Metropolitan Council Environmental Services A Clean Water Agency Presented to the Environment Committee February 9, 2010 Legislative Update: Inflow & Infiltration, Water Supply, SAC Jason Willett, MCES Finance Director

2 Legislative Update I.Inflow and Infiltration (I&I) II.Water Supply III.SAC

3 I. I&I Legislative Request Appropriate $2 million for FY 2011 from Clean Water Fund to fund a metro area inflow and infiltration (I&I) grant program for private properties

4 I&I Definitions Inflow: — Surge water from rain storms that gets into wastewater system Infiltration: — Clean water that seeps into sewer lines Foundation drain or sump pump connected to house lateral Downspout connected to house lateral Yard drain connected to house lateral House lateral Publicly owned sewer Cracked pipe or open sewer joint

5 Why Legislation is Needed Inflow & Infiltration: — Wastes drinking water resources — Creates risk of sewer overflows (into water bodies) or sewage backups (into homes) — One of biggest challenges facing wastewater system and metro area water resources City customers asking for help

6 Fiscal Impact If I&I program is successful: — MCES can avoid hundreds of millions of dollars in increased sewage fees – About 30% increase to all cities served

7 II. Water Supply Legislative Requests 1.Appropriate $500K funding in FY 2011 for plan implementation — Funds will be used to: – Improve water supply availability technical analysis – Update water supply planning tools, water supply development guidance, and online water supply mapping – Collect information that will improve future water availability 2.Eliminate sunset date of Metropolitan Area Water Supply Advisory Committee

8 Background Minn. Statute Sec directs the Metropolitan Council: — “carry out planning activities addressing water supply needs of the metropolitan area” including the development of a master water supply plan for the metro area Minn. Statute Sec directs the Advisory Committee: — “assist the Metropolitan Council in planning activities”; the committee is set to expire at the end of 2010

9 Plan Development The Metropolitan Area Master Water Supply Plan: — was a collaboration between communities, counties, state agencies, other public and private entities — is a long-term view that recognizes the importance of basing decisions on the best available information and developing supply management strategies—adaptable as conditions change and information becomes available

10 Fiscal Impact Without funding to implement the master plan, cities and states will face greater supply uncertainty which could result in: — Permitting delays — Increased development costs for cities — Detrimental impacts to natural resources Money may be wasted by pursuing non- optimal water supply

11 III. SAC Legislative Request Flexibility to fund wastewater reserve capacity through wastewater charges only when: — Service Availability Charge (SAC) rates and fund are not sufficient to fund reserve capacity — Triggers: – “Appropriate Study” – Public hearing – Council determination — Balanced by a minimum increase in SAC rates (6% or CPI + 3%, whichever is greater)

12 SAC Units Collected (estimated)

13 Reserve Capacity Reserve Balance (Year-end Balance in Millions)

14 SAC Rates (Per residence or equivalent unit)

15 Actions to Date Increased Service Availability Charge rates Refined Reserve Capacity definition (reduced portion of capital costs funded by SAC) Tightened SAC credit rules Appointed task force to develop long term policies for defining and funding reserve capacity Deferred capital projects based on changes to forecasted service demands

16 Why Wastewater Charges? High increases to SAC rates may impede new development and might not produce revenue Wastewater volume charge is the other wastewater fee mechanism available to the Council Flexibility to use our wastewater charges further secures Aaa bond rating MCES wastewater charges are among cheapest in the nation

17 Comparative Retail Rates* Milwaukee $455 Philadelphia $369 Seattle $335 Sacramento $222 Cincinnati $441 New York $385 Austin $370 San Diego $460 Phoenix $278 Twin Cities $186 Denver $176 Louisville $337 Cleveland $278 Detroit $475 Memphis $80 Honolulu $693 Rochester, NY $141 Miami $270 Kansas City $221 Indianapolis $205 Columbus $442 Chicago $182 *2008 data

18 Support and Opposition Likely Support — Businesses support restraint in SAC rates – i.e., Builders, commercial developers, industries, and restaurants Possible Opposition — Cities that aren’t growing might argue that developed areas and current users should not fund reserve capacity