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Light and Power

Sanitary Landfill

2017, 2018 and


2019 Rate Analysis
Water Reclamation

Storm Drainage

Water Purification

Rate Presentation
Light and Power:

Customer Rates

Sanitary Landfill:

Tipping Fees

Storm Drainage:

Drainage Fees

Water Purification: Customer Rates


Water Reclamation: Customer Rates

All enterprise accounts (Water Purification,


Water Reclamation, Sanitary Landfill, and
Light and Power) cover the true cost for
the enterprise, including operation,
maintenance, periodic capital replacement,
new capital acquisitions and
improvements, debt service requirements,
and other costs deemed necessary.

Continued investment in our existing


infrastructure reduces risk and
maintains uninterrupted service.

We Are On Plan
Previously presented two year rates

in 2014.
Proposing rates for Light & Power,

Sanitary Landfill, Water Purification,


Storm Drainage and Water
Reclamation through 2019.

Sioux Falls Light and Power


2017, 2018 and 2019 Rate Analysis

Jerry Jongeling,
Light Superintendent
6

Light and Power Facts


Serves small, defined service territory.
Approximately 2680 customers
2250 Private Accounts
430 Governmental Accounts
Ten largest customers, by consumption:
1. Schools (approx. 14 buildings) 6. Lakeside Dairy
2. Events Center
7. Washington Pavilion
3. Water Purification
8. SF Convention Center
4. SD Air Guard
9. Sheraton Sioux Falls
5. SF Regional Airport
10. Health and Human Services
Approximately 50% of electricity provided by the Light
Department is to public entities.
7

Key Modeling Assumptions


Cost of supplemental purchased power is
anticipated to grow by 5%. Power costs
account for 72% of 2016 operating budget.
Investments in infrastructure improve reliability
and reduce risk.
No current or future debt planned for this
utility.

Priority Light and Power Projects


Circuit Improvements

$ 420,000

New distribution circuits


added to increase capacity
and improve reliability.

Electronic Automated
Reading System

$ 150,000

Transmission and
Substation Upgrades

$3,810,000

$5.0

10%

$4.5

9%

$4.0

8%

$3.5

7%
6%

$3.0

6%
5%

$2.5

5%
4%

$2.0

4%

3.5%

$1.5

3%

3%

$1.0

2%

$0.5

1%
0%

$0.0
2015

0%

2016
2017
2018
Estimated Operating Reserves

2019
2020
2021
Target Operating Reserves

% Increase, Residential Rate

Dollars (Millions)

Cash Targets & Balance Projections

0%
0%
0%
2022
2023
2024
Residential Rate Adjustment

0%

10

Proposed 2017 Customer Rates


Light and Power
Average
Monthly
Bill

Class

Change to
Average
User (%)

Monthly
Change to
Average
User ($)

Residential (average usage is 456 kWh*)

52.76

6.0%

3.17

Small Commercial

193.77

6.0%

11.63

Large Commercial (good load factor)

$ 1,833.37

6.0%

110.00

Large Commercial (average load factor)

$ 2,628.84

6.0%

157.73

* 2015 average usage

11

Proposed 2018 Customer Rates


Light and Power
Average
Monthly
Bill

Class

Change to
Average
User (%)

Monthly
Change to
Average
User ($)

Residential (average usage is 456 kWh*)

55.93

5.0%

2.80

Small Commercial

205.40

5.0%

10.27

Large Commercial (good load factor)

$ 1,943.37

5.0%

81.62

Large Commercial (average load factor)

$ 2,786.57

5.0%

139.33

* 2015 average usage

12

Proposed 2019 Customer Rates


Light and Power
Average
Monthly
Bill

Class

Change to
Average
User (%)

Monthly
Change to
Average
User ($)

Residential (average usage is 456 kWh*)

58.73

4.0%

2.35

Small Commercial

215.67

4.0%

8.63

Large Commercial (good load factor)

$ 2,040.54

4.0%

81.62

Large Commercial (average load factor)

$ 2,925.90

4.0%

117.04

* 2015 average usage

13

Sioux Falls Regional


Sanitary Landfill
2017, 2018 and 2019 Tipping Fee
Analysis
Dustin Hansen, Landfill Superintendent
14

Sioux Falls Regional


Sanitary Landfill
Landfill Serves a Five-County Region:

Lake
Lincoln
McCook
Minnehaha
Turner

Landfill serves a population


of approximately 256,250.
Landfill located 5 miles
west of Sioux Falls on
41st Street.

15

Municipal Solid Waste (MSW)


Everyday trash or garbage.

