SRCSD Final Budget

SRCSD 2006-07 Final Budget

SRCSD Service Area

Contents Organizational Chart.................................................................... 4 Board of Directors....................................................................... 5 From the District Engineer............................................................... 6 Overview............................................................................... 7 SRCSD Budget Summary................................................................ 8 SRCSD Budget Schedule, Operating Fund............................................... 11 Top 10 Accounts....................................................................... 12 SRCSD Budget Schedule, Operations-Capital Outlay Fund............................... 13 SRCSD Budget Schedule, Revenue Bonds Fund......................................... 14 SRCSD Budget Schedule, Debt Service Fund............................................ 15 Detail of Provisions for Reserves/Designations.......................................... 16 Service Charge History................................................................. 17 Fee Schedule History................................................................... 17 Capital Improvement Program......................................................... 18

SRCSD Organizational Chart SRCSD Board of Directors District Engineer Mary Snyder Conveyance & Treatment System Stan Dean Communications & Media Office Claudia Goss Finance Marcia Maurer Policy & Planning Wendell Kido Administration Dan Bonebrake Laboratory Hank Stevens Interceptor Engineering Neal Allen Operations & Maintenance Mike Mulkerin Plant Engineering Vick Kyotani 4 SRCSD

SRCSD Board of Directors County of Sacramento Roger Dickinson, District 1 Illa Collin, District 2 Susan Peters, District 3 Roberta MacGlashan, District 4 Don Nottoli, District 5 City of Citrus Heights Jeannie Bruins City of Elk Grove Sophia Scherman City of Folsom Kerri Howell City of Rancho Cordova Dan Skoglund City of Sacramento Heather Fargo Robert King Fong Kevin McCarty Bonnie Pannell Sandy Sheedy City of West Sacramento Oscar Villegas Yolo County Mike McGowan SRCSD 5

From the District Engineer The Sacramento Regional County Sanitation District (SRCSD) is proud to present the District s 2006-07 Final Budget. This budget document represents the District s financial and operating plan for providing vital wastewater conveyance and treatment services to District customers. It supports the goal of providing those services in a responsive, fiscally prudent and environmentally responsible manner. The District s Final Budget was developed through a collaborative process that encouraged working groups within the District to develop their own internal budgets. Budget targets were set for each group, and staff prioritized needs according to District priorities and available funds. Using this process, working groups and managers have ownership and accountability in meeting their budget goals. The District Board reviews and approves both the proposed District budget in June and the final District budget in August of each year. The final budget includes sufficient funding for all the normal operational activities of the District. In addition, the budget funds the 2006-07 portion of the District s $2.3 billion Capital Improvement Program (CIP). Some of the projects scheduled for this upcoming year include the Lower Northwest Interceptor Project, the Upper Northwest Interceptor Project Sections 1 through 4 and 9, and the Stormwater Pump Station Upgrade at the Sacramento Regional Wastewater Treatment Plant (SRWTP). The SRCSD Final Budget is available to the public on the District s Web site at www.srcsd.com. This ensures that District ratepayers and customers have full access to information regarding District operations. I want to thank the District s budget staff for its excellent work and the countless hours spent preparing this very comprehensive, yet accessible, budget document. It is the product of a first-rate and dedicated staff throughout the entire District organization. Mary Snyder 6 SRCSD

About the Sacramento Regional County Sanitation District The Sacramento Regional County Sanitation District (SRCSD), organized in 1974, provides wastewater conveyance, treatment and disposal services for residents and businesses within the 250 square miles of Sacramento County. Through a system of more than 90 miles of interceptor pipes, SRCSD currently receives wastewater collected by three contributing agencies: County Sanitation District 1 (CSD-1), the City of Sacramento and the City of Folsom. The City of West Sacramento will become a contributing agency in 2007. On an average day, the system transports 165 million gallons of wastewater to the regional wastewater treatment plant in Elk Grove (SRWTP). This facility a 181 milliongallons-per-day (mgd) capacity, secondary treatment wastewater plant provides all wastewater treatment services for the Sacramento region. SRCSD is a special district governed by a 16-member Board of Directors that is composed of the Sacramento County Board of Supervisors, representatives of the cities of Citrus Heights, Elk Grove, Folsom, Rancho Cordova, Sacramento and West Sacramento, and a representative of the Yolo County Board of Supervisors. Staff for SRCSD, totaling 444 full-time employees, is provided by the County of Sacramento s Department of Water Quality. The 2006-07 operating budget is $115 million. The District is currently in the midst of implementing the largest Capital Improvement Program (CIP) since its inception in the 1970s. SRCSD s 20-year CIP totals $2.3 billion in treatment plant, interceptor and pump station construction. õ SRCSD 7

