Loading...
HomeMy WebLinkAbout2017-09-12 - Board of Directors Meeting Agenda Packet (B) AGENDA YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS REGULAR MEETING Tuesday, September 12, 2017, 6:30 PM 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL J. Wayne Miller, President Al Nederhood, Vice President Andrew J. Hall, Director Phil Hawkins, Director Brooke Jones, Director 4. ADDITIONS/DELETIONS TO THE AGENDA 5. INTRODUCTIONS AND PRESENTATIONS 5.1. Elected Official Liaison Reports 6. PUBLIC COMMENTS Any individual wishing to address the Board is requested to identify themselves and state the matter on which they wish to comment. If the matter is on the agenda, the Board 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 matters of public interest and matters within the jurisdiction of the Water District. Comments are limited to three minutes. 7. CONSENT CALENDAR All items listed on the consent calendar are considered to be routine matters, status reports, or documents covering previous Board instructions. The items listed on the consent calendar may be enacted by one motion. There will be no discussion on the items unless a member of the Board, staff, or public requests further consideration. 7.1. Minutes of the Board of Directors Regular Meeting Held June 27, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.2. Minutes of the Board of Directors Regular Meeting Held July 11, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.3. Payments of Bills, Refunds, and Wire Transfers Recommendation: That the Board of Directors ratify and authorize disbursements in the amount of $652,947.64. 7.4. Terms and Conditions for Water Service with Terra Culinary, Inc. Recommendation: That the Board of Directors approve the Terms and Conditions for Water Service with Terra Culinary, Inc., Job No. 201730. 7.5. Claim for Damages Filed by Nicholas Estanislau Recommendation: That the Board of Directors reject the claim filed by Nicholas Estanislau and refer it to ACWA/JPIA for further handling. 8. ACTION CALENDAR This portion of the agenda is for items where staff presentations and Board discussions are needed prior to formal Board action. 8.1. Engineering Services for Asset Management Plan Update Recommendation: That the Board of Directors authorize execution of a Professional Services Agreement with Carollo in the amount of $131,875 for consulting services for the 2018 Asset Management Plan, Job No. 2017-15. 9. DISCUSSION ITEMS This portion of the agenda is for matters that cannot reasonably be expected to be concluded by action of the Board of Directors at the meeting, such as technical presentations, drafts of proposed policies, or similar items for which staff is seeking the advice and counsel of the Board of Directors. 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. Reserves Policy Ranges/Goals (Miller) 9.2. Management of District's Unfunded Accrued Liabilities (Jones) 9.3. Disposition of Annual Net Income and Potential Customer Refund (Jones) 9.4. Budget to Actual Reports for the Month Ending July 31, 2017 10. REPORTS, INFORMATION ITEMS, AND COMMENTS 10.1. Directors' Reports 10.2. General Manager's Report 10.3. General Counsel's Report 10.4. Future Agenda Items and Staff Tasks 11. COMMITTEE REPORTS 11.1. Interagency Committee with MWDOC and OCWD (Miller/Nederhood) · Next meeting scheduled September 28, 2017 at 4:00 p.m. 11.2. Joint Agency Committee with City of Yorba Linda (Miller/Hawkins) · Next meeting scheduled September 18, 2017 at 4:00 p.m. at YL City Hall. 11.3. Joint Agency Committee with City of Placentia (Miller/Nederhood) · Next meeting yet to be scheduled. 12. INTERGOVERNMENTAL MEETINGS 12.1. SWRCB Briefing - August 23, 2017 (Jones/Miller/Nederhood) 12.2. OCSD Board - August 23, 2017 (Hawkins) 12.3. ACWA Region 8 Water Reliability Program - August 24, 2017 (Nederhood) 12.4. MWDOC Water Policy Forum - August 30, 2017 (Jones/Hawkins/Miller/Nederhood) 12.5. WACO - September 1, 2017 (Miller) 12.6. ISDOC Executive Committee - September 5, 2017 (Nederhood) 12.7. MWDOC Board - September 6, 2017 (Nederhood) 12.8. OCSD Operations Committee - September 6, 2017 (Hawkins) 12.9. OCWD Board - September 6, 2017 (Jones) 13. BOARD OF DIRECTORS ACTIVITY CALENDAR 13.1. Meetings from September 13 - October 31, 2017 14. CONFERENCES, SEMINARS, AND SPECIAL EVENTS This section of the agenda is for the Board of Directors to authorize Director attendance at the listed events. 14.1. ACWA Region 5 Tour - September 17-18, 2017 ACWA Regions 9 and 10 Tour - October 6, 2017 OCWD Groundwater Adventure Tour - October 26, 2017 YL State of the City Address - November 2, 2017 ACWA/JPIA Fall Conference - November 27-28, 2017 ACWA Fall Conference - November 28 - December 1, 2017 CRWUA Annual Conference - December 13-15, 2017 Recommendation: That the Board of Directors approve Director attendance at these events if desired. 15. ADJOURNMENT 15.1. A Special Board of Directors Meeting has been scheduled Thursday, September 14, 2017 at 4:30 p.m. A Board of Directors Strategic Planning Workshop Meeting has been scheduled Wednesday, September 20, 2017 at 6:30 p.m. The next Regular Board of Directors Meeting will be held Tuesday, September 26, 2017. Closed Session (if necessary) will begin at 5:30 or 6:00 p.m. depending on time requirements and regular business at 6:30 p.m. Items Distributed to the Board Less Than 72 Hours Prior to the Meeting Pursuant to Government Code section 54957.5, non-exempt public records that relate to open session agenda items and are distributed to a majority of the Board less than seventy-two (72) hours prior to the meeting will be available for public inspection in the lobby of the District’s business office located at 1717 E. Miraloma Avenue, Placentia, CA 92870, during regular business hours. When practical, these public records will also be made available on the District’s internet website accessible at http://www.ylwd.com/. Accommodations for the Disabled Any person may make a request for a disability-related modification or accommodation needed for that person to be able to participate in the public meeting by telephoning the Executive Secretary at 714-701-3020, or writing to Yorba Linda Water District, P.O. Box 309, Yorba Linda, CA 92885-0309. Requests must specify the nature of the disability and the type of accommodation requested. A telephone number or other contact information should be included so the District staff may discuss appropriate arrangements. Persons requesting a disability-related accommodation should make the request with adequate time before the meeting for the District to provide the requested accommodation. ITEM NO. 7.1 AGENDA REPORT Meeting Date: September 12, 2017 Subject:Minutes of the Board of Directors Regular Meeting Held June 27, 2017 STAFF RECOMMENDATION: That the Board of Directors approve the minutes as presented. ATTACHMENTS: Name:Description:Type: 2017-06-27_-_Minutes_-_BOD_(B).doc Minutes Minutes Minutes of the YLWD Board of Directors Regular Meeting Held June 27, 2017 at 6:30 p.m. 1 2017-XXX MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS REGULAR MEETING Tuesday, June 27, 2017, 6:30 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The meeting was called to order at 6:39 p.m. 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL DIRECTORS PRESENT STAFF PRESENT J. Wayne Miller, President Marc Marcantonio, General Manager Al Nederhood, Vice President Steve Conklin, Engineering Manager Andrew J. Hall, Director John DeCriscio, Operations Manager Phil Hawkins, Director Gina Knight, HR/Risk and Safety Manager Brooke Jones, Director Delia Lugo, Finance Manager Art Vega, Information Technology Manager Annie Alexander, Executive Assistant ALSO PRESENT Andrew Gagen, Partner and General Counsel, Kidman Law LLP Beth Haney, Councilmember, City of Yorba Linda 4. ADDITIONS/DELETIONS TO THE AGENDA General Manager Marcantonio indicated there were no changes to the agenda and that additional materials had been distributed to the Board and made available to the public. 5. INTRODUCTIONS AND PRESENTATIONS 5.1. Elected Official Liaison Reports None. 6. PUBLIC COMMENTS Julia Schultz (resident) spoke against the issuance of a customer refund and in favor of establishing a rate stabilization reserve. Minutes of the YLWD Board of Directors Regular Meeting Held June 27, 2017 at 6:30 p.m. 2 7. CONSENT CALENDAR Director Hall indicated he would need to abstain from voting on Item Nos. 7.2. and 7.5. as he wasn’t present at the meetings. Finance Manager Lugo responded to questions from Vice President Nederhood regarding the timing of a payment listed on Item No. 7.6. Director Hawkins made a motion, seconded by Director Nederhood, to approve Item Nos. 7.1., 7.3., 7.4., 7.6., and 7.7. on the Consent Calendar. Motion carried 5-0. Director Hawkins made a motion, seconded by Director Nederhood, to approve Item Nos. 7.2. and 7.5. on the Consent Calendar. Motion carried 4-0-1-0 with Director Hall abstaining. 7.1. Minutes of the Board of Directors Workshop Meeting Held March 21, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.2. Minutes of the Board of Directors Special Meeting Held March 22, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.3. Minutes of the Board of Directors Regular Meeting Held March 28, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.4. Minutes of the Board of Directors Regular Meeting Held April 11, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.5. Minutes of the Board of Directors Special Meeting Held April 18, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.6. Payments of Bills, Refunds, and Wire Transfers Recommendation: That the Board of Directors ratify and authorize disbursements in the amount of $1,814,608.97. Minutes of the YLWD Board of Directors Regular Meeting Held June 27, 2017 at 6:30 p.m. 3 7.7. Declaration of Restrictive Covenants with Bernardo and Ana B. Flores Recommendation: That the Board of Directors authorize the President and Secretary to execute a Declaration of Restrictive Covenants with Bernardo and Ana B. Flores. 5. INTRODUCTIONS AND PRESENTATIONS CONTINUED 5.1. Elected Official Liaison Reports Councilmember Haney reported on her recent tour of MW D’s Diemer Water Filtration Plant and the City’s 4th of July Celebration. 8. ACTION CALENDAR 8.1. Adopting a Public Funds Investment Policy for Fiscal Year 2018 Finance Manager Lugo explained that the District’s chief fiscal officer was legally required to present an investment policy to the Board for consideration on an annual basis. The purpose of the policy is to establish procedures for a prudent and systemic investment program in support of the District’s overall mission. The Board and staff briefly discussed the future issuance of an RFP for banking services. The Board voted 5-0 on a Roll Call vote to approve Resolution No. 17-16 adopting a Public Funds Investment Policy for Fiscal Year 2018 and rescinding Resolution No. 16-18. 8.2. Appropriations Limit for Fiscal Year 2018 Finance Manager Lugo explained that the District was legally required to adopt an Appropriations Limit and factors used to calculate this number annually. This limit assures that government agencies do not assess and collect taxes in excess of the controlled limits. Historically, the District has received a small amount of property tax revenue which is substantially lower than the calculated limitation. The Board voted 5-0 on a Roll Call vote to approve Resolution No. 17-17 adopting the Appropriations Limit for Fiscal Year 2018. 8.3. Financial Reserves Policy for Fiscal Year 2018 Finance Manager Lugo explained the purpose of this policy and the recommended revisions. The Board and staff discussed current reserve categories and target levels as compared to those recommended by Minutes of the YLWD Board of Directors Regular Meeting Held June 27, 2017 at 6:30 p.m. 4 Fieldman Rolapp & Associates, the District’s financial advisors, and in the 2015 rate study performed by Raftelis Financial Consultants. They also discussed relationships between reserve levels, debt coverage ratios, days of cash on hand, and credit agency ratings; projected reserve balances ending FY17 and beginning FY18; and the District’s unfunded accrued liabilities. Vice President Nederhood suggested eliminating the Emergency, Maintenance, and Administration Reserves, and updating the District’s purchasing policy. Finance Manager Lugo noted that the District’s debt management and proposed reserves policies were geared towards maintaining the YLWD’s current credit agency ratings. If a future rating surveillance finds a material difference in the District’s days of cash and reserve levels as compared to what was presented in the Official Statement for the 2017A refunding bonds, its possible YLWD’s credit ratings could be downgraded. Vice President Nederhood clarified that he was suggesting to subsume the above listed reserve categories with the Operating Reserve, not eliminate the reserve amounts. The Board and staff continued discussing various metrics considered by credit rating agencies. Director Hawkins suggested that reserve categories under $500K be combined with a similar reserve. Finance Manager Lugo suggested that the Maintenance and Administration Reserves be combined with the Capital Replacement Reserve as associated purchases would be capitalized. Operations Manager DeCriscio explained the historical purpose and management of the Maintenance Reserve in relation to the District’s purchasing policy. Finance Manager Lugo noted that staff was currently working on revising the District’s purchasing policy. The Board and staff discussed the difference between and management of the Operating and Emergency Reserves; best practice recommendations for segregation of reserves; and potential drawbacks of combining reserve categories. Terry Harris (resident) commented on the Ad Hoc Citizens Advisory Committee’s (AHCAC) recommendations in regards to the District’s reserves. Finance Manager Lugo responded to questions from an unknown resident regarding the composition (cash versus investment) and management of the District’s reserves. Julia Schultz (resident) spoke against the combining of reserve categories. Vice President Nederhood suggested that if the Emergency Reserve was to remain segregated, the definition of such be worded more precisely in the policy. Minutes of the YLWD Board of Directors Regular Meeting Held June 27, 2017 at 6:30 p.m. 5 Director Nederhood made a motion to eliminate the Emergency, Maintenance, and Administrative Reserve categories in the proposed Financial Reserves Policy for Fiscal Year 2018. Motion failed for lack of second. Director Hall made a motion, seconded by Director Hawkins, to combine the Maintenance and Administrative Reserve categories with the Capital Replacement Reserve category in the proposed Financial Reserve Policy and approve Resolution No. 17-18 Adopting the Financial Reserves Policy as amended for Fiscal Year 2018 and Rescinding Resolution No. 16-08. Motion carried 5-0 on a Roll Call vote. The Board then directed staff to revise the District’s purchasing policy to accommodate the changes described above. Finance Manager Lugo indicated the revised policy would be presented to the Board at a regular meeting in late July or August for consideration. 8.4. Sewer Rate for Fiscal Year 2018 Finance Manager Lugo explained that in compliance with Proposition 218, a public hearing was held in September 2015 to consider rates as presented in the FY16-20 Water and Sewer Rate Study Report. Staff is requesting the Board increase the monthly sewer service rate based on customer type for FY18 as identified in Year 3 of the Rate Study. Director Hawkins made a motion, seconded by Director Hall, to approve Resolution No. 17-19 Setting Sewer Rates Effective August 1, 2017 and Rescinding Resolution No. 16-11. Motion carried 5-0 on a Roll Call vote. 8.5. Operating Budget for Fiscal Year 2018 (Financial Summaries) General Manager Marcantonio provided an overview of key financial information contained in the District’s proposed operating budget for FY18. He noted that there was no anticipated increase in water rates. Vice President Nederhood suggested the proposed FY18 budget for supplies and services expenses be reduced by approximately $300K. Director Hawkins indicated that approximately $200K may be more reasonable considering the District’s involvement in pending litigation. General Counsel Gagen reviewed the benefits of participating in the case and recommended the District’s continued involvement due to the potential long-term financial consequences of dropping out. Vice President Nederhood also suggested the Board consider reincorporating any expense items removed from the budget following development of the District’s strategic plan. General Manager Marcantonio indicated that this would be possible. Minutes of the YLWD Board of Directors Regular Meeting Held June 27, 2017 at 6:30 p.m. 6 The Board and staff then discussed deferring or modifying various expenses identified in the FY18 budget including: institution of 100% paperless billing to reduce postage costs; updating the Asset Management Plan (AMP); implementation of customer engagement/water usage analytics software; engagement of legislative and public affairs consultants; performance of an employee compensation survey; and distribution of the customer newsletter in electronic versus print form. Brief discussion followed regarding the reasons for employee turnover. Terry Harris (resident) commented on the Ad Hoc Citizens Advisory Committee’s (AHCAC) recommendations in regards to the District’s reserves and rate structure, and updating the asset management and strategic plans. He also proposed that the Board wait until after the strategic planning process was complete before considering modifications to the budget. Julia Shultz (resident) also suggested the Board go through the strategic planning process prior to modifying the budget. The Board then discussed removing the following expenses from the FY18 budget and reconsidering their necessity following the completion of a strategic plan: legislative consultant services ($60K); public relations consultant services ($50K); employee compensation survey ($60K); and print publication and distribution of the customer newsletter ($47K). Director Hawkins made a motion, seconded by Director Jones to: (1) remove the above listed expenses totaling $217K from the Operating Budget for Fiscal Year 2018; (2) consider adding the same listed expenses back to the Operating Budget for Fiscal Year 2018 following completion of the strategic planning process; and (3) approve Resolution No. 17-20 adopting the Operating Budget for Fiscal Year 2018 as amended and rescinding Resolution No. 16-09. Motion carried 5-0 on a Roll Call vote. Finance Manager Lugo noted that the fully illustrated budget document would be presented to the Board for review in July prior to being submitted to the Government Finance Officers Association’s budget presentation award program. 8.6. Final Environment Compliance for the Hidden Hills Reservoir Project Engineering Manager Conklin explained that in 2010, the District began efforts to restore an area in Chino Hills State Park impacted by construction of the Hidden Hills Reservoir as required by conditions established in the CEQA Mitigated Negative Declaration. The District’s consultant, Chambers Group, has worked over the last six years to restore native vegetation in this area to at least 70% of its former state. Minutes of the YLWD Board of Directors Regular Meeting Held June 27, 2017 at 6:30 p.m. 7 Unfortunately, the achieved percentage of restoration is not to the satisfaction of the federal and state resource agencies reviewing the work. Rather than continue these efforts with the hope of meeting these agencies expectations, staff is recommending the District negotiate with them to purchase offset land-bank mitigation property to compensate for the shortfall in order to end the required mitigation work. The Board and staff then discussed the consultant’s restoration efforts. Director Jones made a motion, seconded by Director Hall, to (1) approve budgeting $120,000 for the purchase of offset land-bank mitigation property and $40,000 for consulting, permitting and related costs, for a cumulative total of $160,000 for FY 2018; and (2) approve a $23,892 Change Order increase to the Professional Services Agreement with Chambers Group which is included in the $40,000 amount. Motion carried 5-0. 8.7. Request for Governor Brown’s Concurrence with Listing of Orange County North Basin Project on National Priorities List Engineering Manager Conklin explained that OCWD was asking each of the groundwater producer agencies to send a letter requesting Governor Brown’s concurrence with listing of the Orange County North Basin Project on the EPA’s National Priorities List. He also reviewed the benefits of doing so. Director Hawkins made a motion, seconded by Director Jones, to authorize the General Manager to execute and submit correspondence requesting Governor Brown’s concurrence with listing Orange County Water District’s North Basin Project on the National Priorities List. Motion carried 5-0. 9. DISCUSSION ITEMS Director Hawkins made a motion, seconded by Director Jones, to defer discussion of Item Nos. 9.1. and 9.2. to the next regular meeting. Motion carried 5-0. 9.1. Budget to Actual Statements for Month Ending May 31, 2017 9.2. Cash and Investment Report for Period Ending May 31, 2017 10. REPORTS, INFORMATION ITEMS, AND COMMENTS 10.1. Directors' Reports None. Minutes of the YLWD Board of Directors Regular Meeting Held June 27, 2017 at 6:30 p.m. 8 10.2. General Manager's Report None. 10.3. General Counsel’s Report General Counsel Gagen provided guidance to the Board regarding the use of e-mail in relation to the Public Records Act and the Ralph M. Brown Act. 10.4. Future Agenda Items and Staff Tasks None. 11. COMMITTEE REPORTS 11.1. Interagency Committee with MWDOC and OCWD (Miller/Nederhood) Next meeting is scheduled July 27, 2017 at 4:00 p.m. 11.2. Joint Agency Committee with City of Yorba Linda (Miller/Hawkins) Minutes of the meeting held June 12, 2017 at 4:00 p.m. will be provided when available. Next meeting is scheduled September 18, 2017 at 4:00 p.m. at YL City Hall. 11.3. Joint Agency Committee with City of Placentia (Miller/Nederhood) Next meeting yet to be scheduled. 12. INTERGOVERNMENTAL MEETINGS The Directors reported on their attendance at the following meetings. 12.1 LAFCO – June 14, 2017 (Nederhood – As Needed) 12.2 YL Planning Commission – June 14, 2017 (Hawkins – As Needed) Director Hawkins did not attend this meeting. 12.3. OC Water Summit – June 16, 2017 (Hawkins/Jones/Miller/Nederhood) Minutes of the YLWD Board of Directors Regular Meeting Held June 27, 2017 at 6:30 p.m. 9 12.4. MWDOC – June 21, 2017 (Nederhood) 12.5. OCWD – June 21, 2017 (Jones) 12.6. YL City Council – June 26, 2017 (Nederhood) 13. BOARD OF DIRECTORS ACTIVITY CALENDAR 13.1. Meetings from June 28 – September 30, 2017 The Board reviewed the activity calendar and made no changes. 