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Home My WebLink About4/10/2008 AGENDA BACKUPAgenda Item 3) Capital Projects Special Meeting of April 10, 2008 Announcements: a) District Surplus Sale of Computers and Eguipment On Saturday, April 12, 2008, Nationwide Auction Systems will conduct the District's surplus sale of computers and equipment. The auction site is 1 Oak Road in Benicia. Gates open at 7 a.m. for an inspection period that will end at 8:30 a.m., and the auction will begin at 9 a.m. 2008/09 Capital Improvements Program Board Workshop April 10, 2008 2008/09 Capital Improvements Program Workshop Agenda • Review Board role in Capital planning and future challenges • Review planned 2008/09 Capital Expenditures • Review programs and selected 2008/09 projects — Collection System Program • A -line Phase 2A • Renovation Program — Treatment Plant Program • Mercury Removal Project • Green House Gas Reduction — Recycled Water Program • Industrial Recycled Water Planning — General Improvements Program • Collection System Operations Facility Improvements • Information Technology Plan • Revisit future planning challenges and review next steps in Capital Budgeting process Capital Improvement Budget Summary for FY 2008/09 Board Role in Capital Program is Ongoing • Authorize Program Budgets each fiscal year in June • Re- authorize Program Budgets in August with actual carryover amounts (new) • Authorize Supplemental Program Funds if needed • Create New Projects > $25,000 • Award Construction Projects > $15,000 • Authorize Construction Change Orders >$50,000 • Authorize Consultant Contracts > $50,000 • Authorize Revisions to Consultant Contracts > 15% 2 Estimated Estimated Estimated Total Program FY 2008/09 Carry -over Allocation FY 2008/09 Program from Prior FY 2008/09 Proposed Expenditures Fiscal Year Authorization Treatment Plant $12,680,000 $16,279,000 $10,660,000 $26,939,000 Collection System $22,355,000 $13,688,000 $17,339,000 $31,027,000 General Improvements $3,418,000 $783,000 $3,071,000 $3,854,000 Recycled Water $405,000 $30,000 $399,000 $429,000 To Total $38,858,000 $30,780,000 $31,469,000 $62,249,000 2008109 Board Role in Capital Program is Ongoing • Authorize Program Budgets each fiscal year in June • Re- authorize Program Budgets in August with actual carryover amounts (new) • Authorize Supplemental Program Funds if needed • Create New Projects > $25,000 • Award Construction Projects > $15,000 • Authorize Construction Change Orders >$50,000 • Authorize Consultant Contracts > $50,000 • Authorize Revisions to Consultant Contracts > 15% 2 Next Steps in CIB /CIP Process • April 17, 2008 set Public Hearing for CIB /CIP • May 15, 2008 hold Public Hearing and Approve CIB /CIP • June 5, 2008 Board Adopts all Budgets, including CIB /CIP, officially Authorizing the FY 2008/09 CIB • June 5, 2008 Board Approves Closeout Position Paper for completed CIB projects • Hold Board briefing on closed out projects for any interested Board members after June 5, 2008 • August 2008, ask Board to Reauthorize FY 2008/09 CIB with actual carryover amounts (new this year) November 2008 will be critical decision point for a number of issues.... • Is Ad Valorem Tax lost... if so, how is Capital Program impacted? • To Expand or Contract Renovation Program? — Expand if master plan reduces capacity expenditure needs? — Expand if peer agencies are outpacing us? — Contract if AVT is lost? • To Construct or Not To Construct Mercury Removal? — Construct if funds available and air emissions are a concern? — Defer, particularly if AVT lost? • To Add Projects to Reduce Green House Gas Emissions? — Will regulations be taking shape? — Should projects be budgeted or wait and see? • To increase Treatment Plant Renovation based on Asset Mgmt Plan? Listen today and then stay tuned ............. 3 FY 2008/09 Expenditure Recommendations EXPENDITURES (% Capital Program) FY 2008/09 Collection System $22,355,000 (57 %) Treatment Plant $12,680,000 (33 %) General Improvements $3,418,000 (9 %) Recycled Water $405,000 (1 %) TOTAL EXPENDITURES $38,858,000 (100°/x) FY 2008 -09 Collection System Program Expenditures by Subprogram Program /Subprogram FY 2008 -09 Expenditures Total Collection System Program $22.4 million (100 %) Expansion /Capacity Improvements (Driven by $8M A -line Phase 2A) $12.5 million (56 %) Renovation $8.3 million (37 %) Pumping Stations /Force Mains $1.2 million (6 %) Regulatory Compliance /Planning $.3 million (1 %) 2008/09 Large Project Expenditures Collection System Program PROJECT 2008109 Expenditures Total Project Cost A -Line Phase 2 -A Capacity Improvements $8,125,000* $20,000,000* Camino Pablo Trunk Sewer /Flush Kleen FM $1,850,000 $2,200,000 Walnut Creek Sewer Renovation — Phase 6 $1,800,000 $2,200,000 Lafayette Sewer Renovation — Phase 5 $1,500,000 $1,700,000 Martinez Sewer Renovation — Phase 2 $1,200,000 $1,400,000 South Orinda Sewer Renovation — Phase 3 $1,200,000 $1,400,000 2007/08 Development Sewerage $1,180,000 NA Alhambra Valley Assessment Districts $1,000,000 $2,000,000 TV Inspection Program $900,000 $5,600,000 Total Collection System Projects <$900,000 $3,600,000 NA Total Collection System Program $22,355,000 NA *Discussion of A -line and Renovation Program to follow A- Line /Concord Joint Project Overview .00 .... A -L= a .r1.IC.1O11 5 A- Line /Concord Joint Project Cost Update Facility Total Cost Concord Portion A -line Phase 2A $14.8 million $4.4 million Concord Intertie $7.2 million $7.2 million Recycled Water Line (deferred) $0 million $0 million Total Cost $22 million $11.6 million A- Line /Concord Joint Project Updated Construction Schedule • Award Construction • Notice to Proceed • Begin Tunneling • Cross Walnut Creek • Tie -in Concord Flows • Complete Construction October 2007 February 2008* April 2008 June 2008 September 2008 February 2009* * Six month delay primarily due to tunneling machine not available. DRIVING 70 FOOT LONG SHORING PILES FOR MAIN TUNNELING PIT ***BOARD TOUR WILL BE SCHEDULED WHEN EPBM BORING MACHINE IS ON SITE... EST 4122 * ** 7 EXCAVATING SOIL FROM MAIN TUNNELING PIT TUNNEL PIT SOIL DISPOSAL NEAR FILTER PLANT SITE PLACING CONCRETE FLOOR IN MAIN TUNNELING PIT