SRCSD Budget Summary Operations The 2006-07 Operating Fund budget request is $133,488,236, which includes a contribution of $18.4 million to reserves. Highlights of the budget include: A significant change in this year s budget is the addition of depreciation expense. SRCSD has used a governmental fund basis for budgeting and is converting to an enterprise fund basis effective July 1, 2006. This change requires that depreciation now be included in the budget. A total reserve contribution of $18.4 million, $3 million to the general reserve and $15.4 million to the replacement reserve. The contribution to the general reserve increases that reserve balance to approximately 10 percent of the operating budget (excluding reserve contributions) per the District s reserve policy. The increase to the replacement reserve continues the interim policy of contributions to this reserve in recognition of the future replacement projects needed within the District. Funding for these contributions is from one-time sources, including the repayment of a loan from CSD-1 and a transfer of remaining reserves from the District s general obligation bonds. Labor costs, which are shown in the Services and Supplies category, total slightly more than $47 million or almost 41 percent of the operating budget (excluding reserve transfers). The District has transitioned from using chlorine to bioxide as a new form of chemical treatment at its pumping stations. This has caused chemical costs to increase by approximately $1 million, while the overall electricity budget has slightly decreased. Financing for this fund is primarily from customer service charges and interest earnings on cash balances. This budget is based on a rate of $17 per month per ESD (equivalent singlefamily dwelling), which became effective in October 2005. The cost of the Sewer Lifeline Rate Assistance Program $5 credits per month for qualifying low-income customers is also included in this budget. Capital Fund The Capital Fund budget is $776,242,572. In March 2005, the Auditor s office changed the process for budgeting multi-year contracts. Due to this change, the proceeds from the 2004 revenue bond issue have already been encumbered and included in the fund balance. Proceeds from the 2006 revenue bond have been shown as Other Financing. The 2006-07 capital budget includes expenditures for capital projects not currently encumbered, as well as debt service payments of almost $82 million. Financing for the Capital Outlay Fund is derived from impact fees charged to new users of District facilities, a portion of the monthly service charge for projects benefiting existing users, revenue bond proceeds and interest earned on cash balances. The budget includes release of $10.9 million in the capital replacement reserve to fund qualifying projects. An offsetting reserve contribution has been made to keep the reserve levels constant. Debt Service Funds The District s general obligation bonds for $75 million were first issued in 1976 and 1978 to provide the local share of the District s original grant program. The bonds were refunded in 1998 to provide lower debt service and will be paid in full in August 2006. District counsel has 8 SRCSD

SRCSD Budget Summary advised that any remaining funds, primarily a cash reserve, should be transferred to the Operations Fund in recognition of the original contributions made by the Operations Fund for the bonds. No property tax levy will be required in 2006-07, as sufficient funds exist to repay the debt. Through the Finance Authority, SRCSD issued $499 million in revenue bonds in June 2000. In June 2001, the Authority refunded approximately $125 million in Series A bonds and refunded an additional $61 million in Series A bonds in September 2005 to reduce debt service costs on this issue. In fiscal year 2004-05, the Authority issued $720 million in revenue bonds for SRCSD. An additional $335 million in bonds was issued in July 2006. The purpose of each of these bond issues is to provide financing for SRCSD s $2.3 billion Capital Improvement Program. The 2006-07 budget for SRCSD revenue bonds is based on estimated aggregate debt service for the 2000, 2001, 2004, 2005 and 2006 revenue bonds. The debt service and miscellaneous financial services cost is $83,743,336, and financing for this amount will be provided from SRCSD s Capital Outlay Fund, where similar amounts have been budgeted. A reserve release of $124 million was also made related to the 2001 refunding. õ Monthly Service Charge $17 Debt Service $5.70 $3.06 $1.17 $1.00 Services & Supplies Power $0.08 Equipment $0.59 Chemicals Labor $5.40 BRF Major Components of $17 Monthly Service Charge SRCSD 9

