Agenda Item Wording:
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Capital Improvement Program - Approve updates to the Fiscal Year 2025/26 Wastewater Capital Improvement Program Budget, and appropriate an additional $24,760,000 from the Wastewater Fund.
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Prepared by:
Rehana Cale, Senior Project Manager (559) 713-4176, rehana.cale@visalia.city
Ben Litwack, Public Works Manager (559) 713-4716, ben.litwack@visalia.city
Department Recommendation: Staff recommends that City Council approve updates to the FY 2025/26 Wastewater Capital Improvement Program (CIP) Budget, and appropriate an additional $24,760,000 from the Wastewater Fund (431).
Summary:
The City contracted with Carollo in 2023 to conduct a condition assessment and to develop both a near-term Facility Plan and a 20-year Master Plan. Carollo identified $70 million in near-term projects, including upgrades to sludge systems, UV disinfection capacity, and construction of a new anaerobic digester, with $24,760,000 recommended for immediate action. On June 26, 2024, Council adopted the updated Master Plan, that included these projects. However, budget amendments are needed to accommodate them. Because the City operates on a biennial budget approval process and these projects will need appropriations in advance of the next budget approval cycle, Staff worked to compile the updated Capital Improvement Program budget for fiscal year 2025/26. This fiscal year is being brought for approval, including requested appropriations for these projects, with four additional planning years shown for reference, as is typical through the standard City-wide budget process.
Background Discussion:
In 2018, the City completed a $150 million upgrade to the City’s Water Reclamation Facility (WRF). This project made various improvements throughout the plant utilizing a tertiary treatment process, thus creating the ability to produce California Title 22 compliant recycled water using membrane bioreactor (MBR) treatment, and ultraviolet (UV) disinfection technologies. However, the significant upgrades completed in 2018 made major changes to the treatment processes and increased Plant-wide efficiencies, focused on certain components and processes within the Plant, but did not increase the overall design capacity of the entire facility. Since the last major upgrade project in 2018, influent industrial flow loadings for biochemical oxygen demand (BOD) and total suspended solids (TSS) have increased drastically. This, coupled with successful water conservation efforts throughout the City, while beneficial from a water usage standpoint, have changed and impacted the consistency of flows entering the plant. These changes have skewed the overall perception of available capacity of the Plant. While the permitted capacity of the facility is 18 mgd and current annual average flows are 12.6 mgd, higher loadings cause strains and upsets on the solids handling system including the thickening, digestion, and dewatering processes. These changes have affected the operations of the facility and its overall available functional capacity.
While the WRF discharge continued to meet effluent limitations, it was prudent for the City to evaluate the long-term impacts of the changes on the plant and its ability to maintain discharge requirements, continue efficient operations, and accommodate future growth. Due to the deteriorating condition of some process areas, the increased loading at the WRF, along with several other operational and maintenance issues, Staff identified the need for an overall facility assessment and the development of a near-term Facility Plan to evaluate the current flows, loads, and facility conditions.
On April 3, 2023, Council approved a contract with Carollo to perform a Condition Assessment, Facility Plan and Master Plan update. The Facility Plan would provide a 6-year strategy for near-term improvements, and the Master Plan Update would include a 20-year roadmap to plan for build-out growth conditions and long-term improvements. This process would help evaluate the current planned Capital Improvement Projects Program, prioritize improvements, and address any needs for future expansion.
On February 20, 2024, Council received a report and presentation on the Condition Assessment, Facility Plan, and Master Plan Update for the Water Reclamation Facility. Carollo found the majority of the facility to be “generally in good to acceptable condition.” But, using their process model to analyze the flows and loadings throughout the Plant, Carollo found it to be effectively functioning at a significantly lower capacity than currently designed. Whereas the limiting factors in the Plant were designed to accommodate 18 mgd (as currently configured), given the current make-up of the wastewater entering the facility, the results showed the Plant’s current total capacity is effectively 13.9 mgd. For context, the Plant experiences average annual flows of 12.6 mgd. The report also identifies deficiencies in “firm capacity,” defined as “the capacity with the largest unit out of service,” or effectively the necessary redundancy required of each treatment process to account for equipment failures, breakdowns, or required service. While the facility can accommodate existing and immediately projected growth volumes, improvements are necessary to address projected growth, meet ongoing regulatory requirements, and provide for necessary operational reliability and redundancy. With this information, Carollo identified several near-term projects needed to meet and improve existing operational compliance, while maintaining the ability to accommodate ongoing increased demand. The tables included in this report provide estimated costs and a proposed timeline for these near-term improvement projects, totaling an estimated $70 million over the next 5 years. The suggested capital improvements are the following:
• Construction of Additional Sludge Drying Beds - The WRF is running out of space to dry the dewatered sludge that comes off the end of the screw presses. New beds are needed to accommodate the larger amount of solids entering the plant. In addition, a 3rd Screw Press is needed. Staff is currently renting a Belt Filter Press because incoming solids loadings overwhelmed the two screw presses at the WRF. A permanent 3rd screw press will be installed to replace the rental unit.
