HomeMy WebLinkAbout06-14-2016 Item 02 2016-17 Sewer Enterprise Fund Review
Meeting Date: 6/14/2016
FROM: Carrie Mattingly, Utilities Director
Prepared By: Dave Hix, Utilities Deputy Director, Wastewater
Brigitte Elke, Utilities Business Manager
SUBJECT: FISCAL YEAR 2016-17 SEWER ENTERPRISE FUND REVIEW
RECOMMENDATION
1. Review and accept the Fiscal Year 2016-17 Sewer Enterprise Fund financials; and
2. Conceptually approve the Fiscal Year 2016-17 Sewer Enterprise Fund budget, with final
action with the adoption of the Fiscal Year 2016-17 Financial Plan Supplement.
DISCUSSION
Background
The Wastewater Division is responsible for collecting wastewater from businesses and
residences and transporting it to the Water Resource Recovery Facility where it is treated to high
standards for reuse in the creek system and as an irrigation water source. Additionally, solids
treatment creates and utilizes energy while the biosolids it creates are beneficially reused for
their nutrients. Protection of the entire wastewater system, its staff, and the environment is
provided through the Environmental Programs group in compliance with the federal pretreatment
program. The Water Quality Laboratory team serves the City related to water quality studies,
data, testing, and analyses to ensure appropriate regulatory compliance and operational decision-
making. Operating, maintaining, and installing and/or replacing the hundreds of millions of
dollars of wastewater infrastructure assets is the responsibility of this entire team of
professionals.
Ongoing water conservation has resulted in significant reductions in indoor water use resulting in
decreased wastewater flows to the Water Resource Recovery Facility (WRRF). Designed to treat
5.1 million gallons per day (MGD), the WRRF is currently processing 2.74 MGD for 2015 with
summer flows being as low as 2.15 MGD. Low flows have resulted in some increased
maintenance in the wastewater collection system and challenging treatment situations at the
WRRF.
The WRRF completed its energy efficiency project, a public/private partnership with PG&E, in
December 2015. A component of the project is presently generating about 25% of the facility’s
energy requirements. In January 2016, the project was awarded project of the year in the
environmental class from the American Public Works Association local chapter. Also in
December 2015, the design consultant for the WRRF project was hired and the draft
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Environmental Impact Report was released in April 2016 with completion scheduled for early
summer. Design of the WRRF project continues. The wastewater collection system
Infrastructure Renewal Strategy was approved by City Council in January 2016. This strategy
document is a valuable tool that includes an operating model of the collection system, prioritized
capital improvement list, and recommendations such as a strategy to control inflow and
infiltration.
The FY 2016-17 budget approved within the 2015-17 Financial Plan provides the basis for the
review of the Sewer 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 Sewer Enterprise Fund Analysis, which forecasts the financial
position of the fund through 2020-21 the City will be able to:
1. Continue to deliver safe and reliable wastewater services to the community within the FY
2016-17 adopted sewer rates; and
2. Maintain its operation in FY 2016-17 within approved budget levels without any
adjustments; and
3. Continue capital improvement projects to maintain the community’s wastewater
infrastructure assets; and
4. Maintain a relatively healthy working capital balance and revenue plan while working to
position the Fund for financing terms needed for the upcoming WRRF project.
FY 2016-17 Sewer Enterprise Fund Analysis Report
The FY 2016-17 Sewer Enterprise Fund analysis report (Attachment A) includes the details of
assumptions used to complete the review, changes in financial position, and an update on major
capital activities.
Revenue Update
Annually, the Utilities Department captures residential water use during December, January, and
February to establish the winter water use average and the sewer cap for the upcoming fiscal
year. Analysis of the use data indicates a further drop in indoor water consumption due to
ongoing extraordinary conservation efforts driven by the severe drought conditions. The Sewer
Fund is expecting a revenue drop of $1.4 million dollars as the average sewer cap will drop from
five to four units. No immediate changes to rates adopted on June 23, 2015 are recommended but
the revenue shortfall will require an adjustment to projected future rate increases in order to
adequately position the fund to support the debt service required for the WRRF project and other
critical capital projects.
