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2010 Water Supply Plan, Water Rate and Connection Charge Study City Council Study Session September 8, 2010.

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Presentation on theme: "2010 Water Supply Plan, Water Rate and Connection Charge Study City Council Study Session September 8, 2010."— Presentation transcript:

1 2010 Water Supply Plan, Water Rate and Connection Charge Study City Council Study Session September 8, 2010

2 2 Agenda 1.Purpose of Meeting 2.Water Supply Situation 3.Impact on City 4.Demand Forecast 5.Conservation Plan for New Development 6.Off-site Conservation Funded by New Conservation Offset Charge 7.Other Strategies to Satisfy Demand 8.Comparison of Strategies 9.Meeting Demand at Buildout

3 3 Agenda (cont.) 10.Needed Capital Improvements 11.Allocation of Costs to New Development 12.Water Connection Charges and Comparisons 13.Billing System and Rate Structure 14.Financial Models and Key Assumptions 15.Financing Alternatives and Comparison 16.Recommended Financing Alternative (Alt. 4) 17.Impact on SF Customer and Comparisons 18.Water Shortage (Drought) Surcharge 19.Recommendations

4 4 Purpose of Meeting Provide update on water supply situation and water supply projects Provide brief update on water demands, demand projections and water conservation Presentation of 2010 Water Supply Plan and Water Rate and Connection Charge Study prepared by John Olaf Nelson Obtain input from the Council and the general public

5 5 Water Supply: Importance of Local Groundwater Supply Constitutes 5 to 15% of Citys water supply picture Conjunctive use strategy Drought contingency supply Emergency supply

6 6 Local Groundwater Planning

7 7 Fault & 2008-2009 Groundwater Contour Reference Map

8 8 Geologic Map

9 9 Cross Section

10 10 Well Study Area

11 11 Potential New Well Siting Map

12 Other Sonoma Valley Groundwater Projects Active in the Groundwater Management Plan Meetings SC Water Agency Groundwater Banking Feasibility Study SC Water Agency Stormwater Capture and Recharge Project City of Sonoma Well #7 monitoring for groundwater depression 12

13 13 Water Supply Situation Biological Opinion (BO) Impacts Limits access to Warm Springs storage (Lake Sonoma) Increases cost of Russian River (RR) water Lake Mendocino Storage Issues Increased demands Reduced diversions from Eel River Inadequate storage for Fall fish runs in some years

14 14 Water Supply Situation (cont.) SCWAs response: Abandon The Water Project Calls for reduction of RR diversions from June - September in some years Fix BO limitations with In-stream improvements Build Dry Creek Bypass, if needed Focus on conservation, recycled reuse and groundwater alternatives Action Plan based on limiting RR diversions to 75,000 afa and renegotiation of Restructured Agreement Citys response: Demand management through water conservation Increased reliance on local groundwater 2008 Water Supply Action Plan

15 15 Impact on City Peak month delivery capacity limited to 3.46 mgd vs. 6.3 mgd Entitlement 1 Annual delivery limit of 2,617 af vs. 3,000 af Entitlement 1 Potential BO and Lake Mendocino storage issues resulting in reductions in Aqueduct deliveries of up to 25% during June - September in some years Increased cost of water purchased from SCWA 2 City must look to its own resources to meet increased demands of growth envisioned in General Plan Notes: 1. Cal. Year 2009 Demand (a depressed demand year): Pk Mo 2.73 mgd Annual - 2065 af 2. 11% per yr average for past 4 years Caution: 3.46 mgd capacity could be reduced.

16 16 Demand Forecast Remaining New Development 1 TypeDwelling UnitsESDs% of Demand SF 386 346 31% MF1,006 557 50% COMna 203 19% Total 2 1,3921,106100% Notes: 1. Based on Citys 2020 General Plan. 2. Buildout estimated to occur in year 2031.

17 17 Demand Forecast (cont.) Projected Demand Including Remaining New Development DemandAnnual (afa) Peak Month (mgd) Existing (Normal Year) 1 2,5833.41 New Development 2 4920.53 Projected New Gross 3,075 (19%)3.94 Notes: 1. Determined by regression model of historic data. 2. Includes 8% for Unaccounted-for Water (UFW). Deducting UFW leaves balance of 456 af.

18 18 Conservation Plan for New Development Conservation ProgramsSavings (afa) % of New Demand Cost On-site Savings at Buildout: Plumbing Code 5111% NDS - General 45.3 NDS - Submetering MF 13.8 NDS - Commercial 14.9 Subtotal NDS7416% Subtotal, on-site savings12527%$1.6 M Off-site savings 1 10323%$2.1 M Total, on and off-site savings22850% 2 Notes: 1. Paid for by new Conservation Offset Charge. 2. Predicted increase in demand of 456 af is cut in half.

19 19 Conservation Plan (cont.) ProgramSavings (afa) Benefit/Cost Ratio Off-site Programs for Consideration (Savings achieved by Buildout): Smart controller program29.74.0 Double clothes washer rebate7.51.5 Sub-metering MF4.31.2 Cash-for-grass14.41.1 Hot water on-demand4.90.9 Cost Total, off-site programs listed61$1.5 M Added Tier 1 and Tier 242$0.6 M Total savings, off-site programs 1 103$2.1 M 1. Funded by proposed Conservation Offset Charge

20 20 Conservation Plan (cont.) Other Strategies Considered to Satisfy Demand ProgramSavingsCost Sonoma Development Center and VOM - CU Proj. 0.57 mgd; 165 afa $655,000 Groundwater Banking - CU Proj.?? New/increased Local Wells 0.61 mgd; 180 afa $3.4 M Recycled Water 106 afa$3.3 M ? 1 Graywater, clothes washer only gravity system 2 11,545 g/yr/SF $649/ SF site Rainwater harvesting (barrels) 2 3,362 g/yr/SF $488/ SF site Notes: 1.Cost incomplete. Does not include rehab/modification of storage or pump station. Does not include connection from ST Plant to Watmaugh Rd. 2. Participation and persistence of use unknown. Pilot programs recommended.

