The URL can be used to link to this page

Home My WebLink AboutAdopt the Water 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 Water Impact Fee Fund Capital Improvement Plan (CIP) for FY13-17 AGENDA ITEM TYPE: Consent MEETING DATE: December 19, 2011 RECOMMENDATION: Adoption of the Water 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 Water 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: Water Impact Fee Fund CIP 51 Water Impact FeeCapital Improvement PlanFinancial SummaryCurrent YearFY12 FY13 FY14 FY15 FY16 FY17Projected Beginning Reserve Balance Dedicated to CIP8,500,000$ 4,100,000$ 1,883,210$ ‐$ (0)$ (0)$ Plus: Impact Fee Revenues Dedicated to CIP850,000$ 858,500$ 867,085$ 884,427$ 902,115$ 920,158$ Less: Scheduled CIP Project Costs(5,250,000)$ (3,075,290)$ (2,750,295)$ (884,427)$ (902,115)$ (920,158)$ Projected Year‐End Cash Dedicated to CIP4,100,000$ 1,883,210$ ‐$ (0)$ (0)$ (0)$ Assumptions Made for Revenue Estimates:Current YearFY12FY13FY14FY15 FY16 FY17Estimated Annual Water Impact Fee Revenues850,000$ 850,000$ 858,500$ 867,085$ 884,427$ 902,115$ Estimated Annual Increase0.0%1%1%2%2%2%Total Estimated Revenues850,000$ 858,500$ 867,085$ 884,427$ 902,115$ 920,158$ Current Revenues Dedicated to CIP %100.0%100.0% 100.0% 100.0% 100.0% 100.0% Plus: Increase Dedicated to Water 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 CIP850,000$ 858,500$ 867,085$ 884,427$ 902,115$ 920,158$ 50,000,00045,000,00040,000,00035,000,00030,000,00025,000,00020,000,00015,000,00010,000,0005,000,0000FY13 FY14 FY15 FY16 FY17 UnscheduledWater Impact Fee Projects Page 152 PROJ.DEPARTMENTPROJECT NAMEFY13FY14FY16UnscheduledFY15RATINGFY17CIP PROJECT FUND:Impact Fees WaterW07WATER IFWATER TREATMENT PLANT 22MG MEMBRANE PLANT$3,075,290WIF08WATER IFWATER TREATMENT PLAN DEBT SERVICE PAYMENT$2,750,295$884,427$902,11550$920,158WIF07WATER IFGRAF STREET EXTENSION$150,00035WIF01WATER IFWater Supply Planning and Infrastructure$19,750,00032WIF03WATER IF5.3MG CONCRETE WATER STORAGE RESERVOIR$5,300,00028WIF05WATER IFWest Water Transmission Main Loop$21,680,00010Summary for Impact Fees Water (6 items)Totals by year:$3,075,290 $2,750,295 $884,427$902,115$46,880,000FY13FY14FY15FY16UnscheduledFY17$920,158Page 253 CIP Project Fund Impact Fees Water PROJECT NUMBER W07 DEPARTMENT WATER IF PROJECT NAME WATER TREATMENT PLANT 22MG MEMBRANE PLANT FY13 $3,075,290 FY14 FY15 FY16 Unscheduled DESCRIPTION OF PROJECT This new Membrane Filter Treatment Plant is the preferred water treatment alternative identified in the adopted Water Facility Plan. It is recommended to be built with an initial configuration providing 22MGD of water treatment capacity, with future expansion capability to 36MGD. This addresses both the 10- and 20- year capacity requirement forecast for the City’s water treatment system. It is expected to be online by October 2013. The current 15MGD WTP equipment is nearing the end of its useful life; the plant’s direct filtration treatment process, while effective most of the year, becomes only marginally effective during spring runoff or flash thunderstorms in the watershed, dropping plant efficiency as low as 70%; and, rapid population growth and expansion of city water services is increasing demand for water. The current plant capacity may be exceeded in as few as five years. ALTERNATIVES CONSIDERED The Water Facility Plan considered numerous alternatives for water treatment. This was identified as the preferred alternative in the adopted plan. ADVANTAGES OF APPROVAL Planning for increased water supply to meet growing demands and to replace existing equipment that is at the end of its useful life. The New Plant will be located at the current site in a 49,620 sf building located directly north of the plant. It will include pre- ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED This plant is not estimated require an addition to existing plant staff. Annual O&M costs = est. $1,735,901 (including existing staff plus new plant expenses). None of these costs can be paid with Impact Fees. FUNDING SOURCES The most recent estimate of plant costs was provided in the Fall of 2010, at a total of $40.7 Million. It is estimated that 33% of total project costs (approx $13.4 Milion) are related to capacity expansion of the plant, and therefore are eligible for impact fee funding. TOTAL PROEJCT: FY08 Pilot Testing: $200,000. FY09,FY10, FY11 Design and Membrane equipment deposit, construction $7,267,000. FY12 $16,460,000. FY13 $16,460,000. New Replacement Equipment