NARRAGANSETT BAY COMMISSION · 7 Rhode Island Resource Recovery 484,038 0.50% 8 Providence School Department 426,562 0.44% 9 Providence College 416,746 0.43%

NARRAGANSETT BAY COMMISSION

RATING AGENCY PRESENTATION

PROPOSED $268.7 MILLION WIFIA LOAN

JULY 29, 2019

1

ABOUT NBC

• 1980 – Established by statute as the Narragansett Bay Water Quality Management District Commission

• Serving the Greater Providence Metropolitan Area

• 1992 former Blackstone Valley District Commission was merged into NBC

• Expanded the Service area

• 1997 Granted custody of own funds

• 1999 Renamed the Narragansett Bay Commission

• 1999 Union Employees transitioned from State Employee status to Narragansett Bay Commission Employee status

2

ORGANIZATION

3

• NBC is governed by a 19‐member Board of Commissioners• 10 gubernatorial appointments

• 9 appointments representing the communities in the service area

• Chairman is the Chief Executive Officer

• Committee Structure

• Monthly meetings • Action Items

• Executive Reports

• Financial Reporting

• Monthly financial statements

• Operating budget transfers

• Capital budget reallocations

• Purchase requisitions

• 272 Employees – 118 union and 154 non‐union • Union contracts through June 30, 2021

• Laborers’ International Union of North America ‐ Local 1033

• Rhode Island Council 94, American Federation of State, County and Municipal Employees ‐ Local 1010 and 2884

ORGANIZATION

4

LEADERSHIP

5

Administration Construction & Engineering Finance Operations & MaintenanceEnvironmental Science &

Compliance

James McCaughey, P.EDirector of

Adminis trationAppointed January 2019

27 years at NBC

Richard Bernier, P.E.Director of Construction

& Engineering33 years at NBC

Karen GiebinkChief Financia l

Officer30 years at NBC

Margaret GouletDirector of Operations &

MaintenanceAppointed Apri l 2019

25 years at NBC

Thomas UvaDirector of Environmenta l Science & Compl iance

34 years at NBC

Gregory WaughConstruction Manager

Hired 201833 years of experience

David Bowen, P.E.Engineering Manager

Hired 201834 years of experience

Kathryn Kel ly, P.E.CSO Program Manager

19 years at NBC

Laurie HorridgeExecutive Director

Appointed January 201927 years at NBC

COLLECTION AND TREATMENT FACILITIES

Field’s Point WWTF ‐ Providence, RI

• Advanced treatment for dry weather flow of 65 MGD

• 200 MGD total treatment capacity

• CSO Tunnel Pump Station

• 4 pump stations

• 80 miles of interceptors

Bucklin Point WWTF ‐ East Providence, RI

• Advanced treatment for dry weather flow of 46 MGD

• 116 MGD total treatment capacity

• 3 pump stations

• 30 miles of interceptors

CSO Phase I and Phase II Facilities

• Three‐mile long, 250‐foot deep tunnel ‐ Operational in FY 2009

• Two main interceptors along the Seekonk River (7,000 feet) and the Woonasquatucket River (17,200 feet) and a wetlands treatment facility ‐ Operational in FY 2015 6

SUSTAINABLE ENERGY FACILITIES

7

Field’s Point Wind Turbines ‐ 2012

• Three 1.5 MW wind turbines located at Field’s Point

• “behind the meter”

Coventry Turbines ‐ 2016

• Three 1.5 MW wind turbines off‐site

• Generate Net Metering Credits

Power Purchase Agreements ‐ 2017

• Two solar and one wind project

• Shared Net Metering Credits

Biogas Reuse

• Biogas reuse project at Bucklin Point

• “behind the meter” – not yet operational

REGULATION• Rhode Island Public Utilities Commission (PUC)

• NBC’s Board and PUC must authorize adjustments to sewer user rates

• General Rate Case – 9 months

• Debt Service Compliance – 60 days

• Division of Public Utilities and Carriers must approve debt issuance > 1 year

• Rhode Island Department of Environmental Management (RIDEM) and the US Environmental Protection Agency (EPA)

• New Consent Agreement signed in January 2019Third and Final Phase of Combined Sewer Overflow (CSO) Abatement Program

• New RIPDES PermitsMore stringent limits for certain parameters

cBOD

TSS

Enterococci – 35 mpn

Resiliency study and other studies and evaluations

8

NBC CUSTOMER BASE

9

Top Ten Customers in FY 2018

Number of Accounts by User Class

Percent of Accounts by Community

71,500

76,725

7,800

7,730

65,000 70,000 75,000 80,000 85,000

FY 2001

FY 2018

Residential Non‐Residential

CustomerTotal Annual Billing FY 2018

Percentage of Total Annual User Charges

1 Rhode Island Hospital 1,663,452$ 1.72%2 Providence Housing Authority 1,628,527 1.69%3 Brown University 1,241,906 1.29%4 City of Pawtucket 663,778 0.69%5 City of Providence 657,568 0.68%6 Johnson & Wales University 551,497 0.57%7 Rhode Island Resource Recovery 484,038 0.50%8 Providence School Department 426,562 0.44%9 Providence College 416,746 0.43%10 State of Rhode Island 369,523 0.38%

FINANCIAL OVERVIEWStrong Financial Management

• Active operating budget management (27 years below budget)• Timely and complete financial reporting• Strong liquidity and debt service coverage• Comprehensive budget policies/debt policy• Excellent project oversight