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Revenue Category
Adopted 2016-
17 Budget
2016-17 Budget
Supplement Variance
Customer Sales 15,668,900$ 14,300,000$ -9%
Agency Sales 942,800$ 875,000$ -7%
Late Charges 150,000$ 150,000$ 0%
Credit Card Fees (80,000)$ (85,000)$ 6%
Dev. Impact Fees 250,000$ 300,000$ 20%
Industrial User Charges 71,100$ 70,000$ -2%
Meter Sales 47,100$ 71,000$ 51%
Other Revenue 146,300$ 202,500$ 38%
Investments 50,000$ 50,000$ 0%
Total 17,246,200$ 15,933,500$ -8%
The adopted sewer rate for 2016-17 reflects a 3% increase, effective July 1, 2016.
Rate Category 2015-16 2016-17
Base Fee $8.32 $8.57
Volume Charge $9.17 $9.44
Increase on average household of 4 units* $45.00 $46.33
Average Increase $1.33
* average based on winter water use cap.
Operating Program Update
The Sewer Enterprise Fund includes seven operating programs, all of which are on track with
their work programs within allocated resources. No increases or changes from the assumptions
made in the 2015-17 Financial Plan for are recommended for FY 2016-17.
Sewer Operating Programs
Adopted 2016-
17 Budget
2016-17 Budget
Supplement Variance
WW Administration 797,829$ 956,406$ 20%
WW Collection 1,232,041$ 1,046,199$ -15%
WW Pretreatment 280,210$ 258,694$ -8%
Water Reclamation Facility 3,625,551$ 3,582,761$ -1%
Water Quality Laboratory 750,164$ 775,609$ 3%
Utilities Services 416,841$ 479,174$ 15%
Total Operating Expenditure 7,102,636$ 7,098,843$ -0.05%
Capital Improvement Program Update
The recommended program will stay within approved overall funding for the fiscal year. Some
projects identified in the 2015-17 approved capital program for 2016-17 are being rescheduled.
Construction bids are coming in higher and engineer’s estimates have been increased to reflect
this change. The 2015-17 Financial Plan reflected the Foothill Lift Station replacement in 2016-
17. Funding of this facility has been adjusted to reflect new estimates. Below is a list of projects
and changes recommended to the previously approved funding.
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Account Title
FY 2016-17
per 2015-17
FP Adoption
FY 2016-17
Financial
Supplemental
Budget Variance
Master Coll Sys Improv
CN-Santa Barbara, Osos, Church, trench &
pipe bursting $630,000 $0 ($630,000)
CM-Santa Barbara, Osos, Church, trench
& pipe bursting $60,000 $0 ($60,000)
Lift Stations
CN-Foothill Lift Station $1,100,000 $1,600,000 $500,000
CM-Foothill Lift Station $125,000 $155,000 $30,000
WRRF Upgrade
Program Mgmt-WRRf Upgrade $1,500,000 $0 ($1,500,000)
CN-WRRF Upgrade $68,032,000 $0 ($68,032,000)
CM-WRRF Upgrade $6,000,000 $0 ($6,000,000)
WRRF Major Maintenance $155,000 $105,000 ($50,000)
TOTAL $77,602,000 $1,860,000 ($75,742,000)
Project Highlights
Energy Efficiency Project
The Water Resource Recovery Facility (WRRF) completed its energy efficiency project, a
public/private partnership with PG&E, in December 2015. A component of the project is
presently generating about 25% of the facility’s energy requirements.
Water Resource Recovery Facility Project & Collection System
In December 2015, the design consultant for the WRRF project was hired and the draft
Environmental Impact Report was released in April 2016 with completion scheduled for early
summer. Design of the overall WRRF Project continues. The wastewater collection system
Infrastructure Renewal Strategy was approved by City Council in January 2016. This strategy
document is a valuable tool that includes an operating model of the collection system, prioritized
capital improvement list, and recommendations such as a strategy to control inflow and
infiltration.