21 21 Comparison of Strategies - Unit Cost

22 22 Comparison of Strategies - Capital Cost

23 23 Comparison of Strategies Comparison of Various Strategies - Unit Cost over 30 years StrategyAmount (af) Capital ($) O&M ($) Total ($/af) Recycled Water1061,2064791,685 Conjunctive Use Project1657355791,314 NDS74 1,0371041,141 Off-site Conservation Offsets103 985981,083 New Wells180771 212983 Discount Rate = 3.0%

24 24 Comparison of Mixes of Strategies Comparison of Mixes 1 Program MixCapital Cost ($, PV) Cost/af ($/af) New wells+NDS+Cons Offsets+CU8,856,3361,080 New wells+NDS+Cons Offsets+CU+RW12,126,4461,223 The Water Project 2 33,455,427 1,525 NDS = New Development Standards CU = SDC and VOM Conjunctive Use Proj. RW = Recycled Water Proj. Notes: 1.All three alternatives include cost of watershed restoration (in-stream improvement projects) and Dry Creek Bypass. 2.Updated cost of project is $518.9 M (including instream improvement projects and Bypass. $33,4 M is Sonomas estimated share. <==

25 25 Meeting Demand at Buildout – Normal Year Annual afa % Peak Month mgd % Existing Demand2,5833.41 Remaining New Gross Demand4920.53 Total Gross Demand at BO3,075 3.94 Reductions (Cons. and RW) Conservation in New Development Conservation off-site offsets Remaining Tier 1 savings – future RW offsets Total Cons. savings & RW offsets 125 103 54 106 389 32% 27% 14% __27% 100% 0.11 0.09 0.05 _0.09 0.35 32% 27% 14% __27% 100% Net Potable Demand w RW 2,687 3.59 Net Potable Demand w/o RW 2,793 3.69

26 26 Meeting Demand at Buildout – Normal Year (cont.) Annual afa % Peak Month mgd % Supply Available (excl. RW) SCWA aqueduct Existing wells Planned new wells Total Available Cushion in a Normal Year Additional Supply on Standby/reserve Conjunctive Use Project 2,617 250 __180 3,047 254 165 94% 9% __6% 109% 9% 3.46 0.85 _0.61 4.92 1.23 0.57 94% 23% -17% 133% 33% Surplus Available to Meet Drought and Weather Variations 41915%1.8049%

27 27 Meeting Demand at Buildout – Dry Years Comparison of Various Water Year Conditions Water Supply Condition Surplus (+) or Deficit (-) in af and as Percent of demand Existing (2009)Buildout (2031) Normal Year – excl. BO impact 1 Normal Year – incl. BO impact +284 / +11% -37 / -1% +419 / +15% +99 / +4% Single Dry Year – excl. BO impact Single Dry Year – incl. BO impact +284 / +11% -37 / -1% +245 / +9% -54 / -2% Multiple Dry Years – excl. BO impact Multiple Dry Years – incl. BO impact +284 / +11% -37 / -1% +419 / +15% +99 / 4% Extreme case 2 – excl. BO impact Extreme case – incl. BO impact -81 / -3% -401 / -14% -149 / -5% -448 / -14% Notes: 1.BO impact could be addressed as early as 2016 or as late as 2030. 2.Extreme case assumes hot dry year coincides with worst supply limitation.

28 28 Meeting Demand at Buildout - Conclusions Without BO limitations, strategy mix provides surplus in Normal, Single Dry and Multiple Dry Years With BO limitations, minor deficits of 1 to 2%, except for Extreme Case condition where deficit of 3 to 14% result With resolution of Dry Creek flow problem, deficits drop to 3 to 5% During Extreme Case conditions, well production will be increased to maximum capacity. Also an additional 85 af might be available from the SDC CU Project.

29 29 Annual Water Demand Forecast

30 30 Capital Improvement Plan - Summary Project TypeCost Water mains$ 1.2 M Service line replacements$ 3.2 M Tanks, pumps, wells$12.9 M Post 2019 projects$ 3.4 M Total$20.7 M

31 31 Calculation of New Capacity Charge and Conservation Offset Charge ChargeCost, PV% Capacity Charge: Future Water System Improvements SCWA Watershed Restore/Dry Creek Bypass Total Remaining ESDs to Buildout $8,354,147 $1,050,789 $9,404,936 994 89% 11% 100% Unit Capacity Charge ($/ESD)$9,460 Conservation Offset Charge: Off-site offsets funded by New Development$2,138,989 Unit Conservation Offset Charge ($/ESD)$2,200

32 32 Recommended Connection Charges

33 33 SF Rate Structure Design Table S6

34 34 Financial Models

35 35 Financial Models - Key Assumptions

36 36 Alternative Financing Plans

37 37 Comparison of Financing Plans Table S7

38 38 Recommended Financing Plan (Alt. 4)

39 39 Recommended Rates Table S8

40 40 Impact of Rates on SF Customer Table S9

41 41 Comparison of Current Rates Fig S4

42 42 Drought Surcharge

43 43 Recommendations - Water Supply Plan

44 44 Recommendations - Connection Charges

45 45 Recommendations - Rates

46 46 Future Items for Discussion & Consideration

47 47 Questions


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