Project Impact Fee Funds Project and Equipment Scoring TOTAL SCORE: FY17 REQUIRED - CAPITAL or DEBT SERVICE REQUIRED - USEFUL LIFE 10+ YEARS REQUIRED - CAPACITY EXPANDING BENEFITS TO NEW DEVELOPMENT: (Up to 20 pts) DIRECT BENEFITS: (Up to 10 pts) FUNDING CERTAINTY: (Up to 10 pts) COMMISSION WORK PLAN PRIORITY: (Up to 10 pts) Page 3 54 CIP Project Fund Impact Fees Water PROJECT NUMBER WIF01 DEPARTMENT WATER IF PROJECT NAME Water Supply Planning and Infrastructure FY13 FY14 FY15 FY16 Unscheduled $19,750,000 DESCRIPTION OF PROJECT The 2005 Water Facility Plan forecasts a growth-related water supply deficiency to occur within the 20 year planning horizon of the document. A new source of water supply must be planned for, including construction of related infrastructure, to meet the future water demands of the City before an actual supply problem arises. When this deficiency will actually occur is difficult to predict due to its nexus with multiple factors that may vary significantly with time. Important temporal-related variables include population growth, per capita water use, climate-related hydrological impacts, and the relative pattern of sectored growth (i.e. large industrial, residential, and commercial sectors, etc.). Further complicating the water supply issue are uncertainties surrounding the City’s existing water rights. The project consists of two main components: Planning; and Implementation. An Integrated Water Supply Plan (IWRP) will be prepared to document, analyze, and evaluate all pertinent and relevant information surrounding current water rights and water use, future demand, climate impacts, and alternative sources of future water supply. Alternative source analysis is intended to be a broad array of sources from deep groundwater, shallow groundwater, purchase of Hyalite Reservoir water, Sourdough Dam, Water Conservation, etc. The goal of the plan is to address the complexities of the City’s existing water rights, water use and future demand to determine a realistic set of water supply alternatives and capital estimates to further plan and develop through implementation of IWRP recommendations. The implementation component of the project will likely require additional specific planning and/or studies. For instance, a specific hydrogeologic characterization of a potential groundwater well field including pump testing; or a specific geotechnical, geological, and seismic characterization of a potential dam site. Furthermore, environmental permitting (i.e. NEPA/MEPA compliance) of the implemented alternative will be a likelihood and acquisition of a new beneficial water right permit will be required for any new water source development. These are complex issues with a protracted implementation future. ALTERNATIVES CONSIDERED The IWRP will consider and evaluate a broad array of available water supply sources to satisfy the future needs of the City. ADVANTAGES OF APPROVAL Additional water is secured to meet future needs. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED Unknown at this time. FUNDING SOURCES 100% Water Impact Fees New Replacement Equipment Project Impact Fee Funds Project and Equipment Scoring TOTAL SCORE:32 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)2 COMMISSION WORK PLAN PRIORITY: (Up to 10 pts)5 Page 4 55 CIP Project Fund Impact Fees Water PROJECT NUMBER WIF03 DEPARTMENT WATER IF PROJECT NAME 5.3MG CONCRETE WATER STORAGE RESERVOIR FY13 FY14 FY15 FY16 Unscheduled $5,300,000 DESCRIPTION OF PROJECT According to the 2007 Water Facility Plan, a new 5.3MG partially buried concrete water storage reservoir was to be constructed by 2017. Given the recent slow-down in growth, we anticipate needing the tank some time after 2017. The proposed location of the reservoir is on City property adjacent (to the North) of the proposed new Hyalite/Sourdough water treatment plant. This reservoir is sized to meet the City’s storage needs up to 2025, assuming a 5% annual growth rate. Locating the storage reservoir at the recommended site will raise the hydraulic grade line in the City’s water system, which will increase pressure for the southern part of the City and will allow future development to occur in the south on a gravity system. ALTERNATIVES CONSIDERED The water facility plan reviewed numerous options. This is the preferred alternative of the adopted plan. ADVANTAGES OF APPROVAL Increased water storage to meet the needs of our growth community, and the requirement of MDEQ. Increased system water pressure in the southern part of the City. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED Requires minimal operation and maintenance. Checking of valves, level sensors and vents on an annual basis and diver inspection and vacuuming every five years. Estimated at $4,000 annually. FUNDING SOURCES 100% Water Impact Fees New Replacement Equipment Project Impact Fee Funds Project and Equipment Scoring TOTAL SCORE:28 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)3 FUNDING CERTAINTY: (Up to 10 pts)5 COMMISSION WORK PLAN PRIORITY: (Up to 10 pts)0 Page 5 56 CIP Project Fund Impact Fees Water PROJECT NUMBER WIF05 DEPARTMENT WATER IF PROJECT NAME West Water Transmission Main Loop FY13 FY14 FY15 FY16 Unscheduled $21,680,000 DESCRIPTION OF PROJECT The Water Facility Plan identifies this project as the most critical redundancy issue in the City’s water distribution system. 4,525 N/A 12" Install New 12" $ 911,335 2,636 N/A 24" Install New 24" $ 1,101,716 5,154 N/A 36" Install New 36" $ 3,481,785 17,093 N/A 48" Install New 48" $16,187,712 Total Project Cost $21,682,548 The precise location of the required mains is somewhat flexible, but in general will be from Wagonwheel road (extended) in S. 19th to Goldenstein to South 3rd to Nash Road (see exhibit 5.B.3 of the facility plan). Given the priority of the Water Treatment Plant project, the City is not currently planning to complete these projects. ALTERNATIVES CONSIDERED Do not build redundant transmission main. ADVANTAGES OF APPROVAL The city will be assured that water can be supplied even if one transmission main sustains damage and is offline for a number of days. The City receives the majority of its water from the Water Treatment Plant through an existing 30 inch concrete ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED Annual Operating & Maintenance Costs: Impact Fees can not be spent on annual operations and maintenance costs. The Water Utility will see incremental increases in general maintenance costs. Current cost estimate of $12,500 per water-main mile maintained annually. FUNDING SOURCES Impact Fee eligible portions are related to improvement costs beyond an 8” line capacity. At this point in time, it is estimated that the 12” and 24” lines are most likely to be built within the next 5 years; the cost of over-sizing those lines would be eligible for impact fees and is estimated to total $1,874,886. Given the priority of the Water Treatment Plant project, it’s relative size and scope, these improvements have been moved to “unscheduled.” New Replacement Equipment Project Impact Fee Funds Project and Equipment Scoring TOTAL SCORE:10 FY17 REQUIRED - CAPITAL or DEBT SERVICE REQUIRED - USEFUL LIFE 10+ YEARS REQUIRED - CAPACITY EXPANDING BENEFITS TO NEW DEVELOPMENT: (Up to 20 pts)5 DIRECT BENEFITS: (Up to 10 pts)5 FUNDING CERTAINTY: (Up to 10 pts)0 COMMISSION WORK PLAN PRIORITY: (Up to 10 pts)0 Page 6 57 CIP Project Fund Impact Fees Water PROJECT NUMBER WIF07 DEPARTMENT WATER IF PROJECT NAME GRAF STREET EXTENSION FY13 FY14 FY15 FY16 Unscheduled $150,000 DESCRIPTION OF PROJECT This project is to extend Water 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 Water 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% Water 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 Page 7 58 CIP Project Fund Impact Fees Water PROJECT NUMBER WIF08 DEPARTMENT WATER IF PROJECT NAME WATER TREATMENT PLAN DEBT SERVICE PAYMENT FY13 FY14 $2,750,295 FY15 $884,427 FY16 $902,115 Unscheduled DESCRIPTION OF PROJECT Total adjusted project price for the Water Treatment Plant (WTP) construction of phase one is estimated at $40.7 Million. Of that amount, $13.3 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 $5 Million of impact fee eligible costs will be paid with a long-term loan (20 years, 4%) 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 Water Treatment Plant (WTP) will enable the City to meet its ever growing demand for water services. Expansion of the Bozeman WTP is consistent with the City’s long-term need to accommodate growth and ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED FUNDING SOURCES FY08 Pilot Testing: $200,000. FY09,FY10, FY11 Design and Membrane equipment deposit, construction $7,267,000. FY12 $16,460,000. FY13 $16,460,000. Of this total, approximately 33% is eligible for payment via impact fees. New Replacement Equipment Project Impact Fee Funds Project and Equipment Scoring TOTAL SCORE:50 FY17 $920,158.00 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 Page 8 59