Irving Water Sewer Update 2010-07-07

8/9/2019 Irving Water Sewer Update 2010-07-07

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Water and Sewer System UpdateGoal 8: Sound Governance

Goal 9: Enhance and Sustain InfrastructureCity Council Work Session

July 7, 2010


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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

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Overview

Whats Needed?

Why Invest in Infrastructure?

Capital Improvement Plan Financial Update

Recommendation


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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


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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


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Importance of Water and Sewer

Infrastructure

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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


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Water Infrastructure Grades

8


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News Video

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10/23

Water Infrastructure Problem

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..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


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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

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Irving has more repairs, but replaces pipes at half therate

Lean Six Sigma projects increasing repair capabilities


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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


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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


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Band Aid Repairs-Britain 5/2/10

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Three pipe failures


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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


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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


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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


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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

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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


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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


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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


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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


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Questions

Documents

Irving Water Sewer Update 2010-07-07