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72 <br />WELL <br />%HATER RATE STUDY I City of Santa Ana, CA <br />Major Refurbishment (TV well, <br />Well sonarjet screens, brush, swab, 30 25% <br />and bail as needed.) <br />CAPITAL ASSET VALUATION AND SCHEDULE OF R &R NEEDS AND ESTIMATED <br />COSTS <br />A common practice used in the industry to determine a baseline value for R &R needs is to take the <br />estimated replacement cost asset value, adjusted for depreciation, and then apply a depreciation <br />calculation. This approach is acceptable when a utility has performed no system condition assessments. <br />In the following sections, Black & Veatch presents suggested R &R schedules for the Water Enterprise. <br />Where available, Black & Veatch used condition assessment data and developed risk profiles to more <br />accurately reflect replacement needs. <br />Capital Asset Valuation Summary <br />The valuation of Water system infrastructure capital assets was developed using the asset class -based <br />methodology to estimate replacement costs (in FY2012 dollars), then adjusted for depreciation (straight - <br />line). Table A - 10 presents the estimated replacement cost and depreciated FY2012 value for capital <br />assets for each of the systems. <br />Table A -10: Asset Valuation by System <br />Water $1,013,137,165 $435,688,075 43% <br />1. Replacement Costs (in 2012 dollars) are calculated using the unit costs presented in within this report applied to all <br />assets Water and Sewer assets. <br />2. The asset valuation methodology (RCNLD) represents an estimate of total infrastructure value, accounting for <br />depreciation of assets. <br />A comparison of the current infrastructure value with the total replacement cost presented previously is <br />an indicator of overall infrastructure age, and represented as a Value Ratio. The value ratio is calculated <br />as the Asset Value divided by Replacement Cost. <br />Total System Capital Asset Schedule of R &R Needs <br />Using the R &R needs forecasting methodology described previously, Figure A - 1 illustrates the overall <br />R &R needs identified projected over a 30 -year period, beginning with FY 2013 for the combined Water <br />and Sewer Enterprises. <br />M L� � • <br />.0 <br />NOVFNISEP 1.111 <br />