Committee of the Whole

Village of Brookfield Agenda Committee of the Whole Meeting Monday, June 28, 2021 @ 7:00 PM or Immediately Following Village Board Meeting Edward Barcal Hall 8820 Brookfield Avenue Brookfield, IL 60513 I. Roll Call II. REGULAR BUSINESS 1. Consideration of Approval for Establishing a Recreation Scholarship Foundation Committee Item Memo-Parks Foundation 2. Discussion Concerning the Village's Potable Water System Committee Item Memo-Potable Water System - Pdf III. Public Comment IV. Executive Session V. ADJOURNMENT Page 1 of 32  Committee Item Memo Meeting Date: June 28, 2021 Staff Contact: Stevie Ferrari, Parks and Rec Director Department: Parks and Recreation Subject: Consideration of Approval for Establishing a Recreation Scholarship Foundation Background Information: The Parks and Recreation Department has received donations from the Palacky Lodge's "Kids are Essential" fund which provides monetary relief to Brookfield families to meet the needs of their children. Families in need have been identified through our application process. The need has grown to surpass the monetary amount available through these donations. The goal of the Scholarship Fund is to establish a 501(c)3 not-for-profit organization that would raise funds to provide financial relief (free or discounted registration) to low-income families looking to participate in parks and recreation department programs. The Brookfield Parks and Recreation Department offers a wide array of programs year-round that benefit families throughout the village. These activities are supported by village tax revenue and registration fees, which must grow over time to match increasing costs. Sometimes these fees can be a barrier to participation for low-income families, who often stand to benefit the most from programs due to a lack of resources at home. According to Census data, 1,460 local residents (8%) live below the federal poverty line. Villages in the surrounding area and across the U.S. often have affiliated foundations that offer free or discounted programming for low-income residents. Currently, Brookfield has a small scholarship program ($500-$1000 total per year) that’s supported largely by Odd Fellows Lodges. Demand for these scholarships from qualifying families, who provide proof of low income, currently exceeds the supply of available funds. The Village of Brookfield’s Scholarship Foundation would recognize that some residents are financially unable to participate in programs offered by the Village of Brookfield’s department of Parks and Recreation but still desire the opportunity to experience the benefits of leisure activities. The Recreation Scholarship Foundation will assist in making recreational leisure activities available to as many residents as possible through subsidizing registration fees in order to make participation more accessible for those who have established a need for assistance. The Parks and Recreation Commission has appreciated and acknowledged the help we have been able to provide families but has also acknowledged that the need now surpasses the available funds. Page 2 of 32 The Commission discussed the interest in establishing a 501c3 Non-Profit foundation that would focus on raising funds to be allocated to families in financial need to access recreation programs. Creating a Scholarship Fund for Brookfield families via establishment of a formalized, board operated 501c3 has been discussed and supported by all Parks and Recreation Commissioners. Financial Impact: NA Recommendation(s): Village staff recommends board support and approval for the Parks and Recreation Commission to begin the formal process of implementing a Scholarship Foundation. Page 3 of 32  Committee Item Memo Meeting Date: June 28, 2021 Staff Contact: Tim Wiberg, Village Mananger Department: Village Manager's Office Subject: Discussion Concerning the Village's Potable Water System Background Information: The Village owns and operates a water system which provides potable water to homes and businesses. While the Village purchases water through the Brookfield/North Riverside Water Commission, the Village owns and maintains water mains which convey the water from the Commission's reservoirs on Brookfield Avenue to every property in the Village. Like most inner-ring Chicagoland suburbs, our water system is getting older. Over 50% of the water mains in our system are over 100 years old. While the reliability of our water mains continues to be relatively stable, all available data suggest that the system is in need of upgrading. In the Village Board's Strategic Plan approved in 2020, the Board created the following goal, "Develop Infrastructure Replacement Strategy and Capital Plan." Currently the Village's water system is confronting two significant challenges: replacement of the Meter Transmission Units (MTUs) which are how individual meter readings are transmitted to the Village when preparing water bills, and the replacement of the oldest water mains in our system. Both these projects are extremely expensive and neither can be funded through the Village's current water rate system. Therefore, staff is recommending the Village Board consider a rate adjustment sufficient to fund