BOARD AGENDA MEMORANDUM
SUBJECT:
Title
Receive an Informational Update on the Draft Fiscal Year 2025-2029 Water Utility and Watersheds Operations and Maintenance and Asset Renewal Plans.
End
RECOMMENDATION:
Recommendation
A. Receive an informational update on the Draft Fiscal Year 2025-2029 (FY25-29) Water Utility and Watersheds Operations & Maintenance and Asset Renewal Plans.
Body
SUMMARY:
The Five-Year Water Utility and Watersheds Operations & Maintenance and Asset Renewal Plans (Plans) identify and document the resources needed for operations and maintenance activities and asset replacements and rehabilitations for the next five fiscal years, 2025 to 2029.
The Plans forecast the resources needed for operator labor, energy and supplies, preventive and corrective maintenance, and engineering and environmental staff support. Additionally, the Plans forecast asset renewal projects that involve the replacement or rehabilitation of equipment or systems to extend their service life. These projects are typically budgeted and executed as small capital improvement projects.
The Plans are updated annually and cover a rolling five-year period. The Draft Plans were prepared using long-term forecast data as of December 2023. The FY25 budget requests will be evaluated throughout the budget and groundwater charge-setting processes through May 2024. The Plans will be finalized following the Board’s adoption of Valley Water’s final budget and groundwater production charges for FY25. The Draft Plans are included as Attachments 2 and 3.
Water Utility Summary
The Draft Five-Year Water Utility Operations & Maintenance and Asset Renewal Plan (Water Utility Plan) summarizes the funded and unfunded resources needed for Raw Water and Treated Water Operations Divisions, as shown in the figure below.
The Raw and Treated Water Operations Divisions have identified funded resource needs of approximately $573.8 Million, and an additional unfunded need of approximately $67.8 Million for the next five years. Further information and details on funded and unfunded needs are included in Section V. of the Plan.
In addition to operations and maintenance project forecasts, the Draft Water Utility Plan documents planned asset renewal projects. These projects are identified by the asset management program and are typically budgeted and executed in one of six water utility small capital improvement projects. When many assets at a single facility are due for renewal, the plan may recommend a new large/individual capital project.
Valley Water has identified 46 planned asset renewals scheduled in Fiscal Year 2025 for Water Utility facilities. This work is estimated at $12.0 million. This cost does not include large/individual capital projects such as the Anderson Dam Seismic Retrofit Project.
Watersheds Summary
The Draft Five-Year Watersheds Operations & Maintenance and Asset Renewal Plan (Watersheds Plan) summarizes the funded and unfunded resources needed for the Watersheds Operations and Maintenance Division, as shown in the figure below.
In total, the Watersheds Operations and Maintenance Division has identified funded resource needs of $328.3 Million, and an additional unfunded need of $15.9 Million for the next five fiscal years. Further information and details on funded and unfunded needs are included in Section V. of the Plan.
The Draft Watersheds Plan also discusses efforts on a strategic planning approach to identify future asset renewal projects under the Safe, Clean Water Project F8: Sustainable Creek Infrastructure for Continued Public Safety (Project F8). Asset renewal work identified through Project F8 will restore the level of service originally intended for flood protection infrastructure, extend the life of flood protection infrastructure, and improve the reliability of flood protection infrastructure.
Progress in the past year includes developing an asset management plan for Stevens Creek and business cases for new Regnart Creek Rehabilitation and Permanente and Hale Creeks Concrete Replacement Projects. Based on analysis to date, the magnitude of future Watershed’s asset renewal work is estimated at $388.5 million. This estimated cost is preliminary and will be refined over the next few years.
Next Steps
The activities and resource needs described in the draft plans will continue to be evaluated throughout the budget and groundwater charge-setting processes, through May 2024. The Plans will be finalized following the Board’s adoption of Valley Water’s final budget and groundwater production charges for FY25 and will be provided to the Board at that time.
ENVIRONMENTAL JUSTICE IMPACT:
There are no Environmental Justice impacts associated with this item.
FINANCIAL IMPACT:
There is no financial impact associated with this item.
CEQA:
The recommended action does not constitute a project under CEQA because it does not have a potential for resulting in direct or reasonably foreseeable indirect physical change in the environment.
ATTACHMENTS:
Attachment 1: PowerPoint
Attachment 2: Draft FY2025-29 WUE O&M and AR Plan
Attachment 3: Draft FY2025-29 WS O&M and AR Plan
UNCLASSIFIED MANAGER:
Manager
Luz Penilla, 408-630-2228