14. CONFERENCES, SEMINARS, AND SPECIAL EVENTS 14.1. CBWCD Symposium on Statewide Conservation – June 29, 2017 Director Hawkins made a motion, seconded by Director Hall, to approve Director attendance at this event if desired. Motion carried 5-0. 15. ADJOURNMENT 15.1. The meeting was adjourned at 9:31 p.m. Annie Alexander Assistant Board Secretary ITEM NO. 7.2 AGENDA REPORT Meeting Date: September 12, 2017 Subject:Minutes of the Board of Directors Regular Meeting Held July 11, 2017 STAFF RECOMMENDATION: That the Board of Directors approve the minutes as presented. ATTACHMENTS: Name:Description:Type: 2017-07-11_-_Minutes_-_BOD.doc Minutes Minutes Minutes of the YLWD Board of Directors Regular Meeting Held July 11, 2017 at 6:30 p.m. 1 2017-XXX MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS REGULAR MEETING Tuesday, July 11, 2017, 6:30 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The meeting was called to order at 6:30 p.m. 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL DIRECTORS PRESENT STAFF PRESENT J. Wayne Miller, President Steve Conklin, Engineering Manager Al Nederhood, Vice President John DeCriscio, Operations Manager Andrew J. Hall, Director Gina Knight, HR/Risk and Safety Manager Phil Hawkins, Director Delia Lugo, Finance Manager Brooke Jones, Director Art Vega, Information Technology Manager Annie Alexander, Executive Assistant Cindy Botts, Management Analyst Kelly McCann, Senior Accountant Malissa Muttaraid, Public Affairs Representative ALSO PRESENT Art Kidman, Partner, Kidman Law LLP Andrew Gagen, Partner, Kidman Law LLP Brett Barbre, Director, MWDSC and MWDOC Tom Lindsey, Councilmember, City of Yorba Linda Andy Sells, Chief Executive Officer, ACWA/JPIA 4. ADDITIONS/DELETIONS TO THE AGENDA None. 5. INTRODUCTIONS AND PRESENTATIONS 5.1. Elected Official Liaison Reports Councilmember Tom Lindsey reported on the results of multiple Proposition 218 hearings for zones within the City of Yorba Linda’s Landscape Maintenance Assessment District, the expected reduction in Minutes of the YLWD Board of Directors Regular Meeting Held July 11, 2017 at 6:30 p.m. 2 water consumption, and data contained in the County’s most recent assessment roll. Director Brett Barbre reported on MWDSC’s water storage efforts, status of water storage related legislation, and the successful conclusion of pending litigation. 5.2. Overview of Services Provided by ACWA/JPIA Andy Sells, CEO for ACWA/JPIA, provided an overview of the association’s governance structure. He also reviewed ACWA/JPIA’s liability, property, workers compensation, and employee health insurance programs as well as the association’s specialized services such as training and development. He then summarized staff’s accomplishments related to training, the association’s retroactive premium adjustments, and the requirements for and benefits provided by agency membership. 5.3. Overview of County Water Districts Art Kidman, General Counsel for YLWD, provided an overview of county water districts. This included defining types of special districts; forms of local government and water suppliers; specific powers, purposes and differences; property taxes; and water rights. He also reviewed the OCWD Act, benefits afforded by annexation into OCWD, and pending litigation between IRWD and OCWD to which the District is a party. Operations Manager DeCriscio provided a brief explanation of OCWD’s Conjunctive Use Program, Basin Production Percentage, and Basin Equity Assessment. He also clarified the differences between and percentages of the District’s two water sources. 6. PUBLIC COMMENTS Kay Dotson (resident) spoke against the continuance of joint District and City Council committees and Director attendance at City Council meetings. She also commented on a discussion which took place during a recent Yorba Linda City Council meeting, thanked the Board and staff for the work, and suggested a forensic audit be conducted. Mark Schock (resident) commended Operations Manager DeCriscio and his staff for their work and spoke against the implementation of a budget based rate structure. He also commented on the timing for transcription of the meeting minutes and suggested video recordings of the meetings be aired on the local public access television channel. Minutes of the YLWD Board of Directors Regular Meeting Held July 11, 2017 at 6:30 p.m. 3 Engineering Manager Conklin noted that this was Management Analyst Botts’ last meeting as she was moving out of state. The Board thanked Ms. Botts for her exemplary service to the District. Julia Schultz (resident) commented on some misconceptions she had observed in the community. She also recommended a piece of literature. Greg Schultz (resident) commented on the impact of the Governor’s previous emergency drought declaration and the community’s water conservation efforts. He also remarked on the state’s lack of appropriate water storage and pending legislation. Jon Hansen (resident) commented on the District’s historical revenues and expenses and the General Manager’s employment contract. 7. CONSENT CALENDAR Director Hawkins requested to remove Item No. 7.3 from the Consent Calendar. Director Hall made a motion, seconded by Director Jones, to approve the remainder of the Consent Calendar. Motion carried 5-0. 7.1. Minutes of the Board of Directors Regular Meeting Held April 25, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.2. Payments of Bills, Refunds, and Wire Transfers Recommendation: That the Board of Directors ratify and authorize disbursements in the amount of $461,487.91. ITEMS REMOVED FROM THE CONSENT CALENDAR FOR SEPARATE ACTION 7.3. Terms and Conditions for Water and Sewer Service with Shea Homes for Tract 18061 The Board and staff briefly discussed the possibility of having the developer install smart meters rather than radio read meters. Engineering Manager Conklin was tasked with looking into the matter. Director Hawkins made a motion, seconded by Director Jones, to approve the Terms and Conditions for Water and Sewer Service with Shea Homes for Tract 18061, Job No. 201719. Motion carried 5-0. Trevor Dodson, Principal/Senior Project Manager for Fuscoe Engineering, described the location of the project. Minutes of the YLWD Board of Directors Regular Meeting Held July 11, 2017 at 6:30 p.m. 4 8. ACTION CALENDAR HR/Risk and Safety Manager Knight briefly explained the purpose of Item Nos. 8.1. and 8.2., and noted that neither one had any fiscal impact. 8.1. Revised Budgeted Positions for the Remainder of Fiscal Year 2018 HR/Risk and Safety Manager Knight explained that staff previously presented a proposal to the District’s Employees Association which included the revision of specific represented job descriptions and titles. The Association recently approved these changes which now requires a revision to the budgeted positions for the remainder of FY18 in order to comply with CalPERS regulations. She reiterated that these revisions would have no fiscal impact. Director Hawkins made a motion, seconded by Director Hall, to adopt Resolution No. 17-21 Approving the Revised Budgeted Positions for the Remainder of Fiscal Year 2018 and Rescinding Resolution No. 17-15. Motion carried 5-0 on a Roll Call vote. 8.2. Clarifying Employee Classifications, Salary Ranges, and Pay Ranges HR/Risk and Safety Manager Knight explained that in anticipation of Board approving Item No. 8.1., staff updated Exhibit A of the Bargaining Unit Employees Association Classifications and Salary Ranges to revise the impacted positions. Staff also updated Exhibit B of the Professional and Confidential Employees Classifications and Salary Ranges and Exhibits B and E of the Management Employees Classifications and Salary Ranges to reflect the reclassification and replacement of certain positions previously approved by the Board in November 2016 and May 2017. Additionally, staff has generated a Classification and Salary Range for the position of General Manager in order to comply with CalPERS regulations. She again reiterated that these revisions would have no fiscal impact. Jeff Decker (resident) commented on establishing goals and objectives for the position of Assistant General Manager. Kent Ebinger (resident) commented on the District’s historical and budgeted revenues and expenses. The Board voted 5-0 on a Roll Call to adopt Resolution No. 17-22 approving the modification of certain Classifications and Salary Ranges agreed upon between the District and Employees of the Yorba Linda Water District Employees Association for the remainder of Fiscal Years 2015-2018 and amending Resolution No. 15-06. Minutes of the YLWD Board of Directors Regular Meeting Held July 11, 2017 at 6:30 p.m. 5 The Board voted 5-0 on a Roll Call to adopt Resolution No. 17-23 approving the modification of certain Classifications and Salary Ranges for Professional and Confidential Employees for the remainder of Fiscal Years 2015-2018 and amending Resolution No. 15-07. Director Jones made a motion, seconded by Director Hawkins, to adopt Resolution No. 17-24 approving the modification of certain Classifications and Salary Ranges, and Pay Plan for Management Employees for the remainder of Fiscal Years 2015-2018 and amending Resolution No. 15- 08. Motion carried 5-0 on a Roll Call vote. Director Jones made a motion, seconded by Director Hawkins, to adopt Resolution No. 17-25 approving the Classification and Salary for the General Manager effective July 11, 2017. Motion carried 5-0 on a Roll Call vote. 9. DISCUSSION ITEMS 9.1. Budget to Actual Statements for Month Ending May 31, 2017 Finance Manager Lugo reviewed key information contained in the consolidated statement and indicated there was an increase in cumulative volumetric water revenue and total variable costs due to warmer weather and increased customer consumption. Jeff Decker (resident) commented on the YTD budgeted versus actual net position before capital contributions as identified in the consolidated statement. Management Analyst Botts reviewed the ProForma water statement and touched on total revenue and expenses, debt service principal and interest, committed capital expenditures, remaining funds available for transfer to reserves, and the debt service coverage ratio. Board discussion followed regarding reserves, unfunded accrued liabilities, capital expenditures, potential customer refund, and anticipated developer contributions. Staff was instructed to equal among active meters for conservation purposes 9.2. Cash and Investment Report for Period Ending May 31, 2017 Finance Manager Lugo summarized the fiscal impact of the advance refunding of the 2008 Certificates of Participation and issuance of the Revenue Bonds, Series 2017A. She noted that the funds being held at US Bank could only be used for construction of the Fairmont Booster Pump Station. Minutes of the YLWD Board of Directors Regular Meeting Held July 11, 2017 at 6:30 p.m. 6 9.3. Budget Process for Fiscal Year 2018 and Potential Modifications for Fiscal Year 2019 Discussion of this item was deferred to the next regular meeting. 9.4. District Unfunded Accrued Liabilities Finance Manager Lugo explained that as reported in the District’s financial statements, YLWD had the following unfunded accrued liabilities: employee pension; other post-employment benefits (OPEB); and compensated balances (vacation/sick leave). She then reported each liability category’s approximate total and percentage funded. She also provided an overview of various strategies which may help mitigate the District’s risk exposure. The Board and staff briefly discussed putting together a plan for funding these liabilities and other agencies strategies for addressing this issue. Jon Hansen (resident) suggested the District convert to a 401K for new hires. Jeff Decker (resident) commented on the potential impact on recruitment should the District convert to a 401K. Director Brett Barbre stated that CalPERS would not allow a hybrid retirement system and that the total liability would have to be paid in order to cancel the contract. He then shared some of MWDSC’s strategies for addressing this issue and commented on future financial reporting requirements. Councilmember Tom Lindsey suggested that the District’s and City of Yorba Linda’s Finance Manager’s meet to discuss the City of Yorba Linda’s recent actions to help mitigate this issue. Kent Ebinger (resident) spoke in favor of a issuing a refund and using it as an opportunity to educate customers regarding the District’s unfunded liabilities. 9.5. District Unfunded Long-term Projects Discussion of this item was deferred to the next regular meeting. 9.6. Disposition and Potential Refund of Administrative Penalties Finance Manager Lugo explained that the projected administrative penalty fund balance as of June 30, 2017 would be $1.2M. She noted that staff was working on a pending rebate for the Placentia-Yorba Linda Unified Minutes of the YLWD Board of Directors Regular Meeting Held July 11, 2017 at 6:30 p.m. 7 School District and inputting journal entries for YLWD’s leak detection program activities through April 2017. General Counsel Gagen briefly summarized the potential uses for the remaining funds. Jon Hansen (resident) spoke in favor of refunding the remaining administrative penalty funds in an equal amount to all District customers. Kay Dotson (resident) commented on the City of Yorba Linda’s expenses for irrigation in various Landscape Maintenance Assessment District zones. She also spoke in favor of refunding the remaining administrative penalty funds in an equal amount to all District customers. Terry Harris (resident) commented on the Ad Hoc Citizens Advisory Committee’s (AHCAC) recommendation to use the remaining administrative penalty funds to develop and support a water efficiency program for the District. Jeff Decker (resident) suggested that a poll be placed on the District’s website to receive customer input on the use of the administrative penalty funds. He also suggested that the District issue a $50 refund to each household. Kent Ebinger (resident) commented on the amount of administrative penalties paid by the City of Yorba Linda. Jeff Decker (resident) spoke against issuing a refund to the City of Yorba Linda. Greg Shultz (resident) commented on the loss of his landscape due to the conservation mandate. He also spoke against issuing a refund to customers who paid administrative penalties and in favor of using the remaining funds to enhance the District’s water efficiency and education efforts. Julia Schultz (resident) commented on the cost of restoring her landscape which was lost due to the conservation mandate. Councilmember Tom Lindsey commented on the administrative penalties paid by the City of Yorba Linda and the potential refund. Director Brett Barbre spoke in favor of refunding the administrative penalties and commented on the challenge of determining the method for execution. Minutes of the YLWD Board of Directors Regular Meeting Held July 11, 2017 at 6:30 p.m. 8 An unknown resident commented on the loss of her landscape due to the conservation mandate. She also spoke in favor of issuing a refund to the City of Yorba should the Board decide to refund the remaining administrative penalties. Board discussion followed regarding the options and methods for utilizing or refunding the remaining administrative penalty funds. Finance Manager Lugo explained that the most efficient process for issuing a refund would be to apply a credit to each customer’s bill. She also explained that issuing a refund may impact the District’s debt service coverage ratio. Staff was instructed to put together a plan for issuing a refund of the remaining administrative penalties in an equal amount as a credit to each active customer connection for water service. Staff was also tasked with developing a list of suggested water-saving devices for which customers can consider utilizing the credit. Julia Schultz (resident) spoke against the issuance of a refund and in favor of utilizing the remaining funds to support a water efficiency education program. 9.7. Disposition and Potential Refund for Fiscal Year 2017 Net Income Terry Harris (resident) commented on the AHCAC’s recommendation to issue a refund following reconciliation of the year end financials. He also commented on the District’s current rate structure and reserve levels. Jeff Decker (resident) commented on the unaudited water financial statements for FY16 and handouts he had prepared and distributed to the Board. He also commented on the conservation mandate, previous rate increase, and the 2015 rate study. Kay Dotson (resident) commented on the conservation mandate and the importance of planning for future drought conditions. Julia Schultz (resident) commented on the District’s unfunded liabilities and spoke against the issuance of an annual refund. Jon Hansen (resident) spoke in favor of utilizing the District’s annual net income to issue a refund and contribute towards the District’s unfunded liabilities. Greg Schultz (resident) commented on the challenges associated with the budgeting process and the benefits of utilizing the District’s annual net income for maintenance of the distribution system and paying down accrued liabilities. Minutes of the YLWD Board of Directors Regular Meeting Held July 11, 2017 at 6:30 p.m. 9 Kent Ebinger (resident) spoke in favor of a issuing a refund and using it as an opportunity to educate customers regarding the District’s unfunded liabilities and the need for maintaining the distribution system. The Board discussed the need for establishing funding priorities, setting reserve targets, and determining what conditions would quantify the issuance of a refund. The Board also discussed the District’s unfunded accrued liabilities, unfunded long-term projects, the need for updating the Asset Management Plan, the 2015 rate study, the potential for increased regulation associated with the state’s long-term framework for conservation, and YLWD’s capital improvement plan. Jeff Decker (resident) commented on balancing the issuance of a refund with the District’s maintenance and funding priorities. Director Brett Barbre commented on MWDSC’s management of annual net income to fund reserves and accrued liabilities. The Board then directed staff to bring this item back at a future meeting for discussion following completion of the FY17 audited financial statements. 9.8. Request for Proposals for Contractual Services Discussion of this item was deferred to the next regular meeting. 10. REPORTS, INFORMATION ITEMS, AND COMMENTS 10.1. Directors' Reports None. 10.2. General Manager's Report None. 10.3. General Counsel’s Report None. 10.4. Future Agenda Items and Staff Tasks None. Minutes of the YLWD Board of Directors Regular Meeting Held July 11, 2017 at 6:30 p.m. 10 11. COMMITTEE REPORTS 11.1. Joint Agency Committee with City of Yorba Linda (Miller/Hawkins) Minutes of the meeting held June 12, 2017 at 4:00 p.m. will be provided when available. Next meeting is scheduled September 18, 2017 at 4:00 p.m. at YL City Hall. 11.2. Joint Agency Committee with City of Placentia (Miller/Nederhood) Next meeting yet to be scheduled. 11.3. Interagency Committee with MWDOC and OCWD (Miller/Nederhood) Next meeting is scheduled July 27, 2017 at 4:00 p.m. 12. INTERGOVERNMENTAL MEETINGS The Directors reported on their attendance at the following meetings. 12.1 OCSD Board – June 28, 2017 (Hawkins/Jones) 12.2 YL Planning Commission – June 28, 2017 (Hawkins – As Needed) 12.3. Symposium on Statewide Conservation – June 29, 2017 (Jones) 12.4. ISDOC – June 29, 2017 (Hawkins/Nederhood) 12.5. MWDOC – July 5, 2017 (Nederhood) 12.6. OCSD Operations Committee – July 5, 2017 (Hawkins) 12.7. OCWD Board – July 5, 2017 (Jones) 12.8. WACO – July 7, 2017 (Hawkins/Miller/Nederhood) Director Nederhood made a motion, seconded by Director Hawkins, to adjourn the meeting. No vote was taken. Minutes of the YLWD Board of Directors Regular Meeting Held July 11, 2017 at 6:30 p.m. 11 13. BOARD OF DIRECTORS ACTIVITY CALENDAR 13.1. Meetings from July 12 – September 30, 2017 Director Hawkins made a motion, seconded by Director Nederhood, to approve the Board of Directors activity calendar as presented. Motion carried 5-0. 14. CONFERENCES, SEMINARS, AND SPECIAL EVENTS 14.1. MWDOC Water Policy Forum – August 30, 2017 CSDA Annual Conference – September 25-28, 2017 Director Hall made a motion, seconded by Director Hawkins, to approve Director attendance at these events if desired. Motion carried 5-0. 