SRCSD Budget Summary Budget $5.5 GO Bonds will be paid off in August 2006 $133.5 Operations Capital Outlay $776.2 Total District Budget $915.2 million Major fund components in millions ($) Revenues Reserves Service Charges & Fees $22.0 Interest & Other $29.0 Depreciation Offset $153.8 $140.2 $235.2 $335 2006 Revenue Bonds Fund Balance Total District Revenue $915.2 million Major fund components in millions ($) 10 SRCSD

SRCSD Budget Schedule Operating Fund Fiscal Year 2006-07 Fund # 261A Budget Unit # 3028000 Actual 2004-05 Adopted 2005-06 Year-end Actuals 2005-06 Requested 2006-07 EXPENDITURES Salaries/Benefits 24,505 30,000 26,192 40,000 Services & Supplies 65,768,259 76,014,210 74,735,782 86,127,822 Other Charges 885,257 3,325,000 2,475,406 30,571,400 Improvements 2,000 0 0 0 Equipment 665,581 305,000 270,155 535,424 Interfund Reimbursement 0 (3,694,061) (3,694,061) (2,194,652) Cost of Goods Sold 1,868 2,500 298 1,000 Subtotal Expenditures 67,347,470 75,982,649 73,813,772 115,080,994 Reserve Provision 0 13,600,000 13,600,000 18,407,242 Total Expenditures 67,347,470 89,582,649 87,413,772 133,488,236 REVENUES Fund Balance 8,532,296 8,505,426 8,505,426 16,675,916 Reserve Release 0 6,278,155 6,278,155 0 Use of Money/Property 1,656,303 1,950,000 3,025,082 3,599,000 Aid for Govn t Agencies 485,391 200,000 303,703 100,000 Charges for Service 68,064,217 71,699,068 75,669,046 106,163,320 Other Revenues 1,008,696 950,000 1,751,553 6,950,000 Other Financing 5,781 0 10,296,289 0 Total Revenues 79,752,684 89,582,649 105,829,254 133,488,236 SRCSD 11

SRCSD Operations Top 10 Accounts* Fiscal Year 2006-07 The following service and supply accounts comprise approximately 90 percent of the SRCSD service and supply budget: Public Works Services $47,475,625 Labor costs charged from the Municipal Services Agency. These labor charges are for 444 full-time Water Quality Department positions assigned to SRCSD, part-time and seasonal Water Quality positions assigned to SRCSD, and other labor charges from the Municipal Services Agency for services provided to SRCSD. This is an increase of $4,454,110 from the 2005-06 budget. Electricity $9,908,000 Electricity costs to operate the regional treatment plant and the regional pump stations. This is a decrease of $125,987 from the 2005-06 budget. Chemical Supplies $7,944,935 Chemical costs to operate the regional treatment plant, regional pump stations and the water reclamation facility. This is an increase of $1,004,261 from the 2005-06 budget. This increase is due to changing from chlorine to bioxide at the pump stations and projected increases in chemical prices. Sewage Disposal Services $4,205,500 Payments to Synagro for biosolids recycling and to the City of Sacramento for the operation of SRCSD facilities. This is a $0.5 million increase from the 2005-06 budget due to a smaller than expected encumbrance for the contract with Synagro. Engineer and Consulting Contracts $1,826,000 Professional services provided by engineering and consulting firms. This is a $7,000 increase from the 2005-06 budget. Regional Sanitation Stores Charges $1,314,400 The cost of supplies and materials needed for the operation and maintenance of the regional plant and outlying plants. This is an increase of $178,600 from the 2005-06 budget, due to the increased repair work and use of parts by SRCSD Stores. Other Professional Services $1,271,350 Professional services provided by private firms to SRCSD. This is an increase of $444,040 from the 2005-06 budget. The entire increase is due to the projected costs of cleaning two digesters in the coming fiscal year. Mechanical Systems Maintenance Supplies $921,300 Mechanical supplies needed for preventive and repair maintenance at the regional plant, regional pump stations and the outlying plants. This is a $131,800 increase from the 2005-06 budget, primarily due to the increased repair work at the regional plant. Engineering Services $925,000 Professional engineering services. This is a $725,000 increase from the 2005-06 budget. Approximately $425,000 of this increase is to renew a contract for assistance with the regional plant cryo facility. The remaining $300,000 is primarily for anticipated new contracts for regulatory compliance issues. Mechanical Systems Maintenance Services $847,500 Mechanical maintenance work that cannot be performed by SRCSD staff, including machine shop work. This is a $184,000 increase from the 2005-06 budget due to the increase in repair work at the regional plant. *Excluding depreciation 12 SRCSD