these two initiatives. Staff has thoroughly researched this issue and is prepared to discuss the establishment of a strategic plan to position the water distribution system for the future. At its Committee of the Whole (COTW) meeting of March 8, the Board began its deliberations on these issues. During discussion, various points were raised by Board members which staff has been researching to provide a response. Please find below a summary of the issues that were raised at this meeting: 1) Pertaining to the MTU replacements, a question was raised as to why staff was recommending the current service provider, Badger meters and its Beacon software system, and not considering new vendors for the MTUs. Approximately 15 years ago, the Village Board approved a contract with Badger Meters for the purchase of new water meters and the MTU system, which transmits the meter read to the Village Finance Department for billing purposes. At the time, and staff believes is the case today, the Village went with Badger since they were widely believed to be the best quality Page 4 of 32 meters on the market and they were a well-established service provider in the Chicagoland area. Since these meters still have at least 15 years of expected life remaining, and the MTU system has worked well for the Village, staff at first, did not consider changing either system with a new provider. Nevertheless, following the March COTW meeting, staff looked into other service provider options. Below is a summary of staff's research on this issue: Staff contacted representatives from the following manufacturing companies to obtain information regarding their water meter and MTU options. 1. Badger 2. Itron 3. Neptune 4. Sensus Itron was not able to provide acceptable references for providing an MTU system that works with our existing Badger meters and therefore staff does not consider them as a viable option. The chart below summarizes the proposal costs staff obtained for installation of New MTU’s and a second option for installation of New Meters and MTU’s. Both options would also include the installation of a new register. New MTUs Only Badger & Beacon Sensus Neptune MTU including $1,898,540 N/A $1,906,257 installation Software/training $12,500 N/A $60,500 Annual software 39,000 - 55,000 N/A $24,904 maintenance New MTUs and Meters Installation and $2,263,352 $2,609,251 $2,162,254 material Software/training $12,500 $33,850 $60,500 Annual software 39,000 - 55,000 32,163 24,904 maintenance When the Village last replaced the water meters in 2006 – 2007, it had several options including selecting lower cost water meters but it chose to purchase higher-quality meters in order to get as long a service life from the meters as possible. At the time, it was known that the MTU’s would need to be replaced during the service life of the water meters. These water meters have performed well for the first 15 years and we feel that they will continue to provide accurate water use readings for the next 15 – 20 years. In addition, replacing the existing water meters with new water meters would involve cutting the water service pipes (most of which are lead). The USEPA has recognized that cutting into lead water services can temporarily increase the amount of lead in drinking water. Staff prefers to minimize the amount of Page 5 of 32 work on lead water services and only have it performed when necessary. Therefore, staff recommends the meters not be replaced currently. In examining the three options for MTU replacement, Sensus did not offer an MTU product that was compatible with the existing Badger meters. Neptune offers a MTU product that is compatible with the existing Badger meters, however, staff only received two references from other local municipalities that are using the Neptune MTU product with the existing Badger meters and neither of these references were located in the Chicagoland area. Staff contacted these two references and did not receive a reply. Additionally, the Neptune MTU package would use a Fixed-Point Antennae system to transmit readings from the MTU’s in the house to the computers in the Village Hall. This is an older technology that requires additional infrastructure (2 – 3 antennae) to be constructed and maintained. The Beacon Cellular System offered by Badger Meters relies on cell towers to transmit readings from the MTU’s in the house to the computers in the Village Hall. Staff feels that this is a newer, more progressive meter transmission system that also has the benefit of allowing a water user with a cell phone to receive real time data on their cell phone if they choose. Staff has contacted several communities that are using the Beacon Cellular System and they have all reported that it is reliable and that they prefer the system to the previous Fixed Point Antennae System. Since the water billing process and revenue received from this process is one of the most critical revenue sources the Village has and accounts for approximately $5,000,000 in revenue each year, staff recommends that the MTU selected be manufactured by the same company as the meters that are being used to ensure compatibility (Badger and Beacon software). 