Public Information Meeting November 9, 2015 Village of Hamburg Water Consolidation Study This presentation was prepared with funds provided by the New York State Department of State under the Local Government Efficiency Grant Program

Why Are We Here? The Village water system is aging and many assets have exceeded their design life expectancy. Normal depreciation and aging will inevitably require significantly more re-investment in the future. There have been over 200 water main breaks in the Village during the last 10 years. As part of its ongoing efforts to control costs, the Village Board initiated a Study to determine if there is a more cost effective way to manage the water system. Today we will present the Study’s findings and seek public input. 2

Hydrants – 287 Pipe Inventory Water Storage Facilities Existing Water System Facilities 3

Water System Study Evaluation of Management/Ownership Options Village Board recognized the growing need and financial risk associated with its water system The Village proactively applied for and received a NYSDOS Local Government Efficiency grant to conduct a Study to evaluate management/ownership options Two options are included in the Study  Lease Management – current method  Direct Service – consolidation with ECWA 4

Water System Management Options Option 1 - Lease Management (Current Method) Village owns all water system infrastructure Village leases water system to the ECWA ECWA provides day-to-day maintenance Village is responsible for all capital repair and replacement costs Residents pay the same standard rates and fees as all other ECWA customers Village pays ECWA hydrant fees 5

Water System Management Options Option 2 - Direct Service (Consolidation with ECWA) Village would transfer ownership to ECWA after required improvements ECWA would be responsible for all future capital repair and replacement costs ECWA continues to provide day-to-day maintenance Residents pay the same standard rates and fees as all other ECWA customers Village would pay moderately higher ECWA hydrant fees 6

Comparison of Management Options 7

Study Approach & Framework Developed Two Scenarios for Purposes of Identifying and Quantifying Potential Costs and Savings 1. Status Quo Scenario – Current management method 2. Merged Scenario – Consolidation with ECWA For each Scenario, several cost components were evaluated and projected Operation and Maintenance Costs (largely influenced by management option) Administrative Costs Waterline Repairs Hydrant Fees Capital Costs (largely influenced by management option) Debt service costs associated with previously completed capital projects Project debt service costs for future capital needs ECWA Rates & Fee (not impacted by management option) Cost projections for each scenario were compared to identify potential savings 8

Total Annual Projected O&M Costs O&M Includes: Administrative Costs Waterline Repairs Hydrant Fees 9

10 Current Capital Improvement Needs An estimated 31,000 feet of waterline must be replaced and a new water storage tank constructed

Annual Projected Capital Costs (Debt Service) 11

Total Annual Projected Water System Costs 12

Conclusions/Findings The Village water system is aging and maintenance costs are escalating rapidly and will continue into the future The Village Board is seeking the greatest cost savings opportunities for residents Only 2 options are available for the Village to consider; (1) Lease Management - Status Quo (Village Ownership) (2) Direct Service – ECWA Ownership Short term costs are modestly higher under Direct Service but long term savings would be significant Long term costs of Lease Management are considerably higher 13

The capital requirements of the Village owned water system will inevitably continue to escalate. This trend supports getting out of the water business. Current interest rates create a favorable financing opportunity at this time. The current bond market supports acting sooner rather then later. Currently, Direct Service customers pay the same ECWA rate and fees as Lease Management customers. Conclusions/Findings Continued 14

There will be no cost increase for ECWA services due to consolidation. Conclusions/ Findings Continued 15

Next Steps Post Presentation on Village Web-Site Receive Public Input Following public comment the Study Report will be completed Following review, the Village Board will make final decision on possible merger with ECWA: if yes, Execute MOU with ECWA 16

Questions & Discussion Village of Hamburg Water Consolidation Study This presentation was prepared with funds provided by the New York State Department of State under the Local Government Efficiency Grant Program