This is a digital document from the collections of the Wyoming Water Resources Data System (WRDS) Library.

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1 This is a digital document from the collections of the Wyoming Water Resources Data System (WRDS) Library. For additional information about this document and the document conversion process, please contact WRDS at wrds@uwyo.edu and include the phrase Digital Documents in your subject heading. To view other documents please visit the WRDS Library online at: Mailing Address: Water Resources Data System University of Wyoming, Dept E University Avenue Laramie, WY Physical Address: Wyoming Hall, Room 249 University of Wyoming Laramie, WY Phone: (307) Fax: (307) Funding for WRDS and the creation of this electronic document was provided by the Wyoming Water Development Commission (

2 BUFFALO MASTER PLAN LEVEL I STUDY EXECUTIVE SUMMARY July 2015 Prepared for: Wyoming Water Development Commission Prepared by: WWC Engineering APRIL 2013

3 Buffalo Master Plan Level I Study Executive Summary Prepared for: Wyoming Water Development Commission 6920 Yellowtail Road Cheyenne, WY Prepared by: WWC Engineering 1849 Terra Avenue Sheridan, WY Author: Greg Reid, P.E., Project Engineer Reviewed by: Chad Reed, P.E., Project Manager Doyl M. Fritz, P.E., Senior Technical Advisor Innovation Quality Value

4 TABLE OF CONTENTS PURPOSE AND NEED... ES-1 POPULATION AND WATER DEMAND PROJECTIONS... ES-1 PROPOSED BRASS TRANSMISSION LINE OPTIONS... ES-1 PRIORITIZATION OF BRASS AREAS... ES-3 FINANCIAL SUSTAINABILITY OF BRASS AREAS... ES-5 BRASS FORMATION... ES-5 EXISTING INFRASTRUCTURE INVENTORY... ES-5 NONSTRUCTURAL RECOMMENDATIONS... ES-8 WATER SYSTEM FINANCING... ES-9 CITY OF BUFFALO WATER SYSTEM REVENUE AND COSTS... ES-9 CITY OF BUFFALO ADJUSTED WATER ACCOUNTS... ES-9 LIST OF TABLES Table 1. Table 2. Table 3. Table 4. Table 5. Table 6. Table 7. Prioritization of BRASS Options... ES-3 Financial Sustainability of BRASS Options... ES-5 Water Supply and Distribution System Upgrades... ES-6 WTP Upgrades... ES-6 Financial Indicators... ES-8 Comparable Utility Costs... ES-8 Funding Sources Summary... ES-9 LIST OF FIGURES Figure 1. Figure 2. BRASS Project Area... ES-2 BRASS Project Recommended Alignments... ES-4 LIST OF CHARTS Chart 1. Cursory Water Rate Analysis Results... ES-7 ES-i

5 EXECUTIVE SUMMARY BUFFALO MASTER PLAN LEVEL I STUDY PURPOSE AND NEED The City of Buffalo (City) and the Wyoming Water Development Commission (WWDC), in conjunction with WWC Engineering (WWC), conducted the Buffalo Master Plan Level I Study. The goal of the study is to provide the City with a planning and management tool to facilitate efficient operation of the City s water system, in addition to evaluating the feasibility of providing potable City water to areas outside of the corporate limits. The Buffalo Rural Area Supply System (BRASS) project area (Figure 1) includes approximately 500 existing residences with insufficient water supply via domestic wells with low yield and poor water quality. The results of this Level I Study will provide the City (Project Sponsor) with the data and recommendations necessary to create a capital improvement plan serving the City in the years to come and decide whether to continue evaluation of supplying water to the BRASS area. POPULATION AND WATER DEMAND PROJECTIONS Population projections were performed to estimate the future water demands for the City and the BRASS area. The water demands developed for the project area were used for evaluating the effects of BRASS on the City s water system, from the City s water rights to the distribution system. A comparison of the water demands to the water available from existing facilities and water rights shows that sufficient capacity exists for projected population, including the complete BRASS area, to the year PROPOSED BRASS TRANSMISSION LINE OPTIONS Multiple alignments were analyzed for the BRASS areas. The analysis concentrated on determining potential alignments, necessary appurtenances, water demand allocations along the proposed alignments, piping size requirements, and determination of required pipe material and pressure rating. From this analysis, several options for each of the nine identified service areas were determined for detailed hydraulic analysis and construction cost projections. These options were further refined to develop a recommended option based on considerations of construction cost, life cycle, operation and maintenance, and easement acquisition. A ranking criteria equation (RCE) was developed to assist in determination of the recommended option, which is shown below. RCE = Cost Factor + Easement Factor + O&M Factor + Life Cycle Factor ES-1

