HomeMy WebLinkAbout2009-10-05 - Board of Directors Meeting Agenda Packet
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AGENDA
YORBA LINDA WATER DISTRICT
BOARD OF DIRECTORS SPECIAL MEETING
Monday, October 5, 2009, 4:00 PM
1717 E Miraloma Ave, Placentia CA 92870
1. CALLTO ORDER
2. PLEDGE OF ALLEGIANCE
3. ROLL CALL
John W. Summerfield, President
William R. Mills, Vice President
Paul R. Armstrong
Michael J. Beverage
Ric Collett
4. ADDITIONS/DELETIONS TO THE AGENDA
5. 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 five
minutes.
6. CLOSED SESSION
The Board may hold a closed session on items related to personnel, labor relations and/or litigation. The public is excused during these discussions.
6.1. Conference with Legal Counsel -Anticipated Litigation
Pursuant to Subdivision (b) of Section 54956.9 of the California Government Code
Number of Potential Cases: Unknown
7. ACTION CALENDAR
This portion of the agenda is for items where staff presentations and Board discussions are needed prior to
formal Board action.
7.1. Approved Rate Increase and Effective Billings
Recommendation: That the Board of Directors not change the method current) y
used by the District for implementation of the rate increase (Option A).
8. ADJOURNMENT
8.1. The next regular meeting of the Board of Directors will be held October 8, 2009 at 8:30
a.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.coml.
Accommodations for the Disabled
Any person may make a request for adisability-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 adisability-related accommodation should
make the request with adequate time before the meeting for the District to provide the requested accommodation.
ITEM N0.7.1
AGENDA REPORT
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Meeting Date: October 5, 2009 Budgeted: NIA
To: Board of Directors
Funding Source: NIA
From: Ken Vecchiarelli, General
Manager
Presented By: Ken Vecchiarelli, General Dept: Administration
Manager
Reviewed by Legal: Yes
Prepared By: Cindy Navaroli, Interim Finance CEQA Compliance: NIA
Director
Subject: Approved Rate Increase and Effective Billings
SUMMARY:
At the September 24, 2009 Board meeting, there was discussion regarding the effective date of the
rate increase approved by the Board on September 10, 2009. The rate increase was implemented
effective September 14, 2009 with all billings on or after that date, which results in customers
paying the new rates on water used before September 14, 2009. At issue is whether the September
10, 2009 approved rate increase should be applied to billing periods which include water used
before September 14, 2009.
STAFF RECOMMENDATION:
That the Board of Directors not change the method currently used by the District for implementation
of the rate increase (Option A).
DISCUSSION:
It has historically been the practice of the District to make all rate increases effective for readings
and billings as of the Board approved effective date. The District is currently following the past
practices and original intent of the approved rate increase by applying the increase to all readings
and billings on or after September 14, 2009.
The District has received numerous complaint calls and several letters opposing this
implementation practice. Staff agrees that it was not made clear in the public notices or in staff's
reports, that past practices would be implemented and that the rate increase would be applied
retroactively with billings calculated and mailed on and after September 14th. Staff has
communicated to ourcustomers that have phoned in thatthe District mustcover its expenses for
the Fiscal Year which began on July 1 and which include substantial cost increases and the effects
of a supply allocation that began on that date.
Overall, the Board has the following options:
0 Lion A: Make no changes to the retroactive application of the rate increase. If this option is
selected, the District is projecting a Fiscal Year 2009/10 debt service ratio of 110%, which is in the
absolute minimum for compliance with our debt covenants (Attachment A, Column C).
0 Lion B:Recalculate all bills and apply the rate increase prospectively to usage starting September
14, 2009. If this option is selected, the District will need to modify the billing program to recalculate
and refund the difference between what was billed using the new rate for usage before September
14th. This approach results in a Fiscal Year 2009/10 shortage of $829,374 in net revenues required
to meet the debt service ratio of 110%. The resulting ratio is 20% below compliance (Attachment A,
Column D). It should also be noted that programming and related costs necessary to calculate the
credits to each customer's account have not been inlcuded in the expense calculations presented.
Additional discussion ensued at the September 24,2009 meeting about the volume and frequency
of customer complaints regarding the timing and collection of the rate increase. District staff noted
that 346 phone complaints (approximately 5% of customers billed) were received in the first cycle of
billing. The District has subsequently received 169 phone complaints from the second billing cycle
(approximately 3% of customers billed), and will have an update on the third cycle complaints at the
Board meeting. Fourth cycle bills will be sent out the week of October 5th. It is likely that as more
time passes, and as customers become more aware of the rate increase approval, there will be
significantly less calls and complaints, as reflected by the graph on Attachment B.
PRIOR RELEVANT BOARD ACTIONS}:
Notice was sent to customers in mid-July 2009, following Proposition 218 guidelines, that the
District was considering a rate increase which would be effective September 14, 2009.On
September 10, 2009, the Board adopted the proposed rate increase. At the September 24, 2009 Board meeting the Board scheduled this workshop to further explore customer concerns relating to
implementation of the rate increase.
ATTACHMENTS:
I~J~~i'r1~: Iv~s~d'~ipticf~: ! yo:
Budget Changes_Rate_Increase_Impacts.pdf attachment A Backup Material
Customer Phone_Activity.pdf attachment B Backup Material
Total Revenues
Less Total Expenses
Net Revenues
YLWD FINANCIAL PROJECTIONS
Audited
Water Fund
as of 6130109
$ 22,177,980
20,596,000
$ 175817980
10% conservation
entire year
Amended Budget
$ 27,382,324
23.377.304
$
470057020
10% conservation
6 week late start
retroactive
$ 25,771,945
22,679,542
$ 370927403
10% conservation
9/14/2009
prospective
$ 24,937,065
22.679.542
$ 272577523
Total Debt Service $ 278067270
$ 278067270
$ 278067270
$ 278067270
Net Revenues After Debt Service $ (112247290)
$ 171987750
$ 2867133
$ (548,747)
Debt Service Ratio** 56%
143%
110%E0
80%
Amount of Net Revenues as calculated above
370927403
272577523
Amount of Net Revenues needed to get to 110% debt ratio
(3,086,897)
(3,086,897)
PROJECTED OVERAGE (SHORTFALL)
5,506
Projected Debt Service Ratio with additional conservation
Additional 5% conservation 93% 64%
Additional 9% conservation 79% 51%
* Variable cost decrease from amended budget is due to more accurate data and updated prices from MWDOC
as well as reclassification of some personnel costs into CIP;partial year PIO position
**Debt Service Ratio calculated as Net Revenues (before depreciation)/Total Debt Service
160
140 V
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Sep 17
(Thu)
Sep 18 Sep 21 Sep 22
(Fri) (Mon) (Tue)
Phone Call Activity (New Water Rates)
Sept 18 - Oct 2
0-1,
Sep 23
(Wed)
V
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Sep 23
(Wed)
Sep 24
(Thu)
Sep 25 Sep 28
(Fri) (Mon)
Attachment "6"
Sep 29 Sep 29 Sep 30 Oct 1 Oct 2
(Tue) (Tue) (Wed) (Thu) (Fri)
10/2/2009