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RECOMMENDATIONS FROM THE WATER DISTRICT ADVISORY BOARD
Release Date: May 27, 2014
At the Greenburgh Town Board meeting tomorrow we will discuss increasing water rates. The water rate increase is a pass along --NYC has increased their rates. And, we purchase from them. The following are additional recommendations being made by the Water District Advisory Board --dealing with a 10 year plan and infrastructure improvements that have to be made. The Town Board meeting starts at 7:30 PM on Wednesday at Greenburgh Town Hall.
The Water District Advisory Board is made up of residents. The members have extensive management, business, financial, legal skills. They have been working very hard reviewing the operations of the water district. If you would like to be a part of the Water District Advisory Board or would like to be notified of meetings please e mail me at firstname.lastname@example.org
WATER DISTRICT ADVISORY BOARD STATUS REPORT TO TOWN BOARD ON ACTIVITIES TO DATE AND RECOMMENDATION
THAT WATER DISTRICT RATES BE INCREASED
The Water District Advisory Board (“Advisory Board”) respectfully provides the following status report to the Town Board and, of critical importance, recommends that the Town Board approve a rate increase for the Greenburgh Water District (“Water District”), effective July 1, 2014, limited to the increases in New York City water rates described below.
The Water District receives all of its water supply from the New York City Department of Environmental Protection (“DEP”) and must pay for that water at the rate determined by DEP. Water rates were already increased 12.3% (to $1,496.76 per MG) for bulk water supply, effective July 1, 2013, an increase not yet reflected in Water District rates, and DEP has further increased the cost of bulk water another 5.13% (to $1,573.61 per MG) to be effective July 1, 2014 (pending public hearing and final ratification by DEP June 2, 2014). Water District rates should be increased by 7.70% to reflect the combined 18.11% increase from the DEP and that bulk water supply accounts for 42.52% of the District’s 2014 budget.
The Advisory Board recognizes that various fixed costs have increased since Water District rates were last set, however, the Advisory Board has been unable to obtain information from the Water District sufficient to determine the net increase in fixed costs and any corresponding additional rate increase that might be appropriate. The Advisory Board, therefore, recommends that the Town Board authorize a rate increase at this time that is limited to the increase in bulk water rates described above. The Advisory Board encourages the Water District to carefully analyze the need for an additional increase based upon a net increase in fixed costs, including infrastructure costs, and any reduced sales and, if the Water District believes an additional rate increase is necessary, to provide support for such an increase to the Advisory Board for its review.
In addition, the Advisory Board recognizes that the Water District has not yet completed a rate study that will provide more detail regarding the precise rates necessary to produce the required revenues. The Advisory Board recommends that the Town Board consider and approve a 7.70% across the board increase as soon as possible. The Advisory Board further recommends that the Town Board consider and approve a revised rate structure, including any necessary true-ups to reflect differences between the across the board increase and the approved rate structure, when the Water District has provided the necessary detail.
The Advisory Board recommends this approach for two important reasons. First, the same amount of dollars will need to be collected whether the increase goes into effect on July 1 or at a later date, but those revenues can be collected with a lower percentage rate increase if the rates go into effect during the summer when water consumption is highest. Second, in the interest of conserving water and reducing overall costs to the Water District and its customers, customers are better off if their rates reflect the costs of providing water during the peak summer period so that they can adjust their consumption accordingly.
The Advisory Board recognizes the impact of water rate increase on Greenburgh’s residents and businesses and, for that reason, has recommended the minimum amount necessary for the Water District to continue to provide safe, sustainable and reliable water service now and in the future, while also maintaining the financial strength of the Water District and the Town of Greenburgh.
In order to provide context for the Town Board’s consideration of the proposed rate increase and to advise the Town Board of critically important Water District issues, the Advisory Board has prepared the following status report on its consideration of key Water District issues. The Advisory Board emphasizes the urgent need for infrastructure improvements, including at the Rumbrook and Knollwood pumping stations and at various water tanks.
