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HomeMy WebLinkAbout2020-09-30 - Board of Directors Meeting Agenda PacketAGENDA YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS SPECIAL MEETING  Wednesday, September 30, 2020, 4:00 PM 1717 E Miraloma Ave, Placentia CA 92870 1. TELECONFERENCE INFORMATION    In an effort to help mitigate the spread of Coronavirus (COVID­19), the District will be facilitating  participation in this meeting via teleconference pursuant to Paragraph 3 of Executive Order N­29­20  issued by the Governor of California on March 17, 2020.  Information for accessing this meeting is  provided below.  Public comment related to items on this agenda or other matters within the District’s  jurisdiction will be facilitated on the teleconference or can be submitted in writing via e­mail to the  Board Secretary (bodsecretary@ylwd.com) at least two (2) hours prior to the start of the meeting.  If  you choose to submit comments via e­mail, please identify the agenda item you wish to address.  Your  comments will be shared with the Board prior to the meeting.  For questions regarding participation  please call 714­701­3020. Computer/Mobile Device:  https://zoom.us/j/95197750283 Telephone:  669­900­6833 or 346­248­7799   Meeting ID:  951 9775 0283  2. CALL TO ORDER 3. PLEDGE OF ALLEGIANCE 4. ROLL CALL   Phil Hawkins, President Andrew J. Hall, Vice President Brooke Jones, Director J. Wayne Miller, PhD, Director Al Nederhood, Director 5. PUBLIC COMMENTS  Any individual wishing to address the Board or Committee is requested to identify themselves and state  the matter on which they wish to comment. If the matter is on the agenda, the Chair will recognize the  individual for their comment when the item is considered. No action will be taken on matters not listed  on the agenda. Comments are limited to three minutes and must be related to matters of public interest  within the jurisdiction of the Water District. (GC 54954.3)  6. ACTION CALENDAR  This portion of the agenda is for items where staff presentations and Board or Committee discussions  are needed prior to formal action.  Page 1 of 36  6.1.Task Order for Design of Timber Ridge Booster Pump Station Rehabilitation  Project   Recommendation:  That the Board of Directors approve a Task Order for  design of the Timber Ridge Booster Pump Station Rehabilitation Project to  Tetra Tech under the Professional Services Agreement for On­Call  Professional Engineering Services awarded on January 14, 2020.  6.2.2020 Water and Wastewater Rate Study   Recommendation:  That the Board of Directors authorize the Finance Manager  to issue a Notice to Proceed with Raftelis Consultants, Inc. to initiate the 5­ Year Water and Wastewater Rate Study. 7. CLOSED SESSION  7.1. Conference with Real Property Negotiators Pursuant to Section 54956.8 of the California Government Code Property:  APN 352­181­12 Agency Negotiators:  Brett R. Barbre, General Manager Negotiating Parties:  That and Qui Dang Under Negotiation:  Price and Terms of Payment 8. ADJOURNMENT  8.1. The next Regular Board Meeting will be held Tuesday, October 13, 2020.  Closed Session (if necessary) will begin at 5:30 p.m. and regular business at  6:30 p.m. Items Distributed to the Board Less Than 72 Hours Prior to the Meeting Prior to the Governor’s ‘Stay­at­Home’ Executive Orders regarding COVID­19, non­exempt materials related to  open session agenda items that were distributed to a majority of the Board of Directors or Committee Members  less than seventy­two (72) hours prior to the meeting were made available for public inspection in the lobby of the  District’s Administrative building during regular business hours and posted on the District’s website shortly  thereafter (GC 54957.5).  As the District’s lobby has been closed to the public in accordance with the Governor’s  Executive Orders and to help mitigate the spread of COVID­19, staff will make these materials available on the  District’s website (https://ylwd.com/) as soon as possible following receipt. Accommodations for the Disabled Requests for disability­related modifications or accommodations, including auxiliary aids or services, required for  participation in the above posted meeting should be directed to the Board Secretary at (714) 701­3020 at least 24  hours in advance. (GC 54954.2(a)) Page 2 of 36 ITEM NO. 6.1. AGENDA REPORT MEETING DATE:September 30, 2020 TO:Board of Directors FROM:Brett R. Barbre, General Manager STAFF CONTACTS:Rosanne Weston, Engineering Manager Danielle Logsdon, Principal Engineer SUBJECT:Task Order for Design of Timber Ridge Booster Pump Station Rehabilitation Project RECOMMENDATION: That the Board of Directors approve a Task Order