Notice of Committee Meeting€¦ · for South Urban Region District Adopted Increases ; Meeting Date: April 30, 2019 ; Subject: Pay Adjustment and Self-Insured Health Plan for FY

MEETING NOTICE The Finance Committee of the Metropolitan Sewerage District of Buncombe County will meet in the Boardroom of the W. H. Mull Building located at 2028 Riverside Drive, Asheville, NC on the following date:

THURSDAY, MAY 2, 2019 @ 9:00 AM

AGENDA 1. Third Quarter Budget to Actual Review for FY 2018-2019 2. Pay Adjustment & Self-Insured Health Plan for FY 2019-2020 3. Capital Improvement Program for FY 2020-2029 4. MSD Business Plan/Financial Forecast 5. MSD Rates & Survey Data Comparisons 6. FY 2019-2020 Budget & Proposed Sewer Rates 7. Schedule of Sewer Rates & Fees for FY 2019-2020

Finance Committee Members: E. Glenn Kelly, Chairman Jackie W. Bryson Jim Holland Esther Manheimer Al Whitesides Gwen Wisler

Notice of Committee Meeting

METROPOLITAN SEWERAGE DISTRICT OF BUNCOMBE COUNTY, NORTH CAROLINA 2028 Riverside Drive W. H. Mull Building Asheville, North Carolina 28804 Phone: (828) 254-9646 Website: www.msdbc.org

METROPOLITAN SEWERAGE DISTRICT OF BUNCOMBE COUNTY

Meeting Date: May 2, 2019

Submitted By: Thomas E. Hartye, PE., General Manager

Prepared By: W. Scott Powell, CLGFO, Director of Finance

Subject: Third Quarter Budget to Actual Review – FY 2019 Attached for the Board’s information is a budget to actual comparison of the revenues and expenditures for the third quarter of the fiscal year ending June 30, 2019. This information is based on cash revenues and invoices received prior to April 1, 2019 and may not include some accruals of revenue and expenditures as explained below.

The attached sheet summarizes revenues and expenditures per the budget summary, comparing actual plus encumbered expenditures to budgeted amounts. The notes are added to anticipate any questions or comments concerning amounts reported. Additional notes to aid in the analysis of the District’s financial performance for the fiscal year are as follows:

Domestic revenue is at budgeted expectations. Industrial revenue is trending better than budgeted expectations due to a temporary increase in revenue from one industrial user. Staff monitors consumption trends as they have a direct effect on the District’s current and future revenue projections.

Facility and Tap Fees are budgeted conservatively and can be significantly higher than budget. Facility and Tap fees are above budgeted expectation due to receiving unanticipated revenue of $1.9 million from four commercial/residential developers as well as a general residential development exceeding budgeted expectations.

Interest and miscellaneous income are above budgeted expectations. Actual short-term interest rates were better than anticipated for the fiscal year.

Rental income reflects expected earnings.

INFORMATIONAL ITEM Finance Committee

Discussion

Background

Meeting Date: May 2, 2019 Subject: Third Quarter Budget to Actual Review – FY2019 Page 2

O&M expenditures are below 75% of budget. The expenditures include encumbered amounts, which will be spent in the fourth quarter.

Bond principal and interest expenditures are reflected at 75%. This will aid the user to properly assess the District’s overall debt service commitments. Actual amount spent is 23.7%, due to the timing of the District’s debt service payments. The District is required to make a semi-annual interest payment on January 1, 2019 and a principal and semi-annual interest payment on July 1, 2019.

Amounts budgeted for capital equipment and projects are rarely expended proportionately throughout the year and are expected to be fully spent prior to the end of the year.

None – Informational only.

Staff Recommendation

Meeting Date: May 2, 2019 Subject: Third Quarter Budget to Actual Review – FY2019 Page 3

Budget to Actual Revenue and Expenditure Report ~ For the Nine Months ended March 31, 2019 UNAUDITED—NON-GAAP

Budget

Actual to Date % Budget to

Actual

REVENUES Domestic User Fees 1 $ 32,431,584 $ 25,668,378 79.15% Industrial User Fees 3,422,373 2,872,634 83.94% Facility Fees2 2,000,000 4,318,570 215.93% Tap Fees3 175,000 477,945 273.11% Billing and Collection 816,660 609,172 74.59% Interest and Misc. Income 1,164,716 1,535,122 131.80% Employee Contribution to Health Ins. 421,467 274,677 65.17% City of Asheville (Enka Bonds) 35,000 - 0.00% Rental Income 71,641 51,079 71.30% Use of (Contributions to) Available Funds4 10,243,546 5,917,439 57.77% Total Revenues5 $ 50,781,987 $ 41,725,017 82.16%

EXPENDITURES Operations and Maintenance 6 $ 16,875,154 $ 12,201,842 72.31% Bond Principal and Interest7 9,448,115 7,086,086 75.00% Capital Equipment (Other than O&M)6 966,000 577,290 59.76% Capital Projects6 22,492,718 21,859,798 97.19% Contingency 1,000,000 - 0.00% Total Expenditures $ 50,781,987 $ 41,725,017 82.16%

Notes: 1. Revenues are accounted for on the cash basis method 2. Increase due to unanticipated revenue from three developments at $1,971,000 3. Increase in number of Taps requiring Pavement Disturbance 4. Pay-as-go funds to be used for CIP 5. Budget-to-Actual Ratio does not include use of available funds 6. Includes encumbered amounts as well as actual insurance expenditures 7. Bond principal and interest expenditures are reflected a 75%. Actual spend amount is 23.07%.

METROPOLITAN SEWERAGE DISTRICT OF BUNCOMBE COUNTY Meeting Date: April 30, 2019

Submitted By: Thomas E. Hartye, P.E., General Manager James A. Hemphill, SPHR, Human Resources Director W. Scott Powell, CLGFO, Director of Finance

Subject: Pay Adjustment and Self-Insured Health Plan for FY 2019-2020

Staff Recommendation: That the MSD Board fund and approve: 2.5% wage adjustment for all employees 6.5% increase for the Self-Funded Medical Plan% 15.5% increase in state required contributions for the NC an average of 6.5%

The Division Directors and Employee Advisory Committee concur with these recommendations.

Background

As the Board has requested, the recommendations reflect a composite view of both salary and benefit programs costs. Each year, during the budgetary process, the Personnel Committee considers cost of living and merit pay salary adjustments with the goal of keeping MSD’s compensation program competitive with other area employers and to meet the objective of retaining skilled, high performing employees. Inadequate wages lead to high turnover levels and increased costs from training new employees as well as loss of efficiencies until they are fully proficient. The Personnel Committee also considers benefits as an integral part of budgeting for a comprehensive compensation package. The Employee Advisory Committee (EAC) has reviewed the staffs’ recommendations and endorses them. In April 2005, the Personnel Committee reaffirmed the policy of annually adjusting the labor grade ranges, based on recommendations of several consultants. To confirm that MSD is providing a competitive compensation program, we conducted a wage survey in 2015, minimal changes were required.

Staffing Levels

MSD management has endeavored to effectively maintain the reduced staffing levels. As a vacancy occurs, it is evaluated to determine the impact on efficient and effective operations. Frequently MSD reengineers, reorganize, and reassigns duties or implements technology applications to help control personnel costs. At other times, a position may be added to support work needs or safe work practices. MSD’s workforce continues to average 46 years of age and has 12.5 years of service with the District. MSD’s staff is considered extremely skilled and responsive.

Personnel Committee Action Item Personnel Committee

Meeting Date: April 30, 2019 Subject: Pay Adjustment and Self-Insured Health Plan for FY 2019-2020 Page 2

Health Insurance

In March, the District’s insurance consultants indicated that medical and drug costs would be lower than previous years but still significant. U.S. medical cost “trend” is projected to be 6 to 7%. Drug “trend” is estimated at 7-9%, with specialty drugs exceeding 20% increases. It is important to keep in mind that health plan cost increases continue to significantly outpace general inflation and average wage increases. Attachment # 1 provides actual and projected medical costs for MSD. Significant cost drivers for MSD continue to be rising medical inflation costs, lack of hospital competition and increasing drug costs (both specialty and generic). In 2019 many large pharmaceutical companies implemented higher drug costs for over 1000 prescriptions. Several years ago, we rebuilt the medical insurance plan. Based on the changes we made, savings were realized in brokerage fees, drug costs, claims experience and reinsurance fees. Over the last 5 years the medical plan has had significant expenditures that have reduced our insurance reserve. This insurance reserve allows for a smoothing of costs during adverse times, such as these. Last year, both the Board and Employees increased their contributions with the goal of growing the reserves. In response to the increases in medical costs, MSD management has taken the following actions, with which the Employee Advisory & Wellness Committees concurred: Partnering with Park Ridge Hospital and Associates to offer higher discounts that save the District and employee’s significant costs; Working with the Pharmacy Benefit Manager (PBM) has reduced drug costs; Requiring that working spouses be covered as “primary” by their employer’s insurance, before they can be

covered by MSD’s insurance;

We continue to offer several well received Health & Wellness programs including: House Calls, an on-site nurse-practitioner available at zero cost to the employee; medical and nutritional training classes through Mission Hospital and AB Tech; Wellness activities that encourage healthier lifestyles; on-site “Asheville Project” services; required physicals for all adults covered by MSD’s medical insurance. Additional on-site programs include: a monthly health newsletter, smoking cessation options, flu and tetanus shots, training on industry medical issues, Health Days and increased use of the workout & weight rooms.

Salary & Benefit Discussion

The District has attempted to provide employees with competitive wages and benefits as a means of retaining and rewarding high-performing employees. The benefit to MSD of keeping professional and motivated employees has been illustrated repeatedly over the past years.

Consumer Price Index (CPI) for South Urban Region

District Adopted Increases


Salary & Benefit Discussion (continued)

Over 60% of MSD employees have earned technical certifications above their job requirements. MSD employees have continued to earn national and state awards for ISO 14001, the AMSA Environmental Achievement Award, National and North Carolina GIS recognitions, NC “Operations Challenge” and the NACWA “Excellence in Management” award, among others. A summary of the last 10 years’ Consumer Price Index compared with actual and proposed FY 2019-20 cost of living and merit raises is summarized below:

2008 0.0% FY 2009-10 0.0% 2009 2.9% FY 2010-11 2.9% 2010 2.7%* FY 2011-12 3.0% 2011 3.9%* FY 2012-13 4.0% 2012 2.1%* FY 2013-14 2.1% 2013 1.5%* FY 2014-15 2.5% 2014 1.6%* FY 2015-16 3.0% 2015 0.5%* FY 2016-17 3.0% 2016 2.0%* FY 2017-18 3.0% 2017 1.89%* FY 2018-19 3.0% 2018 1.50%* FY 2019-20 2.5% PROPOSED

*CPI-W for “Urban Wage Earners and Clerical” for the South Urban region

Cost of Living The District obtains the cost of living data from the Bureau of Labor Statistics for the South Region. The Consumer Price Index increased by 1.50% for “all urban consumers and for wage earners and clerical workers” during the period of December 2017 to 2018.

Private Sector Each year several international consulting firms (Mercer, Towers Watson, Kiplinger, the Conference Board, Hay Group, World at Work, Aon Hewitt, the Economic Research Institute, Price Waterhouse Cooper) survey thousands of companies for projected pay increases for the next year. Many private sector firms granted raises averaging 2.7 - 3.3% in 2018 and are planning increases of 3% or more in 2019.


Agency Comparisons Attachment # 2 provides a listing of our benchmark agencies showing the past years’ increases, as well as actual and projected increases.

Fiscal Impact

The proposed salary and benefit adjustment costs are approximately $564,000 higher than last years’ budget request in this area.


Therefore, to keep MSD competitive in the relevant Labor Market, the staff requests that the Personnel Committee approve the recommendations:

2.5% wage adjustment for all employees

6.5% increase for the Self-Insured Medical Plan

15.5% increase in state required contributions for the NC Retirement Plan

Committee Recommendation

ATTACHMENT #1

Actual Actual Actual Actual Actual Actual ActualEstimated

Actual BudgetFY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Beginning Balance 641,105$ 909,289$ 1,150,083$ 1,344,342$ 1,142,038$ 626,684$ 1,168,265$ 1,198,068$ 1,194,088$

Income:Employer Contribution 1,717,936 1,735,116 1,735,116 1,735,116 1,735,116 1,908,628 2,051,775 2,185,141 2,327,175Employee Contributions 418,069 401,522 402,139 394,846 399,412 360,418 382,579 344,907 344,907Transfer from Other Insurance Funds 357,240 47,000 98,000 310,381 278,500 735,800 225,000 150,000 150,000Interest 5,720 6,132 4,974 1,157 2,926 5,982 15,701 30,184 30,500

Total Income 2,498,965$ 2,189,770$ 2,240,229$ 2,441,500$ 2,415,954$ 3,010,828$ 2,675,055$ 2,710,232$ 2,852,582$

Total Funds Available 3,140,070$ 3,099,059$ 3,390,312$ 3,785,842$ 3,557,992$ 3,637,512$ 3,843,320$ 3,908,300$ 4,046,670$

Expenses:Claims Paid 1,739,643 1,582,293 1,676,381 2,231,754 2,544,004 2,051,542 2,201,519 2,267,053 2,414,412Fixed Costs 491,138 366,683 369,589 412,050 387,304 417,705 443,733 447,159 476,224

Total Expenses 2,230,781$ 1,948,976$ 2,045,970$ 2,643,804$ 2,931,308$ 2,469,247$ 2,645,252$ 2,714,212$ 2,890,636$

Ending Balance 909,289$ 1,150,083$ 1,344,342$ 1,142,038$ 626,684$ 1,168,265$ 1,198,068$ 1,194,088$ 1,156,034$

Number of Participants 154 154 155 158 158 158 163 163 166

Total Cost per Participant $14,486 $12,656 $13,200 $16,733 $18,553 $15,628 $16,229 $16,652 $17,413

MSD Cost per Participant $11,771 $10,048 $10,605 $14,234 $16,025 $13,347 $13,881 $14,536 $15,336

MSD Contribution Increase 7.50% 1.00% 0.00% 0.00% 0.00% 10.00% 7.50% 6.50% 6.50%

* Employees cost sharing includes premium increases and overall plan modifications.

