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HomeMy WebLinkAbout01. Attachment 1 - (Final) First presentation �7 ATTACHMENT 1 CAPITAL IMPROVEMENT PLAN (CIP) UPDATE AND REVIEW OF BUDGET ISSUES/TRANSFERS -+ Board Workshop # 2 r , January 15, 2019 CSO Meeting Room 12pm to 4pm � � CENTRALSAN Irl Presentation Outline ❖ Part 1 : Updated 10-Year CIP Overview Jean-Marc Petit ❖ Part 2: Are there budget concerns with the CIP? Phil Leiber ❖ Part 3: CIP Review of Budget Issues and Transfers Phil Leiber ` 2 PART 1 UPDATED MLYEAR, "VERVIEW By Jean-Marc Petit, Director of Engineering and Technical Services h CENTRALSAN i E v3 Current 10 Year CIP FY 2018-19 ❖ $806 Million of Projects/Improvements (In million 2018 Dollars) Ten Year CIP 1 2 3 4 5 6 7 8 9 10 + FY18/19 FYI-9/20 FY20/21 FY21/22 FY22/23 FY23/24 FY24/25 FY25/26 FY26/27 FY27/28 FY28/29 $16.9 $38.5 $52.5 $69.4 $56.5 $33.3 $27.3 $30.6 $47.7 $36.9 CoIIection System $19.3 $26.1 $35.3 $33.1 $42.0 $36.6 $39.0 $40.0 $27.1 $28.9 Recycled VVater $2.9 $8.4 $8.4 $32 $0.1 $0_1 $0.1 $0_1 $0.1 $0_1 $4.7 $3.9 $2.6 $2.4 $2.4 $1.9 $1.9 $1.9 $1.9 $1.9 Contingency $1.5 $2.0 $2.0 $2.0 $2.0 $2.4 $2.0 $2.0 $2.0 $2.0 TOTAL Revised Total CI $45.3 $78.9 $^100.8 ^$110.1 $^103 0 ^$73.9 $70.3 ^$74.6 $78.8 $63.8 $8455 $120,0 $L00.0 �SD.D �6D.D •0 50.0 FY1S/19 FYWO FY20/21 FY21/22 FY22f23 FY2V24 FY24/25 FY25/26 FY26/27 FY27128 FY2" ❑Contingency 06enerallmprowements ERecydedWater ❑Collection SWem oTreatmentPlant CENT ` 4 ■ . U pdati ng 10 Year CI P FY 2019-20 ❖ 1 . New Total extended to FY 2028-29 (Rolling 10 Years) (In million 201Z Dollars) Ten Year CIR 1 2 3 4 5 6 7 8 9 10 FY19/20 FY2O/21 FY21/22 FY22/23 FY23/24 FY24/25 FY25/26 FY26/27 FY27/28 FY28/29 Treatment Plant $38.5 $52.5 $69.4 $56.5 $33.3 $27.3 $30.6 $47.7 $36.9 $26.9 Collection System $26.1 $35.3 $33.1 $42.0 $36.6 $39.0 $40.0 $27.1 $28.9 $42.7 Rec:rc'ed Vw ater $8.4 $8.4 $3.2 $0.1 $0.1 $0.1 $0.1 $0.1 $0.1 $0.1 nts $3.9 $2.6 $2.4 $2.4 $1.9 $1.9 $1.9 $1.9 $1.9 $1.8 �!Gntingency $2.0 $2.0 $2.0 $2.0 $2.0 $2.0 $2.0 $2.0 $2.0 $2.0 TOTAL Revised Total CI 57a.9 S!Looz $110.1 $103,0 $73.9 1 $70.3 1 $74.6 1 $78.8 $69.8 $73.5 5833,7 5120.0 SiCO.0 $SILO $60.Q 540.0 $0.0 FVWI9 FY15V20 FY20j21 FY21f22 FY2V23 FY23j24 FY24125 FY25126 FY26127 FY27j28 ME,+29 ❑Contingency ■rSeneral improvernents ■RenyeledWatu ❑Coll ection System ■Treatment Plant jig-rig5 CENT■ . Updating 10 Year CIP FY 2019-20 A, ❖ 2. New Total extended to FY 2028-29 (Rolling 10 Years & inflated 3%) (In$millio-ns;assumes3. inflati?r Ten Year CI 0 1 2 3 4 5 6 7 8 9 10 FY18/19 FYi9/20 FY20/21 FY21/22 FY22/23 FY23/24 FY24/25 FY25/26 FY26/27 FY27/28 FY29/29 $39.7 $54.1 $71.5 $58.2 534.3 $28.1 $31.6 $49.1 $38.0 $27.7 Calle tion System $26.9 $36.4 $34.1 $43.3 $37.7 $40.2 $41.2 $27.9 $29.8 $44.0 Pec:rcIed Water $8.6 $8.6 $3.3 $0.1 $0.1 $0.1 $0.1 $0.2 $0.2 $0.2 neral $4.1 $2.7 $2.5 $2.5 $1.9 $1.9 $1.9 $1.9 $1.9 $1.8 Cantingency $2.0 $2.0 $2.0 $2.0 $2.0 $2.5 $2.5 $2.5 $2.5 $2.5 TOTAL Revised Total CI $81.3 $103.8 $113.4 $106.1 $76.0 $72 $77.3 $81.6 $72.4 $76.2 5860.9 $120.0 $100.0 $SILO $Gao $40.0 $20.0 $0.0 FY1W19 FY19/20 FY20f21 FY21f22 FY22/23 FY23f24 FY2AA5 FY25[26 