HomeMy WebLinkAbout06-14-2016 Item 01 2016-17 Water Enterprise Fund Review
Meeting Date: 6/14/2016
FROM: Carrie Mattingly, Utilities Director
Prepared By: Aaron Floyd, Deputy Director Utilities - Water
Brigitte Elke, Utilities Business Manager
SUBJECT: 2016-17 WATER ENTERPRISE FUND REVIEW
RECOMMENDATION
1. Review and accept the Fiscal Year 2016-17 Water Enterprise Fund report; and
2. Conceptually approve the Fiscal Year 2016-17 Water Enterprise Fund budget, with final
action with the adoption of the 2016-17 Financial Plan Supplement; and
3. Approve the transfer of revenue collected for new development meters to the expenditure
account for applicable meter purchases on a quarterly basis.
DISCUSSION
Background
The Water Division is responsible for securing and protecting the community’s surface and
ground water supplies, treating water to meet stringent water quality standards, and safely
distributing it to the community. Distributing recycled water is also an important function of this
division. Maintaining complex infrastructure including a dam, multiple storage tanks, and
pressure zones will soon be assisted by the installation of sophisticated monitoring equipment on
pumps, tanks, and pressure regulating valves that will allow for remote access and control of
these systems. This project is currently underway and will result in a modernization of control
systems that will allow the City to improve the efficiency of operations.
Although rainfall levels were near average in 2016, the prolonged drought has fully engaged the
community in laudable water conservation efforts with water use down almost 20% as compared
to 2013. The Utilities Services team performed hundreds of water audits, administered water
reduction programs, and ensured community member compliance with State and local mandates
along with multiple outreach, engagement, and education activities. Additional funding is
requested to support the continued temporary staffing needed to fulfill the needs of the water
conservation program efforts.
The addition of 2,102 acre feet of water from Lake Nacimiento to the City’s water supply was an
important milestone achieved in 2016. In light of the ongoing drought conditions on the Central
Coast and in order to be prepared to maximize the use of water from Nacimiento, additional
funding is requested to support the energy and staffing requirements for 24/7 water treatment
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plant operation. This additional expense is significant and requires the deferral of critical capital
projects identified in the Potable Water Distribution System Operations Master Plan adopted in
January 2016. Reprogramming funds for a capital improvement project to expand the City’s
groundwater program is also requested.
The FY 2016-17 budget approved within the 2015-17 Financial Plan provides the basis for the
review of the Water Enterprise Fund for this report. All assumptions made during the preparation
of the Financial Plan were reviewed and necessary updates and adjustments incorporated.
As outlined in the FY 2016-17 Water Enterprise Fund Analysis, which forecasts the financial
position of the Water Fund through FY 2020-21, the City continues to:
1. Provide adequate water supply for the community; and
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; including
operational cost for the full allocation of Nacimiento water; and
3. Manage capital maintenance projects to maintain the community’s water infrastructure
assets; including a groundwater well project; and,
4. Provide recycled water for landscape irrigation and construction water purposes.
FY 2016-17 Water Enterprise Fund Analysis Report
The FY 2016-17 Water Enterprise Fund Financials (Attachment A) include the above-noted
changes, an update to the Fund’s financial position and underlying assumptions, and incorporates
the updated capital improvement plan.
2015-17 Financial Plan Supplement: FY 2016-17 Budget
Revenue Update
Due to the ongoing severe drought conditions, the City Council approved a drought surcharge to
be added to the 2015-16 and 2016-17 rates. The purpose of the drought surcharge is to ensure
adequate revenues are received to effectively run the water utility within fiscal policy
requirements. The basis for the amount of the surcharge was the difference in revenue loss due to
lower water consumption because of the community’s successful efforts to conserve water. With
the surcharge in place, the revenue forecast remains in line with the revenue assumptions
provided during the 2015-17 Financial Plan review.