Long‐Term Planning• Strategic Plan• Fiscal Sustainability Plan• Use of long‐term financing model• Asset Management Program

Timely Rate Relief• Debt service compliance filing mechanism• Good relationship with RIPUC and Division of Public Utilities

Excellent Customer Service• Implemented a new customer service application in January 2019• New online payment functionality and customer portal• Staggered billing cycles• Deferred collection activity during implementation

10

FINANCIAL OVERVIEW

• GFOA Distinguished Budget Presentation Award for the last 17 years and NBC’s FY 2019 Budget was awarded the following distinctions:

• Operating Budget + Capital Budget = NBC Budget

• GFOA Certificate of Achievement for Excellence in Financial Reporting for the last 16 years FY 2002 through FY 2017

• Clean Audit Opinion with no management letter for 21 years11

Distinguished Budget Presentation Award FY 2019

Outstanding as a Communications

Device

Outstanding as an Operations Guide

Outstanding as a Financial Plan

Special Performance Measures Recognition

Special Capital Recognition

FY 2019 PERFORMANCE

12

UNAUDITED FIGURES*

• Increase in Net Position of $27.8 M

• Debt Service Coverage of 1.29x

• June 30, 2019 Cash and Investments of $80.3 M

UnrestrictedCash and Cash Equivalents 21,257,284$

RestrictedEnvironmental Enforcement 69,948$ Debt Service Payment Accounts 30,419,349 Stabilization Account 3,947,511 Operating Reserve for Revenue Stability Fund 4,508,560 Debt Service Reserve 3,503,652 Construction 16,587,145

Subtotal Restricted 59,036,165 Total 80,293,449$

*Prior to Pension and OPEB entries and other audit adjustments

13

Assets Operating RevenuesCurrent assets 81,940,888$ User Fees 97,271,851$ Restricted assets 59,036,165 Other operating revenues 2,917,171 Capital assets (net) 1,025,324,109 100,189,022 Other assets 184,381 Operating Expenses

Total assets 1,166,485,543 Personnel services 24,382,524 Operations and maintenance 1,412,815

Deferred Outflow of Resources Utilities 3,415,257 Deferred Outflows 8,375,297 Supplies 1,318,180

Total deferred outflows 8,375,297 Professional services 1,100,809 Depreciation and amortization 16,401,372

Liabilities Miscellaneous 9,740,870 Current liabilities 10,570,730 57,771,827 Noncurrent liabilities 635,358,573

Total liabilities 645,929,303 Operating Income 42,417,195

Deferred Inflows of Resources Non‐operating Revenue (Expenses) (15,671,390) Deferred Inflows of Resources 3,068,006

Total deferred inflows 3,068,006 Net income (loss) 26,745,805

Net Position Change in net position 26,745,805 Net Investment in capital assets 504,260,346 Restricted 8,082,160 Total net position ‐ beginning 498,117,723 Unrestricted 13,521,025

Total Net Position 525,863,531$ Total net position ‐ ending 524,863,528$

Statement of Net Position Statement of Revenues, Expenses, and Changes in Net PositionAs of June 30, 2019 For the Period Ending June 30, 2019


FY 2019 PERFORMANCEUNAUDITED FIGURES*

FY 2019 PERFORMANCEOPERATING BUDGET VS. ACTUAL

14

UNAUDITED FIGURES*


Revenue FY 2019 Budget FY 2019 Actual DifferenceOperating Revenue

Total Operating Revenue 101,418,392$ 100,189,022$ (1,234,109)$

Non‐Operating RevenueTotal Non‐Operating Revenue 387,800 435,412 47,612

Transfer from Revenue Fund Balance 1,600,000 1,600,000 ‐

Total Revenue 103,406,192$ 102,224,434$ (1,186,497)$

Expense FY 2019 Budget FY 2019 Actual DifferenceOperations & Maintenance Expense

Total Operations & Maintenance 43,668,346$ 41,370,455$ (2,297,891)$

Debt ServiceTotal Debt Service 47,787,187 46,576,163 (1,211,024)

Transfer to Project Fund ‐ Restricted Account 11,950,659 11,950,659 ‐

Total Expense 103,406,192$ 99,897,277$ (3,508,915)$

Surplus (Deficit) ‐$ 2,327,157$ 2,322,418$

PENSION AND OPEBUNION EMPLOYEES - STATE OF RI PENSION (ERSRI) AND RETIREMENT HEALTH

15

Long‐term net pension liability ‐ ERSRI 19,376,984$ Long‐term net OPEB liability 4,265,419

June 30, 2018

Pension - 7% Discount Rate

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

2015 2016 2017 2018

Plan Fiduciary Net Position as a percentage of Total Pension Liability For the Years Ended June 30,

Year Ended Measurement Date

NBC's Proportion of the Net Pension Liability (NPL)

NBC's Proportionate Share of the Net Pension Liability

(NPL) NBC's Covered Payroll

NBC's Proportionate Share of the NPL as a %

of Covered Payroll

Plan Fiduciary Net Position as a % of Total Pension

LiabilityJune 30, 2015 June 30, 2014 15,554,087$ 0.873% 5,695,059$ 273.12% 58.58%June 30, 2016 June 30, 2015 16,936,520 0.852% 5,700,723 297.09% 55.03%June 30, 2017 June 30, 2016 18,292,407 0.862% 5,798,735 315.46% 51.88%June 30, 2018 June 30, 2017 19,376,984 0.859% 5,956,481 325.31% 51.83%