FY26127 FY27/29 FY209 ❑Contingency ■General Improvements ❑Recyded Water ❑Collection System ■Treatment Plant CENT ` 6 ■ . Updated 10 Year CIP FY 2019-20 : $867M ❖ 3. New Total extended to FY 2028-29 (Rolling 10 Year & inflated 3%) with Updated cash flow (In million 2019 Dollars) Ten Year CIP 1 2 3 4 5 6 7 8 9 10 FY19/20 FY20121 FY21122 FY22123 FY2.3124 FY24125 FY25126 FY26127 FY27128 FY28129 Treatment Plant $28.8 544.5 549.9 $53.0 545.7 -W.4 546.4 $38.8 545,8 $24.8 Cc I Iecticn `_--stem $27.1 536.8 $37.7 WA 535.5 $32.3 $37.2 $27.8 $.90.0 $44.6 Recycled Water 54.1 .$11.1 $14.1 $8.4 55.4 $4.4 $4.4 $0.4 $0.4 $0.4 GenerjEmprovemenis $4.1 $2.6 1 $2.6 $2.6 $1.7 $1.7 $1.7 $1.7 $1.7 $1.9 Contingency 52.0 $2.0 52.0 52.0 $2.0 52.5 52.5 $2.5 52.5 52.5 TOTAL Updated Total CI $66.1 $96,8 $106.3 $106.4 $90.3 $83.3 $92.2 $71.2 $8UA $74.2 $867.2 Reprised Total CIP (*) $81.3 $103.8 $113A $106.1 $75.0 $72.8 $77.3 $81.6 $72A $76.2 $860.9 (*Presented 11/1/18) SizQn Sioao 560.0 Sao.o Sao.o Szfl-fl FWIV29 FfIWaa Ff2Qfm rexi m FT2ZrE3 Pr2F,z Praa}M F zsfm FT2a/23 FYX7129 PY28f29 ❑Oontin@WcY ■Genzral rnproYavienG ■Recycled Water ❑Oomedtion:SYA-m ■7reatrrerrt Pl arrt 7 CENTRa a Lower Spending 10 Year CIP FY 2019-20 Scenario? ❖ 4. Per the Board's Request, what if we cut the CIP by 10%? FY 201912020 (10% Reduction Scenario) (In million 2019 Dollars) Ten Year CIP 1 2 3 4 5 6 7 8 9 10 FY19/20 FY20121 FY21/22 FY22/23 FY23/24 FY24/25 FY25/26 FY26/27 FY27/29 FY28/29 Treatment Plant $288 $44.0 $49.9 $49.6 $35.6 $33.7 $36.9 $31.0 $38.0 $22.3 Cc ect'cn System $27.1 $36.9 $37.7 $40.4 $35.5 $32.2 $35.9 $26.1 $19.0 $23.6 Rec:,c ed 44ater 1 $4.1 $11.2 $14.2 $9.4 1 $5.4 $4.4 $4.4 $0.4 $0.4 $0.4 n $4.1 $2.6 $2.6 $2.6 $1.7 $1.7 $1.7 $1.4 $1.4 $1.6 Contingency $2.0 $2.0 $2.0 $2.0 $2.0 $2.5 $2.5 $2.5 $2.5 $2.5 TOTAL Reduced Total CIP $66.1 $96.6 $105.4 $103.0 $80.2 $74.5 $81.4 $61.4 $61.3 $50.4 $780.3 Baseline $66.1 $96.13 $146.3 $106.4 $40.3 $83.3 $92.2 $71.2 $80.4 $74.2 $867.2 5120.0 NOT RECOMMENDED 5100.0 560.0 W.0 6 allu $0-0 FUS819 FY19120 FY201 MIP2 Fr2V23 Fr23f24 FY24125 FY25f26 FY26/27 FY27PB FrLW9 ❑Cmtiigency ■Generallmprawements ■RerrdedWater ❑Cdk�rion9ysteFn ■Treatment Plant g CENTRa a Major Treatment Plant Projects Overview by Phase and Drivers from CWMP 0 0 0 Headworks.Screenings Upgrade i11n33 O PLC Systems Upgrades Phases 1 and 2 in Pump&Blower Building Saismic Upgrade 1 3 0 Treatment Plant Urgent Repairs 1 Switch ear Refurbishment-Phase 2 (1)(2)(3)0064D Applied Research Ft Innovations 1 Influent Pump Station Electrical Improvements (D�(D(D�O Outfall Improvements-Phase 7 to 9 QMechaninal and Concrete Renovations TOO TP Safety Enhancoments-Phases d to 11 `�� 1 23 Plant Control System 1/0 Replacement 1 Annual Infrastructure Replacement Pro ram P ,n Equipment Replacement (DO(DO Recycled Water Distribution System Renovafir S�,e ` 1 Fire Protection System-Phases 2 to B 1 3 Plant Control System Network U pp— lovas ` a n 0 Piping Renovation-Phase 9 1 3 Odor Control Upgrades-P' `vA` 1 *Walnut Creek/Grayson Creek Levee Rehab Wet W ether F'- V-a 1 UV Disinfection Upgrades 1/ Prima to V" 1 0Treatment Plant Security Im rovemen#s �' `^I a►� 1 0 Plant-Wide Instrumentation Upgrades ` •` f e v v Lipgrades Innovative Bioono[gy Demonstration e�5`v . wous Seismic Upgrades 1 Solids Condhianing Building Roof Fp-' r Clearwell Improvements UV Hydraulic Imiprrovompe SecondaryTreatment Hydrau lic Improvements Condition Asspc- Go� �9 0-0-411W TP SCADA Replacement Plant ts 00 • Solids Handling Facility Improvements-Phase 2 Solids Handling Facility Improvements-Phase 3 ``,`�� yy Upgrades DO Tunnel Improvements e*ec .,dfing Facility Improvements 3 Secondary Clarifier Improvements r e a r Iant Operations Budding Seismic Upgrade 3 DAFT Improvements a`e ✓ + Surcharge Soil Pile Relocation - Aging Infrastructure Phase 1(0 to S years) v V (15M 9 Nutrient Removal(BACWA Level 11 +UV Disinfeotien Replacement Capacity Q Phase 2(5 to 10 years) Treatment Plant SCADA Improvements Regulatory Phase 3(10to 20 Sustainability Years) Treatment Plant Projects and Their Drivers 9 CENT■ . PART 2 ARE THERE BUDGET CONCERNS WITH THE CIP? By Phil Leiber, Director of Finance and Administration h i E v10 Aw ";. CENTRALSAN Potential Budget Concerns • Concern 1 : Is necessary work being left off or underfunded in the 10-year CIP? If yes, is this creating rate pressure in the future? • Considerations & Findings: - The scope of some of the work identified in the Comprehensive Wastewater Master Plan (CWMP) is contingent on condition assessments that may yet have been performed. The 10-Year CIP includes an annual budget ($3 to $5.5 million) for treatment plant repair and replacement, which will be allocated based on condition assessments. - Contingency budgeted annually, and project close-outs at cost savings can generate capacity for funding new needs. Budgeted contingency is increasing from $1 .5 million in FY 2018-19 to $2 million through FY 2023-24 then $2.5 million thereafter. - Potential projects identified in the CWMP but not in the CIP are discussed annually in the budget book such as nutrient removal as well as costs for projects that would be funded by others (Concord Community Reuse Project and Water Exchange). - The 10-year CIP is reviewed and updated annually to accommodate revised project priorities and schedules. - Contractual Assessment District (CAD) projects (e.g. Harper Lane CAD) were specifically identified in the CIP, but don't have a net rate impact as funds will be reimbursed, with interest, over time. ` 11 CENT■ . Potential Budget Concerns • Concern 2: Are Projects costing more than estimated, resulting in funds being diverted from other (current and future) projects, creating possible future budget pressure? • Considerations & Findings: - 36 Projects completed in FY 2016-17 and FY 2017-18 were under budget with savings of $11 million. So, there does not appear to be systematic under budgeting. - Some harvesting of future dollars is merely taking dollars from the same project budgeted in future years; work proceeding faster than planned. - Projects are originally budgeted using current year dollars; actual costs will be subject to inflation — this inflation is contemplated in Financial Plan. - At times, we are combining projects for bidding efficiency — bundling. - We are executing on the Master Plan; projects are on schedule and getting done as planned (see previous slide). CIP actual as percentage of budget was 100% and 92% for FY 2016-17 and FY 2017-18 respectively' . 