- It is now five o'clock. I'd like to call today's City of Bloomington Utility Service Board meeting to
- order. The City of Bloomington Utility's mission is to enhance the quality of life in our community
- by providing safe, sustainable, and high-quality drinking water, wastewater, and stormwater services
- in a cost-effective manner promoting public health, economic vitality, and environmental stewardship.
- If any board member has any personal or financial
- conflict with any issues or individuals on the agenda, then please be sure to recuse yourself during
- those portions of the meeting. We'll start off with petitions and communications. Are there any petitions
- or communications from the public? Hearing none, we'll move along to the approval of minutes from the
- previous meetings. First, we have a regular meeting on August 25th.
- Questions or comments about the minutes from the regular meeting on August 25th? I'll move that we approve
- the minutes of the meeting from August 25th. Second. A motion and a second. All in favor, please say
- aye. Aye. All opposed, say nay.
- Minutes are approved. Next, we have the bid opening from August 25th. Are there any questions or comments
- on the bid opening? Do we have a motion for approval? I move we approve the bid opening from August
- 25th. We have a motion and a second. All in favor, please say aye. Aye. All opposed, say nay.
- The bid opening is approved. Moving along, we have the approval of claims. We start with the standard
- invoices for a total amount of $453,020.17. Are there any questions or comments on the standard invoices?
- Hearing none, do we have a motion for approval? I move we approve the standard invoices for pay date
- September 12th.
- Motion to the second. All in favor, please say aye. Aye. All opposed, say nay. Standard invoices are
- approved. Next, we have utility bills for a total amount of $84,871.26. Any questions or comments on
- the utility claims? All right, I move we approve the utility claims list for September 8. All in favor,
- please say aye.
- Aye. All opposed say nay. Utility claims are approved. Next we have wire transfers for a total amount
- of $613,436.89. Are there any questions or comments on the wire transfers? I move we approve the wire
- transfers for September 2025. All in favor, please say aye. Aye.
- All opposed say nay. Wire transfers are approved. Thank you all. Moving along, we have approval of consent
- agenda. Catherine Zager. Good evening, I'm Catherine Zager, utilities director. I'm presenting tonight's
- consent agenda totaling $95,739.39 for all non-chemical contracts. Our first contract is with Cassidy
- Electric LLC for $20,000 for on-call services for medium voltage electrical.
- Next is with price electric ink for 20,000 for on-call services for low voltage electrical. Next is
- with the dot look crane ink for $1,800 for a crane being used to remove and put back a pump for repair
- at the Henderson pump station. Next is with electric plus ink for $5,175 to install wiring for a battery
- charger at Monroe water treatment plant.
- Next is with Troy Risk Inc. for $10,367.50 for a phase two environmental site assessment for the property
- located at 6570 South Old State Road 37. Next is with Jacobi Carbons Inc. for $1.02 and a half cents
- per pound for the supply of carbon aquasorb at Monroe Water Treatment Plant.
- Next is with Air Gas Specialty Products Inc. for $0.1484 per pound for the 2025 supply of aqua ammonia
- at Monroe Water Treatment Plant. Next is with Electric Plus Inc. for $3,970 to run three-phase power
- in the Slow Mix building downstairs for the new carbon at the Monroe Water Treatment Plant.
- Next is with Gonzales Companies LLC for $16,000. For West 8th Street and Fountain Drive detention ponds,
- civil plans update, bid administration, and construction support. Next is with Aquatic Informatics Inc.
- for $8,426.89 for WIMS software license and support at CBU plants. And last we have Amrise Building and
- Envelop LLC for $10,000 for on-call services for roofing. Is there any member who wishes to consider
- one or more of these items individually? Hearing none, if there's no opposition, these items will be
- approved as recommended by staff. Hearing no opposition, the consent agenda is approved.
- Item seven is request approval of resolution 2025-17, finance bond for 2025 water rate case. Chris Wheeler.
- I'll actually be presenting this one. He skipped six. Oh, sorry. Sorry, I was reading. My bad.
- That's okay. You're right, yes. Request. Yes.
- Request approval of resolution 2025-16, Adjustment of Water Rates and Charges of the City of Bloomington
- Water Works Utility. Kathryn Zager. Hello, Kathryn Zager, Utilities Director, requesting approval for
- the Adjustment of Water Rates and Charges of the City of Bloomington Water Works Utility. I'd like to
- first, we've had multiple presentations on this, but first I'd like to introduce STANTEC,
- Stantec has been our consultant who has been essentially leading us and in charge of this cost of service
- study, which we're basing our rates on. So Stantec has a lot of experience in helping water utilities
- with financial sustainability analysis, developing their water rates and budgets, and has done similar
- cost of service studies for other cities. Andrew Burnham, specifically who we've been working with,
- has worked with
- cities such as Ann Arbor, Michigan, St. Petersburg, Florida, Tempe, Arizona, and Nashville, Tennessee.
- Stantec has worked with staff throughout this process, making sure that we were always on the same page
- and understood where they were going, explaining things along the way, especially for me as I learn
- as we go through this. They were also great about seeking input from staff when questions arose or they
- needed clarification for some of the data that they were receiving from us
- After working through them with this cost of service study, CBU staff feels confident that the cost
- of service study approach has resulted in one of the most accurate data-driven water rate assessments
- that this utility has had to date. And with that, I'd introduce Danica to go ahead and do the presentation
- for the cost of service study. Thanks so much for the introduction, Kat. My name's Danica Katz. I'm
- with STANTEC, and as Kat mentioned, we also have Andy Burnham here as well.
- And today we're going to walk through the cost allocation and rate design. So we've got a handful of
- slides here that Pat mentioned provide data-driven findings as well as just walking through the process
- of the cost of service itself and ultimately where we land with those findings and rates. So with all
- that, step through. So the first step of the process was to look at the test year and determine if we
- had an appropriate test year with 2024. So we looked at things such as annual rainfall patterns.
- Next slide. Some of the billing data that was provided by the city. So we went through detailed analysis
- of all of that data that was provided just to confirm that we were utilizing a representative test year.
- In addition to the billing data that was provided, the city also provided AMI data. Pop to the next slide.
