Agmt 2002 Lawson_Craig R - Laserfiche WebLink

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EXHIBIT A SCOPE OF SERVICES Task 1. Long-Term Wastewater Facility Replacement Financing Study The purpose of a replacement program is to provide adequate revenues for replacements uniformly over time, ensure rate equity between existing users and future users, and promote rate stability over time. A replacement program accomplishes these objectives by anticipating, planning, and funding the costs of facilities before facilities actually wear out. The City implemented a long-term replacement program on July 1, 1985 based on the results of"A Long- Term Replacement Financing Study for City Wastewater Management Facilities" completed by this Consultant on March 28, 1985. Updates of this study were completed on May 6, 1987, April 15, 1989, May 5, 1991, May 16,1993, February 16, 1995, April 24, 1997, May 20, 1999 and July 23, 2001 by this Consultant. The purpose of this task is to update the July 23, 2001 Study and to identify replacement reserve accruals for fiscal years 2003/04 and 2004/05. The City's wastewater facility inventory contained in the July 2001 Study includes one thousand assets and groupings of assets with a then current replacement cost of $106 million with annual depreciation of $2.4 million and estimated past, unfunded depreciation of $55 million. Study projections are designed to fund both annual depreciation and past, unfunded depreciation. The database is continually refined with each study update. Prior study updates incorporated acquisition, abandonment and changes of 304 assets in the 2001 Study, 72 assets and the City's new $40 Sanitary Sewer Capital Improvement Program in the 1999 Study, 120 assets in the 1997 Study, 200 assets in the 1995 Study, 50 assets in the 1993 Study, 195 assets in the 1991 Study, 175 assets in the 1989 Study, and 120 assets in the 1987 Study. Descriptions, useful lives, and replacement costs for all new capital assets must be incorporated into the replacement program. In addition, actual historical rates of inflation and interest, actual replacement reserve accruals and replacement expenditures for fiscal years 2000/01, 2001/02 and 2002/03, and revised projections of interest, inflation, and useful lives must be incorporated in the City's replacement program in order to meet the objectives previously discussed. City staff will soon begin assembling the inventory data required to update this study. The required data includes an inventory of the installation dates, useful lives and original costs for all facilities acquired since early 2001. The Consultant will incorporate this data in the computer model developed for the July 2001 Study. This computer model will be used to develop and analyze alternative funding methods and levels and to prepare annual or biennial updates of the program. Details of the elements of the work to be accomplished by the Consultant are shown below. EXHIBIT A Page 1 of 5 CSA for Craig R.Lawson June 2002