HomeMy WebLinkAbout07. (Revised) Board Workshop re 10-yr CIP Update, Proposed FY 17-18 and FY 18-19 CIB, and Rate Scenarios Item 7. (Revised) (Handout) 10-YR CIP UPDATE, PROPOSED FY17=18 AND FY 18-19 CIB) AND RATE SCENARIOS Board Workshop # 4 January 26, 2017 MPR Conference Room 11am to 4pm 1 ITEM A INTRODUCTION By Roger S. Bailey, General Manager 1 Revised 1 WORKSHOP PRESENTATION OUTLINE A Introduction B. Review and Summary of Discussions from November 10, 2016 Board Workshop#3 C. Update on Solids Handling and Energy Alternatives 1 Solids Process Alternative Analysis 2. Energy Improvements D. Update on 10-Yr Capital Improvement Plan (CIP) E. Proposed FY17-18 and FY 18-19 Capital Improvement Budgets (CIB) F. Update on Rate Impact Scenarios and Implementation Schedules 1. Revenue Assumptions 2 Sewer Service Rate Impact Scenarios 3. Recycled Water Rate Impact Scenarios 4 Rate Implementation Schedule 5 Outreach Plan G. Recap of Recommendations and Closing ITEM B REVIEW AND SUMMARY OF DISCUSSIONS FROM NOVEMBER 10, 2016 BOARD WORKSHOP #3 By Roger S. Bailey, General Manager 1 Revised 2 RECAP OF DIRECTIONS GIVEN Financials: • OPEB • Utilize the entire$2.5M budgeted toward existing OPEB Trust • Change the amortization schedule of OPEB from 30-yrs to 18-yrs to be consistent with the amortization schedule for CCCERA • Include in the budget$2.5M annually towards OPEB liability • Use FY 15-16 favorable variance to create a new Section 115 Pension Trust Recycled Water Accounting: • instead of setting up a separate recycling water fund,modify and implement a formal recycled water budget to track details of cost and revenues as part of the annual adopted District budget Bond Financing: • Update Board Policy No.BP 017—Fiscal Reserves to address bond financing • Rates to be used for five year financial window Rate Scenarios: ■ Rate scenarios to include staggered bonds issued at intervals as recommended by staff • Pipeline replacement projects should generally be funded by pay-as-you-go revenues ITEM C UPDATE ON SOLIDS HANDLING AND ENERGY ALTERNATIVES By Jean-Marc Petit, Director of Engineering and Technical Services Dan Frost, Senior Engineer Planning and Applied Research . l T --9 _ Revised 3 ITEM C1 SOLIDS PROCESS ALTERNATIVE ANALYSIS .�s 7 IF FoUR MAJOR DRIVERS THAT IMPACT SOLIDS AND ENERGY PROJECTS DriversDescriptions 1 Aging Infrastructure Maintain performance and reliability of existing assets to ensure reliable treatment of wastewater Increase capacity of existing facilities to 2 Capacity accommodate planned growth for the communities we serve Reliably comply with regulatory requirements that 3 Regulatory are designed to protect human health and the environment&Plan for anticipated future regulatory requirements Minimize life-cycle costs,maximize benefits,and 4 Sustainability achieve economic stability through optimization, resiliency,resource recovery,and energy projects Revised 4 AGING SOLIDS HANDLING INFRASTRUCTURE - MULTIPLE HEARTH FURNACES (MHFs) OU 1 MHF CONSIDERATIONS AND RISKS 1. Condition: MHFs are in good to fair condition 2. Seismic: MHFs and Solids Conditioning Building do not meet current seismic standards 3. Regulatory Cost Trigger: SSI MACT 129 regulations limit capital expenditures to 50% of original investment to be classified as an "existing" multiple hearth incinerator 4. Regulatory Capacity Trigger: Future MHFs Solids Loading Exceed Capacity Limitations 5. Design Capacity Limitation: Future MHFs Solids Loading Exceed Design Capacity Limitations (From June 16,2016 Board Workshop#1) Revised 5 ALTERNATIVES CONSIDERED TO ADDRESS AVERAGE FURNACE FEED CAPACITY 1. Solids Handling Improvement Project Phase 1: (Black and Veatch) • Reduce Load to Furnace and Delay Capacity Limitation • Lime Reduction Study to reduce O&M cost and increase capacity • Improved Storage and Blending will Improve Cake Consistency • Centrifuge&Cake Pump Replacement will Increase%Dryness • Investigate Impacts of Increasing Permitted Feed Capacity • Regulatory Impact Study • New Source Review(Health Risk Assessment, BACT,TBACT) • Re-Rate the Design Capacity of the MHF • Capacity Testing • Improve Ash Handling 2. Evaluate Options to Split Solids Load to Other Process&Avoid MHF Capacity Issue • Pilot then consider implementing long-term demonstration of innovative process such as BioEnergy Projects(e.g.; gasification, hydrothermal liquefaction, or pyrolysis) EXISTING SOLIDS HANDLING AT 'CENTRAL SAN USING MULTIPLE HEARTH FURNACES Air Pollution Control Equipment Primary Sludge (from Primary Heat for Steam Clarifiers) DAFs