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Agenda 02/23/2021 Item #11D (CCWSD Service Expansion)02/23/2021 EXECUTIVE SUMMARY Recommendation to approve the Collier County Water-Sewer District’s phased implementation strategy for the (1) planned expansion of water and wastewater utility infrastructure in Golden Gate City; (2) provision of service expansion in the northeast regional service area; and (3) to direct the County Manager, or his designee, to explore financing opportunities to fund the expansion. OBJECTIVE: To secure approval from the Board of County Commissioners (Board), as the ex-officio Governing Board of the Collier County Water-Sewer District (CCWSD), for utility expansion plans in Golden Gate City with an estimated cost of $88 million, and in the phased expansion in the northeast regional service area in an estimated amount of $48.1 million and to coordinate funding plans with the county’s finance committee, financial advisors and bond council for the construction of infrastructure in a total approximate amount of $136,100,000. CONSIDERATIONS: Phase 1 of the utility expansion in the northeast was approved at the March 12, 2019 meeting, agenda item 11B. At that time, the Board approved a contract award to Mitchell and Stark Construction Company for $77,653,700 for the design/build of the interim wastewater treatment plant, storage tank and associated pipelines necessary to provide utility services in the growing northeast service area. At that same meeting, agenda item 9A, the Board approved a Bond Resolution to fund the construction of the infrastructure identified in item 11B. The CCWSD has executed this phase with much of the work complete or nearing completion. The funding for Phase 2 is under consideration and the Board will be briefed on the structure of planned water/sewer district bonds after consideration by the finance committee. Right now given the interest environment and likely rise in rates over the coming months, it seems prudent to structure debt with a tax exempt and taxable component. The tax exempt component would total approximately $88 million, be spent within the IRS required three (3) year spend down requirement and applied to immediate construction of potable water transmission mains and an additional four million gallons per day wastewater treatment capacity servicing the Central Service area (formerly FGUA/Golden Gate City Utility System). The taxable component totaling $48.1 million would be issued simultaneously thus avoiding multiple issuance costs and applied toward utility infrastructure construction in the northeast area as demand dictates. Taxable debt is not subject to IRS spend down provisions. Since capacity expansion projects are impact fee eligible, there should be no impact on those rates. The Board approved Ordinance 2019-48, the Consolidated Impact Fee Ordinance, increasing water impact fee rates by 32 percent and Wastewater Impact Fee Rates by 22.7 percent effective March 30, 2020 in anticipation of such capacity expansion requirements within the coming 3 -year period. An update to the impact fee rate study, performed at least every three years, is anti cipated in 2022. These expansion plans will have no impact on user fee rates, which are used exclusively to fund utility operations and maintenance, capital repair and rehabilitation projects and required reserves. Golden Gate City Acquisition of the Golden Gate City Utility System was intended to achieve three main objectives: 1. Public Health - move residents from wells adjacent to septic systems to a safe public water supply (within 10 years) 2. Public Safety - improved fire protection by adding fire hydrants throughout the service area (within 10 years) 3. Environmental - move residents from septic systems to a public sewer system (within 15 -20 years) 11.D Packet Pg. 230 02/23/2021 Potable water and fire protection: To achieve objectives 1 and 2, at the September 8, 2020 meeting, agenda