09/17/2013 Minutes CITY OF GRAND ISLAND,NEBRASKA
MINUTES OF CITY COUNCIL STUDY SESSION
September 17, 2013
Pursuant to due call and notice thereof, a Study Session of the City Council of the City of Grand
Island, Nebraska was conducted in the Council Chambers of City Hall, 100 East First Street, on
September 17, 2013. Notice of the meeting was given in the Grand Island Independent on
September 11, 2013.
Mayor Jay Vavricek called the meeting to order at 7:00 p.m. The following Councilmembers
were present: Vaughn Minton, Mike Paulick, Scott Dugan, John Gericke, Mitch Nickerson, Julie
Hehnke, Chuck Haase, and Bob Niemann. Councilmembers Peg Gilbert and Linna Dee
Donaldson were absent. The following City Officials were present: City Administrator Mary Lou
Brown, City Clerk RaNae Edwards, City Attorney Robert Sivick, City Treasurer and Finance
Director Jaye Monter, and City Engineer and Public Works Director John Collins.
INVOCATION was given by Community Youth Council member Hannah Sugita followed by
the PLEDGE OF ALLEGIANCE.
Mayor Vavricek introduced Community Youth Council member Hannah Sugita and board
member Jennifer Cramer.
SPECIAL ITEMS:
Wastewater Rate Study and Construction Update. Public Works Director John Collins introduced
representatives from Black &Veatch and the Public Works Department.
Derrick Cambridge, consultant with Black & Veatch gave a PowerPoint presentation on the
background and rate study results. It was recommended eliminating Ammonia surcharge and
adding TKN surcharge. The total 5-year Capital Improvement Plan (CIP) from the 2011 rate
study was $44.1 million. Due to major changes such as: collection system master planning, north
interceptor, collection system rehabilitation, and WWTP improvements, the proposed 5-year CIP
of$72.9 million was used in the rate study update. Reviewed was the Capital Improvement Plan
for 2013 through 2017.
Discussion was held regarding the difference between a pump system and a gravity system at a
cost of $16 million for a gravity system. Reliability, maintenance, and costs savings were the
reasons to go with a gravity system. Mr. Collins stated a pump system would cost approximately
$40,000 to $250,000 for maintenance each year depending on the size of the pump. It was
mentioned that three pump stations would be taken out of service.
Classification of lines was explained. Mr. Collins commented on the steps being taken such as
televising lines to see which lines needed repair.
Page 2,City Council Study Session,September 17,2013
Anna White with Black and Veatch explained the rate study results. The study would accomplish
the following objectives:
• Establish operating and capital financial plans that fully fund activities
• Perform a cost of service analysis to determine if cost allocations are fair and equitable
among the customer classifications
• Review the existing rate structure and proposed rates that provide adequate revenues
The revenue objective was to provide adequate funding of future utility operating and capital
program needs. Mentioned were the following considerations: assess appropriateness of
operating and capital reserves; evaluate allocation of direct and indirect costs; and review other
revenue sources. Financial planning and cost allocation were reviewed. Debt service and bonding
questions were answered.
The following rate structures were explained: residential; residential-suburb; residential-
commercial; interdepartmental-commercial; commercial-suburb; and surcharge. The following
rate setting principles were recommended: equitability; revenue stability; provides appropriate
price signals; recognizes customer usage patterns & demands; easy to understand and administer;
customer acceptance; consistent with City policies; and legally acceptable/defensible.
WWTP Superintendent Marvin Strong stated nitrates and phosphorous were included in this
study. The biggest concern right now was chloride.
The typical monthly residential bill would increase $10.08 from 2013 to 2017. The first rate
increase of 12% would be October 1, 2013. 12% increase on October 1, 2014, 6% on October 1,
2015, and 5% increase on October 1, 2016.
Mr. Collins stated by 2017 the north interceptor would be completed, operating costs for lift
stations would go down, and we would have a much better system. Capacity of the plant growth
was projected at 25 years with room for new industrial clients.
Potential rate customers south on Highway 281 to I-80 were included in this study.
ADJOURNMENT: The meeting was adjourned at 8:27 p.m.
POn 0-Q- Y.,,Q(A...Dan
RaNae Edwards
City Clerk