Utility Rates Presentation

8/18/2019 Utility Rates Presentation

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2017, 2018 and2019 Rate Analysis

Sanitary Landfill

Storm Drainage Water Purification

Water Reclamation

Light and Power


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Rate Presentation

Light and Power: Customer RatesSanitary Landfill: Tipping Fees

Storm Drainage: Drainage Fees

Water Purification: Customer Rates

Water Reclamation: Customer Rates


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All enterprise accounts (Water Purification,Water Reclamation, Sanitary Landfill, andLight and Power) cover the true cost forthe enterprise, including operation,maintenance, periodic capital replacement,new capital acquisitions andimprovements, debt service requirements,

and other costs deemed necessary.


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Continued investment in our existinginfrastructure reduces risk andmaintains uninterrupted service.


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We Are On Plan

•

Previously presented two year ratesin 2014.

• Proposing rates for Light & Power,Sanitary Landfill, Water Purification,Storm Drainage and WaterReclamation through 2019.


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Sioux Falls Light and Power

2017, 2018 and 2019 Rate Analysis

Jerry Jongeling,Light Superintendent


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Light and Power Facts• Serves small, defined service territory.

‒

Approximately 2680 customers• 2250 Private Accounts• 430 Governmental Accounts

• Ten largest customers, by consumption:1. Schools (approx. 14 buildings) 6. Lakeside Dairy2. Events Center 7. Washington Pavilion3. Water Purification 8. SF Convention Center4. SD Air Guard 9. Sheraton Sioux Falls5. SF Regional Airport 10. Health and Human Services

• Approximately 50% of electricity provided by the LightDepartment is to public entities.


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Key Modeling Assumptions

•

Cost of supplemental purchased power isanticipated to grow by 5%. Power costsaccount for 72% of 2016 operating budget.

• Investments in infrastructure improve reliabilityand reduce risk.

• No current or future debt planned for thisutility.


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Priority Light and Power Projects

Circuit Improvements $ 420,000• New distribution circuits

added to increase capacityand improve reliability.

Electronic Automated $ 150,000Reading System

Transmission and $3,810,000Substation Upgrades


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Cash Targets & Balance Projections

0% 0%

6%

5%

4%

3.5%

3%

0% 0% 0$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$4.0

$4.5

$5.0

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

D o

l l a r s

( M i l l i o n s )

Estimated Operating Reserves Target Operating Reserves Residential Rate Adjustment


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Proposed 2017 Customer RatesLight and Power

Class AverageMonthly

Bill

Change toAverageUser (%)

C

Residential (average usage is 456 kWh*) 52.76$ 6.0% $

Small Commercial 193.77$ 6.0% $

Large Commercial (good load factor) 1,833.37$ 6.0% $

Large Commercial (average load factor) 2,628.84$ 6.0% $

* 2015 average usage


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Bill


C







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Bill


C







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Sioux Falls Regional

Sanitary Landfill

2017, 2018 and 2019 Tipping FeeAnalysis

Dustin Hansen, Landfill Superintendent


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Sioux Falls RegionalSanitary Landfill

•

Landfill Serves a Five-County Region:‒ Lake‒ Lincoln‒ McCook‒ Minnehaha‒ Turner

• Landfill serves a populationof approximately 256,250.

• Landfill located 5 mileswest of Sioux Falls on41 st Street.


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Municipal Solid Waste (MSW) ‒ Everyday trash or garbage.

Construction and DemolitionDebris (C&D)

‒ Debris generated byconstruction, renovationand demolition.

‒ Concrete, wood, metals,glass, etc.


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Key Modeling Assumptions• 0.5% Increase in Waste Tonnage Annually.•

Material Recovery Facility beginning in 2018.• Planning for a reduction in Landfill Gas revenues starting in 2019.• No current or future debt planned for this utility.


