Stormwater Utility Rate Adjustment Presented To City Council
October 6, 2020 at 4:32 a.m.
Stormwater Utility Rate Adjustment Presented To City Council
By David [email protected]
Currently, the residential rate is $2.95 per household per month. If the council approves the increase at its next two meetings, that will reach $8 per month by Jan. 1, 2025.
Stormwater coordinator Ryan Workman gave the Council a presentation on why the rate adjustment was needed.
“We have been working the past year assessing how the stormwater utility is financially. And when it comes to at least our revenue requirements as a utility, as well as the increased capital projects that we keep having to archive until we can actually pay for those, as well as the increasing costs and stress that we have on our own utility and infrastructure,” Workman said.
He said first they did an annual study within the utility and their biggest find was that through two different departments, the stormwater utility was being subsidized around $600,000 to $700,000 in operations cost.
“So us alone, we’re not generating enough money to actually sustain our utility,” Workman said.
He said the new proposed rate is to “increase the rates to provide outgoing revenue stream currently, to meet current operations and capital plan needs with subsidization.” And then moving forward, by “incremently increasing the rates to sustain the revenue stream,” Workman said the utility can become a self-supporting utility as well as still tapping into the cumulative capital development fund.
The utility rate adjustment is needed to remain compliant with regulatory requirements, continue operations and maintenance and to continue to do the large-scale capital improvement projects.
“So, currently, right now, we’re realigning a section of storm line that’s just south of Center Lake, and that costs around $400,000,” Workman said. “Currently, right now, we are now being subsidized this year by $500,000 through cumulative capital development and then we also have two appropriations in our budgets that allow us to put aside for quantity and quality projects.”
He said about 70% of the utility budget is going toward projects and administrative costs.
The state is making changes to the utility’s permit program and Workman said costs will be inflated from that over the next two years.
Aside from capital improvement projects, he said they’re going to need to update their master plan and operating procedures.
The utility really wasn’t a utility until 2013 and didn’t begin generating revenue until 2014-15, Workman said, “but we were in the program since 2003.”
Last year, the utility purchased a five-year lease-to-own street sweeper, which cost $500,000, and Workman said that cost keeps increasing.
Working with rate consultants, he said they were able to ascertain the proposed rate increases presented to the Council.
“We are just, one, bringing it up to meet the current operations needs for this next year. And then, two, within the next four years increasing from 2021 to 2025, moving up to where we can, one, get to a self-supporting utility while utilizing CCD funds, and then it also allows us to displace monies that both wastewater utility is using for us as well as public works, which again is around $600,000-plus,” Workman said.
He said the Eisenhower Basin project was done in three phases and cost over $700,000 the last few years. That project will allow the utility to address the pond at Kelly Park next year.
The utility also has done around 1,700 linear feet of shoreline stabilization since 2016, amounting to about $400,000, and that only included the shorelines owned by the city.
The utility has two large projects for next year estimated at $600,000 to $700,000.
“Overall, we have a lot of expenses,” Workman said, which is why the rates need increased.
Later in the meeting, Warsaw Mayor Joe Thallemer introduced the stormwater utility rate and charges adjustment that will be sought at the next council meeting.
“I know Ryan discussed the importance of quantity and quality of water projects that there just doesn’t seem to be a shortage of in a community like ours with challenging soils, high-water tables, many lakes, streams and creeks. Stormwater is certainly a concern,” he said.
Additionally, as a MS4 community, the city is bound by federal regulations enforced by the Indiana Department of Environmental Management. “Requirements that we have to maintain that are costly, and provide education, to enforcement on erosion control,” Thallemer said.
He said the increase is a stepped approach, rather than a single jump. “When this thing was first set up, the residential rate was $2.95, it continues at $2.95. That was probably one of the lowest in the state when we established it. Now we’re looking at getting that rate eventually to $8 per household per month in January of 2025,” Thallemer said.
He said the variable rate for the ERU (equivalent residential unit) is established in the new rate ordinance. “Pretty much, the language and the way rate payers are approached in this ordinance are the same as they have been,” Thallemer said.
