WEBVTT 00:00:00.322 --> 00:00:07.208 - Okay, welcome to our public meeting regarding our rate case. Today, we are gonna go a little more in 00:00:07.208 --> 00:00:14.298 - depth into the rate case. We are joined today by Jennifer Wilson, our consultant with Crow, who's gonna 00:00:14.298 --> 00:00:21.320 - review our revenue requirements report. We are joined by consultants from Stantec, who will review our 00:00:21.320 --> 00:00:28.478 - cost of service study and rate allocation. And we also have Mark Menafee, our capital projects engineer. 00:00:29.090 --> 00:00:37.194 - and Matt Havy, our Assistant Director of Finance to help answer any questions people may have. With that, 00:00:37.194 --> 00:00:44.993 - I'll hand it off to Jennifer. Thank you, Kat. I'm Jennifer Wilson with Crow, and I have served as the 00:00:44.993 --> 00:00:53.480 - rate consultant to prepare the revenue requirement analysis for Bloomington Water Utility. Next slide, please. 00:00:53.480 --> 00:00:58.526 - As part of our task, we go in and we look at 2022, 2023, and 2024 00:00:58.978 --> 00:01:05.710 - and we look at the balance sheet and all the other financial statements of the utility. We use the year 00:01:05.710 --> 00:01:11.989 - end 2024 as the test year, and we made adjustments to it for fixed known and measurable changes, 00:01:11.989 --> 00:01:18.656 - which then computes to the revenue requirements of the operation and maintenance expenses, current and 00:01:18.656 --> 00:01:25.258 - proposed debt and lease payments, and annual extensions and replacements, which is paying for capital 00:01:25.258 --> 00:01:27.006 - items with cash. Next tab. 00:01:29.794 --> 00:01:36.322 - Some of the key considerations out of doing the study is that you have $84 million worth of projects 00:01:36.322 --> 00:01:43.367 - that need to be done. And we have proposed two bond issuances that will fund 54.5 million of those projects. 00:01:43.367 --> 00:01:50.541 - The rest of it will be funded with cash on hand as the revenues come in year over year. And we're having that, 00:01:50.541 --> 00:01:57.262 - that's called extensions and replacements. And that will be increased to $7.1 million of annual funding 00:01:57.262 --> 00:01:58.878 - from revenues each year. 00:01:59.938 --> 00:02:10.583 - Next slide. When we looked at the operation and maintenance expenses as compared to revenues, the first 00:02:10.583 --> 00:02:21.432 - columns of lines there, the first one is 2022 and the revenues came in about $20 million and the expenses 00:02:21.432 --> 00:02:22.558 - were 18.1. 00:02:22.786 --> 00:02:30.895 - which meant that the utility had about $1.9 million of annual funding of capital improvements. 00:02:30.895 --> 00:02:39.003 - And as I said before, we're gonna increase that up to $7.1 million. The set next year in 2023, 00:02:39.003 --> 00:02:47.538 - it was a negative $1.9 million. And in 2024, there was $3.8 million as there was a rate increase in 00:02:47.538 --> 00:02:51.294 - the beginning of the year 2024. Next slide. 00:02:52.738 --> 00:03:00.524 - We've looked at the year of 2024 and made adjustments for fixed known and measurable items and then 00:03:00.524 --> 00:03:08.543 - include the payment of shared services and pilot. So there was about $3.2 million worth of adjustments 00:03:08.543 --> 00:03:16.406 - that we made from the test year to what a pro forma year is gonna be in 2025. Next slide. This graph 00:03:16.406 --> 00:03:20.766 - shows operation and maintenance and taxes and what that 00:03:21.218 --> 00:03:29.423 - a total of $14.9 million of operation and maintenance and taxes goes towards. So a majority of it, 42%, 00:03:29.423 --> 00:03:37.550 - is going towards employee costs for salaries and wages and the related employee costs related to that. 00:03:37.550 --> 00:03:45.834 - Purchase power is about 11% of that total. And you can see the other lines dividing out what those other 00:03:45.834 --> 00:03:47.806 - expenses are. Next, Pam. 00:03:49.794 --> 00:03:56.448 - As I said, there's a capital improvement plan of $84 million. We are funding $54 million with bonds 00:03:56.448 --> 00:04:03.301 - and those two bonds will be done in 2026 and 2028. Our goal, which I'll show it here in the next slide 00:04:03.301 --> 00:04:10.022 - is that we are doing capitalized interest when we fund those bonds so that we're not increasing debt 00:04:10.022 --> 00:04:17.075 - service and we'll be utilizing the debt roll off and I'll show that in the next slide. But we are funding 00:04:17.075 --> 00:04:18.206 - about 28 million 00:04:18.402 --> 00:04:28.853 - with cash on hand over that four year time period. Next slide. The next one. There we go. This is the debt. 00:04:28.853 --> 00:04:38.626 - And so currently the debt service is at $7.1 million and will continue that way until the year 2029. 00:04:38.626 --> 00:04:46.174 - And then it drops down to $1.7 million. We're taking that opportunity to fund 00:04:46.594 --> 00:04:53.860 - $54.5 million worth of projects by financing those projects through two series of bond issues so that 00:04:53.860 --> 00:05:01.056 - the debt service goes back up to $7.1 million and is maintained at that level for a number of years. 00:05:01.056 --> 00:05:08.536 - So basically we're filling in the reduction in debt service with the issuance of new debt and thus being 00:05:08.536 --> 00:05:13.950 - able to get a lot of the improvements that Kat will talk about. Next slide. 00:05:16.450 --> 00:05:23.323 - Here's the total revenue requirements. The big dark blue one is the operation and maintenance expenses, 00:05:23.323 --> 00:05:30.129 - and that's at $14.4 million. Taxes is $475,000. Debt service, as I said, is at $7.1 million right now, 00:05:30.129 --> 00:05:36.737 - and will continue that way after the issuance of debt. And then annual extensions and replacements, 00:05:36.737 --> 00:05:43.742 - which is funding for capital projects with cash as it comes in each year, is gonna be set at 7.1 million. 00:05:44.386 --> 00:05:52.950 - That's a total of $29.1 million of revenue requirements. We currently are bringing in 22.6 million. 