DRAFT SANITARY SEWER COMPREHENSIVE PLAN

Presentation to City of Puyallup CouncilJuly 12, 2016

Mark Palmer, P.E., City Engineer

DRAFT SANITARY SEWER COMPREHENSIVE PLAN

SANITARY SEWER COMPREHENSIVE PLAN PREVIEWS• Update as required by RCW 90.48.110:

• Pursuant to Washington law, sewer comprehensive plans must be submitted to and be approved by the Department of Ecology, before construction of identified facilities may begin. No approval shall be given until DOE is satisfied that said plans and specifications and the methods of operation and maintenance submitted are adequate to protect the quality of the state's waters as provided for in this chapter.

• DOE has reviewed and approved the draft plan

SANITARY SEWER COMPREHENSIVE PLAN PREVIEWS• WAC 173-240-050:

– Such plans must include: • A discussion of who will own, operate, and maintain the systems• The existing and proposed service boundaries • Layout map including the following: Boundaries; Existing sewers; Proposed sewers; Existing and

proposed pump stations and force mains; Topography and elevations; Streams, lakes, and other bodies of water; and Water systems.

• The population trend • Domestic or industrial wastewater facilities• Infiltration and inflow problems• Adequacy of the treatment• Establishments producing industrial wastewater • Existing private and public wells • A discussion, including a table, that shows the cost per service in terms of both debt service

and operation and maintenance costs, of all facilities (existing and proposed) during the planning period

• Compliance with any adopted water quality management plan under the Federal Water Pollution Control Act, SEPA and NEPA

SANITARY SEWER COMPREHENSIVE PLAN PREVIEWS• Last Update was 1997

– Plan presented in 2011 but not finalized– New information/data-ADS Flow Monitoring Study– More confident in Sanitary Sewer model, less assumptions

• Sanitary Sewer Comprehensive Plan– Calibrated Model=>lots of adds/deletes to CIP– Surcharge pipe LOS– Plan for sewer in entire sewer service area– Septic to sewer incentives and other policies considered– Utility Rate Recommendations

Sanitary Sewer Comprehensive Plan Basic ElementsChapter # Title

1 Executive Summary2 Introduction3 Land Use and Service Area4 Design Criteria5 Existing Facilities6 Existing and Future Population and Flow Projections7 Model Construction and Capacity Analysis8 Puyallup Wastewater Treatment Facility9 Comprehensive Plan And Capital Improvements

10 Operations and Maintenance Program11 Financial Chapter12 Sewer Policy Analysis

DRAFT SANITARY SEWER COMPREHENSIVE PLAN• Chapters 1-3 are required sections that probably don’t need

much review• Chapter 4-Design Criteria is first location for proposed changes

– Eliminate concrete pipe as a material option– Add HDPE butt fused anchored pipe as an option for steep slopes– Establish minimum cover as 3 feet for sewer lines– Require ductile iron pipe for 3-5 feet cover– Require HDPE butt fused pipe in areas of high ground water, crossing

ponds or streams

DRAFT SANITARY SEWER COMPREHENSIVE PLAN• Chapter 4-Design Criteria (cont.)

– Require GU liners and/or lined manholes– Require water tight locking hinged lids in potentially inundated locations– Require grinder pump wet wells to have 24-hour storage capacity

• Chapter 5-Existing Facilities– Good overview of Cities existing facilities

• Chapter 6-Flow Projections– Provides detailed explanation of future flow basis

DRAFT SANITARY SEWER COMPREHENSIVE PLAN• Chapter 7-Capacity Analysis

– Additional field survey was completed for better accuracy of the model– Level of Service (LOS) was changed from no surcharge to 2 x pipe

diameter– Existing conditions resulted in 5 areas not meeting LOS

• Gravity piping upstream of 4th and River Road Lift Station• Adverse pipe slope between 14th St SW and 9th Ave SW• Bradley Lake Line• Outlet to mini-basin 19 (14th St SW and SR 512 intersection)• Outlet to mini-basin 22 (West Pioneer between 18th St SW and 12th St SW)

Service Area

Boundary

City Limits

Proposed future sewer

Sewer basin to change

DRAFT SANITARY SEWER COMPREHENSIVE PLAN• Chapter 7-Capacity Analysis (cont.)

