City of Lawrence
Department of Utilities
Memorandum
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TO: |
Dave Corliss, City Manager Diane Stoddard, Assistant City Manager Cynthia Boecker, Assistant City Manager |
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FROM: |
Mike Lawless, Assistant Director of Utilities |
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CC: |
Dave Wagner, Director of Utilities Philip Ciesielski – Asst. Director of Utilities Beth Frailey Krishtalka – Management Analyst Ed Mullins, Finance Director |
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DATE: |
April 29, 2009 |
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RE: |
May 5, 2009 City Commission Meeting on Utilities |
Background
The Utilities Department provides water and wastewater service to the more than 90,000 residents, as well as, businesses and industries within the City of Lawrence. In addition, through wholesale water contracts the Department provides water treatment and distribution for the City of Baldwin and Rural Water District’s No. 1, 2, 4, 5, 6 and 13. In all, there are more than 32,800 active service accounts.
Two water treatment plants, Kaw and Clinton, provide water treatment for the City. The Kaw Water Treatment Plant (WTP) is located at 3rd and Indiana Street. It was originally constructed in 1917 and has been expanded multiple times. The Kansas River supplies raw water to the plant through an intake structure located in the river adjacent to Burcham Park. The plant has a treatment capacity of 16.5 million gallons per day (MGD).
The Clinton WTP is located at 21st and Wakarusa Drive. It was constructed in 1980 and it too has been expanded several times. Clinton Lake supplies raw water through an intake structure in the lake that pumps the water to the plant. With the completion of the most recent expansion later this spring, the treatment capacity will be 20 to 25 MGD. This will depend on the re-rating of the filters through the Kansas Department of Health and Environment.
The water distribution system moves and stores water throughout the City and is comprised of storage tanks and raw and finished water mains. There are more than 441 miles of water mains in the system. The water mains range in size from 2-inch to 36-inch with the oldest active mains dating back to 1886. There are five ground storage tanks with associated pumping stations and three (soon to be four) elevated storage tanks.
Wastewater treatment is provided by the Kaw Wastewater Treatment Plant (WWTP) located at the end of East 8th Street. It was constructed in 1954 and has been expanded multiple times. It has a treatment capacity of 12.5 MGD with the capability to treat an additional 40 MGD during wet weather events. Wastewater is transported in the collection system consisting of gravity and forcemain sewers. There are more than 402 miles of gravity sewers, 22 miles of forcemain sewers, and 31 pumping stations.
Operations and maintenance of these facilities and creating, maintaining and providing customer service for the active accounts is carried out by nine divisions in two departments. Utility billing, meter reading, residential meter service and financial services are performed by the Finance Department. Operations, maintenance and capital improvement planning and execution for the three plants and the collection and distribution systems are implemented by the Utilities Department. Together the 2009 adopted budget is $23.51 million and the proposed 2009 Capital Improvement Plan (CIP) is $22.58 million. The CIP is largely funded through debt financing.
Funding
The Utilities Department is funded through the sale of water and wastewater service and from the proceeds of the sale of revenue bonds. The rates that each customer class (e.g. residential, commercial, industrial, etc.) is charged for water and wastewater services is determined from the rate model. The rate model was developed for the Department from the American Water Works Association M1 Manual, Principles of Water Rates, Fees and Charges to determine the cost of service for each class. Cost of service is a method to equitably allocate the revenue requirements of the Department to the various customer classes that the Department serves. Cost of service is generally accepted as fair and equitable and is legally defendable.
Each year at this time, the rate model is updated with the previous year’s financial information, CIP and operations and maintenance needs for the next year.
The total revenues from the sale of water and wastewater services in 2008 exceeded $29.5 million but were below 2008 Adopted Budget projection of $30.4 million. Rainfall during the summer months along with the economic conditions are the main reasons for the lower than expected revenues. Staff monitors the expenditures and revenues on a monthly basis. Adjustments are made as necessary to maintain expenditures within the actual revenues received.
Planning
In order to correctly determine the revenue requirements and rates to be set for the Department, an accurate forecast of the current and future needs of the Department must be established. This is accomplished through the master planning process. The master planning process encompasses all aspects of the Department from growth and where it will occur to capacity and maintenance needs and changing or future regulatory requirements. The plans provide a roadmap of future CIP Projects and the triggers that require their implementation. This in turn provides inputs into the rate model to project the rates needed to support the Department. In many cases, this can lead to the adoption of a multi-year rate plan.
The current Master Plans for water and wastewater were completed in late 2003 and were based on information from 2001 and prior. These master plans have reached the end of their useful life and are out of date. Because these plans are out of date, the CIP projects recommended now and in the future are more speculative and not reflective of the true needs of the Department.
The 2008 and proposed 2009 CIP Projects are strictly focused on maintenance of the system. They do not contain projects that address future growth of the City and new projects that have been proposed since the current plans were completed. Until new master plans can be prepared that evaluate growth and the timing and impact of new projects, the rate model and the rates generated from it only reflect maintaining the system as it is without planning for future needs.
On-going Projects
The following project descriptions and links to previous memos are projects or Commission actions that staff believes are important to the continued success of the Department.
Staff recommends approval of the Proposed 2009 CIP.
Staff recommends approval of Resolution No. 6835
· Master Plan for Wastewater – The new Plan will be based on improved system and flow information, with more detailed data than any previous wastewater system evaluation. During the last several years, the department initiated efforts using the latest technologies to enhance critical system data acquisition and information accuracy specifically for this purpose. The new Plan will review the growth rate projections and development patterns within a defined boundary. One of the first phases will be a review of the Wakarusa Water Reclamation Facility with recommendations for timing of the construction and initial capacity of the project.
Using the detailed system and flow information a hydraulic model of the sanitary sewer collection system will be created. Several intermediate and build-out scenarios will be modeled. The results of the model runs will be used to create a recommended watershed based CIP with established criteria to determine construction schedules. Previous Master Plans have only indicated the planning year that the improvements are needed. The new Plan will also have a rehabilitation and replacement component based on system age, regulatory compliance changes and staff knowledge of the system. Upon completion of the project, the calibrated model network and software will be delivered to the City for use by staff to determine more accurately the impact that proposed developments will have on the collection system.
Previous memos
January 29, 2009 Staff Memo to City Commission
June 6, 2008 Staff Memo to City Commission
Proposals have been received from firms interested in the project. Staff has recommended beginning contract negotiations with the team of Burns & McDonnell/BG Consultants as the most qualified firm responding to the RFP.
Previous Memo
June 6, 2008 Staff Memo to City Commission
Proposals have been received from firms interested in the project. Staff has recommended beginning contract negotiations with Black & Veatch as the most qualified firm responding to the RFP.
Using the detailed system information a model of the model of the distribution system will be created. Several intermediate and build-out scenarios will be modeled. The results of the model runs will be used to create a recommended CIP with established criteria to determine construction schedules. The Plan will also have a rehabilitation and replacement component based on system age, pipe materials, regulatory compliance changes and staff knowledge of the system. Upon completion of the project, the calibrated model network and software will be delivered to the City for use by staff to determine more accurately the impact that proposed developments will have on the distribution system.
Staff has recommended advertising an RFP for engineering services for the project.
Requested Actions
Staff recommends the following actions for Commission consideration: