The Otay Water District is a potable water, recycled water, and sewer service provider. The District is a “revenue neutral” public agency where each end-user pays only his or her fair share of the District’s costs of acquiring, treating, transporting, or the operation and maintenance of the public water, recycled water, or sewer facilities. The District provides water service to a population of approximately 225,870, which is expected to ultimately increase to 308,000 by the year 2050. This growth, as well as the maintenance of existing assets, requires long-term capital planning. The process is dynamic, due to the evolving needs of the community, the water supply issues, and changing regulations. As such, capital planning is part of the District’s overall strategic planning. The capital planning process involves identifying current needs, future needs, and prioritizing them based on certain operating assumptions. The primary objective of this planning effort is to support an orderly and efficient program of expansion, new water supply, replacement, and betterment while maintaining a stable long-range financial plan.
To accommodate growth requires that the District invest over $280 million in capital assets through ultimate build-out. The opens in a new windowFiscal Year 2021 Capital Budgetopens PDF file is approximately $8.5 million and the opens in a new windowSix-Year Capital Improvement Program (CIP)opens PDF file totals approximately $92.3 million.
Capital Improvement Projects
The Fiscal Year 2021 Capital Improvement Program Budget consists of 104 projects. The cost for the work planned in Fiscal Year 2021 is $8.5 million.
The following shows how the $8.5 million of projects are broken down into four categories:
Expansion Projects: $69 thousand
Betterment Projects: $1.684 million
Replacement or Renewal Projects: $6.552 million
New Supply Projects: $157 thousand
The Fiscal Year 2021 Capital Improvement Program (CIP) Budget and the Six-Year CIP are consistent with the District’s Water Facilities Master Plan (formerly known as Water Resources Master Plan), current capacity fees, and the District’s strategic financial objectives.
Assumptions and Criteria
The CIP is developed based on the District’s Water Facilities Master Plan incorporating historical data, growth, developers’ input, SANDAG projections, and long-term economic outlook.
The Water Facilities Master Plan was built using several major assumptions and design criteria as follows:
- Utilizing historical water demands for each land use type in the District to calculate future demands.
- Using maximum day peaking factors that vary with demand level.
- Utilizing land use as planned by the City of Chula Vista.
- Providing ten days of emergency water supply through a maximum of five days in covered reservoirs and a minimum of five days from interconnections with adjacent agencies.
- Inclusion of emergency operational storage to meet the five-day covered storage requirement into the ten-day outage supply requirement.
The justification for each project is determined by whether it is required due to growth (Expansion), new water sources (New Supply), improvements or upgrades (Betterment), or to replace an existing asset (Replacement). As these projects are completed and placed into service, there may be an impact on the Operating Budget by increasing costs in the areas of maintenance, energy, or chemicals.
The CIP projects are identified and are prioritized based on the following criteria:
- Safety, restoration of service, immediate obligation, Board directed, or critical system need.
- System upgrades or requirements to maintain system reliability in the next few fiscal years.
- Need to meet the future growth of the system.
- Project requirement may be reduced in capacity or may have low probability of need in the future.
The following are the four categories of CIP projects:
Expansion: Facilities required to support new or future users are funded from capacity fees or user rates.
Betterment: Facilities required because of inadequate capacity or new requirements that benefit existing users are funded from availability, betterment fees, or rates.
Replacement: Facilities required to renew or replace existing facilities that have deteriorated or have exceeded their useful life are funded from user rates.
New Water Supply: Facilities required to support new sources of water are funded from new supply fees or user rates.
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