65B - PROPOSED WATER AND SEWER RATE ADJ

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Y7 SEWER RATE STUDY I City of Santa Ana, CA Library based on our knowledge of similar systems and specific asset types. The draft Asset Class Library was then refined through collaboration with the City staff with system- specific familiarity, to reflect the best appropriate information for use in the R &R analysis. The components of each of the asset classes were presented in detail in draft form, then finailized based on discusion of the asset class details, and any follow -up research on costs, types of assets and related information. Using this method, the resulting class library developed for the City incorporates Black & Veatch's experiences with other agencies, as well as City- specific experience with each asset class. For the City's asset class library, Black & Veatch developed the following elements, which are available for viewing within the Comprehensive Asset Management Prioritization System (CAMPS). Expected useful lives For each defined asset class, and for each specific asset where required, appropriate expected useful lives were developed for these assets. Black & Veatch defines useful life as the number of years of normal use that can be expected prior to replacement becoming necessary. It should be noted that some assets would be expected to fail before and after the estimated useful life, however, this approach provides planning level funding needs when averaged over a 5, 10, 15, or 20 year smoothing period. These estimates are based on our industry experience, manufacturers' estimates, previous literature research, and our work for other agencies. Adjusted useful lives, based on Condition Monitoring The expected useful life of the asset is an average expected life for that asset class, as described above. The CAMPS database contains the functionality for the City to identify assets that are in need of immediate or near -term (next 1 -2 years) replacement, by indicating a condition rating of '1' within the asset registry. Similarly, CAMPS contains the functionality for Staff to indicate assets as being in very good condition, using a rating of '3' within the asset registry. Presented below are examples of each of these cases illustrating how users can adjust the expected useful life of a specific asset to reflect a more detailed knowledge of the assets. Case #1: Asset with an Assessed Condition Rating of 1 (Poor Condition) A sewer pump (associated with a lift station) was placed in service in 2002, with a class life of 30 years. At the time of the analysis, 2012, the pump is 10 years old and should be expected to operate effectively for another 20 years. If the pump has been assessed at a poor condition (rating = 1), then an adjustment is made to indicate more urgent replacement, or analysis year+ 1 year. Algorithm used by the CAMPS model: c, If Condition Rating= 1, then use current year+ 1 for Replacement Year Case #2: Older Asset with an Assessed Condition Rating of 3 (Excellent, or like new condition) A sewer pump was placed in service in 1987, with the same class life of 30 years. In this case, the pump is 25 years old and expected to last until 2017. If the pump has been assessed at a like 65B -215 NOVEMBER 2014