2021 Capital Improvements Plan

Topics

• Introduction• Plan Highlights• Financial Summary• Capital Projects Summary• Financing • Next Steps

Introduction to Draft CIP

Plan is required by commission policy ID ATT-2:

Plan Highlights

1. Increase in annual expenditures2. More projects funded by cash reserves3. Decrease in connection charge revenue4. Proposing to increase annual cash

transfer from operating fund 5. No increase in debt transfer rate from

2020 CIP

Annual Expenditures

$36

$20

$15

$9 $8

$23$25

$41

$19

$29 $30

$19

$27

$0

$10

$20

$30

$40

$50

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

Mill

ions

Actual Expenditures Budgeted or Proposed Expenditures

Number of Projects in CIP

0

5

10

15

20

25

30

35

40

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Importance of cash reserves

1. Fund construction in progress until loan disbursements received from Clean Water Fund

2. Unplanned expenses or projects3. Fund small or ineligible projects4. Lessen reliance on debt

District FundsConnection

charges (6%)

Direct transfer

(4%)

Clean Water Fund loan (90%)

Operating Fund Capital

Fund

Interest (<1%)

Debt ServiceFundService

charges

$2.4 M

< $0.1 M

$33.6 M

Cash spending in 2021

Project 2021 Spending

Metrogro Applicators & Equipment $0.9 M

CMMS Replacement $1.3 M

Pump Station 17 Relief Force Main – Phase 1 $2.8 M

Total $5.0 M

Connection Charge Projection

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.020

05

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

Mill

ions

Historical Connection Charges 2020 Budget Projection

2021 CIP Projection

Transfer from Operating Fund to Capital Fund

Year

2020 Capital Budget (Actuals through

2019)

Proposed 2021 Capital

Improvements Plan Difference 2016 $0

2017 172,000

2018 0

2019 1,200,000

2020 915,000

2021 961,000 $1,486,000 $525,000

2022 1,009,000 2,001,000 992,000

2023 1,059,000 2,506,000 1,447,000

2024 1,112,000 3,021,000 1,909,000

2025 1,168,000 3,542,000 2,374,000

2026 1,226,000 4,040,000 2,814,000

2021-2026 Total $6,535,000 $16,596,000 $10,061,000

End-of-Year Capital Reserves

$0

$2

$4

$6

$8

$10

$12

$14

$16

2020 2021 2022 2023 2024 2025 2026

End

of Y

ear C

ash

Bala

nce

Mill

ions

Base Alt 1 Alt 2 Minimum Balance

Total Six-Year Expenditures (2021-2026)

2020 CIP = $151.2M 2021 CIP = $164.8M

NSWWTP , 53%

Interceptors , 30%

Pump Stations,

15%

Capital Expenses ,

2%

NSWWTP , 39%

Interceptors , 37%

Pump Stations,

23%

Capital Expenses ,

1%

Liquid Processing Improvements –Phase 1 • Total Project Budget: $16.8M• 2021 Spending: $7.7M• Estimated Construction

Amount: $13.5M• Currently under construction• Contractor: CD Smith• Estimated Completion:

Spring 2021

Resource Recovery Facility

• Total Project Budget: $899,000• 2021 Spending: $309,000• Study in 2020 by Black &

Veatch/MSA

Metrogro Applicators

• Total Project Budget: $4.1 M• 2021 Spending: $896,000• Four planned purchases from

2021 to 2024

Operations Building First Floor Remodel

• Total Project Budget: $2.4M

• 2021 Spending: $1.5M• Bid in summer 2020• Estimated Completion:

Fall 2021

Interceptor Projects

NSVI Improvements, $4.8M (2020-2021)

NEI – Truax Lining, $6.0M (2022)

Capacity or relocationConditionNew growthRedundancy

Project driver

WI – Shorewood Relief, $14.6M (2021-2023)

PS 6 to PS 10 Connector, $7.1M (2024) NEI Joint Grouting ($0.3 M (2021)

NEI – Waunakee Ext, $7.1M (2023-2024)

Northeast Interceptor Lining, $2.1M (2023)

LBMC – Phase 5, $4.3M (2024)

NSVI Capacity Relief (Phase 1), $13.2M (2027)

NSVI Improvements –McKee Road to Dunn’s Marsh

• Total Project Budget: $4.8M• 2021 Spending: $4.4M• Bid in fall 2020• Estimated Completion: Fall/winter

2021

Dunn’s Marsh

McKee Rd

Capital City TrailBa

dger

Sta

te T

rail

Interceptor to be replaced

Existing Interceptor

Manhole

West Interceptor (Shorewood Relief)

• Total Project Budget: $14.6M• 2021 Spending: $7.1M• To be built in three phases from

2021 to 2023

Pump Station 6 to Pump Station 10 Connector

• Total Project Budget: $7.1M• Coordinate with City of Madison street reconstruction project• 2024 construction