15. ADJOURNMENT 15.1. The meeting was adjourned at 11:24 p.m. Annie Alexander Assistant Board Secretary ITEM NO. 7.3 AGENDA REPORT Meeting Date: September 12, 2017 Budgeted:Yes To:Board of Directors Funding Source:All Funds From:Marc Marcantonio, General Manager Presented By:Delia Lugo, Finance Manager Dept:Finance Reviewed by Legal:N/A Prepared By:Richard Cabadas, Accounting Assistant I CEQA Compliance:N/A Subject:Payments of Bills, Refunds, and Wire Transfers SUMMARY: Section 31302 of the California Water Code says the District shall pay demands made against it when they have been approved by the Board of Directors. Pursuant to law, staff is hereby submitting the list of disbursements for Board of Directors’ approval. STAFF RECOMMENDATION: That the Board of Directors ratify and authorize disbursements in the amount of $652,947.64. DISCUSSION: The items on this disbursement list includes a wire of $62,652.19 to So. California Gas Co. for March through July 2017 gas charges at Richfield Rd. The balance of $277,263.37 is routine invoices. The Accounts Payable check register total is $339,915.56; Payroll No. 17 total is $313,032.08; and the total of all listed disbursements for this agenda report is $652,947.64. A summary of the disbursements is attached. PRIOR RELEVANT BOARD ACTION(S): The Board of Directors approves bills, refunds and wire transfers semi-monthly. ATTACHMENTS: Name:Description:Type: 17-CS_0912.pdf Cap Sheet Backup Material CkReg091217.pdf Check Register Backup Material 17_CC_0912.pdf Credit Card Summary Backup Material Summary of Disbursements September 12, 2017 CHECK NUMBERS & WIRES: Computer Checks 70431—70551 $ 277,263.37 Void Checks 70310 – 70430 $ 0.00 ____________ $ 277,263.37 WIRES: W082417 So. California Gas Co. $ 62,652.19 _____________ $ 62,652.19 TOTAL OF CHECKS & WIRES $339,915.56 PAYROLL NO. 17: Direct Deposits $ 171,813.53 Third Party Checks 6757—6768 $ 17,560.11 Payroll Taxes $ 50,128.30 EFT – CalPERS Payroll #17 $ 36,881.72 EFT – CalPERS Payroll #16 $ 36,648.42 $ 313,032.08 TOTAL OF PAYROLL $313,032.08 ---------------------------------------------------------------------------------------------------------------------- DISBURSEMENT TOTAL: $652,947.64 ================================================================== APPROVED BY THE BOARD OF DIRECTORS MINUTE ORDER AT BOARD MEETING OF SEPTEMBER 12, 2017 ==================================================================. Check No.Date Vendor Name Amount Description 70470 09/12/2017 3T Equipment Company Inc.4,729.80 TOOLS & EQUIPMENT AND SEWER MAIN PARTS 70471 09/12/2017 Al Nederhood 160.14 TRAVEL EXPENSE - CA/NV AWWA CONF. & MILEAGE REIMBURSEMENT - AUG 2017 70445 09/12/2017 AMANDA FRONCZAK 144.73 CUSTOMER REFUND 70434 09/12/2017 AMY FOSTER 86.17 CUSTOMER REFUND 70472 09/12/2017 Aramark 564.00 UNIFORM SERVICE 70488 09/12/2017 ARC 90.00 J2009-22#22 - PW DOC/BID MGMT 70473 09/12/2017 Archie's Towing 125.00 TOWING - VACTOR TRUCK 70468 09/12/2017 ARMIN CORP 403.60 CUSTOMER REFUND 70474 09/12/2017 Art Vega 25.00 TRAVEL EXPENSE - BLACK HAT CONVENTION 70475 09/12/2017 AT & T - Calnet3 3,415.92 ATT CALNET3 70476 09/12/2017 Autoscribe Corporation 1,179.25 PAYMENT VISION GATEWAY 70477 09/12/2017 Bee Busters, Inc 450.00 BEE ABATEMENT- (5) LOCATIONS 70478 09/12/2017 Boot World Inc.513.85 SAFETY BOOTS - (4) EMPLOYEES 70479 09/12/2017 BrightView Tree Care Services Inc.3,550.00 LANDSCAPE SERVICE - JUNE & AUGUST 2017 70480 09/12/2017 Brooke Jones 182.64 MILEAGE REIMBURSEMENT - AUGUST 17 70491 09/12/2017 C. Wells Pipeline 770.42 TOOLS & EQUIPMENT 70482 09/12/2017 CalCard US Bank 9,626.75 CREDIT CARD TRANSACTIONS - JULY & AUGUST 2017 70481 09/12/2017 Calolympic Safety Co.38.07 FORKLIFT REGULATION POSTER 70483 09/12/2017 CDM Smith 12,215.61 J09-22#22-PROF ENG SVCS-WELL22 70463 09/12/2017 CENTURY 21 REAL ESTATE 427.14 CUSTOMER REFUND 70444 09/12/2017 CHELSEA BOUDREAU 8.09 CUSTOMER REFUND 70443 09/12/2017 CHRISTOPHER STEPHENSON 92.95 CUSTOMER REFUND 70484 09/12/2017 City Of Anaheim 38,234.16 RICHFIELD & LAKEVIEW -ELECTRICITY FEES- 07/14-08/14 70485 09/12/2017 City Of Placentia 7,020.58 SEWER FEES - JULY 2017 & ENCROACHMENT PERMIT #717007 70486 09/12/2017 Clinical Lab. Of San Bern.2,930.00 WATER QUALITY - LAB SAMPLES 70487 09/12/2017 Coastal Ignition & Controls 1,696.73 SPARK PLUGS - ALL GAS ENGINES 70489 09/12/2017 Culligan of Santa Ana 2.85 EQUIPMENT PE SOFTENER 70490 09/12/2017 Cummins Pacific, LLC 1,688.29 VEHICLE MAINTENANCE - UNIT #175 70492 09/12/2017 Cynthia Botts 5,490.00 AUGUST 2017 - BUDGET/PLANNING "CONSERVATION WAY OF LIFE" PREP 70493 09/12/2017 Dan Copp Crushing Corp.1,711.50 VEHICLE MAINTENANCE - UNIT #197 70494 09/12/2017 Daniels Tire Service 3,984.00 VEHICLE MAINTENANCE - UNIT #210 70495 09/12/2017 Dapper Tire Co. Inc.796.27 VEHICLE MAINTENANCE - UNITS #182 & #190 70437 09/12/2017 DENNIS BURK 222.06 CUSTOMER REFUND 70496 09/12/2017 Diane Dalton 90.00 CERTIFICATE REIMBURSEMENT - WATER DISTRIBUTION OPERATOR 70497 09/12/2017 Dick's Lock & Safe Inc.3,554.98 REMOVE WORN LOCK & STEEL DOOR 70498 09/12/2017 DLT Solutions, LLC.1,680.56 AUTODESK AUTOCAD 2018 70499 09/12/2017 Eisel Enterprises, Inc.1,537.06 CONCRETE COVER & LIDS 70500 09/12/2017 Energy Environmental Soln, Inc 2,400.00 ICE TESTING - HIGHLAND GENERATOR 70501 09/12/2017 Enkay Engineering & Equipment Inc 900.00 TRANSIT PIPE DISPOSAL 70431 09/12/2017 ERRICK ROBINSON 212.73 CUSTOMER REFUND 70502 09/12/2017 Fleet Services, Inc 2,743.44 VEHICLE MAINTENANCE - UNIT #210 70503 09/12/2017 Flex Advantage 117.00 FLEX ADVANTAGE - 26 PARTICIPANTS - AUGUST 2017 70504 09/12/2017 Fry's Electronics 350.40 MONITOR & IT HARDWARE SUPPLIES 70505 09/12/2017 G.M. Sager Construction Co., Inc.13,700.00 PAVING REPAIR - 14 LOCATIONS 70506 09/12/2017 Golden Bell Products 560.30 BIG TIME ODOR CONTROL BLOCKS 70436 09/12/2017 GRACE SOONG 61.85 CUSTOMER REFUND 70507 09/12/2017 Haaker Equipment Co.3,367.43 VEHICLE MAINTENANCE - UNIT #197 & 210 70508 09/12/2017 Hopkins Technical Products Inc.709.29 SPARE MEMBRANE CAPS 70509 09/12/2017 Hushmand Associates Inc 35,080.50 J14-23 & J10-11B - GEOTECHNICAL OBSERVATION 70510 09/12/2017 Infosend Inc.5,952.43 POSTAGE BILLING - JULY & AUGUST 2017 70511 09/12/2017 Inland Overhead Door Company 539.00 SERVICE CALL - GATE 70512 09/12/2017 Jackson's Auto Supply - Napa 1,081.42 VEHICLE MAINTENANCE - UNIT #164, #169, #175, #197, #200, #201 & 210 70441 09/12/2017 JAE H LEE 81.31 CUSTOMER REFUND 70442 09/12/2017 JANE L EVANS 8.09 CUSTOMER REFUND 70439 09/12/2017 JASON ALLEN 225.00 CUSTOMER REFUND 70440 09/12/2017 JAY YU 2.70 CUSTOMER REFUND 70447 09/12/2017 JENNIFER SO 75.29 CUSTOMER REFUND 70513 09/12/2017 JM Justus Fence Company 1,755.00 INSTALL FENCE PANELS 70432 09/12/2017 JOHN ARIAS 7.35 CUSTOMER REFUND 70462 09/12/2017 JONATHAN NELSON 173.49 CUSTOMER REFUND 70459 09/12/2017 JUN HE 160.81 CUSTOMER REFUND 70450 09/12/2017 JUSTIN LEBLANC 76.15 REISSUE CUSTOMER REFUND Yorba Linda Water District Check Register For Checks Dated: 08/23/2017 thru 09/12/2017 70514 09/12/2017 Kidman Law 14,391.75 LEGAL SERVICES 70515 09/12/2017 Konica Minolta Business 854.48 LEASE - C258 & C558 COPIERS 70516 09/12/2017 LA Networks 3,525.00 PROFESSIONAL SERVICES - INFOCAST SYSTEM 70465 09/12/2017 LIMEI CAO 74.82 CUSTOMER REFUND 70517 09/12/2017 LPR-Laser Printer Repair Co 95.00 SERVICE - BROTHER MFC9970 70518 09/12/2017 Managed Health Network 171.00 EAP SEPTEMBER 2017 70519 09/12/2017 Marc Marcantonio 107.54 TRAVEL EXPENSE - UWI ANNUAL CONFERENCE 70456 09/12/2017 MARCO V MENENDEZ 165.52 CUSTOMER REFUND 70520 09/12/2017 Mc Fadden-Dale Hardware 226.91 HARDWARE SUPPLIES 70521 09/12/2017 Mc Master-Carr Supply Co.224.48 HARDWARE SUPPLIES 70448 09/12/2017 MIAN TANG 196.04 CUSTOMER REFUND 70458 09/12/2017 MICHAEL SUGIYAMA 120.02 CUSTOMER REFUND 70466 09/12/2017 MIKE PUTNAM 157.46 CUSTOMER REFUND 70522 09/12/2017 Mobile Industrial Supply 420.55 WELDING SUPPLIES 70523 09/12/2017 O.C. Driveline 174.65 MAINTENANCE - VALLEY VIEW ENGINE 70524 09/12/2017 Office Solutions 107.69 CHAIRMATS - 46X60 70452 09/12/2017 OLTMANS CONSTRUCTION 847.50 CUSTOMER REFUND 70525 09/12/2017 Orange County - HCA 321.00 HAZMAT PERMIT - FAC#FA0024226 70526 09/12/2017 Orange County - Tax Collector 66.95 APPLICATION FEE - 2017-00586 70529 09/12/2017 P.T.I. Sand & Gravel, Inc.355.69 MATERIAL - +30 FILL SAND 70527 09/12/2017 Partition Specialties Inc.467.00 MAINTENANCE - SERVICE TO WALL 70435 09/12/2017 PAT STARR 112.45 CUSTOMER REFUND 70457 09/12/2017 PICR LP 334.10 CUSTOMER REFUND 70528 09/12/2017 Powerstride Battery 360.89 BATTERY REPLACEMENT - UNIT#175 & HIGHLAND GENERATOR 70530 09/12/2017 Quinn Company 1,660.50 ENGINE MAINTENANCE - HIGHLAND #5 70538 09/12/2017 Rachel Padilla/Petty Cash 479.60 PETTY CASH - O080317, Y081017 & O082217 70531 09/12/2017 Red Wing Shoe Store 198.26 SAFETY BOOTS - BALTIERRA, G 70469 09/12/2017 RELIABLE EQUIPMENT RENTAL INC 621.30 CUSTOMER REFUND 70532 09/12/2017 RMJ Technologies 18,759.60 NVZ 5500 SERVICE - SEPTEMBER 2017 - AUGUST 2018 70446 09/12/2017 ROSE ROMO 19.59 CUSTOMER REFUND 70533 09/12/2017 Ruben Maldonado 90.00 CERTIFICATE REIMBURSEMENT - D3 70454 09/12/2017 RUBINA MOOSANI 97.41 CUSTOMER REFUND 70535 09/12/2017 S&J Supply Co.10,587.82 WAREHOUSE STOCK & REPAIR PARTS 70534 09/12/2017 Security Solutions 950.00 ANNUAL FIRE & BURGLAR ALARM 70467 09/12/2017 SELECT ENTERPRISES 456.51 CUSTOMER REFUND 70455 09/12/2017 SHOKRY LAWANDY 58.11 CUSTOMER REFUND 70464 09/12/2017 SIDA ZHAO 172.18 CUSTOMER REFUND 70536 09/12/2017 South Coast AQMD 1,517.22 EMISSION & PERMIT FEES - (3) LOCATIONS W082417 08/24/2017 Southern Calif Gas Co.62,652.19 RICHFIELD RD - GAS CHARGES - MARCH - JULY 2017 70537 09/12/2017 Specialized Painting Co., Inc.11,700.00 PAINT FENCE & GATE - PASO FINO 70540 09/12/2017 Stantec Consulting Services In 5,784.50 J14-23 - RICHFIELD RD PIPELINE 70539 09/12/2017 Stater Bros. Markets 46.86 MEETING SUPPLIES 70542 09/12/2017 Step Saver Inc 565.06 COARSE SALT 70541 09/12/2017 Steven Enterprises 51.55 PRINTER SUPPLIES 70460 09/12/2017 TBU INC 1,000.00 CUSTOMER REFUND 70433 09/12/2017 TERRY CASEY 4.69 CUSTOMER REFUND 70449 09/12/2017 TESS FOX 0.23 CUSTOMER REFUND 70543 09/12/2017 The Shredders 11.00 SHRED ON SITE SERVICE 70544 09/12/2017 Time Warner Cable 3,696.79 BUSINESS INTERNET, CABLE & COMMUNIATIONS SERVICE 70545 09/12/2017 TMobile 0.10 T-MOBILE - 7/21-8/20/17 70546 09/12/2017 Toxguard Fluid Technologies 625.85 WASTE DISPOSAL 70451 09/12/2017 U GYM YL LLC - UFC GYM 387.01 CUSTOMER REFUND 70547 09/12/2017 Underground Service Alert 331.75 DIGALERT - JULY 2017 70548 09/12/2017 United Industries 273.42 BREAKROOM SUPPLIES 70549 09/12/2017 United Water Works, Inc.9,406.77 WAREHOUSE STOCK & REPAIR PARTS 70550 09/12/2017 Westside Building Material 390.03 HARDWARE & CLEANING SUPPLIES 70438 09/12/2017 WILLIAM WEIRICH 7.50 CUSTOMER REFUND 70551 09/12/2017 YO Fire 3,344.77 WAREHOUSE STOCK & REPAIR PARTS 70453 09/12/2017 YOUJIAN LI 122.87 CUSTOMER REFUND 70461 09/12/2017 YUNG-HSIAO HUANG 186.88 CUSTOMER REFUND 339,915.56 08-24-2017 PAYROLL #17 - EMPLOYEE DIRECT DEPOSIT 171,813.53 08-24-2017 PAYROLL #17 - PAYROLL TAX PAYMENT 50,128.30 08-24-2017 PAYROLL #17 - CALPERS EFT 36,881.72 08-21-2017 PAYROLL #16 - CALPERS EFT 36,648.42 6757 08-24-2017 COLONIAL LIFE & ACCIDENT 128.30 6758 08-24-2017 FLEX ADVANTAGE 1,914.72 6759 08-24-2017 LINCOLN FINANCIAL GROUP 3,471.83 6760 08-24-2017 NATIONWIDE RETIREMENT SOLUTIONS 8,106.24 6761 08-24-2017 GARNISHMENT 231.00 6762 08-24-2017 CALIFORNIA STATE DISBURSEMENT UNIT 366.92 6763 08-24-2017 CALIFORNIA STATE DISBURSEMENT UNIT 339.69 6764 08-24-2017 CALIFORNIA STATE DISBURSEMENT UNIT 404.30 6765 08-24-2017 AMERICAN HERITAGE LIFE 1,544.89 6766 08-24-2017 MIDLAND LIFE INSURANCE 240.00 6767 08-24-2017 RELIANCE DI 47.54 6768 08-24-2017 AMERITAS 764.68 313,032.08 Payroll Checks #17 Vendor Name Amount Description Monoprice.com 20.86 IT supplies CDWG.com 41.47 Ergotron CPU holder Monoprice.com 144.28 IT supplies FexEx 143.06 Shipping fees for office supplies Amazon 139.99 Air tool for filter regulator Millennium Cincinnati 109.73 Travel expense - Groundwater Contamination Conference - Hong, B MWDOC 320.00 Registration - MWDOC Water Policy Forum (4) attendees Amazon 70.80 Center Console lid - Unit #164 American Ground Water Trust 110.00 Travel expense - Groundwater Contamination Conference - Hong, B United Airlines 283.60 Travel expense - Groundwater Contamination Conference - Hong, B Home Depot 1,163.67 Sod for landscape repair & equipment Home Depot 384.90 Sod for landscape repair & pallet of soil topper Amazon 55.98 Power strip - surge protector R.E. Michel 51.82 A/C repair parts for Well 18 AWWA 305.00 Registration - AWWA Water Education Seminar - Hong, B Source Media Conference 580.00 Bond Buyers California Public Finance Conference - Marcantonio & Barbre Best Valve Tire 20.00 Flat repair - Unit #157 Home Depot 32.22 Sod repair CAPIO 225.00 2017/2018 CAPIO Membership - Administration Taco Bell 9.02 Meal - Forklift training Baci Di Firenze 105.50 Business lunch meeting - (4) attendees Orchard Supply 40.54 Hardware supplies Dan Copp Crushing 150.00 Road material disposal Source Media Conference 290.00 Bond Buyers California Public Finance Conference - Lugo, D Tlaquepaque Restaurant 43.40 Business lunch meeting - (4) attendees Constant Contact 1,638.00 Year subscription - newsletter Fitness Grill 89.50 Welcoming lunch - new employee Luxor 164.54 Travel expense - Black Hat Convention - Vega, A In n Out 11.75 Travel expense - Black Hat Convention - Vega, A Panera 40.98 Lunch - Interview panel (4) attendees Showtime Shuttle 18.00 Travel expense - Black Hat Convention - Vega, A Blue Agave 77.17 Retirement luncheon for Cloonan, A The Toll Roads 26.94 Toll roads - Risk transfer training FTP Today 1,188.00 Year subscription - ylwd.ftptoday.com Orchard Supply 11.14 1QT of white paint YO Fire 25.86 (2) 2" Blank Flange Home Depot 25.77 Sod for landscape repair Fullerton Paint 258.09 (4) cases - Blue marking paint Staples 1,060.17 Printer Ink for operations GFOA 150.00 GFOA employment ad for Accountant position 9,626.75 Cal Card Credit Card U S Bank ITEM NO. 7.4 AGENDA REPORT Meeting Date: September 12, 2017 Budgeted:N/A To:Board of Directors Funding Source:Developer Funded From:Steve Conklin, Engineering Manager Account No:1-2600 Job No:201730 Presented By:Steve Conklin, Engineering Manager Dept:Engineering Reviewed by Legal:N/A Prepared By:Ariel Bacani, Engineering Technician II CEQA Compliance:N/A Subject:Terms and Conditions for Water Service with Terra Culinary, Inc. SUMMARY: Terra Culinary, Inc. proposes to open a pizzeria business at an existing building on 4886 Main Street, in the City of Yorba Linda, as shown in the attached exhibit. STAFF RECOMMENDATION: That the Board of Directors approve the Terms and Conditions for Water Service with Terra Culinary, Inc., Job No. 201730. DISCUSSION: The District has an existing Zone 2, 8-inch water pipeline in Main Street that is adequate in size and of sufficient pressure to serve the project. The applicant is conditioned by the Orange County Fire Authority to provide a private fire suppression system for the existing building. The District will require a double check detector assembly and isolation valve to separate the private system from the public water system, as depicted in the attached exhibit. The applicant also requests to upsize the existing water service due to the water demand required by the pizzeria. ATTACHMENTS: Name:Description:Type: 201730_T_C.docx Terms and Conditions Backup Material 201730_Exhibit.pdf Exhibit Exhibit Date: SEPTEMBER 12, 2017 YORBA LINDA WATER DISTRICT TERMS AND CONDITIONS FOR WATER SERVICE NAME OF APPLICANT: TERRA CULINARY, INC. LOCATION OF PROJECT: 4886 MAIN ST., YORBA LINDA TRACT NUMBER: N/A JOB NUMBER: 201730 SEWER: N/A LOT(S): N/A The applicant will be required to complete to the satisfaction of the District the following items that have an “X” following the number. 1) X The applicant shall provide the District with a copy of the Grant Deed or Title Report of the property to be served. 2) X The applicant shall include information deemed necessary by the District in the event the applicant is required to file a Department of Real Estate Tax Disclosure statement. 3) The applicant shall provide to all purchasers of the homes a statement that the home is located within Improvement District No. 1 and that the home is subject to a property tax over and above the normal 1% Basic Tax Levy to pay for Production, Storage, and Transmission water facilities serving Improvement District No. l. 4) The applicant shall provide to all purchasers of the homes a statement that the home is located within Improvement District No. 2 and that the home is subject to a property tax over and above the normal 1% Basic Tax Levy to pay for Production, Storage, and Transmission water facilities serving Improvement District No. 2. 5) X The applicant shall submit two (2) sets of the improvement plans to the District for plan check processing. a) Improvement Plans b) Grading Plans c) Tract, Parcel or Vesting Map d) Landscaping Plans 6) X Improvement Plans submitted for plan check shall comply with the submittal requirements established by the YLWD Engineering Department. 7) X The applicant shall dedicate or obtain all easements deemed necessary by the District in accordance with the Rules and Regulations of the District. All easement documents shall be prepared under the supervision of and stamped by a Professional Land Surveyor or a Registered Civil Engineer Page 2 of 5 NAME OF APPLICANT: TERRA CULINARY, INC. LOCATION OF PROJECT: 4886 MAIN ST., YORBA LINDA (licensed prior to January 1, 1982) licensed to practice in the State of California. 8) X The applicant shall provide the District with a copy of the Recorded Tract/Parcel Map(s) or Easement Documents illustrating all District easements required by Term and Condition No. 7, prior to requesting occupancy releases. 9) The applicant shall prepare and process all easements to be quitclaimed by the District in accordance with the Rules and Regulations of the District. 10) X The applicant shall furnish the District with a 24-hour emergency telephone number prior to the District’s approval of the construction plans. 11) X The applicant shall notify the District 48 hours prior to initiating any work related to required or proposed improvements. 12) X The applicant shall complete a Temporary Construction Meter Permit application for all water to be used in construction work and all water used under such permit shall be taken from the approved construction meter. 13) X The applicant shall provide per the District specifications one complete set of "As Built" mylars and electronic copy of ACAD drawings (version 2008 or later) for the Water and/or Sewer facilities. 14) X The applicant shall complete an Application to and Agreement with the Yorba Linda Water District for Water Service. 15) X The applicant shall pay all of the water fees as required by the Rules and Regulations for Water Service of the District. 16) X The applicant shall pay meter fees associated with the installation of radio read meters for this project. 17) X The applicant shall comply with the Rules and Regulations for Water Service of the Yorba Linda Water District. 18) X The applicant shall provide the District with a set of plans stamped and approved by the Orange County Fire Authority, or fire agency having jurisdiction, that identifies approved fire hydrant locations. Such approved plan must be submitted to the District before staff will initiate a District plan check for water improvements. 19) X The applicant shall have all water facilities designed in accordance with the District's Water Facilities Plan and the Standard Specifications and Drawings for Construction of Domestic Water and Sewer Facilities. All design plans shall be prepared under the supervision of and stamped by a Registered Civil Engineer licensed to practice in the State of California. Page 3 of 5 NAME OF APPLICANT: TERRA CULINARY, INC. LOCATION OF PROJECT: 4886 MAIN ST., YORBA LINDA 20) X The applicant’s engineer shall provide a computer hydraulic analysis report to confirm that the District’s existing water system can accommodate the project. 21) The applicant’s water facilities (on-site) shall be District owned and maintained. 22) X The applicant shall be required to conduct flow tests at their cost in the event the Orange County Fire Authority requires a flow test. A District representative shall be present to witness the flow test. 23) X The applicant shall comply with all additional District requirements, relative to the fire protection system, fire hydrant construction and fire hydrant locations. 24) The applicant shall install water Sampling Station(s) in conformance with the District’s Standard Specifications and Drawings for Construction of Domestic Water and Sewer Facilities. 25) X The applicant shall provide a completed Surety Bond for the water facilities prior to the District signing the Water Improvement Plans. The applicant shall also provide to the District an estimate of the construction costs of the proposed water facilities. 26) The applicant shall install the curb and gutters a minimum of one week prior to the installation of the water main and services. 27) X All existing water services that are not useable in the new plan shall be cut and plugged at the main line. 28) X The applicant shall coordinate through the District all connections of new water facilities to the existing District facilities. 29) X The applicant shall provide a written copy of the Bacteriological Report prior to occupancy releases certifying that the water meets the Health Department's requirements. 30) X The applicant shall adjust and raise to grade all valve covers within the limits of this project. 31) X The applicant shall install a pressure regulator in all buildings that have over 80 p.s.i. static water pressure in accordance with the appropriate building codes. 32) X The applicant shall complete a Temporary Water Permit for all water that will be used through the new water services to serve the new buildings. Page 4 of 5 NAME OF APPLICANT: TERRA CULINARY, INC. LOCATION OF PROJECT: 4886 MAIN ST., YORBA LINDA 33) X The applicant shall install a District approved backflow device in connection with any private fire suppression sprinkler facilities that may be required by the Orange County Fire Authority or fire agency having jurisdiction. 34) X The applicant shall install a reduced pressure principle backflow prevention device on all commercial buildings and landscape services. 35) X The applicant shall install and provide a written test report to the District for each backflow device certifying that the backflow devices are operating properly prior to the water meters being turned on for service. 36) X The applicant shall install and provide a written test report to the District certifying that the double check detector assembly is operating properly prior to the double check detector assembly being turned on for service. 37) X The applicant shall provide an annual written test report to the District certifying that the backflow devices and fire detector assemblies are operating properly pursuant to the District’s Backflow Prevention Program and the State of California Administrative Code, Title 17, Public Health Rules and Regulations Relating to Cross-Connections. 38) The applicant shall complete a Sewer Connection Application and Permit for Sewer Service. 39) The applicant shall complete an Application to and Agreement with the Yorba Linda Water District for Sanitary Sewer Service. 40) The applicant shall comply with the Rules and Regulations for Sewer Service of the Yorba Linda Water District. 41) The applicant shall pay all of the sewer fees as required by the Rules and Regulations for Sewer Service of the District. 42) The applicant shall have all sewer facilities designed in accordance with the District's Sewer Master Plan and the Standard Specifications and Drawings for Construction of Domestic Water and Sewer Facilities. All design plans shall be prepared under the supervision of and stamped by a Registered Civil Engineer licensed to practice in the State of California. 43) The applicant’s engineer shall provide sewer flow calculations to confirm that the District’s existing sewer system can accommodate the peak wastewater generation from the project. 44) The applicant shall provide a completed Surety Bond for the sewer facilities prior to the District signing the Sewer Improvement Plans. The applicant shall also provide to the District an estimate of the construction costs of the proposed sewer facilities. Page 5 of 5 NAME OF APPLICANT: TERRA CULINARY, INC. LOCATION OF PROJECT: 4886 MAIN ST., YORBA LINDA 45) The applicant’s sewer facilities (on-site) shall be Privately owned and maintained. 46) The applicant shall construct a sewer main and appurtenances in conformance with the approved plans and the District’s Standard Specifications and Drawings for Construction of Domestic Water and Sewer Facilities. 47) The applicant shall adjust and raise to grade all sewer manhole covers within the limits of this project. 48) The applicant shall install a sewer backflow prevention valve on all sewer service connections in which the pad elevations of the property being served is lower than the rim elevation of the upstream manhole. Installation of the backflow device shall comply with all requirements of the Building and Plumbing Codes of the appropriate agency having jurisdiction. 