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Home My WebLink AboutC16. Water Impact Fee CIP Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Anna Rosenberry, Administrative Services Director SUBJECT: Adoption of the Water Impact Fee Fund Capital Improvement Plan (CIP) for FY17-21. AGENDA ITEM TYPE: Consent MEETING DATE: December 14, 2015 RECOMMENDATION: Adopt the Water Impact Fee Fund Capital Improvement Plan (CIP) for FY17-21. 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 17th and December 3rd to review and make recommendations for the planned expenditures of Street Impact Fees. The Committee had no quorum on December 3rd to make a vote; their general recommendations are embodied in this plan. Items of Note: 1. Under this plan, the Water Impact Fee Fund would be providing the Local Share in advance of development for the WIF07, WIF21, WIF22, and WIF25 projects. These projects are noted with an “*”. o We anticipate that some of these payback amounts will come back to the Water Impact Fee Fund as projects develop; but, for purposes of this plan we have not 270 relied on receiving any of that money to fund projects. This is a conservative approach to a difficult-to-estimate cash flow. o We anticipate a payback for “local share” of these projects would be made at the time a development project is approved. 2. Debt service payments for WIF03 – 5.3MG Concrete Water Storage Reservoir project have been added to the schedule, and increased to reflect the amount necessary to fund the latest estimate of project costs. With preliminary engineering work completed, the total project costs (design and engineering) are estimated at $8,820,000. 3. We have added items for water supply called “Groundwater Well Field.” This is an item that will provide added water supply, as recommended by the City’s Integrated Water Resource Plan. We anticipate we will need to borrow money for this project, backed by the Water Fund, because cash is not expected to be available for this project. o The related water rights issues will be funded with $1 million from Cash-In-Lieu of Water Rights, as the Impact Fee program does not fund the acquisition of water rights. 4. A new Water Impact Fee Study is included in this plan for FY17. 5. Revenues have been updated to reflect the 5-year average for Water Impact Fee collections. Our annual collections in the most recent fiscal year (FY15) dipped slightly below FY13’s amount. We estimate growth in revenues at 5% per year. $- $200,000.00 $400,000.00 $600,000.00 $800,000.00 $1,000,000.00 $1,200,000.00 $1,400,000.00 $1,600,000.00 $1,800,000.00 $2,000,000.00 2011 2012 2013 2014 2015 Average Water Impact Fee Revenues 271 Revenue History - Water Impact Fees Amount Change 2011 $ 811,000.00 - 2012 $ 1,060,000.00 31% 2013 $ 1,726,000.00 63% 2014 $ 1,833,000.00 6% 2015 $ 1,663,000.00 -9% Average 1,418,600.00 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 FY17. Report compiled on: December 7, 2015 Attached: Draft Water Impact Fee Fund CIP 272 Water Impact Fee Capital Improvement Plan Financial SummaryCurrent YearFY16FY17FY18 FY19 FY20 FY21UnscheduledProjected Beginning Reserve Balance Dedicated to CIP(233,603)$ 666,115$ 20,365$ 663,865$ (675,898)$ (688,137)$ ‐$ Plus: Impact Fee Revenues Dedicated to CIP1,400,000$ 1,470,000$ 1,543,500$ 1,620,675$ 1,701,709$ 1,786,794$ ‐$ Plus: Loan for WIF14 ‐ 5.3MG Storage Reservoir8,820,000$ Plus: Loan for Well Field WIF19 & WIF201,000,000$ 2,000,000$ Plus: WIF19 ‐ Contribution from Cash in Lieu of Water Rights1,000,000$ Less: WTP Debt Service Final Payments(588,282)$ Less: Scheduled CIP Project Costs(8,732,000)$ (2,115,750)$ (2,900,000)$ (4,960,438)$ (1,713,948)$ (900,000)$ (44,361,600)$ Projected Year‐End Cash Dedicated to CIP666,115$ 20,365$ 663,865$ (675,898)$ (688,137)$ 198,657$ Assumptions Made for Revenue Estimates:Current YearFY16FY17FY18FY19 FY20 FY21Estimated Annual Water Impact Fee Revenues1,400,000$ 1,400,000$ 1,470,000$ 1,543,500$ 