Report on Feasibility Assessment and Proposed Consolidation - - PowerPoint PPT Presentation

Report on Feasibility Assessment and Proposed Consolidation Agreement Maumelle Water Management

September 22, 2015

40 50 60 70 80 90 100 Sep-15 2016 2017 2018 2019 2020 Future Monthly Utility Bill in $

Combined Average Utility Bill for 2015-2020 5/8” Meter with 4,400 Gallons

Established Rates MWM Option 1 MWM Option 2

MWM’s Water System

• approximately 10,500 metered service

connections

• 613,507 linear feet of water mains
• 2 water storage tanks
• 675 fire hydrants
• 13 supply wells,
• 2 pump stations
• 1 water treatment plant
• 2.78 MGD average
• 6.68 MGD peak
• 2.4 – peaking factor
• 7.8 MGD Well Capacity
• 6.84 MGD Treatment Capacity

MWM’s Wastewater System

• approximately 7,500 service

connections

• 621,000 linear feet of collection

mains

• 3,100 manholes
• 25 pump stations
• 1 wastewater treatment plant
• 2.08 MGD average
• 2.80 MGD max
• 3.50 MGD Permitted Treatment

Capacity

Project Description Estimated Cost Manitou Booster Pump Station $500,000 Ground Storage Tank #1 & #2 Maintenance $1,200,000 New 2.5 MG Storage Tank $3,000,000 Flushing System $150,000 Water Transmission Improvements $5,500,000 WTP Residual Handling $1,000,000 New Wells (4) $800,000 Emergency Generators & Platforms for 5 Wells $425,000 Expansion of WTP to 12 MGD $22,250,000 Meter Replacement $888,000 Permanent Chlorine Dioxide Feed System $25,000 Entergy Power Distribution in Well Field TBD Future Improvements Required for Water Quality TBD Total Estimated Cost $35,738,000

Feasibility Assessment

Water PER Projects without Consolidation

Project Description Estimated Cost Sewer Rehabilitation $2,370,000 WWTP Expansion $10,000,000 Mechanical Bar Screen $750,000 Aeration Improvements $600,000 WWTP Blower $100,000 Rehabilitate Secondary Clarifier $50,000 Sludge Dewatering Container $150,000 Disinfection System $200,000 Effluent Pump Station $500,000 WTP Residuals Disposal $2,000,000 Total Estimated Cost $16,720,000

Feasibility Assessment

Wastewater PER Projects without Consolidation

CAW’s Water System

• Over 125,000 metered service

connections

• 12,144,000 linear feet of water mains
• 27 water storage tanks
• 14,870 fire hydrants
• 2 water supply lakes
• 26 pump stations
• 2 water treatment plants
• 62 MGD average
• 126 MGD peak
• 2.06 – peaking factor
• 121 MGD Lake Capacity
• 153 MGD Treatment Capacity

MWM’s Water System

• Approximately 10,500 metered service

connections

• 613,507 linear feet of water mains
• 2 water storage tanks
• 675 fire hydrants
• 13 supply wells,
• 2 pump stations
• 1 water treatment plant
• 2.78 MGD average
• 6.68 MGD peak
• 2.4 – peaking factor
• 7.8 MGD Well Capacity
• 6.84 MGD Treatment Capacity

System Comparisons

CAW Service Territory

Project Description Budget Estimate Implementation Manitou Booster Pump Station $500,000 12 months Ground Storage Tank #1 & #2 Maintenance $1,200,000 8 months Flushing System $150,000 6 months Distribution System Improvements $71,000 6 months 30” CAW Transmission Main $8,320,000 24 months New High Service Pump at Jack Wilson $375,000 8 months Meter Replacement $888,000 48 months Permanent Chlorine Dioxide Feed System $25,000 12 months Total Budget $11,529,000 24 Months

Feasibility Assessment

Water PER Projects with CAW Consolidation

Feasibility Assessment

Water Consolidation Connection Location

CAW Transmission System

CAW Distribution System

CAW Water Sources

Description Budget Estimate Source of Funds

Transition Costs Intermediate Debt Long Term Debt

Manitou Booster Pump Station

$500,000

X Ground Storage Tank #1 & #2 Maintenance

$1,200,000

X Flushing System

$150,000

X Distribution System Improvements

$71,000

X 30” CAW Transmission Main

$8,320,000

X New High Service Pump at Jack Wilson

$375,000

X Meter Replacement

$888,000

X Chlorine Dioxide Feed System

$25,000 X

Feasibility Assessment

Water PER Projects with CAW Consolidation

Cost Description Estimated Costs Decommissioning of Existing Water Plant & Wells

$300,000

Information Services Transition

$50,000

GIS Mapping

$360,000

Property Transfers

$2,500

Increased Payroll/Benefits during first 2 years

$400,000

Billing Modifications to enQuesta

$135,000

Immediate Transition Costs (rolling stock, computers, telephone system, rebranding, outfitting employees)