Construction and Demolition


Debris (C&D)
Debris generated by
construction, renovation
and demolition.
Concrete, wood, metals,
glass, etc.
16

Key Modeling Assumptions


0.5% Increase in Waste Tonnage Annually.
Material Recovery Facility beginning in 2018.
Planning for a reduction in Landfill Gas revenues starting in 2019.

No current or future debt planned for this utility.

17

Rate Funded Capital


Improvement Projects
(2017-2021)
Material Recovery Facility

$6,795,000

Leachate Recirculation and


Landfill Gas Infrastructure

$2,135,000

Land Acquisition

$1,219,000

Composting Facilities Expansion

$ 765,000

18

Cash Targets & Balance Projections


$25,000,000

No Rate Increase requested for 2017, 2018 or 2019

10.00%
9.00%

$20,000,000

8.00%
7.00%
6.00%

Dollars

$15,000,000

5.00%
$10,000,000

4.00%
2.78%

3.00%
$5,000,000

2.00%

0.00%

0.00%

0.00%

0.00%

2016

2017

2018

2019

0.00%

$0

1.00%
0.00%

Unrestricted Cash

Restricted Cash

Year

Target Unrestricted Balance

2020
Target Restricted Balance

2021
Rate Adjustments

19

Expanded Regional Landfill MSW Tipping Fees


Billings, MT
Lincoln, NE
Omaha, NE
Sheldon, IA
Fort Dodge, IA
Boone, IA
Clear Lake, IA
Jackson, NE
Lemmon, SD (2012)
Watertown, SD
Selby, SD
Mitchell, SD
Sioux Falls, SD (2016-2019)
Fargo, ND
Aberdeen, SD
Marion, IA
Sioux City, IA
Vermillion, SD
Sisseton, SD
Pierre, SD
Pukwana, SD
Brookings, SD
Blue Earth County, MN
Bismarck, ND
Belle Fourche, SD
Grand Forks, ND
Lake Andes, SD
Cheyenne, WY
Albert Lea, MN
Custer, SD
Norfolk, NE
Ames, IA
Marshall, MN
Worthington, MN
Rapid City, SD
Rochester, MN

Location of Landfill

$17.50
$17.75

$0.00

$25.03

$33.00
$35.00
$31.00
$31.00
$35.00
$33.33
$37.50
$37.00
$36.00
$36.00
$38.00
$38.00
$38.00
$43.00
$46.50
$42.00
$42.00
$41.50
$44.00
$45.00
$45.00

$52.19
$48.40
$48.00
$49.45

$58.67
$52.00
$56.00
$52.75
$56.97

$59.00
$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

Fee Per Ton

$65.00
$83.00
$70.00

$80.00

$90.00

$100.00

$110.00

20

Expanded Regional C&D Tipping Fees


$4.00

$17.50
$20.00
$20.00

$26.77
$24.00
$25.03
$25.90
$27.00

Location of Landfill

Lincoln, NE
Billings, MT
Selby, SD
Aberdeen, SD
Grand Forks, ND
Bismarck, ND
Omaha, NE
Belle Fourche, SD
Sheldon, IA
Pierre, SD
Marshall, MN
Fort Dodge, IA
Boone, IA
Norfolk, NE
Worthington, MN
Clear Lake, IA
Fargo, ND
Jackson, NE
Lemmon, SD (2012)
Rochester, MN
Sioux Falls, SD (2016-2019)
Watertown, SD
Sisseton, SD
Mitchell, SD
Sioux City, IA
Vermillion, SD
Pukwana, SD
Brookings, SD
Custer, SD
Albert Lea, MN
Blue Earth County, MN
Cheyenne, WY
Rapid City, SD
$0.00

$52.19

$33.00
$31.00

$35.00
$56.00

$40.00

$31.00
$33.00
$35.00
$33.33
$33.33
$34.00
$37.50
$35.00
$36.00

$43.00
$41.50
$44.00
$45.00
$45.00
$45.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

Fee per Ton

$35.00

$40.00

$45.00

$50.00

$52.00

$53.40
$55.00

$59.00
$60.00

$65.00

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Storm Drainage Utility


2018 and 2019
Rate Analysis

Andy Berg, Environmental/Storm


Water Manager

22

STORM DRAINAGE
DIVISION OVERVIEW
Mission is to safely convey urban runoff
to the Big Sioux River
SW Floodplain model and plan public
improvements
Continue to lead efforts to improve water
quality of the Big Sioux River

