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HomeMy WebLinkAbout2010-11-05Tentative BOARD OF SUPERVISORS NOVEMBER 5, 2010 10:30 A.M., ROOM 241 COUNTY OFFICE BUILDING JOINT MEETING WITH THE ALBEMARLE COUNTY SERVICE AUTHORITY BOARD OF DIRECTORS 1. Call to Order. a. Introductions and Agenda Review. 2. Discussion: Water Supply Plan a. Current Status. b. Ragged Mountain Earthen Dam – Engineering/Design Status. 3. ACSA Budget. 4. ACSA Rates and Connection Fees. 5. ACSA Sewer System Repair, Replacement and Rehabilitation. 6. Adjourn to November 10, 2010, 3:30 p.m., Room 241. Return to Board of Supervisors Home Page Return to County Home Page file:////coba-webapp01/BOSForms/Agenda/2010Files/Migration/20101105/00_Agenda.htm [10/1/2020 3:24:37 PM] MEMORANDUM To: Albemarle County Board of Supervisors Albemarle County Board of Directors From: Gary O’Connell, Executive Director Date: November 2, 2010 Re: Joint Board Meeting on November 5 – Agenda Background cc: James M. Bowling, IV This is a background and briefing memo to accompany the agenda for the Joint Boards meeting of the Albemarle County Board of Supervisors and the Albemarle County Service Authority Board of Directors. Background information is below and in several attachments. The item number references the Agenda item: 2. Water Supply Plan a. Current Status – Tom Frederick, Executive Director of the RWSA, will be briefing the Boards on the current status of the water supply plan, particularly updating on new items and actions since the September Four Boards meeting. b. Ragged Mountain Earthen Dam – Chris Webster of Schnabel Engi- neering will be briefing the Boards on the current status of their engi- neering work, and in particular the next six months of work as recently approved by the RWSA Board, and financially supported by the ACSA. Mr. Webster will be bringing a series of charts and drawings that show the earthen dam design elements, and discuss how that fits in with the current design schedule. 3. FY 2011 Budget The ACSA Board of Directors approved on June 17 th the budget for the current year, FY ’10-11 (a copy of the ACSA Budget was previously given to the Board of Supervisors). The Operating Budget totaled almost $19 million, with additional funding for Capital Improvements at $15.7 million. So overall the AC- SA Budget totaled over $35 million. Nearly 2/3 of our Operating Budget is the purchase of water/wastewater from the Rivanna Water and Sewer Authority. We reduced expenses by $335,000 to help balance our Budget and respect the ec o- nomic times we are in. Our goal was to produce a budget with flat rates (no in- crease) and we did that. 4. ACSA Rates and Connection Fees Water and Sewer Rates - As part of the Budget development the Board adopted a water and sewer rate that was a very slight decrease (-.3%) for the average residential customer, and a flat rate (remaining the same) for all other customers. The Adopted Budget used the 4-tiered system for water usage that ACSA devel- oped over six years ago, and updated again last year in a very detailed rate model study. This rate approach is an “inclining block rate structure” which in- cludes a first tier (Level 1) for water usage ranging from 0 to 3,000 gallons per month (this near the average residential use). Level 1 is aimed at what we are charged by the Rivanna Water and Sewer Authority wholesale rate. Level 1 was established to provide all customers with a reduced rate, and to make it more a f- fordable for lower income customers. The remaining tiers (levels 2, 3, and 4) have rates that are respectively 2, 3, 4 times the RWSA wholesale rate. The i n- clining block rate structure promotes water conservation, by allowing those who conserve more to reduce their monthly water and sewer bills. Based on the rate study work of this past year 82% of our customers use Levels 1 and 2, 12% Le v- el 3, and 6% using level 4. With the ACSA being in large part a residential sys- tem, it makes sense that over ¾ of our customers are smaller water users. Connection Fees - Another part of our budget was the adoption of new conne c- tion fees. From strictly a rate standpoint, the new connections are based on the ACSA and Rivanna “system value,” and were adopted such that they went up 8% and 3% respectively. These rates for new connections are an attempt to reflect the costs to provide capacity in both the ACSA and Rivanna water and sewer systems. This means that new customers are “buying in” with their connection costs, and as much as possible keeping our current customers from having to pay for this out of their current monthly bills. To further explain, the ACSA New Connections Policy is aimed at having new users and new development pay for their share of the total system costs necessary to serve their new needs. The new customer “buy-in” and connection fees help reduce the amount of user fees that ACSA must collect from current customers, and as mentioned earlier the largest part of our customer base is residential use. This ACSA approach to new connection fees carefully calculates the current ACSA/RWSA water lines and treatment plants, and sewer lines and treatment plants “System Value” to come up with what “buy in” is financially needed to pay for the capacity for new water and sewer connections. These are calcu lated on the basis of Equivalent Resi- dential Connections (ERC’s), with residential units (apartments, homes, hotels) having the highest water and sewer utility needs, and consequently the highest new connection fees. In the end it is a matter of “who” pay s, is it the current cus- tomer, or the new customer? Our Board believes and adopted a new connections fee approach that means the new customer is paying their fair share of coming into the system (buy-in), and in many cases that will mean increased capacity to accommodate their water and sewer needs for the future. 