00:05:52.950 --> 00:06:01.685 - So that's a deficit of $6.5 million that needs to be made up with rates. So we're proposing a revenue 00:06:01.685 --> 00:06:10.249 - increase of 30.5%. Now that does not mean everyone's bill will go up 30.5%. What that means is that 00:06:10.249 --> 00:06:12.990 - we need revenues to go up 30.5% 00:06:13.122 --> 00:06:20.077 - the next person that will be speaking, Stantec, they have prepared a cost of service study to allocate 00:06:20.077 --> 00:06:26.965 - those expenses to the customer classes that are causing those expenses so that those that are causing 00:06:26.965 --> 00:06:34.056 - the expenses will have a larger increase than 30.5 and those classes that are not, might not see a 30.5% 00:06:34.056 --> 00:06:40.606 - increase. So that's a long way of saying that rates are determined by the cost of service study. 00:06:42.882 --> 00:06:50.185 - That's my presentation. And at this point, I'm going to hand it over to Stantec, who prepared, 00:06:50.185 --> 00:06:58.564 - who's the cost of service study expert. So Andy or Danica? Good evening, everyone. Danica Katz with Stantec. 00:06:58.564 --> 00:07:06.483 - We also have Andy Burnham on from Stantec as well. As Jennifer mentioned, as well as Kat, this evening 00:07:06.483 --> 00:07:11.710 - we're going to be presenting on the cost allocation and rate design 00:07:12.034 --> 00:07:19.888 - component of this rate case and we'll step through each of those pieces. So next slide please. All right, 00:07:19.888 --> 00:07:27.297 - I just want to highlight here some of the objectives of the cost of service analysis. So what we do 00:07:27.297 --> 00:07:35.076 - is we utilize the revenue requirements that Jennifer just talked through as our test year and as defined 00:07:35.076 --> 00:07:39.966 - by Crow, which ultimately flow into the cost of service analysis. 00:07:40.610 --> 00:07:48.398 - And what we do is we utilize that to go through all of the expenses, things of that nature, and go through 00:07:48.398 --> 00:07:55.750 - and functionalize those costs, and ultimately divvy those up by customer class. And the goal of that 00:07:55.750 --> 00:08:00.190 - is to determine the cost to serve each class compared to the 00:08:00.322 --> 00:08:08.189 - current revenues that are being collected by each of those classes. So ultimately, just to become consistent 00:08:08.189 --> 00:08:15.334 - with the cost of providing service for each of those customer classes. As we go through the study, 00:08:15.334 --> 00:08:22.624 - one of the big things I want to point out here is that for this pre-case, we've utilized city AMI or 00:08:22.624 --> 00:08:28.542 - automated metering infrastructure, which has really allowed us to use data-driven 00:08:28.962 --> 00:08:37.334 - data-driven customer data in order to come up with peaking factors that are specifically from that data. 00:08:37.334 --> 00:08:45.547 - We've also used 2024 billing records as a basis for the analysis. And then just also want to highlight 00:08:45.547 --> 00:08:54.238 - here that as we go through the cost of service process, this is very much along with AWWA industry guidance. 00:08:54.498 --> 00:09:03.256 - as we approach the base extra capacity methodology for this cost allocation. Next slide, please. 00:09:03.256 --> 00:09:12.285 - And so here's the cost of service summary that came out of our analysis. And as Jennifer mentioned, 00:09:12.285 --> 00:09:20.862 - you can see in that top right corner as well as in the blue bars, that 30.5% overall increase. 00:09:21.506 --> 00:09:30.278 - compared to the orange bar, which is the existing or current revenue for each of those customer classes 00:09:30.278 --> 00:09:38.543 - along the bottom axis there. So what that would show is there's a 19.8% increase for residential, 00:09:38.543 --> 00:09:47.400 - whereas general service may see slightly higher than that, at about 42%. It just shows that spread based 00:09:47.400 --> 00:09:50.942 - on the findings from the cost of service. 00:09:51.042 --> 00:09:59.247 - across those different customer classes. You can see public fire protection going down at that 17.2%. 00:09:59.247 --> 00:10:07.854 - And to Jennifer's point there that not everyone is seeing that 30.5% based on the cost of service findings 00:10:07.854 --> 00:10:10.750 - specific to those customer classes. 00:10:22.402 --> 00:10:30.620 - And so once we get through the cost of service summary and get to the findings there by customer class, 00:10:30.620 --> 00:10:38.600 - that ultimately drives the proposed rates that you're seeing here compared to the current rates that 00:10:38.600 --> 00:10:45.948 - are in place. On the left-hand side, you'll see the charges specific to the fixed component. 00:10:45.948 --> 00:10:49.662 - So the base charge that goes up by meter size. 00:10:50.434 --> 00:10:59.066 - So what you'll see there is starting at that smallest 5 eighths meter, currently at that $6.50. 00:10:59.066 --> 00:11:08.598 - And then you're seeing that proposed rate there on the right hand of that table at $8.16. And that scales 00:11:08.598 --> 00:11:10.846 - up by those meter sizes. 00:11:14.146 --> 00:11:22.443 - On the right hand side we showed the component for the usage or what's sometimes referred to as the 00:11:22.443 --> 00:11:30.740 - volumetric per thousand gallons. And so we've shown each of the individual customer classes as well 00:11:30.740 --> 00:11:38.789 - as their current and proposed rate. So you can see there for residential currently at that $4.38 00:11:38.789 --> 00:11:43.518 - and then the $5.31 under the cost of service or proposed 00:11:43.682 --> 00:11:52.224 - rates there and so forth, or IU master meter as well as wholesale general service and irrigation. 00:11:52.224 --> 00:12:01.203 - And we'll also be pulling all of this together kind of into a summary that shows some of those impacts 00:12:01.203 --> 00:12:10.181 - for some specific customers or more common customers for each of those classes. So we can jump to that 00:12:10.181 --> 00:12:13.406 - next slide, which should show those. 