Village of Baltimore Water & Wastewater Analysis. July 2018

Transcription

1 Village of Baltimore Water & Wastewater Analysis July 2018

2 Table of Contents Introductory Summary... 1 Data... 1 Water Treatment Plant (WTP)... 1 Production... 2 Costs & Debts... 2 Wastewater Treatment Plant (WWTP)... 2 Production... 3 Costs & Debts... 3 VOB Usage & Rates... 4 Rates... 4 New Rates... 6 Conclusion... 6 Charts & Data... 8 Water Treatment Plant... 8 WTP Production... 8 WTP Costs & Debt... 9 Wastewater Treatment Plant WWTP Treatment WWTP Costs & Debt Rates & Combined Data Chart - WTP & WWTP Costs & Outlays Chart WTP & WTTP Production Rate History... 13

3 Introductory Summary The Village of Baltimore operates a water treatment plant and a wastewater treatment plant. In recent years the Village has upgraded both facilities and has experienced issues related to the upgrades. Additionally, Village consumer rates for water and wastewater, as well as the Village s debt obligation have not been reviewed and revised for several years. Analysis of thirty months of data and prior Council decisions revealed prior information provided to Council was not always accurate which has resulted in insufficient savings for known future maintenance and repair. Rate adjustments in line with debt amortization schedules and accounting for current operational costs were passed by Council to provide for future maintenance and repair while minimizing the need to rely on future debt obligations. Data Data regarding water production, wastewater treatment, and billing data were compiled for review and analysis. The data range covers thirty (30) months, starting January 2015 and ending in June January 2015 was chosen as a starting date due to the repair/replacement of the master meter at WTP. Details from 38,422 individual bills were summarized and analyzed. Financial data regarding operating costs, loan and debt obligations, and usage rates were compiled with a starting year of The decision to use seventeen (17) years of financial data ensures that the debt obligations, which are responsible for much of the utility charges, are fully captured for analysis. Doing such permits review and analysis of rates prior to the Village incurring large debt obligations. Water Treatment Plant (WTP) The Water Treatment Plant (WTP) was originally built and placed into operation in While it was occasionally expanded and some equipment updated over the years, the original WTP building and treatment equipment and process from 1937 remained in use until 2014 when a new plant was built over the existing plant. This plant, with a new process for treating water, was put online and placed in service in April The WTP pulls raw well water from three (3) wells and treats the water for consumption through a threestep process. First, the water is sent through a three-cell pressure filter that removes manganese from the raw water. Then the water is sent through two ion exchange softeners to remove iron and lower water hardness. The last step disinfects the water with sodium hypochlorite. Finished water that is ready for use and consumption is transferred to the elevated tower or ground storage tanks for use. The finished water is then distributed throughout the Village. There are approximately twenty-two (22) miles of water line in the Village. Much of the water distribution system lines remain dated with some original lines still in use. In some instances this could mean the line dates to 1937 but many of the lines were installed after the original plant was built in conjunction with the 1959 expansion. Water line replacement costs approximately $150 per foot to install. To replace the approximately twenty-two (22) miles of water line in the Village, the estimated cost is $17,424,000. Page 1 of 15