SRCSD Budget Schedule Operations-Capital Outlay Fund Fiscal Year 2006-07 Fund #262A Budget Unit # 3030000 Actual 2004-05 Adopted 2005-06 Year-end Actuals 2005-06 Requested 2006-07 EXPENDITURES Services & Supplies 46,511,824 68,482,281 64,898,108 62,510,050 Other Charges 68,172,630 100,615,482 74,690,073 108,603,229 Land 11,017,959 0 1,042,887 0 Improvements 150,164,976 131,602,035 382,309,690 594,134,803 Equipment 88,813 0 0 0 Operating Transfer Out 0 3,694,061 3,694,061 0 Subtotal Expenditures 275,956,202 304,393,859 526,634,819 765,248,082 Reserve Provision 5,000,000 400,000 400,000 10,994,500 Total Expenditures 280,956,202 304,793,859 527,034,819 776,242,582 REVENUES Fund Balance 131,599,158 228,392,399 228,392,399 218,360,566 Reserve Release 5,000,000 400,000 400,000 135,004,500 Use of Money/Property 14,019,534 6,550,000 23,958,497 11,300,000 Charges for Service 89,363,443 69,451,460 80,546,775 76,577,516 Other Revenues 753,521 0 (770,922) 0 Other Financing 701,092,473 0 28,361,125 335,000,000 Total Revenues 941,828,129 304,793,859 360,887,874 776,242,582 SRCSD 13

SRCSD Budget Schedule Revenue Bonds Fund Fiscal Year 2006-07 Fund # 240C Budget Unit # 3004101 Actual 2004-05 Adopted 2005-06 Year-end Actuals 2005-06 Requested 2006-07 EXPENDITURES Services & Supplies 420,515 1,879,402 (2,892,809) 1,025,262 Other Charges 55,544,412 66,810,482 62,945,103 81,973,867 Subtotal Expenditures 55,964,927 68,689,884 60,052,294 82,999,129 Reserve Provision 8,837 0 0 744,207 Total Expenditures 55,973,764 68,689,884 60,052,194 83,743,336 REVENUES Fund Balance (3,348,203) (1,185,598) (1,185,598) 744,207 Use of Money/Property 113,513 0 149,877 0 Other Revenues 58,022,855 69,875,482 61,832,224 82,999,129 Total Revenues 54,788,165 68,689,884 60,796,503 83,743,336 14 SRCSD

SRCSD Budget Schedule Debt Service Fund Fiscal Year 2006-07 Fund # 265A Budget Unit # 9607000 Actual 2004-05 Adopted 2005-06 Year-end Actuals 2005-06 Requested 2006-07 EXPENDITURES Services & Supplies 231 1,250 202 1,204 Other Charges 5,255,920 5,292,873 5,257,154 3,282,226 Interfund Transfer Out 0 0 0 2,194,652 Total Expenditures 5,256,151 5,294,123 5,257,356 5,478,082 REVENUES Fund Balance 498,277 658,330 658,330 257,434 Reserve Release 9,575 35,272 35,272 5,220,648 Use of Money/Property 71,871 15,000 135,224 0 Aid for Govn t Agencies 986 0 0 0 Other Revenues - Taxes 5,333,772 4,585,521 4,685,964 0 Total Revenues 5,914,481 5,294,123 5,514,790 5,478,082 SRCSD 15

