HomeMy Public PortalAbout1/20/1999 jointCity of Greencastle
• City Hall
Four East Walnut Street
Greencastle, Indiana 46135
Pamela S. Jones
Clerk- Treasurer
GREENCASTLE COMMON COUNCIL AND BOARD OF WORKS
JOINT MEETING
WEDNESDAY, JANUARY 20, 1999 5:30 P.M. WATER PLANT
The Greencastle Common Council and Board of Works met in Joint Session Wednesday, January
20, 1999, 5:30 p.m. at the Water Plant. Mayor Michael called the meeting to Order. On the Roll
Call, the following were found to be present: Councilor Roach, Councilor Hammer, Councilor
Green, Councilor Baynard, Councilor Masten, Board of Works Members Sue Murray and George
Murphey. Also present was: City Engineer Ron Smith, City Attorney Trudy Selvia, Mike
Brenner and Jim Higgins from London Witte Group, Mike Cline from Hannum, Wagle and Cline
and Dave Arrensen from Baker and Daniels.
Motion to approve claims made by Councilor Baynard, seconded by Councilor Masten. Vote as
follows: Councilor Hammer, yes; Councilor Green, yes; Councilor Baynard, yes; Councilor
Masten, yes; and Councilor Roach abstained due to his son having a check in claims.
• Mike Cline discussed the Agreed Order with IDEM and stated this sets up another series of
documents that have to be delivered in a certain time frame. If these documents are not done and
delivered on time the City can be fined. The Wastewater Treatment Plant peaked at over 12
million gallons Sunday, January 17 which means there was bypassing. The fine for each bypass is
$5,000.00 until the new plant is constructed and then the fine is $10,000.00 per bypass. There is
also a $1,000.00 per day fine for failure to report bypassing or overflow. IDEM has given us a
way out of the fines except for $8750.00 and this is to have the plant under construction by May
2000. George Murphey asked if we can write the contract to read that the contractor will have to
pay any fines due to construction not being started or completed on time. Engineer Smith stated
that is the liquidated damages clause in a contract.
Mike Cline reported the only real change to the PER is the budget has been revised to reflect the
change in utility rates. Mr. Cline explained the steps to complete the process so the PER can be
sent to IDEM for approval. The steps include a legal publication on January 26, 1999 announcing
the Public Hearing to be held February 9, 1999, 6:00 p.m. at Tzouanakis Intermediate School and
after the ten (10) day remonstrance period a special meeting will be held February 23, 1999 to pass
Resolutions accepting the PER.
Mike Brenner, London Witte Group, stated they looked at 5 years of financial records to
determine if the current rates would allow for the new facility. Mr. Brenner stated the current
rates will not allow for an $11 million project and the maximum 64.25% would have to be
® assessed against ratepayers if we wait until the end of the project to implement a rate increase. In
order to avoid a rate shock Mr. Brenner recommend an initial increase of 15 -20% in 1999 and
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look at where we are at in 2000 and adjust rates accordingly at that time. Mr. Brenner reminded
the Boards that even without this project there would have to be a 7.5% rate increase just to cover
expenses at this time.
After some discussion Councilor Roach made the motion to allow Hannum Wagle and Cline to
include London Witte Group numbers in the PER, seconded by Councilor Hammer. Vote was
unanimous.
Councilor Roach asked Mr. Brenner for calculations for step increases loading the first years and
another using consistent figures to give the Council some options.
Being no further business Councilor Roach made the motion to adjourn, seconded by Councilor
Hammer. Vote was unanimous.
ATTS:
Pamela S. Jones, Cler - Tr6asurer
Nancy A. 4hael, Mayor
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MEIMORLT'i'D V M
Date: January 13, 1999
To: Mayor Michael, City of Greencastle
From: Tim Higgins, London Witte Grou ,
Re: Sewer Rate Information
Per our conversation earlier this morning, I have attached the following schedules
concerning the proposed SRF project and the impact on the City's server rates:
• Schedule 1 —Projected Annual Revenue Requirements
• Schedule 2 — Schedule of Proposed Changes in Current Rates
Allow me to take a few paragraphs and provide some working details.
Schedule 1:
This schedule looks at a "test year". In this case it is the 12 month period ending 9/30/98.
The first column provides an analysis of actual revenues vs, expense and indicates that a
rate increase of 7.42% would be called for to keep the utility operating at the current
levels.
The adjustment column reflects modifications that are called for due to the proposed
Project, I have not attached the detail of the adjustments, however, you can see that many
of the operational costs of the utility have been adjusted (reduced) to reflect the impact of
reducing labor and eliminating the existing plant. The majority of the larger adjustments
(increases) reflect the additional debt service associated with the project's financing. All
of the adjustments are based on the information provided by the engineer; along with our
estimates of the financing costs.
As you can see in the third column, each adjustment is reflected as a °./o impact on the
current rates. The total impact of the proposed project itself will call for a 56.83%
increase in rates.
When combined, the total rate increase that is required to allow for current operations and
fund the project is estimated to be 64.25% (final column).
Mayor Michael
t January 13, 1999
Page 2
Schedule 2:
The second schedule shows the impact of the proposed rate increase on the current rate
structure. For the average residential customer (Monthly usage of 900 cubic feet), rates
would go from $19.98 to $32.82 (an increase of $12.84). The breakdown of the increase
is as follows:
• To adjust for current operations $ 1.49 ( 7,42;/0)
• To adjust for the proposed project 11.35 (56.83 %)
As I noted this morning, I belieAat the City has several optionhconcerning the rate
increase it needs to adopt. A phasing in of the rates is most likely called for and would be
most prudent for the City to pursue.
