HomeMy WebLinkAbout2024-04-25 - Board of Directors Meeting Agenda Packet
AGENDA
YORBA LINDA WATER DISTRICT
BOARD OF DIRECTORS REGULAR MEETING
Thursday, April 25, 2024, 8:30 AM
1717 E Miraloma Ave, Placentia CA 92870
1. PARTICIPATION INSTRUCTIONS
This meeting will be held in person. For public convenience, the meeting can also be accessed via
internet-based service or telephone as indicated below. For questions regarding participation, please call
the Board Secretary at (714) 701-3020.
Computer/Mobile Device: https://us06web.zoom.us/j/85968334390
Telephone: (669) 444-9171 or (669) 900-6833
Meeting ID: 859 6833 4390
2. CALL TO ORDER
3. PLEDGE OF ALLEGIANCE
4. ROLL CALL
Trudi DesRoches, President
Tom Lindsey, Vice President
Brett R. Barbre, Director
Phil Hawkins, Director
Gene Hernandez, Director
5. ADDITIONS/DELETIONS TO THE AGENDA
Items may be added to the agenda upon determination by a two-thirds vote of the Board, or a
unanimous vote if only three Directors are present, that there is a need to take immediate action which
came to the District's attention subsequent to the agenda being posted. (GC 54954.2(b)(2))
6. AB 2449 TELECONFERENCE REQUESTS
7. 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)
8. CONSENT CALENDAR
All items on the consent calendar are considered routine and may be approved by a single motion.
There will be no discussion of these items unless a member of the Board, staff, or public requests
separate consideration.
8.1. Award of Professional Services Agreement for a Comprehensive Classification
and Compensation Study
Recommendation: That the Board of Directors authorize the General Manager
to execute a Professional Services Agreement with Gallagher Benefit Services,
Inc. for the completion of a comprehensive Classification and Compensation
Study for an amount not to exceed $111,400.
9. DISCUSSION ITEMS
This portion of the agenda is for matters that cannot reasonably be expected to be concluded by action
Page 1 of 40
of the Board (or Committee) at the meeting, such as technical presentations, drafts of proposed policies,
or similar items for which staff is seeking advice and counsel. Time permitting, it is generally in the
District’s interest to discuss these more complex matters at one meeting and consider formal action at
another meeting. This portion of the agenda may also include items for information only.
9.1. Fiscal Year 2024-25 Proposed Water & Sewer Customer and Developer Fees
Update
9.2. Fiscal Year 2024-25 Budget Workshop #3
10. CLOSED SESSION
The Board may hold a closed session on items related to personnel, labor relations and/or litigation. The
public is excused during these discussions.
10.1. Public Employee Performance Evaluation
Pursuant to Section 54957 of the CA Government Code
Title: General Manager
11. ADJOURNMENT
11.1. The next regular Board meeting is scheduled Thursday, May 16, 2024 at 9:30
a.m.
Items Distributed to the Board Less Than 72 Hours Prior to the Meeting
Non-exempt materials related to open session agenda items that are distributed to a majority of the Board of
Directors (or Committee Members) less than seventy-two (72) hours prior to the meeting will be available for
public inspection in the lobby of the District’s Administrative building located at 1717 E Miraloma Ave, Placentia
CA 92870 during regular business hours. When practical, these materials will also be posted on the District’s
website at https://ylwd.com/. (GC 54957.5)
Accommodations for the Disabled
Requests for disability-related 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) 701-3020 at least 24
hours in advance. (GC 54954.2(a))
Page 2 of 40
ITEM NO. 8.1.
AGENDA REPORT
MEETING DATE: April 25, 2024
TO: Board of Directors
FROM: Mark Toy, General Manager
STAFF CONTACTS: Lori Thompson, Human Resources and Risk Manager
SUBJECT: Award of Professional Services Agreement for a Comprehensive
Classification and Compensation Study
RECOMMENDATION:
That the Board of Directors authorize the General Manager to execute a Professional Services
Agreement with Gallagher Benefit Services, Inc. for the completion of a comprehensive Classification
and Compensation Study for an amount not to exceed $111,400.
BACKGROUND:
On February 8, 2024, after receiving authorization from the Board of Directors, the District issued a
Request for Proposal (RFP) for the completion of a comprehensive classification and compensation
study. The RFP was posted on the California Special Districts Association RFP Clearinghouse,
LinkedIn, and sent directly to four known qualified service providers. At the close of the RFP proposal
window on March 14, 2024, two proposals were received. Staff reviewed the proposals, consulted
with the RFP Review Group (Director Hawkins and Director Lindsey), and determined that only one
proposal was submitted by a qualified service provider. The disqualified provider did not meet the
minium qualifications for the scope of work, and lacked any experience with water and/or sanitation
districts. The proposals received are listed below:
Proposer Proposal Cost Qualified Service
Provider (Y/N)
Gallagher Benefit
Services, Inc.
$111,400
($72,800 Classification; $38,600 Compensation) Y
unCOMPlicate HR $44,850
($21,600 Classification; $22,050 Compensation) N
Staff recommends entering into a Professional Services Agreement with Gallagher Benefit Services,
Inc. to complete a comprehensive classification and compensation study, for an amount not to
exceed $111,400.
