CITY OF JOLIET, ILLINOIS WATER & SEWER RATE STUDY BRIEFING SEPTEMBER 19, 2016

Transcription

1 CITY OF JOLIET, ILLINOIS WATER & SEWER RATE STUDY BRIEFING SEPTEMBER 19, 2016

2 Agenda Background Financial plan / rate increase recommendations Impacts to water and sewer bills 2

3 Water and Sewer Enterprise Fund Self-funded, meaning rates and fees pay for services provided No taxes or other funding sources Projects paid with cash or debt Does not include garbage utility, although utility bills collect garbage fees $90 $80 $70 $60 $50 $40 $30 Typical Monthly Residential Utility Bill 7 ccf Garbage, $29 Sewer, $32 $20 $10 Water, $23 $- 3

4 Typical bill comparison August 2015 $160 $140 $120 Average Residential Monthly Water & Sewer Bill Using 7 ccf per Month Current Rates $54 Monthly Bill $100 $80 $60 Regional Average: $65/month $40 $20 $- Water Bill Sewer Bill Sanitary District Current Avg Among other Illinois communities, Joliet s existing utility rates are lower than average (a) Communities with combined water and sewer rates have solid blue bar 4

5 Typical bill comparison - today $160 $140 $120 Average Residential Monthly Water & Sewer Bill Using 7 ccf per Month Current Rates $54 Monthly Bill $100 $80 $60 Regional Average: $68/month $40 $20 $- Water Bill Sewer Bill Sanitary District Current Avg The regional average has increased about 4.5 percent since August 2015 (a) Communities with combined water and sewer rates have solid blue bar 5

6 How have Joliet rates and average industry rates changed? Water and Sewer CPI Joliet General CPI Over time, Joliet rates have increased comparable with general inflation The industry average increase has substantially outpaced Joliet 6

7 Factors contributing to rising utility rates Reduced growth & consumption leading to lower revenues for many utilities Most utility costs are fixed and do not vary with water use Inflation on operating and capital costs Increasing regulatory requirements / consent orders Aging facilities require renewal and replacement 7

8 Joliet s Utility Financial Challenges Rates unchanged since 2011, while nationally rates have increased about 36% Must do Long Term Control Plan and phosphorus removal ($106 million) Deferring renewal and replacement will cause further deterioration of water and sewer system, leading to higher maintenance costs and water loss Revenue increases are needed to meet rising operational costs, future CSO loan requirements, and renewal and replacement projects 8

9 Proposed Water Projects 9

10 Water Implementation Schedule and Project Costs 5-Year Water Main Replacement Program Year Project Name Loan Amount 1 Downtown Water Main Replacement $ 1,400,000 Glenwood Water Main Replacement $ 3,200,000 Northeast Raw Water Line Analysis $ 500,000 Forest Park Phase I $ 725,000 Terry Drive WM Replacement $ 1,000,000 Marycrest Water Main Replacement Phase II $ 800,000 $ 7,625,000 2 Raynor Park WM Replacement Phase I $ 2,200,000 Schriber Water Main Replacement $ 300,000 Marycrest Water Main Replacement Phase III $ 3,325,000 Jefferson Street Water Main Replacement $ 1,375,000 $ 7,200,000 3 South Raynor WM Replacement $ 950,000 Garnsey Park WM Replacement Phase I $ 1,850,000 Marycrest Water Main Replacement Phase IV $ 2,950,000 Krings Acres WM Replacement $ 1,550,000 $ 7,300,000 4 Raynor Park WM Replacement Phase II $ 3,175,000 Garnsey Park WM Replacement Phase II $ 2,200,000 Mills Water Main Lining $ 800,000 Ridgewood Water Main Replacement Phase II $ 775,000 $ 6,950,000 5 Northeast Raw Water Line Rehab $ 2,000,000 Forest Park Phase II $ 3,225,000 Reedswood Area WM Replacement $ 1,700,000 $ 6,925,

