Post on 30-May-2018
8/9/2019 Irving Water Sewer Update 2010-07-07
1/23
Water and Sewer System UpdateGoal 8: Sound Governance
Goal 9: Enhance and Sustain InfrastructureCity Council Work Session
July 7, 2010
8/9/2019 Irving Water Sewer Update 2010-07-07
2/23
Bottom Line
Additional Revenue is Needed:
1. To Maintain Lowest Interest Rates (Bonds) Pay
Less for Capital
2. For Increased Cost State Mandated/Treatment
3. For the Lake Chapman Booster Pump Station
4. For Ongoing Pipe Replacements
2
8/9/2019 Irving Water Sewer Update 2010-07-07
3/23
3
Overview
Whats Needed?
Why Invest in Infrastructure?
Capital Improvement Plan Financial Update
Recommendation
8/9/2019 Irving Water Sewer Update 2010-07-07
4/23
4
Team
Ramiro Lopez, IGS and Public Works Team Dir
Max Duplant, Chief Financial Officer
Todd Reck, Water Utilities Director Bret Starr, Asst Chief Financial Officer
Aimee Kaslik, Business Manager
David Cardenas, Water Business Manager
8/9/2019 Irving Water Sewer Update 2010-07-07
5/23
5
Whats Needed?
NEED ANNUAL CIP INVESTMENT OF $24-$40M
Replace Failing Infrastructure
Goal: 40 to 60 yr life
Master Plan for Growth Water Supplies and Pipeline Capacity
Water Reuse
Operations and Maintenance
CURRENT CIP FUNDING OF $12M NOT ADEQUATE
8/9/2019 Irving Water Sewer Update 2010-07-07
6/23
Importance of Water and Sewer
Infrastructure
6
8/9/2019 Irving Water Sewer Update 2010-07-07
7/23
7
Why Invest in Infrastructure?
Aging and Becoming Less Reliable Almost 1500 miles total
Unlined Cast Iron
35 to 60 yrs old
140 miles Breaks easily
Water quality issues
Cement Pipe
28 to 40 yrs old 130 miles
Breaks easily
Concrete Sewers
Corrosion failures
8/9/2019 Irving Water Sewer Update 2010-07-07
8/23
Water Infrastructure Grades
8
8/9/2019 Irving Water Sewer Update 2010-07-07
9/23
News Video
9
8/9/2019 Irving Water Sewer Update 2010-07-07
10/23
Water Infrastructure Problem
10
..out-of-sight, out-of-mind predicament
..is in dire need of repair or replacement
..more that any single bond election
could ever cover
Failure examples: Dallas County Records Bldg Stemmons Freeway Los Angeles 43 breaks in a month
So, the alarm has been sounded againand again.
Major Irving failure - Riverside Sewer
8/9/2019 Irving Water Sewer Update 2010-07-07
11/23
Dallas/Irving Comparison
City of Dallas City of Irving
Water System Size 5,000 miles 700 miles
Pipe over 50 yrs old > 10% > 10%
Pipe Replacement Budget $127 M $9 MPipe Replacement Rate $25,400/mile $12,900/mile
Water Main Repairs 1,849 360
Water Main Repair Rate 37/100 miles 51/100 miles
11
Irving has more repairs, but replaces pipes at half therate
Lean Six Sigma projects increasing repair capabilities
8/9/2019 Irving Water Sewer Update 2010-07-07
12/23
12
Neighborhood Line Replacement
History and Projection
$3.4 $4.5
$11.0
$6.7
$4.4
$5.3
$8.0
$5.6$7.6
$11.0
$4.0$1.2
$14.0$15.0 $15.1 $15.3
$0
$10
$20
$30
Water and Sewer ReplacementsMillions
8/9/2019 Irving Water Sewer Update 2010-07-07
13/23
13
Failing Pipe Impacts
Pipe Breaks Cartwright St (55 yrs old), 12 repairs in 2 yrs
Pennington St (46 yrs old), 9 repairs in 2 yrs
Red Water Fowler St (54 yrs old) Marie Ln (55 yrs old)
Sewer Overflows
Impacts: Loss of service (frustration) Cost (overtime and repair)