Wastewater Collection
The California/Higuera/Marsh sewer replacement was recently completed. The project replaces
mainlines that are over 100 years old and redirects to the flow that retires two vulnerable clay
lines under the railroad.
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FISCAL IMPACT
While a revenue loss of $1.4 million is anticipated and cost estimates for capital projects
increased (requiring the re-programming of certain capital projects), the Sewer Fund will be able
to fund 2016-17 operations without immediate changes to the adopted rates or utilization of the
rate stabilization reserve. However, rate assumptions (Exhibit A) have been adjusted in outer
years to keep the fund healthy into the future.
Attachments:
2.a a - 2016-17 Sewer Enterprise Fund Analysis
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ATTACHMENT 1
FY 2016-17 Sewer 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 Summary
B. Operating Programs
D. Debt Service Summary
SEWER 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 Sewer Enterprise Fund, based on the 2015-17
Financial Plan Supplement: FY 2016-17 Financial Supplemental Budget and includes revenue,
operating, and debt service information. The data incorporates 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. SEWER FUND REVENUE
A. Revenue Summary
The Sewer Fund’s 2016-17 projected revenues are summarized below together with 2015-16
estimates:
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
Sewer Service Charges 13,748,145 13,748,145 - 14,160,600 12,749,800 (1,410,800)
Sewer Base Fee 1,464,400 1,464,400 1,508,300 1,550,200 41,900
Sales to Cal Poly 915,300 915,300 - 942,800 875,000 (67,800)
Development Impact Fees 350,000 600,000 250,000 250,000 300,000 50,000
Industrial User Charges 69,500 69,500 - 71,100 70,000 (1,100)
Account Set-up Fees 105,800 105,800 - 108,200 100,000 (8,200)
Connection Charges & Meter Sales 46,000 46,000 - 47,100 71,000 23,900
Other Revenues 107,200 107,200 - 108,100 102,500 (5,600)
Total 16,856,345 17,106,345 250,000 17,246,200 15,868,500 (1,377,700)
2015-16 2016-17
The continued drought conditions and the water conservation efforts by the community are now
effecting indoor water use and the expected sewer fund revenue. The evaluation of the 2015-16
winter cap period revealed a drop from an average of five units used during December, January,
and February to four units. The effects are reflected in the revenue assumption for sewer service
charges with an estimated drop of $1.4 million. The revenue assumptions shown for the five-year
forecast are based on that new base. Assumed rate increases (Exhibit A.2) were adjusted to keep
the fund healthy over the forecast period.
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Attachment 1
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REVENUE COMPARISON 2015-16 to 2016-17
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. The approved rates approved a
three-percent increase effective July 1, 2015. The new rates, applicable July 1, 2016 are:
Rate Category 2015-16 2016-17
Base Fee $8.32 $8.57
Volume Charge $9.17 $9.44
The following table compares the FY 2015-16 and FY 2016-17 monthly cost for residential
customers based on the average sewer cap for each year and approved sewer service rates.
80%
10%
6% 2% 2%
2016-17
Sewer
Charges
Base Fee
Sales to
Agencies
Impact
Fees
Other
revenue
80%
9%
5% 4%
2% 2015-16
Sewer
Charges
Base Fee
Sales to
Agencies
Impact
Fees
Other
revenue
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Attachment 1
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Cal Poly Rates: Based on the 2012 agreement between the City and Cal Poly, applicable rates
for Cal Poly are increasing in 2016-17. Cal Poly’s rate is established using a methodology based
on the University previously making capital contributions to the Water Resource Recovery
Facility upgrade projects, as well as collection system-related improvements. The debt related to
these projects has now been retired and the University’s rates will continue to increase until they
reach 100% of the City rate. Effective July 1, 2016, Cal Poly’s rate will go from 94% to 97% of
the City rate. Cal Poly will be paying the full rate by 2017-18. However, based on current usage
patterns, the overall revenue from Cal Poly is expected to decrease due to ongoing conservation
efforts at the university.