FISCAL IMPACT:
Budgeted: Yes (FY 2024-25; Pending Approval)
Total Budget: $112,000
Page 3 of 40
Cost Estimate: Not to Exceed $111,400
PRIOR RELEVANT BOARD ACTION:
The District completed a Compensation Study in March 2023. After completion of the Compensation
Study, the Board of Directors requested a more in-depth review of the District's job descriptions and
salaries as compared to other agencies. At the August 3, 2023 Board meeting, the Board of Directors
provided direction that a comprehensive Classification and Compensation Study be completed by
January 2025.
STRATEGIC PLAN INITIATIVES:
G5 1A - Retain a highly skilled and capable workforce.
Page 4 of 40
ITEM NO. 9.1.
AGENDA REPORT
MEETING DATE: April 25, 2024
TO: Board of Directors
FROM: Mark Toy, General Manager
STAFF CONTACTS: Delia Lugo, Finance Manager
Sophia Phuong, Accounting Supervisor
Rosanne Weston, Engineering Manager
SUBJECT: Fiscal Year 2024-25 Proposed Water & Sewer Customer and Developer
Fees Update
Staff will present and discuss the updates to the capacity fees and frontage charges for the proposed
Fiscal Year 2024-25 Water & Sewer Customer and Developer Fees.
ATTACHMENTS:
1. Slide Deck - FY25 Proposed Water & Sewer Development Fees
2. Raftelis Memorandum - Update of Capacity Fees and Frontage Charges
Page 5 of 40
PROPOSED
DEVELOPMENT FEES
UPDATE
Fiscal Year
2024-25
4/25/24 Board of Directors Workshop 1Page 6 of 40
Water Service Capacity Fees
Adequate Water Mains Serve Property
4/25/2024 Board of Directors Workshop 2
Fee Increase
or (Decrease)
+12.9%
FY24-25
Fee per Meter
FY23-24
Fee per Meter
Meter Size
(Inches)
$1,589$13,900$12,3111
$3,179$27,801$24,6221-1/2
$5,086$44,481$39,3952
$11,125$97,302$86,1773
$20,025$175,144$155,1194
$41,322$361,409$320,0876
Additional Capacity Fees may apply to larger developments that will utilize more facility capacity.
Page 7 of 40
Water Service Capacity Fees
Developer to Construct Water Mains To Serve Property
4/25/2024 Board of Directors Workshop 3
Fee Increase
or (Decrease)
+13.6%
FY24-25
Fee per Meter
FY23-24
Fee per Meter
Meter Size
(Inches)
$1,205$10,045$8,8401
$2,412$20,091$17,6791-1/2
$3,859$32,146$28,2872
$8,440$70,318$61,8783
$15,193$126,573$111,3804
$31,350$261,182$229,8326
Additional Capacity Fees may apply to larger developments that will utilize more facility capacity.
Page 8 of 40
Sewer Service Capacity Fees
4/25/2024 Board of Directors Workshop 4
Fee Increase
or (Decrease)
FY24-25 Capacity
Fee Per
Connection
FY23-24 Capacity
Fee Per
Connection
Property Class
(Various
Examples)
$71$865$794Single Family
Residence
8.9%$0.82 x Number of
Units x $865
$0.82 x Number of
Units x $794
Master Metered
8.9%
Equivalent Dwelling
Unit x Total
SF/1,000SF x $865
Equivalent Dwelling
Unit x Total
SF/1,000SF x $794
Commercial
Equivalent Dwelling Unit is based on one Single Family Residence.
Page 9 of 40
Frontage Charge
Adequate Sewer Mains Serve Property and Property is Not Subject to
Developer Reimbursement Program
4/25/2024 Board of Directors Workshop 5
Fee
Increase or
(Decrease)
FY24-25 Frontage
Charge
FY23-24 Frontage
ChargeProperty Class
$542$6,305$5,763Single Family
Residence
9.4%Sewer Frontage
(FT)/75FT x $6,305
Sewer Frontage
(FT)/75FT x $5,763
Master Metered
9.4%Sewer Frontage
(FT)/75FT x $6,305
Sewer Frontage
(FT)/75FT x $5,763 Commercial
75 Feet is average frontage of a Single Family Residence.
Page 10 of 40
445 S. Figueroa Street,
Suite #1925
Los Angeles, CA 90071
Phone 626 . 583 . 1894
Fax 213.262.9303
www.raftelis.com
Memorandum
To: Rosanne Weston
From: Sudhir Pardiwala/Lindsay Roth
Date: April 5, 2024
Re: Update of Water and Wastewater Capacity Fees and Frontage Charges for FY 2025
Raftelis has updated the water, wastewater capacity fees, and frontage charges as you requested
based on the Raftelis report, Water and Wastewater Development Capacity Fee Study Report,
dated May 22, 2023.
Typically, utilities update the capacity fees annually based on the Engineering News‐Record
Construction Cost Index (CCI) to reflect the increases in asset values because of inflation. Raftelis
has updated the CCI data and used the CCI value of 13,358 for December 2023 to update the
depreciated asset values. In addition, since the water utility has a significant debt burden, that
credit was updated to reflect the debt principal to $54,655,000 as of Dec 31, 2023. Finally the
updated equivalent meters and dwelling units were updated to reflect the June 30, 2023 data.