Year Ended Measurement Date

NBC's Proportion of the Net OPEB Liability

(NPL)

NBC's Proportionate Share of the Net

OPEB Liability (NPL) NBC's Covered Payroll

NBC's Proportionate Share of the NPL as a %

of Covered Payroll

Plan Fiduciary Net Position as a % of Total Pension

LiabilityJune 30, 2018 June 30, 2017 4,265,419$ 82.1115% 5,785,794$ 73.72% 51.83%

Proportionate Share Employees' Retirement System of RI (1)

Proportionate Share Net OPEB Liability (2)(1) Subsequent to GASB 67 and 68 Implementation ‐ Additional Schedules and information are available in NBC's CAFR

(2) Subsequent to GASB 75 Implementation ‐ Additional Schedules and information are available in NBC's CAFR

PENSION AND OPEB

16

6% Discount Rate

NON-UNION DEFINED BENEFIT PLAN

$‐ $500,000 $1,000,000 $1,500,000 $2,000,000

2014

2015

2016

2017

2018

Actuarial Determined vs. Actual Contribution for the Years Ended June 30,

Actual Contribution Actuarial Determined Contribution

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

2014 2015 2016 2017 2018

Plan Fiduciary Net Position as a percentage of Total Pension Liability For the Years Ended June 30,

Year EndedTotal Pension

LiabilityPlan Fiduciary Net

PositionNet Pension Liability

Plan Fiduciary Net Position as a

percentage of Total Pension Liability

Covered‐Employee Payroll (2)

Net pension Liability as a Percentage of Covered‐

Employee PayrollJune 30, 2014 13,349,388$ 9,701,650$ 3,647,738$ 72.67% 7,979,500 45.71%June 30, 2015 16,104,077 11,239,783 4,864,294 69.79% 8,207,940 59.26%June 30, 2016 17,482,805 13,467,193 4,015,612 77.03% 8,598,820 46.70%June 30, 2017 18,252,983 16,979,011 1,273,972 93.02% 9,082,700 14.03%June 30, 2018 19,450,204 19,634,585 (184,381) 100.95% 9,078,824 (2.03%)

Non‐Union Defined Benefit Plan(1)

(1) Subsequent to GASB 67 and 68 Implementation ‐ Additional Schedules and information are available in NBC's CAFR

FY 2020 BUDGET

17

FY 2018 Actual

FY 2019 Budget

FY 2020 Budget

Budgeted Difference

User Fees 95,822,841$ 98,225,193$ 104,620,531$ 6,395,338$ Other Operating Revenue 2,510,274 3,193,199 2,019,380 (1,173,819) Non‐Operating Revenue 314,357 387,800 439,500 51,700 Transfer from Revenue Fund Balance ‐ 1,600,000 ‐ (1,600,000) Restricted Account ‐ CIP 19,579,714 20,015,021 6,909,839 (13,105,182) Restricted Account ‐ OCP 4,102,698 4,752,000 3,261,200 (1,490,800) Grant and Project Reimbursement Account ‐ 7,715,796 8,914,056 1,198,260 SRF Loan Proceeds 25,849,612 23,828,148 36,056,481 12,228,333

Total Revenue and Source of Funds 148,179,496$ 159,717,157$ 162,220,987$ 2,503,830$

Operations & Maintenance Expense 39,903,703$ 43,668,346$ 45,314,307$ 1,645,961$ Debt Service 45,431,230 47,787,187 47,816,624 29,437 Transfer to Project Fund ‐ Restricted Account 13,312,539 11,950,659 13,948,480 1,997,821 Operating Capital Program (OCP) 4,102,698 4,752,000 3,261,200 (1,490,800) Capital Improvement Program (CIP) 39,408,439 50,558,965 51,330,376 771,411 Debt Service Payment Account/Other 6,020,887 1,000,000 550,000 (450,000)

Total Expense and Use of Funds 148,179,496$ 159,717,157$ 162,220,987$ 2,503,830$

Revenue and Sources of Funds

Expense and Use of Funds

FY 2020 OPERATING BUDGET

18

FY 2018Actual

FY 2019Budget

FY 2020Budget

BudgetedDifference

Revenue Operating Revenue 98,333,115$ 101,418,392$ 106,639,911$ 5,221,519$ Non‐Operating Revenue 314,357 387,800 439,500 51,700

Transfer from Revenue Fund Balance ‐ 1,600,000 ‐ (1,600,000)

Total Revenue 98,647,472$ 103,406,192$ 107,079,411$ 3,673,219$

Expense Operation and Maintenance 39,903,703$ 43,668,346$ 45,314,307$ 1,645,961$ Debt Service 45,431,230 47,787,187 47,816,624 29,437

Total 85,334,933 91,455,533 93,130,931 1,675,398

Transfer to Project Fund ‐ Restricted Account 13,312,539 11,950,659 13,948,480 1,997,821

