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Home My WebLink About04-8-16_AgendaPkt Metropolitan Wastewater Management Commission A NIN, SPRINGFIELD �i OREGON partners in wastewater management MWMC MEETING AGENDA Friday, April 8, 2016 @ 7:30 a.m. City of Springfield City Hall, Library Meeting Room 225 Fifth St., Springfield, OR 97477 Please Turn Off Cell Phones 7:30-7:35 I. ROLL CALL 7:35-7:40 II. CONSENT CALENDAR a. MWMC 3/11/16 Meeting Minutes Action Requested: By motion, approve the Consent Calendar 7:40 - 7:45 III. PUBLIC COMMENT 7:45 — 7:55 IV. FY 2016-17 USER RATES, PUBLIC HEARING, AND ADOPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Katherine Bishop/ Tonja Kling a. Staff Presentation b. Public Hearing c. Discussion and consideration of adoption of Resolution 16-06 Action Required: The Commission is requested to conduct a public hearing on the proposed schedule of regional wastewater user rates, consider adoption of Resolution 16-06, and recommend to the appropriate governing bodies for implementation. 7:55 — 8:05 V. FY 2016-17 REGIONAL WASTEWATER PROGRAM BUDGET & CAPITAL IMPROVEMENTS PROGRAM, PUBLIC HEARING, AND ADOPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Katherine Bishop/ Tonja Kling a. Public Hearing b. Discussion and consideration of adoption of Resolution 16-07 Action Requested: The Commission is requested to conduct a public hearing and consider adopting Resolution 16-07 adopting Regional Wastewater Program Budget and CIP, and forwarding it to the governing bodies for ratification consistent with the MWMC Intergovernmental Agreement (IGA). 8:05 — 8:25 VI. STRATEGIC PLANNING - STAFF SURVEY RESULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loralyn Spiro/ Amber Fossen Action Requested: Information and direction THE FULL PACKET IS POSTED ON THE WEBSITE www.mwmcpartners.org 8:25 — 8:40 VII. OPERATIONS AND MAINTENANCE BUILDING IMPROVEMENTS UPDATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mark Van Eeckhout Action Requested: Information only 8:40 — 9:00 VIII. TEMPERATURE COMPLIANCE REGULATORY STATUS UPDATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Todd Miller Action Requested: Information only 9:00 — 9:15 IX. BUSINESS FROM COMMISSION, GENERAL MANAGER, AND WASTEWATER DIRECTOR 9:15 X. ADJOURNMENT The meeting location is wheelchair-accessible. For the hearing-impaired, an interpreter can be provided with 48-hours-notice prior to the meeting. To arrange for service, call 541-726-3694. All proceedings before the MWMC are recorded THE FULL PACKET IS POSTED ON THE WEBSITE www.mwmcpartners.org AGENDA ITEM II. Metropolitan Wastewater Management Commission SPRINGFIELD %I OREGON partners in wastewater management MWMC MEETING MINUTES Friday, March 11 , 2016 @ 7:30 a.m. Water Pollution Control Facility — Willamette Meeting Room 410 River Avenue, Eugene, OR President Loud opened the meeting at 7:31 a.m. Roll call was taken by Kevin Kraaz. ROLL CALL Commissioners Present: George Brown, Bill Inge, Doug Keeler, Hilary Loud, Walt Meyer, Joe Pishioneri and Faye Stewart Staff in Attendance: Todd Anderson, Jolynn Barker, Katherine Bishop, Dave Breitenstein, Michelle Cahill, Ivan Campbell, Judy Castleman, Tim Falk, Amber Fossen, Marc Furney, Randy Gray, John Huberd, K.C. Huffman (attorney), Tonja Kling, Kevin Kraaz, Shawn Krueger, Richard Maberry, Barry Mays, Troy McAllister, Todd Miller, Brian Millington (attorney), Josh Newman, Neil Obringer, Brandon Serrano, Loralyn Spiro, Matt Stouder, Russell Styles, Mark Van Eeckhout, and Greg Watkins. ELECTION OF OFFICERS President Loud opened the floor for nominations. MOTION: IT WAS MOVED BY COMMISSIONER KEELER TO APPOINT VICE-PRESIDENT PISHIONERI AS PRESIDENT AND COMMISSIONER INGE AS VICE- PRESIDENT. THE MOTION WAS SECONDED BY COMMISSIONER BROWN. THE MOTION PASSED UNANIMOUSLY 7/0. Commissioner Loud passed the gavel to Commissioner Pishioneri, who continued with the meeting. PUBLIC COMMENT There was no public comment. CONSENT CALENDAR a. MWMC 2/12/16 Meeting Minutes MOTION: IT WAS MOVED BY COMMISSIONER LOUD TO APPROVE THE CONSENT CALENDAR. THE MOTION WAS SECONDED BY COMMISSIONER STEWART THE MOTION PASSED UNANIMOUSLY 7/0. MWMC Meeting Minutes March 11, 2016 Page 2 of 9 AWARD OF CONTRACT TO GREENWOOD RESOURCES FOR BIOCYCLE FARM POPLAR REPLANTING SERVICES — RESOLUTION 16-05 Todd Miller, Environmental Management Analyst, requested the Commission approve Resolution 16-05 which authorizes a contract agreement with GreenWood Resources for an amount not to exceed $177,092 for poplar planting services and execution of contract amendments as needed not to exceed a cumulative total of 15% ($26,564) of the initial contract amount. Mr. Miller stated that this Request for Proposals (RFP) differed from others in that we sought innovation from the planting contractor and were less prescriptive on the planting methods. He explained the reason the initial RFPs were more prescriptive was to ensure success of the initial planting but now we have more experience and therefore can offer more flexibility. The RFP did outline the following service objectives: 1. Ensure complete and successful replanting of MU1 in 2016. 2. Coordination of replanting to ensure the MWMC's biosolids application program needs is maintained. 3. Ensure the poplar replanting strategy aligns with best market potential for tree use forecast at 10-12 years of growth. 4. Manage plantings within guidelines for Forest Stewardship Council (FSC) certification, including minimizing use of herbicides. 5. Manage replanting to be as cost-effective as possible while ensuring the above objectives are met, including efficient use of contract services. Mr. Miller stated that the RFP for Poplar Farm Planting Services — MU1 went out on January 15, 2016. Initially there were four interested parties but GreenWood Resources was the only proposal received. Mr. Miller referred to a table on page three of the memo that showed the previous costs for planting MU1, MU2, MU3, was higher than GreenWood Resources' current proposal. DISCUSSION: Commissioner Meyer asked if all the stumps have been removed. Mr. Miller replied that they have. Commissioner Keeler asked what accounted for the much lower per acre cost. Mr. Miller replied it was because the soil had been so well worked during the harvest activities and stumps removals; it saved on ground preparation costs. Also, GreenWood came up with a cost saving approach to apply herbicides. Instead of a row by row application they will do a broad field application which greatly reduces the total volume of herbicides and the total number of machine hours. MOTION: IT WAS MOVED BY COMMISSIONER KEELER TO APPROVE RESOLUTION 16- 05. THE MOTION WAS SECONDED BY COMMISSIONER INGE. THE MOTION PASSED UNANIMOUSLY 7/0. MWMC Meeting Minutes March 11, 2016 Page 3 of 9 PRELIMINARY FY 2016-17 REGIONAL WASTEWATER PROGRAM BUDGET Matt Stouder, MWMC General Manager, stated the preliminary budget and user rate options are being presented and asked the Commission for comments and direction. At the April 8 meeting, public hearings will be held on the budget and user rates and the Commission will have the option to adopt them. The budget will then go to the three governing bodies for ratification — City of Springfield on May 2, City of Eugene on May 9, and Lane County on May 17. The final adoption of the budget by the Commission will be on June 10, 2016. Mr. Stouder stated the proposed Capital Programs Budget is $36.9M, of which $30.2M is budget carryover for active projects that are in pre-construction phases (study/design) and includes the following: • $14.7M — Increase Digestion Capacity • $14M — O&M Building Improvements project • $772,000 — Poplar Harvest Management Services $390,000 — Design phase for removal of the temporary lagoon • Study phase for Thermal Load Mitigation $5.3M in Major Capital Outlay for the Engine Generator project Mr. Stouder went over the Regional Wastewater 5-Year Capital Programs Plan (on page 45 of the budget document). He noted the Major Capital Outlay was $5.6M, of which about $5.3M is budgeted for the cogeneration replacement project. Staff is still evaluating options based on power with EWEB and expects to come back to the Commission this spring with an update. Staff is looking at doing either a rebuild of the existing engine or moving forward with a new 1.2 MW engine; the budget is planned to accommodate a 1.2 MW engine should that option be selected. Mr. Stouder said this year's proposed Regional Operating Budget plans for a 2% increase. The Regional Operating Combined Budget shows a slight decrease in personnel (FTE) this year, a small increase in personnel costs and material and supplies (M&S). Capital Outlay includes new equipment or fleet additions (as opposed to equipment replacement). The proposed Capital Outlay includes a water truck for the BMF (dust control, fire protection and cleanup activities at the BMF and biosolids application sites) and a one-ton pickup with a service body for maintenance activities. Tonja Kling, Management Analyst, presented Springfield's budget. She stated that the proposed FY 16-17 operating budget for Springfield includes a budget decrease of 0.8% or $32,478 when compared to last year's budget. Ms. Kling stated that Springfield's FTE is decreasing by 2.7%, personnel costs decreasing by 1.7% and material and supplies decreased by 0.1%. That is an overall decrease of 0.8%. Ms. Kling stated that each year staffing needs are reviewed and this year the decrease in FTE was due to reorganization of staff allocated to the regional program which also decreased personnel costs. The M&S costs remained close to level. The insurance budget savings of $70,000 was partially from the Commission choosing to increase the deductible which lowered premiums. Other costs savings is due to insurance related changes (fee based Agent of Record services and a two-year property coverage agreement). There is an increase in MWMC Meeting Minutes March 11, 2016 Page 4 of 9 internal charges which pays for the rent and allows MWMC the use of Springfield's City Hall building. The fee also pays for City of Springfield liability, auto and risk insurance which covers Springfield staff. A decrease in computer software and licenses was due to renewing and prepaying the Constructware maintenance/license for three years last fiscal year to receive cost savings. Michelle Cahill, Wastewater Director, presented Eugene's budget, which is a 2.8% or $383,636 increase over last year's budget. Ms. Cahill went over the details of the increase starting with Personnel Services. She stated that although there were no staffing changes, there was a 2.8% increase in regular wages based on the labor contracts in place, retirement contributions increased by 2%, and health insurance increased by 5%. The overall increase of Personnel Services is 2.8% or$230,448. The M&S expenses net increase of 0.7% or $35,088 was due to indirect charges increase of 1.9%, contractual services increase of 12.7°/x, and materials and program expense decrease of 15.6%. Ms. Cahill next went over the 5-year Combined Operating Budget. The proposed FYI 6-17 Operating Budget includes an increase of 2% or $351,158 when compared to the prior year. The Operating Budget trend showed the recent 4-years combined reflect a 9.4% increase, resulting in an average annual budget increase of 2.3%. Katherine Bishop, ESD Program Manager, stated that staff is proposing a 2% user rate increase to take effect July 1, 2016. The rate would be a $0.49 increase for the typical residential customer based on 5,000 gallons of wastewater treated per month. She said that the average residential usage in Eugene is currently 3,800 gallons monthly which is equal to a monthly bill of about $22.10. In Springfield, the average residential usage is 4,440 gallons monthly which equals a monthly charge of about $23.70. Both Cities average residential usage has decreased slightly. Ms. Bishop showed a comparison of residential wastewater fees for neighboring communities. The average monthly fee, based on 5,000 gallons, is $47.85. Springfield's comes in at $46.37 and Eugene comes in at $35.06 (regional plus city fees). The highest was Coburg at $85 and the lowest was Gresham at $28.73. Mr. Stouder pointed out that although the user rates are typically the major way that communities fund their services, System Development Charges (SDC) is another way. He said depending on where the community is at with growth, they may have higher or lower SDCs. Gresham has very low user rates but has very high SDCs. Ms. Bishop continued with the community comparison stating that Bend had the highest increase in user rates at 13.4%, next was Cottage Grove at 10.5°/x, Gresham at 9.2%, West Linn 5%, Corvallis 3.6% and Portland 3.4% increase. The 2% proposed rate increase is on just the regional portion of the customer's bill. Ms. Bishop went over the financial plan strategy, which includes: • Continued use of SDC revenues for debt service • Maximize capital transfers • Increased insurance reserve to $515,000 (to cover the higher deductible) MWMC Meeting Minutes March 11, 2016 Page 5 of 9 • Maintain rate stability reserve at $2M (this is a carry through, haven't had the need to use it which is positive) • Responsible rate increases to do the following: work towards pay as you go capital investments; replenish capital reserves; maintain strong debt service coverage ratio; and avoiding future rate spikes. Ms. Bishop went over the multi-year financial work plan. It included paying off the 2006 revenue bonds and advance refunding of the 2008 revenue bonds. Staff hopes to close on these two items on May 3, 2016. After that, staff will focus on looking at the regional SDCs in terms of reflecting the paying off of that debt and to refresh and reconcile data inputs. Next year staff hopes to start on the financial plan policy updates. In the long term, staff plans to do the cost of services analysis where they look at the base charge and volume charges by customer type and make adjustments as needed. Ms. Bishop hopes to have this completed before the permit renewal. Ms. Bishop presented three user rate scenarios. 1. Use the prior year's forecast of 3% increase for FYI 6-17 and a 4% increase for each of the next four years. It allows for significant capital transfers to pay for capital improvement investments and to begin replenishing reserves. It also maintains strong debt coverage ratio. A 3% rate increase is about $0.74 monthly increase from $24.12 to $25.34 monthly bill on 5,000 gallons of wastewater treated ($8.88 annual increase). 2. The proposed rate is a 2% increase for FYI 6-17 with a 3.5% increase for FYI 7-18 and a 4% increase for each of the next three years. It also allows for significant capital transfers to pay for capital improvement investments and to begin replenishing reserves. It is $3 less annually than prior year projection. A 2% rate increase is about $0.49 monthly increase from $24.60 to $25.09 monthly bill on 5,000 gallons of wastewater treated ($5.88 annual increase). 