Requesting drainage fees for 2018 and


2019

23

STORM DRAINAGE FUNDING


DRAINAGE FEE
REVENUE

OPERATION &
MAINTENANCE

PLATTING FEE
REVENUE

FLOOD CONTROL
SYSTEM
RENEWAL &
REPLACEMENT

CAPITAL
IMPROVEMENTS
IN EXISTING
AREAS

CAPITAL
IMPROVEMENTS
IN DEVELOPING
AREAS

ADDITIONAL O&M
REVENUE
REQUIREMENTS

24

STORM DRAINAGE FUNDING

Before

After

INLETS ARE DETERIORATING FASTER THAN WE


CAN FIX THEM
25

STORM DRAINAGE FUNDING

Before

After

CHANNEL REHABILITATION
26

STORM DRAINAGE FUNDING

Before

After

SUMP PUMP COLLECTION SYSTEM RETROFITS


27

STORM DRAINAGE FUNDING

CLEANING CHANNELS AND PIPES TO REDUCE


STREET FLOODING
28

STORM DRAINAGE FUNDING

STREET SWEEPING TO REDUCE


SILTATION AND IMPROVE WATER QUALITY
29

STORM DRAINAGE FUNDING

REGIONAL BMP PROGRAM


(LAND, CONSTRUCTION, MAINTENANCE)
30

STORM DRAINAGE FUNDING

LEVEE SYSTEMS OPERATIONS AND MAINTENANCE


31

Priority Storm
Drainage Projects
(2017-2021)
Covell Ave Area Drainage Improvements

Terry Ave and 43rd St Improvements

$ 4,779,000

SW Sioux Falls Improvements

$ 4,529,000

Developing Areas Improvements

$13,133,000

Flood Control System Improvements

$ 3,000,000

915,000

32

City of Sioux Falls Storm Drainage Utility


Projected Operating, DSCR and RDC Cash Balances
$12,000,000

10%

9%

9%

9%

9%
9%

$10,000,000

8%
7%

7%

$8,000,000

Dollars

6%
5%

$6,000,000

5%
4%

4%
$4,000,000

3%
2%

2%

2%

2%

2%

$2,000,000

2%
1%

$0

0%
2015

2016

2017

2018

2019

2020

2021

2022

2023

Operating and Capital Balance


DSCR Reserve
RDC Reserve
Target Capital and Operating Reserve
Drainage Fee Rate Increase

2024

2025

2026

33

DRAINAGE FEE
RECOMMENDATIONS
2018 2019 DRAINAGE FEE RECOMMENDATIONS:
2018

2019

Unit Charge % Increase*

9%

7%

Typical Residential Bill**

$47.76

$51.08

Annual Impact to Average Customer

$3.94

$3.32

*2017 Unit Charge = $0.000779 previously set by Council


**7,500 sq ft lot; 2017 Residential Bill = $43.82

34

2015 Regional
Stormwater
Monthly Charge
Comparison

35
Copyright 2016 AE2S - All Rights Reserved

Sioux Falls Water Purification


2017, 2018 and 2019 Rate Analysis

Greg Anderson, Water Superintendent

36

Key Modeling Assumptions


Water Purification cash reserves will be used
to smooth customer rates.
Modeling for final true up with Lewis & Clark.
Currently estimating payment of $8.5M in
2024.
Replacement of remaining lead service lines.
Investing heavily in replacement of current
infrastructure.

37

The water distribution system


currently has more than 1,020 miles
of water main, delivering on average
19 million gallons per day to our
customers.

38

38

Priority Water Purification Projects


2017 - 2021
Repair and Replacement of
Infrastructure

$ 42.96M

(Minnesota Avenue Transmission Main,


41st Street and Neighborhood Watermains)

New Development

$ 11.12M

(Foundation Park, Arrowhead Parkway


New Elevated Storage)

Investment in Source and Supply

$ 3.57M

(Large Collector Well Improvements)

39

Water Division
Well Field Development
USGS Aquifer Study

40

Sioux Falls Water Division


2017, 2018 and 2019 Budget Year Rate Analysis
April 19, 2016

$24,000,000
$22,000,000

3.0%

3.5%

3.0%
3.0%

$20,000,000
$18,000,000

2.5%

$16,000,000

2.0%

Dollars

$14,000,000

2.0%

0.0%

$12,000,000

2.0%

2.0%

2.0%

2.0%

2.0%

2.0%
2.0%

0.0%
1.5%

$10,000,000
$8,000,000

1.0%

$6,000,000
$4,000,000

0.5%

$2,000,000
$-

0.0%
2013

2014

2015

Capital Reserve
Operating Reserves
Target - Operating Reserves
Residential Rate Adjustment

2016

2017

2018

2019

2020

2021

2022

2023

2024

Rate Stabilization Fund Balance


Target - Operating and Rate Stabilization Reserves
Target - Operating, Rate Stabilization and Capital Reserves