Total Expense 98,647,472$ 103,406,192$ 107,079,411$ 3,673,219$

FY 2020 BUDGETED REVENUE

19

FY 2018Actual

FY 2019Budget

FY 2020Budget

BudgetedDifference

RevenueOperating RevenueUser Fees 95,822,841$ 98,225,193$ 104,620,531$ 6,395,338$ Pretreatment Fees 1,066,370 1,100,000 62,800 (1,037,200) Septage Income 333,037 325,000 335,000 10,000 Connection Fees/Capacity Charge 123,319 130,000 172,580 42,580 Late Fees 796,362 800,000 800,000 ‐ Customer Service Fees 38,848 445,100 230,000 (215,100) Renewable Energy Credits 152,338 393,099 419,000 25,901

Total Operating Revenue 98,333,115 101,418,392 106,639,911 5,221,519

Non‐Operating Revenue:Investment Income 199,406 200,000 280,000 80,000 Miscellaneous 114,951 187,800 159,500 (28,300)

Total Non‐Operating Revenue 314,357 387,800 439,500 51,700

Transfer from Revenue Fund Balance ‐ 1,600,000 ‐ (1,600,000)

Total Revenue 98,647,472$ 103,406,192$ 107,079,411$ 3,673,219$


20

DOCKET 4885 ‐ 2.98% user fee increase January 1, 2019

Debt Service and Debt Service Coverage ‐ $45 million RIIB loan

DOCKET 4890 ‐ 6.17% revenue increase effective July 1, 2019 (actual 5.88%)

Increase in Operation and Maintenance Expense

Adjustment to Flat Fee User Base

0.4%

0.7%0.3%

0.3%

117,500

118,000

118,500

119,000

119,500

120,000

120,500

FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Projected Budget

Residential Dwelling Units

0.0%

‐2.8%‐0.9%

‐0.9%

7,600

7,700

7,800

7,900

8,000

8,100

8,200

8,300

FY 2017 FY 2018 FY 2019 FY 2020

Actual Actual Projected Budget

Non‐Residential Meters

Actual Actual Actual Projected BudgetUser Base FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Residential Dwelling Units 118,006 118,437 119,230 119,642 120,055Non‐Residential Meters 8,218 8,222 7,991 7,919 7,849


21

Adjustment to Consumption Fee User Base

$‐

$10

$20

$30

$40

$50

$60

$70

Actual FY 2017 Actual FY 2018 Actual FY 2019 Budget FY 2020

Millions

Consumption Revenue

Residential Commercial Industrial

Residential Commercial Industrial TotalActual FY 2017 8,457,830 4,755,534 610,116 13,823,480 Actual FY 2018 8,233,501 4,694,089 655,659 13,583,249 Actual FY 2019 8,221,780 4,762,219 664,270 13,648,269 Budget FY 2020 8,152,818 4,667,872 673,807 13,494,497 PUC Approved 8,153,259 4,678,683 673,807 13,505,749

Billable Consumption (HCF)

Other Rate Design ChangesReplacement of annual pretreatment permit fee with a fee for new pretreatment permit applications only

Lower pretreatment permit fee revenue recovery from non‐

residential consumption fees

New sewer connection permit fee structure with a capacity charge based on meter size

FY 2020 BUDGETED REVENUEOTHER OPERATING REVENUE

22

FY 2019

FY 2020

$‐ $1,000,000 $2,000,000 $3,000,000

Pretreatment Fees Septage Income Connection Fees Late Fees Closing Fee RECs

Budget 2019 Budget 2020Pretreatment Fees 1,100,000$ 62,800$ Septage Income 325,000 335,000 Connection Fees 130,000 172,580 Late Fees 800,000 800,000 Customer Service Fees 241,100 26,000 Closing Fee 204,000 204,000 RECs 393,099 419,000 Interest Income 200,000 280,000 Miscellaneous 187,800 159,500

Total 3,580,999$ 2,458,880$

FY 2020 BUDGETED EXPENSE

23

FY 2018Actual

FY 2019Budget

FY 2020Budget

BudgetedDifference

ExpenseOperations and Maintenance ExpensePersonnel 23,581,657$ 25,509,996$ 25,737,917$ 227,921$ Operating Supplies/Expense 15,125,106 16,468,700 18,111,200 1,642,500 Professional Services 1,196,940 1,689,650 1,465,190 (224,460)

Total Operations & Maintenance 39,903,703 43,668,346 45,314,307 1,645,961

Debt ServicePrincipal 27,529,555 28,801,973 28,848,395 46,422 Interest 17,901,675 18,985,214 18,968,229 (16,985)

Total Debt Service 45,431,230 47,787,187 47,816,624 29,437

Transfer to Project Fund ‐ Restricted Account 13,312,539 11,950,659 13,948,480 1,997,821

Total Expense 98,647,472$ 103,406,192$ 107,079,411$ 3,673,219$

FY 2020 BUDGETED EXPENSEPERSONNEL

24

• Increase of 0.9% or $227,921 over prior year

• FY 2020 includes a net increase of 3.0 FTEs

• 2.5% COLA and step increases for union employees and merit increases for non‐union employees

• FY 2020 budget reflects a 3.8% increase to health insurance premium

Budget 2019

Budget 2020

FY 19 ‐ FY 20 % Change

Personnel 25,509,996$ 25,737,917$ 0.9%

Net FTEs FY 2019 Budget 269 Added in FY 2019 1 New in FY 2020 7 Less: Unfunded (2) Less: FY 2020 Increased Turnover (3)