00:12:14.082 --> 00:12:21.932 - Oh, sorry, I forgot the public fire protection and private fire protection. So through the rate design, 00:12:21.932 --> 00:12:29.706 - we've also gone ahead and done something very similar to what we did on the regular rates and go ahead 00:12:29.706 --> 00:12:37.254 - and calculate those for the public from both inside city as well as outside city. And that leftmost 00:12:37.254 --> 00:12:42.462 - table also by meter size. And you can see there that those rates are 00:12:42.690 --> 00:12:51.226 - like decrease from the current rates and that is in line with the cost of service graph that you saw 00:12:51.226 --> 00:12:59.678 - in a couple of the prior slides. And then on the right side, we've got our private fire connections 00:12:59.678 --> 00:13:07.454 - or private fire lines by line size with the current rates there and then the proposed rate. 00:13:20.482 --> 00:13:28.737 - We should have the customer impacts. Perfect. So we wanted to show here some monthly bill impacts for 00:13:28.737 --> 00:13:37.317 - a residential customer at a five-case meter, that smallest meter size. So we've shown a handful of usages 00:13:37.317 --> 00:13:45.815 - in thousand gallons on that leftmost column, as well as that current bill, which would include the fixed 00:13:45.815 --> 00:13:49.214 - component, their volumetric usage charge, 00:13:49.634 --> 00:13:58.402 - as well as the public fire protection charge. So you can kind of see all of those tables that we just 00:13:58.402 --> 00:14:06.999 - looked at kind of all snapped together here to get the full picture of what those impacts would be. 00:14:06.999 --> 00:14:15.080 - So for someone who's using maybe 1,000 gallons, a smaller residential user, we'll see a $2.32 00:14:15.080 --> 00:14:19.550 - change for that monthly bill, which is about $17.8. 00:14:21.026 --> 00:14:35.541 - And then you can see for some of those larger users, just a slightly higher impact there on the dollar change. 00:14:35.541 --> 00:14:48.094 - And then next slide, we have something similar for the general service category, which includes 00:14:48.514 --> 00:14:57.134 - your commercial customers, industrial, interdepartmental customers of that type. And so we're showing 00:14:57.134 --> 00:15:06.177 - two different situations here at three-quarter inch meter, small, medium, and large, at that 1,000, 5,000, 00:15:06.177 --> 00:15:14.967 - and 10,000 increment. So for that small three-quarter inch commercial meter, maybe seeing about a $3.30 00:15:14.967 --> 00:15:17.502 - change there, or about a $22. 00:15:17.602 --> 00:15:26.243 - and a little bit higher on those larger meters with a little bit larger usage. And then also wanted 00:15:26.243 --> 00:15:35.143 - to show a one inch meter down below as well. Those are the two most common meter sizes for the general 00:15:35.143 --> 00:15:43.870 - surface category. So we're showing a 15,000 gallon, a 20,000 gallon, and a 25,000 gallon user there. 00:15:44.802 --> 00:15:55.973 - see that those charges are anywhere from $32.85 up to that $54. And these also contain the city public 00:15:55.973 --> 00:16:06.927 - fire protection charge as well. And next slide, I think that was all that we had. So happy to answer 00:16:06.927 --> 00:16:10.398 - any questions that may come up. 00:16:16.322 --> 00:16:25.754 - Next question. Should I go up there? Sure. I don't have to. You don't have to. Can I go back to that, 00:16:25.754 --> 00:16:35.647 - the graph slide you talked about, to set inches for each category? Yeah, absolutely. Glad you can hear me. 00:16:35.647 --> 00:16:44.894 - One more. There we go. That one there, yep. OK. The first question is just in terms of terminology. 00:16:45.442 --> 00:16:53.240 - I think we're used to seeing those commercial, industrial, interdepartmental broken out. And why is 00:16:53.240 --> 00:17:01.272 - it that those are grouped into general service now? Yeah, great question. So one of the pieces to this 00:17:01.272 --> 00:17:09.460 - analysis, specifically for the general service, with the AMI data that we have, we're able to go through 00:17:09.460 --> 00:17:10.942 - pretty data-driven 00:17:11.458 --> 00:17:19.256 - intense analysis on the AMI data and we're able to determine that the commercial and industrial classes 00:17:19.256 --> 00:17:27.053 - behaved very similarly when it came to their demands, usage, things of that nature, as well as the fact 00:17:27.053 --> 00:17:34.701 - that the industrial class is very small. I believe there's only 17 or 18 accounts specifically within 00:17:34.701 --> 00:17:41.374 - that class. And so through discussions, we talked with the city about consolidating that 00:17:42.466 --> 00:17:56.272 - Commercial and industrial into a general service class and so that's why you see those kind of rolled 00:17:56.272 --> 00:18:10.214 - up here in this presentation If you were to look at the current rates versus the proposed rates That's 00:18:10.214 --> 00:18:11.838 - the overall 00:18:12.354 --> 00:18:23.276 - percent increase in revenue for that customer class, not specifically the rate increases, because those 00:18:23.276 --> 00:18:34.197 - are dependent on the meter size and the usage and things of that nature. Right. Could we, sometime well 00:18:34.197 --> 00:18:38.398 - before the September 8 meeting, see the 00:18:39.042 --> 00:18:47.806 - percentage-wise increases in rates for the current rates versus these that are proposed. Yeah, absolutely. 00:18:47.806 --> 00:18:55.996 - So on the tables that are on the next slide, I'd like to see the percent changes there. Yeah. Yeah. 00:18:55.996 --> 00:19:04.351 - And I mean, this is a little bit of a bigger ask, but seeing the historical changes over our last few 00:19:04.351 --> 00:19:08.446 - rates increases would be useful as well, I think. 00:19:11.138 --> 00:19:18.806 - That's something that you wouldn't be responsible for, but maybe staff can do to show what's happened 00:19:18.806 --> 00:19:26.624 - historically. Yeah, we can work with staff to show something like that in there. And then let's go back 00:19:26.624 --> 00:19:34.291 - to that slide right before this one. Oh, sorry. So go back to that. I have one more question. I mean, 00:19:34.291 --> 00:19:40.606 - one you just had. Yeah. So when you show the two current rates for general service, 00:19:41.986 --> 00:19:51.088 - Are those the two for commercial and industrial? Correct. Yep. Yes, one of those represents the current 00:19:51.088 --> 00:20:00.015 - rate for industrial and the current rate for commercial. OK. I mean, it might be useful just to break 00:20:00.015 --> 00:20:09.642 - those out into two lines. General service used to be just two lines, I think, would be helpful for comparison 00:20:09.642 --> 00:20:11.742 - purposes. Anyway, yeah. 00:20:11.938 --> 00:20:22.094 - That's a lot. Thank you. Yeah, absolutely. Great question. And then, so I mean, I did this on my own 00:20:22.094 --> 00:20:31.044 - based on current rates and the new increases and what the percentage increases would be. 00:20:31.044 --> 00:20:40.798 - So if the residential rates are going up less than those of the other customer categories, is it 00:20:40.930 --> 00:20:49.877 - reasonable to say that our residential customers have been subsidizing these other customer classes. 