1 920%10 and 84% calculated as actual / (budget & carryforward) ` 12 CENTRALSAN Potential Budget Concerns In • Concern 3: Has actual cost as compared to the CIP budget required excess fund movements calling into question the validity of the initial budget numbers presented? • Considerations & Findings: - Budget transfers to projects affected 19% of projects in FY 2016-17, 19% of projects in FY 2017-18 and 9% of projects in FY 2018-19 (year-to-date (YTD)). Analysis shows multiple reasons for transfers; half of the reasons for the transfers (and half of the actual number of transfers) are overall rate/budget neutral (explained in next section). - Changes in budgets are for customary (and essentially unavoidable) reasons: a few unforeseen projects; changes in costs; timing; new scope; etc. - As the Master Plan project status list shows, we believe projects generally are on schedule" and not being unduly delayed. ` 13 CENTRALSAN PART 3 REVIEW OF BUDGET ISSUES AND TRANSFERS By Phil Leiber, Director of Finance and Administration lIl 4 CENTRALSAN Review of Prior Year Budget vs. Actual Data Finance Staff reviewed project spending vs. budget for the past two closed fiscal years (FY 2017-18 and FY 2016-17) and YTD for the current year. - Calculated various statistics regarding budget transfers and reasons for transfers. - Reviewed project performance at close-out (actual cost vs. initial budgeted cost). ` 15 CENT■ Extent • Data RegardingTransfers # of transfers: 29 in total compared to 196 active projects across three years Distribution of transfers as percent of original budget (Treatment Plant vs. Collection System) Projects with Transfers vs. Total Projects Transfers by Program Area 70 g 60 7 6 50 5 40 4 30 3 20 2 0 0 0 1 10 � 0 0 Current Year Last Year Two Years Ago Current Year Last Year Two Years Ago ■Treatment Plant ■Collection System ■General Improvement■Recycled Water ` 16 CENT■ Reasons for the Transfers 29 total transfers* since FY 2016-17 totaling $ 14.7 million against initial project budgets of $69.4 million Six causes; each explored on subsequent slides Cause for Transfers 8 7 6 — 5 — 4 3 2 1 0 ■ A.Bundling ■B.Cashflow accelerations ■C.Developer/CAD or ■D.New Project ■ E.New project scope ■F.Cost exceeded other cost neutral initial budget No Rate Pressure Rate Pressure *Counting the recipient side of the transaction ` 17 CENT■ Analysis of Transfers by Type Total Original Project Budgets and Transfers: Total of $14.7 million Potential Transfers with $30,000,000 Rate Impact over 2 years: $6.7 million. $25,000,000 Excluding Budgeted Contingency of$2.6 million: $20,000,000 $4.1 million $15,000,000 $10,000,000 F.Cost exceeded initial budget E.New project scope D.New Project $5,000,000 'C.Developer/CAD or other cost neutral �qj B.Cashflow accelerations ' A.Bundling �o No Net Rate Impact transfers over 2 %2 years: $8 million 18 CENT■ . Explanation for the Transfers A. Bundling : 6 projects Original Was the Was money Project Status: Project Budget in Year Has project moved from From Final 1.on schedule, Prog. Project# Project Title FY Budget($) budget Project(excluding Project other How much How Budgeted 2.delayed, Type (Per Budget increased Budget($)transfers& started project(s)or ($) much(%) Contingency 3.accelerated, Book) carryforwards) (Yes/No) (Yes/No) contingency ? 