2023 6 20 City Council Agenda Packet

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Wastewater Division Summary

As discussed with you over the past year, we have been delayed in starting our largest capital
project for the wastewater division. Phase 1 of the Cedar Springs Pump Station replacement
and force main work is a three-year project that was originally estimated to be in excess of $3.3
million when completed and to start in FY 2023. We have been delayed on starting the project
by a number of factors beyond our control. This includes delays from both state and federal
agencies in the grant award process and delayed start dates from contractors who won the bid
for the project. We are seeing higher bids due to inflationary pressures impacting the cost and
availability of materials as well as labor. The silver lining in all of this is that we were
awarded additional grant monies from the United States Economic Development Agency
(USEDA) that will greatly reduce the cost burden to our rate-payers. We anticipate the project
to begin this fiscal year as reflected in the capital budget for wastewater.

Highlights of the remaining capital budget include upgrades to our control systems at the
Oostanaula Plant, replacement of the biosolids dryer conveyor system at Oostanaula, SCADA
implementation at both plants, and purchase of a spare pump at the Mt. Verd pump station.

We will continue to evaluate our mini-basins and design projects to further reduce inflow and
infiltration (I&I) across our collection system to eliminate system overflows and reduce
treatment costs. To address these issues, we have budgeted $500,000 for sewer rehab work in
this FY. We have included $250,000 in FY 2024 for general refurbishment of equipment at
both sewer plants and $500,000 for the installation of new customer services. This will be an
on-going budget item as these plants are showing their age, which is evident in equipment
issues and failures.

Vehicle/equipment replacements and expenditures planned for this year in the wastewater
division are expected to be $180,000 including an articulating front end loader.

There is always a level of concern financially for this division given the debt structure as well
as the need for additional large capital outlays in the future to address I&I. In order to fund
these projects while maintaining the financial stability of the division, we will eventually be
required to issue bonds or find other funding alternatives to finance longer-lived capital
projects associated with Cedar Springs and Sterling Road basins. We are pleased to be the
recipient of Tennessee State Revolving Funds (SRF), Community Development Block Grants
(CDBG) and USEDA funding this FY. These funds will eliminate the need for issuing bonds
this year and reduce the cost burden of this project by 87% to our customer base.

We see no need for a rate increase in the wastewater division in FY 2024.

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