AGENDA I. Context: Transition to Impervious Area II. Program - PDF document

1/22/2019 11 JANUARY 2019 | PROPRIETARY AND CONFIDENTIAL ST STORM ORMWATER ER RA RATE TE TRAN TRANSITIO SITION Chamber of Commerce January 22, 2019 AGENDA I. Context: Transition to Impervious Area II. Program Costs: UG’s Needs III. Cost Recovery: Equitable Approach IV. Impact: Bill Impact V. Stakeholder Outreach 2 1

1/22/2019 CONTEXT: TRANSITION TO IMPERVIOUS AREA Context: Why Focus on Stormwater? • Our top priority is protecting protecting public public health health an and our our envi enviro ronment nment and complying with federal, federal, st state and and lo local regula regulatory ry standards andards • Commission requested evaluation of service area and solutions to address the following: •Reduce frequent flooding risks •Improve water quality in our waterways •Enhance and maintain drainage infrastructure in a 160 square mile service area 4 Black & Veatch 2

1/22/2019 Context: What is the Significance of the Existing Stormwater Rate? • The Stormwater fund is fully funded by user fees; not taxes • Only customers with an electric or water account pay $4.50 per month • Current revenue is approximately $3.4M per year • Properties of different sizes pay the same fee • The charge is not proportional to stormwater runoff from a property Need Need to to addr ddress ess equity equity of of cost cost reco recovery very in in rat rate str struct cture 5 Black & Veatch Context: Why is UG focusing on transitioning to an impervious area based rate now? Impervious Area • The current approach of a uniform fee contributes to significant inequities in cost recovery •Under current stormwater fee, 93% of revenue is Residential, 36% generated from Residential customers •Non ‐ Residential customers make up 64% of impervious area Non-Residential, 64% • As program costs increase to address operational needs, inequi equity ty in in cost cost reco recovery very will ill be be exacerba exacerbated ted Prop Proposed rate rate stru structure refle reflects ts fai fair and and equitable equitable co cost rec recovery ry fr from all all pr properti operties es 6 Black & Veatch 3

1/22/2019 PROGRAM COSTS: WHAT ARE THE UG’S NEEDS? Program Costs Issues Operation & Maintenance 1 Current Situation Solution Needed   Approximately $2M of stormwater operation The services provided by the stormwater program and maintenance costs are recovered from should be funded from the revenue generated by the wastewater fee the stormwater fee  Costs in the wastewater budget need to be moved to the stormwater budget Deferred Maintenance 3 1 Current Situation Solution Needed   Due to inadequate funding of maintenance, Increase funding for enhanced and consistent routine maintenance of the system has been annual maintenance activities  deferred Provide funding to catch up on deferred maintenance 8 Black & Veatch 4

1/22/2019 Program Costs Issues Major Capital Expenditures 1 Current Situation Solution Needed   Existing fee has only been able to fund 2 Significant investment necessary to address flooding stormwater projects in the last 10 years for a and water quality issues total of $5M Emergency Reserve 3 1 Current Situation Solution Needed   The stormwater system has no emergency Industry best practice to maintain a operating reserve set aside reserve equal to 30 ‐ 90 days of operating expenses 9 Black & Veatch What is included in the Financial Plan? Projection ojection Projection ojection of of Projection ojection of of Projection ojection of of Projection ojection of of of of annual annual annual annual annual annual ca cash sh annual annual O& O&M annual annual ma manda ndatory tory O& O&M cos costs ex existing and and financin fin ing of of reserve re tr transfers, if if an any futu fu ture deb debt ca capi pital requir quirem emen ents ser service ice Existing G.O. Stormwater O&M 25% of Major Bonds Achieve a 60 ‐ day PILOT Additional LOS Capital to be Reserve by Year 3 Proposed G.O. funded from Indirect Costs Deferred (2020) Bonds to fund Revenue Maintenance Capital A fin financia ial plan plan prov provides ides a reaso asonable able fo forecast to to design design an an evolvin evolving fe fee program program 10 5

