water and wastewater utility rates - workshop 1...wastewater solar project $2,398,711 $173,000...
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Water and Wastewater Utility Rates -
Workshop 1
January 12, 2016
Presented By: Diana Langley
Public Works Director
1
Workshop Agenda
• Workshop 1 – January 12
– Water and Wastewater Operational Needs
– Condition of Water and Wastewater Systems
– Major Capital Improvements Required
• Workshop 2 – February 9
– Presentation of Proposed Rates
– Review of Proposition 218 Process
2
Enterprise Operations
3
Operating Cost
Debt Service
Capital Investment
= Revenue Requirement
Enterprise Operations - Water
4
= Revenue Received Operating
Revenues
Capital Revenues
Operating Revenues = Water Sales, Backflow Prevention Fees, Interest on Investments Capital Revenues = Extension Fees, Connection Fees, HWS Surcharge, Interest on Investments
Enterprise Operations –
Wastewater
5
= Revenue Received
Operating Revenues
Capital Revenues
Operating Revenues – Wastewater Service Charges, Septage Fees, Lab Fees, Pretreatment Permits, Interest on Investments Capital Revenues – Extension Fees, Connection Fees, Interest on Investments
Funding Allocation Over Time
6
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
$18,000,000
10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20
An
nu
al
Ob
lig
ati
on
s
Fiscal Year
Water Revenue Requirements vs. Revenue Under Existing Rates
Reserve Funded Capital Expenses
Rate Funded Capital Expenses
Debt Service
O&M Expenses
Revenues under Existing Rates
Anticipated Revenues under 2011Approved Rates
Funding Allocation Over Time
7
$0
$2,500,000
$5,000,000
$7,500,000
$10,000,000
$12,500,000
$15,000,000
$17,500,000
$20,000,000
$22,500,000
10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20
An
nu
al
Ob
lig
ati
on
s
Fiscal Year
Wastewater Revenue Requirements vs. Revenue Under Existing Rates
Reserve Funded Capital Expenses
Rate Funded Capital Expenses
Debt Service
O&M Expenses
Revenues under Existing Rates
Anticipated Revenues under 2011Approved Rates
Operating Costs - Water
8
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
10/11 11/12 12/13 13/14 14/15 B15/16
Fiscal Year
Water Operating Costs
Operating Costs = Salaries & Benefits + Materials, Services, & Supplies
Operating Costs - Wastewater
9
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
$10,000,000
10/11 11/12 12/13 13/14 14/15 B15/16
Fiscal Year
Wastewater Operating Costs
Operating Costs = Salaries & Benefits + Materials, Services, & Supplies
Operating Costs
10
Fixed 58%
Variable 42%
Fixed 60%
Variable 40%
Water Wastewater
• Fixed Costs – Do not vary by volume treated • Examples: Raw water, staffing, maintenance, and repairs
• Variable Costs – Vary depending on volume treated • Examples: Power, utilities, and chemicals
Debt Service - Water
• Existing Debt Obligations
11
Title Amount Approximate Annual Payment
Water Revenue Refunding Bonds - 2013
$21,710,000 $1,391,000
Water SRF Loan – Region 1 $5,927,874 $378,500
Water SRF Loan – Region 2/3 $18,381,507 $1,150,000
Total: $2,920,000
Debt Service - Water
12
0.50
0.70
0.90
1.10
1.30
1.50
1.70
1.90
11/12 12/13 13/14 14/15 B15/16
De
bt
Co
vera
ge R
atio
Fiscal Year
Debt Service Coverage Ratio
Minimum Required
Debt Service - Wastewater
• Existing Debt Obligations
13
Title Amount Approximate Annual Payment
Wastewater Revenue Refunding Bonds – 2011
$9,715,000 $500,000
Wastewater Revenue Refunding Bonds – 2014
$7,321,914 $759,000
Wastewater SRF Loan – WWTF $3,500,000 $219,000
Wastewater SRF Loan – Collection
$7,193,965 $386,000
Wastewater Solar Project $2,398,711 $173,000
Total: $2,040,000
Debt Service - Wastewater
14
-
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
11/12 12/13 13/14 14/15 B15/16
De
bt
Co
vera
ge R
atio
Fiscal Year
Debt Service Coverage Ratio
Minimum Required
Capital Investment - Water
15
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
$18,000,000
$20,000,000
05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 B15/16
Fiscal Year
Capital Improvement Program Expenditures
Capital Investment - Water
• Raw Water Intake & Fish Screen
• Low Lift Pump Station Security Improvements
• WTP Expansion to 36 MGD
• Hillcrest Conversion to Surface Water
• Water Line Replacement Project 2012
• Louise Avenue Water Line Replacement
16
Capital Investment –
Wastewater
17
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 B15/16
Fiscal Year
Capital Improvement Program Expenditures
Capital Investment –
Wastewater
• Downtown Collection System Rehabilitation &
Replacement
• Oxygen Reactors Improvements
• 12 kV Switchgear Improvements
• Emergency Wastewater Outfall Line
18
Water System Overview
• Water Treatment Plant
