Utilities

The utilities group encompasses all City of Salem owned and operated public utility services consisting of sanitary sewer, storm sewer, and water. The capital projects identified in this group reflects the construction required to maintain and/or expand the wastewater collection and treatment, stormwater collection, and the water source/delivery systems.

Funding Summary

Funding sources consist of:

User rate revenues are generated by charges to customers, applicants, or others who purchase, use, or directly benefit from the services provided. User rates are utilized as either a funding source to service debt incurred or to accumulate reserves to fund projects on a pay as you go basis.

Growth revenues reflect the utilization of System Development Charges (SDC) or developer-required infrastructure. SDCs are charges assessed on all new development to recover a portion of the costs of existing infrastructure and planned future facilities that will provide them service. Developer funded projects are improvements constructed by the developer and subsequently turn over in title to the City upon completion.

Other Funding Sources reflect utilization of certain opportunity grants, contributions, restricted/unrestricted reserves, and/or other financing tools. These other funding sources may not be fully realized at the time of publication (funding sources are further detailed in the category section that follows).

Capital Project Summary

Capital project category and project classifications are further detail groupings that are defined by the operating department in project identification and assessment.

Sanitary Sewer projects consist of all structures and systems relevant to the collection and treatment of wastewater.

Storm Sewer projects consist of all structures and systems relevant to the collection and treatment of stormwater.

Water projects consist of all structures and systems relevant to the treatment and distribution of water.

Further classifications of these project categories are identified in the subsequent category sections

Other Relevant Factors

The projected costs for all projects are the costs anticipated in the year of construction. Project construction cost estimates are indexed using the Engineering News Record (ENR) cost index, an average of the Seattle, San Francisco, and Los Angeles indices. This brings the original project cost estimate up to "current year" dollars. This value then has an assumed 3 percent annual inflation increase in subsequent years for general civic construction projects, and 4 percent for treatment / pump station projects.

During the 2004 utility rate hearings, the City Council agreed with the Public Works Department recommendation to cut $60 million from its capital construction budget over the next five years to reduce the upward pressure on water and sewer rates. To meet this goal, Public Works staff has identified a number of projects for elimination or deferral from the 5-year CIP. The selection process has been conducted with care and to accommodate projects required to meet compliance with Oregon Department of Environmental Quality standards.

Staff is proposing to expand the Urban Service Area to include the Fairview Industrial Park and its southern portion of the McGlichrist industrial area. These areas are currently served by all required infrastructure. As such no capital projects are proposed for this addition.

The City has completed comprehensive master plans for each of the infrastructure categories. These master plans identify the needed infrastructure improvements to each of the system over a 20-year planning period. The Capital Improvement Program provides detail on planned projects that have an identifiable funding source over the immediate five-year time horizon. Those projects without an identifiable funding source are reflected in the unfunded project listing (reference supplemental “Unfunded Project Listing”).

Sanitary Sewer

Funding Summary

Important Information

The City’s sewage system, a "separate" system - apart from the drainage system, is a major component in protecting our environment from diseases and pollution that result from our urban lifestyle. It provides sanitary sewer service to 56,000 accounts. The accounts encompass a population of 200,000, including customers in the cities of Salem, Turner and Keizer, and the Labish Village area, Eola-Chatnika and East Salem sewer districts.

The sewer system is comprised of two main components: the collection system and the treatment plant. The collection system–the pipes and pump stations–collects wastewater from throughout the Salem Urban Area and conveys it to the Willow Lake Water Pollution Control Facility. The wastewater is treated before the effluent is discharged into the Willamette River.

Capital construction projects for the sanitary sewer system continue to emphasize our investments in reducing ground and rainwater infiltration into the sewers, as well as the expansion of the Willow Lake Water Pollution Control Facility. The infiltration reduction programs include the Pipeline Replacement Program that works to replace older public mains and the laterals that connect to them.

With the completion and adoption of the Willow Lake Facilities Plan, the course is now set for the funding of the expansion of the service area’s treatment needs, including construction of a separate peak excess flow treatment facility to address the issue of Sanitary Sewer Overflows (SSOs) in accordance with the City’s compliance with the Federal Clean Water Act. This project is required to bring the City’s sewage treatment operations into compliance with state and federal laws. The initial phases of the project will be funded with proceeds from sewer rates, SDCs, Oregon DEQ Revolving Fund, and a series of Revenue Bonds.