2) Prior to replacing water mains, should the Village complete a water system audit? The Village could pay for a water system audit from another vendor. However, that would cost approximately $100,000, and most likely not result in any more useful knowledge than what is already readily available. Hancock Engineering can provide this service, but in the last 20 years none of its municipal clients have requested one. When considering which mains need replacing, it is fairly common to look at two variables: age and break history. The Village has solid data on these points. Furthermore, the Village Engineer will review age and break history, along with considering what streets may be scheduled for reconstruction and time the main replacement so that the project can take advantage of the construction already occurring. Therefore staff believes a water system audit is not necessarily needed. 3) Should the Village consider lining the water mains rather than replacing them? Alternative methods of repairing or replacing the water mains including lining, pipe bursting, and directional boring will be considered. However, these methods of replacement are less effective when installing water main where there are frequent service connections. The majority of the planned water main replacement will have frequent service connections so the majority of water mains will likely continue to be installed via an “open cut” method. One benefit of the open cut method is that the restoration typically includes installing new sidewalk and driveway aprons on the side of the street on which the water main is replaced. 4) What are the Village requirements for replacing private lead service lines, when replacing a public water main? Page 6 of 32 Partial lead service replacement is defined as replacing only a portion of a lead service between the water main and the water meter located inside the house. Currently, partial lead water service replacement (from the main to the b-box) is allowed. In fact, our current water main replacement project, as part of the 2021 Street Projects, has an approved IEPA permit and includes replacement of the lead water service from the water main to the b-box. On January 15, 2021 the USEPA finalized revisions to the Lead and Copper Rule. One of the proposed revisions would prohibit partial lead service line replacement. These rules are currently out for public comment until at least Sept 2021. It is anticipated that these rules would go into effect no earlier than 2024. 5) The Board requested staff obtain public input into the proposed rate increase. Staff posted an online survey on the website and social media platforms asking whether they would support a 18% water rate increase in order to allow the Village to begin replacing our oldest water mains. 555 people responded to the survey and 217 or 39% answered “Yes” to supporting the $2.03 increase to the water bill and 338 or 61% answered “No”. After considering all the data, it remains staff's recommendation to replace the current MTUs with the Badger system using the Beacon software platform; and the Village Board approve a rate adjustment of 18% to allow the Village to begin accumulating funds to pay for future water main replacements. Financial Impact: Annual investments in the Village's water infrastructure. Attachments: Water Fund capitalk improvements 6-28-21 Page 7 of 32  Water Infrastructure Upgrade Plan June 28, 2021 Page 8 of 32  Water Capital Planning • Replacement of water meter transmission units (MTUs) • Begin a process to replace and upgrade water transmission mains Page 9 of 32  MTUs Replacement • MTUs installed in 2007 – have reached the end of their useful life • If not replaced, meter reads will not be accurately transmitted to the Finance Department • Staff recommends replacing them with a cellular-based transmitter in 2022 • Cost: $2.5 million • Funded through an alternative revenue bond • Will add $.60 to a water bill Page 10 of 32  Water Main Replacement Program Page 11 of 32  Existing Water System Brookfield’s water system includes: • 1,000,000 gallon elevated tank • 60.1 miles of water main • 750 fire hydrants • 800 valves • Approximately 6,600 water services • Pump Station and reservoirs operated by BNRWC Page 12 of 32  Existing Water System • Current estimated replacement value of water system is $83,000,000 • One of Brookfield’s most valuable assets Page 13 of 32  Existing Water System Age of Water Main Length (miles) Percentage of Total Length 0 – 20 Years 8.95 14.9% 21 – 40 Years 5.87 9.8% 41 - 60 Years 2.52 4.2% 61 - 80 Years 12.07 20.1% 100+ Years 30.73 51.1% Totals 60.14 100.0% Page 14 of 32 Page 15 of 32  Water Main Replacements • 51% of our water mains are over 100 years old • No precisely defined life span; but engineers widely assume 100 years is the reasonable service life • Good news: no significant main break history • Bad news: the mains will eventually fail – and they are expensive to replace Page 16 of 32  Replacement Options • A) Replace 100+ year old mains over 50 years • Total Cost: $65 million • Annual Cost: $1.3 million • Would replace approximately 5 blocks of main per year • Required water rate: $13.50/1,000 gallons • B) Replace oldest mains over 75 years • Total Cost: $65 million • Annual Cost: $865,000 • Would replace approximately 4 blocks of main per year • Required water rate: $12.72 • C) Replace oldest mains over 100 years • Total cost: $65 million • Annual Cost: $649,000 • Would replace approximately 3 blocks of main per year Page 17 of 32 • Required water rate; $12.22 • Staff recommends Option A  POSSIBLE FINANCING OPTIONS 1. Low interest rate loan from the Illinois Environmental Protection Agency (IEPA). 