3. An optional scenario would be a 3% increase annually for FYI 6-17 and FY 17-18, followed by a 4% increase for each of the next three years. It allows for significant capital transfers to pay for capital improvement investments and to begin replenishing reserves at a slightly greater rate. Ms. Bishop said that other considerations for the user rate change would be a 1% rate increase in FY 16-17. This would reduce capital transfers and replenishing reserves as well as reduce the ability to respond to customer usage changes. It would have a negative fiscal impact to forecasted base revenues. A no rate change would accelerate all the above and would require greater rate increases in the following years. Commissioner Pishioneri asked if a 1.5% rate increase would result in a neutral affect. Ms. Bishop said that she would not recommend less than 2% because it would likely have a negative fiscal impact in the following years. Commissioner Meyer asked in regards to user fee revenue, are we on budget or slightly below. He said that the last report he saw, stated that we were down 2%. Ms. Bishop said that when they are preparing the budget they only have six months of data. On the EWEB side there is a two month lag in receiving the data. On the Springfield side (SUB), there is a one month lag. Ms. Bishop stated that for the estimated actuals at year end — she has estimated user fee MWMC Meeting Minutes March 11, 2016 Page 6 of 9 revenues to be $200,000 less than the original budget which was $30,800,000. The $200,000 decrease is less than I%. Last year, on the commercial side, we had an increase in activity. This fiscal year to date, we are seeing a slight decrease on the commercial side and a slight decrease in volumes on the residential side. Ms. Bishop pointed out how the total resources have changed in the adopted budget. The adopted budget assumes that the refinancing and the paying off of the revenue bonds will be completed. The total resources go down from $157.8M to $123.9M. The change is in the beginning cash and also on the expenditures side in the reserves. There is a positive drop in the debt service expense because the debt obligation is reduced. Ms. Bishop asked for input from the Commission. DISCUSSION: Commissioner Keeler said that he is thankful that we are looking at a 2% rate increase instead of the 4% that was projected last year. He asked what the CPI is. Ms. Bishop answered that it was less than 2.0% last year; however, it depends on which CPI you use. Commissioner Keeler asked if the reason the user rate increased on the projected years was because of capital projects and if we have a reduction in debt service wouldn't that help. Ms. Bishop replied that one of the next steps after the debt services are reduced is the SDC recalculation. The SDC recalculation will have some costs come out of it, like the interest associated with the debt. But other costs will be added into the calculations, such as the SRF loans, the operations and maintenance projects, and the digester project increase in cost. The bottom line is that we don't know what the outcome will be. The SDCs are a good source of revenue that comes in at about $2M a year that is put towards paying debt service. She said that staff would like to hold off on the forecast until the SDC process is completed. When we have the outcome, that slice of our revenue can be revised and then potentially our rate forecast can be revised. Mr. Stouder added that the further out the forecast the harder it is to predict. The CPI may be 2% or 3% for the year; however the cost of construction has been increasing more than that recently. It is hard to forecast. We want to be somewhat conservative so that when we come into the projected years, a large increase (in user rates) will not be needed. Commissioner Keeler said that overall he is appreciative of the 2%. Commissioner Meyer stated that he likes to keep the rate increase equal to our cost increases so he is also for the 2%. Commissioner Loud said that on the other side is that we have a couple of businesses coming in that will bring in more revenue. Mr. Stouder said we are hopeful for the new business. But also when the Swanson mill shut down for a couple of years because of the fire, it was a pretty big hit to the cash intake. Staff tries to be able to absorb those spikes the best we can. Commissioner Stewart agrees with the 2% rate increase. President Pishioneri closed regular session at 8:21 a.m. and opened the executive session. MWMC Meeting Minutes March 11, 2016 Page 7 of 9 EXECUTIVE SESSION The Metropolitan Wastewater Management Commission met in Executive Session pursuant to ORS 192.660(2)(h) for the purpose of consulting with legal counsel regarding MWMC"s legal rights and duties in regard to current litigation or litigation that is likely to be filed, and to consider information that is exempt from public inspection pursuant to ORS 192.660(2)(f). President Pishioneri asked if any representatives of the news media were present or general public. There were none. Staff was allowed to attend the executive session. President Pishioneri closed the executive session at 8:38 a.m. and opened the regular session. PHASE 3 RECYCLED WATER PLANNING STUDY UPDATE Mr. Miller stated that staff is currently in the third phase of Recycled Water Planning Study for thermal load mitigation strategy. Besides recycled water, staff is looking at riparian shade, effluent storage, and indirect discharge such as a wetland or hyporheic discharge. The temperature reduction goal remains uncertain and Mr. Miller will report back to the Commission next month to give an update. Mr. Miller said that Phase 3 has technical evaluations that have been on hold over the past 18 months. Staff hasn't spent anymore of the consultant's budget and Kennedy/Jenks is still on tap to do technical consulting for the MWMC in Phase 3. Mainly staff has been heavily involved with tracking regulatory framework. Oregon updated new water quality trading rules in December 2015. The DEQ is currently updating its internal management directive (IMD) water quality trading. Both regional staff and ACWA have been working with the DEQ to make sure the rules and framework are the most beneficial that we could get out of DEQ. Staff is also continuing to build partnerships, and keeping an eye on how the harvest of the Biocycle Farm rolled out. That will give us better information to access the benefit of increased irrigation. The WPCF heat management considerations are internal sources of heat, external sources of heat, effluent cooling, and heat recovery. • Using effluent storage during peak periods during the risk timeline by using existing infrastructure such as the Beneficial Reuse site (BRS) lagoon or the facultative sludge lagoon to temporarily store the effluent until the risk period has passed. • Indirect discharge plan — looking at areas at the Biocycle Farm and the BRS. • Recycled water use plan —to optimize the use of the hose reel system to increase the volume of effluent used which will then increase growth of the trees. • Recycled water demonstration plan (going outside the fence) — to demonstrate to the community that recycled water is a safe and effective resource. Staff had a very promising talk with the Eugene City Parks to use recycled water. They are interested this year to begin their street tree irrigation program using tanker trucks and individually irrigate the street trees. They see their costs going up and EWEB has taken away the available tap points for fire hydrants. It is now down to three fire hydrants so contractors have to go wait in line to get water. Given our current permit situation and other technical issue that we have to straighten out before we can actually do this, it probably won't happen in 2016 but we do have a pretty good chance of launching a pilot project MWMC Meeting Minutes March 11, 2016 Page 8 of 9 with them in 2017. They are also very interested in the fact that we have the old Agripac line that runs from downtown out to the treatment plant. If there is a way we can resurrect that line, it goes right to Washington Jefferson Park as well as their Greenway Park system. Commissioner Stewart said that Cottage Grove has an agreement with ODOT to use recycled water on their property. He was wondering if Mr. Miller had researched using ODOT and golf courses. Mr. Miller said that he would check into it. • Riparian Shade Project Portfolio. We have the pilot projects in the Springfield Millrace and the two Cedar Creek sites. Staff is working closely with EWEB on their Voluntary Incentive Program (VIP). The Pure Water Partners program protects and restores the McKenzie watershed. They access the tax lots properties along the river for canopy coverage (tree coverage). EWEB is interested in incentivizing the protection of currently high-functioning lands. They would be partnering with the MWMC in their watershed protection program to fill in the gaps and to have a restoration tract. EWEB recently submitted a grant to do a feasibility study on a funding partnership where funding for this program could be streamlined and the MWMC could partner with them. We are also working with The Freshwater Trust to access the total amount of shade credits that are available including looking up the Mohawk, which is a tributary on the lower McKenzie and is not part of EWEB's program. • Flow and channel restoration assessment. Besides just shading the rivers there are cold water alcoves and flood plain restoration opportunities. The MWMC is collaborating with Oregon ACWA on promoting a "Willamette Alliance" to restore river processes and habitat. Instead of all the permitees doing it on their own, we are pooling together to find cost-effective responses to temperature limitations. The MWMC is contributing to the grant-funded feasibility study of regulatory and legal issues to make the Willamette Alliance workable. Mr. Miller said next month he would report back to the Commission regarding the TMDL status, the numeric criteria vs. natural thermal potential, what DEQ is doing on cold water refugia, the water quality trading rules for shade credits, and the NPDES permitting status. DISCUSSION: Commissioner Keeler asked what the liquid volume storage at the BRS is. Mr. Miller replied that it is 57 million gallons. Commissioner Keeler asked if staff had looked into having some kind of cooling process — passive cooling tower at the BRS. Mr. Miller replied the presentation this morning was as far as it has gone so far, but staff plans on looking into it deeper. BUSINESS FROM COMMISSION, GENERAL MANAGER, AND WASTEWATER DIRECTOR General Manager: • Bond Counsel and Bond Payoff: The Bond Counsel suggested that we provide a copy of the Preliminary Official Statement (POS) to the Commission for an opportunity to review. The POS will be coming electronically to the Commissioners. The closing date is May 3, 2016. • The MWMC staff survey is in and being reviewed. It will be discussed at next month's meeting. There was a 71% response rate. MWMC Meeting Minutes March 11, 2016 Page 9 of 9 • Willamette Reservoir storage. Oregon Water Resources Division and the Army Corp of Engineers are holding two open houses on storage in their reservoirs and how they may allocate the storage (not water, but storage). They are embarking upon a three-year planning process and Mr. Miller attended a meeting yesterday. One of their open houses will be held at Springfield's City Hall on March 16. Anyone interested can attend. • The DEQ Director, Dick Petersen, has resigned. Wastewater Director: • Introduced new employee, Tim Falk, certified operator. Marc Furney is his mentor. • Brandon Serrano is co-op work experience person from Lane Community College who works two days a week. • Odor— Two clarifiers went down last week which increased odor. Kudos to staff for figuring out the problem quickly. • ACWA director is moving on. Ms. Cahill is on the Selection Committee and they hope to have a person selected by June. Commissioner Keeler said that he rode his bike around the plant and saw all the landscaping done. He was wondering who is taking care of it. Ms. Cahill replied that it is being taken care of in a multi-prong approach. We have increased our use of the Sheriff's crews; have increased the use of seasonal employees, but the bulk of it staff is managing. Commissioner Keeler stated that he thinks we have one of the most beautiful plants in the country. Audience: • Russell Styles stated in regards to recycle water, some of the WPCF sidewalks were cast using recycled water. Core samples were taken and they showed good structural integrity. It is a viable source of water and should be considered. • Ms. Cahill added that one of the sidewalks is down Coy Jones Boulevard, and it is most beautiful. ADJOURNMENT President Pishioneri adjourned the meeting at 9:06 a.m. AGENDA ITEM IV. Metropolitan Wastewater Management Commission SPRINGFIELD OREGON partners in wastewater management MEMORANDUM DATE: April 1, 2016 TO: Metropolitan Wastewater Management Commission (MWMC) FROM: Katherine Bishop, ESD Program Manager Tonja Kling, ESD Management Analyst SUBJECT: Fiscal Year 2016-17 User Rates, Public Hearing and Adoption ACTION To conduct a public hearing on the proposed schedule of regional REQUESTED: wastewater user rates and to consider adoption of Resolution 16-06 ISSUE A public hearing is scheduled for the April 8, 2016 Commission meeting to review and discuss the proposed fiscal year 2016-17 (FY 16-17) user rates for the Regional Wastewater Program (RWP) and to solicit public comment. A public hearing notice was published in The Register Guard and the meeting agenda was provided to the standing list of parties interested in notification of the Metropolitan Wastewater Management Commission (MWMC) meetings. The notice provides the Commission with the opportunity to adopt the schedule of user rates on April 8t". Per the intergovernmental agreement (IGA), once the Commission takes action, the recommended schedule of user charges will be forwarded to the cities of Springfield and Eugene for adoption and implementation. BACKGROUND The Commission was presented and discussed the components of the FY 16-17 RWP Budget and Capital Improvements Program over the past three months, including: ■ On January 8, 2016, the Commission reviewed the proposed Key Outcomes and Performance Indicators as part of the FY 16-17 Budget Kick-Off. ■ On February 12, 2016, the Commission reviewed the proposed FY 16-17 Capital Budget and 5-Year Capital Plan. ■ On March 11, 2016, the Commission considered the operating program budget, user fee rate scenarios and provided input on the Preliminary FY 16-17 RWP Budget. Memo: Fiscal Year 2016-17 User Rates, Public Hearing and Adoption April 1, 2016 Page 2 of 2 DISCUSSION Wastewater User Rates - On March 11 th, the Commission was presented with two multi- year user fee rate scenarios for FY 16-17 including a 3% user rate change (as previously forecasted), and a proposed 2% rate change. Based on discussions and input from Commissioners, the Commission provided direction to move forward with a 2% rate increase in FY 16-17 in order to maintain revenue adequacy to: (1) meet the existing debt service obligations; (2) support the capital improvements program and begin to replenish capital reserves; (3) maintain a favorable credit rating, and; (4) continue to implement moderate rate changes annually to avoid future rate spikes. ■ Fiscal Impact to the Typical Residential Monthly Bill- A 2% user fee rate change to the regional wastewater component results in a $0.49 increase monthly from $24.60 to $25.09 for a typical residential customer based on 5,000 gallons of wastewater treated. While 5,000 gallons is commonly used when comparing a "typical' residential monthly bill with other communities, the "average" residential usage varies by community. When considering the average single family residential monthly bill based on current usage trends in Eugene and Springfield and including the proposed 2% rate change, the average residential monthly bill would be about $22.10 in Eugene and $23.70 in Springfield for the regional wastewater treatment component. The average bill amount in Springfield is slightly greater due to an increase in the average usage (gallons) in Springfield which is attributed to a greater number of people per household (families) when compared to Eugene. With the proposed 2% increase in regional wastewater user charges applied to the base and flow charge, the FY 16-17 revenue from the increased rates is projected to meet the covenants of the Revenue Bonds and SRF loan requirements, and to maintain or exceed an unenhanced credit rating of A (as required by the IGA) by adequately funding operations, administration, capital financing and reserves as proposed in the FY 16-17 RWP Budget and CIP. Septage Rates - Septage fees are charged to mobile waste haulers based on the volume of septage discharged, and fee adjustments are based on the cost of providing services. Based on the cost to provide this service remaining close to level, there is no rate adjustment proposed for the septage fees in FY 16-17. Staff plans to provide a brief presentation on the proposed user fees, to be followed by a public hearing. ACTION REQUESTED The Commission is requested to conduct a public hearing on the proposed schedule of regional wastewater user rates and to consider adoption of Resolution 16-06. ATTACHMENT 1. Resolution 16-06 METROPOLITAN WASTEWATER MANAGEMENT COMMISSION RESOLUTION 16-06 ) IN THE MATTER OF THE FY 2016-17 MWMC REGIONAL WASTEWATER SCHEDULE OF USER AND SEPTAGE CHARGES AND RECOMMENDING THEM TO THE GOVERNING BODIES WHEREAS, the Metropolitan Wastewater Management Commission ("MWMC"), pursuant to the Intergovernmental Agreement ("IGA") between the cities of Springfield and Eugene, and Lane County (collectively "Governing Bodies"), is responsible for the administration and operation of the regional wastewater system; and WHEREAS, the IGA requires MWMC to recommend to the Governing Bodies a schedule of sewer user charges; and WHEREAS, MWMC's recommendation must set forth: 1) the rates and amounts MWMC reasonably determines are necessary to meet MWMC's bond covenants and to achieve and maintain an unenhanced credit rating of A from at least one nationally recognized rating agency ("Goal V) and 2) such additional rates and amounts MWMC determines are appropriate to adequately fund the actions necessary to perform MWMC's functions under the IGA ("Goal 2"); and WHEREAS, on April 8, 2016, the MWMC held a public hearing on the levels of sewer user and septage charges necessary to meet the requirements set forth above for Fiscal Year 2016-2017; and WHEREAS, MWMC has determined the user charges proposed satisfy Goal 1 and that additional funds, such as would satisfy Goal 2, are not necessary; and WHEREAS, MWMC, to the extent such exist, have considered all written and/or oral comments made at the public hearing, the recommendation of staff, and being otherwise fully advised; NOW, THEREFORE, BE IT RESOLVED BY THE METROPOLITAN WASTEWATER MANAGEMENT COMMISSION that the Metropolitan Wastewater Management Commission Schedule of Regional Wastewater Sewer User fees for Fiscal Year 2016-2017 in the form attached as Exhibit A, incorporated herein by this reference, with the rates set forth therein increased by the amounts that are necessary to reflect an overall rate increase of 2% over the user rates currently in effect, satisfies Goal 1 and is recommended to the appropriate Governing Bodies for implementation. Septage fees, which are implemented only in Eugene, remain at $0.127 per gallon with no rate change based on the current cost of service. ADOPTED BY THE METROPOLITAN WASTEWATER MANAGEMENT COMMISSION OF THE SPRINGFIELD/EUGENE METROPOLITAN AREA ON THE 8th DAY OF April, 2016. Joe Pishioneri, MWMC President ATTEST: Approved as to form: Kevin Kraaz, Secretary K.C. Huffman, MWMC Legal Counsel ATTACHMENT 1 PAGE 1 OF 2 Exhibit A Metropolitan Wastewater Management Commission Schedule of Regional Wastewater Sewer User Fees Fiscal Year 2016-2017 Base Charge per Account (excludes septage) $12.58 Per Unit Per Flow-Based Fee (748 gallons) 1,000 gallons Residential $1.872 $2.502 Low Strength $2.515 $3.363 Medium Strength $3.665 $4.900 High Strength $5.200 $6.952 Very High Strength $6.740 $9.011 Super High Strength $8.276 $11.065 Septage (1,000 gallons) $127.00 ATTACHMENT 1 PAGE 2 OF 2 AGENDA ITEM V. Metropolitan Wastewater Management Commission SPRINGFIELD OREGON partners in wastewater management MEMORANDUM DATE: April 1, 2016 TO: Metropolitan Wastewater Management Commission (MWMC) FROM: Katherine Bishop, ESD Program Manager Tonja Kling, ESD Management Analyst SUBJECT: Fiscal Year 2016-17 Regional Wastewater Program (RWP) Budget and Capital Improvements Program, Public Hearing and Adoption ACTION Review the Preliminary Fiscal Year 2016-17 RWP Budget, conduct a REQUESTED: public hearing, and consider adoption of Resolution 16-07 ISSUE The Preliminary Regional Wastewater Program (RWP) Budget and Capital Improvements Program (CIP) for fiscal year 2016-17 (FY 16-17) is attached for review and consideration. A public hearing is scheduled for the April 8, 2016 Commission meeting to solicit public comment. A public hearing notice was published in The Register Guard and the meeting agenda was provided to the standing list of parties interested in notification of the MWMC meetings. The notice provides the Commission with the opportunity to adopt the RWP Budget and CIP on April Stn BACKGROUND On January 8, 2016, the Commission reviewed the proposed Key Outcomes and Performance Indicators as part of the FY 16-17 Budget Kick-Off. On February 12th the Commission reviewed the proposed Capital Budget and 5-Year Capital Plan. On March 11th the Commission considered the operating program budget, user rate scenarios and provided input on the Preliminary FY 16-17 RWP Budget. The Preliminary FY 16-17 RWP budget funds all operations, administration, and capital projects planned for the MWMC Regional Wastewater Facilities. Based on feedback received from the Commission during prior years, staff does not intend to make a significant presentation on the budget document at the April 8 Commission meeting; however staff will be prepared to support the Commission's discussion. Memo: Fiscal Year 2016-17 RWP Budget, Public Hearing and Adoption April 1, 2016 Page 2 of 2 DISCUSSION Operating Program Budget— The total FY 16-17 operating budget is $17,700,630, reflecting an increase of 2.0% ($351,158) in FY 16-17 when compared to the adopted FY 15-16 budget. ■ Operations and Maintenance — The operations and maintenance budget for Eugene is $13,899,707, reflecting an increase of 2.8% ($383,636) in FY 16-17 when compared to the adopted FY 15-16 budget. ■ Administration —The administration budget for Springfield is $3,800,923 in total, reflecting a decrease of 0.8% ($32,478) in FY 16-17 when compared to the adopted FY 15-16 budget. Capital Programs Budget— The FY 16-17 capital programs budget is $36,941,600 which includes about $30.4 million in capital project carryover funding. Based on the status and phasing of capital improvement projects, projects are fully budgeted in the fiscal year in which the contract is awarded. Projects and associated expenditures span multiple years. In FY 16-17 capital project and asset management spending is projected at $17 million. Wastewater User Rates— The Preliminary FY 16-17 RWP Budget and CIP document reflects a 2.0% user rate increase effective July 1, 2016. With the 2.0% rate change included in the preliminary budget, sufficient revenues will be generated to fund daily operations and planned capital projects, while maintaining appropriate reserve levels, and continuing to meet debt service coverage requirements. Next Steps— Per the MWMC intergovernmental agreement, once approved by the MWMC, the Budget and CIP will be referred to the City of Springfield, City of Eugene, and Lane County for consideration and ratification. After the ratification process is complete, the budget will be brought back to the MWMC for final adoption on June 10tH ACTION REQUESTED The Commission is requested to review the Preliminary FY 16-17 RWP Budget and CIP materials, conduct a public hearing, and consider adoption of Resolution 16-07. ATTACHMENT 1. Resolution 16-07 METROPOLITAN WASTEWATER MANAGEMENT COMMISSION RESOLUTION 16-07 ) IN THE MATTER OF ADOPTING THE FY 2016-17 MWMC REGIONAL WASTEWATER PROGRAM BUDGET AND CAPITAL IMPROVEMENTS PROGRAM AND RECOMMENDING THEM TO THE GOVERNING BODIES WHEREAS, the Metropolitan Wastewater Management Commission ("MWMC"), pursuant to the Intergovernmental Agreement ("IGA") between the cities of Springfield and Eugene, and Lane County (collectively "Governing Bodies"), is responsible for the administration and operation of the regional wastewater system; and WHEREAS, the IGA requires MWMC to prepare an annual budget and Capital Improvements Program and recommend them to the Governing Bodies for adoption; and WHEREAS, MWMC's annual budgeting process involves a number of public meetings in which the MWMC's administrative and operational needs for the upcoming fiscal year are presented and reviewed; and WHEREAS, on April 8, 2016, MWMC held a public hearing on the proposed FY 2016-2017 Regional Wastewater Program Budget (RWP) and Capital Improvements Program (CIP); and WHEREAS, MWMC, to the extent such exist, have considered all written and/or oral comments made at the public hearing, the recommendation of staff, and being otherwise fully advised; NOW, THEREFORE, BE IT RESOLVED BY THE METROPOLITAN WASTEWATER MANAGEMENT COMMISSION that the RWP and CIP for FY 2016-2017 as presented to the MWMC on April 8, 2016, are hereby approved and the General Manager is directed to refer them to the Governing Bodies for ratification in accordance with the IGA. ADOPTED BY THE METROPOLITAN WASTEWATER MANAGEMENT COMMISSION OF THE SPRINGFIELD/EUGENE METROPOLITAN AREA ON THE 8th DAY OF APRIL, 2016. Joe Pishioneri, MWMC President ATTEST: Approved as to form: K.C. Huffman, MWMC Legal Counsel ATTACHMENT 1 Resolution 16-07 Page 1 of 1 Preliminary REGIONAL WASTEWATER PROGRAM BUDGET and CAPITAL IMPROVEMENTS PROGRAM Fiscal Year 2016-17 The Metropolitan Wastewater Management Commission is scheduled to adopt its Operating Budget and Capital Improvements Program (CIP) for FY 16-17 on April 8, 2016. The Budget and CIP are currently scheduled for consideration and ratification by the Springfield City Council on May 2, 2016, the Eugene City Council on May 9, 2016, and the Lane County Board of Commissioners on May 17, 2016. The Commission is scheduled for final consideration and ratification of the Budget and CIP on June 10, 2016. COMMISSION MEMBERS: Joe Pishioneri, President(Springfield) Bill Inge, Vice President(Lane County) George Brown (Eugene) Doug Keeler (Springfield) Hilary Loud, (Eugene) Walt Meyer (Eugene) Faye Stewart(Lane County) STAFF: Anette Spickard, MWMC Executive Officer/Springfield Development and Public Works Director Matthew Stouder, MWMC General Manager/Springfield Environmental Services Manager Michelle Cahill, Eugene Wastewater Division Director Robert Duey, MWMC Finance Officer/Springfield Finance Director www.mwmcpartners.org TABLE OF CONTENTS Metropolitan Wastewater Management Commission Overview METROPOLITAN WASTEWATER MANAGEMENT COMMISSION Preliminary FY 16-17 BUDGET AND CAPITAL IMPROVEMENTS PROGRAM for the REGIONAL WASTEWATER PROGRAM TABLE OF CONTENTS PROGRAM OVERVIEW BudgetMessage..................................................................................................................... 1 Acronyms and Explanations....................................................................................................3 Regional Wastewater Program Overview.............................................................................. 5 Exhibit 1: Interagency Coordination Structure............................................................. 11 BUDGET SUMMARY Regional Wastewater Program Budget and Program Summary.......................................... 12 Exhibit 2: Regional Operating Budget Summary........................................................... 12 Exhibit 3: Line Item Summary by Program Area........................................................... 14 Exhibit 4: Budget Summary and Comparison................................................................ 15 RESERVE FUNDS Regional Wastewater Program Reserve Funds...................................................................... 19 Exhibit 5: Operating Reserves Line Item Budget...........................................................20 OPERATING PROGRAMS Regional Wastewater Program Staffing.................................................................................23 Exhibit 6: Regional Wastewater Program Organizational Chart....................................23 Exhibit 7: Regional Wastewater Program Position Summary........................................24 Springfield Program and Budget Detail.................................................................................26 Exhibit 8: Springfield Administration Program Budget Summary.................................29 Exhibit 9: Springfield Administration Line Item Summary...........................................30 Eugene Program and Budget Detail.......................................................................................31 Exhibit 10: Eugene Operations & Maintenance Program Budget Summary ..................35 Exhibit 11: Eugene Operations & Maintenance Line Item Summary.............................36 CAPITAL PROGRAM Regional Wastewater Capital Improvements Program..........................................................37 Exhibit 12: Capital Program Budget Summary...............................................................41 Exhibit 13: Capital Program 5-Year Plan........................................................................45 CAPITAL PROJECT DETAIL Capital Program Project Detail Sheets...................................................................................46 PROGRAM OVERVIEW Metropolitan Wastewater Management Commission Budget Message BUDGET MESSAGE Members of the Metropolitan Wastewater Management Commission (MWMC) MWMCs' Customers and Partnering Agencies We are pleased to present the Metropolitan Wastewater Management Commission's (MWMC) budget for fiscal year 2016-17 (FY 16-17). This budget funds operations, administration, and capital projects planned for the Regional Wastewater Program (RWP). The MWMC administration and Capital Improvements Program(CIP) components of the budget are reflected in the City of Springfield's RWP budget. The operations, maintenance, equipment replacement, and major rehabilitation components are reflected in the City of Eugene's RWP budget. The Cities' Industrial Pretreatment Programs, managed locally in compliance with the MWMC Model Ordinance, also are included in the RWP budget. The MWMC has been quietly providing high-quality wastewater services to the metropolitan area for more than 30 years. The combined Eugene-Springfield population is 220,840, with the MWMC providing wastewater services for approximately 77,200 residential and commercial service connections to the Regional Wastewater Facilities. The MWMC is committed to clean water, the community's health, and the local environment. r MWMC Service Area r man This budget reflects a continued focus on design and construction of capital improvements planned to ensure that operation of the Regional Wastewater Facilities meets environmental regulations, and that adequate capacity will be provided to meet the needs of a growing service area. The Capital budget for FY 16-17 is $36,941,600. Approximately$20 million of the total capital budget will not be spent in FY 16-17, but is included to enable MWMC to commit to contracts that will occur in FY 16-17 for projects that span multiple years. Page 1 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Budget Message The FY 16-17 RWP Operating Budget for personnel services, materials and services and capital outlay expense is $17,700,630, reflecting a 2%increase when compared to the prior year adopted budget. The FY 16-17 budget includes Debt Service payments that total $5,504,462 as scheduled for repayment of$20.8 million in Clean Water SRF loans, plus $33.25 million in revenue bonds issued in 2016 to fund the Facilities Plan capital improvements. In FY 15-16, the 2006 revenue bonds were retired early, along with an advance refunding on the 2008 revenue bonds for interest cost saving, resulting in the 2016 revenue bonds. As such, the table below reflects a lower amount in beginning cash, reserves and debt service expenses in FY 1617. REGIONAL WASTEWATER PROGRAM RESOURCE AND EXPENDITURE SUMMARY ADOPTED AMENDED ADOPTED BUDGET BUDGET BUDGET 2015-16 2015-16 2016-17 RESOURCE'S Beginning Cash $107,167,940 $110,160,579 $76,342,200 User Fees 30,987,500 30,987,500 31,327,500 Internal Transfers 16,878,904 21,428,904 13,570,191 Miscellaneous 1,273,800 1,273,800 1,061,110 System Development Charges 1,100,000 1,100,000 1,200,000 Interest 434,300 434,300 403,200 EXPENDITURES $157,842,444 $165,385,083 $123,904,201 Reserves $92,512,921 $36,935,342 50,187,318 Capital Projects 21,938,604 44,322,560 36,941,600 Internal Transfers 16,878,904 21,428,904 13,570,191 Operations 13,516,071 13,636,525 13,899,707 Debt Service 9,163,743 44,808,743 5,504,462 Administration 3,832,201 3,787,009 3.800,923 $157,842,44.1 5165,385,083 $123,904,201 For FY 16-17 user fee revenues (including septage service and SDC compliance charges) are projected at $31,327,500. This level of revenue is based on a recommended 2% increase in regional wastewater user fees in order to continue to meet the net revenue objectives. In summary, the FY 16-17 budget implements the Commission's adopted Financial Plan policies, funding operations and administration sufficiently to maintain existing levels of service and to meet the environmental performance necessary for compliance with the National Pollutant Discharge Elimination System (NPDES) permit issued to the MWMC and the two Cities. Respectfully submitted, 4AA4&A0ekAA6k-- Anette Spickard MWMC Executive Officer Page 2 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Acronyms and Explanations ACRONYMS AND EXPLANATIONS AMCP—Asset Management Capital Program. The AMCP implements the projects and activities necessary to maintain functionality, lifespan, and effectiveness of the MWMC facility assets on an ongoing basis. The AMCP is administered by the City of Eugene for the MWMC. ARRA—American Reinvestment and Recovery Act. This funding was part of the federal government's economic stimulus program and issued loans under favorable conditions to stimulate infrastructure and capital project investment. BMF—Biosolids Management Facility. The Biosolids Management Facility is an important part of processing wastewater where biosolids generated from the treatment of wastewater are turned into nutrient rich,beneficial organic materials. CIP—Capital Improvements Program. This program implements projects outlined in the 2004 Facilities Plan and includes projects that improve performance, or expand treatment or hydraulic capacity of existing facilities. CMOM—Capacity Management and Maintenance Program. The CMOM program addresses wet weather issues such as inflow and infiltration with the goal to eliminate sanitary sewer overflows to the extent possible and safeguard the hydraulic capacity of the regional wastewater treatment facility. CWSRF —Clean Water State Revolving Fund. The Clean Water State Revolving Fund loan program is a federal program administered by the Oregon DEQ that provides low-cost loans for the planning, design and construction of various water pollution control activities. (DEQ) EMS—Environmental Management System. An EMS is a framework to determine the environmental impacts of an organization's business practices and develop strategies to address those impacts. ESD—Environmental Services Division. The ESD is a division of the City of Springfield's Development and Public Works Department that promotes and protects the community's health, safety, and welfare by providing professional leadership in the protection of the local environment, responsive customer service, and effective administration for the Regional Wastewater Program. IGA—Intergovernmental Agreement. Pursuant to ORS 190.010, ORS 190.080, and ORS 190.085, the IGA is an agreement between the cities of Eugene and Springfield and Lane County that created the MWMC as an entity with the authority to provide resources and support as defined in the IGA for the Regional Wastewater Program. Page 3 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Acronyms and Explanations MWMC —Metropolitan Wastewater Management Commission. The MWMC is the Commission responsible for the oversight of the Regional Wastewater Program. In this role, the MWMC protects the health and safety of our local environment by providing high-quality management of wastewater conveyance and treatment to the Eugene-Springfield community. The Commission is responsible for the oversight of the Regional Wastewater Program. NPDES—National Pollutant Discharge Elimination System permit. The NPDES permit program is administered by the Oregon Department of Environmental Quality (DEQ) in fulfillment of federal Clean Water Act requirements. The NPDES permit includes planning and technology requirements as well as numeric limits on effluent water quality. RWP—Regional Wastewater Program. Under the oversight of the MWMC, the purpose of the RWP is to protect public health and safety and the environment by providing high quality wastewater management services to the Eugene-Springfield metropolitan area. The MWMC and the regional partners are committed to providing these services in a manner that will achieve, sustain, and promote balance