HomeMy WebLinkAboutCAPITAL PROJECTS ACTION SUMMARY 08-04-09Central Contra Costa Sanitary District
CAPITAL PROJECTS COMMITTEE
ACTION SUMMARY
Chair McGill
Member Lucey
BOARD OF DIRECTORS
JAMES A. NE/EULY
President
MICHAEL H. McG1LL
President Pro Tem
HAXHARA U HOC'KETT
GF,RALU R. LUCF,Y
MAltlO M MF,NESIN/
/'HONE: (925) 228-9500
FAX: (925) 676-7211
www. centralsan, org
Tuesday, August 4, 2009
3:00 p.m.
Third Floor Executive Conference Room
Central Contra Costa Sanitary District
5019 Imhoff Place, Martinez, CA
PRESENT: Mike McGill, Jerry Lucey, Ann Farrell, Jim Kelly, Randy Musgraves,
Tad Pilecki, Gail Chester, Christina Gee
1. CALL MEETING TO ORDER
Chair McGill called the meeting to order at 3:37 p.m.
2. PUBLIC COMMENTS
None.
* 3. FISCAL YEAR 2009-10 CAPITAL IMPROVEMENT BUDGET AND TEN YEAR
PLAN REVISIONS
Director of Engineering Ann Farrell stated the need to revise the previously-
adoptedplan to reflect recent Board actions where a $10 sewer service charge
increase that was embedded in the adopted Budget and Plan was not approved.
Three tables have been revised to eliminate the $10 sewer service charge
increase.
COMMITTEE ACTION: Received the report and recommended reissuing
Tables 2, A-4 and A-5 of the FY 2009-10 Capital Improvement Budget and
Ten-Year Plan with corrected Sewer Service Charge revenues (attached).
®Becytletl Paper
Capital Projects Committee
August 4, 2009
Page 2
*4. CAPITAL IMPROVEMENT PROGRAM EXPENDITURE AND REVENUE
SCENARIO FOR FISCAL YEAR 2009-10 AND BEYOND
Ms. Farrell distributed a table of the predicted Sewer Service Charge (SSC) rate
increases associated with various expenditure scenarios (attached). She
emphasized that the District's capital budget is in a state of flux because capital
revenues and expenses have been difficult to project in the current volatile ,
economic climate. For this reason, staff wanted to discuss a number of capital
expenditure and revenue scenarios with the Board. Ms. Farrell noted that all
scenarios indicate that either significant SSC rated increases or some level of
bond financing will be necessary to continue the capital program, even after
taking credit for the competitive bid climate and deferring some non-essential
projects.
Member Lucey noted that he has spoken against bond financing in the past if the
project can be deferred, though he conceded that his opinion was based on the
District's history of functioning with very little help from bonds. Member Lucey
also commented that, while he did not support construction of the new Collection
Systems Operation Department (CSOD) Administration, Crew, and Warehouse
Facility when it came to the Board for a vote in November 2008, it was approved
by a 3-2 vote of the Board and he does not feel this vote needs to be revisited.
In fact, the current bid climate may result in significant savings in the CSOD
facility construction costs. Chair McGill spoke in favor of bond financing,
arguing that it would be put to good use by financing necessary, long-life capital
projects, and the current economic climate would result in an increased return on
investment due to the very competitive bids that are expected. Member Lucey
suggested that if the District did employ the use of bonds it should be prepared to
sell more than the minimal amount in order to better leverage the fixed costs of
the bond sales. Director of Administration Randy Musgraves stated the District
would need about ninety days to prepare to sell bonds.
Chair McGill reiterated his support for using bonds to finance significant capital
projects with a service live of 30 years of more, which would allow the District to
keep SSC rates lower. Chair McGill stated he could not see the District not
moving forward with bidding the new CSOD Facility. Given the current
construction bid climate and the need for a new CSOD Facility in the next ten
years, the project should be bid. Member Lucey concurred.
In regards to bond sale, Chair McGill suggested obtaining a proposal for a bond
issuance in the $30 - 40 million range, buf staggering sales of bonds with
projects. Ms. Farrell agreed, notin"g that this would allow a decision to reduce the
total amount of bond sales if the economy improves and capital revenues
increase over the next several years. In response to a question by Chair McGill,
Capital Projects Committee
August 4, 2009
Page 3
Mr Musgraves clarified that the financial advisors who would influence the bond
sales are paid a fee and are not on commission.
