City of Idaho Springs October 16 th Public Meeting Presentation Draft Presentation to Council Working Session, October 8, 2018 Presented by Michael Katalinich, Josh McGibbon, JVA Inc, and Andrew Rheem, Raftelis
AGENDA • Overview of Significant Capital Projects • Wastewater › General overview drivers for expansion › Summary of Projects • Water › Polishing Filters › Water Distribution Improvements • Financial plan and rates › 2018 through 2022 water and wastewater financial plans › 2019 and 2020 water and wastewater rate structure and rates • Questions 2
Wastewater System Overview 3 3
Wastewater System Background • Collection System › Consists of over 15 miles of pipe installed from 1920’s to current – Vitrified Clay and history of plastic, Stacked Brick and Rock Manholes in Clear Creek, Running through old steam lines › Infiltration and Inflow of groundwater and Clear Creek that has to be treated at WWTF • Idaho Springs Wastewater Treatment Plant (WWTP) › Installed in 1980’s as first Sequencing Batch Reactor in Colorado › Upgrades completed in 2010 and 2016 (equipment only) • Currently 0.6 MGD capacity › Existing max month average flows past 3 years – 0.49, 0.63, 0.49 MGD › Maintains compliance with discharge permit › CDPHE requires planning at 80% (0.48 MGD) › Construction required at 95% (0.57 MGD) 4
Summary of Wastewater Expansion Projects • WWTP Expansion to 0.995 MGD › Increased capacity › Improved water quality • Proposed Upgrades Project 1 › New headworks (screen, grit, flow measurement) › Influent equalization › New digester › Relocated dewatering • Proposed Upgrades Project 1 › New activated sludge process › Advanced treatment › New technology 5
WWTF Expansion Site Plan 6
WWTF Project Delivery • Total project cost = $8,200,000 (not inflated) • Funding Package › (2) State Revolving Fund (SRF) Loans › (2) Design and Engineering Grant › Energy/Mineral Impact Assistance Fund Grant – Tier I $200,000 and Tier II $1,000,000 › City funds (rate increases) • Completed Items › SRF Pre-Qualification and Project Needs Assessment › Preliminary Effluent Limits › Site Application › Basis of Design Report › Alternative Technology Approval 7
Water System Overview 8
Idaho Springs Water System • Distribution System › Consists of over 20 miles of pipe installed from 1899 to current – PVC, Cast and Iron Pipe, Some lead service lines › Frequent breaks and leaks • Water Treatment › Installed in 2001 as one of first membrane plants in State › Upgraded in 2007, again in 2014, again in 2018 9
Water System Pictures 10
Water Treatment and Distribution Improvements • Polishing Filters › DBPs, taste and odor, $1,000,000 budgeted • Pre-Treatment › Sedimentation, DBPs, taste and odor › $385,000 budgeted in 2020-2021 • Replace aging water mains and services › Highway 103, $3,000,000 budgeted in 2020-2021 – Large project to replace single line serving City › Miner Street, $70,000 budgeted in 2019 › Soda Creek, $200,000 budgeted in 2019 › 2-inch Line to Ball Fields, $175,000 budgeted in 2019 11
Water and Wastewater Financial Plan, Cost of Service and Rates 12
Raftelis is a Registered Municipal Advisor within the meaning as defined in Section 15B (e) of the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder (Municipal Advisor Rule). However, except in circumstances where Raftelis expressly agrees otherwise in writing, Raftelis is not acting as a Municipal Advisor, and the opinions or views contained herein are not intended to be, and do not constitute “advice” within the meaning of the Municipal Advisor Rule. 13
Prudent Utility Financial Planning • Revenue sufficient to maintain the financial stability of the water and wastewater enterprises and: › Fund annual O&M expenses, debt service payments and capital improvements and other requirements › Exceed annual debt service coverage ratio targets with adequate revenues – Target is 150% of annual debt service for total existing and proposed loans › Exceed annual operating and capital reserve targets with adequate reserves – 20% of O&M – Contingency of $75,000 (water) and $50,000 (wastewater) – Next year’s debt service (existing and proposed) 14
Current Rate Structure Description Water Sewer (1) Bi-Monthly Base Charge (2) (3) $60.38 $45.89 Volume Charge per 1,000 gallons 0 – 25,000 gallons $3.93 25,001 – 50,000 gallons 4.53 Over 50,000 gallons 5.13 Normal Strength Residential, Commercial (1) $4.83 Commercial – High Strength (1 15.70 (1) Actual water use during Nov – Apr. May through Oct. water use based on lessor of actual water use or average of Nov – Apr period use. (2) Water base per equivalent residential unit (EQR). Multi-family is 1.0 EQR for the 1 st dwelling unit and 0.9 EQRs for each additional dwelling unit. Commercial EQRs increase based on meter size. Mixed use EQRs reflect the make up of the multi-family and/or non- residential uses served by the single meter. Outside City rates are 2.00 times inside city rates. (3) Higher Sewer base for commercial low strength is $57.98 and commercial high strength of 15 $70.04 bi-monthly.