The projected costs for all projects are the costs anticipated in the year of construction. These costs are arrived at by indexing the engineering estimates to an average of the Seattle, San Francisco, and Los Angeles Construction Cost Indices. (CCI), an indexing system adopted by the City Council. This brings the original project cost estimate up to "current year" dollars. This value then has an assumed 3 percent annual inflation increase in Year 1 - 5 for general civic construction projects, and 4 percent for treatment / pump station projects.

During the 2004 utility rate hearings, the City Council agreed with the Public Works Department recommendation to cut $60 million from its capital construction budget over the next five years to reduce the upward pressure on water and sewer rates. To meet this goal, Public Works staff have identified a number of projects for elimination or deferral from the 5-year CIP. The selection process has been conducted with care and to accommodate projects required to meet compliance with Oregon Department of Environmental Quality standards.

Urban Service Areas

Staff is preparing to expand the Urban Service Area to include the Fairview Industrial Park and its southern portion of the McGilchrist industrial area. These areas are currently served by all required infrastructure. As such no capital projects are proposed for this addition.

CIP Bond Program

Storm Sewer

Funding Summary

Important Information

The City of Salem provides stormwater drainage service within a service area of approximately 40 square miles. The stormwater collection system is entirely separate from the sanitary sewer system, and consists of approximately 450 miles of pipe (the "closed" system), and over 80 miles of open channels/ditches and 66 miles of waterways (the "open" system). However, the storm drainage system and sanitary sewer system are both funded from sanitary sewer rates.

In September 2000, the City Council adopted the new Stormwater Master Plan as the City’s guiding document for management of our storm drainage system. The overall goal of the Master Plan is a stormwater management program that cost effectively balances reductions in flood damages with improvements in stream water quality, reflecting the community’s financial resources to support such a broadened program. The Master Plan and its resulting projects address issues of stormwater quantity (i.e., conveyance and flood damage reduction) and stormwater quality in a manner that is compatible with the City’s NPDES Municipal Stormwater Permit; while attempting to anticipate the implications of the Endangered Species Act (ESA) and the Total Maximum Daily Load (TMDL) program for the Willamette River and its tributaries (including the City’s urban streams)

One major focus has been to continue to be good stewards of the community’s investment in the existing drainage system. Since adoption of the Master Plan, approximately $750,000 per year of sewer rate revenue that was previously earmarked for stormwater "pay as you go" construction projects was shifted to increase the annual operation and maintenance level of service. Consequently, revenue bond funding now comprises essentially 100 percent of the funding for stormwater capital construction projects; to be supplemented by any SDC revenues which result from the new Stormwater SDC that became effective in September 2002.

Capital construction projects for the stormwater system continue to emphasize resolution of existing flooding problems throughout the community, including those identified as high priority by the Master Plan as well as those of a relatively smaller nature identified by Public Works and the affected neighborhoods. Other projects are associated with the Lone Oak and West Salem Urban Service Areas (USAs). High priority opportunity projects with surface water quality and/or ESA benefits (e.g. fish passage issues) will also be addressed, often in conjunction with flood-related projects within the open drainage system.

The projected costs for all projects are the costs anticipated in the year of construction. These costs are arrived at by indexing the engineering estimates to an average of the Seattle, San Francisco, and Los Angeles Construction Cost Indices. (CCI), an indexing system adopted by the City Council. This brings the original project cost estimate up to “current year” dollars. This value then has an assumed 3 percent annual inflation increase in Year 1 - 5 for general civic construction projects, and 4 percent for treatment / pump station projects.

During the 2004 utility rate hearings, the City Council agreed with the Public Works Department recommendation to cut $60 million from its capital construction budget over the next five years to reduce the upward pressure on water and sewer rates. To meet this goal, Public Works staff have identified a number of projects for elimination or deferral from the 5-year CIP. The selection process has been conducted with care such that all projects required to meet compliance with Oregon Department of Environmental Quality standards are still in the CIP.

Urban Service Areas

Staff is preparing to expand the Urban Service Area to include the Fairview Industrial Park and its southern portion of the McGilchrist industrial area. These areas are currently served by all required infrastructure. As such no capital projects are proposed for this addition.

CIP Bond Program