COMMITTEE ACTION: Recommended that staff pursue bond financing in
parallel with advertisement of the CSOD Administration, Crew, and
Warehouse Facility, District Project 8208. At the time of award of the CSOD
project, a decision on the amount of the initial bond issuance would be
made. Additional bonds could then be sold over the next several years as
project needs dictate.
5. UPDATE ON THE STATUS OF THE COLLECTION SYSTEM OPERATIONS
DEPARTMENT (CSOD) ADMINISTRATION, CREW, AND WAREHOUSE
FACILITY, DP 8208
Ms. Farrell introduced the report as being additional support for the decision that
was essentially made during discussion of the previous item. Capital Projects
Division Manager Tad Pilecki announced that due to better design detail and a
reduction in the permit fees to be charged by the City of Walnut Creek, the total
project cost estimate is approximately $1 million less than the estimate of
$17, 725, 000 which was presented to the Board in November 2008. Ms. Farrell
anticipates further reduction in the total project cost due to the favorable bid
climate.
COMMITTEE ACTION: Recommended the Board proceed with the
advertisement of the CSOD Administration, Crew, and Warehouse Facility,
District Project 8208.
6. ADJOURNMENT - at 4:07 p.m.
" Attachment
3.
Central Contra Costa Sanitary District
August 6, 2009
TO: BOARD OF DIRECTORS
VIA: JAMES M. KELLY, GENERAL MANAGER ~~" /r~`q/~~
FROM: ANN E. FARRELL, DIRECTOR OF ENGINEERING UwU
SUBJECT: FISCAL YEAR 2009-10 CAPITAL IMPROVEMENT BUDGET AND TEN-
YEAR PLAN
On June 4, 2009, the Board adopted the FY 2009-10 Capital Improvement Budget (CIB)
and Ten-Year Plan (CIP). At the same meeting, the Board declined to adopt the $10
sewer service charge increase that was embedded in the revenue and cash flow
assumptions for the CIB/CIP document. In order to make the adopted CIB/CIP
document consistent with the Board action on the sewer service charge increase, staff
has amended three pages from the CIB/CIP document and provided them as an
attachment to this memo for inclusion in your copy of the CIB/CIP document. The
replacement pages include Table 2 on page 9 of the CIB introductory section and
Tables A-4 and A-5 on pages A-13 and A-14 of the CIP introductory section of the
document. The Board Capital Projects Committee reviewed the amended pages and
recommended including them in the CIB/CIP document.
P:\Public\PLANNING\GAIL\CIB-CIP amended pages memo 8-6-09.doc
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Table 2: SEWER CONSTRUCTION FUND REVENUES AND EXPENDITURES
REVISED FOR NO SSC RATE INCREASE IN 2009-10
A summary of projected FY 2009-2010 Capital Improvement Program revenue and
expenditures is presented below:
Adjusted for
Anticipated Bid
•
•
Revenues
Facilities Capacity Fees
Pumped Zone Fees
Interest
Ad Valorem Taxes
Sewer Service Charges'
Reimbursements from Others:
City of Concord
Recycled Water Sales z
Per CIB Budget
$ 5,298,000
825,000
556,000
8,200,000
3,188,000
4,528,000
175,000
359,000
427.000
Savings in Current
Economy
$ 5,298,000
825,000
556,000
8,200,000
3,188,000
Alhambra Valley
Developer Fees, Charges, Other
Total Revenues2:
Expenditures
Treatment Plant Program
Collection System Program
General Improvements Program
Recycled Water Program
Total Expenditures
4,528,000
175,000
359,000
427.000
$ 23,556,000 $ 23,556,000
$ 13,769,000
15,161, 000
10,637,000
550,000
$ 13,069,000
13,544,000
9,037,000
550,000
$ 40,117,000
A summary of Sewer Construction Funds Available is Presented Below:
Projected Beginning Balance (7/1/09) $ 47,641,000
Projected Revenues 23,556,000
Projected Expenditures (40,117,000)
Projected S/C Funds Available (6/30/10) $ 31,080,000
$ 36,200,000
$ 47,641,000
23,556,000
(36,200,000)
$ 34,997,000
More specific information regarding the revenue and expenditure categories is included in the
Capital Improvement Plan.
Adjusted for no $10 rate increase in FY 2009-2010.
s Revenue is first recorded in the O&M budget until O&M costs are offset. Any additional revenue will be recorded in
the Sewer Construction Fund.
Note: Original adopted budget based on March 5, 2009 Board Meeting recommending $10 SSC increase in 2009-10.
Revised budget reflects reduced SSC revenue due to Board action on June 4, 2009 to not raise SSC for 2009-10.
FY 2009-10 CIB/ 2009 CIP 9
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