1,620,675$ 1,701,709$ Estimated Annual Increase0.0%5%5%5%5%5%Total Estimated Revenues1,400,000$ 1,470,000$ 1,543,500$ 1,620,675$ 1,701,709$ 1,786,794$ 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%Total Estimated Revenues Dedicated to CIP1,400,000$ 1,470,000$ 1,543,500$ 1,620,675$ 1,701,709$ 1,786,794$ ProjectedProjectedCURRENT50,000,00045,000,00040,000,00035,000,00030,000,00025,000,00020,000,00015,000,00010,000,0005,000,0000Water Impact Fee Projects 273 CIP PROJECT FUPROJ.DEPARTMENTPROJECT NAMEFY17UnscheduledFY21FY18FY19FY20Impact Fees WaterWIF05WATER IMPACTWEST WATER TRANSMISSION MAIN LOOP$28,617,600WIF07WATER IMPACTGRAF STREET EXTENSION*$701,929WIF09WATER IMPACT FEESCOTTONWOOD/STUCKY TRUNK MAIN LOOP$5,544,000WIF14WATER IMPACT FEES5.3MG CONRETE WATER STORAGE RESERVOIR ‐ DEBT PAYMENTS$600,000$600,000$6,800,000$600,000$600,000$600,000WIF17WATER IMPACT FEESLYMAN CREEK WATER SYSTEM IMPROVEMENTS ‐ CONSTRUCTION$2,000,000WIF18WATER IMPACT FEESLYMAN CREEK WATER SYSTEM IMPROVEMENTS ‐ DESIGN$270,000$300,000WIF19WATER IMPACT FEESGROUNDWATER WELL FIELD – LAND ACQUISITION, MITIGATION WATER AND WATER RIGHT PERMITTING$2,000,000WIF20WATER IMPACT FEESGROUNDWATER WELL FIELD DESIGN & CONSTRUCTION$2,000,000WIF21WATER IMPACTS 11TH (OPPORTUNITY TO ARNOLD)*$210,438WIF22WATER IMPACT FEESBAXTER LN (LASSO TO HARPERPUCKET) WATER MAIN EXTENSION*$493,821WIF23WATER IMPACTIMPACT FEE STUDY ‐ WATER$50,000WIF24WATER IMPACT FEESDEBT SERVICE ‐ WELL FIELD DEVELOPMENT$300,000$3,400,000$150,000$300,000WIF25WATER IMPACT FEESDAVIS LN (VALLEY CENTER TO CATAMOUNT ST)*$813,948$900,000$2,115,750$2,900,000$4,960,438$1,713,948$44,361,600Summary for Impact Fees Water (13 items)Totals by year:$900,000$2,115,750 $2,900,000$44,361,600FY21FY17FY18UnscheduledFY20$1,713,948$4,960,438FY19274 CIP Project Fund Impact Fees Water PROJECT NUMBER WIF05 DEPARTMENT WATER IMPACT FEES PROJECT NAME WEST WATER TRANSMISSION MAIN LOOP FY17 FY18 Unscheduled $28,617,600 DESCRIPTION OF PROJECT Install a secondary trunk main from the WTP to the distribution network. The precise location of the required main is somewhat flexible, but in general will be from Wagonwheel Road (extended) in S. 19th to Goldenstein to South 3rd to Nash Road. 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 removed from service, but the existing 30-inch main is expected to reach capacity by the year 2020. 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 Fees, developer contributions New Replacement Equipment Project FY19 FY20 FY21 275 CIP Project Fund Impact Fees Water PROJECT NUMBER WIF07 DEPARTMENT WATER IMPACT FEES PROJECT NAME GRAF STREET EXTENSION* FY17 $701,929 FY18 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 Improves distribution network ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED Routine annual maintenance FUNDING SOURCES 100% Water Impact Fee – to be recovered by developer payback. New Replacement Equipment Project FY19 FY20 FY21 276 CIP Project Fund Impact Fees Water PROJECT NUMBER WIF09 DEPARTMENT WATER IMPACT FEES PROJECT NAME COTTONWOOD/STUCKY TRUNK MAIN LOOP FY17 FY18 Unscheduled $5,544,000 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 FY19 FY20 FY21 277 CIP Project Fund Impact Fees Water PROJECT NUMBER WIF14 DEPARTMENT WATER IMPACT FEES PROJECT NAME 5.3MG CONRETE WATER STORAGE RESERVOIR - DEBT PAYMENTS FY17 $600,000 FY18 $600,000 Unscheduled $6,800,000 DESCRIPTION OF PROJECT Repayment of debt used to finance construction of WIF03 - 5.3 Million Gallon Concrete Water Storage Reservoir. 