City Council Study Session

CITY COUNCIL STUDY SESSION MUNICIPAL BUILDING CONFERENCE ROOM 201 WEST GRAY, NORMAN, OK MAY 14, 2019 4:00 P.M. 1. UPDATE ON THE PROGRESS OF THE MEMORANDUM OF UNDERSTANDING REGARDING THE UNIVERSITY NORTH PARK TAX INCREMENT FINANCE DISTRICT. 2. DISCUSSION REGARDING THE FYE 2020 CITY OF NORMAN BUDGET – ENTERPRISE FUNDS AND OTHER BUDGET RELATED ITEMS.  CITY OF NORMAN Fiscal Year 2019-2020 Budget May 14, 2019 Enterprise Funds  Fiscal Year 2019-2020 Summarized Budget Calendar • Council Finance Committee Budget Discussions • Council Capital Budget Study Session (11/20/2018) • Finance Committee Mid-Year Budget Review (1/17/2019) • Council Capital Budget Study Session (2/26/2019) • Council Budget Study Session – General & Special Revenue Funds (4/16/2019) • Council Budget Study Session – Capital Funds (4/23/2019) • Public Budget Hearing (4/23/2019) • Council Budget Study Session – Enterprise Funds (5/14/2019) • Council Budget Study Session –Follow-Up (6/21/2019) • Public Budget Hearing (5/28/2019) • Council Budget Study Session – Optional Follow-Up (6/4/2019) • Council Considers Budget For Adoption (6/11/2019)  ENTERPRISE FUNDS Operated in a manner similar to private business enterprises, where the intent of the City is that the costs of providing goods or services to the general public is financed or recovered primarily through user charges. • WATER • SANITATION • WATER RECLAMATION – SEWER MAINTENANCE – NEW DEVELOPMENT EXCISE TAX WATER FUND  Water Production Over 4.8 billion gallons produced annually Over 600 miles of distribution pipes Production runs 24 hrs./ day 365 days / year  Water Line Maintenance Maintain over 600 miles of water main Maintain almost 6,000 Fire Hydrants • Repair an average of over 180 water line breaks each year • Replaced over 8,000 feet of old deteriorated/ undersized water main • Install/replace over 20 fire hydrants each year • Maintain over 40,000 water meters  Water Rate History  1999 Inverted block rate adopted to encourage conservation. Higher tiers affect 25% of residential customers. Progressive rate structure charges higher rates to highest water users.  March 2006 water rate increase approved  August 2010 water rate increase vote failed  January 2015 increased water rates to current level to fund WTP Improvements and additional 2 MGD of groundwater supply Current Residential Rate Structure Gallons Rates (per 1 k gal.) Base Fee $6.00 0 – 5,000 $3.35 5,001 – 15,000 $4.10 15,001 – 20,000 $5.20 Over 20,000 $6.80 Summer Surcharge during July and August $0.35/1,000 gallons for usage over 20,000 gallons /month Mandatory odd /even day watering rotation system  Water Rates Residential Water Monthly Charge for 10,000 gallons Lawrence, KS Lubbock, TX Denton, TX Tulsa Broken Arrow Stillwater Ponca City Ardmore Bartlesville Lawton Oklahoma City Enid Edmond Moore Midwest City Norman $0 $8 $16 $24 $32 $40 $48 $56 $64 $72 $80 $88  Water Fund Major Revenue Assumption • User fee revenues are estimated at a growth rate of 1.9% per year for projected customer growth. • Effective August 1, 2016, water connection charges were increased for all meter sizes and are as follows: – ¾” meter $1,000 – 1” meter $1,667 – 2” meter $6,667  Water Fund Expenditure Assumptions • Interim water purchase contract with Oklahoma City = $1,213,330 budgeted 1 MGD (take or pay) at $2.22/1,000 gal in 2019, 5% increase in 2020, etc. • COMCD raw water purchase =$1,136,441 (decrease of $11,873 or 1%) COMCD will fund replacement of Del City raw water line in near future. Norman share is 43% • $742,332 included in FYE 20 budget for fleet related replacement purchases and other equipment (Water Treatment and Water Line Maintenance) • FYE 20 Ending Fund