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HomeMy WebLinkAbout06-12-2012 ph3 2012 water fund reviewcounci laccnba 1 epolt CITY OF . SAN LUI .S -OBISP O FROM : Carrie Mattingly, Utilities Directo r Prepared By :Wade Horton, Water Division Manage r Greg Head, Interim Senior Administrative Analys t SUBJECT : FY 2012-13 WATER FUND REVIE W RECOMMENDATION S 1.Review and accept the FY 2012-13 annual Water Fund financial review ; 2.Conceptually approve the 2012-13 Water Fund budget, with final action on June 19, 2012 wit h the adoption of the 2011-13 Financial Plan Supplement; 3 Authorize the addition of the Utilities Business Manager position ; an d 4 . Adopt resolution revising water fixture and meter charges based on current material costs . DISCUSSION This report presents the annual Water Fund review . It highlights major adjustments made to th e Water Fund analysis since the preparation of the 2011-13 Financial Plan . As outlined in the FY 2012-13 Water Fund Analysis, which forecasts the financial position of th e Water Fund through FY 2019-20, the City is able to : 1.Provide adequate water supply for the community ; 2.Fund debt service for the completed Water Treatment Plant improvements and the City's share of long-term financing obligations for the Nacimiento water supply ; 3 Manage capital maintenance projects to maintain the community's water infrastructur e assets ; and, 4 . Provide recycled water for landscape irrigation and construction water purposes . FY 2012-13 Water Fund Analysis Repor t The attached FY 2012-13 Water Fund Analysis Report (Attachment 1) includes changes in financia l position, analysis assumptions, an update on major activities and programs, and incorporates th e following key financial impacts : 1.New agreement between the City and Cal Poly with updated water rates commencing o n July 1, 2012 . 2 . 2012-13 salary and benefit updates . PH3-1 A Meeting Date June 12, 201 2 Item Number PH3 FY 2012-13 Water Fund Review Page 2 3.Assumed salary and benefit concessions of 6 .8% from San Luis Obispo City Employee s Association (SLOCEA). 4.Increased City PERS contributions commencing on July 1, 2013 . 5 Four Significant Operating Program Changes . 2011-13 Financial Plan Supplement : FY 2012-13 Budget Revenue Update Overall, revenue projections for FY 2011-12 and FY 2012-13 are in alignment with the 2011-1 3 Financial Plan . The City Council adopted water service rates in support of the City's 2011-13 Financial Plan during a public hearing on June 14, 2011 in accordance with Proposition 218 requirements . The adopte d FY 2012-13 water rates reflect a 9% increase, effective July 1, 2012 . Cal Poly Agreement .Discussions between the City and Cal Poly have culminated in a tentative F Y 2012–13 Rate Agreement for Water and Sewer Services that will be presented to Council, in detail , for its consideration on June 12, 2012 . Building on the existing five-year agreement, which expire s on June 30, 2012, the new agreement establishes a mutually-approved methodology for calculatin g the University's appropriate water rate, based on the University owning its own source of suppl y and previously making capital contributions to the Water Treatment Plant upgrade project . The agreement provides for an annual update of water rates . Rates were previously updated every five years . The proposed methodology and new rates are scheduled to commence July 1, 2012, resulting in a 17% reduction in revenues to the Water Fund from Cal Poly for FY 2012-13 . Operating Program Update The Water fund's operating program budgets were updated to reflect the following changes . Salary and benefit updates provided by Finance, 6 .8% salary and benefits concessions fro m SLOCEA, and increased City PERS contributions . 