$150,000

Connect to CAW SCADA

$50,000

Banking Transition

$15,000

Health Insurance Transition Costs

TBD

Feasibility Assessment

CAW Consolidation - Other Transition Costs

Project Description Estimated Cost Sewer Rehabilitation $2,370,000 Mechanical Bar Screen $750,000 Aeration Improvements $600,000 WWTP Blower $100,000 Rehabilitate Secondary Clarifier $50,000 Sludge Dewatering Container $150,000 Disinfection System $200,000 Effluent Pump Station $500,000 WTP Residuals Disposal $2,000,000 Total Estimated Cost $6,720,000

Feasibility Assessment

Wastewater PER Projects with NLRWW Consolidation

2 4 6 8 10 12 14 16 18 20 Monthly Surcharge in $

Monthly Surcharge Comparison 2014 – 2047 5/8” Meter

Existing MWM Combined Option 1 MWM Combined Option 2

MWM Existing Debt Schedule

Debt Issue Total

ASWCC #1 $3,331,531.97 ASWCC #2 $1,035,358.57 2002 Lease Purchase $2,047,492.58 Series 2005 $3,017,404.36 Series 2008 $1,859,928.30 Total $11,291,715.78

MWM Existing Debt Schedule

Debt Issue Total

ASWCC #1 $3,331,531.97 ASWCC #2 $1,035,358.57 2002 Lease Purchase $2,047,492.58 Series 2005 $3,017,404.36 Series 2008 $1,859,928.30 Total $11,291,715.78 ASWCC #1 Clarifier Aerator Water Filters (4) 2.4 MG Storage Tank 3 Wells (6, 7, & 8) SCADA

ASWCC #2 Water Plant Imp. 2 Wells (9 & 10) Waste lime pond Lift Station 4 Imp. Raw Water Booster Pump

MWM Existing Debt Schedule

Debt Issue Total

ASWCC #1 $3,331,531.97 ASWCC #2 $1,035,358.57 2002 Lease Purchase $2,047,492.58 Series 2005 $3,017,404.36 Series 2008 $1,859,928.30 Total $11,291,715.78

2002 Lease Purchase Surge Basin Imp. Surge Basin Lift Station Levee Improvements Well Field Generators Office Building Water Meters

MWM Existing Debt Schedule

Debt Issue Total

ASWCC #1 $3,331,531.97 ASWCC #2 $1,035,358.57 2002 Lease Purchase $2,047,492.58 Series 2005 $3,017,404.36 Series 2008 $1,859,928.30 Total $11,291,715.78

Series 2005 Bonds - Wastewater Improvements:

Clarifier Yard piping & pumping improvements Lift Station #2 rehab Chlorination facility Dechlorination facility SCADA/Telemetry Equipment storage building Outfall line (discharge to river) Lift Station #4 rehab Engineering costs

MWM Existing Debt Schedule

Debt Issue Total

ASWCC #1 $3,331,531.97 ASWCC #2 $1,035,358.57 2002 Lease Purchase $2,047,492.58 Series 2005 $3,017,404.36 Series 2008 $1,859,928.30 Total $11,291,715.78

Series 2005 Bonds - Water Improvements

Well field fencing Aerator SCADA/Telemetry rehab Filter 1 through 4 backwash valve Lime Silo Well #11 Filter 1 through 4 rehab Existing clarifier demolition New clarifier Yard Piping Equipment building Chemical Feeders

MWM Existing Debt Schedule Debt Issue Total

ASWCC #1 $3,331,531.97 ASWCC #2 $1,035,358.57 2002 Lease Purchase $2,047,492.58 Series 2005 $3,017,404.36 Series 2008 $1,859,928.30 Total $11,291,715.78

Series 2008 Bonds

Complete 2005 Projects Water Plant Elec. Rehab Wastewater Lift Station Rehab Water Plant Emergency Generator Wastewater Sludge Drying Container

MWM Existing Debt Schedule

Debt Issue Total

ASWCC #1 $3,331,531.97 ASWCC #2 $1,035,358.57 2002 Lease Purchase $2,047,492.58 Series 2005 $3,017,404.36 Series 2008 $1,859,928.30 Total $11,291,715.78

