CAPITAL IMPROVEMENT PROGRAM 2015 – 2019

Greenville Water

Capital Improvement Program 2015 – 2019

Phillip A. Kilgore Chairman James W. Bannister Vice Chairman Deb Sofield Commissioner Knox H. White Mayor-Ex-Officio J. David Sudduth Commissioner-Ex-Officio David H. Bereskin Chief Executive Officer

Introduction

2015-19 CAPITAL IMPROVEMENT PROGRAM INTRODUCTION The Capital Improvement Program (CIP) is a five-year fiscal planning tool used to identify the future capital needs of Greenville Water, as well as identify the timing and method of financing those capital needs. Generally, projects included in the CIP are non-recurring projects that exceed $100,000 in cost and have a useful life of at least five years. The significant cost of the projects included in the CIP may also require the use of debt or reserves to finance their cost. Normal System Improvements and Routine Annual Additions & Replacements are included as part of the Annual Operating Budget rather than the CIP. This is because these types of capital needs are funded with current revenues generated by our rates and the funding level for these recurring capital needs is steady and constant from year to year. Normal System Improvements include the City CIP, Water Line Replacement Program, Meters, Highway Improvements, and System Additions & Extensions. Routine Annual Additions and Replacements are generally purchases of new or replacement vehicles & equipment. The capital budget is adopted annually, encompassing appropriations for the projects scheduled for the first year of the plan, and authorizing any bond issues necessary to fund these improvements. The subsequent four years are considered planning years and are subject to annual appropriation. The Five-Year Financial Forecast is used in the development of the CIP, and the financing plan for the CIP has been shaped by the availability of funds projected in the forecast. Changes to the CIP The Commission has authorized a change from our current fiscal year ending July 31 to a calendar year. Accordingly, the 2015-19 CIP will be aligned to the calendar year starting January 1, 2015. New funding for continuation and new projects will commence in 2015 with our first full calendar year. Greenville Water Strategic Plan Greenville Water recently completed its first formal comprehensive strategic plan. The planning process included numerous strategic planning workshops with both staff and Commissioners, facilitated by a consultant who specializes in strategic business planning. The Vision Statement for Greenville Water that was developed in the strategic planning process is Quality Water – Sustainable Future.

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In keeping with that Vision, the Strategic Plan identified three main strategic areas to focus on over the next five years:   

Stakeholder Relations Operational Excellence Human Capital

Numerous strategies were then developed and prioritized to ensure the successful implementation of the Strategic Plan. The strategies that were developed are designed to either continuously improve our current state or to reposition our organization for the future. Some of these strategies will require additional human or financial resources. The Operational Excellence focus area of our Strategic Plan has a substantial impact on our CIP and is evidenced in the projects we are proposing for the Commission’s approval. Among the objectives of the Operational Excellence focus area is the development and implementation of a robust asset management program in order to optimize infrastructure life cycle costs. A strategy to accomplish this involves developing and maintaining coordinated master plans for all facilities to enhance service levels. Another strategy that will impact future CIPs is the utilization of an asset management program to prioritize future operating and capital expenditures. Another objective of the Operational Excellence focus area is to develop and implement a secure long-term water supply. One of the strategies to accomplish this is the development of a water resource master plan that provides for a 100-year water supply. Increasing the reliability of water delivery through enhanced capital planning and improvement of operational processes is another objective. Among the strategies to achieve this is the optimization of operations to reduce energy and chemical costs and the exploration of alternate energy sources for improved sustainability. Project Ranking Project requests have been evaluated against the following criteria:       

Improves Water Quality Provides Capacity to Meet Current or Future Demand Mitigates Risk to Public Safety or Health Systematic Replacement of Existing Infrastructure Improves Operational Efficiency Coordinates with Other Projects and Requirements Promotes Economic Development

Each project has been reviewed and evaluated as to how it meets the following requirements: 

Evaluation criteria they met

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Review of the project objectives Priority assigned to them by the proposing department Assessment of their urgency Risks of deferring project

The CEO and the executive management team have met with each department to go over their requests and to better understand their priorities. From this process, the CEO provides the Commissioners a comprehensive recommendation on our most critical capital needs.