Thickening Blend Tank Dewatering Centrifuges Steam for glowers WAS (from Secondary Clarifiers) Multiple Heart Ash Furnaces Thickener underflow Centrate Heat for Steam Landfill Gas Natural Gas Co-Gen Electricity Natural Gas Generation —2.7 MW Revised SOLIDs ALTERNATIVES DEVELOPMENT ralids processes MHFs MAD+SSI MAD+Drying Direct drying pyrolysis lex,stingy - leeer.d Fluidized Bed Thermal Thermaphilic Exi$lin g , Reactor Hydrolysis+SSI Anaerobic Indirect drying _ Gasification Digestion 2026+2035 Process Alternative ryonk TPAD+5sl - AG Anaerobic £nwren&trnb Hydrothermal Don Not Meet Ofteria Liquefaction Biological Enhanced supercritical hydrolysis+SSI anaerobic Water ('HP,etc.) Oxidation �J SOLIDS ALTERNATIVES DEVELOPMENT CRITERIA FOR CONSIDERATION * Proven technology • Can physically fit at Central San's WWTP • can be integrated with central San's liquid, solids, and energy processes * Reliable and improves resiliency Revised 7 SCREENED SOLIDS TREATMENT ALTERNATIVES FOR CENTRAL SAN • Multiple hearth furnaces (existing) is Fluidized bed incinerator (FBI) ■ Mesophilic anaerobic digestion (MAD) ■ Thermophilic anaerobic digestion (TPAD) • Enhanced processes (e.g. CAM B I thermal hydrolysis) • Innovative BioEnergy: Gasification, Pyrolysis, Supercritical Water Oxidation, or Hydrothermal Liquefaction • Combinations of the above solids handling processes DEVELOPED A FLEXIBLE PHASED APPROACH TO SOLIDS HANDLING Phase 1 Phase 2 Phase 3 (0-5 Years) (6-10 yrs.) (11-20 yrs.) MHFs MHFs MHFs MHFs Construct Phase FBIi Design Phase 1 Solids Construct Phase 1 Desi n Phase z Solids place Yes g 3 Solids Handling Yes Re Handling Facilities Yes Solids Handling Handling Facilities Yes Facilities MHF with Improvement Project Facilities Improvement Project- Improvement FBI Improvement Project Add two Anaerobic No Digesters and Evaluate a Project'Two -- Di esters No High Strength Waste Innovative BioEnergy �HSW)Program No NO Abandon New Alternative Solids Yes Incineration and Energy Technology Innovative BioEnergy and convert Project Evaluation(e g.; Construct Phase 1 Yesto TPAD and Innovative Gasification)? Project In BioEnergy a HSW Yes BioEnergy ii program Construct Phase z -110. Construct Phase 3 No BioEnergy Project i BioEnergy No COGEN COGEN No Implement -COGEN COGEN COGEN COGEN Cogen Renew 5 Year Solar Turbine Maintenance with a 5-Year Mfr. Renew S Year Solar Turbine Improvement Yes Agreement Yes Maintenance Yes Mai nten ance Agreement Project Agreement - —� Revised REVISED PHASED APPROACH TO SOLIDS HANDLING Phase 1 Phase 2 Phase 3 (0-5 Years) (6-10 yrs.) (11-20 yrs.) MHFs MHFs MHFs MHFs C truct Pha -3 FBI Design Phase 1 Solids Construct Phase 1 �gn Phase 2 So' Soli an Re Handling Facilities YDS Solids Handling Hag Facil'' g M h Faciliti Improvement Project Facilities Improv a roject Impr m F Improvement Project No Add two erobcc Pr ct-Two Diges s an valuate a igesters Hi trength to - -- Innovative BioEnergy .gram Abandon New Alternative Solids Yes Xno and Energy Technology Innovative BioEnergy Project Evaluation le g; Construct Phase 1 yes Gasification)? BioEnergy Project Innovative BioEnergy Innovative Construct Phase 2Yes BioEnergy �- � Construct Phase 3 BioEnergy Project BioEnergy Nv UM COGEN >ha Implement COGEN RN Cogen , Renew 5 Year Solar war Mfr NTurbine Maintenance Renew 5 Ye .lar Turbine Improvement Yes Agreement Mn Mainten a ement Project Ant ITEM C2 ENERGY IMPROVEMENTS DAN FROST, SENIOR ENGINEER PLANNING AND APPLIED RESEARCH i �vz ate. FU.- -;-z -;-._, Emil Revised BOARD VOTED ON A POLICY ON ENERGY BP. 027 ter*wtw"cosw Number SP 027 SQ7►p AUMW Eftctw A40 a own" rao"DWADW � �►itQrreta7lses awl BOARD POUCY ERERGT f a Drae:e`ray easw+cY a tit err tea act O 7d Dalen WMUMJta n3V*n PM carpus mlrtsnn sgntas bCO"POM t3alrs�t arw cora M%&M**orM4 WWWW urd blab"To t W%w il++dfwe ani.c'b 1t VWNPS M rr%a pw pmw aid ones b"bf wolp offiamc7 Rd M awoo O +a'4taarnianaterWuttnp dRercrsae7naapersc �e�+r yss I�+F eRaeseart io saAw rrt Iw fry 7¢!