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Home My WebLink About12-02-19 City Commission Packet Materials - A3. Wastewater Impact Fee Fund CIP for FY21-25 Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Kristin Donald, Finance Director SUBJECT: Adoption of the Wastewater Impact Fee Fund Capital Improvement Plan (CIP) for FY21-25. AGENDA ITEM TYPE: Action MEETING DATE: December 2, 2019 RECOMMENDATION: Adopt the Wastewater Impact Fee Fund Capital Improvement Plan (CIP) for FY21-25. BACKGROUND: Each year, the City Manager is required to prepare a 5 Year Capital Improvements Plan and submit it to the Commission by December 15th. The Public Works Department, City Manager, and other city staff met in October and November to develop the attached Capital Plan for the equipment and capital needs of the Wastewater Impact Fee Fund. The City’s Impact Fee Advisory Committee (IFAC) met on November 5 to review and make recommendations for the planned expenditures of Wastewater Impact Fees. There was a quorum of the Committee and they voted to recommend the attached CIP. They did emphasize the debt financing of the large projects in FY19 and FY20 is using up funding for future projects along with debt financing scheduled FY23. There is concern that the majority of the impacts fees in the future will be going towards debts payments rather than projects. Our Financial Summary is conservative with entire projects being budgeted in one year and the debt service starting the following year in the full amount. 167 UNRESOLVED ISSUES: None. ALTERNATIVES: As suggested by the City Commission. If the Commission is does not wish to adopt this schedule tonight, it can be scheduled for approval on a later agenda. FISCAL EFFECTS: This step in the process has no fiscal effect. Once adopted, the Capital Improvements Plan becomes the basis of the City Manager’s Recommended Budget for FY21. Report compiled on: November 15, 2019 Attached: Wastewater Impact Fee Fund CIP Section 168 WASTEWATER IMPACT FEE FUND FINANCIAL SUMMARY Financial Summary Current YearFY20 FY21 FY22 FY23 FY24 FY25UnscheduledProjected Beginning Reserve Balance Dedicated to CIP 3,590,778$ 2,389,548$ 2,812,077$ 2,809,273$ 3,091,771$ 688,406$ ‐$ Plus: Impact Fee Revenues Dedicated to CIP 1,109,180$ 1,142,455$ 1,176,729$ 1,212,031$ 1,248,392$ 1,285,844$ ‐$ Plus: Financing WWIF38 5,200,000$ Plus: Financing WWIF20 2,800,000$ Plus: Financing WWIF211,250,000$ Plus: Funding from FY19 Carry forward financing 7,985,000$ Less: Carryover FY19 Capital Projects (8,623,947)$ Less: Debt payments (WWIF11, 24,38,20,22) (97,463)$ (194,926)$ (879,533)$ (879,533)$ (1,151,757)$ (1,151,757)$ Less: Scheduled CIP Project Costs (6,774,000)$ (525,000)$ (300,000)$ (4,100,000)$ (2,500,000)$ ‐$ (20,245,000)$ Projected