You can get an old age exemption, for example,but not just for age but for income as well. It came to mind at the last meeting that maybe that would be a resource for you and that information is kept in the Auditor's Office. Mr. Horvath replied, Ok. I did have a conversation with John Murphy, but I hadn't talked about that with him, specifically, so I will follow up with him about that. Mr. Horvath continued, So we figured that it made sense, as we go down that track,to try and find a way to have multiple programs that people can come in and apply for. Then,the benefit becomes much greater. So,instead of them getting, say,twenty dollars($20)off one(1)bill,they get twenty dollars ($20) off multiple bills and it actually becomes something that is more meaningful. So, I think those were the outstanding issues that I was aware of,but I'm happy to answer any questions or go over anything that was in the presentation before. Committee Chair Teshka then opened the floor to questions from Committee and Council Members. EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 17D574.235.5567 www.southbendin.gov 2 •CITY OF SOUTH BEND I OFFICE OF THE CLERK Committeemember Regina Williams-Preston stated, So you have the two dollars ($2) a month for residential and five dollars ($5) a month for non-residential. For clarity's sake, how does that impact rental properties?Are those still considered residential since the landlords own the home? Mr. Horvath replied, My understanding is that residential, in this case, is considered one (1) and two (2) unit. So, if you have one (1) or two (2) units, you are still residential. Then it is based on how many meters you have. So, if there is one (1) meter and two (2) units, they will be charged two (2) dollars. If you have an apartment complex and you have more than two (2) units, you will be charged at the commercial rate which is the five-dollar ($5) rate. Having said that, if you have a building and it has thirty(30) apartments in it, and you have one (1)meter, they will get one (1) five-dollar($5) charge per month. That is the way it is currently written. Committeemember Williams-Preston interjected, So, it depends on the number of meters. Mr. Horvath replied, Number of meters, that is right. Tax parcel and meter, yes. Committeemember Williams-Preston followed up, I don't know if that happens in real life having one(1)meter for thirty(30) apartments. Mr. Horvath replied, I talked to our water billing office and I don't know of any apartment complexes that don't have that, actually. The one (1) example they came up with, which was the most units they could find was East Race Villas. Those eight (8) villas all have separate meters. So, in that particular case, each one(1) of those villas will be charged five dollars ($5)per month. Real quickly, we are still working on the income-based rate and are still planning on having a proposal for the Council by June. We are working with the service providers right now, especially trying to make that income verification easier for us, and also because we think it will be helpful to have the cumulative impact for those parties. So, if they come in for heating assistance, for instance, they can flag that, and we can find other programs and discounts as well. Committeemember Williams-Preston asked,And this is something you have to deal with,with the State? Is there anything we can do as a body to help? Mr. Horvath replied, I don't think so yet, but we will have a group meeting on a regular cadence. If we find the need to bring something,we will,but we will for sure need to have an ordinance that comes from the Council. We will then take that to the IURC. I do know Indianapolis is also approaching them and are asking them to consider this. So, they are at least starting to think about how they are going to move on some of these things going forward and deal with these issues. In advance of having that,we will have a dialogue with the IURC just to make sure we aren't bringing something in front of Council that they are not good with. Councilmember Voorde stated, I don't know if they would apply, necessarily, but there is a distinction in assessing things whether or not it is residential or commercial. I thought that, and maybe I'm wrong, but the distinction between a residential and commercially assessed property was five(5)units. I'm not sure about that but I know there is a distinction and if it's already there, you could just use that, you know? Just trying to make things easier,just like my last suggestion. Mr. Horvath replied, Sure. I do know it is somewhat dependent on the ordinance. I do know we have a number of local ordinances and trash, for instance, is four (4) units and under, I'm pretty EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f574.235.9173 TTD574.235.5567 www.southbendin.gov 3 CITY OF SOUTH BEND OFFICE OF THE CLERK sure. So,they do vary already, and I hear what you're saying, and it would be nice to have it easier for everyone if it was a little more consistent with the distinction of residential and non-residential. It is already one (1) of those tough things and the line has been drawn differently already. Councilmember Jo M. Broden stated, I just have a recommendation for your work group and giving folks a break on this. Including 311 and United Way is most important. Increasingly, as