�a QrFYstts FLLNM= i.W alp% For nt Dwws wab mu ttrnrrt stn cymw hd Ln [jwvp n&4ree4 a'A resltsaMr rratnwd VWt cwrph bg UM a pfoov i*f4wp pw4wwo MMPI M r%w B 011ft Wfto 0 Grp (wifteV UZ Dcpwet=M of FrM" P etAMSM r*T Et*OW dtcOt n M brM Of MWOMMY 0"a area ftm wwwapt w"M x""M amch as rod acrd rot-pww goo t-A fWOODW ar 2M►rWWA kWM Cl b0ft i!?hn*8Ywtry MUM art CO MMMM ltlgrr"1ClIM bocw rw(arse cm4ruww +ar M an R5r SIM(Rahranct us K�Lwrftwwm 0106K20 A91MV(OP t4 s L3Xt aMU Any 9M DOW or a erste rte-rex-Mate rtrand 93064M n st,a a KNOMOM trartrtnrr UMPA' i Gidi eawalals rrsit wa Laney F n a ww RMA d laareas Adwft s of as t o mien COMA"pransfra cps rlaw Luca+ aRKtF1 a1 rraW aer+.rats lRata WPW V*f PAy CURRENT ENERGY PROFILE MAE ENERGYSOU PROFILE ' PM 2000 MMBTU/Day Mdsmatft � f. NG 11500 32% m V ou 1,000 Noto a` e WI SDO SOUns doe( Revised 10 ELECTRICAL PRODUCTION REQUIRED TO MEET DEMAND 9= i 7= Need to continue to evaluate alternatives to minimize y dependence on electricity and imported fossil fuel to lower our operating cost and meet the Ener Policy BP 027 s 9Y Y W 1AW NG 5011Q5 0 Current Projected Baseline (MHFs) ENERGY IMPROVEMENT PROJECTS • Solar PV Installation at CSD and HHW Facilities on line • Reduce NG usage&lower GHGs with Cogen Upgrades(0-2 Years) • Reduce Furnace Fuel Usage by Replacing Older Solids Equipment with Higher Efficiency Units:Blend tank mixing,Afterburners,Centrifuges/Cake Pumps, and Vliet Scrubbers(0-3 Years) PG&E Study to reduce power loads(e.g.;convert to LED lighting) ' • Evaluate and Start Implementing Alternative Solids to Energy Projects: • Current Discussions to Use Gasification(0-3 Years) - 0 • DDE Project Approved-Hydrothermal Processing Pilot with WE&RF& Genifuel(0-3 Years) • Pilot Innovative,Low-energy Nutrient Removal Technologies: Solar PV Information Kiosk at HHW Facilities • Current Discussions with Nereda for Aerobic Granular Sludge Pilot • Current Discussions with GE for Membrane Aerated Biofilm Reactor (MABR)Pilot • Replace Steam System with DRC, Install Electric Blowers and High Efficiency Diffusers(3-6 Years) • Replace UV Disinfection System(5-10 Years) • Add Renewable Energy(Solar and/or Wind)and evaluate solar with batteries (e.g.;Tesla batteries) r Revised 11 MULTIPLE STRATEGIES AVAILABLE TO REACH NET ZERO ENERGY GOAL • Energy Efficiency Improvements(VFDs, LED Lighting, electric high efficiency blowers, new air diffusers, SRT control for activated sludge, more efficient processes, more instrumentations and controls) • Anaerobic digesters can play a key role by allowing imported carbon energy source (e.g. FOG, food waste, other high strength wastes) • Biogas from co-digestion is typically the most economical way of offsetting other power costs • Alternative energy(solar,wind)can help offset imported natural gas or grid power • For Central San, alternatives are compared against the cost of producing power on-site with natural gas and/or the cost of imported grid power • Initiate an investigation on how to implement alternative solids to energy processes(e.g.; gasification, pyrolysis) under Phase 1 (0-5 years) any ITEM D UPDATE ON 10-YR CAPITAL IMPROVEMENT PLAN (CIP) BY JEAN-MARC PETIT, DIRECTOR OF ENGINEERING AND TECHNICAL SERVICES DAN FROST, SENIOR ENGINEER, PLANNING AND APPLIED RESEARCH Revised 12 PRELIMINARY 1 OwYEAR CIP $873M OF IMPROVEMENTS IDENTIFIED (WITH DIGESTERS STARTING IN FY 24=25) 1417]9 IM s ".u(j7( ftu l Fyz3rr4 FMAI Fn ? 7014 207J 2074 4m 7026 2077 516.0"950 526,707219 U0.102 2U S49411.LM S46161119 SSG-S:3212 $51635.746 $23.375.212 $34949903 537392.32S mproremenm Pfua 293(0*ster4•Fes 50 s0 SO 50 50 50 so 520.190,"9 520.190.449 320 190,"9 -'5� 511,492.120 517 UWA1.3 335 732 312 537,499,645 339 439.6m $36.754.521 116.29),113 341.739.196 541.915 174 $45 703.02S A 5464000 5"0000 $1.209445 55.770.993 $5.770.993 S12SJM $1,646,920 59.099.060 5125.000 5125.000 S4 277,030 S2911.96S S]4SS 774 $1.943 276 S3 297500 54172.500 31.797,500 52.197.500 51.797.500 52.570,000 $1500.000 Sl 500.000 S2=000 SIM.= 52.000.000 S2 o00 o00 57.000.000 52,000.000 S2 000.000 52.004000 517.7F4J10 I J*tLV,U $92,111."g 574,325,074 1 596,447,911 I%",S79,233 j 141,2Pilel S9'h,101,41t L 5101.641,06 1 5107.940.791 [In 2016 Dollars} $120,080,000 _ $�.�.� 'moi 530404,ON $60AN,wo $40AW.000 $20010,000 so rdN N I"+ fV N N 1_► 0_0 Cn 4':1 H H N'S Ir_7 r}1 r4 N N N ry'd N N NNy ■General Improvements Recycled Water Solids ImprovemenU Please Zllti3 I Resters t FBI) Treatment Piant Collection System 501"i PRELIMINARY 'I0-YEAR CIP 8'121 OF IMPROVEMENTS IDENTIFIED (DELAYED DIGESTERS To 2028-2035) Fr17eu F VIS FVIIr3l FYAM FMAJ RUM Frun4 FVW2 RIM Fri 7 2614 2019 26x6 2021 2u2 2623 2624 eon 2026 2x27 514.044.950 514.707,119 SS0.S027" WALLIN 546.141519 SS6.521212 551.63S.744 $27175.212 574,949.903 $37392.325 s Imp""w4nb1 FIu44 747 IDPn4n•FBrI 50 50 Sc 50 S0 50 50 50 SO S0 516.492,320 $17140026 S35.7S2.312 $37999.695 $39.439460 S36.7S9321 536193,113 $41,739.19S41.99S,174 S4S,n3.025 5460.000 5540.000 31209445 55,770.993 S5,774993 5125= S1,646.920 59099.010 $125.000 5125.000 54777.050 52.911,%5 53.455.776 SL943.276 $3.297,$00 54.172.500 51.797,500 SL791.500 SL797.