CC Agenda Packet 05-14-18 Work Session

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Metropolitan Wastewater Management Commission Capital Improvement Program lifecycle using asset management tracking software. Based on this information, the three AMCP program annual budgets are established and projected for the 5-Year Capital Plan. For planning purposes, the MWMC must consider market changes that drive capital project expenditures. Specifically, the MWMC capital plan reflects projected price changes over time that affect the cost of materials and services. Until about 2003, the 20-city average Engineering News RecordConstruction Cost Index (ENRCCI) served as a good predictor for future inflation and was used for projecting the MWMC’s construction costs. Accordingly, construction cost projections considered in the 2004 FP were based on January 2004, 20-city average ENRCCI. However, in the period 2004 through 2008, construction inflation accelerated nationally with local construction cost inflation accelerating even faster than the national average. City of Springfield staff identified this trend in 2005 and subsequently modified their inflationary projection methodology accordingly. In early 2006, the MWMC hired the consulting firm CH2M to perform a comprehensive update of project cost estimates. Following the 2006 update, the RWP’s CIP assumed a general price increase of 5% per-year over the planning period. However, the MWMC continues to monitor inflationary trends to inform our forecasting of capital improvement costs. Accordingly, based on historical inflationary rate trends from 2006 through 2017, capital project budgets now reflect a 4% annual inflationary factor in the FY 18-19 Budget and 5-year Capital Plan. Regional Wastewater Capital Program Status and Budget CIP Project Status and Budget The FY 18-19 CIP Budget is comprised of the individual budgets for each of the active (carryover) or starting (new) projects in the first year of the 5-Year Capital Plan. The total of these FY 18-19 project budgets is $31,076,000. Each capital project represented in the FY 18-19 Budget is described in detail in a CIP project sheet that can be found at the end of this document. Each project sheet provides a description of the project, the project’s purpose and driver (the reason for the project), the funding schedule for the project, and the project’s expected final cost and cash flow. For those projects that are in progress, a short status report is included on the project sheet. Page 39FY 18-19 BUDGET AND CIP