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Revenue Category
Adopted 2016-
17 Budget
2016-17 Budget
Supplement Variance
Water Sales 17,216,708$ $ 17,216,708 0%
Agency Sales 905,000$ 850,000$ -6%
Late Charges 150,000$ 150,000$ 0%
Credit Card Fees (85,000)$ (85,000)$ 0%
Dev. Impact Fees 800,000$ 800,000$ 0%
AB 939 Reimbursement 137,700$ 135,000$ -2%
Meter Sales 47,100$ 71,000$ +51%
Other Revenue 75,600$ 150,000$ +98%
Investments 50,000$ 50,000$ 0%
Total 19,297,108$ 19,337,708$ 0.21%
The adopted water service rates in support of the City’s 2015-17 Financial Plan were approved
during a public hearing on June 16, 2015 in accordance with Proposition 218 requirements.
FY 2016-17 Water Rates
Customer Type All Customers 1
Inside the City Rates
Drought Surcharge
1 - 8 Units $6.92/ Unit
$1.10/Unit
9+ Units $8.65/ Unit
$1.37/Unit
Base Fee
Drought Surcharge
$9.98
$0.74
1 1 unit = 100 Cubic Feet = 748 gallons of water
Operating Program Update – Exhibit A.1
The Water Enterprise Fund administers seven operating programs, five of which are on track
with their respective work programs within allocated resources. Two significant operating
program changes are requested: one for the Source of Supply program to account for the increase
in operating cost for the additional water allocation from Lake Nacimiento; and one for
continued temporary staffing in the Utilities Services section conservation program in order to
fulfill the educational components, state-mandated enforcement measures, and other activities
related to the continuation of drought conditions.
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Water Operating Programs
Adopted 2016-
17 Budget
2016-17 Budget
Supplement Variance
Water Admin & Engineering 724,561$ 846,858$ 17%
Source of Supply 8,718,966$ 9,771,026$ 12%
Water Treatment Plant 2,505,881$ 2,771,220$ 11%
Water Distribution 1,506,734$ 1,397,945$ -7%
Utilities Services 621,189$ 721,421$ 16%
Total Operating Budget 14,077,331$ 15,508,470$ 10%
Capital Improvement Plan (CIP) Amendments – Exhibit A.3
The Water Fund is recommending the addition of a new capital improvement project for an
expanded groundwater program that will coordinate with existing water supplies. The cost for
study and design of a productive wellfield and accompanying centralized wellhead treatment,
and re-construction of an existing well is estimated to cost $1,470,000.
The CIP approved with the 2015-17 Financial Plan adoption for FY 2016-17 was revised in
order to accommodate one new capital project request and to keep the overall 2016-17 budget
within available resources . CIP project phases were paced out over a longer period of time given
the drought’s impact on revenues and workload measures. The table below shows the
recommended realignment of the CIP.
Account Title
FY 2016-17
per 2015-17
FP Adoption
FY 2016-17
Financial
Supplemental
Budget Variance
Water Dist Sys Improv
Pipeline Replacements $1,255,000 $0 ($1,255,000)
Construction Management - Pipeline Repl.$125,000 $0 ($125,000)
Trench Repair $125,000 $150,000 $25,000
Raise Valve Covers $25,000 $0 ($25,000)
Storage Tank Maintenance $700,000 $900,000 $200,000
Reservoir Replacement $5,300,000 $0 ($5,300,000)
CIP Request - Groundwater Program $0 $1,470,000 $1,470,000
TOTAL $7,530,000 $2,520,000 ($5,010,000)
FISCAL IMPACT
The 2016-17 Financial Plan Supplement work program was established in consideration of
available resources and the Water Fund will be able to fund the water program operation without
changes to the adopted rates.