between community, environmental, and economic needs while meeting customer service expectations. SDC— System Development Charge. SDCs are charges imposed on development so that government may recover the capital needed to provide sufficient capacity in infrastructure systems to accommodate the development. SRF—Clean Water State Revolving Fund. The Clean Water State Revolving Fund loan program is a federal program administered by the Oregon DEQ that provides low-cost loans for the planning, design and construction of various water pollution control activities. (DEQ) SSO—Sanitary Sewer Overflows. Discharges of raw sewage. TMDL—Total Maximum Daily Load. The federal Clean Water Act defines Total Maximum Daily Load as the maximum amount of any pollutant that can be safely assimilated by a waterway in one day without significant degradation of water quality. TSS—Total Suspended Solids. Organic and inorganic materials that are suspended in water. WPCF—Regional Water Pollution Control Facility. The WPCF is a state-of-the-art facility providing treatment of the wastewater coming from the Eugene/Springfield metropolitan area. The WPCF is located on River Avenue in Eugene. The treatment plant and 49 pump stations distributed across Eugene and Springfield operate 24 hours a day, 7 days a week, 365 days a year to collect and treat wastewater from homes, businesses and industries before returning the cleaned water, or effluent, to the Willamette River. Through advanced technology and processes, the facility cleans, on average, up to 30 million gallons of wastewater every day. WWFMP—Wet Weather Flow Management Plan. This plan evaluated and determined the most cost-effective combination of collection system and treatment facility upgrades needed to manage excessive wet weather wastewater flows in the Eugene/Springfield metropolitan area. Page 4 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Overview REGIONAL WASTEWATER PROGRAM OVERVIEW The Metropolitan Wastewater Management Commission The Metropolitan Wastewater Management Commission (MWMC) was formed by Eugene, Springfield, and Lane County through an intergovernmental agreement (IGA) in 1977 to provide wastewater collection and treatment services for the Eugene-Springfield metropolitan area. The seven-member Commission is composed of members appointed by the City Councils of Eugene (3 representatives), Springfield(2 representatives) and the Lane County Board of Commissioners (2 representatives). Since its inception, the Commission, in accordance with the IGA,has been responsible for oversight of the Regional Wastewater Program(RWP) including: construction, maintenance, and operation of the regional sewerage facilities; adoption of financing plans; adoption of budgets, user fees and connection fees; adoption of minimum standards for industrial pretreatment and local sewage collection systems; and recommendations for the expansion of regional facilities to meet future community growth. Staffing and services have been provided in various ways over the 39 years of MWMC's existence. Since 1983, the Commission has contracted with the Cities of Springfield and Eugene for all staffing and services necessary to maintain and support the RWP. Lane County's partnership has involved participation on the Commission and support to the Lane County Metropolitan Wastewater Service District (CSD), which managed the proceeds and repayment of general obligation bonds issued to construct RWP facilities. Regional Wastewater Program Purpose and Key Outcomes The purpose of the RWP is to protect public health and safety and the environment by providing high quality wastewater management services to the Eugene-Springfield metropolitan area. The MWMC and the regional partners are committed to providing these services in a manner that will achieve, sustain, and promote balance between community, environmental, and economic needs while meeting customer service expectations. Since the mid-1990s, the Commission and RWP staff have worked together to identify key outcome areas within which to focus annual work plan and budget priorities. The FY 16-17 RWP work plans and budget reflect a focus on the following key outcomes or goals. In carrying out the daily activities of managing the regional wastewater system, we will strive to achieve and maintain: 1. High environmental standards; 2. Fiscal management that is effective and efficient; 3. A successful intergovernmental partnership; 4. Maximum reliability and useful life of regional assets and infrastructure; 5. Public awareness and understanding of MWMC, the regional wastewater system, and MWMC's objectives of maintaining water quality and a sustainable environment. The Commission believes that these outcomes, if achieved in the long term, will demonstrate success of the RWP in carrying out its purpose. In order to determine whether we are successful, indicators of performance and targets have been identified for each key outcome. Tracking performance relative to identified targets over time assists in managing the RWP to achieve desired results. The following indicators and performance targets provide an important framework for the development of the FY 16-17 RWP Operating Budget, Capital Improvements Program and associated work plans. Page 5 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Overview Outcome 1: Achieve and maintain high environmental standards. Indicators: Performance: FY 14-15 FY 15-16 FY 16-17 Actual Estimated Actual Target • Amount of wastewater treated to 100%; 11.6 100%; 12 100%; 14.3 water quality standards billion gallons billion gallons billion gallons • Compliance with environmental In compliance In compliance In compliance performance requirements of all permits • MWMC target for high quality <50% EPA <50%EPA <50% EPA biosolids 40CFR Part 40CFR Part 40CFR Part 503.13 -Table 3 503.13 -Table 3 503.13 -Table 3 Pollutant Pollutant Pollutant Concentrations: Concentrations: Concentrations: Policy Met Policy Met Policy Met • Volume of reclaimed water 88 million 85 million 80 million beneficially reused gallons gallons gallons • Performance targets under the 100% of EMS 100% of EMS 100% of EMS Environmental Management System targets met or on targets met or on targets met or on are achieved schedule schedule schedule Outcome 2: Achieve and maintain fiscal management that is effective and efficient. Indicators: Performance: FY 14-15 FY 15-16 FY 16-17 Actual Estimated Actual Target • Annual budget and rates meet Policies Met Policies Met Policies Met MWMC Financial Plan policies • Annual audited financial statements Clean Audit Clean Audit Clean Audit • Uninsured bond rating AA AA A • Reserves funded at target levels Yes Yes Yes • Net revenue to debt service coverage 2.33 >1.25 >1.25 ratio Page 6 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Overview Outcome 3:Achieve and maintain a successful intergovernmental partnership. Indicators: Performance: FY 14-15 FY 15-16 FY 16-17 Actual Estimated Actual Target I • Industrial Pretreatment Program In compliance In compliance n compliance implementation in compliance with state/federal requirements; audit findings addressed • Capacity Management Adopted Implemented Implementation Operations and Maintenance Regional CMOM Regional CMOM of Regional (CMOM)Program development Program Plan Program Plan CMOM Program annual reporting • MWMC Facilities Plan projects 100% of initiated 100% of initiated 100% of initiated consistent with CIP budget and projects within projects within projects within schedule budget and 50% budget and 86% budget and 50% (3 of 6 projects) (6 of 7 projects) on schedule on schedule on schedule Outcome 4: Maximize reliability and useful life of regional assets and infrastructure. Indicators: Performance: FY 14-15 FY 15-16 FY 16-17 Actual Estimated Actual Target • Preventive maintenance completed 97% 95% 90% on time (best practices benchmark is 90%) • Preventative maintenance to 5.2:1 5:1 5:1 corrective maintenance ratio (benchmark 4:1-6:1) • Emergency maintenance required 0.2% 0.3% <2% (best practices benchmark is<2% of labor hours) Page 7 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Overview Outcome 5: Achieve and maintain public awareness and understanding of MWMC, the regional wastewater system, and MWMC's objectives of maintaining water quality and a sustainable environment. Indicators: Performance: FY 14-15 FY 15-16 FY 16-17 Actual Estimated Actual Target • Create and distribute 2 Newsletters 4 Newsletters Increase distribution e-newsletters by 15% and readership by 10% • Pollution prevention 2 Campaigns 4 Campaigns 2 campaigns; reaching campaigns 20% of residents in service area • Provide tours of the 20 Tours/about 27 Tours/more than Provide tours for more Water Pollution 700 people 700 people than 750 people Control Facility • MWMC website Maintained visitor Maintain visitor Increase unique traffic levels levels visitors by 15% • Community survey Completed survey Results used to Annual Review and presented results develop Communications Plan • Communications Plan -- Update completed Annual Review • Develop video series Designed and began Final production --- production completed and public release Page 8 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Overview Roles and Responsibilities In order to effectively oversee and manage the RWP, the partner agencies provide all staffing and services to the MWMC. The following sections describe the roles and responsibilities of each of the partner agencies, and how intergovernmental coordination occurs on behalf of the Commission. City of Eugene The City of Eugene supports the RWP through representation on the MWMC, provision of operation and maintenance services, and active participation on interagency project teams and committees. Three of the seven MWMC members represent Eugene—two citizens and one City Councilor. Pursuant to the Intergovernmental Agreement(IGA), the Eugene Wastewater Division operates and maintains the Regional Water Pollution Control Facility (WPCF), the Biosolids Management Facility (BMF) and associated residuals and reclaimed water activities, along with regional wastewater pumping stations and transmission sewers. In support of the RWP, the Division also provides technical services for wastewater treatment; management of equipment replacement and infrastructure rehabilitation; biosolids treatment and recycling; industrial source control (in conjunction with Springfield staff); and regional laboratory services for wastewater and water quality analyses. These services are provided under contract with the MWMC through the regional funding of 77.40 full-time equivalent(FTE) employees. Springfitel The City of Springfield supports the RWP through representation on the MWMC,provision of MWMC administration services, and active coordination of and participation on interagency project teams and committees. Two MWMC members represent Springfield—one citizen and one City Councilor. Pursuant to the IGA, the Springfield Development and Public Works Director, and the Environmental Services Manager serve as the MWMC Executive Officer and General Manager, respectively. The Environmental Services Division and Finance Department staff provide ongoing staff support to the Commission and administration of the RWP in the following areas: legal and risk management services; financial management and accounting; coordination and management of public policy; regulatory and permit compliance issues; coordination between the Commission and the governing bodies; long-range capital project planning, design, and construction management; coordination of public information, education, and citizen involvement programs; and coordination and development of regional budgets, rate proposals, and revenue projections. Springfield staff also provides local implementation of the Industrial Pretreatment Program, as well as billing coordination and customer service. These services are provided under contract with the MWMC through the regional funding of 14.58 FTE of Development and Public Works Department staff and 0.88 FTE of Finance Department staff, for a total 15.46 FTE as reflected in the FY 16-17 Budget. Lane County The Board of County Commissioners support the RWP through representation on the MWMC, including two MWMC members that represent Lane County—one citizen and one County Commissioner. Lane County's partnership initailly included providing support to manage the proceeds and repayment of the RWP general obligation bonds to finance the local share of the RWP facilities construction. These bonds were paid in full in 2002. The County, while not presently providing sewerage, has the authority under its charter to do so. The Urban Growth Boundary includes the two Cities (urban lands) and certain unincorporated areas surrounding the Page 9 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Overview Cities which lies entirely within the County. Federal funding policy requires sewage treatment and disposal within the Urban Growth Boundary to be provided on a unified, metropolitan basis. Interagency Coordination The effectiveness of the MWMC and the RWP depends on extensive coordination, especially between Springfield and Eugene staff, who provide ongoing program support. This coordination occurs in several ways. The Springfield ESD/MWMC General Manager and the Eugene Wastewater Division Director coordinate regularly to ensure adequate communication and consistent implementation of policies and practices as appropriate. The Eugene and Springfield Industrial Pretreatment Program supervisors and staff meet regularly to ensure consistent implementation of the Model Industrial Pretreatment Ordinance. Additionally, interagency project teams provide input on and coordination of ongoing MWMC administration issues and ad hoc project needs. Exhibit 1 on the following page reflects the interagency coordination structure supporting the RWP. Special project teams are typically formed to manage large projects such as design and construction of new facilities. These interagency staff teams are formulated to provide appropriate expertise, operational knowledge, project management, and intergovernmental representation. Relationship to Eugene and Sprin6field Local Sewer Programs The RWP addresses only part of the overall wastewater collection and treatment facilities that serve the Eugene-Springfield metropolitan area. The Cities of Eugene and Springfield both maintain sewer programs that provide for construction and maintenance of local collection systems and pump stations, which discharge to the regional system. Sewer user fees collected by the two Cities include both local and RWP rate components. Page 10 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Overview EXHIBIT I REGIONAL WASTEWATER PROGRAM INTERAGENCY COORDINATION STRUCTURE EUGENE CITY COUNCIL LANE COUNTY SPRINGFIELD CITY COUNCIL COMMISSIONERS METROPOLITAN WASTEWATER MANAGEMENT COMMISSION Operation&Maintenance Contract Administration Contract EUGENE SPRINGFIELD WASTEWATER DIVISION ENVIRONMENTAL SERVICES DIVISION Regional Facility Operation and Maintenance Planning Major Rehab and Equipment Replacement Capital Construction Technical Services Rates,Revenues Eugene Pretreatment Program Permit Coordination Pump Station and Interceptor Operations and Interagency Coordination Maintenance Public Information/Education Springfield Pretreatment Program Legal and Risk Services PUBLIC WORKS ADMINISTRATION Billing and Customer Service Billing and Customer Service FINANCE DEPARTMENT MAINTENANCE DIVISION Accounting and Financial Reporting Regional Sewer Line Support INTERAGENCY COORDINATION AND PROJECT TEAMS Administrative Policy Decisions and Coordination Operational Policy Decisions and Coordination Capital Project Planning and Coordination Design Standards Development Capital Construction Guidance KEY OUTCOMES ACHIEVED Page 11 FY 16-17 BUDGET AND CIP BUDGET SUMMARY Metropolitan Wastewater Management Commission Budget and Program Summary REGIONAL WASTEWATER PROGRAM FY 16-17 BUDGET The MWMC's RWP Operating Budget provides the Commission and governing bodies with an integrated view of the RWP elements. Exhibit 2 provides a summary of the overall Operating Budget. Separate Springfield and Eugene agency budgets and staffing also are presented within this budget document. Major program areas supported by Springfield and Eugene are described in the pages that follow and are summarized in Exhibit 3 on page 14. Finally, Exhibit 4 on page 15 combines revenues, expenditures, and reserves to illustrate how funding for all aspects of the RWP is provided. It should also be noted that the "Amended Budget FY 15-16" column in all budget tables represents the updated FY 15-16 RWP budget as of February 23, 2016, which reconciled actual beginning balances at July 1, 2015, and approved budget transfers and supplemental requests. EXHIBIT 2 REGIONAL OPERATING BUDGET SUMMARY: INCLUDING RESERVE CONTRIBUTIONS r ADOPTED AMENDED ADOPTED BUDGET BUDGET BUDGET CHANGE (1) FY 15-16 FY 15-16 FY 16-17 iNCR/(DECR) Full-Time Equivalent Staffing Level 93.29 93.29 92.86 (0.43) -0.5% Personnel Services (2) $10,102,922 $10,072,730 $10,303,071 $200,149 2.0% Materials & Services (2) 7,201,550 7,306,803 7,234,459 32,909 0.5% Capital Outlay (2, 3) 45,000 45,000 163,100 118,100 262.4% Equip Replacement Contribution (4) 650,000 650,000 250,000 (400,000) -61.5% Capital Contribution (5) 8,500,000 11,885,000 11,-300,000 2,800,000 32.9% Debt Service Contribution(6) 7,163,743 7,878,743 5,504,462 (1,659,281) -23.2% Bond Sale Costs 0 466,000 0 0 Working Capital Reserve (7) 900,000 900,000 900,000 0 0.0% Rate Stability Reserve(8) 2,000,000 2,000,000 2,000,000 0 0.0% Insurance Reserve (9) 0 500,000 515,000 515,000 15,000 3.0% Operating Reserve (10) 4,823,396 4,585,929 3,798,506 (1,024,890) -21.2% Rate Stabilization Reserve(11) 2,000,000 2,000,000 2,000,000 0 0.0% SRF Loan Reserve(12) 670,908 670,908 670,908 0 0.0% Revenue Bond Reserve (13) 4,100,000 0 0 (4,100,000) 0.0% Budget Summary $48,657,519 $48,976,113 $44,639,506 ($4,018,013) -8.3% Notes: 1. The Change column and Percent Change column compare the adopted FY 16-17 Budget with the originally Adopted FY 15-16 Budget column. 