HomeMy WebLinkAbout11/12/2009 AGENDA BACKUPCentral Contra Costa Sanitary District
November 6. 2009
TO: BOARD OF DIRECTORS
VIA: JAMES M. KELLY, GENERAL MANAGERnj ` /
FROM: ANN E. FARRELL, DIRECTOR OF ENGINEERING
TAD J. PILECKI, CAPITAL PROJECTS DIVISION MANAGERO
SUBJECT: FY 2010 -11 INITIAL CAPITAL PLANNING WORKSHOP
The proposed 2010 Ten Year Capital Improvement Plan is a moderate plan for $313 million
in improvements over the next ten years. It addresses needed reliability, capacity and
building improvement projects, including renovating almost 100% of the high priority
defective sewers identified to date, and provides $14 million to address needed seismic
improvements. The plan is partially funded by the bonds recently issued for net proceeds of
$30 million as well as an expected bond issuance for $32 million in 2016 -17 to fund potential
regulatory driven projects. The remainder of the funding is from traditional sources of capital
revenue, including property taxes, capacity fees and contributions from the City of Concord.
The Ten Year Plan also relies on moderate annual sewer service charge increases in the
range of $15 -17 per year. The Plan does not include funding for potential increased
regulation requiring ammonia and /or nutrient removal, increased treatment if incinerator air
emissions, alternative energy projects to meet new green house gas regulations, or
construction of large recycled water projects. These expenses are difficult to estimate at this
time and may need to be funded by additional borrowing to the "place holder" of $32 million
in bonds in year 2016 -17. The preliminary budget and plan are described below and will be
further discussed with the Board at the November 12, 2009 Capital Budget Workshop.
BACKGROUND
In preparation for the Capital Planning Workshop on November 12, 2009, staff has
summarized the material we will be covering in this memo. Much of this information, with
additional detail, was reviewed with the Chair of the Board Capital Projects Committee on
November 4, 2009. We routinely hold a Capital Planning Workshop in the fall to set an
estimated dollar amount for our capital program for the following ten years. We have found
this approach to be very helpful in narrowing the scenarios and considerations for the
January Financial Planning Workshop in which the Board will be asked to consider rate -
setting scenarios for future years. By fixing the level of capital expenditures at approximately
35 percent of District overall spending, the possible budgeting scenarios become more
limited and understandable. If the scenarios in January lead to some concerns about capital
revenue and expenditures, adjustments can be made at that time and incorporated into the
draft Capital Improvement Budget and Plan, which is brought to the Board in a second FY
2010 -11 Capital Planning Workshop in April.
As our District assets age, renovation and replacement is necessary to keep them
functioning properly. For budgeting purposes, the amount of annual investment in renovation
and replacement must be estimated. In January 2000, without a formal condition
assessment and asset management plan, staff developed and recommended a baseline for
investment in our capital facilities which assumed replacement of all assets every one
hundred years. This equates to a reinvestment of 1 % of the estimated replacement value.
At that time the total replacement value of our facilities was estimated at $2.1 billion and
therefore the annual investment was set at $21 million. This target amount has been
increased for inflation at 3% per year and has reached approximately $29 million for fiscal
year 2010 -11. Since January 2000, staff has invested significant resources in developing
more sophisticated asset management programs for the collection system and treatment
plant to provide the data for a more rigorous assessment of the appropriate baseline
budgetary figure for asset renovation and replacement.
Expenditures for significant projects to increase capacity or address changing regulations
should be viewed as in addition to the budget for renovation and replacement. For several
years in the recent past, budgeted expenditures for needed capacity and regulatory projects
were increased to take advantage of increased revenues from a number of sources, principle
among them being capacity fees for new connections. However, more recently, revenues
have significantly decreased and the size of the capital program has been reduced. In
addition, staff recommended and the Board concurred that bonds netting $30 million should
be sold to enable completion of some needed reliability, capacity and building improvement
projects that were already underway or in the planning stages.
HISTORICAL PERSPECTIVE
A series of two tables and two figures detailing expenditures and revenues for the last eleven
years are attached in the appendix and summarized as follows. Since fiscal year 1999 -00,
District capital spending has ranged from a low of $19.8 million in 2002 -03 to a high of $41.5
million for fiscal year 2008 -09. This wide variation has been due to the conscious effort to
defer needed projects in fiscal years 2001 -02 through 2003 -04, when the permanent loss of
ad valorem tax was feared, and then the escalation of projects when the revenue picture
improved. Over the eleven year period the total expenditures were $313.2 million and the
revenues were $282 million. In 2002 bonds were issued for approximately $16.5 million to
supplement capital revenue and fund construction of some capacity improvements needed to
serve the Dougherty Valley of San Ramon. These expenses were to be repaid as
connections were made in the Valley. The Capital Program was developed based on these
anticipated revenues and other sources. However, as development slowed and the economy
deteriorated, anticipated revenues did not materialize. Because a number of needed projects
were under design and ready to be constructed and because the bidding climate is very
competitive now such that projects can be built for much less than the engineer's estimate,
staff recommended again in October of 2009 that bonds netting $30 million be sold to
supplement capital revenues. In addition to the sale of bonds, the one capital revenue
source completely controlled by the District is the capital component of the sewer service
charge. The capital component is adjusted each year, as needed, to either match planned
expenditures, draw down the Sewer Construction Fund Balance or place additional revenue
in the fund, depending on the goals and strategies of the Capital Budget and Plan in any
given year and the need for the Sewer Construction Fund Balance to fund the cash flow
needs of the District.