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Rate Funded CapitalImprovement Projects

(2017-2021)

• Material Recovery Facility $6,795,000• Leachate Recirculation and $2,135,000

Landfill Gas Infrastructure•

Land Acquisition $1,219,000• Composting Facilities Expansion $ 765,000


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Cash Targets & Balance Projections

0.00% 0.00% 0.00% 0.00%

2.78%

0.00%$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

2016 2017 2018 2019 2020 202

D o

l l a r s

Year

Unrestricted Cash Restricted Cash Target Unrestricted Balance Target Restricted Balance

No Rate Increase requested for 2017, 2018 or 2019


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$83.00$59.00

$65.00$56.97

$52.75$56.00

$52.00$58.67

$49.45$48.00$48.40$52.19

$45.00$45.00

$44.00$41.50$42.00$42.00

$46.50$43.00

$38.00$38.00$38.00

$36.00$36.00$37.00$37.50$33.33

$35.00$31.00$31.00

$35.00$33.00

$25.03$17.75$17.50

$0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00

Rochester, MNRapid City, SD

Worthington, MNMarshall, MN

Ames, IANorfolk, NECuster, SD

Albert Lea, MNCheyenne, WY

Lake Andes, SDGrand Forks, NDBelle Fourche, SD

Bismarck, NDBlue Earth County, MN

Brookings, SDPukwana, SD

Pierre, SDSisseton, SD

Vermillion, SDSioux City, IA

Marion, IA Aberdeen, SD

Fargo, NDSioux Falls, SD (2016-2019)

Mitchell, SDSelby, SD

Watertown, SDLemmon, SD (2012)

Jackson, NEClear Lake, IA

Boone, IAFort Dodge, IA

Sheldon, IAOmaha, NELincoln, NEBillings, MT

Fee Per Ton

L o c a

t i o n o

f L a n

d f i l l

Expanded Regional Landfill MSW Tipping Fees


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$45.00$45.00$45.00

$44.00$41.50

$43.00$36.00$35.00

$37.50$34.00

$33.33$33.33

$35.00$33.00

$31.00$40.00

$31.00$35.00

$27.00$25.90 $33.00

$25.03$24.00

$26.77$20.00$20.00

$17.50$4.00

$0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00 $45.00 $5

Rapid City, SDCheyenne, WY

Blue Earth County, MN Albert Lea, MN

Custer, SDBrookings, SDPukwana, SDVermillion, SDSioux City, IA

Mitchell, SDSisseton, SD

Watertown, SDSioux Falls, SD (2016-2019)

Rochester, MNLemmon, SD (2012)

Jackson, NEFargo, ND

Clear Lake, IAWorthington, MN

Norfolk, NEBoone, IA

Fort Dodge, IAMarshall, MN

Pierre, SDSheldon, IABelle Fourche, SD

Omaha, NEBismarck, ND

Grand Forks, ND Aberdeen, SD

Selby, SDBillings, MTLincoln, NE

Fee per Ton

L o c a

t i o n o

f L a n

d f i l l

Expanded Regional C&D Tipping Fees


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Storm Drainage Utility

2018 and 2019Rate Analysis

Andy Berg, Environmental/StormWater Manager


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• Mission is to safely convey urban runoffto the Big Sioux River

• SW Floodplain – model and plan publicimprovements

• Continue to lead efforts to improve waterquality of the Big Sioux River

• Requesting drainage fees for 2018 and

2019

STORM DR IN GE

DIVISION OVERVIEW


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DRAINAGE FEEREVENUE

OPERATION &MAINTENANCE

CAPITALIMPROVEMENTS

IN EXISTINGAREAS

PLATTING FEEREVENUE

FLOOD CONTROLSYSTEM

RENEWAL &REPLACEMENT

ADDITIONAL O&MREVENUE

REQUIREMENTS

STORM DR IN GE FUNDING

CAPITALIMPROVEMENTS

IN DEVELOPINGAREAS


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CHANNEL REHABILITATION

Before After


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SUMP PUMP COLLECTION SYSTEM RETROFITS

BeforeBefore Afte


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CLEANING CHANNELS AND PIPES TO REDUCESTREET FLOODING


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STREET SWEEPING TO REDUCESILTATION AND IMPROVE WATER QUALITY


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REGIONAL BMP PROGRAM(LAND, CONSTRUCTION, MAINTENANCE)


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LEVEE SYSTEMS OPERATIONS AND MAINTENANCE


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Priority StormDrainage Projects

(2017-2021)

• Covell Ave Area Drainage Improvements $ 915,000• Terry Ave and 43 rd St Improvements $ 4,779,000• SW Sioux Falls Improvements $ 4,529,000• Developing Areas Improvements $13,133,000• Flood Control System Improvements $ 3,000,000

City of Sioux Falls Storm Drainage Utility


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9% 9% 9% 9%

7%

5%

4%

2% 2% 2% 2%

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

D o

l l a r s

y g yProjected Operating, DSCR and RDC Cash Balances

Operating and Capital BalanceDSCR ReserveRDC ReserveTarget Capital and Operating ReserveDrainage Fee Rate Increase


