December 2, 1993EIMIAZZLIBELBLia
JACK CRAHAN, MAI
06468313
DEIGHANAPPRAISAL ASSOCIATES, INC:
REAL ESTATE ANALYSTS AND CONSULTANTS
DATUM K. DLICRAN, MAI
84414144 2000 S.E PORT ST. LUCIEBOULEVARD, SUITEA
PORT ST. LUCK FLORIDA 34952
44 BURL Wu aON,JR, MAI
4468n1s (407) 335 -1405 FAX N(407) 335 -1423
P. L ROCKWELL, TREAS. REPLY TO:
PORT ST. LUCIE
MEMORANDUM
TO: John Drago, Skip Harvey, Bill Reese, Susan Groover, Dave Rivera
FROM: Jack Crahan
DATE: 12/2/93
SUBJECT: Response to field inspection meetings' inquiries
PROJECT: City of Okeechobee Utility Appraisal
MI RASI OCSAN )OULZVARD
STUART, FLORIDA 74904
(497) 335-1485
748 NORTH MESCAL HIGHWAY
THE HOYT CiNTER SUM 241 A
NORTH PALM BEAM TL 37468
(487) 427-5367
This memo is in response to Susan Groover's and Bill Reese's question on 11/18/93
regarding "supplies" referenced in my 11/2/93 "draft asset letter and Bill Reese's
question on 11/30/93 regarding "how inspection results will be used
A. In my 11/2/93 "draft asset letter I made the following statement "As supplies are
typically expense items, no inventory of these materials has been accomplished, nor
is one anticipated as part of this appraisal. If you believe some of these items
should be included in the equipment or plant lists, these need to be identified at this
time Susan Groover and Bill Reese indicated at the 11/18/93 meeting that a
substantial amount ($100,000 of chemicals were kept on hand by the city. Bill
Reese and Rick Jordan indicated on 11/30/93 that the City also kept an inventory of
pipe lengths and meters.
To include these items, I will either need a detailed listing (along with costs) of the
items or because of the fluidity of some of the supplies I will need approximated
what portion of a year's stock you keep on hand. Example: If we know that you
spend $240,000 a year on chemicals and you order them 4 times a year, we can
estimate that you have roughly $60,000 on hand at the time of appraisal.
Please furnish an inventory or the accounting information of those supplies, which
you feel need to be included.
B. At the 11/30/93 field inspection meeting, Bill Reese asked that when the field
inspection was done, how was the observed condition data to be used?
Due to the nature of the 'evaluation, our efforts are limited to determining general
conditions of major portions of the system. Professional judgements and experience
are used to evaluate the accumulated pieces of information and estimate the
resulting overall condition and remaining life.
Efforts will be made in conjunction with City staff and their present consultants, to
select areas that are "representative samples" of a particular component age or type.
Physical conditions of pipe interior and exterior will be compared to any historical
City records, maintenance data and /or to accepted municipal records for similar
systems.
WHS will use the observed data, along with interview information of maintenance
practices, water testing, and flow testing, to adjust published average service life's
in order to estimate a reasonable expectation of remaining life for the specific utility
component As requested I am enclosing copies of the Public Service Commission's
water and sewer systems- Guideline Averaee Service Life Rates as one of the
published sources which will be used.
An example of this procedure follows: WHS takes a sample of a cast iron
distribution main installed in 1960. The sample indicates a less then average
corrosion for the 33 year old pipe which is supported through an interview with the
line's maintenance supervisor. According to the PSC Guideline a ductile iron water
pipe has a 40 year average service life. Instead of estimating physical depreciation
to be 33/40 or 82.5 WHS extends the pipes useful life by 20 years based on its
observed condition. Therefore, the estimated depreciation is now 33/60 or 55
This methodology takes into consideration the known facts about the pipe (age, condition)
and historical data about similar pipe to conclude with a realistic estimate of the system's
components. More extensive testing is possible, however, it is typically cost prohibitive for
the information sought after and the degree of reliability does not significantly increase.
JC\TM312283.DOC
Water Systems Guideline Average Service Life Rates
Account Description
1. Source of Supply 3.6
304 Structures Improvements 3.0 3.6
Frame 3.6 4.0
Masonry 3.3 3.7
Reinforced concrete 2.5 2.7
Steel (tanks or sheds) 4.0 4.5
Fiberglass 5.0 5.6
305 Collecting and Impounding
Reservoirs 2.0 2.5
306 Lake, River and Other
Intakes 2.5 2.5
307 Wells and Springs
Drilled and cased well
(Floridan or non corrosive) 3.3
Shallow well
(Sand aquifer or corrosive) 5.0
308 Infiltration Galleries
and Tunnels 2.5
309 Supply Mains 2.9
2. Pumping Plant 5.0
304 Structures and Improvements
(see "Source of Supply"
for subcategories)
310 Power Generation
311 Pumping Equipment
Electric pumping equip.
Page 8 of 14
Large Small Small
Utility Utility Utility
(Class (Class Function
A B) C) Composite
3.0 3.6
5.0 5.9
5.0 5.9
5.0 6.7
3.7
5.6
N.A.
3.1
Water Systems Guideline Averaae Service Life Rates
Account Description
3. Water Treatment Plant
304 Structures and Improvements 3.0
(see "Source of Supply"
for subcategories)
320 Water Treatment Eauip.
Chlorination Equip.
Other Mechan.Equip.
