HomeMy WebLinkAbout2022-05-12 - Board of Directors Meeting Agenda PacketYorba Linda
Water District
AGENDA
YORBA LINDA WATER DISTRICT
BOARD OF DIRECTORS SPECIAL MEETING
Thursday, May 12, 2022, 3:00 PM
1717 E Miraloma Ave, Placentia CA 92870
1. PARTICIPATION INSTRUCTIONS
Due to the continuing state of emergency declared by the California Governor related to preventing the
spread of Coronavirus (COVID-19), and pursuant to California Government Code Section 54953(e), this
meeting will be facilitated in a hybrid format. As such, Directors and members of the public may choose
to participate in person or by video/teleconference. Information for accessing this meeting by telephone
or internet-based service is provided below. For questions regarding participation, please call the Board
Secretary at (714) 701-3020.
Computer/Mobile Device: https://us06web.zoom.us/m/88214800865
Telephone: (669) 900-6833 or (346) 248-7799
Meeting ID: 882 1480 0865
Live -stream: https://www.ylwd.com/youtube
2. CALL TO ORDER
3. PLEDGE OF ALLEGIANCE
4. ROLL CALL
J. Wayne Miller, PhD, President
Brooke Jones, Vice President
Trudi DesRoches, Director
Phil Hawkins, Director
Tom Lindsey, Director
5. PUBLIC COMMENTS
Any individual wishing to address the Board (or Committee) is requested to identify themselves and state
the matter on which they wish to comment. If the matter is on the agenda, the Chair will recognize the
individual for their comment when the item is considered. No action will be taken on matters not listed on
the agenda. Comments are limited to three minutes and must be related to matters of public interest
within the jurisdiction of the Water District. (GC 54954.3)
6. DISCUSSION ITEMS
This portion of the agenda is for matters that cannot reasonably be expected to be concluded by action
of the Board (or Committee) at the meeting, such as technical presentations, drafts of proposed policies,
or similar items for which staff is seeking advice and counsel. Time permitting, it is generally in the
District's interest to discuss these more complex matters at one meeting and consider formal action at
another meeting. This portion of the agenda may also include items for information only.
6.1. Presentation from Municipal Advisors on Potential Debt Financing
6.2. Summary of Draft Budget for Fiscal Year 2022-23, Analysis of Supplies and
Services, Analysis of Salaries and Related Expenses, Review of Financial
Scenarios and Customer Impact
Page 1 of 43
7. ADJOURNMENT
7.1. A special Board meeting to consider adoption of the budget is scheduled
Tuesday, May 24, 2022 at 6:00 p.m. The next regular Board meeting is
scheduled Tuesday, June 14, 2022. Closed Session (if necessary) will begin at
5:30 p.m. and regular business at 6:30 p.m.
Items Distributed to the Board Less Than 72 Hours Prior to the Meeting-
Non-exempt
eetingNon-exempt materials related to open session agenda items that are distributed to a majority of the Board of
Directors (or Committee Members) less than seventy-two (72) hours prior to the meeting will be available for
public inspection in the lobby of the District's Administrative building located at 1717 E Miraloma Ave, Placentia
CA 92870 during regular business hours. When practical, these materials will also be posted on the District's
website at https://ylwd.com/. (GC 54957.5)
Accommodations for the Disabled
Requests for disability -related modifications or accommodations, including auxiliary aids or services, required for
participation in the above posted meeting should be directed to the Board Secretary at (714) 701-3020 at least 24
hours in advance. (GC 54954.2(a))
Page 2 of 43
Ai* r
FIELDMAN ROLAPP
& ASSOCIATES
EXPERIENCE, INTEGRITY & SERVICE
FIELDMAN, Ro Pp &ASSOCIATES, INC.