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Attachments:
1.a a - 2016-17 Water Enterprise Fund Analysis
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ATTACHMENT 1
FY 2016-17 Water Enterprise Fund
FINANCIAL SECTION
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Attachment 1
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TABLE OF CONTENTS
I. OVERVIEW
II. 2015-17 FINANCIAL PLAN SUPPLEMENT: FY 2016-17 BUDGET
A. Revenue Information
B. Operating Program Data
D. Debt Service Summary
WATER FUND ANALYSIS – FIVE-YEAR FORECAST
A.1. Changes in Financial Position
A.2. Projection Assumptions
A.3. Capital Improvement Plan
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Attachment 1
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I. OVERVIEW
This report presents the financial condition of the Water Enterprise Fund, based on the 2015-17
Financial Plan Supplement: FY 2016-17 Financial Supplemental Budget and includes revenue
information, operating and debt service data. The data considers regulatory requirements,
infrastructure maintenance, and adopted City financial policies and the fund’s standing
considering the assumptions made for the 2015-7 Financial Plan Supplement.
II. REVENUE DATA
A. Revenue Summary
The Water fund’s projected revenues are summarized in Table A below.
Table A. Revenue Summary
Original Revised Original Revised
Budget Budget Variance Budget Budget Variance
Investment & Property Revenue 50,000 50,000 - 50,000 50,000 0
Water Service Charges 15,224,450 15,224,450 - 15,299,972 15,299,972 0
Water Base Charges 1,420,800 1,420,800 1,916,736 1,916,736
Sales to Other Agencies 845,000 845,000 - 905,000 850,000 (55,000)
Development Impact Fees 1,300,000 1,500,000 200,000 800,000 800,000 0
AB 939 Reimbursement 134,300 134,300 - 137,700 135,000 (2,700)
Account Set-up Fees 105,800 105,800 - 100,000 100,000 0
Connection Charges & Meter Sales 46,000 58,659 12,659 47,100 71,000 23,900
Other Revenues 101,700 103,007 1,307 40,600 115,000 74,400
Total 19,228,050 19,442,016 213,966 19,297,108 19,337,708 40,600
2015-16 2016-17
Overall, revenue projections for FY 2016-17 are in alignment with the 2015-17 Financial Plan
with a conservative assumption for development impact fees. Operational income streams remain
as assumed due to the adopted drought surcharge that balances the continued conservation efforts
from the community and ongoing drought conditions. FY 2015-16 revenue projections are based
upon actual revenue collection through March 31, 2016. Beyond FY 2016-17, Water Service
Charges are estimated using projected water service rate changes applied to the previous year’s
projected sales (Exhibit A.2).
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Attachment 1
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With the 2015-17 Financial Plan, the City Council adopted rates applicable to both years of the
Financial Plan in accordance with Proposition 218 noticing. In order to keep the fund healthy and
in good financial standing for bond ratings, the Council approved and increase to the base fee
and the introduction of a drought surcharge effective July 1, 2015. The new rates, applicable July
1, 2016 are summarized below which incorporates a further increase to the base fee and the
drought surcharges as the volumetric rates remain the same:
Water Rates Increase
Base Fee 7.63$ 9.98$ 31%
Drought Surcharge 0.37$ 0.74$ 100%
Tier 1 Rate 6.92$ 1 - 8 units 6.92$ 1 - 8 units 0%
Drought Surcharge 0.98$ 1.10$ 12%
Tier 2 Rate 8.65$ 9+ units 8.65$ 9+ units 0%
Drought Surcharge 1.23$ 1.37$ 11%
2015-16 2016-17
79%
10%
4% 4% 3%
2016-17
Water Sales
Base Fee
Sales to
Agencies
Impact Fees
Other
revenue
78%
7%
5%
8% 2%
2015-16
Water
Sales
Base Fee
Sales to
Agencies
Impact
Fees
Other
revenue
Revenue Distribution 2015-16 & 2016-17
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Attachment 1
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The following table compares the FY 2015-16 and FY 2016-17 monthly cost for residential
customers based upon various usage levels and approved water rates.
