65B - PROPOSED WATER AND SEWER RATE ADJ

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rf: SEWER RATE STUDY I City of Santa Ana, CA Refurbishment Intervals and Schedule Capital refurbishment activities were identified for specific assets where major (non - operational /annual) expenditures would be required to maintain the intended useful life of the asset. For each of these refurbishments, defined intervals and costs were developed for specific asset classes, as presented in Table A 8. Table A -8: Assets Refurbishment Intervals and Costs -2012 dollars Pressure Major refurbishment (valves, gaskets, PRV Reducing 20 30% Vault mist. piping, controls) PUMP W Major refurbishment (seal replacement, W— Pump (Sewer) bearing replacement, shaft sleeve repair, 5 30% rewind, varnish and bake, etc.) PUMPS_ Submersible Major refurbishment (seal replacement, WW Pump (Sewer) bearing replacement, shaft sleeve repair, 5 30% rewind, varnish and bake, etc.) STRN Structure Misc. rehabilitation (e.g., paint, fix up 15 10% stucco, etc.) CAPITAL ASSET VALUATION AND SCHEDULE OF R &R NEEDS AND ESTIMATED COSTS A common practice used in the industry to determine a baseline value for R &R needs is to take the estimated replacement cost asset value, adjusted for depreciation, and then apply a depreciation calculation. This approach is acceptable when a utility has performed no system condition assessments. In the following sections, Black & Veatch presents suggested R &R schedules for the Water and Sewer Enterprises. Where available, Black & Veatch used condition assessment data and developed risk profiles to more accurately reflect replacement needs. Capital Asset Valuation Summary The valuation of Sewer system infrastructure capital assets was developed using the asset class -based methodology to estimate replacement costs (in FY2012 dollars), then adjusted for depreciation (straight - line). Table A 9 presents the estimated replacement cost and depreciated FY2012 value for capital assets for each of the systems. 65B -221 NOVEMBER 2014