On Tuesday night, Bloomington’s utilities director Vic Kelson presented the city council with a proposed $1.7 million for water main replacement as part of the department’s 2020 budget. He described how that would pay to replace roughly 2.5 miles of pipe.
During the time for councilmember questions, Isabel Piedmont-Smith responded to the 2.5-mile figure by saying, “That does sound like very little.” Piedmont-Smith’s assessment was based on the roughly 420 miles of pipe in the system, and the frequency of recent high profile water main breaks.
At a press briefing on the Friday before the week of budget hearings, Mayor John Hamilton said the pace of water main replacement was not fast enough, because pipes don’t last as long as it will take to replace them all—if the current pace of replacement is maintained. About the 2.5 miles per year that has been budgeted for the last few years, Hamilton said, “That’s way better than it was five years ago, but is not good enough.”
At Tuesday’s city council session, utilities director Vic Kelson put the possibility of increasing the pace of water main replacement in the context of a possible rate increase. The current residential rate for City of Bloomington Utilities (CBU) is $3.73 per 1,000 gallons with a monthly $5.89 charge for a 5/8-inch meter. Any proposal for an increase in water rates has to be presented to the Indiana Utility Regulatory Commission. Bloomington’s rate case to the IURC is planned for 2020.
Kelson said as a part of the rate case, CBU would be evaluating whether the 2.5 miles of pipe a year is aggressive enough.
Related to water rates, councilmember Andy Ruff wanted to know if there was any movement at the state legislature on the idea of allowing utilities to charge more to customers who use more water. Kelson told Ruff, “I don’t think that’s really in the cards right now.”
The $1.7 million for water main replacements is part of a total utilities budget for 2020 of $46.6 million, which is up from $44.9 million last year. Of that roughly $1.7 million increase, most of it is due to an increase in the stormwater budget, which was made possible by an increase in stormwater fees, approved by the city council late last year and implemented in July this year.
A question from councilmember Dave Rollo drew out the fact that the levels of total organic carbon in the water that comes from Lake Monroe are on average up, from about 3 parts per million in 2002, to about 3.5 parts per million in 2018. The amount of organic carbon in the source water is important to track, because disinfectants can react with natural organic matter to form disinfection byproducts, which can pose health risks. The city tests for disinfection byproducts once a month at eight different locations.
Responding to a question from councilmember Jim Sims, who’s the council’s ex officio representative on the Utilities Service Board, Kelson described a $5.1 million project to build a lift station to support the new east-side IU Health hospital. The hospital is now under construction. The sewer project includes rerouting the Tamarron lift station and expanding the Northern Interceptor.
Kelson said that the new hospital’s site was in a “saddle at the top of a water divide,” and it had no sewers when it was chosen. That meant that the wastewater would have to be pumped up a hill, whether it was to the Dillman Road or the Blucher Poole treatment facility, Kelson said.
Responding to a question from Piedmont-Smith, Kelson said the university was paying $3.1 million of the cost and the city was paying around $2 million. That was based on a 3/5 benefit to the university and 2/5 to the city. Kelson characterized the city’s benefit as a reduction in sewer overflows along College Mall Road.
Rates and Replacement
City of Bloomington Utilities gets its revenue from customers, so an increase in the budget to increase the pace of water main replacement would likely be based on increase in rates.
The current rates support a budget of $1.7 million a year for water main replacements. At Tuesday’s city council session, councilmember Piedmont-Smith wanted to know how CBU had arrived at $1.7 million as an appropriate number.
Kelson told her that number had been developed as a part of the 2016 rate increase—it was before Kelson joined CBU in April 2016. He said at the time CBU didn’t know exactly how much water main replacement could be done with $1.7 million per year. After the replacement projects started, CBU learned more about how much water main replacement can be done with that amount of money.
He said one of the challenges in Monroe County and in Bloomington is that bedrock is found at shallow depths. “So you may not be able to achieve as much as you thought, simply because you hit rock,” Kelson said.
Kelson described how priority setting for the water main replacement program uses a lot of different criteria, including frequency of main breaks in a particular area. As an example, he gave several breaks in the Linden Hill area, that had led to re-prioritization of the main there.
Earlier this year, Kelson told The Beacon that work on a rate case will start in October this year. The rate case has to be presented to the Indiana Utility Regulatory Commission. The final order in the city’s last rate case, presented in 2016, authorized a 20.15 percent across-the-board increase in rates. That order was issued on March 29, 2017.
State legislation enacted earlier this year (HB 1406) also puts some pressure on local public water systems to understand where and why breaks are occurring. In order to take advantage of the state’s water infrastructure assistance fund, a public water system has to “conduct or participate in efforts to determine and eliminate the causes of non-revenue water in its water distribution system.”
“Non-revenue water” is how state lawmakers describe the geyser that flooded the intersection of Kirkwood Avenue and Washington Street a few weeks ago.
HB 1406 was approved unanimously in both chambers of the legislature earlier this year. When state representative Matt Pierce (D) visited Bloomington during the legislative session as a part of an update hosted by the League of Women Voters, he said the idea was to put $20 million per budget cycle into the fund for maybe the next two or three budget cycles.