00:20:49.877 --> 00:20:58.736 - I guess I'm being cautioned against drawing that kind of a conclusion because we really looked at a 00:20:58.736 --> 00:21:08.126 - test year and the customer usage characteristics and cost in that year and it's very well recognized that 00:21:08.226 --> 00:21:13.913 - We do these cost of service allocations. They are to a degree a snapshot in time. And so while we try 00:21:13.913 --> 00:21:19.766 - to normalize the test here, there can certainly be variances and fluctuations from one year to the next. 00:21:19.766 --> 00:21:25.397 - So I don't know that I'd necessarily draw a room for that conclusion, because we've not had a chance 00:21:25.397 --> 00:21:31.028 - to do that analysis to see what's really transpired in those years. But if you had the data from all 00:21:31.028 --> 00:21:36.826 - the years before, since the last rate increase, you'd be able to do that? I mean, in essence, you could 00:21:36.826 --> 00:21:37.662 - go back and do 00:21:37.858 --> 00:21:43.800 - a true up, if you will, based on actuals to say, well, how did our rates perform if we have the AMI 00:21:43.800 --> 00:21:49.861 - information for those historical periods? And the cost in the appropriate degree of detail, that type 00:21:49.861 --> 00:21:55.981 - of analysis could be performed. But there very well may be some data limitations in terms of the level 00:21:55.981 --> 00:22:02.042 - of precision you can do that with from the AMI system. That data, I don't know how far back that goes 00:22:02.042 --> 00:22:04.894 - to the last rate case, which was filed in 2021. 00:22:05.250 --> 00:22:15.399 - Sure, and the level of effort involved, I understand. Absolutely. Good one as well. OK. Well, are there 00:22:15.399 --> 00:22:25.744 - any instances where there's a proposed increase that doesn't fully account for the cost of any particular 00:22:25.744 --> 00:22:28.574 - customer class at this time? 00:22:37.666 --> 00:22:45.559 - I think I'll let Danica speak to it a little more specifically, but I do believe for the irrigation 00:22:45.559 --> 00:22:53.688 - and service classification, that does reflect the limitation of the increase for this particular case. 00:22:53.688 --> 00:23:01.897 - Is that in the report that we can have access to and read? At present, the report hasn't been prepared. 00:23:01.897 --> 00:23:07.422 - It will be developed as part of the application and filing materials. 00:23:07.778 --> 00:23:13.814 - be putting kind of the narrative together about the cost of service outcomes, but it will certainly 00:23:13.814 --> 00:23:20.453 - be identified in terms of what the full cost of service is for irrigation and what's been proposed this year. 00:23:20.453 --> 00:23:26.428 - I'll say this is a substantial step towards cost of service, but it's stopping just short of that, 00:23:26.428 --> 00:23:32.524 - recognizing the magnitude of the increase that's presented here. Thank you, sir. So just to clarify, 00:23:32.524 --> 00:23:37.534 - even though irrigation as a customer class has a very large increase and still not 00:23:38.626 --> 00:23:47.276 - enough to cover the entire cost of service. Yes. That's correct. Yes. Could someone maybe talk a little 00:23:47.276 --> 00:23:55.510 - bit about what that customer class is? Because I think when people see irrigation, they think, oh, 00:23:55.510 --> 00:24:04.742 - CBU knows that I'm using this water to water my lawn, which is, of course, not the case. That would be creepy. 00:24:04.742 --> 00:24:08.318 - So what is irrigation as a customer class? 00:24:10.722 --> 00:24:19.530 - Give us some examples so that we understand who these people are, whose rates are going to be increasing 00:24:19.530 --> 00:24:27.836 - the most. Sure. So our irrigation customer class is a mix of residential, general service, and IU. 00:24:27.836 --> 00:24:36.896 - We don't have any wholesale irrigation customers. This is based on irrigation meters. So there are specific 00:24:36.896 --> 00:24:38.238 - meters that are 00:24:39.074 --> 00:24:46.551 - irrigation only meters. And those meters are what are going to have these rates. So yes, CBU is not 00:24:46.551 --> 00:24:54.252 - able to know whether or not you're using your garden hose at home to water your garden. And that's not 00:24:54.252 --> 00:25:01.803 - what this is about. This is specifically for metered water that is specific to irrigation. So it's a 00:25:01.803 --> 00:25:07.934 - little more large scale type of irrigation. So Indiana University has some meters 00:25:08.162 --> 00:25:17.417 - that are irrigation meters. Yes. Those are built differently than Indiana University meters. Yes. 00:25:17.417 --> 00:25:26.956 - As long as we're bringing up Indiana University, last time around they were an intravenor. This time 00:25:26.956 --> 00:25:35.550 - around there were some required meetings that had to take place. I think the intent was to 00:25:36.130 --> 00:25:43.323 - Increase the probability that potential interveners might be, I don't know, more coordinated or on the 00:25:43.323 --> 00:25:50.585 - same page with the cost of service approach to avoid the need for an intervening case. Without speaking 00:25:50.585 --> 00:25:57.778 - on behalf of Indiana University, is CBU optimistic that this case is going to proceed without the kind 00:25:57.778 --> 00:26:00.990 - of intervention that we saw last time around? 00:26:04.098 --> 00:26:19.816 - I'm going to actually offer Dave McGimsey to answer that question. He's been helping us through the 00:26:19.816 --> 00:26:22.174 - legal process. 