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Home My WebLink About12-9-13 Water Fund.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 Fund Capital Improvement Plan (CIP) for FY15-19. AGENDA ITEM TYPE: Action MEETING DATE: December 9, 2013 RECOMMENDATION: Adopt of the Water 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. Staff met in October and November to develop the attached draft schedules. The Water Fund CIP tracks the capital equipment replacements and construction projects for Water Operations (distribution system) and the Water Treatment Plant. Items of Note: • W33 – Water Supply Capital Improvements, $50,000,000 was added to the plan, unscheduled, to indicate the needs that have been outline in the Integrated Water Resource Plan (IWRP). It also appears in the Water Impact Fee schedule. Determinations need to be made on how much of this will rely on the Utility and how much on the Impact Fee program. 141 • WIF03 – 5.3MG Concrete Water Storage Reservoir is an Impact Fee project that will likely need, at a minimum, the Water Fund to guarantee the loan necessary for the project. It is included on the Water Impact Fee schedule. • W32 – Sourdough Bypass pipe lining has been added to the schedule as a newly effective solution to our maintenance and repair issues with this critical pipe. These levels of capital expenditure are in line with our adopted rate models, however current Water Rates (and Water Impact Fees) only include a relatively small amount for Water Supply related issues ($200,000/yr for purchase of Water Rights.) UNRESOLVED ISSUES: None. ALTERNATIVES: As suggested by the City Commission. If the Commission is does not wish to adopt this schedule tonight, it can be scheduled for approval on a later agenda. FISCAL EFFECTS: This step in the process has no fiscal effect. Once adopted, the Capital Improvements Plan becomes the basis of the City Manager’s Recommended Budget for FY15. Report compiled on: November 27, 2013 Attached: Water Fund CIP 142 Water FundCapital Improvement PlanFinancial Summary Current YearFY14 FY15 FY16 FY17 FY18 FY19UnscheduledProjected Beginning Reserve Balance Dedicated to CIP 2,418,979$ 2,754,716$ 1,934,557$ 2,413,160$ 2,777,478$ 3,012,993$ ‐$ Plus: Water Revenues Dedicated to CIP 1,392,402$ 1,455,061$ 1,520,538$ 1,588,962$ 1,660,466$ 1,726,884$ ‐$ Less: Scheduled CIP Project Costs (1,056,665)$ (2,275,220)$ (1,041,935)$ (1,224,645)$ (1,424,950)$ (861,000)$ (50,000,000)$ Projected Year‐End Cash Dedicated to CIP 2,754,716$ 1,934,557$ 2,413,160$ 2,777,478$ 3,012,993$ 3,878,878$ (50,000,000)$ Assumptions Made for Revenue Estimates: Current YearFY14 FY15 FY16 FY17 FY18 FY19Estimated Annual Water Revenues 6,962,012$ 6,962,012$ 7,275,303$ 7,602,691$ 7,944,812$ 8,302,329$ Estimated Annual Increase 0.0% 4.5% 4.5% 4.5% 4.5% 4.0%Total Estimated Revenues 6,962,012$ 7,275,303$ 7,602,691$ 7,944,812$ 8,302,329$ 8,634,422$ Current Revenues Dedicated to CIP % 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% Plus: Increase Dedicated to CIP 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Total % Dedicated to CIP 20.0% 20.0% 20.0% 20.0% 20.0% 20.0%TtlEti tdRDdi tdtCIP1 392 402$1 455 061$1 520 538$1 588 962$1 660 466$1 726 884$ProjectedProjectedTotal Estimated Revenues Dedicated to CIP1,392,402$ 1,455,061$ 1,520,538$ 1,588,962$ 1,660,466$ 1,726,884$ 50,000,00045,000,00040,000,00035,000,00030,000,00025,000,00020,000,00015,000,00010,000,0005,000,0000Water Fund Projects & Equipment 143 CIP PROJECT FUPROJ.DEPARTMENTPROJECT NAMEFY16UnscheduledFY15FY17FY18FY19Water FundW33PUBLIC WORKSWATER SUPPLY CAPITAL IMPROVEMENTS$50,000,000W34PUBLIC