– Placed into operation 1969
– Expanded in 1999 – 24 MGD
– Expanded in 2007 – 36 MGD
– Current Permitted Capacity – 42 MGD
– Average Demands
Year Winter (MGD) Summer (MGD)
2011 8.5 20.7
2012 9.7 22.9
2013 9.0 21.0
2014 9.4 18.7
2015 8.6 15.0 19
Water Treatment Plant
Sludge Lagoons
Clearwells
Flocculation Basins
Sedimentation Tanks Media Filters
Operations Building
Pump Station
Membrane Filters
Solar Panels
20
Water System Overview
• Water Distribution System
– 265 Miles of Transmission and Distribution Mains
– Sizes Range From 3” to 36”
– 6 Storage Tanks
21
Water Infrastructure
Condition & Needs
• Water Treatment Plant
Project Estimated Cost Priority
Electrical & Instrumentation Improvements
Aquifer Storage Recovery/Second Well $4,600,000
Carbon Feed System Replacement $500,000
Backwash Recovery
Sedimentation/Floc Basin Rehabilitation
Fluoride System Replacement
Security Improvements $75,000
Groundwater Well Abandonments $400,000
Total:
22
Water Infrastructure
Condition & Needs
23
Electrical & Instrumentation Improvements
Water Infrastructure
Condition & Needs
24
Sedimentation/Floc Basin Rehabilitation
Water Infrastructure
Condition & Needs
25
Fluoride System Replacement
Water Infrastructure
Condition & Needs
• Water Distribution System
Project Estimated Cost Priority
Recoating Water Storage Reservoirs $400,000 Annual High
Replacement of Water Mains $27,400,000 High
Replace Water Services/Water Meters $700,000 Annual High
26
Water Infrastructure
Condition & Needs
• Water Distribution System
Sam Brannan Tank Harter Tank
27
Water Infrastructure
Condition & Needs
• Water Distribution System
28
Water Infrastructure
Condition & Needs
• Water Distribution System
29
Water Infrastructure
Condition & Needs
• Water Distribution System
30
Water Infrastructure
Condition & Needs
• Water Distribution System
31
Wastewater System Overview
• Wastewater Treatment Plant
– Placed into operation 1972
– Expanded in 2005
– Current Permitted Capacity – 10.5 MGD
– Current Average Flow – 6.5 MGD
– Solids Coming Into Facility – 11,000 lbs/day
32
Wastewater Treatment Facility
Secondary Clarifiers
Digesters
Primary Clarifiers
Headworks/BarScreens
Oxygen Reactors
Dewatering Building
Odor Control
Oxygen Generation
Operations
Lab Maintenance Shop
Disinfection Solar
33
Wastewater System Overview
• Wastewater Collection System
– 173 Miles of Sewer Mains
– Sizes Range From 6” to 42”
– 17 Sewer Lift Stations
34
Wastewater Infrastructure
Condition & Needs
• Wastewater Treatment Facility
Project Estimated Cost Priority
Digester Improvements
Barscreen Rehabilitation/Replacement $1,200,000
Dewatering System Improvements $3,550,000
Electrical & Instrumentation Improvements $1,000,000
West Chlorine Contact Basin Rehabilitation $650,000
Secondary Clarifier No. 4 $5,500,000
New Outfall Diffuser $11,500,000
Secondary Clarifier Improvements $980,000
New Co-Generation System
35
Wastewater Infrastructure
Condition & Needs
• Wastewater Treatment Facility
Project Estimated Cost Priority
Oxygen Generation Improvements
Grit Removal Facility $4,000,000
Disinfection System Evaluation & Replacement
$3,150,000
Advanced Treatment & Water Recycling Opportunities Evaluation
$270,000
New Septage Receiving Facility $1,650,000
Total:
36
Wastewater Infrastructure
Condition & Needs
Digester Lids
37
Wastewater Infrastructure
Condition & Needs
Barscreen Rehabilitation/ Replacement
38
Wastewater Infrastructure
Condition & Needs
Dewatering System Improvements
39
Wastewater Infrastructure
Condition & Needs
Electrical & Instrumentation Improvements
40
Wastewater Infrastructure
Condition & Needs
Rehabilitation of West Chlorine Contact Basin
41
Wastewater Infrastructure
Condition & Needs
Secondary Clarifier No. 4
42
Wastewater Infrastructure
Condition & Needs
New Outfall Diffuser
Existing Outfall Diffuser
43
Wastewater Infrastructure
Condition & Needs
New Outfall Diffuser
Existing Outfall Diffuser
Proposed Outfall
Diffuser Location
44
Wastewater Infrastructure
Condition & Needs
• Wastewater Collection System
Project Estimated Cost Priority
Replacement of Sewer Mains $33,000,000 High
Rehabilitation of Sewer Mains & Manholes
Lift Station Improvements $150,000 Annual High
45
Wastewater Infrastructure
Condition & Needs
• Wastewater Collection System
Manhole Concrete Sewer Pipe
46
Wastewater Infrastructure
Condition & Needs
• Wastewater Collection System
Concrete Sewer Pipe Concrete Sewer Pipe
47
Conclusion
• Need to recover revenues to meet operating and
debt service costs at a minimum
• Long-term need to collect sufficient revenues for
continued capital investment for rehabilitation
and replacement
48
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