- Here's some additional build monthly usage that we went through. Next slide should show some of the
- AMI-related data. So we looked at this on a very in-depth level by customer class for those appropriate
- test years, which really ultimately gave us the backing for the peaking factors that were derived for
- the cost of service. So we looked at it on both a daily level
- the next slide you'll see we also looked at it from an hourly perspective as well. This shows the hourly
- AMI data by those classes. And then you keep going, one more slide. This would show that all of that
- data that was provided up until that point that we went through and did our analysis on would ultimately
- get us to the max day.
- peak hour factors for each of the individual customer classes. And so that was the analysis that we
- conducted on kind of an upfront customer demand usage and test year perspective. And then we went into
- the actual cost allocation analysis itself. And for that, I guess just from a high level, the objectives
- of the cost of service is
- We take the annual revenue requirement that was provided by Crowe, has been presented thus far, and
- ultimately the goal is to determine the cost to serve for each of those customer classes compared to
- the current revenue that is being collected, ultimately to get us to that cost of providing service
- to each of those individual customer classes.
- So this just shows a high level approach for the cost of service study itself. So step one, we get the
- revenue requirements from Pro. And our second step is to functionalize all of those costs into different
- buckets or different functions for the system itself. The next step would then be to take all of those
- costs, all of the functionalized costs, and ultimately allocate those to different demand characteristics.
- That would be that base max day, max hour, and customer that you see there. And then the last step is
- ultimately to take all of those costs and distribute them to the different or various customer classes
- of your system or of CBU's system, which would ultimately tell us based on all the data that we had
- and all the information that was provided by CBU the cost to serve results or findings.
- So this will just step through in a little bit more detail, those high levels. So step one here is ultimately
- the revenue requirements, which have been presented by PRO. So I just wanted to recap that. It just
- shows all of the different components that make up that revenue requirements of that $29.1 million.
- And so then in step two, we take that $29.1 million
- revenue requirements and we functionalize them by line item based on descriptions working with city
- staff in many work sessions to make sure that we understand how each of those line items apply in the
- system. Ultimately get to a point where we functionalize all of those costs into their different respective buckets.
- There on the next slide, this shows kind of the summary level of those revenue requirements by function.
- So you can see 35% in that treatment and pumping, 11%, 14% in the supplies. Those are kind of the three,
- I'll call them major categories. There's a 21% transmission, and then some smaller percentages there
- on customer related and fire protection related costs, but ultimately,
- Just taking that 29.1 million and functionalizing them into those different buckets. Okay. And then
- step three, we allocate those functionalized costs to the different demand parameters. So you can see
- here, majority of the functions get a portion of the average day demand costs. There's a handful there
- that get a portion of max day as well as max hour.
- There are certain functions that are strictly customer or meter related, which is the billing and services
- that you can see over to the right there. And then just a small piece for fire protection. OK. And then
- in order to get the percentages that make up each of those different spreads of base extra capacity
- or the average max day, max hour, we just utilize system data.
- provided by the city for 2024, which ultimately gets us to those percentages of the share between average
- day, max day, and max hour that you can see there. And then the customer being allocated directly or
- functionalized directly to customer. This is just a dollar summary. When you take those percentages
- and all those functionalized costs,
- This is the matrix that you get for a summary of all the costs by different function, by different demand
- parameters, but still ultimately getting to that 29.1 revenue requirement. We also take into account
- fire protection. So the city provided us detailed information of calls for service,
- So we looked at certain calls for service and the number of those in 2024 in order to develop the fire
- protection side, as well as the max day and max hour associated with those flows. Next slide. We also
- utilized data on the fire protection side to differentiate between public and private fire.
- So we were able to identify certain hydrants that were specific to public versus private based on those
- demand factors that you can see here. Okay. And then ultimately when we get to the point here at step
- four, we take all of the units of service and all of those functionalized costs and pull it all together.
- This just shows this table right here, a summary of all of the units, so the number of bills, number
- of customers, and then all of the usages. But ultimately on the next slide, we pull all of that together
- based on all of those pieces that I just went through. And we get to a point where we say in the blue
- bar what the cost of services for each of those individual customer classes.
- compared to an orange, what is currently being collected for all of those, or what the existing revenue
- is. You can see that the change between the orange and the blue is essentially that 13.5% overall increase,
- but it shows the percent needs down there on the bottom between the different customer classes. You
- can see residential showing that 18.9% increase
- and so forth across the board there for that 30.5% increase. And so that was the cost of service. And
- then we then moved into rate design or rate structure design. Just a quick slide here talking about
- the CBU's current structure. Currently,
- on the left side there are fixed charges by meter size, as well as on the right side, uniform volumetric
- rates per thousand gallons by each of those individual customer classes or for each of those individual
- customer classes. I just wanted to highlight the current structure there. Also wanted to highlight some
- of the current fire protection charges. So there is a public fire protection charge.
- by meter size for both inside and outside city, as well as a private fire protection for private fire
- lines that has a separate charge by meter size that you can see over there on the right side. Okay.
- We'll just quickly walk through. So the fixed charge components or the items that make up the fixed
- charge include customer service related items,
- anything meter related services or service drops and anything billing and billing collection. So what
- this slide demonstrates is based on the cost of service findings that we showed on some of those prior
- slides, we take those by each of those components and we either scale them or don't scale them based on
- you know, the specific line items and how they operate in the system. But ultimately what it does is
- it gets to a, in that bottom table there, the unit cost across all customer classes, or sorry, across
- all meter sizes, that's flat, $5.32, and then the $2.84, which is scaled upon meter size. And you'll
- see that, I think we have a slide coming up here that shows how that gets.
- You can see that flat component is flat across all meter sizes or irrelevant to meter size. And then
- the scaled component is increased by meter size based on a scaling factor, which ultimately get added
- together to make up that fixed charge. And then you can see it compared to the current fixed charge
- And you can see that dollar change and percent change there. So a slight increase on those lower meters
- and then actually a decrease on some of the larger meters. We also went through a similar analysis to
- look at the rate development for public fire protection. So we went through and took all of the cost
- of service between public and private fire there based on
- what I presented earlier for the split between public and private, and ultimately did something very
- similar where we get to a unit cost between inside and outside, or a separate unit cost for inside and
- outside. Then the next slide here, very similar to what we just looked at on the other slide, those
- charges are then scaled by meter size.
