Strategic Goal #1

 

Lompoc Regional Wastewater Reclamation Plant (LRWRP)

 

 

Issue

The State of California mandated that the City of Lompoc upgrade the Lompoc Regional Wastewater Reclamation Plant (LRWRP).   VVCSD owns 17.8% of the plant’s capacity.  In 2004 the City awarded a $6M contract to Brown & Caldwell to design and manage the project.  VVCSD used reserve funds to pay its share of this portion of the cost, or $1,174,800.  Lompoc is in the process of applying for a State Revolving Fund (SRF) loan to fund the actual construction, which is estimated to be in the $40-$60M range.  Repayment of the SRF loan begins on the July 1st following the fiscal year that the project is complete.  Lompoc will be passing a share of the SRF loan costs on to VVCSD.  For planning purposes, VVCSD expects to start paying significantly increased wastewater expenses beginning July 2008.

 

Goal

Continue to contract with the City of Lompoc for wastewater treatment and gradually increase sewer rates to pay increased wastewater treatment expenses.

 

Strategy

1.      Educate ratepayers on reasons for plant upgrade project and why it will increase VVCSD sewer rates.  Use website, newspaper, announcements, etc.

2.      Use reserve funds to pay off bonds early.  This will reduce interest expense, eliminate current debt, and put VVCSD in better posture to finance new debt.  [Bonds are scheduled to be paid off in 2008; however, VVCSD may pay them off as early as November 2005 at a cost of $1,100,900.]

3.      Finance Committee and staff to develop a sewer rate structure with public input.

4.      Gradually increase rates to replenish reserves and avoid rate shock.

5.      Cooperate and collaborate with City of Lompoc staff to develop best project with least cost to District ratepayers.

6.      Renegotiate Wastewater Service Agreement with the City of Lompoc.

Current agreement has 35-year term:  June 1, 1974 through June 1, 2009.

 

Cost  (Capital Budget)

Assuming a $50M construction cost, the VVCSD share would be $8.9 million dollars.  SRF loans must be repaid over 20 years.

 

Increase to monthly sewer rates will be about $22 and phased in over next four years.  ($15.05 bond charge already in place and 2%-4% increases per year.)

 

Cost to monthly water rates is zero.

 

Development impact is 20%.

Project Website

http://cityoflompoc.com/departments/utilities/wastewater/Plant_Update_News.htm