Subject
This action refines and updates the adopted 2019-2024 Capital Improvement Plan (CIP) by adding two years of necessary system improvements at the end of this long-range budget planning document.
Summary and Background
City Council adopted the first comprehensive 5 year plan for investments to be made in to water, sewer, and street infrastructure in January, 2019 in the form of the 2019-2024 CIP. The purpose of a CIP is to provide longer-range certainty for planning around large capital projects.
The CIP is intended as a working document which is to be revisited and updated every two years so that there is always a 4-5 year window in to the future of expensive capital projects. The fact that the document only looks five years in to the future should not be misconstrued as that these are the only big expensive items on the horizon and that once we complete these, then we're done. Major system maintenance will always be necessary. The 5-year CIP simply allows staff to more efficiently focus on the most emergent needs & to identify opportunities to gain efficiencies by pairing similar improvements.
To provide transparency in to execution of CIP projects, city staff developed www.hermistonprojects.com. This website digitizes the 100+ page CIP document in to a more easily accessible format to see what projects are planned, track current projects, and to review completed projects.
Since 2019, the City has completed 14 CIP projects, totaling $2.7 million. These projects included replacing the 20 year old computer system which controls the water systems operations, replacing undersized sewer main which otherwise required staff to 'bypass pump' sewage during peak events to avoid backing up in to nearby homes, and repaving 11 blocks of Hermiston Avenue, among others. Projects underway for completion in 2021 include replacing nearly a half-mile of 1920's vintage water main and replacing a costly 40 year old sewer lift station with a more efficient gravity sewer main, among others.
The updated proposed CIP will invest a total of $20.2 million in to maintaining and rehabilitating existing water, sewer, and street infrastructure through projects from now through 2026. There are many projects included, but some of the highlights include:
- Replacing nearly 3 miles of aging water mains. There is approximately 91 miles of water main existing in the city's system.
- Reconstructing four sewer lift stations which all are over 40 years old and nearing system failures due to age and corrosion. There are 12 sewer lift stations & 78 miles of sewer main existing in the city's system.
- Re-building N. 1st Place between Hermiston Ave. & Elm, which is nearing failure, at a cost of approximately $4.5 million. This will reconstruct approximately 3/4 of a mile of roadway. There are approximately 79 miles of city-owned roadway in the city.
Two of the projects from the 2019 CIP were to update the 1996 & 1998 Water and Sewer System Master Plan documents. Those updates were both completed in 2019 & 2020, and provided City staff and the City Council's Public Infrastructure Committee with the foundation for identifying this next 5-years of projects as the highest priority needs across those systems.
Tie-In to Council Goals:
2020: Goal 7- Provide City Facilities that meet the current and future needs of the Hermiston Community.
2021 DRAFT: Plan for City Facilities that meet current and future needs.
Fiscal Information
The CIP document is a long-range budget planning document which helps to guide development and adoption of the actual annual City budget. Adoption of this document does not commit funding, but provides direction to City Staff in developing annual budgets.
The expenses for water and sewer projects are based on forecasted revenue in the Water & Sewer utility funds; which includes assumptions of growth in customers, and that utility rates will keep pace with inflation.
The expenses for street projects are funded by a combination of gas taxes shared by the State, a $4.5 million state legislative earmark, and an annual contribution of Franchise Fees charged to utilities which use public rights of way.
All expenses in this plan are assumed to be incurred on a "pay as you go" basis, with no new debt issuances.
Alternatives and Recommendation
Alternatives
1. Adopt the updated CIP as presented for use in the FY '22 budget formulation process this Spring.
2. Recommend changes for review by the Public Infrastructure Committee.
3. Reject the updated CIP.
Recommendation
1. Adopt the updated CIP as presented.
Requested Action/Motion
Motion to adopt the City of Hermiston Capital Improvement Plan Update 2021 as presented.
Submitted By: Mark Morgan