Net FTEs 272

FY 2020 Budgeted FTEs

FY 2020 BUDGETED EXPENSEBIOSOLIDS

25

BiosolidsFY 2019Budget

FY 2020Budget

Budgeted Difference

Field's Point Dry Tons 8,274 8,797 523 Bucklin Point Dry Tons 2,124 2,114 (10)

Total Dry Tons 10,398 10,911 513

Total Expense 4,808,259$ 5,484,313$ 676,054$

Average Rate/DT 462.41$ 502.62$ 40.21$

$440

$450

$460

$470

$480

$490

$500

$510

‐

2,000

4,000

6,000

8,000

10,000

12,000

FY 2019 Budget FY 2020 Budget

Average Ra

te /Ton

Dry Ton

s

Biosolids

Bucklin Point Field's Point Average Rate

FY 2020 BUDGETED EXPENSEELECTRICITY

26

"Behind the Meter" Projects "Net Metered" ProjectsField's Point Wind Turbines WED TurbinesBucklin Point Biogas Reuse WED PPAs

Energy produced and used on‐site Energy produced off‐site and net meteredReduces kWh purchased Generates Net Metering Credits (NMC)

Reflected in budget as reduction in purchased kWh NMC applied to National Grid BillNBC saves supply, distribution and related costs 75% of PPA Generated NMC Paid to PPA

Budgetary Impact of Renewable Energy Resources

ElectricityFY 2019Budget

FY 2020Budget

Budgeted Difference

kWh Use 36,755,543 39,015,314 2,259,771 kWh Purchases 25,290,995 31,402,077 6,111,082

Expense 3,634,821$ 4,230,831$ $ 596,010

$2,500,000

$3,000,000

$3,500,000

$4,000,000

$4,500,000

‐

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

kWh Use kWh Purchases

FY 2019 Budget FY 2020 Budget Expense

FY 2020 BUDGETED EXPENSENET METERING CREDITS

27

Net Metering Credits kWhFY 2019Budget

FY 2020Budget

WED Turbine kWh 8,520,487 8,508,726 WED PPA kWh 6,562,430 9,842,397

Total NMC kWh 15,082,917 18,351,123 NMC Rate $ 0.1189 $ 0.1470

Total NMC Account 54091 $ 1,793,359 $ 2,697,615

PPA Payable Account 54095 $ 585,205 $ 1,085,124 Retained by NBC $ 1,208,154 $ 1,612,491

$‐

$0.0400

$0.0800

$0.1200

$0.1600

‐

4,000,000

8,000,000

12,000,000

16,000,000

20,000,000

FY 2019Budget

FY 2020Budget

NMC Ra

te/kWh

kWh Ge

nerated

WED Turbine kWh WED PPA kWh NMC Rate

FY 2020 BUDGETED EXPENSENATURAL GAS

28

$‐

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

‐

100,000

200,000

300,000

400,000

500,000

600,000


Expe

nse

Therms

Natural Gas

Bucklin Point Field's Point IM COB Expense

ThermsFY 2019 Budget

FY 2020 Budget

BudgetedDifference

Field's Point 141,536 164,405 22,869 Bucklin Point 251,510 88,217 (163,293) IM 13,992 13,779 (213) COB 74,668 70,807 (3,861)

Therms 481,706 337,208 (144,498)

Expense 508,051$ 340,620$ (167,431)$

Rate per Therm 1.055$ 1.010$ (0.045)$

FY 2020 BUDGETED EXPENSECHEMICALS

29

Chemical FY 2019 Budget

FY 2020 Budget

PercentChange

Sodium Hypochlorite (Gallons) 688,124 846,047 22.9%Sodium Bisulfite (Gallons) 236,613 335,641 41.9%Sodium Hydroxide (Gallons) 34,754 34,754 0.0%Carbon Feed (Gallons) 27,081 27,081 0.0%Polymer‐Liquid (Gallons) 52,500 59,641 13.6%Polymer‐Powder (Lbs.) 18,000 30,641 70.2%Soda Ash (Tons) 135 135 0.0%

Chemical Expense 883,736$ 1,307,378$ 47.9%

$‐ $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000

FY 2019Budget

FY 2020Budget

Sodium Hypochlorite Carbon Feed Sodium Hydroxide Sodium Bisulfite Soda Ash Polymer

FY 2020 BUDGETED EXPENSEOTHER LARGE OPERATING EXPENSE

30

$725,790

$749,306

$633,000

$477,299

$‐ $400,000 $800,000 $1,200,000 $1,600,000

FY 2019Budget

FY 2020Budget

Insurance

Insurance Workers Compensation

FY 2019 Budget FY 2020 Budget Budgeted DifferenceMaintenance Contracts 1,022,811$ 1,461,439$ 438,628$

FY 2020 BUDGETED EXPENSEDEBT SERVICE

Programmed $50 million borrowing through RIIB (will not be needed with WIFIA)

31

$28,801,973

$28,848,395

$17,774,190

$18,968,229

FY 2019Actual

FY 2020Budget

$‐ $10,000,000 $20,000,000 $30,000,000 $40,000,000 $50,000,000

Principal Interest

FY 2020 CAPITAL BUDGET

32

FY 2018Actual

FY 2019Budget

FY 2020Budget

Budgeted Difference

Source of FundsRestricted Account ‐ CIP 19,579,714$ 20,015,021$ 6,909,839$ (13,105,182)$ Restricted Account ‐ OCP 4,102,698 4,752,000 3,261,200 (1,490,800) Grant and Project Reimbursement Account ‐ 7,715,796 8,914,056 1,198,260 SRF Loan Proceeds 25,849,612 23,828,148 36,056,481 12,228,333