INSPECTING PIPE AT THE AMERON PLANT LOAD TESTING OF 96 INCH PIPE I INSPECTING PIPE AT THE AMERON PLANT INSPECTING FINISHED PRODUCT Ten Year Collection System Capital Improvement Program Budgets approximately 50% of $178 million in Planned Collection System Expenditures for TV Program and Renovation Projects 10 Investment in Sewer Renovation Continues..... *Based on Total Project Cost in 2007 -08 of approximately $1.75 million per mile renovated /replaced. This cost may decrease in 2008 -09 favorable bid climate. Definition of Future Needs Continues... • Extrapolation of TV results indicates that about 100 miles of 6,8 and 10 -inch sewer mains still need to be renovated • Plan next 10 years — 46 miles renovated • 54 miles will remain after next ten years unless rate of renovation expenditures are increased or cost per mile decreases • Sewers will continue to deteriorate 11 FY 90/91 — 99/00 4 Miles/Year = 40 Miles 10 Yr Cost = $40 M Renovation FY 00/01 — 07/08 5.3 Miles/Year = 42.1 Miles Program 8 Yr Cost = $49 M FY 08/09 —17/18 4.6 Miles/Year = 46 Miles 10 Yr Cost = $81 M* TV Program 900 Miles of 1500 Miles of District Sewers Inspected to Date *Based on Total Project Cost in 2007 -08 of approximately $1.75 million per mile renovated /replaced. This cost may decrease in 2008 -09 favorable bid climate. Definition of Future Needs Continues... • Extrapolation of TV results indicates that about 100 miles of 6,8 and 10 -inch sewer mains still need to be renovated • Plan next 10 years — 46 miles renovated • 54 miles will remain after next ten years unless rate of renovation expenditures are increased or cost per mile decreases • Sewers will continue to deteriorate 11 How to "right size" sewer renovation program? • Complete TV program / validate extrapolation figures • Research renovation programs of peers to determine how CCCSD compares in renovation investment • Complete Collection System Master Plan to validate and revisit cost/timing of needed capacity projects • Review /optimize right of way /design /construction process to minimize project costs • Develop report to Board for November 2008 CIB Workshop on "Right Sizing" renovation program FY 2008 -09 Treatment Plant Program Expenditures by Subprogram Program /Subprogram FY 2008 -09 Expenditures Total Treatment Plant Program $12.7 million (100 %) One -Time Renovation $4.9 million (39 %) Recurring Renovation $4.8 million (38 %) Regulatory Compliance /Planning $2.2 million (17 %) Expansion /Capacity Improvements $.3 million (3 %) Other Miscellaneous Projects $.4 million (3 %) 12 2008 -09 Large Project Expenditures Treatment Plant Program PROJECT 2008109 Expenditures Total Project Cost Piping Renovations & Replacement- Phase4 $1,800,000 $1,800,000 Plant Site Improvements $1,500,000 $2,500,000 Standby Power Facility Improvements $1,200,000 $6,800,000 Primary Structures Demolition $1,100,000 $1,400,000 Solids Handling Improvements $1,054,000 $6,500,000 Aeration Air Renovations $1,000,000 $2,100,000 Scrubber Water Mercury/Metals Removal* $1,000,000 $20,300,000 Treatment Plant Asset Management $1,000,000 $1,200,000 Total Treatment Plant Projects< $1,000,000* $3,046,000 NA Total Treatment Plant Program $12,700,000 NA *Discussion of Mercury Removal and Green House Gas Emissions to follow Mercury was Greatest Regulatory Challenge Effluent Limits Now Achievable for Short Term • Interim Limit* 87 ppt Superceded by TMDL/Watershed P. • Final Limit* 18 ppt Superceded by TMDL/Watershed P. • Watershed Permit Limit* 66 ppt Effective March 1, 2008 • CCCSD Actual 24 ppt 2007 Max Monthly Ave • Watershed Calc Limit ** 41 ppt Based on 2.23 kg /yr ** • CCCSD Actual 19 ppt 2007 Annual Ave *Monthly average effluent limit * *Watershed Permit Allowable Mass 2.23 kg /yr 2008 1.8 kg /yr 2018 1.3 kg /yr 2028 13 0.5 0.45 0.4 0.35 0.3 0.25 777 0.2 0.15 0.1 0.05 0 Effluent Mercury Concentration 991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Year -- - AV9iAGE1�lNhA) • - "AVH3AGE(�tr0) -r -D LY M4XM.1M 14 Influent Mercury Concentration ,a -- -------------------------------------------- a-- --------------------------------------------------- 9 -- ------------------------------------------------- 7 -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - J 8 - - - -- - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 7 5 -- --- -------------------------------------------------- q__ _ -__ ._---_.-__.______-- _--- __- ____._.__- .__-- _. -_____ 3 __.__ __-___-.__-______ _______- ___- ._-- _________ - -_ - -. 2 __ -_- _- _.-- __- .___ -_ ___ ___.__- ._- _- _.________ _ .__ 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Year - �AVIRAOE(MMOL) __.A__- AyCRAO!(I,p�O) �DALYIMNM/A 0.5 0.45 0.4 0.35 0.3 0.25 777 0.2 0.15 0.1 0.05 0 Effluent Mercury Concentration 991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Year -- - AV9iAGE1�lNhA) • - "AVH3AGE(�tr0) -r -D LY M4XM.1M 14 Where does Hg come from and where does it go? (2003 analysis based on historical data) INTO PLANT • 34.7 Ib /yr plant influent RECYLE WIN PLANT • 19.3 Ib /yr recycled scrubber water • 33.2 Ib /yr to aeration basins OUT OF PLANT • 29.1 Ib /yr air emissions • 4.8 Ib /yr plant effluent • 0.8 Ib /yr grit/ash Total 34.7 Ib /yr Where does Hg come from and where does it go? 2007 UPDATE INTO PLANT • 14.5 Ib /yr plant influent Mercury air emissions are still a potential concern....... as is effluent mass reduction to 1.3 kg /yr in 2028 OUT OF PLANT • 11.8 Ib /yr air emissions • 2.3 Ib /yr (1.03 kg /yr) plant effluent • 0.4 Ib /yr grit/ash Total 14.5 Ib /yr 15 Long Term Mercury Removal Solutions Cost Comnarisnn Approach Capital Cost PW Annual Total PW O&M Cost Cost (20 yrs) (20 yrs) Haul Dewatered Sludge — $4 million $133 million $137 million Facility being constructed for reliability... would allow shutdown of incinerators Scrubber Water $40 million $90 million $130 million Treatment — Does not adequately address air emissions... on hold Dry Scrubber Air $21 million $87 million $108 million Treatment — Most cost effective method to address air and effluent mercury emissions Currently being piloted... MEIROU .Y Removal Pilot 16 MERCURY PILOT PLANT OVERVIEW MERCURY PILOT PLANT COMPONENTS PRIMARY HEAT EXCHANGER & CARBON FEEDER WATER INJECTION 17 Ten Year Treatment Plant Capital Improvement Program does NOT Budget for Projects to Respond to Climate Change and Green House Gas Regulations. Regulations being developed for Green House Gas (GHG) reductions could have significant impacts.... • AB 32 (2006 Global Warming Solutions Act) — Reduce statewide GHG emissions to 1990 levels by 2020 (approx. 