Pump Station & Force Main Projects

Pump Station 14 Rehab, $5.9M (2020-21)

PS 17 FM Relief – Ph 1, $3.2M (2020-21)PS 17 FM Relief – Ph 2, $4.3M (2023)PS 17 Rehab, $5.2M (2023)

CapacityCondition

Project driver

Pump Station 13 Rehab, $6.1M (2020-21)

PS 4 Rehab, $5.3M (2022-2023)

Grass Lake Dike Stabilization, $0.9M (2021)

PS 16 FM Rehab, $1.7M (2023)

Pump Station 13 & Pump Station 14 Rehabilitation• Total Project Budget:

$12.0 M• 2021 Spending: $10.8 M• Estimated Construction

Amount: $10.1 M• Bid August 2020• Estimated Completion: Fall

2021

PS 17 Projects

ProjectTotal

BudgetConst.Year

PS 17 FM-Ph 1 $3.3 M 2021

PS 17 Rehab $5.2 M 2023

PS 17 FM-Ph 2 $4.3 M 2023

Lower Badger Mill Creek Interceptor

$4.3 M 2024

Badger Mill Creek Phosphorus Compliance

• Total Project Budget: $1.5 M• 2021 Spending: $206,000• Status report: 2021• Prelim compliance plan: 2022• Final compliance plan: 2023• Final plans & specs: 2025• Achieve compliance: 2028

Debt Service

-2000000

0

2000000

4000000

6000000

8000000

10000000

12000000

14000000

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

$40,000,000

$45,000,000

$50,000,000

1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027

Debt

Ser

vice

Fun

d

Debt

Ser

vice

Use of Stabilization

Historical Debt Service Requirement

Projected Debt Service Requirement - 2021 CIP

Historical Debt Service from Service Charges

Potential Debt Service from Service Charges - 2021 CIP

EOY Debt Reserve Balance

Service Charge Impacts

Year

Operating Fund Support for the Capital Program (From Service

Charges)Increase Over Prior

Year

Implied Percentage Increase in Service

Charge Revenue Over Prior Year

2016 $12,909,000 $1,066,000 4%

2017 13,856,000 947,000 3%

2018 14,505,000 649,000 2%

2019 16,358,000 1,853,000 5%

2020 16,755,000 397,000 1%

2021 18,038,000 1,283,000 3%

2022 19,298,000 1,260,000 3%

2023 20,582,000 1,283,000 3%

2024 21,910,000 1,328,000 3%

2025 24,667,000 1,371,000 3%

2026 $24,667,371 $1,386,000 3%

Summary/Alternatives

• Increased spending in 2021• Uncertain revenue streams due to COVID-19

pandemic• Proposing increased transfers from operating

fund to mitigate uncertainty• Alternatives

– Reduce debt transfer rate for 2021– Reduce amount of direct transfer from operating

fund

Next Steps

• 2021 Draft CIP and business cases available on District websitehttp://www.madsewer.org/Planning/Budget-Finance

• Acceptance of 2021 Draft CIP at July 16 meeting

• Comments/questions:• Todd Gebert – toddg@madsewer.org• Bill Walker – williamw@madsewer.org

Questions?

Thank you!

2020 Connection Charge Revenue

$2.8

$1.7

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec

Mill

ions

202020195-Year Average2020 Budget Target2020 Revised Budget Target

District FundsConnection

charges (7%)

Direct transfer

(2%)

Clean Water Fund loan (91%)

Operating Fund Capital

Fund

Interest (<1%)

Debt ServiceFundService

charges

Interceptor Construction by Decade

0.52.3 1.2

5.7

27.624.3

3.3

10.28.4

5.11.60.8

1.2

0.8

1.4

0.4

1.0

0

5

10

15

20

25

30

35

1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

Mile

s of I

nter

cept

or In

stal

led

Lined Interceptors - 7.2 miles

Unlined Interceptors -88.8 miles

Cash Reserves

$-

$5

$10

$15

$20

$25

$30

$35

$40

$45

2018 2019 2020 2021 2022 2023 2024 2025

Mill

ions

Contribution from Operating Fund Connection charges Loan RevenueExpenditures EOY Cash Balance Cash balance minimum

Introduction to Draft CIP

• Plan is required by commission policy ID ATT-2• Six-year planning window• Provides estimates of actual and future cash

flows and debt service• Draft CIP presented in early summer• Capital Budget approved in fall• Actual spending only authorized for budget

year

Lagoon Dikes Improvements

• Total Project Budget: $2.1M• 2021 Spending: $299,000• Study/design: 2020-2021• Repairs: 2022-2024

Grass Lake Dike Stabilization

• Total Project Budget: $864,000

• 2021 Spending: $659,000• Bid late 2020• Estimated Completion:

Fall 2021