a community, we have been looking to them as a key source for all issues of where to go for help. I think we need to make sure they are a part of these discussions. Mr. Horvath replied, The person at United Way that used to do a lot of these programs is now a City employee. She is running our AmeriCorps program but she is ready to help us. We will include United Way and there are other partners we want to include as well. We really do want to use this to make it bigger so that if we can get to that point where there is a single source of data base, somebody comes in and applies and it hits all of these different checklists to get additional assistance on other things. Councilmember Broden stated, So, even some of this information is already in a database. If you present yourself, for instance at St. Margaret's House,and provide a profile there,that information can be shared and that is a nice thing. Committeemember Sharon L. McBride stated, I would like to request some informational meetings, surveys or something sent out because in talking to people in my various communities throughout the Third(3rd) District,we have some concerns. There is an aging population and they had some concerns about the increase. We had some concerns with, of course, the impoverished but you also have some of the people who are more affluent that it affects as well. It warrants dialogue to have some open discussion and community input. My request is to have some people talk to discuss the impact. So, when you're putting together the information about who would qualify for discounts and things of that nature, if you have a variety of what people's needs are and what is impacting the financial burdens, I would request that you do something like that. I suggest you have some target dates to have some open discussions with the neighborhoods. Mr. Horvath replied, Sure. Councilmember Karen White asked, Looking at this, the total impact that it will have on our residents will be twenty-four dollars ($24) a year, correct? Mr. Horvath replied, Yes, that is right. Councilmember White followed up, So looking at twenty-four dollars ($24) a year, those individuals based on income that you've been talking with a number of social service agencies, so they could go to those social service agencies and be able to receive funds to support the increase? I want to make sure that is what I heard. Will these financial agencies really have the money to support a number of residents based on income? Mr. Horvath replied, Hopefully I didn't mislead you on that. I don't know of any social service agencies that have money available and that are prepared to help with the storm water fee. That is not saying they couldn't or wouldn't, but we haven't approached that with them because it hasn't come up as a need, obviously, because it doesn't exist. What I was talking about in working with EXCELLENCE ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD574.235.5567 www.southbendin.gov 4 CITY OF SOUTH BEND I OFFICE OF THE CLERK those other agencies and the lifeline rates is if they meet an income threshold based on the number of people in their household,we would give a discount. We'll do some sensitivity analysis and we don't even have an amount yet because part of the process will be having our financial consultant look at,first(1St),how many people fall below a certain threshold.These things will be,essentially, revenue neutral.What that means is,for everyone who pays less,the rest of the population is going to pick that up. So, as we do that, we will look at different rate discounts to see what impact it has on the overall, and then we'll have some dialogue on that to figure out where we should be. Councilmember White then asked, And your goal is to have a number of discussions prior to that implementation? Mr. Horvath replied, Yeah. We will definitely keep the Council involved in that process because we are definitely going to need to determine how big that rate break is. Then, based on how big that rate break is, it is then contemplated how much others are going to have to pay. Councilmember Broden interjected,This is just interim because we are looking toward impervious surface, correct? Mr. Horvath replied, That is correct. For the storm water fee, this is the interim way we are doing it. As we mentioned before,of the communities in Indiana and throughout the nation,most of them are on an impervious surface calculation but there are still a couple doing it similar to what this proposal is.This is an easy way to get started and start billing.We have started our billing software kick off meeting for our new water billing software. Our current software is twenty (20) some years old so it is really difficult to do any kind of change in rates. If you want to add a five-dollar ($5) charge on across the board, that is easy. But if each one (1) is different, you have to touch each bill. So, the new software will give us the ability to do a lot of those things without having to touch each bill. That is about a fourteen (14) month process and we just started it on January 8th, 2019. Committee Chair Teshka asked, Just to be clear, though, these rates, if established today, will be in effect until Public Works brings us something different. Mr. Horvath replied, That is correct. Committeemember Williams-Preston interjected, The