– For the 6-year model, one more area will not meet LOS• Sewer line downstream of East Main Lift Station (LS 16)

– For the 20-year model, three more areas will fail to meet LOS• Cross Valley Trunk in 9th Ave SW and 12th Ave SE• Gravity main from mini-basin 12 to Cross Valley Trunk• Gravity main along Shaw Road in mini-basins 1 & 4

– For the 20-year model, growth is uncertain that far out, plan should be revaluated in future years.

DRAFT SANITARY SEWER COMPREHENSIVE PLAN• Chapter 7-Capacity Analysis (cont.)

– Reducing I/I• Cost/Benefit analysis performed• Assumes proactive I/I reduction could gain 30% reduction• Proactive I/I could eliminate 5 CIP projects entirely, one partially• Avoided costs estimated at $8.2M• WPCP avoided costs zero, excess capacity available until end of planning period. • Cost of I/I program is difficult, but Kirkland used for basis• Conservative (low) cost estimate is $15.5M• Costs of program out weigh benefits almost 2 to 1, but further analysis/review is needed• WPCP operations would benefit from reduced I & I• Appendix O has analysis for overflow basin which be cost effective I & I • Eventually, if unchecked, I & I will consume a large portion of WPCP capacity

DRAFT SANITARY SEWER COMPREHENSIVE PLAN• Chapter 8-Water Pollution Control Plant (WPCP)

– Provides overview of plant status– Plant capacity generally in good shape until 2034, start planning

expansion in 2030– Several major pieces of equipment will need replacement in the planning

period however: • Main lift screws to stainless steel• Adding coarse bubble diffusers for Aeration basin #3• Update UV system or replace with chemical disinfectant system• Decommission Solids Handling Building, move processes• Upgrade SCADA system

– Recommends Facility Plan be developed (proposed in CIP 2016 budget)

DRAFT SANITARY SEWER COMPREHENSIVE PLAN• Chapter 9-Comprehensive Plan and Capital Improvements

– 4 major components of CIP Program• Recurring maintenance issues that can be solved by a project• Repairing/replacing infrastructure with known deficiencies• Mechanical/Electrical equipment past service life (obsolescence)

– Capital Improvement Projects broken out into 3 timeframes:• 6-year CIP from 2015-2020• 6-year CIP from 2015-2020 deferred to the 2021-2025 period• 20-year CIP from 2021-2035

– System expansion by private development and not included in CIP

DRAFT SANITARY SEWER COMPREHENSIVE PLAN• Chapter 9-Comprehensive Plan and Capital Improvements (cont.)

– Cost of CIP in 2015 dollars (from table 9.1):

CIP Program Years Total Budget 2015-2020 $31,222,0742021-2034 $49,998,000

Total CIP $81,220,074*

*does not include proactive I & I program costs or system expansion costs

DRAFT SANITARY SEWER COMPREHENSIVE PLAN• Chapter 10-Operations and Maintenance Program

– Overview of Sanitary Sewer program– Table 10.1 lists chronic and frequent sewer problem areas– Table 10.2 lists root intrusion problem areas– Analysis of current staffing levels of division

DRAFT SANITARY SEWER COMPREHENSIVE PLAN• Chapter 11-Financial Chapter

– No deferral of projects leads to rate increases of 80% first year, 1.7% thereafter.

– Preferred option, with deferral of some projects, proposes increases of 21% first year, 3% thereafter

– Evaluates affordability of City’s current and proposed sewer rates in the context of industry standards

SANITARY SEWER COMPREHENSIVE PLAN• Chapter 12-Sanitary Sewer Policies• Policies for City Council consideration:

– Rate Discounting (for more vulnerable residents)– Sewer Expansion & Hookup Requirements, including Septic-to-Sewer

Conversions– Inflow and Infiltration Reduction (I&I) – Sustainable Sewer Revenue & Growth– LOS for conveyance to 2x pipe

QUESTIONS?

