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?