B. Operating Program Summary
The Sewer Fund Operating Program budgets are summarized in Table B. The summary reflects
the operating program base budget amounts for FY 2016-17. There are no changes to the
assumed cost from the 2015-17 Financial Plan adoption for the overall budget. However, the
distribution of funding changed between programs with MOU adjustments taking effect within
the individual programs.
Sewer Operating Programs
Adopted 2016-17
Budget
2016-17 Budget
Supplement Variance
WW Administration 797,829$ 956,406$ 20%
WW Collection 1,232,041$ 1,046,199$ -15%
WW Pretreatment 280,210$ 258,694$ -8%
Water Reclamation Facility 3,625,551$ 3,582,761$ -1%
Water Quality Laboratory 750,164$ 775,609$ 3%
Utilities Services 416,841$ 479,174$ 15%
Total Operating Expenditure 7,102,636$ 7,098,843$ -0.05%
Comparison Average Single Family Residential Sewer Customer Monthly Bill
2015-16 2016-17
AWWU SFR “Sewer Cap”: 5-Units 4-Units
Rates Average Bill Rates Average Bill
Base Charge: $8.32 $8.32 $8.57 $8.57
Volume Charge (Sewer Cap x Rate): $9.17/unit $45.85 $9.44/ unit $37.76
Total $54.18 $46.33
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Attachment 1
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C. Debt Service Summary
The Sewer Fund’s debt service obligations are summarized in Table D.
As the Water Resource Recovery Facility project is moving through the EIR and design process,
the financial assumptions now place a first debt payment in FY 2017-18.
WW
Admin
WW Pre-
Treatment
WW
Collection WRRF WQL Utilities
Services Total
2015-16 $920,026.$272,150.$1,218,42 $3,672,95 $751,770.$424,092.$7,259,42
2016-17 $956,406.$258,694.$1,046,19 $3,582,76 $775,609.$479,174.$7,098,84
Variance 103.95%95.06%85.86%97.54%103.17%112.99%97.79%
$-
$1,000,000.00
$2,000,000.00
$3,000,000.00
$4,000,000.00
$5,000,000.00
$6,000,000.00
$7,000,000.00
$8,000,000.00
Operating Budgets
Table D. Debt Service Summary
Adopted 2016-17
Budget
2016-17
Supplement
WRRF Energy Efficiency Project 618,544$ 618,544$
Tank Farm Lift Station - Private Placement 184,500$ 184,500$
Tank Farm Lift Station - I-Bank 558,500$ 558,500$
2009 Public Safety Radio System Upgrade 41,800$ 41,800$
2009 Public Saftey Communication Center 32,500$ 32,500$
Total Debt Service 1,435,844$ 1,435,844$
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Attachment 1
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EXHIBIT A
FY 2016-17 SEWER FUND
FUND ANALYSIS
FIVE-YEAR FORECAST
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CHANGES IN FINANCIAL POSITION - SEWER 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
Service Charges
Customer Sales
Sewer Service Charges 13,748,145 13,748,145 12,749,800 13,103,300 13,496,400 13,901,300 14,318,300
Sewer Base Fee 1,464,400 1,464,400 1,550,200 1,596,700 1,644,600 1,693,900 1,744,700
Sales to Cal Poly 915,300 915,300 875,000 901,300 928,300 956,100 984,800
Late Charges 150,000 150,000 150,000 151,050 152,107 153,172 155,470
Credit Card Fees (80,000)(80,000)(85,000)(85,595)(86,194)(86,798)(88,099)
Development Impact Fees 600,000 600,000 300,000 253,000 256,000 259,700 265,600
Account Set-Up Fees 105,800 105,800 100,000 100,700 101,400 102,100 103,600
Industrial User Charges 69,500 69,500 70,000 70,500 71,000 71,500 72,600
Connection Charges and Meter Sales 46,000 46,000 71,000 71,500 72,000 72,500 73,600