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2018 2019

Unit Charge % Increase* 9% 7%

Typical Residential Bill** $47.76 $51.08

Annual Impact to Average Customer $3.94 $3.32

*2017 Unit Charge = $0.000779 previously set by Council**7,500 sq ft lot; 2017 Residential Bill = $43.82

DR IN GE FEE

RECOMMEND TIONS

2018 – 2019 DRAINAGE FEE RECOMMENDATIONS:


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Copyright © 2016 AE2S - All Rights Reserved

2015 RegioStormwat

Monthly ChCompariso


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Sioux Falls Water Purification

2017, 2018 and 2019 Rate Analysis

Greg Anderson, Water Superintendent


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• Water Purification cash reserves will be usedto smooth customer rates.

• Modeling for final true up with Lewis & Clark.Currently estimating payment of $8.5M in2024.

• Replacement of remaining lead service lines.• Investing heavily in replacement of currentinfrastructure.


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The water distribution systemcurrently has more than 1,020 milesof water main, delivering on average19 million gallons per day to ourcustomers.

Priority Water Purification Projects


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Priority Water Purification Projects2017 - 2021

• Repair and Replacement of $ 42.96M

Infrastructure(Minnesota Avenue Transmission Main,41 st Street and Neighborhood Watermains )

• New Development $ 11.12M(Foundation Park, Arrowhead ParkwayNew Elevated Storage)

• Investment in Source and Supply $ 3.57M(Large Collector Well Improvements)

Water Division


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Water DivisionWell Field Developm

USGS Aquifer Study

Sioux Falls Water Division


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3.0% 3.0%

0.0%

0.0%

2.0%2.0% 2.0% 2.0% 2.0% 2.0% 2.0%

$-

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

$18,000,000

$20,000,000

$22,000,000

$24,000,000

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

D o

l l a r s

Sioux Falls Water Division2017, 2018 and 2019 Budget Year Rate Analysis

April 19, 2016

Capital Reserve Rate Stabilization Fund BalanceOperating Reserves Target - Operating and Rate Stabilization ReservesTarget - Operating Reserves Target - Operating, Rate Stabilization and Capital ReserveResidential Rate Adjustment

Proposed 2017 - 2019 Rates


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Proposed 2017 - 2019 RatesWater Purification

AnnualAdjustment

Actual2016 Rate

Proposed2017

Proposed2018

Residential 5/8” Meter +2.0% $3.10 $3.16 $3.22

Flow – Tier 1(per CCF*)

+2.0% $3.53 $3.60 $3.68

Commercial 5/8” Meter +2.0% $12.18 $12.42 $12.67


+2.0% $3.03 $3.09 $3.15

Industrial Meter +2.0% $1,337.49 $1,364.24 $1,391.52 $1,4


+2.0% $1.80 $1.84 $1.87

SkylineHeights


+2.0% $5.21 $5.31 $5.42

* CCF = 100 cubic feet = 748 gallons

Typical Monthly Water Bill


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Typical Monthly Water Bill

Proposed 2017 Residential Water Rate Increase = 2.0%Monthly

Consumptionin Gallons*

MonthlyConsumption

in CCF

2016MonthlyCharge

2017 MonthlyIncrease with

2.0% Adjustment

2017MonthlyCharge

5,310 7.1 $28.17 $0.55 $28.72



MonthlyConsumption

in CCF

2017MonthlyCharge


2.0% Adjustment

2018MonthlyCharge

5,310 7.1 $28.72 $0.63 $29.35



MonthlyConsumption

in CCF

2018MonthlyCharge


2.0% Adjustment

2019MonthlyCharge

5,310 7.1 $29.35 $0.57 $29.92

*Average Winter Water Use


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Wastewater Treatment Facility


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Wastewater Treatment Facility

• Design Capacity Average Flow – 21 MGD• 2015 Average Flow – 15.5 MGD• Customers – 51,500

S it S C ll ti S t


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Sanitary Sewer Collection System

Collection Mains – 870+ Miles – 6 to 66 Inch Diameter – 15,000+ Manholes and

Structures

22 Lift Stations – 4 Major – 2 Private


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• Investing heavily in replacement of currentinfrastructure.

• Prioritizing projects to minimize risk and maximizeinvestment in system.

• Using low interest State Revolving Fund program tominimize impact to customer.

•

Planning for Regional Growth (Regional WastewaterSystem includes Brandon, Harrisburg, Prairie Meadows,Renner and Sioux Falls).

