Wastewater Enterprise
Capital Budget Review
Greg Norby, Assistant General Manager
Wastewater Enterprise
January 30, 2022
Force main rehab at Embarcadero & Jackson 1
• Introductions
• Capital Plan Development Process
• Financial Summary
• Prioritization Process & Trade-Offs
• Key Projects
Agenda
2 Capital Plan Development Process
Wastewater Capital Plan (FY24 - 33)
3 Stormwater
Management
Capital Plan – Project Drivers
4 Operational
Reliability
Seismic
Reliability
Health, Safety
& Security
An integral part of the never-ending asset lifecycle
5 Capital
Planning &
Budgeting
Project Delivery Startup &
Commissioning
Operations &
Maintenance
Asset
Utilization
Asset
Onboarding
Asset
Creation
Asset
Funding
Get the most
value out of each
investment
Control project
outcomes and
deliver as planned
Set up O&M staff
on a path to
success
Maximize asset life
while controlling
operational risks
SFPUC Commission adopted Asset Management Policy, December 22, 2020 Move from a one-time large investment to a more
sustainable strategic capital planning approach
$
Time
R&R
Capital
SSIP Phase 1 & Other
$
Time
R&R
F&I
SSIP
Phase 1,2,3
One-time Large Investment
(previous)
Adaptive Management
(moving forward)
Sewer System Improvement Program (SSIP) Facilities & Infrastructure (F&I) Renewal and Replacement (R&R) 6 Capital Planning Strategy
7 Adaptively managed for sustainable delivery
New
WWE Business Plan
CAPITAL
BUDGET
• Wastewater Deliverability was considered in the capital planning process to ensure projects could be initiated, implemented and received on schedule, within budget, and of high quality • Performed in-depth Deliverability Reviews for R&R Collection System and R&R Treatment Facilities Projects (collectively $ 1.64 B of the 10-yr CIP) to:
• Inform capital planning / 10-Yr CIP budgets
• Identify resource and functional gaps
• Enhance project delivery processes (across a project’s lifecycle continuum) to best align with our asset management framework
• Working on implementing deliverability recommendations • Affordability continues to be the major constraint on delivering routine investments needed in the system in the 10-Year CIP
Capital Plan Deliverability
Financial Summary
Wastewater Capital Plan (FY24 - 33)
9 Wastewater
Wastewater/$million FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 FY 30-31 FY 31-32 FY 32-33 Total SSIP 778.5 676.0 590.2 323.9 151.7 86.7 63.3 40.4 69.3 133.7 2,913.8 Renewal &
Replacement 95.3 148.7 172.1 170.7 174.0 163.0 165.2 171.5 183.7 191.1 1,635.4 Treasure Island 111.7 39.0 1.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0 152.6 Wastewater Facilities &
Infrastructure 0.0 30.8 54.2 26.5 27.9 30.8 4.1 2.8 0.2 0.5 177.7 Total Wastewater 985.5 894.5 818.5 521.1 353.6 280.5 232.7 214.7 253.2 325.2 4,879.4 10 985.5 894.5 818.5 521.1 353.6 280.5 232.7 214.7 253.2 325.2$, M 11 10-Year Total Request: $4.9 B
Total Sources: $4.9 B
Shortfall: $0
Appropriation: FY 24-33 Capital Plan
Appropriation: FY 23-24 Capital Budget
12 Treatment - $609 M
Collection - $89 M
Flood Resilience - $43 M
Stormwater Management - $25 M
Program Management - $18 M
R&R Treatment - $6 M
FY 21-22 Approved
$545.9 M
FY 22-23 Approved
$687.4 M
FY 23-24 Proposed
$985.5 M
R&R Collection - $89 M
Facilities & Infrastructure
and Treasure Island - $112 M
SSIP
R&R
Facilities & Infrastructure
and Treasure Island
LEGEND
$ 985.5 M
Forward-Looking Project Expenditures
13 Sewer System Improvement
Program - $5,337 M
$ 7.7 B
Renewal & Replacement
(Collection & Treatment) – $1,901 M
Facilities & Infrastructure
and Treasure Island – $472 M
Remaining: $ 816 M
FY24-33: $ 4.88 B
After FY33: $ 2.01 B
Appropriations:
Wastewater has $816 M of remaining appropriated budget, and an additional $6.9 B of future spending identified in the Capital Plan. Of this, $4.9 B would be appropriated in the next 10 years.
Prioritization Process & Trade
-
Offs
Wastewater Capital Plan (FY24 - 33)
14 Prioritizing the 10-Year CIP for Customer Affordability
IDENTIFIED
NEEDS
BALANCED
10-YR CIP
$ 5.9 B
$ 4.9 B
Substantial rate increases are projected, and there is a potential for additional regulatory projects.
Hard choices were made to reduce the 10-Year Plan by $1 B from the initial budget request.