for design of the Timber Ridge Booster Pump Station Rehabilitation Project to Tetra Tech under the Professional Services Agreement for On-Call Professional Engineering Services awarded on January 14, 2020. SUMMARY: The District's current Timber Ridge Booster Pump Station has three electrical vertical turbine pumps and an existing pump with a natural gas engine that is over 35 years old and beyond its useful life. The original scope of the project described in the District's 2018 Asset Management plan included the replacement of one pump and a natural gas engine. The pump was operating inefficiently and replacement parts for the natural gas engine were no longer available. Upon further analysis, the District determined that the pump station capacity must be increased to meet flow demand and fire flow requirements. The project scope has been modified to include the construction of a new booster pump station adjacent to the existing pump station. The existing pump station will remain in operation until the new pump station is constructed and operable to avoid interruptions in water service. The new booster pump station will consist of new pumps, a new pump building, a natural gas generator, a new flow meter; and electrical, instrumentation, security and site improvements. Staff estimates that approximately 75% of the design costs will occur in FY21 and the remainder in FY22. FISCAL IMPACT: Budgeted: Yes Page 3 of 36 Total Budget: $270,000 for Design and Engineering Services During Construction (Total of $1,830,000 for Design and Construction) Cost Estimate: $473,400 for Design and Construction Assistance (Total of $3,730,000 for Design and Construction) Job No: 2020-37 BACKGROUND: On January 14, 2020, the Board of Directors authorized the General Manager to execute five Professional Services Agreements for Professional Engineering Services with Krieger & Stewart, Inc., Carollo Engineers, Inc., Tetra Tech, Psomas and AECOM for an initial period of three (3) years and with a cumulative total not to exceed $1,500,000. Staff has identified Tetra Tech to have the most experience and knowledge of the District's booster pump stations. Tetra Tech submitted a comprehensive task proposal that complies with the District's request. The design phase will take approximately 10 months to complete and Tetra Tech's cost will be a not-to-exceed amount of $473,400. PRIOR RELEVANT BOARD ACTION: Board of Directors authorized a Professional Services Agreement with Tetra Tech during the Regular Board Meeting on January 14, 2020. STRATEGIC PLAN INITIATIVE: G1 1A - Work towards service reliability and efficiency by evaluating all water sources; G1 4A - Address infrastructure needs by updating/implementing the Asset Management Plan; G1 6B - Maintain distribution system and its capability to provide 100% groundwater and/or import water to the entire service area. ATTACHMENTS: 1.Revised Timber Ridge BPS Proposal Page 4 of 36 Page 5 of 36 Page 6 of 36 Page 7 of 36 Page 8 of 36 Page 9 of 36 Page 10 of 36 Page 11 of 36 Page 12 of 36 Page 13 of 36 Page 14 of 36 ITEM NO. 6.2. AGENDA REPORT MEETING DATE:September 30, 2020 TO:Board of Directors FROM:Brett R. Barbre, General Manager STAFF CONTACTS:Delia Lugo, Finance Manager Kaden Young, Senior Management Analyst SUBJECT:2020 Water and Wastewater Rate Study RECOMMENDATION: That the Board of Directors authorize the Finance Manager to issue a Notice to Proceed with Raftelis Consultants, Inc. to initiate the 5-Year Water and Wastewater Rate Study. SUMMARY: On September 21, 2020, the project team from Raftelis Consultants, Inc. and District staff conducted a kick-off meeting to discuss the goals and objectives of the 2020 Water and Wastewater Rate Study. Topics of discussion included: (1) project team, (2) rate study objectives, (3) scope of service and tentative schedule, (4) legal requirements; and, (5) financial policies and financial plan discussion. BACKGROUND: The 2015 Water and Wastewater Rate Study Report of August 25, 2015 prepared by Raftelis Financial Consultants, Inc. provides the rationale in support of the Study approved by the BOD on September 17, 2015. The water and wastewater industries have changed drastically within the 5-year (2015-2020) term of the current Study and with new legislation being implemented or pending at the State level, a new and updated study is required for the District to function optimally. At the regular Board of Director’s meeting on August 27, 2019, the Board of Directors directed staff to engage Raftelis to conduct a new water and wastewater rate study rather than issue a formal Request for Proposals. PRIOR RELEVANT BOARD ACTION: At the regular Board of Directors’ meeting on August 25, 