1. Waste Water Treatment Plant Expansion/Capital Improvement Plan. 2. Catawba River Water Treatment Plant (CRWTP) Non-Capacity Costs

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1 Table of Contents Agenda 2 Waste Water Treatment Plant Expansion/Capital Improvement Plan Staff Report 3 WWTP Capital Improvement Plan Update Report 6 Catawba River Water Treatment Plant (CRWTP) Non-Capacity Costs Staff Report 36 CRWTP Improvements 38 Presentation of City Council Budget Schedule for Fiscal Year 2018 Budget Staff Report 39 Budget Schedule 40 1

2 CITY OF MONROE CITY COUNCIL STRATEGIC PLANNING MEETING 300 WEST CROWELL STREET MONROE, NORTH CAROLINA DECEMBER 6, :00 PM AGENDA 1. Waste Water Treatment Plant Expansion/Capital Improvement Plan 2. Catawba River Water Treatment Plant (CRWTP) Non-Capacity Costs 3. Presentation of City Council Budget Schedule for Fiscal Year 2018 Budget Agenda is tentative and is subject to change up to and including the time of the meeting. At the discretion of City Council, Agenda Items listed above that are not discussed at the Strategic Planning Meeting or moved at the request of Council, may be carried forward to the City Council Regular Meeting at 6:00 p.m. to be considered. Cell Phones/Pagers: As a courtesy, please turn off cell phones and pagers while Meeting is in progress. 2 12/5/2016 4:55 PM

3 STAFF REPORT TO: VIA: City Council E.L. Faison, City Manager DATE: December 6, 2016 FROM: SUBJECT: Russell Colbath, Water Resources Director WWTP Capital Improvement Plan Update SUMMARY STATEMENT City Council is requested to receive information regarding the City WWTP Capital Improvement Plan Update and provide input to staff. REVIEW Background The existing City WWTP has a capacity of 10.4 million gallons per day (MGD). The City capacity share is 7.75 MGD with 2.65 MGD of capacity allocated to Union County via a Water and Sewer Agreement. In 2008 staff made a series of presentations to the Environment and Water Resources Committee (EWRC) and City Council regarding a City WWTP Capital Improvement Plan. This plan provided a roadmap for future improvements to meet the wastewater treatment needs of the City and the Union County Eastside Sewer system. The plan outlined options for capacity expansions and the need for capital equipment maintenance for the existing WWTP until an expansion was needed. The recession and slowing economy delayed the need for capacity expansion as outlined in the plan. In FY 16 funding was allocated for a plan update, and Hazen and Sawyers Engineers was again selected to perform the work. Efforts were coordinated with Union County to consider continuing partnership opportunities at the WWTP. The updated plan is attached. Needs Assessment: There are three primary factors that will drive future improvement needs at the WWTP: Facility age As shown in the plan, many of the process structures at the WWTP were constructed in 1965 and While staff has done a good job maintaining the facilities, there is a finite useful life to them, particularly in the corrosive wastewater environment. 3

4 Economic development - Increased flow capacity will be needed to serve future industrial, commercial, and residential customers. The plan analyzes flow projection scenarios for low, moderate and high growth rates. Using the moderate growth rates defined in the study, expanded capacity will be needed by 2031 to meet the City and County needs. Pending environmental regulations for nutrient (nitrogen and phosphorous) removal from the WWTP effluent discharge under the Federal Clean Water Act and NPDES permit program. In 2014 the NCDEQ submitted the North Carolina Nutrient Criteria Plan to USEPA, and it is anticipated that the nutrient criteria could be implemented statewide by as early as 2025, and impact the City s discharge permit by The current WWTP cannot meet these regulations. Planning Considerations The following factors were considered in developing future WWTP improvement options: Age of existing WWTP structures; The difficulty, cost, and capacity downgrade related to retrofitting old process treatment components with the technology needed for nutrient removal; and The difficulty of operating the existing WWTP during a major process and capacity upgrade; Lowest life cycle cost. Based on all considerations, it is recommended to construct a new WWTP adjacent to the existing plant in the 2030 timeframe. This can be moved forward or backward in time depending on actual flow growth and/or changes in the timing of nutrient removal regulations, but not indefinitely given the age of the facility. The new plant would be located on City owned property, or purchased property next to the current WWTP. The proposed initial phase would be a new 15 MGD WWTP, expandable to an ultimate capacity of 22.5 MGD based on annual average day flows. This first phase is projected to meet the needs of the City until approximately The site layout and details of the new WWTP are contained in section 4.0 of the Plan. The City capacity share of the initial phase would be 10 MGD, with 5 MGD for Union County. The Union County Board of Commissioners approved a County Wastewater Master Plan update in August 2016, and identified a continued partnership with Monroe to meet the County eastside sewer needs as a preferred option. They did however direct County staff to continue to evaluate a new WWTP further downstream on Richardson Creek as an alternative to a Monroe partnership. Should the County choose to build a new WWTP further downstream on Richardson Creek, the City can proceed stand alone with a new 10 MGD WWTP or examine if a partnership in a new County WWTP would be advantageous and cost effective for the City. The cost to build a new WWTP is significant and requires advanced planning and rate analysis. Table 4.2 in the plan shows the estimated construction cost of the new 15 MGD WWTP to be $143.5 million. This equates to a City share of $95.7 million and a County share of $47.8 million. 4

