Memorandum
TO Patrick Dobbins From Megan Panofsky
DATE 11/13/2025
Subject Updated CIP and Sewer Enterprise Fund Cash Flow Projections MNS was tasked with updating the City of Gonzales’ Capital Improvement Plan (CIP) budget to fund the unanticipated Municipal Wastewater Treatment Plant (MWWTP) Rehabilitation Project as well as the 5th Street Manhole Rehabilitation Project. The following memorandum provides details as to the projects reviewed, and updates made to the CIP to fund the projects.
Updated CIP
MNS made the following adjustments to the CIP to re-allocate the estimated $1,140,000 to the MWWTP Rehabilitation effort and $125,400 for the 5th Street Manhole Project. 1) Updated Fiscal Year (FY) 24/25, the 21-inch Trunk Sewer Video Inspection and Rehabilitation project was not started in 24/25. This project must be completed before startup of the Industrial Wastewater Treatment Facility (IWTF). Funds were transferred to FY 25/26 and FY 26/27 to be accurate per planned design, bid, and construction.
2) Reallocated funds for the following projects to the MWWTP Rehabilitation Project:
Project Determination CIP Budget Reallocated
Install New Groundwater
Monitoring Wells at MWWTP
Postponed to future CIP $125,000 (FY 25/26)
Wastewater Treatment Plant
Upgrades
Postponed to future CIP $205,000 (FY 25/26 $80,000 + FY 26/27 $125,000)
Wastewater Treatment Plant
Sludge Removal
Sludge Removal to be accomplished as part of
the MWWTP Rehabilitation Project
$750,000 (FY 25/26)
Replace SCADA/Control
System
Postponed to FY26/27 with decreased budget. FY 25/26 $10,000 WWTP Process Optimization In progress as part of the MWWTP Planning Study
$25,000 (FY 26/27)
Sewer System Condition
Assessment
Postponed to FY26/27 with decreased budget. $25,000 (FY 25/26) TOTAL $1,140,000
811 El Capitan Way Suite 130,
San Luis Obispo, CA 93401
Ph 805.692.6921
3) Reallocated funds for the following projects to the 5th Street Manhole Rehabilitation Project Project Determination CIP Budget Reallocated
Sewer Condition Assessment Postponed to FY26/27 with decreased budget. $125,400 (FY 25/26) TOTAL $125,400
Sewer Enterprise Cash Flow Model
The updated CIP reallocates nearly all the FY 26/27 CIP budget to FY 25/26. A cash flow analysis was developed to evaluate if the Sewer Enterprise fund can support the anticipated expenditures.
The following assumptions were used to develop the cash flow analysis:
1) The analysis initiates October 2025, using actual to-date costs and fund balances. 2) City costs for FY 25/26 assume the remainder of the FY 25/26 budget expenditure will be equally distributed over the next 8 months.
3) City anticipated expenditures for FY 26/27 were assumed to increase from FY 25/26 budgets at the same annual percentage increase as from FY 24/25 to FY 25/26. 4) City revenue for FY 25/26 assumes the remaining anticipated revenue for FY 25/26 is distributed considering a 20% increase on January 1, 2026, per the Sept 2023 Water/Sewer Rate Study. 5) City revenue for FY 26/27 assumes a 6% increase on January 1, 2027, per the Sept 2023 Water/Sewer Rate Study.
6) The current Sewer Enterprise Fund balance is $1,153,055 per the Balance Sheet provided on October 24, 2025.
Based on the cash flow model, the Sewer Enterprise Fund can support the anticipated expenditure but will drop to a minimum balance of $300,000 after which revenue will continue to replenish the fund balance. As shown in the Projected Sewer Enterprise Fund Balance figure attached herein.
Current MWWTP operation is reliant on infiltration via the new IWTF infiltration basins, which must cease operation in February 2026 to avoid delaying IWTF construction. Rehabilitation of the MWWTP is needed as soon as possible. Additionally, City Staff has stated that the 5th Street Manholes are a hazard in their current condition and need to be rehabilitated.