The revised water capacity fees are shown below for the various meter sizes.
For properties with existing water mains in the streets the capacity fees are shown below.
Water Capacity Fees with Water Mains
Meter Size Ratio Proposed Fee
FY 2024‐25
1" & smaller 1.00 $13,900
1 1/2" 2.00 $27,801
2" 3.20 $44,481
3" 7.00 $97,302
4" 12.60 $175,144
6" 26.00 $361,409
For properties where the developer pays to connect the parcel to the water system, the capacity
fees are charged excluding the asset value of pipelines 8 inches and smaller. The revised water
capacity fees for these properties that do not have water mains fronting their properties the
capacity fees are shown below:
Page 11 of 40
Ms. Rosanne Weston
Yorba Linda Water District Capacity Fee Update
April 5, 2024
Page 2
Water Capacity Fees without Water Mains
Meter Size Ratio Proposed Fee
FY 2024‐25
1" & smaller 1.00 $10,045
1 1/2" 2.00 $20,091
2" 3.20 $32,146
3" 7.00 $70,318
4" 12.60 $126,573
6" 26.00 $261,182
The revised wastewater capacity fees:
Wastewater Capacity Fees
Connection Class Ratio Charge per Unit FY 2024‐25
Single Family 1.00 $865
Master metered per Unit 0.82 $709
Commercial EDU Ratio by
Customer Type
$865 x EDU x
Total SF/1000 SF
The multipliers applied to the capacity charges for Commercial customers remain unchanged, as
shown in our 2022 Report.
The frontage fee for development applies to properties where adequate sewer mains serve the
property and the property is not subject to the Developer Reimbursement Program.
Wastewater Frontage Fees with Sewer Mains
Connection Class Ratio Charge per Unit FY 2024‐25
Single Family 1.00 $6,305
Master Metered By Frontage (ft) Sewer Frontage (ft)/75ft * $6,305
Commercial By Frontage (ft) Sewer Frontage (ft)/75ft * $6,305
The application of frontage fees for apartments remains unchanged, as shown in the 2022
Report.
Page 12 of 40
Ms. Rosanne Weston
Yorba Linda Water District Capacity Fee Update
April 5, 2024
Page 3
ADU Wastewater Capacity Fee
The wastewater capacity fee for an Accessory Dwelling Unit (ADU) is calculated by multiplying
the capacity fee for a Single Family Residence (SFR) by the ratio of the actual ADU square footage
and the average square footage of a Single Family Residence (fixed at 2,883 square feet per the
2022 Report).
Example of a 900 Square Foot ADU Wastewater Capacity Fee Calculation:
$865 SFR capacity fee x 900 SF ADU/2,883 SF SFR = $270.03
ADU Water Capacity Fee
The Water Capacity Fee is applied differently under three scenarios. There may be some
situations that differ from the scenarios below and will be addressed on a case‐by‐case basis by
the District.
Assume the ADU is 900 SF:
1. Existing meter is adequate to serve both the SFR and the ADU.
2. A separate water service connection and meter is constructed for the ADU.
3. Existing meter is upsized to serve both the SFR and the ADU.
The calculations for Scenarios #1 and 2 are the same.
For Scenario # 1 assume the existing SFR water meter is 1‐inch, and for Scenario #2 assume the
proposed separate meter for the ADU is a 1‐inch.
The Water Capacity Fee is calculated by multiplying the capacity fee for a Single Family Residence
by the ratio of the actual ADU square footage and the average square footage of a Single Family
Residence (fixed at 2,883 square feet per the 2022 Report). Use the Water Capacity Fees for
“Adequate Water Main Fronts Property.”
$13,900 SFR capacity fee x 900 SF ADU/2,883 SF SFR = $4339.23
For Scenario #3:
The Water Capacity Fee is calculated based on the difference between the two capacity fees for
the existing meter size and the new meter size. Assume a 1‐inch meter is upsized to 1‐1/2 inches
and use the Water Capacity Fees for “Adequate Water Main Fronts Property.”
$27,801 – $13,900 = $13,901The summary of the capacity fees is shown below:
Page 13 of 40
Ms. Rosanne Weston
Yorba Linda Water District Capacity Fee Update
April 5, 2024
Page 4
Water Capacity Fee
Adequate Water Main Fronts Property
Meter Size Fee
1 Inch Meter $13,900
1-1 1/2 Inch Meter $27,801
2 Inch Meter $44,481
3 Inch Meter $97,302
4 Inch Meter $175,144
6 Inch Meter $361,409
Developer to Construct Water Main in
Front of Property
Meter Size Fees
1 Inch Meter $10,045
1-1 1/2 Inch Meter $20,091
2 Inch Meter $32,146
3 Inch Meter $70,318
4 Inch Meter $126,573
6 Inch Meter $261,182
Sewer Capacity Fee
Property Type Fees
Single Family
Residence
$865
Master Metered 0.82 x Number of Units
x $865 = $709
Accessory
Dwelling Unit
Commercial
Sq ft of ADU/2883 *865
Equivalent Dwelling Unit
x Total SF/1,000SF x
$865
Equivalent Dwelling Unit (EDU) is based on one
Single Family Residence
Frontage Charge
Applies to Properties Where Adequate Sewer Main
Fronts Property and Property is Not Subject to
Developer Reimbursement Program
Property Type Fees
Single Family
Residence
$6,305
Master Metered Sewer Frontage (FT)/75 FT x
$6,305
Commercial Sewer Frontage (FT)/75 FT x
$6,305
Contact Engineering Department for Water and
Wastewater Accessory Dwelling Unit (ADU)
Capacity Fees.