5 Until the need to build the new WWTP occurs, the existing WWTP must be fully maintained to meet all regulatory requirements and flow needs of the City and County. The improvement recommendations for the existing 10.4 MGD plant are contained in section 5.0 of the plan. The cost estimate for capital maintenance to the existing WWTP is $8.0 million for FY17 to FY21. Action Items Staff proposes the following actions items as next steps regarding this topic: Present the WWTP Capital Improvement Plan Update to City Council at the December 6, 2016 strategic Council meeting. Gain input from Council on the plan. Present cost and rate analysis to City Council at the February 7, 2017 strategic Council meeting. Establish a capital reserve account strategy to ensure future improvements can be adequately funded without last minute rate spikes. Monitor all undeveloped properties surrounding the existing WWTP to identify potential properties for purchase that may facilitate future plans for WWTP improvements, and or cost savings. Closely monitor regulatory developments that may impact the timing of the Nutrient Criteria Plan, and ultimate timing of impacts to Monroe. This topic was presented for information to the Public Enterprise Committee at their November meeting. RECOMMENDATION Staff recommends that City Council provide input to staff regarding the City WWTP Capital Improvement Plan Update and action items. 5

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36 STAFF REPORT TO: VIA: City Council E.L. Faison, City Manager DATE: December 6, 2016 FROM: SUBJECT: Russell Colbath, Water Resources Director Catawba River WTP (CRWTP) Potential Non Capacity Costs SUMMARY STATEMENT City Council is requested to receive information regarding potential non-capacity costs at the CRWTP. REVIEW In 2005 the City entered into a water supply agreement with Union County to provide up to 1.99 million gallons per day (MGD) to the City through an existing water system interconnect located at Airport and Old Goldmine road. The City agreed to a deferred delivery of this water supply and began using it in April This supply is a critical resource to Monroe s future economic development. Under the agreement the City has an allocated capacity equivalent to 5.53% of the CRWTP and an allocated capacity of 11.06% in the water distribution piping, pumps, and tanks owned by Union County that are needed to deliver the water to Monroe. Initial cost to Monroe was: CRWTP 5.53 % = $1.74 million (lump sum paid in 2014) Water Distribution 11.06% = $2.6 million (financed via revenue bonds beginning in 2006, 20-year term) The total cost to secure this important 1.99 MGD of water supply was $4.34 million. For comparison, the replacement cost of this water supply today (for instance the current Union County Yadkin water supply project), is $29+ million for 1.99 MGD. This illustrates the value that Monroe received, and low cost nature of water supply under this important agreement. 36