25% reduction) — Requires Air Resources Board to develop regulations on: 1.GHG reporting by 2008 2. Specific GHG emission reduction requirements by 2012 (Implementation Plan) • Governors Executive Order — Reduce statewide GHG emissions by an additional 80% by 2050 20 -Aer" Illi* ..,. ; . rnia's a h i eons re • ers 41 (8% Transportation 00(41%) Electric Power 109(22%) * *All value in MMT CO all Equivalent Agriculture & al Forestry 41(8%) MmMmy ofCaVornia Ownhou a Gas &WmA nr and Sinks.- 19910 to 1004 Status of Regulatory Development • ARB adopted mandatory GHG reporting regulations January 2008 • CCCSD must begin reporting April 2009 for 2008 calendar year • ARB is holding scoping meetings to develop draft emission reduction regulations • Will take several years to develop and finalize specific emission reduction regulations and market mechanisms... legally enforceable January 1, 2012 • Reductions in place by December 31, 2020 21 District GHG Inventory Summary • 1990 emissions were 52,612 metric tons of CO2eq • Cogen facility operational in 1995 • Cogen footprint 21,741 metric tons of CO2eq is larger than replaced PG &E footprint of 6,000 metric tons of CO2eq because of PG &E renewable power • 2006 emissions were 69,296 metric tons of CO2eq Therefore, would have to reduce emissions by 16,684 metric tons of CO2eq or 24% to return to 1990 levels. How much will CCCSD actually have to reduce? • We don't know yet how much CCCSD will have to reduce! (could be more than 24 %) • Why? Mobile sources (the largest emissions sector) are difficult and controversial to regulate • Large stationary sources are easier to regulate and it is sometimes assumed that it is easier for large utilities to raise money for control measures • For now, CCCSD should plan to reduce to 1990 levels by 2020 while we await development of the regulations 22 What can CCCSD do to reduce GHG emissions? • Reduce energy use through conservation and changes in operation • Use alternative forms of energy • Purchase carbon credits on the open market Energy Efficiency and GHG's • Energy use is directly related to GHG emissions ...generally the more power we use, the bigger our carbon footprint • Two prior energy conservation studies have been conducted (1990 & 1996) • The District has already implemented recommended energy savings strategies (VFDs; peak shaving of influent flows; high efficiency motors, lighting and HVAC) • No more "low hanging fruit" • However, some energy savings may be still possible and energy study should be updated 23 Alternative Energy and GHG's • District Staff completed study February 2008 • Evaluated 15 different alternative energy technologies • Recommended four options for additional study — Solar at plant (large scale - sell power for "credits ") — Solar at remote sites — Bio Diesel — Purchase of Green Power • Most technologies are not cost - effective due to low cost power available from cogeneration — Cogeneration is greatest source of GHG emissions added since 1990 — Cogeneration provides essential redundancy through onsite power generation • Consultant peer review of staff work is next.... Next Steps to Comply with AB32 • Proactively monitor AB 32 regulatory development • Submit 2008 GHG inventory to ARB in April 2009 per regulations • Complete update of energy conservation study • Complete peer review of alternative energy study • Develop potential scenarios for meeting 24% ++ reduction... consider including in next years CIB /CIP • Analyze GHG impacts of future projects in CIB, as necessary • Follow development of carbon trading markets 24 2008/09 Expenditures Recycled Water Program *Discussion of potential Industrial Recycled Concepts to follow Potential Industrial Recycling Concepts Being Evaluated • CCCSD Serve Power Plant in East County through abandoned pipeline • CCWD Serve Power Plant in East County from raw water canal and CCCSD Serve Local Refineries • CCCSD Serve Power Plant on District Site • CCWD Transfer Water to Other User and CCCSD Serve Local Refineries 25 2008109 Total PROJECT Expenditures Project Cost Recycled Water — Pleasant Hill Phase $340,000 NA 16 Total Remaining Recycled Water Projects including Industrial Concepts $65,000 NA Planning* Total Recycled Water Program $405,000 NA *Discussion of potential Industrial Recycled Concepts to follow Potential Industrial Recycling Concepts Being Evaluated • CCCSD Serve Power Plant in East County through abandoned pipeline • CCWD Serve Power Plant in East County from raw water canal and CCCSD Serve Local Refineries • CCCSD Serve Power Plant on District Site • CCWD Transfer Water to Other User and CCCSD Serve Local Refineries 25 28 CSO PROJECT APPROVAL PROCESS ADMINISTRATIVE DRAFT MND REVIEW BY THE SEPTEMBER 13, 2007 �I CITY OF WALNUT CREEK FEBRUARY 2009 DRAFT MND AVAILABLE FOR PUBLIC REVIEW NOVEMBER 9, 2007 END OF PUBLIC REVIEW PERIOD DECEMBER 10, 2007 CCCSD BOARD APPROVES MND, MMRP, AND DECEMBER 20, 2007 PROPOSED PROJECT JULY - AUGUST 2009 CCCSD SUBMITS CONDITIONAL USE PERMIT JANUARY 14, 2008 (CUP) APPLICATION CITY OF WALNUT CREEK SEPTEMBER. 2009 — CITY REVIEW OF CUP APPLICATION JANUARY - APRIL (130 detailed comments reed Feb 14 1resubmital 2008 with comments incorporated April 9) DECEMBER 2010 CITY STAFF DEEMS APPLICATION COMPLETE MAY 2008 CITY DESIGN REVEW COMMISSION HEARING MAY - JUNE 2008 CITY PLANNING COMMISSION HEARING JULY 2008 CUP APROVAL AUGUST 2008 PRELIMINARY CSO FACILITY DESIGN /CONSTRUCTION SCHEDULE PREPARE DETAILED DESIGN PLANS AND AUGUST 2008 - SPECIFICATIONS FOR BIDDING FEBRUARY 2009 CITY PLAN CHECK (FOR BUILDING PERMIT) AND MARCH - JUNE 2009 SITE DEVELOPMENT PERMIT BIDDING /AWARD OF CONSTRUCTION JULY - AUGUST 2009 CONTRACT CONSTRUCTION OF NEW SEPTEMBER. 2009 — ADMINISTRATION /CREW/ WAREHOUSE NOVEMBER 2010 BUILDING OCCUPANCY OF NEW BUILDING DECEMBER 2010 DEMOLITION AND LANDSCAPING OF DECEMBER 2010 - EXISTING ADMINISTRATION /CREW BUILDING MARCH 2011 29 Capital Program Impacts from Potential Loss of Ad Valorem Taxes • Loss of Ad Valorem Taxes (AVT) not known till State budget adopted (estimated September /October 2008) • Sewer Construction Fund Balance is adequate to fund program for several years if AVT is lost • Bid climate is excellent at current time and many needed projects are /will be ready for bidding in next six months • Staff recommends proceeding with planned capital program at this time • Review AVT impacts and ongoing capital program at November 2008 Capital Budget and Plan Workshop FY 2008/09 Capital Cash Flow Estimate w/o Ad Valorem Tax Capital Program Cash Flow 2008/09 Total Budgeted Revenue w/o Ad Valorem Tax $29,628,000 Total Budgeted Expenditures $38,858,000 Negative Variance - $9,230,000 Projected SCF Balance June 30, 2009 $38.6 M* *Assumes beginning SCF Balance $47.8 M (7/1/2008) 32 November 2008 will be critical decision point for a number of issues.... • Is Ad Valorem Tax lost... if so, how is Capital Program impacted? • To Expand or Contract Renovation Program? — Expand if master plan reduces capacity expenditure needs? — Expand if peer agencies are outpacing us? — Contract if AVT is lost? • To Construct or Not To Construct Mercury Removal? — Construct if funds available and air emissions are a concern? — Defer, particularly if AVT lost? • To Add Projects to Reduce Green House Gas Emissions? — Will regulations be taking shape? — Should projects be budgeted or wait and see? • To increase Treatment Plant Renovation based on Asset Mgmt Plan? Stay tuned ............. Capital Improvement Budget Summary for FY 2008/09 33 Estimated Estimated Estimated Total Program FY 2008/09 Carry -over Allocation FY 2008/09 Program from Prior FY 2008/09 Proposed Expenditures Fiscal Year Authorization Treatment Plant $12,680,000 $16,279,000 $10,660,000 $26,939,000 Collection System $22,355,000 $13,688,000 $17,339,000 $31,027,000 General Improvements $3,418,000 $783,000 $3,071,000 $3,854,000 Recycled Water $405,000 $30,000 $399,000 $429,000 Total o $38,858,000 $30,780,000 $31,469,000 $62,249,000 2008109 33 Next Steps in CIB /CIP Process • April 17, 2008 set Public Hearing for CIB /CIP • May 15, 2008 hold Public Hearing and Approve CIB /CIP • June 5, 2008 Board Adopts all Budgets, including CIB /CIP, officially Authorizing the FY 2008/09 CIB • June 5, 2008 Board Approves Closeout Position Paper for completed CIB projects • Hold Board briefing on closed out projects for any interested Board members after June 5, 2008 • August 2008, ask Board to Reauthorize FY 2008/09 CIB with actual carryover amounts (new this year) Questions? Staff is available to stay after meeting for any detailed technical question. 34 *- 0 1 r - I I 1 0 ji 0 , , , - • Public Health and the Environment I A Alk Public Health and the Environment I A Central Contra Costa Sanitary District Capital Improvement Program Executive Summary Central Contra Costa Sanitary District funds an extensive Capital Program designed to preserve, maintain and enhance the District's assets, accommodate the community's needs, and protect the environment. Capital improvements /capital projects are major construction, acquisition or renovation activities which add value to the District's fixed assets (buildings, pipelines, facilities, equipment) or significantly increase their useful life. The District's Fiscal Year 2008 -09 Capital Improvement Budget details expenditures of approximately $39 million for the planning, design and construction of capital projects. By adopting the Capital Improvement Budget, the Board of Directors authorizes staff to pursue this work. In addition to the Capital Improvement Budget for the upcoming year, the Board approves a Ten -Year Capital Improve- ment Plan that forecasts needed expenditures for ten years into the future. This plan focuses on renovation, expan- sion and regulatory requirements. Its estimated expenditures for the next ten years are $340 million (in 2008 dollars), an average of $34 million per year. The Capital Improvement Budget and Ten -Year Capital Improvement Plan also include projected revenues and cash - flow analyses to demonstrate how planned expenditures will be funded. The projections assume revenue potential and make up deficits through a combination of drawing on reserves and raising the capital component of the annual sewer service charge paid by each new connection to the sewer system. Each planned project addresses one or more of these District goals: • Protect public health and the environment • Maintain existing assets • Respond to regulatory and community concerns • Accommodate planned growth This summary describes the major projects for fiscal year 2008 -09, the major projects included in the Ten -Year Capital Improvement Plan, and the revenue streams that will support the planned expenditures. FY 2008 -09 Capital Improvement Budget The FY 2008 -09 Capital Improvement Budget shows expenditures of approximately $39 million ($38,858,000) for the planning, design and construction of capital projects categorized into four programs: • Treatment Plant • Collection System • General Improvements • Recycled Water Each of those programs is subdivided into subprograms. Most of the money will be spent on renovation or preservation of capital assets, as shown in the following table: Capital Program/ Subprogram Planned Expenditure For FY 2008 -09 Treatment Plant Program $12.7 million 33% Regulatory Compliance/Planning $ 2.2 million One -Time Renovation $ 4.9 million Recurring Renovation $ 4.8 million Expansion/Capacity Improvements $ 0.3 million Other Miscellaneous Projects $ 0.4 million Collection System Program $22.4 million 57% Renovation $ 8.3 million Regulatory Compliance/Planning Compliance/Planning $ 0.3 million Expansion/Capacity Improvements $12.5 million Pumping Stations /Force Mains $ 1.2 million General Improvements Program $ 3.4 million 9% Vehicles and Equipment $ 0.9 million Management Information Systems $ 0.8 million CSO Facility Improvements $ 0.7 million All Other $ 1.0 million Recycled Water Program $ 0.4 million 1 