Residential Monthly Water Bill Comparison
Consumption 3 units 8 units 12 units 25 units
Water Current $31.70 $71.20 $110.72 $239.16
Water Proposed July 1, 2014 $34.78 $74.88 $114.96 $245.22
Variance $3.08 $3.68 $4.24 $6.06
Cal Poly Rates. FY 2016-17 Sales to Other Agencies (Cal Poly) are projected to decrease based on
current water usage. The percentage of water rate Cal Poly will pay in 2016-17 will increase
from 50% to 51% of applicable rate as defined in the Cal Poly rate agreement adopted in 2012.
The decreased rate is due to the exclusion of cost of the Source of Supply program as Cal Poly
has its own source of supply in Whale Rock. As listed under Operating Program Summary, the
Source of Supply program accounts for approximately 63% of the Water Enterprise Fund
operating program cost.
B. Operating Program Summary
The Water Division Operating Program budgets are summarized in Table B. The summary
reflects the operating program base budget amounts for FY 2016-17. The most significant
change can be seen in the Source of Supply program due to the cost increase for the full
allocation of Nacimiento water supply. A Significant Operating Budget Change request is before
the City Council for approval and incorporated in these assumptions.
Water Operating Programs
Adopted 2016-17
Budget
2016-17 Budget
Supplement Variance
Water Admin & Engineering 724,561$ 846,858$ 17%
Source of Supply 8,718,966$ 9,771,026$ 12%
Water Treatment Plant 2,505,881$ 2,771,220$ 11%
Water Distribution 1,506,734$ 1,397,945$ -7%
Utilities Services 621,189$ 721,421$ 16%
Total Operating Budget 14,077,331$ 15,508,470$ 10%
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Attachment 1
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C. Debt Service Summary
The Water fund’s debt service obligations are summarized in Table D below.
The Nacimiento Water Supply Project debt financing is facilitated through the County of San
Luis Obispo, and the City’s share of the debt service costs are accounted for as an operating
expense in the Source of Supply operating program budget. No new debt financing is proposed
in 2016-17.
Water
Admin
Source of
Supply
Water
Treatment
Water
Distribution
Utilities
Services Total
2015-16 $763,963.10 $8,640,298.$2,535,336.$1,437,924.$814,981.00 $14,192,502
2016-17 $846,858.00 $9,771,026.$2,771,220.$1,397,945.$721,421.00 $15,508,470
Variance 110.85%113.09%109.30%97.22%88.52%109.27%
$-
$2,000,000.00
$4,000,000.00
$6,000,000.00
$8,000,000.00
$10,000,000.00
$12,000,000.00
$14,000,000.00
$16,000,000.00
$18,000,000.00
Operating Budgets
Table D. Debt Service Summary
Adopted 2016-17
Budget
2016-17
Supplement
2012 Water Revenue Bonds 572,000.00$ 572,000.00$
2006 Water Revenue Bonds 1,030,948.00$ 1,030,948.00$
State Revolving Fund - Water Reuse 525,457.00$ 525,457.00$
2009 Public Safety Radio System Upgrade 36,801.00$ 36,801.00$
2009 Public Saftey Communication Center 28,586.00$ 28,586.00$
Total Debt Service 2,193,792.00$ 2,193,792.00$
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Attachment 1
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EXHIBIT A
FY 2016-17 WATER FUND
FUND ANALYSIS
FIVE-YEAR FORECAST
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CHANGES IN FINANCIAL POSITION - WATER FUND
2015-16 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
Mid-Year Current