41

Proposed 2017 - 2019 Rates


Water Purification
Annual
Adjustment
Residential

Commercial

Industrial

Skyline
Heights

Actual
2016 Rate

Proposed
2017

Proposed
2018

Proposed
2019

5/8 Meter

+2.0%

$3.10

$3.16

$3.22

$3.29

Flow Tier 1
(per CCF*)

+2.0%

$3.53

$3.60

$3.68

$3.75

5/8 Meter

+2.0%

$12.18

$12.42

$12.67

$12.92

Flow Tier 1
(per CCF*)

+2.0%

$3.03

$3.09

$3.15

$3.21

Meter

+2.0%

$1,337.49

$1,364.24

$1,391.52

$1,419.35

Flow Tier 1
(per CCF*)

+2.0%

$1.80

$1.84

$1.87

$1.91

Flow Tier 1
(per CCF*)

+2.0%

$5.21

$5.31

$5.42

$5.53

* CCF = 100 cubic feet = 748 gallons

42

Typical Monthly Water Bill


Proposed 2017 Residential Water Rate Increase = 2.0%
Monthly
Consumption
in Gallons*

Monthly
Consumption
in CCF

2016
Monthly
Charge

2017 Monthly
Increase with
2.0% Adjustment

2017
Monthly
Charge

5,310

7.1

$28.17

$0.55

$28.72

Proposed 2018 Residential Water Rate Increase = 2.0%


Monthly
Consumption
in Gallons*

Monthly
Consumption
in CCF

2017
Monthly
Charge

2018 Monthly
Increase with
2.0% Adjustment

2018
Monthly
Charge

5,310

7.1

$28.72

$0.63

$29.35

Proposed 2019 Residential Water Rate Increase = 2.0%


Monthly
Consumption
in Gallons*

Monthly
Consumption
in CCF

2018
Monthly
Charge

2018 Monthly
Increase with
2.0% Adjustment

2019
Monthly
Charge

5,310

7.1

$29.35

$0.57

$29.92

*Average Winter Water Use

43

2015 Regional
Water Rate
Comparisons

Sioux Falls Population = 173,300;


Population for other cities noted in
brackets next to city name

Copyright 2016 AE2S - All Rights Reserved

45

Wastewater Treatment Facility

Design Capacity Average Flow 21 MGD


2015 Average Flow 15.5 MGD
Customers 51,500
46

Sanitary Sewer Collection System


22 Lift Stations
4 Major
2 Private

Collection Mains
870+ Miles
6 to 66 Inch Diameter
15,000+ Manholes and
Structures

47

Key Modeling Assumptions


Investing heavily in replacement of current
infrastructure.

Prioritizing projects to minimize risk and maximize


investment in system.
Using low interest State Revolving Fund program to
minimize impact to customer.
Planning for Regional Growth (Regional Wastewater
System includes Brandon, Harrisburg, Prairie Meadows,
Renner and Sioux Falls).

48

Priority Water Reclamation Projects

Foundation Park 2016


Outfall Sewer Replacement 2016
Equalization Expansion 2017
Primary Digester Improvements - 2017
Main Pump Station Replacement 2019
Foundation Park Phase 2 2020
Biosolids Sludge Dewatering 2021

$ 8.84M
$ 21.13M
$ 4.75M
$ 7.46M
$ 22.40M
$ 28.89M
$ 9.17M

49

Sioux Falls Water Reclamation Division


2017 Budget Year Rate Analysis for 2017, 2018, 2019 Rate Setting
April 19, 2016
$12,000,000

7%
6.0%

$10,000,000

6.0%

6.0%
6%

5.0%
5.0%
5%

$8,000,000

4.0%

Dollars

4%
$6,000,000

3.0%
3%
3.0%

3.0%

3.0%

$4,000,000
2%

$2,000,000

1%

$-

0%
2016

2017

2018

2019

Capital Reserve (Restricted & Unrestricted)


Target Operating Reserve Balance
Residential Rate Adj

2020

2021

2022

2023

2024

2025

Operating Reserve
Target Operating and Capital Reserve Balance

50

Proposed 2017-2019 Rates


Water Reclamation

Residential

Commercial

Domestic
Industrial

High Strength
Industrial

Proposed
Annual
Adjustment

Actual 2016
Rate

Proposed
2017

Proposed
2018

Proposed
2019

Basic Charge

6%

$3.96

$4.20

$4.45

$4.72

Flow (per CCF*)

6%

$3.73

$3.95

$4.19

$4.44

Basic Charge

5%

$16.95

$17.80

$18.69

$19.62

Flow (per CCF*)

