2006 Water Comprehensive Plan - City of Bellevue

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B. Funding LevelsFunding for capital investments shall be sustained at a level sufficient to meet theprojected 20 year (or longer) capital program costs.Funding from rate revenues shall fund current construction and engineeringcosts, contributions to the Capital Facilities Renewal and Replacement (R&R)Account, and debt service, if any.Inter-generational equity will be assured by making contributions to andwithdrawals from the R&R Account in a manner which produces smooth ratetransitions over a 20 year (or longer) planning period.On an annual basis, funding should not fall below the current depreciation ofassets expressed in terms of historical costs less any debt principal payments.Discussion:These policies are based on the experience gained by developing a long-term CapitalReplacement Funding Plan. In absence of such a plan, the range of capital investmentfunding should fall between the following minimum and maximum levels:The minimum annual rate funding level would be based on the current depreciation ofassets expressed in terms of historical costs, less any debt principal payments.The maximum annual rate funding level would be based on the current depreciation ofassets expressed in terms of today's replacement costs, less any debt principalpayments.The minimum level based on historical cost depreciation approximates the depletion ofasset value. Some of the cost may already be in the rates in the form of debt service.Depreciation less debt principal repayment provides a minimum estimate of the cost ofassets used. Any funding level below this amount defers costs to future rate payersand erodes the Utility’s equity position, which puts the Utility’s financial strength andviability at risk.The maximum level based on replacement cost depreciation represents fullcompensation to the utility, in terms of today's value, for the depletion of assets. Thereplacement cost depreciation, again less debt principal repayment, provides a ceilingto an equitable definition of "cost of service".The purpose of long-term capital reinvestment planning is to establish a target fundinglevel which is based on need and to assure that funds will be available for projectedcapital costs in an equitable manner. The best projection of the needed capitalreinvestment is based on a "survival curve" approach, approximating the timing andcost of replacing the entire system. This defines the projected financial needs andallows determination of equitable rate levels, funding levels for current capitalconstruction and engineering, contributions to and withdrawals from the R&R Account,and the use of debt, if any. It also provides a means to project depreciation on bothhistorical cost and replacement cost basis which are used to calculate minimum and2-21
maximum funding levels, debt to fixed asset ratios, and debt coverage levels, if debt isused. These later measures can be used to assure that the financial plan meetsconventional standards.C. Use of DebtThe Utilities should fund capital investment from rates and other revenue sourcesand should not plan to use debt except to provide rate stability in the event ofsignificantly changed circumstances, such as disasters or external mandates.Resolution No. 5759 states that the City Council will establish utilityrates/charges and appropriations in a manner intended to achieve a debt servicecoverage ratio (adjusted by including City taxes as an expense item) ofapproximately 2.00". Please note that the Moody’s Investor Services ratingshould be Aa2 (not Aa as stated in Resolution No. 5759).Discussion:The Utilities are in a strong financial position and have been funding the Utility CapitalInvestment Program from current revenues for a number of years. The current 20 yearand 75 year capital funding plans conclude that the entire long-term renewal andreplacement program can be funded without the use of debt if rates are planned andimplemented uniformly over a sufficient period. Customers will pay less over the longtermif debt is avoided, unless it becomes truly necessary due to unforeseencircumstances such as a disaster or due to changes in external mandates. Havinglong-term rate stability also assures inter-generational equity without the use of debtbecause the rate pattern is similar to that achieved by debt service.Use of low interest rate debt such as the Public Works Trust Fund loans, by offeringrepayment terms below market rates, investment earnings or even inflation, should beviewed as a form of grant funding. When available or approved, such sources shouldbe preferred over other forms of rate or debt funding, including use of availableresources. Since such reserves would generate more interest earnings than the cost ofthe loan, the City's customers would be assured to benefit from incurring such debt.2-22
Page 1 and 2: WaterComprehensivePlan
Page 6 and 7: ASSET MANAGEMENTR&R needs areregula
Page 8 and 9: CONTENTSExecutive SummaryPageiiiCha
Page 10 and 11: Chapter 12 - Financial Information
Page 12 and 13: 10-1 Federal Drinking Water Quality
Page 14 and 15: CHAPTER 1IntroductionUtilities Depa
Page 16 and 17: Demand. The quantity of water obtai
Page 18 and 19: EKCEast King CountyEKC-CWSP East Ki
Page 20 and 21: CHAPTER 2Water Utility PoliciesThe
Page 22 and 23: owner agrees to reimburse the City
Page 24 and 25: Facility AbandonmentWhen the Utilit
Page 26 and 27: Discussion:The Utility should syste
Page 28 and 29: Discussion:It is Bellevue’s polic
Page 30 and 31: Discussion:In 1982, Bellevue, along
Page 32 and 33: Waterworks UtilityFinancial Policie
Page 34: B. Self-sufficient FundingEach Util
Page 44 and 45: D. Capital Facilities Renewal & Rep
Page 46 and 47: overhead for developer extension pr
Page 48 and 49: equired to balance the expenses. A
Page 50 and 51: demonstrate that the hydrologic res
Page 52: adopted to recover those costs dire
Page 55 and 56: In 2004, the Financial Consulting S
Page 57 and 58: Discussion:Providing reserves for e
Page 59 and 60: individual Transportation Analysis
Page 61 and 62: Table 3-2Residential Population Pro
Page 63 and 64: 2006CURRENT LAND USENE 8TH ST104TH
Page 65 and 66: SERVICE AREAThe current Bellevue ci
Page 67 and 68: Table 3-3Interties(Regional Supply
Page 69 and 70: Bellevue and Kirkland are currently