Year‐End Cash Dedicated to CIP 2,389,548$ 2,812,077$ 2,809,273$ 3,091,771$ 688,406$ 822,493$ Assumptions Made for Revenue Estimates Current YearFY20 FY21 FY22 FY23 FY24 FY25Estimated Annual Wastewater Impact Fee Revenues 1,109,180$ 1,109,180$ 1,142,455$ 1,176,729$ 1,212,031$ 1,248,392$ Estimated Annual Increase 0.0% 3% 3% 3% 3% 3%Total Estimated Revenues 1,109,180$ 1,142,455$ 1,176,729$ 1,212,031$ 1,248,392$ 1,285,844$ Current Revenues Dedicated to CIP % 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Plus: Increase Dedicated to Wastewater Capacity Expansion CIP 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Total % Dedicated to CIP 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%Total Estimated Revenues Dedicated to CIP 1,109,180$ 1,142,455$ 1,176,729$ 1,212,031$ 1,248,392$ 1,285,844$ ProjectedProjectedCURRENT$(525,000)$(300,000)$(4,100,000)$(2,500,000)$‐$(20,245,000)FY20 FY21 FY22 FY23 FY24 FY25 UNSCHEDULEDWASTEWATER IMPACT FEE PROJECTS 169 WASTEWATER IMPACT FEE FUND PROJECT SUMMARY Project # Project Name FY2021 FY2022 FY2023 FY2024 FY2025 UnscheduledWWIF20NORTH FRONTAGE ROAD INTERCEPTOR ‐ ‐ 2,800,000 ‐ ‐ ‐ WWIF22DAVIS‐FOWLER INTERCEPTOR ‐ ‐ 1,250,000 ‐ ‐ ‐ WWIF35BABCOCK SANITARY SEWER UPGRADE ‐ ‐ ‐ ‐ ‐ 245,000 WWIF44WRF INTERCEPTOR ‐ ‐ 50,000 500,000 ‐ WWIF45BIOTRAIN #1 RETRO FIT ‐ 300,000 ‐ 2,000,000 ‐ ‐ WWIF46DOWNTOWN SEWER MAIN UPGRADES ‐ ‐ ‐ ‐ ‐ 3,000,000 WWIF47WASTEWATER COLLECTION PLAN UPDATE 125,000 ‐ ‐ ‐ ‐ WWIF48HIDDEN VALLEY LIFT STATION ‐ ‐ ‐ ‐ ‐ 7,000,000 WWIF49WRF CAPACITY & NUTRIENT UPGRADES ‐ ‐ ‐ ‐ ‐ 10,000,000 WWIF51COTTONWOOD SUB SEWER OVERSIZING 400,000 Fiscal Year totals 525,000 300,000 4,100,000 2,500,000 ‐ 20,245,000 170 WASTEWATER IMPACT FEE FUND DETAIL BACKGROUND This enterprise fund revenue source is impact fees. Revenue estimates for Water Impact Fees have been updated with the 5‐year average collection amount, detailed on the following page. Revenues have grown on average by 4.62% per year, over the past 5 years. For the CIP, we have used the 5‐year Average collection, plus 3% growth each year from FY21 to FY25. $1,052,000.00 $1,232,889.00 $1,121,780.00 $1,810,489.00 $1,109,180.00 $1,265,267.60 $‐ $200,000.00 $400,000.00 $600,000.00 $800,000.00 $1,000,000.00 $1,200,000.00 $1,400,000.00 $1,600,000.00 $1,800,000.00 $2,000,000.002015 2016 2017 2018 2019 Average FY15‐19Wastewater Impact Fee Revenues171 CAPITAL PLAN SUMMARY The next major project for the plan is WWIF 20 the North Frontage Road interceptor scheduled in FY23, which will replace the road’s interceptor between Springhill RD and Bridger Dr. Portions of the current interceptor are at or very near capacity. This project will directly increase collection capacity in the southeast and east part of town. The same year we start work on WWIF44 