Page 2
PROJECTED FISCAL YEAR 2009 -10 EXPENDITURES /REVENUES
For the current fiscal year 2009 -10, expenditures are projected to significantly exceed
revenue. Revenues have continued to drop, and are projected to be $18 million, a $7.2
million shortfall. Expenditures are based on funding some needed projects that had been
planned before the magnitude of the revenue shortfall was known and are projected to be
$32.4 million, a $7.7 million reduction over budgeted. Even though expenditures are
projected to be significantly under budget, this still represents a $14.4 million draw down in
the sewer construction fund balance, bringing the balance to $30.6 million, very close to the
minimum recommended prudent reserve needed for cash flow. Given the competitive bid
climate and the need for certain reliability, capacity and building improvement projects that
are already in the planning /design phase, staff recommended moving forward with the
projects. This resulted in the request by staff for the Board to consider issuing $30 million net
in bonds. The Board approved the bond issuance on October 15, 2009 in addition to a
refinancing of current debt to reduce the interest rates and total cost of debt repayment. The
following table shows that the bond sale brings the projected sewer fund balance to $60.6
million.
2009 -10 Capital
Budgeted *
Budgeted*
Projected
Program
(Adjusted for no
SSC increase
Total expenditures
$40.1 million
$40.1 million
$32.4 million
Total revenue
$25.2 million
$23.6 million
$18 million
Variance
-$14.9 million
-$16.5 million
-$14.4 million
Bond Proceeds October
-
-
$30 million
2009
SCF balance 6/30/10
$32.8 million
$31.2 million
$30.6 million **
w/o Bonds
SCF Balance 6/30/10 w/
-
-
$60.6
Bonds
*Not accounting for potential bid savings.
** Includes cash flow adjustment to beginning 7/1/09 balance from $47.7 million to $45
million to convert accrued year -end expenses and receivables to a cash basis for the cash
flow model. These accruals record revenue and expenses in the prior fiscal year, but cash
has not been received or paid until the following fiscal year.
As discussed in previous years, the Sewer Construction Fund balance acts as the bank to
fund all District operations. This is necessary because SSC revenue and property tax
revenue are collected by the County on the tax rolls twice per year. For the intervening
months, the District draws on these reserves to fund its operation and maintenance functions
as well as the capital program. The cash flow needs for this self- funding dictate that the
Sewer Construction Fund balance be maintained between $30 -$35 million.
Page 3
RECOMMENDED 2010 CAPITAL IMPROVEMENT PLAN
FY 2010 -11 TO FY 2019 -20
Within the preliminary $313 million ten year plan there are adequate funds budgeted for the
sewer renovation program to complete renovation of essentially all of the high priority sewer
projects that have been identified. There is also over $14 million budgeted to make the
needed seismic improvements to many of our District buildings that have been identified by
our ongoing seismic study. There are funds to begin constructing the highest priority
collection system capacity projects identified in the recently completed collection system
master plan. Finally, there is an allowance of $32 million in bonds in year 2016 -17 to fund
any currently undefined regulatory projects. The $313 million plan has been reduced from
that proposed in recent years and more closely matches historical levels of spending. For
the seven years prior to 2006 -07, spending had been maintained at a level sufficient to
replace needed facilities on a 100 -year life cycle, or approximately 1 % of the estimated
replacement value of all District facilities each year. Beginning in fiscal year 2006 -07 the
District embarked upon an aggressive capital program to complete needed one time
reliability and capacity projects and make use of a significant accumulated reserve, which
resulted from a robust economy and the associated revenue from new connections and
increased property tax revenues.
The ten year 2009 Capital Improvement Plan (CIP) included continued significant spending
through the year 2011 -2012 to complete these needed projects, then tapering down to the
1% of replacement value baseline level of spending (estimated at $29 million per year in
2009) to cover renovation and replacement over a 100 year period.
While the projects included in the higher level of spending were essential projects, the
current housing crisis and other unfavorable economic factors began to reduce revenues
before the projects could be completed. Thus, staff developed a memorandum dated
October 24, 2008, which was discussed with the Capital Projects Committee on October 28,
2008. This memo estimated reductions in capital revenue and delineated three potential
spending scenarios for the fiscal year 2009 -10 CIB; Aggressive, Moderate and Reduced
spending. The capital revenue figure adjustments included a reduction in the rate of increase
of property tax revenues, the number of new connections per year, and the interest rate
assumption on the Sewer Construction Fund balance. The Moderate spending scenario was
adopted for presentation at the November 13, 2008 Capital Planning Workshop and inclusion
in the January 2009 Financial Plan. The Moderate expenditure scenario continued most
essential projects but shifted some to future years and had a total 10 year expenditure of
$331 million.
When the sewer service charge was not increased, revenues continued to decline, it became
apparent that further reductions in expenditures should be considered along with added
sources of revenue in order to maintain the Sewer Construction Fund Balance at acceptable
levels. Staff further reduced planned spending to $313 million and proposed significant rate
increases or more moderate increases and a $30 million net bond issuance. On October 15,
2009 the Board formally approved the bond issuance and preliminarily accepted the concept
of a $313 million ten year capital plan pending discussion at future Capital Planning
Workshops.