Total MMMOR Wo _ ind In FY 2008 -09, 75 percent of the budgeted $39 million will be for the following 18 large projects. Treatment Plant Plant Site Improvements: As in any industrial facility, heavy use, time and weather deteriorate pavement. This project will restore and preserve areas of paving throughout the plant site, add new paving as appropriate, correct drainage deficiencies, replace deteriorated fences and gates, and enhance visual appearance through landscaping. In addition, handicap accessibility will be improved, and a new conduit for fiber optic communications will be installed. ($1,500,000 FY 08 -09; $2,500,000 estimated total project cost) Among other things, the Plant Site Improvements Project will remove the old railroad tracks and repair paving throughout the site. Aeration Air Renovations: The existing aeration tanks were installed in the mid 1970s. Since then, numerous cracks and air leaks have developed. This air loss, if allowed to continue, could undermine the structural integrity of the aeration tanks and represents a significant energy cost. The cracks will be repaired using a technology (pressure grouting) that both fills the voids beneath the tanks and fills the cracks. A future phase may require replacement of the air delivery system of the secondary aeration system. ($1,000,000 FY 08 -09; $2,100,000 estimated total project cost) Piping Renovations and Replacement, Phase 4: Since the inception of the treatment plant facilities in 1948, numerous piping systems have been installed that carry processed waste- water, sludge, steam, air, and other constituents. Over time, these pipes fail due to corrosion and erosion. This multi- phase program replaces piping that has reached the end of its useful life. Phase 4 will focus on ash piping, furnace gas piping, diesel piping, return activated sludge piping, and chemical piping. ($1,800,000 FY 08 -09; $1,800,000 estimated total project cost) Primary Structures Demolition: This project will demolish the abandoned primary sedimentation tanks constructed in 1948 and 1957 and backfill the area. It will also demolish the unused lime storage silos, building, and associated piping systems. Pipes at risk of failure due to corrosion and erosion will be replaced Additional obsolete facilities may be included based on further evaluations. This work will increase safety around the abandoned tanks and allow for future expansion of related adjacent facilities. ($1,100,000 FY 08 -09; $1,400,000 estimated total project cost) The abandoned primary sedimentation tanks will be demolished. 4 Treatment Plant Asset Management Plan: Replacement value of the current treatment plant facilities is conservatively estimated at $600 million. This includes all mechanical and electrical equipment, piping systems, concrete structures and buildings, access roads, etc. All of these components have a finite useful life. The purpose of the Asset Management Plan is to develop a systematic approach to identifying, prioritizing and funding replacement projects. The first step documents completed projects and institutional knowledge within the various processes of the treatment plant, and will be continued. The second step, to be initiated in FY 08/09, will assess the conditions of treatment plant processes, systems, equipment, and structures. ($1,000,000 FY 08 -09; $1,200,000 estimated total project cost) Standby Power Facility Improve- ments: This project will replace the standby power units with generators that meet new air quality regulations, increase runtime to meet operational requirements, and improve overall reliability. The standby power generator building will also be brought into compliance with the latest Uniform Building Code. ($1,200,000 FY 08 -09; $6,800,000 estimated total project cost) Standby power units will be replaced Solids Handling Improvements: A major recommendation of the 2005 Solids Handling Facilities Plan was to upgrade the equipment for handling biosolids (sludge) during emergencies (furnace failure) or non - routine operations (e.g., spikes in solids productions) that exceed the furnace capacity. This project will design and construct a sludge truck loading facility with a sludge cake hopper and odor control facilities to store sludge generated during overnight and weekend hours when hauling to landfills is not possible. Contracts with local landfills will be executed for disposal of biosolids on an intermittent basis. ($1,054,000 FY 08- 09; $6,500,000 total estimated project cost) Scrubber Water Mercury/Metals Removal: This project will modify the multiple - hearth furnace air pollution control train to decrease emissions of mercury, other heavy metals, and cyanide. A pilot study is being performed to determine the effectiveness of various air pollution control methods. ($1,000,000 FY 08 -09; $20,300,000 estimated total project cost) Collection System TV Inspection Program: This is a large - scale multi -year effort to inspect the entire collection system using closed - circuit TV cameras, digital imaging and database software. A publicly bid inspection contract using digital imaging and database software is awarded each year. The new contractor's data is being integrated with existing inspection and sewer information databases, which is then used to identify and prioritize sewer replacement and renovation needs. Currently sewers in Danville /Diablo are being televised with sewers in Alamo and Moraga to follow. ($900,000 FY 08- 09; $5,600,000 estimated total project cost) Walnut Creek Sewer Renovation Project, Phase 6: This ongoing project (which may include up to 15 phases) will replace or renovate deteriorating or deficient sewers in Walnut Creek. Phase 6 will renovate approximately 10,000 feet of deficient sewers at 10 sites using open cut and various trenchless technologies. Construction of this phase is expected to start in June 2008 and be finished by February 2009. ($1,800,000 FY 08 -09; $2,200,000 estimate total project cost) Lafayette Sewer Renovation Project, Phase 5: This ongoing project will replace or renovate deteriorating or deficient sewers in Lafayette. Phase 5 will renovate approximately 11,000 feet of sewers at 