YORBA LINDA WATER DISTRICT
BOARD MEETING
Yorba Linda
Water District
May 12th, 2022
Page 3 of 43
YORBA LINDA WATER DISTRICT'S CIP
The District has a need for approximately
$20,000,000 in capital projects and approximately
$10,000,000 to retire the balance on its revolving
fund credit facility
New capital projects are expected to start
construction in August 2022 and be completed by
August 2026
The District's capital reserves contain
approximately $3,800,000
The District may be able to refund its 2012 bonds
simultaneously with issuing its new money bonds
FIELDMAN I ROLAPP Page 4 of 43
& ASSOCIATES g
FEDERAL RESERVE ACTIONS
• On March 16, 2022 the Federal Reserve increased its
short-term rate by 0.25%
• On May 4, 2022, the Federal Reserve increased its
short-term rate by 0.50%
• The Fed is now targeting interest rates in a range
between 0.75% and 1.00%, with some Fed officials
advocating for raising the target closer to 2.5% by the
end of the year and potentially up to 3%
• Generally, the Fed's actions and inflationary pressures
have caused rates to rise
HELDMAN ROLAPP Page 5 of 43
nssoc]A res 9
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HELDMAN I ROLAPP
& ASSOCIATES
OVERVIEW OF US TREASURY &
MUNICIPAL BOND MARKETS
Page 6 of 43
US TREASURY YIELDS JANUARY 3, 2022 -MAY 6, 2022
Historic US Treasury Yields
(January 3, 2022 through May 6, 2022)
3.50
10 -Year UST 30 -Year UST
3.00
2.50
2.00
1.50
1.00
0.50
0.00
oL�
OLS
OLS
00�
O1�
O1�'
O1�
0p
0p
Op
Op
Otis'
Otis'
Otis
Otis
Op
OLS
OLS
FIELDMAN I ROLAPP Page 7 of 43
& ASSOCIATES g
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
HISTORIC CHANGE IN AAN MMD YIELDS
Historic Change in 'AAA' MMD Yields
(April 26, 2017 through May 6, 2022)
'AAA' MMD 10 -Year Yields 'AAA' MMD 30 -Year Yields
0.00
4/26/2017
4/26/2018
4/26/2019
4/26/2020
4/26/2021
4/26/2022
FIELDMAN I ROLAPP Page 8 of 43
& ASSOCIATES g
2
$20,000
$15,000
$10,000
$5,000
$0
($5,000)
($10,000)
($15,000)
($20,000)
($25,000)
($30,000)
($35,000)
($40,000)
($45,000)
MUNI BOND FLOWS
Monthly Flow Into and Out of Municipal Bond Mutual Funds
illiliilli.
� Monthly Inflow / Outflow
3 -Month Moving Average
O O O O O O O O O O O O r+ - c. r+ r+ — N N N N N
N N N N N NN NN N N NN N N N N N N N N N N N N N N NN
„ , ,
Source: ICI Investment Company Institute
FIELDMAN I ROLAPP Page 9 of 43
& ASSOCIATES g
� Monthly Inflow / Outflow
3 -Month Moving Average
O O O O O O O O O O O O r+ - c. r+ r+ — N N N N N
N N N N N NN NN N N NN N N N N N N N N N N N N N N NN
„ , ,
Source: ICI Investment Company Institute
FIELDMAN I ROLAPP Page 9 of 43
& ASSOCIATES g
YLWD ESTIA-IATED DEBT PROFILE*
$6,000,000
$5,000,000
00,00J�IIIIIIIIIII���
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16V o6v otic' 1b A 6V 6V otic otic o'5° 1'5 1'5 1'5 ('5 6b 1"5 1"5 o'55 ':: -05 o°° o°ti 'Z� 'Z� o°° Q° e o°�
o�ti o�ti o�ti o�ti o�ti o�ti o�ti o�ti o�ti o�ti o�ti o�ti o�ti o�ti o�ti o�ti o�ti o�ti o�ti o�ti o�ti o�ti o�ti o�ti o�ti o�ti o�ti o�ti o�ti o�ti o�ti
■ Series 2022 Revenue Bonds ■ Series 2012A Refunding Revenue Bonds ■ Series 2017A Revenue Bonds
*Preliminary, subject to change. Based on market conditions as of May 9, 2022.
FIELDMAN I ROLAPP Page 10 of 43
& ASSOCIATES g
PROPOSED SCHEDULE
Week of Monday, May 9, 2022 Board Meeting Presentation
Week of Monday, May 16, 2022
Distribution of 1 st draft legal documents and District section of
POS
Tuesday, May 24, 2022
Board Approval of Underwriter
Week of Monday, June 20, 2022
Distribute first full draft of POS
Monday, July 4, 2022
July 4th Holiday
+/- Tuesday, July 12, 2022
Rating Call @ TBD
Monday, July 25, 2022
Credit Ratings received
Tuesday, July 26, 2022
Board Meeting to approve legal documents and the POS
Tuesday, August 9, 2022
Bond Pricing Conference Call TBD
Thursday, August 18, 2022
Closing and receipt of funds
FIELDMAN I ROLAPP Page 11 of 43
& ASSOCIATES g
DISCLAIMER
These materials include an assessment of current market conditions, and include
assumptions about interest rates, execution costs, and other matters related to
municipal securities issuance or municipal financial products. These assumptions
may change at any time subsequent to the date these materials were provided.
The refinancing and refunding scenarios presented herein are not intended to be
inclusive of every feasible or suitable refinancing alternative.
Fieldman, Rolapp & Associates, Inc. is an SEC -registered Municipal Advisor, and
undertaking a fiduciary duty in providing financial advice to the Yorba Linda
Water District only. Compensation contingent on the completion of a financing
or project is customary for municipal financial advisors. To the extent that our
compensation for a transaction is contingent on successful completion of the
transaction, a potential conflict of interest exists as we would have a potential
incentive to recommend the completion of a transaction that might not be
optimal for the public agency. However, Fieldman, Rolapp & Associates, Inc.
undertakes a fiduciary duty in advising public agencies including the Authority
regardless of compensation structure.