00:26:38.370 --> 00:26:39.134 - We don't know. 00:27:09.154 --> 00:27:29.643 - more for water here in Bloomington based on this proposed increase? We also had a few more slides to 00:27:29.643 --> 00:27:38.974 - explain the rate increases a little bit more. 00:27:39.554 --> 00:27:47.072 - to talk about our capital improvement projects. I didn't want to interrupt. There was good questions 00:27:47.072 --> 00:27:54.740 - happening. So I think we can go forward with that and then we can take some more questions after that. 00:27:54.740 --> 00:28:02.928 - All right. So just a little background on CBU. So we are a municipally owned water, wastewater and stormwater 00:28:02.928 --> 00:28:08.958 - utility service. We serve the residents of Bloomington and the surrounding area. 00:28:09.794 --> 00:28:16.672 - We operate under the guidance of a seven member utility service board and that board is appointed by 00:28:16.672 --> 00:28:23.754 - both the mayor and city council. We're responsible for the treatment and distribution of drinking water 00:28:23.754 --> 00:28:30.700 - for the city of Bloomington through the Monroe water treatment plant seen here. It has been owned and 00:28:30.700 --> 00:28:37.374 - operated since its construction in 1967. We are also the sole provider of water to Monroe County. 00:28:38.626 --> 00:28:45.781 - In addition to our water services, we also handle the collection, treatment, and disposal of wastewater 00:28:45.781 --> 00:28:52.660 - through the ownership and operation of two wastewater treatment facilities, Dillman Road wastewater 00:28:52.660 --> 00:29:00.227 - treatment plant and Blucher Pool wastewater treatment plant. This rate case is specifically for water though, 00:29:00.227 --> 00:29:05.662 - and this is specifically a water rate case which is not associated with sewer. 00:29:06.050 --> 00:29:14.548 - We also manage the collection and disposal of stormwater for the city of Bloomington. We currently employ 00:29:14.548 --> 00:29:22.565 - approximately 195 full and part-time employees, and we all work diligently to provide water quality 00:29:22.565 --> 00:29:30.983 - service to Bloomington residents, and our staff is very proud of the work that we do. So this is a slide 00:29:30.983 --> 00:29:34.430 - that Stantec had. I added to the side here 00:29:34.722 --> 00:29:42.154 - just to help with a little clarity what the difference between the current and proposed rates are for 00:29:42.154 --> 00:29:49.586 - both the fixed charges and usage charges for our different customer classes. So you may notice in our 00:29:49.586 --> 00:29:57.090 - fixed charges based on meter size, after one and one half meter and larger, the proposed rate actually 00:29:57.090 --> 00:30:04.158 - goes down. And that again is based off of the information we got from the cost of service study. 00:30:06.146 --> 00:30:16.304 - For our different customer classes, residential, we'll see their usage charge go up 93 cents. General service, 00:30:16.304 --> 00:30:25.639 - which again, we talked about commercial and industrial, we'll see their charges go up $1.85 and $2.12 00:30:25.639 --> 00:30:35.614 - respectively. Wholesale, we'll see an increase of $1.46 per unit. IU master meter, we'll see $1.77 increase. 00:30:35.938 --> 00:30:44.594 - and their non-master metered charges will go up $1.85. And then irrigation, which we discussed a bit 00:30:44.594 --> 00:30:52.906 - in our questions, will have an increase of $6 per unit. Again, a unit is 1,000 gallons of water. 00:30:52.906 --> 00:31:01.819 - Our public fire protection, which I wanted to kind of simplify a little bit. When you talk about public 00:31:01.819 --> 00:31:04.990 - fire protection, we're talking about 00:31:05.122 --> 00:31:14.367 - You know, the service of our hydrants, the cost to maintain those, to make sure that our emergency personnel 00:31:14.367 --> 00:31:22.764 - can reliably have that water when they need it. And so most customers have public fire protection. 00:31:22.764 --> 00:31:31.246 - And so all of the public fire protection rates have actually gone down because of the data provided 00:31:31.246 --> 00:31:33.790 - in our cost of service study. 00:31:38.658 --> 00:31:45.677 - And then next, we'll talk about the private fire protection. These rates have gone up. And what private 00:31:45.677 --> 00:31:52.088 - fire protection is is basically fire lines. So you imagine a building with a sprinkler system. 00:31:52.088 --> 00:31:57.150 - This is what private fire protection is versus the public fire protection. 00:32:01.282 --> 00:32:09.581 - Danica did a good job of looking at just kind of how your water bills would go up and looking at those 00:32:09.581 --> 00:32:18.444 - percent changes. For those of you who were here on Monday, you may recognize this slide. This is my own bill. 00:32:18.444 --> 00:32:26.501 - And so I just like to show how a regular single family residential users bill may change after this 00:32:26.501 --> 00:32:27.710 - rate increase. 00:32:28.546 --> 00:32:39.290 - And so my current charges for this past month with a small sanitation cart and using three units of 00:32:39.290 --> 00:32:50.356 - water was 7101. After our rate increase, or after the proposed rate increase, it would change to 7535. 00:32:50.356 --> 00:32:57.662 - The average for single-family residential usage is about 3.5 units. 00:32:57.794 --> 00:33:08.352 - But really we see anywhere between three and five being pretty standard bills for a single family residential 00:33:08.352 --> 00:33:18.527 - home. I also wanted to take a look at where our rates, where our proposed rates will put us in comparison 00:33:18.527 --> 00:33:24.958 - to cities and towns in Indiana with over 25,000 people population. 