Community Water Supply Community Water Supply Resources Resources Implementation StrategyImplementation Strategy

Lane AuditoriumLane Auditorium

Albemarle County Office BuildingAlbemarle County Office Building

September 13, 2007September 13, 2007

Objective of MeetingObjective of Meeting

Tonight’s objective is to begin a dialogue with our community and its leaders regarding the priorities and the financial challenges and opportunities in implementing our Community Water Supply Plan.

AgendaAgenda

Where We Have Been . . .Where We Have Been . . . Implementation ChallengesImplementation Challenges The Resources ChallengeThe Resources Challenge

– Updated Cost EstimatesUpdated Cost Estimates External RequirementsExternal Requirements Financing ScenariosFinancing Scenarios Next StepsNext Steps Public ConversationPublic Conversation

Where We Have Been . Where We Have Been . . .. . 32 Water Supply Alternatives 32 Water Supply Alternatives

ScreenedScreened Comprehensive Alternative AnalysisComprehensive Alternative Analysis Rigorous & Extensive Federal & Rigorous & Extensive Federal &

State Legal RequirementsState Legal Requirements 9 Previous Public Meetings Since 9 Previous Public Meetings Since

September 2004 – Significant Public September 2004 – Significant Public InputInput

Where We Have Been . Where We Have Been . . .. . Context of Selecting Preferred Context of Selecting Preferred

Alternative:Alternative:– “…“…least environmentally damaging, least environmentally damaging,

practicable alternative…”practicable alternative…”– What’s Best for Local Community as What’s Best for Local Community as

a Wholea Whole– Cost Was Not the Primary DriverCost Was Not the Primary Driver

RMR Alternative is Cost-EffectiveRMR Alternative is Cost-Effective RMR Alternative Amenable to PhasingRMR Alternative Amenable to Phasing

Where We Have Been . Where We Have Been . . .. .

Community: Stay in Local “Watershed” Community: Stay in Local “Watershed” Ragged Mountain Alternative Ragged Mountain Alternative

“Retooled”“Retooled” Overwhelming Community ConsensusOverwhelming Community Consensus Excellent Mitigation PlanExcellent Mitigation Plan Balance: Human Needs and NatureBalance: Human Needs and Nature

Implementation Challenges . Implementation Challenges . . .. .

Prioritization and Financing of Prioritization and Financing of Plan ElementsPlan Elements– Being introduced tonight, Being introduced tonight,

followed by future discussionsfollowed by future discussions Logistical Issues of Logistical Issues of

ConstructionConstruction– Focus of future discussionsFocus of future discussions

In preparing for battle, I have always found that plans are useless, but planning is indispensable.

-Dwight D. Eisenhower

Great minds discuss ideas; average minds discuss events; small minds discuss people.

-Eleanor Roosevelt

The only way not to think about money is to have a great deal of it.

-Edith Wharton

Updated Estimated Updated Estimated CostsCosts Ragged Mountain Ragged Mountain

DamDam Observatory Upgrade Observatory Upgrade

to 8 MGD and Pipingto 8 MGD and Piping SFRR PipelineSFRR Pipeline

South Fork South Fork Expansion to 16 MGDExpansion to 16 MGD

Observatory Observatory Expansion to 10 MGDExpansion to 10 MGD

$37.2 Million$37.2 Million

$34.0 Million$34.0 Million$55.9 Million$55.9 Million

$127.1 Million

$ 9.0 Million

$ 6.0 Million

$142.1 MillionNote: All Estimates are in 2007=$. Estimates Subject to Change with Inflation.

The Resources The Resources ChallengeChallenge Existing RWSA Depreciated Water Existing RWSA Depreciated Water

Assets: $79 MillionAssets: $79 Million– ““Prorated” RWSA Water System ~ Prorated” RWSA Water System ~

$33.5 Million$33.5 Million Proposed Community Water Supply Proposed Community Water Supply

(CWS) Plan=$142 Million (2007=$)(CWS) Plan=$142 Million (2007=$) CWS Plan Alone is CWS Plan Alone is 424%424% of Current of Current

TotalTotal Water Assets!! Water Assets!! Additional $11 Million in Urban Additional $11 Million in Urban

Water Needs Identified in 5-Year CIP Water Needs Identified in 5-Year CIP Outside CWS Outside CWS

The Resources The Resources ChallengeChallenge Existing Debt (Water and Existing Debt (Water and

Wastewater)=$54 MillionWastewater)=$54 Million Anticipated Debt for CWS Plan Anticipated Debt for CWS Plan

Alone is Alone is 263%263% of Current of Current TotalTotal RWSA Debt!!RWSA Debt!!

Wastewater Needs and Water Wastewater Needs and Water Distribution Needs Will Further Distribution Needs Will Further Add Substantially Greater Debt Add Substantially Greater Debt over Next 5-10 Years over Next 5-10 Years

The Resources The Resources ChallengeChallenge Ragged Mountain Dam, Ragged Mountain Dam,

Observatory Upgrade, and New Observatory Upgrade, and New Pipelines=$127 Million or Pipelines=$127 Million or 89%89% of of Total $142 Million 50-Year PlanTotal $142 Million 50-Year Plan

External RequirementsExternal Requirements

Improved Stream Flow ReleasesImproved Stream Flow Releases Dam Safety RequirementDam Safety Requirement Mitigation Before ImpactMitigation Before Impact Safe Yield > Average Day Safe Yield > Average Day

