Utilities Division Study Session October 22 2015

Utilities Division

October 22, 2015

Study Session

Today’s Agenda

1. Revisiting Utilities Division business principles 20 minutes

2. Role of Utilities in economic development 20 minutes

3. 2016 overall Division budget and organization 20 minutes

4. Discussion and questions 30 minutes

Revisiting Utilities Division Business Principles

Checking in, looking forward

Rates

• Culture

• Continue to live within

our means

Costs

Continue to manage

costs aggressively oExpense growth within our rates

oContinue creativity and refine

and implement discipline

Pursue opportunities to

expand rate base Low marginal cost

opportunities:

Waste to Energy, Water

o Major link between Utilities and

economic development/growth

Sustainable development

Support targeted growth areas

Capacity and Service

Debt and Reserve Levels

Defined levels were critical for bond rating we received

Borrowing levels are less than prescribed in the 2011 Rate Study

Capital Programs

Integrated and risk –

based capital program Integrated approach for highest

ROI

Added value and added

complexity

o Continue risk assessment of Utility

infrastructure

Water System Loss

Waste to Energy Facility

Checking in, looking forward to 2016 and beyond

Environmentally and Financially Responsible

• Meet and surpass environmental requirements while

maintaining affordability of services

• Encourage protection of natural resources through

appropriate rate structures, conservation and recycling

• Allow for growth while maintaining current water and waste

use levels

• Attack water system loss

• Commit portion of revenue growth in Utilities revenue/tax to

incentivize economic development

Role of Utilities in Economic Development

Transportation Roads

Rail

Air

Ports

Intermodal

Business

Climate

Sustainability

Location

Human Capital Labor Pool

Labor Costs/Product.

Training Res./Skill Dev.

Real Estate

Utilities &

Infrastructure

Permitting &

Regulatory

Environment

Everything &

Everyone

Working

Together =

Competitive

Community

Business Resources Innovation

Entrepreneurship

Financing

Incentives

Economic Development

10 Key

Competitiveness

Factors

Transportation Roads

Rail

Air

Ports

Intermodal

Business

Climate

Sustainability

Location

Human Capital Labor Pool

Labor Costs/Product.

Training Res./Skill Dev.

Real Estate

Utilities &

Infrastructure

Permitting &

Regulatory

Environment

Everything &

Everyone

Working

Together =

Competitive

Community

Business Resources Innovation

Entrepreneurship

Financing

Incentives

Economic Development

10 Key

Competitiveness

Factors

Business & Environmental Interests are Aligned

First Rule of

Business:

First Rule of

Environmental

Science:

Protect

Your

Greatest

Assets

Protect

Your

Greatest

Assets

River and aquifer are regions greatest assets & greatest competitive advantage.

Evolution of Integration

• Integrated Clean Water

Plan

• Integrated: streets,

parks, water, sidewalks,

ped/bike, trees, etc.

• Rates tied to CPI

• CNG Conversion

• Operating WTE Facility

• Cleaner River, Faster

• Formalized capital

planning

• Reorganized around

integration

• Set multi-year utility

rates

• Sold 20-year bonds

• 20-year street levy

Sustainable Natural Resources

Integrated Approach

Environmentally &

Financially Responsible

Monthly Utility Cost Comparison*

Spokane Seattle Portland

Water $17.86 $53.75 $67.26

Wastewater $28.06 $94.72 $76.00

Stormwater/ Drainage $3.95 $29.20 $27.16

Integrated Capital $26.34

Solid Waste & Recycling $28.42 $76.20 $35.65

MONTHLY $104.63 $253.87 $206.07

ANNUALLY $1,255.56 $3,046.44 $2,472.84

*Example is based on usage for a family of four in a single residential home.

*Charges are for inside City residents for each location.

*Water consumption is assumed to be 50 gallons/day per person—or 8 units per month.

*Example uses as close to 68-gallon cart as possible depending on the options of each City.

2016 Overall Division Budget and Organization

Wastewater

Water

Integrated Capital

Solid Waste Collection

Solid Waste Disposal

Budgetary

Org. Chart

Utility Billing/Admin (Program)

Environmental Programs (Program)

121 FTE

$44,495,286

174 FTE

$34,477,862

157 FTE

$39,695,503

14 FTE

$133,933,399

76 FTE

$28,108,224

24 FTE

$5,237,320

3 FTE

$395,393

Utilities Division

605 FTE

$298,037,157

Fleet Services 36 FTE

$11,694,170

Mike Taylor

Dan Kegley Steve Burns

Katherine Miller Kara Heatherly

Scott Windsor Corin Morse

Chuck Conklin Ken Gimpel

Gene Jakubczak Steve Riggs

Rick Romero Marlene Feist

7 Departments

•6 Department Heads

•7 Additional Exempts

Ken Gimpel,

Assistant Utility

Director

Fleet

Services

Solid Waste

Collection

Utility Billing

Chuck Conklin,

Director

Solid Waste

Disposal

RPWRF

Dan Kegley,

Director

Wastewater Ops

Water Ops

Upriver Dam

Katherine

Miller, Director

Integrated

Capital

Marlene Feist,

Director,

Strategic

Development

Utilities Division

Rick Romero

7 Departments

•6 Department Heads

•7 Additional Exempts

Gene Jakubczak

Scott Windsor

2016 Personnel Impact

Water Solid Waste Disposal

Education Coor. (Full-Time) +0.5 Safety Coordinator +1

Inventory Control Specialist +1 Cash Acct. Clerk I +1

Wastewater Assist Plant Operator +2

Project Coordinator (Taylor) +1 Crane Operator -1

Principal Engineer (Hendron) +1 Ash Operator -1

Department Head (Arnold) -1 Maintenance Specialist -2

GIS to Desktop -1 Solid Waste Collections

Utilities Division Customer

Service Manager

+1

Net Change +2.5

Division Operating Budget Summary

2014

Adopted

2015

Adopted

2016

Program

% Change

(‘15 /‘16)

Wages & Benefits 52,125,943 54,394,424 55,626,208 2.2%

Supplies & Services 58,680,863 42,820,367 41,679,802 -2.7%

Interfund 28,782,582 34,089,313 33,950,491 -0.4%

Intergov’tl Prof Srvs 36,573,759 37,649,595 38,886,140 3.2%

Other 18,604,706 12,166,372 10,776,467 -12.9%

Operating Expenses 194,767,853 181,120,071 180,919,108 -0.1%

Capital 92,178,790 110,679,900 101,472,136 -9.1%

Debt Service 1,517,237 1,647,749 15,645,913 *89.5%

Total 288,463,880 293,447,720 298,037,157 1.5%

FTE# 594 602.50 **605

*Revenue Bond Principal & Interest/ Nelson Center (Operating Transfer out from ICM to Debt Svcs)

* *After Online Budget Planner closed 2.5 positions were added for a total of 605 (See Personnel Impact)

Next Study Session: October 29th

Solid Waste Collection

Solid Waste Disposal

Water

Wastewater

Budget Summaries and Personnel Impacts

2016 Rate Review

Accomplishments and Strategic Direction

2016 Projects and Capital Program

Performance Measures

Discussion and Questions