4.cancelled, (Yes/No) S.completed GI 8238 Asset Management 16-17 2,700,000 800,000 Yes Yes Yes 171,264 6.34% 0 2,871,264 on schedule TP *7351 Mechanical&Concrete Renovation 17-I8 6,906,000 560,000 Yes Yes Yes 740,000 10.72% 240,000 7,646,000 on schedule CS 8433 S.Orincla Sewer Renovation Phase 17-18 3,752,238 1,500,000 Yes Yes Yes 359,889 9.59% 0 4,112,127 on schedule CS *8435 WC Sewer Renovation Phase 12 17-18 4,100,000 1,000,000 Yes Yes Yes 450,000 10.98% 0 4,550,000 on schedule CS 8434 Urgent P roj ects 16-17 500,000 Yes No Yes 256,000 51.20°/ 0 756,000 on schedule TP 7330 Piping Renovation Phase 9 17-18 1,500,000 1,075,000 Yes I Yes Yes 1,250,000 83.33%1 0 2,750,000 on schedule Total 19,458,238 4,935,000 3,227,153 240,000 22,685,391 Average $ 3,243,040 $ 537,859 28.69% $ 40,000 ❖ Projects were bid in a grouped manner for purposes of internal efficiency & cost savings. Example: the Odor Control Project was included and received significant cost savings when combined with Mechanical & Concrete Renovations due to more competitive bids on a larger project. ❖ No net adverse impact on financial plan or rates. Al A9- - RACENTLSAN Explanation for the Transfers B. Cash flow accelerations : 5 projects Original Was the Was money Project Status: Budget in Year Has moved from From 1.on schedule, Project project Final Prog. (excluding Project other How much How Budgeted 2.delayed, Project# Project Title FY Budget($) budget Project Type transfers& started project(s)or ($) much N Contingency 3.accelerated, (Per Budget increased Budget($) Book) carryforwards) (Yes/No) (yes/No) contingency ? 4.cancelled, (Yes/No) 5.completed CS 8430 Lafayette Sewer Renovation Phase 11 16-17 3,650,000 500,000 Yes Yes Yes 50,000 1.37% 0 3,700,000 on schedule CS 8437 Martinez Sewer Renovation Phase 5 16-17 3,650,000 325,000 yes Yes Yes 210,000 5.75% 0 3,860,000 on schedule GI 8236 District Easements 16-17 210,000 19,665 Yes Yes Yes 15,000 7.14916 10,000 225,000 on schedule TP *7348 Solids Handling Facility Improvements 16-17 9,500,000 400,000 Yes Yes Yes 1,950,000 20.53% 600,000 11,450,000 on schedule Cs 8422 WC Sewer Renovation Phase 11 16-17 3,750,000 545,000 Yes No Yes 1,484,000 39.579/o0 5,234,000 on schedule Tota l _ 20,760,000 1,789,665 1 1 3,709,000 610,000 24,469,000 Average $ 4,152,000 $ 741,800 14.87% $ 122,000 Transfers accelerated from future year's annual budgets for the same multi-year project; work progressed faster than originally anticipated. No net impact on financial plan or rates. S � � - � 20 Explanation for the Transfers J C. Developer/Contractual Assessment Districts (CAD) (Cost Neutral) : 4 projects Original Was the Was money Project Status: Project Budget in Year Has ect projmoved from From Final 1.on schedule, Prog. (excluding Project other How much How Budgeted 2.delayed, Project# Project Title FY Budget($) budget Project Type transfers& started projects)or ($) much(%) Contingency 3.accelerated, (Per Budget increased Budget($) Book) carryforwards) (Yes/No) (yes/No) contingency ? 