2.Due to a change in workload distribution, the allocation of administrative managemen t salaries and benefits to the Water Fund was reduced from 50% to 40%. 3.As described in the table below, four Significant Operating Program Changes (SOPCs). SOPC Name Budge t Impact Comment s Organizational Structure Review $12,500(1)Joint water (50%) and sewer (50%). One-time . Use of consultant services to augment staff work to-date . Development Impact Fee Study $7,500(1)Joint water (50%) and sewer (50%). One-time . Update facility costs, demographic data and growth assumptions,water suppl y component, secondary dwelling units/guest houses ._ Nacimiento Water Project ($276,400)Water.One-time .Result of reduction in Nacimiento Water Operating Fund budget recently adopted by the Nacimiento Projec t Commission. PH3-2 FY 2012-13 Water Fund Review Page3 (1) Water Fund's share of cos t Capital Improvement Plan Amendments While no amendments are recommended at this time, two important FY 2011-12 budgetar y transactions will be processed to provide potential opportunity to accelerate construction of a critical pipeline replacement project from FY 2014-15 to FY 2013-14 : 1.Approximately $364,000 held in the Water Reuse capital improvement project account wil l be returned to working capital due to settlement of the PMC lawsuit. 2.A total of approximately $471,000 will be returned to working capital through th e Completed Projects account ($461,000) and CIP cost savings ($10,000). A total of approximately $835,000 will be returned to working capital . Debt Service Update In FY 2012–13, a decrease of approximately $161,000 in debt service expenditures will be realized due to the refinancing of the 2002 Water Revenue bonds . Over the twelve year refinancing period,a decrease of approximately $1,355,570 in debt service expenditures will be realized . The Leas e Purchase – Energy Projects annual $29,300 obligation will be complete in FY 2012-13 . Proposed Revisions to Water Fixture and Meter Charge s Resolution Setting Charges for Water Customer Valves, Adapters, and Meter Boxes and Lids , (Attachment 2) identifies the proposed revisions to water fixture and meter charges . Propose d revisions are based on increases in actual material costs and reflect the amount the City currentl y pays for these items . Due to changes in State-mandated lead standards in plumbing fixtures (A B 1953), water fixture and meter costs have increased substantially . ATTACHMENT S 1. FY 2012-13 Water Fund Analysi s 2. Resolution Setting Charges for Water Customer Valves, Adapters, and Meter Boxes an d Lids PH3-3 Comment s Joint water (45%) and sewer (55%). Ongoing. 1 .0 FTE addition o f new job classification coordinated with HR . Estimated annual cos t of $125,383 included in 2011–13 Financial Plan for 2012-13 a s ongoing operating program expenditure . Therefore, there is no increase in the 2012-13 budget or projected years budgets . The comprehensive analytic and fiscal needs of the Utilities Departmen t have been undergoing assessment since July 2010 . This work, which is completed, complements the broader organizationa l structure analysis that commenced in July 2011 . The broader organizational review is entering phase two for which there is a n SOPC request for consultant services. In an effort to accelerate the process of hiring the Utilities Business Manager position, staff intends to begin the recruitment following Council's authorizatio n of the added position . Budget SOPC Name Impact Utilities Business Manager $0 ATTACHMENT 1 FY 2012-13 Water Fund Analysi s June 12, 201 2 Prepared by th e Utilities Departmen t city of san lu g s o13ispo Attachment 1 city Of san tuts oliisp o FY 2012-13 Water Fun d TABLE OF CONTENT S OVERVIEW II . 