FIELDMAN ROLAPP Pae 12 of 43
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HELDMAN I ROLAPP
& ASSOCIATES
OVERVIEW OF BOND ISSUANCES
Page 13 of 43
WHAT ARE BONDS?
Municipal bonds are a type of security issued to the public capital
market to many investors (not just one financial institution i.e.
commercial bank)
✓ Issue is divided into different maturities and interest rates (i.e. 1-30 year
maturities) to appeal to various investor types
Municipal governments that issue bonds receive a cash payment at the
time of issuance in exchange for a promise to repay investors
principal plus interest over time
✓ Bonds used to finance long-term municipal infrastructure projects are
typically repaid over 20-30 years (match useful life of the asset to term of
bonds)
Accessing the capital markets generally results in getting the lowest
cost of capital for projects of size
Bonds are repaid through a pledge of revenue received from
providing services (i.e. the maintenance and operation of the water
system)
FIELDMAN I ROLAPP Page 14��Sf 43
& ASSOCIATES g
HOW WILL THE BONDS BE ISSUED?
Rating Agency's (i.e. S&P, Fitch and Moody's) provide a credit rating on bonds issued in the public
capital market
✓ Rating process is a thorough examination of many factors and is a report card of how an agency's
financial results match up against its peers — describes the ability of the special district to repay debt
✓ Highest offered rating is "AAA" which offers the best possible (lowest) yields in the market
Finance team works together to make the Bonds credit -worthy and marketable
Legal documentation outlines the (limited) rights of the bondholders and the mechanics for
repayment; team aids District to disclose information on the credit to potential investors
Yorba Linda Water District may offer to investors through an investment bank
Bonds
Municipal advisor carefully monitors pricing at time of sale.
> Retail Investors
Bond Funds
> $ > Insurance Companies
— Underwriter manages the sale of the Bonds to investors
— Underwriter will offer Bonds at certain prices on a maturity -by -maturity basis based on investor demand
— If less than 100% of bonds are sold, underwriter typically underwrites a portion of the bonds
FIELDMAN I ROLAPP Page 1 d>f 43
& ASSOCIATES 9
Bond Counsel
Prepares legal documentation, (Installment
Sales Agreement, Indenture) resolutions,
provides the validity opinion letter for
bond issuance and that the Bonds are
exempt from Federal income taxes.
Financial Advisor
Has fiduciary relationship with issuer; provides
advice on structure and mechanics of
YL1 1 � 1 , transaction. Reviews legal documentation,
WPreliminary and Final Official Statements;
Water District manages transaction flow; manages rating
agency process, including creation of credit
presentation; represents District during
pricing process.
Disclosure Counsel
Prepares the Preliminary and final Official
Statements. POS and OS provide details of
District, e.g. financial results, forecast,
customers, etc., and other material
information for investors to make an
informed decision to buy or not to buy.
BENEFITS OF BOND FINANCING
Generally, using cash to fund long-term capital infrastructure is impractical as it requires
increasing rates well in advance of expenditures and investing cash to maintain pace with
inflation
Using bonds to fund large capital projects allows the repayment period of the debt to
equal the useful life of the project (infrastructure projects benefit current and future rate
payers)
✓ Current rate payers do not feel the burden of replenishing cash reserves to keep up with policies
and inflation
✓ Future rate payers share the debt cost of funding larger capital projects
Pros
Avoids negative arbitrage
No interest expense
No interest rate risk
HELDMAN I ROLAPP
& ASSOCIATES
Cons
Depletes reserves; must
maintain policy levels
Lose operational and
liquidity flexibility
Must fund project costs
(including inflation) in
advance of expenditures
Pros
Cons
Inter -generational equity Added interest expense
Lock in current interest
rates
More affordable and
stable water rate
structure
Market risk
Annually meet bond
covenants
Page 17 of 43
Yorba Linda
Water District
Page 18 of 43
Response to Directors' Requests For
Additional Information/Detail/Analysis
• Supplies &Services—Analysis
• 10% Reduction in Water Sales
• Salary Related Expenses Detail
• Sewer Analysis
• Summary of FY2022-23 Budget
• Effect on Customer Bills
05/12/2022
FMMM=,
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Page 19 of 43
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Page 20 of 43
PriorYear FY2020-21to FY2021-22 Projections
Supplies & Services - Maintenance
This analysis is for the maintenance expense account from FY2020-21 PriorYear Actuals to FY2021-22 Projections.
Listed below are items that present the most impact on the increase.
Maintenance
Expense Item
Gardenia Reservoir
Lakeview Reservoir
Fairbury Waterline Abandonment
Well 11 Abandonment
Well 15 Abandonment
City of Yorba Linda & Placentia Pavement
Program [Cost Increase]
Camino De Bryant - Asphalt Paving
s Increased by $775,400
Increased by 97%
Amount
Comment
$
22,000
Grading and drainage improvements to address slope failure issue.