Attachments:
October 2025 Updated CIP Table
Cash Flow Model
January 2025 Updated CIP Table
2023 Rate Study CIP Table
10/28/2025 Updated CIP
FY 23/24 FY 24/25 FY 25/26 FY 26/27
WWT 1 Wastewater Treatment Plan Expansion - $ - $ - $ - $ WWT 2 Wastewater Rate Study $ - 10,000 $ - $ - $
WWT 3 Wastewater Master Plan - $ 25,00 $ 275,00 0 $ - 0 $ WWT 4 Groundwater Monitoring Plan 15,00 $ - 0 $ - $ - $ WWT 5 Install New Groundwater Monitoring Wells at WWTP $ - - $ 125,00 $ 0 $ - WWT 6 Wastewater Treatment Plant Upgrades $ - - $ 80,00 $ 0 $ 125,000 WWT 7 Wastewater Treatment Plant Sludge Removal $ - - $ - $ 750,00 $ 0 WWT 8 Replace SCADA/Control System - $ - $ 10,00 $ 0 $ 100,000 WWT 9 WWTP Process Optimization - $ - $ - $ 25,00 $ 0
WWT 10 Renewal of WWTP WDR 20,00 $ - 0 $ - $ - $
WWT 11 Sampling, Analysis and Regulatory Report Plan $ - 14,000 $ - $ - $ WWT 12 Spill Prevention, Emergency Response and Staff Training Plans $ - 7,500 $ - $ - $ WWT 13 Wastewater Disposal and Sludge Management Plan $ - 14,000 $ - $ WWT 14 WWTP and Collections Staffing Study $ - - $ 5,50 $ - 0 $ WWT 15 Annual Waste Discharge Requirement Fees (WWTP and IWTF) $ 28,00 25,000 $ 28,00 0 $ 55,00 0 $ 0 WWT 16 CUPA Spill Prevention Control and Countermeasures Plan $ 20,00 - $ - 0 $ - $ WWT 17 Climate Change Adoption Plan - $ - $ 25,00 $ - 0 $ WWT 18 Time Schedule Compliance Plan 10,00 $ - 0 $ - $ - $ WWT 19 Emergency Infiltration Basin - $ 550,00 $ - 0 $ - $ WWT 20 Wastewater Treatment Plant Rehabilitation $ - - $ 1,140,00 $ - 0 $ Total $ 598,000 115,500 $ 1,198,500 $ 155,000 $ $ 2,067,000
$ 208,000 351,000 $ 453,000 $ 1,105,000 $ 2,117,000 $
$ (390,000) 235,500 $ (745,500) $ 950,000 $ 50,000 $
CS 1 Industrial Wastewater Pretreatment Program $ - 10,000 $ - $ - $ CS 2 Update Sewer System Management Plan 10,00 $ - 0 $ - $ - $ CS 3
Clean and Video Inspect 21-Inch Trunk Sewer (Along Fermin Lane from Alta Street to WWTP) $ 130,000 $ - 130,000 $
CS 4
Rehabilitate Manholes on 21-inch Sewer (Along Fermin Lane from Alta Street to WWTP) $ 270,000 $ 390,000 230,000 $
CS 5 Sewer System Condition Assessment $ 150,000 $ 129,600 CS 6 5th Street Manhole Rehabilitation $ 125,400 Total
$ - 20,000 $ 485,400 $ 519,600 $ $ 1,025,000
$ 330,000 335,000 $ 180,000 $ 180,000 $ 1,025,000 $
$ 330,000 315,000 $ (305,400) $ (339,600) $ - $
IS 1 Conveyance $ 7,500,00 - $ - 0 $ - $
IS 2 Treatment Facility $ 1,400,00 - $ 0 $ 7,400,00 16,300,000 $ 0 IS 3 Land, Legal, Engineering Costs $ 990,00 100,000 $ 2,900,00 0 $ 640,00 0 $ 0 $ 8,490,000 100,000 $ 19,200,000 $ 8,040,000 $
$ 12,500,000 8,300,000 $ 3,500,000 $ - $
$ 4,010,000 8,200,000 $ (15,700,000) $ (8,040,000) $
$ 9,088,000.00 235,500.00 $ 20,883,900.00 $ 8,714,600.00 $ Funding Sources FY 23/24 FY 24/25 FY 25/26 FY 26/27
