Agenda - 05-01-2008-5a - Laserfiche WebLink

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3 Given the overlapping time frames for construction of the sewer collection system expansion with upgrades to the McGowan Creek pumping station, it may be possible to achieve economy of scale savings by including upgrades as a part of the sewer expansion project. Furthermore,. by having the upgrade take place during the construction project, the pumping station can be upgraded before the additional flow from the expanded service area comes on line and becomes a factor in the degree of difficulty in taking the McGowan station off-line during the upgrade process. The projected cost of this upgrade, assuming the installation of pumps of similar configuration and capacity, is approximately $200 - $250,000. As with the funding shortfall for the proposed expansion, this additional cost can be financed through the planned debt issuance. As a CIP item that will provide service to the entire Efland sewer customer base, debt service for the McGowan Creek pumping station upgrade may also be included in any BOCC approved revisions to the sewer use rate structure for the Efland sewer system. Inclusion of the McGowan Creek pumping station upgrades should have no effect on the project permitting or construction timeline. Should the Board wish to move forward with the McGowan Creek Pumping Station capital upfits as a part of the Central Efland/Northern Buckhorn Sewer Construction Project, staff recommends that the costs be combined with the $1.82 million proposed future debt issuance plans. Rate Study Update Another potential element of project financing relates to the outcome of the ongoing Raftelis rate study commissioned by the BOCC. On March 24t", Raftelis provided a preliminary rate setting model that will allow the County to devise, evaluate and adopt new sewer rates for the Efland system. As the Board considers the rate study; Commissioners may wish to give consideration to dedicating a certain portion of the anticipated sewer system revenues to offset capital and debt costs. The model will allow the County to incorporate system expenses (that may include some portion of the debt service on the capital costs of system expansion) into a rate structure that serves County taxpayers and Efland sewer customers in the most equitable manner possible. FINANCIA<_ IMPACT: Total project costs include $4.3 million for Central Efland/Northern Buckhorn sewer system construction plus up to $250,000 for the McGowan Creek Pumping Station for a total of $4.55 million Funding for the project includes approximately $1.3 million in federal grants (after the State removes its "administrative" fees), plus $1.2 million in 1997 voter approved bonds. The remaining $2.05 million is currently unfunded. Should the Board decide to move forward with full completion of the Central Efland/Northern Buckhorn sewer system construction and the upgrade to the McGowan Creek Pumping Station, staff recommends debt financing the unfunded portion of the project in winter 2009 after the County receives the final bids. RECOMMENDATION(S): The Manager recommends that the Board approve funding of the entire northern Buckhorn Community and central Efland sewer project, as well as the upgrades to the McGowan Creek pumping station, with funding shortfalls financed by funds advanced against FY 2010-11 alternative financing.