2011-13 FINANCIAL PLAN SUPPLEMENT :FY 2012-13 BUDGET A.Revenue Summar y B.Operating_ Program Summar y C.Capital Improvement Plan Summar y D.Debt Service Summar y III. MAJOR ACTIVITIES AND PROGRAM S A.FY 2011-12 Update B.FY 2012-13 and Forecas t EXHIBIT A - FINANCIAL SCHEDULE S A.1.Changes in Financial Positio n A.2.Projection Assumption s A.3.Capital Improvement Plan EXHIBIT B —WATER RATE STRUCTURE PH3-5 Attachment 1 city o f san luis oBisp o FY 2012-13 Water Fund Analysi s I.OVERVIE W This report presents the financial condition of the Water Fund, based on the 2011-13 Financia l Plan Supplement : FY 2012-13 Budget operating and capital programs . It reflects regulatory requirements, infrastructure maintenance, and adopted City financial policies . II.2011-13 FINANCIAL PLAN SUPPLEMENT : FY 2012-13 BUDGE T A .Revenue Summary The Water fund's projected revenues are summarized in Table A . Table A .Revenue Summary 2011-12 2012-1 3 Original Revised Original Revised Budget Budget Variance Budget Budget Variance Investment & Property Revenue 267,600 232,225 (35,375)166,900 187,600 20,70 0 Water Service Charges 13,519,800 13,951,195 431,395 14,736,600 14,859,900 123,30 0 Sales to Other Agencies 1,207,800 1,137,100 (70 ;700)1,316,500 1,028,800 (287,700) Development Impact Fees 383,800 516,300 132,500 390,700 386,900 (3,800) AB 939 Reimbursement 125,600 125,600 0 127,900 126,600 (1,300) Account Set-up Fees 115,500 115,500 0 117,600 116,400 (1,200) Connection Charges & Meter Sales 6,900 9,100 2,200 7,000 9,200 2,200 Other Revenues 38,400 37,800 (600)37,600 38,100 500 Total 15,665,400 16,124,820 459,420 16,900,800 16,753,500 (147,300) Overall, revenue projections for FY 2011-12 and FY 2012-13 are in alignment with the 2011-1 3 Financial Plan . FY 2011-12 revenue projections are based upon actuals through March 31, 201 2 and include the following key points . 1.Water Service Charges are expected to exceed original budget by $431,000 or thre e percent. 2.Sales to Other Agencies (Cal Poly) is projected to decrease by approximately $71,000 or si x percent. The current methodology to calculate water service charges applies the projected rate increase t o previous years' sales . Based on this methodology FY 2012-13 projected sales would b e $15,206,800 . Considering the lack of consistency in recent water demand trending, staff adjuste d projected sales down by approximately two percent to maintain fiscal conservancy . Beyond FY 2012-13, Water Service Charges are estimated using projected water service rat e changes applied to the previous year's projected sales . FY 2012-13 monthly water rates , PH3-6 Attachment 1 including the 9% increase effective July 1, are summarized below . FY 2012-13 Monthly Water Charge s Single Famil yCustomer Type Residential Customers All Other Customer s Inside the City Rates 1 - 5 Units $6.25/ Unit 1 - 5 Units $6 .25/ Uni t 6 - 25 Units $7 .82/ Unit 6+ Units $7 .82/ Uni t 26+ Units $9 .80/ Unit Outside the City Rates 2 1 - 5 Units $12 .50/ Unit 1 - 5 Units $12 .50/ Unit 6 - 25 Units $15 .64/ Unit 6+ Units $15 .64/ Uni t 26+ Units $19.60/ Unit '1 unit = 100 Cubic Feet = 748 gallons of water 2 For service to customers outside the City, the water rates are two times the "in-City" rate. The following table compares the FY 2011-12 and FY 2012-13 monthly bill for