City of ModestoFY 12-13 Proposed Budget

Utility Funds

Utility Planning

& Projects

Public WorksFinance

City of ModestoFY 12-13 Proposed Budget

Wastewater Fund

City of ModestoFY 12-13 Proposed Budget

Fund OverviewThe Wastewater Fund is responsible for operating and maintaining the City’s sanitary sewer system, including the treatment process, and assuring safe compliance with all state and federal regulations. Wastewater rates fund the operations and maintenance of the sewer system, customer service utility billing and collections, and capital improvement projects.

Strategic CommitmentsThe Wastewater Fund supports the Council’s Strategic Commitments to:• Provide a safe and inviting community in which to live, work and visit• Foster a vibrant, competitive and diverse economic environment for business• Provide an innovative and accountable city government that embraces a

standard of service excellence through adaptive leadership and responsive public service

Wastewater Fund

City of ModestoFY 12-13 Proposed Budget

Key Performance Measures• Cost per million gallons of sewage processed• Number of sewer overflows per 100 miles of sewer line• Online customers utilizing the e-billing• Effectiveness of support for the North Valley Regional Recycled Water

Program (NVRRWP)

Achievements in 2011• Secured SRF loan & completed construction documents - Phase 2

BNR/Tertiary Treatment Project• Reduced Sanitary Sewer Overflows (SSOs) by 31.5%• Prevented 10 SSOs by using the SmartCover monitoring program• Treated 11 miles of sewer pipe as part of the Sewer Root Control Program• Issued certificates of merit to Industrial users that met compliance standards

Wastewater Fund

City of ModestoFY 12-13 Proposed Budget

Achievements in 2011 (cont.)• Completed the Digester Gas Treatment System Project, which replaced the

use of natural gas with digester gas, saving the City $80k per year• Transitioned 78% of online customers to e-billing• Maintained bad debt write-off to less than 1% of revenue • Improved the efficiency of our billing operations

Wastewater Fund

City of ModestoFY 12-13 Proposed Budget

Five-year Glance of Wastewater Processed (in billions of gallons)

Wastewater Fund

City of ModestoFY 12-13 Proposed Budget

4-Year Operating Expense History w/ Proposed Budget

Wastewater Fund

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Actual FY 2009 Actual FY 2010 Actual FY 2011 Adopted FY 2012 Proposed FY 2013

City of ModestoFY 12-13 Proposed Budget

Fiscal Health Discussion• Due to increasingly stringent discharge permit requirements, Council

approved a 5-year rate plan to address the funding needs for capital improvements

• Maintain healthy debt service coverage for FY 2012-13• Staff secured a State Revolving Fund loan to help fund the Phase 2

BNR/Tertiary Treatment Project• Staff seeking other alternative funding sources to fund projects and programs

Wastewater Fund

City of ModestoFY 12-13 Proposed Budget

Challenges• Changes in operational practices• Phase 2 BNR/Tertiary Treatment completion and implementation • Sewer lateral cost share program• Long-term infrastructure maintenance• Lobby traffic and wait times in Customer Service

Opportunities• Partnering with Industry for Environmental Compliance• Regionalization• Sale of recycled water• Public/Private partnerships• Late penalties and fine effectiveness• Public Education

Wastewater Fund

City of ModestoFY 12-13 Proposed Budget

Questions?

Wastewater Fund

City of ModestoFY 12-13 Proposed Budget

Storm Drain Fund

City of ModestoFY 12-13 Proposed Budget

Fund OverviewThe Storm Drain Fund operates and maintains the storm drain system and protects our groundwater and waterways from pollution. Storm Drain rates fund the operations and maintenance of the City of Modesto storm drain system, street sweeping, leaf collection, and customer service utility billing and collections.