The first reading of the ordinance will be Oct. 19, with the final reading and public hearing Nov. 2.
Currently, the residential rate is $2.95 per household per month. If the council approves the increase at its next two meetings, that will reach $8 per month by Jan. 1, 2025.
Stormwater coordinator Ryan Workman gave the Council a presentation on why the rate adjustment was needed.
“We have been working the past year assessing how the stormwater utility is financially. And when it comes to at least our revenue requirements as a utility, as well as the increased capital projects that we keep having to archive until we can actually pay for those, as well as the increasing costs and stress that we have on our own utility and infrastructure,” Workman said.
He said first they did an annual study within the utility and their biggest find was that through two different departments, the stormwater utility was being subsidized around $600,000 to $700,000 in operations cost.
“So us alone, we’re not generating enough money to actually sustain our utility,” Workman said.
He said the new proposed rate is to “increase the rates to provide outgoing revenue stream currently, to meet current operations and capital plan needs with subsidization.” And then moving forward, by “incremently increasing the rates to sustain the revenue stream,” Workman said the utility can become a self-supporting utility as well as still tapping into the cumulative capital development fund.
The utility rate adjustment is needed to remain compliant with regulatory requirements, continue operations and maintenance and to continue to do the large-scale capital improvement projects.
“So, currently, right now, we’re realigning a section of storm line that’s just south of Center Lake, and that costs around $400,000,” Workman said. “Currently, right now, we are now being subsidized this year by $500,000 through cumulative capital development and then we also have two appropriations in our budgets that allow us to put aside for quantity and quality projects.”
He said about 70% of the utility budget is going toward projects and administrative costs.
The state is making changes to the utility’s permit program and Workman said costs will be inflated from that over the next two years.
Aside from capital improvement projects, he said they’re going to need to update their master plan and operating procedures.
The utility really wasn’t a utility until 2013 and didn’t begin generating revenue until 2014-15, Workman said, “but we were in the program since 2003.”
Last year, the utility purchased a five-year lease-to-own street sweeper, which cost $500,000, and Workman said that cost keeps increasing.
Working with rate consultants, he said they were able to ascertain the proposed rate increases presented to the Council.
“We are just, one, bringing it up to meet the current operations needs for this next year. And then, two, within the next four years increasing from 2021 to 2025, moving up to where we can, one, get to a self-supporting utility while utilizing CCD funds, and then it also allows us to displace monies that both wastewater utility is using for us as well as public works, which again is around $600,000-plus,” Workman said.
He said the Eisenhower Basin project was done in three phases and cost over $700,000 the last few years. That project will allow the utility to address the pond at Kelly Park next year.
The utility also has done around 1,700 linear feet of shoreline stabilization since 2016, amounting to about $400,000, and that only included the shorelines owned by the city.
The utility has two large projects for next year estimated at $600,000 to $700,000.
“Overall, we have a lot of expenses,” Workman said, which is why the rates need increased.
Later in the meeting, Warsaw Mayor Joe Thallemer introduced the stormwater utility rate and charges adjustment that will be sought at the next council meeting.
“I know Ryan discussed the importance of quantity and quality of water projects that there just doesn’t seem to be a shortage of in a community like ours with challenging soils, high-water tables, many lakes, streams and creeks. Stormwater is certainly a concern,” he said.
Additionally, as a MS4 community, the city is bound by federal regulations enforced by the Indiana Department of Environmental Management. “Requirements that we have to maintain that are costly, and provide education, to enforcement on erosion control,” Thallemer said.
He said the increase is a stepped approach, rather than a single jump. “When this thing was first set up, the residential rate was $2.95, it continues at $2.95. That was probably one of the lowest in the state when we established it. Now we’re looking at getting that rate eventually to $8 per household per month in January of 2025,” Thallemer said.
He said the variable rate for the ERU (equivalent residential unit) is established in the new rate ordinance. “Pretty much, the language and the way rate payers are approached in this ordinance are the same as they have been,” Thallemer said.
The first reading of the ordinance will be Oct. 19, with the final reading and public hearing Nov. 2.
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