Budget Budget Projection Projection Projection Projection Projection
Revenues
Investment and Property Revenues 50,000 50,000 50,000 50,000 50,000 50,000 50,000
Water Sales
Water Service Charges 15,224,450 15,224,450 15,299,972 16,065,000 16,547,000 17,208,900 17,897,300
Water Base Charges 1,420,800 1,420,800 1,916,736 2,403,072 2,691,000 2,880,000 2,995,200
Sales to Other Agencies 845,000 845,000 850,000 892,500 919,300 956,100 994,300
Late Charges 150,000 150,000 151,050 152,107 153,172 154,244
Credit Card Fees (80,000)(85,000)(85,595)(86,194)(86,798)(87,405)
Development Impact Fees 1,300,000 1,500,000 800,000 809,600 819,300 831,200 843,300
AB 939 Reimbursement 134,300 134,300 135,000 138,800 142,700 147,000 151,400
Account Set-up Fees 105,800 105,800 100,000 100,700 101,400 102,100 102,800
Connection Charges and Meter Sales 46,000 58,659 71,000 71,500 72,000 72,500 73,000
Other Revenues 101,700 33,007 50,000 50,400 50,800 51,200 51,600
Total Revenues 19,228,050 19,442,016 19,337,708 20,647,027 21,459,413 22,365,375 23,225,739
Expenditures
Operating Programs
Public Utilities 14,169,442 14,192,503 15,508,470 15,162,081 15,337,460 15,580,246 15,474,913
General Government 1,797,668 1,797,668 2,038,842 2,348,856 2,443,179 2,162,975 2,204,295
Total Operating Programs 15,967,110 15,990,171 17,547,312 17,510,937 17,780,639 17,743,221 17,679,208
Capital Improvement Plan 6,878,369 6,878,369 2,958,493 7,329,642 2,253,867 4,207,145 3,663,200
Debt Service 2,192,461 2,192,461 2,193,791 2,561,914 2,565,217 2,520,432 2,525,315
Total Expenditures 25,037,940 25,061,001 22,699,596 27,402,493 22,599,723 24,470,798 23,867,723
16,645,250 16,645,250 17,216,708 18,468,072 19,238,000 20,088,900 20,892,500
Other Sources (Uses)
Operating Expenditure Adjustment 34,737 35,431 36,140 36,863
PERS employer rate increase (35,500)(38,300)(39,300)(10,700)
Projected Debt Proceeds 5,000,000
Total Other Sources (Uses)0 0 0 4,999,237 (2,869)(3,160)26,163
Revenues and Other Sources Over (Under)
Expenditures and Other Uses (5,809,890)(5,618,985)(3,361,888)(1,756,229)(1,143,178)(2,108,583)(615,821)
Working Capital, Beginning of Year 21,857,589 21,857,589 16,238,604 12,876,716 11,120,487 9,977,308 7,868,725
Adj to balance to CAFR
Working Capital, End of Year 16,047,699 16,238,604 12,876,716 11,120,487 9,977,308 7,868,725 7,252,904
Reserve (20% of operating)3,193,400 3,198,000 3,509,500 3,502,200 3,556,100 3,548,600 3,535,800
Rate Stabilization Reserve (10% of sales revenue)900,000 900,000 1,615,000 1,695,800 1,746,600 1,816,500 1,889,200
CJPIA Designated Reserve 131,406 131,406
Unreserved Working Capital 11,822,893 12,009,198 7,752,216 5,922,487 4,674,608 2,503,625 1,827,904
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PROJECTION ASSUMPTIONS - WATER FUND
CATEGORIES 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
Utilities Service Fees CPI Projections 2.3%0.7%0.7%0.7%0.7%0.7%
Nacimiento Payment for Operating and Maintenance & Reserves $1,854,163 $2,962,738 $2,752,700 $2,820,700 $2,890,400 $2,961,900
Nacimiento Payment for SLO County Debt Service $4,698,580 $4,781,194 $4,779,385 $4,778,440 $4,738,137 $4,741,205
Debt Service - 2012 Water Revenue Bonds $568,600 $572,000 $569,600 $571,600 $567,800 $568,400
Debt Service - 2006 Water Revenue Bonds $1,032,748 $1,030,948 $1,033,548 $1,035,348 $1,030,873 $1,035,293
