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(Handout) Preliminary 2011 10-Yr Capital Plan2011 -12 Capital Improvement Budget and Plan December 16, 2010 Board Presentation Capital Program Has Been Deficit Spending for Six Years QM Sewer GonNivalon 10 w.a s%,z ogeowe FuM B�I�rce %1.e %1.7 Mli � M011 MI11 8304MEAWOalmmb ConNuolon FU M qW Dl ibM Hnnual Expense lueVSYa Annual Revenue ^ NM g.a. 1 Current Year Program Sets Beginning Balance for Ten Year Plan 2010 -11 CAPITAL RECOMMENDED BUDGETED PROJECTED PROGRAM (WITH $16 SSC (ADJUSTED Total Sewer Service Charge per RUE INCREASE) FOR NO SSC $15 $200 2001 -02 INCREASE) $20 Total expenditures $28.5 million $28.5 million $28.2 million Total revenue $22.4 million $19.7 million $16.6 million Variance -$6.1 million -$8.8 million -$11.6 million SCF Balance $59.5 million $56.8 million $54.0 6/30/11 2005 -06 million (Beginning balance $280 6/30/10 $65.6 million $213 $76" $289 w /$30 M bonds.) 2007 -08 $242 2 ANNUAL SERVICE CHARGE PER RUE Fiscal Year Operations Component Capital Component Total Sewer Service Charge per RUE 2000 -01 $185 $15 $200 2001 -02 $204 $20 $224 2002 -03 $207 $41 $248 2003 -04 $218 $54 $272 2004 -05 $204 $76 $280 2005 -06 $234 $46 $280 2006 -07 $213 $76" $289 2007 -08 $242 $58 $300 2008 -09 $260 $51 $311 2009 -10 $292 $19 $311 2010 -11 $300 $11' $311 "$65 reduction in Capital Component represents $10.8 million per year Assuming 166,000 connections (RUE'S) 2 Sewer Service Charge Revenues Diverted from Capital Program to Balance District O &M Budget Total charge per RUE -- $000 $2M _ 3200 $150 $5,731,000 $3,816,000 $100 $853,000 ie0 Interest Sewer Construction Fund to-- .. .j�� .p' y` jY�r p y qtr Y Y" ar Y" Y Y" Y" , Y Y" Y ale Why are FY 2010 -11 Revenues Less Than Budgeted? FY 2010 -11 CAPITAL REVENUES BUDGETED PROJECTED Facility Capacity Fees $5,731,000 $3,816,000 Pumped Zone Fees $853,000 $493,000 Interest Sewer Construction Fund $850,000 $312,000 Property Taxes" $6,873,000 $6,570,000 Sewer Service Charge ($11 ** capital component) $1,856,000 $1,812,000" Reimbursements from Others City of Concord $2,429,000 $2,871,000 Recycled Water Sales $175,000 $175,000 Developer Fees /Other $445,000 $287,000 Alhambra Valley Assessments $457,000 $193,000 TOTAL $19,669,000 $16,529,000 Remainder after first paying for annual debt service of - $6 million Need $84 capital component to fully fund $28.2 M projected expenditures. 3 Residential Unit Equivalents (RUES) Connected by Fiscal Year 3.000 2803 2 500 Jws tY 2,000 1741 170J 1780 17M /047 0: 1lIJ 1CN G q5 y 1.500 1J59 1]70 13J! - k 1324 E Z 1000 500 0 9 " 9 a� P ° j _A P A�' P A� ,,yp A� A I �& � ,g �� le ,9e .,9° ,Ae e e h oA h o ° ' T e l hd'� g h4 h� P a Fiscal Year ■ Total RUES per Year 12 Ten Year Expenditures at a Glance • On going - $29 million / year 2011 dollars renovation / replacement / infill capacity • Years 1 -2 Concord Landscape Irrigation expenditures $3.2 million District share funded by SRF loan paid by REW revenue so little impact on rates. IS Years 2 -6 - $50 million incinerator air emissions improvements and $1 million per year increased O &M when operational • Assume start 2012 - $250,000 - $1 million per year to buy GHG allowances if exceed 25 metric tons CO2 per year • Years 7 -10 - $70 million nitrification improvements and $1.6 million per year increased O &M when operational 5 TABLE 1 CAPITAL RAIGETI PLAN SCENAM08 FOR 2011 F" 1111.1 m11n2 m10m awu mum aura man? m1 7m mum WIM 20WI Taal Fa Wane -Wf y m_ Iloanpnl F4n1 Yt1,W0 B. OW FM i. OW 0 ]WO 9950 01.5,0W A0550W BI%,OW 6100.W0 151]5.000 13 17019000 U1M,000 10.71 WD 10117M 1017= 17 000 I0,za0W IAWM 1111410: +nUSM CaaW 1,190,000 7u0.0a I.W= IaOAW INSM IWOM 1500.000 1502190 IMM I M "MM WM Sam MW 40.000 SWn 5.50190 550000 MW Mo,n S5 M 550190 5!35.000 Bs Maaunobemlt $CMMi 1 dW WO mW10W mIISOW X.