2. Alternate revenue bond issue (ARS). 3. Debt certificates. Page 18 of 32  IEPA LOW INTEREST LOAN • Current interest rate: 1.35%. • AMI project allowable for IEPA low interest rate funding. • Application process is lengthy. • If approved, loan would be approved in 2022, for receipt in 2022/2023. Application filing does not ensure that the grant will be awarded. Page 19 of 32  ALTERNATE REVENUE SOURCE (ARS) GENERAL OBLIGATION BONDS • Current net interest cost estimated at 1.70%. • Would need to provide 125% of largest principal and interest payment – an additional $270,000 in revenues annually or 60 cents per thousand gallons. • Replaces the ARS bonds of 2009 which matured in December 2019. • Needs backdoor referendum approval. Page 20 of 32  Staff Recommendation • Issue Alternate Revenue Bond to fund MTU replacement • Board authorize staff to begin application process for IEPA loan program to fund water mains • No guarantee of acceptance in IEPA loan program. • IEPA loan application process is bureaucratic and lengthy. • The difference in interest cost between ARS and IEPA loan is approximately $6,000 a year (given the rates provided above) to fund MTUs replacement Page 21 of 32  Components of Typical Water Rate 1. Cost to Purchase Water from Supplier 2. Recovery Cost 3. Equipment and Maintenance Costs 4. Operational Costs 5. Capital Improvement Costs Page 22 of 32  Current Water Rate Cost of Water (from BFNRWC) $ 5.74 Recovery Cost $ 1.84 Equipment and Maintenance Costs $ 0.30 Operational Costs $ 2.52 Capital Costs $ 1.28 Current Water Rate (as of July 1, 2021) $11.68 Page 23 of 32  Previous Capital Improvement Programs • Current Rate generates $556,000 per year for capital improvements • Would allow for replacement of 1,400’ of water main per year or 14,000’ in 10-year period • Brookfield has replaced 5,300’ of water main in last 10 years • Remaining Capital Improvement Funds were used for other capital improvement needs (e.g. Stormwater Pump Station, Sewer Repairs on Street Improvement Projects) Page 24 of 32  Current Water Rates in Nearby Communities Communities in blue are members of the Brookfield-North Riverside Water Commission Community Rate per 1,000 Gallons Lyons $11.00 Westchester $11.32 Brookfield (current as of July 1, 2021) $11.68 La Grange $12.66 North Riverside $13.60 Riverside $14.00 Western Springs $14.00 Page 25 of 32 La Grange Park $15.37  Recommendation for New Water Rate Staff recommends Option A – replace all 100+ year-old water mains in 50 years. Cost of Water (from BFNRWC) $ 5.74 (effective 7-1-2021) Recovery Cost $ 1.84 Equipment and Maintenance Costs $ 0.30 Operational Costs $ 2.52 Capital Improvement Costs $ 3.31 ($1.28 currently) Proposed Water Rate $13.71 ($11.68 currently) Page 26 of 32  Recommendation for New Water Rate Increased component for capital improvements will provide funding for the following: • Replace all 100+ year-old water mains during the next 50 years • Replace MTU’s on water meters • Future maintenance of the elevated tank (e.g. cleaning, painting, etc.) Page 27 of 32  Impact of new rate per Household • Average Residential Usage: 7,856 gallons per bimonthly billing cycle • Increase of $14.61 per bill • Annual increase of $87.66 • 34% of households receive a minimum bill • Minimum Residential Usage: 4,987 gallons per bimonthly billing cycle • Increase of $9.28 per bill • Annual increase of $55.68 Page 28 of 32  Current Water Rates in Nearby Communities Communities in blue are members of the Brookfield-North Riverside Water Commission Community Rate per 1,000 Gallons Lyons $11.00 Westchester $11.32 La Grange $12.66 North Riverside $13.60 Brookfield – Proposed Rate $13.71 (17.42% Increase) Riverside $14.00 Western Springs $14.00 Page 29 of 32 La Grange Park $15.37  Recommendation for New Water Rate After 50 Year Water Replacement Program – Year 2072 • Water mains have continued to age during replacement program • 14.59 miles of water mains are 90+ years old (reduction from 30.73 miles 100+ years old in 2021) • 24.3% of water mains are 90+ years old (reduction from 51.1% that are 100+ years old in 2021) Page 30 of 32  Analysis of Status Quo If we decide not to increase the Capital Improvements component of the water rate: • Need to ensure as a minimum we expend the $556,000 towards annual water main replacement • Average age of water mains in system will increase from current average age Page 31 of 32  Analysis of Status Quo Following issues will occur: 1. Higher frequency of water main breaks and repairs a. More frequent service interruptions to customers b. Increased water loss c. Increased cost for water main repairs 2. Risk that there will be a higher frequency of water main breaks and repairs 3. May lead to a need to fund large amounts of water main replacement over short period of time Page 32 of 32