MSD Self-Funded Health Insurance Plan Projection

ATTACHMENT #2

Local Governments and Utilities:

Town/Utility 2018 2019

Montreat Split between COLA & Merit of 3.5% Split between COLA & Merit of 2.0% - 3.0%

Woodfin 3.0% - 3.5% COLA 5.0% COLA

Weaverville COLA 2.0% & Merit 3.0% COLA 2.0% & Merit 3.0%

Black Mountain 3.0% COLA & Maybe a 2.0% Merit 3.0% COLA

Biltmore Forest 3.0% COLA 3.0% COLA

City of Asheville 2.5% COLA 2.0% COLA

Buncombe County April 1st - 2.2% increase CPI Increase on April 1st Longevity Pay ($100 to 7% of annual salary)

CMUD 3.0% Merit COLA 1.5% & Merit 1.5%

Beaufort - Jasper Water & Sewer 3.0% Merit 3.0% Merit

OWASA

Merit only – - 4.0% for meets expectations - 5.0% for exceeds expectations - 7.0% for above expectations

Merit only - Unknown %

Western Carolina Sewer & Water (REWA)

Merit only - from 1.0% - 3.0% Merit only - Unknown %


Meeting Date: April 23, 2019 Board Meeting Date: May 15, 2019

Submitted By: Thomas E. Hartye, P.E., General Manager

Prepared By: Ed Bradford, P.E., Director of Engineering Hunter Carson, P.E., Assistant Director of Engineering

Subject: Capital Improvement Program Priorities & Review of Ten-Year CIP Document

Background

Enclosed are the Fiscal Year 2020 budget recommendations for the District’s Capital Improvement Program (CIP), as well as projections for the following nine fiscal years. A budget summary showing the entire program is included in the committee package. The full budget document, with detailed information for each project, is posted on the main page of the District’s website (www.msdbc.org). It is also available to the public for viewing and comment.

Capital Improvement Program

The District’s Capital Improvement Program is divided into the following six areas, generally based upon the type of project or expense category: Interceptor & Wet Weather Rehabilitation General Sewer Rehabilitation Private Sewer Rehabilitation Treatment Plant, Pump Stations, and General Capital Improvements Design, ROW, and Construction Management Expenses Reimbursement Projects

In accordance with the State Collection System Permit, the District maintains a CIP, which details necessary system improvements. The state permit requires a minimum of three years in the CIP; however, the District utilizes a ten-year window for more accurate prioritization and planning. The District rehabilitates approximately 40,000 LF of the collection system each year. Major plant projects are guided by the Facility Plan and include the Plant Headworks, High Rate Primary Treatment, and RBC Replacement projects. Construction of the Plant Headworks began in April 2017 and the system is now operational. Construction of the High Rate Primary Treatment project is now underway, with completion expected in early 2021. These projects, totaling $26.6 million, will significantly improve plant performance when complete. Replacement of the RBC’s is the final major plant project and may be regulatory-driven.

Capital Improvement Program Committee

Meeting Date: April 23, 2019 Subject: Capital Improvement Program Priorities & Review of Ten-Year CIP Document Page 2

Reimbursement projects include one Annexation Project from Consolidation, Developer Reimbursements, and NCDOT Reimbursements.

Highlights

Collection System

The District rehabilitates 40,000 LF of sewer line each year. This is accomplished by using both in-house forces and outside contractors. Twenty-seven new collection system projects have been added to the CIP for FY19-20 and beyond. Within the entire program, there are 128 collection system projects which range in length from 92 LF to over 36,000 LF.

Significant collection system projects underway or completed over the past year are the South French Broad Interceptor Lining Project (Phase III of IV), Memory Lane, Hill Street, Dry Ridge Road, and Old West Chapel Road. These projects total over 15,200 LF.

The French Broad/Carrier Bridge PER is at final completion. This important study, along with its hydraulic model of the interceptors and the Carrier Bridge Pump Station, will help define and recommend major improvements within the collection system. These improvements include the replacement/upgrade of the Carrier Bridge Pump Station, the construction of a new equalization tank on the Swannanoa River, and several large interceptors, which are all incorporated into the ten-year CIP. This study is planned to be formally presented to the MSD Board in July 2019.

The District’s Pipe Rating Program is used to objectively prioritize collection system projects within the CIP for each fiscal year. This rating considers overflow history, structural issues, customer service requests, and impacts to surface waters for each project location.

Water Reclamation Facility

The 2015 Facility Plan Update for the treatment plant guides our capital investment in the plant. The Plant Headworks project is substantially complete, and includes new bar screens, fine screens, vortex grit removal, and a storm surge system for peak flows using the existing decommissioned digester tanks. The system is now operational.

Construction of the High Rate Primary Treatment project is now underway. The building foundation is expected to begin in Summer 2019, and full completion is expected in early 2021. The Plant Headworks and High Rate Primary projects total $26.6 million and will significantly improve the plant’s treatment process.


The final recommendation of the Facility Plan, and the most significant, is the replacement of the plant’s biological treatment process - the Rotating Biological Contactors (RBCs). These were installed in the 1980s and have functioned well over the years. They are approaching the end of their functional lifespan and are limited in the kind of treatment that they can provide. Replacement of the RBCs will be a major project - the exact timing of which may be regulatory-driven. It is important to note that this project is now fully incorporated into the District’s ten-year planning window.

Smaller projects recently completed include replacement of the slide gates at the Intermediate Clarifier, and the replacement of the Motor Control Centers (MCCs) for the five large 450 Hp blowers. These blowers are used to turn the RBCs.

Proposed Ten-Year Capital Improvement Program Document

Listed within this document are the specific areas where proposed projects are to occur. Total expenditures for the current Fiscal Year 2019 are estimated at $21.8 million.

The proposed capital budget for FY19-20 is $29,894,818.00 which includes a contingency of $1,000,000.00. The $1,000,000 contingency line item is used for the entire program, rather than having a separate contingency for each project. This is more efficient and continues to provide sufficient reserves for the District’s capital program.

A budget for Reimbursement Projects totaling $736,000.00 is proposed for two (2) projects. One is a Master Plan project located in Woodfin (in two project phases) and the other is for a separate project in downtown Asheville. For these types of projects, the District will reimburse a developer for constructing a system which will serve larger areas upstream of their development.

Total project costs over the ten-year window are estimated at $332.4 million. Costs are updated each year during budget preparation to accurately reflect current bid pricing and market conditions. Included in future years is an inflation factor of 2.90%, which is a ten-year average of the annual increases in the ENR Construction Cost Index. This factor is also updated each year.

Staff will present information on a selection of significant projects within the District’s ongoing Capital Improvement Program, as well as the proposed CIP Budget for FY19-20 and beyond.

Special thanks go to the Engineers, Angel Banks, Cheryl Rice, and the GIS Section for the many hours of preparation necessary to complete the District’s annual CIP budget document.



Endorsement of the Capital Improvement Program budget for Fiscal Year 2019-2020.

Committee Recommendation

Mr. Watts made a motion recommending endorsement of the CIP Budget for FY19-20 in the total amount of $29,894,818. The CIP Committee was unanimous in favor of the motion.

METROPOLITAN SEWERAGE DISTRICT OF BUNCOMBE COUNTY, NORTH CAROLINATEN YEAR CAPITAL IMPROVEMENT PROGRAM

FY 2019-2020 through 2028-2029

FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29

BUDGET FOOTAGE BUDGET FOOTAGE BUDGET FOOTAGE BUDGET FOOTAGE BUDGET FOOTAGE BUDGET FOOTAGE BUDGET FOOTAGE BUDGET FOOTAGE BUDGET FOOTAGE BUDGET FOOTAGE

INTERCEPTOR AND WET WEATHER REHABILITATION

AB Tech Equalization Tank Asheville HC 2019047 N/A 0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Christian Creek Interceptor Buncombe County HC 2011110 24 12,226 $5,755,429 $190,574 $1,950,370 3,668 $3,615,000 8,558 $0 $0 $0 $0 $0 $0 $0 $0

Lower Swannanoa Interceptor Asheville EB/HC 2004040 9 6,500 $6,599,879 $14,879 $0 $32,500 $0 $30,000 $12,500 $3,255,000 3,250 $3,255,000 3,250 $0 $0 $0

Middle Beaverdam Crk. @ I-26 Woodfin OH 2010002 23 2,930 $1,299,830 $7,430 $0 $0 $0 $0 $0 $0 $10,000 $0 $40,500 $1,241,900 2,930

South French Broad Relief Int. Buncombe County HC 2017070 N/A 36,330 $31,250,250 $95,000 $50,000 $0 $5,250 $510,000 $7,635,000 9,082 $7,635,000 9,082 $7,635,000 9,082 $7,685,000 9,084 $0 $0

South French Broad Int. - Lining Biltmore Estate HC 2011033 8 21,913 $4,892,686 $4,059,686 $833,000 3,976 $0 $0 $0 $0 $0 $0 $0 $0 $0

Swannanoa Equalization Tank Swannanoa HC 2019046 N/A 0 $20,525,000 $0 $0 $0 $700,000 $1,400,000 $9,212,500 $9,212,500 $0 $0 $0 $0

Town Branch Interceptor Lining Asheville DP 2019069 81 800 $251,000 $0 $251,000 800 $0 $0 $0 $0 $0 $0 $0 $0 $0

Weaverville Force Main @ Plant Asheville OH 2018259 N/A 2,370 $2,430,000 $0 $2,430,000 2,370 $0 $0 $0 $0 $0 $0 $0 $0 $0

SUBTOTAL 83,069 73,004,074 $4,367,569 $5,514,370 10,814 $3,647,500 8,558 $705,250 0 $1,940,000 0 $16,860,000 9,082 $20,102,500 12,332 $10,900,000 12,332 $7,685,000 9,084 $40,500 0 $1,241,900 2,930

Inflation per ENR Const. Cost Index 2.90% 1.0000 1.0000 1.0000 1.0290 1.0588 1.0895 1.1211 1.1537 1.1871 1.2215 1.2570 1.2934

SUBTOTAL with inflation 83,069 $73,004,074 $4,367,569 $5,514,370 10,814 $3,753,278 8,558 $746,748 0 $2,113,722 0 $18,902,492 9,082 $23,191,399 12,332 $12,939,537 12,332 $9,387,533 9,084 $50,907 0 $1,606,294 2,930



GENERAL SEWER REHABILITATION

Albemarle Commons PS Elimination Asheville OH 2018171 N/A 832 $228,000 $0 $0 $0 $25,500 $0 $202,500 832 $0 $0 $0 $0 $0

Atkins Street Arden HC 2014012 39 1,833 $619,330 $5,480 $0 $0 $0 $2,250 $28,000 $583,600 1,833 $0 $0 $0 $0

Aurora Drive Asheville DP 2017145 53 2,815 $967,000 $10,000 $4,000 $47,000 $906,000 2,815 $0 $0 $0 $0 $0 $0 $0

Beale Road at Copney Lane Asheville DP 2009129 47 4,027 $1,509,925 $15,725 $16,200 $155,000 $0 $1,323,000 4,027 $0 $0 $0 $0 $0 $0

Beaucatcher Rd. @ Kenilworth Rd. E. Asheville SA 2015219 35 1,590 $639,708 $179,408 $460,300 1,590 $0 $0 $0 $0 $0 $0 $0 $0 $0

Bellevue Road S. Asheville DP 2015175 49 1,100 $378,600 $9,600 $0 $7,000 $57,000 $305,000 1,100 $0 $0 $0 $0 $0 $0

Bent Tree Road Asheville DP 2016102 60 1,670 $782,250 $8,250 $0 $70,000 $704,000 1,670 $0 $0 $0 $0 $0 $0 $0

Braddock Way - PRP 20002 Asheville OH 2006025 36 3,848 $1,437,290 $18,353 $0 $0 $0 $0 $1,000 $35,837 $1,382,100 3,848 $0 $0 $0

Buchanan Ave. Asheville SA 2014023 51 2,228 $1,121,400 $28,000 $11,400 $64,000 $1,018,000 2,228 $0 $0 $0 $0 $0 $0 $0

Caledonia Road Asheville HC 2014153 31 1,225 $1,244,850 $365,600 $0 $0 $0 $0 $0 $0 $1,500 $68,000 $809,750 1,225 $0

Chatham Road Asheville SA 2015019 43 1,450 $530,200 $4,800 $0 $50,000 $13,000 $0 $462,400 1,450 $0 $0 $0 $0 $0

Cherokee Road Asheville DP 2009132 48 1,960 $782,680 $24,680 $0 $1,000 $101,000 $656,000 1,960 $0 $0 $0 $0 $0 $0

Chestnut Lodge Rd. Black Mountain SA 2014017 61 4,560 $1,900,200 $43,200 $115,000 $1,742,000 4,560 $0 $0 $0 $0 $0 $0 $0 $0

Cub Road Asheville OH 2018027 40 1,204 $425,600 $0 $0 $0 $14,000 $9,000 $67,000 $335,600 1,204 $0 $0 $0 $0

East Chestnut Ave @ Five Points N. Asheville SA 2015192 36 5,225 $1,875,800 $138,000 $1,000 $0 $0 $31,800 $130,000 $0 $1,575,000 5,225 $0 $0 $0

Elk Mountain Place Woodfin HC 2010094 48 4,101 $1,158,250 $18,000 $0 $160,000 $45,000 $935,250 4,101 $0 $0 $0 $0 $0 $0

TOTAL EST. EXPENDS

THRU FY 19

TOTAL EST. EXPENDS

THRU FY 19

PROJECT NUMBER

PIPE RATING

PIPE RATING

PROJECT NUMBER

PROJECT NAME

PROJECT NAME

PROJ. MGR.

PROJ. MGR.

LOCATION OF PROJECT

LOCATION OF PROJECT

TOTAL ESTIMATED COST

PROJECT FOOTAGE


PROJECT FOOTAGE

Page 1 of 4


FY 2019-2020 through 2028-2029



GENERAL SEWER REHABILITATION continued…

Fairmont Road N. Asheville DP 2015017 31 3,900 $1,378,000 $0 $0 $0 $0 $0 $0 $15,000 $8,500 $61,500 $1,293,000 3,900 $0

Forestdale Drive S. Asheville DP 2014002 33 2,600 $860,000 $0 $0 $0 $0 $0 $0 $12,000 $17,500 $106,000 $724,500 2,600 $0

Four Inch Main - Patton Hill Rd. Swannanoa OH 2016100 27 618 $326,910 $410 $326,500 618 $0 $0 $0 $0 $0 $0 $0 $0 $0

Harmony Lane Asheville DP 2016103 35 670 $135,000 $0 $0 $0 $0 $0 $2,500 $0 $132,500 670 $0 $0 $0

Hazel Mill Rd @ Richland St. Asheville SA 2014016 26 3,300 $1,104,700 $0 $0 $0 $0 $0 $17,000 $1,000 $18,400 $84,000 $984,300 3,300 $0

Highland Farms Road Black Mountain HC 2018018 65 1,131 $301,250 $5,700 $750 $7,000 $287,800 1,131 $0 $0 $0 $0 $0 $0 $0

Hill Street @ Cross Place Asheville OH 2016249 44 254 $81,050 $1,525 $0 $1,475 $0 $14,000 $64,050 254 $0 $0 $0 $0 $0

Horizon Hill Rd. (Hy-Vu Drive) Asheville SA 2008084 51 713 $228,444 $10,444 $0 $0 $218,000 713 $0 $0 $0 $0 $0 $0 $0

Howland Rd. @ Sunset Trail Asheville DP 2012134 43 1,033 $440,600 $7,500 $0 $0 $0 $4,500 $65,000 $363,600 1,033 $0 $0 $0 $0

Jarnaul Avenue N. Asheville HC 2016104 75 4,640 $1,829,750 $77,750 $260,000 $1,492,000 4,640 $0 $0 $0 $0 $0 $0 $0 $0

Johnston Blvd. @ Providence Rd. W. Asheville DP 2014013 37 2,000 $628,150 $8,150 $0 $0 $0 $11,000 $55,000 $554,000 2,000 $0 $0 $0 $0

Kenilworth @ Springdale Rd. Asheville HC 2014010 42 2,524 $747,350 $306,500 $0 $0 $8,250 $61,000 $371,600 2,524 $0 $0 $0 $0 $0

Kimberly Ave. @ Sedley Avenue Asheville OH 2018029 35 3,005 $1,069,000 $0 $0 $0 $0 $31,000 $0 $86,500 $40,000 $911,500 3,005 $0 $0

Lakeshore Dr. @ Merrimon Ave. N. Asheville HC 2014177 25 362 $221,600 $8,866 $0 $0 $0 $0 $0 $1,800 $0 $3,000 $96,134 $111,800 362

Le An Hurst Road Asheville OH 2019027 77 820 $262,000 $0 $9,000 $41,500 $10,000 $201,500 820 $0 $0 $0 $0 $0 $0

Lincoln Avenue Asheville HC 2013103 26 1,415 $504,370 $2,870 $0 $0 $0 $0 $0 $0 $0 $0 $501,500 1,415 $0

Logan Avenue W. Asheville SA 2017256 48 1,884 $674,500 $10,500 $500 $16,200 $65,000 $582,300 1,884 $0 $0 $0 $0 $0 $0

Lynn Cove Road Beaverdam DP 2015010 35 5,589 $1,757,000 $0 $0 $0 $25,000 $0 $22,000 $154,000 $0 $1,556,000 5,589 $0 $0

Manetta Rd. @ Johnson Dr. N. Asheville SA 2014022 20 6,500 $2,225,700 $0 $0 $0 $0 $0 $0 $0 $33,000 $7,000 $110,000 $2,075,700 6,500

Meadow Road @ Train Yard Asheville HC 2015207 37 2,001 $1,001,000 $9,000 $0 $0 $0 $3,000 $46,000 $943,000 2,001 $0 $0 $0 $0

Mitchell Avenue W. Asheville SA 2014185 23 3,360 $1,164,300 $0 $0 $0 $0 $0 $0 $17,000 $0 $5,800 $68,000 $1,073,500 3,360

Montford Ave. @ Montford Park Asheville HC 2017144 50 1,258 $464,150 $0 $0 $6,300 $6,750 $100,000 $351,100 1,258 $0 $0 $0 $0 $0

Mountainbrook Rd. @ Chunns Cove Asheville DP 2010112 55 2,984 $964,515 $21,015 $0 $167,000 $776,500 2,984 $0 $0 $0 $0 $0 $0 $0

New Haw Creek Rd. @ Dogwood Grove E. Asheville SA 2014021 31 1,900 $652,500 $9,500 $0 $0 $0 $0 $0 $6,600 $0 $82,000 $554,400 1,900 $0

New Haw Creek @ Water Booster Station Asheville OH 2016250 69 92 $65,785 $6,285 $59,500 92 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Stock Road Woodfin DP 2015011 45 9,020 $2,653,500 $36,000 $0 $6,500 $77,000 $2,534,000 9,020 $0 $0 $0 $0 $0 $0

New Walnut St. @ Riverside Dr. Woodfin DP 2017007 63 1,270 $392,000 $32,000 $360,000 1,270 $0 $0 $0 $0 $0 $0 $0 $0 $0

North Lexington @ I-240 Asheville SA 2014182 47 210 $114,970 $2,570 $112,400 210 $0 $0 $0 $0 $0 $0 $0 $0 $0

North Market Street Asheville SA 2014019 26 1,064 $283,400 $5,300 $0 $0 $0 $0 $0 $0 $0 $500 $277,600 1,064 $0

Northwest Ave. @ No. 215 Swannanoa HC 2018017 84 1,049 $388,350 $1,250 $1,500 $30,000 $355,600 1,049 $0 $0 $0 $0 $0 $0 $0

TOTAL EST. EXPENDS

THRU FY 19PROJECT NAME LOCATION OF

PROJECTPROJ. MGR.

PROJECT NUMBER

PIPE RATING

PROJECT FOOTAGE


Page 2 of 4


FY 2019-2020 through 2028-2029



GENERAL SEWER REHABILITATION continued…

Oakland Drive @ Church Street Black Mountain DP 2015177 27 575 $196,000 $0 $0 $0 $0 $0 $0 $2,500 $2,500 $29,000 $162,000 575 $0

Owenby Lane @ Old US Hwy 70 Black Mountain OH 2018033 85 1,426 $510,000 $15,000 $22,500 $50,500 $422,000 1,426 $0 $0 $0 $0 $0 $0 $0

Riverside Dr. @ Riverside Baptist Asheville OH 2016251 40 510 $208,100 $0 $0 $0 $5,500 $0 $19,600 $183,000 510 $0 $0 $0 $0

Riverview Drive Asheville HC 2013104 24 2,302 $823,680 $7,880 $0 $0 $0 $0 $0 $0 $0 $0 $815,800 2,302 $0

Rosewood Ave. @ Riverside Cemetery Montford HC 2019023 25 180 $73,150 $0 $0 $0 $0 $0 $1,800 $0 $2,250 $23,000 $46,100 180 $0

Royal Pines Drive - PRP 47009 Arden SA 2007020 35 2,888 $958,100 $10,100 $0 $0 $0 $6,500 $0 $0 $17,000 $924,500 2,888 $0 $0

Sand Hill Road @ Baker Place W. Asheville SA 2015223 56 1,100 $371,900 $0 $7,000 $13,200 $351,700 1,100 $0 $0 $0 $0 $0 $0 $0

Smokey Park Hwy @ Sand Hill Rd. Enka OH 2018035 20 590 $272,200 $0 $0 $0 $0 $0 $0 $0 $7,500 $0 $54,700 $210,000 590

S. Main St. @ Reems Creek Rd. Weaverville HC 2017012 51 565 $201,450 $2,300 $3,750 $51,000 $144,400 565 $0 $0 $0 $0 $0 $0 $0

Springside Rd. @ Overlook Rd. S. Asheville SA 2012127 52 4,080 $1,469,700 $54,750 $54,550 $0 $1,360,400 4,080 $0 $0 $0 $0 $0 $0 $0

Starnes Avenue Asheville HC 2014154 22 2,871 $1,082,500 $0 $0 $0 $0 $0 $0 $14,300 $0 $3,000 $79,000 $986,200 2,871

Sulphur Springs Rd. @ Covington St. W. Asheville DP 2014006 44 1,350 $499,000 $7,500 $0 $0 $10,000 $107,000 $374,500 1,350 $0 $0 $0 $0 $0

Sweeten Creek Rd. @ Buck Shoals Rd. S. Asheville HC 2014015 51 918 $407,190 $5,640 $2,250 $58,000 $341,300 918 $0 $0 $0 $0 $0 $0 $0

Sweeten Creek Rd. @ Mills Gap Rd. Asheville SA 2014189 22 2,572 $1,100,000 $28,000 $80,000 $992,000 2,572 $0 $0 $0 $0 $0 $0 $0 $0

Toxaway Street W. Asheville SA 2019004 51 722 $206,600 $0 $4,000 $1,000 $201,600 722 $0 $0 $0 $0 $0 $0 $0

US 70 @ Jordan Road Swannanoa DP 2015014 21 4,550 $1,555,000 $0 $0 $0 $0 $0 $0 $20,000 $0 $20,500 $161,000 $1,353,500 4,550

Walnut St. @ N. Lexington Ave. Asheville DP 2017008 42 1,550 $563,500 $0 $0 $0 $0 $7,000 $0 $556,500 1,550 $0 $0 $0 $0

Walnut Street @ Rankin Ave. Asheville SA 2014018 54 2,495 $1,359,100 $18,500 $1,340,600 2,495 $0 $0 $0 $0 $0 $0 $0 $0 $0

Waynesville Ave. @ Brownwood Ave. W. Asheville SA 2014183 33 3,022 $1,216,200 $0 $0 $0 $0 $19,500 $0 $0 $68,200 $304,000 $824,500 3,022 $0

West Crabapple Lane W. Asheville DP 2014005 67 1,720 $635,800 $12,800 $183,000 $440,000 1,720 $0 $0 $0 $0 $0 $0 $0 $0

Wildwood Park Weaverville HC 2015194 27 582 $209,780 $2,380 $0 $0 $0 $0 $0 $0 $0 $0 $207,400 582 $0

SSD Rehab. & Replacement Various MS 2002101 N/A 200,000 $46,000,000 $4,400,000 $4,600,000 20,000 $4,600,000 20,000 $4,600,000 20,000 $4,600,000 20,000 $4,600,000 20,000 $4,600,000 20,000 $4,600,000 20,000 $4,600,000 20,000 $4,600,000 20,000 $4,600,000 20,000

Surveys for Design Various EB 2002060 N/A N/A $500,000 $0 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000

Future Projects - Non Critical Various EB Varies Varies Varies Varies $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

SUBTOTAL 343,402 $98,939,877 $5,997,081 $8,085,700 26,275 $10,319,675 33,492 $12,200,300 41,401 $11,594,600 42,912 $6,931,050 27,668 $8,535,837 30,131 $7,955,950 29,743 $8,839,300 31,482 $12,419,684 42,065 $10,460,700 38,233


SUBTOTAL with inflation 343,402 $98,939,877 $5,997,081 $8,085,700 26,275 $10,618,946 33,492 $12,918,178 41,401 $12,632,866 42,912 $7,770,707 27,668 $9,847,432 30,131 $9,444,616 29,743 $10,797,557 31,482 $15,611,101 42,065 $13,530,041 38,233



PRIVATE SEWER REHABILITATION

Dogwood Rd. @ White Pine Circle Arden OH 2014132 60 565 $229,750 $5,800 $6,500 $22,500 $195,950 565 $0 $0 $0 $0 $0 $0 $0

Homeland Park Asheville OH 2016248 48 921 $360,550 $7,250 $0 $0 $54,500 $19,000 $279,800 921 $0 $0 $0 $0 $0

Old County Home Rd PSR W. Asheville SA 2015221 67 4,471 $1,771,900 $20,000 $0 $59,400 $28,000 $0 $1,664,500 4,471 $0 $0 $0 $0 $0

SUBTOTAL 5,957 $2,362,200 $33,050 $6,500 0 $81,900 0 $278,450 565 $19,000 0 $1,944,300 5,392 $0 0 $0 0 $0 0 $0 0 $0 0


SUBTOTAL with inflation 5,957 $2,362,200 $33,050 $6,500 0 $84,275 0 $294,834 565 $20,701 0 $2,179,841 5,392 $0 0 $0 0 $0 0 $0 0 $0 0

TOTAL EST. EXPENDS

THRU FY 19

TOTAL EST. EXPENDS

THRU FY 19


PROJECT FOOTAGE

PROJECT NUMBER

PIPE RATINGPROJECT NAME LOCATION OF

PROJECTPROJ. MGR.

PROJECT NUMBER

PIPE RATINGPROJECT NAME LOCATION OF

PROJECTPROJ. MGR.

PROJECT FOOTAGE


Page 3 of 4


FY 2019-2020 through 2028-2029



TREATMENT PLANT, PUMP STATIONS & GENERAL CAPITAL IMPROVEMENTS

Biological Treatment MSD-Treatment Plant HC 2016063 N/A 0 $45,500,000 $0 $0 $0 $0 $500,000 $500,000 $2,500,000 $2,500,000 $10,000,000 $18,000,000 $12,000,000

Building and Facility Rehabilitation MSD-Treatment Plant HC 2002068 N/A 0 $756,000 $756,000 $101,000 $91,000 $68,000 $68,000 $68,000 $68,000 $68,000 $68,000 $68,000 $68,000

Carrier Bridge PS Replacement Asheville EB/HC 2019045 N/A 0 $20,012,250 $0 $1,592,250 $4,995,000 $8,950,000 $4,475,000 $0 $0 $0 $0 $0 $0

Erwin Hills PS Improvements Erwin Hills DP 2019043 N/A 0 $125,000 $0 $125,000 $0 $0 $0 $0 $0 $0 $0 $0 $0

Flow Monitoring MSD-Treatment Plant SA 2008013 N/A 0 $442,535 $417,981 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000

Incinerator Polymer System Replacement MSD-Treatment Plant HC 2019071 N/A 0 $200,000 $0 $0 $200,000 $0 $0 $0 $0 $0 $0 $0 $0

Mull Bldg. HVAC Asheville OH 2018186 N/A 0 $477,600 $32,600 $235,000 $210,000 $0 $0 $0 $0 $0 $0 $0 $0

Mull Bldg. IT Back-up Generator Asheville OH 2018227 N/A 0 $175,000 $0 $175,000 $0 $0 $0 $0 $0 $0 $0 $0 $0

Plant High Rate Primary Treatment MSD-Treatment Plant HC 2015054 N/A 0 $17,005,665 $3,902,665 $9,228,000 $3,875,000 $0 $0 $0 $0 $0 $0 $0 $0

Solids Handling Capacity Improvements MSD-Treatment Plant HC 2019087 N/A 0 $2,052,000 $0 $0 $0 $180,000 $1,872,000 $0 $0 $0 $0 $0 $0

Thickener Rehabilitation MSD - Treatment Plant DP 2018222 N/A 0 $100,000 $0 $100,000 $0 $0 $0 $0 $0 $0 $0 $0 $0

Weaverville PS Replacement Weaverville HC 2019080 N/A 0 $7,267,000 $0 $0 $25,000 $640,000 $3,301,000 $3,301,000 $0 $0 $0 $0 $0

General Capital Equipment Varies EB 2016072 N/A 0 $1,500,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000

SUBTOTAL 0 $95,613,050 $5,259,246 $11,756,250 0 $9,596,000 0 $10,038,000 0 $10,416,000 0 $4,069,000 0 $2,768,000 0 $2,768,000 0 $10,268,000 0 $18,268,000 0 $12,268,000 0


SUBTOTAL with inflation 0 $95,613,050 $5,259,246 $11,756,250 0 $9,874,284 0 $10,628,646 0 $11,348,726 0 $4,561,936 0 $3,193,324 0 $3,285,930 0 $12,542,771 0 $22,962,227 0 $15,867,633 0



DESIGN, ROW, & CONSTRUCTION MANAGEMENT EXPENSES

Design, ROW, & Const. Mgmt. Exp. MSD/ENG EB N/A N/A 0 $31,682,735 $2,705,222 $2,795,998 $2,864,930 $2,939,320 $3,015,851 $3,094,638 $3,239,959 $3,315,027 $3,392,251 $3,471,600 $3,553,161

SUBTOTAL 0 $31,682,735 $2,705,222 $2,795,998 0 $2,864,930 0 $2,939,320 0 $3,015,851 0 $3,094,638 0 $3,239,959 0 $3,315,027 0 $3,392,251 0 $3,471,600 0 $3,553,161 0

BUDGET SUMMARY



SUBTOTAL with Inflation 432,428 $301,601,936 $18,362,168 $28,158,818 37,089 $27,195,712 42,050 $27,527,726 41,966 $29,131,866 42,912 $36,509,614 42,142 $39,472,113 42,463 $28,985,110 42,075 $36,120,112 40,566 $42,095,835 42,065 $34,557,129 41,163

CONTINGENCY $1,000,000

REIMBURSEMENT PROJECTS Various Various Various 0 $1,636,000 $12,307 $736,000 0 $100,000 0 $100,000 0 $100,000 0 $100,000 0 $100,000 0 $100,000 0 $100,000 0 $100,000 0 $100,000 0

TOTAL 432,428 $303,237,936 $18,374,475 $29,894,818 37,089 $27,295,712 42,050 $27,627,726 41,966 $29,231,866 42,912 $36,609,614 42,142 $39,572,113 42,463 $29,085,110 42,075 $36,220,112 40,566 $42,195,835 42,065 $34,657,129 41,163

TOTAL EST. EXPENDS

THRU FY 19

TOTAL EST. EXPENDS

THRU FY 19

TOTAL EST. EXPENDS

THRU FY 19

PIPE RATING

PIPE RATING

PIPE RATING

PROJECT FOOTAGE


LOCATION OF PROJECT

PROJ. MGR.

PROJECT NAME LOCATION OF PROJECT

PROJECT NUMBER


PROJECT NAME LOCATION OF PROJECT


PROJ. MGR.

PROJECT FOOTAGE

PROJ. MGR.

PROJECT FOOTAGE

PROJECT NUMBER

PROJECT NUMBERPROJECT NAME

Page 4 of 4



Submitted By: Thomas E. Hartye, PE., General Manager W. Scott Powell, CLGFO, Director of Finance

Subject: MSD Business Plan/Financial Forecast

The MSD Business Plan is a financial policy established by the Board to forecast long-term planning needs for its operations and capital improvement. The Plan covers a 10-year period and aids staff’s ability to evaluate Bond Order compliance and infrastructure reinvestment in accordance with state and federal regulations.

The MSD Business Plan/Financial Forecast is designed to assess the funding mixture, revenue versus debt, while addressing current and long-term operational needs and state and federal required infrastructure improvements. Additionally, the forecast illustrates these effects on sewer rates as well as the impact on the Board accepted target debt coverage ratio of 1.5. All general operation, infrastructure, and debt assumptions are listed on the right side of the forecast, which addresses the following:

Maintain or improve operation and service delivery

Implement a Capital Improvement Program to meet all current and future regulatory requirements for the Wastewater Reclamation Facility and Collection system

Support of the pay-as-you-go element of the CIP in addition to bonds

Continue with goal of periodic smaller consistent rate increases in lieu of large increase in future years

Also included are the FY20 Personnel Committee recommendations for employee compensation and self-insurance funding as well as FY20 CIP Committee recommendations for infrastructure improvements. (See Tabs 2 & 3). Lastly, the purpose of this item is to review both budget and rates as a part of the Districts’ overall business plan prior to taking action on them individually.

For information prior to upcoming budget and rate setting process.


Background

Discussion


Meeting Date:

May 2, 2019

Subject: M

SD Business Plan/Financial Forecast Page 2

2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.50% 2.50% 2.75% 2.75% 2.75% 2.75% 2.75%$29.15 $29.88 $30.62 $31.36 $32.17 $32.97 $33.80 $34.64 $35.51 $36.49 $37.49 $38.52 $39.58 $40.67

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 Assumptions

REVENUE:Domestic Users 29,581,170 30,842,462 31,935,658 32,531,584 33,623,113 34,732,618 35,860,421 37,006,848 38,233,303 39,557,512 41,241,300 42,674,046 44,194,128 45,740,039Industrial Users (No growth) 3,344,074 3,909,925 4,159,767 3,745,625 3,464,402 3,544,137 3,625,866 3,709,637 3,795,503 3,892,317 3,716,793 3,819,005 3,924,028 4,031,939Billing and Collections (User Fee) 754,317 768,833 795,574 811,883 832,994 861,327 887,167 913,782 941,195 969,431 998,514 1,028,470 1,059,324 1,091,104Tap Fees 526,415 571,126 604,047 500,000 175,000 175,000 175,000 175,000 175,000 175,000 175,000 175,000 175,000 175,000Facility Fees 5,798,181 6,405,971 4,752,960 4,500,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000Interest & Non-operating Revenues 207,246 306,110 885,718 1,500,000 1,296,960 972,308 670,020 813,495 950,266 980,501 1,083,323 692,586 656,774 617,036City of Asheville (annex.-Enka) 37,146 35,834 34,522 35,000 35,000 35,000 35,000 35,000 35,000 0 0 0 0 0Rental Income 78,925 71,399 81,826 71,641 71,641 71,641 71,641 71,641 71,641 71,641 71,641 71,641 71,641 71,641Transfer from Reserves (to / from) 430,058 (214,395) 298,619 0 0 0 0 0 0 0 0 0 0 0Miscellaneous 170,897 138,469 171,097 140,000 140,000 140,000 140,000 140,000 140,000 140,000 140,000 140,000 140,000 140,000

Total Revenues 40,928,429 42,835,734 43,719,788 43,835,733 41,639,110 42,532,031 43,465,115 44,865,404 46,341,908 47,786,402 49,426,571 50,600,748 52,220,895 53,866,759State and Federal (EPA) GrantsRevenue Bonds/Stimulus 28,003,632 40,000,000 50,000,000 50,000,000

Total Funds Available 85,513,528 84,654,881 118,179,258 113,628,107 107,098,500 92,357,942 80,066,567 107,821,320 95,696,670 124,452,887 101,200,160 85,492,988 113,501,046 86,371,516

EXPENSES:Operations & Maintenance 14,804,769 14,874,149 15,538,788 16,163,063 16,793,404 17,793,395 18,828,983 19,475,331 20,161,257 20,875,778 21,620,299 22,396,257 23,205,244 23,948,859Replacement Funds (WRF & Fleet) 625,000 625,000 660,000 730,000 750,000 830,000 830,000 860,000 865,000 865,000 865,000 865,000 865,000 865,000Debt Service 9,003,519 7,918,557 9,423,689 9,448,115 9,834,367 9,837,382 9,823,943 8,899,361 11,394,314 11,366,407 14,737,511 14,731,468 14,730,209 18,269,556CIP (including Bond Projects) 19,261,094 14,781,337 22,764,407 21,827,539 29,894,818 27,295,713 27,627,726 29,231,865 36,609,614 39,572,114 29,085,110 36,220,112 42,195,835 34,657,129

Total Expenses 43,694,382 38,199,043 48,386,884 48,168,717 57,272,589 55,756,490 57,110,652 58,466,557 69,030,185 72,679,299 66,307,920 74,212,837 80,996,288 77,740,544June 30 Carry Over for Construction 41,819,146 46,455,838 69,792,374 65,459,390 49825911.1 36,601,452 22,955,916 49,354,762 26,666,485 51,773,588 34,892,240 11,280,151 32,504,757 8,630,972Pay-as-you-go (Current Revenue only) 17,120,141 20,043,028 18,757,311 18,224,555 15,011,339 14,901,254 14,812,190 16,490,711 14,786,337 15,544,217 13,068,762 13,473,023 14,285,441 11,648,344

Debt Coverage (User Fees only) 2.1 2.6 2.3 2.2 2.2 2.2 2.2 2.5 2.0 2.1 1.7 1.7 1.8 1.5Debt Coverage with Total Revenue 2.9 3.5 3.0 2.9 2.5 2.5 2.5 2.8 2.3 2.4 1.9 1.9 2.0 1.6

April 4, 2019Active Plan CIP FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029

Interceptor/Wet Weather Rehabilitation 618,050 760,970 1,726,500 1,366,293 5,514,370 3,753,278 746,748 2,113,722 18,902,492 23,191,399 12,939,537 9,387,533 50,907 1,606,294 General Sewer Rehabilitation 9,104,792 8,859,631 13,213,448 10,377,703 8,085,700 10,618,946 12,918,178 12,632,866 7,770,707 9,847,432 9,444,616 10,797,557 15,611,101 13,530,041Private Sewer Rehabilitation 2,000 646,000 51,200 0 6,500 84,275 294,834 20,700 2,179,841 0 0 0 0 0

Treatment Plant / Pump Stations 7,181,959 1,868,250 5,291,691 7,112,321 11,756,250 9,874,284 10,628,646 11,348,726 4,561,936 3,193,324 3,285,930 12,542,771 22,962,227 15,867,633Engineering Force Account 2,254,293 2,546,486 2,481,568 2,705,222 2,795,998 2,864,930 2,939,320 3,015,851 3,094,638 3,239,959 3,315,027 3,392,251 3,471,600 3,553,161

Reimbursements 100,000 100,000 0 266,000 736,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000Contingency 0 0 0 0 1,000,000

Capital Improvement Program Totals 19,261,094 14,781,337 22,764,407 21,827,539 29,894,818 27,295,713 27,627,726 29,231,865 36,609,614 39,572,114 29,085,110 36,220,112 42,195,835 34,657,129

32,504,757

Sewer Rate Increase

3% inflation in O & M, Replacement Funds and

Engineering Force Account

No growth in Industries - Rate Parity for Flow in 2020

General Sewer Rehab to cover approx. 45,000 lineal ft / year

Target Debt Coverage 1.5

ENR 10-year Construction Index @ 2.90%

Minimum of 365 Days Cash on Hands

0.75% Increase

District 10yr CIP $332.4 Million

District total 10yr Budget $669.2 Million

Average Monthly Bill

46,455,838 69,792,374 65,459,390 34,892,240 11,280,15136,601,452 22,955,916 49,354,76249,825,911

Consumption and Account Growth

Bond Issues figured at: 4.0% yield FY23 4.5% yield FY25 5.0% yield FY28

26,666,485 51,773,588

10-Year Capital Improvement Program

Business Plan FY20

44,585,099 41,819,146July 1- Available for Construction

Bond Money Used

Pay-as-you-go

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

16 17 18 19 20 21 22 23 24 25 26 27 28 29

TOTAL CONSTRUCTION COSTS

$0

$20,000,000

$40,000,000

$60,000,000

$80,000,000

16 17 18 19 20 21 22 23 24 25 26 27 28 29

CASH BALANCE & REVENUEPay-as-you-go

Revenue w/o Bonds

Bond Issues

Cash Balance



Submitted By: Thomas E. Hartye, PE., General Manager W. Scott Powell, CLGFO, Director of Finance

Subject: MSD Rates and Survey Data Comparisons

Every three years the National Association of Clean Water Agencies (NACWA) publishes a comprehensive survey for our industry. The report covers financial trends, utility operations, business practices, future rate, and service charge increases. It also provides a complete picture of how utility managers continue to find a balance in providing an essential service and responsibly managing their communities’ resources. A total of 126 clean water agencies representing over 81 million people served by centralized sewer service participated.

One of the significant data comparisons in the survey is the EPA Region IV average residential sewer charge comparison (Exhibit 1). For 2017 NACWA survey, MSD’s monthly residential charges are very competitive as compared to agencies within our EPA Region IV. Additionally, MSD’s average residential sewer bill compares well with the rest of the EPA regions across the country (Exhibit 2). As reported in NACWA 2017 Cost of Clean Water Index (Exhibit 5), sewer service rate increases nationally have averaged 3.8% per year for the period of 2013 through 2017. The District’s annual rate increases have averaged 2.5% for the same time period. Sewer service rates are anticipated to increase nationally at an average of 3.9% per year for the next five fiscal years. The District’s currently proposed rate increase of 2.5% is well below the projected national average. Finally, the state and national average residential sewer bills are typically 20% greater than water bills. Based upon current projection, MSD’s average sewer bill will only be 11.8% greater than local area water bills (Exhibit 3). Staff has also included a 2019 rate comparison for all AA & AAA sewer providers in North Carolina (Exhibit 4).

None – Informational only.

Discussion


Background


Ran

king

Agency NameRate Design Gallons Per

Year

Rate Design CCF's per

month

Volume Rate per

CCF

Average Annual Sewer Charge

Average Monthly Sewer Charge

Residential Connection

Fee

Residential Facility /

Hookup Fee

% Billed of Metered

Water

Industrial Volume Rate per

CCF

BOD Rate per lb

BOD Limit

TSS Rate per lb

TSS Limit

17 City of Atlanta, DPW, GA * * * 1,309$ 109.12$ 1,800$ * 100% * * * * *

16 Gwinnett County DPU, GA 84,000 9.4 5.86$ 1,234$ 102.80$ * 4,147$ 100% 5.97$ 0.480 250 0.300 275

15 Marion County, FL 127,750 14.2 * 684$ 56.97$ 1,160$ 4,602$ 100% 4.29$ * 400 * 288

14 Knoxville Utilities Board, EO, TN 44,880 5.0 0.70$ 678$ 56.50$ 1,500$ * 100% 0.85$ 0.124 240 0.117 300

13 Greenville, SC ReWA 84,000 9.4 4.20$ 603$ 50.27$ * 2,500$ 100% 4.20$ 0.275 250 0.275 250

12 Charlestion Water System, SC 62,832 7.0 7.21$ 589$ 49.10$ 200$ 3,525$ 95% * 0.623 290 0.631 290

11 Beaufort Jasper WSA, SC 78,000 8.7 4.70$ 522$ 43.50$ 500$ 2,760$ 100% 4.70$ 0.350 250 0.600 250

10 Sanitation District #1, KY 53,856 6.0 7.02$ 505$ 42.12$ 3,259$ * 100% 7.02$ 0.435 * 0.242 *

9 Orange County Utilities, FL 82,125 9.1 2.60$ 488$ 40.70$ * 3,346$ * 2.60$ 0.513 300 0.546 300

8 Greenwood Metro District, SC 55,651 6.2 4.21$ 480$ 40.01$ 950$ 150$ 100% 4.41$ 0.520 300 0.240 300

7 Charlotte -Carolina Water, NC 62,832 7.0 4.54$ 478$ 39.83$ 2,812$ 2,186$ 100% 0.24$ 0.160 * 0.160 *

6 Mobile Area, AL WSS 60,000 6.7 5.43$ 460$ 38.30$ 1,600$ 820$ 100% 5.43$ 0.230 280 0.250 250

5 Orange WSA, NC 48,000 5.3 4.85$ 455$ 37.92$ 340$ 3,690$ 100% 4.85$ * * 0.520 235

4 Miami-Dade County WSD, FL 81,000 9.0 * 440$ 36.66$ 487$ * * * 0.190 * 0.140 *

3 Johnson City, TN 57,600 6.4 4.32$ 401$ 33.45$ 1,500$ * 100% * * * * *

2 MSD of Buncombe County, NC 44,880 5.0 4.08$ 359$ 29.88$ 650$ 2,500$ 100% 3.96$ 0.320 240 0.259 240

1 Macon Water Authority, GA 62,832 7.0 2.46$ 311$ 25.92$ * * 100% 2.46$ 0.100 250 0.100 250

Minimum 44,880 5 0.70$ 311$ 25.92$ 200$ 150$ 0.24$ 0.100 240 0.100 235

Maximum 127,750 14 7.21$ 1,309$ 109.12$ 3,259$ 4,602$ 7.02$ 0.623 400 0.631 300

Average 68,140 8 4.44$ 588$ 49.00$ 1,289$ 2,748$ 3.92$ 0.332 277 0.313 269

Median 62,832 7 4.43$ 488$ 40.70$ 1,160$ 2,760$ 4.29$ 0.320 250 0.255 263

2017 NACWA Financial Survey

EPA Region IV - Southeast Residential - Single Family Homes Industry

Meeting Date:

May 2, 2019

Subject: M

SD Rates and Survey Data Comparisons

Page 2

Exhibit 1

Meeting Date: May 2, 2019 Subject: MSD Rates and Survey Data Comparisons Page 3

Exhibit 2

Monthly Bills for Residential Customers (5 CCF or 3,750 gallons)

Asheville (bi-monthly bills) FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Increase Water Service 24.59 25.67 25.67 25.67 25.90 26.27 26.82 26.98 27.39 27.98 2.1%

MSD Sewer Service 24.84 25.72 26.45 27.14 27.81 28.49 29.15 29.88 30.62 31.36 2.4%$49.43 $51.39 $52.12 $52.81 $53.70 $54.76 $55.97 $56.86 $58.01 $59.344.8% 4.0% 1.4% 1.3% 1.7% 2.0% 2.2% 1.6% 2.0% 2.3%

Biltmore Forest (bi-monthly bills)Water Service 28.24 28.24 29.37 30.83 32.07 33.50 35.19 36.96 38.81 39.07 0.7%MSD Sewer Service 24.84 25.72 26.45 27.14 27.81 28.49 29.15 29.88 30.62 31.36 2.4%

$53.07 $53.95 $55.82 $57.97 $59.87 $61.99 $64.34 $66.84 $69.43 $70.431.6% 1.7% 3.5% 3.9% 3.3% 3.5% 3.8% 3.9% 3.9% 1.4%

Black Mountain (monthly bills)Water Service 25.55 25.55 25.55 26.90 27.58 27.95 28.51 29.11 29.46 29.89 1.5%MSD Sewer Service 25.86 26.77 27.52 28.24 28.93 29.63 30.30 31.03 31.80 32.56 2.3%

$51.41 $52.32 $53.07 $55.14 $56.51 $57.58 $58.81 $60.14 $61.26 $62.456.3% 1.8% 1.4% 3.9% 2.5% 1.9% 2.1% 2.3% 1.9% 1.9%

Montreat (monthly bills) * All single family homes have larger 3/4" metersWater Service 29.77 29.77 29.77 31.41 32.10 32.11 32.11 32.92 32.92 32.92 0.0%MSD Sewer Service * 28.42 29.42 30.25 31.04 31.80 32.57 33.31 34.11 34.96 35.80 2.4%

$58.19 $59.19 $60.02 $62.45 $63.90 $64.68 $65.42 $67.03 $67.88 $68.722.1% 1.7% 1.4% 4.1% 2.3% 1.2% 1.1% 2.5% 1.3% 1.2%

Weaverville (monthly bills)Water Service 24.14 25.35 25.35 25.88 25.88 25.88 25.88 29.85 30.45 30.93 1.6%MSD Sewer Service 25.86 26.77 27.52 28.24 28.93 29.63 30.30 31.03 31.80 32.56 2.4%

$50.00 $52.12 $52.87 $54.12 $54.81 $55.51 $56.18 $60.88 $62.25 $63.494.1% 4.2% 1.4% 2.4% 1.3% 1.3% 1.2% 8.4% 2.3% 2.0%

Woodfin (bi-monthly bills)Water Service 19.98 19.98 19.98 19.98 19.98 20.38 20.63 20.70 21.70 22.31 2.8%MSD Sewer Service 24.84 25.72 26.45 27.14 27.81 28.49 29.15 29.88 30.62 31.36 2.4%

$44.81 $45.69 $46.43 $47.11 $47.78 $48.87 $49.78 $50.58 $52.32 $53.671.9% 2.0% 1.6% 1.5% 1.4% 2.3% 1.9% 1.6% 3.5% 2.6%

Average Sewer Bill (weighted) $30.79

Meeting Date:

May 2, 2019

Subject: M

SD Rates and Survey Data Comparisons

Page 4 Exhibit 3

*Average sewer bill is currently 11.8% greater than local area water bills. The National average residential sewer bills are typically 20% greater than water according to NCLM and AWWA surveys.

Meeting Date: May 2, 2019 Subject: MSD Rates and Survey Data Comparisons Page 5

Exhibit 4

NACWA’s 2017 Cost of Clean Water Index indicates that the average cost of wastewater services rose 3.6 percent in 2017, eclipsing the $500 mark earlier than last year’s survey had projected. The national average amount that a single-family residence pays for wastewater collection and treatment is now $501 per year. This is the 16th consecutive year that waste-water service charges have increased faster than inflation (as measured by the Consumer Price Index), doubling the average sewer service charge since 2003 (see Cost of Clean Water Index vs. Inflation chart below). This rate of increase in the average charge reflects what we know anecdotally – the nation’s clean water utilities are working to address growing infrastructure challenges and better recover the full cost of providing sustainable wastewater collection and treatment services.

The national average of $501 provides only part of the picture. Wastewater service charges vary widely among EPA regions and States, and are affected by demographics, geography, and a range of other issues. As an example of these variations, the Regional Average Annual Charge map (above) shows a breakdown of average charges by EPA region. The average service charge by Region varies from a low of $261 in EPA Region 8 to a high of $884 in EPA Region 1.

The Cost of Clean Water Index vs. Inflation chart (below) presents a national snapshot of the increase in service charges, as compared to inflation, since 2000. Table A-1 (see Cost of Clean Water Index Annex) provides a breakdown of NACWA Index values and service charges back to 1985, the base year for the Index. The values for 2017 are based on the responses from 174 NACWA members serving nearly 104 million people.

In 2017, a majority of clean water utilities implemented rate structures that resulted in increases in the average annual household service charge. However, in some communities (3% of respon-dents), volume-based rates increased, but average service charges dropped due to reductions in residential water use. Two communities reported rate decreases. Additional national and regional data are included in Tables A-1 and A-3 (see Cost of Clean Water Index Annex).

2017 COST OF CLEAN WATER INDEX

$884$593

$571

$512

$445

$261

$401

$542$456

$536

REGION 1

REGION 2

REGION 3

REGION 5

REGION 7

REGION 8

REGION 9

REGION 10

REGION 6

REGION 4

Regional Average Annual Charges 2017

(includes all responses)

2018 - 2022 Projected Service Charge Changes Based on Approved and Anticipated Rate Increases

2017 NACWA COST OF CLEANWATER INDEX SUMMARY

ANNUAL CHANGE IN COST OF CLEAN WATER INDEX vs. INFLATION

104 MILLIONPopulation Served

174Utility Respondents

$501Average National Annual Wastewater Collectionand Treatment Service Charge

3.6%Increase in Charges, 2016 to 2017

2.1%Increase in Consumer Price Index, 2016 to 2017

10%

8%

6%

4%

2%

0%

-2%

2000 2002 20042001 2003 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

NACWA Index

Consumer Price Index

3.0%2.2%

3.6%3.1%

6.5%

7.3%

6.0% 6.0%5.4%

8.2%

4.4%

6.1%

3.3%

5.5%

4.1%

3.1%2.6%

3.6%3.0%

3.5% 3.7%

4.5% 4.6%

Average Charge for Wastewater Services Tops $500 for the First Time

Exhibit 5

60

0

60

0

60

0

60

0

60

0

2018

3.5% avg.

3.7% avg.

4.5% avg.

4.6% avg.

<0 - 0% >0 - 3% >3 - 5% >5 - 7% >7 - 10% >10 - 15% >15%

3.0% avg.

2019

2020

2021

2022

Projected Increase

Nu

mb

er o

f A

gen

cies

Projected Charges Expected to Increase 3.0 to 4.6% per Year

Customers pay for sewer services in a variety of ways. Charges may be based on property values, gallons of water used, on a flat rate, or include some combination of these values. Because of this variabili-ty, the NACWA Index uses what the average single-family residence pays annually because it is a more consistent measure to track the cost of services over time.

This year, NACWA’s Index indicates that clean water utilities are expecting average charges to continue to increase from 3.0 to 4.6% per year for the next five years. Plant and sewer repair and rehabil-itation were the top reasons cited by respondents for projected rate increases greater than 25 percent (over 5 years). Other drivers for large rate increases include consent decree requirements, growth and construction of infrastructure, combined sewer overflow (CSO) long-term control plan compliance, debt reduction, and regulatory requirements associated with nutrients/total maximum daily loads (TMDLs).

The Projected Increases in Charges, 2018-2022 chart (right) shows the projected percentage increase in charges distributed among agency respondents. Of those utilities responding, 28 percent of agencies project cumulative five-year rate increases above 25 percent.

Average Annual Service Charge Has Doubled in Last 14 Years

The Average Annual Service Charge chart (below) presents a national snapshot of wastewater service charges since 2000 and provides a projection of average charges through 2022. From 2003 to 2017, the average annual service charge doubled from $250 to $501. The Consumer Price Index (CPI) increased only 34 percent in the same time period.

The average annual charge of $501 represents 2.03 percent of the 2017 Federal poverty income threshold ($24,600) for a family of four – marking the first time this metric has exceeded two percent. This proportion has risen from 1.3 percent in 2000. Projected increases in rates show the average charge

reaching nearly $600 by 2021.

AVERAGE ANNUAL SERVICE CHARGE, 2000 - 2017 & PROJECTED

PROJECTED INCREASES IN CHARGES, 2018-2022

$700NACWA Index

Consumer Price Index (as $ amount)

2000 2004 2008 2012 20162002 2006 2010 2014 2018 20212001 2005 2008 2013 2017 20202003 2007 2011 2015 2019 2022

$600

$500

$400

$300

$200

$100

$0

$222 $230 $239 $250 $262$284 $295 $308 $324

$357$381 $399 $412

$435 $448 $452$479

$501 $517 $536$558

$589$623

Disclaimers: “The NACWA Index strives to use the best available data each year when determining current and historical household charges and trends. These data are intended for comparison pur-poses only, and are subject to change from one year to the next. While this document presents the most up-to-date data available, if better data become available in the future, the data presented here may be modified.”





Subject: Proposed FY2020 Budget

The District Budget process must comply with North Carolina General Statues and the MSD Revenue Bond Order. The Bond order requires that the District adopt its final budget on or before June 15 of each year. The North Carolina General Statutes require an annual balanced budget ordinance, based upon expected revenues, along with a budget message be presented to the governing board no later than June 1 of each year. Staff recommends to the Finance Committee that the attached Proposed FY2020 Budget along with the Resolution be endorsed today and presented to the Board at the May 15, 2019 Board Meeting.