49) The applicant shall submit a video inspection report of their sewer project in DVD format. The video of the sewer facilities shall be conducted in the presence of the District inspector, which will include stationing locations of manholes, cleanouts, wyes, laterals, backflow devices and appurtenances. (END OF STANDARD TERMS AND CONDITIONS) PROJECT SPECIFIC TERMS AND CONDITIONS 50) X The applicant shall install one fire service line, per approved plans and District Specifications. I hereby certify that the foregoing Terms and Conditions were approved at the September 12, 2017 Regular Meeting of the Board of Directors of the Yorba Linda Water District. The approved Terms and Conditions shall become void six (6) months from the approval date if a formal Application To and Agreement with the Yorba Linda Water District for Water and/or Sewer Service is not executed for the project under consideration. Marc Marcantonio, General Manager 1 o 3 O rL PROPOSED NEW SUE ARROYO WAY LEMON DR LOCATM Y ORBq LINDA DRIVE 3 ✓ EXISTING WATER SERVICE AND rO PROPERTY LINE L_�J METER TO BE ABANDONED TO BE ADJUSTED 3 PROPOSED 1-1/2"WATER SERVICE AND METER ❑ ❑ ❑ Q Lu ��J� i�A • L z WCRESTAURA c I 'PROP SED Q NT TENANT - v� a / I -0 W IMPROVEMENT > VICINITY MAP N NOT TO SCALE - 2'W WATER LINE �l Fa F9 Fa F9 Fa F9 I I I I J N 3 I r j I EXISTING pROPERTYLINE I I I I I I COMMERICAL I Z _ BUILDING Q W \o PROPOSED 4"DOUBLE oT IN SCOPE PROP.SEWER LINE rn I w3 � CHECK DETECTOR NOTA PART o Q ASSEMBLY EX SEWER LINE 0 PROPOSED ISOLATION VALVE m ILL I I PREPARED BY: EXHIBIT SCALE: 1" = 20' YORBA LINDA WATER DISTRICT PROPOSED WATER SERVICE DATE: El 1717 E. MIRALOMA AVENUE FOR 4886 MAIN ST. 09/12/2017 PLACENTIA, CALIFORNIA 92870 TERRA CULINARY, INC. FILENAME: (714) 701-3100 J-201730 ITEM NO. 7.5 AGENDA REPORT Meeting Date: September 12, 2017 To:Board of Directors From:Marc Marcantonio, General Manager Presented By:Gina Knight, HR/Risk and Safety Manager Dept:Human Resources/Risk Management Prepared By:Gina Knight, HR/Risk and Safety Manager Subject:Claim for Damages Filed by Nicholas Estanislau SUMMARY: A claim was filed with the District on August 29, 2017 for the cost to demolish existing concrete driveway and replace the driveway with new concrete. STAFF RECOMMENDATION: That the Board of Directors reject the claim filed by Nicholas Estanislau and refer it to ACWA/JPIA for further handling. DISCUSSION: On August 29, 2017, the District received a claim filed by Nicholas Estanislau stating that the District had a service leak at his address that pushed water up through his sidewalk and driveway joints for three days. After the District repaired the leak, claimant stated that his driveway continued to crack and that it continues to crack and move as cars and trucks drive on it. Staff was contacted on June 14, 2017 by the City of Placentia regarding a service leak. District staff responded to the call and went out to the address to assess the leak. On June 15, 2017, staff repaired the leak by replacing the 1"service line. According to the District's Operations Manager, leaks surface through existing cracks and the type of leak in this situation would not have created the cracks in the driveway as the leak was small. The claim form and supporting documents are on file and available for review in the office of the General Manager. ITEM NO. 8.1 AGENDA REPORT Meeting Date: September 12, 2017 Budgeted:Yes Total Budget:$100,000 To:Board of Directors Cost Estimate:$131,875 Funding Source:Operating Funds From:Marc Marcantonio, General Manager Account No:101-2700 Job No:J2017-15 Presented By:Steve Conklin, Engineering Manager Dept:Engineering Reviewed by Legal:N/A Prepared By:Danielle Logsdon, Associate Engineer CEQA Compliance:N/A Subject:Engineering Services for Asset Management Plan Update SUMMARY: Staff prepared a Request for Proposal (RFP) for consulting services for the 2018 Asset Management Plan, Job No. 2017-15. Following evaluation, staff recommends award to Carollo Engineers, Inc. (Carollo), for a fee not to exceed $131,875. STAFF RECOMMENDATION: That the Board of Directors authorize execution of a Professional Services Agreement with Carollo in the amount of $131,875 for consulting services for the 2018 Asset Management Plan, Job No. 2017-15. DISCUSSION: Staff prepared an RFP for consulting services for the 2018 Asset Management Plan, Job No. 2017- 15, and solicited proposals from five firms experienced in this area. Three firms submitted proposals for consideration. The District’s Review Team ranked and scored the proposals based on experience of the firm's staff, proposal content, and consultant's experience with Asset Management Plans. The ranking of the firms based on technical evaluation is as follows: The firm with the highest technical score was Carollo. After the proposals were ranked by the Review Team, the separate fee envelope from each proposer was opened. Listed below is the proposed fee for the project, total work hours, as well as the average hourly billing rate for that firm. The proposed fee and hours by Carollo were reviewed and found to be reasonable and appropriate. Therefore, staff recommends award to Carollo based on technical merit and the quality Arcadis US, Inc. Carollo Engineers Hazen & Sawyer 22.70 25.34 22.88 of its project team. In summary, based on experience, qualifications, technical scores and total fee, staff is recommending award to Carollo, for a fee not to exceed $131,875. Arcadis US, Inc. Carollo Engineers Hazen & Sawyer Total Fee $249,800 $131,875 $272,770 Total Hours 1,500 674 1,607 Total Fee Per Hour $166.53 $195.66 $169.74 ITEM NO. 9.3 AGENDA REPORT Meeting Date: September 12, 2017 Subject:Disposition of Annual Net Income and Potential Customer Refund (Jones) ATTACHMENTS: Name:Description:Type: Fitch_Four_Criteria_for_Strong_Ratings_- _with_Data.pdf Back-up Material Backup Material Fitch_Ratings_Criteria.pdf Backup Material Backup Material Four Main Areas of Consideration  Governance and Management General Stability, effectiveness and experience of leadership Limited to no political pressure from governing body Transparency and communication between management and governing body History of forecasts and resource management plans Documented policies and procedures Financial Profile Total debt service coverage of approximately 2.0X or greater 309.23% Days cash and days of working capital equal to one year or more 370 days Free cash relative to depreciation equal to 100% or better 90.22% Residential charges for combined water/sewer less than or equal to 1.2% of MHI 0.90% (average 18 units and 1” meter) Approximately 30% or more of revenues recovered through fixed (connection) fees 37.78% Debt Profile Existing and five-year projected debt per customer of $1,500 or less Existing - $1,464.36 Five Year - $1,185.46 Existing and five-year projected debt per capita levels of $500 or less Existing - $462.85 Five Year - $361.79 Debt funding of capital of 50% or less 19.8% Amortization of principal equal to 90% or greater over the ensuing 20 years 89.0% Operating Profile Customer accounts stable or growing less than 1% annually 0.60% Top 10 customers for retail utilities represent 5% or less of system revenues and no customer accounts for more than 2% of system revenues 10.7%; City of YL – 6.95%; PYLUSD – 1.13% Annual renewal of 100% or more of depreciated assets 98.14% Unbilled/unaccounted for water of less than 10% 8.20% Full compliance with regulatory requirements YES Service territory MHI equal to 115% or more of state/nation State – 182% Nation – 210% www.fitchratings.com November 30, 2016 Public Finance Water & Sewer / U.S.A. U.S. Water and Sewer Revenue Bond Rating Criteria Sector-Specific Criteria Scope This report represents a sector-specific extension to Fitch Ratings’ global criteria on “Revenue- Supported Rating Criteria,” dated June 2014, and details Fitch’s approach to rating new and existing U.S. municipal water and sewer (sanitary and stormwater) utilities. Municipal water and sewer utilities in the U.S. are enduring natural monopolies that provide highly essential services and generally have local rate-setting authority. Fitch’s average rating for these utilities is ‘AA’. This report elaborates on Fitch’s review of specific factors known as the “10 Cs,” which are a subset of the Revenue-Supported Rating Criteria’s four areas: styled governance and management, financial profile, debt profile and operating profile. The 10 Cs include crew (an informal term for management); coverage and financial performance; cash and balance sheet considerations; charges and rate affordability; capital demands and debt burden; covenants; customer growth and concentration; capacity; compliance with environmental laws and regulations; and community characteristics. Fitch’s approach to rating sector credits remains consistent with prior sector criteria publications. As the industry evolves or new market dynamics emerge, particular emphasis on certain aspects of the credit evaluation may arise. In addition, not all factors outlined in this report apply to each individual rating or rating action. Each specific rating action commentary or rating report discusses those factors most relevant to the individual rating decisions. Key Rating Drivers Governance and Management: A utility’s operating and fiscal health is highly dependent on the actions of the utility’s employees and governing body. Consequently, Fitch performs a qualitative assessment of management, staff and policies to gauge likely ongoing operating stability. Financial Profile: Fitch evaluates both historical and forecast financial results to determine the ability of a utility to fund operating and capital needs and meet its debt obligations. This component of the analysis is primarily quantitative in nature. This area of the analysis includes the majority of Fitch’s key ratios. As a result, the financial profile of a utility is a primary determinant in the rating outcome. Debt Profile: Fitch analyzes the level and structure of a borrower’s debt in determining overall creditworthiness. This area includes both quantitative and qualitative assessments relating to a utility’s debt obligations. Like the financial profile, the analysis of a utility’s debt profile is a major factor in the credit rating. Operating Profile: The ability of a utility to provide service to its customers and generate resources sufficient to meet its financial obligations is affected by a range of factors from the deployment of assets to the health of the service area. This component includes both quantitative and qualitative assessments of all aspects related to a utility’s operations. Inside This Report Page Scope 1 Key Rating Drivers 1 Overview 2 Governance and Management 2 Financial Profile 3 Debt Profile 6 Operating Profile 9 Appendix A: Key Ratios Used in the “10 Cs” Rating Process 13 Appendix B: Water and Sewer Management Practices 14 Appendix C: Checklist of Basic Documents for the Rating Review Process 15 This report replaces the previous report of the same title dated September 3, 2015. Related Criteria Revenue-Supported Rating Criteria (June 2014) Analysts Doug Scott +1 512 215-3725 douglas.scott@fitchratings.com Kathryn Masterson +1 512 215-3730 kathryn.masterson@fitchratings.com Andrew DeStefano +1 212 908-0284 andrew.destefano@fitchratings.com U.S. Water and Sewer Revenue Bond Rating Criteria 2 November 30, 2016 Public Finance Governance and Management Crew Fitch’s evaluation of management and management practices is qualitative in nature and includes a review of organizational policies and practices. Because sound management practices are critical to a utility’s operations and affect all aspects of Fitch’s rating criteria, Fitch’s assessment in this area has an asymmetric impact on a utility’s credit rating, with standard to above-standard performance considered credit neutral and below-standard performance considered a credit negative. In general, utilities exhibiting management practices that promote operational stability (including actions that limit expenditure escalation by anticipating future regulatory and growth/supply demands); reliably implement rate increases to cover operational and capital costs; and ensure sufficient liquidity to cope with unexpected sales shortfalls or emergency needs are expected to be the norm. Throughout this report, numerous management practices that affect credit quality are discussed and highlighted in addition to being summarized in Appendix B. Financial Profile Coverage and Financial Performance This area — including the various quantitative ratios used to evaluate an entity’s revenues and expenditures — serves as a primary indicator in an entity’s credit rating. These ratios are not only used to gauge current, historical and projected performance, but also compared with those of other peer systems. Fitch typically rates only the senior lien debt of an issuer, as subordinate debt is more commonly privately placed with a state revolving fund and not rated. However, in the credit analysis, Fitch reviews not only an entity’s senior lien debt service coverage, but also coverage on all debt supported by the utility. This provides a more complete assessment of an entity’s ability to pay all its obligations (that is, operating and debt) and generate adequate financial margins. In evaluating debt service coverage, Fitch takes into consideration all pledged revenues. However, Fitch also reviews coverage without growth-sensitive revenues, such as connection fees, given their variability. As part of its evaluation of debt service coverage, Fitch also employs three standard stress scenarios internally to evaluate potential performance during periods of intense operating weakness such as prolonged drought, economic softness and/or a deceleration in customer usage. In general, the first scenario includes a 15% drop in revenues that continues throughout the five-year forecast without corresponding cuts to expenses or Attributes: Governance and Management Neutral to risk assessment • General stability, effectiveness and experience of leadership. • Limited to no political pressure from governing body. • Transparency and communication between management and governing body. • In the case of wholesale systems, coordinated efforts among member utility systems and the governing body. • History of forecasts and resource management plans. • Documented policies and procedures. Negative to risk assessment • Lack of experience, depth and/or stability in leadership at the utility. • Significant political pressure in the underlying municipality or in the members’ service areas. • Failure to maintain open communications between the utility and the governing body, which may reveal itself in unexpected, significant rate increases. • Lack of forecasts and resource management plans. • Lack of policies and procedures. U.S. Water and Sewer Revenue Bond Rating Criteria 3 November 30, 2016 Public Finance increases in rates. The second includes a similar initial 15% decline in revenues, followed by an immediate increase in user charges the following year to Fitch’s affordability levels (see Charges and Rate Affordability on page 4), which typically would lead to an increase in revenues during the following years of the forecast. The third is a break-even scenario evaluating the level of revenue declines that may be sustained without cuts in expenditures. These stress scenarios are used solely to inform the evaluation of debt service coverage and are not used to predict future performance. In addition to Fitch’s standard internal stress scenarios, other stress analyses may be performed if deemed necessary and appropriate, although such scenarios are not part of the normal review process. An example of a scenario that may be utilized includes calculating an issuer’s variable-rate debt service at a higher interest rate in future years than assumed by the issuer if an issuer has an elevated proportion of variable-rate debt (generally greater than 20% of an issuer’s debt profile) and/or any of the issuer’s variable-rate bonds have been tendered, not remarketed, and purchased by the liquidity provider in accordance with the liquidity support agreement (that is, bank bonds). Another example of a stress scenario that may be utilized by Fitch is to assume a higher level of operating expenses than forecast by the issuer to account for potential budgetary pressures such as accelerating electricity, chemical or water purchase costs. Other types of financial performance indicators evaluated by Fitch within its credit evaluation include growth in operating revenues and expenditures, operating margin, the level of transfers out made by the utility and the strength of the cash flows. Each of these ratios provides insight into the operations of the utility and serves to illuminate particular credit concerns. For example, growth in operating expenditures consistently outpacing that of operating revenues may signal that costs are not being adequately recovered in the rate structure. Also, cash flows consistently lower than the annual depreciation expense may signal that insufficient internal resources are being generated for renewal needs, which could lead to increased reliance on borrowable resources over time. In general, Fitch views long-term financial planning as a fundamental component for successful utility operations given long-range planning can clearly highlight future structural deficits necessitating revenue development, expenditure containment or both. Fitch believes utilities are more likely to be stable when such decisions are considered in advance, as a result of financial forecasting, rather than when they are made on a reactive basis, under pressure and with increased political controversy. Numerous factors can cause financial volatility, including variations in water supply, weather- related demand and economic cycles. Consequently, highly rated utilities set goals for appropriate financial margins, including debt service coverage levels, debt affordability and reserve funding (such as rate stabilization, repair and rehabilitation, and operating reserves), and consistently establish rates and budgets that comply with their goals. Utilities operating in areas especially prone to rainfall volatility that consider the effect of such variability on their revenues and establish financial cushions or rate structures to deal with potential weather events are considered stronger than those that do not consider such risks. Because the financial health of a utility depends on the receipt of revenues for services rendered, Fitch considers the development and maintenance of adequate billing and collection measures an imperative to investment-grade credit quality. Consequently, inadequate practices include failure to meter customers or to replace aging meters. Fitch also considers the existence of policies regarding the termination of service for unpaid accounts and a utility’s practice of acting on those policies when necessary. In cases where accounts receivable U.S. Water and Sewer Revenue Bond Rating Criteria 4 November 30, 2016 Public Finance (expressed as days of operating revenues) are significantly high in relation to a utility’s billing cycle (for example, 2.0x or higher), negative credit implications would be expected. Cash and Balance Sheet Considerations Similar to coverage and financial performance, a utility’s cash and balance sheet serve as key indicators of an entity’s credit rating, and the resulting analysis is closely tied to quantitative ratios and the comparison of these ratios with those of other peer utilities. For the most part, these ratios are designed to measure a utility’s available liquid resources to meet near-term liabilities, particularly in the event of unforeseen hardships or difficult operating conditions. Because of the nature of these calculations, Fitch considers liquid resources to be current unrestricted assets, although credit may be given to noncurrent or restricted assets if they are available for general purposes at the discretion of the governing body (for example, a restricted operating reserve fund) and if Fitch is aware of such resources. The key ratios Fitch uses in determining an entity’s liquidity are days cash and days of working capital, which compare available resources with operating expenses. However, other measurements are also used, including quick and current ratios, to gauge a utility’s ability to meet near-term liabilities. Fitch also considers an entity’s cash position relative to swap termination events to gauge the hardship such an event might pose to continued operating performance. Charges and Rate Affordability Fitch’s analysis in this area is a mixture of qualitative and quantitative factors. While this area typically does not have a significant impact on the rating outcome, Fitch’s perception of high utility rates, lack of future rate flexibility, volatility in the revenue structure or difficulty in obtaining timely rate relief may have a direct bearing on the entity’s rating level. In measuring affordability, Fitch generally considers rates for service higher than 1% of MHI for an individual water, sewer and stormwater utility to be financially burdensome. Fitch may also utilize the cost of service from other comparable utilities in the region, where available, in measuring relative affordability. The comparison is utilized to determine whether future growth may be hampered due to the lack of competitiveness, particularly in neighboring suburban communities that have similar economic and residential bases. The comparison is also useful in that anticipated rate increases may be projected forward to determine continued competitiveness. Finally, a regional comparison may act as a counterbalance to the 1% threshold where rates overall are above average but well within local affordability levels or, conversely, low to moderate overall but at or near 1% of MHI. In evaluating user charges, Fitch considers how a utility generates its revenues. Most utilities bill customers based on a fixed amount (that is, a readiness-to-serve charge) and a volumetric rate relative to actual usage. Because systems with greater percentages of fixed charges have less volatility in their revenue streams than systems that rely extensively or completely on volumetric charges, utilities whose fixed-charge components generate a significant amount (30% or more) of their revenue streams are considered stronger. U.S. Water and Sewer Revenue Bond Rating Criteria 5 November 30, 2016 Public Finance Fitch also incorporates the rate approval process and general relationship with the utility’s rate- making body into its rating analysis. A major credit strength of municipal utilities is the local control over rate setting, free from external oversight. Still, local authorities can be subject to other community interests or political pressures. A lengthy rate review process, which can hinder timely cost recovery, or a demonstrated reluctance by governing officials to adjust rates in line with increasing costs can negatively affect the rating. Debt Profile Capital Demands and Debt Burden Utilities are capital intensive, with debt service burdens that