&% ,WD 17 W70W 20,185019 26.096000 aAWOW m0a 019 m,W5,W0 214 E31,OW vmmmnar Ismwo: ).000.190 ).000.190 2101= 45537 15.000190 . Wp moo M d0II5aW 7190010 sFbO.oW 7019.019 0185.190 m.0a.W0 mAa.aW aFa WS X.195.195 II0,37M awtrm.iaax•colmm 05v1 Sma007 1.219019 0819019 20WAW .7&1]019 MIISOW N2WOW 7.019.019 25,119190 0058,019. aOH.OW 10 Bi�OW WBW OW J21.J)1 190. Phohiv.rtb • Cumtl ZV1.I Pwivwl 1 m8D5 OW .7fiJ10W'dBIIS WO 21118019 lOW.OW 19019.019 5019.190 10 05019 15=0 dt WB.OW 18519.019 WONOW 10.190.019 :III WO I,OWAW 7. OW ]01.ff10W '8.we aomaw Yirry 0aa S1 mAm barMSUUWxnp.wnunlOmp3 InamOOn, f9W,W5 •gram 301071 pmpvg hmtl m550Mbm. 5 TABLE 2 ASSUMPTIONS USED TO CALCULATE CASH FLOW TABLES FOR 10 -YEAR CAPITAL IMPROVEMENT PLAN Fiscal YSar 2010 - 2011- 2012. 2013- 2014 - 3016 2016- 2017. 2018. 2DW 2020- 2011 2012 2013 2014 2015 2016 2017 2019 2019 2020 2021 Interest% 0.5D% 0.50% 0.75% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 5.00% Inflation % 0.00% 0.00% 100% 1,50% 2.00% 3.00% 3.00% 3.00% 3.DD% 100% 3.00% #of New 700 am 900 loop 1.000 1.000 1,000 loop 1.000 1.000 1.000 Connections Ad Valorem -100% 0.00% 000% 100% 2.00% 2.00% 3.00% 3.00% 100% 300% 300 %' Tax Escalation" -Debt Service is funded First and the remaining goes to Capital TAKE PRELIM11 URV FIGURES J SUBJECT TO CHANGE 12a111ft 1a CUCrA Sallfr a 1XVINCY NTOtlMTNET. WRaI M0611a11.RN lr The SSC rate Increases shown below are based on very preliminary O&M Information and are for Illustration purposes only. Actual projected Increases could be higher than Indicated. Updated figures will be available for the February Financial Planning Workshop. IOIiL YGMrt ➢art LMf�ll :] IISMl1�! ®M�le1M11f•ME�IS�l�llll The SSC rate Increases shown below are based on very preliminary O&M Information and are for Illustration purposes only. Actual projected Increases could be higher than Indicated. Updated figures will be available for the February Financial Planning Workshop. IOIiL YGMrt fwAwM Yb K wwwu�tltl�rN�n Yrn tww� rnluwlww�tl Yw�wwnwwG�ralm n».rvA Otl Gwtl�aetl w{aY[y�w F KwwwrwiwlnL 161 ➢art fwAwM Yb K wwwu�tltl�rN�n Yrn tww� rnluwlww�tl Yw�wwnwwG�ralm n».rvA Otl Gwtl�aetl w{aY[y�w F KwwwrwiwlnL 161 Capital Component of Sewer Service Charge Fiscal Year 10 -11 11 -12 12 -13 13.14 .... 20 -21 Base Scenario $11 $18 $25 $33 19 -20 $57 Add Incinerators — No $11 $47 $81 $110 $20 $57 Bonds $18 $14 $14 $14 Scenario Add $11 $45 $79 $116 $102 Incinerators /Nitrification — GHG = No Bonds Add Incinerators — Bond $11 $21 $31 $42 $76 Finance Add $11 $22 $33 $46 $0 $75 Incinerators /Nitrification — $0 $0 $0 Incinerators Bond Finance Inon Sewer Service Charge Rate Increase Preliminary Figures ...... O&M Costs Still Being Estimated Fiscal Year 11-12 12 -13 13 -14 14-15 15 -16 16 -17 17.18 18 -19 19 -20 20 -21 Base $21 $21 $21 $20 $20 $20 $18 $14 $14 $14 Scenario +$2 -6 GHG = $23 -$27 Add $50 $48 $42 $6 $0 $0 $0 $0 $0 $0 Incinerators +$2.6 Inon — No Bonds GHG = O &M $50 -$54 Add $48 $48 $50 $6 $0 $28 $28 $26 $0 $0 Incinerators +$2-6 Intro +$10 /Nitrification GHG = O &M O &M — No Bonds $50-$54 =$36 Add $24 $24 $24 $22+ $22 $22 $18 $18 $15 $15 Incinerators +$2-6 $5 — Bond GHG = O &M = Finance $26 -30 $28 Add $25 $25 $25 $24+ $24 $23 $23 $10 $10 - S10 Incinerators +$2.6 $8 +$10 /Nitrification GHG = O &M = O &M — Bond $27-31 $30 = $20 Finance Discussion of Rate Setting Scenarios Advantages to raising rates higher and avoiding