5%

$4.40

$4.62

$4.85

$5.09

Basic Charge

5%

$16.95

$17.80

$18.69

$19.62

Flow (per kgal**)

5%

$5.89

$6.18

$6.49

$6.82

Basic Charge

2%

$16.23

$16.55

$16.89

$17.22

Flow (per kgal**)

2%

$1.65

$1.69

$1.72

$1.76

*CCF = 100 cubic feet = 748 gallons


**kgal = 1,000 gallons

51

Proposed 2017-2019 Rates


Water Reclamation
Proposed
Annual
Adjustment

Actual
2016 Rate

Proposed
2017

Proposed
2018

Proposed
2019

BOD (per pound)

2%

$0.2527

$0.2578

$.2629

$0.2682

TSS (per pound)

2%

$0.2429

$0.2478

$0.2527

$0.2578

TKN (per pound)

2%

$0.9264

$0.9449

$0.9638

$0.9831

Grease (per pound)

2%

$0.9264

$0.9449

$0.9638

$0.9831

Regional Customer Rate(per kgal*)

6%

$4.51

$4.78

$5.06

$5.37

Credit for Flow Equalization (per kgal*)

6%

($0.50)

($0.53)

($0.56)

($0.59)

Credit for Strength Equalization


(per kgal*)

6%

($0.61)

($0.65)

($0.69)

($0.73)

Industrial

*kgal = 1,000 gallons

52

Typical Monthly Sewer Bill


Proposed 2017 Residential Sewer Rate Increase = 6.0%
Monthly
Consumption
in Gallons*

Monthly
Consumption
in CCF

2016
Monthly
Charge

2017 Monthly
Increase with
6.0% Adjustment

2017
Monthly
Charge

5,310

7.1

$30.44

$1.81

$32.25

Proposed 2018 Residential Sewer Rate Increase = 6.0%


Monthly
Consumption
in Gallons*

Monthly
Consumption
in CCF

2017
Monthly
Charge

2018 Monthly
Increase with
6.0% Adjustment

2018
Monthly
Charge

5,310

7.1

$32.25

$1.95

$34.20

Proposed 2019 Residential Sewer Rate Increase = 6.0%


Monthly
Consumption
in Gallons*

Monthly
Consumption
in CCF

2016
Monthly
Charge

2017 Monthly
Increase with
6.0% Adjustment

2017
Monthly
Charge

5,310

7.1

$34.20

$2.04

$36.24

* Average Winter Water Use

53

2015 Regional
Wastewater Rate
Comparisons

Sioux Falls Population = 173,300;


Population for other cities noted in
brackets next to city name

Copyright 2016 AE2S - All Rights Reserved

2015 SD Regional Rate Comparison


Combined Water and Wastewater Residential Bill

Copyright 2016 AE2S - All Rights Reserved

Monthly Impact to Typical


Residential House 2017
Utility

Current

Requested Increase

2017 Total

$52.76

$3.17

$55.93

Current

Requested Increase

2017 Total

Storm Drainage

$3.35

$0.30

$3.65

Water Purification

$28.17

$0.55

$28.72

Water Reclamation

$30.44

$1.81

$32.25

Total

$61.96

$2.66

$64.62

Light and Power*

*Light and Power Division has @ 1,700 residential customers

Utility

Monthly Impact to Typical


Residential House 2018
Utility

2017 Request

Requested Increase

2018 Total

$55.93

$2.80

$58.73

2017 Request

Requested Increase

2018 Total

Storm Drainage

$3.65

$0.33

$3.98

Water Purification

$28.72

$0.63

$29.35

Water Reclamation

$32.25

$1.95

$34.20

Total

$64.62

$2.91

$67.53

Light and Power*

*Light and Power Division has @ 1,700 residential customers

Utility

Monthly Impact to Typical


Residential House 2019
Utility

2018 Request

Requested Increase

2019 Total

$58.73

$2.35

$61.08

2018 Request

Requested Increase

2019 Total

Storm Drainage

$3.98

$0.28

$4.26

Water Purification

$29.35

$0.57

$29.92

Water Reclamation

$34.20

$2.04

$36.24

Total

$67.53

$2.89

$70.42

Light and Power*

*Light and Power Division has @ 1,700 residential customers

Utility

Next Steps
1st Reading of All Ordinances:
April 19, 2016
2nd Reading of All Ordinances:
May 3, 2016

59

Thank you for your support!


Mark Cotter
Director of Public Works
mcotter@siouxfalls.org

Dean Borchardt
Business Operations Manager
dborchardt@siouxfalls.org

Trent Lubbers
Utility Operations Administrator
tlubbers@siouxfalls.org

(605) 367-8600
60