6 R83W R82W R82W R81W EAST I-90 AREA ROCK CREEK AREA JOHNSON CREEK ROAD AREA FRENCH CREEK ROAD AREA EAST AREA ELK RIDGE AREA MR EST AREA WEST AREA T 51 N T 51 N T 50 N T 50 N BURGER LANE AREA LEGEND BUFFALO CITY CORPORATE LIMIT SUBDIVISION CITY PARCEL 0 3,000 6,000 CITY WATERLINE GRAPHIC SCALE (FEET) WATER TANK POTENTIAL DEVELOPMENT AREA R82W R81W EXISTING BRASS SERVICE AREA FIGURE 1 CURRENTLY PROVIDED WATER SUPPLY AREA AREA NOT TO BE DEVELOPED (E.G. AIRPORT, CONSERVATION EASEMENT, ETC.) BRASS SERVICE AREAS SLOPE ANALYSIS ZONES BOUNDARY >12.5%-25% >25% R83W R82W ES-2 K:\Sheridan\WWDC\14127\ACAD\BrassServiceAreas.dwg 6/23/2015 4:47:15 PM condia gonzales

7 The RCE determined for the BRASS areas recommendations are shown below. The MR Estates Area included two recommended options, as installation of both alignments will loop the proposed area for a minimal cost increase. The recommended options are shown in Figure 2 and are listed below: West Area Option 2, Burger Lane Area Option 1, French Creek Area Option 1D, Johnson Creek Area Option 1D, MR Estates Area Options 2 and 3, East I-90 Area Option 2, Rock Creek Area Option 4, Elk Ridge Area Option 1, and East Area Option 1. PRIORITIZATION OF BRASS AREAS The nine service areas were prioritized to facilitate construction order based on least cost per likely connection. The number of likely connections per service area was determined based on questionnaires sent to all residents in BRASS. Responses from these questionnaires were reviewed to determine if the residents would likely connect or not. Table 1 was developed based on these reviews. Table 1. Prioritization of BRASS Options Loan Cost per Connections Service Area Option Cost Loan Cost 1 Connection Likely 2 Total Likely 2 Total West 2 $ 843,634 $ 278, $ 3,275 $ 1,051 Burger Lane 1 $ 1,005,847 $ 331, $ 10,707 $ 4,202 French Creek 1D $ 1,419,827 $ 468, $ 13,015 $ 2,242 Johnson Creek 1D $ 515,326 $ 170, $ 14,171 $ 4,475 MR Estates 2 & 3 $ 528,342 $ 174, $ 17,435 $ 3,006 East I-90 2 $ 1,577,704 $ 520, $ 26,032 $ 21,693 Rock Creek 4 $ 473,403 $ 156, $ 3,255 $ 1,644 Elk Ridge 1 $ 1,073,912 $ 354, $ 50,627 $ 14,766 East 1 $ 750,035 $ 247, $ 82,504 $ 17,679 Notes: 1 Assuming WWDC funding for every option at 67% grant and 33% loan. 2 Based on questionnaire responses. ES-3