Debt Issue Total Allocated to Water Allocated to Wastewater ASWCC #1 $3,331,531.97 $3,331,531.97 ASWCC #2 $1,035,358.57 $1,035,358.57 2002 Lease Purchase $2,047,492.58 $1,740,368.69 $307,123.89 Series 2005 $3,017,404.36 $1,418,180.05 $1,599,224.31 Series 2008 $1,859,928.30 $1,320,549.09 $539,379.21 Totals $11,291,715.78 $8,845,988.37 $2,445,727.41

MWM Existing Debt Schedule

2 4 6 8 10 12 14 16 18 20 Monthly Surcharge in $

Monthly Surcharge Comparison 2014 – 2047 5/8” Meter

Existing MWM Combined Option 1 MWM Combined Option 2

Option 1 Debt Existing $11,291,715.78 + Proposed $15,625,000.00 TOTAL $26,916,715.78

2 4 6 8 10 12 14 16 18 20 Monthly Surcharge in $

Monthly Surcharge Comparison 2014 – 2047 5/8” Meter

Existing MWM Combined Option 1 MWM Combined Option 2

Option 2 Debt Existing $11,291,715.78 + Proposed $10,150,000.00 TOTAL $21,441,715.78

2 4 6 8 10 12 14 16 18 20 Monthly Surcharge in $

Monthly Surcharge Comparison 2014 – 2047 5/8” Meter

MWM Wastewater Only CAW Water NLR Wastewater

CAW Consolidation Debt Existing MWM Water $8,845,988.37 + 2-year Transition $1,637,500.00 + 10-year Intermediate $2,088,000.00 + 30-year Long-Term $9,117,128.40 TOTAL $21,688,616.77

2 4 6 8 10 12 14 16 18 20 Monthly Surcharge in $

Monthly Surcharge Comparison 2014 – 2047 5/8” Meter

MWM Wastewater Only CAW Water NLR Wastewater

MWM Wastewater Only Debt Existing MWM Wastewater $2,445,727.41 + New MWM Wastewater $4,720,000.00 TOTAL $7,165,727.41

2 4 6 8 10 12 14 16 18 20 Monthly Surcharge in $

Monthly Surcharge Comparison 2014 – 2047 5/8” Meter

Existing MWM Combined Option 1 MWM Combined Option 2 MWM Wastewater Only CAW Water NLR Wastewater

5 10 15 20 25 Monthly Surcharge in $

Monthly Surcharge Comparison 2016 – 2047 5/8” Meter

Existing Rates MWM Combined Option 1 MWM Combined Option 2 MWM Wastewater Only CAW Water NLR Wastewater MWM Water & Wastewater Capacity Expansions MWM Wastewater Only Capacity Expansions

Long-Term Water and Wastewater Capacity Debt Estimate $34,833,000.00 Long-Term Wastewater Capacity Debt Estimate $10,000,000.00

40 50 60 70 80 90 100 Sep-15 2016 2017 2018 2019 2020 Future Monthly Utility Bill in $

Combined Average Utility Bill for 2015-2020 5/8” Meter with 4,400 Gallons

Established Rates MWM Option 1 MWM Option 2

40 50 60 70 80 90 100 Sep-15 2016 2017 2018 2019 2020 Future Monthly Utility Bill in $

Combined Average Utility Bill for 2015-2020 5/8” Meter with 4,400 Gallons

Established Rates MWM Option 1 MWM Option 2 CAW/MWM

40 50 60 70 80 90 100 Sep-15 2016 2017 2018 2019 2020 Future Monthly Utility Bill in $

Combined Average Utility Bill for 2015-2020 5/8” Meter with 4,400 Gallons

Established Rates MWM Option 1 MWM Option 2 CAW/MWM CAW/NLRWW

20 25 30 35 40 45 50 55 60

Sep-15 2016 2017 2018 2019 2020 Future

Monthly Water Bill in $

Water Average Bill 2016-2020 5/8” Water Meter with 4,400 Gallons

Existing Rates CAW/MWM MWM - Option 1 MWM - Option 2 CAW/NLRWW

45 55 65 75 85 95 105 115 Sep-15 2016 2017 2018 2019 2020 Future Monthly Sprinkler Bill in $

Sprinkler Bill 2016-2020 5/8” Sprinkler Meter with 11,000 Gallons

Existing Rates CAW/MWM MWM - Option 1 MWM - Option 2 CAW/NLRWW

10 15 20 25 30 35 Sep-15 2016 2017 2018 2019 2020 Future Monthly Wastewater Bill in $