FOLLOWING PAGES ARE AS NEEDED FOR REFERENCE ONLY

TENTATIVE SANITARY SEWER COMPREHENSIVE PLAN REVIEW SCHEDULE

City Staff Review Sept 21 to Oct 15, 2015

Planning Comm Intro Sept 23, 2015

BHC Incorporate Comments Oct 19 to Nov 03, 2015

Send DRAFT to PComm. Nov 04, 2015

PComm Mtg - Introduction Nov 18, 2015

PComm Review Nov 19 to Dec 09, 2015

PComm Mtg - Formal Q&A Dec 09, 2015

Staff Response Dec 10 to Jan 01, 2016

Submit SEPA Checklist Dec 16, 2015

SEPA Internal Review Dec 17 to Jan 03, 2016

SEPA Distributed Jan 04, 2016

SEPA Comment Period Jan 05 to Jan 25, 2016

PComm Mtg - Hearing Jan 13, 2016

SEPA Approval Jan 26, 2016

Council Meeting July 12, 2016

DRAFT SANITARY SEWER COMPREHENSIVE PLAN• Chapter 11-Financial Chapter

– Assesses historical performance of sewer utility over past 6 years– Discusses potential funding sources for CIP– Forecasts future financial performance considering impacts on CIP of:

• Projected O&M expenses• Debt Service• Other legal/policy/permit requirements

– Evaluates affordability of City’s current and proposed sewer rates in the context of industry standards

DRAFT SANITARY SEWER COMPREHENSIVE PLAN• Chapter 11-Financial Chapter (cont.)

– Assesses historical performance of sewer utility over past 6 years• City did not increase rates 2009-2012• Raised rates 2.6% in 2013, 2.7% in 2014 (based on ENR Construction Cost Index)• Resulted in 5.4% increase over 2009• Revenue was up 6.6% reflecting modest level of growth in customer base• During same period, operating expenses increased 3.9% on average per year, 20.8%

total– Financial Plan

• Enterprise Fund: sewer utility is responsible for funding all of its costs• Primary source of funding is ongoing charges for service


– Financial Plan• Capital Funding Strategy

– $60.8M included in 6-year CIP plan in 2015 dollars ($66.1M inflation adjusted)– $21.2M in 20-year CIP plan in 2015 dollars ($94.6M inflation adjusted)

• Funding Sources– System Development Charges

• Last adjustment in 2004, currently $4,520 per ERU• Updated calculation shows $5,723 per ERU should be current rate• Highly volatile revenue source• Does make “Development pay for development”, alleviates existing rate payer burden


– Financial Plan• Funding Sources

– Local Facilities Charges• Not currently used in Puyallup• Often called a front-footage charge• Used mainly when sewer is already present in front of a development.

– Grants and Loans• Public Works Trust Fund

– Low interest loans for infrastructure– Not currently receiving funding from Legislature– Would have to be exception to current “Pay as You Go” policy


– Financial Plan• Funding Sources

– Grants and Loans• Department of Ecology

– Centennial Grant– Clean Water Act Section 319– Clean Water State Revolving Fund Loans– Currently have a grant application in to Ecology for Decant Facility

– Bonds• General Obligation Bonds-greater than 1.5% value of taxable property requires public vote• Revenue Bonds-generally higher interest rate but does not require public vote


– Financial Forecast• Utility Reserves-60 days operating expenses = $1.1M• Capital Fund Reserves-1% of assets = $945,000

– This plan relaxes this requirement based on current status and short term needs• Bond Reserve-least of three measures = $883,000

– Pay As You Go policy – no new debt considered in plan– Key Assumptions

• Rate Revenue increases through growth ($9.8M projected for 2015)• SDC Revenue-projected for $630,958 in 2015. Analysis assumes no increase in SDC fee.• Growth-assumes 1% per year in customer base• Expenses- O&M increases by 3 or 5%, CIP by 3% per year.• Debt- Payments start at $2.3M/year drop to $375,000 by end of study period• Rate-Funded Capital-based on projections, rates will need to fund $50.7M

REVENUE REQUIREMENT FORECASTTable 11.5

Revenue Requirement Forecast ($000s)2015 2016 2017 2018 2019 2020

RevenuesRate Revenue At ExistingRates Other OperatingRevenues Total

ExpensesOperating ExpensesDebt ServiceLess: Use of Bond Reserve for FinalPaymentsRate-Funded CapitalTotal