10 sites using open cut and various trenchless technologies. Construction of this phase is expected to start in June 2008 and finish by February 2009. ($1,500,000 FY 08 -09; $1,700,000 estimated total project cost) Open -cut digging (as shown above) and trenchless technologies will be used for construction projects in Walnut Creek and Lafayette. Martinez Sewer Renovation Project, Phase 2: This ongoing project will install, replace or renovate deteriorating or deficient sewers in Martinez. Phase 2 will renovate approximately 5,000 feet of sewers using open cut and various trenchless technologies. Construction of this phase is expected to start in June 2008 and finish by January 2009. ($1,200,000 FY 08-09; $1,400,000 estimated total project cost) South Orinda Sewer Renovation Project, Phase 3: This ongoing project will renovate deteriorating sewers in South Orinda. Phase 3 will renovate approximately 10,000 feet of sewers at 10 sites south of Highway 24 using trenchless technologies. Construction of this phase is expected to start in July 2008 and finish by February 2009. ($1,200,000 FY 08-09; $1,400,000 estimated total project cost) A -Line Relief Interceptor, Phase 2A: This project will increase capacity and reduce the potential for wet - weather overflows in the A -Line Relief Interceptor. It entails building 3,000 feet of 96 -inch pipe from Buchanan Fields Golf Course to the intersection of Meridian Park Boulevard and Galaxy Way. An additional 1,300 feet of 48 -inch through 72 -inch pipe will be installed along Galaxy Way, then across Walnut Creek to the City of Concord Pumping Station. The project will also eliminate the need for the pumping station. To minimize construction impacts, 4,000 feet of pipe will be installed by tunneling. Construction is expected to begin in March 2008 and finish in January 2009. ($8,125,000 FY 08-09; $20,000,000 estimated total project cost) Camino Pablo Trunk Sewer and Flush Kleen Force Main Improvements: This project will replace gravity sewers and two pumping station force mains within Camino Pablo and the Camino Pablo frontage road, from Miner Road north to the Flush Kleen pumping station, using open -cut and pipebursting methods. Construction and traffic control details will be closely coordinated with the City of Orinda. Construction is expected to start in June 2008 and finish by December 2008. ($1,850,000 FY 08 -09; $2,200,000 estimated total project cost) Approximately 1,500 feet of trunk sewer and two force mains in Camino Pablo will be replaced Alhambra Valley Assessment District Program: This project will assist Alhambra Valley property owners currently using septic tanks by financing the cost of extending and connecting to the public sewer. It will also help to avoid future use of septic systems and sewage pumping systems in Alhambra Valley; and facilitate direct and indirect connections to the Alhambra Valley trunk sewer so the District's expenditures associated with the trunk sewer extension can be reimbursed more quickly. ($1,000,000 FY 08 -09; $2,000,000 estimated total project cost) 2008 -09 Development Sewerage: This project will provide capitalization of District force account labor and other expenses for planning, designing, and constructing developer - installed and contributed main sewer facilities. ($1,180,000 estimated total project cost) General Improvements Collection System Operations Department Facility Improvements: This project will design and construct a new administration, crew and warehouse building, and provide new paving and landscaping at the Collection System Operations facility in Walnut Creek. The District will obtain permits from the City of Walnut Creek and address any City requirements prior to construction. ($700,000 FY 08-09; $14,100,000 estimated total project cost) This illustration shows the south elevation of the new CSO facility that will be built at the District's Walnut Creek property. Ten -Year Capital Improvement Plan The District develops a Ten -Year Capital Improvement Plan each year which provides the information needed to formulate long -range policy regarding: • Identifying, prioritizing, and scheduling capital projects for the ten -year period. • Providing financial resources for completing those capital projects. The plan covers FY 2008 -09 through FY 2017 -18 and includes total expenditures of approximately $340 million (in 2008 dollars), or an average of $34 million per year, as described in the following table: Capital Pt9grarn Expenditure Category Dollars Percent Renovation One time and recurring) $180 million 53% Expansion (Capacity increases /sewers for new customers $110 million 32% Regulation Driven $ 38 million 11% Miscellaneous $ 16 million 4% Total 10 -Year Capital Program Expenditures $340 million 100% The plan is divided into the same four programs as the budget. While a large portion of the plan is devoted to ongoing renovation, several projects address capacity and regulatory issues. The following table lists total ten -year expenditures by program and subprogram. A brief description of the major projects /programs not described under the FY 2008 -09 Capital Improvement Budget section follows the table. C►t ram/Subprogram Planned 10 Year Expenditure Treatment Plant Program $121.6 million (36%) Regulatory Compliance $ 31.9 million One -Time Renovation $ 24.3 million Recurring Renovation $ 36.2 million Expansion $ 28.4 million Other Miscellaneous Projects $ 0.9 million Collection System Program $1708.2 million (53%) Renovation $ 91.3 million Regulatory Compliance/Planning Compliance/Planning $ 1.9 million Expansion/Capacity Improvements $ 72.8 million Pumping Stations /Force Mains $ 12.2 million General Improvements Program $ 35.2 million 10% Vehicles and Equipment $ 9.9 million Management Information Systems $ 5.8 million CSO Facility Improvements $13.1 million All Other $ 6.4 million Recycled Water Program $ 4.3 million 1 Major Treatment Plant Projects /Programs Electric Blower Renovations: The electric blower serves as a backup to the plant's two steam powered turbine blowers. Its capacity is adequate during winter months, but not during summer months, when the plant's demand for air