Total Source of Funds 49,532,024$ 56,310,965$ 55,141,576$ (1,169,389)$

Use of FundsOperating Capital Program 4,102,698$ 4,752,000$ 3,261,200$ (1,490,800)$ Capital Improvements 39,408,439 50,558,965 51,330,376 771,411 Cost of Issuance/Other 6,020,887 1,000,000 550,000 (450,000)

Total Use of Funds 49,532,024$ 56,310,965$ 55,141,576$ (1,169,389)$

OPERATING CAPITAL PROGRAM

33

Division FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 Total

FY 2021‐2025 Administration 595,000$ 175,000$ 440,000$ 175,000$ 440,000$ 210,000$ 1,440,000$ Construction & Engineering 40,000 30,000 75,000 30,000 35,000 ‐ 170,000 Finance 336,000 71,000 31,000 66,000 31,000 31,000 230,000 Operations & Maintenance 2,036,200 1,728,000 1,434,000 1,255,000 1,872,000 1,807,000 8,096,000 Env. Science & Compliance 254,000 386,000 410,833 441,000 388,000 397,500 2,023,333

3,261,200$ 2,390,000$ 2,390,833$ 1,967,000$ 2,766,000$ 2,445,500$ 11,959,333$

FY 2020 – 2025 Operating Capital Program

FY 2020 Operating Capital Program

$‐

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

$4,500,000

$5,000,000


Administration FinanceOperations & Maintenance Construction & Engineering

FY 2021 – 2025 CIP

34

Expenditures by Major Initiative(In thousands)

Programmed Capital Improvements (Thousands)

FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 Total FY2021‐2025

CIPCSO Phase III A Facilities 34,981$ 41,879$ 94,086$ 143,803$ 110,546$ 55,989$ 446,303$ Bucklin Point 1,367 4,694 15,301 3,126 ‐ ‐ 23,121 Other CIP 14,344 8,483 5,904 5,942 5,117 2,500 27,946 Unfunded Capital Improvements/Contingency 1,714 747 3,933 1,616 970 2,482 9,748 Total Original CIP 52,406$ 55,803$ 119,224$ 154,487$ 116,633$ 60,971$ 507,118$ CIP AdjustmentsCSO Phase III A Facilities Inflation Adjustment 355$ 2,396$ 8,353$ 13,593$ 12,197$ 7,818$ 44,357$ Bucklin Point Resiliency Change in Scope/Schedule 285 14,070 (4,289) (2,328) ‐ ‐ 7,453 Total Adjusted CIP 53,046$ 72,269$ 123,288$ 165,752$ 128,830$ 68,789$ 558,928$

$‐

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

$140.0

$160.0

$180.0

FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025

Millions

CSO Phase III A Facilities Bucklin Point ResiliencyOther Funded Capital Improvements Unfunded Capital Improvements/Contingency

FY 2021 – 2025 CIP

35

Priority 'B' ‐ 3%•Required to

maintain system reliability and

ongoing operation of facilities.

Priority 'C' ‐ 2%•Project scope & requirements are

dependent on future system needs or

regulatory requirements.

Priority 'A' ‐ 95%•Mandated,

emergency, critical need or under construction.

Functional Area (In thousands)

Prior Year CIP (FY 2020‐2024)

Current Year CIP (FY 2021‐2025)

% Change

Wastewater Treatment Facility 20,582$ 39,138$ 90%Infrastructure Management 2,191 1,999 (9%)CSO Phase III A Facilities 314,972 446,303 42%Sewer System Improvements 3,863 4,974 29%Interceptor Inspection and Cleaning 2,500 2,500 0%Interceptor Restoration and Construction 12,791 12,204 (5%)

Total 356,899$ 507,118$ 42%

Administrative 2%

A/E Professional12%

Construction 80%

Contingency 6%

CSO PHASE III FACILITIES

36

Estimated Phase III Program Cost and Schedule

Phase Amount Start Date End DatePhase III A1 Design/Construction 548.4$ April‐2013 December‐2026

Phase III B2 Construction 28.5 December‐2027 December‐2030

Design 23.1 May‐2032 June‐2034Construction 141.5 April‐2034 July‐2037

Design 13.2 April‐2037 September‐2039Construction 70.3 August‐2039 December‐2041Total 825.0$

1 Does not include costs prior to July 1, 2019 of $ 21.2 million, costs inflated per WIFIA application2 Pre‐design estimates in 2018 $ with cost and schedule subject to change

CSO Phase III Facilities ‐ in Millions

Phase III C2

Phase III D2

CSO PHASE III FACILITIES

• 30’ internal diameter deep rock tunnel approximately 11,700’ long in Pawtucket located along the Seekonk and Blackstone Rivers

• Tunnel pump station to convey flow to the Bucklin Point WWTF in East Providence, drop shafts, regulator modifications and consolidation conduits

• Green Stormwater Infrastructure

• Design of the Upper BVI relief, CSO 105 relief sewer and CSO 206 sewer separation (Phase B)