$
66,000
Geotechnical evaluation, monitoring and repairs at the reservoir site
$
90,000
$
60,000
$
40,000
$
128,000
$
57,000
Heli -Hydrant Camino De Bryant paving was re-evaluation as expense,
not capitalized.
Leak Detection Program $ 30,000
Emergency Main Break Repair on Esperanza $ 55,000
Painting & Fencing [Cost Increase] $ 212,000
05/12/2022 Page 21 of 43 4
FY2021-22 Projections to FY2022-23 Budget
Supplies & Services - Summary
Prior Year Projected Budget $ VAR Projected % VAR Projected
FY2020-21 FYE2021-22 FY2022-23 FY22to Budget FY22to Budget
FY23 FY23
Communications $ 164,667 $ 140,985 $ 193,000 $ 52,015 37%
Contractual Services 715,712 551,996 614,039 62,043 11%
Data Processing 311,867 322,529 416,614 94,085 29%
Dues & Memberships 87,809 103,366 97,522 (5,844) -6%
Fees & Permits 362,049 441,182 467,990 26,808 6%
Board Election - - 137,000 137,000 -
Insurance 274,975 284,869 434,590 149,721 53%
Materials 719,502 714,317 1,001,300 286,983 40%
District Meetings & Events 24,032 34,995 45,500 10,505 30%
Maintenance 800,875 1,576,275 1,509,900 (66,375) -4%
Non Capital Equipment 197,846 167,579 204,300 36,721 22%
Office Expense 39,758 41,817 42,300 483 1%
Professional Services 1,025,746 1,385,819 1,713,760 327,941 24%
Professional Development 35,858 45,362 83,150 37,788 83%
Travel & Conferences 10,247 43,529 102,780 59,251 136%
Uncollectible Accounts 15,906 11,337 10,000 (1,337) -12%
Utilities 202,963 171,510 224,000 52,490 31%
Vehicle Expenses 469,611 408,341 538,550 130,209 32%
PFAS - 611500 1,422,000 1,360,500 2212%
$ 5,459,423 $ 6,507,308 $ 9,258,295 $ 2,750,987 42%
05/12/2022 Page 22 of 43 5
Supplies & Services Analysis
This analysis will be the expense accounts that are increasing over s5o,000 from FY2021-22 Projections to FY2022-23
Budget. Each expense account will be represented individually with a list of items that present the most impact on the
increase.
Communications $ Increased by $52,015 % Increased by 37%
Expense Item Amount Comment
Water Conservation Communications Program $ 40,000 Moved from Engineering professional services to Public Communications.
Sponsorship Fees [Cost Increase] $ 10,000
Contractual Services s Increased by 662,043 % Increased by 11%
Expense Item
Janitorial Service [Cost Increase]
Landscape Service [Cost Increase]
05/12/2022
Amount Comment
$ 30,000 A new contract will be bid on in FY2022-23 and is estimated to have an
increase in cost from current contract.
A new contract will be bid on in FY2022-23 and is estimated to have an
$ 40,000 increase in cost from current contract. Additional landscape service at
Lakeview Reservoir Slope Stabilization.
Page 23 of 43 6
Supplies & Services Analysis Cont.
Data Processing
$ Increased by $94,085
Expense Item Amount
New GIS Parcel Data Software $ 3,000
New GIS Aerial Image Software $ 20,000
SCADA Alarm Software $ 6,000
Microsoft 365 Licenses $ 45,000
Additional Dell Support $ 5,000
Board Election
Insurance
Increased by 29%
Comment
New Engineering Software (Annual)
New Engineering Software Update to increase efficiency of GIS and
Cityworks programs.
New software for entire district. This allows for increased security,
efficiency and compatibility with our system.
$ Increased by $137,000 Estimates from OC ROV is $112k - $161k
$ Increased by $149721
% Increased by 53%
Expense Item Amount Comment
ACWA-JPIA Liability Insurance [Cost Increase] $ 72,000 Premium rates have increased.
ACWA-JPIA Property Insurance [Cost Increase] $ 39,000 Property insurance increase due to the PFAS Treatment Plant.
ACWA-JPIA Cybersecurity Insurance $ 42,000
05/12/2022 Page 24 of 43 7
Supplies & Services Analysis Cont.
materials
Expense Item
Replacement Meters
Replacement Registers
Replacement MXU
Methane Sensors (5)
Work on Flow Meters
Salt Materials [Cost Increase]
Professional Services
Expense Item
Water Master Plan
Decrease in Legal Services
s Increased by $286,983 % Increased by 40%
Amount Comment
YL
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Grant program ended, meters will be replaced as maintenance. Prior years
$ 75,000 totals will give a comparative amount (FY18 $147k) (FY19 $193k).
Grant program ended, meters registers will be replaced as maintenance.
$ 86,000 prior years totals will give a comparative amount (FY18 $Ok) (FY19 $42k).