Detail Of Provisions For Reserves/Designations Schedule 15 Fiscal Year 2006-07 Fund No. SRCSD Fund Reserves/ Designations Balance as of June 30, 2006 Amount Made Available for Financing by Cancellation Approved/ Adopted by the Board of Directors Increase or New Reserves/ Designations to be Provided in Budget Year Recommended Recommended Approved/ Adopted by the Board of Directors Total Reserves/ Designations Budget Year 261 Operating Fund General Reserve 6,000,000 0 0 3,000,000 0 9,000,000 Reserve for Replacement 14,591,842 0 0 15,407,242 0 29,999,084 Rate Stabilization Reserve Reserve for Facilities Closure Reserve for Incentive & Lifeline Programs Reserve for Premium Payment 20,500,000 0 0 0 0 20,500,000 10,121,078 0 0 0 0 10,121,078 3,500,000 0 0 0 0 3,500,000 0 0 0 0 0 0 Reserve for SLRAP 10,000,000 0 0 0 0 10,000,000 261 TOTAL 64,712,920 0 0 18,407,242 0 83,120,162 262 Capital Outlay Fund Reserve for Expansion 20,908,124 0 0 0 0 20,908,124 Reserve for 40,430,166 10,994,500 0 10,994,500 0 40,430,166 Replacement Debt Service 5,100,000 0 0 0 0 5,100,000 Stabilization 2001 Refunding Debt 124,010,000 124,010,000 0 0 0 0 Repayment 262 TOTAL 190,448,290 135,004,500 0 10,994,500 0 66,438,290 240 Revenue Bonds Fund General Reserve 20,347 0 0 744,207 0 764,554 240 TOTAL 20,347 0 0 744,207 0 764,554 265 Debt Service Fund General Reserve 5,220,648 5,220,648 0 0 0 0 265 TOTAL 5,220,648 5,220,648 0 0 0 0 GRAND TOTAL 260,402,205 140,225,148 0 30,145,949 0 150,323,006 16 SRCSD

SRCSD Monthly Service Charge History Date Monthly Charge July 1, 1995 $10.70 July 1, 1996 $11.75 July 1, 1997 $11.80 July 1, 1998 $11.85 July 1, 1999 $11.90 October 1, 2000 $11.90 October 1, 2001 $13.40 October 1, 2002 $13.40 October 1, 2003 $13.40 October 1, 2004 $15.40 October 1, 2005 $17.00 SRCSD Fee Schedule History Year Fee Per ESD* March 1, 1995 $2,222 March 1, 1996 $2,241 March 1, 1997 $2,284 March 1, 1998 $2,336 March 1, 1999 $2,385 March 1, 2000 $2,404 April 28, 2001 $3,500 Two-tier Fee (Effective April 1, 2002) New Infill April 1, 2002 $4,500 $2,300 April 1, 2003 $5,255 $2,314 April 12, 2004 $6,000 $2,314 April 1, 2005 $6,500 $2,500 April 1, 2006 $7,000 $2,700 *ESD is an Equivalent Single-Family Dwelling Unit, or one household. SRCSD 17