debt financing — Reduces total cost of program (no interest paid) — Reduces total rate increase needed by front loading the increase and enjoying the advantages of compounding — Maintains ability to debt finance in the future for unforseen events instead of using bonding capacity now — Any "excess" funds if regulations are less stringent can be used to pay down current unfunded liabilities Advantages to debt financing in mitigating rate increases — Allows for more moderate rate increases but over extended period of time — Those who benefit ..... ie. future users..... pay for facilities What are our total unfunded liabilities as of June 30, 2010? Accrued Compensated Absence $5.7 M GASB 45 OPEB Liability $54.3 M CCCERA Unfunded Liability $71.0 M Outstanding Debt $55.5 M TOTAL UNFUNDED LIABILITY —$187 M* *SEWER CONSTRUCTION FUND BALANCE 6 -30 -11 $54 MILLION 1.1 What is our bonding capacity? • Depends on willingness to raise rates to repay. • Currently we have no uncommitted capital revenue and are under - funding the capital program by about $10 million per year for baseline renovation investment. • We need to, as a minimum, raise rates to cover $10 million capital revenue shortfall. • Therefore, practically speaking we have NO available bonding capacity unless we raise rates significantly. What is our bonding capacity? • Guideline 10% of revenue going to debt service. Current revenue -- $81 million therefore debt service $8.1 million. • Current debt service $5.7 million per year vs. $8.1 million per year guideline. • By spreading debt from 20 -30 years and restructuring can maximize bond proceeds from minimum $ 56 to maximum $78 million. • Total Net Bond Revenue needed over 10 year Plan under scenarios presented if bond fund both Incinerator improvements and Nitrification is $111 million. CCCSD Debt Capaci Eslimmed Based on E.6 Uny mm Pmpoaed Debt Serviee F'Y 2010/11 Net Revenues of 519.346 Million 20 Year Tertn Aa2 /AAA Maximum Annual Debt St Miee AppMximotely SO.] million ' r' / ♦Ir Aae Mrllwn mM�rn'o1M FY 1aI1 Net 3 xn x..r.rra rrw..x• 3 4 b D 'al � 10' lee Te aund\ban Btu, O E�inina W W .Fn ropomJ 0.p An'ioa y -2nI l Nn per'mrre CC'C'SD Debt Capacity Estllnated Based on Emsting mld pl oposed Debt Sellice EY 3010 11 Net Revenues of $19..46 Million W Yea Te12n Aa3 AAA Tlaxiltnan A mtt l Debt Senia'r Applonlnatdr $8.1 m1111aD 20,000,000 f19 3f6 btll0dnielLlmeeatl Fy2011 Net pmeae �� e � no J 13,000,000 f Na limmle Conagp 10.000.000 � s.000aoo a 0 , o 1 o .163 9 tp19 , ya9 1p1S v 99 . , \ . . ,PA .mp . Bw veua snag o Eaivp DAa Snece =Pmpa Debt Seine 7011 No pnraop 10 What is down side of not funding Capital Program? • Sewer System Overflows subject to significant fines up to $10 per gallon • NPDES discharge violations subject to mandatory minimum penalties of $3000 up to $25,000 per day per violation • Air quality violations under Clean Air Act up to $25,000 per day per violation • Total exposure significant ...... for example City of Pacifica $2.3 million in fines What do EPA and RWQCB's consider affordable? • EPA guideline 2% of mean household income (MHI) for water and 2% for wastewater • MHI for central Contra Costa County - $80,000 per year • Affordable wastewater rate $1600 per year per household ....compared to current rate of $311 per year per household • Sacramento Regional permit (CVRWQCB) will result in increase to $720 per year per household 11 Conclusion of Rate Setting Discussion • Raising rates to pay for capital improvements is essential to maintain existing assets and meet new regulatory mandates • Raising rates more in early years of 10 year window