Sam Cooper City of Rehoboth Beach May 4, 2015

Rehoboth Beach 55%

Dewey Beach 36%

Henlopen Acres 4%

North Shores 5%

Ocean Outfall $25,000,000

Plant Improvements $15,000,000

Bio-solids Handling $12,500,000

Project Cost Interest Rate

Term in Years

Annual Payment

Outfall* $25,000,000 2% 25 $1,275,637

Plant* $15,000,000 2% 20 $913,668

Bio-solids** $12,500,000 2% 25 $637,818

Total $52,500,000 $2,827,123

*This funding has been approved by DNREC through the Clean Water State Revolving Fund. **Application will be made to the Clean Water State Revolving Fund in August of 2015. If approved this year the interest rate will be 2%.

Total Cost Rehoboth’s Share

Annual O&M Cost $1,888,000 $1,184,000*

Outfall Additional O&M $150,000 $82,500**

Bio-solids Operational Savings ($210,000) ($115,500)**

Annual Loan Payments $2,827,123 $1,554,918**

Total $4,655,123 $2,705,918

*This amount comes from the Excel spreadsheet found on the following slide which is derived from the 2015-2016 budget. **These amounts are 40% of totals.

Portion Amount % Portion Amount Portion Amount % Portion Amount Portion Amount % Portion Amount2015-2016 Attributed Attributed Attributed Attributed Attributed Attributed Attributed Attributed Attributed Attributed Attributed Attributed

Wastewater Department Budget to WWTP to WWTP to Flows to Flows to Collection to Collection to Flows to Flows to Main Pump to Main Pump to Flows to Flows

Advertising 1,500 50% 750 55.00% 413 50% 750 91.50% 686 0% - - Chemicals 180,000 100% 180,000 55.00% 99,000 0% - - 0% - - Conferences & Training 2,000 90% 1,800 55.00% 990 10% 200 91.50% 183 0% - - Connection Expense 3,000 0% - 55.00% - 100% 3,000 91.50% 2,745 0% - - Contracted Services - 25% - 55.00% - 75% - 91.50% - 0% - - Depreciation - 0% - - 0% - - 0% - - Equipment Rental 1,400 50% 700 55.00% 385 50% 700 91.50% 641 0% - - Outfall Engineering - 100% - 55.00% - 0% - 0% - - Fringe Benefits 177,318 90% 159,586 55.00% 87,772 10% 17,732 91.50% 16,225 0% - - Gas, Diesel and Oil 38,250 90% 34,425 55.00% 18,934 10% 3,825 91.50% 3,500 0% - - Insurance - Auto and General 8,397 80% 6,718 55.00% 3,695 20% 1,679 91.50% 1,537 0% - - Insurrance - Commercial, Umbrella & Prop. 13,912 90% 12,521 55.00% 6,886 10% 1,391 91.50% 1,273 0% - - Insurance - Workmens Compensation 58,000 90% 52,200 55.00% 28,710 10% 5,800 91.50% 5,307 0% - - Lab Equipment & Testing 39,000 100% 39,000 55.00% 21,450 0% - - 0% - - Land Application Study Costs - 0% - 55.00% - 0% - - 0% - Land Rental - Sludge 72,000 100% 72,000 55.00% 39,600 0% - - 0% - - Landfill Disposal 2,200 25% 550 55.00% 303 75% 1,650 91.50% 1,510 0% - - Maintenance Contracts 24,500 100% 24,500 55.00% 13,475 0% - - 0% - - Memberships & Publications 1,000 100% 1,000 55.00% 550 0% - - 0% - - Minor Equipment and Supplies 12,400 90% 11,160 55.00% 6,138 10% 1,240 91.50% 1,135 0% - - Office Supplies 4,975 90% 4,478 55.00% 2,463 10% 498 91.50% 455 0% - - Payroll Taxes 45,476 90% 40,928 55.00% 22,511 10% 4,548 91.50% 4,161 0% - - Postage 3,500 50% 1,750 55.00% 963 50% 1,750 91.50% 1,601 0% - - Professioanal Services 25,000 100% 25,000 55.00% 13,750 0% - - 0% - - Legal Fees 3,000 0% - - 100% 3,000 91.50% 2,745 0% - - Pumping Station Electric 17,680 0% - - 100% 17,680 91.50% 16,177 0% - - Pumping Station Electric - Main 7,800 0% - - 0% - - 100% 7,800 86.62% 6,757 Radio Maintenance 400 50% 200 55.00% 110 50% 200 91.50% 183 0% - - Repairs and Maintenance 150,000 90% 135,000 55.00% 74,250 10% 15,000 91.50% 13,725 0% - - Salaries 594,459 90% 535,013 55.00% 294,257 10% 59,446 91.50% 54,393 0% - - Small Tools 1,100 90% 990 55.00% 545 10% 110 91.50% 101 0% - - Telephone 3,950 90% 3,555 55.00% 1,955 10% 395 91.50% 361 0% - - Uniform Allowance 9,700 90% 8,730 55.00% 4,802 10% 970 91.50% 888 0% - - Utilities 283,500 100% 283,500 55.00% 155,925 0% - - 0% - - Vehicle Maintenance 20,000 90% 18,000 55.00% 9,900 10% 2,000 91.50% 1,830 0% - - Sludge Disposal Vehicle Repairs 30,000 100% 30,000 55.00% 16,500 0% - - 0% - Schoolvue Principal and Interest 52,421 100% 52,421 91.50% 47,965

1,887,838

90% Improvements 32,000 90% 28,800 55.00% 15,840 10% 3,200 91.50% 2,928 0% - - Plant 55,000 100% 55,000 55.00% 30,250 0% - - 0% - - Collection 25,000 0% - - 100% 25,000 91.50% 22,875 0% - -

1,999,838 1,767,854 972,319 224,184 205,129 7,800 6,757

Mine

Plant 972,319

Collection 205,129

Main Pump Station 6,757

1,184,205

Rehoboth Beach

Without Existing Surcharge

With Existing Surcharge

Rehoboth Share of Annual Cost $2,705,918 $2,705,918

Current Revenue from Service Fees $1,160,000 $1,740,000

Additional Needed Revenue $1,545,918 $965,918

Percent Increase in Needed Revenue 133.3% 55.5%

Existing Average User Rate $325.00 $487.50

Proposed Annual User Rate $760.00 $760.00

There really is no such thing as an average or typical user. In 2009 a year’s worth of usage was analyzed for all 1 inch and smaller meters in the City. This data revealed that on average these customers used 150 gallons per day on a year round basis. This equates to an annual bill of $325.

***Base sewer rates have not been increased since 2006.

Recently bio-solids handling was added to the project at an estimated cost of $12,500,000. Total estimated project costs have risen from $34,600,000 to $52,500,000 since 2009, largely because of the addition of bio-solids handling, but also the effects of inflation. The estimated average user rate during this same time period has risen from $680 to $760. This increase takes into account the new scope of the project (addition of bio-solids handling) and 6 years of cost inflation (operational and capital).