SRCSD 2006-11 Capital Improvement Program* Project Name Bradshaw Interceptor Section 6B Fruitridge Interceptor Upper Northwest Interceptor Sections 5 & 6 Upper Northwest Interceptor Section 9 Laguna Interceptor Extension Lower Northwest Interceptor Natomas Pump Station Phase 2 South River Pump Station Phase 2 Laguna Creek Interceptor Section 1 Regional Chlorine Conversion Sunrise Interceptor Sections 1 & 2 North Natomas Interceptor Upper Northwest Interceptor Sections 1 & 2 Upper Northwest Interceptor Sections 3 & 4 Dry Creek Relief South Interceptor Section 1 South Interceptor Section 2 Description South of Elder Creek Road to Mayhew Road and Jackson Highway on Bradshaw Road Fruitridge Road Pump Station to central trunk construction of Power Inn Pump Station Cherry Lane to Don Julio Boulevard on Elkhorn Boulevard Auburn Boulevard and Old Auburn Boulevard from Van Maren Lane to Fair Oaks Boulevard SRWTP to Franklin Boulevard at Dwight Road SRWTP to the Natomas Pump Station, Natomas Pump Station Phase 1, Southport Regional Pump Station Phase 1 and West Sacramento collection system Adds pumps to increase pumping capacity connected with the Lower Northwest Interceptor Provides additional pump capacity at that site SRWTP to Highway 99 along Laguna Creek Conversion of pump stations to hypochlorite Folsom Boulevard to north of the American River to Pennsylvania Avenue to Sunset Avenue Del Paso Road to end of pipe; transfer of pipe from CSD-1 occurs this year. Natomas Pump Station to Elkhorn Boulevard along the East Main Drainage Canal; Sections 1 & 2 combined into one project this year. Elkhorn Boulevard from the East Main Drainage Canal to Cherry Lane 28 th Street and Elkhorn Boulevard to Scotland Drive Along the UP railroad line from Laguna Boulevard to SRWTP Along the UP railroad line from Laguna Boulevard to south of Elk Grove Boulevard; includes a pump station at Franklin and Elk Grove boulevards 2006 Total Project Cost** 2005 Total Project Cost** * CIP approved by District Board of Directors in November 2005; subject to change based on actual conditions and projected needs. ** Total Project Costs extend beyond the 2006-07 fiscal year and are in Year 2005 dollars. # Project Timing refers to projects that now appear on the CIP list, as the start date occurs within the five-year window. Start Date End Date $27.3 million $27.3 million 1999/00 2006/07 $19.6 million $19.6 million 2001/02 2006/07 $34.7 million $34.7 million 2000/01 2006/07 $29.3 million $29.3 million 2004/05 2007/08 $23.9 million $23.9 million 2001/02 2006/07 $584.0 million $584.0 million 2000/01 2006/07 $3.2 million $1.9 million 2006/07 2009/10 $3.2 million Project Timing 2009/10 2012/13 # $28.4 million $28.4 million 2009/10 2012/13 $1.1 million $1.1 million 2006/07 2009/10 $32.4 million $32.4 million 2005/06 2008/09 $2.5 million $2.5 million 2006/07 2006/07 $143.0 million $105.8 million 2003/04 2007/08 $132.0 million $60.1 million 2003/04 2007/08 $13.4 million $13.4 million 2002/03 2007/08 $9.2 million $9.2 million 2006/07 2009/10 $26.5 million $26.5 million 2007/08 2011/12 18 SRCSD

SRCSD 2006-11 Capital Improvement Program* Project Name South Interceptor Section 3 Disinfection Contact Basin South Secondary Clarifier Expansion North Stormwater Pump Station Upgrade Barscreen Replacement Small Projects Miscellaneous Projects Non-structural Alternatives Switchgear 2E/2F Replacement Operations Manual Update Water Recycling Strategic Plan Water Reclamation Facility-10 mgd Water Reclamation Facility- 25 mgd Water Reclamation Facility- 40 mgd Process Control Computer System- Phase II CO Tank Conversion Chlorine Injection/ Odor Control for LNWI Influent Hydraulic/ LNWI Relief Description South of Elk Grove Boulevard along Franklin Boulevard and Bruceville Road to south of Poppy Ridge Road New disinfection facilities, including an effluent pumping station, will be needed as a result of changing regulations. Addition of one clarifier battery to provide additional flow capacity Provides increased pumping reliability to minimize potential local flooding Replacement of barscreens to reduce maintenance, enhance reliability and improve process efficiency A number of small projects, including replacement of river flow meter and water reclamation facility improvements Includes Sims Road renovation, I/E pump control, outfall clean sampling system upgrade and water recycling treatment study Includes wastewater management program, source control and watershed offsets focused on specific pollutant reduction Extends life of infrastructure and maintains safe work environment by replacing switchgear that powers influent/effluent pumps Assists ongoing operations and helps train new staff Identifies, evaluates and prioritizes projects for potential water recycling use Expansion of existing facility from 5 mgd to 10 mgd Expansion of facility from 10 mgd to 25 mgd Expansion of facility from 10 mgd to 40 mgd Removal of the backup control panels made obsolete by Phase I Replacement of 32 existing aerators with more efficient equipment Chlorine injection and odor control facilities for the LNWI connection to the plant Construction of influent relief from LNWI transition structure to ESBs 2006 Total Project Cost** 2005 Total Project Cost** Start Date End Date $22.2 million $22.2 million 2009/10 2012/13 $62.3 million $62.3 million 2003/04 2008/09 $39.9 million $39.9 million 2010/11 2014/15 $7.2 million $6.0 million 2003/04 2007/08 $10.9 million $9.8 million 2001/02 2006/07 $13.0 million $13.0 million 2006/07 2010/11 $4.0 million $4.0 million 2002/03 2012/13 $29.8 million $29.8 million 2002/03 2020/21 $7.9 million $7.3 million 2000/01 2006/07 $5.1 million $5.1 million 2002/03 2006/07 $1.9 million $1.9 million 2003/04 2007/08 $13.9 million $13.9 million 2006/07 2010/11 $41.8 million $41.8 million 2006/07 2015/16 $41.8 million $41.8 million 2011/12 2020/21 $13.0 million $13.0 million 2007/08 2014/15 $37.9 million $37.9 million 2009/10 2012/13 $2.0 million $2.0 million 2005/06 2008/09 $2.0 million $2.0 million 2005/06 2008/09 * CIP approved by District Board of Directors in November 2005; subject to change based on actual conditions and projected needs. ** Total Project Costs extend beyond the 2006-07 fiscal year and are in Year 2005 dollars. # Project Timing refers to projects that now appear on the CIP list, as the start date occurs within the five-year window. SRCSD 19