Page 4
RECOMMENDED FISCAL YEAR 2010 -11 CAPITAL IMPROVEMENT BUDGET
The recommended fiscal year 2010 -11 Capital Improvement Budget has been reduced to
$29.6 million from the $38.6 million included in the 2009 -10 Capital Improvement Plan. Some
of the reduction is from an improved bidding climate and some is from deferred projects. The
goal was to keep spending at a level that would require only a moderate rate increase, in the
neighborhood of $15 -17 per year, for the next several years while maintaining the investment
in renovation of our infrastructure and completing some significant one time projects, such as
Standby Power, Sludge Handling and Wet Weather Bypass Improvements. The following
table breaks down the expenditures by program.
FY 2010 -11 Capital Improvement Budget
Total
Treatment Plant
$7.5 million
Collection System
$10.5 million
General Improvements
$11.0 million
Recycled Water
$.6 million
Total
$29.6 million
Staff will be working to develop the detailed budget document using the above preliminary
figures as modified by the November 2009 and January 2010 Board Workshops. Many of
the projects have already been defined. Others will evolve and emerge as we prepare the
budget document over the next six months in anticipation of the second Board Capital
Workshop in April 2010, when the detailed draft Capital Improvement Budget is reviewed
with the Board.
A review of the preliminary 2010 -11 Capital Improvement Budget for major projects and
areas of emphasis follows.
Treatment Plant Program
Preliminary estimates of expenditures for the fiscal year 2010 -11 Treatment Plant Program
can be grouped into two major categories: renovation and reliability. The major projects are
as follows:
Category
Project
Annual Ex ense
Renovation
Piping Renovation Phase 5
$1,300,000
Asset Management
$500,000
Reliability
Wet Weather Bypass Improvements
$2,700,000
Standby Power Improvements
$1,000,000
Treatment Plant Seismic Improvements
$11.7 million over 10 ears
$500,000
All Other
$1,500000
Total
$7,500,000
Page 5
Collection System Program
The major 2010 -11 projects planned for the proposed $10,500,000 collection system
program can be grouped into four categories: renovations to existing sewers, pumping
stations, developer services and capacity /renovation driven projects.
Estimated expenditures are shown as follows:
Category
Project
Annual expense
Renovation program
Hall Drive, Diablo Ph1, Martinez
Ph3 and others
$7,300,000
Pumping Stations
Small Stations
$400,000
Developer services
Developer Services
$1,200,000
Capacity /Renovation
Highest Priority project from CSMP
$1,300,000
All others
$300,000
Total
$10,500,000
General Improvements Program
General Improvements in fiscal year 2010 -11 are proposed at $11,000,000 and will include
the traditional equipment budget, information technology budget and items associated with
miscellaneous District facilities. The CSO Administration Crew and Warehouse Building is
budgeted at $6.5 million for 2010 -11. Also budgeted is $2.4 million for seismic retrofit of
District buildings, primarily the Headquarters Office Building.
Recycled Water Program
Staff recommends limiting Recycled Water Program spending to that needed for planning
only and continued implementation of cost effective Pleasant Hill Zone 1 connections, as an
appropriate approach for this year's financial planning cycle (estimated at $550,000 per
year). This planning will include funds for legal and lobbying efforts to pursue Title 16
funding for the Concord landscape irrigation project as well as pursue partners and support
for a large -scale recycled water project to serve the Martinez refineries. Should these efforts
be successful, a source of additional revenue to fund these projects would be needed.
UNBUDGETED POTENTIAL REGULATORY DRIVEN PROJECTS
The preliminary 2010 -11 Capital Improvement Budget and Plan do not include funds for a
number of potential regulatory driven projects. Some of these projects will be discussed with
the Board at the November 12, 2009 Workshop. There is increasing public and Federal level
pressure to require removal of ammonia and possibly nutrients by all publicly owned
treatment plants. Currently the District does not remove ammonia or nutrients. District staff
has recently completed a study that indicates that the capital costs of nitrification to remove
ammonia would be $65 million and the capital cost for full nutrient removal would be $130
million. These costs do not include any additional costs necessary to remediate the
contaminated soils in the area where the new tanks would be located or to remove cyanide
from the furnace scrubber water return to ensure that the nitrifying bacteria are not inhibited
Page 6
by cyanide. Therefore, the capital costs could be significantly higher. To the capital costs
must be added the significant increase in operating cost that would result. There is also
public and Federal pressure to increase the regulation of sewage sludge incinerators which
could result in significant unbudgeted upgrades to the incinerator air emissions treatment.
District staff is also closely following the development of the green house gas regulations and
evaluating their potential impact on District facilities. Staff is currently procuring the services
of a consultant with the necessary expertise to assist us in developing a green house gas
reduction plan. In summary, there are many millions of potential regulatory driven projects
that are currently unbudgeted, with the exception of a "place holder" $32 million bond
issuance in the year 2016 -17. Given the regulatory uncertainty, it is not recommended that
these projects be included in the budget. However, it is important that the Board be aware
that significant bond funding or rate increases or a combination would be necessary should
any of these regulatory changes take place.
