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Home My WebLink About2023-01-19 - Board of Directors Meeting Agenda PacketYorba Linda Water District AGENDA YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS WORKSHOP MEETING Thursday, January 19, 2023, 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/*/89558956652 Telephone: (669) 900-6833 or (346) 248-7799 Meeting ID: 895 5895 6652 2. CALL TO ORDER 3. PLEDGE OF ALLEGIANCE Brett R. Barbre, President Trudi DesRoches, Vice President Phil Hawkins, Director Tom Lindsey, Director J. Wayne Miller, PhD, 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. Board of Directors Goals and Objectives for Fiscal Year 2023-24 Budget 7. ADJOURNMENT 7.1. The next regular Board meeting is scheduled Thursday, February 2, 2023 at 3:00 p.m. Items Distributed to the Board Less Than 72 Hours Prior to the Meeting Non-exempt materials related to open session agenda items that are distributed to a majority of the Board of Directors (or Committee Members) less than seventy-two (72) hours prior to the meeting will be available for Page 1 of 11 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://vlwd.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 11 ITEM NO. 6.1. Yorba Linda Water District AGENDA REPORT MEETING DATE: January 19, 2023 TO: Board of Directors FROM: Mark Toy, General Manager STAFF CONTACTS: Delia Lugo, Finance Manager SUBJECT: Board of Directors Goals and Objectives for Fiscal Year 2023-24 Budget SUMMARY: Staff will present and discuss the attached slide deck. ATTACHMENTS: 1. Slide Deck Page 3 of 11 YLWD Goals B — Ensure Fiscal Responsibility 2 - Stay Within Operating Budget oard of irectors Goals sand Objectives r FY 2023-24 Aerating udget Yorba Linda Water District het Workshop Meeting ary 19, 2023 Budget Workshop Meeting #1 Budget Process This Budget Workshop is for the Board of Directors to provide goals and objectives to serve as the guidelines for staff to develop the District's FY 2023-24 Annual Operating and Capital Improvement Budget. Key Points of Discussion: • Budget Development Calendar • 2021 Rate Study Assumptions and proposed annual rate adjustments • Impact of inflationary pressures on cost of supplies and materials • Annual debt service obligations — Revenue Bonds, Series 2022A • Key factors that may impact development of budget • Discussion on need to update 2021 Rate Study Water Fund Model • Compensation Survey in progress • New Successor Memorandum of Understanding (Labor Negotiations) Budget Workshop Meeting #1 Ry F�EBRUA R r RCfi PRft Wednesday, January 4, 2023 Monday, January 16, 2023 Thursday, January 19, 2023 Wednesday, January 25, 2023 Wednesday, February , 2023 Monday, February 13, 2023 Wednesday, February 15, 2023 Thursday, February 16, 2023 Wednesday, February 22, 2023 Wednesday, March 1, 2023 Wednesday, March 6, 2023 M orday, M arch 13, 2023 Thursday, March 16, 2023 Wednesday, March 22, 2023 Tuesday, Apri14, 2023 Wednesday, Apri 15, 2023 Monday, April 17, 2023 Thursday, April 20, 2023 Wednesday, April 26, 2023 Wednesday, May 3, 2023 Wednesday, May 10, 2023 Monday, May 15, 2023 Thursday, May 16, 2023 Wednesday, May 24, 2023 Tuesday, May 30, 2023 Monday, June 5, 2023 Thursday, June 15, 2023 Draft Budget Calendar F YJIIJ:i 14 ANNUAL OPERA 1IN(:CAPFTAL BU MET DEVELOPMENT • CALENDAROFKEYE VE N15 Staff Meeting E �ecutive Staff Budget Work shop Staff Meeting ErgfOps Managers E �ecutive Staff Staff Meeting Budget Work shop StaffMeeting Departmert Managers Staff Meeting E �ecutive Staff Budget Work shop Staff Meeting HR and Dept Managers Staff Meeting E �ecutive Staff Budget Work shop Staff Meeting Departmert Managers Staff Meeting E �ecutive Staff Budget WorkshopMearing Staff Meeting Department Managers Distribute FY 2023-24 Budget Development Packages to Departmert Managers Discussion on budget development processes M eeting v -Ah BOD to establi sh goals and object ves far F Y 2023-24 Annual operating and C apital B udgets Status updates on departrnert#ogram budget developmert FY2023-24 CIP. Capital Outlayand Vari able CostBudgets CV 1.0)due taFinance Update on Budgeted Positions and Draft SalaryP rojecti ons for FY 2023-24 Status updates on departrnert#ogram budget developmert P resent D raft F Y 2023-24 C IP, C apital Outlay, and Vari able C