Other Revenue 37,200 37,200 37,500 37,800 38,100 38,400 39,000
Total Revenue 17,106,345 17,106,345 15,868,500 16,250,255 16,723,713 17,211,875 17,719,570
Expenditures
Operating Programs
Public Utilities 7,220,332 7,259,425 7,098,843 7,249,248 7,415,005 7,597,301 7,711,260
General Government 1,576,026 2,069,099 2,081,360 2,392,224 2,487,415 2,208,095 2,293,385
Total Operating Programs 8,796,358 9,328,524 9,180,203 9,641,473 9,902,419 9,805,396 10,004,645
General Carryover
Capital Improvement Plan 19,997,912 20,093,672 4,023,275 78,278,349 3,275,305 1,725,743 2,238,700
Debt Service 1,437,573 1,437,573 1,435,587 6,180,663 6,178,077 6,134,285 6,136,287
Total Expenditures 30,231,843 30,859,769 14,639,065 94,100,485 19,355,801 17,665,424 18,379,632
Other Sources (Uses)
Other Operating Adjustments (109,334) (111,521) (113,751) (116,026)
PERS employer rate increase (18,200)(34,900)(35,800)(9,800)
Proceeds from Debt Financing 74,000,000
Other Sources (Uses)(443,073)
Total Other Sources (Uses)(443,073)0 0 73,872,466 (146,421)(149,551)(125,826)
Revenues and Other Sources Over (Under)
Expenditures and Other Uses (13,568,571)(13,753,424)1,229,435 (3,977,764)(2,778,508)(603,100)(785,888)
Working Capital, Beginning of Year 27,050,422 27,071,809 13,318,385 14,547,820 10,570,056 7,791,548 7,188,448
Working Capital, End of Year 13,481,851 13,318,385 14,547,820 10,570,056 7,791,548 7,188,448 6,402,559
Reserve (20% of operating)1,759,300 1,865,700 1,836,000 1,928,300 1,980,500 1,961,100 2,000,900
Rate Stabilization Reserve (5% of sales)733,200 733,200 681,200 700,200 721,200 742,900 765,200
CJPIA designated Reserve 135,062 135,062
Unreserved Working Capital 10,854,289 10,584,423 12,030,620 7,941,556 5,089,848 4,484,448 3,636,459
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PROJECTION ASSUMPTIONS - SEWER 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%1.5%
Debt Service - 2009 Public Safety Radio System Upgrade $42,033 $41,800 $41,800 $41,300 $0 $0
Debt Service - 2009 Public Safety Communications Center $32,442 $32,500 $32,400 $32,400 $32,300 $32,100
Debt Service - I-Bank Loan for Tank Farm Lift Station $559,328 $558,500 $557,500 $556,600 $555,600 $554,500
Debt Service - Private Placement for Tank Farm Lift Station $185,020 $184,500 $183,700 $182,700 $181,500 $185,000
Debt Service - Water Resource Recovery Facility Upgrade $0 $0 $4,746,900 $4,746,900 $4,746,900 $4,746,900
Debt Service - WRRF Energy Efficiency Project (15 Years)$618,720 $618,544 $618,363 $618,177 $617,985 $617,787
Development Impact Fee Growth Rate 0.50%0.50%0.50%0.50%0.75%0.75%
Working Capital Requirement @ 20% of operating expenditures $1,865,705 $1,836,000 $1,928,300 $1,980,500 $1,961,100 $1,992,700
Debt Service Coverage at 110% of Net Revenues (2)499%445%103%106%117%122%
Sewer Service Rate Increase 4.6%3.0%3.0%3.0%3.0%3.0%
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CAPITAL IMPROVEMENT PLAN - SEWER 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
Wastewater Collection
Collection System Improvements 2,310,912
DN-Santa Barbara, Osos, Church, trench & pipe bursting 60,000
CN-Santa Barbara, Osos, Church, trench & pipe bursting 630,000
CM-Santa Barbara, Osos, Church, trench & pipe bursting 60,000
DN-Walnut, Morro, Jeffery, etc trench & pipe bursting 80,000
