Capital Improvement Program

reservoir

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 operating and maintenance of the public water, recycled water, or sewer facilities. The District provides water service to a population of approximately 228,000, which is expected to ultimately increase to 272,350 by 2045. This growth, as well as the maintenance of existing assets, requires a long-term capital planning process. The process is dynamic, due to the evolving needs of the community, water supply issues, and changing regulations. As such, capital planning is part of the District’s overall strategic planning process. The capital planning process involves identifying current and 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 $269 million in capital assets through ultimate build-out. The Fiscal Year 2023 Capital Budget is approximately $12.6 million and the Six-Year Capital Improvement Program (CIP) totals approximately $108.4 million.

Capital Improvement Projects

The Fiscal Year 2023 Capital Improvement Program (CIP) Budget consists of 128 projects. The cost for the work planned in Fiscal Year 2023 is $12.6 million.

The following shows how the $12.6 million of projects are broken down into four categories:

Expansion Projects: $298,000
Betterment Projects:  $2,286,000
Replacement or Renewal projects: $9,995,000
New Supply Projects: $0

The Fiscal Year 2023 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:

  1. Utilizing historical water demands for each land use type in the District to calculate future demands.
  2. Using maximum day peaking factors that vary with demand level.
  3. Utilizing land use as planned by the City of Chula Vista.
  4. 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.
  5. Inclusion of emergency operational storage to meet the five-day covered storage requirement into the ten-day outage supply requirement.

CIP Justification

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 following general criteria are used to determine the reasonableness of a project before it is considered for inclusion within the CIP budget:

  • Safety and existing facility conditions
  • Operating system conditions and energy improvements
  • Water and sewer system deficiencies
  • Regulatory and permitting requirements
  • Developer driven requirements
  • Economic outlook
  • Growth projections
  • Water supply diversification goals
  • Board and management directives

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 by new supply fees or user rates. As of November 4, 2020, the collection of the new water supply fee was discontinued.  The new water supply fund will remain until the funds collected from the new water supply fees have been fully depleted.

For contracting opportunities and requests for proposals (RFPs), please refer to the Engineering Bids page.

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