Balance estimated to be $8,543,588 (construction timing) (balance in FYE 22 negative $2,252,000)  Water Projects • Major projects completed in FYE 19 – Crossroads Area Waterline Replacements, $1.35M – Segment D 24-inch Waterline Phase 4 (Chautauqua: Lindsey to Timberdell with OU), $850K – Pilot Study for Chromium Treatment: $340K – 24th Avenue NE Waterline Relocations, transfer $1.4M PW – Rock Creek Waterline Relocations, $450K PW – Waterline Replacement adjacent to Library $80K PW  Water Projects • Major projects from FYE 19 to be complete in FYE 20 – Phase II Water Treatment Plant Improvements (start in June 2017) including UV disinfection, ozone treatment, new chemical building & equipment storage; total project with engineering is $35.6M to be complete in January 2020 – Wellfield Development and Permitting $1.4M – FYE15 Water Wells/Supply Lines, $10.7 million through FYE 21 – Backwash Tower Rehabilitation $280K  Water Projects • Major projects from FYE 19 to be complete in FYE 20 – Robinson WL, Phase II (Brookhaven Creek to Water Tower) $3.2M – Robinson WL, Phase III (24th NW to Flood) $3.9M – Robinson WL, Phase IV (24th NE to WTP) $2.3M – Segment D 24-inch Waterline Phase 5 (Timberdell: Chautauqua to Jenkins & Jenkins: Timberdell to Constitution), $4.5M – Parsons Waterline (west of Campus) $860K – Gray Street Waterlines (Flood to Porter with side streets) $750K – Tonhawa Waterlines (Flood to Webster with side street) $550K  Water Projects • Major New Water Projects for FYE 20 • WL Replacement, Flood-Robinson to Venture, $3.5M • James Garner Extension WL Replacement, Library to Robinson, $930K • New Building for Line Maintenance, $1.6M from Water Fund, equal amount from Water Reclamation Fund • Hot Soils and Urban WL Replacements Completed by Line Maintenance Crews: $300 to $400K Annually  Water Projects • Future Water Projects (Subject to Funding) • Hall Park WL Replacements $440K in FYE21 (delayed from FYE20) • Flood Avenue WL (Gray to Robinson) $1.9M , FYE 21 to FYE 22 • Annual Water Line Replacement Program, $2.9M annually FYE 22 (delayed from FYE21) • SE Norman Water Tower $3.5 M to begin in FYE 23 (delayed from FYE22) • Robinson 30” WL (24th NE to Flood) $5.3 million, FYE 23 • Alameda 24” WL (24th NE to Carter) $3.5M begin in FYE 24 (delayed from FYE23) SANITATION FUND  Sanitation Fund Curbside Recycling • Curbside Recycling started in 2008 • A new 5-year Curbside Recycling contract with Republic Services started in August 2018 • Contract rates include 3% per year increase • Single stream curbside recycling every other week • Participation rate continues around 90% • Tons collected each month around 430 tons  Sanitation Rates Services included in the Residential Sanitation City of Norman Sanitation Monthly charge monthly charge: Lawrence, KS CR Lubbock, TX •Spring/Fall Clean-up Days Denton, TX CR Tulsa CR •1 x week collection Broken Arrow Stillwater CR •1 x week Yardwaste collection Ponca City Ardmore • Free brush Drop-Off Bartlesville Lawton •4 Recycling Drop-Off Centers Oklahoma City CR Enid • Free Compost (as available) Edmond CR Moore •Residential Curbside Midwest City CR Norman CR Recycling $0 $5 $10 $15 $20 $25 $30 CR = Curbside recycling fee included  Sanitation Fund Major Revenue Assumptions • Sanitation rate increased in April 2011 to $17.20 per unit per month which includes $3 per month curbside recycling charge and $0.20 for the Oklahoma Solid Waste Management Charge • Additional Poly Cart is $7 per month • Revenues have been estimated at a growth rate of 1.7% per year  Sanitation Fund Major Expenditures • $4,522,060 included in FYE 20 budget for fleet related replacement purchases • Landfill tipping fees reduced during FYE 2019 by 4.6% with