Sewer Operations Fund 135,50 $ 598,00 0 $ 1,683,90 0 $ 674,60 0 $ 0 Sewer Operations Fund Totals per Sept 2023 Water/Sewer Rate Study $ 538,00 686,000 $ 633,00 0 $ 1,285,00 0 $ 0 Δ $ (60,000) 550,500 $ (1,050,900) $ 610,40 $ 0
Loans $ 9,890,00 100,000 $ 19,200,00 0 $ 8,040,00 0 $ 0 Grants $ 25,00 - $ 275,00 0 $ - 0 $
$ 10,991,000 1,472,000 $ 20,741,000 $ 10,610,000 $
WASTEWATER TREATMENT
COLLECTIONS SYSTEM
INDUSTRIAL SYSTEM
Total =
Total
CIP Totals
CIP Totals per Sept 2023 Water/Sewer Rate Study
Δ
CIP Totals per Sept 2023 Water/Sewer Rate Study
Δ
CIP Totals
CIP Totals per Sept 2023 Water/Sewer Rate Study
Δ
CIP Totals
$0
$200,000$400,000$600,000$800,000
$1,000,000$1,200,000$1,400,000$1,600,000
Oct-25 Nov-25 Dec-25 Jan-26 Feb-26 Mar-26 Apr-26 May-26 Jun-26 Jul-26 Aug-26 Sep-26 Oct-26 Nov-26 Dec-26 Jan-27 Feb-27 Mar-27 Apr-27 May-27 Jun-27 Sewer Enterprise Fund Balance
Projected Sewer Enterprise Fund Balance
1/13/2025 Updated CIP
FY 23/24 FY 24/25 FY 25/26 FY 26/27
WWT 1 Wastewater Treatment Plan Expansion $ - $ - $ - $ - WWT 2 Wastewater Rate Study $ 10,000 $ - $ - $ -
WWT 3 Wastewater Master Plan $ - $ 25,000 $ 275,000 $ - WWT 4 Groundwater Monitoring Plan $ 15,000 $ - $ - $ -
WWT 5 Install New Groundwater Monitoring Wells at WWTP $ - $ - $ 125,000 $ - WWT 6 Wastewater Treatment Plant Upgrades $ - $ - $ 80,000 $ 125,000 WWT 7 Wastewater Treatment Plant Sludge Removal $ - $ - $ - $ 750,000 WWT 8 Replace SCADA/Control System $ - $ - $ 10,000 $ 100,000 WWT 9 WWTP Process Optimization $ - $ - $ - $ 25,000
WWT 10 Renewal of WWTP WDR $ 20,000 $ - $ - $ -
WWT 11 Sampling, Analysis and Regulatory Report Plan $ 14,000 $ - $ - $ - WWT 12 Spill Prevention, Emergency Response and Staff Training Plans $ 7,500 $ - $ - $ - WWT 13 Wastewater Disposal and Sludge Management Plan $ 14,000 $ - $ - WWT 14 WWTP and Collections Staffing Study $ - $ - $ 5,500 $ - WWT 15 Annual Waste Discharge Requirement Fees (WWTP and IWTF) $ 25,000 $ 28,000 $ 28,000 $ 55,000 WWT 16 CUPA Spill Prevention Control and Countermeasures Plan $ - $ 20,000 $ - $ - WWT 17 Climate Change Adoption Plan $ - $ - $ 25,000 $ - WWT 18 Time Schedule Compliance Plan $ 10,000 $ - $ - $ - WWT 19 Emergency Infiltration Basin $ - $ 550,000 $ - $ - $ 598,000 115,500 $ 273,500 $ 1,055,000 $
$ 351,000 $ 208,000 $ 453,000 $ 1,105,000
$ 235,500 $ (390,000) $ 179,500 $ 50,000
CS 1 Industrial Wastewater Pretreatment Program $ 10,000 $ - $ - $ - CS 2 Update Sewer System Management Plan $ 10,000 $ - $ - $ - CS 3
Clean and Video Inspect 21-Inch Trunk Sewer (Along Fermin Lane from Alta Street to WWTP) $ - 130,000 $ - $
CS 4
Rehabilitate Manholes on 21-inch Sewer (Along Fermin Lane from Alta Street to WWTP) $ 350,000 270,000 $ - $
CS 5 Sewer System Condition Assessment $ 150,000 $ 180,000 $ 400,000 20,000 $ 500,000 $ 180,000 $
$ 330,000 335,000 $ 180,000 $ 180,000 $
$ (70,000) 315,000 $ (320,000) $ - $
IS 1 Conveyance $ - $ 8,400,000 $ - $ -