Page 14 of 40
ITEM NO. 9.2.
AGENDA REPORT
MEETING DATE: April 25, 2024
TO: Board of Directors
FROM: Mark Toy, General Manager
STAFF CONTACTS: Delia Lugo, Finance Manager
Sophia Phuong, Accounting Supervisor
Paige Appel, Budget Analyst
SUBJECT: Fiscal Year 2024-25 Budget Workshop #3
Staff will present and discuss the proposed Fiscal Year 2024-25 program budgets for Debt Service,
Reserves & Other Key Updates.
ATTACHMENTS:
1. Slide Deck - FY25 Budget Workshop #3
Page 15 of 40
FY2024-25 BudgetWorkshop 3
April 25, 2024
4/25/2024 1Page 16 of 40
Overview
•BOD Requests
•Commodity Rate – Variable & Fixed Costs
•Pass-Through Analysis
•Single Family Residential Customer Bill
•10-Year Historic Consumption – Budget to Actual
•3-YR & 5-YR Average on Demand/Production
•Revenue with Various Scenarios
•Debt Service
•Reserve Balance, Staff Recommendations & Other Contributions
•Summary of FY2024-25 Budget
4/25/2024 2Page 17 of 40
BOD Requests
4/25/2024 3Page 18 of 40
Commodity Rate – Variable & Fixed Costs
4/25/2024 4
What makes up the commodity rate in the 2021 Rate Study?
The commodity rate is determined by three factors. Water supply, Power, and Delivery
(annual costs for operating and additional expenses needed to function).
“Delivery” is the essential costs to run the district such as O&M expenses, debt service
obligations, rate funded CIP (Pay-Go), and funding reserves.
Water Usage Rate Water Supply
(Variable/Fixed)
Power
(Variable)
Delivery
(Fixed)Proposed Rate
Uniform Rate $2.54 $0.24 $0.65 $3.43
Percentage Allocation 74%7%19%100%
Conclusion: Total Fixed Costs are $0.90 or 26% of the Commodity Rate. Total Variable
Costs are $2.53 or 74% of the Commodity Rate.
Water Supply Rate % Allocation
Fixed Costs 0.25$ 10%
Variable Costs 2.29$ 90%
Total Water Supply Cost 2.54$ 100%
Water Supply Detail:
Page 19 of 40
FY2024-25 Proposed Pass-Through
4/25/2024 5
Pass-Through Analysis for FY2024-25
2025
Budget
FY25 Budget Consumption (ccf)7,558,749
R ate Study Consumption (ccf)7,380,219
RATE STUDY
Total Power & Supply Costs in Rate Study ($)16,245,856$
Water Sales (ccf)7,380,219
Unit Rate ($/ccf)2.20$
FY25 BUDGET
Total Power & Supply Costs ($)20,448,201$
Water Sales (ccf)7,558,749
Unit Rate ($/ccf)2.71$
PASS-THROUGH RATES
Calculated Pass-Through (Difference between Budget & Rate Study by Unit)
Unit Rate ($/ccf)0.51$
Allowable Pass-Through - 10% Limitation on Proposed Commodity Rate $3.43
Unit Rate ($/ccf)0.34$
Page 20 of 40
4/25/2024 6
Billing on 1” Meter
(Water & Sewer)
FY2023-24
w/ 9% Wtr & 15% Swr Adj
With Pass-Through $0.31
FY2024-25
w/ 9% Wtr & 15% Swr Adj
FY2024-25
w/ 9% Wtr & 15% Swr Adj
With Pass-Through $0.34
Monthly Water Related Charges $109.91 $114.19 $119.97
Monthly Sewer Related Charges $11.97 $13.77 $13.77
Capital Finance Charge $11.25 $12.27 $12.27
Avg Monthly Bill w/ CFC (17 units)$133.13 $140.23 $146.01
Percentage increase of 9.67%
Cost increase of $12.88
Effect on Single Family Residential
Customer Bill (Water & Sewer)
Current Assumptions
Note: The calculated Pass-Through is $0.51 representing water supply and power costs per
unit. However, the Pass-Through is limited (per the Prop218 notice) to $0.34, shown above as
proposed.
Page 21 of 40
4/25/2024 7
-
5,000
10,000
15,000
20,000
25,000
FY
13/14
FY
14/15
FY
15/16
FY
16/17
FY
17/18
FY
18/19
FY
19/20
FY
20/21
FY
21/22
FY
22/23
AC
R
E
-FE
E
T
10-YR HISTORICAL CONSUMPTION IN AF
BUDGET TO ACTUAL
Budget
AF
Actual
AF
Explanation:
This graph shows within 10-years Budgeted consumption has been very close to the
Actual consumption. The 10-year consolidated variance is -1%.
