Northwest Water Facility Project and 2020 Rate Adjustments Public - - PowerPoint PPT Presentation

Northwest Water Facility Project and 2020 Rate Adjustments

Public Works & Utilities

December 3, 2019

Combined Charges Ranking Among 50 Largest Cities 2016 10 4 7

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Description: Progressive design-build project to replace the City’s aging water treatment plant with a new, fully-redundant, 120 MGD treatment plant, known as the Northwest Water Facility (NWWF). $270 M $267 M $16 M Favorable financing is available for 97% of the project WIFIA SRF Water Utility Funds Financing Sources WIFIA

EPA financing with a low, fixed interest rate and a deferred repayment option

SRF

KDHE loan with the lowest interest rate available and deferred repayment options

Water Utility Funds

Prudent combination of cash reserves and revenue bonds

PROJECT BACKGROUND

Combined Charges Ranking Among 50 Largest Cities Residential Commercial Industrial 2016 10 4 7 2018 11 5 8

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February 12 City Council approved Phase 1 contract with Wichita Water Partners (WWP) for design up to 30% completion, WIFIA application assistance, and development of a GMP April 9 City Council approved Phase 1 contract with Garver for Owner’s Representative services September 12 WWP submitted preliminary GMP to the City September – October Value engineering and optimization review October 11 WWP provided project updates, cost reductions, and overview of proposed plant design to Oversight Steering Committee (open public meeting) October 30 WIFIA application submitted November 5 Notice of December 3, 2019 Public Hearing was published as required for SRF November 19 Oversight Steering Committee reviewed final GMP and projected rate adjustments, and unanimously agreed to the project team’s Phase 2 recommendations November 26 Final GMP, Phase 2 recommendations, and projected rate adjustments were presented to the City Council in workshop December 3 Public hearing for the project and City Council consideration of Phase 2 recommendations

PHASE 1: 2019 ACTIVITY

OUTCOMES

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• Final Phase 2 price is

$494.2 million

• Total cost for plant,

power substation, and pipelines is $14.1 million under the budget

• Fully redundant plant

that can operate with any single asset out

• f service
• High water quality,

water source flexibility, and 120 MGD capacity

• WIFIA application

submitted on time

• Early works package

to begin in January

• Startup and

commissioning begins March 2024

  

UNDER BUDGET ON SCOPE ON TIME

PROJECT TEAM

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Construction Inflation $6,000,000 Risk-Based Contingency $25,000,000 Other Market Impacts $3,000,000

PROTECTS CITY FROM COST INCREASES

Wichita Water Partners

• Highly qualified team with a contractual obligation

to meet the City’s needs for redundancy and water quality

• More certainty of WIFIA/SRF financing by

proceeding with Phase 2 and Wichita Water Partners Garver Engineering

• Consistent team familiar with NWWF design and

construction plans

• Future work would be centered on construction

management and inspection; multiple personnel

• n site monitoring construction

Combined Charges Ranking Among 50 Largest Cities Residential Commercial Industrial 2016 10 4 7 2018 11 5 8

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City staff and Oversight Steering Committee recommendations:

• 1. Continue working with the Phase 1 project team (WWP and

Garver);

• 2. Submit the SRF loan application;
• 3. Implement the necessary rate adjustments for 2020

PHASE 2 RECOMMENDATIONS

Combined Charges Ranking Among 50 Largest Cities Residential Commercial Industrial 2018 11 5 8

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Phase 2 will proceed in two stages with separate Notices to Proceed (NTP) issued for each.

Nov 2019 Dec 2019 Jan 2020 Oct 2020 Nov 2020 Dec 2020 Jan 2021 Sep 2024 (NTP #1) Phase 2A "Early works" site prep and design completion Request City Council approval

• f Phase 2B and final WIFIA &

SRF financing terms (NTP # 2) Phase 2B - construction & startup WIFIA application reviewed; final financing terms negotiated SRF application reviewed; final financing terms negotiated

PHASE 2 OVERVIEW

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0% 1% 2% 3% 4% 5% 6% 7%

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039

Current Projection National Average

COMBINED RATE INCREASES

Residential Commercial Industrial 2016 10 4 7 2018 11 5 8

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Average Combined Monthly Water and Sewer Bill

Gallons per Month 2019 Cost 2020 Cost Dollar Increase Residential Low 3,750 $47.44 $49.62 $2.18 Mid 7,500 $69.96 $73.27 $3.30 High 15,000 $130.37 $137.44 $7.08 Commercial 100,000 $664.95 $693.19 $28.24 Industrial 10,000,000 $62,226 $64,848 $2,622

CUSTOMER IMPACTS

CUSTOMER IMPACTS

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$19.44 $15.13 $11.05 $7.07 $3.30 $40.38 $30.16 $20.47 $11.84 $4.14 2024 2023 2022 2021 2020

CUMULATIVE CHANGE IN AVERAGE MONTHLY RESIDENTIAL BILL

Without WIFIA/SRF With WIFIA/SRF

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Recommendations

• 1. Approve amendment to WWP contract to provide all Phase 2

design and construction services

• 2. Approve amendment to Garver contract to provide all Phase 2
• wner’s representative services
• 3. Authorize the Notice to Proceed with Phase 2A
• 4. Close the public hearing and approve submission of the SRF

loan application

• 5. Place the water and sewer rate ordinances on first reading to

adopt the recommended 5% adjustment for 2020

• 6. Adopt the amending resolution to reflect the full project budget

($553,187,535)

• 7. Authorize all necessary signatures

Upcoming Actions

• SRF loan application to be

submitted on December 17

• First Notice to Proceed to

be issued in January 2020 to initiate final design and site preparations

• Application review and

negotiation of financial terms with EPA and KDHE throughout 2020; results to be considered by City Council in 4th Quarter 2020

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