$ 28,000 Grant program ended, meters MXU's will be replaced as maintenance. Prior
years totals will give a comparative amount (FY18 $8k) (FY19 $113).
$ 10,000 Methane sensors at Booster Stations have failed and need replaced.
$ 16,000 Instrumentation and controls related work for Well sites.
$ 25,000 Groundwater production increased from FY22. Amount is on trend from
prior years.
s Increased by $327941
Increased by 24%
Amount Comment
$ 550,000 Removed from FY2021-22 Projections and moved to FY2022-23 Budget.
$ (165,000)
05/12/2022 Page 25 of 43 8
Supplies & Services Analysis Cont.
Travel & Conferences
$ Increased by $59,251
Expense Item Amount Comment
See Travel & Conferences Detail in Future Slide
Utilities
Increased by 136%
$ Increased by $52,490 % Increased by 31%
Expense Item Amount Comment
Power [Cost Increase] $ 52,490 Edison cost increase of 12% and increase in cost of Gas.
Vehicle Expenses $ Increased by $130,209 % Increased by 32%
Expense Item Amount Comment
Diesel [Cost Increase] $ 10,000 We estimated diesel prices going from $3.50/gallon to $5.50/gallon.
Gas [Cost Increase] $ 50,000 We estimated gas prices going from $3.50/gallon to $5.50/gallon.
Stationary Engine Maintenance [Cost Increase] $ 50,000
As Wells production will increase, more maintenance will be required on
stationary equipment.
Water Vehicle Maintenance [Cost Increase] $ 15,000 Increases are being realized for vehicle maintenance.
05/12/2022 Page 26 of 43 9
Travel & Conference
Board of Directors
Board of Directors
ACWA Semi -Annual Conferences (2)
AWWA Annual Conference (2)
CA -NV AWWA Annual Conference (2)
CASA Semi -Annual Conferences (1)
Other Conferences and Workshops
UWI Semi -Annual Conferences (2)
CRWUA Annual Conference (2)
ISDOC Quarterly Meetings (5)
OCWA Monthly Meetings (3)
Legislative Meetings
Meeting Mileage
Finance
Finance Admin
Gov't Tax Update (2)
CALPERS (2)
FY2022-23
Budget Priority
4,000
4,800
3,700
4,150
1,000
4,700
2,500
400
1,100
4,000
2,000
32,350
FY2022-23
Budget Priority
900 1
1,000 1
1,900
05/12/2022 Page 27 of 4310
FY2022-23
Accounting
Budget
Priority
GFOA
1,500
1
CalPERS (2)
500
1
CMTA
1,500
1
CSM FO
1,500
1
5,000
05/12/2022 Page 27 of 4310
Travel & Conference
Administration
05/12/2022
FY2022-23
Records Management Budget Priority
ARMA InfoCon (2) 1,100 1
Laserfiche Empower (2) 4,000 2
Other Conferences and Workshops 400 3
5,500
Page 28 of 43
11
FY2022-23
Administration
Budget
Priority
ISDOC Quarterly Meetings (2)
160
1
OCWA Monthly Meetings (2)
720
1
Meeting Mileage
500
1
Legislative Meetings (2)
4,000
2
ACWA Semi -Annual Conferences (2)
4,000
2
Other Conferences and Workshops
3,000
3
CRWUA Conference (2)
2,500
3
MMC Academy (1)
1,600
3
CSDA Board Secretary/Clerk Conference (1)
2,000
3
CA -NV AWWA Annual Conference (2)
3,700
3
UWI Semi -Annual Conferences (2)
4,700
3
CASA Semi -Annual Conferences (1)
4,150
3
31.030
05/12/2022
FY2022-23
Records Management Budget Priority
ARMA InfoCon (2) 1,100 1
Laserfiche Empower (2) 4,000 2
Other Conferences and Workshops 400 3
5,500
Page 28 of 43
11
FY2022-23
Public Communications
Budget
Priority
Legislative Advocacy - Sacramento (5 Trips)
5,400
1
ACWA Fall Conference
2,000
2
OCBC Sacramento
1,500
2
ACCOC Sacramento
1,500
2
Urban Water Institute Conference
1,100
2
11,500
05/12/2022
FY2022-23
Records Management Budget Priority
ARMA InfoCon (2) 1,100 1
Laserfiche Empower (2) 4,000 2
Other Conferences and Workshops 400 3
5,500
Page 28 of 43
11
Travel & Conference
Human Resources
FY2022-23
Human Resources Budget Priority
Liebert Cassidy Whitmore (LCW) Conference (2) 4,000 1
FY2022-23
Risk Management Budget Priority
Public Agency Risk Management Assoc. (PARMA) 2,500 1
NEOGOV Annual Conference (1) 2,000 2 NEOGOV Annual Conference (1) 2,000 2