CN-Walnut, Morro, Jeffery, etc trench & pipe bursting 1,100,000
CM-Walnut, Morro, Jeffery, etc trench & pipe bursting 80,000
DN-Serrano, Bressi, Palomar, etc trench & pipe bursting 50,000
CN-Serrano, Bressi, Palomar, etc trench & pipe bursting 600,000
CM-Serrano, Bressi, Palomar, etc trench & pipe bursting 50,000
DN-Johnson, Buchon, etc trench & pipe bursting 100,000
CN-Johnson, Buchon, etc trench & pipe bursting 1,215,000
CM-Johnson, Buchon, etc trench & pipe bursting 100,000
Inflow/Infiltration Reduction 100,000 100,000 100,000 100,000
Raise Manholes 25,000 25,000 25,000 25,000
Telemetry System Improvements 100,000
CN-Sewerline Improvement 09-10
CM-Sewerline Improvement 09-10
Collection System Infrastructure Replacement Strategy 456
Marsh/Higuera/California 999,397
Laguna Lift Station
Design
Construction
Construction Management
Calle Joaquin Lift Station
Design 40,761
Construction 2,390,389
Construction Management 295055
Madonna Lift Station
WASTEWATER SERVICES
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CAPITAL IMPROVEMENT PLAN - SEWER FUND
PROJECT DETAIL AND PHASING - PUBLIC UTILITIES
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
Budget PROPOSED PROPOSED PROPOSED PROPOSED PROPOSEDWASTEWATER SERVICES
Design 620,454
Construction
Construction Management
Margarita Lift Station
Easement Acquisition 50,000
Design 55,355
Construction 800,000
Construction Management 100,000
Foothill Lift Station
Easement Acquisition 50,000
Design 123,907
Construction 1,600,000
Construction Management 155,000
Buckley Lift Station
Design
Construction
Construction Management
Airport Lift Station
Study 50,000
Design 100,000
Construction 1,400,000
Construction Management 150,000
Silver City Lift Station
Study
Design 100,000
Construction 1,400,000
Construction Management 150,000
Sewerline Repl Rachel 941
Sewerline Repl Stafford 10,287
Marsh St Siphon (PW project)39,978 240,000
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CAPITAL IMPROVEMENT PLAN - SEWER FUND
PROJECT DETAIL AND PHASING - PUBLIC UTILITIES
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
Budget PROPOSED PROPOSED PROPOSED PROPOSED PROPOSEDWASTEWATER SERVICES
SY-JENNIFER RR/HIG-MARSH 23,379
DN-SANTA ROSA SWRLINE REPL
CN-SANTA ROSA SWRLINE REPL
CM-Santa Rosa Sewerline Repl
RR Safety Trail Hath/Taft
SCADA Upgrade Integration 23,932
Roadway Sealing 2014
IT - CityWorks 23,454
Fleet Particulate Matter Trap Retrofit
Fleet Replacement: 1/2 Ton Pickup
Fleet Replacement: Hydro-Cleaner 375,000
Fleet Replacement: Portable Generators (50% share)152,900
Equipment Replacement: Generator (50% share)
Fleet Replacement: CCTV Van 169,100
Fleet Replacement: 1 1/2 Ton Service Trucks 144,000
Fleet Replacement: Portable Sewage Pump 36,900
Fleet Replacement: Caterpillar Mini Escavator (pooled)78,000
Total Collection 8,380,658 2,510,900 2,545,000 2,983,000 1,250,000 1,315,000
Water Resource Recovery Facility
Major Maintenance 1,235,735 105,000 - - 875,000
Emergency Dig - Chloride Leak
WRRF Energy Efficiency
Design 1,325
Construction 1,388,503
WRRF Upgrade
Study/Environmental 633,116
Program Management 2,114,481 1,500,000
Design 5,999,918 1,300,000
Construction
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CAPITAL IMPROVEMENT PLAN - SEWER FUND
PROJECT DETAIL AND PHASING - PUBLIC UTILITIES