- And you can see that compared to the current charge, all these charges here for public fire are going
- down slightly based on the cost of service findings. It showed an overall decrease for that specific
- customer class. And then again, did something very similar here on the private fire protection. So we
- take the findings for the private fire
- billing from the cost of service, and we get to a unit cost there, $3.29, $5.32, which ultimately get
- us to that total monthly private fire charge by meter size. And then we've compared that to the current
- as well and showed that dollar change and percent change there to the right.
- what we wanted to show was in the original cost of service graph that we provided were the full cost
- of service. But what we are showing here is that we have capped the irrigation at four times the overall
- identified rate increase of 30.5. So you can see that 122 is four times the 30.5 percent. And so
- What we're doing here is just trying to get irrigation closer to cost of service based on prior rate
- cases and discussions with CBU. So this just shows kind of that reallocation of irrigation to some of
- the other customer classes here, but as a summarization.
- And this graphic should look very familiar, but this is essentially with the cap and adjustments for
- irrigation service. So irrigation is capped at that four times the overall rate increase. And so you
- can see there's some small adjustments on some of the other customer classes to ultimately get to that 30.5%
- overall increase or amount of revenue needed.
- summary of rates here. This was presented on some of the prior slides. I just wanted to kind of put
- it all together. We've got the current rates there compared to the proposed, and then the usage charges
- as well. I think it was mentioned on the last slide highlighted for that general service. The reason
- there's two rates there is because throughout the study or through the study, we've determined that
- we're going to consolidate the commercial and area
- commercial and industrial customer classes and that is just due to number of customers in the industrial
- class as well as their trends and peaking factors being very similar between the two classes. You can
- see the other rates there as well for irrigation sale.
- Very similar on the monthly to show the comparison here. Like I mentioned, this public fire protection
- rates are going down slightly and the private fire protection are going up slightly.
- We may have lost our audio.
- I can carry us through the last part of the presentation. Just on these customer bill impacts
- for residential, this is just a summary of those specific rates and charges that Dana going through
- and just applying them to residential customers with a five-eighths inch meter at different usage levels.
- So as you work your way from top to bottom on the table, you can see the current bill with all charges,
- this is one of the fixed charges, public tire protection and usage charges and the proposed
- to see what the dollar and percent change would be. And so you can see for lower volumes of residential
- use, that range of increase might be $1 to $5. And then as you get to those higher levels of usage,
- you can see the levels of increase, you know, corresponding to increase. And then you have to get the
- range of percentages, per person, that's about a 16% increase to 20%. We do have a couple of other benefits
- on that. So if you go to the next slide, please. We also looked at general service customers,
- And with general service customers, there can be a variety of different meter sizes as well as usage
- levels. So we grabbed the two most common meter sizes, three-quarter inch and one inch. And then in
- looking at the billing data, just kind of identified some profiles of small, medium, or typical and
- large usages. We provided the same information so that you could see what the current bill and what
- the proposed bill would be.
- to kind of get a sense of the range of the impacts that the proposed rates would have on both the dollar
- change and the percent change basis. So you can see for some of the small usage levels with a three-quarter
- inch meter, that might be a $3 increase. The larger usage at that three-quarter inch meter might be
- about $22. The range of increase would be 22 to, say, 46%. And then for a one-inch meter, a smaller
- usage there would be about 15,000 gallons per month. And so the increase on that commercial bill would
- be about $32.
- If you look at a larger usage level at a one-inch meter at 25,000 gallons, that increase would be about
- $54. So between that 45% and 50% level. And then if you go to the next slide, we again also looked at
- billing packs for wholesale customers. And again, this will depend upon the level of usage, which here
- again is much greater. As you can see generally, the range of increase is between 38% to 48% on those
- bills, depending upon the volume that we're looking at.
- And if you go one more slide, we also do have Indiana University Master Meter, six-inch meter. Again,
- looking at the different range of usage levels for their account from Master Meter customer bill with
- a range of increase of about 38% to 58%. Obviously, significantly higher usage levels here than, say,
- residential or commercial customers. So the dollars are certainly larger.
- And the last, but certainly not least, would be the irrigation meters. And so for a three-quarter inch
- separate irrigation meter service, again, those bills would increase between, say, $30 at 5,000 gallons.
- If you did 30,000 gallons a month for the irrigation, it might increase $181. This assumes no conservation.
- So this is the current bill and proposed bill at the same amount of usage level. Notwithstanding that
- with the irrigation, customers do have the ability to control the amount of usage on that service.
- So we can take some questions from Stantec if you'd like.
- Okay. Again, this slide is pretty familiar. This is the impacts on my own bill. We looked at our data
- a little bit and the
- So we say, you know, the average residential customer uses between three and five units a month. The
- actual average is 3.5. So, yeah, so again, my bill went from 7101 to 7535. And, you know, that includes
- my small sanitation cart using three units. Yeah, so there's that.
- So, and I also wanted to point out, and we pointed this out in our public meeting on the 29th, where
- we stand and where we will potentially stand if these rate changes are accepted, we're currently, our
- combined water and sewer rate is 24th out of cities and towns in Indiana with over 25,000 people. If
- these proposed rates are accepted, that will
- essentially keep us at 24. Yeah. Um, and then looking at our, just our water rate at the next slide.
- Thank you. Um, and that same group of cities and towns, uh, our water rate would move from in the lower
- third to being in the lower half. So move from 30th to the 25th out of 39 cities and towns.
- Now I'll go on to talk about our capital improvement plan a little bit. With this rate, we will be bonding
- for some capital improvement projects, and so I'd like to talk a little bit about how we'd be spending
- this money. So first I'll start with our water treatment plant projects. Our planned water treatment
- plant projects total $30.7 million. Those projects include electrical upgrades
- sediment base and rehabilitation, chemical building improvements and feed line replacement, which will
- include restoring a safe and sustainable fluoride delivery system. Those also include some high service
- pump rebuilds and variable frequency drives, essentially improving reliability and redundancy at the
- plant. Next slide, yep. We also at our plant will be
- making sure that we're funding our maintenance projects. We have quite a few maintenance projects. This
- also includes the completion of our asset management system. We'll be doing treatment plant water handling
- and delivery updates, bypass pumping improvements, and then we will do a residuals project with our
- backwash pump replacement and improving the efficiency and consistency of our filter cleaning at Monroe.
- Next, we have projects that fall into two major categories with our distribution system, that total
- $34.4 million. The first category is booster station and storage tank rehabilitations and upgrades.