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 FY19 $600,000 FY20 $600,000 FY21 $600,000 278 CIP Project Fund Impact Fees Water PROJECT NUMBER WIF17 DEPARTMENT WATER IMPACT FEES PROJECT NAME Lyman Creek Water System Improvements - Construction FY17 FY18 Unscheduled DESCRIPTION OF PROJECT Construction of Lyman Creek water system improvements including well infrastructure to expand the firm yield of the Lyman Creek water source, if results of the Phase 2 PER are favorable, as well as construction of water storage infrastructure to replace the existing Lyman Creek Reservoir. $7,000,000 project total, $2,000,000 in Water Impact Fees and $5,000,000 in Water Funds ALTERNATIVES CONSIDERED Alternatives considered with the Lyman Creek PER and Lyman Creek Water System Improvements design projects. ADVANTAGES OF APPROVAL The project implements the Integrated Water Resources Plan to expand the capacity of the Lyman Creek water supply system making additional water available for the future needs of the City. Replacing the Lyman Creek Reservoir is crucial to the efficient and effective operation of the overall water utility. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED Currently unknown FUNDING SOURCES $2,000,000 Water Impact Fees New Replacement Equipment Project FY19 $2,000,000 FY20 FY21 279 CIP Project Fund Impact Fees Water PROJECT NUMBER WIF18 DEPARTMENT WATER IMPACT FEES PROJECT NAME Lyman Creek Water System Improvements - Design FY17 $270,000 FY18 $300,000 Unscheduled DESCRIPTION OF PROJECT Design of the Lyman Creek water system improvements will be built upon Phase I and Phase 2 of the Lyman Creek Preliminary Engineering Report, completed in FY16 and FY17 respectively. The preliminary engineering report findings will set forth infrastructure recommendations to the Lyman Creek system to expand the firm production yield of the Lyman Creek supply source should exploration well drilling completed in Phase 2 of the PER phase yield favorable results. Furthermore, the existing Lyman Creek Reservoir is nearing the end of its useful life and is in need of replacement. This project will complete engineering design for the Lyman Creek water system as a whole, including the siting and design of a replacement water storage reservoir. ALTERNATIVES CONSIDERED Depending on the results of the exploration well drilling completed with Phase 2 PER, the Lyman Creek water system improvements design project may be limited to a replacement water storage reservoir only. ADVANTAGES OF APPROVAL The project implements the Integrated Water Resources Plan to expand the capacity of the Lyman Creek water supply system making additional water available for the future needs of the City. Replacing the Lyman Creek Reservoir is crucial to the efficient and effective operation of the overall water utility. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED Currently unknown FUNDING SOURCES 100% Water Impact Fees New Replacement Equipment Project FY19 FY20 FY21 280 CIP Project Fund Impact Fees Water PROJECT NUMBER WIF19 DEPARTMENT WATER IMPACT FEES PROJECT NAME Groundwater Well Field – Land Acquisition, Mitigation Water and Water Right Permitting FY17 FY18 $2,000,000 Unscheduled DESCRIPTION OF PROJECT Project consists of three components: 1) Purchase land for construction and operation of a municipal groundwater well field; 2) Obtaining mitigation water necessary to implement a DNRC-approved mitigation plan; and 3) Water right permitting to obtain a beneficial water use permit, the legal water rights necessary to operate a municipal groundwater well. Cash in Lieu of Water Rights will contribute for the purchase of water rights. ALTERNATIVES CONSIDERED ADVANTAGES OF APPROVAL The project puts critical elements in place needed in advance of the actual final design and construction of a groundwater well field. Groundwater is indentified in the Integrated Water Resources Plan as an important source of new water to meet the City’s future water supply needs. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED Currently unknown FUNDING SOURCES 50% Water Impact Fees - 50% Cash in lieu of water rights New Replacement Equipment Project FY19 FY20 FY21 281 CIP Project Fund Impact Fees Water PROJECT NUMBER WIF20 DEPARTMENT WATER IMPACT FEES PROJECT NAME Groundwater Well Field Design & Construction FY17 FY18 Unscheduled DESCRIPTION OF PROJECT Design and construction of a municipal groundwater wellfield including wells, pumps, industrial and automation controls, disinfection facilities, control building, primary and backup power supply, and transmission main connection to the existing municipal water distribution system. ALTERNATIVES CONSIDERED ADVANTAGES OF APPROVAL Adds new source of water supply to the City of Bozeman, pursuant to the Integrated Water Resources Plan, to meet the City’s future water supply needs. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED Currently unknown FUNDING SOURCES 100% Water Impact Fees New Replacement Equipment Project FY19 $2,000,000 FY20 FY21 282 CIP Project Fund Impact Fees Water PROJECT NUMBER WIF21 DEPARTMENT WATER IMPACT FEES PROJECT NAME S 11TH (OPPORTUNITY TO ARNOLD)* FY17 FY18 Unscheduled DESCRIPTION OF PROJECT Install a new 8” water main along S. 11th from Opportunity to Arnold. ALTERNATIVES CONSIDERED Do nothing and wait for development to connect the infrastructure. ADVANTAGES OF APPROVAL Improves distribution network. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED Routine operating and maintenance. FUNDING SOURCES WATER IMPACT FEES, to eventually recover local share via a payback district (estimated at $210,438). New Replacement Equipment Project FY19 $210,438 FY20 FY21 283 CIP Project Fund Impact Fees Water PROJECT NUMBER WIF22 DEPARTMENT WATER IMPACT FEES PROJECT NAME BAXTER LN (LASSO TO HARPERPUCKET) WATER MAIN EXTENSION* FY17 $493,821 FY18 Unscheduled DESCRIPTION OF PROJECT Install a new 12" water main along Baxter Ln from Lasso to Harperpucket. This is a recommended project from the Water Facility Plan to provide increased capacity. ALTERNATIVES CONSIDERED Do nothing and wait for development to connect the infrastructure. ADVANTAGES OF APPROVAL Provides increased capacity ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED Incremental increase in the cost of operation and maintenance FUNDING SOURCES Water Impact Fees, with some Local Share recovered via payback district New Replacement Equipment Project FY19 FY20 FY21 284 CIP Project Fund Impact Fees Water PROJECT NUMBER WIF23 DEPARTMENT WATER IMPACT FEES PROJECT NAME IMPACT FEE STUDY - WATER FY17 $50,000 FY18 Unscheduled DESCRIPTION OF PROJECT Update to the current Fee Study. ALTERNATIVES CONSIDERED ADVANTAGES OF APPROVAL ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED FUNDING SOURCES Impact Fees, developer contributions New Replacement Equipment Project FY19 FY20 FY21 285 CIP Project Fund Impact Fees Water PROJECT NUMBER WIF24 DEPARTMENT WATER IMPACT FEES PROJECT NAME DEBT SERVICE - WELL FIELD DEVELOPMENT FY17 FY18 Unscheduled $3,400,000 DESCRIPTION OF PROJECT This items is for the repayment of the loan that financed the groundwater well-field design and construciton. ALTERNATIVES CONSIDERED Once issued, the debt will need to be repaid. ADVANTAGES OF APPROVAL Debt financing helps to provide the cash necessary to complete the project, and spread payments over time. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED FUNDING SOURCES 100% Water Impact Fees. However, this debt will need to be "backed" or guaranteed by the Water Utility Fund. If Impact Fee collections aren't sufficient, the Water Utility will need to make the payment. New Replacement Equipment Project FY19 $150,000 FY20 $300,000 FY21 $300,000 286 CIP Project Fund Impact Fees Water PROJECT NUMBER WIF25 DEPARTMENT WATER IMPACT FEES PROJECT NAME DAVIS LN (VALLEY CENTER TO CATAMOUNT ST)* FY17 FY18 Unscheduled DESCRIPTION OF PROJECT Install a 12" water main ALTERNATIVES CONSIDERED Wait for adjacent development to occur. Install at a later date. ADVANTAGES OF APPROVAL Provides service to an increased area and improves overall network performance. ADDITIONAL OPERATING COSTS IN THE FUTURE, IF FUNDED Routine operating and maintenance FUNDING SOURCES Water Impact Fees, with some Local Share recovered via payback district. New Replacement Equipment Project FY19 FY20 $813,948 FY21 287