often surpass those of general governments as measured by the percentage of revenues. Because of the pressure capital and debt activities can have on a utility’s operating and financial profiles, the analysis related to this area also serves as a key indicator of an entity’s credit rating. Quantitative ratios are an overarching consideration, with such ratios compared with those of other utilities to help gauge relative capital needs and debt burden. In general, utilities limiting debt exposure by utilizing annual pay-as-you-go funding, including excess user charges and growth-related fees, for a significant portion of their capital programs are considered stronger than those relying predominantly on debt. Elevated debt issuance over the near term may not adversely affect credit quality, although, in assigning a credit rating, Fitch considers anticipated debt issuance in light of outstanding obligations, affordability levels and historical financial performance, as well as the need for financing such projects. Key ratios used in evaluating an entity’s debt burden include the measurement of outstanding debt on both a customer and per capita basis, as well as expected customer and per capita debt levels five years into the future; for wholesale systems, the measurement generally is limited to just debt per capita. Other quantitative ratios typically considered include the expected level of annual capital spending per customer through the capital improvement program (CIP) cycle, the percentage of debt funding relative to total CIP costs, and debt relative to equity and net plant assets. In addition, to gauge a utility’s capacity for future debt issuances over the long term, Fitch evaluates the amortization rate of all debt payable from system revenues. For debt funding of capital requirements, long-term fixed-rate debt historically has been the norm for water, sewer and stormwater utilities, with terms ranging from 20−30 years. However, borrowers have utilized variable-rate instruments as well to reduce borrowing costs. In some Attributes: Financial Profile Stronger • Total debt service coverage of approximately 2.0x or greater. • Days cash and days of working capital equal to one year or more. • Free cash relative to depreciation equal to 100% or greater. • Residential charges for individual or combined water/sewer utilities less than or equal to 0.6% or 1.2% of MHI, respectively. • Approximately 30% or more of revenues recovered through base charges as opposed to volumetric charges. Midrange • Total debt service coverage of approximately 1.5x. • Days cash and days of working capital of about six months. • Free cash relative to depreciation equal to approximately 85%. • Residential charges for individual or combined water/sewer utilities of about 0.8% or 1.5% of MHI, respectively. • Approximately 15% of revenues recovered through base charges. Weaker • Total debt service coverage of approximately 1.25x or less. • Days cash and days of working capital of three months or less. • Free cash relative to depreciation of 60% or less. • Residential charges for individual or combined water/sewer utilities in excess of 1.0% or 2.0% of MHI, respectively. • Little or no revenues recovered through base charges. U.S. Water and Sewer Revenue Bond Rating Criteria 6 November 30, 2016 Public Finance instances, borrowers have also entered into swap agreements as a hedge to variable-rate obligations or to take advantage of spreads between fixed-rate debt and a swap index. Fitch recognizes the potential benefits of both variable-rate obligations and swap agreements to borrowers and believes that both types of instruments can be important tools in a utility’s overall debt strategy. Nevertheless, Fitch believes it is imperative that management understand the implications of variable-rate and swap strategies prior to engaging in them, thoroughly evaluating the potential risks and benefits of such instruments within the utility’s asset/liability plans. Utilities with a perceived high degree of exposure (for example, a significant proportion of variable-rate debt and/or swaps relative to all outstanding debt or a high exposure of credit facilities with a single institution) and/or a perceived lack of understanding and ability to manage such exposure will face tighter scrutiny than those with little or no variable-rate obligations or swap agreements outstanding. In evaluating variable-rate and swap exposure, Fitch employs both qualitative and quantitative factors to assist in gauging relative risk associated with these instruments. Qualitative factors include items such as an evaluation of lien payment of regular and termination payments, collateral posting requirements and cross-default provisions. Quantitative factors generally include the amount of hedged and unhedged variable-rate debt and the ability to meet termination payments from unrestricted reserves. Covenants Fitch performs a qualitative assessment in this area. Fitch’s rating analysis focuses on actual and likely future performance as opposed to minimum covenanted performance. Consequently, risk factors in this area work asymmetrically, where only below-standard features are factored into the rating, while more credit-positive features are expected to be the rule, and would have a neutral impact on the rating. Fitch views standard bond covenants for retail utilities and most wholesale providers as those that limit parity bond issuance of either senior and/or subordinate lien obligations to instances when historical and/or projected revenues cover annual debt service (ADS) at least 1.1x and require 1.1x rate setting annually to cover both operations and debt service costs. Fitch also views 1.0x coverage of ADS from ongoing net revenues, excluding one-time sources such as connection fees, as standard for the additional bonds test and rate covenant. Additional covenants requiring debt service reserve funds and set-asides for operational, maintenance and other financial reserves are considered less standard but are positive credit features, as they heighten prospects for stable financial management. Attributes: Debt Profile Stronger • Existing and five-year projected debt per customer of $1,500 or less. • Existing and five-year projected debt per capita levels of $500 or less. • Debt funding of capital of 50% or less. • Amortization of principal equal to 90% or greater over the ensuing 20 years. Midrange • Existing and five-year projected debt per customer of approximately $1,800. • Existing and five-year projected debt per capita of about $550. • Debt funding of capital of about 75%. • Amortization of principal of approximately 80% over the ensuing 20 years. • Rate covenant of 1.10x or more of ADS by net revenues. • Additional bonds test of 1.10x or more of ADS by historical or projected net revenues. Weaker • Existing and five-year projected debt per customer of $2,100 or greater. • Existing and five-year projected debt per capita of approximately $600 or greater. • Debt funding of capital of about 90% or more. • Amortization of principal of about 70% or less over the ensuing 20 years. • Rate covenant of less than 1.10x ADS by net revenues and/or less than 1.0x ADS from recurring net revenues. • Additional bonds test of less than 1.10x coverage of ADS by historical or projected net revenues and/or less than 1.0x ADS from historical or projected recurring net revenues. U.S. Water and Sewer Revenue Bond Rating Criteria 7 November 30, 2016 Public Finance In nearly all cases, Fitch will consider financial performance on a net revenue basis even if a gross revenue debt security pledge is present, as creditworthy systems must reliably cover operating expenditures from the same revenue streams used to pay debt service. However, most retail and wholesale utilities comfortably exceed their covenant coverage and liquidity requirements and should continue to do so. For them, the focus of a rating review should be actual and likely future performance, not minimum covenanted performance in a stress scenario. A trend in the sector toward relaxed covenants continues. Changes proposed typically focus on reducing coverage requirements or reserve fund levels. The particular rating impact of relaxed covenants will depend on the system, its characteristics and the specific proposed changes. In cases where a change in covenants has not adversely affected a rating, such utilities have demonstrated strong and consistent performance well above existing requirements, and such change is not expected to weaken the credit quality of the utility in the foreseeable future. Covenants will be an increasingly greater credit factor for lower rated credits and in cases of declining credit quality. Consequently, any loosening or modernization of such covenants may be expected to have a negative impact on the credit rating in these instances. Other legal covenants that have been modified (and weakened from a bondholder’s perspective) include the elimination of DSRFs and satisfaction of these DSRF requirements with surety policies, along with the ability to enter into swaps or other forms of hedge agreements. To date, there has been little impact on utility credit ratings from these changes, and any future downward pressure on individual credits will likely be isolated. However, instances that may affect the credit rating of a utility include cases where there is a reasonable chance revenues available to pay debt service are below 1.0x and no DSRF exists or a surety policy is in place; a large swap termination payment(s) exists, which would have a material impact on an entity’s financial capacity if required to be paid; or it is likely that rated obligations could be affected by cross-default provisions of a hedge agreement. Operating Profile Customer Growth and Concentration A central component of a utility’s operating profile is the level of growth of a utility’s residential, commercial, industrial and government customer bases, as well as the utility’s customer concentration. In terms of growth, demonstrated steady increases are considered positive from a credit perspective, given projecting financial results and planning for needed improvements or expansions are generally easier in such stable environments. Conversely, high growth and declining customer bases are more likely to affect a rating negatively, as they can pressure the financial and capital decisions of a utility. Fitch considers annual growth rates above 3% to be rapid, whereas rates of 1% and under are viewed as stable; annual growth rates between 1% and 3% are seen as moderate. A high-growth environment poses special challenges for utilities, particularly in terms of the timing and funding of capital improvements. As a community expands, water and wastewater infrastructure must often be built in advance of growth and/or additional water supplies or treatment capacity must be developed. Potential vulnerabilities include instances when growth does not occur as fast as anticipated. In such cases, user charges will likely be raised for existing customers to cover debt and operating costs. Not only can this provoke political and rate pressure for the utility, potentially resulting in strained financial margins, but it can also reduce the community’s attractiveness to new residents and businesses, compounding the growth challenge. While these growth challenges pose credit concerns, management can offset potential risks through well-developed capital and financial plans and policies that identify the nature and timing of future capital and operational needs. U.S. Water and Sewer Revenue Bond Rating Criteria 8 November 30, 2016 Public Finance On the other end of the spectrum, Fitch’s credit analysis will consider the pressure associated with a declining customer base. Utilities with long-term planning practices in place may find savings through cost or personnel reduction and rely less on underused assets, when possible. The credit benefits of these management practices will be more pronounced when they are institutionally implemented on an ongoing basis, preparing for future challenges instead of responding to such demands in a reactive way. While planning may limit certain exposures of a declining service base, customer concentration, which may ultimately lead to the loss of significant revenues with the departure of a single customer or downturn in a particular industry, is considered a negative characteristic in the analysis. To this end, Fitch evaluates concentration levels in light of a service area’s economic focus and sector concentration among the users. Volatility in the service base can be most severe when the largest customers, particularly industrial entities, exit a community or substantially downsize operations. In such a case, a utility not only would face pressures from the loss of revenues of such large users, but also may be constrained to increase rates because of elevated unemployment among its residential customers. In general, Fitch views revenue concentration from the top 10 customers in excess of 20% as high. Fitch also considers concentration in excess of 5% from any individual customer as high. Capacity Fitch’s rating criteria take into account treatment capacity available to service demands given utilities facing treatment constraints are likely to require related capital expansion costs once available capacity falls below 120% of demands. Fitch’s criteria also consider a utility’s comprehensive plans to maintain existing facilities and replace aging or obsolete assets. Consequently, Fitch views trends of deferred maintenance as a credit risk. In this regard, Fitch quantitatively evaluates a utility’s annual depreciation in relation to its total historical depreciation of fixed assets to determine the age of plant. Fitch also compares a utility’s annual capital expenditures in relation to depreciation for the year to gauge the amount of ongoing maintenance being performed. Utilities with aging infrastructure or annual capital spending that regularly falls below the amount of annual depreciated assets may require substantial upgrades in the near term to maintain regulatory compliance. Another quantitative indicator of potential needs, as far as water utilities are concerned, is the amount of treated but unbilled water distributed. Water utilities regularly replacing aging pipelines should experience unbilled water rates at or below the 10%−12% typically seen within the industry. The availability of adequate water supplies is critical for a utility to meet its customer demands. Credit quality is enhanced for utilities that demonstrate a sustainable long-term supply to meet current and expected future growth needs. Alternatively, negative credit implications arise for utilities whose resources may be insufficient to allow for continued economic development. Compliance with Environmental Laws and Regulations Mandates have been a dominant factor for sector credits since passage of the federal Clean Water Act in 1972 (amended in 1977, 1981, 1987 and 2014) and federal Safe Drinking Water Act in 1974 (amended in 1986 and 1996). Although regulatory requirements continue to pressure some enterprises, utilities can reduce credit risk by consistently attempting to predict and stay ahead of expected requirements at both the state and federal level given this typically provides more flexibility to utilities than acting while under the threat of orders and fines from regulatory bodies or the courts. U.S. Water and Sewer Revenue Bond Rating Criteria 9 November 30, 2016 Public Finance For utilities facing regulatory enforcement, Fitch evaluates in the rating process the events leading to enforcement, scope of the corrective plan, current stage of the corrective plan and projected timeline for completion. Fitch also focuses on the expected impact on ratepayers and management’s commitment to meeting the set milestones and returning to compliance. Community Characteristics The service area economy and customer base characteristics are part of the rating analysis, since the essentiality of the enterprises’ services provides localities with a de facto ability to tax for their provisions. Quantitative factors related to the analysis of this particular area typically include employment/unemployment statistics, wealth levels in the form of median household income, poverty rates and an evaluation of major employers relative to the total employment base. The highest rated utilities typically reflect service areas with broad economies and broad and diverse customer bases, since they are less vulnerable to sectoral downturns and cyclical economic shifts. Utilities operating in service areas with prospects for significant future population, commercial and industrial volatility or long-term decline are more likely to have lower bond ratings. Rating Sensitivities Water and sewer ratings are subject to positive or negative adjustment based on actual utility experience. Below is a non-exhaustive list of the primary sensitivities that can influence water and sewer ratings. • Supply/Demand Performance: Changes in supply levels and resulting sales performance can affect a utility’s ability to earn projected revenues and potentially reduce its ability to service the debt. • Price Risk: Lower than expected rate action could reduce the expected cash flow generation, affecting coverage and leverage metrics and ultimately weighing negatively on a utility’s rating. Attributes: Operating Profile Stronger • Customer accounts stable or growing less than 1% annually. • Top 10 customers for retail utilities represent 5% or less of system revenues and no customer accounts for more than 2% of system revenues. • Treatment capacity in excess of 140% of demand or flows. • Annual renewal of 100% or more of depreciated assets. • Unbilled/unaccounted for water of less than 10%. • Full compliance with regulatory requirements. • Service territory median household income equal to 115% or more of the state and/or nation. Midrange • Customer account growth of 1%−3% annually. • Top 10 customers for retail utilities represent approximately 10% of system revenues and no customer accounts for more than 5% of system revenues. • Treatment capacity of about 130% of demand or flows. • Some deferred maintenance. • Unbilled/unaccounted for water of about 12%. • Limited noncompliance with regulatory requirements. • Service territory median household income equal to around 100% of the state and/or nation. Weaker • Customer account growth in excess of 3% annually. • Top 10 customers for retail utilities represent over 20% of system revenues and/or individual customer concentration accounts for 10% or more of system revenues. • Treatment capacity falls below 120% of demand or flows. • Significant deferred maintenance. • Unbilled/unaccounted for water exceeds 15%. • Material noncompliance with regulatory requirements, resulting in significant capital expenses and/or fines. • Service territory median household income equal to 85% or less of the state and/or nation. U.S. Water and Sewer Revenue Bond Rating Criteria 10 November 30, 2016 Public Finance • Costs: Operating and capital expenditures that deviate materially from projections may indicate greater than expected cost volatility, higher than expected funding needs, or a failure to properly estimate or fully capture all relevant cost items. Data Sources The key rating assumptions used in these criteria are based on Fitch’s analysis of transaction documents for various water and sewer projects; information received from local government issuers/obligors for financed projects; and reports issued by engineers, fiscal consultants and other third parties. Limitations Ratings, including Rating Watches and Outlooks, assigned by Fitch are subject to the limitations specified in Fitch’s Rating Definitions page, at www.fitchratings.com Variations from Criteria Fitch’s criteria are designed to be used in conjunction with experienced analytical judgment exercised through a committee process. The combination of transparent criteria, analytical judgment applied on a transaction-by-transaction or issuer-by-issuer basis, and full disclosure via rating commentary strengthens Fitch’s rating process while assisting market participants in understanding the analysis behind our ratings. A rating committee may adjust the application of these criteria to reflect the risks of a specific transaction or entity. Such adjustments are called variations. All variations will be disclosed in the respective rating action commentaries, including their impact on the rating where appropriate. A variation can be approved by a ratings committee where the risk, feature, or other factor relevant to the assignment of a rating and the methodology applied to it are both included within the scope of the criteria, but where the analysis described in the criteria requires modification to address factors specific to the particular transaction or entity. U.S. Water and Sewer Revenue Bond Rating Criteria 11 November 30, 2016 Public Finance Appendix A: Key Ratios Used in the “10 Cs” Rating Process Ratio Definition Significance Total Outstanding Long-Term Debt per Customer ($) Total amount of utility long-term debt divided by the number of utility customers (for a combined utility, the aggregate number of water and sewer accounts is used) Indicates the existing debt burden attributable to ratepayers (principal only) Projected Debt per Customer Year Five ($) Total projected outstanding system debt (existing debt less scheduled amortization plus planned issuances) divided by total outstanding projected customers five years from the date of the rating (for a combined utility, the aggregate number of water and sewer accounts is used and is inflated by anticipated growth) Indicates the total debt burden to ratepayers five years from the date of the rating (principal only) Total Outstanding Long-Term Debt per Capita ($) Total amount of utility long-term debt divided by total population served by the utility Indicates the existing debt burden of a utility attributable to each person served by the utility (principal only) Projected Debt per Capita Year Five ($) Total projected outstanding system debt (existing debt less scheduled amortization plus planned issuances) divided by total projected population served by the utility (population is inflated based on anticipated growth) Indicates the total debt burden of a utility to each person served by the utility five years from the date of the rating (principal only) Three-Year Historical Average Senior Lien Annual Debt Service (ADS) Coverage (x) Most recent three-year historical average of annual revenues available for debt service divided by respective senior lien debt service for the year Indicates the historical trend in senior lien ADS coverage Senior Lien ADS Coverage (x) Current-year revenues available for debt service divided by current-year senior lien debt service Indicates the financial margin to meet current senior lien ADS with current revenues available for debt service Minimum Projected