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HomeMy WebLinkAboutFC Minutes 03/20/2017mmtart 11'"Wpw FINANCE COMMITTEE Minutes of the Meeting March 20, 2017 Emergency Operations Center 1720 W. Central Road CALL TO ORDER — ROLL CALL The meeting was called to order at 7:03 p.m. by Chairperson John Kellerhals. Commissioners present included Trisha Chokshi, Vince Grochocinski, Don Ocwieja and Mary Rath. Staff present included Finance Director David Erb, Public Works Director Sean Dorsey, Public Works Deputy Director Jason Leib and Administrative Analyst Alexander Bertolucci. II. APPROVAL MINUTES a. February 23, 2017 — Motion made by Commissioner Grochocinski seconded by Commissioner Chokshi. Minutes were approved as amended. III. CITIZENS TO BE HEARD None IV. OLD BUSINESS Water Rate Study Discussion Public Works Director Sean Dorsey reviewed the existing water and sewer cost drivers that include loss of Special Service Area (SSA) #5, accelerated lead service line and water main replacement, reduced consumption, tighter water loss rules, 1% annual replacement of water and sewers mains per best practices, and general system improvements (i.e. addressing high/low water pressures). Nationally utility rate increases are rapidly outpacing inflation with an Average Water & Sewer Index increase of 5.5%/year and Average Consumer Price Index increase of 1.5%/year. Revenues under existing rates are not sufficient to fund anticipated operating and maintenance and capital costs. The proposed revenue adjustments (8.5% annual rate increases) will meet the funding needs and typical bill impacts were reviewed. Staff provided additional information to answer questions from the February 23 meeting. This included identifying the Village's small meter inventory and presenting alternative rate scenarios which equalize disbursement of fixed fee across the small water meters. The proposed water and sewer rates options included: • Report recommendation - 8.5% average annual increases with non -equalized small meter fixed rate. • Alternative 1 — 8.5% average annual increases with equalized small meter fixed rate. • Alternative 2 - 6.5% average annual increases with equalized small meter fixed rate. • Alternative 3 — 9% increase initially, with 6.5% annual increases thereafter and equalized small meter fixed rate. The Finance Commission reviewed the presented water & sewer rate scenarios. Finance Commission Page 1 of 3 03/20/17 The following responses from staff were provided to questions from the Finance Commission: • 2/3 d of the community would see a break in property taxes with the expiration of SSA #5. • Water consumption declines as appliances are replaced with more water efficient models, households become smaller and the population ages. There is potential for small growth in water consumption from annexations and redevelopment. Funding models can be adjusted if growth is realized. • 1" water meters are not geographically concentrated but are spread throughout the Village. • The Village complies with the State Plumbing Code and does not have local plumbing code requirements. The State code as a formula to determine water meter size based on demand (e.g. number of fixtures). • Fix rate component helpful for stabilizing the revenue stream from seasonal impacts. • The Village has received complaints due to low water pressure. Additionally, adequate water pressure throughout the system is critical for fire response and hydrant pressure which ultimately affects the Village's ISO (Insurance Service Office) rating and homeowner insurance rates. • Water demand is measured over the period of a year. There was also general discussion regarding the practice of aligning revenues with services, expected capital improvements, other near term financial impacts (expiration of SSA #5, renewal of solid waste contract at lower rates, etc.) and the budget calendar with respect to presenting the Commission's water and sewer rate recommendation. There was further discussion weighing the option of equalizing the fixed rate for residential 5/8, 7/8 and 1 inch water meter accounts. Commissioner Grochocinski, seconded by Commissioner Ocwieja, moved to recommend the 120 year replacement schedule using an equalized fixed rate for residential 5/8, 7/8 and 1 inch water meter customers and implementing a borrowing schedule as recommended by consultants. Ayes: Grochocinski, Ocwieja, Rath Nays: Chokshi Absent: Bazan, Pekras Commissioner Rath, seconded by Commissioner Ocwieja, moved to have Chairperson Kellerhals meet with Finance Director Erb to act on the recommendation for the purposes of presenting it to the Village Board. Ayes: Chokshi, Grochocinski, Ocwieja, Rath Nays: None Absent: Bazan, Pekras Finance Commission Page 2 of 3 03/20/17 Commissioner Chokshi, seconded by Commissioner Rath, moved to hold a special meeting on Thursday, April 20, 2017 to further review the Commission's water and sewer rate recommendation. Ayes: Chokshi, Grochocinski, Ocwieja, Rath Nays: None Absent: Bazan, Pekras V. NEW BUSINESS None VI. ANY OTHER BUSINESS The 1St quarter budget review typically held in April was rescheduled to the first Committee of the Whole meeting in May (May 9th). This will be a joint workshop with the Village Board and Finance Commission. VII. CHAIRMAN'S REPORT None VIII. FINANCE DIRECTOR'S REPORT None IX. NEXT MEETING Thursday, April 20, 2017 at 7:00 p.m. in the Emergency Operations Center, 1720 W. Central Road X. ADJOURNMENT Motion made by Commissioner Grochocinski seconded by Commissioner Chokshi. The meeting adjourned at 9:36 p.m. Alexander Bertolucci Administrative Analyst Finance Commission Page 3 of 3 03/20/17