$W S2.S7= 3.54400- 51.500000 52 01x140= 52.000.000 52.000.000 $10W.000 52,000.000 S2 O.W0 57,000.000 Stow.= 542,77;120 348931,272 512,931,191 Z%An,674 13i.M.S71 S91mul S9iri73.tal $was" SM937,377 S27.710" (In 2016 Dollars) [$120AW,000 $141,000,000 S30A=.0D0 i $60AM4000 Sa0A11,000 SMIM1.000 S4 A - .pi aw 1ptil e l H` NV N N N t_r 0�6 G :: eq en qq &A zir N y�y rr yy N NN fyyV rw yN N LL i4. LCL hi 1i LL iL 1i ti. LCL Collection System Treatment Plant I Soilds Irnprovements Phase 2&3 f Resters t FBI) Recycled Water i ■General hnprvvements Revised 13 PRELIMINARY 5wYEAR CIP ($369n5M FY17 18 FY18 19 FY19 20 FY20 21 FY21 22 2018 2019 2020 2021 2022 rc atmtnt Plant $18,044,950 $18,707,219 $50,502,244 $48,611,109 $46,181,619 Solids Improvements Phase 2&3!Digesters+FBI) $0 $0 $0 $0 50 lectianSystem $18,492,120 $17,180,028 $35,752,312 $37,999,695 $39,439,860 ecycled Water $460,000 $540,000 $1,209,665 $5,770,993 $5,770,993 $4,277,050 $2,911,965 $3,455,778 $1,943,278 $3,297,500 $1,500,000 $1,500,000 $2,000,000 $2,000,000 $2,000 ODO $42,774,120 540,839,212 $92,919,998 $96,325,074 596,689,971 $100010MO (in 2016 Dollars) $80,000,000 560.000.000 $40.000,0a0 $0 N f" r-]Collection System Treatment Plant Solids Improvements Phase 2&3(Digesters+FBI) Recycled Water ■General Improvements i PRELIMINARY 2=YEAR CIP F1171M M1119 2018 2014 Trpaftmment Pint $I8.0 $15.7 Similar to Solids Improvements Phase 2&3{Di tern FBI) $0 $0 currently 0k,dion tem approved Recycled Weter $0.5 $0.54 budget $4.3 $Z.g P Program Coming - - W $1S IOdal�.°��r Fn�l.�-tltDre unt '� (Rounded In rvl X016 Dollars S60,000,000 = Collection System r?Treatment Plant W,000,000 11111111IM W Recycled Water ■General tmprovements 20.000,000 S0 FY17/18 FY18/19 A,wLk Revised 14 r MAJOR PROJECTS RECOMMENDED IN MASTER PLAN FOR NEXT 2 FISCAL YEARS TREATMENT PLANT COLLECTION SYSTEM RECYCLED WATER • Screenings Removal Sewer R n vati n ' Filter Plant Upgrade • Pump&Blowerrp oiects: Seismic Upgrade Pleasant Hill • Piping Renovation Ph.2 Phase 9 • Walnut Creek GENERAL • Solids Handling Ph.11 and 12 Improvements • Lafayette— IMPROVEMENTS Headworks/Preair/ Ph.11 and 17 Asset Management Primary Gates and • S,Orinda— Information Concrete Renovation Ph.6 and 7 'tech nology • UV Electrical • Martinez--Ph.5 Buildings Improvements Pump Stations: Improvements • Odor Control Moraga/Cross Roads, 'vehicles Replacement Replacement Martinez,Fairview Equipment Alternative Energy and and Maltby Replacement BEoenergy Project Evaluation ITEM E PROPOSED FY 17= 1 8 AND FY '18= 1 9 CAPITAL IMPROVEMENT BUDGETS SIC BY EDGAR J. LOPEZ, CAPITAL PROJECTS DIVISION MANAGER Y• Y „ Revised 15 PROPOSED CAPITAL IMPROVEMENTS BUDGET FOR FY 2017-1 8 ANS 2018-1 9 Program Adopted FY 16/17 FY 17/18 FY 18119 Budget Collection System $17,925,105 $181492,000 $1711801000 Treatment Plant $13.125,000 $18,045,000 $18,707,000 General Improvements $3,808,651 $41277,000 $2,912,000 Recycled Water $5001000 $460,000 $540,000 CIB Contingency $114501000 $1,500,000 $195001000 Totals: $36,808,756 X42,7749000 $40,8399000 Carry forward from past FY's: $3,084,886 Amended Total Budget:1 39,893,642 FY 2017-1 8 COLLECTION SYSTEM PROGRAM MAJOR PROJECTS Sewer Renovation: (Approx. 7 Miles) h - • Walnut Creek Phase 11 (9,700 ft.) • Lafayette Phase 11 (8,500 ft.) • Martinez Phase 5 (8,700 ft.) ,�-- • S. Orinda Phase 6 (8,500 ft.) • Designs for WC, Orinda, Lafayette, and Pleasant Hill • Urgent projects, Cured in Place Pipe and Pipebursting Contracts (1,600 ft.) New to the Program: • Large Diameter & Forcemain Inspection, North Jackson Contractual Assessment District(CAD), more sewer renovation design dim Revised 16 FY 2017-1 8 COLLECTION SYSTEM PROGRAM MAJOR PROJECTS Pumping Stations: • Martinez, Fairview, Maltby, Moraga, and � Orinda Crossroads Improvements Design � 1 s � 1 PROPOSED COLLECTION SYSTEM PROGRAM PROJECT BUDGETS Projects FY 17118 FY 18/19 Walnut Creek Phase 11 $2,865,000 $0 Lafayette Phase 11 � $31100,000 I $0 Y Martinez Phase 5 $312751000 $0 South Orinda Phase 6 $1,500,000 $2.150,000 Development Sewerage and CAD $1,400,000 $110001000 Pump Stations(Martinez, Fairview, Maltby. Mora a&Crossroads, and Equipment) $1,017,000 $1,946,000 Sewer Renovation Projects(12 total) $4,760,000 $111509,000 4 Planning projects $575,000 $575,000 Totals: $18,492,000 51791809000 Revised 17 FY 2017-18 TREATMENT PLANT PROGRAM MAJOR PROJECTS 1 FY 2017-18 TREATMENT PLANT PROGRAM NEW PROJECTS ~ Mechanical & Concrete Renovations Outfall Improvements Phase 7 � Treatment Plant Security Improvements o Odor Control Improvements Plant Operations Building _ Improvements