the averag e residential customer based upon average usage and approved monthly water rates . Comparison Average Residential Water Customer Monthly Bil l 2011-12 2012-1 3 Average Usage 9 Units 9 Units UNIT S 1– 5 $5 .73/unit $28 .65 $6 .25/unit $31 .2 5 6 –25 $7 .17/unit $28 .68 $7 .82/unit $31 .2 8 26 +$8 .99/unit n/a $9 .80/unit n/a $57 .33 $62 .5 3 FY 2012-13 Sales to Other Agencies (Cal Poly)are projected to decrease due to an adjustment to th e ratio (from 66% to 49%) applied to the City's water rate that is incorporated in the new Cal Pol y rate agreement . The majority of this decrease is related to the exclusion of Nacimiento Projec t costs . Considering the current economic volatility and development climate, projected FY 2012-1 3 Development Impact Fees, as originally estimated in the 2011-13 Financial Plan, remai n unchanged . A trending analysis will be performed in conjunction with the 2013-15 Financia l Plan to determine if an adjustment to current forecast methodology is substantiated . B.Operating Program Summary The Water Division Operating Program is summarized in Table B . The summary of operatin g programs reflects the operating program base budget amounts for FY 2012-13, which include s four Significant Operating Program Changes . Forecasted operating and maintenance costs ar e adjusted for inflation using inflation rates coordinated with Finance . PH3-7 Attachment 1 C . Capital Improvement Plan Summar y Capital improvement project expenses are forecast based on infrastructure maintenance an d repair history, individual project budget estimates and regulatory requirements . Maintaining th e water system infrastructure, including major equipment and technology, is critical for th e delivery of uninterrupted high quality water services to the community . Water Division Capital Improvement Plans are summarized in Table C . The table includes no new recommende d amendments, and reports FY 2012-13 and two projected years . Table B . Summary of Operating Program s Water Source of Supply (1 ) Utilities Conservatio n Water Treatmen t Water Distributio n Water Customer Service (2 ) Water Administration/Engineering (3 ) Water Franchise Fee s TOTAL WA'1NR SERVICES OPERATING PROGRAMS 2012-1 3 BUDGET 7,663,600 382,300 2,317,900 1,168,200 331,100 562,800 562,00 0 $12,987,90 0 (I)Source of Supply costs include $6,200,000 in FY 2012-13 for the Nacimiento Water Projec t (2)Customer Service costs are allocated 50/50 between the Water and Sewer Fund s (3)Includes SOP Cs except Nacimiento Water Project which is in Water Source of Supply PH3-8 Attachment 1 Table C . Capital Improvement Plan 2012-1 3 BUDGET 2013-1 4 PROPOSED 2014-1 5 PROPOSE D Source of Supply Water Reuse Automation Improvements 100,000 Water Reuse Distribution System Analysis & Master Plan Update 50,000 Water Treatment Plan t Major Facility Maintenance 200,000 100,000 Fleet Replacement: Service Body Truck 35,000 Fleet Replacement : Compact Pickup 20,000 Water Distributio n Distribution System Improvements - Pipelines 200,000 200,000 1,487,300 Distribution Pump Station Assessment Study 35,000 Water Storage Reservoir Maintenance and Tan k Repacement 181,00 0 Equipment Replacement: Generator (50% share)55,000 Administration and Engineering Fleet replacement : Sedan 20,000 Fleet replacement : Compact Pickup 20,000 Total Water Services CIP Requests 200,000 575,000 1,928,30 0 Shared Information Technology Telemetry System Upgrade - Water Distributio n Construction 1,500,000 Virtual Private Network (VPN) Appliances 29,000 Network Firewalls 10,500 Web Filter, Security Upgrades, Network Security 6,500 Network Equipment Replacement 17,000 Total Share of Information Technology CIP 0 1,546,000 17,000 TOTAL WALER FUND CAPITAL PLAN $200,000 $2,121,000 $1,945,30 0 D . Debt Service Summar y The Water fund's debt service obligations are summarized in Table D . Table D . Debt Service Summary 2012-13 Comments 2012 Water Revenue Bonds Budget $531,600 Refunded 2002 Water Revenue Bonds . 