6,000 4,500
Engineering
FY2022-23
Engineering Budget Priority
Water Education Seminar (4) 1,000 1
Cal -Nevada AWWA Conference (3) 1,500 2
Operations
FY2022-23
Operations Budget Priority
Tri-State Conference (3) 2,500 1
2,500
05/12/2022 Page 29 of 4312
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Page 30 of 43
Financial Summary Consolidated
Zo%Reduction in Water Sales
Proposed
Revenue Budget
FY2022-23
Revenue (Operating) $ 42,260,299
Revenue (Non -Operating) 5,998,767
Total Revenue $ 48,259,066
Rate Study Assumptions
$ 46,560,875
4%
10% Reduction in Demand
Budget
FY2022-23
$ 40,193,945
5,998,767
$ 46,192,712
$ 46,560,875
_1%
Consumption 7,159312
Reduction
in Revenue
$z,o66,354
Expenses
$ 5,628,003
$ 5,156,096
Expenses (Operating):
-
-
Variable Costs
$ 17,686,074
$ 16,091,627
Reduction
Salary Related Expenses
13,231,809
13,231,809
Demand 17,504.3
Supplies & Services
9,258,295
9,258,295
$471,907
Expenses (Non -Operating)
2,454,885
2,454,885
Reduction
Total Expenses
$ 42,631,063
$ 41,036,616
_ in Expense
Rate Study Assumptions
$ 38,222,320
$ 38,222,320
Variance %
12%
7%
$1,594,447
Net Position Before Capital Contributions &
Depreciation
$ 5,628,003
$ 5,156,096
Capital Contributions
-
-
Depreciation
9,500,000
9,500,000
Reduction
Total Net Income (Loss)
$ (3,871,997)
$ (4,343,904)
in Net
Debt Service
$ 3,686,750
$ 3,686,750
$471,907
Ratio
1.96
1.84
Per Policy
2.25
2.25
05/12/2022 Page 31 of 4314
W
N,'/' Salary Related 1
Expenses Detail
Salary Related Expenses Detail
2021 Rate Study Assumptions
FY2020-21 FY2021-22 FY2022-23
Salary Related - Water
$
10,156,647
$
11,893,405
$
12,770,939
Salary Related - Sewer
1,738,874
2,041,083
2,191,322
$
11,895,521
$
13,934,488
$
14,962,261
Salaries & Related
Expenses Detail
Prior Year
Projected
Budget
FY2020-21
FY2021-22
FY2022-23
Salaries
$
7,223,556
$
7,608,005
$
8,386,138
Mandatory Benefits
2,222,836
1,778,580
2,633,869
Fringe Benefits
1,501,503
2,516,175
2,211,802
$
10,947,895
$
11,902,760
$
13,231,809
Variance from Assumptions
Rate Study Assumptions
$
(947,626)
$
(2,031,728)
$
(1,730,452)
Variance %
-8%
-15%
-12%
*Amounts include the labor for capital projects which is capitalized.
05/12/2022 Page 33 of 4316
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Page 34 of 43
Financial Summary Sewer —
9% Rate Increase
Revenue
Revenue (Operating)
Revenue (Non -Operating)
Total Revenue
Proposed 15% Rate Increase
Budget
FY2022-23
$ 3,788,399
69,995
$ 3,858,394
9% Rate Increase
Budget
FY2022-23
$ 3,595,185
69,995
$ 3,665,180
Rate Study Assumptions $ 3,668,273 $ 3,668,273
Variance % 5% 0.2%
Expenses
Expenses (Operating):
Salary Related Expenses
Supplies & Services
Expenses (Non -Operating)
Total Expense
Rate Study Assumptions
Variance %
$ 1,872,417
1,155,882
5,785
$ 3,034,084
$ 1,872,417
1,337,720
5,785
$ 3,215,922
$ 3,228,163 $ 3,228,163
-6% 0%
Net Position Before Capital Contributions &
Depreciation $ 824,310 $ 452,351
I CIFJIICII l U[ Ill IIJUIIUI IJ - -
Depreciation 1,495,000 1,495,000
Total Net Income (Loss) $ (670,690) $ (1,045,742)
05/12/2022
Reduction
in Revenue
$193214
Reduction
in Expense
$O
Reduction
in Net
$193214
Page 35 of 43
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Page 36 of 43
Various Customer Bills
Customer #1 @ 4 Units
$
72.70
$
79.27
$
79.35
$
79.85
$
79.93
Customer #2 @ 9 Units
$
85.90
$
93.67
$
93.85
$
94.25
$
94.43
Customer #3 @ 12 Units
$
93.82
$
102.31
$
102.55
$
102.89
$
103.13
Customer #3 @ 18 Units
$
109.66
$
119.59
$
119.95
$
120.17
$
120.53
Customer #4 @ 23 Units
$
122.86
$
133.99
$
134.45
$
134.57
$
135.03
Customer #5 @ 29 Units
$
138.70
$
151.27
$
151.85
$
151.85
$
152.43
Customer #6 @ 55 Units
$
207.34
$
226.15
$
227.25
$
226.73
$
227.83
