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Home My WebLink About12-9-13 Impact Fee Water.pdf Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Chris Kukulski, City Manager Anna Rosenberry, Administrative Services Director SUBJECT: Adoption of the Water Impact Fee Fund Capital Improvement Plan (CIP) for FY15-19. AGENDA ITEM TYPE: Action MEETING DATE: December 9, 2013 RECOMMENDATION: Adopt the Water 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 Water 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. Item of Note: • 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. 173 • W33 – Water Supply Capital Improvements have been added to the plan, with no cost listed in the Impact Fee Schedule. This is to indicate the needs that have been outline in the Integrated Water Resource Plan (IWRP). (This item also appears in the Water Fund schedule.) Determinations need to be made on how much of this will rely on the Utility and how much on the Impact Fee program. This item was added to the CIP after the IFAC met in November; 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 Water Impact Fee Fund CIP 174 Water Impact Fee Capital Improvement PlanFinancial Summary Current YearFY14 FY15 FY16 FY17 FY18 FY19UnscheduledProjected Beginning Reserve Balance Dedicated to CIP‐$ ‐$ ‐$ 124,890$ 354,277$ 875,628$ ‐$ Plus: Impact Fee Revenues Dedicated to CIP 933,500$ 1,083,242$ 1,127,005$ 1,149,545$ 1,172,536$ 1,195,987$ ‐$ Plus: Loan for WIF03 ‐ 5.3MG Storage Reservoir 5,000,000$ Less: Scheduled CIP Project Costs (933,500)$ (1,083,242)$ (6,002,115)$ (920,158)$ (651,185)$ ‐$ (25,880,000)$ Projected Year‐End Cash Dedicated to CIP‐$ ‐$ 124,890$ 354,277$ 875,628$ 2,071,615$ Assumptions Made for Revenue Estimates: Current YearFY14 FY15 FY16 FY17 FY18 FY19Estimated Annual Water Impact Fee Revenues 933,500$ 1,083,242$ 1,104,907$ 1,127,005$ 1,149,545$ 1,172,536$ Estimated Annual Increase 0.0% 2% 2% 2% 2% 2%Total Estimated Revenues 933,500$ 1,104,907$ 1,127,005$ 1,149,545$ 1,172,536$ 1,195,987$ Current Revenues Dedicated to CIP % 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Plus: Increase Dedicated to Water 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 933,500$ 1,104,907$ 1,127,005$ 1,149,545$ 1,172,536$ 1,195,987$ 30,000,00025,000,00020,000,00015,000,00010,000,0005,000,0000FY15 FY16 FY17 FY18 FY19 UnscheduledWater Impact Fee Projects 175 CIP PROJECT FUPROJ.DEPARTMENTPROJECT NAMEFY16UnscheduledFY15FY17FY18FY19Impact Fees WaterW33PUBLIC WORKSWATER SUPPLY CAPITAL IMPROVEMENTSWIF03WATER IF5.3MG CONCRETE WATER STORAGE RESERVOIR$300,000$5,000,000WIF05WATER IFWEST WATER TRANSMISSION MAIN LOOP$21,680,000WIF07WATER IFGRAF STREET EXTENSION$150,000WIF08WATER IFWATER TREATMENT PLANT DEBT SERVICE PAYMENT$383,242$902,115$920,158$501,185WIF09WATER IFCOTTONWOOD/STUCKY TRUNK MAIN LOOP$4,200,000WIF10WATER IFWATER MASTER PLAN UPDATE$350,000WIF11WATER IFWATER MAIN EXTENSION ‐ FERGUSON AVE (DURSTON TO OAK STREET)$100,000WIF12WATER IFWATER MAIN EXTENSION ‐ SOUTH 11TH (OPPORTUNITY TO ARNOLD STREET)$50,000Summary for Impact Fees Water (9 items)Totals by year:$1,083,242 $6,002,115 $920,158$25,880,000FY15FY16FY17UnscheduledFY19$651,185FY18176 CIP Project Fund Impact Fees Water PROJECT NUMBER W33 DEPARTMENT PUBLIC WORKS PROJECT NAME WATER SUPPLY CAPITAL IMPROVEMENTS FY15 FY16 Unscheduled DESCRIPTION OF PROJECT The Integrated Water Resource Plan (IWRP) calls out the long term need to fund capital improvements related to the City's water supply. The current rough estimate of cost totals $50 million. While these costs will be impact fee eligible, we are uncertain how much to add the the Water Impact Fee CIP, as the current Impact Fee was adopted without a calculation for water supply costs. Actual costs will depend on community growth, conservation success and results of engineering analysis conducted as part of the water master plan update. ALTERNATIVES CONSIDERED The IWRP considers many alternatives for water supply. ADVANTAGES OF APPROVAL Improving our water supply capital will allow the City to grow into the future, with adequate water for citizens, businesses, and visitors. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED Until the chosen alternative is known, operating costs can not be determined. FUNDING SOURCES Water Fund, including Cash In Lieu of Water; Water Impact Fees. New Replacement Equipment Project FY17 FY18 FY19 177 CIP Project Fund Impact Fees Water PROJECT NUMBER WIF03 DEPARTMENT WATER IF PROJECT NAME 5.3MG CONCRETE WATER STORAGE RESERVOIR FY15 $300,000 FY16 $5,000,000 Unscheduled 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 FY17 FY18 FY19 178 CIP Project Fund Impact Fees Water PROJECT NUMBER WIF05 DEPARTMENT WATER IF PROJECT NAME West Water Transmission Main Loop 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 transmission main. If this main is off-line for any reason, the City will need to rely