Summary of Prioritization
16 Treatment
Plants
Pump Station
& Force Mains
Gravity
Sewers
Stormwater
& Flood
- $ 356 M
- $ 234 M - $ 226 M - $ 174 M
Breakdown to achieve $ 1 B reduction:
R&R Other: - $ 25 M
• Reduced Renewal &
Replacement funding for
State of Good Repair
projects
• Deferred State of Good
Repair Projects at
Southeast & Oceanside
Plants
• Deferred seismic protection
projects at Oceanside Plant
• Deferred system
reliability rehab of
Channel Force Main
• Deferred State of
Good Repair projects
at Berry and Channel
Pump Stations
• Reduced small diameter
sewer renewal &
replacement mileage
scope and construction
methods
• Reduced large diameter
sewer renewal mileage
scope
• Defer interceptor project
(Kansas & Marin)
• Deferred Green Infrastructure
parcel projects at Lincoln High
School and Sutro Reservoir
• Deferred Green Infrastructure
Streetscape projects citywide
• Deferred flood resilience projects
at Ocean & Urbano area, and in
Western Addition along Gough St
R&R
Changes:
17 Long Term Spending
Patterns
Regulatory
Alignment
Safety &
Performance
Non-ideal spending profile
with peaks and valleys
Potential new regulatory
obligations, including
Nutrient Reduction
Increased risks of safety
hazards and service
disruptions
Trade-Offs of Budget Change
Key Projects
Wastewater Capital Plan (FY24 - 33)
18 Total Project Budget: $ 2,373 M
• Significant impact to proposed WW Capital
Plan total and annual appropriation.
• Construction bid and award of most of the
major biosolids facilities are completed.
• Construction of the digester vessels, solids
pretreatment facility and chemical feed and
No. 2 water facilities are underway.
SEP Biosolids Digester Facilities Project
Construction of digester tanks
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Planning through Bid & Award Construction Close Out
Project Schedule:
10-Year CIP Budget: $ 1,330 M (FY24-33)
Reduced from $1,810 M (FY23-32) for affordability
• Includes small and large diameter gravity sewers, and condition assessment of transport/storage boxes
• Expand use of trenchless technologies
• Repurposed a portion of sewer main replacement to
pilot accelerated sewer main spot repairs
• Re-evaluating state of system and determining future
open cut sewer replacement targets to align with the
system’s updated risk profile and WWE asset
management program
Trenchless cured-in-place lining on Mission St.
R&R Collection System
Total Project Budget: $ 320 M
Increased from $298 M
• Cost increase is based on 65% engineer’s estimate;
refined geotechnical information led to a more expensive shoring methodology and a higher tunneling cost
• Scope of work has been divided into four separate
contracts
• Mandated by the San Francisco Bay Regional Water
Quality Control Board Clean-Up and Abatement Order
Folsom Area Stormwater Improvements
New Year’s Eve in the Folsom area (Dec 2022)
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Planning through Bid & Award Construction Close Out
Project Schedule:
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Total Project Budget: $ 299 M
• Project completed Planning Phase in 2022 and will
initiate Design Phase in January 2023
• Project scope consists of construction of 5,650 LF of tunnel and 1,000 LF box sewer to convey flows to Islais Creek Transport/Storage Box
• Mandated by the San Francisco Bay Regional Water
Quality Control Board Clean-Up and Abatement Order
Lower Alemany Area Stormwater Improvements
Flooding in Lower Alemany Area
Planning through Bid & Award Construction Close Out
Project Schedule:
Discussion
23 Other Potential Projects in 10-Yr CIP
• SEP Permanent Sidestream (Nutrients) Treatment
• SEP Campus Buildings Phase 1
• Lincoln and Vicente Outfall Extensions
An evolution of change since SSIP workshops in 2010
25 Affordability
Levels of Service & Asset Management
Market conditions
Delivery capacity, pace & operations
WWE Appropriation – Long Range Projection
26 Appropriated To-Date, $5,015 M
10-Year CIP, $4,879 M
Post 10-Year, $2,013 M
LEGEND
$2,864 M
$9,044 M
Total Project Budget
27 Treatment - $4,933 M
Collection - $1,760 M
Flood Resilience - $823 M
R&R Treatment - $580 M
Facilities & Infrastructure
and Treasure Island - $671 M
SSIP
R&R Collection
Facilities & Infrastructure
and Treasure Island
LEGEND
R&R Treatment
R&R Collection - $2,283 M
SSIP: $ 8.37 B
Total Project Budget
$ 11.9 B Total Project Budget
Stormwater Management - $427 M
Program Management - $431 M
To-date: $ 5.02 B
FY24-33: $ 4.88 B
After FY33: $ 2.01 B
Appropriations:
28 Trade-Offs of Budget Reductions
1. Unsustainable Peaks & Valleys
• Moving appropriations to occur outside the
10-yr horizon creates a “peak” of CIP projects
in pace and spending
• Spending plan in second half of 10-yr CIP is
significantly lower than routine investments
needed (forming a “valley” in the CIP), that
can have lasting effects on asset condition
and system reliability
2. Safety & Performance Risks
• Deferring State of Good Repair projects at
treatment facilities exposes staff to safety
risks, and may increase permit violations
• Reductions in gravity sewer R&R rates result
in a higher probability of breakages,
increased risk of service disruptions, and
lower system reliability
3. Regulatory Alignment
• Reducing gravity sewer rehab and
replacement projects may not align with
previous conversations between the City
and Regulators
• Regulators may require a nutrient reduction
project in the 10-year timeframe
4. Negative Community Perceptions
• Deferring flood resilience and sewer rehab
projects that have high community and
developer interest may cause negative
perception of SFPUC’s commitment to
deliver on planned capital projects