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

P ROJECT B ACKGROUND 2 Description : Progressive design-build project to Favorable financing is available Combined Charges Ranking replace the City’s aging water treatment plant with for 97% of the project Among 50 Largest Cities a new, fully-redundant, 120 MGD treatment plant, known as the Northwest Water Facility (NWWF). 2016 10 WIFIA 4 $267 M Financing Sources 7 WIFIA EPA financing with a low, fixed SRF interest rate and a deferred repayment option Water Utility SRF KDHE loan with the lowest interest $270 M Funds rate available and deferred repayment options $16 M Water Utility Prudent combination of cash reserves and revenue bonds Funds

P HASE 1: 2019 A CTIVITY 3 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 Combined Charges Ranking April 9 City Council approved Phase 1 contract with Garver for Owner’s Representative services Among 50 Largest Cities September 12 WWP submitted preliminary GMP to the City 2016 2018 September – October Value engineering and optimization review 10 11 Residential October 11 WWP provided project updates, cost reductions, and overview of proposed plant design to Oversight Commercial 4 5 Steering Committee (open public meeting) Industrial 7 8 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

O UTCOMES 4    UNDER BUDGET ON SCOPE ON TIME  Fully redundant plant  Final Phase 2 price is  WIFIA application that can operate with $494.2 million submitted on time any single asset out of service  Total cost for plant,  Early works package power substation, to begin in January  High water quality, and pipelines is water source $14.1 million under  Startup and flexibility, and 120 commissioning the budget MGD capacity begins March 2024

P ROJECT T EAM 5 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 Other Market proceeding with Phase 2 and Wichita Water Impacts $3,000,000 Partners Risk-Based Garver Engineering Contingency $25,000,000 • Consistent team familiar with NWWF design and Construction construction plans Inflation $6,000,000 • Future work would be centered on construction management and inspection; multiple personnel on site monitoring construction

P HASE 2 R ECOMMENDATIONS 6 Combined Charges Ranking City staff and Oversight Steering Committee recommendations: Among 50 Largest Cities 1. Continue working with the Phase 1 project team (WWP and 2016 2018 10 11 Residential Garver); Commercial 4 5 Industrial 7 8 2. Submit the SRF loan application; 3. Implement the necessary rate adjustments for 2020

P HASE 2 O VERVIEW 7 Phase 2 will proceed in two stages with separate Notices to Proceed (NTP) issued for each. Combined Charges Ranking Among 50 Largest Cities WIFIA application reviewed; final financing terms negotiated 2018 11 Residential SRF application reviewed; final financing terms negotiated Commercial 5 Industrial 8 (NTP #1) Phase 2A "Early works" site prep and design completion Request City Council approval of Phase 2B and final WIFIA & SRF financing terms (NTP # 2) Phase 2B - construction & startup Nov 2019 Dec 2019 Jan 2020 Oct 2020 Nov 2020 Dec 2020 Jan 2021 Sep 2024

0% 1% 2% 3% 4% 5% 6% 7% C OMBINED R ATE I NCREASES 2020 2021 2022 2023 2024 2025 2026 Current Projection 2027 2028 2029 2030 National Average 2031 2032 2033 2034 2035 2036 2037 2038 2039 8

C USTOMER I MPACTS 9 Average Combined Monthly Water and Sewer Bill Gallons per 2019 2020 Dollar 2016 2018 10 11 Month Cost Cost Residential Increase Commercial 4 5 Residential Industrial 7 8 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

C USTOMER I MPACTS 10 CUMULATIVE CHANGE IN AVERAGE MONTHLY RESIDENTIAL BILL Without WIFIA/SRF With WIFIA/SRF $4.14 2020 $3.30 $11.84 2021 $7.07 $20.47 2022 $11.05 $30.16 2023 $15.13 $40.38 2024 $19.44

P ATH F ORWARD 11 Recommendations Upcoming Actions  SRF loan application to be 1. Approve amendment to WWP contract to provide all Phase 2 submitted on December 17 design and construction services 2. Approve amendment to Garver contract to provide all Phase 2  First Notice to Proceed to owner’s representative services be issued in January 2020 3. Authorize the Notice to Proceed with Phase 2A to initiate final design and 4. Close the public hearing and approve submission of the SRF site preparations loan application  Application review and 5. Place the water and sewer rate ordinances on first reading to negotiation of financial adopt the recommended 5% adjustment for 2020 terms with EPA and KDHE 6. Adopt the amending resolution to reflect the full project budget throughout 2020; results to ($553,187,535) be considered by City 7. Authorize all necessary signatures Council in 4 th Quarter 2020