ACTION ITEM Finance Committee

Background

1 FY20 Budget & Proposed Sewer Rates

May 2, 2019

Members of the Finance Committee Metropolitan Sewerage District of Buncombe County, North Carolina W. H. Mull Building 2028 Riverside Drive Asheville, North Carolina 28804 Subject: FY20 Budget and Proposed Sewer Rates

Dear Members of the Finance Committee,

We respectfully present the FY20 Budget for the Metropolitan Sewerage District of Buncombe County, North Carolina. The budget incorporates staff recommendations presented to and accepted by the Capital Improvement Program Committee, which met on April 23, 2019 and the Personnel Committee, which met on April 30, 2019. We have developed the FY20 Budget to advance the organization’s mission “to provide wastewater collection and treatment to its users which promotes the health and safety of affected citizens in the most effective and efficient manner possible today and in the future”. The following Operational and Capital budget is designed to provide services meeting or exceeding all state regulations and Bond Order covenants with which the District must comply, with any rate changes to be at the lowest responsible level.

Current Year Highlights In FY19, the District’s domestic and industrial revenue are expected to meet budgeted projections. The District continues to achieve growth in the number of residential customers. By effectively controlling the increase in operating expenditures and strategically planning the timing of CIP projects, the District has been able to limit the proposed rate increase to 2.5% for the upcoming year. Additionally, the District’s long-range business plan incorporates these changes and projects that future rate increases will be between approximately 2.5% to 2.75% for the remaining nine (9) years. This budget continues several recent initiatives to maintain the District’s overall strategy of keeping collection lines and the plant functioning effectively while rehabilitating significant portions of aging infrastructure. The most important goal remains meeting all regulatory permit requirements.


The SS Construction Department continues to expand its participation in sewerline rehabilitation and replacement efforts to minimize SSOs. Goals for FY20 include utilizing Infrastructure Rehabilitation System (IRS) lining, pipe bursting, and dig-and-replacement construction to rehabilitate and replace at least 20,000 linear feet, while providing preventative maintenance for approximately 500,000 linear feet of the system by employing in-house jet wash cleaning and both chemical and mechanical root control. In addition, the SS Maintenance Department will manage the District’s Right-of-Way maintenance program whereby easements will be periodically cleared or mowed. The Wastewater Treatment Plant is continuing systematic improvements as part of the District’s detailed Facilities Plan. In FY17, the District began the construction phase of the $9.6 million Headworks project. This project included installing new bar screens and grit removal systems along with fine screens and a surge system for peak flows. This project is now operational and is in the punch list phase.

Operating Budget The proposed $17.5 million Operating Budget represents routine expenditures and capital equipment acquisitions needed for the day-to-day operations of the District. Highlights of significant components and changes include:

Compensation and Benefits—The staff and employees considered salary and health insurance increases together as part of a comprehensive compensation package.

• A 2.5% salary adjustment—CPI increased 1.9% for the last twelve-month period; Division Directors in conjunction with Employee Advisory Committee have requested a cost of living increase to keep pace with industry salary increases as well as to encourage retention of valued employees. The Personnel Committee has recommended a wage increase, which has an approximate $283,000 net impact on current year expenditures.

• A 15.5% increase in funding for North Carolina retirement cost—In 2016, the Local Governmental Employees’ Retirement Systems (LGERS) adopted a rate stabilization policy to allow for predictability and stability in the contribution rates, while continuing keeping the local retirement system one of the best-funded systems in the country. Subsequently, LGERS raised the District’s contribution rate from 7.75% to 8.95% of total salary and wages. Over the next five years, contribution rates are projected to increase to an amount slightly over 11.35%. This has an approximate $112,000 impact on current year expenditures.

• A 6.5% increase in funding for Self-Insured Medical Plan—During FY16, staff worked with its consultant and initiated a top to bottom review of our medical insurance plan. The effort was to insure the District had a medical plan in line with our sister agencies as well as to limit certain benefits and increase cost sharing by employees in the amount of $175,000. The Employee Advisory Committee endorsed these changes. The two groups continue to work on a long-term strategic plan to address controllable medical issues. The 6.5% increase in the employer contribution is in line with medical and prescription trend and has an approximate $142,000 impact on current year expenditures.

• Funding for Post-Employment Health Benefit—Starting in FY09, GASB 45/75 required recognition of cost for Post-Employment Health Benefits. An actuarial study was done in the current year, which stated that


FY20 funding should be approximately $283,000. Current funding has been implemented into the proposed FY20 budget, in addition to the current business plan, and represents 1.6% of total operations.

Materials, Supplies, and Service expenditures increased 1.8% over prior year—The District has made a concerted effort to hold materials, supplies, and services cost close to the prior year’s level, taking into account inflationary cost increases and continued expansion of the District. The District has increased specific line items to address regulatory and operational needs. Discretionary expenditures have been limited where practicable. This has an approximate $125,000 impact on current year expenditures.

Capital Improvement Program The District prepares a ten-year Capital Improvement Program as required by its State Collection System Permit and the Consolidation Agreements. The estimated construction expenditure for FY20 is $29.9 million, which is comprised of an estimated $28.2 million in construction, $736,000 of reimbursement, and $1 million in contingency. The total 10-year CIP budget is $332.4 million. A detailed list of individual projects and planned expenditures by year was presented at the April 23, 2019 CIP meeting. This signifies a large increase in the 10-year CIP due largely to major improvements at the Plant along with upgrades to the interceptor network. MSD will be positioned to meet future regulations and to provide capacity to serve the estimated growth for the next 50 years.

The Board has consistently financed its Capital Improvement Program through revenue bonds and pay-as-you-go moneys. As of June 30, 2019, the District will have $105.6 million in outstanding revenue bond debt, with total debt service of $9.4 million due before the end of the fiscal year. Unlike counties and cities, the District does not have a legally mandated debt limit. However, the District does have a rate covenant. The covenant requires the District to set rates and charges so that income available for debt service will not be less than 120% of fiscal year debt service requirement.

Collection System Capital Improvements: MSD initiated and maintains an aggressive program to rehabilitate its Wastewater Collection System. This program will conform to the North Carolina Department of Environmental and Natural Resources (NCDENR) Collection System Permit requirements, will improve the operational performance, and extend the life of the collection system. The estimated cost over a 10-year period is approximately $225.4 million. MSD’s focus to rehabilitate over 400,000 feet of sewer lines for the next 10 years and other projects identified in the Master Plan. This rehabilitation has been made more cost-effective by the development of the Pipe Rating Program. Pipe Rating is a proactive planning tool, which utilizes Closed Circuit Television (CCTV) information, a GIS database, actual maintenance history to view, rate, and computer-score pipe segments based on a number of factors. These factors, for any given manhole-to-manhole segment, include maintenance work order history, number, severity of defects, record of overflows on that segment, and are combined to yield a rating useful for prioritizing rehabilitation efforts.


Pipe Rating minimizes costs by helping the District focus rehabilitation dollars where they are needed most, rather than the previous replacement of collector lines throughout an entire basin. In recognition of this innovative program, the Association of Metropolitan Sewerage Agencies (AMSA) awarded the District one of only two 2003 National Environmental Achievement Awards. Major projects for FY20 include the Christian Creek Interceptor with 3,668 linear feet $1,950,000, South French Broad Lining Project with 3,976 linear feet $833,000, Weaverville Force Main at Plant with 2,370 linear feet $2,430,000, Walnut Street at Rankin Avenue with 2,495 linear feet $1,341,000. In FY20, Carrier Bridge Pump Station Replacement is scheduled to cost $1.6 million and Plant High Rate Primary Treatment are scheduled to cost $9.2 million. These are in addition to numerous smaller projects completed throughout the collection system. Further details are available in the CIP section of the budget document. The District’s Collection System Master Plan addresses the orderly extension of the District’s collection system into future service areas. The plan has been prepared in close cooperation with the District’s member agencies and regional stakeholders. The land use policies and zoning regulations of each agency were used for land usage, growth projections/densities, and line locations. For areas outside of corporate or jurisdictional limits, Buncombe County’s Zoning Ordinance has played an integral role in defining future service areas. The Plan will serve as a basis to ensure that the sewer system will be extended in an orderly fashion and is done so in accordance with the planning policies of the various local governments within the District’s service area.

Wastewater Treatment Plant Capital Improvements: During FY15, the Treatment Facilities Plan was updated for the Water Reclamation Facility. This Plan provides short, medium, and long-term recommendations for each specific process and facility. This update primarily expanded on several of the original plan’s longer-term recommendations. It focused specifically on improvements to the WRF Headwork’s (i.e. bar screens, influent pumping station, and the problematic grit & grease removal system), including surge control for short-term peak flows. It also investigated in detail the installation of a primary clarification process and has evaluated alternatives for the biological treatment process. Another key aspect of the Facility Plan Update was to gain a solid understanding of regulatory issues that may influence (impact) future treatment requirements and identify long-term biological treatment alternatives to comply with anticipated future regulation changes. Near-term and mid-term project recommendations from the Plan include:

Plant Headworks Project—This $9.6 million project spans 2 years and consists of a new grit removal system to replace the existing problematic system, a fine screening facility which will supplement the WRF’s existing bar screens, and storage at the plant using existing decommissioned tanks to provide more effective treatment during peak flow events. In addition, by removing more grit than the current process, it will help to better protect downstream processes within the plant. Construction of the Plant


Headworks Project began in early April 2017 and is currently operational and in the close-out phase of construction.

High Rate Primary Treatment Project— This $15.1 million project will provide primary clarification by removing solids before the biological treatment stage. This will provide a more effective treatment and will help the Rotating Biological Contactors (RBC’s) to better perform. During high flow (storm) events, this treatment can be ramped-up in order to match the higher flows. Design began in FY17 and construction began in January 2019 and will be completed in the spring 2021.

Biological System Upgrades—This $50 million project is being drive by the water quality regulations as set forth in MSD’s NPDES permit (effluent discharge permit). Compliance with effluent ammonia levels must be achieved by October 2030 and will require significant upgrades to the existing biological treatment system. Design will begin in FY25 with construction starting in FY27.

Impact of CIP on Operations For most municipal and county governments, capital improvements often result in higher operating costs. New buildings typically result in higher utility cost as well as cost for additional personnel. The CIP for the District is largely made up of upgrades to existing facilities such as pump stations, sewer mains, and treatment plant facilities. Although some new chemicals may be added to treatment methods on occasion, the overall net effect of the CIP is actually one of reduced cost. The marginal increase in the size of replacement facilities (seen as up-front capital cost) is offset by increases in efficiencies of the new mechanical and electrical equipment replacements. In addition, as the level of service of the sewer mains increase with the new replacements, the operational cost will decrease for general maintenance and for emergency spill response.

Sewer Rate Increase Staff recommends a 2.5% increase in domestic sewer rates and meter fees for FY20, including a previously approved plan to achieve flow rate parity between industrial and domestic users. This amount is in line with past increases. We believe this rate increase is prudent under the current economic situation and is necessary to provide for the following District responsibilities and objectives:

Meet current and future regulations at the Water Reclamation Facility and for the Collection System Replace and rehabilitate approximately 41,000 linear feet of sewer mains a year Debt coverage ratio attractive to investors and rating agencies Support of the pay-as-you-go element of the CIP in addition to bonds Continue with goal of periodic smaller rate increases in lieu of large increases in future years Adequate current funding and maintenance of prudent reserves for Self-Insured Medical and Dental Plan

In the past, the MSD Board has endeavored to keep rate increases to a minimum. The District’s Bond Order requires sewer rates be set to ensure that the excess of revenues over current expenditures is at least 120% of debt service.


Additionally, the Board balances the bond order requirements while maintaining all regulatory and fiduciary responsibilities. Domestic sewer rates for the past five years as well as FY20 are shown below:

FY15 FY16 FY17 FY18 FY19 FY20

Rate Increase % 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% Meter, Maintenance & Billing Fees $8.73 $8.90 $9.08 $9.30 $9.51 $9.74 Flow Rate (per ccf) $4.18 $4.28 $4.39 $4.50 $4.61 $4.73 Avg. Monthly Bill (5ccf) $28.49 $29.15 $29.88 $30.62 $31.36 $32.17

Distinguished Budget Award The Government Finance Officers Association of the United States and Canada (GFOA) presented a Distinguished Budget Presentation Award to the Metropolitan Sewerage District of Buncombe County, North Carolina for its annual budget for the fiscal year beginning July 1, 2018. This is the twenty-second (22) consecutive year that the MSD has received this award. In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan, and as a communication device. This award is valid for a period of one year only. We believe our FY20 budget continues to conform to program requirements and we are submitting it to GFOA to determine its eligibility for another award.

In Closing The Budget represents the combined efforts and guidance of the Board, its Committees, and staff. A special thanks to Teresa Gilbert for assembling the budget documents, Jim Hemphill/HR Director, Ed Bradford/CIP Director, and Cheryl Rice for assembling the CIP Section of the Budget. We look forward to working with you, staff, and our ratepayers as we implement this financial plan and policy document.

Respectfully submitted,

Thomas E. Hartye, PE W. Scott Powell, CLGFO General Manager Director of Finance


Trend Analysis

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

$40,000,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (EST)

Revenue Trends

Industrial User Fees Domestic User Fees Facility & Tap Fees Investment Interest & Misc.

