HomeMy WebLinkAboutCAPITAL PROJECTS ACTION SUMMARY 03-27-07
Central Contra Costa Sanitary District
5019 Imhoff Place, Martinez, CA 94553-4392 (925) 228-9500 . www.centralsan.org
CAPITAL PROJECTS COMMITTEE
ACTION SUMMARY
Chair Hockett
Member McGill
Tuesday, March 27, 2007
3:00 p.m.
Third Floor Executive Conference Room
Central Contra Costa Sanitary District
5019 Imhoff Place, Martinez, CA
PRESENT: Barbara Hockett, Michael McGill, Jim Kelly, Ann Farrell, Randy
Musgraves, Gail Chesler, Debbie Ratcliff, Tad Pilecki, Doug Craig
1. CALL MEETING TO ORDER
Chair Hockett called the meeting to order at 3 p.m.
2. PUBLIC COMMENTS
None.
3. REVIEW DRAFT 2007-08 CAPITAL IMPROVEMENT BUDGET AND 2007
CAPITAL IMPROVEMENT PLAN
. Overview of Document
Gail Chesler provided a brief description of the contents of the document to
aid in its review (see attached Readers Guide Version). Member McGill
complimented staff on the thoroughness of the document and asked if there
was a system in place for prioritizing projects. Ms. Farrell and Mr. Pilecki
described some of the ways projects are prioritized and several documents
that are in preparation to document the condition of District assets and
systematically prioritize future projects.
. Overview of 2007-08 Large Projects (see pages 1-3 of CIB introduction
section of binder)/Select Projects for Discussion with Full Board at April
12,2007 Workshop
A
"., Recycled Paper
Ann Farrell reviewed the 15 largest projects planned for the next fiscal year
and asked for input on which ones should be discussed in more detail at the
workshop. The committee agreed that a discussion on the largest project, the
A-line Phase 2A and the associated Concord portion and recycled water line
would be appropriate. Member Hockett suggested an update on the
Ultraviolet Disinfection Expansion, including the equipment patent and supply
issues and the improved hydraulic capacity of the treatment plant. Member
McGill suggested that staff should consider updating the Board on any project
that may be controversial in the coming year. Ms. Farrell noted that the Plant
Wet Weather Protection will be a sensitive project and that Mitch A valon of
County Flood Control will be coming to the Board meeting on April 5, 2007 to
discuss the flooding issues with the full Board.
. Discuss change in Mercury Removal strategy and impact on timing of
Bond Financing
Ms. Farrell updated the Committee on a change in mercury removal strategy
that has occurred since the November Board Capital Workshop. This change
results in higher expenditures for mercury removal in the near term than
previously planned and would require bond financing to minimize near term
rate impacts (see attached). This issue will be discussed in more detail at
the April 12, 2007 Board Capital Workshop.
. Discuss continued down turn in housing market and potential impact on
Capital Revenue
Ms. Farrell presented information on the sensitivity of the Capital Revenue
stream to down turns in the housing market (see attached). A discussion
followed regarding this sensitivity and how difficult it is to predict the revenue
from new housing connections.
COMMITTEE ACTION: Reviewed draft CIB and CIP and provided
suggestions for items to discuss with full Board at the April 12, 2007
Capital Workshop.
4. DISCUSSION OF PROCESS IMPROVEMENTS USING INFORMATION
TECHNOLOGY FUNDED BY THE CAPITAL PROGRAM
Gail Chesler provided a demonstration of a number of the information technology
tools that have been funded by the Capital Program and illustrated how they
benefit the District through improved information transfer and productivity.
. Sewer Hydraulic Model
. Geographical Data Integration of Maps and other District Data
. Digital Plan Review Process
. CIB/CIP Compilation and Monitoring Program
.'~"_.""'_'__'__'_'''_'_''__'_'"'_____'_~"'>o'__~'____""~_~_"_"_""'._,~._"_m"______,....___.._______~"'____....."_"._..........._]._.__.'... ,....~.__..__...._~..______._,_..____.,,_._..~...._'"... "'_""__'''~''_' 'm_._"..__.__'.__~.M._.'_'__._.._
. Others
COMMITTEE ACTION: Received the report.