2. Personnel Services, Materials and Services, and Capital Outlay budget amounts represent combined Springfield and Eugene Operating Budgets that support the RWP. 3. Capital Outlay does not include CIP, Equipment Replacement,Major Capital Outlay, or Major Rehabilitation,which are capital programs. Page 12 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Budget and Program Summary 4. The Equipment Replacement Contribution is a budgeted transfer of operating revenues to "sinking funds"(reserves) for scheduled future replacement of major equipment,vehicles, and computers. See table on page 21 for year-end balance. 5. The Capital Reserve Contribution is a budgeted transfer of operating revenues to "sinking funds" (reserves). Capital is passed through the Springfield Administration Budget. See table on page 22 for year-end balance. 6. The Debt Service line item is the sum of annual interest and principal payments on the Revenue Bonds and Clean Water State Revolving Fund(SRF) loans made from the Operating Budget (derived from user rates). The total amount of Debt Service budgeted in FY 16-17 is $5,504,462 the balance of which is budgeted from SDCs. 7. The Working Capital Reserve acts as a revolving account which is drawn down and replenished on a monthly basis to fund Eugene's and Springfield's cash flow needs. 8. The Rate Stability Reserve is used to set aside revenues available at year-end after the budgeted Operating Reserve target is met. Internal policy has established a level of$2 million for the Rate Stability Reserve. See Exhibit 5 on page 20 for year-end balance. 9. The Insurance Reserve was established to set aside funds equivalent to the insurance deductible amount for property and liability insurance coverage, for losses per occurrence. 10. The Operating Reserve is used to account for the accumulated operating revenues net of operations expenditures. The Commission's adopted a policy provides minimum guidelines to establish the Operating Reserve balance at approximately 10% of the adopted Operating Budget. The Operating Reserve provides for contingency funds in the event that unanticipated expenses or revenue shortfalls occur during the budget year. 11. The Rate Stabilization Reserve was established at$2 million as a result of the 2006 MWMC Revenue Bond Declaration and Covenants. It holds funds that are available if needed,to ensure Debt Service payments can be made. 12. The Clean Water SRF loan reserve is budgeted as required per loan agreements. 13. The Revenue Bond Reserve was created to provide assurances to the bond holders that adequate revenue coverage would be provided for future debt service obligations. Prior to FY 16-17, and to meet reserve requirements of the 2006 bond issuance the Bond Reserve was budgetd at$4.1 million in the operating fund(as it was funded with user fees) and the Bond Reserve from the 2008 issuance was held in the capital funds budget at$4.0 million. Beginning in FY 16-17,the revenue bond reserve is no longer a requirement due to the restructuring of the revenue bonds and improved financial position. Page 13 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Budget and Program Summary EXHIBIT 3 REGIONAL WASTEWATER PROGRAM OPERATING BUDGET LINE ITEM SUMMARY BY PROGRAM AREA ADOPTED AMENDED ADOPTED ACTUAL BUDGET BUDGET BUDGET CHANGE SPRINGFIELD FY 14-15 FY 15-16 y FY 15-16 FY 16-17 INCR/(DECR) MWMC ADMINISTRATION Personnel Services $1,073,318 $1,319,068 $1,299,784 $1,292,903 ($26,165) -2.0% Materials&Services 1,703,218 1,926,147 1,910,947 1,917,781 (8,366) -0.4% Capital Outlay 0 0 0 0 0 NA TOTAL $2,776,536 $3,245,215 $3,210,731 $3,210,684 ($34,531) -1.1% INDUSTRIAL PRETREATMENT Personnel Services $300,986 $340,867 $335,289 $331,231 ($9,636) -2.8% Materials&Services 130,694 117,252 117,252 123,128 5,876 5.0% Capital Outlay 0 0 0 1 0 0 NA TOTAL $431,680 $458,119 $452,541 $454,359 ($3,760) -0.8% ACCOUNTING Personnel Services $92,263 $95,196 $89,866 $100,698 $5,502 5.8% Materials&Services 22,937 34,871 34,871 35,182 311 0.9% Capital Outlay 0 0 0 0 0 NA TOTAL $115,200 $130,067 $124,737 $135,880 $5,813 4.5% TOTAL SPRINGFIELD op Personnel Services $1,466,567 $1,755,131 $1,724,939 $1,724,832 ($30,299) -1.7% Materials&Services 1,856,849 2,078,270 2,063,070 2,076,091 (2,179) -0.1% Capital Outlay 0 0 0 0 0 NA TOTAL $3,323,416 $3,833,401 $3,788,009 $3,800,923 ($32,478) -0.8% EUGENE ADMINISTRATIVE SERVICES Personnel Services $1,506,912 $1,799,936 $1,799,936 827,105 $27,169 1.5% Materials&Services 561,943 640,252 662,717 625,521 (14,732) -2.3% Capital Outlay 0 0 0 0 0 NA TOTAL $2,068,855 $2,440,188 $2,462,653 $2,452,626. $12,437 0.5% BIOSOLIDS MANAGEMENT Personnel Services $1,125,091 $1,265,210 $1,265,210 $1,276,526 $11,316 0.9% Materials&Services 782,347 990,888 1,016,060 1,018,329 27,442 2.8% Capital Outlay 0 0 0 118,000 118,000 NA TOTAL $1,907,438 $2,256,098 $2,281,270 $2,412,855 $156,758 6.9% INDUSTRIAL SOURCE CONTROL Personnel Services $531,116 $554,628 $554,628 $572,935 $18,307 3.3% Materials&Services 114,118 132,957 132,440 114,146 (18,811) -14.1% Capital Outlay 20,137 45,000 45,000 0 (45,000) NA TOTAL $665,371 $732,585 $732,068 $687,081 ($45,504) -6.2% TREATMENT PLANT Personnel Services $4,118,910 $4,360,274 $4,360,274 $4,527,886 $167,612 3.8% Materials&Services 2,378,481 2,993,678 3,035,914 3,039,851 46,173 1.5% Capital Outlay 6,728 0 0 0 0 NA TOTAL $6,504,120 7,353,952 $7,396,188 $7,567,737 $213,785 2.9% REGIONAL PUMP STATIONS Personnel Services $114,018 $191,450 $191,450 $195,102 $3,652 1.9% Materials&Services 287,361 307,501 338,765 303,748 (3,753) -1.2% Capital Outlay 0 0 0 45,100 , 45,100 NA TOTAL $401,379 $498,951 $530,215 $543,950 $44,999 9.0% BENEFICIAL REUSE SITE Personnel Services $126,361 $176,293 $176,293 $178,685 $2,392 1.4% Materials&Services 48,972 58,004 57,838 56,774 (1,230) -2.1% Capital Outlay 0 0 0 0 0 NA TOTAL $175,333 $234,297 $234,131 $235,459 $1,162 0.5% TOTAL EUGENE Personnel Services $7,522,408 $8,347,791 $8,347,791 $8,578,239 $230,448 2.8% Materials&Services 4,173,222 5,123,280 5,243,734 5,158,368 35,088 0.7% Capital Outlay 26,865 45,000 45,000 1 163,100 118,100 262.4% TOTAL $11,722,495 $13,516,071 $13,636,525 $13,899,707 $383,636 2.8% TOTAL REGIONAL BUDGET $17,349,472 $17,700,630 $351,158 2.0% Page 14 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Budget and Program Summary EXHIBIT 4 REGIONAL WASTEWATER PROGRAM BUDGET SUMMARY AND COMPARISON ADOPTED AMENDED ADOPTED BUDGET BUDGET BUDGET CHANGE * OPERATING BUDGET FY 15-16 FY 15-16 FY 16-17 INC(DECR) Administration $3,833,401 $3,788,009 $3,800,923 ($32,478) Operations 13,516,071 13,636,525 13,899,707 383,636 Capital Contribution&transfers 8,500,000 11,885,000 11,300,000 2,800,000 Equip Repl-Contribution 650,000 650,000 250,000 (400,000) Operating&Revenue Bond Reserves 14,994,304 10,671,837 10,424,414 (4,569,890) Debt Service 7,163,743 7,878,743 51504,462 (1,659,281 Total Operating Budget $48,657,519 $48,510,114 $45,179,506 ($3,478,013) Funding: Beginning Balance $16,289,243 $16,158,038 $10,684,205 ($5,605,038) User Fees 30,985,000 30,985,000 31,325,000 340,000 Other 1,383,276 1,383,076 3,170,301 1,787,025 Total Operating Budget Funding $48,657,519 $48,526,114 $45,179,506 ($3,478,013) CAPITAL PROGRAM BUDGET Poplar Harvest Mgmt Services $1,265,000 $1,334,535 $772,000 ($493,000) Facility Plan Engineering Services 70,000 97,547 99,600 29,600 Capacity Mgmt., Operations, and Maint. 16,833 94,454 30,000 13,167 Influent P S/Willakenzie P S/Headworks 145,140 285,186 0 NA Digestion Capacity Increase 8,645,000 16,157,068 14,720,000 6,075,000 WPCF Lagoon Remove/Decommission 4,938,231 4,869,681 390,000 (4,548,231) Sodium Hypochlorite Conversion 1,039,800 1,039,800 0 NA Operations Building Improvements 950,000 14,719,167 13,970,000 13,020,000 Thermal Load Pre-Implementation 210,000 246,092 244,000 34,000 Thermal Load Implementation 1 794,000 730,884 131,000 (663,000) Biosolids Force Main Rehab 0 322,704 0 NA Tertiary Filtration 1 0 0 0 NA Primary Sludge Thickening 0 0 0 NA Asset Mana eg ment: Equipment Replacement Purchases 593,300 755,300 381,000 (212,300) Major Rehab 371,300 570,142 534,000 162,700 Major Capital Outlay 2,900,000 3,100,000 5,670,000 2,770,000 Total Capital Projects $21,938,604 $44,322,560 $36,941,600 $15,002,996 Funding: Equipment Replacement $593,300 $755,300 $381,000 ($212,300) Capital Bond Fund 10,937,849 13,292,107 10,576,394 (361,455) Capital Reserve 10,407,455 30,275,153 25,984,206 15,576,751 Total Capital Projects Funding $21,938,604 $44,322,560 $36,941,600 $15,002,996 Note: *The Change(Increase/Decrease)column compares the adopted FY 16-17 budget to the originally adopted FY 15-16 budget column. Page 15 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Budget and Program Summary OPERATING BUDGET AND RATE HISTORY The graphs on pages 17 and 18 show the regional residential wastewater service costs over a 5- year period, and a 5-year Regional Operating Budget Comparison. Because the Equipment Replacement, Major Infrastructure Rehabilitation and Major Capital Outlay programs are managed in the Eugene Operating Budget, based on the size, type and budget amount of the project these programs are incorporated into either the 5-year Regional Operating Budget Comparison graph or the 5-Year Capital Programs graph on page 18. The Regional Wastewater Capital Improvement Programs graph on page 18 shows the expenditures over the recent five years in the MWMC's Capital Program and including Asset Management projects. A list of capital projects is located in Exhibit 13 on page 45. As shown on the Regional Residential Sanitary Sewer Rate graph on page 17, regional sewer user charges have incrementally increased to meet the revenue requirements necessary to fund facility improvements as indentified in the 2004 MWMC Facilities Plan. This Plan demonstrated the need for a significant capital investment in new and expanded facilities to meet environmental performance requirements and capacity to serve the community through 2025. Although a portion of these capital improvements can be funded through system development charges (SDCs), much of the funding for approximately $196 million(in 2006 dollars) in capital improvements over the 20-year period will come from user charges. Since 2004, this has become the major driver of the MWMC's need to increase sewer user rates on an annual basis. In FY 08-09, there was an 11%user rate increase over FY 07-08 rates applied uniformly across all user classes. This rate increase provided adequate revenue to meet current bond covenants and meet requirements to issue $50.7 million in bonds in FY 08-09. Additionally, in October of 2008, the Commission adopted an interim user rate increase of 7% due to the closure of Hynix Semiconductor. This increase was necessary to issue new revenue bonds and maintain bond covenants for existing bonds. The typical residential monthly wastewater bill increased an additional $1.10 per month and went into effect on December 1, 2008. In FY 09-10, there was an 18%user rate increase over FY 08-09 rates applied uniformly across all user classes. This rate provided for Operations, Administration, Capital programs, reserves and debt service to be funded at sufficient levels to meet FY 09-10 requirements. In FYI 0-11 user rates increased 5% over the prior year rates, and in FY 11-12 and FY 12-13 user rates increased 4% each year, over the prior year rates to provide for Operations, Administration, Capital programs, reserves, debt service, and debt coverage requirements. In FY 13-14 user rates increased 3% over the prior year rates, in FY14-15 user rates increased by 3.5% and in FY 15-16 user rates increased by 2% over the prior year rates to provide for Operations, Administration, Capital programs, reserves, debt service, and debt coverage requirements. The FY 16-17 Budget is based on a 2%user rate increase over the FY 15-16 rates. This increase will provide for Operations, Administration, Capital programs, reserves and debt service, continuing to meet capital and operating requirements and supporting the Commission's Financial Plan policies, as well as financially positioning for future investments in capital assets. Page 16 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Budget and Program Summary The chart below displays the regional component of a residential monthly bill when applying the base and flow rates to 5,000 gallons of wastewater treated, which includes a $0.49 increase effective July 1, 2016. REGIONAL RESIDENTIAL SEWER RATES 5-YEAR COMPARISON 35 05 NOW- 25.00 N 2©.00 d a} N U 1500 A �^ Q 522k2 $23.30 $24.12 $24.60 $25.09 1D.00 5.00 0.00 2013 2014 2016 2078 2017 Page 17 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Budget and Program Summary The graph below displays the Regional Operating Budget amounts for the recent 5-year period. REGIONAL OPERATING BUDGET 5-YEAR COMPARISON $22,000.000 $20.000,000 $18,000,000 $16.682,647 $17,349,272 $17,700,630 516.180.715 $16.352,793 $16.000.000 $14,000.000 $12,aoo,000 $10,000.000 $8,000.000 $6,000.000 $4,000.000 $2.000,000 $0 FY 12-13 FY 13-14 FY 14-16 ;�( 15-16 FY 16-17 The graph below displays the Regional Wastewater Capital Improvement Program Budget amounts for the recent 5-year period. REGIONAL WASTEWATER CAPITAL IMPROVEMENT PROGRAMS 5-YEAR COMPARISON 545.000.000 540,000.000 s36.941.6ac 535,000,000 530,000.000 S24 024.103 525.000.000 521.93$.604 $20.000.000 514.496,514 514.939,647 $15,000,000 51o.o0a.a0a $5.000.000 FY 12-13 FY 13-14 FY 14-15 FY 15-16 FY 16-17 Page 18 FY 16-17 BUDGET AND CIP RESERVE FUNDS Metropolitan Wastewater Management Commission Reserves REGIONAL WASTEWATER PROGRAM RESERVES The RWP maintains reserve funds for the dedicated purpose to sustain stable rates while fully funding operating and capital needs. Commission policies and guidance, which direct the amount of reserves appropriated on an annual basis, are found in the 2005 MWMC Financial Plan. Further details on the FY 16-17 reserves are provided below. OPERATING RESERVES The MWMC Operating Budget includes seven separate reserves: the Working Capital Reserve, Rate Stability Reserve, Rate Stabilization Reserve, Revenue Bond Reserve, State Revolving Fund (SRF) Reserve, Insurance Reserve and the Operating Reserve. Revenues are appropriated across the reserves in accordance with Commission policy and expenditure needs. Each reserve is explained in detail below. WORKING CAPITAL RESERVE The Working Capital Reserve acts as a revolving account that is drawn down and replenished on a monthly basis to provide funds for payment of Springfield Administration and Eugene Operations costs prior to the receipt of user fees from the Springfield Utility Board and Eugene Water and Electric Board. The Working Capital Reserve is set at $900,000 for FY 16-17, $200,000 of which is dedicated to Administration and $700,000 is dedicated to Operations. RATE STABILITY RESERVE The Rate Stability Reserve was established to implement the Commission's objective of maintaining stable rates. It is intended to hold revenues in excess of the current year's operating and capital requirements for use in future years, in order to avoid"rate spikes." The amount budgeted on an annual basis has been set at $2 million, with any additional net revenues being transferred to the capital reserve for future projects. RATE STABILIZATION RESERVE The Rate Stabilization Reserve contains funds to be used at any point in the future when net revenues are insufficient to meet the bond covenant coverage requirement. The Commission shall maintain the Rate Stabilization account as long as bonds are outstanding. In FY 16-17 no additional contribution to this reserve is budgeted and the balance at June 30, 2017, will remain at $2 million. REVENUE BOND RESERVE The Bond Reserve was created to provide assurances to the bond holders that adequate revenue coverage would be provided for future debt service payments associated with the 2006 and 2008 bond issuances. Prior to FY 16-17, and to meet reserve requirements of the 2006 bond issuance the Bond Reserve was budgeted at $4.1 million in the operating fund(as it was funded with user fees) and the Bond Reserve from the 2008 issuance was held in the capital funds budgeted at Page 19 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Reserves $4.0 million. Beginning in FY 16-17, the revenue bond reserve is no longer a requirement due to the restructuring of the revenue bonds and improved financial position. CLEAN WATER STATE REVOVLING FUND (SRF) RESERVE The Clean Water SRF Reserve was established to meet revenue coverage requirements for SRF loans. The SRF Reserve is set at $670,908 for FY 16-17. INSURANCE RESERVE The Insurance Reserve was established to set aside funds equivalent to the insurance deductible amount for property and liability insurance coverage, for losses per occurrence. The Insurance Reserve is set at $515,000 for FY 16-17. OPERATING RESERVE The Operating Reserve is used to account for accumulated operating revenues net of operating expenditures (including other reserves). The Commission's adopted policy provides minimum guidelines to establish the Operating Reserve at approximately 10% of the adopted