IS 2 Treatment Facility $ - $ 1,400,000 $ 16,100,000 $ 3,100,000 IS 3 Land, Legal, Engineering Costs $ 100,000 $ 2,230,000 $ 2,400,000 $ 640,000 $ 12,030,000 100,000 $ 18,500,000 $ 3,740,000 $
$ 8,300,000 $ 12,500,000 $ 3,500,000 $ -
$ 470,000 8,200,000 $ (15,000,000) $ (3,740,000) $
$ 13,028,000.00 235,500.00 $ 19,273,500.00 $ 4,975,000.00 $ Funding Sources FY 23/24 FY 24/25 FY 25/26 FY 26/27
Sewer Operations Fund $ 135,500 $ 998,000 $ 773,500 $ 1,235,000 Sewer Operations Fund Totals per Sept 2023 Water/Sewer Rate Studay $ 686,000 $ 538,000 $ 633,000 $ 1,285,000 Δ $ (550,500) $ 460,000 $ 140,500 $ (50,000)
Loans $ 100,000 $ 12,030,000 $ 18,500,000 $ 3,740,000
Grants $ - $ 25,000 $ 275,000 $ -
$ 14,051,000 371,000 $ 20,322,000 $ 6,210,000 $
CIP Totals per Sept 2023 Water/Sewer Rate Study
Δ
CIP Totals
CIP Totals per Sept 2023 Water/Sewer Rate Study
Δ
CIP Totals
WASTEWATER TREATMENT
COLLECTIONS SYSTEM
INDUSTRIAL SYSTEM
Total =
Total
CIP Totals
CIP Totals per Sept 2023 Water/Sewer Rate Study
Δ
City of Gonzales Page 28
Water and Sewer Utility Rate Study 2023
Table 19: Wastewater CIPCity of GonzalesWater and Sewer Utility Rate Study 2023 2023/24 2024/25 2025/26 2026/27
WASTEWATER TREATMENTWastewater Treatment Plan Expansion 0 0 0 0 Wastewater Rate Study 10,000 0 0 0
Wastewater Master Plan 25,000 275,000 0 0
Projected Grant Funding (25,000) (275,000) 0 0
Groundwater Monitoring Plan 15,000 0 0 0
Install New Groundwater Monitoring Wells at WWTP 125,000 0 0 0 Wastewater Treatment Plant Upgrades 80,000 125,000 300,000 300,000 Wastewater Treatment Plant Sludge Removal 0 0 0 750,000 Replace SCADA/Control System 0 10,000 100,000 0
WWTP Process Optimization 25,000 25,000 0 0
Renewal of WWTP WDR 20,000 0 0 0
Sampling, Analysis and Regulatory Report Plan 14,000 0 0 0 Spill Prevention, Emergency Responds and Staff Training Plans 7,500 0 0 0 Wastewater Disposal and Sludge Management Plan 14,000 0 0 0 WWTP and Collections Staffing Study 5,500 0 0 0
Annual Waste Discharge Requirement Fees (WWTP and IWTF) 25,000 27,500 27,500 55,000 CUPA Spill Prevention Control and Countermeasures Plan 0 20,000 0 0 Climate Change Adoption Plan 0 0 25,000 0
Time Schedule Compliance Plan 9,500 0 0 0
Subtotal Wastewater Treatment 351,000 208,000 453,000 1,105,000 COLLECTIONS SYSTEMIndustrial Wastewater Pretreatment Program 25,000 0 0 0 Update Sewer System Management Plan 10,000 0 0 0
Clean and Video Inspect 21" Trunk Sewer (Along Fermin Ln from Alta St to WWTP) 50,000 50,000 0 0 Rehabilitate Manholes on 21" Sewer (Along Fermin Ln from Alta St to WWTP) 100,000 100,000 0 0 Sewer System Condition Assessment 150,000 180,000 180,000 180,000 Subtotal Collections System 335,000 330,000 180,000 180,000 INDUSTRIAL SYSTEMIndustrial Wastewater Reclamation System 8,300,000 12,500,000 3,500,000 0 Subtotal Industrial System 8,300,000 12,500,000 3,500,000 0 TOTAL WASTEWATER CIP $8,986,000 $13,038,000 $4,133,000 $1,285,000