2020, the Board of Directors authorized the General Manager to execute a Professional Services Agreement with Raftelis Page 15 of 36 Consultants, Inc. to develop a 5-Year Water and Wastewater Rate Study. STRATEGIC PLAN INITIATIVES: Goal 2: Fiscal Responsibility – Initiative 3: Equitable Rates ATTACHMENTS: 1.Presentation Page 16 of 36 t Board Workshop September 30, 2020 2020 Water and Wastewater Rate Study 1 Page 17 of 36 Agenda •Project Team •Study Objectives / Schedule •Review Scope of Service •Legal Requirements •Financial Policies and Financial Plan Discussion •Policy Discussion •Next Steps 2 Page 18 of 36 Raftelis Key Staff Sanjay Gaur, Project Manager •Email: sgaur@raftelis.com •Phone: 213-262 -9304 Edward Takara, Support Analyst •Email: etakara@raftelis.com •Phone: 213-262 -9303 Khanh Phan, Lead Analyst •Email: kphan@raftelis.com •Phone: 626-233 -6762 3 Page 19 of 36 STUDY OBJECTIVES •Implement rates to maintain financially sound water and wastewater operations •Evaluate optimal yearly capital investment while minimizing customer impacts •Conduct a cost of service analysis and calculate defensible rates •Create drought allocation stages and associated rates •Conduct workshops to explain the need and rationale for adjusted revenue and rates •Develop a report that demonstrates “nexus requirements” between the costs and rates 4 Page 20 of 36 PROJECT SCOPE & SCHEDULE REVIEW 5 Task #Task Descriptions # of Meetings Due Date 1 Kick-off Workshop, Data Collection & Project Management 1 9/21/20 2 Financial Plan Development Oct / Nov 3 Cost of Service Analysis for Water & Wastewater Nov / Dec 4 Water & Wastewater Rates Development Nov / Dec 5 Budget Allocation Model –Drought Uniform Rates Dec 6 Rate Workshop Feb 9, 2021 7 Water & Wastewater Rate Study Report Board Receives and Sending the Prop 218 Notice March 9 / 23, 2021 8 Proposition 218 Public Hearing 1 May 25, 2021 Rates Implemented July 1, 2021 Page 21 of 36 6 Rate Study Overview Page 22 of 36 Rate Study at a Glance Rate Setting Framework •Financial goals and policies •Pricing objectives Financial Plan •Evaluation of CIP and financing options •Prefunding OPEB / Pension Liability •Cash flow analysis for financial sufficiency Cost of Service & Rate Design •Cost allocations •Rate design ̶Rate calculations ̶Customer impact analyses Final Rate Adoption •Report •Public Hearing 7 Page 23 of 36 LEGAL ENVIRONMENT OF RATE MAKING •Cost of Service Requirements ›Proposition 218 and Proposition 26 (Article XIIIC and XIIID of California Constitution) •Pass-through Provision ›AB 3030 –Section 53756 of the Government Code •Water Conservation ›Article X of California Constitution –prohibits water waste ›SB X7-7 –20% reduction by 2020 ›EO B-37-16 Each water agency will have a target based on an indoor and outdoor water budget 8 Page 24 of 36 9 Financial Policies & Financial Plan Discussion Page 25 of 36 Financial Challenges of Managing a Water / Wastewater System Properties of Utility System •Capital intensive •Highly fluctuating capital cost •Unknown liability •Increasing regulatory demand Political Acceptance on Rates •Rate stability •Affordability •Equity •Environmental stewardship A FINANCIAL MODEL CAN BE A TOOL TO NAVIGATE THROUGH THESE CHALLENGES 10Page 26 of 36 OVERVIEW OF FINANCIALPOLICIES Goals of Financial/Reserve Policies: •To mitigate financial risk –Rate / revenue instability –Emergency with asset failure –Volatility in working capital •To achieve/maintain a certain credit rating •To determine most opportune time to issue debt 11Page 27 of 36 OVERVIEW OF FINANCIAL POLICIES Importance of Financial Policies: •To maintain financial solvency –Provide a basis for coping with fiscal emergencies (revenue short-falls, asset failure, emergency, etc …) •To provide guidelines for sound financial management with an overall long-range perspective •To enhance financial management transparency –Improve public’s confidence and elected officials’ credibility 12Page 28 of 36 FINANCIAL HEALTH INDICATORS Healthy Reserves •Operating Reserve –results from positive cash flow •CIP Reserves –Can award contracts quickly and speed up projects if necessary •Rate Stabilization –funds used during periods of revenue shortages ›Such as a drought ›Can use probability analysis to determine reserve levels •Emergency –funds available in case of asset failure ›Critical asset replacement analysis used to set reserve level Debt Coverage Ratio •Exceed Official Statement requirements •Achieve / Maintain good credit ratings •If there is no debt, what is your debt capacity? ›How much debt are you able to issue with your current rates? 