Aeration and Energy Upgrades Solids Conditioning Building Roof Replacement a Alternative BioEnergy Project Revised 18 PROPOSED TREATMENT PLANT PROGRAM PROJECT BUDGETS Projects FY 17/18 FY 18119 Headworks Screening Upgrade � $5,720,000 $0 Pump and Blower Building Seismic ' $21358.000 $0 Piping Renovations Phase 9 $111751000 $2841000 Solids Handling Facility Improvements � $2,625,000 $8,200,00 Applied Research and Planning $900,000 $900,000 Projects All other Infrastructure and replacement projects $2,267,000 ! $142.000 Odor Control Improvements(New) $4501000 $118661000 All other New projects $2,550,000 $7,315,000 Totals: $18,0459000 $18,707,000 -.,AWL_ PROPOSED GENERAL IMPROVEMENTS PROGRAM PROJECT BUDGETS Projects FY 17/18 FY 18/19 IT Masterplan Improvements $730,000 $8301000 Server Room Relocation $1,000,000 $2801000 Asset Management $9501000 $5001000 District Vehicle Replacement and New $8001000 $800,000 Equipment Program Buildings(MPR,4737, and Others) $550,000 $3001000 All other projects(4 total) $247,000 $202,000 Totals: x49277,000 $22912,000 Revised 19 PROPOSED RECYCLED WATER PROGRAM PROJECT BUDGETS Projects FY 17118 FY 18/19 Zone 1 Recycled Water $301000 $40,000 a Filter Plant Upgrades $3301000 $500,000 Surge Analysis $100,000 I —$0 Totals: $4607000 $5409000 i ITEm F UPDATE ON RATE IMPACT SCENARIOS AND RATE IMPLEMENTATION SCHEDULES By Danea Gemmell, Planning and Development Division Manager J. Revised 20 F1 REVENUE AssuMPTIONS k. FINANCIAL FATE MODEL AssumPTIONS Basis of Model Cost of Service Study Raftelis May 2015 Updated CSM Budget • Based on current employee contracts per MCUs Number of employees per latest Staffing Plan i Retirement(CCCERA data) Medical per current employee contract Additional Annual payment of$2 5M for unfunded 11abiIity in the next ten years One time payment from FY 15-16 net favorable variance of$3 359M used for unfunded liability in new Trust Fund Capital Budget: • Yl.CPI • Current 10-Yr CI P $413M for Baseline i Updated 10-Yr C I P $873M for based on CWM P w Use Reserves Targets per Board Policy(revised for working capital) • Debt Service Coverage included for Bonds • Bonds assume 30-yr terns Interest Rate 4 51x�first five years 5':.°thereafter No double digit rate increases No rate volatility over next ten years Revised 21 BP=017 RESERVE POLICY PROPOSED REVISION • BP-o1 7 set Targets for each of the District's Reserve Funds.. 1. O&M Fend Reserves: - Working Capital Reserves Target: Five Months of Gross Operating Expense at start of each FY. 2. sewer Construction Fund (Capital improvement) Reserves: "'corking Capital Rpr-nLrves: 5011_ ^f art-,,jai Capital Budge+ n+�&+ rt of each l Revision: to cover 50% cash (Pay-as-You-go) component of GIP annual budget at start of each FY. . zDeIr-insurance r una »e.. --Three times the annual deductiut: kuuijuimy bac at $0 5M) or $1.5M and $5M in self insurance fund. REVENUE REQUIREMENTS VarianceFY 2017-18 FY 116-17 Projections f rorn '. Budget • Model) Budget Operations and 1 1 $9214621784 $2,651,866 3.0%Maintenance $89,8 0,9 8 Sewer 36,808,756 42 774 120 5p965,364 16.2% Construction Debt Service 3,790,807 31790,340 (467) 0.0% Self-Insurance 948.000 995,400 471400 5.0% Jotal Budget $131,358,481 $8,664,163���� Revised 22 l F2 UPDATED SEINER SERVICE RATE IMPACT SCENARIOS I i 4 d k J CIP FUNDING SOURCES �1,Qoo r $900 $873M $873M Ca.star Pr9stam Tr"Utom Picot $800 n Reevdod w.w a Centl�nry $700 .. o+►.,r.,d o° 51x 463x. a c4a.cd,�"" �i $6 Revenue Sources SSW 3% ■Par Go $400 z% 3'K 5300 $200 $100 so 4- 10-Year Capital Program Revenue Sources �10 Revised 23 CIB SCENARIOS 10=YR CFY 17=18 To FY 26=27 ■ O: • t-Yr CIP Payment Methods Description of ■ Cost of FY 14 15 O&M Current Pay as you Go NOne Cost of Service Study Raftelis Financial Service Study 10 yr CIP Method Consultants May 2015 (COS) ($413M) Updated Updated O&M Current Pay as-you•G-- Nz;nim Updated COS using most recent O&M data Bac Line Budget 10 yr CIP Methc.d (COS) ($413M) Scenario 1 Updated O&M New Pay as you Gc Nen(- Add CWMP additional$454M CIP,or a Pay,G0 Budget 10-yr CIP Method total of$867M for new 10 yr and add$2 5 +$2.5M ($873M) M for ten years for pension liability Scenario 2 Updated O&M New Pay-a3-you-Go $482M In Bonds in 3 Same as Scenario 1 but issue three bonds Partial Bond Budget 10 yr CIP Method w/Partial issuance: and pay go methods to pay for new 10 yr Funding +$2.5M ($873M) Bond Funding 1. FY18-19:$110M CIP and add$2 5 M for ten years for (3 Bonds) 2. FY21-22:$178M pension liability 3- FY24-25:$194M Scenario 2.1 Updated O&M New Pay as you Gu $S13M in Bonds in 4 Same as scenario 2 0 but issue 4 bonds Partial Bond Budget 10 yr CIP Method w/Partial issuance: instead of 3 Funding +$2.5M ($873M) Bond Funding 1. FY18-19:$60M (4 Bonds) 2- FY20-21:$100M 3. FYZZ-23:$1xSM 4- FY 24-25:$228M SUMMARY OSCENARIOS AnMW Rate Increases 1 2 3 4 5 6 7 a 9 14 1D-Year PemFen ftling ficanar ear ap um ription 10 Yuahiuty 2417,18 201949 7019.20 ZM-21 21Mi 22 2022-23 2023+24 2024-ZS 2025.26 ZCZS;27 Rate and Pmts TOW nsi36oni 'li increase dar Year 2015-16 enario used Cost of or Rate Setting(June $28 � iZ6Zl $rl 527 $234 lx 53 $747 Service 415) I $4t2 Percentage Increase ISM 5,330€ 4.97X 3.3% 3�3% 3 5,4 7-5% 35% 3-57. 