SEWER DEPARTMENT FY 200809 BUDGET WORKSHOP

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SEWER DEPARTMENTFY 2008/09 BUDGET WORKSHOP

• April 9, 2008

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SEWER DEPARTMENT Mission Statement

• The mission of the Water and Sewer Department is
  to provide the highest possible water quality and
  customer service at the lowest possible cost,
  while continuing our commitment to improving the
  infrastructure and our communitys environment.

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SEWER DEPARTMENT

FY 2008/09 Budget
SummaryExpenditures

• Total Recommended Operating Budget - 6,222,121
• Major factors influencing recommended operating
  costs
• The combined Personal Services and Employee
  Benefits objects provide a 78,106 increase
  (3.4)
• Increased cost of 6.5K in Professional
  Technical Services to include improved security
  to network computers also covers cost associated
  with Munis and other shared services
• Electricity costs up 11K due to increased unit
  cost
• Decreased natural gas cost by 13K due to less
  usage projected
• Increased domestic water costs by 18K due to
  unit cost increase and adjusted usage projection
• Sludge disposal fee from Sanitation Dept
  increased by 60K

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SEWER DEPARTMENT

FY 2008/09 Budget
SummaryExpenditures (Continued)

• Repairs to buildings decreased by 7.8K as HVAC
  work was completed in FY07/08
• Unclassified services increased by 11K charges
  paid to other Towns for wastewater disposal
• Energy up 10K due to unit cost increases of fuel
  oil
• Chemicals up by 6.4K due to increased unit costs
• Equipment repair materials up by 7K costs
  associated with keeping vital equipment running
  at an aging facility
• Gasoline Diesel costs up by 8K due to unit
  costs
• Nitrogen credits increased by 40K
  State-mandated program for nitrogen removal
• Interfund Transfers decreased by 275K decrease
  in the use of retained earnings
• Total Sewer Fund Budget decrease of 5,843

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(No Transcript)
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SEWER DEPARTMENT FY 2008/09 Budget Summary
Revenue

• Total Recommended FY 2008/09 Revenue - 6,222,121
• Major factors influencing revenues
• Revenue from regular sewer service charges is
  estimated to be 4,538,980
• This reflects a 8 rate increase and is based on
  a 5-year history of average usage
• Economic downturn weather-related effects have
  resulted in revenue shortfalls when compared to
  MFS model predictions to reduce variables
  associated with these factors, a 5-year average
  was used
• Revenues from Eighth Utilities District based on
  formula in District Agreement and values in
  recommended budget 935,079
• Interest lien fees are 65K
• Water Department usage for discharge is 277,200
• Outlet charges of 40,000 reflect a decrease of
  approximately 183K in revenue from the FY2007/08
  Budget
• MFS Cost Model anticipated 119 new connections
  actual number will be about 21
• Use of Retained Earnings decreased by 264,513
• Need to work our way up to the desired 180 days
  of operating reserve through multi-year rate
  adjustments
• Remainder of revenue, 98,078 is derived from the
  following
• Sludge (septage) disposal, repairs, review
  inspection, interest, rent, miscellaneous and
  assessments

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SEWER DEPARTMENT FY 2008/09 Recommended
Transfer to Reserve Request Summary

• Recommended Cash-Funded Capital Improvement
  Projects
• 1. Vehicle Replacement
  55,000
• 2. Manhole Rehabilitation
  30,000
• 3. Public Works Projects
  7,500
• 4. Raw Sewage Pump Rebuild 18,000
• 5. Pump Station RTU Upgrade
  41,600
• 6. Oversized Pipe
  20,000
• 7. Roof Replacements
  115,000
• 
  Total 287,100
• Note Original FY08/09 Request totaled 1.2M
  reduced by gt900K based on sewer priority
  list due to FY07/08 revenue shortfalls

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SEWER DEPARTMENT FY 2008/09 Transfer to
Reserve Request SummaryMoved, Deleted or
Deferred Items

• Project Name Amount Status
• SSS Improvements 400,000 Reflected in
  note-funded
• GIS Updates 9,000 Deferred
• SCADA System Upgrade 184,400 Deferred
• Sanitary Sewer Extensions 175,000 Deleted
• Anoxic Tank Mixers 85,000 Deleted
• Vehicle Replacement Engineering
  25,000 Deleted
• Chlorine Building Modifications
  55,000 Deleted
• Total request reduction 933,400

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SEWER DEPARTMENT FY 2008/09 Recommended
Transfer to Reserve Justification Details

• Vehicle Replacement - 55,000
• Replace 1989 Stake Body Truck 450 with similar
  vehicle
• Manhole Rehabilitation - 30,000
• Annual contribution that will result in the
  rehabilitation of ten (10) manholes there are a
  total of approximately 3,200 system-wide
• Public Works Projects - 7,500
  
• This is the Sewer Departments share of the costs
  of projects that originate from the Public Works
  Department and/or the State of Connecticut
• Raw Sewage Pump Rebuild - 18,000
• In-house refurbishment of 18-year old main raw
  sewage pump