5. Capital Improvements Program (CIP) - Sewer System Projects The ACSA has adopted and is implementing a very aggressive capital program to keep up with the needs for repairs, rehabilitation, and replacement within our water and sewer systems. The FY2011 Capital Improvement Program totals over $15.7 million. Of the total amount, $2.5 million is for water improv e- ments, and $13.2 million for wastewater. Over the course of two years we will have over $25 million in capital projects underway. These include project s in all our service areas that includes the Urban ring and 29 North, Glenmore, Scott s- ville and Crozet. North Fork Regional Pump Stations & Sewer Force Main – This new pump sta- tion and related sewer lines will allow ACSA/RWSA to abandon the current Ca- melot Wastewater Treatment Plant which has exceeded its useful life, and to handle wastewater generated by proposed development in the northern urban area of the County. Our schedule calls for having the construction project under contract by mid-November, which means visible construction activity in the winter on the pump stations at North Fork and Camelot, and early spring construction on the pipe line project. The work is in two phases: the first phase for the sewer pump stations, and the second phase for the force main sewer lines. Both have been bid and we received excellent prices, over 30% under our engineer’s est i- mates. We also this week will be considering the financing for the project us ing bonds, and we have very favorable rates. It clearly is a good time to be doing major projects to take advantage of the construction market cost savings. The project was planned with the understanding that new growth within this area would pay their respective share of the project costs. This will be done through the recent creation of a Special Rate District (north and south zones), with co n- nection charges computed for each of the zones by dividing the total project and financing costs by the anticipated number of equivalent residential connections (ERC’s) in the zone. These Special Rate District connection fees will be a s- sessed in addition to the standard connection fees. Crozet Sewer System – We just completed the first of two phases of study on the current condition of the Crozet sewer system. Work to address the phase 1 project sewer infiltration and inflow (I/I – stormwater and groundwater that is get- ting into the lines in our system) is almost completed. The second phase of the Crozet sewer system study is underway. This follows major sewer line rehabilit a- tion and some line replacement in the Meadow Creek sewer drainage area. Sewer System Studies – The City, Rivanna and the ACSA are together syste- matically looking at all our sanitary sewers to reduce the amount of infiltration and inflow (I/I) into our common systems. All three have been working together since 2006 on a comprehensive study and approach to the sewer system dra i- nage basins and I/I in all three systems. During heavy wet weather, the capacity of our sewer mains is reduced from heavy rains entering our systems. These ACSA studies and targeted rehabilitation are aimed at reducing this I/I. Meadow Creek, Scottsville and Crozet are our current projects, as they seem to have the most I/I. We will expand the sewer system study work in the future to include the Biscuit Run drainage area, Woodbrook, Ednam, and the PVCC areas. We are proactively looking for sewer system infiltration and inflow, and have a multi -year program to address I/I issues through repairs, rehabilitation and line replace- ments. In addition we have a proactive effort to utilize TV camera technology (CCTV robotic cameras that inspect our underground sewer lines), such that over the next 5-10 years we will have inspected most all of the ACSA sewer system. We are pleased to have this chance to brief the Joint Boards on current ACSA projects and activities, as well as update you on the current status of the water supply plan and the design of the Ragged Mountain earthen dam . The ACSA strives to provide good value and good customer service to our ratepayers. We welcome your questions and inquiries on anything that we do. Thanks for th e op- portunity for the joint briefing. GBO/dbh Attachments Return to regular agenda November 5, 2010 Joint Meeting with Albemarle County Board of Supervisors ACSA Revenue Requirements/Components FY 2011 Operating & Maintenance Expenses (Day to Day Operations) The purchase of bulk water and the treatment of wastewater is the largest expense in the operating budget. Allocation of RWSA expenses is driven by the “4-Party” agreement. These charges fund RWSA’s operations, capital improvement projects, and debt service. Most of the charges are based upon reported flows; therefore, expenses are subject to fluctuations in usage. The water & wastewater systems must each be