4.cancelled, (Yes/No) 5.completed CS 6602 South Jackson CAD 17-18 333,867 Yes Yes Yes 77,423 23.19% 77,423 411,290 done by others CAD CS **6679 Cordell Drive CAD 18-19 No n/a Yes 123,443 >100% 0 123,443 on schedule CS **6534 Harper LaneArea CAD 18-19 No n/a I Yes 800,000 >100%1 0 800,000 done by outside CS **8439 Miner Rd Sewer Repairs 2017(new) 16-17 Yes No I Yes 1 95,000 >100%1 0 95,000 on Schedule Projects above represent temporary use of Central San funds (CAD projects paid back over period not to exceed 10 years; Alhambra Valley Assessment Districts (AVAD) 15 years); Miner's Road costs reimbursed by FEMA. No (long term) net impact on financial plan or rates. 21 r ►9x � CENTRALSAN Explanation for the Transfers D. New Projects: 4 projects Original Was the Was money Project Status: Project Budget in Year Has project moved from From Final 1.on schedule, Prog. (excluding Project other How much How Budgeted 2.delayed, Project# Project Title FY Budget($) budget Project Type transfers& started project(s)or ($) much(%) Contingency 3.accelerated, (Per Budget increased Budget($) Book) carryforwards) (Yes/No) (yes/No) contingency ? 4.cancelled, (Yes/No) 5.completed CS **8249 CSO Dump Pad Modification 17-18 Yes n/a Yes 60,000 >1009% 0 60,000 new + CS **8453 willows Sewer Repair 17-18 Yes n/a Yes 98,000 1 >1009%1 01 98,000 Ion schedule CS **7367 IConcord Main Metering station 18-19 No n/a Yes 250,000 1 1 1 250,000 Inew + RW **7365 iRecycled water Clearwell Repairs 17-18 Yes I n/a I Yes 1 1,400,000 >100•9 1 01 1,400,000 Ion schedule Tota 1 1,808,000 1,808,000 Average $ $ 452,000 >100% $ New projects that were not specifically foreseen in the planning cycle; two of the four projects were emergencies (+). Potential impact on financial plan or rates. Total impact is not more than $1.8 million. Running Total of Cost Pressure: $1.8 million. 22 CENTRALSAN Explanation for the Transfers E. New Scope: 3 projects Original Was the Was money Project Status: Budget in Year Has moved from From 1.on schedule, Project project Final Prog. (excluding Project other How much How Budgeted 2.delayed, Project# Project Title FY Budget($) budget Project Type transfers& started project(s)or ($) much N Contingency 3.accelerated, (Per Budget increased Budget($) Book) carryforwards) (Yes/No) (Yes/No) contingency ? 4.cancelled, (Yes/No) 5.completed TP 1 *7358 linnovation Bioenergy Demonstration 17-18 1 400,000 1 200,000 1 Yes No I Yes 1 100,000 25.009/60 500,000 Ion schedule TP 1 7362 JPOB seismic upgrades 1 18-19 1 2,530,000 1 1,100,000 1 yes No I Yes 1 1,831,177 1 72.38%1 457,930 1 4,361,177 Ion schedule GI 1 8207 IGeneral Security and Access 16-17 1 250,000 Yes Yes I Yes 1 80,000 1 32.00-/ol 01 330,000 Ion schedule Total 3,180,000 1,300,000 2,011,177 457,930 5,191,177 Average $ 1,060,000 $ 670,392 62.50% $ 152,643 Projects with