ordinance currently says at least two (2) years. So, if we pass this, we don't have to come back if it goes past two (2) years, it's basically rolling? Committee Chair Teshka replied, Yes, nothing would change. Councilmember White stated, And the implementation date is still June 1 but, in the meantime, there are a number of activities that would be occurring, and then you would come back to the Council. Mr. Horvath affirmed, Yes, absolutely. We would have to because any rate change would have to be approved by Council. EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD 574.235.5567 vwvw.southbendin.gov 5 •CITY OF SOUTH BEND I OFFICE OF THE CLERK Councilmember Broden interjected, So, kind of related to this, downspout disconnect, what is the timeline on that for residential? Mr. Horvath replied, Yeah, so by ordinance, it was at the end of 2018. We had up through December, we had done seven hundred and eighty(780) homes in 2017/2018. We've pushed out direct mailings to everyone we thought that still had downspouts. We received about eight hundred (800) of those back before the deadline. So, we have a huge list now. That is eight hundred (800) homes so that is a lot more downspouts than eight hundred (800). We've been finding that there are about two and a half(2.5) to three (3) downspouts per home. We end up disconnecting them but some we can't disconnect and give exemptions. Otherwise, we get them disconnected. All of those will be done for free. There is $100,000 in the budget allocated to do those. That work is all done by ACORN and ACORN bid that out and it is sixty-five dollars ($65)per downspout. Councilmember Broden followed up,And there is no requirement for non-profit organizations and institutions, correct? Mr. Horvath replied, I think the requirement is that all entities must disconnect. The ordinance gave us the ability to give exemptions but there needs to be a way to show it is cost prohibitive. Because there may also be a threshold that if you are below a certain number of employees,it isn't required. Kara Boyles, City Engineer with offices located on the 13th floor of the County-City Building, stated, It's got a few tiers. So, one (1) is the certain amount of employees. As a business gets smaller, there is a great reduction and you pay less for the disconnect. That is for commercial. Also, if there is hardship or it is impossible to disconnect, that is exempt. Councilmember Broden asked, Does that commercial designation encompass non-profits though? Ms. Boyles replied, No. Committeemember Williams-Preston stated, I want a clarification. Councilmember White said something I would like to repeat. So, we are looking to make a decision tonight as to whether we want to pass this or not. Whether we pass this or not, it has been requested we have public conversation and dialogue. Then, in June, even if we pass it tonight, you will come back and talk about scaled stuff, but is there anything else that needs to come back to us if we pass this tonight? Councilmember White stated, We want to make sure there are conversations that include the proper level of constituent and partner input. I would encourage residents to join those as well. Mr. Horvath replied, In addition to trying to figure out the lifeline rates piece,we will start moving down the path of moving to a pervious and impervious surface-based calculation. The first (1St) piece of that is figuring out the average impervious rate for a residential lot,then figuring out what the ERU is, and then assigning rates to the ERUs, and then at that time we would bring that back to the Council as well. Committeemember Williams-Preston followed up, So we aren't anticipating that by June 1St?That is why we have the two (2) year kind of thing? EXCELLENCE ' ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 227W Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD574.235.5567 www.southbendin.gov 6 (:I'I'Y OF SOUTH BEND OFFICE OF THE CLERK Mr. Horvath replied,Yeah, I wouldn't anticipate that by June 1St because part of the reason is that it would be really difficult for us to bill until the new billing software is done which is about a year away. Committee Chair Teshka stated,The other side of that is what we are expecting though,the lifeline rates by June. Mr. Horvath confirmed, Yes, that is correct. Committeemember Williams-Preston interjected, And what is it called? Lifeline? Mr. Horvath replied,They are called lifeline rates. I think they are called income-based as well but that is a little misleading. I don't want people thinking that if I make a dollar more than someone that I will be paying a little bit more or something. We will have a threshold where if people are below, there is a certain discount. We will try to make it fairly simple to understand. Committee Chair Teshka then opened the floor to members of the public wishing to speak in favor of or in opposition to the legislation. Sue Kesim, 4022 Kennedy Drive, stated, A couple things. One (1) is the expected revenue from this expected rate hike will be about$1.4 million a year. Is that accurate? Mr. Horvath replied, It is a little less than that, it is more about $1.2 million. Ms. Kesim continued, I just wanted to be accurate,thank you. And the new software will cost how much? I'm wondering what the net is. Mr. Horvath replied, The new