CITY COUNCIL REGULAR MEETING AGENDA PACKET (2)

Page 1 of 5 Item #18 CITY COUNCIL AGENDA REPORT November 19, 2024 Public Works - Utilities Division TITLE: ACCEPT THE FINAL WATER SYSTEM MANAGEMENT PLAN DATED OCTOBER 2024 SUMMARY The City has developed a Water System Management Plan (WSMP) that recommends a near- , mid-, and long-term Capital Improvement Program (CIP) and improvements to the operation and maintenance (O&M) program to determine funding needs that will ensure the sustainability of the water system. As a foundational planning document, the WSMP will be reviewed on a 2- year cycle to evaluate implementation progress and will be updated on a 6-year cycle to reflect any changes in key factors and needs. These regular updates are necessary to accommodate changes in system priorities and to update the City’s rates and connection fees that support effective water system management. The City Council approved a contract for Carollo Engineers (Carollo) in 2022 to prepare the WSMP. The effort focused on conducting and reviewing several technical evaluations on water supply and quality, water distribution system capacity, condition of facilities, system risk and resilience, and O&M best practices to inform the City’s CIP and O&M program recommendations. The resulting CIP includes prioritized projects to be implemented over a 20- year timeframe. The resulting long-term CIP includes prioritized projects to be implemented over the 20-year span with a cost estimate of $262 million; however, as implementation will require additional City engineering staff and result in new O&M requirements, the total estimated cost impact ranges from $283 to $289 million. Additionally, O&M program improvements were recommended for compliance with future regulations and to be consistent with industry best practices; implementation and additional O&M staff over the 20-year span is $19 million. The WSMP will be used as the foundation for the City's upcoming water rate connection fee studies. The studies will utilize the results of the WSMP to calculate and recommend a water rate structure for the City, including user rates and connection fees that support the City’s water system capital and operational needs. Different alternatives and scenarios, including the phasing of projects and the pros and cons of the delivery alternatives, will be evaluated during the water rate and connection fee studies. As part of these studies, options for financing, near versus long-term funding, risk to operations, and resource impacts to the City for each alternative will be evaluated. RECOMMENDATION Approve the 2024 Water System Management Plan dated 2024. BACKGROUND The City owns and operates a potable water system under a permit from the State Water Page 421 of 658