2006 Water Revenue Bonds $1,034,600 State Revolving Fund Loan - Water Reuse $525,500 Lease Purchase - Energy Projects $29,300 Complete FY2012-13 . 2009 Public Safety Radio Sys tern Up grade $37,80 0 2009 Public Safety Communications Center $28,80 0 Total $2,187,600 The Nacimiento Water Supply Project debt financing is facilitated through the County, and th e City's share of the debt service costs are accounted for as an operating expense in the Source o f Supply operating program budget . PH3-9 Attachment 1 III . MAJOR ACTIVITIES AND PROGRAM S A. FY2011-12 Updat e Nacimiento Water Projec t Per the City's General Plan Water and Wastewater Management Element Policy A 2 .2 .1 , the City shall utilize multiple water resources to meet its water supply needs . Having several sources of water, including surface water sources in distinct watersheds, avoid s dependence on any one source that may not be available during a drought or other wate r supply reduction or emergency . With the delivery of Nacimiento Reservoir wate r beginning in January 2011, the City now has five water sources, achieving the goal o f diversifying its water supply portfolio to meet current and future community needs . The City has a contractual right to 3,380 acre feet per year . The total project budget for the Nacimiento Project was $176 million for design and construction. The City's share o f that cost is estimated at $83 .7 million . Further, the City's share of project costs for F Y 2011-12 and annually thereafter is approximately $6 .3 million . 2.Salinas Reservoir Infrastructure Upgrade s The San Luis Obispo County Flood Control and Water Conservation District operates th e Salinas Reservoir under contract with the Army Corps of Engineers . Through payments in the City's source of supply program, the City pays for the total cost of operating an d maintaining Salinas Reservoir and delivery system for transporting raw water to th e City's water treatment plant . In 2007, City and County staff began forecasting budgetar y needs for a booster pump station upgrade near the top of Cuesta Grade, the project wa s approved as part of the 2009-11 Financial Plan (Appendix A, Significant Operatin g Program Change, page 18 provides additional background information on this project). The project is currently under construction, on budget, and is scheduled for completio n June 2012 . 3.Telemetry Upgrade Project Capital funding was approved as part of the 2009-11 Financial Plan (Appendix B, Capita l Improvement Plan, page 3-99 provides background information and project objectives ) for the telemetry system upgrade of the control and monitoring systems for the Whal e Rock and the city-wide water distribution system . The project design phase was delaye d in order to conduct a radio study to include in the design phase request for proposals . Th e radio study is anticipated to commence June 2012, with the design phase RFP followin g shortly thereafter Construction of the telemetry system, previously adopted at $1 .5 million in 2010-11, was deferred last year to 2013-14 to moderate 2011-13 rate increases . 