and paying as you go is least cost long term alternative • Bond financing allows more gradual rate increases but significantly increases total cost • Bonding capacity is limited and prudent management would preserve some capacity for future unidentified necessities Proposed FY 2011 -12 Capital Improvement Program FY 2011 -12 CIB Program /Project Total Cost Treatment Plant Baseline $ 6.9 million Incinerator Improvements $ 3.0 million Collection System Baseline $13.9 million General Improvements Baseline $ 4.1 million Recycled Water Baseline $ 0.6 million Concord Recycled Water $1.2 million Total Baseline $25.5 million Total Baseline + Incinerator Improvements $28.5 million Total Baseline+ Incinerator+ Concord REW $29.7 million 12 FY 2011 -12 TREATMENT PLANT PROGRAM CATEGORY PROJECT ANNUAL EXPENSE One Time Pump &Blower Building Seismic $1,000,000 Renovation Primary Treatment Renovation' $ 750,000 Auxiliary Boiler Burner Upgrade $ 750,000 Outfall Inspection and Renovation' $ 700,000 Recurring Piping. Renovation Phase 6 $1,000,000 Renovation Treatment Plant Coatings Phase 4 $ 750,000 All Other $1,977,000 Total Baseline $6,927,000 Regulatory FY 2011 -12 CAPITAL REVENUE PRELIMINARY BUDGET $4,500,000 Facility Capacity Fees Pumped Zone Fees $593,000 Interest Sewer Construction Fund $260,000 on scenario) Property Taxes $6,630,000 Sewer Service Charge ($ 18 - 47 capital component depending on scenario) $3,060,000 - $7,520,000 Reimbursements from Others (Concord 30% depends $3,407,000 - $4,657,000 FY 2011 -12 Budgeted Expenditures $28,500,000 w/o REW FY 2011 -12 Budgeted Negative Variance - $4M - $10M FY 2011 -12 TREATMENT PLANT PROGRAM CATEGORY PROJECT ANNUAL EXPENSE One Time Pump &Blower Building Seismic $1,000,000 Renovation Primary Treatment Renovation' $ 750,000 Auxiliary Boiler Burner Upgrade $ 750,000 Outfall Inspection and Renovation' $ 700,000 Recurring Piping. Renovation Phase 6 $1,000,000 Renovation Treatment Plant Coatings Phase 4 $ 750,000 All Other $1,977,000 Total Baseline $6,927,000 Regulatory on scenario) $18,500,000 - $24,600,000 TOTAL (w /o REW Loan) FY 2011 -12 TREATMENT PLANT PROGRAM CATEGORY PROJECT ANNUAL EXPENSE One Time Pump &Blower Building Seismic $1,000,000 Renovation Primary Treatment Renovation' $ 750,000 Auxiliary Boiler Burner Upgrade $ 750,000 Outfall Inspection and Renovation' $ 700,000 Recurring Piping. Renovation Phase 6 $1,000,000 Renovation Treatment Plant Coatings Phase 4 $ 750,000 All Other $1,977,000 Total Baseline $6,927,000 Regulatory 13 Incinerator Air Emissions Impvmnts' $3,000,000 Total Baseline+ Incinerator Imp. $9,927;000 13 Using Asset Management Techniques to Scope Treatment Plant Renovation Projects Assets Condition Assessment r Business Risk Exposure (BRE) - Remaining useful life? I - Consequences of failure (criticality)? - Deficiencies? - Likelihood of failure? Determine Projects & Group Appropriately — by Location "Primary Renovation" or by Asset Type "Piping Renovation Incorporate in 10 yr CIP Condition Rating Key to Prioritizing Expenditures 1 Excellent No visual deface Only normal maintenance required. 2 Good Minor defects only Minor maintenance required (5 %). 