Page 71 and 72: Water District No. 22Water District
Page 73 and 74: Utility Service Review ProceduresTh
Page 75 and 76: CHAPTER 4Water RequirementsThe exis
Page 77 and 78: This type of demand is relatively c
Page 79 and 80: • Apparent Losses: Includes unaut
Page 81 and 82: Existing DemandExisting water deman
Page 83 and 84: The future build-out demand project
Page 85 and 86: Table 4-4cBuildout Demand Projectio
Page 88 and 89:
Table 4-6Comparison of Eastside Com
Page 90 and 91:
pressure throughout the rest of the
Page 92 and 93:
Pressure ZonesPressure zones are de
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CHAPTER 5Water ConservationThe City
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identifies the main categories of a
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Table 5-2Historical Conservation Me
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Speakers BureauThis measure is defi
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Bill Showing Consumption HistoryThi
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schedules, and efficient irrigation
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Seasonal Demand ManagementThis meas
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RowTable 5-5Conservation Savings Ac
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Figure 5-1Single Family Water Use P
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Since the post-conservation era beg
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statement about each measure is inc
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CHAPTER 6Existing SystemThis chapte
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KIRKLANDREDMONDLakeWashingtonWest B
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City of BellevueWater Pressure Zone
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Supply ConnectionNE 40th InletCherr
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appropriate, PRV records also inclu
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Table 6-5Pump StationsPage 1 of 2Na
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Table 6-6Storage FacilitiesPage 1 o
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HYDRAULIC OPERATIONSTables 6-7 thro
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ZonePrimary SupplyConnectionsReserv
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ASSET MANAGEMENT PROGRAM DEVELOPMEN
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total business risk exposure.Determ
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PIPELINE RENEWAL AND REPLACEMENTBel
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In 1999 Montgomery Watson completed
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CHAPTER 8System AnalysisThe purpose
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from Seattle’s Eastgate and SE 28
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year. When these small-diameter pip
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Fire Flow VolumeDefinitionWAC 246-2
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increase in demand anticipated due
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Table 8-1bSummary of Storage Evalua
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Storage Conclusions and Recommendat
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To evaluate required capacity for t
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CHAPTER 9Operations and Maintenance
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Table 9-1Engineering and Environmen
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Table 9-3Water Department Vehicles
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RECORDS AND DATA MANAGEMENTSystem O
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Pump Stations. Each pump station is
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CHAPTER 10Water QualityThis Chapter
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Bellevue is responsible for monitor
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Table 10-2Annual Average of Total T
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esponsible for collecting any repea
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While the CCR provides an annual
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• Very Small System Waiver - Syst
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CCL, which is comprised of 51 (nine
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• Aging infrastructure and corros
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SUMMARY OF MONITORING REQUIREMENTST
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. At the time the backflow preventi
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Element 8: The purveyor shall inclu
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separation of common water inlets/o
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Fire Hydrant ImprovementsThis progr
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PRIORITIZATION OF IMPROVEMENTSCapit
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CHAPTER 12Financial InformationThis
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TABLE 12-2City of BellevueWater Uti
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during periods of high expenditures
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Bonds issued by the "Waterworks Uti
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TABLE 12-5City of BellevueWaterwork
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APPENDIX BService Area and Adjacent
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APPENDIX DAdjacent Purveyor Review
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CopyCenterFrom: Thompson, Randall L
Page 490 and 491:
CopyCenterFrom:Scott Thomasson [STH
Page 492 and 493:
CopyCenterFrom:Bob Trimble [bob.tri
Page 494 and 495:
Consistency w/SPU forecast for wate
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Provision of SDWA water quality rep
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• Federally-approved habitat cons
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APPENDIX EConsistency Statement Let
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2006 Water Comprehensive Plan - City of Bellevue

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