05/12/2022 Page 37 of 43 20
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FY2022-23 FY2022-23 FY2022-23 FY2022-23
Billing
# of Units (12 mo. Avg) w/ 9% Wtr & w/ 9% Wtr & w/ 9% Wtr & w/ 9% Wtr &
Monthly Bill w/ CFC 9% Swr Adj 9% Swr Adj 15% Swr Adj 15% Swr Adj
Plus $0.02 Pass -Through Plus $0.02 Pass -Thi
FY2022-23
FY2022-23
FY2022-23
FY2022-23
Billing
# of Units (12 mo. Avg)
w/ 9% Wtr &
w/ 9% Wtr &
w/ 9% Wtr &
w/ 9% Wtr &
9% Swr Adj
9% Swr Adj
15% Swr Adj
15% Swr Adj
Monthly Bill w/ CFC
Plus $0.02 Pass -Through
Plus $0.02 Pass-Thro
PME=q
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Page 39 of 43
Financial Summary - Consolidated
Prior Year Projected Budget
Revenue FY2020-21 FYE2021-22 FY2022-23
Revenue (Operating) $ 39,250,600 $ 38,426,328 $ 42,260,299
Revenue (Non -Operating) 3,568,724 5,784,790 5,998,767
Total Revenue $ 42,819,324 $ 44,211,118 $ 48,259,066
Rate Study Assumptions $ 39,720,066 $ 43,727,333 $ 46,560,875
Variance % 8% 1% 4%
Expenses
Expenses (Operating):
Variable Costs $ 18,638,471 $ 20,766,799 $ 17,686,074
Salary Related Expenses 10,947,895 11,902,760 13,231,809
Supplies & Services 5,459,423 6,507,308 9,258,295
Expenses (Non -Operating) 2,153,233 1,268,928 2,454,885
Total Expenses $ 37,199,022 $ 40,445,795 $ 42,631,063
Rate Study Assumptions $ 36,725,574 $ 39,170,380 $ 38,222,320
Variance % 1% 3% 12%
Net Position Before Capital Contributions &
Depreciation $ 5,620,302 $ 3,765,323 $ 5,628,003
Capital Contributions 2,051,988 8,966 -
Depreciation 7,858,355 8,769,648 9,500,000
Total Net Income (Loss) $ (186,065) $ (4,995,359) $ (3,871,997)
05/12/2022 Page 40 of 43 �3
Financial Summary -Water
Prior Year Projected Budget
Revenue FY2020-21 FYE2021-22 FY2022-23
Revenue (Operating) $ 36,374,319 $ 35,120,509 $ 38,471,900
Revenue (Non -Operating) 3,459,038 5,588,271 5,928,772
Total Revenue $ 39,833,357 $ 40,708,780 $ 44,400,672
Rate Study Assumptions $ 36,914,814 $ 40,519,621 $ 42,892,602
Variance % 8% 0% 4%
Expenses
Expenses (Operating):
Variable Costs $ 18,638,471 $ 20,766,799 $ 17,686,074
Salary Related Expenses 9,389,188 10,174,107 11,359,392
Supplies & Services 4,465,134 5,486,003 8,102,413
Expenses (Non -Operating) 2,137,203 1,256,936 2,449,100
Total Expenses $ 34,629,996 $ 37,683,845 $ 39,596,979
Rate Study Assumptions $ 33,630,572 $ 36,113,679 $ 34,994,157
Variance % 3% 4% 13%
Net Position Before Capital Contributions &
Depreciation $ 5,203,361 $ 3,024,935 $ 4,803,693
Capital Contributions 1,297,379 8,966 -
Depreciation 6,380,976 7,282,836 8,005,000
Total Net Income (Loss) $ 119,764 $ (4,248,935) $ (3,201,307)
Debt Service $ 2,729,381 $ 2,728,919 $ 3,686,750
Ratio 2.38 1.57 1.96
Per Policy 2.25 2.25 2.25
05/12/2022 Page 41 of 43�4
Financial
Summary - Sewer
Prior Year
Projected
Budget
Revenue
FY2020-21
FYE2021-22
FY2022-23
Revenue (Operating)
$ 2,876,281
$
3,305,819
$
3,788,399
Revenue (Non -Operating)
109,686
196,519
69,995
Total Revenue
$ 2,985,967
$
3,502,338
$
3,858,394
Rate Study Assumptions
$ 2,805,252
$
3,207,712
$
3,668,273
Variance %
6%
9%
5%
Expenses
Expenses (Operating):
Salary Related Expenses
$ 1,558,707
$
1,728,653
$
1,872,417
Supplies & Services
994,289
1,021,305
1,155,882
Expenses (Non -Operating)
16,030
11,992
5,785
Total Revenue
$ 2,569,026
$
2,761,950
$
3,034,084
Rate Study Assumptions
Variance %
Net Position Before Capital Contributions &
Depreciation
$ 3,095,002 $ 3,056,701 $ 3,228,163
-175vo -10% -6%
$ 416,941 $ 740,388 $ 824,310
Capital Contributions 754,609 - -
Depreciation 1,477,379 1,486,812 1,495,000
Total Net Income (Loss) $ (305,829) $ (746,424) $ (670,690)
�YL
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05/12/2022 Page 42 of 43 25
5 -Yr CIP FY23 Budget
PROJECT NAME
Hidden Hills BPS Upgrades