1/22/2019 Preview of Financial Plan Re Revenue Requirements 2017 2017 2018 2018 2019 2019 2020 2020 2021 2021 2022 2022 2023 2023 2024 2024 Pr Prelim elim Bud Budget Bud Budget Projec Pr ojected Projec Pr ojected Pr Projec ojected Projec Pr ojected Pr Projec ojected Operation & Maintenance $697,800 $834,100 $849,000 $3,528,600 $3,626,500 $4,019,600 $4,365,500 $4,513,700 PILOT / Direct Costs 240,715 251,600 256,600 597,200 645,600 776,100 789,600 900,100 Debt Service 1,102,931 1,249,200 1,829,700 2,051,200 2,492,100 3,006,800 3,816,500 4,650,400 Capital Outlay 1,470,710 1,900,000 1,900,000 3,384,200 4,869,100 4,908,600 5,672,100 5,713,200 Transfer to Operating Reserve 0 0 0 135,200 141,500 331,400 56,000 16,100 Less: Miscellaneous Revenue ‐ 27,701 ‐ 17,600 ‐ 6,900 ‐ 4,100 ‐ 4,400 ‐ 5,700 ‐ 6,100 ‐ 5,100 Less: Use of Funds on Hand (a) ‐ 30,826 ‐ 817,300 ‐ 1,328,400 586,600 ‐ 557,000 753,600 ‐ 669,000 411,700 Net Re Net Revenu nue Requ quir irements 3, 3,453 453,629 3, 3,400 400,000 3,500 3, 500,000 10,27 10, 278,9 8,900 11, 11,21 213,4 3,400 13, 13,79 790,4 0,400 14,02 14, 024,6 4,600 16, 16,20 200,1 0,100 Fee Under Parcel Based Rate Structure: Estimated Billable ESUs 158,381 159,964 161,565 163,180 164,813 Monthly Fee per ESU (a) $5.90 $5.90 $7.35 $7.35 $8.55 (a) Proposed rate increases every other year 11 Black & Veatch Priority Capital Investments Needed in the Community Pro Projec ect Est stimat ated ed Cos Cost Prioritized on the basis of: Argentine 1 $5,572,900 • Severity of flooding Armourdale 3 $3,365,400 • Property damage Armourdale 5 $23,105,700 • High visibility Jersey Creek 1 $1,939,900 • Potential to integrate with other community planning and funding Little Turkey 2 $702,700 Mill Creek 3 $2,783,900 Mill Creek 5 $2,783,900 Mill Creek 6 $890,700 Over 80 problem locations identified and prioritized Muncie Creek 1 $3,358,500 Turkey Creek 4 $3,285,600 47 of those 80 were located in 8 Asset Management Investment $5,000,000 watersheds Future Planning Investment $2,000,000 Engineering Design $4,622,400 12 Black & Veatch 6

1/22/2019 COST RECOVERY: EQUITABLE APPROACH Allo Allocation Stormwater Storm er of Ef of Effective Allo Allocation Billable ESUs (Units of Service) Cus Customer er Number of Nu of Allo Allocation Imperv rviou ious of Bill of illable Class Cl ass Pa Parc rcels of of Pa Parc rcels Area Ar ES ESU (a) (a) Impervious Area (IA) Residential 47,520 74% 36% 39% Cemetery 31 0% 0% 0% • IA data layer in GIS (based upon 2012 Commercial 2,507 4% 30% 29% LiDAR survey) Educational / 491 1% 7% 7% Institutional • Structures, Private Roadways, Government 38 0% 0% 0% Parking Lots/Driveways Industrial 753 1% 18% 18% Park / • 2017 Tax Parcel Polygons 30 0% 0% 0% Recreation • 2018 Tax Assessment Database Undeveloped 5 0% 0% 0% Utility 7 0% 0% 0% • Stormwater Customer Classes based Water Body 19 0% 0% 0% on Tax Accessor Land Use Code Agricultural 814 1% 1% 1% • No Exempt parcels Vacant 11,581 18% 4% 3% Bonner Springs, Edwardsville, Lake Quivira and Fairfax Unclassified 268 0% 2% 2% are not in the stormwater service area To Total 64, 64,064 064 99% 99% 98% 98% 99% 99% 14 Black & Veatch 7

1/22/2019 Preview of 2020 Rates – Single ‐ Family Residential Re Resident ntial Monthl nthly SW SW Re Resident ntial Sq Sq Ft Ft of of IA IA ESUs Tie Tier Fe Fee Pa Parc rcels 1 ESU = 2,420 square Tier 1 0 – 1,208 0.40 $2.36 6% feet of Impervious Area Tier 2 1,209 – 3,626 1.00 $5.90 76% (based on median Residential IA) Tier 3 3,627 – 6,044 1.80 $10.62 13% Tier 4 6,045 + 3.40 $20.06 5% Residential Impervious Area Distribution 12000 10000 PARCEL COUNT 8000 ESU = Equivalent Stormwater Unit 6000 4000 2000 0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 5500 6000 7000 8000 9000 10000 15000 20000 More IMPERVIOUS AREA (SQUARE FEET) 15 Black & Veatch Preview of 2020 Rates – Non ‐ Residential Sample Sam le Non Non ‐ Re Residential Pa Parcel – G – Grocery St Stor ore Impervious Area (sf) 91,311 Estimated ESUs 91,311 / 2,420 = 38 Proposed 2020 Monthly Fee 38 x $5.90 = $224 Vacant and Agricultural Parcels Sample Sam le Va Vacant Land Land Pa Parcel Gross Parcel Area (sf) 50,000 • Application of 10% runoff coefficient to estimate stormwater runoff based on Impervious Area (sf) 0.10 X 50,000 = 5,000 development of a site Calculated ESUs 5,000/2,420 = 2.07 Proposed 2020 Monthly Fee $5.90 X 2.07 = $12.21 • Cap gross parcel area at 2 acres (87,120 sf) 16 Black & Veatch 8

1/22/2019 Credit Program – To be determined . . . •Factors to be considered in designing credits •Quantity •Quality •Direct Discharge •Magnitude of credits •Maximum credit •Technical & Administrative Requirements 17 Black & Veatch What are not billable? •In the context of this study, the following are not billable: •Public Streets •Public Medians •Public Right ‐ of ‐ Way •These areas are typically deemed an integral part of the overall stormwater conveyance system •Hence, stormwater management costs associated with these areas are recovered equitably from all the customers 18 Black & Veatch 9