Debt Service - State Revolving Fund Loan - Water Reuse Project $525,457 $525,457 $525,457 $525,457 $525,457 $525,457
Projected Debt Service - 2021 Water Treatment Plant Upgrade $0 $0 $0 $0 $0 $0
Projected Debt Service-Reservoir Replacement $0 $0 $367,909 $367,909 $367,909 $367,909
Debt Service - 2009 Public Safety Radio System Upgrade $37,055 $36,801 $36,841 $36,408 $0 $0
Debt Service - 2009 Public Safety Communications Center $28,600 $28,586 $28,560 $28,496 $28,394 $28,256
Revenue Debt Coverage 122%80%311%130%170%198%
Net Revenues/ Debt Service 0.92 0.47 2.93 1.14 1.52 1.89
Water Service Rate Increase (Volumetric only-does not include base rate
and drought surcharge in 2014-2018)0.0%0.0%5.0%3.0%4.0%4.0%
Tier 1 Drought Surcharge 0.98$ 1.10$ 1.18$ 1.23$
Tier 2 Drought Surcharge 1.23$ 1.37$ 1.48$ 1.54$
Water Base Rate 7.63$ 9.98$ 12.33$ 12.82$ 13.40$ 13.94$
Water Base Fee Drought surcharge 0.37$ 0.74$ 1.11$ 1.15$
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CAPITAL IMPROVEMENT PLAN - WATER FUND
PROJECT DETAIL AND PHASING - PUBLIC UTILITIES
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
BUDGET PROPOSED PROPOSED PROPOSED PROPOSED PROPOSED
Water Treatment
Major Facility Maintenance 202,425 170,000 290,000 160,000 160,000
Air Compressor Replacements (design)
Air Compressor Replacements (construction)
Stenner Canyon Raw Waterline Replacement (Study)14,935
Stenner Canyon Raw Waterline Replacement (Design)35,000
Stenner Canyon Raw Waterline Replacement (Const)100,000
Floating Cover Replacements
IT - MP2 Upgrade
Wash Water Tank #2 (Design)15,000
Wash Water Tank #2 (Const)170,000
Reservoir 2 Replacement (Study)65,600
Reservoir 2 Replacement (Design)184,400
Reservoir 2 (Construction)5,000,000
Reservoirt 2 Replacement ( CM)300,000
Reservoir 1 Replacement-design
Fleet Replacement: Compact Pickup
Fleet Replacement: Service Body Truck 59,100
Forebay and Culvert Rehab (Study)20,000
Forebay and Culvert Rehab (Design)80,000
Forebay and Culvert Rehab (Const)
Forebay and Culvert Rehab (Const Mgmt)
Treatment Plant Ozone Generation Upgrade 700,000
SCADA Upgrade with Controllers
Fleet Replacement Forecast
Total 676,460 340,000 5,590,000 160,000 160,000 800,000
Water Distribution
WATER SERVICES
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CAPITAL IMPROVEMENT PLAN - WATER FUND
PROJECT DETAIL AND PHASING - PUBLIC UTILITIES
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
BUDGET PROPOSED PROPOSED PROPOSED PROPOSED PROPOSEDWATER SERVICES
Distribution System Improvements - Pipelines 1,860,000
Mt View, Hill, West, Lincoln, etc.-Design 125,000
Mt View, Hill, West, Lincoln, etc.-Const 1,255,000
Mt View, Hill, West, Lincoln, etc.-Const Mgmt 125,000
Chorro, El Paseo, El Cerrito, etc - Design 125,000
Chorro, El Paseo, El Cerrito, etc - Const 1,258,000
Chorro, El Paseo, El Cerrito, etc - Const Mgmt 125,000
Craig, Christina, Jaycee, etc -Design 135,000
Craig, Christina, Jaycee, etc -Const 1,350,000
Craig, Christina, Jaycee, etc -Const Mgmt 135,000
Patricia, Highland, La Entrada - Design 127,000
Patricia, Highland, La Entrada - Construction 1,270,000
Patricia, Highland, La Entrada - Construction Mgmt 127,000
Serrano Zone Consolidation-(Study & Design)100,000
Serrano Zone Consolidation Phase 1 (Const)1,000,000
Serrano Zone Consolidation Phase 1 (Constr Mgmt)100,000
Serrano Zone Consolidation Phase 2 (Const)1,000,000
