Water System Master Plan & Rate Study City of DeKalb, Illinois City Council Presentation May 16, 2015

Water System Master Plan 2

3 Water System Master Plan – Services Performed ► Current and future operations were examined for cost saving opportunities ► Well, treatment plant, and storage facility capacities were assessed ► Raw and treated water quality data was reviewed against regulatory requirements ► The City’s water distribution system was analyzed for improvements related to: ► Hydraulic deficiencies ► Water main break history

Water Consumption 4 Findings & Recommendations ► In 2013, total daily average water billed was 3.06 million gallons per day (mgd) 83.29% Residential Non-Residential ► Equates to 64 gallons per population equivalent per day ► Gallons billed: 1.12 billion (3.06 mgd) ► Gallons produced: 1.22 billion (3.33 mgd) ► 8.17% water is unaccounted for Slightly high due to water main break Reasonable compared to other communities

Water Supply 5 Findings & Recommendations ► 6 deep water supply wells ► 3 shallow water supply wells ► Firm capacity of wells is 7.6 mgd (total capacity with largest well out of service) ► Projected Maximum Day Demand based on population projections is 6.48 mgd ► Existing wells are adequate to serve existing population and projected population ► Recommended rehabilitation of all of the City’s wells

Water Treatment 6 Findings & Recommendations ► Raw water is generally good quality ► Low turbidity ► Low TOC ► High hardness ► Moderate iron and ammonia ► Detectible radium (3 to 11 pCi/L) ► Hardness reduced from 17 grains per gallon to 8 grains per gallon ► Radium reduced to less than 5 pCi/L ► The City is using the most economical treatment approach for current needs ► Replacement of zeolite media is recommended & required

Water Storage 7 Findings & Recommendations ► 4 elevated water storage tanks ► Combined storage volume of 5.75 million gallons ► Projected Maximum Total Required Storage Volume based on population projections is 4.80 million gallons ► Existing storage is adequate to serve existing population and projected population ► Recommended repainting of 3 water towers (East Water Tower completed in 2014)

Water Distribution 8 Findings & Recommendations ► 177 miles of water main from 3 to 24 inches in diameter ► 2,400 fire hydrants ► 2,949 valves ► 10,974 service lines ► Projected 2034 demand: ► Average day: 4.32 mgd ► Maximum day: 6.48 mgd ► Peak Hourly Max Day: mgd ► 2 conditions used to identify need for improvements: ► Hydraulic deficiencies ► Water main break history

Water Distribution Modeling & Break History 9 Findings & Recommendations ► Modeling found that no locations in the City experience static water pressures less than 35 psi ► Several locations throughout the City experience fire flows less than 2,000 gallons per minute at a residual pressure of 20 psi ► A significant amount of 4-inch and 6-inch diameter water mains result in significant pressure losses during fire flows ► Water main break records were analyzed to identify mains for replacement due to higher than normal break records ► Water mains with more than 3 break records in the previous 10 years were identified for replacement

10 Locations with Less than 2,000 gpm Fire Flow

11 Replacement Due to Breaks Replacement Due to Hydraulic Restrictions

Water Distribution Recommendations 12 Findings & Recommendations ► Replace approximately 55,184 feet or 10.5 miles of water main to alleviate hydraulic issues and replace water mains that have a history of breaking ► Complete main replacement over a 30-year period ► Construct all new water mains in the City a minimum of 8-inches in diameter ► Develop a comprehensive water main replacement program that extends beyond the scope and timeframe of this Study ► The plan should: ► Provide a working schedule to replace the entirety of the water distribution system ► Identify the amount of water main to be replaced per year ► Take into consideration water main diameter, age, break history, and relative importance of each pipe

13 10-Year Capital Improvement Plan Summary Water System ComponentEstimated Cost Water Supply Well Rehabilitation$480,000 Water Treatment Improvements$886,000 Water Tower Recoating$1,900,000 Water Main Replacement$9,868,000 Total Estimated Capital Cost$13,134,000 ► Costs presented are in addition to items already identified by the City such as O&M and other miscellaneous projects ► Costs presented in 2015 dollars without inflation

Water System Rate Study 14

15 Rate Study Process

16 Typical Bill Competitiveness – Existing Rates ► Among other Illinois communities, DeKalb’s existing water rates are reasonably positioned.

17 Key Assumptions ► No forecast growth in customer accounts or usage ► CPI-U: 1.5 percent ► General Utility Inflation: 3.0 percent ► New Debt Terms: 20 years, 2.5 percent interest rate ► Operating Reserve: 25 percent of costs ► Capital Reserve: $1M

18 Water Rate Revenues by Class ► Revenues under existing rates are forecasted to remain at current level

19 Funding the Capital Plan ► Total $18.5M CIP $8.3M Facilities $10.2M Main R&R Program ► Three IEPA loans anticipated ► Funded 81% pay-as- you-go, 19% debt

20 Revenues Under Existing Rates not Sufficient to Meet Requirements

21 Recommended Revenue Adjustments ► 4.5% increases for FY16 through FY20; returning to CPI-U in FY21 ► Proposed increases less than industry averages ► Provide adequate funding to meet DeKalb’s water utility needs

22 Other Scenarios Considered ► Alternative scenarios included: Scenario 2: 8.5% revenue increases in FY2016 & FY2017; considered difficult to implement Scenario 3: 4.0% revenue increases FY2016-FY2021; does not fully fund CIP

23 Proposed Rates ► Maintains current rate structure ► Increases FY16 revenues 4.5 percent

24 Impact of Proposed Rates on Typical Bills ► Increase at different usage levels varies slightly ► Provides overall desired increase in FY16 revenues

25 Typical Bill Competitiveness – Proposed Rates ► Among other Illinois communities, DeKalb’s proposed FY16 water rates maintain competitive position

QUESTIONS?

28 National Trends in Water Rates ► Source: BLS CPI-U & CPI: Water and Sewer Maintenance Series Average Water & Sewer Index Increase: 5.5 %/yr Average CPI-U: 1.5 %/yr Last Five Years:

29 Master Plan & Rate Study CIP Assumptions ► Master Plan costs are stated in 2015 dollars; 3% inflation applied for rate study purposes. ► In addition to Master Plan costs, there are additional project costs primarily in: Water main improvements Meter replacement Fleet/equipment replacement