item 11F, the Board awarded an agreement to Johnson Engineering, Inc. for the design of the Golden Gate City potable water transmission mains to provide a sufficient potable water supply needed to expand the distribution system into the current unserved areas. Once the design is complete this summer, construction of the backbone transmission mains with fire hydrants will begin. Customers in Golden Gate City will continue to receive potable water service from the existing regional water treatment facilities. Wastewater: To achieve objective 3, plans to expand service in the Golden Gate City area and Activity Center #9 are underway. At the April 28, 2020 meeting, agenda item 16C13, the Board approved a contract with TetraTech, Inc. to design future repair, rehabilitation and expansion of the Golden Gate City wastewater treatment system which will serve as the Central County Wastewater Reclamation Facility. Design is now 60 percent complete. The current 1.5 mgd plant is at 86% capacity, necessitating expansion with an additional 4 mgd capacity estimated to be in service in 2023. Northeast Regional Utility The construction of additional utility infrastructure for regional utility service district -wide, including but not limited to raw water wells for future water treatment on the northeast utility site, two deep injection wells and monitoring well and a landscape buffer around the utility site, must begin in the next two years. The majority of the funding for utility/capacity expansion is impact fee eligible. Construction of the landscape buffer (required by the Land Development Code) around the utility site in advance of vertical infrastructure should start sooner so as to provide visible sightline protection in the coming years. The landscape buffer would be user fee funded. Long term financing is required to implement the CCWSD service plan, pursuant to Special Act Section 1 authorizing the Board to act to provide water and sewer services to prevent the proliferation of package treatment plants, to construct expansion and enhancements to the Golden Gate City Utility System as well as the next phase of CCWSD’s Northeast Regional Utility expansion over the next two years. FISCAL IMPACT: Staff, in coordination with the county’s finance committee, financial advisors and bond council, will develop a Plan of Finance. Once a funding plan is identified, staff will request a bond feasibility report utilizing the financial services of Raftelis to commence upon the Board’s approval of the phased expansion plan In total, approximately $136,100,000 will be needed to implement the next phase of the expansion in the Golden Gate City service area and the Northeast Regional Utility service area as follows. 11.D Packet Pg. 231 02/23/2021 Total Funding GOLDEN GATE CITY:Water (412)Sewer (414)Water (411)Sewer (413)Required Central Water Reclamation Facility (Golden Gate) 4 mgd capacity expansion $70,000,000 $70,000,000 Potable Water Transmission Mains (backbone with hydrants)$18,000,000 $18,000,000 Sub-Total Golden Gate City $18,000,000 $70,000,000 $88,000,000 NORTHEAST REGIONAL: Wells and raw water transmission mains in developer easements (Orange Blossom Ranch and Immokalee Road Rural Village).$9,240,000 $9,240,000 Construct Two Deep Injection Wells on NE Utility site $11,000,000 $11,000,000 $22,000,000 Design 4 mgd NECWRF technology and process updates $4,500,000 $4,500,000 Construct Potable Water and WW transmission mains to Oil Well Road $1,925,000 $1,925,000 $3,850,000 Design Water and WW transmission mains and water storage tank to interconnect Bellmar with Rivergrass/Longwater $531,250 $177,083 $708,333 Construct Water and WW transmission mains and water storage tank to interconnect Bellmar with Rivergrass/Longwater (demand dependent).