the Water Reclamation Facility (WRF) Interceptor with construction done in FY24 and will expand capacity upgrading from a thirty‐inch outfall to a 48‐inch main. Scheduled in FY24 is WWIF45 Biotrain #1 Retro Fit that will increase nutrient (total nitrogen and total phosphorous) removal treatment capacity of the WRF. The retrofit will modify the reactor basin into a 5‐stage bardenpho reactor similar to existing Biotrains 2 & 3. The retrofit helps the WRF maintain its current nutrient effluent performance as the city continues to grow. In other words, as our wastewater load increases with growth, we need additional bioreactor capacity to maintain current nutrient effluent performance. A significant amount of borrowing has been incurred for Projects WWIF24, WWIF11, WWIF20, WWIF22 and WWIF38. Due to the uncertainty of the revenue stream, the Wastewater Utility will need to borrow via revenue bonds and be reimbursed by the Water Impact Fee Fund. There may be rate‐requirements to support this borrowing, which were included in the most recent Wastewater Rate Study. The estimated borrowing it outlined in the table below: The projects highlighted above aid in our efforts towards the Strategic Plan 4.3 b Increase Capacity of Sewer Pipes to Accommodate Development Projects. Debt‐ Description FY2021 FY2022 FY2023 FY2024 FY2025Davis Lane Lift Station Debt Service (WWIF24) 194,926 389,851 389,851 389,851 389,851 Front Street Interceptor Debt Service (WWIF11) ‐ 140,161 140,161 140,161 140,161 Norton East Rach Outfall Diversion (WWIF38) ‐ 349,521 349,521 349,521 349,521 N. Frontage Street Interceptor Debt Service ‐ ‐ ‐ 188,204 188,204 Davis‐Fowler Interceptor (WWIF22) ‐ ‐ ‐ 84,020 84,020 Total Estimated Debt Service Payment $ 194,926 $ 879,533 $ 879,533 $ 1,151,757 $ 1,151,757 Estimated Debt Schedule 172 Project NameYear Description Amount Total Project #N FRONTAGE RD INTERCEPTOR 5,290,000 DESCRIPTION: ‐ THIS PROJECT WILL REPLACE OR PARALLEL 11,500' OF ‐ THE NORTH FRONTAGE ROAD INTERCEPTOR BETWEEN ‐ SPRINGHILL RD AND BRIDGER DR. PORTIONS OF THE ‐ INTERCEPTOR ARE AT OR VERY NEAR CAPACITY AND UNLES ‐ IMPROVEMENTS ARE MADE IT WILL BE AT OR OVER ‐ CAPACITY WHEN THE TRIBUTARY OBLIGATED AREAS ARE ‐ DEVELOPED. THIS PROJECT WILL DIRECTLY INCREASE ‐ COLLECTION CAPACITY IN THE SOUTHEAST AND EAST PART ‐ OF TOWN WITHIN THE COMMUNITY PLAN BOUNDARY AS ‐ WELL AS THE EAST PART OF TOWN WILL BE TRIBUTARY TO ‐ THIS NORTH FRONTAGE ROAD INTERCEPTOR. THERE ARE ‐ POTENTIALLY A GREAT NUMBER OF PRIVATE ‐ DEVELOPMENT PROJECTS WHICH WILL NOT BE ABLE TO ‐ PROCEED DUE TO THE LACK OF WASTEWATER COLLECTION ‐ CAPACITY. THIS PROJECT WILL CONFORM TO THE CITY'S ‐ WASTEWATER MASTER PLAN. ‐ ALTERNATIVES CONSIDERED: ‐ LIMIT FUTURE DEVELOPMENT IN THE AREA. ‐ ADVANTAGES OF APPROVAL: ‐ IF