5. ADJOURNMENT - at 4:50 p.m.
MERCURY REMOVAL STRATEGY
IMP ACT ON BOND FINANCING
March 2007
ISSUE: The District needs to be prepared to meet an 18 ng/l monthly
average final effluent limit for Mercury by April of 20 1 O. It is unlikely that
the mandatory amalgam separator program will yield the reductions
necessary to meet this limit. While the mercury TMDL could provide some
relief, it's timing is not predictable. Therefore, a parallel process of looking
at ways to reduce mercury through in-plant treatment has been conducted.
PLAN IN NOVEMBER: At the time of the November workshop, it looked
potentially feasible to do an interim project to remove mercury from the
incinerator scrubber water for less than $5 million and, in the long term,
install a state of the art fluidized bed incinerator with dry scrubber
technology. A $30 million fluidized bed incinerator project was included in
the November discussion to be bond funded in year seven of the plan.
CURRENT PLAN: Staff s ongoing analysis found that treating the liquid
scrubber water stream could not be done effectively in the short term using a
low budget approach. The liquid treatment cost grew to $20 million or more
and involved a complex advanced treatment process. Staff changed
direction to pursue installation of dry scrubber technology on the existing
multiple hearth furnaces in the near term. This approach has a similar cost
of approximately $20 million and will remove the mercury from the air
stream by adsorbing it onto dry powdered carbon prior to the air stream
entering the wet scrubber. Thus, the mercury in the scrubber water will be
significantly reduced. This approach has the added benefit of significantly
increasing the mercury removal from the air stream being emitted and thus
reducing our future regulatory risk. It has been assumed that this project
will be bond financed. Work is continuing and staff will be updating the
Board at a future meeting.
CONCLUSION: Our largest current regulatory risk is exceeding our
mercury effluent limits in April of2010. If the mercury TMDL is not
adopted, the amount of mercury in the scrubber water from the incinerators
must be reduced within three years. The best available technology is use of
powdered activated carbon to remove mercury from the air stream. It is
estimated that this approach will cost $20 million and will require bond
financing to mitigate rate impacts.
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CAPITAL REVENUE
SENSITIVITY TO HOUSING MARKET
March 2007
ISSUE: The continuing down turn in the housing market represents a
potential significant loss in revenue to the capital program. Our projections
at the end of2006 called for 1500 connections in 2007-08 and 1550
connections in 2008-09, increasing to 1600 for the next two years. We now
feel that this may be overly optimistic. We have adjusted the projection
down to 1400 connections for the first two years of the plan, as shpwn in
Table A-5. We have not made an adjustment for the outlying years.
REVENUE IMP ACT: The facility capacity fee paid by each connection in
2007-08 will be approximately $5315 (a weighted average of pumped and
non pumped zone connections). Thus, each 100 connections represent about
$530,000 in capital revenue. By reducing the connections in 2007-08 from
1500 to 1400, the revenue projection is reduced by $530,000. In 2008-08,
the 150 connection reduction results in a revenue reduction of about
$800,000. In subsequent years, if the connections are 1400 instead of 1600,
the revenue impacts are over $1 million per year.
POTENTIAL SEWER SERVICE CHARGE IMP ACT: The current facility
capacity fee of $5315 represents a sewer service charge increment of $.33
per connection, assuming 160,000 equivalent connections paying sewer
service charge. Therefore, if our connection projection is overstated by 100
connections and the loss of these connections must be made up, it represents
an increase of$3.30 on the s~wer service charge. If off by 200 connections,
the SSC increase is $6.60.
CONCLUSION: If the housing market down turn continues, a higher than
planned sewer service charge increase will be needed in outlying years to
continue the planned capital expenditures. Alternatively, the Board could
choose to increase the use of bond funding or reduce planned expenditures.
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