3-5X 48.571E pdated January Data nciuding Wages, $28 $29 $28 $21 $21 $22 $23 524L $3e $25 $748 Updated Basekine etirement&Medic am $ata ates Perrenraae Increase 5 oN 5.40X 5 00% 3.5 4.5%6 3.5 r. 3 51& 3 5.1k 3 59 1AX AMIN Revised 24 SUMMARY OF SCENARIOS "721Rate 1nctooses L ! e S 6 7 I 3 Le s�ettartesft"mod If V-W CIO � .,.,t Ip tkm 2R17-U sda -p:3.20 262st;i ?Q7.22 2OZI•23 M3�r 34244S MS•21 2026.27 .. rior Year 2015-16 enario used Cost of or Rate Setting 11une $28 $28 $28 $Zl $21 $22 $23 $24 $24 $25 $747 Service 0151 $413 I _ Percentage Increase _ _ S57% 5 35% 4 97% 3 51L 354. 3 5- 35* 35%- 3 S% 35% 48.5% 'pdated January Data s ncluding Wages, $28 $29 $28 $Zl $21 $22 $23 $Z4 $24 $25 $748 Updated Baseline etirement&Medical ate$ $413 Percents a Increase 5.60% 5 40� 5 00NI 35N 15% 35% 3.5% 3.55 35N 3.5% 40.7% pdated data,$873 j 10 MP,add pension Pay Go ayment5 $95 $113 $134 $160 $35 $36 $38 $39 S44 S42 $1,236 $E73 � $2.5 Percentage Increase J8 9,, ll 9-. 129.1 lag" 354 351. 3.5'• 3 3%� 3 5'f 354 145#*w I SUMMARY OF SCENARIOS An�wl Iia1e tntreeses z s • s 6 7 1 e ly ssswwie >�wraw, .w...i uw.rv► rw►a �,1r 2477•®I to i6 1+•40 3ar�•,}; uqz 299.-I "Z:t24 AZ41 5 MS-Ps I112447 �-- fe►Year 2015-16 Scenario ed 5e r+rke cost r Rate Setting(lune 2015) $22 $22 57s $21 $21 $22 $23 114 $r4 SI5 $743' $419 Pff"ente1w Increase 5.5771 535% 4AN 3.5� 3.374 3.514 35.4 15,% 35% 3154 48 5!i pdated January Data ncluding Wages, Updated Baseline etirementi Medical Rater $22 $29 $24 $21 $21 $22 $23 $24 $24 $25 $742 $413 Prrcent a Increase 5.5074 S40% 5.006 3.5!s 3.5% is,, 3.5'- 3.5% 3.3%. 3.5m 4&IX pdated data,$873 CWMR, _ 1.D odd pension payments $95 $113 $134 $160 535 53® $31 $39 $40 $42 51,236 Pay-Go $873 $25 Pertenta 0fterr" 18 f% 1/.3'74 18.971 7l Sm 3.5,, 3.5% 3.S"4. 33, 3.54 3.519 145.1% pdated data,$173 CWMP. dd pension payments 2.0 Partial Deist Funding from Partial Bend Issuance eremher workshop $38 $41 S44 5 44 $40 $43 $45 $44 S51 S54 $956 (3 Bends( $4?3 6" Percentage.iacrease 7.674 76% 71r.%i 7 F54 6.0% 6.0% 6.074 6.071 6.0% 6.07E sal+: Debt Issue mi�bns,! $170 5178 .5194 � Revised 25 SUMMARY OSCENARIOS Anrwal Rate Increases 1 3 + 5 a 7 a e u Isom A1111111110110.4 rew ft-Am Wbbw art a.a 1p 2Q N31 i l 2til-A 2+23.24 20.2445 2125-2) Idt6-27 w.... riot Year 2015-16 Scenario sed Coit of r Rate Setting(June x015) $29 $23 $28 $21 $23 623 $12 $24 $24 S25 $747 Service $413 Perctnta elncrease 5 5771 5.35'1 40% 3.5% Asu J-Ju 3.59 7 SN is" 35,1 435., pdated January Data Updated Baisl ine lartial clud n8 Wages. etlrement A Medkal Rates $28 $29 $23 $21 S21 $32 $23 S24 $24 $L $,'41$413 Percents r Increase 5.60% 340% 5.006 3.S% 3 5!f 9$% 3 s% 3s% 3 SN 3 5'•F 49 N pdated data,$873 CWMP, 1.0 dd pension payments $93 $213 $134 $1" 635 S#8 $33 $39 $40 $42 51,23E Pay-Go $673 oil Pmenta a Increase Is 9+4 lit 9% 189% is 97i 3.5!41 J 33'.. 3-S-,, 3.5.% 3.s%� I45 FN pdated data,$373 CWMP. - dd pension payments 2.0 Debt Funding from Partial Band Issuance Yovember workshop Sag $41 Sao ,48 $40 $;3 $4S $ff SS] $54 $956 13 Bands) $E73 Sit.b Percentage Increase 79% 76', 7ISfa 71sV i9,.0% 6.071 6.0% 6-09 6.6% aft 90.17 Debt Issue rMINIOR4 $120 5171 $134 $482 pdated data,$973 CWMP, 21 dd pension payments, Partial Bond Issuance [educe O&M spending t4 Bonds ardal Debt Funding(inMal yearbend) $13 $33 $40 $43 54D $42 544 $47 $50 $53 $935 $973 82$ Percentage Increase ?am 70% 709 70%, f.09 6.07E 60% sox 6.119 6.09 l5 9'� Debt Issue r"11111crisy 560 5100 S125 S228 13 SEVER SERVICE [LARGE RATES FOR 27 BAY AREA AGENCIES 2016-11 AVR per SSC p lus SSC= Rano Connection AVR Santa Rosa 51239 27 SL239 Petaluma $1.119 26 51119 Rodeo Sant District 5962 _ _25 566 S1028__ Berk ele EBMUD for treatment) SON 24 $82p Crockett Community Services Distr ct $743 23 5212 5945 Richmond $722 22 _ S723 Daidand I f i UD for treatments 5717 21 5717 Benicia 5678 20 $678 Brentwood 5"3 19 S6fi3 Ironhouse Sanitaty District 5636 IS S13 $671 