increases. This project will design and install a new, higher capacity blower. (Construction FY 12 -14; $3,825,000 estimated total project cost) Centrifuge and Cake Pumps Upgrades: This project will upgrade the treatment plant's centrifuges and cake pumps, which will have been in service for more than 20 years by 2010. The design life of rotating equipment is generally around 20 years. While routine rotation of the operational and stand -by centrifuge helps increase the operating lifespan, as the equipment continues to age the operation and maintenance requirements become extensive. (Construction FY 12 -13; $4,150,000 estimated total project cost) Primary Expansion: This project will add two primary sedimentation tanks to increase the plant's wet - weather capacity to roughly 270 million gallons per day (62.5 mgd dry weather capacity with one tank out of service). The new tanks will provide additional operational flexibility, reduce the amount of raw wastewater bypassed to holding basins during heavy rain storms, and decrease the potential for associated odor issues. This project will also upgrade the existing primary sedimentation tanks, pre - aeration tanks and grit - handling system. (Construction FY 16 -18; $26,210,000 estimated total project cost) Recurring Renovation: Replacement value of the current treatment plant facilities is conservatively estimated at $600 million. This includes all mechanical and electrical equipment, piping systems, concrete structures and buildings as well as access roads, etc. All of these components have a finite useful life. In order to maintain the facilities in top operational condition, the Ten -Year Capital Improvement Plan sets aside funds for recurring renovation (Ten -year plan; $36,154,000) 10 Recurring renovation work is vital to maintaining the plant's assets. Major Collection System Projects /Programs Sewer Renovation: In 2002, the District initiated a long -term program to televise all 1,447 miles of its gravity sewers. To date the program has televised approxi- mately 578 miles of main sewers. The results indicate approximately 4.6 percent, or almost 29 miles of pipes, are in poor condition. Extrapolating the data to the entire collection system shows 72 miles of sewer mains in poor condition, with a replacement cost of $123.5 million. The current ten -year plan targets approximately 44 miles of pipe for renovation /replacement. (Ten -year plan; $91,284,000 estimated total project cost — includes TV program, large diameter pipe renovation and cathodic protection) Sewer Capacity: Periodically the District updates the Collection System Master Plan to identify capacity deficiencies, which are prioritized and scheduled for replacement in the Capital Plan. Presently, the Collection System Master Plan is being updated to reflect recently approved land use and new flow monitoring data. The current figures are based on the 2000 Master Plan. The Capital Plan will be updated to reflect the new results when available. (Ten -year plan; $61,000,000 estimated total project cost) Ongoing TV inspection of the collection system reveals problems like this broken pipe. 11 Potential Future Projects Not Included in Ten -Year Capital Improvement Plan The Ten -Year Capital Improvement Plan budgets $38 million (11 percent of the planned ten -year expenditures) for regulatory- driven projects. However, this does not tell the entire story. There are a number of potential projects that may be required to meet regulations that are under consideration but have not yet been enacted into law. The following table shows these potential projects and the estimated probability (low, medium or high) of their being necessary. If these expenditures become necessary, additional revenues not currently identified in the ten -year plan will need to be generated, or other needed projects will need to be deferred. Description Time Estimated Total "� Estimated Frame cost Probability Treatment Plant: Hydraulic/ Process Capacity Filter Plant Expansion - Provide facilities to filter secondary effluent during dry and wet $135 -150 weather to meet new regulations such as metals 3 -15 yrs million Medium reduction or provide additional effluent for water recycling. Nutrient Removal — Provide facility for nutrient 10 -20 removal (nitrogen and phosphorus). yrs $50 million Low Nitrification — Provide facilities for nitrification (convert ammonia to nitrate). This project is 5-10 yrs $50 million Medium partially funded in the latter years of the Plan. Treatment Plant: Solids Handling Sludge Treatment Replacement - Implement anaerobic digestion or thermal drying if future 3 -15 yrs $30 -50 million Low regulations prohibit incineration. Incinerator Emissions - The EPA is currently considering stricter regulation of air emission 3 -10 yrs $30 million Medium from sewage sludge incinerators. Treatment Plant: Other Projects Air Emissions Projects — Provide processes to control air toxics and odors and construct tank 5 -10 yrs $25 -30 million Low covers (primary and /or secondary processes to capture air emissions ). Greenhouse Gas Reduction — Construct alternative energy projects to reduce or provide 5 yrs $25 -50 million High offsetting credits for greenhouse gas emissions. Collection System: Regulatory Response Sewer System Management Plan Projects — The SF Bay Regional Water Quality Control Board and State Water Resources Control Board 1 -5 yrs $5 - $10 million Medium require a Sewer Maintenance Management Plan. per year The requirements may necessitate an escalated capital program to televise and renovate sewers. 