Senior Lien ADS Coverage (x) Minimum debt service coverage projected typically over the ensuing five-year period, based on revenues available for debt service in any given fiscal year, divided by the respective senior lien debt service amount for that fiscal year Indicates the financial margin during the year in which future senior lien ADS coverage is projected to be the lowest Three-Year Historical Average All-In ADS Coverage (x) Most recent three-year historical average of annual revenues available for debt service divided by respective total debt service for the year Indicates the historical trend in total ADS coverage All-In ADS Coverage (x) Current-year revenues available for debt service divided by current-year total debt service Indicates the financial margin to meet current total ADS with current revenues available for debt service Minimum Projected All-In ADS Coverage (x) Minimum debt service coverage projected typically over the ensuing five-year period, based on revenues available for debt service in any given fiscal year, divided by the respective total debt service amount for that fiscal year Indicates the financial margin during the year in which future total ADS coverage is projected to be the lowest Days Cash on Hand Current unrestricted cash and investments plus any restricted cash and investments (if available for general system purposes), divided by operating expenditures minus depreciation, divided by 365 Indicates financial flexibility to pay near-term obligations Days of Working Capital Current unrestricted assets plus any restricted cash and investments (if available for general system purposes) minus current liabilities payable from unrestricted assets, divided by operating expenditures minus depreciation, divided by 365 Indicates financial flexibility to pay near-term obligations Free Cash as % of Depreciation Current surplus revenues after payment of operating expenses, debt service and operating transfers out divided by current-year depreciation Indicates annual financial capacity to maintain facilities at current level of service from existing cash flows U.S. Water and Sewer Revenue Bond Rating Criteria 12 November 30, 2016 Public Finance Appendix B: Water and Sewer Management Practices Financial Profile Related • Long-term integrated financial forecasting that considers future demand, expected rate increases, regulations, and infrastructure renovation and renewal needs. • Policies to ensure appropriate financial margins, including debt service coverage and operating liquidity levels. Utilities with variable-rate debt and swap agreements are expected to understand the implications and potential risks of such capital management strategies. In addition, these utilities should include management’s rationale for the sizing of financial reserves and the adequacy of those reserves to cope with interest rate fluctuations and possible termination payments. • Regular financial reporting and monitoring systems that enable policymakers access to timely information on fiscal performance relative to the budget. • Limited operating exposure to growth-sensitive revenues, such as tap, connection or impact fees. • Collection policies that regularly track the rate of timely payment receipts and enforce penalties against late payers or terminate service for nonpayment. • Willingness of governing board to adjust rates when necessary. • Limited exposure to financial operations of the general government, so that system revenues can be relied on for use to operate and improve the utility. For transfers to the general fund, policies that specifically limit their scope and growth are favorable. • Compliance with industry accounting practices and establishment of appropriate internal controls. • Rate affordability guidelines that consider absolute levels of rates and their affordability relative to income levels. Debt Profile Related • Prioritized capital improvement plans that cover at least five years and consider capacity, supply, regulatory, and replacement and renewal needs. • Debt issuance policies, including types, terms and suitability under specific conditions, as well as the total amount of variable-rate debt deemed appropriate. • Development of comprehensive policies on the use of hedge agreements and their disclosure prior to entering into any such agreements. Operating Profile Related • Key management industry experience and active participation in organizations to keep pace with sector issues, regulatory mandates and technological advances. • Use of professional engineers, either within the utility or outside of it, to prepare objective reviews of system performance and needs on a regular basis and provide periodic revisions of construction cost estimates. • Regular consultation with regional and local growth planners, community development officials and demographers to predict and, if possible, limit infrastructure needs related to population and business growth. U.S. Water and Sewer Revenue Bond Rating Criteria 13 November 30, 2016 Public Finance Appendix C: Checklist of Basic Documents for the Rating Review Process □ Legal documents related to the debt being rated. □ Five years of audited financial statements. □ Current budget. □ Detailed five-year capital improvement plan (CIP), including sources of funding by year. □ Minimum five-year financial forecast inclusive of implementation of the CIP-related debt issuance and operations; this forecast should include detailed assumptions used, including service rate adjustments, nonrecurring revenue sources and timing of debt issuances. □ List of current debt outstanding segregated by lien, including the principal maturity schedule, total annual debt service requirements for each lien and expected annual federal interest subsidies for each lien; this information should include all obligations outstanding that are supported by system revenues. □ Information related to all outstanding hedge agreements, including terms, notional amortization, lien pledge of regular and termination payments, bond events, and bond cures, including collateral posting requirements; a recent fair market value for each swap should also be provided. □ Discussion of longer term capital needs beyond the five-year horizon. □ Formal policies and disclosure of targets for annual financial performance and transfers to the general fund, as well as other formal policies, including those related to investments, cash funding of the CIP, and maintenance of repair/replacement, rate stabilization, and other reserve funds. □ Five-year history of average annual number of customers, average daily water demand, peak water demand, unbilled water, average sewer flows and peak sewer flows. Wholesale service providers, whether full or partial, should also provide an estimate of single-family equivalent units. □ List of top 10 customers in terms of both annual sales and revenue. □ Description of system facilities, including treatment and storage capacity. □ Description of water sources, any purchased water contract terms and priority of water rights; discussion of potential new supplies, if applicable. □ Integrated resource plan, if available. □ Disclosure of compliance or regulatory issues, if any; required remedies and major milestones; and costs. □ Policies on reviewing and setting rates, current rate schedule, historical rate changes for at least five years and proposed future rate schedule (planned or adopted). □ Current rate comparisons with other area providers. □ Description of billing procedures, level of delinquencies and bad debts, and available recourse options for customer nonpayment. U.S. Water and Sewer Revenue Bond Rating Criteria 14 November 30, 2016 Public Finance ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTPS://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright © 2016 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch’s factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third-party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch’s ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed. The information in this report is provided “as is” without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001. ITEM NO. 9.4 AGENDA REPORT Meeting Date: September 12, 2017 To:Board of Directors From:Marc Marcantonio, General Manager Presented By:Delia Lugo, Finance Manager Dept:Finance Prepared By:Kelly McCann, Senior Accountant Subject:Budget to Actual Reports for the Month Ending July 31, 2017 DISCUSSION: Cumulative Volumetric Water Revenue, as reported through the month ending July 31, 2017, reflects an average rebound of 14.9% as compared to the prior year for the same reporting period. Residential and landscape /irrigation classified customer connections have experienced the largest rebound in monthly consumption as conservation restrictions were lifted compared to the prior year. Total Variable Costs results reflect at 6.3% decrease when compared to prior year for the same reporting period. The decrease in costs is reflective of amortizing Annual Retail Service Connections Fees in the amount of $296,357 payable to MWDOC over twelve months rather that recognizing the total expense in July as done in prior years. The water demand for July 4.1% above projection. STRATEGIC PLAN: FR 1-F: Continue to Record and Report the Fairly Stated Financial Activities of the District in a Timely and Transparent Manner to the Board of Directors and Member Agencies ATTACHMENTS: Name:Description:Type: Consolidated_Budget_to_Actual_Statement_July_2017.pdf Consolidated Statement July 2017 Backup Material Water_Budget_to_Actual_Statement_July_2017.pdf Water Statement July 2017 Backup Material July_2017_Pro_Forma.xlsx July 2017 Pro Forma Backup Material Sewer_Budget_to_Actual_Statement_July_2017.pdf Sewer Statement July 2017 Backup Material Yorba Linda Water District Summary Financial Report Water & Sewer Funds For Period Ending July 31, 2017 Annual YTD July YTD YTD Actual Prior Year Prior Year YTD Actual YTD Actual Budget Budget Actual Actual (Under) Over July Actual Actual (thru vs vs FY 2018 FY 2018 FY 2018 FY 2018 YTD Budget FY 2017 July 2016)PY Actual $PY Actual % Revenue (Operating): Water Revenue (Residential)$14,278,688 $1,576,367 $1,445,434 $1,445,434 (130,933)$1,214,525 $1,214,525 $230,909 19.01% Water Revenue (Commercial & Fire Det.)2,071,031 228,642 171,429 171,429 (57,213)156,922 156,922 14,507 9.24% Water Revenue (Landscape/Irrigation)3,079,054 339,928 397,805 397,805 57,877 341,264 341,264 56,541 16.57% Water Revenue (Service Charge)10,106,238 842,187 832,260 832,260 (9,927)998,438 998,438 (166,178)-16.64% Sewer Charge Revenue 2,032,245 169,354 159,053 159,053 (10,301)134,780 134,780 24,273 18.01% Locke Ranch Assessments 223,000 - - - - - - - 0.00% Other Operating Revenue 866,161 72,180 79,883 79,883 7,703 94,294 94,294 (14,411)-15.28% Total Operating Revenue:32,656,417 3,228,657 3,085,864 3,085,864 (142,793)2,940,223 2,940,223 145,641 4.95% Revenue (Non-Operating): Interest 310,000 25,833 7,102 7,102 (18,731)7,659 7,659 (557)-7.27% Property Tax 1,710,000 - - - - - - - 0.00% Other Non-Operating Revenue 624,521 52,043 60,619 60,619 8,576 26,407 26,407 34,212 129.56% Total Non-Operating Revenue:2,644,521 77,877 67,721 67,721 (10,156)34,066 34,066 33,655 98.79% Total Revenue 35,300,938 3,306,534 3,153,585 3,153,585 (152,949)2,974,289 2,974,289 179,296 6.03% Expenses (Operating): Variable Water Costs (G.W., Import & Power)13,968,855 1,534,140 1,460,113 1,460,113 (74,027)1,558,819 1,558,819 (98,706)-6.33% Salary Related Expenses 9,643,124 699,972 551,093 551,093 (148,879)987,302 987,302 (436,209)-44.18% Supplies & Services 4,621,895 318,950 304,168 304,168 (14,782)360,985 360,985 (56,817) -15.74% Total Operating Expenses 28,233,874 2,553,062 2,315,374 2,315,374 (237,688)2,907,106 2,907,106 (591,732)-20.35% Expenses (Non-Operating): Interest on Long Term Debt 1,489,796 113,212 112,450 112,450 (762) 133,981 133,981 (21,531) -16.07% Other Expense 15,220 1,268 224 224 (1,044)(8,683)(8,683)8,907 102.58% Total Non-Operating Expenses:1,505,016 114,480 112,674 112,674 (1,806) 125,298 125,298 (12,624) -10.08% Total Expenses 29,738,890 2,667,542 2,428,048 2,428,048 (239,494)3,032,404 3,032,404 (604,356)-19.93% Net Position Before Capital Contributions 5,562,048 638,991 725,537 725,537 86,546 (58,115)(58,115)783,652 1348.45% Special Item - 1,105,809 1,105,809 1,105,809 - - 1,105,809 0.00% Capital Contributions (Non-Cash Transaction -- - - - - - - - 0.00% GASB 34 Compliant) Net Position Before Depreciation 5,562,048 638,991 (380,272) (380,272)(1,019,263)(58,115)(58,115)(322,157)-554.34% Depreciation & Amortization 7,182,000 598,500 601,956 601,956 3,456 592,413 592,413 9,543 1.61% Total Net Position ($1,619,952)$40,491 ($982,228)($982,228)($1,022,719)($650,528)($650,528)($331,700)-50.99% (14,914)(14,914) (14,914) (22,525) (22,525) 7,611 -33.79% (With July 31, 2016 for comparison purposes) Annual YTD July YTD YTD Actual Prior Year Prior YTD YTD Actual YTD - CUR Budget Budget Actual Actual (Under)Over July Actual Actual (thru vs vs FY 2018 FY 2018 FY 2018 FY 2018 YTD Budget FY 2017 July 2016) PY Actual $PY Actual % Revenue (Operating): Water Revenue (Residential)$14,278,688 $1,576,367 $1,445,434 $1,445,434 (130,933)$1,214,525 $1,214,525 $230,909 19.01% Water Revenue (Commercial & Fire Det.)2,071,031 228,642 171,429 171,429 (57,213)156,922 156,922 14,507 9.24% Water Revenue (Landscape/Irrigation)3,079,054 339,928 397,805 397,805 57,877 341,264 341,264 56,541 16.57% Water Revenue (Service Charge)10,106,238 842,187 832,260 832,260 (9,927)998,438 998,438 (166,178) -16.64% Other Operating Revenue 769,106 64,092 69,492 69,492 5,400 82,398 82,398 (12,906) -15.66% Total Operating Revenue:30,304,117 3,051,215 2,916,420 2,916,420 (134,795) 2,793,547 2,793,547 122,873 4.40% Revenue (Non-Operating): Interest 275,000 22,917 7,098 7,098 (15,819)7,656 7,656 (558) -7.29% Property Tax 1,710,000 - - - - - - - 0.00% Other Non-Operating Revenue 604,646 50,387 58,465 58,465 8,078 28,438 28,438 30,027 105.59% Total Non-Operating Revenue:2,589,646 73,304 65,563 65,563 (7,741)36,094 36,094 29,469 81.65% Total Revenue 32,893,763 3,124,519 2,981,983 2,981,983 (142,536)2,829,641 2,829,641 152,342 5.38% Expenses (Operating): Variable Water Costs (G.W., Import & Power)13,968,855 1,534,140 1,460,113 1,460,113 (74,027)1,558,819 1,558,819 (98,706) -6.33% Salary Related Expenses 8,644,867 626,109 488,659 488,659 (137,450)892,464 892,464 (403,805) -45.25% Supplies & Services: Communications 189,565 15,797 6,590 6,590 (9,207)10,637 10,637 (4,047) -38.05% Contractual Services 519,653 23,304 23,874 23,874 570 34,911 34,911 (11,037) -31.61% Data Processing 235,322 19,610 14,665 14,665 (4,945)21,638 21,638 (6,973) -32.23% Dues & Memberships 80,492 26,000 25,325 25,325 (675)24,064 24,064 1,261 5.24% Fees & Permits 264,641 6,553 4,244 4,244 (2,309)1,207 1,207 3,037 251.62% Board Election - - - - - 72,539 72,539 (72,539) -100.00% Insurance 263,506 21,959 20,593 20,593 (1,366)20,916 20,916 (323) -1.54% Materials 797,347 66,446 66,163 66,163 (283)59,738 59,738 6,425 10.76% District Activities, Emp Recognition 22,506 1,876 510 510 (1,366)447 447 63 14.09% Maintenance 339,342 28,279 50,873 50,873 22,595 3,463 3,463 47,410 1369.04% Non-Capital Equipment 104,678 8,723 3,479 3,479 (5,244)3,048 3,048 431 14.14% Office Expense 39,662 3,305 1,419 1,419 (1,886)134 134 1,285 958.96% Professional Services 650,108 4,176 17,113 17,113 12,937 34,720 34,720 (17,607) -50.71% Training 61,728 5,144 1,398 1,398 (3,746)4,606 4,606 (3,208) -69.65% Travel & Conferences 102,493 8,541 1,765 1,765 (6,776)3,716 3,716 (1,951) -52.50% Uncollectible Accounts 17,205 1,434 (117) (117) (1,551)(1,115) (1,115) 998 -89.51% Utilities 158,100 13,175 21,188 21,188 8,013 14,006 14,006 7,182 51.28% Vehicle Equipment 286,812 23,901 16,277 16,277 (7,624)28,632 28,632 (12,355) -43.15% Supplies & Services Sub-Total 4,133,160 278,222 275,359 275,359 (2,863)337,307 337,307 (61,948) -18.37% Total Operating Expenses 26,746,883 2,438,472 2,224,131 2,224,131 (214,341)2,788,590 2,788,590 (564,459) -20.24% Expenses (Non-Operating): Interest on Long Term Debt 1,489,796 113,212 112,450 112,450 (762)133,981 133,981 (21,531) -16.07% Other Expense 15,220 1,268 224 224 (1,044)(8,683) (8,683) 8,907 -102.58% Total Non-Operating Expenses:1,505,016 114,480 112,674 112,674 (1,806) 125,298 125,298 (12,624) -10.08% Total Expenses 28,251,899 2,552,952 2,336,805 2,336,805 (216,147)2,913,888 2,913,888 (577,083) -19.80% Net Position Before Capital Contributions 4,641,864 571,567 645,178 645,178 73,611 (84,247)(84,247)729,425 865.82% Special Item - - 1,105,809 1,105,809 1,105,809 - - 1,105,809 0.00% Capital Contributions (Non-Cash Transaction -- - - - - - - - 0.00% GASB 34 Compliant) Net Position Before Depreciation 4,641,864 571,567 (460,631)(460,631)(1,032,198)(84,247)(84,247)(376,384)-446.76% Depreciation & Amortization 5,832,000 486,000 488,820 488,820 2,820 481,649 481,649 7,171 1.49% Total Net Position (1,190,136) 85,567 (949,451) (949,451) (1,035,018) (565,896) (565,896) (383,555) -67.78% Capital - Direct Labor (14,157) (14,157)(14,157) (21,786) (21,786) 7,629 -35.02% (With July 31, 2016 for comparison purposes) Yorba Linda Water District Water Fund For Period Ending July 31, 2017 FY18 Budget July 2017 Actuals Water Revenue (Residential) 14,278,688$ 1,445,434$ Water Revenue (Commercial & Fire Det.) 2,071,031$ 171,429$ Water Revenue (Landscape/Irrigation) 3,079,054$ 397,805$ Service Charges 10,106,238$ 832,260$ Other Operating Revenue 769,106$ 69,493$ Total Operating Revenue 30,304,117$ 2,916,420$ Revenue (Non-Operating): Interest 275,000$ 7,098$ Property Taxes 1,710,000$ -$ Other Non-Operating Revenue 604,646$ 58,465$ Total Non-Operating Revenue 2,589,646$ 65,563$ Total Revenue 32,893,763$ 2,981,983$ Expenses (Operating): Variable Water Costs (G.W., Import & Power) Water-Related Costs 11,240,088$ 1,287,926$ Fixed Costs 1,443,355$ 344,420$ Power-Related Costs 1,285,413$ 99,428$ Variable Water Costs Related Expenses Total 13,968,855$ 1,731,774$ Salary Related Expenses 8,859,867$ 781,821$ Salary Related Expenses - Limited-term Staff -$ -$ Reduction for Capital Project Labor (215,000)$ -$ Salary Related Expenses Total 8,644,867$ 781,821$ Yorba Linda Water District Water Enterprise FY17 ProForma - Use of Funds July 2017 Supplies & Services Communications 189,565$ 6,590$ Contractual Services 519,653$ 23,874$ Data Processing 235,322$ 14,665$ Dues & Memberships 80,492$ 25,325$ Fees & Permits 264,641$ 4,244$ Board Election -$ -$ Insurance 263,506$ 20,593$ Materials 797,347$ 66,163$ District Activities, Emp Recognition 22,506$ 510$ Maintenance 339,342$ 50,873$ Non-Capital Equipment 104,678$ 3,479$ Office Expense 39,662$ 1,419$ Professional Services 650,108$ 17,113$ Training 61,728$ 1,398$ Travel & Conferences 102,493$ 1,765$ Uncollectible Accounts 17,205$ (117)$ Utilities 158,100$ 21,188$ Vehicle Expenses 286,812$ 16,277$ Supplies & Services Sub-Total 4,133,160$ 275,359$ Total Operating Expenses 26,746,883$ 2,788,954$ Expenses (Non-Operating) Other Expense 15,220$ 224$ Special Item - Conservation Credit -$ 1,105,809$ Total Non-Operating Expenses 15,220$ 1,106,033$ Total Expenses 26,762,103$ 3,894,987$ Net Revenues 6,131,660$ (913,004)$ Less: Debt Service (Principal & Interest) 2,729,799$ -$ Less: Committed Capital Expenditures (PayGo) 2,635,755$ 89,591$ Transfer to/(from) Reserves 766,107$ (1,002,595)$ Net -$ -$ Annual YTD July YTD YTD Actual Prior Year Prior Year YTD Actual YTD - CUR Budget Budget Actual Actual (Under)Over July Actual Actual (thru vs vs FY 2018 FY 2018 FY 2018 FY 2018 YTD Budget FY 2017 July 2016)PY Actual $PY Actual % Revenue (Operating): Sewer Charge Revenue $2,032,245 $169,354 $159,053 $159,053 ($10,301)$134,780 $134,780 $24,273 18.01% Locke Ranch Assessments 223,000 - - - - - - - 0.00% Other Operating Revenue 97,055 8,088 10,390 10,390 2,302 11,896 11,896 (1,506) -12.66% Total Operating Revenue:2,352,300 177,442 169,443 169,443 (7,999)146,676 146,676 22,767 15.52% Revenue (Non-Operating): Interest 35,000 2,917 4 4 (2,913)3 3 1 33.33% Other Non-Operating Revenue 19,875 1,656 2,154 2,154 498 (2,031) (2,031) 4,185 -206.06% Total Non-Operating Revenue:54,875 4,573 2,158 2,158 (2,415)(2,028) (2,028) 4,186 -206.41% Total Revenue 2,407,174 182,015 171,601 171,601 (10,414)144,648 144,648 26,953 18.63% Expenses (Operating): Salary Related Expenses 998,257 73,862 62,434 62,434 (11,428)94,838 94,838 (32,404)-34.17% Supplies & Services: Communications 12,010 1,001 496 496 (505)794 794 (298)-37.53% Contractual Services 28,237 2,353 1,797 1,797 (556)2,628 2,628 (831)-31.62% Data Processing 15,078 1,257 1,104 1,104 (153)1,629 1,629 (525)-32.23% Dues & Memberships 6,053 504 1,906 1,906 1,402 1,811 1,811 95 5.25% Fees & Permits 17,474 1,456 197 197 (1,259)80 80 117 146.25% Insurance 19,834 1,653 1,550 1,550 (103)1,574 1,574 (24)-1.52% Materials 51,653 4,304 10,760 10,760 6,456 649 649 10,111 1557.94% District Activities, Emp Recognition 1,694 141 38 38 (103)34 34 4 11.76% Maintenance 170,559 14,213 668 668 (13,545)666 666 2 0.30% Non-Capital Equipment 20,147 1,679 1,621 1,621 (58)291 291 1,330 457.04% Office Expense 2,963 247 107 107 (140)10 10 97 970.00% Professional Services 40,417 3,368 972 972 (2,396)2,237 2,237 (1,265)-56.55% Training 6,782 565 87 87 (478)855 855 (768)-89.82% Travel & Conferences 12,752 1,063 558 558 (505)280 280 278 99.29% Uncollectible Accounts 1,295 108 (25) (25) (133)(139) (139) 114 -82.01% Utilities 12,600 1,050 1,655 1,655 605 1,112 1,112 543 48.83% Vehicle Equipment 69,188 5,766 5,316 5,316 (450)3,708 3,708 1,608 43.37% Supplies & Services Sub-Total 488,735 40,728 28,807 28,807 (11,921) 23,679 23,679 5,128 21.66% Total Operating Expenses 1,486,991 114,590 91,241 91,241 (23,349) 118,517 118,517 (27,276) -23.01% Expenses (Non-Operating): Interest Expense - - - - - - - - - Other Expense - - - - - - - - - Total Non-Operating Expenses:- - - - - - - - 0.00% Total Expenses 1,486,991 114,590 91,241 91,241 (23,349) 118,517 118,517 (27,276) -23.01% Net Position Before Capital Contributions 920,183 67,424 80,360 80,360 12,936 26,131 26,131 54,229 207.53% Capital Contributions (Non-Cash Transaction -- - - - - - - - 0.00% GASB 34 Compliant) Net Position Before Depreciation 920,183 67,424 80,360 80,360 12,936 26,131 26,131 54,229 207.53% Depreciation & Amortization 1,350,000 112,500 113,136 113,136 636 110,764 110,764 2,372 2.14% Total Net Position (429,817) (45,076) (32,776) (32,776) 12,300 (84,633) (84,633) 51,857 61.27% Capital - Direct Labor (757) (757)(757) (742) (742) (15)2.02% Yorba Linda Water District Sewer Fund For Period Ending July 31, 2017 (With July 31, 2016 for comparison purposes) ITEM NO. 13.1 AGENDA REPORT Meeting Date: September 12, 2017 Subject:Meetings from September 13 - October 31, 2017 ATTACHMENTS: Name:Description:Type: BOD_-_Activities_Calendar.pdf Backup Material Backup Material Board of Directors Activity Calendar Event Date Time Attendance By September YL Planning Commission Wed, Sep 13 6:30 PM Hawkins (As Needed) YL Mayor's Prayer Breakfast Thu, Sep 14 7:00 AM Miller/Nederhood