$5,843,750 $1,947,917 $7,791,667 Sub-Total Northeast Regional Utilities $0 $0 $28,540,000 $19,550,000 $48,090,000 GRAND TOTAL $0 $0 $46,540,000 $89,550,000 $136,090,000 PROGRAM ELEMENT User Fees Impact Fees The CCWSD’s currently maintains an exemplary AAA investment credit rating from Fitch and Moody’s primarily due to its robust liquidity and strong coverage margins. Interlocal and Developer Contribution Agreements, either already approved or in process, will provide advance impact fee payments to support incremental debt service requirements. GROWTH MANAGEMENT IMPACT: These projects meet current Growth Management Plan standards to ensure the adequacy and availability of viable public facilities LEGAL CONSIDERATIONS: This item has been reviewed by the County Attorney, raises no legal issue at this time, and requires majority vote for approval. -JAK RECOMMENDATION: To approve the (1) planned expansion of water and wastewater utility infrastructure in Golden Gate City; (2) provision of service expansion in the northeast regional service area; and to (3) direct the County Manager, or his designee, to explore financing opportunities to fund the expansion. Prepared by: Joseph Bellone, Director Utilities Finance, Public Utilities Department ATTACHMENT(S) 1. Commission Update GGC and NESA Feb 23 2021 (PPTX) 11.D Packet Pg. 232 02/23/2021 COLLIER COUNTY Board of County Commissioners Item Number: 11.D Doc ID: 14653 Item Summary: Recommendation to endorse the Collier County Water-Sewer District’s utility plans for continued expansion in the northeast service area, expansion of water and wastewater utility infrastructure in Golden Gate City and to direct the County Manager, or his designee, to explore financing opportunities to fund the expansion. (Joseph Bellone, Public Utilities Finance Ope rations Division Director) Meeting Date: 02/23/2021 Prepared by: Title: – Public Utilities Department Name: Drew Cody 01/05/2021 9:37 AM Submitted by: Title: Division Director - Operations Support – Public Utilities Operations Support Name: Joseph Bellone 01/05/2021 9:37 AM Approved By: Review: Public Utilities Operations Support Joseph Bellone Additional Reviewer Completed 02/01/2021 12:29 PM Public Utilities Planning and Project Management Tom Chmelik Additional Reviewer Completed 02/02/2021 4:00 PM Public Utilities Department Drew Cody Level 1 Division Reviewer Completed 02/02/2021 4:39 PM Public Utilities Department Drew Cody Level 2 Division Administrator Review Skipped 01/15/2021 1:34 PM Office of Management and Budget Debra Windsor Level 3 OMB Gatekeeper Review Completed 02/03/2021 8:23 AM County Attorney's Office Jeffrey A. Klatzkow Level 3 County Attorney's Office Review Completed 02/03/2021 8:34 AM Office of Management and Budget Susan Usher Additional Reviewer Completed 02/16/2021 11:10 AM Budget and Management Office Mark Isackson Additional Reviewer Completed 02/16/2021 11:13 AM County Manager's Office Dan Rodriguez Level 4 County Manager Review Completed 02/16/2021 1:43 PM Board of County Commissioners MaryJo Brock Meeting Pending 02/23/2021 9:00 AM 11.D Packet Pg. 233 CCWSD UTILITY PHASED IMPLEMENTATION STRATEGY GOLDEN GATE CITY NORTHEAST REGIONAL UTILITIES FUNDING NEEDS Public Utilities Department Update February 23, 2021 11.D.1 Packet Pg. 234 Attachment: Commission Update GGC and NESA Feb 23 2021 (14653 : CCWSD Bond Direction) GOLDEN GATE CITY Public Utilities Department Update February 2021 11.D.1 Packet Pg. 235 Attachment: Commission Update GGC and NESA Feb 23 2021 (14653 : CCWSD Bond Direction) GUIDING PRINCIPLES Ø At acquisition of the Golden Gate Utility System: ü Public Health –move residents from drinking wells adjacent to septic systems to public water supply ü Public Safety –provide fire protection throughout the city through installation of fire hydrants ü Environmental -move residents along waterways with septic systems to public sewer system Ø Transmission Mains are the initial steps to build the backbone to provide sufficient water to achieve the first two objectives Ø Expansion of the wastewater treatment plant by 4 MGD will provide sufficient capacity to meet