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9 FINANCIAL SUSTAINABILITY OF BRASS AREAS Financial sustainability of the BRASS options was investigated to evaluate if the proposed options would be self-sustaining. This was performed to provide the City with the necessary information to determine if initiating a Level II study was a prudent decision. A comparison of the likely and potential water rate revenues to the likely annual loan payments shows that with the exception of Elk Ridge Area and East Area, all areas appear to be sustainable. The Elk Ridge and East service areas are not financially sustainable even if all potential residents participate. Table 2. Service Area Financial Sustainability of BRASS Options WWDC Annual Loan Payment Water Rate Revenue Likely Potential Center West $ 20,490 $ 71,400 $ 222,600 Burger Lane $ 23,290 $ 26,040 $ 66,360 MR Estates $ 6,250 $ 8,400 $ 48,720 Not sustainable with likely participants French Creek $ 34,480 $ 30,240 $ 175,560 Johnson Creek $ 12,510 $ 10,080 $ 31,920 East I-90 $ 38,310 $ 16,800 $ 20,160 Rock Creek $ 5,720 $ 40,320 $ 79,800 Not sustainable Elk Ridge $ 26,080 $ 5,880 $ 20,160 East $ 17,650 $ 2,520 $ 11,760 BRASS FORMATION Discussions were held between the City, County, and WWC to determine the potential paths forward for regionalization of the City s water system. This process is primarily based upon determining an organizational structure to allow for funding of the construction, administration, operation, and maintenance of the BRASS distribution system. The City and County prefer to form a Joint Powers Board to allow equal participation by both entities, while also allowing full use of existing City staff, County resources, and funding availability. EXISTING INFRASTRUCTURE INVENTORY Evaluation of the system was conducted and the need for various component upgrades was identified. This analysis centered on the water treatment plant (WTP), the water supply and distribution system, and the administration and operation of the system. As part of the water system supply and distribution analysis the system was evaluated for leakage, bottlenecks, and deteriorating lines (pipe breaks). This analysis identified 13 projects for upgrades as part of the City s system. These upgrades are listed in Table 3. ES-5

10 Table 3. Water Supply and Distribution System Upgrades Water Construction Project Cost Estimates (2015 dollars) Estimated Construction Year Glencoe Way Loop Line $ 63, Main Street High Pressure Line $ 223, South Tank Water Level Control Valve $ 176, High Street Line $ 133, North Bozeman Avenue Line $ 173, North Hart Street Line $ 198, North Carrington Waterline $ 566, West Gatchell Street Waterline $ 200, Sunset Avenue Waterline $ 448, West Brock Street Line $ 209, Cummings Avenue Line $ 220, South Tisdale Street Line $ 220, Clear Creek Road Loop Line $ 379, Total $ 3,215,626 N/A The review of the City s WTP was conducted to evaluate if plant equipment was functioning properly, sized appropriately, and capable of functioning as required to meet water quality standards for the City. As part of this review, 12 upgrades were identified for the WTP. These upgrades are listed in Table 4. Table 4. WTP Upgrades Recommended Improvement Cost Estimate (2015 dollars) Year Fix signal to SCADA for runtime of the house NPW pumps. $10, Develop maintenance strategies to exercise systems not currently in use NA - could be performed in house 2015 Provide redundant control for local HMIs $60, Replace space heater $5, Replace the actuator on FCV2413 $30, Replace or refurbish the plant air compressors $70, Evaluate and increase chlorine contact time for water discharged to the distribution system Identify and mitigate causes of pressure limitation of membranes at 4 MGD Evaluate and increase chlorine contact time for house nonpotable water system $300, $40, $40, Treatment process evaluation and optimization project $50, Add access hatches to caustic storage room $120, Add a fourth membrane rack to increase production capacity $1,200, ES-6

11 The evaluation of the City s operation and administration of the water system involved a cursory water rate analysis, evaluation of financial indicators, and comparison of the City s administrative and operation costs to nearby similar sized utilities. The cursory water rate analysis was based on water system financial data from the City for the 2014 fiscal year. The results of this analysis are shown in Chart 1. As shown by this chart, the City s water reserve accounts are decreasing due to the debt servicing requirements of the City and will be beyond the point that the City wishes to decrease its reserve accounts. This tool indicates that the City should perform a water rate analysis based on the AWWA M1 Manual to determine if a water rate increase is necessary. Chart 1. Cursory Water Rate Analysis Results Target Balance: $5,036,046 Analysis of key financial indicators of the City provides a brief overview of the health of the water system. This analysis involves calculation of four important factors: 1) operating ratio, 2) debt service coverage ratio, 3) days of cash on hand, and 4) current ratio. The operating ratio measures the self-sufficiency of the system. If the ratio is greater than 1.0 the system is able to pay for itself, excluding debt servicing. The debt service coverage ratio provides a measure of the ability of the municipality to service debt with operating revenue. A minimum target for the debt service coverage ratio is 1.0; however, lenders typically like to see a factor of 1.2 or greater. Days of cash on hand shows how long the municipality could operate were rates no longer collected. A Fitch AAA rating is given to utilities that have 427 or more days of cash on hand. The current ratio is a measure of short-term liquidity (i.e., ability to pay bills with money available). A current ratio of 1.0 is the minimum target and typically lenders prefer 2.0 or greater. The calculated key financial indicators for the City and two comparable utilities are shown in Table 5. ES-7