3 Far Maintenance required to return to accepted level of service. ant aintena required (10.20%) Sigmfic m nce 4 Pow Significant ranswellupprade required (20 -50 %) 5 Unacceptable As set unserviceable. Over 50% M asset requires replacement. Condition Assessments completed on: Concrete Asphalt Paving Protective Coatings Transformers Buildings re Seismic Presence of Hazardous Materials Critical Piping (Aeration) Elevators Condition Assessments underway: Switchgear Condition Assessments ongoing: POD maintenance management "Mainsaver' Condition Assessments planned: More extensive piping, mechanical, and electrical, I &C 14 Primary Treatment Renovations Scum Piping Water Sprays 7Creened Scum Holding Tank / /eSreyyare( Concrete Baffles _ �CJffl �: �lud�e Arguably Most Critical Asset = Outfall Inspection Recommended Every Five Years • Last Inspection Summer 2003 • Flooding of Adjacent Properties resulted in need for sand bagging • Capacity strained even with dry weather flows • Need for alternate method of bypassing outfall became more evident......... • New structure complete in time for Outfall Inspection Summer 2011 15 Current Treatment Plant Bypass F $ r' N Capacity of existing drainage ditches for treatment plant bypass are limited to about 40 mg and will result in flooding of adjacent pro Mob A O.A FOF .. �. r Dry/Wet Weather Bypass Structure will allow discharge directly to Walnut Creek ro t�f �tlL "' Ls Dry / Wet Weather Bypass Improvements Project 17 Draft State Cap and Trade Regulations for GHG's • CCCSD can stay below capped sector initially by controlling cogeneration operation..... <25,000 metric tons CO2 per year • As landfill gas runs out will need to burn more natural gas in incinerators and will move above 25,000 metric tons CO2 per year CAP • Will then have to purchase allowances at $10 -40 per metric ton per year for O &M cost of $250,000 - $1 million per year or shut down cogeneration • Earliest implementation FY 2012 -13 under worst case landfill gas scenario in Regulation Under Section 129 of the Clean Air Act even more costly than expected... • Sewage Sludge Incinerators (SSI's) regulated originally under Section 112 domestic sewage sludge exclusion 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 which EPA is currently implementing • Proposed regulations are far more restrictive for mercury emissions than anticipated.... Estimated Cost of 129 Regulation Compliance Modify air emissions treatment for $50,000,000 Capital Cost + existing 2 Multiple Hearth $970,000 per year added Furnaces O &M Install one new Fluidized Bed $72,000,000 Incinerator with appropriate air Will be evaluated in detail as emissions treatment may save O &M Regulations expected to be final in 2011 with 3 -5 year compliance period.... Therefore $3 million budgeted for FY 2011 -12 to begin study and design. Ii MHF Modification Schematic r � IOIM i as sr.. MHF Modification Layout Schematic C' ❑ o WNaYmN W YvN�Yaib Gm[YnceM MNI NMI [PI.fb WCi 20 k EM Sludge Hauling will be possible if 129 compliance date cannot be met with our new sludge hauling facility......... Ammonia removal looking more likely within ten year window of the 2011 CIP • December 2010 — CVRWQCB adopts Sacramento Regional Permit with Stringent Ammonia and Nitrate Removal • December 2010 - San Francisco RWQCB initiates nutrient study plan for Suisun Bay to evaluate impact of ammonia on phytoplankton • September 2010 Sacramento Regional tentative NPDES renewal calls for ammonia and nitrogen 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 —Dr. Dugdale finds that ammonia from wastewater treatment plants may pose a threat to Delta species • November 27, 2007 - Petition for Rulemaking on Secondary Treatmen Standards for Nutrient Removal to EPA by NRDC 21 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) Nitrification Facility Layout New 22 Preliminary Capital Cost for Nitrification FY 2011 -12 COLLECTION SYSTEM PROGRAM CATEGORY Current Operation Conventional Nitrification Item (BOD removal) (Ammonia removal) Total Project - $70 million Capital Cost* inspection