SUMMARY
In summary, the proposed 2010 Ten Year Capital Improvement Plan is a moderate plan for
$313 million in improvements over the next ten years. It addresses needed reliability,
capacity and building improvement projects, including renovating almost 100% of the high
priority defective sewers identified to date, and provides $14 million to address needed
seismic improvements. The plan is partially funded by the bonds recently issued for net
proceeds of $30 million as well as an expected bond issuance for $32 million in 2016 -17 to
fund potential regulatory driven projects. The remainder of the funding is from traditional
sources of capital revenue, including property taxes, capacity fees and contributions from the
City of Concord. The Ten Year Plan also relies on moderate annual sewer service charge
increases in the range of $15 -17 per year. The Plan includes only $32 million in funding for
potential increased regulation requiring ammonia and /or nutrient removal, increased
treatment in incinerator air emissions, alternative energy projects to meet new green house
gas regulations, or construction of large recycled water projects. Additional funding may be
necessary, depending on the magnitude of these changes. The preliminary budget and plan
will be further discussed with the Board at the November 12, 2009 Capital Budget Workshop.
Page 7
APPENDIX
Total Capital Expenditures
50.0
45.0
40.0
35.0
!° 30.0
0
0
c 25.0
0
20.0
15.0
10.0
5.0
0.0
99100 00101 01102 02103 03104 04105 05106 06107 07108 08109 09110. 10111
Fiscal Year
Capital Expenditures
(Nominal millions of dollars)
Prelim.
Projected
Budget
99100
00101
01102
02103
03104
04105
05106
06107
07108
08109
09110
10111
Treatment Plant
9.8
11.0
4.8
4.4
5.5
5.2
7.3
9.2
9.7
9.3
12.1
7.5
Collection System
6.6
14.4
13.6
16.4
12.4
19.5
18.6
24.3
20.5
28.3
11.3
10.5
Gen'Ilmprovements
3.9
1.5
1.7
1.3
1.5
1.6
2.1
6.0
2.9
3.3
8.5
11.0
Recycled Water
0.3
1.3
0.3
0.2
0.3
0.2
-0.3
0.2
0.2
0.6
0.6
0.6
TOTAL
21.3
28.0
20.5
22.4
19.8
26.5
27.7
39.7
33.4
41.5
32.4
29.6
Total Capital Revenues
50.0
45.0
40.0
35.0
N
200 30.0 _
0
0
c 25.0 -
20.0 -
15.0
10.0 --
5.0
99100 00101 01102 02103 03104 04105 05106 06107 07108 08109 09110 10111
Fiscal Year
Capital Revenues
(Nominal millions of dollars)
Prelim.
Projected
Budget
99100
00101
01102
02103
03104
04105
05106
06107
07108
08109
09110
10111
Ad Valorem Tax
5.5
6.1
6.4
7.7
7.9
0.2
1.1
8.1
8.5
8.7
5.7
6.5
Capacity Fees
4.7
3.9
4.1
5.5
6.5
10.6
8.7
7.5
7.4
4.2
2.3
7.1
Pumped Zone Fees
0.2
0.3
0.3
0.6
1.1
2.2
1.7
1.3
1.7
0.7
0.8
0.9
City of Concord
4.2
3.9
1.6
1.5
1.8
2.6
2.4
3.4
5.3
5.5
4.4
2.7
Interest
2.2
2.2
1.1
0.7
0.7
1.2
1.8
2.0
1.5
0.5
0.6
1.0
Other Fees & Charges
0.2
0.3
0.4
1.2
1.8
1.1
1.7
1.5
1.3
0.4
1.0
1.0
Subtotal
17.0
16.7
13.9
17.2
19.8
17.9
17.4
23.8
25.7
20.0
14.8
19.2
Sewer Service Charge
4.6
2.2
3.1
6.3
8.4
12.1
7.4
12.5
9.6
8.5
3.2
7.3
Subtotal
21.6
18.9
17.0
23.5
28.2
30.0
24.8
36.3
35.3
28.4
18.0
26.5
Bond Proceeds
-
-
15.0
-
-
-
-
-
-
-
30.0
-
TOTAL
21.6
18.9
32.0
23.5
28.2
30.0
24.8
36.3
35.3
28.4
48.0
26.5
Fiscal Year 2010/11
Capital Improvements Program
Board Workshop
November 12, 2009
2010 -11 Capital Improvement Program Workshop
Agenda
• Establish recommended expenditure level for 2010 -11
• Review preliminary projected sewer service charge range
• Review programs, selected 2010 -11 projects and recent
accomplishments
• Review recommended ten year expenditures
• Discuss regulatory uncertainty and potential unfunded projects
• Summarize Board role in Capital Program
FY 2010 -11 Expenditure
Recommendations
Program
Total Expenditures
Treatment Plant
$7.5 million
Collection System
$10.5 million
General Improvements
$11.0 million
Recycled Water
$.6 million
Total Expenditures
$29.6 million'
`Replaces estimated asset value of $2.9 billion in 100 years
(- $29 million per year)
2010 Capital Plan Expenditure Scenario
• $313 M in expenditures over 10 years
• Reduced from $331 M in 2009 CIP
($324 M bid savings scenario)
• Includes two bond issuances
• $30 M net 2009 -10
• $32 M net 2016 -17
• Maintains SSC annual increase @ $15 -17 /year
(based on preliminary revenue and O &M Budget Data)
1)
REGULATORY COMPLIANCE RENOVATION.