Water Fund Financial Plan, Cost of Service and Rates 16
Water Fund Capital Projects 2018 through 2022 (Inflated $’S) Debt of $4.7 Million Cash of $1.5 Million Total of $6.2 Million Average of $1.3 Million 17
Water Rate Revenue Increases 18
2020 Water Cost of Service 2020 Customer Adjustment to Class Cost of 2020 Revenue at Achieve Cost of Description Service 2018 Rates Service Residential $643,387 $511,841 25.7% Commercial 513,479 279,030 84.0% Municipal 52,763 21,832 141.7% Total 1,209,629 812,703 48.8% 19
Existing Water Rate Structure – 2018 Proposed 2019 and 2020 (1) (2) Residential Annual Volume Description Volume (gallons) Use (%) 2018 (2) 2019 2020 Base Rate 1 N/A N/A $60.38 $65.00 $70.00 Base Rate 2 N/A N/A $60.38 $100.00 $140.00 Volume Rate Tier 1 0 to 10,000 79% $3.93 $4.15 $5.15 Tier 2 10,001 to 30,000 17% 4.53 5.19 6.44 Tier 3 Over 30,000 4% 5.13 6.23 7.73 Commercial All Use (2) 6.95 9.21 Municipal All Use (2) 8.50 14.15 (1) Inside City. Outside City rates are increased by 2.0 times inside City. (2) 2018 tiered rates are 0 to 25,000 (Tier 1), 25,001 to 50,000 (Tier 2) and Over 50,000 (Tier 3). 20
Water Bills Compared (1) 21 (1) Bi-monthly residential customer bill using 10,000 gallons with a 5/8-inch meter
Wastewater Fund Financial Plan, Cost of Service and Rate Design 22
Wastewater Fund Capital Projects 2018 through 2022 (Inflated $) (1) Debt of $6.3M Cash of $1.8M Grant of $1.8M Total of $9.9M Average of $2.0M (1) No Phase 2 WWTP construction grant 23
Wastewater Rate Revenue Increases 24
2020 Wastewater Cost of Service 2020 Customer Adjustment to Class Cost of 2020 Revenue Achieve Cost of Description Service at 2018 Rates Service Residential $374,790 $369,763 1.4% Commercial Low 369,819 269,263 37.3% Commercial Medium 42,749 71,456 (40.2%) Commercial High 89,573 74,368 20.4% Indian Springs 59,507 54,906 8.4% Chicago Creek (1) 102,020 85,134 19.8% Total 1,038,458 924,890 12.3% (1) Assessed outside City rates per agreement. 25
Wastewater Rate Structure – Existing 2018 and Proposed 2019 and 2020 (1) Description 2018 2019 2020 Base Rate 1 $45.89 $46.50 $47.00 Base Rate 2 57.96 93.00 94.00 Base Rate 3 70.04 93.00 94.00 Volume Residential (2) $4.83 $5.02 $5.10 Commercial Low 4.83 6.76 7.23 Commercial Medium 15.70 12.00 8.35 Commercial High 15.70 18.00 18.90 Indian Springs (3) 4.83 13.00 17.15 (1) Inside City. Outside City and Chicago Creek rates are increased by 2.0 times inside City. (2) Applied to average winter period bi-monthly water use consumption. 26 (3) Applied to metered water use. Volume rate would be modified if applied to sewer flow meter
Wastewater Bills Compared (1) 27 (1) Bi-monthly residential customer bill using 6,000 gallons with a 5/8-inch meter
Bi-Monthly Residential Water and Wastewater Bills Compared (1) (2) (1) Bi-monthly residential customer water bill using 10,000 gallons with a 5/8-inch meter. (2) Bi-monthly residential customer wastewater bill using 6,000 gallons with a 5/8- 28 inch meter.
Contacts: Andrew Rheem 303 305 1137 / arheem@raftelis.com Katie Knoll 303 305 1147 / kknoll@raftelis.com Michael Katalinich 303 565 4952 / mkatalinich@jvajva.com Josh McGibbon 303 565 4941 / jmcgibbon@jvajva.com 29
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