Timber Ridge BPS Pump Replacement
Well 22 Equipping
BNSF Crossing -Weir Canyon / YL Blvd
BNSF Crossing -Veteran's Village and Highland
Resiliency Improvements to District Facilities (AWIA)
Site and Security Upgrades at District Facilities (AWIA)
Well Rehabilitation Project
Lakeview BPS Piping
Waterline Replacement *Based on AMP and Leak History
PRS Rehabilitation Project *Based on AMP and Asset Scores
Golden Ave Waterline
Santiago BPS Rehab
Well 23 Drilling & Equipping
Total Water CIP $
Main Street and YL Pines Sewer
Green Crest Lift Station Rehab
Sewer System Rehabilitation and Replacement Project
Buena Vista Sewer Main Improvements
CAPITAL OUTLAY
Network Redesign
Records Scanner
Operations Department
05/12/2022
Total Sewer CIP $
FY2022-23
1,407,603
4,199,550
1,901,208
134,655
1,975,557
330,000
10,000
9,958,573 $
813,000
813,000 $
FY2023-24
1,399,850
220,000
220,000
165,000
2,877,600
803,100
266,805
1,819,070
1,734,900
9,506,325 $
396,000
396,000 $
FY2024-25
275,000
275,000
165,000
1,210,000
1,320,000
2,705,000
5,950,000 $
385,500
r'TLVL7-LO
275,000
275,000
165,000
1,210,000
1,320,000
3,245,000 $
440,000
385,500 $ 440,000 $
FY2026-27
275,000
275,000
165,000
1,210,000
1,320,000
3,245,000 $
1,130,500
1,130,500 $
CIP Total $
10,771,573 $
9,902,325 $
6,335,500 $
3,685,000 $
4,375,500
$ 35,069,898
FY23
FY24
FY25
FY26
FY27
TOTAL
30,000
-
-
-
-
30,000
8,000
-
-
-
-
8,000
1,725,000
516,000
505,000
710,000
820,000
41276,000
Outlay Total $
1,763,000 $
516,000 $
505,000 $
710,000 $
820,000
$ 4,314,000
Grand Total $
12,534,573 $
10,418,325 $
6,840,500 $
4,395,000 $
5,195,500
$ 39,383,898
Page 43 of 43
26
BACKUP MATERIALS DISTRIBUTED LESS THAN 72 HOURS PRIOR TO THE MEETING
Yorba Linda Water District
Current Outstanding Debt
Outstanding Maturity
Issuance Principal Interest Rate Year
Refunding Revenue Bonds, Series 2012A
Revenue Bonds, Series 2017A
$20M Revolving Line of Credit - B of A
anticipate to borrow up to $10M
"Fixed Rate" means an annualized fixed
rate, for the applicable Interest Period
(rounded upward to the fourth decimal
place) that is equal to the sum o£ (i) the
product of (x) the Applicable Factor and
(y) the LIBOR Rate (Fixed) for the
applicable Interest Period, and (ii) the
Applicable Margin; provided, however
that immediately and upon the occurrence
of an Event of Default (and without any
notice given with respect thereto) and
during the continuation of such Event of
Default, "Fixed Rate" shall mean the
Default Rate.
$ 5,975,000 2.86% 2034
$ 25,805,000 3.20% 2039
$ 4,543,751 1 Month LIBOR May 2023
Avg at 0.5%
MATERIALS SUBMITTED BY: Delia Lugo
MEETING DATE: May 12, 2022
"LIBOR Rate (Fixed) " means, for any
Interest Period with respect to a Fixed
Rate Revolving Loan, a rate per annum
equal to the London Interbank Offered
Rate, or a comparable or successor rate
which rate is approved by the Lender, as
published on the applicable Bloomberg
screen page (or such other commercially
available source providing such quotations
as may be designated by the Lender from
time to time) at or about 11:00 a.m.,
London time, two London Banking Days
prior to the commencement of such
Interest Period, for Dollar deposits (for
delivery on the first day of such Interest
Period); provided that (i) to the extent a
comparable or successor rate is approved
by the Lender in connection herewith, the
approved rate shall be applied in a manner
consistent with market practice; provided,
further that to the extent such market
practice is not administratively feasible for
the Lender, such approved rate shall be
applied in a manner as otherwise
reasonably determined by the Lender and
(ii) if the LIBOR Rate (Fixed) shall be less
than zero, such rate shall be deemed zero
ITEM NO. 6.1.