- This will include the addition of emergency generators, which will improve our preparedness and reliability
- during natural disasters, electrical grid issues, or other emergencies. The other category is water main
- projects, maintenance, testing, and replacement. This includes replacing our aging water mains and servicing
- our valves proactively in a more cost effective manner than just emergency repairs and replacements.
- And then finally, we have the water portion of the Winston Thomas Service Center, which is $18.7 million.
- I think this board has discussed extensively our need for a new service center as we
- outgrow our current one. This is going to set us up for operational excellence, fiscal responsibility,
- and community resilience. That is all of the slides we have to present. Happy to take questions. We
- also have Jennifer with Crow as well if you have questions about revenue requirements. Thank you to
- the representatives from STANTEC.
- who did hard work as well, and CBU. All this information is valuable. I'm opening it up to questions
- from the board. I have a question on the cost of services study, the methodology in step two. I understood
- it other than why extensions and replacements was assigned to all functions.
- All functions based on the five year capital project that was provided by CPU. And that is because all
- of those extensions and replacements. Sorry, they are categorized based on the way that the five year
- CIP is categorized so
- We try to really assign those based on the functions that were identified in the CIP. So if there was
- a specific amount of projects that were assigned to pumping and treatment based on the capital, then
- the extensions and replacements gets allocated on that corresponding percentage. So it's really a direct
- allocation from the provided five-year capital. This is a better way to say it. Okay. So are there...
- Were there projects within the capital improvements plan that were not related to in the ground
- infrastructure that you would think normally would be associated with say treatment pumping or transmission
- or distribution storage? Were there for some reason other types of projects in there that and is that
- why it got distributed across all functions?
- So it seems to me when I hear those words, extensions and replacements, I'm thinking about in the ground
- infrastructure or some other hard infrastructure. And it seems like a lot of the other functions are
- not hard infrastructure. That's why I have the question. Can you explain that to me, why extensions
- and replacements got allocated across all functions when some of the functions seem like they're not
- associated with hard infrastructure?
- and replacements is when you look at our budget, so we just did our budget, extensions and replacements
- is its own line. That is essentially our, and correct me if I'm wrong, essentially that is our cash
- for projects versus bonding for projects. And so in extensions and replacements, that cash goes to all
- these different process. It's not just extensions and replacements of
- underground infrastructure necessarily. Or tanks. Or tanks. It goes for all types of projects that could
- be related to customer service or something. Thank you. No problem. Got you. Thank you. That was my
- one question on that part. Thanks for the presentation. I've got to say that
- cost of service analysis made perfect sense to me, and I was surprised that I understood it so easily.
- I have one question for you, Kat. It seems that with our increases in rates, if I heard correctly, we
- did not change positions relative to other cities in Indiana, and I would have thought unless there
- are a lot of other cities
- also changing their rates that we would have decreased somewhat. So that surprised me. So we did, if
- you're looking at our combined rate, we moved up, but it was really just 24 to 24. That's, I forgot
- what number slide that is, sorry. It's the one before that. Yeah, so you would think that we'd move down.
- Every city or town that has a two next to it, those actually have pending rate increases. So we'll probably
- shuffle in there after those rate increases happen. That's what I assumed, but I couldn't read the slide.
- No problem.
- just the water rates, there's a whole bunch of them at the top that were exactly the same. Is that because
- there's a cap? Is there a cap on water rates in the state? Is that why they're all the same? That's
- a great question. I think maybe Jennifer would be the best answer. Yeah, this is Jennifer Wilson. Yeah,
- all those communities are all served by Indian American. So they have the same
- rate structure, even though they're located in different parts of the state, they all are under the
- same rate structure, so 5,000 gallons calculates the same for all of those. And it's about twice as
- much as it is here. I guess we're happy we have a municipal-owned utility. Yeah.
- So a little bit of historical, a couple of historical questions here. So the last time we did a rate
- case review on water was four years ago, correct? Or were a little longer? A little bit longer. A little
- bit longer. Okay. I was on the board when we did this previously, and I don't recall the exact number,
- but I feel like four or five years ago,
- we were still at this same point. And that point being the cost of service was 30% higher. Maybe it
- was 26% higher. Does that ring a bell? Sure. Yeah. I'm sure it was more than, yeah. So I guess my question
- is, are we doing enough? Are we going to come back in four years and that number is going to be
- 32.1%. I mean, are we doing enough to just kind of keep it status quo? We're not moving there.
- And to me, that really doesn't matter to me personally. What matters to me is that we are providing
- the most excellent water that we can and we're a great place for our employees to work and we're a safe
- place. So, you know, where we fall in the state really doesn't matter. What matters to me is are we
- setting our, by not taking perhaps a higher increase, whether it's now or later, we're never going to
- catch up with what expenses are. And there are many organizations that I know of, you know, non-profit,
- for-profit, city organizations that we, it just costs, it costs too much, or the costs do not,
- get covered by the revenues. And are we just going to continue to be in this hole for years to come?
- If that makes sense. I guess that's what I mean. Are we doing enough? Are we doing enough? And in four
- years from now, are we still going to say it's 30% or 35% against cost of study? I'll say that it's
- hard to predict.
- what it would be the next time if it's gonna be a 30% or a 25% need as the economy changes, as our goals
- change, and as the projects that we want to be able to do to provide the best quality water in the future
- changes, right? Right now with where we are in our CIP and the projects that we've prioritized that
- we've used the business risk analysis study from Westler, this is,
- what we can do and what we can handle in the next four or five years. And this rate helps us do that.
- So when we come around for another rate case, it'll be dependent on what are the goals of the utility?
- What are the projects we have planned? What are, you know, where are we at in comparison to the economy?
- And so that's, those I think are the major factors that would
- influence an x-ray case. That answers my question. Thank you. I'm just repeating things I've said before
- relevant to Amanda's point. It is likely, I suppose, that the state regulatory board will not give us
- as much of an increase as we're asking. And secondly, it will take
- a long period of time before it goes into effect. So I simply repeat my statement that I make every
- year, that wouldn't it be nice to be out of the grips of the state regulatory commission and doing it
- ourselves more quickly and efficiently and without having it cut by someone who may not understand fully
- what our needs and costs are. So I just put that out there.
- I can only ask what's the other option. What's the other option? That we set our own. That there are
- cities in Indiana that are not under the jurisdiction of the State Regulatory Commission. Is that not
- right, Chris? That is right, Jim. We can go through the process of removing ourselves from the IORC's
- jurisdiction. We didn't think that was prudent in this case.