Serrano Zone Consolidation Phase 2 (Constr Mgmt)100,000
Trench Repairs 126,330 150,000 180,000 180,000 180,000
Raise Valve Covers 125,765 0 25,000 25,000 25,000
Water Meters and Water Meter Boxes 82,500 82,500 85,000 87,500 90,000
Fire Hydrants and Parts 25,000 25,000 25,000 30,000 30,000
16" Waterline Replacement (Design)
16" Waterline Replacement (Construction)-Phase I
16" Waterline Replacement (Construction)-Phase 2 1,544,847
Fel Mar Pump Station (Design)
Fel Mar Pump Station Const)
Ferrini Zone Consolidation (Design)
Ferrini Zone Consolidation (Const)
Ferrini Zone Consolidation (Const Mgmt)
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CAPITAL IMPROVEMENT PLAN - WATER FUND
PROJECT DETAIL AND PHASING - PUBLIC UTILITIES
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
BUDGET PROPOSED PROPOSED PROPOSED PROPOSED PROPOSEDWATER SERVICES
Slack Tank Consolidation (Design)100,000
Slack Tank Consolidation (Const)
Slack Tank Consolidation (Const Mgmt)
Edna Saddle Water Tank Recoating
Fire Lateral Reimbursement
Tank Maintenance (Study)20,000 75,000
Tank Maintenance (Design)42,500
Tank Maintenance (Construction)600,000 675,000
Tank Maintenance (CM)130,000 70,000
IT - CityWorks Upgrade 30,450
Fleet Replacement: Portable Generators (50% share)152,900
Distribution Pump Station Upgrades
Water Pump Station Analysis 4,096
Fleet replacement: Pickup 28,500
Fleet replacement: Caterpillar Backhoe Loader & Attachments 136,000
Fleet replacement: Portable vacuum pump 112,000
Fleet replacement: Service body truck 110,700
Extended Cab Pickup Truck 34,500 28,500
Fleet Replacement Forecast
Sinsheimer Parking Resurface
Street Reconstruction 2013
Sinsheimer Parking Resurface
Monterey Waterline Replacement (Design)
Monterey Waterline Replacement (Const)27,385
Monterey Waterline Replacement (CM)
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CAPITAL IMPROVEMENT PLAN - WATER FUND
PROJECT DETAIL AND PHASING - PUBLIC UTILITIES
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
BUDGET PROPOSED PROPOSED PROPOSED PROPOSED PROPOSEDWATER SERVICES
Foothill/Chorro PRV Replacement (Design)4,996
Foothill/Chorro PRV Replacement (Const)86,950
Total 4,280,220 1,112,500 1,695,000 2,034,000 3,926,000 2,863,200
Water Customer Service
Fleet replacement: Compact Pickups 57,000
Total 0 0 0 0 57,000 0
Utilities Services
Fleet replacement: Compact Pickup 25,256 25,200
Total 25,256 25,200 0 0 0 0
Administration and Engineering
879 Morro Refurbishment 75,330
Groundwater (Study)70,000
Groundwater (DN)250,000
Groundwater (CN)1,150,000
Fleet replacement: Sedan 33,700
Corporation Yard Security-PW Project
Mobile Equipment Lifts & Safety Stands
Total 75,330 1,470,000 0 33,700 0 0
General assumption for future planning purposes
Total Water Services CIP Requests 5,057,265 2,947,700 7,285,000 2,227,700 4,143,000 3,663,200
Shared Information Technology
Fox Pro Replace
Laserfiche
UB System Upgrade 1,667
City Website Upgrade (4% share)
Water Reuse Automation Impr 53,921
Wirless Net Infrastructure Replacement
Telemetry System Upgrade (Design)70,796
Telemetry System Upgrade - Construction 1,488,369
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CAPITAL IMPROVEMENT PLAN - WATER FUND
PROJECT DETAIL AND PHASING - PUBLIC UTILITIES
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