13Page 29 of 36 RESERVE POLICY DISCUSSION Reserves Current Target Level O&M Reserve 25% -50% of O&M (Water & Sewer) Emergency Reserve 5%-10% of capital assets (Water & Sewer) Capital Reserve Min: Current Fiscal Year (FY) Capital budget Max: Current plus 100% of the subsequent FY capital Budget (Water & Sewer) Rate Stabilization Reserve 5%-20% of water sales 14 Page 30 of 36 RESERVE POLICY DISCUSSION Reserves Current Target Level Conservation Reserve $0 -$104,911 (Funding established from net result of admin penalties) Employee Liability Reserve FY21 Minimum Target: Water: $260,554 Sewer: $45,980 Debt Service Debt Covenant Ratio of 1.25x required, District targets 2.25x MWD Contingency (new) Staff will present this 2 Year of water supply – 100% on MWD 15 Page 31 of 36 Policy Discussion •Financial Plan to include Prefunding OPED/Pension Liability •A new reserve target to be created ›MWD Contingency –2 year of water supply from MWD •The District would like to maintain its current rate structure for both water and sewer •Five-year rate projections will be conducted ›Commodity pass-through in January for Water Supply (MWDOC & OCWD) & electricity ›Revenue Adjustment in July 16Page 32 of 36 Policy Discussion •The District would like to include a Capital charge for water and sewer on the Property roll •District would like to develop Drought Rates based on water budget allocation that considers: ›Indoor and outdoor needs •Budget allocation will assist in determining which customers to cut back and by how much ›Revenue short-fall will be collected by a uniform drought rate –Example: $0.30 per ccf for stage 2 17Page 33 of 36 Next Steps •Receive data from District Staff •Develop the Financial Model to forecast the financial condition of the District over the next 5 to 10 years 18Page 34 of 36 19 Contact: Sanjay Gaur 213-262 -9304 / sgaur@raftelis.com Contact: Edward Takara 213-262 -9303 / etakara@raftelis.com Contact: Khanh Phan 626 -233 -6762 / kphan@raftelis.com Page 35 of 36 20 Raftelis is a Registered Municipal Advisor within the meaning as defined in Section 15B (e) of the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder (Municipal Advisor Rule). However, except in circumstances where Raftelis expressly agrees otherwise in writing, Raftelis is not acting as a Municipal Advisor, and the opinions or views contained herein are not intended to be, and do not constitute “advice” within the meaning of the Municipal Advisor Rule. Page 36 of 36 BACKUP MATERIALS DISTRIBUTED LESS THAN 72 HOURS PRIOR TO THE MEETING 6 . 1 . Task Order for Design of i Timber Ridge Booster Pump Station Rehabilitation Project - . i J J + Presented by: -+i 0 AV+ Rosanne Weston Engineering Manager �;�i' AV r,� i - i . • I � i i t • YL _ W - _ ITEM NO. 6.1. r r � C Clty of Brea County of OrangeAm- fi V F RVAMS]t15 ��9��-' CClty of Fullerton �� it u,K�vlEw /l( TIMBER RIDGE BP5 2 ¢ \ BASTANCHuRy �STANONIIRY YDRBA LINDA _Y_DRBA LINDA Y 11 CABT LAHC � ^ m C� I�3•� Y O 6U ENAVIWA�� J° r � ALfA VISTA rw, City of Plaeentla NW Fsc1=AAN rA tse K'FI DqH k w, Yp4y:P. YpN "VP N ORANaET DRPE + f C 3 i x�RGALiH�GpHAL WNC $, LWD �'_� - T OR4N6_E7ilORPE `v Y Fi HTAAH 35 A RNCR CITY oTAnaliel F& n f. YDS ff� �ArA4eM R � ���ATP AKA cnx ! �. nnmwAau�R OA��ti S� -, s� Cl ty_ Coraoge a Yorba Linda :� = /,J Water DisLric-1:7 0111� - �= Board of Directors Special Meeting Wednesday, September 30, 2020 " ITEM NO. 6.1. A —rims TIMBER RIDGE B.P.S. r - LITTLE CANYQN P.R.S. - _49 Y' Yorba Linda ` Water Dist] i c�..� •• - �.- - �-�=�`� _ �-_ � _ --- Board of Directors Special Meeting Wednesday, September 30, 2020 ITEM NO. 6.1. r CIP Project Budget Updated Project Budget .. Project Cost TYJA--- June 2020 4111111111h Septern 020 A t PIanning/Design/Project r Management/Inspection $270,000 $473,400 Construction $114001000 $218001000 cr YLWD Staff Project and Construction Management $160,000 $300,000 Total: 118301000 315731000 Yorba Linda �. Water District Board of Directors Special Meeting Wednesday, September 30, 2020 ITEM NO. 6.1. r Original Scope, A Updated Scope 1 Remove existing pump and natural gas Demo existing pump station once new station is in engine operation 2 Install 1 pump and motor Install 3 or 4 electrically driven pumps and piping 3 Install natural gas generator Install natural gas generator 4 Install meter vault and flow meter Install meter vault and flow meter 5 Make electrical, instrumentation and Install new electrical transformer, switchboard, MCC security improvements and VFDs (if required) 6 Station capacity: 1 800 GPM Station capacity: 3000 GPM 7 ----- Install electrical room AC system 8 ----- Excavate and pave site 9 ----- Construct larger pump building and electrical room Yorba Linda -� Water District - - -- Board of Directors Special Meeting Wednesday, September 30, 2020