added scope; Bioenergy project allowed us to postpone future phases of the solids projects beyond the 10-year CIP window and budget it in the future resulting in substantially decreased projected borrowing. - General security findings were from Security Assessment conducted at end of Master Plan. - POB Seismic Upgrade; project had both higher costs and added scope. Potential impact on financial plan or rates: total impact is $2 million ($1.6 million net of contingency). Running Total of Cost Pressure: $3.8 million ($3.4 million after contingency). ` 23 CENTRALSAN Explanation for the Transfers .J F. Cost exceeded original budget: 7 projects Original Was the Was money Project Status: Budget in Year Has moved from From 1.on schedule, Project project Final Prog. (excluding Project other How much How Budgeted 2.delayed, Project# Project Title FY Budget($) budget Project Type transfers& started project(s)or ($) much(%) Contingency 3.accelerated, (Per Budget increased Budget($) Book) carryforwards) (Yes/No) (yes/No) contingency ? 4.cancelled, (Yes/No) 5.completed CS 8419 Collection System Planning LT 17-18 1,670,000 200,000 Yes Yes Yes 15,000 0.90% - 1,685,000 on schedule TP 7319 Laboratory Upgrades&Repair 16-17 1,171,500 700,000 Yes Yes Yes 70,000 5.98916 1,241,500 on schedule CS 8412 Pleasant Hill Grayson Creek Trunk 17-18 13,700,000 800,000 Yes Yes Yes 1,578,371 11.52% 1,178,371 15,278,371 on schedule TP 7291 Pump&Blower Bldg.Seismic Upgrade 16-17 5,953,000 2,900,000 Yes Yes Yes 829,000 13.93% 829,000 6,782,000 on schedule RW 7347 RewAutomated Fill Station 16-17 115,000 15,000 Yes Yes Yes 19,000 16.52% 11,000 119,970 Closed 16/17 GI 8243 Server Room Relocation 18-19 1,835,430 880,000 yes No Yes 164,570 8.97%1 164,570 2,000,000 on schedule TP 7322 Fire Protection System Ph.2 17-18 1,200,000 360,000 Yes Yes Yes 206,000 17.17% 1,406,000 Ion schedule Total 1 25,644,930 5,855,000 2,881,941 2,182,941 28,512,841 Average $ 3,663,561 $ 411,706 10.71% $ 311,849 ❖ Projects with that exceeded original budgets; Overages ranged from 1% to 17% of original multi-year project budget. Potential impact on financial plan or rates. Total impact is only $2.9 million ($0.7 million net of contingency). Running Total of Cost Pressure: $6.7 million ($4.1 million after contingency). This is 5.4% and 3.3% of overall budgeted spending $124 million over three years. 24 r ►9x Nib- CENTRAL a Analysis ofProjectsClosedOut with • . • R:f qW11p, Total Two FY2017/18 FY201 a/1 7 Years Projects Closed Out from that Year 36 11 25 Projects Closed Out % from that Year 15% 36% Original Budget of Projects Closed Out $ 64,534,600 $14,815,500 $ 49,719,100 Overall Savings from Closeout $10,957,659 $3,299,555 $7,658,104 Overall Savings from Closeout as % of 17% 22% 15% Project Budget Savings remain in Sewer Construction Fund and have been used to reduce planned debt issuances. ••� Alternatives: transfer savings towards larger planned contingency in future years. MOM O 25 CENTRALSAN From this analysis, do we have reason to believe the $867M 10-Year CIP cost • • No as the savings from close-outs exceed the cost increases: Savings from project closeouts since FY 2016-17 $11 million Less: New projects & cost overages projects total (categories D, E, F) net of contingency ($4. 