CONSTRUCTED TO THE LINE SIZES MASTER PLANNED ‐ IN THE CITY S WASTEWATER FACILITIES PLAN, ‐ CAPACITY WILL BE PROVIDED FOR FUTURE GROWTH ‐ TRIBUTARY TO THIS MAIN. ‐ ADD OPERATING COSTS: ‐ IMPACT FEES CAN NOT FUND OPERATING AND MAINTENANCE ‐ COSTS. THE CITY S WASTEWATER UTILITY WILL PAY FOR ‐ HESE COSTS, WHICH ARE ESTIMATED TO BE A SMALL ‐ INCREMENT OF THE CITY S SYSTEM AS A WHOLE. ‐ DECREASE: (2,490,000) CHANGING THIS PROJECT TO BE DONE IN PHASES AS IT ‐ IS PROPOSED IN THE MASTER PLAN ‐ NORTH FRONTAGE ROAD INTERCEPTOR 20232,800,000 WWIF20173 Project NameYear Description Amount Total Project #DAVIS‐FOWLER INTERCEPTOR ‐ CONSTRUCTION 1,250,000 DESCRIPTION: ‐ THIS PROJECT WILL REPLACE OR PARALLEL 2700' OF THE ‐ DAVIS‐FOWLER INTERCEPTOR BETWEEN DURSTON AND ‐ OAK. THE INTERCEPTOR BETWEEN DURSTON RD AND W ‐ OAK WILL EVENTUALLY EXCEED CAPACITY AS THE BAXTER ‐ CREEK DRAINAGE BASIN DEVELOPS. IN ORDER TO CONVEY ‐ THE ULTIMATE BUILD‐OUT FLOW, THE INTERCEPTOR WILL ‐ NEED TO BE INCREASED FROM AN 18‐INCH DIAMETER TO ‐ A 24‐INCH DIAMETER PIPE. ‐ ALTERNAITVES CONSIDERED: ‐ LIMIT FUTURE DEVELOPMENT IN THE AREA. ‐ ADVANTAGES OF APPROVAL: ‐ IF CONSTRUCTED TO THE LINE SIZES MASTER PLANNED ‐ IN THE CITY S WASTEWATER FACILITIES PLAN, ‐ CAPACITY WILL BE PROVIDED FOR ANTICIPATING THE ‐ LONG‐TERM FUTURE GROWTH IN THIS AREA. ‐ ADD OPERATING COSTS: ‐ WASTEWATER FUND WILL TAKE ON MAINTENANCE OF ‐ THE SYSTEM. ‐ DAVIS‐FOWLER INTERCEPTOR ‐ CONSTRUCTION20231,250,000 WWIF22 (FY23)174 Project NameYear Description Amount Total Project #BABCOCK SANITARY SEWER UPGRADE 245,000 DESCRIPTION: ORIGINALLY SCHEDULED FY20 ‐ TO ACCOMMODATE FLOWS FROM PHASE 2 OF THE ICON ‐ APARTMENTS PROJECT, FERGUSON FARM, AND LUPINE ‐ VILLAGE AS WELL AS FUTURE IN‐FILL DEVELOPMENT, THE ‐ EXISTING 10‐INCH SANITARY SEWER MAIN IN W. ‐ BABCOCK MUST BE UPGRADED TO A 15‐INCH SANITARY ‐ SEWER MAIN FROM MANHOLE L0408 AT THE ‐ INTERSECTION OF RESORT DRIVE AND BABCOCK TO L0412 ‐ AT THE INTERSECTION OF BABCOCK AND COTTONWOOD. ‐ ALTERNATIVES CONSIDERED: ‐ DO NOTHING ‐ ADVANTAGES OF APPROVAL: ‐ ALLOWS INFILL DEVELOPMENT TO PROCEED AS THIS ‐ SANITARY SEWER MAIN WILL BE AT CAPACITY AFTER ‐ DEVELOPMENT OF PHASE I OF ICON APARTMENTS ‐ AND VARIOUS SITE PLAN APPLICATIONS AT FERGUSON ‐ FARMS. ‐ ADD OPERATING COSTS: ‐ MINIMAL AS THIS WILL BE A CAPACITY UPGRADE OF AN ‐ EXISTING SANITARY SEWER MAIN. ‐ BABCOCK SANITARY SEWER UPGRADE UNSCHEDULED245,000 WWIF35175 Project NameYear Description Amount Total Project #WRF INTERCEPTOR 50,000 DESCRIPTION: ‐ REPLACE OR PARALLEL 1200 FEET OF SEWER FROM I‐90 ‐ TO THE WRF. UPGRADE 30" OUTFALL TO 48" MAIN. ‐ WRF INTERCEPTOR 500,000 DESCRIPTION: ‐ REPLACE OR PARALLEL 1200 FEET OF SEWER FROM I‐90 ‐ TO THE WRF. UPGRADE 30" OUTFALL TO 48" MAIN. ‐ DESCRIPTION: 300,000 THIS IS A RETROFIT TO OUR