• Piping Renovation
` w • Asset Management
h .
1 1
CAPACITY - BILITY
A
ass Im wrt
rovements
eis m ro ents
FY 2010 -11 Treatment Plant Program Highlights
Category
Project
Annual
Expense
OX
Program
Renovation
Asset Management
$0.5M
7%
Piping Renovation Phase 5
$1.3 M
17%
Reliability
Wet Weather Bypass
Improvements "
$2.7 M
36%
Standby Power Improvements
$1.0 M
13%
Treatment Plant Seismic
Improvmnts ($11.7 M over 10
years)'
$.5M
7%
All Other
Plant Equipment,
Electrical and Instr. Replacement
$1.5 M
20%
Total
1
1 $7.5 M
1000/0
"Presentation to
i
I
a
Mail
Wet Weather Capacity Improvements
• UV capacity improvements to —135 mgd Winter 2007
• Flow through outfall previously increased to 135 mgd
• Wet weather bypass project design begun in 2006
• Surcharging and permitting completed in 2008 -09
• Ability to discharge directly to Walnut Creek by 2010
Wet Weather Flow Routing
UV Disinfection Capacity 135.x%9,
• Y
.1 l.., C.1.11 p11d
1.5
Effect of Treatment/Outfall
Overflow Frequency
Capacity
to Creek
--
to gmaa/yr.
1.25
0 1.0
a 9m
m
r
z
m°
75
d
W d
e
�
O
U
'O
.50
OncaR Yrc. ylO
D
Actual
Once/J yra.
OMefS Yn.
Oncell0 yra.
01
1
50
75 100 125
150 175 200
TreatmentlOutfall
Capacity (mgd) •Modal
Predi teat
170mgd pond
cupacgY 11MActuM
M
Wet Weather Bypass Structure will be located
at the north east end of Basin B immediately
adjacent to Walnut Creek
Surcharging occurred this past year to prepare
for construction in 2010
$2.2 M Wet Weather Bypass Structure will allow
discharge directly to Walnut Creek
Treatment Plant Program Planning and
Innovations Update
• Green house gas inventory completed and
developing Green House Gas Management Plan —
Update at November 19 Board meeting.......
• Pilot testing of powdered carbon for mercury removal
from incinerator air emissions and scrubber water —
Testing complete and results available
• Sealing of leaks in aeration basins complete — Initial
data on reduction in air usage available
• Treatment plant asset management — Development
of geographical data integration for treatment plant
underway
• Investigation of costs and approach to comply with
possible future requirements for ammonia and
nutrient removal — Preliminary findings available
I#
The Good News... Mercury Emissions
from the Incinerator can be
controlled ............
INTO PLANT OUT OF PLANT
11.9 (34.7) Ib /yr plant influent • 19.2 (291) Ib /yr air emissions"
• 1.7 (4.8) Ib /yr plant effluent
• 0.3 (0.8) Ib /yr grit/ash
Total 11.9 (34.7) Ib /yr
"Current year estimates shown first, estimates before mercury
pollution prevention efforts shown in parentheses
** Average 80% removal of mercury achieved in pilot
test potentially reducing emissions to 3.84 Ib /yr
The bad news .... the next Frontier for
Furnace Air Emissions .....112 vs. 129
• Sewage Sludge Incinerators (SSI's) regulated under
Section 112 of the Clean Air Act (CAA)
• Sierra Club suit in 2001 sought to compel EPA to regulate
SSI's under Section 129 of the CAA
• CCCSD asked by EPA to sample incinerator emissions.
This information will be used to assist with EPA
determination by April 2010.
• If regulated by Section 129, emission limits could be
set for constituents not now regulated..... including
mercury, cadmium, carbon monoxide, dioxins, lead,
NOX, PM, and S02
• Current Capital Plan includes only $4 million for
scrubber upgrades.....likely not enough if regulated
under Section 129
VA
Aeration Air Renovation
Corrected Leaks from Cracks in Plenum
AerdlionAir Hmdm
Dilr
Down Caror
Air Plenum Ow
i
o n e 5 DaGls in D00Geb
Aeration Air Renovation
Air Loss Increase Significant last 6 Yrs —
Concern about tank stability and potential need to
replace /upsize Electric Blower
Alrnow to Secondary Process
70,WO
ere
. c.c
40.000 ! — MOnlnty AVareOe
• Matlmum lour
30.000 St Driven Blow
Elechric Driven Slaw 20.000
i 10,000
o
1998 2000 2002 2005 2000 2009
rear
0
Tanks have been stabilized and reduction in Total
Air Usage will defer need for $2.5 M Electric
Blower Project......
E
25000
A
20000
15000
0 10000
d 5000
n
d
a
Tank 1 Total Air Usage
Nov Dec Jan Feb Mar
Tank1 06 -07
t Tank1 07 -08
a— Tank 108-09
What is Treatment Plant GDI?
• Geographic Data Integration (GDI)
GDI:
— Links databases and graphics
— Is view only
— Allows turning on and off layers of data
— Acts as a user - friendly gateway to other systems
Collection System GDI has already been done
• Treatment Plant is next..........
9
Treatment Plant GDI Development will
utilize surface features to locate underground pipes.