Advisory Board Role
The Advisory Board’s role is set forth in the March 28, 2012 resolution of the Town Board, which charged the Advisory Board with:
1. Determining appropriate water rates;
2. Addressing existing and future concerns affecting the Town’s water supply;
3. Educating ratepayers of necessary and vital infrastructure requirements; and
4. Helping to provide for a safe and sustainable water supply and delivery infrastructure for the future.
Need for 10-Year Comprehensive Plan
The Water District is confronting several important investment decisions regarding the infrastructure necessary to provide safe, reliable and sustainable water in the future. The Advisory Board’s analysis and discussion of infrastructure issues is necessarily preliminary given the scope and complexity of the issues. It is indisputable that the decisions will have very significant rate impacts. The Advisory Board strongly recommends that the Water District develop a ten-year comprehensive plan that thoroughly explores the important issues set forth below. Within the next several months, the Advisory Board will be providing a more detailed recommendation for the funding of a comprehensive plan.
Based upon the Advisory Board’s preliminary analysis, a Comprehensive Water District Plan should be prepared to include: an infrastructure plan for a minimum of ten years; a financial planning model to project the impact on the Water District of activities for the next ten years, including projected fund balances, cash funding, borrowing requirements and impacts on water rates; and analysis of an optimal legal organizational and operating structure, including potential considerations for continued ownership and management versus possible sale to an investor owned utility.
· Issue — the water meter reading systems were not functional.
· Action plan/timetable – New water meter installations should be completed by the middle of 2015 at a total cost of approximately $5.5 million of which $2.0 million had been pre-funded. Upon completion of water meter installation, the Water District and the Advisory Board will consider rate design changes that may be possible with the new meters and associated software, including possible conservation rates designed to reflect the true costs of providing water service and encouraging wise and efficient use of water.
Rumbrook Pump Station
· Issue – Pump station cannot function in a reliable and efficient manner at its full designed capacity and in compliance with all applicable codes and regulations.
· Action plan/timetable – A report dated February 2014 prepared by Arcadis, the Town’s consultant, Rumbrook PS Condition Assessment Report, includes recommendations for critical improvements ranked by priority, the alternatives costing between $1,310,000 to $2,715,000.. The next step is a preliminary engineering study. The Advisory Board anticipates that the recommended action will be implemented approximately three years after the Town Board approves the preliminary engineering study.
Interconnection of Rumbrook
· Issue – Inability of Rumbrook pumping station to serve as a reliable back-up and secondary water source to the Knollwood pumping station.
· Action plan/timetable – A report dated February 13, 2014 prepared by Arcadis, the Town’s consultant, Rumbrook – Knollwood Water Pump Station Interconnection, includes a recommendation to implement one of three proposed scenarios with an aggregate investment of between $6.1 million and $ 14.3 million. The next step is to further refine the recommended interconnection scenario and to better define the estimated construction cost. Following that, the selected scenario would be designed, followed by the construction. The timeframe for implementation of the back-up capability is estimated as three years from the date of approval to proceed with the recommendations.
Knollwood Pump Station.
? Issue – Pump station is over 60 years old and requires major upgrades to the water pumps and electrical control systems
? Action plan – No current engineering analysis has been prepared, but the prior comprehensive plan in 1999 indicated $275,000. The prior study will have to be updated.
Water Tanks -
? Issue – Maintenance of the 6 water tanks is both critical and expensive.
? Action plan/timetable – The Water District must assess the need for water storage, including all existing tanks and fire capacity, as well whether tanks should be maintained or replaced. In addition, the Water District should determine whether future maintenance should be accomplished through a comprehensive 10-year maintenance contact or through a long-term operations and maintenance plan.
Water Pipes and Related Controls
? Issues – Studies indicate many water pipes have flow restrictions due to tuberculation within the pipes. This condition results in related water demand problems and increased pumping.
? Action plan/timetable – An engineering assessment is required to develop an actionable plan.
? Issue – Need for a plan to provide for a safe and minimum but adequate water supply if an infrastructure failure were to occur.
? Action plans/timetable – The Water District must formalize and test such a plan. The Water District should consider whether emergency conservation rates designed to reduce usage should be part of the plan.
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