WORKSWATER COST OF SERVICE AND RATE STUDY$50,000WIF03WATER IF5.3MG CONCRETE WATER STORAGE RESERVOIRPW01WATER OPSSHOPS FACILITY EXPANSION PLAN$10,000W03WATER OPSENGINEERING/DESIGN FOR ANNUAL WATER PIPE REPLACEMENT PROGRAM$22,500$22,500$22,500$22,500$22,500W04‐15WATER OPSWATER PIPE REPLACEMENT PROGRAM ‐ CONSTRUCTION IN 2015$1,147,720W04‐16WATER OPSWATER PIPE REPLACEMENT PROGRAM ‐ CONSTRUCTION IN 2016$969,435W04‐17WATER OPSWATER PIPE REPLACEMENT PROGRAM ‐ CONSTRUCTION IN 2017$1,097,145W04‐18WATER OPSWATER PIPE REPLACEMENT PROGRAM ‐ CONSTRUCTION IN 2018$952,450W04‐19WATER OPSWATER PIPE REPLACEMENT PROGRAM ‐ CONSTRUCTION IN 2019$838,500W28WATER OPSCL‐12 WATER TAP MACHINE$20,000W29WATER OPSLEAK CORRELATOR$45,000W32WATER OPSLINE 18" PIPE FROM PLANT TO SOURDOUGH BYPASS$1,000,000W25WATER PLANTREPLACEMENT VEHICLE$45,000W30WATER PLANTGAUGING STATIONS$40,000W31WATER PLANTSOURDOUGH TANK REPAIR$50,000$450,000144 CIP PROJECT FUPROJ.DEPARTMENTPROJECT NAMEFY16UnscheduledFY15FY17FY18FY19Summary for Water Fund (16 items)Totals by year:$2,275,220 $1,041,935 $1,224,645$50,000,000FY15FY16FY17UnscheduledFY19$861,000$1,424,950FY18145 CIP Project Fund Water Fund PROJECT NUMBER PW01 DEPARTMENT WATER OPS PROJECT NAME SHOPS FACILITY EXPANSION PLAN FY15 FY16 Unscheduled DESCRIPTION OF PROJECT The construction of the new Vehicle Maintenance Shop at the Lower Yards on Rouse Avenue in FY10/FY11 was Phase I in expanding and improving our ability to service equipment, store vehicles, and provide work space for Public Works, Parks, and Facilitiy services. Questions remain about the long-term plan for construction, location, and expansion for: Streets, Sign & Signal, Forestry, Water/Sewer Operations, Solid Waste Collection & Recycling, Facilities, and Parks & Cemetery departments. This project would develop a master plan. In scheduling this project, we are recommending waiting until after the Vehicle Maintenance Division is relocated to its new shop and the interior improvements are made to the Shop at Rouse and Tamarack Street for the remaining divisions. ALTERNATIVES CONSIDERED ADVANTAGES OF APPROVAL ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED FUNDING SOURCES From related divisions: General Fund 20% ($10,000), Water Fund 20% ($10,000), Wastewater Fund 20% ($10,000), Street Maintenance Fund 20% ($10,000), Solid Waste Fund 20% ($10,000). New Replacement Equipment Project FY17 $10,000 FY18 FY19 146 CIP Project Fund Water Fund PROJECT NUMBER W03 DEPARTMENT WATER OPS PROJECT NAME ENGINEERING/DESIGN for ANNUAL WATER PIPE REPLACEMENT PROGRAM FY15 $22,500 FY16 $22,500 Unscheduled DESCRIPTION OF PROJECT This item provides for design work to be completed every year, in anticipation of the Annual System Upgrades. As the Water Operations Division operates the existing system, maintenance projects become apparent. Given our knowledge of system conditions today, the following projects are candidates for design funding and were identified in the Facility Plan: 1. Koch: Lindley to Bozeman, 2. Lindley: Olive to Koch, 3. S. Bozeman: Olive to Story As annual operations occur, other more-urgent projects may be identified and designed under this project heading. ALTERNATIVES CONSIDERED ADVANTAGES OF APPROVAL Provides for the design of necessary water system maintenance work. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED FUNDING SOURCES 100% Water Utility Fund New Replacement Equipment Project FY17 $22,500 FY18 $22,500 FY19 $22,500 147 CIP Project Fund Water Fund PROJECT NUMBER W04-15 DEPARTMENT WATER OPS PROJECT NAME WATER PIPE REPLACEMENT PROGRAM - Construction in 2015 FY15 $1,147,720 FY16 Unscheduled DESCRIPTION OF PROJECT PROJECT AREA: S. Grand Ave: W. Garfield St - W. College St S. Grand Ave: W College St - W. Main St. N. Rouse Ave: Bond - Griffin (needs to be completed prior to MDOT Rouse project.) The timing of this project is critical to our need to mill-overlay S. Grand Ave. After budget approval July 1, 2014, these projects would complete design, bid and begin construction in the Spring/Summer of 2015, at the end of FY15. ALTERNATIVES CONSIDERED ADVANTAGES OF APPROVAL Provides for the construction of necessary water system maintenance work. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED Annual Operating & Maintenance Costs: Incremental increases in general maintenance costs. Current cost estimate of $12,500 per water-main mile maintained annually. FUNDING SOURCES 100% Water Utility Fund New Replacement Equipment Project FY17 FY18 FY19 148 CIP Project Fund Water Fund PROJECT NUMBER W04-16 DEPARTMENT WATER OPS PROJECT NAME WATER PIPE REPLACEMENT PROGRAM - Construction in 2016 FY15 FY16 $969,435 Unscheduled DESCRIPTION OF PROJECT PROJECT AREA: S. Tracy Ave: W. Garfield St - E. Story St N. Willson Ave: W. Lamme St - W. Short St W. Babcock St: S. 10th Ave - S. 8th Ave N. Montana Ave: E. Tamarack St - N End of Existing. After budget approval July 1, 2015, this project would complete design, bid and begin construction in the Spring/Summer of 2016, at the end of FY16. ALTERNATIVES CONSIDERED ADVANTAGES OF APPROVAL Provides for the construction of necessary water system maintenance work. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED Annual Operating & Maintenance Costs: Incremental increases in general maintenance costs. Current cost estimate of $12,500 per water-main mile maintained annually. FUNDING SOURCES 100% Water Utility Fund New Replacement Equipment Project FY17 FY18 FY19 149 CIP Project Fund Water Fund PROJECT NUMBER W04-17 DEPARTMENT WATER OPS PROJECT NAME WATER PIPE REPLACEMENT PROGRAM - Construction in 2017 FY15 FY16 Unscheduled DESCRIPTION OF PROJECT PROJECT AREA: W Olive St: S. 5th Ave - S. 3rd Ave W. Olive St: S. 6th Ave - S. 5th Ave N. Grand Ave: W. Lamme St - W. Peach St N. 5th Ave: W. Aspen St - W. Tamarack St S. 3rd Ave: W. Harrison Ave - W. Curtiss St. After budget approval July 1, 2016, this project would complete design, bid and begin construction in the Spring/Summer of 2017, at the end of FY17. ALTERNATIVES CONSIDERED ADVANTAGES OF APPROVAL Provides for the construction of necessary water system maintenance work. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED Annual Operating & Maintenance Costs: Incremental increases in general maintenance costs. Current cost estimate of $12,500 per water-main mile maintained annually. FUNDING SOURCES 100% Water Utility Fund New Replacement Equipment Project FY17 $1,097,145 FY18 FY19 150 CIP Project Fund Water Fund PROJECT NUMBER W04-18 DEPARTMENT WATER OPS PROJECT NAME WATER PIPE REPLACEMENT PROGRAM - Construction in 2018 FY15 FY16 Unscheduled DESCRIPTION OF PROJECT PROJECT AREA: S 6th Ave: W. Harrison Ave- W Olive S: W. Koch St: S Grand Ave.- S. Willson Ave: S. Willson Ave.: W. College St- W. Koch St. After budget approval July 1, 2017, this project would complete design, bid and begin construction in the Spring/Summer of 2018, at the end of FY18. ALTERNATIVES CONSIDERED ADVANTAGES OF APPROVAL Provides for the construction of necessary water system maintenance work. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED FUNDING SOURCES 100% Water Utility Fund New Replacement Equipment Project FY17 FY18 $952,450 FY19 151 CIP Project Fund Water Fund PROJECT NUMBER W04-19 DEPARTMENT WATER OPS PROJECT NAME WATER PIPE REPLACEMENT PROGRAM - Construction in 2019 FY15 FY16 Unscheduled DESCRIPTION OF PROJECT PROJECT AREA: S 7th Ave: W. Harrison Ave-W. Story St: W. Harrison Ave: S.8th Ave- S 7th Ave : W. Harrison Ave. S. 5th Ave.- S. 4th Ave: W. Harrison Ave. : S. 4th Ave. _ S. 3rd Ave.: S.5th Ave: W. Garfield St- W. College St. After budget approval July 1, 2018, this project would complete design, bid and begin construction in the Spring/Summer of 2019, at the end of FY18. ALTERNATIVES CONSIDERED ADVANTAGES OF APPROVAL Provides for the construction of necessary water system maintenance work. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED Annual Operating & Maintenance Costs: Incremental increases in general maintenance costs. Current cost estimate of $12,500 per water-main mile maintained annually. FUNDING SOURCES 100% Water Utility Fund New Replacement Equipment Project FY17 FY18 FY19 $838,500 152 CIP Project Fund Water Fund PROJECT NUMBER W25 DEPARTMENT WATER PLANT PROJECT NAME Replacement Vehicle FY15 FY16 Unscheduled DESCRIPTION OF PROJECT Replacement 4-wheel Drive ½ Ton pick-up, replaces 1997 ¾ ton pick-up that currently has 99,400 miles ALTERNATIVES CONSIDERED Keep existing unit in service ADVANTAGES OF APPROVAL More reliable, more fuel efficient vehicle ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED none FUNDING SOURCES Water Rates New Replacement Equipment Project FY17 $45,000 FY18 FY19 153 CIP Project Fund Water Fund PROJECT NUMBER W28 DEPARTMENT Water Ops PROJECT NAME CL-12 Water Tap machine FY15 $20,000 FY16 Unscheduled DESCRIPTION OF PROJECT This machine enables us to make water taps on water mains ranging in size from 4” to 12” in diameter. ALTERNATIVES CONSIDERED Have a contractor contract with a contract vendor to do these taps. Currently we do all live taps. ADVANTAGES OF APPROVAL This machine is over 40 years old and has been refurbished apox. 7 years ago. It has made hundreds of taps and recently has shown signs of failure. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED FUNDING SOURCES 100% Water Fund. We do charge contractors for this service and expect a 5 to 7 years payback depending on growth. New Replacement Equipment Project FY17 FY18 FY19 154 CIP Project Fund Water Fund PROJECT NUMBER W29 DEPARTMENT Water Ops PROJECT NAME Leak Correlator FY15 $45,000 FY16 Unscheduled DESCRIPTION OF PROJECT This correlator would replace the current one that is 7 years old and showing signs of aging. This piece of equipment has proven to be highly successful in finding leaks and is and will be instrumental in our water conservation program. ALTERNATIVES CONSIDERED To continue to use the old unit that has increasing down time due to repairs. Subcontract the leak detection out at a cost of $1,000.00 a day. ADVANTAGES OF APPROVAL To have a unit that will be more reliable than our current unit. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED FUNDING SOURCES 100% Water Utility Fund New Replacement Equipment Project FY17 FY18 FY19 155 CIP Project Fund Water Fund PROJECT NUMBER W30 DEPARTMENT WATER PLANT PROJECT NAME Gauging Stations FY15 $40,000 FY16 Unscheduled DESCRIPTION OF PROJECT Per the adopted Integrated Water Resources Plan recommendation, install a new stream gauge on Sourdough Creek and replace existing gauging equipment on Lyman Creek. A suitable location stream gauge location must be identified for Sourdough Creek above the City’s intake diversion and a monitoring protocol developed. An existing gauge site exists on Lyman Creek but the equipment to operate the gauge is no longer functional and must be replaced. ALTERNATIVES CONSIDERED Do not install stream gauges. ADVANTAGES OF APPROVAL Provides monitoring data on all of City’s water sources. Data is important to monitor drought conditions and seasonal variability in supply as well as facilitate future updates to reliable yield hydrology. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED No additional operating costs. Gauge monitoring to become standard operating procedure for water treatment plant personnel. FUNDING SOURCES Water Fund New Replacement Equipment Project FY17 FY18 FY19 156 CIP Project Fund Water Fund PROJECT NUMBER W31 DEPARTMENT WATER PLANT PROJECT NAME Sourdough Tank Repair FY15 FY16 Unscheduled DESCRIPTION OF PROJECT The Sourdough Tank leaks. It has a large crack, the dome is deteriorating. The drain and overflow pipes need replacement. ALTERNATIVES CONSIDERED Do nothing or build a new tank. ADVANTAGES OF APPROVAL Repairing the tank will extend the life of the tank and stop the wasting of water from the leak. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED None FUNDING SOURCES Water Fund New Replacement Equipment Project FY17 $50,000 FY18 $450,000 FY19 157 CIP Project Fund Water Fund PROJECT NUMBER W32 DEPARTMENT WATER OPS PROJECT NAME Line 18" Pipe from Plant to Sourdough Bypass FY15 $1,000,000 FY16 Unscheduled DESCRIPTION OF PROJECT This project would use a lining procedure to treat the water supply pipe that comes from the Water Treatment Plant into town. There is difficulty repairing this critical pipe. ALTERNATIVES CONSIDERED Leave as is. Pursue other full replacement methods for the aging pipe. ADVANTAGES OF APPROVAL This is viewed as one of the lowest cost options to significantly manage the risks of pipe failure. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED None. FUNDING SOURCES Water Fund New Replacement Equipment Project FY17 FY18 FY19 158 CIP Project Fund Water Fund PROJECT NUMBER W33 DEPARTMENT PUBLIC WORKS PROJECT NAME WATER SUPPLY CAPITAL IMPROVEMENTS FY15 FY16 Unscheduled $50,000,000 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 159 CIP Project Fund Water Fund PROJECT NUMBER W34 DEPARTMENT PUBLIC WORKS PROJECT NAME WATER COST OF SERVICE AND RATE STUDY FY15 FY16 $50,000 Unscheduled DESCRIPTION OF PROJECT The Implementation plan for the Integrated Water Resource Plan (IWRP) calls for an updated cost of service and rate study. This is also a best practice for Utility management, especially after a significant system upgrade, such as the Water Treatment Plant project. We expect the plan to also offer options for further water conservation pricing programs. ALTERNATIVES CONSIDERED Keep the existing rate structure and limited conservation pricing (currently, residential only, inclined block rates) ADVANTAGES OF APPROVAL Our user charges will better match the actual cost of service. Hopefully, we will be able to further incentivize water conservation. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED None. FUNDING SOURCES Water Fund New Replacement Equipment Project FY17 FY18 FY19 160 CIP Project Fund Water Fund PROJECT NUMBER WIF03 DEPARTMENT WATER IF PROJECT NAME 5.3MG CONCRETE WATER STORAGE RESERVOIR FY15 FY16 Unscheduled DESCRIPTION OF PROJECT THIS PROJECT IS PRIMARILY AN IMPACT FEE ELIGIBLE PROJECT. How much of the project costs will be borne by the Utility is uncertain at this point in time. 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. Some of this project could potentially be funded with Utility dollars, or a loan for the project underwritten by the Utility. New Replacement Equipment Project FY17 FY18 FY19 161