4.Infrastructure Replacements Two water distribution construction projects funded in the 2009-11 Financial Plan wer e completed in FY 2011-12 : Waterline Replacements 2010-11 and Johnson Waterline an d Pavement Repair Project . The Waterline Replacements 2010-11 Project replace d approximately 1 mile of 8" water main and was completed January 2012 . The project wa s within budget at a cost of $980,412 . The Johnson Waterline and Pavement Repair Projec t replaced 350 feet of 16-inch distribution main following a pipeline failure in front o f French Hospital . The project was completed in September 2011 within budget at a cost o f $179,362 . PH3-10 Attachment 1 B. FY 2012-13 and Forecas t The City has adopted a goal for annual infrastructure replacements at approximately tw o percent of system value (based on a fifty year replacement cycle)for the water distribution system . A reduction in funding for water distribution system improvement s began in FY 2011-12 for a three year period . These short term reductions were necessar y to moderate 2011-13 Financial Plan rate increases ; funding for distribution projects are projected to resume in FY 2014-15 . The $200,000 currently budgeted for FY 2012-1 3 CIP is for street patching following water service breaks and to raise valve covers fo r street reconstruction projects . The capital improvement plan forecast will be further evaluated, based on additiona l information and factors, and updated as part of the 2013-15 Financial Plan developmen t process . PH3-11 EXHIBIT A FY 2012-13 WATER FUND .FINANCIAL SCHEDULES Attachment 1 Exhibit A .1 CHANGES IN FINANCIAL POSITION - WATER FUND 201 6-1 I Actual 2011-1 2 13od,(ct 2012-1 .3 Iiudcct 21113-1 4 f'ro6ection 22614-1`• i ro)(2ot q 21)15-1 6 Pro icctio q 2016-1 7 PmIechan 2017-111 PrnIc Coon ?Utti-1 PlotccLon 2610-2 0 n Revenues - Investment and Property Revenues 342,500 232,200 187,600 191,700 179,600 190,900 232,900 292,100 329,300 400,000 Service Charge s Water Sales Water Service Charges 12,290,700 13,951,200 14,859,900 16,048,700 17,172,100 17,859,000 18,394,800 18,854,700 19,231,800 19,616,400 Sales to Other Agencies 1,098,000 1,137,100 1,028,800 1,111,100 1,188,900 1,236,500 1,273,600 1,305,400 1,331,500 1,358,100 Development Impact Fees 639,600 516,300 386,900 393;300 403,200 416,600 429,200 443,400 458,100 475,400 AB 939 Reimbursement 112,800 125,600 126,600 128,400 131,000 134,700 138,100 142,000 146,000 150,400 Account Set-up Fees 113,800 115,500 116;400 118,000 120,400 123,800 126,900 130,500 134,200 138,200 Connection Charges and Meter Sales 6,800 9,100 9,200 9,300 9,500 9,800 10,000 10,300 10,600 10,900 Other Revenues 36,400 37,800 38,100 38,600 39,400 40,500 41,500 42,700 43,900 45,200 Total Revenues 14,640,600 16,124,800 16,753,500 18,039,100 19,244,100 20,011,800 20,647,000 21,221,100 21,685,400 22,194,600 Expenditures Operating Programs Public Utilities 10,686,500 13,664,100 12,987,900 13 ;168,800 13,334,400 13,628,000 13,897,800 14,197,700 14,471,800 14,756,400 General Government 1,702,700 1,309;400 1316700 1,335;100 1,361,800 1,399,900 1,434,900 1,477;900 1,522,200 1,567,900 Total Operating Programs 12;389,200 14,973 ;500 14,304,600 14,503;900 14,696 ;200 15,027,900 15,332,700 15,675,600 15,994,000 16,324,300 Capital Improvement Plan 2,197,400 2 ;819,600 200,000 2,121,000 1,945,300 2137,400 1,803,600 1,874,500 2,120,400 3,130,000 Debt Service 2373,000 2,343;800 2,187,600 2,191 ;400 2,195,300 2,192600 2,315,400 2,311 ;100 2,314,300 2,273,500 Total Expenditures 16,959,600 20,134,900 16,692,200 18,816,300 18,836,800 19,357,900 19,451,700 19,861,200 20,428,700 21,727,800 Other Sources (Uses ) Operating Expenditure Saving s Operating Expenditure Adjustment 42,700 62,300 62,900 63,800 