20I6.27Meen Rate cy 5 $606 515M ; sen eaf F!207�n AstehrcneateJUL Novato Sanita-li District 5573 17 $64 5637 Nib.p a Sanitation District S555 16 S555 Mountain View Sanitary District SS" 15 S27 5573 Livermore $50 14 _ =5540 CenftW Son PrWesed FY2027--18 Rate Wrease174 Lqu 61113 _ Pittsbu-j IDDSD for treatment) 5530 13 _ S22 5452 Stele SDI EBMUD for treatment- S521 12 S24 5545 Valle o 5320 I i 5520 t'ew2r*fSen $503 10 $73 S576 Concord CCCSD for treatment) 5302 9 5502 P easw"n $464 8 — 54" Ansi DDSD for treat ment-i SW 7 528 $SID Posr t'DDSD for treal menti $473 6 S67 SSQ WeWes�nrt Wastewat er District S468 5 S24 $492 Fairf lei d Sul sun San tart'District $436 ,s $436 Dublin%an Ramon Senrces District 5382 3 S18 S4D0 Union Saiita Dist dtt _ 5380 2 $380 [Oro Lama SLn tary,Disgrict 5221 lowest $221 Its Annaaa Sewer SeMcaChargeperMrgit Farm)yIlar,sdern.s atsrat Revised 26 F3 UPDATED RECYCLED WATER RATE IMPACT SCENARIOS ,z Y i FY 2016=17 RECYCLED WATER REVENUE AND ExPENSES •- ■ '� CCCSD Plant Industrial Use $0 $467,255 $219,885 $687,139 $687,139 $0 Zane 1 $496.345 $0 $291,147($158,830) $628,662 $909,834 ($281,173) Residential Fill $0 $326,083 $153,451 $479,534 $479,534 $0 Satellite 2 4.575 $1 $-0 $234,575 234.575 LO Total $730,920 $793,337 $664,482($158,830)$2,029,909$2,311,08Z ($281,173) FY rAdopted Zone-1,Former Potable 53.48per1000j_allons Zane 1 Former Canal:Wel$1.61pt r 1000 p-aons_ �- Revised 27 i FY 2017'=18 EC C LEC WATER RATE SCENARIOS Annwl Rat.l:>creases AD mm�. lOYear StMaele Fa�ln4 � 2 17 2 •U Zt# �U 20 f-7� 021•21 ZOZl-23 MU.23 2OU-24 M24-23 HHS-26 2 NIZ7 rtW one 1-Former Potable $/1.000 sammsy $343 $354 $369 $3.40 $392 $4.01 $4 U $422 $441 $454 $4.62 Perrsntog@ Increase 30% 3.0% 3 0% 3.0% 30%. 31% 30% 3.11% 3.0% 3 Oa* 34.416 31%CPI Adjustment one 1 Rate-Format anal/Well[5/1,0001alm"I U.s1 S166 $171 $1]'s $51,1 54.01) gig? #1.f2 $1.04 $210 52.1E PerrentoRelrrrrrase 3 L-,- 3&L 3 v, _ 3 d■: i 3t1� 3.0% SON 3.VM 3.09 3 o% NAM FY 2017=18 RWATER RATE SCENARIOS A-Mal Rats inersases 7n.Ysar 6s.swa►;e Endb2 2016+17 2217• 1011+19 1013--M 2020-U 129.1.22 2021.23 2CM24 2112445 202:5-06 2=q7 76W Ems 1-Farmer Potable S/1,000 plans) $343 $351 $3.69 $310 $3.92 $4.03 $4.16 $4.23 $4.41 54.54 $4.62 Percentage Increase 3.0% 3.0x 3.0% 3.01A 3.0% 1.0% 3.0% 3.0% 3.0% 30% 344% 3L CPl Adjustment one 1 Rate-Former anal/W*H($/1.0002allans) $161 $166 $1-71 $176 $1.21 $1.37 51.92 51.92 52.04 $210 52.16 Prrcerta a Increase 3 am 309 3.07E 3 079 3.07 3.019 3.09 3.0% 30% 3 0% 344% rm 1-Foer Potable $/1,200 Plsasj $342 S3 51 $3.69 $3.10 $392 '$4.03 $416 $4.21 $4.41 $454 $4.64 Mach Some Rats in Ton hmentagelncrmse 3.0% 3.0% 3.8% 3.0%, 39% 3.o% 30% 3.0% 3.0% 3.0% 34.4% Years one 1 Rate-Former anal/Well RS/1,000canons) $161 SL79 $191 $2.20 $2.44 $2.71 $3.01 $3.34 $371 $412 $4.57 Percentage Increase 11 0% 11.0% 11 a% 11.0% 110% II.079 UM 1I ON U09 1109 1/3.979 Revised 28 FY 2017= 1 8 RECYCLED WATER FATE SCENARIOS Annual Rain Inmates se Veer ss enarb C+�b+2 2016.17 2017.12 2013-19 2913-20 ZWO-21 ZDZI,Z2 m2I.23 I]-]A 201&25 WZ5-IL 7Q6.27 YEW Zone 1-Former Potable $/1,000 soleus) $342 $3.52 S369 $390 S3 NI $4 a 3 $416 $423 $4.41 $4.54 $4.69 Percentage Increase 30% 30% 30% 30% 30% 3.0% 3 01,� 3 D_N 3.0% 3.0% 344% 3-,CPI Adjustment one 1 Rate-Former anal/Well($/1,000 Salons) $1.01 $l fa $1.71 $176 $1.81 $l V 51 2 $191 $214 $I 10 S216 Percentage increase 3 r- J 0% 3.0% 3 0lk. J V4 30% _ 3.San: 3 UN 3014 3 V, 3446. one 1-Former Potable $/1,000 talons) $343 $3.51 $369 $390 $392 $4.03 $416 $4-23 $441 $4.54 $4.61 Reach Same Rate in Ten hrcentagelncrease 30% 30% 30% 30% 3.4% 311% 3 r.9 30% 3.0% 30% 344% Years one!Rate Farmer anal/Well 1$/1,000Salons) $161 $1 79 $298 $220 $244 $2.71 53.01 $334 $371 $412 $4.57 hrceRtale Increase I!.M* 110% I11K 11.04 I1.&N II a% III" II am 11.0m 1109 jai 9.% one 1-Former Potable $/1,000 talons) $3 U $351 $369 53.20 $3 92 $4 a3 $416 $4 I9 $4.41 $4S4 $4.63 Match CCWD Increase for Percentage Increase 3.0% 3.0,s 30% 30% 3 0ti 3 ar%% 3.0% 30% 3.0% 10-� 34.4 Former Canal/Wif I one 1 Rata-Farmer anal/Well($/1,000 plans) $161 $171 $111 $192 $203 $7 15 $2 to $242 $7 57 $272 $2.38 hrcentagelncrease 6.071 6.09 6 ON 60% 61ti 6.0% 6.0% 60% 6.09 6.07E 79!sr FY 2017=1 8 RECYCLED WATER RATE SCENA.RIOS Mewl Rate lexrraees 1tl,Yrar ra 2016.17 U17,111 JfiW12 20MR1 M1,41 20UIR 20i2-I3 2923;24 2024+5 2025.26 TON-7 l +m 1-Former Poti6le S/1,000 talions) $343 $3.52 $369 $3 20 $3.92 $4.03 $416 $4.23 $4.41 $4.54 $4.63 PPercentagelncrease 30% 30% 3.0% 3.0% 30% 3.0% 30% 3.0% 3 0% 30% 344% 3%-,CPI Adjustment one 1 Rate-Former