ost Budgets (V 1 ld) Status updates on F Y 2023-24 department and program budgets FY2023-24 Operating Re%enue and Department Supplies & Services Budgets due to Finance (V 1 JD) Status updates on F Y 2023-24 department and program budgets Update on key componerts of FY2023-24 Annual Operating and CIP Budget P resent Draft FY2023-24 Operating Re%enue and Supplies & Ser%ices Budgets 1 .0) and Other Key Updates (V 210) Discussion on FY2023-24 Budget updates and Department Performance Measuremerts ( V 1 .0) Drat Salaries and Related Expense Budget (V1 10) and other key updates due to Finance Update on key componerts of FY2023-24 Annual Operating and CIP Budget Discussion on k ey com ponerfts of FY 2023-24 Annual Operating and CIP Budget P resent Draft FY2023f24 Salaries and Related Expense Budget (V 1 JD) and Other Key Updates (V 3.0) Update on key componerts of FY2023-24 Annual Operating and CIP Budget Keyupdates for FY2023-24Annual Operatirg and CIP Budget due to Finarce Over%iewon presentation ofFY2023-24 Annual Operatrg and CIP Budget to Board of Directors Discussion on k ey com porents of FY 2023-24 Annual Operating and CIP Budget P resent F Y2023-24 Annual Operat ng and CIPBudget (Draft Final 4JD) toBoard ofDirectorstrAdopt onGOAL Disco -cion on k ey com porents of FY 2023-24 Annual Operating and CIP Budget Keyupdates for FY2023-24Annual Operating and CIP Budget due to Finance D epartment Managers * F i nal Key updates for F Y2023-24 Annual Operatgand CIPBudget due toFinance BudgetWorkshopHearing* Present FY2023f24Operating and CIPBudget(Final Draft 5.0)for BoardofDirector Appro%al •Aackfonaf rrr oUngsshoulddl o FY2023-F4At7mof O�mfobfnl ofidCW rfackief fm 6vad'opodanmay 10, 2023. Page 6 of 11 2021 Rate Model Assumptions Variable Costs Power Electricity Gas Fixed Water Supply Costs OCWD Annexation MWDOC Connection Fee MWDOC Capacity Fee MWDOC Readiness -to -Serve Variable Water Supply Costs OCWD RA MWD Treated (Jul -Dec) MWD Treated (Jan -Jun) Page 7 of 11 FY21 Rate Study Assumptions Projected Assumptions 2023 2024 2023 2024 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 3.0% 3.0% 2.0% 2.0% 2.0% 2.0% 3.0% 3.0% 7.0% 7.0% 3.0% 3.0% 8.0% 6.0% 3.0% 3.0% 8.0% 6.0% $ 507 $ 517 $ 558 $ 587 $ 1,159 $ 1,217 $ 1,143 $ 1,209 $ 1,217 $ 1,278 $ 1,209 $ 1,256 Page 7 of 11 Impact Inflationary Pressures on Cost of Supplies and Materials Per the 2021 Rate Study Assumption: As of March 2021 inflation was predicted to increase to 2.4% and then level out at 2.1 % in 2023. As of November 2022, inflation was reported at approximately 6%. Chart 1. Ovsr-the-y*ar parcvnt chimp In CPI -U' Los B�ch- An■heim, CA. November 201"civember 2 Pelcerl change Am tafaa lw fill terns leas iaed and anergy 9.0 Ta 5.0 ED 4.0 In 2.0 1.0 0.0 N w Fhb May Aug NN 29 1$ 2020 Sourco: U.S. &ivau of Labor Statistics Feb Mss Aug NCO Feb Frla•e i Mar 2021}? Page 8 of 11 Annual Debt Service Obligations Assumptions Per 2021 Rate Study FY 2023 FY 2024 Current Debt Service Series 2012A $585,388 $583,913 Series 2017A $2,139,294 $2,143,419 Proposed New Water Debt Service Issue Date January 2023 Term 30 Yrs Interest Rate 5% Proposed Debt $15,000,000 Issuance Cost $300,000 Net Proceeds $14,700,000 Series 2022A $382,644 765289 Total Annual Debt Service $3,107,326 $3,492,621 Resulting Annual Debt Service Existing Debt Service Series 2017A $2,139,294 $2,143,419 New Debt Service Issue Date July 2022 Term 30 Years Interest Rate 4.10% Proposed Debt $32,310,000 Issuance Cost $264,000 Net Proceeds $32,046,000 Prepaide Interest $377,000 2022A Series $1,026,270 $1,990,800 Total Annual Debt Service $3,542,564 $4,134,219 Net Annual Increase in DS $435,238 $641,598 Page 9 of 11 Key Factors for Discussion • Water Master Plan • Compensation Study • Bargaining for New Successor Memorandum of Understanding (Labor Negotiations) • Updating the 2021 Rate Study Water Fund Model Page 10 of 11 Board of Director Goals and Objectives for FY 2023-24 Operating Budget • Staff recommendations • To ensure cost of service is met, follow adopted schedule for proposed annual rate adjustments in FY 2023-24 (2021 Rate Study) • Focus on core mission of providing reliable water and wastewater service to protect public health and the environment. • Board comments. 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