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REGULAR MEETING
<br />MARCH 27, 2017
<br />area. Flint, MI, at $910, is number one (1). Mr. Horvath stated, We are very fortunate where we
<br />are right now to have a really good water quality and to have staff that has kept it up, and kept it
<br />operating and made sure that it has been clean and safe for residents all this time. But you can
<br />see that our rates are four - hundred and eighty -eight (488) out of the five- hundred (500) largest
<br />systems in the United States. Mr. Horvath presented a list of the systems in Indiana that are also
<br />on the Food Watch list and made the top five - hundred (500) list. He stated, You can see that
<br />these are all significantly more than ours. Evansville was the lowest on the list and they're
<br />double what our rates are.
<br />Mr. Horvath presented another slide detailing a study done by the Indiana Finance Authority that
<br />was completed in November, 2016. He stated, You can see here that of all the utilities surveyed
<br />there are about $7.95 per 1,000 gallons for their water rates. Of the very large users, about $7 per
<br />1,000 gallons. South Bend is at $2.21 per 1,000 gallons. With the two (2) rate increases that we
<br />are talking about today, South Bend will be at $3.29 per 1,000 gallons, which is still two (2)
<br />times less than the other very large users. Mr. Horvath presented a slide showing data comparing
<br />cities to South Bend that are more similar in size to it. He then presented a slide of the six (6)
<br />year plan. He stated, Within a six (6) year period, you can see that we are going to generate about
<br />$22,500,00 from rates. We will have an operation and maintenance shortfall of about
<br />$7,800,000. Vehicle replacement needs is about $3,000,000. Water meter replacement — replaced
<br />on a fifteen (15) year cycle —will be $4,800,000. That leaves about $9,000,000 remaining from
<br />the money generated from rate to put into the other capital needs —a lot of the stuff you just saw
<br />in pictures. In addition to that —this is the first three (3) years, as I've mentioned —we'll use
<br />about $6,600,000, from the south side TIF and the river west TIF, to help meet that gap and to
<br />get us through the phasing so that we can still meet some of the critical needs that we have for
<br />the Utility.
<br />Mr. Horvath presented another slide, stating, I won't go through these. These show a little more
<br />detail about what we are going to do on a year -by -year basis. The very first year is to redo the
<br />south well field. It is critical for us, because we have one (1) source of water for the south area of
<br />town, right now. It's really vulnerable right now. If this goes down, we are going to be in trouble.
<br />We are going to build a water main and enhance the facility in the south and then decommission
<br />Erskine, because Erskine has high nitrates. Right now, we still have it active but we don't use it.
<br />Just in case there's an emergency and we don't have water, we would activate it, even though it's
<br />going to have high nitrates. Mr. Horvath presented another slide, stating, There's the overview. I
<br />think you guys saw the original plan. Mr. Horvath stated that the needs of the Utility was
<br />$88,000,000 in the original plan. He stated, We went back and spent a lot of time with staff and
<br />with Arcadus looking at this and coming up a with a plan that reflected the really critical stuff,
<br />and we got to a point where we felt like we would be comfortable with continuing to make sure
<br />that we could provide clean and safe drinking water for South Bend with $23,000,000 in capital
<br />improvements. Those are all listed out, and you can see which ones aren't on the list, which we
<br />will be doing on subsequent phases. Large ones were water main replacements as well as a
<br />couple of elevated tanks. Instead of doing elevated tanks, we are going to keep with the operation
<br />scheme that they have set up current, and we will do some of the pumps in booster stations and
<br />try to make sure that some of these booster stations are up to speed and that our ground service
<br />tanks are in good shape.
<br />Councilmember Dr. David Varner asked Mr. Horvath to return to a previous slide that listed the
<br />dollar summary of the plan and leave the slide on- display for the duration of the discussion.
<br />Councilmember Dr. Varner asked, Beginning in the year 2020, what is the funding shortfall that
<br />you see as needs? Because there is only going to be —I think you said — $9,000,000 available.
<br />How many more dollars are we talking about on an annual basis that's going to be needed,
<br />beginning after 2019, to fund the program that you deem necessary?
<br />Mr. Horvath responded that they looked at the most critical needs for the next five (5) years.
<br />Based on those critical needs, they determined a fully funded plan. He stated that there would be
<br />$1,700,000 left for capital if all the numbers were extrapolated to 2023.
<br />Councilmember Dr. Varner asked, Is that adequate to meet your $66,000,000 balance, going
<br />forward?
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