11 Proposed Sewer Projects 11

12 Sewer Implementation Schedule and Project Costs 5 Year Sewer Rehabilitation Plan Project Area Loan Year Loan Amount Project Description Chicago Street 2017 $781,000 Sewer lining and MH rehabilitation Ridgewood 2017 $1,705,000 Sewer lining and MH rehabilitation Mayfair 2017 $1,100,000 MH rehabilitation and sewer grouting Kerwin Estates 2017 $1,727,000 Sewer lining and MH rehabilitation Parkwood & Park Hill 2017 $858,000 Sewer lining and MH rehabilitation Edgecreek, Springview, Thunder Ridge, & Bee Dee Highlands 2017 $418,000 sewer grouting 2017 $6,589,000 Forest Park 2018 $1,969,000 sewer lining and MH rehabilitation Parkview 2018 $3,014,000 sewer lining and MH rehabilitation Benton CSO Basin 2018 $913,000 sewer lining, MH rehabilitation and sewer separation Washington CSO Basin 2018 $990,000 sewer lining, MH rehabilitation and sewer separation 2018 $6,886,000 Belmont Interceptor Replacement 2019 $4,928,000 Pipe bursting Rock Run Interceptor Sewer Rehab 2019 $2,046,000 Sewer lining and MH rehabilitation 2019 $6,974,000 Marycrest 2020 $3,443,000 sewer lining and MH rehabilitation Northeast Area 2020 $2,530,000 sewer lining and MH rehabilitation Reedswood 2020 $1,177,000 sewer lining and MH rehabilitation 2020 $7,150,000 Northeast Area 2021 $2,574,000 sewer lining and MH rehabilitation Spring Creek Interceptor 2021 $1,793,000 sewer lining and MH rehabilitation Raynor Park 2021 $627,000 sewer lining and MH rehabilitation Twin Oaks 2021 $1,320,000 sewer lining and MH rehabilitation Idylside 2021 $440,000 sewer lining and MH rehabilitation 2021 $6,754,

13 Proposed Utility Revenue Increases Ten year plan illustrates proposed revenue increases Recommend adopting first three years and then reevaluate financial position 1 3

14 Existing and Proposed Rates Residential Owner Rates Existing Proposed FY 2016 FY 2017 FY 2018 FY 2019 Water Daily Charge $ $ $ $ Water Volume Charge (per HCF): First 2 HCF $ $ $ $ Over 2 HCF $ $ $ $ Sewer Daily Charge $ $ $ $ Sewer Volume Charge (per HCF) $ $ $ $ Sewer Separation Fee (per day) $ $ $ $ Overall Percentage Increase 12.5% 10.5% 4.0% (a) Simplified to show Residential Owner class only (b) Proposed rates for all classes will increase by the overall percentage increase (c) Tap fees and all other miscellaneous fees are unchanged 1 4

15 Key financial planning performance measures Reserves $ -millions (5.0) (10.0) Op. Reserves w/proposed Increases Op. Reserve w/existing Rates Op. Reserve Target Proposed increases meet reserve targets of 90 Days O&M plus debt service reserve deposits Without revenue increases, reserves will be depleted in

16 Key financial planning performance measures 3.00 Debt Service Coverage DSC w/proposed Increases DSC w/no Rev Increases DSC Target Proposed increases meets 1.35x Debt Service Coverage (DSC) target Without revenue increases, DSC falls below the target 1 6

17 Regional residential typical bill comparison $160 $140 $120 Average Residential Monthly Water & Sewer Bill Using 7 ccf per Month $54 $61 $70 Monthly Bill $100 $80 $60 Regional Average: $68/month $40 $20 $- Water Bill Sewer Bill Sanitary District Current Avg With proposed 2016 increase, Joliet s typical residential bill will remain below the regional average (a) Communities with combined water and sewer rates have solid blue bar (b) Joliet Proposed assumes an across the board increase of 12.5% effective November 1,

18 Regional senior residential typical bill comparison $140 Average Residential Senior Monthly Water & Sewer Bill Using 5 ccf per Month $120 $100 $36 $41 $47 Monthly Bill $80 $60 Regional Average: $50/month $40 $20 $- Water Bill Sewer Bill Sanitary District Current Avg With proposed 2016 increase, Joliet s typical senior residential bill will remain below the regional average (a) Communities with combined water and sewer rates have solid blue bar (b) Joliet Proposed assumes an across the board increase of 12.5% effective November 1, 2016 * indicates communities with discounted senior rates 1 8

19 QUESTIONS?

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