Hopefully, the information that I have attached provides an appropriate summary of our
estimation of the rate impact of this project.
• Please feel free to contact me as soon as you have had an opportunity to review the
schedules.
Attachments
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Cltt+ of graencastle�SeAage Ufllfty ?^
Greencastle, Indiana
Pmjectrtd MDMal Rgyenue Requirements
• Actual
Test Year Percent Projected
12 Months Effect on Annual
Ended Current Revenue
Revenue Requirements 9130198 Adjustment_ fief_ Rates Requi rements
Operation and Maintenance
Collection System:
Operating Labor $63,166 ($1,633) (A) -0.15% $61,533
Materials and Supplies 11,883 11,883
Other Expenses 18,368 (7,700) (L) -0.72% 8,668
Total Collection System 91,417 (9,333) -0.68% 82,084
Treatment Plant:
Operating Labor 184,670 (69,436) (A) -6.52% 115,234
Purchased Power 139,017 (82,309) (B) -7.73% 55,708
Materials and Supplies 63,743 49,200 (D) 4.62% 112,943
Plant Operation - Water 4,101 320 (c) 0.03% 4,421
Other 23,920 (8,719) (c) -0.82% X5.201
Total Treatment Plant 415,45 (110,944) - 10.42% 304,507
_. istomer Accounts
16,762 16,762
ftnlstrattve & General:
yro8 taxes 22,9$9 (5,224) (r;) -0.49% 17,735
PERF 12,485 (2,520) (r) -0.24% 9,985
Employee Benefits 27,433 (2,245) (1) -0.21% 25,188
Unemployment Taxes 205 205
General Office Salaries 69,579 2,783 (A) 0.26% 72,362
Contractual Services - Engineering 11,250 3,750 (n) 0.35% 15,000
Materials & Supplies 23,325 23,325
Contractual Services 26,769 26,769
Building & Equipment Rent 4,628 4,626
Insurance 41,893 41,893
Misc. Expense 26,531 28,531
Total Administrative & General 269,055 (3,456) -0.32% 265,599
733 3
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792,685 2, - 11.62% 668,952
Total Operation � Maintenance ( )
Plus: Annual Plant Replacements 128,623 (38,623) (M) -3.63% 90,000
Total Operation, Maintenance, & Replacements 921,308 (162,356) - 15.24% 758,952
Debt Service 262,932 619,974 (J) 58.20% 882,906
Debt Service Reserve 147,709 Oq 13.87% _x•
Total Revenue Requirements $1,184,240 $605,327 58.83% $1,789,567
(1,065,173)
Less: Revenues from Present Rates (1,065,173)
___J41,010)
Average Recurring Interest Interest Income (40,000)
;[n ' 1M p�CrSase ai UkeveFntea:Re(i[>aetl $C78.pb7 $6A5 327,,
_..... ,.. "25'x`.
�lnceegse'(CleareValse) Percent; ; �, ; .• .. _:7 42%s �5 335,
See Accountants' Report
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City of Greencastle Sewage Utlfity
Greencastle, Indiana
Present
Rates
For all usage per
100 cubic feet $2.22
Minimum Charge
7.38
J vu.
Proposed Monthly Increase
Rates Amount Parcent
$3.65 $1.431 64.25%
12.12 4,74• 64.2510
°
.90hedule
of Tyr, IMI Monthly
Sewer
Bills
( Present and Proposed Rates)
Bills at
Bills at
Present
Proposed
Monthly Increase
Monthly charge
Rates
Rates
Amount
Percent
Monthly Usage
Metered 100 Cubic
Gall ons
Feet
1,000
1.34
$7.38
$12.12
$4.74
$4.25%
1,500
2.01
7.38
12.12
4.74
54.25%
2,000
2,67
7.38
12.12
4.74
64.25%
2,500
3.34
7.42
12.19
4.77
64.25%
3,000
4.01
8.90
14.52
5.72
$4.25%
4,000
5,35
11.87
19.50
7.63
64.25%
4,488
6.00
13.32
.21.88
8.56
64.25%
5,000
6.68
14.84
24.37
9.53
64.25%
6,000
8.02
17.81
29.25
11.44
64.25%
6,732
9.00 °
19.98
32.82
12.84
$4.25%
7,000
9,36
20.78
34.12
13.35
64.25%
8,000
10.70
23.74
39.00
15.2$
64,25%
9,000
12,03
26.71
43.87
17.16
64.25%
10,000
13.37
29.68
48.75
19.07
64.25%
12,000
16,04
35.61
58.50
22.88
64.25%
20,000
26.74
59.36
97,50
3814
64.25%
30,000
40.11
89.04
146.25
57.21
64.25%
50,000
66.84
148.40
243.74
95.35
64.25%
75,000
100.27
22159
365,61
143.02
64.25%
100,000
133.69
296.79
487.49
190.69
$4.26%
200,000
267.38
593.58
974.97
381.3a
64.25%
300,000
401.07
890.37
1,462,46
572.08
64.25%
° Average Residential
Bill
See Accountants' Report
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