1 million) Net savings of: $6.9 million ❖ But, is this the full picture? ` 26 CENTRALSAN What about Other Potential Cost Pressures? Are costs for projects planned but not yet bid increasing? - Capital Projects to assess cost trends as projects have progressed through design: Masterplan 10% 30% 95% estimates design design design Bid Completion Cost Certainty Times during which Board is CIP Budget Contract informed of Update Award potential cost change Economic getter conditions Project �nforrnat1O� Changes Execution in Inflat► n Condition Commodity/ Assessments Equipment prices Ala _ i 27 What about Other Potential Cost Pressures? ❖ Projects not budgeted in the CIP but may be needed due to: Pending condition assessments: Generally, funding for these projects is included in the CWMP (from $3.0 to $5.5 million annually) - We could find the need to accelerate funding, or exceed those annual allocations - Other Projects as listed in FY 2018-19 Budget Book: - Primarily driven by regulatory requirements - Nutrient Removal BACWA Levels 2/3 and associated energy projects driven by power increase needs from nutrient removal - Advanced Treatment/Contaminants of Emerging Concern - Strategic opportunities - Recycled Water Exchange - Concord Community Reuse Project, Collection System, and Recycled Water Facility Improvements (cost recovery approach under discussion) - Routine reforecasts of work as part of 10-year CIP update (projects postponed or refined scope, or reprioritized) ` 28 Financial Plan • • Financial Plan Outlook has improved significantly in the past two years due to: - Flattening out of required cash flows based on reprioritizations. Master Plan Exec Summary Current CIP Outlook $120.000.000 Inflated Capital Improvement Plan Spending(in millions) $1D0.000.00D i c $140 $116 $120 $113 $110 - - $90.000,000 , f $100 $1A2 597 $102 $100 $87 ------ --- $sO.DDo,oaD Ss9 $66- $A0.604,006 � � $40 $20.D00.000 $29 - $o I I I I I I I I I 1, 1 $0 2019 2019 20210 2021 2022 2023 2024 2025 2026 2027 202B 2029 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 ■Treatment Plant ■Collection System ■Recycled Water ■General Improvements ■Treatment Plant ■Collection System ■General Improvements ■Recycled water - Other favorable budget variances; CalPERs transition, etc. ` 29 CENT■ . Process Improvements and Additional Analysis to Improve Transparency M •: Executive Capital Project Review Committee We will incorporate and maintain a running tally of budget pressure items (cost increases and new projects) in Financial Plan and capital report •: Annual Budget variance closeouts offer Board choice to apply savings to: 1 . Future CIP Funding (reducing debt) or L Contingency (allowing capacity for changes to CIP spending without impact on rates) ❖ FY 2019-20 10-Year published CIP Listing to provide greater detail on larger projects by program ❖ Software (e-Builder and ERP) will provide enhanced program management reporting capabilities WE ME MEN BE ` 30 QUESTIONS? °a S CENTRAL SAN