Wastewater Average Bill 2016-2020 5/8” Meter with 4,400 Gallons

MWM - Option 1 MWM - Option 2

10 15 20 25 30 35 Sep-15 2016 2017 2018 2019 2020 Future Monthly Wastewater Bill in $

Wastewater Average Bill 2016-2020 5/8” Meter with 4,400 Gallons

Existing Rates MWM - Option 1 MWM - Option 2 MWM with CAW

10 15 20 25 30 35 Sep-15 2016 2017 2018 2019 2020 Future Monthly Wastewater Bill in $

Wastewater Average Bill 2016-2020 5/8” Meter with 4,400 Gallons

Existing Rates MWM - Option 1 NLRWW MWM - Option 2 MWM with CAW

40 50 60 70 80 90 100 Sep-15 2016 2017 2018 2019 2020 Future Monthly Utility Bill in $

Combined Average Utility Bill for 2015-2020 5/8” Meter with 4,400 Gallons

Established Rates MWM Option 1 MWM Option 2 CAW/MWM CAW/NLRWW

Proposed Consolidation Agreement

• Overall Water Intent
• CAW to provide retail water

service to MWM Customers

• Definitions (Section 1)
• Wastewater (Section 2)
• If desired, CAW will negotiate

and bring MWM an offer

• December 31, 2015

Proposed Consolidation Agreement

• Purchase of Water System (Section 3)
• Closing no later than March 1, 2016
• Purchase price is the existing debt to be

pay off with new bonds

• Offer to hire employees
• Employees (Sections 3.D and 5.A)
• “Unless otherwise directed by

MWM,” CAW shall offer employment to all MWM employees

• Employees will receive compensation

and benefits that CAW provides

• Lease employees to wastewater provider if needed
• Pre-employment testing

Proposed Consolidation Agreement

• Covenants (Section 4)
• Parties will work together to

complete consolidation

• MWM will not issue debt, sell

property, etc.

• Division of Assets (Section 6)
• Parties will identify water and

wastewater assets to attach to Schedules in next couple of weeks, pending decision from MWM

• Cash will include

– Water Account Deposits – Water Accounts Payable – Employee Obligations

• Post Closing Clean-Up

Proposed Consolidation Agreement

Proposed Consolidation Agreement

• Rates (Section 5.D)
• Transition Period (24-30 months)

– MWM Existing Rates – Ends when begin supplying CAW lake water in place of Maumelle well water

Debt Amount Surcharge Transition Period $1,637,500 $7.69 Intermediate Period $2,088,000 $2.18 Long-Term Period $17,963,116.77 $9.34

• Rates (Section 5.D)
• After Transition Date

– CAW Outside City Rates – Transition Surcharge is eliminated – Intermediate Surcharge for about 8 additional years – Long-Term Surcharge for about 22 additional years – Surcharges represent high-end estimates; Actual surcharges will reflect actual costs incurred

Proposed Consolidation Agreement

Debt Amount Surcharge Intermediate Period $2,088,000 $2.18 Long-Term Period $17,963,116.77 $9.34

2 4 6 8 10 12 14 16 18 20 Monthly Surcharge in $

Monthly Surcharge Comparison 2014 – 2047 5/8” Meter

CAW Consolidation Debt Existing MWM Water $8,845,988.37 + 2-year Transition $1,637,500.00 + 10-year Intermediate $2,088,000.00 + 30-year Long-Term $9,117,128.40 TOTAL $21,688,616.77

• Post Consolidation

Operations (Sections 5.E-G)

• Completion of Transition

Improvements

• Use of Surcharge Proceeds
• Quality of Operations
• Billing Partners

Proposed Consolidation Agreement

• Addition of approximately 10,500 customer accounts
• Additional year-round revenue will help offset declining

CAW water demands

• Skilled and knowledgeable employee pool
• Relatively new system
• Additional return on capital investments throughout CAW

system

• Large customer base will help mitigate future rate

increases across entire system through additional economies of scale

Benefits to CAW of Consolidation

• Economies of scale from being part of a system with

125,000 other customer accounts

• Relatively stable rates over time
• Lower operating costs, resulting in lower rates
• Award winning utility operations
• Multiple water sources and supply lines

Benefits to MWM of Consolidation

$22.83 $28.54 $35.90 $29.54 $- $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00 CAW Existing Outside-City MWM Existing MWM Option 1 MWM Option 2

Example Water Bill Using 2015 Water Rates 5/8” Meter with 4,400 Gallons

Benefits to MWM of Consolidation

Does not include taxes and fees; MWM Bills include the water portion of the Debt Surcharge fee based on water’s proportionate share of the proposed debt.

$80.42 $80.42

Action Requested Next steps or additional requests?

Questions?