4. Transmission and Distribution Plant
304 Structures and Improvements 3.0
(see "Source of Supply"
for subcategories)
330 Distribution Reservoirs
and Standpipes
Steel pneumatic tanks
Concrete ground storage
reservoir
331 Transmission and
Distribution Mains
Galvanized steelpipe
fittings
Black steel pipe
Plastic pipe
Asbestos cement
Cast or ductile iron
Valves and valve boxes
Fire mains
333 Services
334 Meters and
Meter Installations
335 Hydrants
339 Other Plant and
Miscellaneous Equip.
Pave 9 of 14
Large
Utility
(Class
A B)
4.5
10.0
4.0
2.7
2.9
2.5
2.3
2.9
5.0
2.2*
2.5
2.5
4.0
3.0
2.5*
5.0
2.2
4.0
Small
Utility
(Class
C)
3.6
5.9
14.3
5.0
3.6
3.0
3.3
2.7
2.6
3.0
5.6
2.5*
2.9
2.9
5.0
3.3
2.9*
5.9
2.5
5.0
Small
Utility
Function
Composite
4.8 (t
2.8
Water Systems Guideline Average Service Life Rates
Large Small Small
Utility Utility Utility
(Class (Class Function
Account Description A B) C) Composite
5. General Plant
304 Structures and Improvements
Reinforced concrete bldg.
Masonry bldg.
Wood bldg.
Steel bldg.
Tanks or sheds
Page 10 of 14
2.5
2.2
2.5
2.9
2.5
4.0
340 Ofc. Furniture and
Equipment 6.7 6.7
Computers 16.7 16.7
341 Transportation Equip. 15.0
342 Stores Equip. 5.6
343 Tools, Shop and Garage Equip. 6.3
344 Laboratory Equip. 6.7
345 Power Operated Equip. 7.9
346 Communications Equip. 9.0
347 Miscellaneous Equip. 6.7
348 Other Tangible Plant 10.0
2.9
2.5
2.9
3.3
2.9
5.0
15.0
N.A.
6.7
N.A.
9.5
N.A.
N.A.
10.0
7.1
Suggested small company rate for use with total depreciable
plant 3.1 (To be used only when acceptable company
plant balances are not available for using function
composites.)
Footnotes
Denotes composite account rate.
Plastic pipe footnote. Assumes use of AWWA standard pipe
only (not thinwall). AWWA DR18 used for all mains 6" or
more.
To be used only when acceptable prant balances are not
available for developing composites using account lives.
This small company composite includes and holds for
Acct.s 342 through 348 only. See text for discussion.
Sewer Systems Guideline Average Service Life Rates
Large Small Small
Utility Utility Utility
(Class (Class Function
Account Description A B) C) Composite
1. Collection System 2.9
354 Structure and Improvements
3.1 3.7
Above grade
Reinforced concrete 2.6 2.9
Masonry 3.3 3.7
Frame 3.6 4.0
Steel 4.0 4.5
Below Grade
Concrete 2.9 3.1
Steel 4.5 5.0
Lift stations 4.0 4.5
360 Collection Sewers Force 3.3 3.7
361 Collection Sewers Gravity 2.2* 2.5*
Manholes 3.3 3.7
362 Special Collecting Structures 2.5 2.7
363 Services to Customers 2.6* 2.9*
364 Flow Measuring Devices 20.0 20.0
365 Flow Measuring Installations 2.6 2.9
2. Pumping Plant
354 Structures and Improvements 3.1 3.7
370 Receiving Wells 3.3 4.0
Pumping equip. N.A. 6.7
371 Pumping Equip. 5.6 N.A.
Page 11 of 14
5.6
Sewer Systems Guideline Average Service Life Rates
Large Small Small
Utility Utility Utility
(Class (Class Function
Account Description A B) C) Composite
3. Treatment and Disposal Plant 5.6
354 Structures and Improvements 3.1 3.7 4
(see "Collection System
for subcategories)
380 Treatment and Disposal Equip. 5.6 6.7
Blowers, motors, pumps,
electric controls 6.7 8.3
Chlorination Equip. 10.0 14.3
Other mechanical equip. 4.3 5.6
381 Plant sewers 2.9 3.1
382 Outfall sewer lines 3.3 3.3
389 Other Plant and
Miscellaneous Equip. 5.6 6.7
4. General Plant
354 Structures Improvements 2.5
Reinforced concrete
buildings 2.2
Masonry bldg. 2.5
Wood bldg. 2.9
Steel bldg. 2.5
Tanks or sheds 4.0
390 Ofc. Furniture and
Equipment 6.7 6.7
Computers 16.7 16.7
391 Transportation Equip.
Page 12 of 14
15.0 15.0
2.9
2.5
2.9
3.3
2.9
5.0
Sewer Systems Guideline Average Service Life Rates
Account Description
General Plant (cont.)
392 Stores Equip,. 5.6
393 Tools, Shop and Garage Equip. 6.3
394 Laboratory Equip.
395 Power Operated Equip.
396 Communications Equip.
397 Miscellaneous Equip.
398 Other Tangible Plant
6.7
7.9
9.0
6.7
10.0
Page 13 of 14
Large Small Small
Utility Utility Utility
(Class (Class Function
A B) C) Composite
N.A.
6.7
N.A.
9.5
N.A.
N.A.
10.0
7.1
Suggested small company rate for use with total depreciable
plant 3.1 (To be used only when acceptable company
plant balances are not available for using function
composites.)
Footnotes
Denotes composite account rate.
Plastic pipe footnote. Assumes use of AWWA standard pipe
only (not thinwall). AWWA DR18 used for all mains 6" or
more.
To be used only when acceptable plant balances are not
available for developing composites using account lives.
This small company composite includes and holds for
Acct.s 392 through 398 only. See text for discussion.