(Based on 5-YR
Average)
Page 22 of 40
3 Year & 5 Year Average on
Demand/Production
4/25/2024 8
Explanation:
This table is to show the calculation of a 3-yr and 5-yr average in demand/production by
month. The total annual demand correlates directly with the estimated yearly
consumption used to project consumption revenue. The variance between the 3-yr and
5-yr average is minimal with a total of 261.1 AF difference or 1.4%. The current FY25 Budget
is based on the 5-yr average totaling 18,678.5 AF for the year.
JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN TOTAL
FY19 2,277.1 2,283.8 2,010.2 1,782.8 1,555.4 980.2 979.5 602.8 873.1 1,531.7 1,436.1 1,712.8 18,025.5
FY20 2,041.6 2,151.2 1,988.3 1,919.2 1,524.6 876.3 1,184.0 1,609.3 1,145.4 1,125.1 1,842.0 1,914.1 19,321.0
FY21 2,165.0 2,174.7 2,057.5 1,956.7 1,552.6 1,524.9 1,231.4 1,113.1 1,275.9 1,646.8 1,819.3 1,952.1 20,469.8
FY22 2,100.2 2,108.1 1,974.9 1,686.1 1,592.6 1,139.9 1,235.1 1,340.8 1,527.9 1,623.8 1,784.7 1,831.2 19,945.3
FY23 2,033.5 2,050.0 1,877.8 1,611.8 1,254.0 1,033.0 722.6 1,033.6 706.5 1,239.6 1,465.1 1,529.3 16,556.8
FY24 2,086.5 1,846.4 1,687.7 1,678.6 1,446.0 1,259.7 938.0 10,942.9
5 YR AVG.2,085.4 2,066.1 1,917.2 1,770.5 1,474.0 1,166.8 1,062.2 1,139.9 1,105.7 1,433.4 1,669.4 1,787.9 18,678.5
3 YR AVG.2,073.4 2,001.5 1,846.8 1,658.8 1,430.9 1,144.2 965.2 1,162.5 1,170.1 1,503.4 1,689.7 1,770.9 18,417.4
DEMAND/PRODUCTION
Page 23 of 40
Water Revenue with Various Scenarios
4/25/2024 9
Water Related Revenue & Variable Costs
Proposed Budget
18.7K @ 85%
5 YR AVG
Scenario 2
18.4k @ 85%
3 YR AVG
BPP 85%85%
Demand 18,678.5 18,417.4
Water Revenues
Operating Revenue:
Water Sales (9% Adjustment on Rates)26,072,749$ 25,733,561$
Water Sales (Pass-Through)2,326,458 2,292,836
Service & Capital Finance Charges 21,436,960 21,436,960
Other Operating Revenue 1,892,435 1,892,435
Total Water Operating Revenue 51,728,602$ 51,355,792$
Change from Proposed Budget -(372,810)
Variable Costs
Groundwater Purchases 10,916,565$ 10,768,094$
OCWD Annexation Fee 745,951 745,951
Power Costs 3,503,835 3,457,617
Import Water Purchases 3,616,898 3,544,674
MWDOC Fixed Costs 1,664,952 1,664,952
Total Variable Costs 20,448,201$ 20,181,288$
Change from Proposed Budget -(266,913)
Net Position 31,280,401$ 31,174,504$
Change from Proposed Budget -(105,897)
Page 24 of 40
Debt Service
4/25/2024 10Page 25 of 40
Annual Debt Service Ratio
For Water Fund
FY23
Actual
FY24
Projections
FY25
Budget
Debt Service $ 3,165,564 $ 4,134,219 $ 4,133,494
Ratio 3.46 2.50 3.39
Per Policy 2.25 2.25 2.25
114/25/2024
Annual Debt Service Ratio Equation:
Total Eligible Revenue –
Total Eligible Expenses (excluding interest expense)
Total Annual Debt Service
Page 26 of 40
Reserve Balance, Staff
Recommendations &
Other Contributions
4/25/2024 12Page 27 of 40
134/25/2024
Reserve Balances & Target Levels
Description: The following reflects the reserve target levels for FY25 utilizing the current policy to
determine the min and max levels. FY24 Year End Projections reserve balance is shown below. Staff
recommends adjustments to the reserve policy for Capital Replacement and MWD Contingency
reserve to determine min and max.
Page 28 of 40
144/25/2024
Staff Recommendation for Capital Reserves
Capital Replacement Reserve: Provides funding for capital projects as well as funding for capital repair and replacement of aging
infrastructure nearing the end of it's listed useful life. Calculated either as a percent of annual depreciation or from the 5-Year
CI Program (to be the minmum of 100% of the current FY CI Plan and a maximum of the next two FY's CI Plan).
Target Levels Water Sewer
Min $7,510,000 $700,000
Max $11,059,500 $1,922,000
Staff Recommendation: Minimum target levels increased to 1.5 years of CIP & Outlay (Pay-Go) plus current
fiscal year depreciation, $13,632,431. Maximum target levels increased to 3 years of CIP & Outlay (Pay-
Go) plus 3 times the current fiscal year’s depreciation, $37,559,743.