software is coming regardless and is around $1.5 million. That is not to do this program. It is because there is water, sewer, solid waste, ReLeaf and all those other fees and they all get billed on this software platform. So, they need to redo that software and they are doing that irrespective of what happens here. Ms. Kesim interrupted, And that is already budgeted for? Mr. Horvath replied, It is, yes. Ms. Kesim continued, Ok, is Council going to propose any kind of rate ceiling so that this just doesn't keep spiraling? I also wonder, you know, I feel like TIF was originally designed to take care of infrastructure projects, so I really feel like this should come out of TIF. That was the original purpose of TIF when they first (1St) created it. And the CSO should have taken care of a lot of this. That has been around for a decade and you should have already been funding working on it, so, how could TIF and CSO offset putting the burden on the citizens? I'm also curious, and Eric I apologize,but I'm always curious about engineering stuff,but the liners you're putting in to prop up some of the sewers to help move them along, how long do they last? How expensive are they? Are we propping up something with a costly liner just to have to go, take the liner out and redo the sewer? Do you get what I'm saying? Are the liners and expensive mandate to a problem that just plain needs to be fixed? And I'm not an engineer so that is my novice question. EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 1227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD 574.235.5567 www.southbendin.gov 7 CITY OF SOUTH BEND OFFICE OF THE CLERK Committee Chair Teshka interjected, Ms. Kesim, are those all of your questions? Ms. Kesim replied, I think so. I know I have quite a few. Committee Chair Teshka stated, Director Horvath, if you would respond to the questions, and I know the sewer line thing is sort of outside the scope of this particular piece of legislation. Ms. Kesim interrupted, But this is for sewers, storm water. Mr.Horvath replied,I can answer that.The liners add fifty(50)to eighty(80)years. It is substantial and it is almost like getting a new sewer. They are actually structural liners, so they give infrastructural stability. So, a lot of times we have brick sewers, which, is actually amazing that they are still performing like they are. They do get to the point where they start to lose their integrity so when you put this liner in, it actually creates structural integrity. Ms. Kesim interrupted, Are those real expensive? Mr. Horvath replied, It is not inexpensive,but it is a lot less expensive than tearing up the road and putting new pipe in. Significantly less. In terms of rate ceiling, you can do what you want. You, Council, ultimately have control. I can't raise any of these rates without coming to the Council anyway, so, there is no mechanism in here that would allow me to raise them without coming to Council,just to be clear.We could use,and in fact we are using,TIF dollars for drainage in addition to some other water infrastructure and other infrastructure needs. That has been hugely helpful.As I mentioned before, that was one (1) of the major sources we were relying on but is also not a dependable and sustainable source because we don't have control of that being used just for storm water. CSO,we've spent about a little over$150 million since we got the consent decree and Phase One (I) portion of the plan. That is funded with sewer rates which is user fees as well. So, if you wanted to build that fee into the sanity sewer rates, you could do that. But, it just seems more appropriate that you would put it where it belongs, in the storm water fee, to take care of storm water issues. If it is built into the sewer rates, the priority is going to be on sanitary sewer issues. You'll get to the storm water issues after you deal with priority areas on the sanitary sewer side. If we have a consent decree that requires us to use a certain amount of dollars,those dollars are going to be allocated toward that consent decree before there is flexibility of taking care of drainage problems. So, I think since they are both user fee based, I would rather see them have a separate dedicated funding source. It is more transparent. Ms. Kesim interjected, And what is the $1.2 million? Committee Chair Teshka called for decorum and asked,Director Horvath,is your answer finished? Mr. Horvath replied, That is it, yeah. Committee Chair Teshka then gave the floor back to the Committee for further comment or main motion. Councilmember Tim Scott arrived at the meeting at 4:53 p.m. EXCELLENCE ACCOUNTABILITY INNOVATION I INCLUSION EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574235.9221 f 574.235.9173 TTD574.235.5567 www.southbendin.gov 8 ®CITY OF SOUTH BEND OFFICE OF THE CLERK Committeemember McBride made a motion to send Bill No. 61-18 to the full Council with no recommendation. Committeemember Williams-Preston seconded the motion which carried by a voice vote of four(4) ayes. With no further business, Committee Chair Teshka adjourned the Utilities Committee meeting at 4:54 p.m. Respectfully Subm' e J ke Teshka, Committee Chair EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227W.Jefferson Bvld South Bend.Indiana 46601 p 574.235.9221 1574.235.9173 TTD 574.235.5567 www.southbendin.gov 9