anal/Well($/1,000tatlansl $1.61 51.66 $171 $176 5111 SL87 $192 $1.93 $2.04 52 10 $L16 PerconfaV eIncrease 3 am 30% 3.0% 309 309 3.09 30% 3.0% jam Jam 344% one i-Former Potable $/1,000 plane) $348 $352 $3.69 $310 $392 $4.03 '$4.16 $4.23 $441 $454 $4.62 Reach Same Rate in Ton hrrenlogeltxreose 3.0% 3.0% 30% 3.0% 3.0% 3111% 3.0% 3.0% 3.0% 3.0% 34.41% Years ne 1 Rate Former anal/Wall 1$/1,000 plans) $161 $179 51.91 SL20 $244 $7.71 $3.01 $334 $371 $412 $4.57 Percents elmmase ILIUM M 0% II.O% 1J.0% 11.0% 1109 11 09 110% I10% 1109 I839' 1-farmer Portable $/1.000 plans) $3 46 $352 $399 33.20 $392 $403 $416 $4 23 54.41 $454 $4.66 Match CCWD Increase for Percentogelncreow 3.0% 30% 30% 3.0% 30% Lim 30% 3D% 3.0% 3.0% 34.4% Former Canal/Well ane i Rate•Farmer anal/Well($/1,000 Salons) $161 $171 $1 21 $L97 $7.03 $LIS $2 Z9 $2 42 $2.57 $2.72 $2.38 Perrenta a Incrrose A.N 6.07E 6.0% 609 6.0% 6.0% 6.0% 6.09 6.09 6.09 79.111 Ewm 1-Fenner Potable -- M1100 talons) $3.43 53.52 '$369 $310 S392 $4.03 $416 $422 $441 $4.54 $4.63 Match Central San Increase Percentagehrc"M 3.0+► 3A+L 3.0% 3." 33196 3&e L 31% 3 0% 3111% 30% 34.4% for Former Canal/Well af■1 Rate-Former nal/Wel(5/1,000 plans) +31.01 $172 $114 $197 $211 51.26 $2 42 $2.59 $277 52% $3.17 Percentog a Increose U% 70% 7 aw 709 7 0% 70% 70% 70% 70% 7 094 .96.77E I� W7= Revised 29 F4 UPDATED RATE IMPLEMENTATION 'SCHEDULE 06 2017 RATE PUBLIC HEARING SCHEDULE Board of Directors- Rate Scenario Assumptions Nov. 10,2016 Board of Directors -Revenue Requirements Jan. 26, 2017 Board of Directors-Follow Up Rate Discussion Feb. 2, 2017 Board of Directors-Set Maximum Rate to Publish Feb. 16,2017 Proposition 218 Notice Mailed March 6, 2017 Board of Directors Public Hearing April 20,2017 • Sewer Service and Recycled Water Board of Directors Public Hearing June 1, 2017 • Adopt O&M and Capital Budgets • Adopt Development Fees&Charges FY 2017-18 Sewer Rates Effective July 1, 2017 Board of Directors—Sewer Service on Property Tax July 20,2017 Sewer Charges Submitted to County Assessor Aug. 10,2017 Revised 30 SUMMARY OF SCENARIOS FOR.. 5 YR. RATE INCREASES T Aenllei RaM i�tresses 1 2 3 4 S S+Yeu £ttd{n; Penson Rate and scwmia 10 Year Cita Lability Pints. Tow ID jmnronsrmK11onsj_ 2017.12 2013.14 2019.20 2020.21 202.1-22 %increase Prior Year 2015-16 Scenario used Cost of or Rate Setting 1iw1e 24151 $29 $28 $39 $21 SII $629 Service Percentage Increase 3 SN 5 35'4 417 3 Sib 3 5't i 2511, Updated Baseline1pdated January Data Including ages Retirement 14 Medical Rates $23 525 523 $21 $2.1 Sa34 $413 Perrentoot Increase 3 60'�- S 40�s S.M'st 3.3N 3.5 25 i pdated data,5973 CWMP,add L r} pe vision payments 54S $113 $134 $160 515 $1.444 Rate $873 $25 Percentage Increase Il BN is 9k 189% is 9+. 3!* I06 9'+ pdated data,$373 CWMP,add nom payments 2.0 artial Debt Funding from November Partial Bond Issuance workshop $33 $41 44 f 4A $40 $715 (3 Bands) $373 f7 s Perren loge Increase 76+d 76% 6 a'+ 42194 Debt Issue fmifiWsJ S11 a $171 USE I dated data,$373 CWMP,add 21 ensign payments.reduce O&M Partial Band Issuance pending (4 Bondsl artial Debt Fund ng(initial 2 year nd) $35 $33 544 $43 $44 $373 $z s Percentage Increase 7 oe. 70's 7 amn 7 Vas i&b 38 9% Debtlssue mlJUams 560 5100 S1ia t BENEFITS of A Two YEAR RATE • Flexibility to address any recommendations after capacity fee study and mixed use sewer service rate structure Additional time to outreach with ratepayers on proposed future increases Demonstrate ability to deliver increased capital budget program Ability to phase in higher capital reimbursement from Concord Time for Board to Adopt a Debt Policy AnIQ 1 Revised 31 i F5 OUTREACH PLAN ti �s k. s t Two RESIDENTIAL CUSTOMER WORKSHOPS SCHEDULED FOR OUTREACH fri-valley Area Area Wednesday,February 8,7017 Wednesday,February 15,2017 I6:30pm to 8:30pm 6:30pm to 8:30pm k °Danville Veteran's Memorial Building ❑rinda Community Center 400 Hartz Avenue,Danville 28 Orinda Way,Qrinda ` .OIL, Revised 32 QUESTIONS OR FEEDBACK? - 1 RECOMMEND BOARD ACTION ON THE FOLLOWING: A. Accelerate the public rate hearing on the annual Sewer Service Charge and Recycled Water Charge to April 20, 2017 B. Allow the use of Bonds for financing large (less frequent and non-recurring) infrastructure projects for purposes of preparing budget and rate scenarios C. Establish whether the rate schedule will be for one year, two years, or a longer period D. For the purposes of preparing Proposition 218 Notice, select preferred rate scenario for: 1) Sewer Service Rate Scenario (scenario 1.0, 2.0, or 2.1); and 2) Recycled Water Charge AWL.] Revised 33