08-15-18 Personnel and Finance (#3)

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CITY OF SOUTH BEND I OFFICE OF THE CLERK taken care of We've got a net capital asset value of about $55 million. The replacement value of that is several hundreds of millions of dollars. So we were well underfunded in terms of updating pumps, well fields and even pipes. We have pipes from 1875 that are still in the ground. This will help us get some of that stuff up to speed. You'll see here the layout of the capital and then the total layout. This one (1) is always a little misleading and should probably do it a little differently. In that $15 million of services is a transfer out of the capital money but we have to count that as an expense out of that Waterworks Operation Maintenance Fund and into the Waterworks Capital Fund. So that$3.766 million is capital that we are doing but is also kind of being double counted in that$15 million. He continued, In addition to that, as you all may recall, we have been very fortunate to have TIF support. A number of our significant needs are where we've got some of our facilities in TIF districts So for 2019, we will have TIF investment in water main, valve and hydrant replacement, in the North Station Treatment Plant, and upgrades in our fellows and bootcom reservoir booster station. That has been significantly helpful as well. On the wastewater side, some major accomplishments this ye include two (2)big ones. One (1)is the digester gas utilization. That is where we take our solids and process them to break down the waste and it is an anaerobic process that breaks it down into, essentially, dirt. Then we have a program where we one hundred percent (100%) beneficially reuse those solids and apply them to farm fields. In addition to that, as these bugs are in there, it generates a lot of heat, kills the pathogens, but as they are eating they are producing methane. So we take that methane gas and clean it and use it in our trash trucks. In addition, we spent about $14 million on secondary treatment clarifiers. This is a tremendous success in a lot of ways but it allows us to return a lot less activated sludge through the process so we will save quite a bit on electric fees and pumping. It also gives us additional capacity in the plant and that is something that needed to happen. So as we try to move our Long-Term Control Plan forward, it will be very helpful as we will have more ability to treat more flow. He went on, On the wastewater side you can see the revenues are pretty flat from 2018. The expenses are significantly lower. Again,that is primarily due to the capital piece. So you can also see here(referencing a slide in the presentation)that the expenses are still greater than the revenue, just like last ye and the year before,so we continue to spend down our cash balance. Having said that, we are still in a very strong financial position so it is not something we are concerned with right now.We just wanted to point that out that is what we are doing. We are doing that on purpose. Here is the total budget, you can see from 2018 to 2019 in various line items it has gone down, a total of about$9 million.A significant portion of that is due to the decrease in capital spending. He continued, Organic Resources, again, through the work with the Council, you may recall you passed an ordinance to get the bags out. We had,essentially, 100,000 cubic yards of trash out there and the State came in a said you have to take care of that. We were able to do that and really turn it from a trash to a treasure program.Now,we have really great quality compost. We are a certified compost through the US Composting Industry and we've increased our revenue on our compost about ten percent (10%) this year. That has been very successful. Finally, budget highlights, you will see some of the capital spending on the wastewater and water we have in there. I also want to point out that,included in these two (2)budgets,there are no position increases for wastewater but on the water side, we have five (5) positions that range from six to sixteen percent (6% - 16%) increases. It is a combination of bringing them in line with other similar positions in the City and additional responsibilities. Any specific questions you may have on those, we would be glad to provide additional information on that. EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 1 227 W.Jefferson Bvld I South Bend,Indiana 46601 l p 574.235.9221 f 574.235.9173 I TTD 574.235.55671www.southbendin.gov 18