Board of Directors Special Meeting Thu, Sep 14 4:30 PM ACWA Region 5 Tour Sun, Sep 17 1:30 PM Jones Joint Committee Meeting with City of Yorba Linda Mon, Sep 18 4:00 PM Miller/Hawkins YL City Council Tue, Sep 19 6:30 PM Hall MWDOC Wed, Sep 20 8:30 AM Nederhood OCWD Wed, Sep 20 5:30 PM Jones Board of Directors Workshop Meeting Wed, Sep 20 6:30 PM CSDA Annual Conference Mon, Sep 25 8:00 AM Hall Board of Directors Regular Meeting Tue, Sep 26 6:30 PM OCSD Wed, Sep 27 6:00 PM Hawkins/Jones Yorba Linda Planning Commission Wed, Sep 27 6:30 PM Hawkins (As Needed) Interagency Committee Meeting with MWDOC and OCWD Thu, Sep 28 4:00 PM Miller/Nederhood October ISDOC Executive Committee Tue, Oct 3 7:30 AM Nederhood Yorba Linda City Council Tue, Oct 3 6:30 PM Hawkins MWDOC Wed, Oct 4 8:30 AM Nederhood OCSD Operations Committee Wed, Oct 4 5:00 PM Hawkins OCWD Wed, Oct 4 5:30 PM Jones WACO Fri, Oct 6 7:30 AM Jones (All Directors PA) ACWA Regions 9 & 10 Tour Fri, Oct 6 8:15 AM Jones/Nederhood Board of Directors Regular Meeting Tue, Oct 10 6:30 PM LAFCO Wed, Oct 11 8:00 AM Nederhood (As Needed) Yorba Linda Planning Commission Wed, Oct 11 6:30 PM Hawkins (As Needed) YL City Council Tue, Oct 17 6:30 PM Jones MWDOC Wed, Oct 18 8:30 AM Nederhood OCWD Wed, Oct 18 5:30 PM Jones Board of Directors Workshop Meeting Thu, Oct 19 6:30 PM CA-NV AWWA Annual Conference Mon, Oct 23 8:00 AM CA-NV AWWA Annual Conference Tue, Oct 24 8:00 AM Board of Directors Regular Meeting Tue, Oct 24 6:30 PM CA-NV AWWA Annual Conference Wed, Oct 25 8:00 AM MWDOC/OCWD Joint Planning Committee Wed, Oct 25 8:30 AM Jones/Nederhood OCSD Wed, Oct 25 6:00 PM Hawkins/Jones Yorba Linda Planning Commission Wed, Oct 25 6:30 PM Hawkins (As Needed) OCWD Groundwater Adventure Tour Thu, Oct 26 8:00 AM Jones CA-NV AWWA Annual Conference Thu, Oct 26 8:00 AM ISDOC Thu, Oct 26 11:30 AM Hawkins (All Directors PA) PA = Preauthorized ITEM NO. 14.1 AGENDA REPORT Meeting Date: September 12, 2017 Subject:ACWA Region 5 Tour - September 17-18, 2017 ACWA Regions 9 and 10 Tour - October 6, 2017 OCWD Groundwater Adventure Tour - October 26, 2017 YL State of the City Address - November 2, 2017 ACWA/JPIA Fall Conference - November 27-28, 2017 ACWA Fall Conference - November 28 - December 1, 2017 CRWUA Annual Conference - December 13-15, 2017 STAFF RECOMMENDATION: That the Board of Directors approve Director attendance at these events if desired. ATTACHMENTS: Name:Description:Type: ACWA_Region_5_Tour.pdf Backup Material Backup Material ACWA_Regions_9_and_10_Tour.pdf Backup Material Backup Material OCWD_Tour.pdf Backup Material Backup Material YL_State_of_City.pdf Backup Material Backup Material ACWAJPIA_Conf.pdf Backup Material Backup Material ACWA_Conf.pdf Backup Material Backup Material CRWUA_Conf.pdf Backup Material Backup Material REGISTRATION NOW OPEN! ACWA Region 5 Tour and Program Recycled Water And Water Reuse Featuring a Tour of Goleta Sanitary District and Corona Del Mar Water Treatment Plant Date: Sunday: Sept.17, 2017 and Monday: Sept. 18, 2017 Time: Sunday 1:30–8:00 p.m. (Check-in begins at 1:00 p.m.) Monday: 9:00 a.m. – 1:30 p.m. (Check in begins at 8:30 a.m.) Location: Courtyard by Marriott Santa Barbara Goleta: 401 Storke Rd Goleta, CA 93117 Region 5 invites you to attend an event that will highlight some of the notable recycled water and water reuse projects in Santa Barbara County. On Sunday, attendees will depart from the Santa Barbara Goleta Courtyard Marriot for a tour of the Goleta Sanitary District, and the Corona Del Mar Water Treatment Plant. Following the tour, Region 5 will host an evening networking reception at the Glenn Annie Golf Course. Monday’s portion of the event will include a program that will focus on local agency projects and examine region wide issues. Sunday, Sept. 17 Tour Itinerary and Monday, Sept. 18 Program Agenda available HERE. REGISTER HERE Pre-Registration Fee: ACWA Member $80 | Non-member $120 Tour of Charles Meyer Desalination Plant and Goleta Sanitary District: $30 (Space is limited, tour transportation included) Onsite Registration Fee: ACWA member $85 | Non-member $125 (Onsite registrations will be accommodated as space permits.) Registration Fee Includes: Continental breakfast, lunch, refreshments and materials. Online Registration Deadline: September 8, 2017 or until space is full. Cancellations Deadline: September 8, 2017, 5 p.m. (PST) to receive reimbursement. Cancellation must be in writing. Substitutions can be made by requesting it in writing by September 8. After that date, substitutions can be handled onsite at the event. Event details are subject to change and registrants will be notified by e-mail if changes occur. Personal Protection Attire for Tour: casual clothing, closed-toed flat shoes, sun hat and sun glasses are highly recommended for the tour. Tour participants are required to sign an ACWA Voluntary Release and Waiver, available HERE. SUGGESTED HOTEL ACCOMMODATIONS Courtyard Marriott Santa Barbara Goleta 401 Storke Road Goleta, CA 93117 (805) 968-0500 starting rate at $234 + tax. Mention ACWA Region 5 to receive room block rate ACWA REGION 5 BOARD  2016‐2017 Chair  David T. Hodgin,  Scott Valley Water District Vice Chair Bill Rosen, Goleta Water District Board Members Polly Holcombe, Carpinteria Valley Water District Lesa R. McIntosh, East Bay Municipal Utilities District Anson B. Moran, Sam Francisco Public Utilities District Dick Quigley, Zone 7 Water Agency John H. Weed,  Alameda County Water District QUESTIONS Contact Brian Sanders, Regional Affairs Representative at: brians@acwa.com or (916) 441-4545 REGISTRATION NOW OPEN! ACWA Regions 9 & 10 Present: Dam Exciting: Accomplishments at Prado - Up & Downstream Date: Friday, October 6, 2017 Time: 8:20 a.m. – 2:30 p.m. (Check-in begins at 8:00 a.m.) Location: Circle City Center, 365 N Main Street, Corona, CA 92880 ACWA Regions 9 and 10 are hosting an exciting program and tour that will showcase the accomplishments at Prado Dam. The morning tour will feature Prado Dam flood control operations and Prado Wetlands where endangered birds have multiplied in number. Following the tour the program will include discussion on the Prado and Orange County nexus as well as above the Dam issues including the Santa Ana River Conservation and Conjunctive Use Program, Upper Santa Ana River Habitat Conservation Plan, and a Review of the Santa Ana River and Western Judgment. The program will also include an ACWA update. REGISTRATION OPEN HERE Pre-Registration Fee: ACWA Member $65 | Non-member $90 Onsite Registration Fee: ACWA member $70 | Non-member $95 (Onsite registrations will be accommodated as space permits.) Registration Fee Includes: Tour transportation, Continental breakfast, lunch, refreshments and materials Online Registration Deadline: September 29, 2017 or until space is full. Cancellations Deadline: September 29, 2017, 5 p.m. (PST) to receive reimbursement. Cancellation must be in writing. Substitutions can be made by requesting it in writing by September 29. After that date, substitutions can be handled onsite at the event. Event details are subject to change and registrants will be notified by e-mail if changes occur. Personal Protection Attire for Tour: casual clothing, closed‐toed flat shoes, sun hat and sun glasses are highly recommended for the tour. Tour participants are required to sign an ACWA Voluntary Release and Waiver, available HERE . EVENT IS UNDERWRITTEN BY ACWA REGIONS 9 AND 10 AND HOSTED BY CITY OF CORONA DEPARTMENT OF WATER AND POWER ACWA REGION 9 BOARD  2016‐2017 Chair  Patrick O'Dowd,  Coachella Valley Water District Vice Chair Harvey Ryan, Elsinore Valley Municipal Water District Board Members Steven Farell, Crestline Village Water District Joe Kuebler, Eastern Municipal Water District  Phil Rosentrater,  Salton Sea Authority James Morales Jr., East Valley Water District Jim Ventura, Mojave Water Agency ACWA REGION 10 BOARD  2016‐2017 Chair Brian Brady,  Fallbrook Public Utility District Vice Chair Cathy Green, Orange County Water District Board Members Jim Atkinson, Mesa Water District Charles T. Gibson, Santa Margarita Water District  Larry McKenney,  Municipal Water District of Orange County Richard Vasquez, Vista Irrigation District DeAna Verbeke, Helix Water District rw GROUNDWATER AbVENTURE TOUR 2017 Groundwater ATour Join OCWD on a tour of its facilities to earn about your water supplies and how they are managed in an environmentally and financially sound manner. The 2017 Groundwater Adventure Tour takes place an Thursday, October 26 from S a_m_-4=30 p_rn_ The free tour includes the Groundwater Replenishment System, the world's largest advanced water purification system; OCWD's world-renowned laboratory-, the H2O Learning Center at 0OWD; 0CWD's recharge basins; a 304 foot-long rubber dam-, and OCWD's wetlands in the Prado Basin_ The Groundwater Adventure Tour begins and ends at OCWD's headquarters in Fountain Valley and features walking and riding aboard a motorcoach_ Breakfast and lunch will be served_ Space is limited and priority will be given to those who have not previous€y attended_ All participants must be 18 years of age or alder_ Click here to resister online_ For questions, please contact Crystal Nettles at (714) 373-3202 or via email_ ALIQ 9 �" Yorh �i Jr— �bL(& // bL l:� al'6'I.-OC-C".I/ of CQL,N/LYYwr4(--e s�® o '—BUdiHea& witfi Vride" 17670 YORBA LINDA BLVD. •YORBA LINDA, CA 92886 �Ew OF 00 (714)993-9537 • FAX(714)993-7764 www.yorbalindachamber.org RE: 2017 State of the City(SOTC) To Whom It May Concern, The City of Yorba Linda and the Yorba Linda Chamber of Commerce will host the 2017 State of the City Address featuring the Honorable Mayor Peggy Huang on Thursday, November 2, 2017 at the Richard Nixon Library and Museum from 11:00 a.m. - 1:30 p.m. This event will provide you the opportunity to meet the honorable Mayor Peggy Huang and hear her comments on the City's 50'Anniversary Celebration, the City's accomplishments and projects of the past year, as well as look to what's ahead in 2018. We would like to personally invite you to share in this experience by becoming a corporate sponsor.The sponsorship levels are as follows: Title Sponsor($5,000) Sponsorship benefits include recognition as the Title Sponsor in all event marketing materials,reserved seating for eight, opportunity to participate on stage in the program,booth space at event,prominent logo placement on video slideshow,and sponsor name recognition in the event program. Platinum Sponsor($2,500) Sponsorship benefits include booth space at event,reserved seating for eight,signage and your company marketing materials placed on guest tables,prominent logo placement on video slideshow,and sponsor name recognition in the event program. Gold Sponsor($1,000) Sponsorship benefits include reserved seating for eight, signage and your company marketing materials placed on guest tables,prominent logo placement on video slideshow,and sponsor name recognition in the event program. Silver Sponsor($500) Sponsorship benefits include reserved seating for four,prominent logo placement on video slideshow,and sponsor name recognition in the event program. Bronze Sponsor($300) Sponsorship benefits include reserved seating for two and sponsor name recognition in the event program. Advertisement($150) Sponsorship benefits include sponsor name recognition in the event program. Individual Ticket @$55 If you would like to be a sponsor of the 2017 State of the City,please contact Susan Wan-Ross at the Yorba Linda Chamber of Commerce Office or visit the Chamber's website.Your donation is tax deductible(Tax ID number: 95-293-5546). Sincerely, Susan Wan-Ross Executive Director Yorba Linda Chamber of Commerce MISSION STATEMENT The role of the Yorba Linda Chamber of Commerce is to build an alliance between business owners, residents, and local government. Through a mutual exchange of services and information, the Chamber of Commerce promotes Yorba Linda as a desirable community in which to conduct business, live, shop and visit. ACWA JPIA | P.O. Box 619082, Roseville, CA 95661 | 800.231.5742 | www.acwajpia.com To: JPIA Members From: Sylvia Robinson, Publications & Web Editor Date: August 30, 2017 Subject: ACWA JPIA Board of Directors’ Meeting and 2017 Fall Conference Notice The JPIA’s Board of Directors’ meeting for the 2017 Fall ACWA Conference in Anaheim, California is scheduled as follows: Monday – November 27, 2017 – (1:30 – 4 p.m.) Marriott Hotel – 700 West Convention Way – Anaheim, CA 92802 For a copy of the JPIA’s preliminary 2017 Fall Conference schedule, click here. JPIA Conference Packets: The packet will be available on the JPIA’s website approximately 14 days prior to the date of the meeting. It will include all the meeting packets for the JPIA’s meetings at the conference as well as a welcome letter from the Board President, the JPIA’s conference schedule, and a summary description of the JPIA’s seminars and speakers for the conference. The handouts for the seminars will be distributed at the time of the sessions. JPIA Directors: If you do not wish to download and/or print the JPIA Conference Packet, use the online JPIA Conference Packet request form (found on the JPIA’s website) to have the JPIA Conference Packet and name badge mailed to you. If you do not complete the form, you will receive a copy of the Board of Directors’ agenda only, which will be mailed approximately 14 days prior to the meeting. Others who attend the meetings: If you do not wish to download and/or print the JPIA Conference Packet, use the online JPIA Conference Packet request form (found on the JPIA’s website) to have the JPIA Conference Packet and name badge mailed to you. Name Badge Only: If you are planning to download your own JPIA Conference Packet, but would still like to have a name badge, use the online JPIA Conference Packet request form to request a name badge only. RSVP for Pre-Board Meeting Lunch with Keynote Speaker: The JPIA will be hosting a pre- Board meeting lunch with a keynote speaker. An RSVP for this event is required in order to attend. Please use the online JPIA Conference Packet request form to RSVP. The online JPIA Conference Packet request form and lunch RSVP must be completed by November 2, 2017. The JPIA Conference Packets will be mailed approximately 14 days prior to the meeting. There are no registration fees to attend any of the JPIA’s seminars or meetings. However, if you are planning to attend the ACWA conference, please check the ACWA website at http://www.acwa.com to get information about how to register. ACWA’s procedure for acquiring hotel rooms at the conference requires attendees to register for the ACWA conference before they can receive the hotel registration form. However, JPIA members, who need hotel rooms but are not attending the ACWA conference, should contact Teresa Taylor at the ACWA office, (916) 441-4545. Indicate that you are a JPIA member who is definitely attending only the JPIA’s portion. Service Above and Beyond JPIA 2017 Fall Conference Schedule Marriott Hotel – Anaheim, CA Monday – November 27, 2017 8:00 a.m. – Light Continental Breakfast (for those attending the meetings) Grand Ballroom F 8:30 a.m. – 10:00 a.m. Finance & Audit Committee Meeting Grand Ballroom F 10:15 a.m. – 11:15 a.m. Executive Committee Meeting Grand Ballroom F 11:30 a.m. – 1:00 p.m. Pre-Board Meeting Lunch With Keynote Speaker – RSVP by 11/2/17 required to attend this event. Platinum Ballroom 1-2 1:30 p.m. – 4:00 p.m. Board of Directors’ Meeting Grand Ballroom E 4:00 p.m. – 5:00 p.m. Town Hall Meeting Grand Ballroom E 5:00 p.m. – 6:00 p.m. ACWA JPIA Reception Platinum Ballroom 1-3 Tuesday – November 28, 2017 8:00 a.m. – Light Continental Breakfast (for those attending the seminars)Grand Ballroom E 8:30 a.m. – 10:00 a.m. JPIA Seminar I (topic in general: service) Grand Ballroom E 10:15 a.m. – 11:45 a.m. JPIA Seminar II (topic in general: pooling) Grand Ballroom E 1:30 p.m. – 3:30 p.m. Sexual Harassment Prevention for Board Members & Managers (AB1825 & AB2053) Platinum Ballroom 9-10 5:00 p.m. – 6:30 p.m. ACWA Conference Welcome Reception Marquis Ballroom Wednesday – November 29, 2017 9:00 a.m. – 5:00 p.m. Exhibit Booth #215 & 217 Marquis Ballroom Thursday – November 30, 2017 8:00 a.m. – 12:00 p.m. Exhibit Booth #215 & 217 Marquis Ballroom Last modified: August 28, 2017 ACWA 2017 Fall Conference & Exhibition PRELIMINARY AGENDA November 28–December 1, 2017 • Anaheim Marriott All conference programs are subject to change. ACWA JPIA - MONDAY, NOV. 27 8:30 – 10:00 AM • ACWA JPIA Program Committee 10:15 – 11:15 AM • ACWA JPIA Executive Committee 1:30 – 4:00 PM • ACWA JPIA Board of Directors 4:00 – 5:00 PM • ACWA JPIA Town Hall 5:00 – 6:00 PM • ACWA JPIA Reception TUESDAY, NOV. 28 8:00 AM – 6:00 PM • Registration 8:30 AM – Noon • ACWA/JPIA Seminars 9:00 AM – 4:00 PM • Legal Affairs Committee CLE Workshop 10:00 – 11:45 AM • Groundwater Committee • Local Government Committee 11:00 AM – Noon • Outreach Task Force Noon – 2:00 PM • ACWA 101 & Luncheon • Committee Lunch Break 1:00 – 2:45 PM • Energy Committee • Finance Committee • Scholarship & Awards Subcommittee • Water Management Committee 1:30 – 3:30 PM • ACWA JPIA: Sexual Harassment Prevention for Board Members & Managers (AB 1825) 3:00 – 4:45 PM • Business Development Committee • Communications Committee • Federal Affairs Committee • Membership Committee • Water Quality Committee 5:00 – 6:30 PM • Welcome Reception in the Exhibit Hall WEDNESDAY, NOV. 29 7:30 AM – 5 PM • Registration 8:00 – 9:45 AM • Opening Breakfast (Ticket Required) 9:00 AM – Noon & 1:30 – 5:00 PM • Exhibit Hall 10:00 – 11:30 AM • Attorneys Program • Energy Committee Program • Exhibitor Case Studies • Finance Program • Region Issue Forum • Statewide Issue Forum • Water Industry Trends Program 11:30 – 11:45 AM • Networking in the Exhibit Hall 11:45 AM – 2:00 PM • General Session Luncheon (Ticket Required) 2:15 – 3:15 PM • Attorneys Program • Communications Committee Program • Energy Committee Program • Exhibitor Case Study • Region Program • Statewide Issue Forum • Water Industry Trends Program 3:30 – 4:45 PM • Aquatic Resources Subcommittee • Exhibitor Demos • Finance Program • Local Government Committee Program • Statewide Issue Forum • Water Industry Trends Program 3:30 – 5:30 PM • Legal Affairs Committee 5:00 – 6:00 PM • Prize Drawing Fiesta Night in the Exhibit Hall 5:00 – 7:00 PM • CalDesal Hosted Mixer • CH2M Hosted Reception THURSDAY, NOV. 30 7:30 AM – 4 PM • Registration 8:00 AM – Noon • Exhibit Hall 8:00 – 9:15 AM • Networking Continental Breakfast, Exhibit Hall (Ticket Required) 8:30 AM – 9:15 AM • Ag Initiative Meeting 9:30 – 11:00 AM • Attorneys Program • Exhibitor Case Studies • Region Issue Forum • Town Hall • Water Industry Trends Program 9:30 - 11:45 AM • Ethics Training (AB 1234) - Limited Seating 11:00 – 11:30 AM • Prize Drawings in the Exhibit Hall 11:45 AM – 2:00 PM • General Session Luncheon (Ticket Required) 2:15 – 3:15 PM • Attorneys Program • Exhibitor Demos • Federal Issues Forum • Finance Program • Statewide Issue Forum • Water Industry Trends Program 3:30 – 5 PM • Regions 1 –10 Membership Meetings 6:00 – 7:00 PM • Outreach Reception 7:00 – 10:00 PM • Dinner & Entertainment (Ticket Required) FRIDAY, DEC. 1 8:00 – 9:30 AM • Registration 8:30 – 10:00 AM • ACWA’s Hans Doe Past Presidents’ Breakfast in Partnership with ACWA JPIA (Ticket Required) OTHER EVENTS TUESDAY, NOV. 28 7:00 AM – 4 PM • ACWA Fall Conference Golf Tournament THURSDAY, NOV. 30 6:45 – 8:30 AM • San Joaquin Valley Agricultural Water Committee Questions? Contact us at 916.441.4545, toll free 888.666.2292. Conference terms and conditions available at acwa.com in the event section. ACWA 2017 Fall Conference & Exhibition REGISTRATION, MEALS & HOTEL PRICING November 28 – December 1, 2017 | Anaheim Marriott Hotel PRICING REFERENCE SHEET REGISTRATION FEES & OPTIONS REGULAR ONSITE Advantage (For ACWA public agency members, affiliates & associates ONLY) (ends 11/1/17)Full Conference Registration & Meals Package . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $699 Not Avail . Full Conference Registration Only (meals sold separately) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $555 $575 One-Day Conference Registration (meals sold separately): Wednesday 11/29 -OR- Thursday 11/30 . $320 $340 Wednesday registration includes Welcome Reception on Tuesday evening. Thursday registration includes ability to purchase a ticket for Friday breakfast. Standard (Applies to non-members of ACWA)Full Conference Registration Only (meals sold separately) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $830 $850 One-Day Conference Registration (meals sold separately): Wednesday 11/29 -OR- Thursday 11/30 . $470 $490 Wednesday registration includes Welcome Reception on Tuesday evening. Thursday registration includes ability to purchase a ticket for Friday breakfast. Guest (Guest registration is not available to anyone with a professional reason to attend.)Guest Conference Registration (meals sold separately) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $45 $45 MEAL FUNCTIONS REGULAR ONSITE Wednesday – November 29Opening Breakfast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $45 $50 Wednesday Luncheon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $50 $55 Thursday – November 30Networking Continental Breakfast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $35 $40 Thursday Luncheon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $50 $55 Thursday Dinner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $65 $70 Friday – December 1Friday Breakfast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $45 $50 HOTEL INFORMATION Reservations will not be accepted until August 21, 2017. You must be registered for the ACWA conference in order to receive hotel reservation information and conference special room rate. Conference special rate is available August 21 – November 6, based on availability. Special Hotel RateAnaheim Marriott Hotel700 Convention Way, Anaheim, CA 92802Single/Double $195 per night (Additional people $20) Rate is subject to 15% Local Fees & Taxes and CA State Tourism Fee of $0.25 per room and occupancy tax of $0.04 per room and a 2% Anaheim Tourism Improvement District Assessment Important Dates:For those registering for conference prior to August 21, hotel information will be provided via e-mail on August 21 . For those registering for conference from August 21 to November 6, your confirmation e-mail will include hotel reservation information and an opportunity to receive a conference special hotel rate . Hotel Reservation Questions? After August 21, call hotel directly . NEED TO REGISTER ON SOMEONE ELSE’S BEHALF? YOU CAN NOW SIGN IN AS YOURSELF - After you’ve logged-in, you can select from a list of people affiliated with your company and proceed to register him/her for the event. If the registrant is not listed, you will have the opportunity to create a Portal profile for him/her before registering. Register online @ acwa.com Regular registration and cancellation deadline is November 1, 2017 • 4:30 p.m. (PST) Tentative Agenda Colorado River Water Users Association Annual Conference - December 13-15, 2017 (Tentative agenda subject to change) Wednesday, December 13, 2017 8:00 AM - 12:30 PM Hoover Dam Tour (Reservations Required) 8:00 AM - 7:00 PM Registration 2:00 PM - 5:00 PM Exhibit Hall Open - Palace I-II 5:00 PM - 7:00 PM President's Reception - Lobby outside of Palace III Thursday, December 14, 2017 7:00 AM - 7:00 PM Exhibit Hall Open - Palace I-II 7:00 AM - 4:00 PM Registration 7:30 AM - 8:30 AM Caucus Breakfasts Arizona State Caucus - Augustus V California State Caucus - Augustus I Colorado State Caucus - Augustus III Nevada State Caucus - Capri New Mexico State Caucus - Anzio Ten Tribes Partnership Caucus - Emperors II Utah State Caucus - Emperors I Wyoming State Caucus - Sicily 8:00 AM - 11:00 AM Spouse and Guest Activities - TBD Continental Breakfast and Prize Drawings 9:00 AM - 9:15 AM Welcome - Palace III Bart Fisher, CRWUA President Video Presentation 10:00 AM - 10:15 AM Session Break, Raffle Drawing - Palace I-II 12:00 PM - 1:00 PM Lunch and Raffle Drawing - Augustus I-IV 2:45 PM - 3:00 PM Session Break, Raffle Drawing - Palace I-II 5:00 PM - 7:00 PM Percolation and Runoff Reception - Palace I-II Friday, December 15, 2017 7:00 AM - 9:30 AM Exhibit Hall Open - Palace I-II Continental breakfast available 7:00 AM - 9:00 AM 8:30 AM - 8:45 AM Business Meeting - Palace III Page 1 of 12017 CRWUA Annual Conference - Agenda | Online Registration by Cvent 9/6/2017http://www.cvent.com/events/2017-crwua-annual-conference/agenda-142ca730ef4... 