future demand from area growth (golf course development, Activity Center 9 and within Golden Gate City service expansion)3 11.D.1 Packet Pg. 236 Attachment: Commission Update GGC and NESA Feb 23 2021 (14653 : CCWSD Bond Direction) NEXT STEPS FY2021 -FY2022 Potable Water „Complete design of potable transmission mains by summer 2021 „Proposals for transmission main construction (fall 2021) „Contract award late 2021,with construction starting 2022 „Total estimated cost $18 million Wastewater Treatment „GG Central WRF expansion to add 4 mgd of capacity (d esign 60% complete) „Wi ll serve golf course development/Activity Center 9 and eventual service expansion within Golden Gate City „FDEP requires High Level Disinfection treatment at this site (BCC approved TetraTech EOR 4-28-20 item 16C13) „Total estimated cost $70 million ($65 million EOR estimate + CEI) Total Golden Gate estimated cost $88 million 4 11.D.1 Packet Pg. 237 Attachment: Commission Update GGC and NESA Feb 23 2021 (14653 : CCWSD Bond Direction) NORTHEAST EXPANSION Public Utilities Department Update February 2021 11.D.1 Packet Pg. 238 Attachment: Commission Update GGC and NESA Feb 23 2021 (14653 : CCWSD Bond Direction) Approved customer base includes Hyde Park Village and Rivergrass Village Finalizing Interlocal Agreements/DCA with IRRV, Longwater and Belmar Villages for BCC review/approval in 2021 Awaiting Letter from Hogan Island Village for request for utility services 6 11.D.1 Packet Pg. 239 Attachment: Commission Update GGC and NESA Feb 23 2021 (14653 : CCWSD Bond Direction) STATUS OF WORK TO DATE „Segment 1: 36” water main on 39th Ave NE is 100% complete „Segment 2: Pipelines under BCIRP are 100% complete „Segment 3: Transmission pipelines are 100% complete „Segment 4: Pipelines along 41st Avenue are 80% complete, roadway paving completed and inspected December 2020 „Segment 5a: Pipelines to IRRV not started „Segment 5b: Pipelines to Hogan Island Village not started (1) „Utility Plant Site: interim wastewater treatment plant,two storage tanks and water pump stations substantial completion in September 2021 „Total cost $76 million funded by the Series 2019 Bond (1 ) Potential to serve HIV through IRVV under review 7 11.D.1 Packet Pg. 240 Attachment: Commission Update GGC and NESA Feb 23 2021 (14653 : CCWSD Bond Direction) NEXT STEPS FY2021 -FY2022 „Construct wells/raw water mains in developer easements (Orange Blossom Ranch/IRRV) „Construct two Class 1 Deep Injection Wells and Monitoring We ll on NE utility site (10/21 –7/22) „Design updates to 4 mgd Northeast Water Reclamation Facility „Construct Water and WW transmission mains to Oil Well Road (t hrough BCIRP Phase 2 before Fall 2021) „Design and construct water and wastewater transmission mains and water storage tank to interconnect Bellmar with Rivergrass/Longwater (function of market demand) „Total Northeast estimated cost $48.1 million „Note that installing a landscape buffer around the utility site early on will enhance residents experience when large scale construction takes place8 11.D.1 Packet Pg. 241 Attachment: Commission Update GGC and NESA Feb 23 2021 (14653 : CCWSD Bond Direction) FUNDING NEEDS Public Utilities Department Update February 2021 11.D.1 Packet Pg. 242 Attachment: Commission Update GGC and NESA Feb 23 2021 (14653 : CCWSD Bond Direction) ESTIMATED FUNDING NEEDS 10 FY2021Q3 FY2021Q4 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 Future 2030s J - A - S O - N - D GOLDEN GATE CITY: Golden Gate Central WRF 2-4 mgd expansion $70,000,000 Water Transmission Mains $18,000,000 NORTHEAST REGIONAL UTILITY: Wells and raw water transmission mains in developer easements (Orange Blossom Ranch and/or Immokalee Road Rural Village).$9,240,000 Construct Two Deep Injection Wells $22,000,000 Design 4 mgd NEUF NECWRF technology and process updates $4,500,000 Construct NEUF Water and WW transmission mains to Oil Well Road.