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Home My WebLink AboutAdopt the Wastewater Impact Fee Fund Capital Improvement Program Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Chris Kukulski, City Manager Anna Rosenberry, Finance Director SUBJECT: Adoption of the Wastewater Impact Fee Fund Capital Improvement Plan (CIP) for FY13-17 AGENDA ITEM TYPE: Consent MEETING DATE: December 19, 2011 RECOMMENDATION: Adoption of the Wastewater Impact Fee Fund Capital Improvement Plan (CIP) for FY13-17. 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. On December 5th, the Commission held a policy discussion to review the proposed Wastewater Impact Fee Fund Capital Improvement Plan (CIP) for FY13-17. As a result of that review, the attached CIP is recommended for approval. UNRESOLVED ISSUES: None. ALTERNATIVES: As suggested by the City Commission. 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 FY13. Report compiled on: December 14, 2011 Attached: Wastewater Impact Fee Fund CIP 60 Wastewater Impact Fee Capital Improvement PlanFinancial SummaryCurrent YearFY12 FY13 FY14 FY15 FY16 FY17Projected Beginning Reserve Balance Dedicated to CIP‐$ 264,000$ 264,000$ 264,000$ 264,000$ 264,000$ Plus: Impact Fee Revenues Dedicated to CIP668,000$ 828,200$ 836,482$ 853,212$ 870,276$ 887,681$ Less: Scheduled CIP Project Costs(404,000)$ (828,200)$ (836,482)$ (853,212)$ (870,276)$ (887,681)$ Projected Year‐End Cash Dedicated to CIP264,000$ 264,000$ 264,000$ 264,000$ 264,000$ 264,000$ Assumptions Made for Revenue Estimates:Current YearFY12FY13FY14FY15 FY16 FY17Estimated Annual Wastewater Impact Fee Revenues820,000$ 820,000$ 828,200$ 836,482$ 853,212$ 870,276$ Estimated Annual Increase0.0%1%1%2%2%2%Total Estimated Revenues820,000$ 828,200$ 836,482$ 853,212$ 870,276$ 887,681$ Current Revenues Dedicated to CIP %100.0%100.0% 100.0% 100.0% 100.0% 100.0% Plus: Increase Dedicated to Wastewater Capacity Expansion CIP0.0%0.0%0.0%0.0% 0.0% 0.0% Total % Dedicated to CIP100.0%100.0%100.0%100.0% 100.0% 100.0%ProjectedProjectedTotal Estimated Revenues Dedicated to CIP820,000$ 828,200$ 836,482$ 853,212$ 870,276$ 887,681$ 7,000,0006,000,0005,000,0004,000,0003,000,0002,000,0001,000,0000FY13 FY14 FY15 FY16 FY17 UnscheduledWastewater Impact Fee Projects 161 PROJ.DEPARTMENTPROJECT NAMEFY13FY14FY16UnscheduledFY15RATINGFY17CIP PROJECT FUND:Impact Fees WastewaterWWIF14WWATER IFWRF PHASE I DEBT RETIREMENT$828,200$836,482$853,212$870,276$960,00050$887,681WWIF12WWATER IFGRAF STREET EXTENSION$50,00035WW28WRF PLANTDESIGN PHASE II ‐ WRF PLANT IMPROVEMENTS$2,615,00030WWIF05WWATER IFHOSPITAL TRUNK LINE: HAGGERTY TO KAGY$1,062,00027WWIF11WWATER IFREPLACE FRONT STREET: TAMARACK/ROUSE$1,800,00027Summary for Impact Fees Wastewater (5 items)Totals by year:$828,200 $836,482 $853,212$870,276$6,487,000FY13FY14FY15FY16UnscheduledFY17$887,681262 CIP Project Fund Impact Fees Wastewater PROJECT NUMBER WW28 DEPARTMENT WRF PLANT PROJECT NAME DESIGN PHASE II - WRF PLANT IMPROVEMENTS FY13 FY14 FY15 FY16 Unscheduled $2,615,000 DESCRIPTION OF PROJECT In January 2006 Morrison & Maierle Consulting Engineers completed a comprehensive Wastewater Facilities Plan. The plan recommends the City proceed with a 3-phased project schedule that includes the construction of the new Water Reclamation Facility (WRF), capable of handling our increased flows while also reducing the amount of Total Nitrogen discharged to the East Gallatin River. Phase two is expected to include one new primary clarifier, more BNR reactor basins, clarifiers, tertiary deep bed filtration, liquid sludge storage tanks, anaerobic digestion, and effluent re-use pumping station. The capacity expanding (impact fee eligible) elements are: reactor basins, clarifiers, and pumping station. It is possible that this phase of the project could be further divided into phase 2A and phase 2B, if necessary. ALTERNATIVES CONSIDERED A variety of treatment technologies and alternatives are presented in the January 2006 Wastewater Facilities Plan. ADVANTAGES OF APPROVAL Major capital expansion of the Bozeman WRF will enable the City to meet its estimated demand for wastewater services and still produce a high quality effluent that is in full compliance with the City’s MPDES discharge permit. Expansion of the Bozeman WRF is consistent with the City’s long-term need to accommodate rapid growth and economic development in the Gallatin Valley. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED Annual Operating & Maintenance Costs: no estimates at this time. FUNDING SOURCES Total Design Cost: $5,230,000. We estimate that half of the costs are related to regulation and maintenance issues and would be borne by the Utility Fund. Half are related to capacity expansion, and would be borne by Impact Fees. 50% Wastewater Fund, 50% Wastewater Impact Fee Fund. New Replacement Equipment Project Impact Fee Funds Project and Equipment Scoring TOTAL SCORE:30 FY17 REQUIRED - CAPITAL or DEBT SERVICE REQUIRED - USEFUL LIFE 10+ YEARS REQUIRED - CAPACITY EXPANDING BENEFITS TO NEW DEVELOPMENT: (Up to 20 pts)20 DIRECT BENEFITS: (Up to 10 pts)5 FUNDING CERTAINTY: (Up to 10 pts)5 COMMISSION WORK PLAN PRIORITY: (Up to 10 pts)0 3 63 CIP Project Fund Impact Fees Wastewater PROJECT NUMBER WWIF05 DEPARTMENT WWATER IF PROJECT NAME HOSPITAL TRUNK LINE: HAGGERTY TO KAGY FY13 FY14 FY15 FY16 Unscheduled $1,062,000 DESCRIPTION OF PROJECT Construct ~7,900 LF of 12" and 15" sewer collector from manhole C0507 to 1E22. 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 anticipating the long-term future growth in this area. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED Annual Operating and Maintenance Costs: Impact fees can not fund operating and maintenance costs. The city’s wastewater utility will pay for these costs, which are estimated to be a small increment of the city’s system as a whole. FUNDING SOURCES 70% Wastewater Impact Fees = $743,400 30% Developer Contribution = $318,600 New Replacement Equipment Project Impact Fee Funds Project and Equipment Scoring TOTAL SCORE:27 FY17 REQUIRED - CAPITAL or DEBT SERVICE REQUIRED - USEFUL LIFE 10+ YEARS REQUIRED - CAPACITY EXPANDING BENEFITS TO NEW DEVELOPMENT: (Up to 20 pts)20 DIRECT BENEFITS: (Up to 10 pts)2 FUNDING CERTAINTY: (Up to 10 pts)5 COMMISSION WORK PLAN PRIORITY: (Up to 10 pts)0 4 64 CIP Project Fund Impact Fees Wastewater PROJECT NUMBER WWIF11 DEPARTMENT WWATER IF PROJECT NAME REPLACE FRONT STREET: TAMARACK/ROUSE FY13 FY14 FY15 FY16 Unscheduled $1,800,000 DESCRIPTION OF PROJECT This project consists of construction of ~11,000 LF 18", 21" & 24" sewer pipe from manhole F0330 to C0507. The lower portion of the existing sewer is at capacity. Additional capacity is needed to serve the future Bozeman Deaconess Hospital development and lands to the south. It is estimated that 70% of this project costs will be due to capacity expansion and will be eligible for Wastewater Impact Fees. The remaining 30% of the project costs will need to be provided by a developer contribution or other source. At this time, the City’s Wastewater Utility does not have a need to replace the existing facility; as such, no utility dollars are scheduled to be spent. ALTERNATIVES CONSIDERED Limit development to only that capacity of the existing sewer. ADVANTAGES OF APPROVAL This project will significantly increase the service area and capacity of the trunk sewer. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED Annual Operating and Maintenance Costs: Impact fees can not fund operating and maintenance costs. The city’s wastewater utility will pay for these costs, which are estimated to be a small increment of the city’s system as a whole. FUNDING SOURCES 70% Wastewater Impact Fees = $1,260,000 30% Developer Contribution = $540,000 New Replacement Equipment Project Impact Fee Funds Project and Equipment Scoring TOTAL SCORE:27 FY17 REQUIRED - CAPITAL or DEBT SERVICE REQUIRED - USEFUL LIFE 10+ YEARS REQUIRED - CAPACITY EXPANDING BENEFITS TO NEW DEVELOPMENT: (Up to 20 pts)20 DIRECT BENEFITS: (Up to 10 pts)2 FUNDING CERTAINTY: (Up to 10 pts)5 COMMISSION WORK PLAN PRIORITY: (Up to 10 pts)0 5 65 CIP Project Fund Impact Fees Wastewater PROJECT NUMBER WWIF12 DEPARTMENT WWATER IF PROJECT NAME GRAF STREET EXTENSION FY13 FY14 FY15 FY16 Unscheduled $50,000 DESCRIPTION OF PROJECT This project is to extend Wastewater Mains below Graf Street approximately ¼ mile in order to connect infrastructure east from 19th Avenue. This is an important connection for public safety purposes – allowing fire service to meet their response time requirements in areas where they currently cannot. The Wastewater infrastructure should be installed at the same time the street connection is made. ALTERNATIVES CONSIDERED Do nothing and wait for development to connect the infrastructure. ADVANTAGES OF APPROVAL Improved traffic flow and better emergency response to the local area. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED FUNDING SOURCES 100% Wastewater Impact Fee – to be recovered by developer payback. New Replacement Equipment Project Impact Fee Funds Project and Equipment Scoring TOTAL SCORE:35 FY17 REQUIRED - CAPITAL or DEBT SERVICE REQUIRED - USEFUL LIFE 10+ YEARS REQUIRED - CAPACITY EXPANDING BENEFITS TO NEW DEVELOPMENT: (Up to 20 pts)20 DIRECT BENEFITS: (Up to 10 pts)10 FUNDING CERTAINTY: (Up to 10 pts)5 COMMISSION WORK PLAN PRIORITY: (Up to 10 pts)0 6 66 CIP Project Fund Impact Fees Wastewater PROJECT NUMBER WWIF14 DEPARTMENT WWATER IF PROJECT NAME WRF PHASE I DEBT RETIREMENT FY13 $828,200 FY14 $836,482 FY15 $853,212 FY16 $870,276 Unscheduled $960,000 DESCRIPTION OF PROJECT Total adjusted project price for the Water Reclamation Facility (WRF) construction of phase one is estimated at $53.8 Million. Of that amount, $17.9 Million is for capacity expanding costs of construction. The impact fee account will not have enough cash on hand to pay the costs of construction when the facility is built. As such, impact fee revenues will be dedicated to pay the outstanding debt in future years, as fee revenues are collected. At this point, approximately $4.87 Million of impact fee eligible costs will be paid with a long-term loan (20 years, 3.75%) through the State’s Revolving Loan Fund. A debt schedule will be updated semi-annually with the amount of impact fee dollars that have been dedicated to debt payments until the full amount owed is paid. ALTERNATIVES CONSIDERED ADVANTAGES OF APPROVAL Major capital expansion of the Bozeman WRF will enable the City to meet its ever growing demand for wastewater services and still produce a high quality effluent that is in full compliance with the City’s MPDES discharge permit. Expansion of the Bozeman WRF is consistent with the City’s long-term need to accommodate rapid growth and economic development in the Gallatin Valley. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED FUNDING SOURCES FY07 Design: Total $3.9 Million 67% Wastewater Utility Cash = $2.33 Million 33% Wastewater Impact Fee Cash = $1.57 Million FY09 & FY10 & FY11 Construction: Total $49.9 Million 67% Wastewater Utility = $33.5 Million New Replacement Equipment Project Impact Fee Funds Project and Equipment Scoring TOTAL SCORE:50 FY17 $887,681.00 REQUIRED - CAPITAL or DEBT SERVICE REQUIRED - USEFUL LIFE 10+ YEARS REQUIRED - CAPACITY EXPANDING BENEFITS TO NEW DEVELOPMENT: (Up to 20 pts)20 DIRECT BENEFITS: (Up to 10 pts)10 FUNDING CERTAINTY: (Up to 10 pts)10 COMMISSION WORK PLAN PRIORITY: (Up to 10 pts)10 7 67