4 Production For the thirty (30) month period analyzed, WTP produced a total of 215,630,521 gallons of water. The minimum water produced during this period was 5,626,952 gallons and the maximum water production was 9,963,211 gallons. The average monthly production was 7,450,000 gallons. Costs & Debts Since 2006 the WTP has had an average operating cost of $352,803.98, with a range between $301, and $428, During the same period there were additional annual disbursements (e.g. loan payments, capital outlays, etc.) averaging $693, and ranging between $111, and $2,570, Since 2008 the Village has incurred debt obligations totaling $4,405,739 of which $3,128,056 remains due. The largest debt obligation is the $2.5M for the WTP upgrade and expansion. The remainder of the debt is for various distribution system improvements. WTP Costs Operating Costs Outlays 2006 $306, $111, $335, $180, $301, $502, $359, $2,570, $391, $1,215, $351, $149, $361, $447, $319, $274, $368, $377, $428, $1,194, $406, $946, $303, $346, Total $4,233, $8,317, Average $352, $693, Low $301, $111, High $428, $2,570, Not included in this debt is the $359, the Village spent in 2017 to clean and rehabilitate the elevated water tower. Records indicate the tower had not been cleaned, closely inspected inside, or repaired in at least 10 years. We were able to negotiate terms with the company repairing the tower to spread these payments over six (6) years while also obtaining annual inspections and maintenance from the company. Wastewater Treatment Plant (WWTP) The Wastewater Treatment Plant (WWTP) was built in 1959 and upgraded in Starting in the late 1980s or early 1990s, the Ohio Environmental Protection Agency (OEPA) began notifying the Village the WWTP would need to be upgraded for increased capacity. The Village undertook multiple studies but took over ten(10) years to take any definitive action, finally doing so only once the OEPA threatened daily fines if the Village did not upgrade the WWTP. The new WWTP was built in In 2008 construction began on a new WWTP and Phase I was placed online and in service in The Village chose to switch from a more traditional treatment plant to a membrane system for treating wastewater. The VOB Water Reclamation Facility utilizes the Zee Weed Membrane Ultrafiltration Wastewater Treatment System (MBR). The MBR system produces the best effluent in Ohio. The membranes are approximately ten feet high cassettes with hundreds of straw like modules that have thousands of micro holes (also called trains). These holes only allow clean water to enter into the fiber. Page 2 of 15

5 Pumps develop a small vacuum to the straws and this suction draws the treated water through the membranes while all other solids remain outside and are eventually wasted to the sludge system. The effluent is near drinking water quality. The water is measured in our labs and outside labs every day and the pollutants are consistently below the detectable limits of the lab instruments. While the plant produces the highest quality effluent which is a great benefit to the Little Walnut Creek and surrounding environment, the downside of the system is high operation and maintenance (O & M) costs. These costs are energy or electricity to run the vacuum pumps and the replacement costs of the MBRs that have a life expectancy of ten (10) to fifteen (15) years. The MBR systems is quicker at treating wastewater than traditional plants. It is believed that there are less than a dozen MBR plants in Ohio. Due to the unique design and limited use around the state, issues with the new plant remained unresolved until recently. In 2016 and 2017 the plant designers were brought back to the plant for several weeks of diagnosis and correction. Some issues i.e. high electric consumption cannot be resolved until Phase II is placed in service. Phase I is designed to process and treat an average of 670,000 gallons per day. Recently the WWTP processed 1,200,000 gallons in a twenty-four (24) hour period. Once Phase I treats 80% of its design capacity for three (3) months, OEPA will mandate Phase II be placed into service. Phase I contains four (4) trains each with a life expectancy of ten (10) to fifteen (15) years, meaning each will need replaced sometime between 2018 and Each train costs approximately $100,000 and with other associated costs of installation, this routine maintenance of replacing the trains is estimated at $500, The current estimate for implementing Phase II is $1,500, Production For the 30 month period analyzed, WWTP treated a total of 437,862,090 gallons of wastewater. The minimum amount treated during this period was 8,255,000 gallons and the maximum amount treated was 21,730,000 gallons. The average monthly amount treated is 14,595,403 gallons. Costs & Debts Since 2006 the WWTP has had an average operating cost of $422,620.08, with a range between $283, and $578, During the same period there were additional annual disbursements (e.g. loan payments, capital outlays, etc.) averaging $2,010, and ranging between $550, and $6,069, Since 2009 the Village has incurred debt obligations totaling $7,690,342 of which $5,075,163 remains due. $5.7 million of this debt is for the WWTP upgrade and expansion WWTP Costs Operating Outlays 2006 $578, $3,659, $361, $6,069, $297, $3,949, $283, $3,061, $424, $2,580, $438, $717, $424, $727, $363, $817, $371, $634, $569, $764, $496, $595, $462, $550, Total $5,071, $24,128, Average $422, $2,010, Low $283, $550, High $578, $6,069, Page 3 of 15

6 with the remainder being for sanitary sewer line upgrades and expansion. With an average of 1,273 billed units per month, each billed unit has a total debt obligation of approximately $6,043.00, or $34.00 per month, for wastewater alone, to retire the debt in 15 years. VOB Usage & Rates Rates The Village WTP and WWTP rates have historically been adjusted either by Council adopting a new ordinance with new rates or by ordinance that includes automatic rate adjustments. Since 2000, there have been 13 WTP rate adjustments and 10 WWTP rate adjustments. The last adjustment for either was in 2013 and the adjusted rates went into effect in Prior to 2001, water usage was billed at a minimum 6,000 gallons while wastewater was billed at a minimum 1,000 gallons. In 2001 the Village moved to a minimum usage of 2,000 usage per bill for both water and wastewater. The table below provides a history of the Village water, wastewater, and debt rates. Added to the chart are columns adjusting for inflation to 2018 dollars. 1 WTP Rate WTP Rate 2018 $ WTP Debt WWTP Rate WWTP Rate 2018 $ WWTP Debt Storm Minimum Bill Minimum Bill 2018 $ 2000 $ $8.19 $3.20 $4.70 $21.00 $40.94 $ $ $8.30 $3.36 $4.76 $21.00 $41.94 $ $6.03 $8.44 $7.06 $9.88 $36.00 $49.09 $ $6.21 $8.47 $7.41 $10.11 $36.00 $49.62 $ $6.40 $8.57 $8.15 $10.91 $36.00 $50.55 $ $9.29 $12.07 $9.90 $12.87 $22.00 $41.19 $ $9.75 $12.19 $10.89 $13.61 $27.00 $47.64 $ $10.73 $13.14 $10.89 $13.34 $27.00 $48.62 $ $11.80 $13.86 $10.00 $10.89 $12.79 $17.00 $49.69 $ $12.98 $15.24 $10.00 $9.80 $11.50 $17.00 $49.78 $ $12.98 $14.85 $10.00 $9.80 $11.21 $33.00 $65.78 $ $12.98 $14.61 $10.00 $9.80 $11.03 $33.00 $65.78 $ $12.98 $14.19 $10.00 $16.80 $18.37 $33.00 $72.78 $ $15.71 $16.91 $10.00 $16.80 $18.08 $33.00 $1.00 $76.51 $ $14.71 $15.59 $10.00 $16.80 $17.80 $33.00 $1.00 $75.51 $ $14.71 $15.60 $10.00 $16.80 $17.82 $33.00 $1.00 $75.51 $ $14.71 $15.39 $10.00 $16.80 $17.58 $33.00 $1.00 $75.51 $ $14.71 $15.01 $10.00 $16.80 $17.15 $33.00 $1.00 $75.51 $ Rates calculated using the Bureau of Labor Statistics Inflation Calculator, using January of the base year and January 2018, 2 $16.74 was the rate charged for 6,000 gallons. The rate for 2,000 gallons has been entered for easier comparison. 3 $17.58 was the rate charged for 6,000 gallons. The rate for 2,000 gallons has been entered for easier comparison. Page 4 of 15