$3,850,000 Design Water and WW transmission mains and water storage tank to interconnect Bellmar with Rivergrass/Longwater.$708,333 Construct Water and WW transmission mains and water storage tank to interconnect Bellmar with Rivergrass/Longwater (market demand)$7,791,667 Construct 4 mgd NEUF NECWRF remaining assets $105,270,000 Design 5 mgd NEUF NECRWTP technology and process updates $4,500,000 Construct 5 mgd NEUF NECRWTP remaining assets $75,020,000 Design additional Water and WW transmission mains to serve additional proposed RLSA developments (Randall looping).$1,333,333 Construct additional Water and WW transmission mains to serve additional proposed RLSA developments (Randall looping).$14,666,667 Total $13,090,000 $708,333 $122,291,667 $0 $0 $109,770,000 $1,333,333 $0 $14,666,667 $75,020,000 Impact Fees $13,090,000 $708,333 $122,291,667 $0 $0 $109,770,000 $1,333,333 $0 $14,666,667 $75,020,000 Tranche 1 $136,090,000 Tranche 2 $111,103,333 Tranche 3 $89,686,667 Northeast $48,090,000 Northeast $111,103,333 Northeast $89,686,667 GG City $88,000,000 GG City $0 GG City $0 PROGRAM ELEMENT FY21-22 FY25-26 FY28-30+ (Timing subject to Public Utilities Master Plan to be completed in FY21) 11.D.1 Packet Pg. 243 Attachment: Commission Update GGC and NESA Feb 23 2021 (14653 : CCWSD Bond Direction) PLAN OF FINANCE Ø Preliminary discussion with OMB/PFM/Bond Counsel 12/15/20 Ø Update BCC on utility plans 2/23/21 Ø Funding needs FY21 –FY22 total $136 million (impact fee eligible) Ø Schedule v 2/23/21: Board endorses FY21-FY22 plan v Feb 2021: Finance Committee Meeting to discuss financing options v March –May 2021: Conduct Bond Feasibility Report (Raftelis/AECOM) v June 2021: Accept Bids (Pricing/Award Bid) v July 2021: Closing 11 11.D.1 Packet Pg. 244 Attachment: Commission Update GGC and NESA Feb 23 2021 (14653 : CCWSD Bond Direction) OTHER FINANCIAL CONSIDERATIONS „Interlocal Agreements/Developer Contribution Agreements require advance water and sewer impact fee payments to share the risk of expansion construction in the northeast with rate payers: Ø Hyde Park paid $1,674,000 in August 2020 Ø Rivergrass advance impact fee payment of $1,674,000 due upon resolution of legal challenge Ø Longwater -$2,343,600 due 30 days after SRA approval Ø Belmar -$4,352,400 due 30 days after SRA approval „Advanced impact fee credits can only be used at 50% for each building permit,thus ensuring a continued revenue stream „Ordinance 2019-48 (Impact Fee) increased cmbinedwater and wastewater fees by 27.2% effective March30, 2020 to fund expansion (next impact fee update due 2022) 12 11.D.1 Packet Pg. 245 Attachment: Commission Update GGC and NESA Feb 23 2021 (14653 : CCWSD Bond Direction) RECOMMENDATIONS „Approve the Utility Plans for Golden Gate City wastewater plant expansion and construction of potable water transmission mains „Endorse the Utility Plans for NE expansion „Direct the County Manager,or his designees,to explore financing plans and begin a Bond Feasibility Report „Explore financing plans with Finance Committee,PFM and Bond Counsel „Develop a Bond Feasibility Report with Raftelis and AECOM 13 11.D.1 Packet Pg. 246 Attachment: Commission Update GGC and NESA Feb 23 2021 (14653 : CCWSD Bond Direction) APPENDIX 14 11.D.1 Packet Pg. 247 Attachment: Commission Update GGC and NESA Feb 23 2021 (14653 : CCWSD Bond Direction) GOLDEN GATE POTABLE WATER TRANSMISSION MAINS 15 11.D.1 Packet Pg. 248 Attachment: Commission Update GGC and NESA Feb 23 2021 (14653 : CCWSD Bond Direction) GOLDEN GATE WASTEWATER TREATMENT PLANT Golden Gate City WWTP 16 11.D.1 Packet Pg. 249 Attachment: Commission Update GGC and NESA Feb 23 2021 (14653 : CCWSD Bond Direction) DEEP INJECTION WELLS 17 11.D.1 Packet Pg. 250 Attachment: Commission Update GGC and NESA Feb 23 2021 (14653 : CCWSD Bond Direction) LANDSCAPE BUFFER TYPE A LOOKING SOUTH TOWARD SITE TYPE B LOOKING NORTH TOWARD UTILITY SITE 18 11.D.1 Packet Pg. 251 Attachment: Commission Update GGC and NESA Feb 23 2021 (14653 : CCWSD Bond Direction)