and others Annual O &M - $1.6 million Cost Increase Sewer — Lafayette *, Grayson per year FY 2011 -12 COLLECTION SYSTEM PROGRAM CATEGORY PROJECT ANNUAL EXPENSE Renovation program* Walnut Creek 8, South $ 8,871,000 Orinda 5, Lafayette 7, TV inspection and others Capacity /Renovations Pleasant Hill Road Trunk $ 2,400,000 Sewer — Lafayette *, Grayson Creek Trunk in Pleasant Hill Pumping Stations San Ramon Pump Station $ 850,000 Upgrades /Bypass pump Developer services Developer Services $ 500,000 Contractual Current CADs — Vista Del $ 500,000 Assessment Districts Orinda All others $ 776,000 Total $13,897,000 23 Collection System Asset Management Program • Condition Assessment of all lines through TV program allows prioritization of repairs • Points given for structural defects, sags, frequent overflows, root mass etc. • Use actual data, not predictive model • Renovation Program prioritizes by point score and schedules renovation by grouping geographically ie. Lafayette 7, Walnut Creek 8 • First round of TV program completed in November 2010.....currently developing scope for continuation All sewers in ulstrlct TV'd as of Nov 2010 24 Pipe Renovated to Date The following table reflects the miles of pipe (6, 8 &10 Inch) renovated to date. FISCAL YEAR PIPE RENOVATED 2005/07 8.1 Miles 2007/08 5.6 Miles 2008/09 6.3 Miles 2009/10 7.5 Miles 2010/11 2.6 miles TOTAL Completed Renovation 30.1 Miles Renovation Program (6, 8 & 10 inch) Achieves 100% Completion of all known defects by FY 17/18 Total miles of pipe to be renovated - 82.8 miles* Miles of pipe renovated to date - 30.1 miles Remaining miles to renovate - 52.7 miles 10 Yr Budget Miles of Percent of for Pipe Known Renovation Renov. in Defects (millions) ** Next 10 Renov. in Yrs * ** 10 Yrs $113.6 76.8 100% * Based on TV inspection of 99 percent of 6, 8 and 10 inch mains ** Provides $33.6 million in FY 18/19 to 20/21 for lines currently not identified by TV program * ** Estimated at $280/ft 404 SSO Downward Trend Has Been Significant Since Start of Renovation Program Running 12 -Month Overflow Totals 1999 to present ' I tw w u 0 o e^ h M1 h h h 12-Month TWM A Monts -raE SSO Downward Trend Has Been Significant Since Start of Renovation Program �Companson of Cumulative Gverflows� 120 100 80 60 60 - O 20 — l- 0 JAN PER MFR APR MAY JUN JUL NUM UEP OR MW MEC X2007 � 2008 X2009 X 2010 26 Capacity Program w - Pl-ee -nl XIIIIOnys=n CI..F zz. 1 10 year plan includes = $20M in high priority Pl....nl XIII Nc.G _ ®. capacity projects U -a. wi� W.InuIC.-eF- ! " e. 4 _ I ,c © C_] [_;o nm°�y umo 1II0° .n uven Ei., wzl B+n 4m n cnMU1.0 O \ J .♦ 27 i �� • 27 °�" ` Lafayette — Pleasant SpringhillI ° Hill Relief Trunk ementary School Sewer AcalagWH S. dw F v�ws`Xi H4 g vua IX M u Acalanes High •4�, School oq� sr s 8 a � si,.rx.s* •'w sr sR cam, Lafayette — Pleasant Hill Relief Trunk Sewer • Combination of tunneling, open cut and CIPP construction methods • Working closely with City of Lafayette • Construction within Pleasant Hill Road during schools' summer vacation complete in 8 -9 weeks • Special working hours (9 am to 6 pm) during construction on Pleasant Hill Road 141 FY 2011 -12 GENERAL IMPROVEMENTS PROGRAM PROJECT ANNUAL EXPENSE Vehicles and Equipment $500,000 Information Technology $500,000 CSOD Facility Improvements' $950,000 Seismic Improvements HOB and 4737 Imhoff Place $760,000 All Other $1,390,000 Total $4,100,000 Z 29 EXTERIOR ELEVATIONS COLLECTION SYSTEMS OPERATIONS DIVISION CENTRAL CONTRA COSTA SANITARY DISTRICT 30 FY 2011 -12 RECYCLED WATER PROGRAM PROJECT ANNUAL EXPENSE $550,000 $550,000 Baseline - Pleasant Hill