7 To determine total amounts billed, 38,422 individual bills between January 2015 and June 2017 were summarized and analyzed. The summary data is as follows: Billed Usage Total Amount Billed (WTP & WWTP) Total Amount Billed 2018 $ Jan 5,368,000 $140, $149, Feb 5,781,600 $143, $143, Mar 5,435,400 $139, $148, Apr 5,707,000 $144, $153, May 5,642,000 $146, $155, Jun 5,607,900 $142, $150, Jul 5,530,300 $142, $151, Aug 5,400,800 $139, $147, Sep 5,753,300 $146, $155, Oct 5,120,600 $139, $147, Nov 5,405,400 $142, $151, Dec 5,384,700 $140, $149, Total 66,137,000 $1,708, $1,803, Jan 5,191,000 $140, $146, Feb 5,481,900 $143, $149, Mar 5,737,200 $144, $151, Apr 5,419,300 $139, $146, May 5,473,400 $141, $147, Jun 5,646,300 $144, $150, Jul 5,241,400 $139, $146, Aug 5,671,400 $144, $150, Sep 5,440,900 $143, $149, Oct 5,035,000 $137, $143, Nov 5,334,400 $142, $148, Dec 4,844,900 $135, $141, Total 64,517,100 $1,695, $1,774, Jan 5,236,700 $142, $145, Feb 5,192,100 $139, $142, Mar 4,898,700 $137, $140, Apr 4,817,800 $136, $139, May 4,780,000 $136, $139, Jun 5,531,500 $143, $146, Total 30,456,800 $835, $852, Grand Total 161,110,900 $4,239, $4,430, Rates calculated using the Bureau of Labor Statistics Inflation Calculator, Page 5 of 15

8 DEBT New Rates Village Council has been discussing the current rates and rate structure for approximately one year. In early 2018 several special meetings were held to specifically discuss water and wastewater rates, debt rates, how to charge debt obligations, and how to set rates so future maintenance and improvements can be made without incurring additional debt obligations while providing some relief to the low-use users 5 while not pricing out current and future large-use commercial users. The original discussions involved changing from a fixed rate for debt for all users to a per gallon rate. By applying the debt obligation to users bills in this manner, each user would pay the debt in proportion to their overall usage. Local business owners attended a special meeting at which this was discussed and, after discussion with them about how their utility bills would increase, it was quickly determined that debt obligations could not be applied proportional to usage without pricing out large-use commercial users. Ultimately a stepped payment system for debt based on usage was devised. Each usage level will pay a flat debt rate and as usage increases the debt payment increases. At the same time, Council decided to increase the storm sewer payment so that future storm sewer installations and upgrades can be performed without incurring additional debt obligations. The final determination on rates, as presented and passed in Ordinance are as follows: Storm Sewer: $3.00 / month WTP Rates WWTP Rates $7.50/1,000 gal $9.00/1,000 gal Level 1 $12.00 $ ,500 gal Level 2 $14.00 $ ,501-9,000 gal Level 3 $16.00 $ ,001-20,000 gal Level 4 $20.00 $40.00 >20,000 gal Also, as part of the ordinance, the fee for minimum usage where there was zero (0) gallons used was eliminated. However, the minimum debt obligation will still be charged. Conclusion The Village has undertaken months of review and discussion regarding WTP and WWTP usage, expenses, and consumer rates. During the discussions it became apparent that the prior Village Administrator had not historically provided Council reliable financial information nor accurate operational information regarding the WTP and WWTP plants. Council made its decisions in the best interest of the Village based on imperfect information and now, with accurate and reliable information have found it necessary to adjust rates. 5 Which have been identified by Council as those using less than 2,000 per month and are typically our elderly residents, many of whom may also be on fixed incomes. Page 6 of 15

9 The usage rate adjustments have been made to not only cover the current operational costs but to account for inflation and to build reserve funds for repair and replacement of existing infrastructure while limiting the future need to incur additional debt. The debt rate adjustments have been made to cover debt obligations according to a debt amortization schedule and to retire debts as soon as practical. Retiring debt as soon as practical will permit for additional repairs and replacement of infrastructure 6. With rates modeled for current needs and future maintenance, the Village is doing planning for shortterm and long-term infrastructure projects. With these new rates, the Village has already identified approximately $300, for water line infrastructure replacement. That results in approximately 2,000 feet of water line replacement, which could increase if the Village receives additional grant funding using the $300, as the Village s share. This year the Village has already done over $17, in storm water upgrades and is planning on similar upgrades next year. While much work remains on the Village s infrastructure, the Village Administration and employees continue to evaluate and monitor WTP and WWTP usage, expenses, and reported problems. The Village s current infrastructure and debt issues occurred over time and will take time to fully resolve but with the current financial and operational plans that have been implemented, the Village will be better positioned for future infrastructure repairs and upgrades. 6 For example, in 2018 the Village has a debt obligation of approximately $775, out of an approximate budget of $3,100,00.00, or 25% of the Village s total budget Page 7 of 15