• Construction of a New Anaerobic Digester - A new digester, Digester 9, will need to be constructed to accommodate the solids loadings that are projected to enter the plant.
• UV Disinfection Capacity Expansion - The UV system will need to be expanded in order to disinfect the higher volumes of water that are projected to enter the plant.
• Construction of a Digester Draining Pond - The upgrade in 2018 filled in the area that was once used to drain the digesters for routine maintenance. As a result, the digesters have not been completely drained, assessed, and serviced in at least 8 years. A digester draining pond will need to be constructed to reinstitute a regular maintenance cleaning cycle for the digesters.
• TWAS Line Improvements - The Thickened Waste Activated Sludge line, which runs from the Gravity Belt Thickener (GBT) to the Digesters, needs to have cleanouts installed in order to flush accumulated grit regularly. Doing so will allow the GBT to thicken to a greater degree and reduce the hydraulic load to the digesters.
On June 26, 2024, Council approved and adopted the Master Plan, which contained the projects identified in the Facility Plan and identified additional projects needed over a 20-year horizon. Since this approval took place after the current budget adoption (June 17, 2024), it was assumed that staff would have to bring an amended budget to Council once reasonable cost estimates could be determined. Carollo has since generated their 100% plans for the Solids Handling Project and associated cost estimates for the near-term projects described in their Master Plan.
In addition to the projects identified by Carollo, staff also made amendments to identify the need for a new Polymer Mixing Skid for the Gravity Belt Thickener. The current skid is decades old and performing poorly, leading to excessive and costly chemical usage and operational difficulties. Staff also identified the need to increase the budget for Digester Maintenance since, after the construction of the new Digester Draining pond, funds will need to be budgeted for the long overdue maintenance and servicing of the digesters.
The list below includes new projects, totaling $70,000,000, with $24,760,000 being requested for FY 25/26. Below is a summary of the projects:
Fiscal Impact: The Wastewater Fund currently has available cash to fund projects requested in FY 25/26 as shown in table below. The large cash balance has been accumulating to fund capital replacements, operating maintenance changes, and the current debt which was for the 2018 expansion. This debt currently has a balance of $79 million and will not be paid off until 2048. The Fund currently has $300+ million in assets which includes many miles of sewer pipes that will need to be replaced over time. The value of these assets are not in today’s cost but from when they were installed, purchased, or improved. Replacements of many of these assets have been deferred over the years which will also need to be addressed in the upcoming years that is not shown in the current 6 year plan (below).
Of the five projects, there is a project that expands the digester capacity. In the past, all expansion projects included a rate increase. The last rate increase was done over a three-year period (2010-2012). Staff is only requesting to appropriate the design phase as the WRF is currently undergoing a rate study with Carollo Engineers. This rate study will help address long-term liabilities to fund the necessary improvements. The expansion project will not be able to move forward without a rate increase.
Prior Council Action:
April 3, 2023: Council approved a contract with Carollo to perform a Condition Assessment, Facility Plan, and Master Plan Update for the WRF.
December 18, 2023: Council approved Contract with Carollo for engineering services related to the identified near-term projects.
December 18, 2023: Council approved a request from the Goshen Community Services District to increase sewer discharge capacity.
February 20, 2024: Council received a report and presentation on the Facility Plan, Condition Assessment, and Master Plan update for the WRF.
June 3, 2024: Council received a final report and presentation on the WRF Master Plan.
August 19, 2024: Council approved and adopted the updated Master Plan for the Water Reclamation Facility.
Other: N/A
Alternatives: None recommended.
Recommended Motion (and Alternative Motions if expected):
recommendation
I move to approve updates to the FY 2025/26 Wastewater Capital Improvement Program (CIP) Budget, and appropriate an additional $24,760,000 from the Wastewater Fund (431).
Environmental Assessment Status: N/A
CEQA Review: Notice of exemption 2024-41 was prepared for the updated Master Plan and submitted on 9/6/2024, and received no responses.
Deadline for Action: 6/2/2025
Attachments: None