ACEC Presentation September 22, 2016 Chris Hassert, PE Planning & Engineering Director

Discussion Items Staff Overview Group Focus Areas Capital Improvement Program Water/Sewer Rates Campus Solar/Battery Project

ASSIGNED FACILITIES, SYSTEMS OR PROGRAMS Water Resources Engineer Planning and Engineering Team TITLE ASSIGNED FACILITIES, SYSTEMS OR PROGRAMS   Water Resources EIT Process Control Assistance Water Resources Engineer Water Distribution System & Hydraulic Modeling Sewer Collection System, RWDS, IWDS Senior WR Engineer Asset Mgmnt, CGTF & Site 80, CAP WTP SROG Support, CWTP, Water Campus Reclamation Plant Principal WR Engineer Water/Sewer Planning & Development Interface Process Control Lead for CAP WTP, Chaparral WTP, Campus/AWT All Potable and Recharge wells, Westworld, Desert Mtn

Planning and Engineering Functions Master Planning Infrastructure Improvement Plans (IIPs) CIP Development Asset Management IGAs and Other Agreements Studies and Evaluations Other Challenges – Salinity, Invasive Species, etc.

Planning and Engineering Functions Troubleshoot system issues Develop project scopes and budgets Engaged in design and construction Guide developers Manage groundwater wells Treatment plant process control Hydraulic model management Monitor sewer flows Pilot test new technologies

Scottsdale Water Capital Improvement Program (CIP)

How do we pay for system capital needs? Water and Sewer Rates – Monthly billing of customers pays for operating costs and asset rehab and replacement Development Fees – Pays for growth Water Development Fee Sewer Development Fee Water Resources Development Fee Agreement Revenue - Cost recovery Golf courses, adjoining systems

Scottsdale Water CIP FY16/17 to FY20/21 Took effect on July 1, 2016 CURRENT 5-YR CIP $176.7 M   AVERAGE YEARLY CIP $35.3 M HIGHEST YEAR (FY 16/17) $70.3 M LOWEST YEAR (FY 19/20) $21.2 M NOTE: Approximately $131M of available funds going into this FY

CIP FUNDING BREAKDOWN FY17-FY21

Water Infrastructure Projects Waterline replacements BPS upgrades Large meter replacement Reservoir rehab Well rehab and replace Membrane replacement Telemetry upgrades Security enhancements Treatment plant mods Other asset mgmnt. driven items

Highlighted Water Projects Reservoir Rehab Gaseous Cl2 Conversions Electrical Upgrades BPS Upgrades FLW Transmission Main East Shea Improvements TGTF Design & Construction

Reclamation Infrastructure Projects Sewer replacements Sewer lining and manhole rehab Odor control Lift station upgrades Membrane replacement Telemetry upgrades Security enhancements Treatment plant mods Advanced treatment mods Other asset mgmnt. Driven items

Reclamation Projects Sewer Assessment Program Lift Station Upgrades Pumpback Rehab Telemetry Upgrades Campus Treatment Facility Mods Gainey Structural Repair

Asset Management Data base

Water and Sewer Rate Adjustment History Fiscal Year Water Sewer Combined 2010/11 - 0 - 2011/12 2012/13 2013/14 (1.8%) 4.0% (0.2%) 2014/15 (1.2%) (0.3%) 2015/16 1.3% 2.6% 1.6% 2016/17 Cumulative (0.5%) 5.4% 1.1% Rate reductions resulted from rate structure changes driven by cost of service study results and revenue stability.

Water Campus Solar Project Solar Services Agreement (SSA) with SolarCity for 2.3MW of solar infrastructure 2000 kWh Tesla lithium-ion battery storage 20-year agreement No capital required by Scottsdale Water SolarCity finances, designs, builds, operates and maintains system SSA approved by Council on July 5, 2016

Project Location – Scottsdale Water Campus

Project Benefits Estimated $1.4M energy savings over 20-year agreement Solar/Battery combination reduces demand charges on electric bill Project will offset 10% of electric grid supplied power to Campus with clean renewable energy Battery storage will serve as an additional power back-up in the event of a regional power outage

Battery Storage Benefits Illustrated Trim Peak Demand Reduce Demand Charges Lower Bills Demand Spike Batteries Trim Demand Spikes