Below is a summary of the current CIP and Outlay based on project funding.
PROJECT FUNDING FY2024-25 FY2025-26 FY2026-27 FY2027-28 FY2028-29 TOTALWATER
PAY-GO 768,000 2,299,500 2,272,700 3,227,800 8,003,000 16,571,000
Debt Funded 6,742,000 1,250,000 850,000 - - 8,842,000
TOTAL WATER 7,510,000 3,549,500 3,122,700 3,227,800 8,003,000 25,413,000 SEWER
PAY-GO 700,000 1,222,000 2,874,000 1,960,500 1,130,500 7,887,000
Debt Funded - - - - - -
TOTAL SEWER 700,000 1,222,000 2,874,000 1,960,500 1,130,500 7,887,000
CIP TOTAL 8,210,000$ 4,771,500$ 5,996,700$ 5,188,300$ 9,133,500$ 33,300,000$
CAPITAL OUTLAY 752,500$ 1,020,000$ 415,000$ 1,225,000$ 1,215,000$ 4,627,500$
PAY-GO 2,220,500 4,541,500 5,561,700 6,413,300 10,348,500 24,458,000
Debt Funded 6,742,000 1,250,000 850,000 - - 8,842,000
COMBINED TOTAL CIP & OUTLAY 8,962,500$ 5,791,500$ 6,411,700$ 6,413,300$ 10,348,500$ 37,927,500$
WATER MASTER PLAN CIP TOTAL 16,657,000$ 16,837,500$ 15,077,500$ 15,341,000$ 15,732,000$ 79,645,000$
Current Policy:
Page 29 of 40
154/25/2024
Staff Recommendation for Reserve Policy
Employee Liability Reserve: Covers employees' vacation and other compensatory time and to ensure the complete funding
associated with the liability incurred for employees whom have met the requirements necessary for district paid health
benefits at retirement based on employee accrued compensatory time (OPEB liability).
Water Sewer
Annual Contributions $641,635 $44,446
Conservation Reserve: Provide funding for District-wide conservation efforts (Restricted Reserve)
Calculated as net result of administrative penalties assessed less allowed expenditures of each fiscal year
Target Levels Water
Min $0
Max $73,801
Staff Recommendation: Current balance will be drawn down until there is a zero balance and
remove the reserve category from the Reserve Policy.
Current Policy:
Staff Recommendation: Target levels are at required amounts. The reserve description should read
as “Covers employees' vacation and other compensatory time and to ensure the complete
funding associated with the liability.”
Current Policy:
Current Policy:
MWD Contingency Reserve: Provides funding if the District is forced to rely 100% on MWD import water at significant
and unbudgeted additional expense. Calculated from a projection of imported cost of 10 years approximately $20,000,000.
Water Max
Target Levels $6,000,000 20,000,000
Staff Recommendation: Remove the reserve category from the Reserve Policy.
Page 30 of 40
164/25/2024
Reserve Balances & Target Levels Graph
$73,801
$324,894
$0
$4,496,672
$9,326,688
$9,828,124
$27,859,868
$0 $5 $10 $15 $20 $25 $30 $35 $40
Conservation (Restricted)
Employee Liability (Restricted)
MWD Contingency
Rate Stabilization
Capital Replacement
Emergency
Operating
Millions
Min Target
Per Current Policy
Max Target
Per Current Policy
Projected Balance at
Year End FY2023-24
Min Per Staff
Recommendation
Max Per Staff
Recommendation
Staff Recommends to increase
Capital Replacement.
Staff Recommends to no longer
contribute to MWD Contingency.
Page 31 of 40
174/25/2024
OPEB & Pension Contribution
Pension/OPEB Funded Ratio
As of June 2022 Total
Additional
Funding Revised
1 Entry Age Accrued Liability 50,913,589 50,913,589
2 Market Value of Assets 37,069,265 37,069,265
3 Funded Ratio (2/1)72.8%72.8%
PARS as of 3/31/24 978,420$ 700,000$ 1,678,420$
Pension Funded Ratio with PARS 74.7%76.1%
As of June 2022
1 Total OPEB Liability 4,107,722$ 4,107,722$
2 Accumulated assets in the CERBT 2,878,686 2,878,686
F unded Ratio (2/1)70.1%70.1%
PARS as of 3/31/24 360,419$ 300,000$ 660,419$
OPEB Funded Ratio with PARS 78.9%86.2%
Pension:
OPEB:
Staff Recommendation: Contribute $700K to Pension PARS and $300K to OPEB PARS.
Page 32 of 40
Summary of
FY2024-25 Budget
4/25/2024 18Page 33 of 40
Details of Financial Changes
19
Consolidated Financials (Water & Sewer)
Budget Presented on
3/28/24
18.7K @ 85%
Proposed Budget
18.7K @ 85%
Revenue
Water Revenue 28,399,207$ 28,399,207$
Service & Capital Finance Charges 21,436,960 21,436,960
Sewer Revenue 4,721,438 4,721,438
Other Operating Revenue 1,565,133 1,995,249
Non-Operating Revenue 5,138,973 5,138,973
Total Revenue 61,261,711$ 61,691,827$
Change from Proposed Budget 430,116
Variable Costs
Groundwater Purchases 10,922,275$ 10,916,565$
OCWD Annexation Fee 745,951 745,951
Power Costs 3,505,425 3,503,835
Import Water Purchases 3,685,419 3,616,898
MWDOC Fixed Costs 1,799,472 1,664,952
Total Variable Costs 20,658,542$ 20,448,201$
Change from Proposed Budget (210,341)
Explanation: Capacity and Frontage charges were increased.