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Expenditure Trends

Operating Expenses Capital Improvement Program Debt Service


Revenue Summary for FY20

Expenditures Summary FY20

Domestic User Fees,$34,456,107, 59.7%

Industrial User Fees,$3,464,402, 6.0%

Facility & Tap Fees, $2,175,000, 3.8%

Interest & Misc. Income,

$2,078,172, 3.6%

Other Sources & Uses,$15,529,165, 26.9%

FY20 Budget Revenues$57,702,846


Consolidated Budget Summary FY20

FY 2020Proposed

Budget

REVENUES & FINANCING SOURCESDomestic User Fees 32,036,793$ 32,431,584$ 33,623,113$ 1,191,529$ 3.67%Industrial User Fees 4,159,767 3,422,373 3,464,402 42,029 1.23%Billing and Collection 795,574 816,660 832,994 16,334 2.00%Facility and Tap Fees 5,357,008 2,175,000 2,175,000 - 0.00%Interest and Misc. Income 1,206,317 1,164,716 1,596,624 431,908 37.08%Rental Income 81,826 71,641 71,641 - 0.00%City of Asheville (Enka Bonds) 34,522 35,000 35,000 - 0.00%Employee Contributions to Health Fund 382,579 421,467 374,907 (46,560) -11.05%

Proceeds from Revenue Bonds 28,003,632 - - - N/A

Use of (Contributions to) Available Funds (23,268,961) 10,243,546 15,529,165 5,285,619 51.60%

Total Revenues & Financing Sources 48,789,057$ 50,781,987$ 57,702,846$ 6,920,859$ 13.63%

EXPENDITURESOperations and Maintenance 16,198,788$ 16,747,044$ 16,920,101$ 173,057$ 1.03%Construction 22,522,870 23,492,718 29,894,818 6,402,100 27.25%Capital Equipment 663,909 1,094,110 1,053,560 (40,550) -3.71%Bond Principal and Interest 9,403,490 9,448,115 9,834,367 386,252 4.09%

Total Expenditures 48,789,057$ 50,781,987$ 57,702,846$ 6,920,859$ 13.63%

FY 2018 Actual Total

FY 2019 Budget

Increase (Decrease)

% Change

NOTE: Both Operation and Maintenance and Capital Equipment expenditures represent actual amounts to be spent in the respective reserve funds. These amounts do not include current year reserve funds funding request.

O & M Overview

ACTUAL APPROVED ESTIMATED PROPOSED INC(DEC)2017-2018 2018-2019 2018-2019 2019-2020 OVER

BUDGET ACTUAL BUDGET PRIOR YR

BUDGET

SALARIES & WAGES 8,753,418$ 9,125,699$ 9,125,699$ 9,364,530$ 2.62%

BENEFITS 4,264,095$ 4,649,393$ 4,649,392$ 4,926,948$ 5.97%

MATERIALS, SUPPLIES & SERVICES 5,882,315$ 6,608,829$ 6,499,913$ 6,733,365$ 1.88%

REPLACEMENT FUNDS & TRANSFERS 830,478$ 900,610$ 900,610$ 918,680$ 2.01%

CAPITAL EQUIPMENT 195,150$ 119,627$ 119,627$ 138,560$ 15.83%

SUB-TOTAL O&M FUND 19,925,456$ 21,404,158$ 21,295,241$ 22,082,083$ 3.17%

LESS:

Capitalized Construction Expenses (4,019,995)$ (4,411,095)$ (4,409,897)$ (4,538,679)$ 2.89%

NET OPERATION & MAINTENANCE FUND 15,905,461$ 16,993,063$ 16,885,344$ 17,543,404$ 3.24%


FY20 All Department Budget Summary

No. Name ACTUAL ACTUAL ACTUAL Adopted Estimated Percent Proposed Inc (Dec)2015-2016 2016-2017 2017-2018 2018-2019 Actual Expended 2019-2020 Over

Budget 6/30/2019 To Total Budget Prior YearBudget

Salaries & Wages51100 Salaries & Wages 8,114,221.40$ 8,256,868.46$ 8,470,591.31$ 8,804,199.00$ 8,804,199.00$ 100.00% 9,039,530.00$ 2.67%51150 Overtime 281,072.44 256,322.95 282,826.59 321,500.00 321,500.00 100.00% 325,000.00 1.09%

8,395,293.84 8,513,191.41 8,753,417.90 9,125,699.00 9,125,699.00 100.00% 9,364,530.00 2.62%8,395,293.84 8,513,191.41 8,753,417.90 9,125,699.00 9,125,699.00 9,364,530.00

51200 North Carolina Retirement 564,384.10 630,362.92 665,374.99 714,543.00 714,542.00 100.00% 844,680.00 18.21%51250 Payroll Taxes 607,735.77 690,654.00 638,911.88 698,117.00 698,117.00 100.00% 716,387.00 2.62%51300 Medical, Dental & Life 1,805,519.85 1,908,628.00 2,051,775.00 2,185,141.00 2,185,141.00 100.00% 2,327,175.00 6.50%51325 Post Retirement Insurance 191,096.15 270,000.00 249,500.00 307,560.00 307,560.00 100.00% 283,000.00 -7.99%51350 Worker's Compensation 215,312.00 273,000.00 273,000.00 273,000.00 273,000.00 100.00% 273,000.00 0.00%51360 State Unemployment Benefits 6,220.43 1,065.51 4,169.82 32,560.00 32,560.00 100.00% 32,465.00 -0.29%51450 Automobile Allowance - - - - - - - -51500 401-K/457 Plan 359,097.20 369,243.99 381,363.05 438,472.00 438,472.00 100.00% 450,241.00 2.68%

3,749,365.50 4,142,954.42 4,264,094.74 4,649,393.00 4,649,392.00 100.00% 4,926,948.00 5.97%3,749,365.50 4,142,954.42 4,264,094.74 4,649,393.00 4,649,392.00 4,926,948.00

Total Salaries, Wages & Benefits 12,144,659.34 12,656,145.83 13,017,512.64 13,775,092.00 13,775,091.00 100.00% 14,291,478.00 3.75%12,144,659.34 12,656,145.83 13,017,512.64 13,775,092.00 13,775,091.00 14,291,478.00

Materials, Supplies & Services52010 Advertising 23,047.57 29,872.28 27,073.65 35,500.00 33,650.00 94.79% 37,000.00 4.23%52050 Dues & Subscriptions 44,742.89 47,248.57 55,087.28 58,260.00 57,745.00 99.12% 60,710.00 4.21%52100 Postage 8,348.72 9,607.87 14,793.94 12,000.00 12,000.00 100.00% 14,000.00 16.67%52150 Travel, Mtgs & Training 132,443.65 135,708.68 123,715.00 172,219.00 153,707.00 89.25% 187,670.00 8.97%52160 Tuition Assistance 3,407.16 1,499.70 2,153.15 7,000.00 5,000.00 71.43% 7,000.00 0.00%52170 Directors Fees & Expenses 21,412.12 22,040.26 19,944.57 20,000.00 20,000.00 100.00% 22,000.00 10.00%52180 Liability Insurance 605,434.00 547,746.00 547,746.00 547,746.00 547,746.00 100.00% 547,746.00 0.00%52200 Telephone/Telefax 29,427.21 31,559.30 34,442.61 38,000.00 37,500.00 98.68% 38,000.00 0.00%52210 Communications 89,900.00 93,540.25 106,119.70 137,855.00 137,049.00 99.42% 148,260.00 7.55%52240 Uniforms 58,905.42 75,502.00 77,392.60 87,250.00 86,775.00 99.46% 88,650.00 1.60%52250 Office Supplies 20,633.94 17,757.72 16,942.06 27,210.04 26,585.00 97.70% 27,200.00 -0.04%52260 Special Dept Supplies 402,558.34 405,698.77 429,723.05 466,140.00 461,980.00 99.11% 473,495.00 1.58%52270 Safety Equip/Supplies 66,747.80 71,485.85 83,212.80 80,550.00 80,390.00 99.80% 80,800.00 0.31%52280 Maint Supp/Small Tools 103,879.67 113,327.73 134,273.28 137,950.00 137,825.00 99.91% 145,900.00 5.76%52290 Chemical Supplies 429,656.28 421,562.83 423,362.80 509,950.00 504,050.00 98.84% 553,500.00 8.54%52300 Line Cleaning Supplies 56,533.42 64,384.72 45,654.89 53,750.00 53,750.00 100.00% 53,750.00 0.00%52330 Legal Fees 46,971.49 39,364.31 19,166.15 46,655.00 28,475.00 61.03% 42,000.00 -9.98%52350 Prof/Contractual Svcs 404,790.52 583,379.74 518,403.65 627,275.00 604,975.00 96.44% 584,500.00 -6.82%52410 Maint-Buildings & Grounds 121,118.94 141,341.47 139,012.01 151,500.00 151,500.00 100.00% 204,200.00 34.79%52420 Maintenance-Equipment 548,283.83 525,057.38 444,035.12 478,270.00 477,770.00 99.90% 508,270.00 6.27%52430 Landscape Restoration 13,513.62 9,189.87 12,928.86 17,000.00 17,000.00 100.00% 17,000.00 0.00%52440 Pump Maintenance 63,764.14 80,410.24 105,799.01 102,500.00 102,500.00 100.00% 102,500.00 0.00%52450 Equipment Rental 7,451.30 9,647.84 9,802.65 26,200.00 26,200.00 100.00% 30,500.00 16.41%52460 Motor Fuel & Lubricants 128,263.06 128,800.36 156,214.88 210,000.00 210,000.00 100.00% 215,000.00 2.38%52470 Outside Vehicle Maint 12,483.16 11,375.26 11,585.14 15,000.00 15,000.00 100.00% 15,000.00 0.00%52500 Rents/Leases 38,994.18 41,020.59 42,848.85 50,300.00 46,800.00 93.04% 49,300.00 -1.99%52510 Permits/Fees/Software Licenses 232,009.87 231,756.42 233,710.24 267,502.00 259,766.00 97.11% 262,550.00 -1.85%52650 Utilities 943,331.54 1,113,988.48 1,161,805.54 1,285,377.00 1,270,000.00 98.80% 1,275,000.00 -0.81%52690 Freight 4,861.58 4,390.63 3,745.54 5,000.00 4,500.00 90.00% 5,000.00 0.00%52715 Safety Incentive Program 1,846.44 841.60 689.59 2,500.00 2,500.00 100.00% 2,500.00 0.00%52720 Health Fair - - - - - - - -52725 Wellness Program 6,730.67 6,222.83 5,828.50 8,000.00 6,000.00 75.00% 8,000.00 0.00%52730 Employee Asst Program 4,355.00 4,355.00 4,355.00 4,500.00 4,355.00 96.78% 4,500.00 0.00%52900 Other Operating Expenses 1,222.53 1,866.34 1,002.49 3,370.00 3,370.00 100.00% 4,000.00 18.69%52910 Non-Capital Equipment 62,258.25 74,655.70 74,170.54 95,839.96 92,839.96 96.87% 80,870.00 -15.62%52915 Copiers Printers & Faxes - - - 4,000.00 3,950.00 98.75% 4,000.00 0.00%52920 Billing & Collections 754,316.76 768,832.93 795,574.21 816,660.00 816,660.00 100.00% 832,994.00 2.00%

Total Materials, Supplies & Services 5,493,645.07 5,865,039.52 5,882,315.35 6,608,829.00 6,499,912.96 98.35% 6,733,365.00 1.88%5,493,645.07 5,865,039.52 5,882,315.35 6,608,829.00 6,499,912.96 6,733,365.00

Interfund Transfers52340 Debt Administration Expenses 188,362.16 178,880.66 170,478.25 170,610.00 170,610.00 100.00% 168,680.00 -1.13%53040 Fleet Replacement Charges 425,000.00 425,000.00 460,000.00 500,000.00 500,000.00 100.00% 500,000.00 0.00%53050 Wwtp Replacement Charges 200,000.00 200,000.00 200,000.00 180,000.00 180,000.00 100.00% 200,000.00 11.11%53070 Pump Maintenance Replacement - - - 50,000.00 50,000.00 100.00% 50,000.00 0.00%

Total Interfund Transfers 813,362.16 803,880.66 830,478.25 900,610.00 900,610.00 100.00% 918,680.00 2.01%813,362.16 803,880.66 830,478.25 900,610.00 900,610.00 918,680.00

Capital Outlay54010 Capital Equipment - New 79,321.14 49,288.10 91,705.92 58,167.00 58,167.00 100.00% 52,070.00 -10.48%54020 Capital Equip-Software 18,353.88 354.22 9,830.37 3,200.00 3,200.00 100.00% - -100.00%54030 Capital Equip - Replacement 74,888.05 84,379.26 93,613.76 58,260.00 58,260.00 100.00% 86,490.00 48.46%

Total Capital Outlay 172,563.07 134,021.58 195,150.05 119,627.00 119,627.00 100.00% 138,560.00 15.83%172,563.07 134,021.58 195,150.05 119,627.00 119,627.00 138,560.00

18,624,229.64$ 19,459,087.59$ 19,925,456.29$ 21,404,158.00$ 21,295,240.96$ 99.49% 22,082,083.00$ 3.17%18,624,229.64 19,459,087.59 19,925,456.29 21,404,158.00 21,295,240.96 22,082,083.00

59200 LESS:Chargebacks to General Fund for CIP (2,295,944.89) (2,288,880.74) (2,353,594.99) (2,705,222.00) (2,704,024.00) 99.96% (2,797,848.00) 3.42%Chargebacks to General Fund for SSD (1,388,104.00) (1,565,955.82) (1,666,399.82) (1,705,873.00) (1,705,873.00) 100.00% (1,740,831.00) 2.05%

(3,684,048.89)$ (3,854,836.56)$ (4,019,994.81)$ (4,411,095.00)$ (4,409,897.00)$ (4,538,679.00)$

Net Operation & Maintenance Fund 14,940,180.75$ 15,604,251.03$ 15,905,461.48$ 16,993,063.00$ 16,885,343.96$ 99.37% 17,543,404.00$ 3.24%, , , , , , , , , , , ,

Total Salaries & Wages

Benefits

Total Benefits

Sub-Total O&M Fund


Flow of Funds Chart

Pump Stations

Maintenance

Trustee Funds

Income Sources

Expenditures

Flow of Funding Flow of Funding if required for emergency repairs or maintenance

Priority of expenditures per Bond Order1. Current Expenditures2. Debt Service3. Capital Reserve4. Any Lawful Purpose

User Charges, Rental Income & Misc.