Treatment Plant GDI Development will
utilize surface features to locate underground pipes.
Treatment Plant GDI will link to
Equipment Information
\bU A
t
Eae Yb 23006
1 p 0♦YC PKAER00.19
InrWbE 1Y6 JMAIN
e
Treatment Plant GDI Sample Asset/Equipment
Report
Asset/Equipment Report tot Asset No. 29009
a..♦e
xalnlenem xxmP/
EMOrwYys v..W Alen
4u t
twn�lwwn
s.P.rei mrorwnPP
WxYRwwaNtl P
r♦E Ux vc�x,Pa.u. e
flww t
-
Pa YeA OCV
'
�n mbar. • Pw.Ywtllw ON [w�M WINel1... [nlble� elm ��
CwMWPbMU
tWxW�a'
re ®awb
.,.- o
o3io+rmw o
M+IMen♦nts FlMrory
syedw wmb,vmrto..wa ,
,osnwu t
tln ;
;evvv O
O3m;;30CP
ww T
Temv.uo,mw.n w.w
Pwxrly w W ad..m w
1,1 ?bo r
rtwdE�. -
-_arcs s.rtwr I.O aia p
pB.lv.: p'c [
[LII .
.!t. n. I
I ..
rurt�v.'v D
3i)M♦ I
IYbin. T
Te1®N+MeYwwT Ne WOSYq W
W/l1 /]WB L
LLY 1
1fp1 l
ll.]tOt
Mb M
M4TSMtnP'Ywi. dew Ted
12
a..♦e
4u t
twn�lwwn
WxYRwwaNtl P
PNe f
flww t
tm,w
J v,IFil
.,.- o
o3io+rmw o
owlPn, s
syedw wmb,vmrto..wa ,
,osnwu t
tln ;
;evvv O
O3m;;30CP
ww T
Temv.uo,mw.n w.w
Pwxrly w W ad..m w
1,1 ?bo r
rtwdE�. -
-_arcs s.rtwr I.O aia p
pB.lv.: p'c [
[LII .
.!t. n. I
I ..
rurt�v.'v D
3i)M♦ I
IYbin. T
Te1®N+MeYwwT Ne WOSYq W
W/l1 /]WB L
LLY 1
1fp1 l
ll.]tOt
Mb M
M4TSMtnP'Ywi. dew Ted
RENOVATION CAPACITY
Walnut Creek 7
• Pleasant Hill 1
• Lafayette 6
• South Ofinda 4
• Danvilik
• Diablo 1
• TV Inspection
• Miner Road
?1G61 JhltC NATION/ FORCE REGULATORY COMPLIANCE/
s CANNING
111 station improvements Collection System master plan
FY 2009 -10 Collection System Program
Highlights
Category
Projects
Annual
Expense
Program
Hall Drive, Diablo Ph 1,
Renovation & TV Program'
Martinez Ph 3, WC Ph
$7.3 M
69%
8 or South Orinda Ph 5
Pumping Stations
Small stations
$.4 M
4%
Capacity
Developer Services
$1.2 M
12%
Highest priority project
Capacity/Renovation
from CSMP (Lafayette-
$1.3 M
12%
Pleasant Hill Road ?)*
All others
$0.3 M
3%
Total
$10.5 M
100%
13
$46M in high priority
capacity projects
Rl..rnl Mnl included in 10 year plan
........ ..... G vY... G...x
LvlvYVtl.. CLe c
VN•ont
v• F
~.,pi.d�rl/a.•x � \�� welnnt BlVtl
ve.•
egeYYp.
U.
de
Legend • R .+
O
eery OV ncivrcv Or... ........I epo.l ev.. Ben...... ana.uleG „ \�
f...w.ynrn�. 4yxi a .nn e n
L
Sewer Renovation Program
• 1,483 miles of public gravity lines
• 1,294 miles of 6, 8 & 10 inch lines for potential
renovation
• Program to televise all lines started in 2002
• TV'd 1,211 miles to date (— 82 %)
• Complete initial TV program in 1 to 2 years
14
Map of TV'd Sewer Lines
. of SW 2009
Martinez
Hill
`JOrind
Lafayette
/ Alamo
M oraga
Danvillel
� � J
San Ramon
Sewer Renovation
T.V. Program Results
(as of Oct 2009)
* Total of lines with a score of 5000 or greater is 5.9%
15
SCORE (High score is poor condition)
PIPE SIZE
1- 5,000
5,000 -7,000
7,000 - 10,000
>10,000
6"
200 miles
17 miles
15 miles
13.5 miles
8"
760 miles
8 miles
4 miles
3.3 miles
10"
39 miles
2 mile
0.5 mile
0.3 mile
TOTAL,
MILES'
94%
2.50
1.8 %`
1.6 %*
* Total of lines with a score of 5000 or greater is 5.9%
15
Extrapolation of T.V. Results
Lines scoring 7000 or greater:
1,294 miles X (3.4% > 7000 score) + 44 miles
1,294 miles X (2% obstructed) X (50% needing renovation)
+ 13 miles
Total 6, 8 and 10 inch pipe scoring
7,000 or greater needing renovation = 57 miles
Lines scoring 5,000 to 7,000: = 27 miles
Total miles of 6, 8 and 10 inch pipe
needing renovation = 84 miles
Progress to Date
(miles per year)
The following table reflects the miles of pipe (6, 8 &10 Inch)
identified by the TV program renovated to date.