BUDGET PROPOSED PROPOSED PROPOSED PROPOSED PROPOSEDWATER SERVICES
Virtual Private Network (VPN) Replacement 9,028
Network Firewalls 15,259
Network Security Upgrades
GPS System Replacement
Network Switching Infrastructure Replacement 14,140
Radio Handhelds and Mobile Replacements 24,282
VM Infrastructure 8,945 8,945
Server Operating System 1,848
VoIP 20,360
Finance System Replacement
Document Management System
Tait Radio System 24,282
Office Application Software Replacement 12,400 16,773
UPS Battery Replacement 1,885 1,885
Enterprise Storage Growth
Storage Capacity Upgrade and Replacement
Total Share of Information Technology CIP 1,629,037 10,793 44,642 26,167 64,145 0
Completed Projects 192,067
TOTAL WATER FUND CAPITAL PLAN 6,878,369 2,958,493 7,329,642 2,253,867 4,207,145 3,663,200
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Utilities Department
Water and Sewer Fund Reviews
City Council Meeting │ June 14, 2016 │ Business Items 1 and 2
Water Revenues – 2016-17
79%
10%
4% 4% 3%
Water Sales
Base Fee
Sales to
Agencies
Impact Fees
Other
revenue
No change to Financial
Plan projections
Base fee and drought
surcharges all increase
Volumetric charge does
not increase
ACTION: New development meter purchase revenue pass-
through
Water Rates for 2016-17
(adopted June 2015)
Water 2015-16 2016-17 Increase
Base Fee $7.63 $9.98 31%
Drought Surcharge $.037 $.74 100%
Volumetric Fee:
Tier 1 Rate $6.92 $6.92 0%
Drought Surcharge $.98 $1.10 12%
Tier 2 Rate $8.65 $8.65 0%
Drought Surcharge $1.23 $1.37 11%
Average Charge for Water – July 1, 2016
6 units Base Fee: $10.72
Tier 1 Rate $48.12
Total Charge $58.84
Increase over 2015-16 Rates $ 3.44
Water Expenditures
Changes for 2016-17
•Source of Supply
•Continued Drought
Response
Operations
•Expanded
Groundwater
Program
Capital
Water Fund Recommendation
Review and accept the FY 2016-17 Water Enterprise
Fund Report
Conceptually approve the FY 2016-17 Water Enterprise
Fund budget, with final action on June 17, 2016 with the
adoption of the 2016-17 Financial Plan Supplement
Approve the transfer of revenue collected for new
development meters to the expenditure account for
applicable meter purchases on a quarterly basis.
Water Resource Recovery Facility
Project Update
Project Update and EIR July 19, 2016
Preliminary Design (30%) August
Value Engineering
Funding Application September October 2016
Construction Management RFP
60% Design January 2017
Sewer Revenues – 2016-17
80%
10%
6% 2% 2%
Sewer Charges
Base Fee
Sales to Agencies
Impact Fees
Other revenue
Major drought impact
↓ $1.4 million
Hold rates; defer
capital
Sewer Rates for 2016-17
(previously adopted June 2015)
Sewer Rates 2015-16 2016-17 Increase
Base Fee $8.32 $8.57 3%
Volume Charge $9.17 $9.44 3%
Average Charge for Sewer – July 1, 2016
4 units Base Fee: $ 8.57
Volume Charge $37.76
Total Charge $46.33
Increase over 2015-16 Rates $ 1.33*
*Winter Water Use Average Decreased One Unit for 2016-17.
Sewer Expenditures
•As projected at 2015-17
Financial Plan Operations
•Separated design and
construction into two years
•WRRF project aligned with
most recent schedule
Capital
Sewer Fund Recommendation
Review and accept the FY 2016-17 Sewer
Enterprise Fund report.
Conceptually approve the FY 2016-17 Sewer
Enterprise Fund budget, with final action on
June 17, 2016, with the adoption of the FY
2016-17 Financial Plan Supplement.