65,100 66,900 68,600 70;500 72,500 74,700 ProjectedMOAAdjustments (49,200)79,300 108,300 96,000 81,200 69,700 57,700 45,100 31,800 Projected Debt Proceed s Other Sources (Uses ) Total Other Sources (Uses)42,700 13,100 142,200 172,100 161,100 148,100 138,300 128,200 117,600 106,500 Revenues and Other Sources Over (Under ) Expenditures and Other Uses (2,276,300)(3,997,000)203,500 (605,100)568,400 802,000 1,333,600 1,488,100 1,374,300 573,300 Working Capital, Beginning of Year 15,653,800 13,377,500 9,380,500 9,584,000 8,978,900 9,547300 10,349,300 11,682,900 13 ;171,000 14 ;545 ;300 Working Capital, End of Year 13,377,500 9,380,500 9,584,000 8,978,900 9,547,300 10,349;300 11,682,900 13,171,000 14,545,300 15,118,600 PH3-1 3 Attachment 1 PROJECTION ASSUMPTIONS - WATER FUN D (ATFGORI I Utilities Service Fees CPI Projections 2011-1 2 1 .5% 2012-1 3 0 .8% 2113-1 4 1 .4% 2014-1 5 2 .0% 2015-1 6 2.8% 2016-1 7 2 .5% 21117-I R 2 .8% 21118-lI ) 2.8% 2010-20 3 .0% Nacimiento Payment for Operating and Maintenance & Reserves $1,564,900 $1,469,662 $1,529,139 $1,497,700 $1,542 ;100 $1,587,700 $1,634,700 $1,683,100 $1,733,100 Nacimiento Payment for SLO County Debt Service $4,741,500 $4;743,800 $4,740,700 $4,740,600 $4,741,400 $4,741,700 $4,745,600 $4,740,300 $4,740,800-' Debt Service - 2012 Water Revenue Bonds $688,200 $531,600 $564,800 $569,600 $568,600 $693,400 $686,500 $688,400 $688,700 Debt Service - 2006 Water Revenue Bonds $1,034,000 $1,034,600 $1,034,600 $1,034,000 $1,032,800 $1,031,000 $1,033,600 $1,035,400 $1,030,900 Debt Service-State Revolving Fund Loan - Water Reuse Project $525,500 $525,500 $525,500 $525,500 $525,500 $525,500 $525,500 $525500 $525,500 Lease Purchase - Energy Projects $29,200 $29,300 $0 $0 $0 $0 $0 $0 $0 Debt Service - 2009 Public Safety Radio System Upgrade $37,900 $37,800 $37,600 $37,600 $37,100 $36,900 $36,900 $36,500 $0 Debt Service - 2009 Public Safety Communications Center $29,000 $28,800 $28,900 $28,600 $28,600 $28,600 $28 ;600 $28,500 $28,40 0 Development Impact Fee Growth Rate 0.00%0.00%0.25%0.50%0 .50%0 .50%0 .50%0.50%0 .75 % Water Service Rate Increase 10%9%8%7%4%3%2 .5%2%2% Attachment 1 Exhibit A.3 CAPITAL IMPROVEMENT PLAN - WATER FUN D PRO,11,1 T UET11L .AND P} EASING -I'U131 1C'CTII I III .S WATER SERVICES 2012-1 3 B12DG1 :T 0 -1 4 }ROI'OSH) 2014-1 2 PR(POSL .D 'n l''-l o PI OPOSGI) 2U1f,-1 7 I'RO1 4 OSF1) 2017-I S PROPOSED ?01S-1 9 PR( 4P(Sit) 201 Q-20 PR(POSI_1 ) Source ofSupply Water Reuse Automation Improvements 100,000 Water Reuse Distribution System Analysis & Master Plan Update 50,000 Salinas Dam Seismic Stud y Water Treatment Plan t Major Facility Maintenance 200,000 100,000 100,000 450,000 400,000 Fleet Replacement : Compact Pickup 20,000 Fleet Replacement Service Body Truck 35,000 Treatment Plant and Ozone Generation Upgrade 100,000 1,500,000 Fleet Replacement Forecas t Water Distribution Distribution System Improvements - Pipelines 200,000 200,000 1,487,300 1,421,400 1,173,100 1,122,500 1,457,400 1,500,000 Distribution Pump Station Assessment Study 35,000 Water Storage Reservoir Maintenance and Tank Repacement 181,000 446,000 326,000 152,000 Equipment Replacement: Generator 150%share)55,000 Distribution Pump Station Upgrades 50,000 200,000 50,000 220;000 55,000 Fleet replacement Pickup 20,000 Fleet Replacement Forecast 60,000 23,000 75,000 Water Customer Service Fleet replacement 2 - Compact Pickups Administration and Engineering Fleet replacement: Sedan Fleet replacement Compact Picku p Water Division Asset Management Pla n Total Water Services CIP Requests 200,000 575,000 1,928,300 2,137,400 1,779,100 1,874,500 2,120,400 