Net Cash Flow

$ 9,789 $ 9,886 $ 9,985 $ 10,085 $ 10,186 $ 10,288155 161 193 201 160 177

$ 9,944 $ 10,048 $ 10,178 $ 10,287 $ 10,346 $ 10,465

$ 6,795 $ 6,973 $ 7,181 $ 7,395 $ 7,617 $ 7,8462,290 2,334 1,673 1,130 1,124 671

- (333) - - (65) (292)- 2,860 8,491 18,386 6,704 14,259

$ 9,085 $ 11,834 $ 17,344 $ 26,911 $ 15,380 $ 22,484

$ 859 $ (1,787) $ (7,166) $ (16,625) $ (5,034) $ (12,019)

Annual Rate Revenue Adjustment 0.00% 80.00% 1.72% 1.74% 1.76% 1.78% Cumulative Rate Revenue Adjustment 0.00% 80.00% 83.09% 86.27% 89.55% 92.93%

Rate Revenue After Rate Adjustments $ 9,789 $ 17,796 $ 18,282 $ 18,786 $ 19,308 $ 19,848Net Cash Flow $ 859 $ 5,347 $ 317 $ (8,777) $ 3,193 $ (3,396) Coverage Ratio Realized 2.01 6.71 8.58 10.08 10.97 31.42Coverage Ratio Required 1.20 1.20 1.20 1.20 1.20 1.20


– Financial Plan Notes:• Revenue rates would have to increase significantly for “pay as you go”• After initial near term projects are done, a rate decrease would be needed• Can avoid above issue by issuing debt OR• Deferring projects until funding is available• Table 11.6 summarizes a phased CIP scenario to manage upfront rate increases• With phased approach, a less radical rate increase can be achieved

REVENUE REQUIREMENT FORECASTTable 11.7

Revenue Requirement Forecast - Phased CIP Scenario ($000s)

2015 2016 2017 2018 2019 2020RevenuesRate Revenue At Existing Rates OtherOperating Revenues Total

ExpensesOperating ExpensesDebt ServiceLess: Use of Bond Reserve for Final PaymentsRate-Funded CapitalTotal

Net Cash Flow

$ 9,789 $ 9,886 $ 9,985 $ 10,085 $ 10,186 $ 10,288155 161 174 158 168 180

$ 9,944 $ 10,048 $ 10,159 $ 10,243 $ 10,354 $ 10,467

$ 6,795 $ 6,973 $ 7,181 $ 7,395 $ 7,617 $ 7,8462,290 2,334 1,673 1,130 1,124 671

- (333) - - (65) (292)- 1,372 8,061 2,934 2,484 2,820

$ 9,085 $ 10,346 $ 16,915 $ 11,459 $ 11,159 $ 11,045

$ 859 $ (298) $ (6,755) $ (1,215) $ (806) $ (578)

Annual Rate Revenue Adjustment 0.00% 21.00% 3.00% 3.00% 3.00% 3.00% Cumulative Rate Revenue Adjustment 0.00% 21.00% 24.63% 28.37% 32.22% 36.19%

Rate Revenue After Rate Adjustments $ 9,789 $ 11,963 $ 12,445 $ 12,946 $ 13,468 $ 14,011Net Cash Flow $ 859 $ 1,574 $ (4,537) $ 1,365 $ 2,154 $ 2,780Coverage Ratio Realized 2.01 3.46 4.50 5.38 6.00 17.53Coverage Ratio Required 1.20 1.20 1.20 1.20 1.20 1.20


– Financial Plan Notes:• Plan assumes SDC have not been increased as recommended• Implementing SDC increases would allow about a 2% reduction in rate increases• Cash balances would decrease steadily over plan period, from $13.6M in 2015 to a low

of $3.9M in 2022– Affordability Evaluation

• PWTF defines “distressed” community as having utility bills exceeding 1.5% of median household income

• Department of Ecology defines “distressed” as 2.0% of median income• Maximum percentage during planning period with proposed phased CIP Plan is 1.34%

Documents

DRAFT SANITARY SEWER COMPREHENSIVE PLAN