OLDEST TRAIN BIOTRAIN #1 ‐ ADVANTAGE: ‐ THIS PROJECT WILL ALLOW FOR ADDITIONAL CAPACITY. ‐ ALTERNATIVES: ‐ NONE ‐ OPERATION COST: ‐ NONE ‐ DESCRIPTION: 2,000,000 THIS IS A RETROFIT TO OUR OLDEST TRAIN BIOTRAIN #1 ‐ ADVANTAGE: ‐ THIS PROJECT WILL ALLOW FOR ADDITIONAL CAPACITY. ‐ ALTERNATIVES: ‐ NONE ‐ OPERATION COST: ‐ NONE ‐ DOWNTOWN SEWER MAIN UPGRADES 3,000,000 DESCRIPTION: ‐ DOWNTOWN DEVELOPMENT AND USE INTENSIFICATION IS ‐ PLACING DEMANDS ON SEWERS THAT ARE UNDERSIZED AND ‐ GREATER THAN 100 YEARS OLD. UPGRADES ARE NEEDED TO ‐ ACCOMMODATE INCREASED DENSITY DOWNTOWN. ‐ ALTERNATIVES CONSIDERED: ‐ ADD OPERATING COSTS: ‐ CHANGES FROM LAST CIP: ‐ NEW ITEM ‐ WRF INTERCEPTOR 202350,000 WWIF44 (FY23)BIOTRAIN #1 RETROFIT 2022300,000 WWIF45 (FY22) WRF INTERCEPTOR 2024500,000 WWIF44 (FY24)DOWNTOWN SEWER MAIN UPGRADES UNSCHEDULED3,000,000 WWIF46 BIOTRAIN #1 RETROFIT 20242,000,000 WWIF45 (FY24) 176 Project NameYear Description Amount Total Project #WASTEWATER COLLECTION PLAN UPDATE 125,000 DESCRIPTION: ‐ GIVEN RAPID GROWTH AND THE DESIRE FOR INCREASED ‐ INFILL DENSITIES UPDATE THE WASTEWATER COLLECTION ‐ FACILITIES PLAN. THE HYDRAULIC MODEL UPDATE IN ‐ FY20 WILL BE A PREREQUISITE EFFORT FOR THIS UPDATE ‐ ALTERNATIVES CONSIDERED: ‐ CONTINUE IMPLEMENTING THE RECOMMENDATIONS PROVIDED ‐ IN THE PREVIOUS PLAN. ‐ ADD OPERATING COSTS: ‐ NONE ‐ CHANGES FROM LAST CIP: ‐ NEW ITEM ‐ HIDDEN VALLEY LIFT STATION 7,000,000 DESCRIPTION: ‐ DESIGN & CONSTRUCT HIDDEN VALLEY LIFT STATION & ‐ FORCE MAIN. THIS PROJECT WILL CONFORM TO THE ‐ CITY'S WASTEWATER COLLECTION FACILITIES PLAN. THE ‐ DAVIS LIFT STATION MUST BE UPGRADED TO ‐ ACCOMMODATE FLOWS FROM THE HIDDEN VALLEY LIFT ‐ STATION WHEN THE HIDDEN VALLEY LIFT STATION IS ‐ CONSTRUCTED. ‐ ALTERNATIVES CONSIDERED: ‐ LIMIT DEVELOPMENT ON THE NORTHWESTERN EDGE OF THE ‐ CITY DUE TO NO SANITARY SEWER AVAILABILITY. ‐ ADDITIONAL OPERATING COSTS: ‐ OPERATING COSTS WILL BE PAID FROM THE CITY'S SEWER ‐ ENTERPRISE FUND. ‐ WASTEWATER COLLECTION PLAN UPDATE 2021125,000 WWIF47 HIDDEN VALLEY LIFT STATION UNSCHEDULED7,000,000 WWIF48 177 Project NameYear Description Amount Total Project #WRF CAPACITY & NUTRIENT UPGRADES 10,000,000 DESCRIPTION: ‐ DUE TO GROWTH ON OUR SYSTEM, WE WILL NEED TO ‐ EXPAND THE CAPACITY OF THE WRF. ‐ THE MONTANA DEQ DISCHARGE PERMIT REQUIREMENTS ‐ ARE BECOMING SIGNIFICANTLY MORE STRINGENT. THIS ‐ UPGRADE WILL INCLUDE TECHNOLOGY UPGRADES FOR MORE ‐ STRINGENT PERMIT REQUIREMENTS. ‐ FUNDING: $10M WWIF 630 AND $50M WW620 ‐ COTTONWOOD SUBDIVISION SEWER OVERSIZING 400,000 DESCRIPTION: ‐ SEWER LINE NEEDS GREATER CAPACITY AND ‐ THIS PROJECT IS THE SUBDIVISION SEWER ‐ OVERSIZING FOR CAPACITY ‐ WRF CAPACITY & NUTRIENT UPGRADES UNSCHEDULED10,000,000 WWIF49 COTTONWOOD SUBDIVISION SEWER OVERSIZING 2021400,000 WWIF51 178