Explanation: Updated the rates provided by MWDOC and MET. The majority of the change was on
the Readiness to Serve charge and Capacity fees.
4/25/2024 Page 34 of 40
Details of Financial Changes
20
Consolidated Financials (Water & Sewer)
Budget Presented on
3/28/24
18.7K @ 85%
Proposed Budget
18.7K @ 85%
Salary Related Expenses 15,201,996$ 15,201,996$
Supplies & Services
Board Election 120,000$ 120,000$
Communications 279,940 279,940
Contractual Services 839,489 878,414
Software Licenses 523,946 523,946
District Activities, Emp Recognition 69,895 69,895
Dues & Memberships 125,960 125,960
Fees & Permits 551,650 469,464
Insurance 525,000 525,000
Maintenance 1,973,300 2,023,300
Materials 2,070,150 2,070,150
Non-Capital Equipment 323,300 323,300
Office Expense 49,250 49,250
Professional Services 2,019,146 2,097,146
Training 59,375 74,375
Travel & Conferences 131,170 131,170
Uncollectible Accounts 15,000 15,000
Utilities 236,000 236,000
Vehicle Expenses 712,850 712,850
Total Supplies & Services 10,625,421$ 10,725,160$
Change from Proposed Budget 99,739
Explanation: Contractual Services -Increase in Class & Comp Study; Fees & Permits -Decrease in
Bank Fees; Maintenance -Increase in Water Maintenance Projects; Professional Services -
Increase in Consulting Services; Training -Increase in Professional Development
4/25/2024 Page 35 of 40
Financial Summary - Consolidated
21
Prior Year
FY2022-23
Projections
FY2023-24
FY25 Budget
Presented on
3/28/24
Revised FY25
Budget
Revenue (Operating)41,607,539$ 48,249,536$ 56,122,738$ 56,552,854$
Revenue (Non-Operating)4,575,966 4,862,667 5,138,973 5,138,973
Total Revenue 46,183,505$ 53,112,203$ 61,261,711$ 61,691,827$
Rate Study Assumptions 46,560,875$ 50,720,658$ 55,284,050$ 55,284,050$
Variance %-1%5%11%12%
Expenses
Expenses (Operating):
Variable Costs 15,308,429$ 18,225,975$ 20,658,542$ 20,448,201$
Salary Related Expenses 10,348,225 13,737,956 15,746,996 15,746,996
(Less Capitalized Labor)- - (545,000) (545,000)
Supplies & Services 8,100,671 9,911,735 10,625,421 10,725,160
Expenses (Non-Operating)2,797,959 2,709,534 2,533,024 2,533,024
Total Expenses 36,555,284$ 44,585,200$ 49,018,983$ 48,908,381$
Rate Study Assumptions 38,222,320$ 40,330,198$ 42,144,833$ 42,144,833$
Variance %-4%11%16%16%
Net Position Before Capital Contributions
& Depreciation $ 9,628,221 $ 8,527,003 $ 12,242,728 $ 12,783,446
Capital Contributions 26,022,951 445,291 - -
Depreciation 9,094,787 9,103,071 9,141,181 9,141,181
Total Net Position (Loss) $ 26,556,385 $ (130,777) $ 3,101,547 $ 3,642,265
4/25/2024 Page 36 of 40
Financial Summary - Water
22
Prior Year
FY2022-23
Projections
FY2023-24
FY25 Budget
Presented on
3/28/24
Revised FY25
Budget
Revenue (Operating)38,102,054$ 44,218,117$ 51,236,420$ 51,728,602$
Revenue (Non-Operating)4,334,643 4,557,127 4,835,869 4,835,869
Total Revenue 42,436,697$ 48,775,244$ 56,072,289$ 56,564,471$
Rate Study Assumptions 42,892,602$ 46,516,980$ 50,456,170$ 50,456,170$
Variance %-1%5%11%12%
Expenses
Expenses (Operating):
Variable Costs 15,308,429$ 18,225,975$ 20,658,542$ 20,448,201$
Salary Related Expenses 8,782,887 11,622,593 13,214,585 13,214,585
(Less Capitalized Labor)- - (445,000) (445,000)
Supplies & Services 7,007,737 8,569,678 9,211,978 9,301,917
Expenses (Non-Operating)2,782,215 2,703,562 2,526,899 2,526,899
Total Expenses 33,881,268$ 41,121,808$ 45,167,004$ 45,046,602$
Rate Study Assumptions 34,994,157$ 36,918,084$ 38,535,306$ 38,535,306$
Variance %-3%11%17%17%
Net Position Before Capital Contributions
& Depreciation $ 8,555,429 $ 7,653,436 $ 10,905,285 $ 11,517,869
Capital Contributions 25,606,815 210,235 - -