on storage from its three reservoirs. At 2005 water demand levels, storage reserves would be depleted in three days during the average day demand, and in 24 hours during the maximum day demand. Not only will a second transmission main provide the security of redundancy if the existing 30-inch main is 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 FY17 FY18 FY19 179 CIP Project Fund Impact Fees Water PROJECT NUMBER WIF07 DEPARTMENT WATER IF PROJECT NAME GRAF STREET EXTENSION FY15 FY16 Unscheduled 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 FY17 FY18 $150,000 FY19 180 CIP Project Fund Impact Fees Water PROJECT NUMBER WIF08 DEPARTMENT WATER IF PROJECT NAME WATER TREATMENT PLANT DEBT SERVICE PAYMENT FY15 $383,242 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 economic development in the Gallatin Valley. 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 FY17 $920,158 FY18 $501,185 FY19 181 CIP Project Fund Impact Fees Water PROJECT NUMBER WIF09 DEPARTMENT WATER IF PROJECT NAME COTTONWOOD/STUCKY TRUNK MAIN LOOP FY15 FY16 Unscheduled $4,200,000 DESCRIPTION OF PROJECT Installation of a trunk water main loop from the intersection of Cottonwood and Huffine Lane south to Stucky Road then east to South 19th Avenue. ALTERNATIVES CONSIDERED Postpone installation to some future time. It is unlikely that such an ambitious and expensive project could or would be installed by the concerted effort of private developers. Even if that were to happen, the City would be asked to participate in the oversizing of these mains, all of which exceed the local 8” diameter requirement. ADVANTAGES OF APPROVAL Provides the water main backbone which will support future growth In a large area of the City. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED Incremental increase in the cost of operation and maintenance FUNDING SOURCES Impact fees, developer contribution for local equivalent share. New Replacement Equipment Project FY17 FY18 FY19 182 CIP Project Fund Impact Fees Water PROJECT NUMBER WIF10 DEPARTMENT Water IF PROJECT NAME Water Master Plan Update FY15 $350,000 FY16 Unscheduled DESCRIPTION OF PROJECT The last water facility plan update was initiated in 2005 and completed in 2007. The City generally endeavors to update its water facility plans on a 5-year cycle to ensure the plan remains relevant as Bozeman grows and infrastructure needs change. This water facility plan will update the existing and proposed distribution system hydraulic models, and include detailed engineering investigations for adopted Integrated Water Resources Plan (IWRP) new capital alternatives. Detailed engineering investigations are proposed to gather sufficient construction details and cost estimates to expand the Lyman Creek source, identify and develop a suitable groundwater source, and site and develop a storage impoundment in Sourdough Canyon above the water treatment plant. The sourdough impoundment investigation may be contracted separately as it does not connect to the distribution system directly and has no effect upon distribution system modeling. ALTERNATIVES CONSIDERED Do not update the plan and continue improving infrastructure based on the existing 2005 Water Facility Plan. ADVANTAGES OF APPROVAL Improving infrastructure is costly and as Bozeman grows, infrastructure needs change. Updating the water facility plan will allow future improvements to the water system to be based on current data. By including detailed engineering investigations for adopted IWRP new capital alternatives, the effect of the addition of these sources to the distribution network can be analyzed concurrently. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED No additional costs. FUNDING SOURCES Water Impact Fees New Replacement Equipment Project FY17 FY18 FY19 183 CIP Project Fund Impact Fees Water PROJECT NUMBER WIF11 DEPARTMENT WATER IF PROJECT NAME WATER MAIN EXTENSION - FERGUSON AVE (DURSTON TO OAK STREET) FY15 FY16 $100,000 Unscheduled DESCRIPTION OF PROJECT Installation of a Water Main along Ferguson Avenue, from Durston to Oak Street. ALTERNATIVES CONSIDERED ADVANTAGES OF APPROVAL Expanded water service in this area of town. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED Minimal FUNDING SOURCES Water Impact Fees, Developer contribution. New Replacement Equipment Project FY17 FY18 FY19 184 CIP Project Fund Impact Fees Water PROJECT NUMBER WIF12 DEPARTMENT Water IF PROJECT NAME WATER MAIN EXTENSION - SOUTH 11TH (Opportunity to Arnold Street) FY15 $50,000 FY16 Unscheduled DESCRIPTION OF PROJECT Extension of the water main on South 11th, from Opportunity to Arnold Street. ALTERNATIVES CONSIDERED ADVANTAGES OF APPROVAL Expanded water service in this area of town. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED minimal. FUNDING SOURCES Water Impact Fees, Developer contriubtion. New Replacement Equipment Project FY17 FY18 FY19 185