Item 3: Ratification of MWMC Budget

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Metropolitan Wastewater Management Commission Capital Improvement Program nationally and local construction cost inflation has even accelerated faster than the national average. Therefore, the MWMC modified its inflationary projections accordingly. In early 2006, the MWMC hired the consulting firm CH2M Hill to perform a comprehensive update of project cost estimates. Following that update, the RWP CIP assumes general prices change at five percent per year over the planning period. This does not reflect a projection of any single inflation index but was developed by CH2M Hill to reflect a reasonable aggregate rate of increases for the next five years, based on the historical activity of both construction and non-construction price indices. Indices tracked include the Engineering News Record Construction Cost Index, the Turner Building Cost Index, and the Consumer Price Index. Recently, construction cost inflation has decreased substantially, contributing to a favorable bidding climate. In several cases, this has resulted in construction bids lower than estimated costs. RWP staff will continue to monitor inflationary trends to inform our forecasting of capital improvement costs. Regional Wastewater Program Capital Projects Budget The following is a summary of the status of capital projects that are currently budgeted in the FY 10-11 Regional Wastewater Program Capital Budget (“Capital Budget”) and those included in the proposed FY 11-12 Capital Budget. The proposed Regional Wastewater Program Capital Budget consists of the projects in the first year of the FY 11-16 five-year CIP, totaling $25,932,282 Budget and cash flow information pertaining to each ongoing or new capital project initiated in FY 11- 12 is provided in the CIP project summary sheets, included in this document. Each summary sheet provides a description of the project, the project’s purpose and what drives the timing of the project, the funding schedule, and the expected final cost and cash flow for the project. For those projects that are in progress, a short status report is included on the summary sheet. Completed Capital Projects (Scheduled Completion by June 30, 2011) In FY 10-11, several capital projects are projected to be completed and closed out. No CIP summary sheets are included in this document for these projects because there is no expected carryover of project funds to FY 11-12, and therefore no FY 11-12 budget for these projects will be requested. All projects completed in FY 10-11 have been completed within the Commission-approved capital budgets for each project. The completed capital projects are: Aeration Basin Improvements – Phase 1 Clarifier Improvements Line Biosolids Lagoon - Phase 2 Odorous Air Treatment—Phase 1 Master Landscape Design & Implementation for the WPCF. (The Landscape Design & Implementation for the WPCF project established the integrated conceptual design for the Page 39 DRAFT FY 11-12 BUDGET AND CIP