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Home My WebLink About12-9-13 Impact Fee Wastewater.pdf Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Chris Kukulski, City Manager Anna Rosenberry, Administrative Services Director SUBJECT: Adoption of the Wastewater Impact Fee Fund Capital Improvement Plan (CIP) for FY15-19. AGENDA ITEM TYPE: Action MEETING DATE: December 9, 2013 RECOMMENDATION: Adopt the Wastewater Impact Fee Fund Capital Improvement Plan (CIP) for FY15-19. 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 City’s Impact Fee Advisory Committee (IFAC) met on November 14th to review and make recommendations for the planned expenditures of Wastewater Impact Fees. There was not a quorum of the committee, however, those present made suggestions and asked that the schedules move forward to the Commission. 1. Revenue estimates for Impact Fee collections should be updated from the amount budgeted in FY14. The attached schedule revenue estimates for FY15 show the 5-year average of collections (FY09-13), with a modest amount of annual growth projected in years 2016-2019. 2. The WWIF15- Flanders Mill – Hidden Valley Trunk Main and Lift Station project to expand service in the West part of town (from the Huffine Lane area back to the Water Reclamation Facility.) The early design, and identification and purchase of utility right- 162 of-way could prove to save millions of dollars, if done before more development occurs in the area. With the recent annexations and subdivisions that have occurred in west area of town, it is felt that this project will need to move forward within the next two years. a. While the project is generally seen as entirely capacity expanding, there will not be cash on hand to construct. The Wastewater Utility will need to borrow money for the project (a pledge by our rate-payers) with debt payments made by the Impact Fee Fund each year. 3. WWIF17 - Install the Fourth Digester, has been added as unscheduled. This item was brought forward by WRF staff, after the IFAC had met. It is expected to be entirely capacity expanding for the plant, needed as growth continues. 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 FY15. Report compiled on: November 27, 2013 Attached: Draft Wastewater Impact Fee Fund CIP 163 Wastewater Impact Fee Capital Improvement PlanFinancial Summary Current YearFY14 FY15 FY16 FY17 FY18 FY19UnscheduledProjected Beginning Reserve Balance Dedicated to CIP‐$ ‐$ 152,083$ 307,207$ (0)$ 269$ ‐$ Plus: Impact Fee Revenues Dedicated to CIP 820,000$ 1,005,295$ 1,025,401$ 1,045,909$ 1,066,827$ 1,088,163$ ‐$ Plus: Loan for WWIF15 ‐ Flanders Mill Trunk and Lift Stn. 13,300,000$ Less: Scheduled CIP Project Costs (820,000)$ (853,212)$ (14,170,276)$ (1,353,116)$ (1,066,558)$ (1,085,000)$ (3,862,000)$ Projected Year‐End Cash Dedicated to CIP‐$ 152,083$ 307,207$ (0)$ 269$ 3,432$ Assumptions Made for Revenue Estimates: Current YearFY14 FY15 FY16 FY17 FY18 FY19Estimated Annual Wastewater Impact Fee Revenues 820,000$ 985,583$ 1,005,295$ 1,025,401$ 1,045,909$ 1,066,827$ Estimated Annual Increase 0.0% 2% 2% 2% 2% 2%Total Estimated Revenues 820,000$ 1,005,295$ 1,025,401$ 1,045,909$ 1,066,827$ 1,088,163$ 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%ProjectedProjectedTotal Estimated Revenues Dedicated to CIP 820,000$ 1,005,295$ 1,025,401$ 1,045,909$ 1,066,827$ 1,088,163$ 16,000,00014,000,00012,000,00010,000,0008,000,0006,000,0004,000,0002,000,0000FY15 FY16 FY17 FY18 FY19 UnscheduledWastewater Impact Fee Projects 164 CIP PROJECT FUPROJ.DEPARTMENTPROJECT NAMEFY16UnscheduledFY15FY17FY18FY19Impact Fees WastewaterWWIF05WWATER IFHOSPITAL TRUNK LINE: HAGGERTY TO KAGY$1,062,000WWIF11WWATER IFREPLACE FRONT STREET: TAMARACK/ROUSE$1,800,000WWIF12WWATER IFGRAF STREET EXTENSION$50,000WWIF14WWATER IFWRF PHASE I DEBT RETIREMENT$653,212$870,276$887,681$896,558$600,000WWIF15WWATER IFFLANDERS MILL ‐ HIDDEN VALLEY TRUNK MAIN AND LIFT STATION$200,000$13,300,000WWIF16WWATER