When it comes to responsible money management, caring for the city’s utilities is a lot like running a household. Many families might identify three main aspects to their household budgets. Primary are the daily costs like groceries, household supplies and gas for the car.
Then, there are the larger expenses of home improvements and rehabilitation, like a new roof, an improved kitchen layout or changing to more water-efficient landscaping. Finally, there are the costs of accommodating a growing family, such as a new room addition, college tuition or replacing the two-door sedan with a car that holds the entire family.
In much the same way, this describes the three facets of the work of the city’s Utilities Division. Daily activities such as meter reading, sewer/water pipeline repairs, ongoing maintenance and troubleshooting in the field (e.g., a city crew member investigates a resident’s call about a water pressure problem) are the most visible. Not so visible is the proper treatment of wastewater at the Sewage Treatment Plant, also a daily, ongoing function. These are examples of the daily operational side in action, and its costs are covered by user fees.
The major projects of rehabilitation or replacement would include items such as upgrading a sewer lift station, recoating a water tank or replacing a several block-long section of older water/sewer main.
These projects – sometimes costing hundreds of thousands of dollars – require several years of planning, design and fund accumulation. An example is the $1.2-million project to replace the old water main from Peak Avenue to Monterey Road. Seventy-five percent of the cost will be paid through user fees because the replacement need arises from ongoing, daily activity by current users of the system.
The third cost category is projects that necessitate expanding the system’s current capacity due to population and business growth. Typical projects might include extending water/sewer pipelines to new subdivisions, building a new sewer lift station or drilling for new water wells. Projects like these are funded from developer impact fees. The rationale is that developers should pay the costs of creating the need for the city to expand its facilities to accommodate population and business growth.
Even the purchase and installation of a modern, integrated hardware and software system was partly paid for through developer impact fees on the basis that it would enable the city to handle future growth and demands.
These major improvements for replacement work or for adding to system capacity are classified as capital improvements. Each year, cities and other public agencies update their “capital improvement programs.” These are multi-year plans for funding long-term investment projects requiring relatively large sums to acquire, develop, improve or build (like land, buildings, infrastructure and major equipment).
Morgan Hill’s own Five-Year Capital Improvement Program lays out the planned water and sewer utilities projects – as well as parks, public facilities, storm drains and streets. It identifies the types of projects, where the funding will come from and the proposed construction schedule. The capital expenditure plan must also take into consideration other Utilities Division operational budget priorities.
The city’s engineering staff prepares the Five-Year CIP and presents it annually to the City Council for input and final approval.
The CIP is part of the city’s overall budget document and can be viewed in its entirety at http://ca-morganhill.civicplus.com/DocumentView.aspx?DID=5021.
Running a major 24/7 operation like the city of Morgan Hill Utilities Division requires daily management oversight, skilled supervisors and a trained workforce. At the same time that the daily operational work is underway, we are also conducting the administrative planning, research and analysis to prepare for the future. This includes pipe replacement schedules and assessments of the condition of water and sewer facilities (the 53 major facilities comprised of water wells, water storage tanks, water booster stations and sewer lift stations).Â
The Master Plans that result from these assessments give 10- to 20-year guides for keeping the system reliable, enhancing the city’s water storage and supply capabilities during emergencies and improving wastewater distribution and collection capability.
We welcome your questions regarding the city’s CIP plan, or any questions regarding daily operational issues. In these columns and in the detailed documents available on the city’s web site, we seek to give our customers a more in-depth look at how we do business and how we work at solving problems.