- to council, council would set the rates, and we wouldn't have that next step of going up to the IURC.
- So we understand the advantage, that one advantage, what are the disadvantages? Disadvantage is that
- the buck stops here. We don't have the IURC reviewing the rates and having the OUCC protecting the customer
- classes against the rates that we've set. Doesn't seem like much of a disadvantage.
- And are we currently exploring this? I mean, Jim has brought this up several times. And I understand
- that we are in the rate case situation right now, but I was under the impression about six, seven months
- ago that there was a conversation happening about what would we do? What are the pros and cons?
- Thank you What happens if the I or C does not accept like what what will the utilities department do
- in that case what will you have to cut or
- So if the full rate is not approved by the IURC, we will need to look at our expenses and likely cut
- projects. So those priorities are not known yet. What would be cut in that case? We do have a prioritization
- from Westler. So we would prioritize things like
- much needed improvements at the plant. We would prioritize being able to continue to deliver clean and
- safe drinking water. But those changes would come before the board. Oh, yeah.
- I've answered many of my questions throughout all of the fellow board members. One of them was that,
- so it's 3.5 average units per month for our average customer. Because when I appreciate you sharing
- your bill, and when we see the monthly impacts on our residential customers, those using say 5,000 gallons
- and below, it's $6.06 increase per month and then less, but then reaching up to our 50,000 gallon users,
- they have an increase of $48,
- and 10 cents per month. And so I recognize that's a significant or a much larger dollar amount. And
- so at some point, I would be interested to see a breakdown of like how many customers fall into each
- of these different categories just on average, not like a big, it took me a whole day's work to find
- this information, but maybe if that's something that we've provided with the study that we could see
- sometime, thank you.
- I also have concerns about thinking back to our last rate case and I was newly on the board at that
- time and they did, IURC did not give us what we had requested. Have we taken, what feedback have we
- taken from that experience and applied to this rate case so we're more prepared and more likely for
- them to say yes, City of Bloomington Utilities, we see that you have these needs and we are going to
- approve them
- to be implemented? So I can definitely name one. So our last rate case came with a settlement where
- there were entities called interveners. And so an agreement as part of that settlement was that we would
- have these meetings before we filed to discuss our cost of service study. There were a lot of things
- that we agreed to. This cost of service study was one of those things.
- And so I think that having that open communication with these stakeholders will go a long way in the
- IURC hearings and just doing everything we can to do pre-filing meetings and to communicate well ahead
- of time to give plenty of time for deliberation. I think that's gonna really help us out this time.
- Like here's the evidence for why we need this kind of thing. Oh, yeah, I think. Thank you for that answer.
- And then I'm just double checking. I've got everything. Oh, I was not able to attend any of the additional
- public meetings. Can you please give us feedback? Did we have any customers that attended? OK, sure.
- So it was sparsely attended. So you provided the opportunity. Yes. And that's what's important. And
- for plenty of people we have, for those of you who can't see and you're watching from home, we have
- a whole room full of chairs here for you. Yes, we provided space and seating for I think at least 60
- attendees out in the chairs. And we
- Each had a presentation from, we also had a screen out in lobby in case we had overflow. Um, we had
- presentations by myself, which is a lot of what you saw today. Um, this was kind of an abbreviated version
- of that. And then, uh, we also had presentations by Crow and Stantec at the meeting as well. Uh, Jeff
- attended and, uh, gave us a lot of great questions and a lot of good feedback.
- Thank you. And then I just want to highlight the things that I really heard that were important with
- this rate case that we're providing safe and sustainable a fluoride delivery system, which I know is
- important. And when our customers hear about the increase, I know that's something that they see the
- value in that and know the importance of it. Obviously they see the value in everything, but that's
- like a really important and our water main replacement projects.
- and our improvement and preparedness for disasters. So those are some of the things that really stuck
- out to me along with all of the other things I feel are very valid that our organization needs and will
- benefit from and I hope that the IURC sees the dedication that we've put into this rate case and rewards
- us with an accepted proposal. Okay.
- Thank you. We've talked a little bit about the capital improvements plan and there's been some discussion
- over the last year and a half about maybe we got behind on some of this. We weren't keeping up with
- all the things that needed to be done as fast as we should have. And that's probably, as you've mentioned,
- it could be a combination of constraints on our ability or capacity to do so much at a time, but maybe also
- resources, so it may be a combination. Are you comfortable with looking at the capital improvements
- plan that Wexler's put together for us? Are you comfortable with us tracking so that we don't find ourselves
- playing catch-up ball? And we've kind of talked a little bit about this before, but are we are we in
- good enough shape with this request that we can fully stay on track with what Wexler has
- projected that we need to replace. Yes, I see this capital improvement plan and what we've put into
- this as our catch up. You know, I'd love for this plan to have, you know, more innovative treatments
- and, you know, looking at things that we could do to improve our treatment processes and modernize some
- things. But really what this
- What this capital improvement plan does is play the catch up in necessary electrical and instrumentation,
- making sure our equipment is up to date, and making sure that our treatment plans and our distribution
- system is in a good position. Have we pushed ourselves much with this? Like, if we had the ability to do more,
- Capacity wise, have we in this request kind of asked for a little more to get us there in case we could?
- So are you asking if this request includes additional funds for projects outside of kind of what we've
- laid out in the capital plan or? Well, maybe if you look at the capital plan,
- and we expect this to take us the next four or five years. Did we maybe put the stuff from year six
- in there? That's a different way to look at it, not specifically, but... This is very much the... Yeah,
- actually, Phil would be great to talk about the capital improvement plan. Thanks, Phil. Phil Peton,
- Engineering.
- As she said, we went through the business risk assessment. Wessler did that study, and so what we did
- was we took those numbers, and I don't have them in front of me, but I want to say it was seven to 10.
- The highest scoring ones made it on the five-year CIP, and then we know that there's some that are going
- to fall below that that are now put on a 20-year CIP so that we're tracking those so they can be in
- the upcoming rate cases as we move forward.