Strategic CommitmentsThe Storm Drain Fund supports the Council’s Strategic Commitments to:• Provide a safe and inviting community in which to live, work and visit • Foster a vibrant, competitive and diverse economic environment for business• Provide an innovative and accountable city government that embraces a

standard of service excellence through adaptive leadership and responsive public service

Storm Drain Fund

City of ModestoFY 12-13 Proposed Budget

Key Performance Measures• Number of rockwells rejuvenated• Cost per rockwell cleaned• Number of street miles swept

Achievements in 2011• Prioritized catch basins and cleaned based on their impact to receiving

waters• Implemented Best Management Practices (BMP’s)• Increased the frequency (more than doubled) of rockwell and catch basin

maintenance• Cleaned 5,414 rockwells

• $ 124.51 per rockell• Cleaned 5,922 catch basins

• $128.63 per catch basin• Rejuvenated 333 rockwells• Swept 56,962 street miles

Storm Drain Fund

City of ModestoFY 12-13 Proposed Budget

Expenses vs. Revenues FY 2013 – 2017

Storm Drain Fund

City of ModestoFY 12-13 Proposed Budget

4-Year Operating Expense History w/ Proposed Budget

Storm Drain Fund

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Actual FY 2009 Actual FY 2010 Actual FY 2011 Adopted FY 2011 Proposed FY2013

City of ModestoFY 12-13 Proposed Budget

Fiscal Health Discussion• Rates have not changed since 1995• A rate increase is required in the coming years in order to meet the

increasing system demands and regulatory requirements• Without an increase, the City will be unable to provide adequate system

maintenance for these vital assets• The cost of meeting storm drain needs in growth areas is being met through

CFD funding

Storm Drain Fund

City of ModestoFY 12-13 Proposed Budget

Challenges• Insufficient funding for regulatory

compliance issues• Street sweeping• Leaf collection• Rockwell rejuvenation

• Competing demands for resources• Groundwater protection• Adapt to limited funding for

professional services• No funds for existing deficiencies • Cross connection issues

Opportunities• Alternative funding sources

• Prop 84• Preparing proposal to fund

Garrison Park Cross Connection Project

• Groundwater protection• Regulatory opportunities• Public education

Storm Drain Fund

City of ModestoFY 12-13 Proposed Budget

Questions?

Storm Drain Fund

City of ModestoFY 12-13 Proposed Budget

Water Fund

City of ModestoFY 12-13 Proposed Budget

Water Fund

Fund OverviewThe Water Fund is responsible for providing low-cost, safe, and reliable drinking water to 265,000 people in the community. Water Rates fund the operations and maintenance of the City of Modesto regional water system, customer service utility billing and collections, and capital improvement projects.

Strategic CommitmentsThe Water Fund supports the Council’s Strategic Commitments to:• Provide a safe and inviting community in which to live, work and visit• Provide an innovative and accountable city government that embraces a

standard of service excellence through adaptive leadership and responsive public service

• Foster a vibrant, competitive and diverse economic environment for business

City of ModestoFY 12-13 Proposed Budget

Water Fund

Key Performance Measures• Gallons of drinking water delivered• Cost per million gallons of water delivered• Online customers utilizing the e-billing process• Net reduction in water use

Achievements in 2011•Delivered 20.9 billion gallons of potable water to our customers •Metered and billed 70% of the total water services•Performed over 12k disconnects, which increased revenue •Reduced water demand through meter installation, water conservation, and system

repairs•Eliminated five contaminated wells from service

• Received a $250k grant from the Department of Water Resources for Well Optimization studies

• Strengthen & replace water system - South Modesto Phase 1 • Transitioned 78% of online customers to e-billing

•Maintained bad debt write-off to less than 1% of revenue •Transitioned over 4,883 customers to metered billing

City of ModestoFY 12-13 Proposed Budget

Five-year Glance of Water Delivered (system-wide) 2007-2011

Water Fund

City of ModestoFY 12-13 Proposed Budget

4-Year Operating Expense History w/ Proposed Budget

Water Fund

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Actual FY 2009 Actual FY 2010 Actual FY 2011 Adopted FY 2012 Proposed FY 2013