Priority Water Reclamation Projects


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Priority Water Reclamation Projects

• Foundation Park – 2016 $ 8.84M• Outfall Sewer Replacement – 2016 $ 21.13M•

Equalization Expansion – 2017 $ 4.75M• Primary Digester Improvements - 2017 $ 7.46M• Main Pump Station Replacement – 2019 $ 22.40M• Foundation Park Phase 2 – 2020 $ 28.89M• Biosolids Sludge Dewatering – 2021 $ 9.17M


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Proposed 2017-2019 RatesWater Reclamation


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Water ReclamationProposed

AnnualAdjustment

Actual 2016Rate

Proposed2017

Proposed2018

Residential Basic Charge 6% $3.96 $4.20 $4.45

Flow (per CCF*) 6% $3.73 $3.95 $4.19

Commercial Basic Charge 5% $16.95 $17.80 $18.69

Flow (per CCF*) 5% $4.40 $4.62 $4.85

DomesticIndustrial

Basic Charge 5% $16.95 $17.80 $18.69

Flow (per kgal**) 5% $5.89 $6.18 $6.49

High StrengthIndustrial

Basic Charge 2% $16.23 $16.55 $16.89

Flow (per kgal**) 2% $1.65 $1.69 $1.72

*CCF = 100 cubic feet = 748 gallons**kgal = 1,000 gallons

Proposed 2017-2019 RatesWater Reclamation


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ProposedAnnual

Adjustment

Actual2016 Rate

Proposed2017

Proposed2018

Industrial BOD (per pound) 2% $0.2527 $0.2578 $.2629 $0.

TSS (per pound) 2% $0.2429 $0.2478 $0.2527 $0

TKN (per pound) 2% $0.9264 $0.9449 $0.9638 $

Grease (per pound) 2% $0.9264 $0.9449 $0.9638 $0

Regional Customer Rate(per kgal*) 6% $4.51 $4.78 $5.06 $5

Credit for Flow Equalization (per kgal*) 6% ($0.50) ($0.53) ($0.56) ($0

Credit for Strength Equalization(per kgal*)

6% ($0.61) ($0.65) ($0.69)

Water Reclamation

*kgal = 1,000 gallons

Typical Monthly Sewer Bill


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Proposed 2017 Residential Sewer Rate Increase = 6.0%Monthly


MonthlyConsumption

in CCF

2016MonthlyCharge


6.0% Adjustment

2017MonthlyCharge

5,310 7.1 $30.44 $1.81 $32.25

MonthlyConsumption

in Gallons*

MonthlyConsumption

in CCF

2017MonthlyCharge


6.0% Adjustment

2018MonthlyCharge

5,310 7.1 $32.25 $1.95 $34.20

Proposed 2018 Residential Sewer Rate Increase = 6.0%

Proposed 2019 Residential Sewer Rate Increase = 6.0%Monthly


MonthlyConsumption

in CCF

2016MonthlyCharge


6.0% Adjustment

2017MonthlyCharge

5,310 7.1 $34.20 $2.04 $36.24

* Average Winter Water Use


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Monthly Impact to Typical


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y p ypResidential House 2017

Utility Current Requested Increase 2017 To

Light and Power* $52.76 $3.17 $5*Light and Power Division has @ 1,700 residential customers

Utility Current Requested Increase 2017 ToStorm Drainage $3.35 $0.30Water Purification $28.17 $0.55Water Reclamation $30.44 $1.81Total $61.96 $2.66 $



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Utility 2017 Request Requested Increase 2018 To


Utility 2017 Request Requested Increase 2018 ToStorm Drainage $3.65 $0.33Water Purification $28.72 $0.63Water Reclamation $32.25 $1.95Total $64.62 $2.91 $



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Utility 2018 Request Requested Increase 2019 To


Utility 2018 Request Requested Increase 2019 ToStorm Drainage $3.98 $0.28Water Purification $29.35 $0.57Water Reclamation $34.20 $2.04Total $67.53 $2.89 $

N t St


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Next Steps

• 1st Reading of All Ordinances:April 19, 2016

• 2nd Reading of All Ordinances:May 3, 2016

Th k f !


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Mark CotterDirector of Public [email protected]

Dean BorchardtBusiness Operations Manager

[email protected]

Trent LubbersUtility Operations Administrator

[email protected]

(605) 367-8600

Thank you for your support!
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]

Utility Rates Presentation

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