operating budget. For FY 16-17, the Operating Reserve is budgeted at $4,338,506, which includes the 10% of total Personnel Services, Materials and Services, and Capital Outlay in accordance with Commission policy. EXHIBIT 5 ADOPTED AMENDED ADOPTED BUDGET BUDGET BUDGET OPERATING RESERVES FY 15-16 FY 15-16 FY 16-17 Beginning Balance $16,289,243 $16,158,038 $10,684,205 User Fee Revenue 30,800,000 30,800,000 31,140,000 Septage Revenue 185,000 185,000 185,000 Other Revenue 1,273,800 1,273,800 1,061,110 Interest 85,000 85,000 85,000 Transfer from Improvement SDCs 0 0 2,000,000 Transfer from Reimbursement SDCs 19,276 19,276 20,191 Transfer from Bond Capital Fund 0 450,000 0 Personnel Services (10,102,922) (10,072,730) (10,303,071) Materials&Services (7,196,350) (7,301,804) (7,230,459) Capital Outlay (45,000) (45,000) (163,100) Interfund Transfers (9,150,000) (12,535,000) (11,550,000) Transfer to Bond Debt Service Fund (5,709,628) (6,424,628) 0 Debt Service-SRF Loan (1,454,115) (1,454,115) (1,486,462) Bond Sale Costs 0 (466,000) 0 Debt Service-2016 Revenue Bond 0 0 (4,018,000) Working Capital (900,000) (900,000) (900,000) Insurance Reserve (500,000) (515,000) (515,000) SRF Loan Reserve (670,908) (670,908) (670,908) Rate Stability Reserve (2,000,000) (2,000,000) (2,000,000) Rate Stabilization Reserve (2,000,000) (2,000,000) (2,000,000) Bond Reserve-Revenue 2006 4,100,000 0 0 Operating Reserve $4,823,396 $4,585,929 $4,338,506 Page 20 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Reserves CAPITAL RESERVES The MWMC Capital Budget includes five reserves: the Equipment Replacement Reserve, SDC Reimbursement Reserves, SDC Improvement Reserves, the Capital Reserve and the Bond Reserve. These reserves accumulate revenue to help fund capital projects including equipment replacement and major rehabilitation. They are funded by annual contributions from user rates, SDCs, bond proceeds, and SRF loans. Each reserve is explained in detail below. EQUIPMENT REPLACEMENT RESERVE The Equipment Replacement Reserve accumulates replacement funding for three types of equipment: 1) major/stationary equipment items costing less than $200,000 with useful lives of 20 years or less; 2) fleet vehicles maintained by the Eugene Wastewater Division; and 3) computers that serve the Eugene Wastewater Division. Contributions to the Equipment Replacement Reserve in the FY 16-17 budget total $250,000, additional budget details are provided below. The Equipment Replacement Reserve is intended to accumulate funds necessary to provide for the timely replacement or rehabilitation of equipment, and may also be borrowed against to provide short-term financing of capital improvements. An annual analysis is performed on the Equipment Replacement Reserve. The annual contribution is set so that all projected replacements will be funded over a 20-year period and at the end of the 20-year period, the reserve will contain replacement funds for all equipment projected to be in use at that time. Estimates used in the analysis include interest earnings, inflation rates and useful lives for the equipment. ADOPTED AMENDED ADOPTED BUDGET BUDGET BUDGET EQUIPMENT REPLACEMENT RESERVE FY 15-16 FY 15-16 FY 16-17 Beginning Balance $11,420,690 $11,705,390 $11,837,948 Annual Equipment Contribution 650,000 650,000 250,000 interest 40,000 40,000 40,000 Equipment Purchases 593,300 (755,300) (381,000 Equipment Re lacement Reserve $11,517,390 $11,640,090 $11,746,948 SYSTEM DEVELOPMENT CHARGE (SDC) RESERVES SDCs are required as part of the MWMC iGA. They are connection fees charged to new users to recover the costs related to system capacity, and are limited to funding Capital Programs. The purpose of the SDC Reserves is to collect and account for SDC revenues separately from other revenue sources, in accordance with Oregon statutes. The Commission's SDC structure includes a combination of"Reimbursement" and"Improvement" fee components. Estimated SDC revenues for FY 16-17 are approximately $1.1 million. Budgeted expenditures include $2 million from Improvement Fees to fund portions of the annual debt service payments on the 2006 and 2008 revenue bonds. The projected beginning SDC Reserve balance on July 1, 2016 is $3,504,354. Page 21 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Reserves ADOPTED AMENDED ADOPTED BUDGET BUDGET BUDGET REIMBURSEMENT SDC RESERVE FY 15-16 FY 15-16 FY 16-17 Beginning Balance $490,946 $555,989 $639,013 Reimbursement SDCs Collected 100,000 100,000 100,000 Interest 1,300 1,300 1,200 SDC Compliance Charge 2,500 2,500 2,500 Xfr to Debt Service(Fund 612) (19,276) (19,276) (20,191) Materials&Services 2,000 2,000 21000 Reimbursement SDC Reserve $573,470 $638,513 $720,522 ADOPTED AMENDED ADOPTED BUDGET BUDGET BUDGET IMPROVEMENT SDC RESERVE FY 15-16 FY 15-16 FY 16-17 Beginning Balance $2,953,028 $3,763,341 $2,865,341 Improvement SDCs Collected 1,000,000 1,000,000 1,100,000 Interest 8,000 8,000 7,000 Materials&Services (2,000) (2,000) (2,000) Xfr to Debt Service Fund 612 2,000,000 2,000,000 2,000,000 Improvement SDC Reserve $1,959,028 $2,769,341 $1,970,341 CAPITAL RESERVE The Capital Reserve accumulates funds transferred from the Operating Reserve for the purpose of funding the CIP, Major Capital Outlay and Major Rehabilitation Program costs. The intent is to collect sufficient funds over time to construct a portion of planned capital projects with cash in an appropriate balance with projects that are funded with debt financing. The FY 16-17 Budget includes a contribution from the Operating Reserve of$11.3 million. The beginning balance on July 1, 2016, is projected to be $50,315,693. Additional budget detail on the CIP, Major Capital Outlay and Major Rehabilitation Program reserves is provided below. ADOPTED AMENDED ADOPTED BUDGET BUDGET BUDGET CAPITAL RESERVES FY 15-16 FY 15-16 FY 16-17 Beginning Balance $76,014,033 $77,977,819 $50,315,693 Transfer from Operating Reserve 8,500,000 11,885,000 11,300,000 Interest 60,000 60,000 60,000 Interest Income(Revenue Bond Proceeds) 240,000 240,000 210,000 Transfer to Operating 0 (450,000) 0 Revenue Bond Principal 08 0 (3,550,000) 0 Revenue Bond Principal 06 0 (31,380,000) 0 Funding For Capital Improvement Projects (18,074,004) (39,897,118) (30,356,600) Funding For Major Rehabilitation (371,300) (570,142) (534,000) Funding For Major Capital Outlay (2,900,000) (3,100,000) (5,670,000) Revenue Bond Reserve 2008 (4,000,000) 0 0 Capital Reserve $59,468,729 $11,215,559 $25,325,093 Page 22 FY 16-17 BUDGET AND CIP OPERATING PROGRAMS Metropolitan Wastewater Management Commission Staffing EXHIBIT 6 REGIONAL WASTEWATER PROGRAMS* ORGANIZATION CHART FY 16-17 Metropolitan Wastewater Management Commission CITY OF SPRINGFIELD" CITY OF EUGENE" Environmental Services Division Wastewater Division 77.40 FTE &Finance Department 15.46 FTE Division Director .85 FTE MWMC Executive Off 08 FTE Operations Manager .93 FTE MWMC General Manager .80 FTE Support Services Wastewater Biosolids Beneficial Reuse Regional Pump Industrial 15.32 FTE Treatment Plant Management Site Stations Pretreatment 39.30 FTE 12.62 FTE 1.77 FTE 1.26 FTE 5.35 FTE gcceunting MWMC .88 FTE Administration PIndustrial retreatment 10.45 FTE 2.65 FTE Admin Support Equipment Regulations& Operations Operations Operations 5.36 FTE 16.0 FTE 6.97 FTE .53 FTE Maintenance Enforcement Administration Administration .85 FTE 3.38 FTE Support Suppert FComputer .70 FTE .3 FTE Services Equipment Equipment Equipment Laboratory Bud to Regulations 2.73 FTE Maintenance Maintenance Maintenance Facility ge Maintenance 1.27 FTE Financial & 10.3 HE 2.57 FTE .59 FTE MaEnforcement Stores .41 FTE 1.nag15ement FTE 2.95 FTE 2.67 FTE Facility Facility Facility Maintenance Maintenance Maintenance Sampling Property/ Env Data .70 FTE 8.51 FTE 1.98 FTE .34 FTE Risk Mgmt Analyst .20 FTE 65 FTE Laboratory Laboratory Laboratory Special Safety,Env& 2.65 FTE .66 FTE .15 FTE Prejects/ Heal[h Planning Supervisor 1.75 FTE .89 FTE Sampling Sampling Sampling Customer .74 FTE .44 FTE .16 FTE Service Management .55 FTE Analyst .89 FTE PW Maint Public 1.10 FTE Education Project Mgr. to FTE .93 FTE construction User Fee Management Support 5.10 FTE 1.0 FTE PW Financial Services .20 FTE Notes: * Full-Time Equivalent(FTE)figures represent portions of Eugene and Springfield staff funded by regional wastewater funds. ** The chart represents groups of staff dedicated to program areas rather than specific positions. Page 23 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Staffing EXHIBIT 7 REGIONAL WASTEWATER PROGRAM POSITION SUMMARY BUDGET BUDGET BUDGET FTE CLASSIFICATION FY 14-15 FY 15-16 FY 16-17 CHANGE SPRINGFIELD ENVIRONMENTAL SERVICES & FINANCE Accountant 0.80 0.80 0.80 - Accounting Supervisor 0.08 0.08 0.08 - Administrative Specialist 1.05 1.85 1.85 - Assistant Project Coordinator 0.90 0.90 0.90 - Civil Engineer/Design& Construction Coordinator 3.00 3.00 3.00 - Construction Inspector 1.00 0.00 0.00 - Development and Public Works Deputy Director 0.08 0.08 0.00 (0.08) Development and Public Works Director 0.08 0.08 0.08 - Engineering Assistant 1.60 0.80 0.80 - Environmental Management Analyst 0.00 0.65 0.65 - Environmental Services Program Manager 0.55 1.35 0.80 (0.55) Environmental Services Program Coordinator 1.00 1.00 0.00 (1.00) Environmental Services Supervisor 0.00 0.00 0.95 0.95 Environmental Services Technician 1.50 1.50 2.00 0.50 ESD Manager/MWMC General Manager 0.75 0.80 0.80 - Managing Civil Engineer 2.00 2.00 1.75 (0.25) Public Information & Education Specialist 1.00 1.00 1.00 - Senior Finance Analyst 0.50 0.00 0.00 - TOTAL SPRINGFIELD 15.89 15.89 15.46 (0.43) Page 24 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Staffing EXHIBIT 7 (Continued) REGIONAL WASTEWATER PROGRAM POSITION SUMMARY BUDGET BUDGET BUDGET FTE CLASSIFICATION FY 14-15 FY 15-16 FY 16-17 CHANGE EUGENE WASTEWATER DIVISION & OTHER PW Administrative Specialist 1.78 1.78 1.78 - Administrative Specialist, Sr 0.95 0.95 0.95 - Application Support Technician 0.95 0.95 0.95 - Application Systems Analyst 1.78 1.78 1.78 - Custodian 1.00 1.00 1.00 - Finance &Admin Manager 0.89 0.89 0.89 - Electrician 1 3.28 3.28 3.28 - Engineering Associate 0.35 0.35 0.35 - Maintenance Worker 12.29 12.29 12.29 - Management Analyst 4.25 4.25 5.14 0.89 Office Supervisor, Sr 0.89 0.89 0.00 (0.89) Parts and Supply Specialist 1.78 1.78 1.78 - PW Financial Services Manager 0.20 0.20 0.20 - Utility Billing Coordinator 1.00 1.00 1.00 - Wastewater Lab Assistant 0.82 0.82 0.82 - Wastewater Division Director 0.85 0.85 0.85 - Wastewater Instrument Electrician 1.00 1.00 1.00 - Wastewater Plant Operations Manager 0.93 0.93 0.93 - Wastewater Operations Supervisor 2.00 2.00 2.00 - Wastewater Plant Maintenance Supervisor 2.88 2.88 2.88 - Wastewater Pretreatment& Lab Supervisor 0.82 0.82 0.82 - Wastewater Technician 36.71 36.71 36.71 - TOTAL 77.40 77.40 77.40 - GRAND TOTAL 93.23 93.29 92.86 (0.43) Page 25 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Springfield Budget Detail CITY OF SPRINGFIELD REGIONAL WASTEWATER PROGRAM RESPONSIBILITIES The City of Springfield manages administration services for the RWP under the Intergovernmental Program Responsibilities ■ Administration&Management Agreement for the Metropolitan Wastewater ■ Financial Planning&Management Management Commission (MWMC). The programs ■ Long-Range Capital Project Planning maintained by Springfield to support the RWP are ■ Project and Construction Management ■ Coordination between the Commission and summarized below and are followed by Springfield's governing bodies regional wastewater budget summaries. Activities, and ■ Coordination and Management of: therefore program budgets, for the MWMC Risk Management&Legal Services Public Policy Issues administration vary from year to year depending upon Regulatory and Permit Compliance Issues the mayor construction projects and special initiatives ■ Public Information,Education and Outreach underway. A list of the capital projects Springfield ■ Industrial Pretreatment Source Control ■ Customer Service staff will support in FY 16-17 is provided in Exhibit 12 on page 41. MWMC ADMINISTRATION The Springfield Environmental Services Division (ESD) and Finance Department provide ongoing support and management services for the MWMC. The Development and Public Works (DPW) Director serves as the MWMC Executive Officer. The Environmental Services Manager serves as the General Manager. Springfield provides the following administration functions: financial planning management, accounting and financial reporting; risk management and legal services; coordination and management of public policy; coordination and management of regulatory and permit compliance issues; coordination between the Commission and the governing bodies; long-range capital project planning and construction management; coordination of public information, education, and citizen involvement programs; sewer user customer set-vice; and coordination and development of regional budgets, rate proposals, and revenue projections. INDUSTRIAL PRETREATMENT (SOURCE CONTROL) PROGRAM The Industrial Pretreatment Program is a regional activity implemented jointly by the Cities of Eugene and Springfield. The Industrial Pretreatment section of the ESD is charged with administering the program for the regulation and oversight of wastewater discharged to the sanitary collection system by industries in Springfield. This section is responsible for ensuring that these wastes do not damage the collection system, interfere with wastewater treatment processes, result in the pass-through of harmful pollutants to treated effluent or biosolids, or threaten worker health or safety. This responsibility is fulfilled, in part, by the use of a permit system for industrial dischargers. This permit system, common to both Eugene and Springfield, implements necessary limitations on waste characteristics and establishes inspection, monitoring, and reporting requirements for documenting waste quality and quantity controls. The industrial Pretreatment section is also responsible for locating new industrial discharges in Springfield and evaluating the impact of those discharges on the regional WPCF. As of February 2016, there were 19 significant industrial users under permit in Springfield. The Industrial Pretreatment Program also addresses Page 26 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Springfield Budget Detail the wastewater discharges of some commercial/industrial businesses through the development and implementation of Pollution Management Practices. Pretreatment program staff also coordinates pollution prevention activities in cooperation with the Pollution Prevention Coalition of Lane County. ACCOUNTING AND FINANCIAL REPORTING Accounting and financial reporting services for the RWP are provided by the Accounting section in the Springfield Finance Department, in coordination with ESD. Springfield Accounting staff maintains grant and contract accounting systems, as well as compliance with all local, state and federal accounting and reporting requirements for MWMC finances. This section also assists ESD with preparation of the MWMC budget, capital financing documents, sewer user rates, and financial policies and procedures. PROGRAMS AND SIGNIFICANT SERVICE/EXPENDITURE CHANGES In FY 16-17, the City of Springfield will support the following major regional initiatives in addition to ongoing Commission administration and industrial pretreatment activities: ■ Continue public information, education and outreach activities focused on the MWMC's Key Outcomes and Communication Plan objectives to increase awareness of the MWMC's ongoing efforts in maintaining water quality and a sustainable environment. ■ Implement Capital Financing strategies necessary to meet current debt obligations, prepare for additional debt financing, and ensure sufficient revenues in accordance with the 2005 MWMC Financial Plan. ■ Continue implementation of the 2004 MWMC Facilities Plan and 2014 Partial Facilities Plan Update to meet all regulatory requirements and capacity needs. Considering emerging environmental regulations that may impact the operation of the WPCF. ■ Implement annual reporting for the local Capacity Management Operations and Maintenance (CMOM)programs, focusing on continued inflow and infiltration reductions, including flow monitoring, data tracking, regional coordination, and exploring methods of addressing private laterals. ■ Protect the Regional Wastewater Program(RWP) interests through participation in Association of Clean Water Agencies activities. ■ Coordinate temperature Total Maximum Daily Load (TMDL) compliance through continued development and implementation of the thermal load mitigation strategy, including but not limited to a recycled water program. ■ Continue participation with the Association of Clean Water Agencies and the Department of Environmental Quality on regulatory permitting strategies and the development of water quality trading rules. Page 27 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Springfield Budget Detail SIGNIFICANT BUDGET CHANGES FOR FY 16-17 The budget for Springfield Personnel Services, Materials and Services, and Capital Outlay for FY 16-17 totals $3,800,923 representing an overall decrease of$32,478 or 0.8%below the adopted FY 15-16 budget, as displayed in Exhibit 8 on page 29. Personnel Services Personnel Services totaling $1,724,832 represents a FY 16-17 decrease of$30,299 or 1.7% over the originally adopted FY 15-16 budget. The major changes are summarized below: Staffing Level- 15.46 full-time equivalent (FTE) staff, a decrease of 0.43 FTE Staffing decreased in the FY 16-17 budget when compared to FY 15-16 based on a