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MetropolitanWastewaterManagementCommissionCapitalImprovementProgram <br />TheCapitalReserveaccumulatesrevenuetohelpfundcapitalprojects,includingmajor <br />rehabilitation,toreducetheamountofborrowingnecessarytofinancecapitalprojects. <br />TheAMCPconsistsofthreeprogramsmanagedbytheCityofEugeneandfundedthrough <br />regionalwastewateruserfees:TheEquipmentReplacementProgram,whichfundsreplacement <br />ofequipmentvaluedatorover$10,000butlessthan$200,000;TheMajorRehabilitation <br />Program,whichfundsrehabilitationofplantinfrastructuresuchasroofreplacements,structure <br />coatings,etc.;andtheMajorCapitalOutlayProgramforcapitalitems(neworreplacement)with <br />costsgreaterthan$200,000.TheMWMCassetsaretrackedthroughouttheirlifecycleusing <br />assetmanagementtrackingsoftware.Basedonthisinformation,thethreeAMCPprogramannual <br />budgetsareestablishedandprojectedforthefive-yearCapitalPlan. <br />Forplanningpurposes,theMWMCmustconsidermarketchangesthatdrivecapitalproject <br />expenditures.Specifically,theCIP’sCapitalPlanreflectsprojectedpricechangesovertimethat <br />affectthecostofmaterialsandservices.Untilabout2003,the20-cityaverageEngineeringNews <br />RecordConstructionCostIndex(ENRCCI)servedasagoodpredictorforfutureinflationand <br />wasusedforprojectingtheMWMC’sconstructioncosts.Accordingly,constructioncost <br />projectionsconsideredinthe2004FPwerebasedonJanuary2004,20-cityaverageENRCCI. <br />However,intheperiod2004through2008,constructioninflationacceleratednationallywith <br />localconstructioncostinflationacceleratingevenfasterthanthenationalaverage.Cityof <br />Springfieldstaffidentifiedthistrendin2005andsubsequentlymodifiedtheirinflationary <br />projectionmethodologyaccordingly. <br />Inearly2006,theMWMChiredtheconsultingfirmCH2MHilltoperformacomprehensive <br />updateofprojectcostestimates.Sincethe2006update,theRWP’sCIPhasassumedageneral <br />priceincreaseoffive-percent-per-yearovertheplanningperiod. <br />TheMWMCcontinuestomonitorinflationarytrendstoinformourforecastingofcapital <br />improvementcosts.Indoingso,theCityofSpringfieldstaffhaveobservedthatwhileinthelast <br />fewyearstheconstructionbiddingclimatehasbeenfavorablewhencomparedtoengineering <br />estimates,mostrecentlybidshavecomeinclosertoengineeringestimates. <br />RegionalWastewaterCapitalProgramStatusandBudget <br />CIPProjectStatusandBudget <br />TheproposedFY12-13CIPbudgetiscomprisedoftheindividualproposedbudgetsforeachof <br />theactive(carryover)orstarting(new)projectsinthefirstyearofthe5-yearCapitalPlan.The <br />totaloftheseFY12-13projectbudgetsis$21,587,796.Eachcapitalprojectrepresentedinthe <br />FY12-13BudgetisdescribedindetailinaCIPprojectsheetthatcanbefoundattheendofthis <br />document.Eachprojectsheetprovidesadescriptionoftheproject,theproject’spurposeand <br />driver(thereasonfortheproject),thefundingschedulefortheproject,andtheproject’sexpected <br />finalcostandcashflow.Forthoseprojectsthatareinprogress,ashortstatusreportisincluded <br />ontheprojectsheet. <br />Page39PreliminaryFY12-13BUDGETANDCIP <br />