10 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Charts & Data Water Treatment Plant WTP Production WTP Production Jan-15 6,773,856 Feb-15 7,471,890 Mar-15 5,849,550 Apr-15 6,033,221 May-15 8,209,123 Jun-15 7,480,569 Jul-15 Aug-15 7,925,580 Sep-15 6,390,005 Oct-15 6,949,611 Nov-15 6,687,504 Dec-15 5,626,952 Jan-16 6,773,856 Feb-16 9,017,279 Mar-16 9,291,837 Apr-16 8,213,734 May-16 9,963,211 Jun-16 8,694,221 Jul-16 8,503,487 Aug-16 8,499,609 Sep-16 7,514,425 Oct-16 8,081,366 Nov-16 Dec-16 7,620,700 Jan-17 7,657,479 Feb-17 8,079,479 Mar-17 8,235,648 Apr-17 7,519,111 May-17 8,670,052 Jun-17 7,897,166 Total 215,630,521 Average 7,701,090 Low 5,626,952 High 9,963,211 10,000,000 9,500,000 9,000,000 8,500,000 8,000,000 7,500,000 7,000,000 6,500,000 6,000,000 5,500,000 5,000,000 WTP Production Page 8 of 15

11 Operating Costs Outlays WTP Costs & Debt Costs Outlays 2006 $306, $111, $335, $180, $301, $502, $359, $2,570, $391, $1,215, $351, $149, $361, $447, $319, $274, $368, $377, $428, $1,194, $406, $946, $303, $346, Total $4,233, $8,317, Average $352, $693, Low $301, $111, High $428, $2,570, WTP Costs $450, $400, $350, $300, $250, $200, $150, $100, $50, $0.00 $2,500, $2,000, $1,500, $1,000, $500, $0.00 WTP Operating Costs WTP Outlays Page 9 of 15

12 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Wastewater Treatment Plant WWTP Treatment Treated Gallons Jan-15 14,513,000 Feb-15 11,799,000 Mar-15 18,836,000 Apr-15 18,101,000 May-15 12,773,000 Jun-15 20,095,000 Jul-15 19,726,000 Aug-15 14,586,000 Sep-15 11,442,100 Oct-15 11,077,600 Nov-15 10,297,000 Dec-15 14,603,000 Jan-16 12,646,000 Feb-16 15,137,000 Mar-16 20,545,000 Apr-16 16,047,000 May-16 13,503,000 Jun-16 11,549,000 Jul-16 9,959,000 Aug-16 13,318,000 Sep-16 9,335,000 Oct-16 10,053,000 Nov-16 8,255,000 Dec-16 13,681,000 Jan-17 21,730,000 Feb-17 13,580,000 Mar-17 21,370,000 Apr-17 19,210,000 May-17 17,050,000 Jun-17 13,045,390 Total 437,862,090 Average 14,595,403 Low 8,255,000 High 21,730,000 23,500,000 21,500,000 19,500,000 17,500,000 15,500,000 13,500,000 11,500,000 9,500,000 7,500,000 WWTP Treated WWTP Page 10 of 15

13 Operating Costs Outlays WWTP Costs & Debt Operating Costs Outlays 2006 $578, $3,659, $361, $6,069, $297, $3,949, $283, $3,061, $424, $2,580, $438, $717, $424, $727, $363, $817, $371, $634, $569, $764, $496, $595, $462, $550, Total $5,071, $24,128, Average $422, $2,010, Low $283, $550, High $578, $6,069, WWTP Costs $575, $525, $475, $425, $6,000, $5,000, $4,000, $3,000, $375, $2,000, $325, $1,000, $275, $0.00 WWTP Operating WWTP Outlays Page 11 of 15