City of ModestoFY 12-13 Proposed Budget

Fiscal Health Discussion• Maintain healthy debt service coverage for FY 2012-13• Maintain the target cash at 25% of Operating Costs• Maintain a healthy bond rating of AA-• Over $100M in capital projects have been deferred• Inflationary rate adjustment 3.1% (July 2012)• Staff seeking alternative funding sources to fund projects and programs• Water cost of service study has been postponed due to economic conditions• Recent Council action to retire the 1997 water bond (FY 2011)

Water Fund

City of ModestoFY 12-13 Proposed Budget

Challenges• Fund health• Delayed completion of the MRWTP Phase 2 and additional costs• Delayed downstream system improvements• Affordable water rates• Long-term infrastructure maintenance• Managing groundwater quality • State conservation mandates• Legal commitments (Del Rio)• Longer wait times on phone and in the lobby due to increased collection

efforts• Security at City facilities

Water Fund

City of ModestoFY 12-13 Proposed Budget

Opportunities• Community partnerships• Regionalization• Public/Private partnerships• Alternative funding• Public education• Technology upgrades• Additional resources• Non-potable water

Water Fund

City of ModestoFY 12-13 Proposed Budget

Questions?

Water Fund

City of ModestoFY 12-13 Proposed Budget

Utility Funds

City of ModestoFY 12-13 Proposed Budget

Utility Planning and Projects

Mission StatementTo protect and manage all water resources for the current and future needs ofthe community and the environment.

VisionAll necessary water supplies, wastewater treatment capacity, storm water capacity, and related utility infrastructure will be available to enhance the quality of life and facilitate economic development for the region.

City of ModestoFY 12-13 Proposed Budget

Utility Planning and Projects

Strategic Commitments • Provide a safe and inviting community in which to live, work and visit• Foster a vibrant, competitive and diverse economic environment for business• Provide an innovative and accountable city government that embraces a

standard of service excellence through adaptive leadership and responsive public service

Key Department Initiatives• Construct Phase 2 tertiary treatment project to meet state mandated deadline• Continue the development of the North Valley Regional Recycled Water

Program• Develop an Integrated Regional Water Management Plan for the region• Facilitate the Regional Surface Water Supply Project• Seek alternative funding for Water, Wastewater, and Storm Drain projects and

programs• Provide Water and Wastewater repair and replacement projects

City of ModestoFY 12-13 Proposed Budget

Utility Planning and Projects

Achievements of 2011• Secured SRF loan ($128M) & completed construction documents - Phase 2

BNR/Tertiary Treatment Project• Started construction - Primary Outfall Rehabilitation Phase 2 Project • Received a $250k grant from the Department of Water Resources for Well

Optimization studies• Formed the East Stanislaus Integrated Regional Water Management group,

which includes the cities of Turlock, Ceres, and Hughson• Formed the Stanislaus Regional Water Authority (JPA) with the Cities of

Turlock and Ceres to evaluate surface water options• Completed construction of over 27,000 linear ft of water mains along the

Virginia Corridor and Coffee/Claratina • Completed the design of Industrial Tank 13 & Pump Station• Managed design and construction of 45 CIP’s - $229M

• Includes the Phase 2 BNR Project - $128M• Provided Construction Administration to 18 non-Utility Fund CIP’s - $43.6M

City of ModestoFY 12-13 Proposed Budget

Utility Planning and Projects

Organizational Chart

City of ModestoFY 12-13 Proposed Budget

Water and Wastewater CIP Expenditures FY 2010-2014

Utility Planning and Projects

City of ModestoFY 12-13 Proposed Budget

Utility Planning and Projects

Water and Wastewater CIP Expenditures FY 2010-2014

City of ModestoFY 12-13 Proposed Budget

Challenges • Funding• Regionalization• Regulatory requirements• System deficiencies• Prioritization of CIPs• MID Water Treatment Plant – Phase 2• Challenges to the rate structure• Long-term water supply• Phase 2 BNR/Tertiary Treatment

Project

Opportunities• Regionalization• Alternative funding• Providing CIP support services for

other agencies• Recycled water• Public/private partnerships• Diversification of water resources

Utility Planning and Projects

City of ModestoFY 12-13 Proposed Budget

Utility Planning and Projects

Questions?