Water Master Plan & Rate Study - DeKalb

Client: City of DeKalb
Completion Date: 2015
Location: DeKalb, Illinois

Summary

We performed a water system master plan and water rate study for the City of DeKalb. The master plan included review of the existing Capital Improvements Plan (CIP) for water supply, storage, treatment and distribution, to enable development of a CIP that includes recommendations for improvements and associated present value costs. A 10-year planning period was used for the CIP and in developing the rates for the rate study. The project included:

  • An assessment of the city’s current water system.
  • Analysis of the city’s water distribution system, including a review of water main break history and hydraulic modeling information. Based on this information a prioritized list of projects including cost impacts was identified.
  • Development of a multiyear water rate study with cost and revenue projections. Suggested changes to the city’s water rates to cover future capital expenses were included in this exercise, as well as a comparison of the city’s water rate to other communities.

A total of $13 million in capital improvements needed were identified in the master plan. This included approximately $10 million in prioritized water main replacement with the remaining $3 million covering water supply, treatment and storage projects.

The rate study consisted of developing a 10-year financial forecast to estimate the annual revenue requirement for the city and included projections of annual revenues, expenses and the resulting cash flows over the forecast period. These estimates were used to identify the need for additional funds through rate adjustments, external capital financing and/or transfers from reserves.

The annual revenue requirement developed from the forecast was used as the basis for the cost-of-service analysis. Each component of cost was assigned to functions based on industry standards, and subsequently allocated to rate classifications. These allocations were developed to reflect the level of service each customer class received from the utility.

Proposed rates were developed consistent with the city's rate objectives. The proposed rate design included maintain a minimum balance of $1 million and was designed to balance the goals to provide full recovery of the costs of providing service, to establish rates commensurate with cost of service, and to minimize the impacts of rate changes on individual groups of customers. Comparison of monthly bills calculated for varying levels of consumption based on the existing rates and the proposed rates were developed. As part of the rate design process, consideration was given to comparisons of monthly bills based on the proposed rates with the current rates of similar neighboring utilities.


Services

  • Water master plan
  • Financial forecast
  • Revenue requirement
  • Cost of service
  • Rate design
  • Workshop presentation

Background

The City of DeKalb is 65 miles west of Chicago and encompasses 14.65 square miles in DeKalb County, Illinois. The city limits are primarily in DeKalb Township, with portions of the city extending eastward into Cortland Township and southward into Afton Township. The existing City water system includes six deep water supply wells, three shallow water supply wells, five ion exchange/iron removal water treatment plants, four elevated storage tanks, and 177 miles of water main.


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