12 Table 5. Financial Indicators Indicator City of Buffalo Utility A Utility B Operating Ratio Debt Service Coverage Ratio Days Cash on Hand 1, Current Ratio A comparison of the City s administrative costs with two other similar sized utilities was also done. The results of this comparison are shown in Table 6. The comparable utilities have slightly more service connections than the City, while having similar infrastructure (e.g., PRV stations, storage tanks, pump stations, etc.) as indicated by each utilities depreciation. As shown by this table, the City s administration of the water system appears to be slightly more efficient than the other two utilities. Table 6. Comparable Utility Costs Item City Of Buffalo Utility A Utility B Total Administration Costs/Year $423, $454, $510, Depreciation $611, $632, $550, NONSTRUCTURAL RECOMMENDATIONS Recommendations for improvements to the City s operation of the water distribution system have been made in various Chapters of the Buffalo Master Plan Level 1 Study, and are as follows: File an enlargement of Permit 23403D for additional water the City purchased to formalize usage with SEO records. Complete adjudication of the City s groundwater rights. Institute a 5-year water audit schedule to evaluate potential leakage. Perform a leakage analysis of the DIP and CIP in the City. Institute a 3-year inspection schedule for the water storage tanks. Modify City ordinances to a maximum day demand of 560 gallons per capita day (current ordinance is 375 gallons per capita day). Perform a water rate study for two areas: 1) inside the City and 2) BRASS. ES-8

13 WATER SYSTEM FINANCING Many financing programs are available to the City for the various projects that are currently being considered. Construction of the BRASS supply system includes five potential grant programs and five potential loan programs. Table 7 contains a summary of these available grant and loan programs. Table 7. Funding Sources Summary Maximum Typical Loan Origination Funding Program Administration Grant % Grant % Interest Rate Fee WWDC WWDC 75% 67% 4.0% -- Wyoming Drinking Water State Revolving Fund Mineral Royalty Grant Program WDEQ % 1.0% SLIB 75% 50% Joint Powers Act Loans SLIB % 1.0% USDA USDA 75% 25% 3.75% -- Wyoming Community Development Block Grant Program Business Ready Community Grant and Loan Program Grant/Loan/Cost Sharing Agreement Wyoming Business Council Wyoming Business Council $500, $1,000, Zero to low -- Johnson County CITY OF BUFFALO WATER SYSTEM REVENUE AND COSTS The City s 2015 water budget has a projected deficit of $649,860. The deficit includes debt payments of $1,204,585 as the City is currently paying off debts with reserve accounts. The City holds two water loans (Drinking Water State Revolving Fund and WWDC) with a total balance of $9,712,907 and three water accounts (the Water Debt Reserve Account, the Operation and Maintenance Account, and the Emergency Operation Account) with a total balance of $5,036,046. The current water deficit is not of high concern as the City projects to have reduced its annual loan payments to $472,486 by Once this is accomplished the water budget is estimated to have a surplus of $82,239 excluding system depreciation and future construction projects. CITY OF BUFFALO ADJUSTED WATER ACCOUNTS The City s water accounts are currently earning very low interest rates. The Wyoming State Treasurer s Asset Reserve (WYO-STAR) program was investigated as an alternate investment option that would result in higher yields than are currently being realized in the City s water accounts. The interest rate for the WYO-STAR program in August of 2014 was 0.228%, which is approximately a 40% increase from the interest being earned by the City s water accounts currently. ES-9