a new five year contract. Annual increases will be around 2.8%. Annual expense around $2 M. • FYE 20 Ending Fund Balance is $7,659,347 • Proposed Budget Amendment – $1.58 M pay off bond six years early (2010, $3.59M bond to build transfer station)  Sanitation Fund Major projects from FYE 19 to be complete in FYE 20 • Completed Eastside Recycling Center at Library: $160K • Composting Reuse Pump Station $480K to bid soon • Class A Sludge Co-Composting project $1,242,000 (equal funding from Water Reclamation Fund) (start as a pilot project). • Household Hazardous Waste Facility (Material Recovery Facility) $1 M • Container Maintenance Facility, $455,000 • Truck Washing Facility, $460,000 WATER RECLAMATION FUND  Water Reclamation Facility Plant Performance Average Flow 10.3 MGD CBOD 2.0 mg/L – 98% Removal TSS 5.5mg/L – 98% Removal Ammonia 0.6 mg/L – 99% Removal Fecal Coliform 11MPN/100 mls – Permit 1000  Sewer Line Maintenance • Maintain over 500 miles of sewer lines • Maintain almost 12,000 manholes • Clean over 1.5 million feet of sewer lines each year • Inspect and record over 200,000 feet of sewer lines • Over the last 20 years reduced Sanitary Sewer Overflows by 90%  Water Reclamation Rates Residential Water Reclamation Monthly charge for 10,000 gallons Lawrence, KS Lubbock, TX Denton, TX Tulsa Broken Arrow Stillwater Ponca City Ardmore Bartlesville Lawton Oklahoma City Enid Edmond Moore Midwest City Norman $0 $8 $16 $24 $32 $40 $48 $56 $64 $72 $80 $88 $96  Water Reclamation Fund Major Revenue Assumptions • Residential wastewater service rates were raised in November of 2013. Current rates are $5 base + $2.70 per 1,000 gallons of treated wastewater. • User fee revenues for FYE 21 are budgeted at a projected 1.9% increase from FYE 20 Estimate. • FYE 20 Ending fund balance projected $6.46 M  Water Reclamation Fund Expenditure Assumptions • Major Projects for FYE 20 – Reuse pilot study $1.6M – Class A Sludge Improvements, $1.24M (shared with Sanitation) – Line Maintenance Building, $1.6M (shared with Water Fund) – Septage Receiving Station, $525k – Land purchase, $450k • Future Major Projects – Non-potable Effluent Reuse System, $3.1M in FYE 21 – WRF Phase 3 BNR Improvements for Reuse, $88M, beginning in FYE 23 and continuing through FYE 26 SEWER MAINTENANCE FUND • All revenue is from a $5 per month sewer maintenance rate approved in 2001 and the $.50 per month Capital Improvement Charge • All Sewer Maintenance Rate projects must be on a pay-as- you-go basis • Major projects in FYE 20 Bishop Interceptor Replacement $2.6M (with $0.9M Sewer Development Fund) • Since 2001, over 433,000 feet of sewer line have been rehabilitated NEW DEVELOPMENT EXCISE TAX FUND Revenue is from new construction building permits based on wastewater generated. New Development Excise Tax Revenue Collections $3,000,000 $2,000,000 $1,000,000 $- FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Est. Proj. Residential Commercial  NEW DEVELOPMENT EXCISE TAX FUND • FYE 20 revenues of $1.7M ($1.3M from residential projects, $0.4M from commercial projects) • Projects: • Completed partial funding of WRF Phase 2 Improvements (approx. $25M) • Summit Valley Interceptor: $140K (with $360K from Water Reclamation Fund) • Bishop Interceptor Replacement Project $940K (with $2.6M Sewer Maintenance Fund)  Total Utility Rates Total Monthly Residential Utility Bills (assuming 10k gallon water usage and 5/8"or 3/4" meter, includes Stormwater fees) Lawrence, KS Lubbock, TX Denton, TX Tulsa Broken Arrow Stillwater Ponca City Ardmore Bartlesville Lawton Oklahoma City Enid Edmond Moore Midwest City Norman * $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 $110 $120 $130 $140 $150 $160 $170 DISCUSSION