• 13 Separate Construction Projects

37

30% Design and Program Management

• STANTEC

Tunnel – Design/Build

• Contract Award end of CY 2020

• Construction Begin end of CY 2021

All other –Design/Bid/Build

• Various dates

CSO PHASE III A FACILITIES

38

Expenditures by Project1(In thousands)

Project Number

Project Name Administrative A/E Services Construction Contingency Land Total

30800 CSO Phase III A Facilities Design & Land Acquisition $ 2,792 $ 33,893 $ ‐ $ ‐ $ 9,486 46,172$ 30801 CSO Phase III A Facilities Pawtucket Tunnel & Pump Station 7,649 31,121 278,748 18,249 ‐ 335,767 30802 CSO Phase III A Facilities Tunnel Pump Station Fit‐out 2,249 7,250 68,638 4,565 ‐ 82,703 30803 CSO Phase III A Facilities OF 205 150 1,225 4,552 304 ‐ 6,230 30804 CSO Phase III A Facilities OF 210,213,214 308 966 10,359 676 ‐ 12,309 30805 CSO Phase III A Facilities OF 217 479 1,464 15,951 1,016 ‐ 18,910 30806 CSO Phase III A Facilities OF 218 213 708 7,038 464 ‐ 8,423 30807 CSO Phase III A Facilities Regulator Modifications 50 144 1,666 128 ‐ 1,988 30808 CSO Phase III A Facilities GSI Demonstration 79 17 2,652 164 ‐ 2,912 30809 CSO Phase III A Facilities GSI Projects 188 106 6,257 390 ‐ 6,941 30810 CSO Phase III A Facilities BPWWTF Clarifiers & Flow Splitters 476 2,184 16,064 1,050 ‐ 19,775 30811 CSO Phase III A High Street Demo 1 ‐ 21 ‐ ‐ 22 30812 CSO Phase III A Facilities Dexter St. Stormwater Infrastructure 40 ‐ 1,358 83 ‐ 1,481 30813 CSO Phase III A Facilities Site Demolition 90 127 4,244 318 ‐ 4,779

548,412$ 1PerWIFIAApplicationestimatedpost7/1/19

Total

CSO PHASE III A FACILITIES

39

Project Status

Project Number

Project Name Phase Status

30800 CSO Phase III A Facilities Design & Land Acquisition Design 20% Design 30801 CSO Phase III A Facilities Pawtucket Tunnel & Pump Station Construction On Schedule30802 CSO Phase III A Facilities Tunnel Pump Station Fit‐out Construction On Schedule30803 CSO Phase III A Facilities OF 205 Construction On Schedule30804 CSO Phase III A Facilities OF 210,213,214 Construction On Schedule30805 CSO Phase III A Facilities OF 217 Construction On Schedule30806 CSO Phase III A Facilities OF 218 Construction On Schedule30807 CSO Phase III A Facilities Regulator Modifications Construction On Schedule30808 CSO Phase III A Facilities GSI Demonstration Construction On Schedule30809 CSO Phase III A Facilities GSI Projects Construction On Schedule30810 CSO Phase III A Facilities BPWWTF Clarifiers & Flow Splitters Construction On Schedule30811 CSO Phase III A High Street Demo Construction Complete 30812 CSO Phase III A Facilities Dexter St. Stormwater Infrastructure Construction On Schedule30813 CSO Phase III A Facilities Site Demolition Construction On Schedule

CIP FUNDING

NBC worked with PFM to optimize funding strategy

Model was developed

• Funding of FY 2020 – 2025 CIP

• WIFIA funded projects adjusted for inflation

• 49% WIFIA funding for CSO Phase III A Facilities

• 49% WIFIA funding for Bucklin Point Resiliency

• (LOI submitted on July 3, 2019)

• Rate increases capped at 3% every other year for debt service/debt coverage

• Proforma includes 2% inflation adjustment

• Proforma includes the projected CIP impact on O&M

40

CSO PHASE III A FACILITIES FINANCING

41

Funding Source AmountRevenue Bonds 175,611,339$ SRF Loans 48,227,777 WIFIA Loan 268,721,668 Pay‐go Cash 59,333,337

551,894,121$

32%

9%48%

11%

Revenue Bonds SRF Loans WIFIA Loan Pay‐go Cash

“What’s Best” ModelingFiscal Year

Beginning Balance

Draws Interest PaymentEnding Balance

2021 ‐$ 41,834,785$ 460,183$ ‐$ 42,294,968$ 2022 42,294,968 95,229,105 2,171,477 ‐ 139,695,549 2023 139,695,549 131,657,778 5,160,539 ‐ 276,513,866 2024 276,513,866 ‐ 7,348,146 ‐ 283,862,012 2025 283,862,012 ‐ 7,543,417 ‐ 291,405,429 2026 291,405,429 ‐ 7,743,878 ‐ 299,149,307 2027 299,149,307 ‐ 7,949,665 ‐ 307,098,972 2028 307,098,972 ‐ 8,160,922 ‐ 315,259,894 2029 315,259,894 ‐ 8,377,792 ‐ 323,637,686 2030 323,637,686 ‐ 8,600,426 ‐ 332,238,112 2031 332,238,112 ‐ 8,828,975 ‐ 341,067,087 2032 341,067,087 ‐ 9,004,171 9,004,171 341,067,087 2033 341,067,087 ‐ 9,004,171 9,004,171 341,067,087 2034 341,067,087 ‐ 9,004,171 9,004,171 341,067,087 2035 341,067,087 ‐ 9,004,171 9,004,171 341,067,087 2036 341,067,087 ‐ 9,004,171 9,004,171 341,067,087 2037 341,067,087 ‐ 9,004,171 9,004,171 341,067,087 2038 341,067,087 ‐ 9,004,171 9,004,171 341,067,087 2039 341,067,087 ‐ 8,988,184 10,199,311 339,855,961 2040 339,855,961 ‐ 8,447,028 48,232,578 300,070,411 2041 300,070,411 ‐ 7,334,677 51,818,125 255,586,963 2042 255,586,963 ‐ 6,144,634 51,815,968 209,915,630 2043 209,915,630 ‐ 4,922,743 51,818,902 163,019,471 2044 163,019,471 ‐ 3,668,103 51,820,485 114,867,088 2045 114,867,088 ‐ 2,245,751 61,847,269 55,265,570 2046 55,265,570 ‐ 862,903 46,022,594 10,105,879 2047 10,105,879 ‐ 133,398 10,239,277 ‐