00:33:25.858 --> 00:33:35.285 - So our combined water and sewer rate is currently 24th out of these 39 cities and towns. The proposed 00:33:35.285 --> 00:33:44.804 - changes to water will only take us up to potentially 23. You may note in this slide, apologies if it's 00:33:44.804 --> 00:33:54.046 - hard to see, but every city or town that has a two next to it in parentheses, that means that there 00:33:54.242 --> 00:34:04.139 - is a proposed rate change for that city or town in the future. So this may shuffle and will likely shuffle 00:34:04.139 --> 00:34:12.926 - again lower in this list. Here's that same list, but now we're just looking at our water rate. 00:34:13.474 --> 00:34:23.847 - So our water rate right now puts us at 30th of 39, so we're in the lower third. This potential rate 00:34:23.847 --> 00:34:34.427 - increase for water will keep us still in that lower half of rates in the state of Indiana. All right, 00:34:34.427 --> 00:34:42.206 - and now I'm gonna take a moment to look at some of our capital improvement 00:34:42.498 --> 00:34:49.494 - plan projects. So I think one of the questions people ask is how much, and then the second question 00:34:49.494 --> 00:34:56.629 - they're going to ask is what are you going to use it for? So I'd like to present some of the projects 00:34:56.629 --> 00:35:03.835 - that we are planning to use these additional funds for. So first I'll start with water treatment plant 00:35:03.835 --> 00:35:11.390 - projects. In total, we're planning on spending $30.7 million in projects just at our water treatment plant. 00:35:12.162 --> 00:35:19.168 - These projects include electrical upgrades. These electrical upgrades will update our obsolete systems, 00:35:19.168 --> 00:35:26.511 - increase resiliency and provide enhanced cybersecurity at our plants. We also have a project to rehabilitate 00:35:26.511 --> 00:35:33.450 - our sedimentation basins. What this is and what this does is will restore critical water clarification 00:35:33.450 --> 00:35:38.974 - equipment. This is gonna improve the efficiency of our early treatment processes. 00:35:39.746 --> 00:35:45.714 - This project will enhance CB's ability to remove organic and inorganic materials from the raw water 00:35:45.714 --> 00:35:52.039 - drawn from Lake Monroe, helping us to address seasonal taste and odor issues. We'll also do some chemical 00:35:52.039 --> 00:35:58.246 - building improvements and feed line replacement. This addresses treatment reliability and staff safety, 00:35:58.246 --> 00:36:01.886 - along with restoring a safe and sustainable fluoride system. 00:36:04.418 --> 00:36:11.387 - We also have a project that will do high service pump rebuilds and variable frequency drives or VFDs. 00:36:11.387 --> 00:36:18.698 - Our high service pump rebuilds will provide redundancy and increase resiliency in our treatment processes. 00:36:18.698 --> 00:36:25.666 - The addition of these VFDs will help prevent service interruptions by preventing wear on the pipes at 00:36:25.666 --> 00:36:33.182 - the plant and throughout our system. Essentially how that works is instead of an on-off, it's variable and so 00:36:33.410 --> 00:36:40.209 - it's easier on our pipes. Additional water treatment plant projects include a maintenance project. 00:36:40.209 --> 00:36:47.420 - So this has miscellaneous maintenance projects, but it's a combination of multiple maintenance projects, 00:36:47.420 --> 00:36:54.288 - including the completion of an asset management system that will allow for our improved maintenance 00:36:54.288 --> 00:37:00.606 - assessment and replacement practices. This is gonna improve the longevity of our equipment. 00:37:03.074 --> 00:37:11.210 - We also have treatment plant water handling and delivery updates. What this does is it's gonna improve 00:37:11.210 --> 00:37:19.345 - the air quality monitoring to improve our worker safety. We'll see maintenance to address leaks in the 00:37:19.345 --> 00:37:27.402 - pipe gallery. There is also a replacement of a backwash header valve actuator. This will also provide 00:37:27.402 --> 00:37:32.062 - funds for items required tank inspections and maintenance. 00:37:32.706 --> 00:37:39.723 - And really a lot of this is about just maintaining, you know, a lot of this is repairs, a lot of this 00:37:39.723 --> 00:37:46.121 - is replacement, but if we don't have our funds for maintenance, you know, what are we doing? 00:37:46.121 --> 00:37:49.630 - So the last two projects here for water treatment. 00:37:49.890 --> 00:37:57.128 - at our water treatment plant. There's a bypass pumping improvement project. What this will do is increase 00:37:57.128 --> 00:38:04.025 - our resiliency by adding another way to withdraw from the lake should our main intake tower suffer a 00:38:04.025 --> 00:38:10.854 - severe failure. So this ensures continued water production. And then we have our residuals project. 00:38:10.854 --> 00:38:18.229 - This will increase generally the efficiency and consistency of our filter processes, helping us to maintain 00:38:18.229 --> 00:38:19.390 - water quality in 00:38:19.554 --> 00:38:28.216 - reliable treatment capacity. Next, we have projects that we are planning on doing in our distribution system. 00:38:28.216 --> 00:38:36.169 - These projects total $34.4 million and are in two main categories. The first category is our booster 00:38:36.169 --> 00:38:44.358 - stations and our storage tanks. We're gonna do rehabilitations and upgrades there. In addition to these 00:38:44.358 --> 00:38:47.902 - rehabilitations and upgrades, we're going to 00:38:48.002 --> 00:38:56.062 - at emergency generators that will improve our preparedness and reliability during natural disasters, 00:38:56.062 --> 00:39:04.282 - electrical grid issues, or other emergencies. Our second category is water main projects, maintenance, 00:39:04.282 --> 00:39:12.501 - testing, and replacement. Essentially, this is just to improve and maintain our ability to replace our 00:39:12.501 --> 00:39:15.454 - water mains, repair water mains, and 00:39:17.442 --> 00:39:26.422 - do our hydrant maintenance and testing. And then finally, we have $18.7 million, which is the water 00:39:26.422 --> 00:39:35.671 - funding portion for the proposed Winston Thomas Service Center. I think at multiple presentations this 00:39:35.671 --> 00:39:44.382 - year and the past year, I have discussed the fact that we are outgrowing our current facilities. 00:39:45.410 --> 00:39:51.680 - We are outgrowing them in regards to personnel, equipment, and adequate inventory storage. This will 00:39:51.680 --> 00:39:58.075 - be a purpose-built service center to improve logistics for field crews, allowing faster deployment and 00:39:58.075 --> 00:40:04.407 - better emergency response. It also allows for stronger protections of our capital assets, such as our 00:40:04.407 --> 00:40:09.374 - specialized service vehicles, which are currently being stored in the elements. 