3,130,00 0 Shared Information Technology Office Application Software Replacement (5% share) Wireless Network Infrastructure Replacement (14%share) City Website Upgrade (4% share ) Telemetry System Upgrade -Water Distribution Construction 1,500,000 Virtual Private Network (VPN) Appliances 29,000 Network Firewalls 10,500 Web Filter, Security Upgrades, Network Security 6,500 Network Equipment Replacement Total Share of Information Technology CIP 1,546, 000 17,000 24,500 TOTAL WATER FUND CAPITAL PLAN 200,000 2,121,000 1,945,300 2,137,400 1,803,600 1 .874,500 2,120,400 3,130,000 20,000 20,000 100,00 0 17,000 PH3-1 5 Attachment 1 EXHIBIT B FY 2012-13 WATER FUN D WATER RATE STRUCTUR E Current policies to guide rate structure setting are as follows : •Comply with legal requirement s ■Encourage conservatio n ■Ensure revenue adequacy to fully meet system operating and capital need s ■Provide equity and fairness between customer s ■Be easy to understand and administe r Facilitate ongoing review to maintain rate stabilit y The City's water rate structure is wholly commodity-based with charges based on the volume o f water used . PH3-16 Attachment 2 RESOLUTION NO . (2012 Series ) A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISP O SETTING CHARGES FOR WATER CUSTOMER VALVES , ADAPTERS, METER BOXES, AND LID S WHEREAS,it is the policy of the City of San Luis Obispo to review charges on an ongoin g basis and to adjust them as required to ensure that they remain equitable and adequate to fully cover th e cost of providing fixtures ; and WHEREAS,based on Assembly Bill 1953, effective January 1, 2010 the amount of lea d in specific plumbing fixtures was reduced from a regulated amount of no more than 8%,to a new standard not to exceed 0 .25%; and WHEREAS,the City's costs of procuring compliant equipment have increased as a result of the new standard ; and WHEREAS,the charges set forth herein represent the actual costs to the City o f procuring compliant equipment . NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Lui s Obispo as follows : SECTION 1 .The charges set forth in Exhibit "A" are hereby adopted, effective July 1, 2012 . Upon motion of , seconded by and on the following vote : AYES : NOES : ABSENT : The foregoing resolution was adopted this 12th day of June, 2012 . Mayor Jan Mar x ATTEST : Sheryll Schroede r Interim City Clerk R PH3-17- Attachment 2 EXHIBIT A to Resolution No . (2012 Series ) APPROVED AS TO FORM : J . Christine Dietric k City Attorney PH3-18 Attachment 2 EXHIBIT A to Resolution No .(2012 Series ) WATER CUSTOMER VALVES, ADAPTERS, METER BOXES AND LIDS CHARGE S Water Fixture Charge s Current Proposed Customer 1 aI e Cost s l .() inch ~ti().11 U ()() Customer V~al~ e (osts -- - ~,),0 0 's ,2',;()() O inch ()Ind( - 2 () _-adapter Costs (Pe r~d .~cr(osts (Per P .,irl Ywr 1j __ 1 .0 inch service /.58 x .75 inch meter $18 .00 1 .0 inch service /.58 x .75 inch meter $20 .00 1 .0 inch service /.75 inch meter $16 .00 1 .0 inch service /.75 inch meter $19 .00 1 .5 inch service / 1 .0 inch meter $124 .00 1 .5 inch service /1 .0 inch meter $ 140 .00 2 .0 inch service / 1 .0 inch meter $128 .00 2 .0 inch service /1 .0 inch meter $ 143 .00 2 .0 inch service / 1 .5 inch meter $ 184 .00 .2 .0 inch service /1 .5 inch meter $ 206 .00 Water Meter Charge s Water ,Meter site Current Cost Proposed Cos t %" meter $89 .00 $138 .5 5 1" meter $115 .00 $177 .92 1 .5" meter $650 .00 $1,231 .00 2" meter $995 .00 $1,296 .00 3" meter Time & Materials $1,532.00 4" meter Time & Materials $1,755 .00 6" meter Time & Materials $2,586 .00 PH3-1 9 Page intentionally lef t blank .