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2019 Water, Recycled Water, and Sewer Rate Study <br />2. Financial Plan <br />system has already exceeded the theoretical useful life (some of which date back to before the 1930s). <br />This number is expected to jump to 70% by 2040 if no pipe replacements are made. <br />The City's CIP has prioritized building resilience in the City's water supply by building new wells in places <br />where infrastructure has been damaged, adding on demand generators to critical wells to maintain water <br />supply even during power outages, and the systematic rehabilitation of the City's wells, reservoirs, pump <br />stations, and water distribution system to keep the City's infrastructure in good working order. The City is <br />also installing new Advanced Metering Infrastructure (AM 1), which will allow the City personnel and <br />customers access to real-time water consumption data. <br />As part of this Study, the project team and City staff reviewed the recommended and limited CIP options <br />from the 2017 Master Plan, updated the project scheduling for the 10-year planning period, based upon <br />which projects have already been completed, and what is currently scheduled. The final CIP totaled <br />approximately $154.9M (in current dollars) over the period of FY 2018/19 through FY 2029/30, averaging <br />$12.9M per year. This capital plan reflects a material increase from the historic capital spending <br />for the Water Enterprise, which has averaged $3.4M per year over the past four years. In conjunction <br />with this increase in capital spending, the Water O&M budget assumes that the Water Enterprise will <br />require 8 additional full-time equivalent (FTEs) staff. <br />A detailed list of repair and replacement projects and associated costs for the Water Enterprise is <br />provided in Schedule 4 of Appendix A. It should be noted that capital spending forecasts beyond a 5-year <br />planning horizon have less certainty than near -term planning. As a result, this Study is primarily <br />concerned with the capital spending forecasts within the next five years. Since capital spending estimates <br />are provided in current dollars, the water RSA includes an annual cost escalation factor for capital costs <br />(see Section 2.2.6). <br />Sewer Enterprise <br />The City's Sewer enterprise serves all of the City of Santa Ana, portions of Garden Grove, Orange, and <br />Tustin that discharge wastewater into the City's sewer system. The City's sewer collection system, <br />consists of approximately 450 miles of sewer mains, including 60 miles of trunk sewers that are currently <br />owned by OCSD. The collection system operates largely by gravity and discharges into gravity trunk <br />sewers that convey wastewater to the OCSD Treatment Plant Number 1. The majority of the City's <br />sewers were built in the 1950s and 1960s, and are now over 60 years old, but portions of the system date <br />back to the 1920s. OCSD recently transferred ownership of 8.7 miles of trunk sewer to the City, along <br />with $23 million to pay for the future repairs and rehabilitation of the trunk sewer. <br />Similar to the Water Enterprise, this Study proposes a financial plan for materially increasing the annual <br />level of capital reinvestment in the sewer utility. Historically the Sewer Enterprise has made efforts to <br />replace and repair the older portions of the sewer main network that has capacity issues. However, due to <br />financial shortfalls, the City's pipe replacement schedule has been limited to about 0.5 miles of pipe per <br />year. Capital spending plan assumed for this Study established a miles -of -pipe replacement approach <br />with the goal of ramping up from 0.5 miles of pipe per year to 3.5 miles of pipe per year by FY <br />City of Santa Ana Stantec 112 <br />