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SEWER DEPARTMENT FY 2008/09 Recommended
Transfer to Reserve Justification Details
(Continued)

• Pump Station RTU Upgrade - 41,600
• Replace remote telemetry units (RTUs) at pump
  stations with Programmable Logic Controllers a
  more reliable and industry-standard methodology
  of control
• Oversized Pipe - 20,000
• Sewer Departments share of expense to
  reimbursement developers when we request they
  install larger lines than their project may
  require to benefit our future growth
• Roof Replacements - 115,000
• Replace deteriorated and leaking 18-year old
  roofs on Primary Treatment Building on Raw
  Sewage Pump Building to protect equipment
  facility

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SEWER DEPARTMENT FY08/09 BUDGET
NOTE-FUNDED PROJECTS

• 
  

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SEWER DEPARTMENT FY 2008/09 Budget
Note-Funded Capital Projects Summary
Recommendations
Biosolids (Sludge) Design Total
Cost

• Long-term biosolids disposal plan
  331,000
• This is the cost of engineering services for the
  Preliminary Design Phase based on the
  evaluation performed by our consultant
• Based on the (draft) biosolids study performed by
  our consultants alternate technologies will
  provide better and more cost-effective solutions
• Age and condition of equipment structures
  necessitate these improvements
• New improved technologies may provide a more
  efficient manner of biosolids handling than those
  previously considered
• Anticipated closure of Town Landfill is also a
  significant factor
• Once evaluation and preliminary design phases are
  complete, we will be able to define the long-term
  cost implications of the project

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SEWER DEPARTMENT FY 2008/09 Budget
Note-Funded Capital Projects Summary
Recommendations
Denitrification Project
Total Cost

• BNR Preliminary Design Facility Plan
  500,000
• This is the cost of engineering services for the
  Preliminary Design Phase based on the BNR Study
  performed by a consultant
• This also includes a comprehensive facility plan
  preliminary design
• Based on the (draft) nutrient removal study
  performed by our consultants alternate
  technologies will provide better and more
  cost-effective solutions
• Nitrogen credit program ends in 2014
• Age and condition of equipment structures
  necessitate these improvements
• New improved technologies, plus stricter
  effluent limitations are important driving
  factors as well
• Once evaluation and preliminary design phases are
  complete, we will be able to define the cost
  implications of the project

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SEWER DEPARTMENT FY 2008/09 Budget
Note-Funded Capital Projects Summary
Recommendations
Sanitary Sewer Improvement Program Total
Cost

• Infrastructure Improvements
  1,500,000
• This is the annual recommended allocation of
  funds to implement collection system pipe
  replacement lining based on the results of the
  Sewer System Evaluation Study (SSES)
• The focus will be on sewer mains that are
  hydraulically deficient and/or have high inflow
  infiltration (I/I) rates
• These lines are problematic as they may cause
  sewer backups, flooding, increase pumping
  processing costs, hydraulic overloads, organic
  under-loading, and create complex operating
  conditions that could jeopardize permit
  compliance
• Long-term finance plan is to authorize 5M every
  three years (1.5M/1.5M/2.0M) through the sale
  of notes

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SEWER DEPARTMENT FY 2008/09 Budget
Note-Funded Capital Projects Summary
Recommendations
Sanitary Sewer System Improvements Total
Cost

• Devon Drive Project 250,000
• This is to fund known problem areas that need
  immediate attention independent of the Sanitary
  Sewer Evaluation Study
• This is the second phase of the Ridgewood Drive
  Pump Station Elimination Project
• It will replace a problematic siphon line running
  beneath Bigelow Brook at the Parkade
• Broad Street Streetscape Project
  150,000
• This fund contributes to the replacement and
  relocation of the sewer lines necessitated by the
  Broad Streetscape Project

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SEWER DEPARTMENT FY 2008/09 Budget Working
Capital Projections

• Adopting a 8 rate adjustment in FY08/09 is
  consistent with the recommendation in the cost
  model derived from the MFS rate study and,
• Continues a multi-year process of adjusting rates
  to cover future capital costs and,
• Results in a smaller draw-down from reserves than
  FY07/08

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SEWER DEPARTMENTFY 2008/09 BudgetRate
Comparisons

• Sewer use cost based on average use of 2,200
  cubic feet/per quarter
• Current usage rate is 2.74/HCF (Hundred Cubic
  Feet)
• Manchesters average sewer use bill is currently
  60.28 per quarter or 241 per year this equates
  to 0.0037 per gallon
• Calculation based on an 8 rate increase
  (2.96/HCF)
• If recommended rate is adopted the average sewer
  use bill would be 65.12 per quarter or 260 per
  year this equates to 0.0039 per gallon
• Based on a comparative analysis performed with
  data from 2005, the average sewer use cost was
  261 per year for a typical Connecticut homeowner
• A new survey which is due out later this month
  estimates that the average annual homeowners
  sewer cost was 290 in 2007