- Ms. Burnham asked a question earlier, and I think I would just add to Kat's response in the fact that
- we are allocating funds toward
- toward the projects that are in the five-year CIP. But I think when you look at the 10-year CIP, you're
- going to see a very similar line of like, you know, it averages 13 million a year. We're going to be
- similar for the next 10 years. As far as at least I've looked out. And so that is, so you had 64 million
- plus the 18 million for the new service center. So we don't have a new service center in the next five-year
- CIP that's in this one. So that's 64 divided by five, something like that. I feel like that's a projection.
- hold me to it because that's there's still some fine-tuning with that CIP. As a staff we went through
- this five-year CIP to see what we felt like was the the highest priority based on Westler's report and
- what if there's anything that we could push off that maybe we didn't have time or at the allocation
- of resources staff to manage those projects at the plant maybe some of those projects can't go on at
- the same time something like that so
- We looked at that and we're able to cut, let's say, like 20 million out of this five-year CIP that will
- go to the next five-year CIP. So we've looked at that. What I would say, at least my opinion is, that
- we don't have a lot of buffer in the five-year CIP for additional projects if they come up. We didn't
- have it in the last rate case. The SCADA project, the electrical project, there's multiple projects
- that were in the previous
- previous rate case that we never got to because we didn't have the funding to do so. By the time those,
- Ms. Zegar has mentioned in the past that that was based off of a 2019 estimate that we had COVID, so
- those estimates were off plus some other factors that came into play where that funding wasn't available
- to handle the growth, the whole aspect of each project.
- We're trying to catch up from what we couldn't do in the last break. And it's a lot of replacement to
- things that the plan, and it's not expansion or anything like that. It sounds like we have a pretty
- good case to get to these goals then with the IORC.
- I feel like that that's true, especially with Wessler's report where we've really came in and gave it
- a score and we know is that prioritization of each of each item that's listed in the CIP. The comment
- was, I appreciate the fact that we've got some significant amounts here for generator and emergency
- backup. That's been something we've learned that we have to deal with almost annually now.
- of full use of those systems and we've come closer to running into trouble than we might realize sometimes.
- So we want to stay ahead of that too. Thank you. And I also think we as a board recognize some of the
- challenges that you guys have had, changes in leadership, things that were completely out of, you know,
- control here.
- I have to use my, I've washed my phrasing here. Some of the demands that are put on us by other entities
- when we have to save limestone or we have to protect something here or somebody has done something in
- their previous business and we're now found out about it. So there's all those things that are just
- part of being a business that happen.
- And those things have affected the bottom line of the budget when all of a sudden you have something
- that has to be done that's not gonna get reimbursed, that we can't get a grant for, and we need X, Y,
- and Z accomplished no matter what the cost is. So we can do all kinds of planning, but there's just
- things that are just gonna happen over the next five years that are gonna be out of our control.
- I just want to say that for things that haven't happened, there's sometimes been reasons why things
- haven't happened. And we're working forward so that we can control what we can control and continue
- to work through those issues and work as a team. So I just want to say that.
- Finally, I'd just like to repeat something I've said before. I can assure any of the public that's watching
- that every employee of CBU, whether it's engineering, environmental or administration, is incredibly
- underpaid. Given their experience and their expertise, they are underpaid.
- There are no big salaries out there that are eating up your monthly payments. And the service on the
- board, we do get paid a modest amount, and I guarantee that nobody among the seven of us is serving
- on this board because of pay that we're getting. We aren't paid. So, you know, I just want to say that
- because this is an incredibly well done
- organization, given the expertise that it takes to do what these folks do. I want to go back into the
- weeds just on one topic. I'm sorry. So I asked at an earlier meeting what the estimated amount of the
- new building is going to be. And I'm wondering if someone can state that.
- where we're at with that number today. Again, I'm asking because in the in the capital improvement plan,
- you know, it's listed as 17 million for the building.
- buildings, sorry, and 1.75 million for the soft costs. So 18.75 million. If we indeed are splitting
- the cost 60-40, then that works out to just under 47 million for the entire package of soft costs and
- building. Is that our number that we are still at? Or is it indeed larger as I remember?
- It's an ever-growing number. The longer we wait to build it. And so at one point, 46, between 46 and
- 48 was the number depending on the add-ons. So Weddle did kind of a construction management assessment
- of it and said it's between, you know, 46 and 48 depending on your add-ons. And some of the add-ons
- were not really optional. They were,
- definitely a part of the service center. So 48 is a little closer to what they had given us in the summer
- of 2024. If you take the construction cost index, price index, and apply that to that number, by the
- time we end up actually paying for it, it'll be closer to 52 to 54.
- that is where we're at and so we're hoping to line up our yeah so as far as how we are planning on funding
- it we are taking we have not bonded for the project in either utility because we were waiting to see
- how this rate case will go seems like the
- right financial decision. Um, so, but we are holding, we are, we have been approved for the wastewater
- portion, but we've been holding back the money that we would be paying for debt service on that to anticipate
- when we take out the bonds for the Winston Thomas project. Um, when we do our next sewer and storm rate,
- we will adjust
- that estimate as part of that rate case so that we're trued up both in water and in wastewater. Does
- that help? Well, if at some point you could show us on a piece of paper how those numbers work, I hear
- you all, but that last little bit, I don't understand where we'd get the water side of it from a sewer
- rate increase. But if you could at some point soon,
- Present that to us and just in how that's going to work and where the money is coming from that would
- be helpful. Yeah Yeah, take a note and Visually, it might be easier for me to wrap my head around it
- if it's written out And then on the
- the capped usage rate for irrigation, and it changed our residential from 18.9 to 19.8, so less than
- a 1% difference. And if we apply that to $30 for the bill, the water part of the bill that was on your
- bill? Yeah, so that's, you know, then we're talking about 30 cents. Thank you, Jim, for your quick math.
- So it's not nothing, but it's very, very small. It's not fair, but that's what we're stuck with. And
- the hope is, again, to realize the full cost of irrigation at the next rate case. Is that correct? Yes,
- this will get us closer to the full cost of service for the irrigation customer class that we are hoping.
- And then when our consultant, Stantec, was talking at the very end,
- the man's voice, I'm sorry, I forgot names. Andy. He talked about something about conservation in regards
- to irrigation, but I didn't understand that statement. Sure. So a rate can also be a, oh, what's the
- word I'm looking for? Andy knows the word. It's essentially, it's a motivator to an incentive
- or disincentive. Yeah.
- Yeah, essentially like if it's a higher rate, it's incentive to use less. And irrigation is a customer
- class where you can be encouraged quite a bit to use less. And a rate can help encourage you to use
- less, a higher rate. What is the word I'm looking for? OK, but there's still a fixed cost and a cost per unit.
- we can't mix conservation rates and cost of service base rates, right? It's not a conservation rate.
- That wasn't man, it was just that there's a higher cost, they're gonna be incentivized to conserve.
- That's all he meant. Okay, thank you. That's all my questions, thank you. So that was a question that
- I've actually missed because it was, yeah, the irrigation is closer to the cost of service and you've
- said we'll work to get there,
- Like I don't know if any of us will be on the board when the next rate case comes around, but like,
- I think our hope would be that we close, the gap is closed at the next rate case. Like not still getting
- there, but it's done, I guess. I don't know, I don't feel like that's fair to pass along that even at
- 30 cents or however much when other customers are using it, just like in the,
- case of for annexation our county residents pay a higher rate because that costs more to get that to
- them and so like I think that if our different customer class is using you know that cost higher amount
- to get to them that I think that they should be billed the actual amount. I guess looking ahead I would
- have rather
- put in here the case for their actual amount, and then maybe the IURC said, you can't charge them that
- much, and then it backed it off, and I don't know. But I feel that, specifically the irrigation, and
- I'm not thinking of any particular customer in mind, so I just think that they should pay their actual
- cost. Can I ask a follow-up to that? Yeah. What's the downside? Why didn't we? Yeah.
- So, when we're looking at the rate design basing it off of the cost of service. We generally want to
- avoid things like rate shock. And it's, it would be a huge spike all at once.
- which is why we did make the decision to cap it at four times the revenue requirement. Even capping
- at four times the revenue requirement is still quite a bit of a jump from a previous rate. And so that's
- how we can do this a little more incrementally, um, and gradually get them to the cost of service. Would
- we be worried about like people going out of business or like impact detrimental impacts to the customers
- by dealing with that level of shock?
- I believe that it's in general, one of the concerns behind rate shock is that, you know, it would have
- acute adverse economic impact. Correct me if I'm wrong, Andy. I think you're right. And I also think
- there's past precedent with the IURC as well in terms of maximum levels of increases that have been
- accepted through past cases.
- for customers in terms of being higher than one to two times the overall level of increase. So we're
- kind of working in that kind of a context and environment as well. But I think this approach definitely
- gets us closer. And I think we'll make more progress than what was done in the last case, and even from
- what I read from the case before that as well.
- Any other questions or comments? I move approval of resolution 25-2025-16, adjustment of water rates
- and charges for the City of Bloomington Water Works Utility. Second. All in favor please say aye. Aye.
- All opposed say nay. It is approved. Thank you.
- Request approval of resolution 2025-17, finance bond for 2025 water rate case, Chris Wheeler. Good evening.
- Chris Wheeler with City Legal. And this is the finance bonding that's before you. We had Brad Bingham
- come in and speak with the board. Well, virtually come in and speak with the board in the finance
- subcommittee meeting a few weeks ago.
- and also with, I think the board as a whole then at the regular meeting. He's with Barnes and Thornburg
- and he is with us again this evening. And I think he's gonna walk us through at a fairly high level,
- the bond ordinance as proposed. There he is, Mr. Bingham, please take it away and then we will ask the
- board for approval.
- The proposed resolution is kind of a companion piece to the rates and charges increase. Just like the
- rates and charges, any bonds that the water works would also have to be approved by the IURC. So the
- idea is to move these two pieces in tandem. The maximum authorized amount of the bonds would be authorized
- to $71 million. That's consistent with what Jennifer Wilson has assumed in her cost of study survey
- as well. It would be used to finance the bonds listed in exhibit A of that resolution.
- That's just a subset of the overall projects in the capital improvement plan. It's contemplated there
- would be two separate series of bonds, one issued in 2026 and a separate series in 2028. Each of those
- would have their own separate 20-year maximum bond term. And again, this approves the form of the bond
- ordinance that would actually go to the council. So this is more of a recommending step. And then if
- the council approves it, then it goes to the IURC for their consideration along with the rates and charges.
- having any questions about the resolutions or the ordinance or just the overall financing process. Any
- questions? And then do we have a motion for approval? I move we approve resolution 2025-17, the finance
- bond resolution. Second. All in favor please say aye. Aye. All opposed say nay. Request is approved.
- Thank you.
- Item eight, request approval of resolution 2025-18, bid acceptance and contract award for Toric Engineering
- for Blue Chipool SCADA improvements. Mark Menafee. Hello, Mark Menafee with Engineering, here to ask
- approval of resolution 2025-18, and that's to accept the bids from Toric Engineering for the Blue Chipool
- SCADA improvements. Be happy to answer any questions.
- Approve resolution 2025-18, bid acceptance for the Toric Engineering and Blucher Pool skater improvements.
- Second. All in favor, please say aye. Aye. All opposed, say nay. Request is approved. Next, we have
- request approval of service agreement with Toric Engineering LLC for Blucher Pool skater improvements.
- I'm also here to ask approval for the service agreement, the contract with Toric Engineering for this
- project at Blucher Pool. Happy to answer any questions. I move we approve the service agreement, Toric
- Engineering, for Blucher Pool skated improvements. Second. All in favor, please say aye. Aye. All opposed, say nay.
- is approved. Thank you very much. Next we got a request approval of letter of engagement with Ice Miller
- LLP for PFAS litigation. Chris Wheeler. Hi Chris Wheeler City Legal this item before you is a letter
- of engagement the city would like to hire Ice Miller to represent the city and
- in a class action litigation that's going on against 3M and DuPont concerning Forever Chemicals. And
- this is not going to cost the city. This is one of those matters where if any kind of payment is made
- to the city out of the class action lawsuit, the law firm would then get paid out of that. That includes
- any expenses that they may have that they will incur for litigation.
- It will also allow the city to do additional testing of its drinking water at the source, and I believe
- drinking water at the plant in order to see where our levels of PFAS currently are. We have tested in
- the past. We have folks here who can talk about PFAS and what our levels are now. They are extremely
- low. They are below what the federal recommended allowed level would be at this time, but any amount
- any trace amount, any amount whatsoever of PFAS found in our drinking our source water allows us to
- be eligible for this class action lawsuit. I attended a seminar with Ice Miller discussing this class
- action lawsuit. Then we had a meeting with Ice Miller with most of the assistant directors and the director
- and myself included to discuss the merits of going forward with this. And we believe it is a benefit
- to the utilities, to the city, to the citizens of the city if we would engage in this class action lawsuit.