00:40:10.306 --> 00:40:17.488 - Building our service center that meets the utility's needs moving forward is an investment that will 00:40:17.488 --> 00:40:24.172 - save our resources over time. By investing now, CBU is setting up for operational excellence, 00:40:24.172 --> 00:40:28.510 - fiscal responsibility, and community resilience. And that is 00:40:28.610 --> 00:40:36.277 - at the end of my presentation, so I'm happy to take additional questions. Again, we have our capital 00:40:36.277 --> 00:40:44.247 - projects engineer here. If you have questions about capital projects, our assistant director of finance, 00:40:44.247 --> 00:40:51.610 - Matt Havy. Happy to take any questions. I have a question about the slide that showed your bill. 00:40:51.610 --> 00:40:55.102 - Three units of water, but two units of sewer. 00:40:59.042 --> 00:41:18.827 - Yeah, so. Summer that they don't get charged for wastewater for that. Question about the capital improvement 00:41:18.827 --> 00:41:27.902 - plan. At the current rate. Water main replacement 00:41:28.418 --> 00:41:36.412 - How long would it take to replace the entire system? Or do you need to take advantage of those terms? 00:41:36.412 --> 00:41:44.328 - That's a great question. I don't have a great answer for that. But I will say that our current water 00:41:44.328 --> 00:41:52.165 - main replacement rate is not as high as we'd like it to be due to a lack of funding. And so I think 00:41:52.165 --> 00:41:57.886 - it would take a very, very long time. Mark, you agree? A very long time. 00:41:58.018 --> 00:42:07.308 - There are pipe systems out there that are 80, 90 years old that we're working to replace. But there's 00:42:07.308 --> 00:42:15.779 - a certain limit on how much work you can actually do, right? So even with unlimited funding, 00:42:15.779 --> 00:42:25.069 - there's just the physical challenge of, I mean, to complain that you were digging up the entire city. 00:42:25.069 --> 00:42:27.710 - So the $19.8 million, if you 00:42:28.450 --> 00:42:38.529 - realistically factoring in the limitations on how much could feasibly be done, what would be your desired 00:42:38.529 --> 00:42:48.798 - amount of funding in a year to get us back on pace where we have some prospect of sort of getting on top of 00:42:52.866 --> 00:43:01.007 - We analyze, we take different criteria, analyze the materials of the pipes, the age of the pipes, 00:43:01.007 --> 00:43:08.899 - the frequency that the pipes in certain areas have had main breaks. And so we try and analyze. 00:43:08.899 --> 00:43:17.455 - It's not always just the latest or the oldest pipe that gets replaced. It's a pipe that we've analyzed 00:43:17.455 --> 00:43:20.030 - to figure out this is a likely 00:43:20.226 --> 00:43:27.087 - spot for a main break. Exactly what that amount is, you know, there are limitations, just a number of 00:43:27.087 --> 00:43:34.284 - employees and the amount of work that can get done in a year. Jennifer, you have it in front of you, yeah. 00:43:34.284 --> 00:43:40.674 - So in the revenue requirements of that $7.1 million that we're building into annual extensions 00:43:40.674 --> 00:43:47.804 - and replacements, in the later, in the beginning years, we are dividing some of those water main projects 00:43:47.804 --> 00:43:49.822 - up between bond financing and 00:43:49.922 --> 00:43:57.500 - revenue, but in the later years, we're trying to build it to about $5 million per year for water main 00:43:57.500 --> 00:44:05.226 - projects. So $5 million out of the $7.1 million of annual extensions or replacements. That's the target 00:44:05.226 --> 00:44:12.507 - we believe we need to accommodate a replacement that keeps us not going into infrastructure debt, 00:44:12.507 --> 00:44:18.302 - just right at that line. Where did we come up? How did we determine that now? 00:44:19.074 --> 00:44:24.844 - I came up with that number as we look at the total overall five year plan and what I try to do is pick 00:44:24.844 --> 00:44:30.503 - out the items that are very costly. There are over $7 million. I'm trying to get to an average of $7 00:44:30.503 --> 00:44:36.273 - million funding. It happens to work out that the water main projects ends up being the item that we're 00:44:36.273 --> 00:44:42.156 - trying to build to in the later years. We'll be funding a lot of the big projects at the water treatment 00:44:42.156 --> 00:44:46.974 - plant, the service center. Those million dollar projects will be funded through bonds 00:44:47.106 --> 00:44:58.221 - Cause we have to spend that down, but we're trying to build up the 7.1 million and the water main projects. 00:44:58.221 --> 00:45:08.821 - It happens to be the area that we're trying to build it up into as well. Yes. This is a five year plan 00:45:08.821 --> 00:45:11.806 - starting 2025 going to 2029. 00:45:12.034 --> 00:45:20.251 - but obviously the rates are not in place here in 2025. And so a lot of, yeah. So if the target's 5 million, 00:45:20.251 --> 00:45:28.240 - then we're however many million short per year, and we're continuing to be, to increase in working debt. 00:45:28.240 --> 00:45:36.152 - Correct. So in the first few couple of years, we've put about 3 million of that into the bond financing 00:45:36.152 --> 00:45:41.630 - to get you started. And then we're trying to, and do other big projects 00:45:42.050 --> 00:45:49.600 - But that is the part where we were trying to play between how much is funded ongoing through revenue 00:45:49.600 --> 00:45:57.374 - each year and how much is being funded through the bonds. So for the next great increase in four years, 00:45:57.374 --> 00:46:04.999 - it would be great to know exactly what we need, not exactly your best estimate of what we need to not 00:46:04.999 --> 00:46:06.718 - to not go any further. 00:46:06.850 --> 00:46:27.102 - Yes, absolutely. And I also think, you know, going back to what Mark said about how we 00:46:27.490 --> 00:46:34.099 - have been doing more and more analysis on the pipes so that we can have a more strategic approach to 00:46:34.099 --> 00:46:40.643 - how we're doing main replacement instead of just saying, hey, this is really old. Let's replace it. 00:46:40.643 --> 00:46:46.991 - Maybe this really old pipe has never had a main break. It was made out of an excellent material. 