FISCAL YEAR
PIPE RENOVATED
2005/06
3.7 Miles
2006/07
4.4 Miles
2007/08
5.6 Miles
2008/09
6.3 Miles
2009/10
7.5 Miles
TOTAL
Completed Renovation
27.5 Miles
16
10 year Renovation Scenario
Achieves 97% Completion
(2010/11 - 2019/20)
Total miles of pipe to be renovated - 84 miles
Miles of pipe renovated to date - 27.5 miles
Remaining miles to renovate - 56.5 miles
10 Yr Budget
Miles of
Percent of
Add.
for
Pipe
Remaining
Years to
Renovation
Renov. in
Miles
Complete
(millions)
Next 10
Renov. in
Yrs*
10 Yrs
$80.2
54.7
1 97%
1 -0.5
" Estimated at $250/ft for 20010/11 & $280/ft for subsequent years
Collection System Program Planning and
Innovations Update
• Continued innovative use of trenchless technology
— Guided horizontal drilling
— Directional drilling
— Microtunneling
— Pipe bursting, CIPP, slip lining, Rib Lok, reaming
• Added functionality to state of the art geographical data
integration platform for collection system
• Completed Collection System Master Plan providing road
map for capacity projects needed over next 30 years
• Streamlined right of way acquisition process for
easement jobs to ensure equitable /consistent offers
17
FY 2010 -11
$11 M General Improvements Program
Highlights
• Maintain basic programs (- $2 M /yr)
- Equipment Budget
- Information Technology Plan
- HOB /HHW /POD Miscellaneous Building
Improvements
• Fund one time building needs
- Collection System Operations Building and
Improvements ($6.5 M remaining FY 2010 -11)
• Fund Building Seismic Retrofit Needs ( -$2.4 M)
Seismic Hazard
.qtr Design Event Probability
100% in 475 years
WWTV
° ` '
10% in 50 years
Concord Fault governs...
N °� V
. ®\
MILES
18
Current Building Code
2007 UBC
Updated after Northridge and Kobe Earthquakes
A .r
i,
/ 1
'1
1. I
Seismic Retrofit Program Costs
Completed to Date and 2010 -11 Budget
Seismic Retrofit Work Completed as part of ongoing projects
- Standby Power Building $ 90,000 Immediate Occupancy
- HHWCF Building $ 150,000 Immediate Occupancy
• General Improvements Program 2010 -11 Budget
Non - Treatment Buildings $2.4 million Preliminary Retrofit Cost
- 4737 Warehouse Building -
$250,000- $300,000 retrofit cost with -2 year payback
Life Safety only .... may need to be demolished after large seismic event
- Headquarters Office Building -
$2.1 million retrofit cost with most work on building exterior
Life Safety Plus...... should be reparable after large seismic event
19
nm
Preliminary HOB Retrofit Concept -
Seismic Retrofit Program Preliminary Costs
Ten Year Plan 2011 -12 and Beyond
• Treatment and Pumping Station Bldgs $11.8 million
Preliminary Retrofit Cost — Life Safety Plus
— Plant Operations Building - $1.1 million
(includes Immediate Occupancy for Multi- Purpose Room)
— Solids Conditioning Building - $6.5 million
— Pump and Blower Building - $2.6 million
— Miscellaneous - $1.6 million
• Total Budgeted Ten Year Program Is Adequate for all
Identified Deficiencies
— Underway or completed as part of ongoing projects $240,000
— 2010 -11 $2.4 million
— 2011 -12 and beyond $11.8 million
20
FY 2010 -11 & Future
Recycled Water Program Highlights
• Maintain basic landscape program, make cost
effective new connections and publicize success
• Participate in BAWRP and process for receiving Title
16 funding for Concord Landscape Irrigation Project —
District 75% share ( —$5.4 M) not budgeted
• Continue to promote providing recycled water to
refineries with USBR and other potential partners in
effort to obtain support politically and financially
Construction cost — $100 M not budgeted
• Fund ten -year program at $550,000 per year and
revisit in 2010 or sooner if needed
FY 2010 -11 Expenditure
Recommendations
Program
Total Expenditures
Treatment Plant
$7.5 million
$10.5 million
Collection System
General Improvements
$11.0 million
Recycled Water
$.6 million
Total Expenditures
$29.6 million
21
What the 2010 Capital Improvement Plan
Does Do........
• Replaces estimated asset value of $2.9 billion in 100 years
(- $29 million per year)
• Completes almost 100% of identified sewer renovation
needs in next ten years
• Funds needed seismic retrofit of District buildings
• Funds $46M in critical collection system capacity projects
• Provides consistent revenue stream for treatment plant
piping, equipment, electrical and other renovation needs
• Funds General Improvement Program to replace computers
and vehicles and provide routine building renovation
What the 2010 Capital Improvement Plan
Doesn't Do.......
• Includes only $4 million for incinerator emissions
controls..... may be too little if change to Section 129
• Includes no budget for upgrades to achieve
nitrification and /or nutrient removal
• Includes no funding for projects to reduce green
house gas emissions
• Includes no funding for construction of large recycled
water projects
Does allocate $32 million in year 2016 -17 for
unidentified regulatory compliance project.....
