HomeMy WebLinkAbout13 Contract for the Water Utility 10-Year CIPAgendaItem#rTRUCKEEDONNERI:PublicUtilityDistrictCONSENTTo:BoardofDirectorsFrom:NeilKaufmanDate:December04,2019Subject:ConsiderationofAwardofaContracttoPrepareaWaterDepartment10-YearCapitalImprovementPlan1.WHYTHISMATTERISBEFORETHEBOARDBoardauthorizationisrequiredforprocurementsinexcessof$15,000.2.HISTORYTheDistrict’swatersystemisreasonablycomplicatedandconsistsof:.46pressurezones;.12activeand3inactivepotablewaterwells;.3activenon-potablewells;.32activeandthreeinactivestoragetanks;.25pumpingstations;.About220milesofpipelinerangingfrom2-inchesto24-inchesindiameter;and.40controlvalvestations.Asignificantportionofthewatersystemwasconstructedinthe1965-1975timeperiod.TheoriginalconstructionoftheGlenshire,SierraMeadows,PonderosaPalisades,ProsserLakeviewandTahoeDonnersubdivisionsalltookplaceduringthistimeframe.TheDistricthasconductedpipelineandpumpstationreplacementprojectsintheseareas,buttherearestilllargepartsofthesystemthatareoriginalconstructionandthesefacilitiesareapproaching(orhaveexceeded)theirusefullife.TheWaterDepartmenthastwofundingsourceavailablefortheconstructionofwatersystemfacilities..FacilitiesFeesarepaidbybuilders/developerswhennewconnectionsaremadetothewatersystem.FacilitiesFeesareintendedtopayfortheconstructionofadditionalwatersupply,storagetankandpipelinecapacityneededtoservethesenewcustomers.FacilitiesFeescannotbeusedtoreplaceoldwatersystemcomponentsthathaveexceededtheirusefullife..RateFundingisintendedtopayfortheongoingmaintenanceandeventualreplacementofexistingfacilitiesthathavereachedtheendoftheirusefullife.13
3.NEWINFORMATIONDuringpreparationoftheFY20&FY21budgets,itwasidentifiedthatadditionalratefundingwillbeneededtocoverthecostsofreplacingexistingfacilitiesthathavereachedtheendoftheirusefullife.Inadditiontoagingwatersystemfacilities,thereareotherfactorsthatmaynecessitatewaterimprovementsthatcannotbefundedfromFacilitiesFees.Theseinclude:.Forthcomingregulationsregardingnon-revenuewater;.California’spublicsafetypowershutoffs(PSPS)&NVEnergy’spublicsafetyoutagemanagement(PSOM);and.Time-of-useelectricalrates.Non-revenuewaterisdefinedasthedifferencebetweentheamountofwatersuppliedintoawatersystemandtheauthorizedusagebilledtocustomers.Non-revenuewateriscomposedofauthorizedunbilledusage(suchasfire-fighting);un-authorizedunbilledusage(suchasillegalconnectionsorillegalwithdrawalsfromfirehydrants);andwaterlosses(suchasproductionmeteringerrorsandsystemleakage).BasedoninformationfromtheCaliforniaStateWaterResourcesControlBoard,theWaterDepartmentanticipatesthatadditionalexpenditurestoimproveproductionmeteringaccuracyandreducesystemleakagewillbenecessarywithinthenextfiveyears.TheDistrict’swatersystemreliesuponelectricalpowertooperateitswellsandpumpstations.TheDistrict’sElectricDepartmenthasnotimplementedanyPSPSlocally,butitispossiblethatwemaybeimpactedbyaninterruptionthetransmissionofelectricitytotheDistrict.TheWaterDepartmenthasstandbygeneratorsatselectedfacilities,butisnotcurrentlycapableofprovidingwaterservicetoallcustomersintheeventofamulti-daypoweroutage.TheWaterDepartmentalsohasconcernsregardingavailabilityoffuelsuppliesforgeneratorsandvehiclesintheeventofamulti-daypoweroutage.Currently,theElectricDepartmentdoesnotoffertime-of-useratestoitscustomers.However,giventhevariablenatureofwindandsolarelectricalsuppliesandtheDistrict’sinvestigationintoelectrification,itisexpectedthatitmaybeadvantageoustooffertheminthefuture.TheDistrict’sWaterDepartmentisthelargestcustomeroftheElectricalDepartmentandelectricalcostsareasignificantcomponentoftheWaterDepartment’soperationalexpenses.Historically,theWaterDepartmenthasnotconsideredthepossibilityoftime-of-userateswhendesigningwatersystemfacilitiesandtheconstructionofadditionalpumpingandstoragetankcapacitymaybenecessarytotakefulladvantageoftime-of-userates.TheDistricthasretainedHDRtoconductanupdatedwaterratestudy.AnecessaryinputtotheHDRstudyisaCapitalImprovementPlan(CIP)ofrate-fundedprojects.Historically,theWaterDepartmenthasmaintainedtheCIPinternally.ItwasproposedtoretainanoutsideconsultanttoassistwithupdatingtheCIPwithconsiderationtothefactorsnotedabove.TheWaterDepartmentthenissuedarequestforproposals(REP)forthepreparationofarate-fundedCIP.ThemajortasksidentifiedintheREPwere:
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HDRwaterratestudy.4.FISCALIMPACTAsnotedabove,anupdatedCIPisneededfortheupcomingwaterratestudy.Theseupdatedrateswouldbereflectedinfuturebudgets.ThecostproposalfromFarrWestforpreparationoftheCIPis$58,110.Thisprojectwasnotidentifiedasaspecificline-itemintheFY20budget.TheFY20budgetdoesallocateabout$1,000,000forthewaterquantificationproject.TheCIPpreparationprojectcanbeconsideredaprecursortothewaterquantificationprojectanditisrecommendedthatitbefundedasapartofthatproject.5.RECOMMENDATIONAuthorizetheGeneralManagertoexecuteanagreementwithFarrWestEngineeringforpreparationoftheCIPinanamountof$58,110,plusatenpercentchangeorderallowanceof$5,790foratotalauthorizationnottoexceed$63,900.frzMichaelD.HolleyGeneralManagerIWaterUtilityDirector