Depreciation 7,566,538 7,597,179 7,602,536 7,602,536
Total Net Position (Loss) $ 26,595,706 $ 266,492 $ 3,302,749 $ 3,915,333
Debt Service 3,165,564$ 4,134,219$ 4,133,494$ 4,133,494$
Ratio 3.46 2.50 3.25 3.39
Per Policy 2.25 2.25 2.25 2.25
4/25/2024 Page 37 of 40
Financial Summary - Sewer
23
Prior Year
FY2022-23
Projections
FY2023-24
FY25 Budget
Presented on
3/28/24
Revised FY25
Budget
Revenue (Operating)3,505,485$ 4,031,419$ 4,886,318$ 4,824,252$
Revenue (Non-Operating)241,323 305,540 303,104 303,104
Total Revenue 3,746,808$ 4,336,959$ 5,189,422$ 5,127,356$
Rate Study Assumptions 3,668,273$ 4,203,678$ 4,827,880$ 4,827,880$
Variance %2%3%7%6%
Expenses
Expenses (Operating):
Salary Related Expenses 1,565,338$ 2,115,363$ 2,532,411$ 2,532,411$
(Less Capitalized Labor)- - (100,000) (100,000)
Supplies & Services 1,092,934 1,342,057 1,413,443 1,423,243
Expenses (Non-Operating)15,744 5,972 6,125 6,125
Total Expenses 2,674,016$ 3,463,392$ 3,851,979$ 3,861,779$
Rate Study Assumptions 3,228,163$ 3,412,114$ 3,609,527$ 3,609,527$
Variance %-17%2%7%7%
Net Position Before Capital Contributions
& Depreciation $ 1,072,792 $ 873,567 $ 1,337,443 $ 1,265,577
Capital Contributions 416,136 235,056 - -
Depreciation 1,528,249 1,505,892 1,538,645 1,538,645
Total Net Position (Loss) $ (39,321) $ (397,269) $ (201,202) $ (273,068)
4/25/2024 Page 38 of 40
5-Year CIP
244/25/2024 Page 39 of 40
25
5-Yr CIP FY25 Budget
4/25/2024
PROJECT NAME FY25 FY26 FY27 FY28 FY29 TOTAL
Pressure Regulating Station Projects
PRS Replacement Program $1,150,000 $-$-$-$-$1,150,000
Waterline Projects 4,600,000 250,000 750,000 300,000 300,000 6,200,000
Golden Avenue Waterline 308,000 - - - - 308,000
Reservoir Projects - - - - - -
Fairmont Reservoir Rehab 390,000 650,000 - - - 1,040,000
Little Canyon Reservoir Valve -225,000 - - - 225,000
Booster Pump Station Projects --- - - -
Timber Ridge BPS 372,000 - - - - 372,000
Lakeview BPS Rehab & Generator - - - 150,000 500,000 650,000
Box Canyon BPS Improvements - - - - - -
Yorba Linda BPS Rehab & Generator - - 150,000 650,000 500,000 1,300,000
Santiago BPS Rehab & Generator 200,000 1,000,000 800,000 - - 2,000,000
Well Projects - - - - - -
Well Rehabilitation (No. 1, 18)420,000 - - - - 420,000
Well Rehabilitation (No. 10, 21 & 12)-420,000 200,000 - - 620,000
Well 23 Drilling & Equipping -424,500 897,700 2,127,800 6,703,000 10,153,000
Well VFD Upgrades 70,000 580,000 325,000 - - 975,000
Total Water CIP $7,510,000 $3,549,500 $3,122,700 $3,227,800 $8,003,000 $25,413,000
Sewer Main Projects
Buena Vista Sewer Main Improvements $-$-$-$1,130,500 $1,130,500 $2,261,000
Kellogg Dr Sewer Main Upsize -822,000 2,874,000 330,000 -4,026,000
Sewer System Rehabilitation & Replacement Projects --- - --
FY25-26 Sewer CIPP Rehab Project -400,000 - - - 400,000
FY27-28 Sewer CIPP Rehab Project - - - 500,000 -500,000
Lift Station Projects - - - - --
Green Crest Sewer Lift Station ($300k Grant)700,000 - - - - 700,000
Total Sewer CIP $700,000 $1,222,000 $2,874,000 $1,960,500 $1,130,500 $7,887,000
CIP Total $8,210,000 $4,771,500 $5,996,700 $5,188,300 $9,133,500 $33,300,000
CAPITAL OUTLAY FY25 FY26 FY27 FY28 FY29 TOTAL
Building 2 Upgrades - Locker Rooms $150,000 $-$-$-$-$150,000
Network Switches 36,000 -- -- 36,000
Replace Car Wash 74,500 -- -- 74,500
Replace Light Tower 35,000 -- -- 35,000
Plotter 7,000 -- -- 7,000
Vehicle Replacements 450,000 1,020,000 415,000 1,225,000 1,215,000 4,325,000
CAPITAL OUTLAY TOTAL $752,500 $1,020,000 $415,000 $1,225,000 $1,215,000 $4,627,500
GRAND TOTAL - CAPITAL IMPROVEMENT & CAPITAL OUTLAY $8,962,500 $5,791,500 $6,411,700 $6,413,300 $10,348,500 $37,927,500
Page 40 of 40