12 Capital Revenue /Cash Flow /Sewer Construction Fund Balance The Capital Program is funded by a number of different fees and charges as described below. Figures 1 & 2 depict the relative magnitude of these revenue sources from the Capital Improvement Budget and Ten -Year Capital Improvement Plan perspectives. Facility Capacity Fees: A facility capacity fee is paid by each new connector to the District's collection system. This fee is recalculated each year and represents the cost of buying into the existing assets of the District. The revenue from these fees is highly dependent on the housing market and the rate of new connections. Pumped Zone Fees: For new connections located in an area where pumping is necessary, an additional facility capacity fee is charged to buy into the existing pumping station assets of the District. The revenue from the pumped zone fees is also highly dependent on the housing market and the rate of new connections. Property Taxes: Historically, some enterprise districts have levied a property tax rate to cover part of their costs. In 1978, when Proposition 13 reduced the taxation rate on property, the State Legislature urged enterprise special districts to shift to user fee financing. In FY 1992 -93, the State of California began diverting portions of the property tax revenue. The District still receives a significant amount of property taxes which are allocated entirely to debt service and the Capital Program. If those taxes were to be permanently diverted, a significant increase in other forms of revenue, particularly the sewer service charge, would be necessary. Sewer Service Charges: The sewer service charge is an annual charge placed on the property tax rolls which funds 13 operation and maintenance costs as well as a portion of the Capital Program. Each year the capital revenue from all other sources is estimated, and the additional revenue needed to fund the planned expenditures is generated by increasing the capital component of the sewer service charge. Reimbursements from Others: The District receives reimbursements from others for capital expenditures which benefit others. For example, the City of Concord is served by a contract which requires them to pay a flow - proportional share of capital projects which benefit Concord (such as projects to improve wastewater treatment facilities and large interceptors). The District also has formed Assessment Districts to promote the installation of sewers in un- sewered areas and has set up loaned money from the Sewer Construction Fund, along with reimbursement accounts to return these revenues, with interest, to that fund. Interest: Interest is earned on the balance of the Sewer Construction Fund, the money held in reserve to fund future capital projects. The interest earned is returned to the fund. Bond Proceeds: While the District generally follows a pay -as- you -go philosophy, sewer service charge rate increases can be mitigated when large, one- time projects are required by utilizing bond funding to spread the payments over time. Figure 1: FY 08 -09 Capital Budget Revenue ($1,000) Facilities Sewer Service Capacity & Pump Charge Zone Fees $8,510 (22.2 %) $7,375 (19.3%) All Other Interest ' $979 (2.6 %) $1,500 (3.9 %) Taxes Concord* $8,636 (22.6)% $11,264 (29.4 %) *Concord revenue unusually high due to reimbursements for Concord project executed by the District. Figure 2: Ten -Year Capital Plan Revenue ($1,000) Bond Proceeds $27,500 (7.3 %) Facilities Capacity & Pump Zone Fees $63,900 (17 %) Sewer Service Charge ' $85,000 (22.6 %) Interest ' $19,600 (5.2 %) Taxes $120,700 (32)% 14 All Other $15,445 (4.1%) Concord $44,604 (11.9 %) As part of the Ten -Year Capital Improve- ment Plan, estimates of expenditures and revenues are made and a cash flow projection developed to show the interrelationship of revenues and the Sewer Construction Fund balance. Each year a policy decision is made by the Board of Directors, based on staff analysis and recommendations, regarding the rate at -which the capital component of the sewer service charge should be set to fund the planned Capital Program while maintaining an adequate Sewer Construction Fund balance. The Sewer Construction Fund balance is needed for future capital projects. It also acts as the bank to meet the District's cash flow needs. To provide sufficient funds for cash flow needs, a balance of approximately $30 million is recommended for the Sewer Construction Fund. The following table shows cash flow projections for the next ten years, including planned expenditures, revenues needed to fund the expenditures, and the utilization of the Sewer Construction Fund. This table includes an inflation factor of 3 percent per year and therefore the expenditure numbers will be slightly higher than those included in the Ten -Year Capital Improvement Plan section of this document. Sewer Construction Fund Cash Flow Projection ($1,000) FY Revenue Ex enditures Net Increase Fund Balance' Treatment Collection General Recycled Subtotal 08 $38,264 Plant $12,680 S stem $22,355 Imp. $3,418 Water $405 $38,858 Decrease) $594 (Projected) $47,173 09 $33,299 $14,042 $17,884 $10,028 $417 $42,371 $9,072 $38,101 10 $36,812 $23,730 $18,410 $7,695 $430 $50,264 $13,452 $24,649 11 $32,987 $8,595 $18,906 $2,430 $443 $30,375 $2,612 $27,261 12 $33,600 $7,710 $19,471 $2,879 $445 $30,505 $3,095 $30,356 13 $34,413 $7,608 $20,055 $2,312 $458 $30,433 $3,980 $34,336 14 $35,825 $7,878 $20,657 $2,350 $472 $31,357 $4,468 $38,804 15 $35,812 $8,624 $21,277 $2,420 $537 $32,859 $2,953 $41,758 16 $37,871 $20,914 $21,915 $2,340 $547 $45,716 $7,845 $33,912 17 $57,637 $20,092 $22,573 $2,871 $770 $54,305 $3,332 $37,244 ' Ending fund balance on June 30, 2008 is estimated at $47,767. 2 $27,500 from bond proceeds. As shown, the Sewer Construction Fund balance acts in concert with the various revenue sources to fund the Ten -Year Capital Improvement Plan. This cash flow projection assumes the sewer 15 service charge capital component is increased each year as necessary to fund the planned expenditures and maintain the Sewer Construction Fund balance at appropriate levels. Questions? For additional information about the District's Capital Improvement Budget and Ten -Year Plan, please contact Director of Engineering Ann Farrell at (925) 229 -7302 or Capital Projects Division Manager Tad Pilecki at (925) 229 -7273. ' Central Contra Costa Sanitary District 16 i 0 too= >4 o+ 0 0 C U N H C 0 E a 0 m d 0 C O L a m V 0 m O O N 00 0 O N SEEN 0 .. O E M 4W 4W c c c 2 O ■ EEN Co ■ CO V V O O 00 IA ' O V O O N .� p N i 4W a _ O a� W i C � o 4W V a LL .. O E M c c c 2 O ■ EEN ■ _ ■ V V V c/i c� cn 4w 4) as 1 N i L L V Go O 01 O m C V fl. ce L V CL . 'Q L a z 0 a CL . 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