1. WATER DEPARTMENT BUDGET WORKSHOP FY16 RECOMMENDED BUDGET March 12, 2015

2. Water Department FY16 Recommended Budget Expenditure Summary Total Recommended Expenditures - $9,021,102 The net increase in recommended expenditures total +$289,535 (+3.3%) above FY15 This increase is mostly attributed to an increase in debt services

3. Water Department FY16 Recommended Budget Expenditure Summary  Expense Overview  Major Drivers: Regular Salaries $1,788,047 (+1.6%) Electricity $618,424 (+0.8%) Energy $73,550 (-3.4%) Chemicals $238,150 (-6.5%) Gasoline $46,315 (-10.8%) Diesel $9,300 (-22.5%) Repairs to Motor Vehicles $34,256 (-18.0%) Note Principal $1,979,750 (+8.2%) Note Interest $403,751 (+20.9%) Transfer to Reserve $461,500 (+3.1%) Overall increase in expenditures +$289,535 (+3.3%)

4. Water Department FY16 Recommended Budget Transfer to Reserve Summary Recommended Transfer to Water Reserve $461,500 Capital List Cost  Water Meters $ 50,000  Well Redevelopment $ 40,000  Ozone Safety Upgrades $ 30,000  Tank Painting $ 75,000  Filter Media $ 45,000  Siphon Replacement $ 80,000  Electrical Switchover Units $ 24,000  New State Road Meter $ 15,000  GHWTP Manganese Study $ 30,000  Vehicle Replacement – T&D $ 35,000  Vehicle Replacement – Engineering $ 12,500  Vehicle Replacement – Water Trmt $ 25,000 *Justification for the expenditures listed above appear on the next 2 pages

5. Water Department FY16 Recommended Budget Transfer to Reserve Justifications Water Meters - $50,000 Annual allocation for replacement meter and MXU’s (water portion) Well Redevelopment - $40,000 Redevelop well and replace pump Ozone Safety Upgrades - $30,000 Install alarm horns and strobes indicating a leak has occurred Tank Painting - $75,000 Annual appropriation to the account for funding a 15-year cycle of tank painting and 5-year inspection cycle; a DPH requirement Filter Media Replacement - $45,000 Annual allocation to fund filter media replacement in 3 to 5 years

6. Water Department FY16 Recommended Budget Transfer to Reserve Justifications - Continued Siphon Replacement - $80,000 Replace original corroded floating siphon at GHWTP Electrical Switchover Units - $24,000 Remote switchover units at tank sites, enabling emergency power New State Road Meter - $15,000 Replace existing failed meter. Metering is presently done with a temporary set-up GHWTP Manganese Study - $30,000 Investigate methods to remove manganese leaving the plant Vehicle Replacements (T&D) - $35,000 Replace T&D vehicle #317 – 2005 Pickup w/ plow Vehicle Replacements (Engineering) - $15,500 Replace Engineering vehicle – shared cost 50% w/ Engineering Vehicle Replacements (Treatment) - $25,000 Replace Treatment vehicle #322 – 2001 Pickup

7. Water Department FY16 Recommended Budget Note-Funded Capital Projects Water Quality Improvement Program Total Cost Infrastructure Improvements $600,000 For pipe rehabilitation and/or replacement Projects are based on the results of the Water Distribution System Evaluation In general, it targets water mains that are unlined, 4 inches or smaller, greater than 60 years old and that require upgrading for hydraulic purposes Work accomplished through previous WQIP appropriations have resulted in significant improvements to the water distribution system Globe Hollow Water Treatment Plant Improvements Security Improvements$130,000 Install gates and fencing to limit public access to the rear of the building

8. Water Department FY16 Recommended Budget Revenue Summary Total Recommended Revenue - $9,021,102 Major factors influencing revenues:  Revenue from the sale of water is estimated to be $6,859,806 This reflects a 3.0% rate increase ($3.08/HCF to $3.17/HCF) Volume is based on this years projected amount  Revenues from fire service charges is $1,360,607 are based on a 3% increase This is a combination of public and private fire charges  Interest and lien fees constitute $175,000 of total revenue  Connection fees estimated to be $14,000  Use of Retained Earnings is $234,921  Remainder of revenue, $376,768 is derived from the following: meter installation fees, repairs, inspections, interest, rent, timber sales and miscellaneous The FY16 Budget maintains a level of working capital equal to 180 days of operating expense The rate increase of 3.0% is consistent with last years budget preparation projections

9. Water Department FY16 Recommended Budget Projections

10. Water Department FY16 Recommended Budget New rate study in progress to reassess future rate and infrastructure needs

11. Water Department FY16 Recommended Budget Value Comparison  Our current water rate is the lowest of 4 out of 5 suppliers serving the Greater Hartford Area  Our recommended water rate is the lowest of 4 out of 5 suppliers serving the Greater Hartford Area  A 3.0% rate adjustment would increase the average water bill by $2.19/quarter or $8.76/year  A gallon of water delivered to your home cost 0.47¢

12. Water Department FY16 Recommended Budget Rate Comparison Chart Location Equalized rate Based on average use, meter charge and surcharges where applicable Quarterly cost per household for usage of 2,200 cubic feet/quarter based on equalized rate calculation Manchester - current$3.40/HCF$74.72 (FY15) Manchester - recommended (3.0%)$3.50/HCF$76.91 (FY16) Middletown$3.33/HCF$73.16 (2014 Rate) New Britain Out of Town $3.87/HCF $4.64/HCF $85.20 (2014 Rate) $102.00 (2014 Rate) MDC – Member (eff. Jan 2015) MDC – South Windsor MDC – Farmington MDC – Glastonbury $7.27/HCF $6.29/HCF $6.48/HCF $6.45/HCF $159.90 (member town) $138.34 (South Windsor) $142.54 (Farmington) $142.00 (Glastonbury) CWC (e.g.; Bolton, Coventry, Enfield, S. Windsor, Tolland, Vernon, etc.) $8.30/HCF$182.61 (eff. 2014) CWC (Redwood Farms)$9.21/HCF$202.72 (eff. 2014)

13. Water Department FY16 Recommended Budget GLOBE HOLLOW WTP FLOW SCHEMATIC (Not to scale)