2017 CRWUA Conference Information _________________________________________________________________________________ Registration Fee Registration is $475 if paid by November 27. (On-site registration is $500.) This includes one entrance to conference sessions; one Thursday caucus breakfast meeting and one Thursday lunch; as well as entry to the Percolation and Runoff that Thursday evening. Retiree registration is $238 if paid by November 27 and includes the same as above. You are considered a retiree only if you are fully retired and paying your own way. If a district, association or organization is paying your registration fee, you are not considered a retiree for this purpose. Please send your completed Registration Forms and check or credit card authorization to:  1001 S. Valley View Blvd., MS 760, Las Vegas, NV 89153 or FAX: (702) 822-8530 NOTE : There is no single-day registration. Fee is for one and all events. Registration fee does not include hotel accommodations. Online Registration Registration is also available on-line by visiting CRWUA's web site at: www.crwua.org If you are paying by check, you are still encouraged to register on-line and select “check” as your payment option. Membership Dues Individual membership dues are $30 and must be paid to attend the conference. Organizational dues do not apply. Registration Deadline November 27 is the deadline for early registration discount. After that date, on-site registration is $500 or if retired, $263, and may be paid by check or credit card (VISA, MasterCard, AMEX or Discover). All early registrations must be received by November 27. After that date, registration must be made on-site. Meals Additional Thursday luncheon tickets may be purchased. Preregistration cost: $60.00. On-site cost: $65.00 Breakfast tickets are not available for purchase. The caucus breakfast is a business meeting and only current, paid members may attend. Spouses/Guests Each paid conference registration allows participants to bring one guest. Guests may participate in the Thursday morning spouse/guest breakfast and program and visit the exhibit hall. There is no charge for these functions, but guests must preregister. Separate paid registration or ticket is required for all other conference activities. Optional Tour There will be an optional tour to the Hoover Dam offered for an additional cost. Tour cost: $25 per person. There is limited space available on the tour. Tour may be cancelled based on interest; if tour is cancelled, refunds will be given. Cancellation / Refund / Substitution Policy Please e-mail all cancellation/refund/substitution requests to Mitch Bishop at mitch.bishop@snwa.com by November 27 or by fax at (702) 822-8530. Substitution requests after November 27 will be handled on-site. There is a processing fee of $75 on registration refunds after November 13. Refunds will be processed after the completion of the conference. No refunds after November 27. Hotel Reservations  Room reservations are guaranteed in the Palace Tower at $129. November 13 is the deadline for room reservations.  Contact Caesars Palace directly at 1-866-227-5944 to reserve your room. Be sure to mention the Conference Code of SCCRW7. You can also reserve your room online at https://aws.passkey.com/go/SCCRW7 Questions: Call Mitch Bishop or Stacey Robb at (702) 258-3939, or e-mail them at mitch.bishop@snwa.com or stacey.robb@snwa.com Dates to Remember November 13 – Last day to reserve a hotel room at Caesars Palace and receive the group rate. November 13 – Final day to request a full refund. November 27 – Last day to request a refund, less $75 processing fee. November 27 – Deadline for online registration. After November 27, you must register on-site. 2017 ANNUAL CONFERENCE Preregistration Form Caesars Palace • Las Vegas • December 13 - 15 Fill in completely – Please Print/Type Clearly Registrant ____________________________________________________ ______________________________________________________ (Name) (Name badge to read – FIRST NAME ONLY) Spouse/Guest* _________________________________________________ ______________________________________________________ (Only if attending) (Name badge to read – FIRST NAME ONLY) Please indicate if your spouse/guest will be attending: □ Thursday, Spouse/Guest Program *One guest allowed per paid registration. Guests may participate in Thursday Spouse/Guest Program and visit the exhibit hall. Company ____________________________________________________________________________________________________________ Address _____________________________________________________________________________________________________________ City______________________________________________________________ State ________________________ Zip __________________ Phone _______________________________________E-Mail___________________________________________________________________ Amount Paid Early Registration Package Before Nov. 27 $475 $_____________ Includes registration, one Thursday caucus breakfast meeting and one Thursday lunch (On-site - $500) ________________________________________________________________________________________________ Retiree Early Registration Package Before Nov. 27 $238 $_____________ Considered a retiree if fully retired and paying your own way. (On-site - $263) If district, association or organization is paying registration fee, you are not considered a retiree for this purpose. Includes the same as above. ________________________________________________________________________________________________ Additional Thursday Lunch Tickets ______ (Quantity @ $60 each; On-site @ $65 each) $60 $_____________ ________________________________________________________________________________________________ 2017 Individual Membership Dues $30 $_____________ If not previously paid. Membership dues are required to attend conference. Organizational dues do not apply. ________________________________________________________________________________________________ Optional Tour – Wednesday morning, Dec.13, Hoover Dam ______ (Qty @ $25 each) $25 $_____________ Reservation deadline – Nov. 27 ________________________________________________________________________________________________ Total $_____________ □ Visa □ MasterCard Card Number_____________________________________________ Expiration Date _______________________ □ AMEX □ Discover Cardholder Name ______________________________________________________________ (Please print) Cardholder Signature____________________________________________________________ (Must be signed to process credit card payment) Make check or money order payable to CRWUA. Mail or fax this form with payment to: Online Registration: Questions: Phone: CRWUA www.crwua.org Mitch Bishop – mitch.bishop@snwa.com (702) 258-3939 1001 S. Valley View Blvd., MS 760 Stacey Robb – stacey.robb@snwa.com Las Vegas, NV 89153 Fax: (702) 822-8530 BACKUP MATERIALS DISTRIBUTED LESS THAN 72 HOURS PRIOR TO THE MEETING M E M O R A N D U M TO: YLWD Board of Directors FROM: Brett R. Barbre DATE: September 12, 2017 RE: Item 9-1 – Reserves Policy Ranges/Goals Following completion of the FY 2016-17 budget, the Board made adjustments in the number and type of reserve accounts. The discussion below will highlight the current unrestricted reserve accounts, how they are calculated, and suggested minimum-maximum target levels. There is only one restricted Water Reserve Account, which will be discontinued by the end of FY 2017-18. DISCUSSION 1) The Operating Reserve covers temporary cash flow deficiencies to meet daily operational obligations. This reserve account is currently calculated as a percentage of the annual Operating Budget, including annual Debt Service interest expense. Levels Water Sewer Minimum 25% 25% Target 67% of Maximum 67% of Maximum Maximum 50% 50% Levels Water Sewer Minimum $7,059,170 $371,748 Target $9,459,287 $498,142 Maximum $14,118,340 $743,496 ITEM NO. 9.1. MATERIALS SUBMITTED BY: Brett Barbre Meeting Date: September 12, 2017 2) The Emergency Reserve provides protection recovery for catastrophic events or unplanned circumstances. This reserve account is calculated at a percentage of Net Capital Assets of water and sewer systems as reported annually in our CAFR. Levels Water Sewer Minimum 5% 5% Target 67% of Maximum 67% of Maximum Maximum 10% 10% Levels Water Sewer Minimum $5,778,600 $1,910,213 Target $7,743,324 $2,559,685 Maximum $11,557,200 $3,820,426 3) The Capital Project Reserve provides funding for capital projects as well as funding for capital repair and replacement of aging infrastructure nearing the end of its listed useful life. This reserve account is calculated either as a percent of annual depreciation or from the Asset Management Plan to be at least 100% of the next two FY approved capital budget. Levels Water Sewer Minimum $5,533,845 $345,000 Target 67% of Maximum 67% of Maximum Maximum $8,531,845 $2,267,699 Levels Water Sewer Minimum $5,533,845 $345,000 Target $5,716,336 $1,519,358 Maximum $8,531,845 $2,267,699 4) The Water Rate Stabilization Reserve provides funding to smooth out water rate increase adjustments during a year where revenues are not sufficient to meet required Debt Service Ratio. This reserve account is calculated at a percentage of Water Sales, which includes both commodity and fixed charges. ITEM NO. 9.1. MATERIALS SUBMITTED BY: Brett Barbre Meeting Date: September 12, 2017 5) The Employee Liability Reserve covers the employees’ vacation and other compensatory time. The Other Post Employment Benefits (OPEB) formerly associated with this reserve fund, will be discussed under item 9.2 Target Levels Water Minimum 5% Target 67% of Maximum Maximum 20% Target Levels Water Minimum $1,476,751 Target $3,957,692 Maximum $5,907,004 Target Level 100% of Liability Target Level $1,619,653 ITEM NO. 9.1. MATERIALS SUBMITTED BY: Brett Barbre Meeting Date: September 12, 2017 ITEM NO. 9.1. Considered of *As of July 1, 2017 to have $1.3 r Current Funding Levels 2/3 target levels from max to use to refu Water Sewer Water (Sewer I Water $14,118,341 $743,496 9459287 498142 9459287 $3,467,160 $1,146,127 7743324 2559685 7743324 $5,533,845 $2,267,699 5716336 1519358 5716336 $4,000,000 $0 3957692 3957692 $1,249,850 $500,000 1619653 144958 $1,253,252 $0 $29,622,448 $4,657,322 $28,496,2921 $4,577,1851 1 $27,021,597 $28,369,196 $34,279,770 $127,096 Days Cash Calculation $272,054 $1,347,599 $27,119,346 $4,157,322 $26,876,639 $26,876,639 $26,746,883 $1,486,992 $26,746,883 $26,746,883 370 1020 367 367 MATERIALS SUBMITTED BY: Brett Barbre MEETING DATE: September 12, 2017 M E M O R A N D U M TO: YLWD Board of Directors FROM: Brett R. Barbre DATE: September 12, 2017 RE: Item 9-2 – Management of District’s Unfunded Accrued Liabilities There are three long term liabilities which currently total $10,254,917: 1) District Compensated Leave Liability - $1,619,653 (as of June 30, 2017) 2) Other Post-Employment Benefits (OPEB) – Unfunded Actuarial Accrued Liability (UAAL) is $1,394,265. This figure will be updated in early October. 3) PERS Net Pension Liability – $7,240,999 DISCUSSION The District Compensated Leave Liability is currently covered by the Employee Liability Reserve. Staff recommends the full funding of this reserve and an annual review to ensure sufficient funds cover this liability. The OPEB UAAL will be added to the balance sheet for the 2017-18 year, per GASB 75. Staff recommends establishing a policy to address the OPEB liability. Though the UAAL will be updated in October, staff suggests the following formula: 1) YLWD has established an irrevocable OPEB trust with the California Employer’s Retiree Benefit Trust (CERBT). This Section 115 trust is specifically designed to deal with OPEB related expenses and is administered by staff of the CalPERS. It is designed to offset the long term liabilities associated with OPEB related expenses. ITEM NO. 9.2. MATERIALS SUBMITTED BY: Brett Barbre MEETING DATE: September 12, 2017 2) Staff recommends establishing an OPEB policy that YLWD will fund their OPEB liability at the 90% level. Once the 90% level is achieved, YLWD will continue to make its annual Annual Required Contribution (ARC) sufficient to cover current liabilities and maintain the 90% coverage. 3) Staff will bring forward a Board Directed policy with options to achieve the 90% level once the UAAL is updated. The CalPERS Net Pension Liability for YLWD has been carried on the balance sheet of the District since FY 2014-15, as required by GASB 68. There are several scenarios which can be pursued: 1) CalPERS assumption rate was 7.50% through the end of FY 2016-17. Moving forward, it will be reduced in the coming years as follows: a. July 1, 2018 – 7.375% b. July 1, 2019 – 7.25% c. July 1, 2020 – 7.00% 2) With the change from in the Net Pension Liability (NPL) of the Miscellaneous Pooled Plans by $730,410,227, the District’s portion was increased almost $2 million from $5,289,322 to $7,240,999. As the assumption rate continues to decline, our liability will continue to climb. 3) YLWD could establish their own Section 115 trust, as the IRS recently opined that establishment of Section 115 trusts may be utilized to pay down long term pension debt. However, the administration of our own trust would require a sophisticated investment strategy and would be cost prohibitive to contract out those services for an agency of our size. Staff does not recommend this approach. 4) YLWD could issue debt to pre-pay the pension liability. Pension Obligation Bonds (POB) are routine cash management strategies for large agencies who are active in the market. These are generally taxable bonds which require a higher rate. Staff does not recommend this approach. 5) YLWD could open a Section 115 trust account with an entity that manages an investment trust designed to prefund pension account liabilities. The Pension Rate Stabilization Program (PRSP), which has been established by the Public Agency Retirement Services (PARS), provides the following benefits (from their website): ITEM NO. 9.2. MATERIALS SUBMITTED BY: Brett Barbre MEETING DATE: September 12, 2017 a. Assets in the trust will offset unfunded pension liabilities. b. Agencies control the risk tolerance of the portfolio. c. Assets held in trust allow for greater investment flexibility and risk diversification compared to an agency’s general fund investments. d. Assets can be used to stabilize rates – to offset unexpected contribution rate increases or be used as a rainy day fund when revenues are impaired based on economic or other conditions. e. There’s the potential of improving an agency’s bond rating. f. Employers have flexibility to access trust assets any time, as long as it’s used to pay employer pension obligations. Staff recommends pursuing this approach. With the continued reduction of the assumption rate, YLWD should establish an irrevocable Section 115 trust account with PARS or another entity that will allow the prefunding of pension liabilities in order to mitigate pension investment volatility. ITEM NO. 9.2. MATERIALS SUBMITTED BY: Brett Barbre MEETING DATE: September 12, 2017 M E M O R A N D U M TO: YLWD Board of Directors FROM: Brett R. Barbre DATE: September 12, 2017 RE: Item 9-3 – Disposition of Annual Net Income and Potential Customer Refund The Board has been discussing the possibility of issuing another refund, this time from unrestricted reserve accounts, ever since issuing the 2017 Revenue Bonds. The subject of a promised refund was the subject of intense discussions with Fitch during their deliberations of the rating for the YLWD 2017 Revenue Bonds. Any time a change in position so close to the issuing of debt occurs, bringing Fitch back to reaffirm the rating prior to issuing another refund has been suggested. Otherwise, the District may be subject to a bond holder lawsuit should any of the financial strengths of the District be compromised. Fitch has agreed, once our plans are in place should the Board decide to issue a refund, to provide us with an analysis to determine whether such refund would have an impact on our current rating. With Direction from President Miller and Vice President Nederhood, staff has worked with our financial advisors, Fieldman, Rolapp & Associates, to prepare for a potential refund and to determine the impact on our rating per the guide developed by Fitch (see attached Fitch Report from November 2016 titled “U.S. Water and Sewer Revenue Bond Rating Criteria.”). Staff took the highest category in each of the four main areas and compiled a checklist (see attached checklist titled “Four Main Areas of Consideration”) with the associated data to justify the check in each box. GOVERNANCE and MANAGEMENT With four new members of the Board and continuous political pressure from the community to issue another refund to fulfill campaign promises, we were unable to check either of the top two boxes. Ratings agencies prefer to see several years of leadership activities before there is a comfort level associated with those two boxes. The other three can easily be checked. FINANCIAL PROFILE Our current profile is quite strong. Four of five boxes are checked: Our debt coverage ratio is over 3X coverage; days of cash exceeds one year (370 days); we fall a bit short in free cash relative to depreciation (90.22% vs. standard of 100%); our residential charges for water and sewer and .90% of MHI in comparison to required standard of less than or equal to 1.2%; And our fixed revenues exceed 30% (37.78% currently). ITEM NO. 9.3. MATERIALS SUBMITTED BY: Brett Barbre MEETING DATE: September 12, 2017 In any refund scenario, the impacts on debt service coverage, days cash on hand, and a further reduction in cash relative to depreciation will be the most significant in these areas. DEBT PROFILE None of the boxes in the debt profile section are likely to change in a significant manner. The only box unchecked is the amortization of principal equal to 90% or greater over 20 years…we are currently at 89.0%. OPERATING PROFILE Once again, YLWD is in a very strong position relative to our operating profile. Even though our top ten customers represent more than 5% of our system revenue and no single account providing more than 2% of revenue, the top two are government agencies (City of Yorba Linda at 6.5% and the PYLUSD at 1.13%). Fitch would be concerned if the top 4 or 5 were manufacturers, but because our list only contains 2 manufacturers and the top customers are governmental agencies that aren’t going out of business any time soon, we will still rate highly in this category. We also fell slightly short in the Annual renewal of 100% or more of depreciated assets; we came in at 98.14%. OTHER ISSUES TO CONSIDER 1) If the Board opts to issue a refund, will it be a ONE TIME REFUND or will there be an ANNUAL REFUND? A ONE TIME REFUND will be considered a special event and therefore will be a “below the line” transaction. If this is intended to be the first of an ANNUAL REFUND, it will be treated as an “above the line” transaction and will have a direct impact on the Financial Profile. 2) The YLWD commodity rate has remained steady for the past three year. OCWD has increased their rates $151/af or 51.4% increase while the MWDOC rate has increased $88.50/af or 9.94% in that same time period. YLWD has absorbed those increases which raises the question: at what point do we need to consider a commodity rate adjustment? 3) Will commodity rates will be increasing in the future, and how that will impact the rate stabilization fund? Imported water through MWDOC/MWD are anticipated to increase 3% in the coming years, with that rate increasing to 4.5% to cover the cost of the CA Water Fix. In addition, if the Carson GWR project is found to be feasible and is implemented by MWD, that will increase the rate impact to an annual increase of 6% per year. Likewise, the Orange County Water District (OCWD) has opted to pursue a “politically” driven Basin Production Percentage (BPP) in lieu of a “hydrologically” driven BPP. As a result, OCWD will need to purchase an increasing amount of replenishment water from MWDOC/MWD to sustain the higher BPP. 4) The latest Little Hoover Commission (LHC) report recommends all water & sewer districts prepare for impacts of Climate Change and sea level rise. Though controversial in many circles, it may not keep legislators in Sacramento from forcing the establishment of a “Climate Change” reserve policy. The LHC report cites statistics that each agency should ITEM NO. 9.3. MATERIALS SUBMITTED BY: Brett Barbre MEETING DATE: September 12, 2017 prepare for ocean level rise of up to 66” by 2100 (insert guffaw here). While our facilities will never be directly impacted by such a rise, any modest increase could create a salinity issue in the groundwater basin. We may need to prepare for any impacts. For instance, utilizing a calculation of for every 1% we roll off groundwater and roll onto MWDOC/MWD import supplies, the impact is $100,000. How much should we set aside for any unplanned events which would require the purchase of imported water in lieu of ground water? 5) There has been discussion about expanding our sewer cleaning business to the surrounding communities of Placentia, Brea, La Habra and Fullerton. How much should we set aside in an “opportunity reserve” fund to provide seed monies to purchase new equipment should we obtain new customers for our sewer cleaning crews? ITEM NO. 9.3. MATERIALS SUBMITTED BY: Brett Barbre MEETING DATE: September 12, 2017