SRCSD 2006-11 Capital Improvement Program* Project Name Primary & Grit Handling Area Rehabilitation CO Tank O2 & Liquid Feed Improvements Mixed Liquor Channel Improvements Corrosion Control System Rehabilitation Maintenance Building Remodel Bradshaw Facility Expansion Asset Management Master Planning and Permit Issues Interceptor SCADA Replacement Project Freeport Water Mitigation New Effluent Conduit Primary Reliability Description Rehabilitation of mechanical and structural elements of the primary tanks grit tanks and grit-handling facilities Improvement of flow-monitoring and controlling capabilities for oxygen and liquid feed to individual CO tanks Evaluation and implementation of improvements to reduce flow imbalance between north and south CO tanks Replacement of the existing cathodic protection system with galvanic and impressed current systems Conversion of a portion of Warehouse B into office and bench space for the Control and Electrical Systems team Construction of new Bradshaw facilities to accommodate the long-term needs of M & O, as well as Water Quality engineering and administration staff Development of the asset management program s strategic plan and initial implementation efforts for the District Provides additional master planning documents and studies for discharge permit negotiations Replacement of the SCADA system for District pump stations and infrastructure to monitor data at SRWTP Development of facilities needed to coordinate operation between the Freeport Regional Water Authority s intake and the SRCSD outfall Construction of a new effluent conduit to serve facilities north of the existing CO tanks. This project is linked with the Secondary Clarifier Expansion-North project. Construction of primary sedimentation tanks and grit-handling facilities to improve the treatment efficiency of the primary and downstream treatment systems 2006 Total Project Cost** 2005 Total Project Cost** * CIP approved by District Board of Directors in November 2005; subject to change based on actual conditions and projected needs. ** Total Project Costs extend beyond the 2006-07 fiscal year and are in Year 2005 dollars. # Project Timing refers to projects that now appear on the CIP list, as the start date occurs within the five-year window. Start Date End Date $28.0 million $30.0 million 2005/06 2008/09 $2.8 million $2.8 million 2006/07 2008/09 $5.9 million $5.9 million 2006/07 2009/10 $2.9 million $1.9 million 2005/06 2007/08 $1.5 million $1.5 million 2006/07 2008/09 $70.0 million $70.0 million 2003/04 2008/09 $3.8 million $3.8 million 2003/04 2006/07 $4.0 million $4.0 million 2002/03 2006/07 $2.0 million New Project 2005/06 2006/07 $17.5 million Project Timing # $4.2 million Project Timing # $64.4 million Project Timing # Five-Year Project Cost Total $1.677 billion $1.464 billion 2010/11 2015/16 2010/11 2014/15 2010/11 2014/15 20 SRCSD