Zone 1 and REW Planning Total Baseline Concord Landscape Irrigation* (assumes 25% Title 16 Grant) $1,200,000 Total $1,750,000 31 Concord Landscape Irrigation Project Over 30 New Customers Recycled Water Program Expansion Dependent on Funding Partners • Concord Irrigation Project has some likelihood of funding in next year or two..... therefore a scenario including expenditures for this project with a 25% Title 16 grant and SRF Loan has been developed and is self funding with REW revenue. The Refinery REW Project is speculative, therefore it has not been included in any 10 year plan scenario. The $100 million cost represents approximately $200 million over 20 years if bond funded for an annual cost of $10 million or about a $63 increase in the sewer service charge. 32 $4.2 million _ total cost Recycled Water Program Expansion Dependent on Funding Partners • Concord Irrigation Project has some likelihood of funding in next year or two..... therefore a scenario including expenditures for this project with a 25% Title 16 grant and SRF Loan has been developed and is self funding with REW revenue. The Refinery REW Project is speculative, therefore it has not been included in any 10 year plan scenario. The $100 million cost represents approximately $200 million over 20 years if bond funded for an annual cost of $10 million or about a $63 increase in the sewer service charge. 32 Sewer Service Charge Rate Increase Preliminary Figures ...... O&M Costs Still Being Estimated Fiscal Year 11- 12 -13 13 -14 14.15 15 -16 16 -17 17 -18 18 -19 19 -20 20.21 12 Base $21 $21 $21 $20 $20 $20 $18 $14 $14 $14 Scenario +$2 -6 GHG = $23 -$27 Add $50 $48 $42 $6 $0 $0 $0 $0 $0 $0 Incinerators +$2 -6 Incin 10 Year Total SSC Increase - No Bonds GHG = O &M $50 -$54 $148 to Total SSC $459 Add $48 $48 $50 $6 $0 $26 $28 $28 $0 $0 Incinerators/ +$2 -6 Inon +$10 Nitrification - GHG = O&M O &M No Bonds $50 -$54 =$36 Add $24 $24 $24 $22+ $22 $22 $17 $17 $15 $15 Incinerators +$2 -6 $6 —Bond Finance GHG - $26 -30 O &M ` $28 10 Year Total SSC Increase $210 to Total SSC $521 Add $25 $25 $25 $24+ $24 $23 $23 $10 $10 $10 Incinerators/ +$2 -6 $ +$10 Nitrification — GHG = O &M = O &M Bond Finance $27 -31 $30 = $20 Board Role in Capital Program is • Set Initial Capital Funding Levels in December • Confirm Capital Funding Levels in February • Mail Prop 218 Notice March • Board Workshop Focused on CIB /CIP Projects April • Authorize CIB /Program Budgets in June • Vote on Rate Increase in 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% 33 Food for Thought..... • Approximately $120 million in capital improvements for new regulatory requirements expected in next ten years. This is in addition to estimated $290 million for renovation and renewal that should be funded from ongoing revenues. • Available bonding capacity at 10% of gross revenues is $56 -78 million depending on term. Thus, would have to exceed 10% guideline in order to bond finance entire $120 million. • Raising rates higher in early years of plan to fund regulatory requirements without bonds resulted in significantly lower rates over the ten year term of the plan and significant lower total cost of program. What do we need from the Board today? Concurrence that proposed preliminary expenditure figures for FY 2011 -12 and the subsequent 9 years are acceptable for inclusion in financial planning documents to be reviewed by Board in February 2011 • Concurrence that relative emphasis and allocation of expenditures between the four programs is acceptable for development of the detailed FY 2011 -12 Capital Improvement Budget and Ten -Year Capital Plan