37 Under the agreement the City is obligated to pay for Capital Costs Not Related to Increased Capacity using the percentages of allocated capacity outlined in the Agreement. This would include improvements needed to satisfy regulatory requirement, enhance reliability, extend the useful life of assets, and/or to maintain existing treatment capacities. The CRWTP is currently undergoing significant improvements totaling over $65 million that will not increase the actual plant capacity beyond its current rating of 36 MGD. (See attached project list). These improvements are primarily related to meeting the Catawba-Wateree Low Influent Protocol which is binding on the Duke Power water releases. These improvements will make water supply from the CRWTP more reliable during drought conditions. The County has communicated Monroe s cost share for these projects to be $3.63 million based on our contractual 5.53% allocated capacity. Staff believes that some these improvements meet the definition of non-capacity improvements as contained in our Agreement. However, staff has communicated other concerns to the County that, while the plant capacity is not currently increasing with these major improvements, future CRWTP expansion may be able to use the installed facilities and that consideration should be given to Monroe s current costs if future expansions are able to use the installed facilities without paying a pro-rata share. The improvements of concern include the Raw Water Main, the Raw Water Intake and Pump Station, and the Raw Water Reservoir. Staff and the City Manager met with Union County staff and County Manager to review these concerns. The County stated they will provide additional information that justifies all of the improvements are needed to support the current 36 MGD treatment plant. The City Attorney is currently reviewing all information and staff is awaiting a reply from the County. Depending on the review and outcome of all items, staff will include the appropriate funding in FY18 budget request for Council consideration. This topic was scheduled to be heard at the October meeting of the Public Enterprise Committee, but was not presented due to cancelation of the meeting. RECOMMENDATION City Council is requested to receive information regarding potential non-capacity costs at the CRWTP and provide input to staff. 37

38 Catawba River Water Treatment Plant Current CIP Projects Project Contractor/Engineer Contract Amount Percent Complete Monroe's Share (5.53%) Redundancy & Reliability Improvements Turner Murphy $ 7,125, % $ 394, Raw Water Main Turner Murphy $ 1,268, % $ 70, Residuals Spray Irrigation System Neal's Grading $ 536, % $ 29, Raw Water Intake & Pump Station Wharton Smith $ 6,787, % $ 375, Engineering Contracts(Task Orders 1-7) Hobbs & Upchurch $ 900, % $ 49, Engineering Contracts(Task Orders 3A,4A,8) MBD $ 1,228, % $ 67, Raw Water Reservoir TBD $ 34,502, % $ 1,907, Engineering Contracts (Task Orders 1-3) Black & Veatch $ 5,409, % $ 299, Engineering Contracts Hobbs & Upchurch $ 71, % $ 3, Engineering Contract (Construction Admin) Black & Veatch $ 3,063, % $ 169, Mitigation Cost Taylors Creek $ 1,551, $ 85, RMC & Associates $ 440, $ 24, ISE Newberry $ 392, $ 21, Harpers $ 2,357, $ 130, Driscoll Sheedy $ $ Total Cost Monroe Share $ 65,636, $ 3,629, Funding Sources for WP003 & WP004 As Denoted in FY2017 CIP Budget Document Capital Contribution 1,829, FY2016 Revenue Bonds 3,284, Revenue Bond 23,492, Utility Pay Go 5,081, Total 33,688,

39 STAFF REPORT TO: VIA: City Council E.L. Faison, City Manager DATE: September 20, 2016 FROM: PREPARED BY: SUBJECT: Lisa Strickland, Finance Director Lisa Strickland, Finance Director Fiscal Year 2018 Budget Schedule SUMMARY STATEMENT To provide overview on the budget calendar for fiscal year REVIEW Attached is a schedule of budget meetings proposed for the review of the fiscal year budget. Meetings in January are intended to set priorities for fiscal year 2018 and beyond. Time is scheduled in May for review of the proposed budget with a planned adoption date of June 6, Discussion item/informational purposes. RECOMMENDATION 39

40 Budget Calendar - from the Perspective of Council CITY OF MONROE BUDGET SCHEDULE FISCAL YEAR Date December 6, 2016 April 4, 2017 April 28, 2017 May 2, 2017 May 2, 2017 May 16, 2017 June 6, 2017 Time 5:00 PM 5:00 PM 6:00 PM 5:00 PM 6:00 PM 6:00 PM 6:00 PM Event Presentation of City Council Budget Schedule (Draft) City Council Strategic Session - Revenue Update FY18 Budget Work Books delivered to City Council City Council Budget Work Session - budget wrap-up discussion City Manager s Presentation of Budget to City Council Budget Public Hearing Adoption of Budget Staff Budget Process Synopsis (dates are approximate) [] October 1 February 20: Departmental Budget Requests developed and submitted, to form a prototype Budget; major components - Operations, Personnel, Capital, Equipment [] February 27 March 10: Departmental Budget & Requests reviewed w/manager [] March April 10: develop working draft of Budget FYE 18 for discussion with Council 40