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
Budget PROPOSED PROPOSED PROPOSED PROPOSED PROPOSEDWASTEWATER SERVICES
Infrastructure 20,156,800
Disinfection 13,860,800
Nutrient Removal 19,214,400
Contingency 13,300,000
Flood Control 1,500,000
Construction Management 6,000,000
WRRF Fiber Optic Impr
Digester 2 Cleaning
WRF Sludge Bed
WRRF Cooling Towers
IT - iFix Replacement 250,000
IT - HachWims 30,000
IT - MP2 Replacement 30,000
Telemetry System Improvements
Fleet Replacement: Utility Trucks (3)36,800 57,600
Fleet Replacement: Sedan 33,000
Fleet Replacement: Sedan
Fleet Replacement: 4-Wheel Drive Loader
Fleet Replacement: Pickup Truck w/Flat Bed & Crane 71,500
Fleet Replacement: Top-Kick Dump Truck (pooled)0
Fleet Replacement: Compact Pickup Truck
Fleet Replacement: Decanter Trailer 8,500
Fleet Replacement: Dump Truck
Total WRRF 11,442,879 1,405,000 75,589,600 80,000 310,000 875,000
Total without CIPs under Debt Financing
Pretreatment
Fleet Replacement: Pickup Truck 39,000 25,900
Total Pretreatment 0 0 0 39,000 0 25,900
Distribution
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CAPITAL IMPROVEMENT PLAN - SEWER FUND
PROJECT DETAIL AND PHASING - PUBLIC UTILITIES
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
Budget PROPOSED PROPOSED PROPOSED PROPOSED PROPOSEDWASTEWATER SERVICES
Water Meters and boxes 82,500 82,500 85,000 87,500 90,000
Total Pretreatment 82,500 82,500 85,000 87,500 90,000 0
Water Quality Laboratory
Fleet Replacement: Pickup Truck 22,800
Total Quality Laboratory 0 0 0 0 0 22,800
Administration and Engineering
From Creek Decom
Street Reconstruction 2013
EA-UB SYSTEM UPGRADE
Fleet Replacement: Sedan 38,500
879 Morro Refurb 82,722
Shared - Corporation Yard Security
Shared - Corporation Yard Emergency Generator
Shared - Fleet Management & Fueling System Consolidation & Replacement
Corp Yard Security-PW Project
Shared - Mobile Equipment Lifts & Safety Stands
Total Admin 82,722 0 0 38,500 0 0
1,250,000
Total Wastewater Services CIP Requests 19,988,758 3,998,400 78,219,600 3,228,000 1,650,000 2,238,700
Total Wastewater CIP without Debt Financing 8,463,380 2,510,900 2,545,000 3,060,500 1,250,000 1,363,700
Shared Information Technology
Server Operating System 4,260
VOIP 15,789
City Website Upgrade (4% share)
UB System Upgrade 1,667
Network Firewalls 8,918
Finance System Replacement
Virtual Private Network (VPN) Replacement 18,958
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CAPITAL IMPROVEMENT PLAN - SEWER FUND
PROJECT DETAIL AND PHASING - PUBLIC UTILITIES
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
Budget PROPOSED PROPOSED PROPOSED PROPOSED PROPOSEDWASTEWATER SERVICES
Network Switching Infrastructure Replacement 27,252
Radio Handhelds and Mobile Replacements 42,960
Tait Radio System 42,960
Document Management System
Google Search Appliance Replacement
Office Application Software Replacement 9,000
VM Infrastructure 20,615 20,615
Enterprise Storage Growth
CA-FOX PRO REPLACE
CA-LASERFICHE
GPS System replacement
UPS Battery Replacement 4,345 4,345
Total Share of Information Technology CIP 15,012 24,875 58,749 47,305 75,743 0
Completed Projects 89,902
TOTAL SEWER FUND CAPITAL PLAN 20,093,672 4,023,275 78,278,349 3,275,305 1,725,743 2,238,700
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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.