Regulatory
Flushing
8/9/2019 Irving Water Sewer Update 2010-07-07
14/23
Band Aid Repairs-Britain 5/2/10
14
Three pipe failures
8/9/2019 Irving Water Sewer Update 2010-07-07
15/23
Water Supply Investment Needed
Proposed Booster Pump Station
- $40M Total- $20M Irvings cost
Princeton Pump Station
- Future Improvements
Intake Pump Station- $2M Total Upgrade- $1M Irvings Cost
Participate: Maximize and maintain control of $150M+ pipelineDont participate: Lose some drought protection and may haveto buy Dallas water sooner
8/9/2019 Irving Water Sewer Update 2010-07-07
16/23
16
Capital Improvement Plan
$1M - 54 Customer Way Sewer
$6.5M - Delaware Creek Sewer
$1M Facility Security
$0.5M Hackberry Pump Station Improvement
Required TXDOT utility relocations
$1.2 M Residential water pipe replacements
Total: About $12M
No funding for Water Supply Booster Pump Station
8/9/2019 Irving Water Sewer Update 2010-07-07
17/23
17
Finances
System Fund needs to stand on its own
Rates have to supply adequate revenue
Avoid General Fund bailout as in 2007 ($4M)
Water revenues down almost 9.8%
Cash reserve projection down $3.6M
Will not meet debt service coverage goals Bond ratings are at risk higher rates
8/9/2019 Irving Water Sewer Update 2010-07-07
18/23
Costs Trending Up
TCEQ Fees and Requirements up $500,000
Water Treatment (Dallas)
Last 4 years up $1.045M (18% Increase)
Wastewater Treatment (TRA)
Last 4 yrs up $3.975M (39% Increase)
Development Costs (TXDOT, DART) Maintenance Costs
18
8/9/2019 Irving Water Sewer Update 2010-07-07
19/23
Public Communications
Audit and Finance Committee
10/2009, 12/2009 and 5/2010
Public Works Committee
10/2009 City Council Work Session
10/21/2009, 12/2/2009, 1/13/2010
City Council Meeting
1/14/2010
City Spectrum
11/2009, 1/2010, 2/2010, 6/2010
Website Video and 5-yr Plans for Pipe Replacements19
8/9/2019 Irving Water Sewer Update 2010-07-07
20/23
20
Voice of the Customer
Customer complaints for the last 2 years
Leaks concerns 1,418
Water Quality (dirty, discolored) 420
Low pressure concerns 255
Sewer backups, slow drainage 2,609
TOTAL 4,702
Average of 6 complaints per day
Each complaint can impact a few or up to hundreds of people
8/9/2019 Irving Water Sewer Update 2010-07-07
21/23
Recommendation
Adopt a 5% Rate Increase
Helps meet legal debt service coverage commitments
Helps cover FY 2009-10 operations
Doesnt fund the water supply booster pump station Doesnt fund new CIP (highest priorities only)
Impact to Residential Customer
$2.66/month increase ($53.37 total) typical
Rates still lowest among 20 plus member cities (Dallas)
Lowest rate among the cities in (North Texas in) the
study (The Celina Record Star- McLain Decision Support
System rate study)21
8/9/2019 Irving Water Sewer Update 2010-07-07
22/23
No Rate Increase Option
Would not sell water and sewer bonds
Limited, if any, CIP for FY 2010-11
High risk of bond rating downgrade Evaluate going from 20 to 30 year debt
Would not participate in Lake Chapman
Booster Pump Station 32% future capacity loss (75 MGD vs. 110 MGD)
Loss of pipeline operational control and drought
flexibility22
8/9/2019 Irving Water Sewer Update 2010-07-07
23/23
23
Questions