11)
Preliminary Ten Year Projected Expense
and Needed Sewer Service Charge Increase*
Fiscal Year
10 -11
11 -12
12 -13
13 -14
15 -16
16 -17
17 -18
18 -19
19 -20
Capital (2010 $M):
Total Planned
$29.6
$28
$30
$29
$29
$28
$26
$31
$31
Regulatory Project
-
-
7$157�5
-
$8
$16
Total Expenditures
$29.6
$28
$30
$29
$29
$36
$42
$31
$31
SSC Increase ($) »
$ts-
$15-
$15-
$
$15-
$15-
$15-
$iS
$15-
17
17
17
17
17
17
17
17
17
Plan is modest - $29 million annual expenditures represent 100 year
replacement of estimated asset value and addresses known issues
Plan includes no funding for:
-Large recycled water project implementation
-Green house gas reduction projects
-Nitrification and /or nutrient removal
-Incinerator emissions control > $4 million
" SSC increase estimates based on very preliminary O &M Budget figures
Why Worry? ? ...... let's look at most costly
pending regulatory issue....... Ammonia and
Nutrient Removal........
• August 2009 — An Urgent Call to Action report of the
State -EPA Nutrient Innovations Task Group
• May 1, 2009 — Ammonia included as "other stressor"
in Bay Delta Conservation Plan and all treatment
plants discharging to the Delta, including CCCSD,
listed as contributors
• June 2, 2008 — Article in Sacramento Bee
highlighting findings by Dr. Dugdale that ammonia
from wastewater treatment plants may pose a threat
to Delta species by interrupting the food chain
• November 27, 2007 - Petition for Rulemaking on
Secondary Treatment Standards for Nutrient
Removal submitted to EPA by NRDC
23
How do we remove Ammonia ?......
Conventional Nitrification
NaMwmX�
Pro
MroX'w
Rlmary
Merobk 5ohemn SXCa�WM' UV
Clnnlbn
pmXpan BaXlns CIMMn
X
y
'+
�_ � T• 9ulXUn
Biy
` /
I
MB
♦III
1
PIXUnT•
I
W49
Llamall
1
, -
1
I
CanXtlX
What is Conventional Nitrification
• Double hydraulic detention time (19.2 million gallons
vs. 9.6 million gallons)
• Double the demand for oxygen
• Longer solids residence time (8 days vs. 1.4 days)
• Decrease in solids production
(69,000 Ibs per day
vs. 80,000 Ibs per day)
24
Nitrification Facility Layout
Expanding to Achieve Nutrient Removal
• Conventional Nitrification can be expanded for
nutrient removal by.......
— Anoxic zone placed upstream of the aeration
basins for nitrogen removal
— Anaerobic zone to promote uptake of phosphorus
in the downstream aerobic zone
— External source of carbon (methanol) to achieve
very low nitrogen levels
25
Nutrient (Nitrogen /Phosphorus) Removal
Nitrogen < 3.0 mg /L, Phosphorus < 0.3 mg /L
5 -Stage Anaerobic /Anoxic/Aerated /Anoxic/Aerated
with Methanol Addition
26
Preliminary Capital Cost for
Nitrification /Nutrient Removal
`Does not include contaminated soil removal or incinerator scrubber
water cyanide treatment.
Example Illustrates Potential Unfunded
Regulatory Initiatives May Require Significant
Additional Rate Increases or More Bonds in
Future.......
• Nitrification
• Nutrient Removal
• Incinerator Emissions Control
• GHG Reduction Project
• Large Scale Recycled Water Project (unlikely to be
regulatory driven)
• Other ? ? ? ? ??
27
Current
Conventional
Nitrification and
Item
Operation
Nitrification
Nutrient
(BOD
(Ammonia
(nitrogen and
removal)
removal)
phosphorus)
Removal
Total Project
-
$65 million
$130 million
Capital Cost'
(not budgeted)
(not budgeted)
Annual O &M
-
$1.6 million
$4.8 million
Cost Increase
per year
per year
`Does not include contaminated soil removal or incinerator scrubber
water cyanide treatment.
Example Illustrates Potential Unfunded
Regulatory Initiatives May Require Significant
Additional Rate Increases or More Bonds in
Future.......
• Nitrification
• Nutrient Removal
• Incinerator Emissions Control
• GHG Reduction Project
• Large Scale Recycled Water Project (unlikely to be
regulatory driven)
• Other ? ? ? ? ??
27
Board Role in Capital Program is Ongoing
• Set Initial Capital Funding Levels in November
• Confirm Capital Funding Levels in January
• Authorize CIB /Program Budgets in April - June
• Authorize Supplemental Program Funds if needed
• Award Construction Projects > $15,000
• Authorize Construction Change Orders >$50,000
• Authorize Consultant Contracts > $50,000
• Authorize Revisions to Consultant Contracts > 15%
What do we need from the Board today?
• Concurrence that proposed preliminary expenditure
figures for FY 2010 -11 and the subsequent 9 years
are acceptable for inclusion in financial planning
documents to be reviewed by Board in January 2010
• Concurrence that relative emphasis and allocation of
expenditures between the four programs is
acceptable for financial planning and development of
the detailed FY 2010 -11 Capital Improvement
Budget and Ten -Year Capital Plan
28
Board Input / Questions?
29