Revenue FundO&M paid from Revenue Fund

Capital Reserve Fund

Tap FeesFacility Fees

Grants

General Fund

ConstructionFund

Wastewater Treatment

Plant

Fleet & Heavy Equip

Replacement Funds

Revenue Bond FundSinking Fund Account

Capitalized Interest AccountInterest AccountPrincipal Account

Redemption AccountParity Reserve Account

Employee Contributions Sale of Surplus Property

Medical & Dental

Worker’s Comp

General Liability

Insurance Funds

Post Retirement


Resolution Adopting Preliminary and Sewer Use Charges For The

Metropolitan Sewerage District of Buncombe County, North Carolina

For the Fiscal Year July 1, 2019 Thru June 30, 2020 WHEREAS, the Board of Directors has reviewed the Operations and Maintenance, Bond, Reserves, Construction Expenditures of the District, and the sources of revenue and allocations (uses) of expenditures for the 2019-2020 fiscal year; and

NOW, THEREFORE, BE IT RESOLVED: 1. The following amounts are hereby appropriated in the Revenue Fund for the Operations and Maintenance of

the District and for transfers to the Debt Service, General Fund, and Insurance Funds for the fiscal year beginning July 1, 2019 and ending June 30, 2020:

Operating and Maintenance Expenses $ 13,362,483

Transfer to Insurance Accounts $ 3,430,921

Transfer to Fleet & Heavy Equipment Fund $ 500,000

Transfer to Wastewater Treatment Plant Reserve $ 200,000 Transfer to Pump Stations Reserve $ 50,000

Subtotal O&M $ 17,543,404 Transfer to the General Fund $ 22,692,000

Transfer to Debt Service Fund $ 9,834,367

$ 50,069,771

It is estimated that the following revenues will be available in the Revenue Fund for the fiscal year beginning July 1, 2019 and ending June 30, 2020:

Domestic User Fees $ 33,623,113

Industrial User Fees $ 3,464,402

Billing and Collection Fees $ 832,994

Investment Interest $ 1,166,960

Reimbursement for Debt Service from COA $ 35,000

Rental Income $ 71,641

Appropriated from Net Position $ 10,875,661

$ 50,069,771

2. The following amounts are hereby appropriated in the General Fund for the transfers to the Construction Fund for the fiscal year beginning July 1, 2019 and ending June 30, 2020:

Transfer into Construction $ 29,366,000


It is estimated that the following revenues will be available in the General Fund for the fiscal year beginning July 1, 2019 and ending June 30, 2020:

Facility and Tap Fees $ 2,175,000 Investment Income $ 240,000

Transfer in from Revenue Fund $ 22,692,000

Appropriated from Net Position $ 4,259,000

$ 29,366,000 3. The following amounts are hereby appropriated in the Construction Fund for Capital Improvement Plan expenditures for the fiscal year beginning July 1, 2019 and ending June 30, 2020.

Capital Improvements Projects $ 29,894,818

It is estimated that the following revenues will be available to the Construction Fund for the fiscal year beginning July 1, 2019 and ending June 30, 2020.

Investment Income $ 30,000

Transfer in from General Fund $ 29,366,000

Appropriated from Net Position $ 498,818

$ 29,894,818

4. The following amounts are presented as the financial plan of the Insurance Funds that are used to provide insurance services. Estimated operating expenditures for the fiscal year beginning July 1, 2019 and ending June 30, 2020 are:

Operating Expenditures $ 3,696,178

It is estimated that the following revenues will be available in the Insurance Funds for the fiscal year beginning July 1, 2019 and ending June 30, 2020:

Transfer in from Revenue Fund $ 3,430,821


Employee/Retirees Medical Contributions $ 374,907

Contribution to Net Position $ (165,150)

$ 3,696,178

5. The following amounts are presented as the financial plan of the Fleet & Heavy Equipment Fund designated for capital equipment expenditures for the fiscal year beginning July 1, 2019 and ending June 30, 2020 estimated as follows:

Capital Equipment $ 557,000


It is estimated that the following revenues will be available in the Fleet & Heavy Equipment Fund for the fiscal year beginning July 1, 2019 and ending June 30, 2020:

Transfer from the Revenue Fund $ 500,000

Sale of Surplus Property $ 66,840



$ 557,000 6. The following amounts are presented as the financial plan of the Wastewater Treatment Plant Replacement Fund designated for wastewater treatment plant capital expenditures for the fiscal year beginning July 1, 2019 and ending June 30, 2020 estimated as follows:


It is estimated that the following revenues will be available in the Wastewater Treatment Plant Replacement Fund for the fiscal year beginning July 1, 2019 and ending June 30, 2020:




$ 298,000 7. The following amounts are presented as the financial plan in the Pump Station Replacement Fund designated for pump capital expenditures for the fiscal year beginning July 1, 2019 and ending June 30, 2020 estimated as follows:


It is estimated that the following revenues will be available in the Pump Station Replacement Fund for the fiscal year beginning July 1, 2019 and ending June 30, 2020:




$ 60,000


8. The following amounts are hereby appropriated in the Debt Service Fund for principal and interest payments for the fiscal year beginning July 1, 2019 and ending June 30, 2020:

Debt Service $ 9,834,367

It is estimated that the following revenues will be available in the Debt Service Fund for the fiscal year beginning July 1, 2019 and ending June 30, 2020:

Transfer from the Revenue Fund $ 9,834,367



$ 9,834,367

9. That the Board of the Metropolitan Sewerage District does hereby approve an increase in the Budgets to the

amount necessary to reflect any contributions to the Debt Service Reserve Fund or Capital Reserve Fund as determined by the Bond Trustee to be necessary to comply with covenants in the Bond Order.

10. The General Manager is hereby authorized to transfer appropriations as contained herein under the following

conditions:

a. He may transfer amounts without limitation between departments in a fund. b. He may transfer any amounts within Debt Service and Reserve Funds designated as excess by the

Trustee into another fund. c. He may transfer up to 10% of Insurance Fund reserves to meet current year expenditures in excess of

budget. 11. That the attached Schedule of Fees and Charges be adopted as effective July 1, 2020.

12. That this resolution shall be entered in the minutes of the District and within five (5) days after its adoption,

copies thereof are ordered to be filed with the Finance and Budget Officer and Secretary of the Board as required by G.S. 159-13 (d).

Adopted this 15th day of May 2019

M. Jerry VeHaun, Chairman Metropolitan Sewerage District of

Buncombe County, North Carolina Attest: Jackie W. Bryson Secretary/Treasurer





Teresa L. Gilbert, CBEO, Budget Analyst

Subject: Schedule of Sewer Rates and Fees FY2020

The following is a schedule of rates and fees based upon assumptions in the Preliminary Budget and recommendations based upon the Business Plan. v Collection Treatment Charge/Base Meter Maintenance Charge: The collection treatment charge is a

volumetric charge based on a customer’s monthly or bi-monthly water use. Staff is recommending a 2.5% increase for residential and commercial flow and continuation of the District’s industrial rate parity plan, which calls for an average increase of 4.0%. The Base meter charge is a fixed rate based on meter size. Staff is recommending a 2.5% increase in this charge. Average monthly residential bill will be $32.17 for five (5) CCF of consumption after the aforementioned increases. This is a $0.81 increase over prior year’s monthly bill.

v Sewer System Development Fee: The District established this in 1990 to collect from the new customers a fee, which accounts for their allotted capacity for the capital cost of the sewage collection, transport, and treatment infrastructure. On July 20, 2017, the North Carolina General Assembly passed into law North Carolina General Statute 162A Article 8 (“Article 8”). Article 8 provides for the uniform authority to implement system development fees for public water and sewer systems. Raftelis Financial Consultants, Inc. was engaged to perform a study which conforms to the conditions and limitations of Article 8. All proposed recommendations have been implemented in the FY2019 Schedule Rates and Fees. Staff is recommending no fee increase in FY2020.

Discussion

ACTION ITEM Finance Committee

Background

Meeting Date: May 2, 2019 Subject: Schedule of Sewer Rates and Fees FY2020 Page 2

v Sewer Connection Fee: The sewer connection fee is the charge for the investigation and actual physical connection to the sewer system. The District has traditionally done this work with its System Services forces while outsourcing certain parts of the tap installation. In FY2019, staff reviewed cost for connections for the last three fiscal periods. Staff is recommending no fee increase in FY2020.

v Other Fees: These fees were computed in connection with the review process of Planning and Development Division. Staff is recommending no fee increase in FY2020.

v Bulk Charges: Septage hauler fees have been updated to reflect the current industrial rates in accordance with the industrial fee parity plan.

v Returned Check Charge: Such charges do not fully reimburse the time spent by District staff processing and collecting bad checks, nor for charges assessed by our bank. However, these fees are comparable to charges assessed by retail merchants and other governments. Staff is recommending no fee increase in FY2020.

v Copy and Printing Fees: These fees were computed by Information Technology staff and reflect the cost of materials used to comply with NC public records regulations. They also are in line with copy fees assessed by certain other NC governmental units. Staff is recommending no fee increase in FY2020.

This fee schedule corresponds to the rates and fees presented in the updated business plan. The typical monthly bill for FY2020 will be $32.17. This is a $0.81 increase over prior year’s monthly bill. Staff requests that the Finance Committee recommend to the Board that the attached Schedule of Rates, Fees, and Charges be endorsed today and presented to the Board at the May 15, 2019 Board Meeting.


Fiscal Impact


Rate increase 2.5% 2.5%

Collection Treatment ChargeResidential & Commercial Volume Charges (per CCF) Inside 4.61$ 4.73$

Industrial Volume Charges (per CCF) Inside 4.47$ 4.58$

Industrial Surcharge for BOD (per lb., BOD >250 mg/l) Inside 0.307$ 0.300$

Industrial Surcharge for TSS (per lb., TSS >250 mg/l) Inside 0.253$ 0.250$

Residential & Commercial Volume Charges (per CCF) Outside 4.62$ 4.74$

Industrial Volume Charges (per CCF) Outside 4.48$ 4.59$

Industrial Surcharge for BOD (per lb., BOD >250 mg/l) Outside 0.307$ 0.300$

Industrial Surcharge for TSS (per lb., TSS >250 mg/l) Outside 0.253$ 0.250$

Base Meter/Maintenance Charge & Billing Fee5/8" 7.11$ 7.29$

3/4" 10.35$ 10.61$

1" 18.37$ 18.83$

1 1/2" 42.04$ 43.09$

2" 74.34$ 76.20$

3" 164.87$ 168.99$

4" 294.21$ 301.57$

6" 662.77$ 679.34$

8" 1,176.82$ 1,206.24$

10" 1,842.84$ 1,888.91$

Billing Fee (per bill) 2.40$ 2.45$

Sewer System Development FeesThis impact fee is for alloted capacity in the treatment and transmission

system. A differential fee will be charged for increases to an existing meter

size.

ResidentialPer Unit 2,836.00$ 2,836.00$

Multifamily Unit 1,900.00$ 1,900.00$

Affordable Housing 670.00$ 670.00$

CURRENT FY19 RATE

PROPOSED FY20 RATE


Sewer System Development Fees (continued)

Nonresidential5/8" 2,836.00$ 2,836.00$

3/4" 4,254.00$ 4,254.00$

1" $ 7,090.00 $ 7,090.00

1 1/2" $ 14,180.00 $ 14,180.00

2" $ 22,688.00 $ 22,688.00

3" $ 45,376.00 $ 45,376.00

4" $ 70,900.00 $ 70,900.00

6" $ 141,800.00 $ 141,800.00

8" $ 226,800.00 $ 226,800.00

10" $ 595,560.00 $ 595,560.00

12" $ 751,540.00 $ 751,540.00

Sewer Connection Fees**This fee is to provide new or re-establish existing service connections to the MSD system.

Sewer Connection by MSD 1,300.00$ 1,300.00$

Pavement Disturbance and Boring Fee 2,300.00$ 2,300.00$

Inspection Fee for Developer (or Utility Contractor) Installed Sewer Connection 140.00$ 140.00$

**The Sewer Connection Fee will apply to all new construction, as well as

existing structures which have been demolished/rebuilt and sewer service is

reinstated under new property ownership. MSD reserves the right to require that

a licensed utility contractor install any sewer connection/service line. Sewer

service lines within public rights-of-way between 75 and 300 feet shall be

constructed by a licensed utility contractor to MSD Standards. All work will be

subject to MSD inspection.

Manhole Installation/ReplacementCost per foot 250.00$ 250.00$ Pavement replacement (if required) 1,800.00$ 1,800.00$

CURRENTFY19 RATE

PROPOSED FY20 RATE


Other FeesAllocation Fee 170.00$ 170.00$

Non-Discharge Permit 200.00$ 200.00$

Plan Review Fee 450.00$ 450.00$

Plan re-review Fee 350.00$ 350.00$

Pump Station Acceptance Fee Note 1 Note 1

Note 1--See policy for details of computation of O&M and equipment replacement costs for upcoming 20 years; 50% discount for affordable housing

Bulk ChargesVolume Charge for Septic Haulers (per 1,000 Gal.) 45.00$ 45.00$ Biochemical Oxygen Demand >250 mg/l (per lb.) 0.307$ 0.300$

Total Suspended Solids >250 mg/l (per lb.) 0.253$ 0.250$

Returned Check ChargeReturned Check (per event) 25.00$ 25.00$ Dishonored Draft (per event) 25.00$ 25.00$

Copy/Printing Fees/Miscellaneous (each)

8x11 first print of standard GIS inquiry 1.00$ 1.00$ 8x14 first print of standard GIS inquiry 1.00$ 1.00$ 11x17 first print of standard GIS inquiry 2.00$ 2.00$ 24x36 first print of standard GIS inquiry 7.00$ 7.00$ 34x44 first print of standard GIS inquiry 12.00$ 12.00$ 36x48 first print of standard GIS inquiry 14.00$ 14.00$ 8x11 or 8x14 copies after first print 0.11$ 0.11$ 11x17 copies after first print 0.20$ 0.20$ 24x36 copies after first print 0.94$ 0.94$ 34x44 copies after first print 1.76$ 1.76$ 36x48 copies after first print 2.03$ 2.03$ Foam Core mounting per sq. foot 3.00$ 3.00$ Data CD 30.00$ 30.00$ Shipping for CD 5.00$ 5.00$ Permit Decals for Septic Haulers 50.00$ 50.00$

CURRENT FY19 RATE

PROPOSED FY20 RATE

Documents

Notice of Committee Meeting€¦ · for South Urban Region District Adopted Increases ; Meeting Date: April 30, 2019 ; Subject: Pay Adjustment and Self-Insured Health Plan for FY