IFFLANDERS MILL ‐ HIDDEN VALLEY TRUNK MAIN DEBT RETIREMENT$465,435$120,000$485,000WWIF17WWATER IFINSTALL FOURTH DIGESTER$1,000,000Summary for Impact Fees Wastewater (7 items)Totals by year:$853,212$14,170,276 $1,353,116$3,862,000FY15FY16FY17UnscheduledFY19$1,085,000$1,066,558FY18165 CIP Project Fund Impact Fees Wastewater PROJECT NUMBER WWIF05 DEPARTMENT WWATER IF PROJECT NAME HOSPITAL TRUNK LINE: HAGGERTY TO KAGY 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 FY17 FY18 FY19 166 CIP Project Fund Impact Fees Wastewater PROJECT NUMBER WWIF11 DEPARTMENT WWATER IF PROJECT NAME REPLACE FRONT STREET: TAMARACK/ROUSE 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 FY17 FY18 FY19 167 CIP Project Fund Impact Fees Wastewater PROJECT NUMBER WWIF12 DEPARTMENT WWATER IF PROJECT NAME GRAF STREET EXTENSION FY15 FY16 Unscheduled 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 FY17 FY18 $50,000 FY19 168 CIP Project Fund Impact Fees Wastewater PROJECT NUMBER WWIF14 DEPARTMENT WWATER IF PROJECT NAME WRF PHASE I DEBT RETIREMENT FY15 $653,212 FY16 $870,276 Unscheduled 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 *We anticipate having a minimum of $13.1 Million available from Impact Fees through the end of the construction period. Impact fee collections during the construction period will be dedicated to the project. The remainder of eligible construction costs would be dedicated to debt service on the Utility Revenue Bonds, as it is collected in the Impact Fee Fund. New Replacement Equipment Project FY17 $887,681 FY18 $896,558 FY19 $600,000 169 CIP Project Fund Impact Fees Wastewater PROJECT NUMBER WWIF15 DEPARTMENT WWATER IF PROJECT NAME FLANDERS MILL - HIDDEN VALLEY TRUNK MAIN AND LIFT STATION FY15 $200,000 FY16 $13,300,000 Unscheduled DESCRIPTION OF PROJECT This project consists of the installation of large diameter sewer from Huffine Lane to the City Water Reclamation Facility along the Cottonwood-Flanders Mill- Hidden Valley alignment as identified in the Wastewater Facility Plan. It also includes a Regional Lift Station located at the north of the alignment and the installation of the force-main necessary to complete the project. $200,000 in design costs and $13,300,000 in construction costs ALTERNATIVES CONSIDERED Limit development in the area served by this trunk sewer to that which can currently be served. ADVANTAGES OF APPROVAL This project will significantly increase the area which can be served by the City’s wastewater treatment infrastructure making development in this corridor possible. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED Annual operating and maintenance costs. Impact fees may not be used to finance those 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 (est.) = $9.3M 30% Development contribution =$4M New Replacement Equipment Project FY17 FY18 FY19 170 CIP Project Fund Impact Fees Wastewater PROJECT NUMBER WWIF16 DEPARTMENT WWATER IF PROJECT NAME FLANDERS MILL - HIDDEN VALLEY TRUNK MAIN DEBT RETIREMENT FY15 FY16 Unscheduled DESCRIPTION OF PROJECT This items reflects the amount of Impact Fee dollars that are estimated to be available for retirement on the debt used to financine the Flanders Mill - Hidden Valley sewer trunk main and lift station. ALTERNATIVES CONSIDERED ADVANTAGES OF APPROVAL ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED FUNDING SOURCES New Replacement Equipment Project FY17 $465,435 FY18 $120,000 FY19 $485,000 171 CIP Project Fund Impact Fees Wastewater PROJECT NUMBER WWIF17 DEPARTMENT WWATER IF PROJECT NAME Install Fourth Digester FY15 FY16 Unscheduled $1,000,000 DESCRIPTION OF PROJECT Fund the design and construction of a fourth anaerobic digester. ALTERNATIVES CONSIDERED Do nothing. ADVANTAGES OF APPROVAL Additional Capacity for wastewater treatment. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED Not known at this time. FUNDING SOURCES Wastewater Impact Fee Fund New Replacement Equipment Project FY17 FY18 FY19 172