DemandDemand Plant Capacity > Maximum Day Plant Capacity > Maximum Day

Demand Demand

Improved Stream Flow Improved Stream Flow ReleasesReleases Extensive Work with TNC and DEQExtensive Work with TNC and DEQ Future Flow Past the Dam Will More Future Flow Past the Dam Will More

Closely Mimic Natural ConditionsClosely Mimic Natural Conditions Significantly Improves Stream Flow Significantly Improves Stream Flow

During Drier PeriodsDuring Drier Periods Provides for Two Conditions Provides for Two Conditions

– After New Full Height RMR BuiltAfter New Full Height RMR Built– After SFRR Pipeline Built After SFRR Pipeline Built

Flow Releases to Moormans River

0

20

40

60

80

100

1200 2 4 6 8

10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40

Probability of Being Below

Per

cent

age

of N

atur

al In

flow

Full PlanImplementation

Full Ht Dam BeforeSFRR Pipeline

Existing Conditions

Dam Safety Dam Safety RequirementRequirement Existing Ragged Mountain Dams Existing Ragged Mountain Dams

Built in 1885 (Upper) and 1908 Built in 1885 (Upper) and 1908 (Lower)(Lower)

Existing Dams Do Not Meet Current Existing Dams Do Not Meet Current Safety RequirementsSafety Requirements

Virginia Dam Safety = 2011 MandateVirginia Dam Safety = 2011 Mandate Design of New RMR Dam Already Design of New RMR Dam Already

UnderwayUnderway

Environmental Environmental Mitigation Mitigation Stream and Wetland Mitigation Stream and Wetland Mitigation

Must Precede Permanent ImpactsMust Precede Permanent Impacts Permanent Impacts Are In Permanent Impacts Are In

Reservoir ExpansionReservoir Expansion Mitigation Cannot Be PhasedMitigation Cannot Be Phased

Safe Yield > Average Safe Yield > Average Day DemandDay Demand

Safe Yield vs. Average Day Demand

0

5

10

15

20

25

2006 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055

Year

Yie

ld o

r D

eman

d (

mg

d)

Beaver Creek Supplementto Safe Yield

Urban System Safe Yield

Forecasted Urban Avg DayDemand

Plant Capacity v. Plant Capacity v. Maximum Day DemandMaximum Day Demand

Plant Capacity vs. Maximum Day Demand

0

5

10

15

20

25

30

2006 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055

Year

Yie

ld o

r D

eman

d (

mg

d)

North Fork WTP

Observatory WTP

South Fork WTP

Forecasted Urban Area MaxDay Demand

Implementation Implementation QuestionsQuestions

How Much Can We Afford to How Much Can We Afford to Build Right Away?Build Right Away?

Is a Phased Implementation Is a Phased Implementation Needed?Needed?

What Are Our Priorities?What Are Our Priorities? How Do We Pay for the Plan? How Do We Pay for the Plan?

Background/ContextBackground/Context

Aging InfrastructureAging Infrastructure Adequacy of Water SupplyAdequacy of Water Supply Present Customers and Future Present Customers and Future

CustomersCustomers Increasing Regulatory Increasing Regulatory

ChallengesChallenges Local Environmental Objectives Local Environmental Objectives Affordability of Urban AreaAffordability of Urban Area

Implementation Implementation ScenariosScenarios

SScenario 1cenario 1: Build Full Dam : Build Full Dam and SFRR Pipeline Nowand SFRR Pipeline Now

Scenario 2Scenario 2: Phase Dam and : Phase Dam and Build SFRR Pipeline NowBuild SFRR Pipeline Now

Scenario 3Scenario 3: Build Full Dam : Build Full Dam Now and Phase SFRR PipelineNow and Phase SFRR Pipeline

Phasing the Dam?Phasing the Dam?

If Ragged Mountain Dam Phased, SFRR If Ragged Mountain Dam Phased, SFRR Pipeline Required at Time of First Pipeline Required at Time of First Phase to Meet DEQ Flow Past the DamPhase to Meet DEQ Flow Past the Dam

Phasing Dam Requires Higher Early Phasing Dam Requires Higher Early Year Capital CostsYear Capital Costs

Building Dam in One Phase Improves Building Dam in One Phase Improves Structural Integrity (Seepage)Structural Integrity (Seepage)

Dam Construction Has Major Logistical Dam Construction Has Major Logistical Challenges – How Much is Too Much? Challenges – How Much is Too Much?

Assumptions for Assumptions for ScenariosScenarios

Inflation=2.8%Inflation=2.8% New Debt Terms=30 years @ New Debt Terms=30 years @

5.25% 5.25% Flow Increase=1.1% per yearFlow Increase=1.1% per year Equal Annual Principal RepaymentEqual Annual Principal Repayment

Estimated Future Debt Service for Community Water Supply Scenarios

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

2028

2030

2032

2034

2036

Current Debt Service

Scenario 1

Scenario 2

Scenario 3

Note: Estimated Debt Service for Scenarios is for Community Water Supply Only

Next StepsNext Steps

Public Public ConversationConversation Tonight Tonight Follow-Up with Agencies on PermitFollow-Up with Agencies on Permit Continue with Ragged Mountain Continue with Ragged Mountain

Dam Design to Meet Dam Safety Dam Design to Meet Dam Safety DeadlineDeadline

Further Conversations on Further Conversations on Resource Implementation PlanResource Implementation Plan

Public ConversationPublic Conversation

Focus Question:

What are the benefits and challenges of the scenario options?