* Preliminary and subject to change

Preliminary WIFIA Draw and Amortization*

PROJECTED OUTSTANDING DEBT

42

$‐

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

Millions

Existing SRF Existing Revenue Bond New WIFIA New Revenue Bond New SRF

PROJECTED ANNUAL DEBT SERVICE

43

$‐

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

2043

2044

2045

2046

2047

Millions

Existing SRF Existing Revenue Bond New WIFIA CSO Phase IIIA New WIFIA BP Resiliency New Revenue Bond New SRF

RATE IMPACT

44

$0

$100

$200

$300

$400

$500

$600

$700

0%

1%

2%

3%

4%

5%

6%

7%

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 AnnualResidentialCharge

Percent Increase

Actual and Projected Rate Increases and Annual Residential Charge

Operations Debt Service Rate Base AdjustmentAnnual Residential Charge Proj. Annual Residential Charge

Late Fees as a Percent of User Charges

COLLECTIONS

45

Receivables

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

$‐

$20

$40

$60

$80

$100

$120

FY 2002 FY 2004 FY 2006 FY 2008 FY 2010 FY 2012 FY 2014 FY 2016 FY 2018

Millions

User Fees Late Charge %

June 30, 2019 June 30, 2018Current 8,047,271$ 3,347,909$ 31 ‐ 90 days 3,016,288 2,249,866 91 ‐ 120 days 788,296 669,342 Over 120 days 3,859,825 2,663,908 Interest 575,029

15,711,680$ 9,506,054$

Receivables reflect transition to weekly billing cycles from monthly cycles

CS Conversion – interest not reflected in aging buckets

Resumption of Water Shut‐off Program spring 2019

Lien Sale scheduled for October 2019

2018 SEWER USER FEE SURVEY

46

Statewide average is $541/year based on usage of 150 gpd or

73.2 HCF.

NBC’s projected rate July 1, 2019 of

$518/year is below the 2018 state average.

Rhode Island Cities & Towns

$280

$306

$343

$345

$400

$401

$459

$470

$477

$498

$502

$504

$509

$750

$803

$870

$1,276

$‐ $200 $400 $600 $800 $1,000 $1,200 $1,400

SOUTH KINGSTOWN

WESTERLY

WEST WARWICK

SMITHFIELD

NARRAGANSETT

WOONSOCKET

CRANSTON

EAST PROVIDENCE

NBC SERVICE AREA

BARRINGTON

WARWICK

BURRIVILLE

NORTH SMITHFIELD

EAST GREENWICH

JAMESTOWN

MIDDLETOWN

NEWPORT

2018 SEWER USER SURVEY

47

Average is $768/yr. based on usage of 120

HCF

MWRA Survey 2018 Annual Residential Sewer Charges for Major U.S. Cities

Seattle, WA 1,615$ Indianapolis, IN 656$ San Francisco, CA 1,567 Houston, TX 648 Honolulu, HI 1,264 Providence, RI 642 Portland, ME 1,194 Los Angeles, CA 601 Washington, DC 998 San Diego, CA 594 MWRA Service Area 979 Columbus, OH 558 Flint, MI 931 Fort Worth, TX 551 Austin, TX 896 Dallas, TX 540 Boston, MA 886 Saint Paul, MN 521 Saint Louis, MO 814 San Jose, CA 467 New Orleans, LA 794 Newark, NJ 457 New York, NY 744 Philadelphia, PA 454 Detroit, MI 733 San Antonio, TX 447 Jacksonville, FL 687 Milwaukee, WI 260

2018 Annual Residential Sewer Charges for Major U.S. Cities

OTHER CONSIDERATIONS

• Filing with Division of PUC for Authority to Borrow an original principal amount not to exceed $270.0 M in federal funds through the WIFIA loan program

• Hearing scheduled for August 5, 2019

• Technical Session held with the RIPUC and Division on July 25, 2019 to discuss the WIFIA loan

• Finalizing Loan Agreement, Supplemental Indenture and Term Sheet

• Anticipated closing the week of August 26th

• Working with the Wiley Center and Treasurer’s Office on Affordability Program

48

Documents

NARRAGANSETT BAY COMMISSION · 7 Rhode Island Resource Recovery 484,038 0.50% 8 Providence School Department 426,562 0.44% 9 Providence College 416,746 0.43%