reorganization of staff allocated to the regional programs. Regular Wages and Overtime- $1,153,170, decrease of$17,895 or 1.5% Salaries are based upon the negotiated management/labor contracts as approved by the Springfield City Council, and staffing levels. Health Insurance-$308,832, a decrease of$6,792 or 2.2% Health Insurance includes employee related medical and dental insurance. PERS/OPSRP Contributions-$155,768, an increase of$2,416 or 1.5% Projected employee retirement contribution for FY 16-17. Materials and Services The Materials and Services budget total is $2,076,091 in FY 16-17,representing a slight decrease of$2,179 or 0.1%below the adopted FY 15-16 budget. The major changes are summarized below: Property and Liability Insurance - $370,000, a decrease of$70,000 or 15.9% The $70,000 decrease is in comparison to the orignially adopted FY 15-16 budget. The budget decrease reflects cost savings in Agent of Record services which are fee-based, a change in liability insurance providers, and an increase in the property insurance deductible amount resulting in a reduced insurance premium cost. Contractual Services—$133,500, a net decrease of$7,500 or 5.3% The $7,500 decrease was due to completion of the educational video series in FY 15-16, which was a one-time expense. Internal Charges - $165,004, a increase of$18,702 or 12.8% The $18,702 increase is primarily related to the regional portion of the City of Springfield facility rents for use of the City Hall building, and a portion of the City of Springfield liability, auto and risk insurance. Page 28 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Springfield Budget Detail Computer Software & License - $32,650, a net decrease of$11,500 or 26.0% The $11,500 decrease is due to entering into a three year contract in FY 15-16 for ongoing service and maintenance for the capital project management system, Constructware. EXHIBIT 8 SPRINGFIELD ADMINISTRATION PROGRAM ADOPTED FY 16-17 BUDGET SUMMARY ADOPTED AMENDED ADOPTED ACTUAL BUDGET BUDGET BUDGET CHANGE FY 14-15 FY 15-16 FY 15-16 FY 16-17 INCR/(DECR) Personnel Services $1,466,567 $1,755,131 $1,724,939 $1,724,832 ($30,299) -1.7% Materials&Services 1,856,849 2,078,270 2,063,070 2,076,091 (2,179) -0.1% Capital Outlay 0 0 0 0 0 0% Budget Summary $3,323,416 I■ $3,833,401 $3,788,009 $3,800,923 ($32,478) -0.8% 5-YEAR MWMC BUDGET COMPARISON SPRINGFIELD ADMINISTRATION $5,000,000 $4,500,000 958670, $3, $4,000,000 $3,636,762 $3,911,289 $3,833,401 $3,800,923 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 FY 12-13 FY 13-14 FY 14-15 FY 15-16 FY 16-17 Note: * Change column compares the adopted FY 16-17 Budget to the adopted FY 15-16 Budget. Page 29 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Springfield Budget Detail EXHIBIT 9 SPRINGFIELD ADMINISTRATION LINE ITEM BUDGET SUMMARY ADOPTER AMENDED F ADOPTED ACTUAL BUDGET BUDGET BUDGET CHANGE FY 14-15 FY 15-16 FY 15-16 FY 16-17 INCR/ DECR PERSONNEL SERVICES Regular Wages $997,633 $1,163,349 $1,163,349 $1,149,666 ($13,683) -1.2% Overtime 42 7,716 7,716 3,504 (4,212) -54.6% Employee Benefits 92,487 110,258 110,258 J107,062 (3,196) -2.9% PERS/OPSRP 134,022 158,184 158,184 155,768 (2,416) -1.5% Medical/Dental Insurance 242,383 315,624 285,432 308,832 (6,792) -2.2% Total Personnel Services $1,466,567 $1,755,131 $1,724,939 $1,724,832 ($30,299) -1.7% FTE 16.68 15.89 15.89 is 15.46 (0.43) -2.7% MATERIALS&SERVICES Billing&Collection Expense $594,701 $577,000 $577,000 $630,000 $53,000 9.2% Property&Liability Insurance 373,780 440,000 425,000 370,000 (70,000) -15.9% Contractual Services 47,029 141,000 141,000 133,500 (7,500) -5.3% Attorney Fees and Legal Expense 72,192 185,505 185,505 188,505 3,000 1.6% WPCF/NPDES Permits 118,466 126,800 126,600 136,000 9,200 7.3% Materials&Program Expense 42,272 87,795 87,795 87,3214 (474) -0.5% Computer Software&Licenses 78,311 44,150 44,150 32,650 (11,500) -26.0% Employee Development 5,320 19,000 19,000 19,275 275 1.4% Travel&Meeting Expense 12,283 21,100 21,100 22,200 1,100 5.2% Internal Charges 181,670 146,302 146,302 165,004 18,702 12.8% Indirect Costs 330,824 289,618 289,618 291,636 2,018 0.7% Total Materials&Services $1,856,849 $2,078,270 $2,063,070 $2,076,091 ($2,179) -0.1% CAPITAL OUTLAY Total Capital Outlay 0 0 0 0 0 0.0% TOTAL $3,323,416 $3,833,401 $3,788,009 $3,800,923 ($32,478) -0.8% Page 30 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Eugene Budget Detail CITY OF EUGENE REGIONAL WASTEWATER PROGRAM RESPONSIBILITIES The Wastewater Division for the City of Eugene manages all regional wastewater pollution control facilities serving the Program Responsibilities areas inside the Eugene and Springfield Urban Growth ■ administration&Management Boundaries under the Intergovernmental Agreement for the ■ Biosolids Management Metropolitan Wastewater Management Commission ■ Facility operations (MWMC). These regional facilities include the ■ Facility Maintenance Eugene/Springfield Regional Water Pollution Control ' Industrial Source Control Facility (WPCF), the Biosolids Management Facility, the ' Laboratory Services Beneficial Reuse Site, the Biocycle Farm site, and regional ' Management information services wastewater pumping stations and transmission sewers. • Project Management In support of the water pollution control program, the Division provides technical services for wastewater treatment, management of equipment replacement and infrastructure rehabilitation, biosolids treatment and recycling, regional laboratory services, and an industrial source control and pretreatment program in conjunction with City of Springfield staff. ADMINISTRATIVE AND MANAGEMENT SERVICES Administrative Services provides management, administrative, and office support to the Wastewater Division. This support includes the general planning, directing, and managing of the activities of the Division; development and coordination of the budget; administration of personnel records; and processing of payroll, accounts payable, and accounts receivable. This section also provides tracking and monitoring of all assets for the regional wastewater treatment facilities and clerical support for reception, telephone services, and other miscellaneous needs. The Administrative services include oversight and coordination of the Division's Environmental Management System, safety, and training programs, and a stores unit that purchases and stocks parts and supplies and assists with professional services contracting. Another area this program administers is the coordination of local and regional billing and rate activities. REGIONAL WASTEWATER TREATMENT FACILITY OPERATIONS The Wastewater Division operates the WPCF to treat domestic and industrial liquid wastes to achieve an effluent quality that protects and sustains the beneficial uses of the Willamette River. The Operations section optimizes wastewater treatment processes to ensure effluent quality requirements are met in an efficient and cost effective manner. In addition, the Operations section provides continuous monitoring of the alarm functions for all plant processes, regional and local pump stations, Biosolids Management Facility, and the Beneficial Reuse Site. MAINTENANCE The mechanical, electrical, and facilities maintenance sections of the Wastewater Division are responsible for preservation of the multi-million dollar investment in the equipment and infrastructure of the WPCF, local and regional pump stations, pressure sewers, as well as the Biosolids Management Facility. These sections provide a preventative maintenance program to Page 31 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Eugene Budget Detail maximize equipment life and reliability; a corrective maintenance program for repairing unanticipated equipment failures; and a facility maintenance program to maintain the buildings, treatment structures, and grounds. BIOSOLIDS MANAGEMENT The Residuals Management section of the Wastewater Division manages the handling and beneficial reuse of the biological solids (biosolids)produced as a result of the activated sludge treatment of wastewater. This section operates the Biosolids Management Facility (BMF) and the Biocycle Farm located at Awbrey Lane in Eugene. The biosolids are treated using anaerobic digestion, stored in facultative lagoons (which provide some additional treatment benefits), and then processed through a belt filter press and air-dried to reduce the water content and facilitate transport. The dried material is ultimately applied to agricultural land. Biosolids are also irrigated on poplar trees at the Biocycle Farm as a beneficial nutrient and soil conditioner. This section also operates the Beneficial Reuse Site which formerly served to treat wastewater from food processing operation. INDUSTRIAL SOURCE CONTROL (Pretreatment) and ANALYTICAL SERVICES, SAMPLING TEAM The pretreatment program is a regional activity implemented jointly by the cities of Eugene and Springfield. The Industrial Source Control group of the Wastewater Division is charged with administering the pretreatment program for the regulation and oversight of commercial and industrial wastewaters discharged to the wastewater collection system by fixed-site industries in Eugene and by mobile waste haulers in the Eugene and Springfield areas. This group is also responsible for ensuring that these wastes do not damage the collection system, interfere with wastewater treatment processes, result in the pass-through of harmful pollutants to treated effluent or biosolids, or threaten worker health or safety. This responsibility is fulfilled through the use of a permit system for industrial dischargers. This permit system, common to both Eugene and Springfield, implements necessary limitations on waste characteristics and establishes inspection, monitoring, and reporting requirements for documenting waste quality and quantity controls. The staff is also responsible for locating new industrial discharges in Eugene and evaluating the impact of new non-residential discharges on the WPCF. During the calendar year 2015 there were 21 significant industrial users under permit in Eugene. The section also has responsibilities related to environmental spill response activities. The Analytical Services group provides necessary analytical work in support of wastewater treatment, residuals management, industrial source control, stormwater monitoring, and special project activities of the Wastewater Division. The laboratory's services include sample handling and analyses of influent sewage, treated wastewater, biosolids, industrial wastes, stormwater, and groundwater. Information from the laboratory is used to make treatment process control decisions, document compliance with regulatory requirements, demonstrate environmental protection, and ensure worker health and safety. The Sampling Team is responsible for the sampling activities related to regional wastewater program functions. These include the Eugene pretreatment program, wastewater treatment Page 32 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Eugene Budget Detail process control, effluent and ambient water quality, groundwater quality, facultative sludge lagoons, and stormwater samples. The Division's Environmental Data Analyst evaluates and reports on the sampling data for various programs. MANAGEMENT INFORMATION SERVICES (MIS) The MIS section provides services for electronic data gathering, analysis, and reporting as necessary in compliance with regulatory requirements and management functions. This section also maintains the electronic communication linkages with the City of Eugene and supplies technical expertise and assistance in the selection, operation, and modification of computer systems (hardware and software) within the Division. PROJECT MANAGEMENT Management of wastewater system improvements and ongoing developments is carried out by the Project Management staff. Activities include coordination of CIP activities with the City of Springfield staff,problem-solving and action recommendations, project management, technical research, coordination of activities related to renewal of the National Pollutant Discharge Elimination System(NPDES) wastewater discharge permit, computer-aided design and electronic storage of design drawings, and planning of projects to anticipate and prepare for new regulatory and operational requirements. The Project Management staff develops Request for Proposals and Request for Quotes, coordinates special project activities between work sections, and coordinates the procurement of building permits as necessary in support of project activities. PROGRAMS AND SIGNIFICANT SERVICE/EXPENDITURE CHANGES In FY 16-17, Eugene staff will support the following major regional initiatives in addition to ongoing operational activities. ■ Manage the O&M responsibilities of the NPDES permits for the wastewater discharge and treatment plant stormwater programs and the Lane Regional Air Protection Agency (LRAPA) air emissions permit for the regional wastewater treatment plant. ■ Continue to evaluate impacts of regulatory actions (such as the federal sanitary sewer overflows (SSO) and blending policy development, Willamette River TMDLs implementation, and any newly adopted state water quality standards) upon operational responsibilities. ■ Provide technical input and O&M assessments related to proposed initiatives for addressing TMDL compliance, greenhouse gas emission controls, and renewable energy objectives. ■ Complete scheduled major rehabilitation, equipment replacement, and other capital projects in an efficient and timely manner. ■ Work cooperatively on the CIP elements and effectively integrate capital project work with ongoing O&M activities, with emphasis on maintaining an effective CIP management and coordination program with Springfield. Page 33 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Eugene Budget Detail ■ Manage the Operations & Maintenance (O&M) aspects of the Biocycle Farm, continuing biosolids irrigation practices and poplar tree management. SIGNIFICANT CHANGES IN THE O &M BUDGET FOR FY 16-17 The budget for Operations and Maintenance of the regional wastewater treatment facilities (personnel,materials and services, and capital outlay) for FY 16-17 totals $13,899,707. The amount represents an increase of$383,636 or 2.8% from the FY 15-16 budget. The largest cost centers for the budget are personnel costs, contractual services,utilities, materials,maintenance, fleet, and chemicals. Details of significant items and changes for the FY 16-17 Operations and Maintenance budget as compared to the FY 15-16 budget include: Personnel Services Personnel Services totaling $8,578,239 represents a FY 16-17 increase of$230,448 or 2.8%. The major changes are in the following budget categories: Staffing The FY 16-17 budget requests no change in staffing level from the FY 15-16 budget. Staffing requests remains at 77.40 Full Time Equivalent(FTE). Regular Wages-$5,165,677, an increase of$142,573 or 2.8% Salaries are based upon the negotiated management/labor contracts between the City of Eugene and the local union(AFSCME). Employee Benefits-$1,811,828, an increase of$35,815 or 2.0% The employee benefits consist mainly of PERS/OPSRP retirement system costs and Medicare contributions. Health Insurance-$1,454,825, an increase of$68,972 or 5.0% The increase is based on group claims experience and cost projections. Costs are calculated based on the number of employees. Materials and Services The Materials and Services budget totaling $5,158,368 represents an FY 16-17 increase of $35,088 or 0.7%. The major changes are in the following budget categories: Indirect Charges - $1,020,000, an increase of$18,850 or 1.9% This expenditure category includes costs for payroll processing, human resources services, information technology services, and budget and financial services provided by the City of Eugene to the Wastewater Division. Contractual Services-$895,941, a net increase of$100,706 or 12.7% This account includes services for outside lab testing,USGS water monitoring, seasonal temporary help, distributive control system(DCS)upgrade, and grit waste disposal. Temporary help budget is $395,250,professional services are $158,796, and trade and other contractual services total $341,895. Page 34 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Eugene Budget Detail Materials & Program Expense-$555,442, a net decrease of$102,662 or 15.6% The Materials &Program Expense account includes a wide variety of operational items such as telephone charges, training costs, tools, small equipment, safety supplies, and inventory. The FY 16-17 budget reduction is due in part to one-time expenditures for flow monitoring being made in the FY 15-16 budget and not budgeted in FY 16-17. A reduction for tools and minor equipment has also been made to align with recent trends of lower expenditures in those areas. Fleet-$426,986, a decrease of$12,705 or 2.9% Fleet services are managed centrally by Eugene Fleet Services. Reduction in fuel costs are reflected in lower fleet charges. Eugene Capital Outlay Expense- $163,100, a net increase of$118,100 Eugene Capital Outlay budget this year will be used to purchase a water truck for the Biosolids Management Facility which will be used for efficient dust control, fire protection and clean up capabilities at the BMF and at biosolids application sites. A one-ton pickup outfitted with a service body is budgeted for maintenance staff use. EXHIBIT 10 EUGENE-OPERATIONS AND MAINTENANCE PROGRAM ADOPTED FY 16-17 BUDGET SUMMARY ADOPTED AMENDED ADOPTED ACTUAL BUDGET BUDGET BUDGET CHANGE FY 14-15 FY 15-16 FY 15-16 FY 16-17 INCR/(DECR) Personnel Services $7,522,408 $8,347,791 $8,347,791 $8,578,239 $230,448 2.8% Materials& Services 4,173,222 5,123,280 5,243,734 5,158,368 35,088 0.7% Capital Outlay 26,865 45,000 45,000 163,100 118,100 262.4% Budget Summary $11,722,495 $13,516,071 $13,636,525 $13,899,707 $383,636 2.8% 5-YEAR MWMC BUDGET COMPARISON $16,000,000 EUGENE -OPERATIONS AND MAINTENANCE $14,000,000 $13,516,071 $13,899,707 $12,509,757 $12,716,031 $12,771,358 $12,000,000 - $10,000,000 — $8,000,000 $6,000,000 $4,000,000 - $2,000,000 AL $0 FY 12-13 FY 13-14 FY 14-15 FY 15-16 FY 16-17 NOTE: Does not include Major or Equipment Replacement Page 35 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Eugene Budget Detail EXHIBIT 11 EUGENE-OPERATIONS&MAINTENANCE LINE ITEM BUDGET SUMMARY ADOPTED AMENDED ADOPTED ACTUAL BUDGET BUDGET BUDGET CHANGE FY 14-15 FY 15-16 FY 15-16 FY 16-17 INCR/(DECR) PERSONNEL SERVICES Regular Wages $4,601,145 $5,023,104 $5,023,104 $5,165,677 $142,573 2.8% Overtime 45,686 70,975 70,975 40,000 (30,975) -43.6% Employee Benefits 1,538,942 1,776,013 1,776,013 1,811,828 35,815 2.0% Workers' Comp/Unemploy Ins 93,005 91,846 91,846 105,909 14,063 15.3% Health Insurance 1,243,630 1,385,853 1,385,853 1,454,825 68,972 5.0% Total Personnel Services $7,522,408 $8,347,791 $8,347,791 $8,578,239 $230,448 2.8% FTE 77.40 77.40 77.40 77.40 0.00 0.0% MATERIALS &SERVICES & Utilities $752,583 $754,682 $754,682 $775,615 $20,933 2.8% Fleet Operating Charges 422,336 439,691 439,691 426,986 (12,705) -2.9% Maintenance-Equip&Facilities 211,579 354,538 354,538 386,497 31,959 9.0% Contractual Services 365,540 795,235 795,235 895,941 100,706 12.7% Materials&Program Expense 568,926 658,104 778,558 555,442 (102,662) -15.6% Chemicals 254,920 330,152 330,152 326,940 (3,212) -1.0% Parts&Components 352,615 357,656 357,656 353,096 (4,560) -1.3% Risk Insurance-Employee Liability 49,174 51,527 51,527 51,572 45 0.1% Laboratory Equipment& Supplies 67,669 93,000 93,000 89,600 (3,400) -3.7% Computer Equip, Supplies, Maint 254,951 287,545 287,545 276,679 (10,866) -3.8% Indirects 872,928 1,001,150 1,001,150 1,020,000 18,850 1.9% Total Materials& Services $4,173,222 $5,123,280 $5,243,734 $5,158,368 $35,088 0.7% CAPITAL OUTLAY EW Motorized Vehicles $26,865 $45,000 $45,000 $163,100 $118,100 262.4% Capital Outlay-Other 0 0 0 0 0 0.0% Total Capital Outlay $26,865 $45,000 $45,000 $163,100 $118,100 262.4% TOTAL $11,722,494 $13,516,071 $13,636,525 $13,899,707 $383,636 2.8% Page 36 FY 16-17 BUDGET AND CIP CAPITAL PROGRAM Metropolitan Wastewater Management Commission Capital Improvement Program REGIONAL WASTEWATER PROGRAM CAPITAL PROGRAMS Overview The Regional Wastewater Program(RWP) includes two components: the Capital Improvement Program (CIP) and the Asset Management Capital Program (AMCP). The FY 16-17 CIP Budget, the FY 16-17 AMCP Budget, and the associated 5-Year Capital Plan are based on the 2004 MWMC Facilities Plan (2004 FP) and the Partial Facilities Plan Update dated June 2014. The 2004 FP was approved by the MWMC, the governing bodies of the City of Eugene, the City of Springfield, Lane County, and the Oregon Department of Environmental Quality (DEQ) in 2004. The 2004 FP and its 20-year capital project list was the result of a comprehensive evaluation of the regional wastewater treatment facilities serving the Eugene-Springfield metropolitan area. The 2004 FP built on previous targeted studies, including the 1997 Master Plan, 1997 Biosolids Management Plan, 2001 Wet Weather Flow Management Plan(WWFMP), and the 2003 Management Plan for a dedicated biosolids land application site. The 2004 FP was intended to meet changing regulatory and wet weather flow requirements and to serve the community's wastewater capacity and treatment needs through 2025. Accordingly, the 2004 FP established the CIP project list to provide necessary facility enhancements and expansions over the planning period. The CIP is administered by the City of Springfield for the MWMC. The AMCP implements the projects and activities necessary to maintain functionality, lifespan, and effectiveness of the MWMC facility assets on an ongoing basis. The AMCP is administered by the City of Eugene for the MWMC and consists of three sub-categories: ■ Equipment Replacement Program ■ Major Rehabilitation Program ■ Major Capital Outlay The MWMC has established these capital programs to achieve the following RWP objectives: • Compliance with applicable local, state, and federal laws and regulations ■ Protection of the health and safety of people and property from exposure to hazardous conditions such as untreated or inadequately treated wastewater ■ Provision of adequate capacity to facilitate community growth in the Eugene-Springfield metropolitan area consistent with adopted land use plans ■ Construction, operation, and management of the MWMC facilities in a manner that is as cost-effective, efficient, and affordable to the community as possible in the short and long term ■ Implementation of the Citizens Advisory Committee recommendations, which represent diverse community interests, values and involvement, and that have been adopted by the Commission as the MWMC's plans and policies ■ Mitigation of potential negative impacts of the MWMC facilities on adjacent uses and surrounding neighborhoods (ensuring that the MWMC facilities are "good neighbors" as judged by the community) Page 37 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Capital Improvement Program Capital Program Funding and Financial Planning Methods and Policies This annual budget document presents the FY 16-17 CIP Budget, the FY 16-17 AMCP Budget, and 5-Year Capital Plan which includes the CIP and AMCP Capital Plan. The MWMC CIP financial planning and funding methods are in accordance with the financial management policies put forth in the MWMC 2005 Financial Management Plan. Each of the two RWP capital programs relies on funding mechanisms to achieve RWP objectives described above. The CIP is funded primarily through proceeds from revenue bond sales, system development charges, and transfers from the Operating Fund to Capital Reserves. The AMCP is funded through wastewater user fees. In addition to revenue bond sales, financing for qualified CIP projects was also secured through the State of Oregon Department of Environmental Quality (DEQ)'s Clean Water State Revolving Fund (CWSRF) loan program. From 2008-2010, The MWMC secured several CWSRF loan agreements totalling $20.8 million. These 20-year loans provide the MWMC below-market interest rates, along with additional financial benefits, including: ■ $450,000 in"Sponsorship" funding allocated for riparian shade tree planting projects to help address the MWMC's pending thermal load obligations. The financing of these watershed-based projects is made available through the CWSRF program Sponsorship Option, which provides funding to the borrower to address nonpoint source water quality solutions through a reduced interest rate. The interest rate reduction allows the MWMC to invest in watershed improvements using money that would have otherwise been paid as interest on the loan. ■ $4 million funded through the American Reinvestment and Recovery Act(ARRA, or "Stimulus"). The ARRA funding provided 50% of the loan in principal forgiveness (not requiring repayment), and the remaining 50% of principal payment bearing 0% interest. This resulted in $2 million of net revenue to the CIP in addition to interest savings. The RWP's operating fund is maintained to pay for operations, administration, debt setvice, equipment replacement contributions and capital contributions associated with the RWP. The operating fund derives the majority of its revenue from regional wastewater user fees that are collected by the City of Eugene and City of Springfield from their respective customers. In accordance with the MWMC 2005 Financial Plan, funds remaining in excess of budgeted operational expenditures can be transferred from the Operating Fund to the Capital Reserve fund. The Capital Reserve accumulates revenue to help fund capital projects, including major rehabilitation, to reduce the amount of borrowing necessary to finance capital projects. The AMCP consists of three programs managed by the City of Eugene and funded through regional wastewater user fees: The Equipment Replacement Program, which funds replacement of equipment valued at or over$10,000 but less than $200,000; The Major Rehabilitation Program, which funds rehabilitation of the MWMC infrastructure such as roof replacements, structure coatings, etc.; and the Major Capital Outlay Program for capital items (new or replacement)with costs greater than $200,000. The MWMC assets are tracked throughout their Page 38 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Capital Improvement Program lifecycle using asset management tracking software. Based on this information, the three AMCP program annual budgets are established and projected for the 5-Year Capital Plan. For planning purposes, the MWMC must consider market changes that drive capital project expenditures. Specifically, the MWMC capital plan reflects projected price changes over time that affect the cost of materials and services. Until about 2003, the 20-city average Engineering News Record Construction Cost Index (ENRCCI) served as a good predictor for future inflation and was used for projecting the MWMC's construction costs. Accordingly, construction cost projections considered in the 2004 FP were based on January 2004, 20-city average ENRCCI. However, in the period 2004 through 2008, construction inflation accelerated nationally with local construction cost inflation accelerating even faster than the national average. City of Springfield staff identified this trend in 2005 and subsequently modified their inflationary projection methodology accordingly. In early 2006, the MWMC hired the consulting firm CH2M to perform a comprehensive update of project cost estimates. Following the 2006 update, the RWP's CIP assumed a general price increase of 5%per-year over the planning period. However, the MWMC continues to monitor inflationary trends to inform our forecasting of capital improvement costs. Accordingly, based on historical inflationary rates from 2006 through 2015, capital project budgets now reflect a 4% annual inflationary factor in the FY 16-17 Budget and 5-year Capital Plan. Regional Wastewater Capital Program Status and Budget CIP Project Status and Budget The FY 16-17 CIP Budget is comprised of the individual budgets for each of the active (carryover) or starting (new)projects in the first year of the 5-Year Capital Plan. The total of these FY 16-17 project budgets is $30,356,600. Each capital project represented in the FY 16-17 Budget is described in detail in a CIP project sheet that can be found at the end of this document. Each project sheet provides a description of the project, the project's purpose and driver(the reason for the project), the funding schedule for the project, and the project's expected final cost and cash flow. For those projects that are in progress, a short status report is included on the project sheet. Page 39 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Capital Improvement Program Completed Capital Projects In FY 15-16, the following capital projects are projected to be completed and closed out. No CIP project sheets are included for these projects because there is no expected carryover of project funds to FY 16-17. ■ Repair/Replacement of Biosolids Force Main ■ Sodium Hypochlorite Conversion ■ Influent Pumping and Headworks Expansion Carryover Capital Projects All or a portion of remaining funding for active capital projects in FY 15-16 is carried forward to the FY 16-17 Budget. The on-going carryover projects are: ■ Increase Digestion Capacity ■ Operations & Maintenance Building improvements ■ Poplar Harvest Management Services ■ WPCF Lagoon Removal/Decommissioning ■ Thermal Load Mitigation: Pre-Implementation ■ Thermal Load Mitigation: Implementation 1 ■ Facilities Plan Engineering Services ■ Capacity Management Operations and Maintenance (CMOM) ■ Biogas Cogeneration (a Major Capital Outlay project) Overall, the budgeting for these projects follows, and is consistent with, the 2006 CH2M estimated cost of the listed capital projects and new information gathered during design development. New Projects No new projects are anticipated for the MWMC FY 16-17 Capital Budget. Page 40 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Capital Improvement Program FY 16-17 Capital Budget Summary (Exhibit 12) Exhibit 12 below displays the adjusted budget and end-of-year expenditure estimates for FY 15- 16, the amount of funding projected to be carried over to FY 16-17 and additional funding for existing and/or new projects in FY 16-17. EXHIBIT 12 Summary of FY 16-17 MWMC Construction Program Capital Budget FY 15-16 FY 15-16 FY 15-16 NEW TOTAL ADJUSTED ESTIMATED CARRYOVER FUNDING FY 16-17 BUDGET ACTUALS TO FY 16-17 FOR FY 16-17 BUDGET Projects to be Completed in FY 15-16 Repair/Replacement of Biosolids Force Main 322,704 40,000 0 0 0 Sodium Hypochlorite Conversion 1,039,800 200,000 0 0 0 Inluent Pumping and Headworks Expansion 285,186 285,000 0 0 0 Projects to be Carried Over to FY 16-17 Increase Digestion Capacity 16,157,068 1,437,068 14,720,000 0 14,720,000 Operations&Maint Building Improvements 14,719,167 749,167 13,970,000 0 13,970,000 Poplar Harvest Management Services 1,334,535 163,526 772,000 0 772,000 WPCF Lagoon Removal/Decommissioning 4,869,681 179,681 390,000 0 390,000 Thermal Load Mitigation:Pre-Implementation 246,092 81,692 164,400 79,600 244,000 Thermal Load Mitigation:Implementation 1 (1) 730,884 171,429 131,000 0 131,000 Facilities Plan Engineering Services 97,547 67,947 29,600 70,000 99,600 Capacity M}nt Operations Maim(CMOM) 94,454 33,058 30,000 0 30,000 TOTAL Capital Projects $39,897,118 $3,408,568 $30,207,000 $149,600 $30,356,600 Major Capital Outlay Carried Over to FY 16-17 Biogas Cogeneration(2) 2,900,000 800,000 2,100,000 3,200,000 5,300,000 TOTAL Major Capital Outlay(trntlti-yearproicct) $2,900,000 $800,000 $2,100,000 $3,200,000 $5,300,000 Notes: (1)Theturd Load Mitigation:Iniplementation 1 budget includes Mill Race Sponsorship($200,000)and CedarCreek Sponsorship($250,000). (2)Riogas Cogeneration is multi-year Major Capital Outlay project,a detail sheet is located at the end ofth is doaunent. FY 16-17 Asset Management Capital Proiect Status and Budget The AMCP consists of the following three programs: ■ Equipment Replacement ■ Major Rehabilitation ■ Major Capital Outlay Page 41 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Capital Improvement Program The FY 16-17 budget and status of each program is described below: Equipment Replacement Program -Budget The FY 16-17 Capital Programs budget includes $381,000 in Equipment Replacement purchases that are identified on the table below. Equipment Re lacement FY 16-17 Project Description Budget Aerial Lift 100,000 Fleet Replacement 90,000 Diesel Generator, 80 KW 80,000 Inductively Coupled Plasma Spectrometer- Lab 77,000 Security Camera System 25,000 Computer File Server 9,000 Total $381,000 Aerial Lift. Provides access for regular and ongoing maintenance of overhead facilities and equipment such as indoor/outdoor lighting, electrical systems, and heating/ventilation equipment. Replaces 45-foot boom lift purchased in 2006. Fleet Replacement. An assessment of age, mileage, hours of operation, and maintenance costs support the replacement of three electric carts and replacement of a 10-yard dump truck bed. Diesel Generator, 80 KW. Provides portable emergency power for wastewater treatment facilities and Glenwood Pump Station. Replacement of 23 year old generator. Inductively Coupled Plasma Spectrometer. Replacement of 12 year old spectrometer in the main laboratory. Security Camera System. Supports video monitoring of Biosolids Management Facility and Biocycle Farm operations and site activities. Replaces and updates 12 year old equipment. Computer File Server. Scheduled replacement of one network file server. Page 42 FY 16-17 BUDGET AND CIP Metropolitan Wastewater Management Commission Capital Improvement Program Major Rehabilitation Program -Budyet The FY 16-17 Capital Programs budget includes $534,000 for Major Rehabilitation projects that are identified on the table below. Major Rehabilitation FY 16-17 Project Description Budget Air Drying Bed Resurfacing(2 beds) 180,000 Solids Pretreatment Building Roof 95,000 Plant Fuel Tank Replacement 85,000 Air Drying Beds Crack/fog Sealing(11 beds) 64,000 Maintenance Building High Bay Air Handlers 60,000 Operations/Maintenance Building 50,000 Total $534,000 Air Drying Bed Resurfacing. The biosolids drying process takes place on 13 asphalt drying beds over a 25 acre area. The beds have been on a rotational schedule for resurfacing to extend their useful life. In FY 16-17 two beds will be resurfaced. Solids Pretreatment Building Roof Replacement. Replacement of 20 year old built-up roofing. Inspection findings of blistering and seams separation indicate need for replacement. Plant Fuel Tank Replacement. Decommissions 32 year old underground fuel tanks and replaces with above ground tank system. Air Drying Beds Crack/Fog Sealing (11 beds). Provides protective seal to surface of asphalt drying beds to help maximize useful life. Maintenance Building High Bay Air Handlers. Replaces original 33 year old air handlers for heating and ventilation that have reached the end of their useful life. Operations/Maintenance Building Improvements. This expenditure will go towards miscellaneous improvements, repairs, and renovations to improve the functionality and usefulness of existing buildings. Page 43 FY 16-17 BUDGET AND CIP