00:46:46.991 --> 00:46:52.030 - And it's been reliable. In a stable area. In a stable area. And so as we use 00:46:52.162 --> 00:46:59.542 - do this analysis we're actually creating you know a criticality scale and we're trying to knock those 00:46:59.542 --> 00:47:06.921 - ones that are at that top of that criticality scale we're trying to get those first and you know once 00:47:06.921 --> 00:47:14.156 - we actually are able to have more funds in our water main replacement we'll be able to see how much 00:47:14.156 --> 00:47:21.246 - we can do both in-house with our crews but also how much we will be able to contract out as well. 00:47:22.530 --> 00:47:38.364 - Glad we're thinking that way and planning that way. Thank you. Any other thoughts, questions? So within 00:47:38.364 --> 00:47:49.022 - the next two weeks, will we be receiving additional information about 00:47:49.282 --> 00:48:00.642 - the cost of services study, will we have access to these briefings? Okay. I got a question for Danica. 00:48:00.642 --> 00:48:12.222 - If you're still there, Danica. I sure am. Or your cohort. So if we can go back to the slide that had the 00:48:12.482 --> 00:48:21.987 - the rates by customer class. It's the one right after that percentage-wise revenue increase by customer class. 00:48:21.987 --> 00:48:31.321 - The first time we show the rates. Yeah, that's fine. So looking at this, like our wholesale cost to provide, 00:48:31.321 --> 00:48:40.226 - well, our rate for wholesale in Indiana University Master is really, really similar, right? Right about 00:48:40.226 --> 00:48:42.110 - $3 per 1,000 gallons. 00:48:42.306 --> 00:48:52.176 - So if that cost were correct, we would say that it costs about the same to provide a wholesale customer 00:48:52.176 --> 00:49:01.951 - a water as it does Indiana master meter. And the increases are ballpark pretty close, right? One's 50% 00:49:01.951 --> 00:49:04.798 - and the other's short of 60%. 00:49:07.298 --> 00:49:15.639 - So knowing that the plant's the plant and that the 36 inch mains coming in, that's all fixed. 00:49:15.639 --> 00:49:24.779 - Nothing differs there. Are the costs then attributable solely to the distribution system and pipes and 00:49:24.779 --> 00:49:34.718 - any pumps that provide those customers? Is that how we come up with the costs? I don't know much about how that 00:49:35.362 --> 00:49:43.688 - the service study is conducted. Sure, yes. You're talking about the differences in wholesale and IEU 00:49:43.688 --> 00:49:52.343 - as far as the cost goes, the cost allocation? Yeah, any customers. I mean, generally, but I'm interested 00:49:52.343 --> 00:50:01.246 - in those two because they're so close together, or were. They must have been, it was decided that they were 00:50:02.338 --> 00:50:11.121 - It was the same cost basically, the same amount of infrastructure in the ground to provide them that water. 00:50:11.121 --> 00:50:19.741 - And now it's just slightly different, but still very, very similar. Yeah, well, I think as Andy mentioned 00:50:19.741 --> 00:50:28.117 - earlier, this is a snapshot in time, right? And so when you see those rates similar, it's based on the 00:50:28.117 --> 00:50:31.614 - demand data that we discovered through the 00:50:32.098 --> 00:50:39.035 - AMI analysis and how those costs get distributed based on the way that they use the system. So at this 00:50:39.035 --> 00:50:46.241 - point in time, for this test year specifically, what we would say is that, you know, based on the findings 00:50:46.241 --> 00:50:53.380 - from the AMI that those two customer costs behave in a similar manner. You know, after that, too, Danica, 00:50:53.380 --> 00:51:00.990 - if it goes to the question, is that, you know, for the interconnection points in the nature of the distribution, 00:51:01.282 --> 00:51:07.099 - slash transmission system that's being used, you know, there is consideration and recognition that wholesale 00:51:07.099 --> 00:51:12.436 - customers have limited points of interconnection as does Indiana University Master Meter customers. 00:51:12.436 --> 00:51:18.307 - And they time more in at the transmission system because they have their own distribution networks, you know, 00:51:18.307 --> 00:51:23.857 - whether they're wholesale customers, you know, and or additional on, you know, on property distribution 00:51:23.857 --> 00:51:27.326 - systems like in the case of Indiana University. So those are the 00:51:27.746 --> 00:51:32.900 - The two big drivers are just the peaking characteristics that they each have as evidence in the ANI data, 00:51:32.900 --> 00:51:37.665 - then the nature of the types of costs that are included based upon their service characteristics, 00:51:37.665 --> 00:51:42.527 - how they tie into the system. Those are the two big drivers for the rates for Indian University and 00:51:42.527 --> 00:51:47.390 - wholesale as compared to the other customer classes. Yeah. Thank you. I got a lot to learn on this. 00:51:47.390 --> 00:51:49.918 - I'm looking forward to seeing the study. Thank you. 00:52:04.354 --> 00:52:18.070 - Questions or comments? I see one formulating. Yeah. Traditionally, this time of year, the water starts 00:52:18.070 --> 00:52:32.318 - tasting really bad and smelling really funky. How are things looking this year from a CPU's point of view? 00:52:32.642 --> 00:52:42.419 - How are things looking? We have had some elevated readings of Geosmin and MIB. Those are responsible 00:52:42.419 --> 00:52:52.196 - for taste and odor. We've switched over to our coconut-based carbon, and so we're hoping that we can 00:52:52.196 --> 00:52:55.390 - mitigate it with that. Also, the 00:52:55.810 --> 00:53:03.292 - Lower temperatures that we're seeing now and all the rain that we've gotten, I'm hoping will also help 00:53:03.292 --> 00:53:10.775 - to mitigate that because typically you see that after longer periods of drought and high temperatures. 00:53:10.775 --> 00:53:18.257 - So our shields have been engaged. Yes, our shields have been engaged. It seemed like about three weeks 00:53:18.257 --> 00:53:25.086 - ago we had a little bit of taste issue and then it was gone. Did anyone else experience this? 00:53:26.274 --> 00:53:43.934 - When did we implement the switch over to coconut? I believe that was today. Oh, OK. Yeah. Right, Hector? Yep. 00:53:55.746 --> 00:54:07.365 - Are there any questions on Zoom or anyone on Zoom? Okay. Okay, well, hearing none, everyone have a lovely 00:54:07.365 --> 00:54:10.654 - three day weekend. Thank you.