- And I would ask the board to approve this letter of engagement. Any questions or comments? Who are the
- other complainants in the class action? Multiple cities across the country. I don't know who they all
- are. So beyond Indiana. It's an awful lot, yes. There are multiple cities within the state of Indiana
- that are engaged.
- and then all across the country. Thanks. How do we select ice Miller for this? Well, because they are
- currently engaged in representing cities in Indiana in this class action, and they were the ones that
- presented the seminar. And so I brought them to meet up with elements of the utilities department to
- discuss the potential of using them.
- time you've already put into it what kind of time even though there's no cost will you or any of our
- staff be putting into the lawsuit. That's a good question and I don't know that I can really give you
- a good answer to that. I'm not sure what amount of time would be asked of our employees to provide any
- data or information. We were already doing testing so that
- Data is already, we've already sunk the cost of getting that data. The additional testing that will
- occur will be from an outside testing company that will come in and do the testing for us, so that shouldn't
- take up, and that is not at our expense as well. That's additional benefit to us to get those results
- at no cost anyway, right? Thank you.
- I don't understand where this is coming from. What has... There's a class action lawsuit currently going
- on against 3M and DuPont because they manufacture forever chemicals that go on to various products that
- are used throughout the country that have caused a great deal of contamination in drinking water in
- soil. And so the fact that it's going on now
- they are there are agreements and settlements that are occurring and if we opt into the class action
- lawsuit we are eligible to receive some of the settlement that will come out if we miss out on this
- opportunity we could still sue some companies that use forever chemicals but we may not be very successful
- in getting after 3M or DuPont who are the main
- I want to say culprits, probably not the best word, but the main manufacturers of these chemicals that
- have caused problems for our citizens and for the country. So there is a timing element that we want
- to get involved so that we can be eligible to receive some of the funding somewhere down the road. Some
- of the payments that come out of the settlement. Thank you. And that money that would come under settlement,
- would it come to CBU or is it the city that
- Well, it goes to the utilities department because it's a water issue. It'll go towards our ability to
- someday down the line treat for if we need to and try to prevent PFAS from being in our drinking water.
- So we tested for PFAS in our source water and
- Our last tests, if I'm remembering correctly, the amount of PFAS in the source water was less than the
- federal limits at the time for PFAS in finished drinking water. And our drinking water was non-detect.
- I'm thinking more of like... It was non-detect, is that what you said? Yeah. Yeah, that's... The work
- that was done on the west side, like in case... Oh, those are PCBs.
- So the federal limits are coming are being determined by the EPA and if if we ever if we ever get to
- a point where we need to start treating for PFAS it's extremely expensive so the money that we would
- we would like to be able to receive some of the funding if we can I keep calling it funding but the
- settlement payments
- We would like to receive some of those if we can, because we would like to be able to use those to go
- towards any kind of treatment that we may need to do, changes in our techniques. Yeah. And just to kind
- of, again, reiterate what you're saying. It's nothing that we are, it's not chemicals that we're putting
- in. No. It's not anything that CBU is doing. It's consumer product.
- items that are getting into our water systems that are, whether it's through boating or whether it's
- through fertilization or fertilizing or whatnot, that's the type of stuff we're talking about. It's
- nothing that CBU has done through the treatment process. It's all outside source. Thank you. So I heard
- you say that our raw water,
- is detectable but below the limits and our finished water is undetectable. So our treatment is doing
- something it would seem, is that correct? Yeah, yeah, yeah. Yes, our current treatment methods are doing
- something, yes. Thank you. They weren't designed specifically for PFAS. That's okay. Yes. Sounds like
- this is another step in our mission of safe and sustainable drinking water.
- I move we approve the letter of engagement with Ice Miller for PFAS litigation. Second. All in favor
- please say aye. Aye. All opposed say nay. Request is approved. Thank you. Next we have request approval
- of agreement for professional services with GRW engineering incorporated for lower cascades culvert
- replacement. Jane Fleague.
- chain fleet for the record. This is a request to approve a professional services agreement. This is
- for the design and permitting of a culvert project in lower cascades. There's, I don't know if you drive
- down that road very often, but there are a couple of head walls that at least the one on the east side
- is broken. We want to replace that culvert under
- Cascades Road and actually continue it to a connection point to the east it's about 80 feet long and
- this would be the design and the survey design and Working with the permitting agencies because we will
- be working in a floodway so IDNR IDM a 401 a 404 permit so
- We're asking for this contract in the amount not to exceed $181,860. It does currently include potential
- construction engineering services, but those could be, we could decide at a later date that those are
- not necessary, but it's currently shown in there. I'd be happy to answer any questions. So remind me,
- is there a,
- Is there a minimum distance under which these projects fall within city jurisdiction and beyond that
- it's county or is that just bridges? Any bridge structure over 20 feet in span is county. There would
- be county bridges. This is about 16 feet in span. Okay, otherwise it would be
- And it is lower cascades old State Road 37 which is a city-maintained street I Don't know I was gonna
- say if it is we've
- We got 90 years out of it, so not so bad. These are concrete head walls. I'm sure that this company
- will be able to tell us that before it's over. Yes. Well, I'll move approval then of the
- Agreement for professional services with GRW Engineering. Second. All in favor please say aye. Aye.
- All opposed say nay. Request is approved. Thank you. Thank you. Moving along. Old business. Any old
- business from the board? Old business from staff. New business. New business from the board. New business
- from staff.
- Subcommittee reports, we had none today. Staff reports. Yeah, we just have one. We would like to welcome
- Derek Belcher, who's our new instrumentation and control specialist, who will be working in our operations
- division. We're very excited to have him. Welcome. How did your branching presentation go? Oh. Yeah.
- Oh, that was weeks ago. 100 years ago.
- I think the budget presentation went really well. There were some good questions. The council did some
- follow-up questions that were written, which we gave written responses to, primarily asking about the
- negative budgeted number in E&R for water, which we've explained. But yeah, I think it went really well
- overall. I stayed under time. Awesome.
- Next, petitions and communications. Any petitions or communications from the public? Hearing none, do
- we have a motion to adjourn?