Highlights of the 2015-19 CIP  The 2015-19 CIP totals $20,846,217. 

The CIP calls for one revenue bond issue over the five-year period: 

2015 - $5,500,000 for the Central Campus Improvements project (a portion of this relates to prior year funding of project)

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The 2015-19 CIP includes the use of rate revenue and reserves totaling $8,059,859 and Capacity Fees in the amount of $8,286,359.

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The CIP includes the assumption that there will be 3% annual rate adjustments from 2015 through 2017.

Highlights of the 2015 Capital Budget  The capital budget for 2015 is $9,545,500. 

The 2015 Capital Budget includes the use of rate revenue and reserves totaling $407,500 and Capacity Fees in the amount of $4,638,000.

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Central Campus Improvements (Year 3) - $4,500,000 

Total project request of $13,500,000 funded over 3 years (The Commission funded $3,000,000 in FY 13 and $6,000,000 in FY 14).

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The relocation of Field Operations from its existing location to newly acquired property adjacent to the Administration Office to consolidate operations on a central campus, resulting in better oversight and operational efficiencies.

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New Billing Inserter - $280,000 

In light of the higher volume of bills with monthly billing, the purchase of a second folder/inserter is needed to serve as a more modernized system, adding greater speed in output as well as a redundancy aspect to billing operations.

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The newer model will serve as primary insertion system, with the existing Pitney Bowes Series 8 serving as a backup or parallel running system, depending on circumstances.

Residence at Trammel Gap Rd. - $127,500 

The current residence at this location is in disrepair and needs to be replaced.

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This constructs a new residence to house Watershed personnel to help maintain security on the northern boundary of the North Saluda Watershed.

Alkalinity Improvements at Treatment Plants (Year 1) - $450,000 

Total project request of $2,879,000 funded over 2 years.

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Constructs liquid lime feed and carbon dioxide feed equipment in order to control the alkalinity of the water in the distribution system.

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Provides additional buffering capacity to our finished water to reduce finished water pH variations, improves distribution system water quality, limits corrosion potential and mitigates the pricing volatility associated with the use of caustic soda.

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May allow for a reduction in phosphates.

Large Mains - $1,689,100 

Mains 12-inches or larger that stabilize system pressures, serve new customers, improve fire flows or create redundancy. 

Install 5,800 ft of 12-in main on Bracken Rd ($800,000).

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Install 7,700 ft of 24-in main on Augusta Rd from US 25 to Bracken Rd ($2,310,000 – Year 2 of two-year project).

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Low Pressure Improvement Projects - $320,900 

Improve pressure for existing customers in the vicinity of water tanks. 

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Water Resources Master Plan - $600,000 

Develop a plan to meet the growing water supply demands of our system for the next 100 years.

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Will consider the safe yields of the existing reservoirs, permitted withdrawal capacities, coordination with Duke Energy on use of Lake Keowee, impacts of water conservation and reuse, and locations of potential future water supplies.

Facilities Master Plan (Year 2) - $308,000 

Total project request of $458,000 funded over 2 years (Commission funded $150,000 in FY 14).

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An update to the comprehensive master plan for water supply, treatment and distribution to identify capital needs to meet the growing demands of our system through the analyses of historical and projected water use and population projections for the next 25 years.

Repaint Paris Mountain Tank - $300,000 

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Little Texas Road and Fallout Shelter Rd Area - install 600 ft of 6-in main on Fallout Shelter Rd, 5,200 ft of 8-in main on Little Texas Rd.

Repaint a 300,000 gallon tank that was last painted in 1978.

North Saluda Intake Repairs – $625,000 

This project consists of performing a condition assessment of the North Saluda Intake and the intake pipeline to the pump station as well as repairing the concrete at the North Saluda Intake. The intake was constructed in 1960 and the structure's concrete is currently in disrepair and has experienced leaks.

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SCADA Study – $150,000 

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The SCADA system at the Stovall Plant was placed into service in 2000. Prior to making upgrades to the system a detailed study should be performed.

Clearwell Dehumidifiers – $195,000 

Replacement of the dehumidifiers in the basement of the Adkins Treatment Plant to reduce moisture and stop corrosion that is occurring.

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Summary Schedules

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Project Descriptions

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