14 Water Treatment Plant Watewater Treatment Plant Operating Costs Outlays Rates & Combined Data Chart - WTP & WWTP Costs & Outlays WTP & WWTP Costs & Outlays $700, $6,100, $600, $5,100, $500, $4,100, $400, $3,100, $300, $2,100, $200, $1,100, $100, $100, $ ($900,000.00) WTP Operating Costs WWTP Operating WTP Outlays WWTP Outlays Chart WTP & WTTP Production WTP & WWTP Production 10,000,000 9,500,000 9,000,000 8,500,000 8,000,000 7,500,000 7,000,000 6,500,000 6,000,000 5,500,000 5,000,000 23,500,000 21,500,000 19,500,000 17,500,000 15,500,000 13,500,000 11,500,000 9,500,000 7,500,000 WTP WWTP Page 12 of 15

15 Rate History Data Chart Water Treatment Plant Wastewater Treatment Plant Minimum Bills Rate Rate 2018 $ Debt Rate Rate 2018 $ Debt Storm Actual $ 2018 $ Inflation WTP Loans WWTP Loans 1999 $16.74 $25.25 $3.05 $4.60 $11.00 $30.79 $ % 2000 $16.74 $24.58 $3.20 $4.70 $21.00 $40.94 $ % 2001 $17.58 $24.89 $3.36 $4.76 $21.00 $41.94 $ % 2002 $6.03 $8.44 $7.06 $9.88 $36.00 $49.09 $ % 2003 $6.21 $8.47 $7.41 $10.11 $36.00 $49.62 $ % 2004 $6.40 $8.57 $8.15 $10.91 $36.00 $50.55 $ % 2005 $9.29 $12.07 $9.90 $12.87 $22.00 $41.19 $ % 2006 $9.75 $12.19 $10.89 $13.61 $27.00 $47.64 $ % 2007 $10.73 $13.14 $10.89 $13.34 $27.00 $48.62 $ % 2008 $11.80 $13.86 $10.00 $10.89 $12.79 $17.00 $49.69 $ % $ 86, $12.98 $15.24 $10.00 $9.80 $11.50 $17.00 $49.78 $ % $ 616, $ 5,704, $12.98 $14.85 $10.00 $9.80 $11.21 $33.00 $65.78 $ % $ 91, $12.98 $14.61 $10.00 $9.80 $11.03 $33.00 $65.78 $ % 2012 $12.98 $14.19 $10.00 $16.80 $18.37 $33.00 $72.78 $ % $ 1,156, $ 1,986, $15.71 $16.91 $10.00 $16.80 $18.08 $33.00 $1.00 $76.51 $ % 2014 $14.71 $15.59 $10.00 $16.80 $17.80 $33.00 $1.00 $75.51 $ % 2015 $14.71 $15.60 $10.00 $16.80 $17.82 $33.00 $1.00 $75.51 $ % 2016 $14.71 $15.39 $10.00 $16.80 $17.58 $33.00 $1.00 $75.51 $ % $ 2,454, $14.71 $15.01 $10.00 $16.80 $17.15 $33.00 $1.00 $75.51 $ % Page 13 of 15

16 Rates Inflation Chart Rate History Actual Dollars Rate History - Actual Dollars $ % $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $ % 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% $ % WTP Rate WTP Debt WWTP Rate WWTP Debt Storm Inflation Loans: 2008 (WTP); 2009 (WTP & WWTP); 2010 (WTP); 2012 (WTP& WWTP); (2016 (WTP) Page 14 of 15

17 Rates Rates $ Inflation Chart Rate History 2018 Dollars Rate History Dollars $80.00 $70.00 $60.00 $50.00 $40.00 $30.00 $20.00 $10.00 $ % 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% WTP Rate WTP Debt WWTP Rate WWTP Debt Storm Inflation Loans: 2008 (WTP); 2009 (WTP & WWTP); 2010 (WTP); 2012 (WTP& WWTP); (2016 (WTP) Chart Rates Actual vs 2018 Dollars $30.00 Rate History - Actual vs Dollars $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 WTP Rate WTP Rate WWTP Rate WWTP Rate Page 15 of 15