self-supporting. In their study, MFSG attributed 57% of these costs to water and 43% to wastewater. Relationship with RWSA Administration Department 8.49% Finance Department 7.59% Engineering Department 7.23% Maintenance Department 13.54% Operating Reserve 1.97% Purchase of Water/Wastewater 61.18% Water Capital Improvement Projects: $ 2.5 Million Wastewater Capital Improvement Projects: $ 13.2 Million Net Revenue Requirement, $20,127,917 Less the Projected Debt Funding of Capital Project plus the Estimated Use of Reserves, $11,575,000 Less Other Estimated Charges and Fees, $560,475 Less the Estimated Availability of Funds from Customer Buy-in and Connection Fees, $2,425,618 Gross Revenue Requirements: $34,689,010 Capital Improvements , $15,673,700 Operations & Maintenance, $19,015,310Gross Revenue Requirement = $34,689,010 * This is the basis for the rates and service charges proposed for fiscal year 2011. It is the projected amount we must collect from our ratepayers through volume and service charges. * Connection fees are based upon system values. (See page 28) Farmington Capital Recovery, $29,000 Buck Mountain Surcharge, $72,400 Connection and Local Facilities Fees, $69,200 System Development Fees, $836,562 RWSA Capacity Fees, $1,418,456 Estimated Availability of Funds from Customer Buy-in and Connection Fees (Forwarded to RWSA) ACSA Water & Sewer System Development FY 2011 Projected Buy-in (connection fees): $836,562 $47,888,541 * ACSA System Value (less developer contributions) per Equivalent Residential Connection: Water = $1,772 Sewer = $2,155 ACSA System Value (less developer contributions) at June 30, 2009: * ACSA system value funded by current and previous ratepayers. Calculated as a percentage of system value, it is not a target value. Farmington Capital Recovery, $29,000 Buck Mountain Surcharge, $72,400 Connection and Local Facilities Fees, $69,200 System Development Fees, $836,562 RWSA Capacity Fees, $1,418,456 Estimated Availability of Funds from Customer Buy-in and Connection Fees (Forwarded to RWSA) RWSA Water & Sewer Capacity FY 2011 Projected Buy-in (connection fees): $1,418,456 $245,332,438 * RWSA System Value per Equivalent Residential Connection: Water = $3,822 Sewer = $2,756RWSA System Value at June 30, 2009: * RWSA system value funded by current and previous ratepayers through volume charges paid to RWSA for operating expenses and debt service. Calculated as a percentage of system value, it is not a target value. Farmington Capital Recovery, $29,000 Buck Mountain Surcharge, $72,400 Connection and Local Facilities Fees, $69,200 System Development Fees, $836,562 RWSA Capacity Fees, $1,418,456 Estimated Availability of Funds from Customer Buy-in and Connection Fees (Forwarded to RWSA) Gross Revenue Requirements Operating Costs (Expenses, Reserves) Plus Capital Costs (Expenses, Debt Service, Reserves) = Gross Revenue Requirements Less Miscellaneous Revenue Less Projected Connection Fees (Buy-in to a system funded by current and previous rate payers) Less the Use of Reserves (Also funded by current and previous rate payers) = Net Revenue Requirement (This is the amount that needs to be recovered from user fees.) Questions? Albemarle County Service Authority (ACSA) Sewer Rehabilitation Program November 2010 The ACSA has developed a methodical program of sanitary sewer evaluation and rehabilitation to reduce infiltration and inflow (I&I) in our wastewater collection system. Some of the projects currently underway or planned for the near future are as follows: Meadow Creek Drainage Basin Sewer Rehabilitation: Our contractor, Tri-State Utilities, Inc., is currently in the middle of a $1.2 million dollar contract rehabilitating defects in our sanitary sewer system served by the new Meadow Creek Sewer Interceptor. An additional contract will be publically bid in the next couple of months to replace defective pipes in this drainage basin. Crozet Phase 1 Drainage Basin Sewer Rehabilitation: Sources of I&I identified through a Sewer System Evaluation Survey (SSES), in the western areas of our Crozet wastewater collection system, are being eliminated under the current Meadow Creek Drainage Basin Rehabilitation contract. Crozet Phase 2 SSES: An evaluation of the remaining older areas of the Crozet wastewater collection system was begun in September of this year and should take approximately 9 to 12 months to complete. This SSES will identify areas of excessive I&I in the wastewater collection system, in order to design and complete the appropriate corrective actions. Scottsville SSES: Our consultant has recently completed an evaluation of the wastewater collection system in Scottsville. Their final report has identified defects in the system that require correction. Rehabilitation work in the S cottsville system will be added to the current Meadow Creek Drainage Basin Rehabilitation contract. The ACSA is committed to a regular schedule in our Capital Improvement Program (CIP) of evaluating at least one major drainage basin annually, while perfo rming sanitary sewer rehabilitation/replacement work in another major drainage basin. We expect to maintain this schedule for the foreseeable future. Some of the other drainage basins we will evaluate over the next four years are: Biscuit Run Drainage Basin Woodbrook Drainage Basin Ednam Drainage Basin PVCC Drainage Basin Return to regular agenda