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Home My WebLink About2023-05-25 - Board of Directors Meeting Agenda PacketYorba Linda Water District AGENDA YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS SPECIAL MEETING Thursday, May 25, 2023, 3:00 PM 1717 E Miraloma Ave, Placentia CA 92870 1. PARTICIPATION INSTRUCTIONS This meeting will be held in person. For public convenience, the meeting can also be accessed via internet-based service or telephone as indicated below. For questions regarding participation, please call the Board Secretary at (714) 701-3020. Computer/Mobile Device: https://us06web.zoom.us/i/81325285052 Telephone: (669) 444-9171 or (669) 900-6833 Meeting ID: 813 2528 5052 2. CALL TO ORDER 3. PLEDGE OF ALLEGIANCE 4. ROLL CALL Brett R. Barbre, President Trudi DesRoches, Vice President Phil Hawkins, Director Tom Lindsey, Director J. Wayne Miller, PhD, Director 5. AB 2449 TELECONFERENCE REQUESTS 6. 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) 7. 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. 7.1. Draft Operating Budget for Fiscal Year 2023-24 8. ADJOURNMENT 8.1. The next regular Board meeting is scheduled Thursday, June 1, 2023 at 3:00 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 Page 1 of 20 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 20 Yorba Linda Water District AGENDA REPORT MEETING DATE: May 25, 2023 TO: Board of Directors FROM: Mark Toy, General Manager STAFF CONTACTS: Delia Lugo, Finance Manager Sophia Phuong, Accounting Supervisor Paige Appel, Budget Analyst SUBJECT: Draft Operating Budget for Fiscal Year 2023-24 SUMMARY: Staff will present and discuss the draft FY 2023-24 Operating Budget. ATTACHMENTS: 1. Slide Deck - Draft Budget for FY23-24 ITEM NO. 7.1. Page 3 of 20 aYorba Linda Water District �via6N�� soV Water a Page 4 of 20 Overview • Salary Related Expenses • Debt Service • Summary of FY2023-24 Budget • CIP Page 5 of 20 Y . L W Salary Related Expenses 05/25/2023 9WL Salary Related Expenses 2021 Rate Study Assumptions Salary Related - Water Salary Related - Sewer FY2021-22 FY2022-23 FY2023-24 $10,969,179 MMIMMI $12,847,163 Salaries & Related Expenses Detail Salaries Fringe Benefits Mandatory Benefits Prior Year FY2021-22 $11,846,713 2,028,223 $13,874,936 Projected FYE2022-23 $12,794,450 � $14,984,930 Budget FY2023-24 $ 7,627,773 $ 7,905,923 $ 9,010,016 1,586,840 2,257,590 2,151,211 1,801,607 2,338,473 2,662,648 $11,016,220 $12,501,986 $13,823,875 Variance from Assumptions Rate Study Assumptions Variance $ (1,830,943) $ (1,372,950) $ (1,161,055) -14% -10% -8% Note: Salary Related Expenses totals do not include actual or anticipated capitalized labor for proper comparison to the 2021 Rate Study Assumptions. Salary related expenses for FY24 does not include potential increases from labor negotiations but do include an adjustment to the median as result of the Compensation Study. 05/25/2023 YL W ervice 05/25/2023 9WL Debt Service Ratio For Water Fund 2021 Rate Study Assumptions FY2021-22 Debt Service $ 2,728,919 Ratio 2.14 Per Policy 2.25 Historic & Future Debt Service Ratio Per Policy Prior Year FY2021-22 $ 2,728,919 2.51 2.25 Variance from Assumptions Rate Study Assumptions 0.37 Variance % 17% FY2022-23 $ 3,107,326 2.98 2.25 Projected FYE2022-23 $ 3,165,564 2.92 2.25 FY2023-24 $ 3,491,620 3.12 2.25 Budget FY2023-24 $ 4,134,219 (0.06) (0.41) -2% -13% 2.71 2.25 Page 9 of 20 Debt Coverage Analysis FY2023-24 Proposed Rates - 9% Increase from Prior Year + Pass -Through of $0.31 on Commodity Rate. - $35 million of Debt (Acquired in FY2022-23) - The District is meeting the policy debt coverage. - The District does not meet the target reserve balance in the budgeted year FY2023-24. The District will meet the target reserve balances by FY2024-25. Water Revenue Adjustments & Debt Coverage 10.0% 5.00x 8.0% c v E 6.0% v 4.0% a Cr 2.0% 0.0% FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 3.00x c� 0.0ox O Water Rev Adjustments Water Debt Coverage (excl. LOC) • Min Debt Coverage - 1.25x • Alert Coverage Policy Debt Coverage - 2.25x 05/25/2023 $90 o $80 $70 $60 a, $50 v $40 $30 Cr $20 $10 $0 Projected Ending Balances (excl Debt Proceeds) FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 Unrestricted Ending Balances Target Balances • Min Targets • Alert Balances Y . L W Summary of FY2O23-24 Budget 05/25/2023 9WL Proposed FY2023-24 Budget Summary Production: • Total Demand 19,227 • Ground Water 77% Revenue* Import Water 23 • Water - The pass-through on commodity rate is projected to generate approximately $2.1 M in revenue. Proposed Rates: • Water - 9% adjustment for all water rates with a $0.31 Pass- through on Commodity Rate • The $0.31 Pass-through includes Power ($0.15), Fixed Water Costs ($0.07), and Groundwater & Import water Costs ($0.09) • Sewer - 15% adjustment for all sewer rates • The cost change on an average customer (20 units) bill will be an increase of $16.80 on the customer's monthly bill and a total monthly cost of $17.73 (including Capital Finance Charge). Page 12 of 20 Proposed FY2023-24 Budget Summary Cont. Expenses: • Variable Costs are based on demand total of 19,227AF with a 77% Groundwater and 23% Import water. Total cost of groundwater is $13M and import water is $7M. • Changes have been made to Salary Related Expenses to account for the results from the FY2022-23 Compensation Study Report. Debt Coverage: • Projected Debt Service $4,134,219 (Principle & Interest) for FY2023-24 • Debt coverage ratio 2.71 • Per Policy 2.25 Capital Improvement Projects: • The CIP will only be 1 year until the Water Master Plan is completed to ensure proper prioritization of each project. Page 13 of 20 Groundwater 16 s Imported Water 9¢ 05/25/2023 'ater Fix osts 4¢ 1 ersonnel ervices 24¢ rM: -per �tin Power & Pumping AL: Supplies & Services 19¢ 9WL Depreciation 17¢ YL w Summary of FY2023-24 Budget Financials 05/25/2023 9WL Financial Summary -Consolidated Expenses Prior Year Projected Revenue FY2021-22 FYE2022-23 Revenue (Operating) $ 43,01 1,492 $ 42,797,751 Revenue (Non -Operating) 2,510,962 4,405,474 Total Revenue $ 45,522,454 $ 47,203,225 Rafe Study Assumptions $ 43, 727,333 6,297,722 $ 46,560,875 Variance % 4% 1 Expenses Expenses (Operating): Variable Costs $ 20,603,385 Salary Related Expenses 11,016,220 (Less Capitalized Labor) - Supplies & Services 6,297,722 Expenses (Non -Operating) 1,270,454 Total Expenses $ 39,187,781 Rate Study Assumptions $ 39,170,380 Variance % 0% Net Position Before Capital Contributions & Depreciation $ 6,334,673 Capital Contributions 289,612 Depreciation 7,935,696 Total Net Income (Loss) $ (1,311,411) $ 15,832,394 12,501,986 8,644,747 2,483,934 $ 39,463,061 $ 38,222,320 3% $ 7,740,164 Budget FY2023-24 $ 51,463,692 4,086,254 $ 55,549,946 $ 50, 720, 658 10% $ 19,891,169 13,823,875 (408,000) 10,489,766 2,623,044 $ 46,419,854 $ 40,330,198 15% $ 9,130,092 25,466,436 - 9,038,130 9,379,000 $ 24,168,470 $ (248,908) Page 16 of 20 Financial Summary -Water Expenses Expenses (Operating): Variable Costs Prior Year Projected Budget Revenue FY2021-22 FYE2022-23 FY2023-24 Revenue (Operating) $ 39,619,594 $ 39,270,910 $ 47,396,018 Revenue (Non -Operating) 2,389,764 4,174,224 3,901,619 Total Revenue $ 42,009,358 $ 43,445,134 $ 51,297,637 Rafe Study Assumptions $ 40, 519, 621 $ 42, 892, 602 $ 46, 516, 980 Variance % 4% 1% 10% Expenses Expenses (Operating): Variable Costs $ 20,603,385 $ 15,832,394 $ 19,891,169 Salary Related Expenses 9,230,304 10,481,360 11,488,469 (Less Capitalized Labor) - - (367,200) Supplies & Services 5,31 1,474 7,489,166 9,070,383 Expenses (Non -Operating) 1,251,753 2,480,657 2,616,744 Total Expenses $ 36,396,916 $ 36,283,577 $ 42,699,565 Rate Study Assumptions $ 36,113,679 $ 34,994,157 $ 36,918,084 Variance % 1% 4% 16% Net Position Before Capital Contributions & Depreciation $ 5,612,442 $ 7,161,557 $ 8,598,072 Capital Contributions 176,963 25,050,300 - Depreciation 6,442,545 7,524,955 7,690,000 Total Net Income (Loss) $ (653,140) $ 24,686,902 $ 908,072 Debt Service $ 2,728,919 $ 3,165,564 $ 4,134,219 Ratio 2.51 2.92 2.71 Per Policy 2.25 2.25 2.25 Financial Summary -Sewer Expenses Expenses (Operating): Salary Related Expenses Prior Year Projected Budget Revenue FY2021-22 FYE2022-23 FY2023-24 Revenue (Operating) $ 3,391,898 $ 3,526,841 $ 4,067,674 Revenue (Non -Operating) 121,198 231,250 184,635 Total Revenue $ 3,513,096 $ 3,758,091 $ 4,252,309 Rafe Study Assumptions $ 3,207,712 $ 3,668,273 $ 4,203,678 Variance % 10% 2% 1 Expenses Expenses (Operating): Salary Related Expenses $ 1,785,916 $ 2,020,626 $ 2,335,406 (Less Capitalized Labor) - - (40,800) Supplies & Services 986,248 1,155,581 1,419,383 Expenses (Non -Operating) 18,701 3,277 6,300 Total Revenue $ 2,790,865 $ 3,179,484 $ 3,720,289 Rate Study Assumptions $ 3,056,701 $ 3,228,163 $ 3,412,114 Variance % -9% -2% 9% Net Position Before Capital Contributions & Depreciation $ 722,231 $ 578,607 $ 532,020 Capital Contributions 112,649 416,136 - Depreciation 1,493,151 1,513,175 1,689,000 Total Net Income (Loss) $ (658,271) $ (518,432) $ (1,156,980) Page 18 of 20 YL W 05/25/2023 Capital Improvement Plan 9WL CIP YE Projected FY2022-23 & FY2023-24 Budget PROJECT NAME BNSF Crossing -Veterans Way and S. Highland BNSF Crossing -Weir Canyon / YL Blvd Golden Ave Waterline Hidden Hills BPS Upgrades Imperial Waterline Improvement Mountain View Waterline Replacement PRS Rehabilitation Project *Based on AMP & Asset Scores Resiliency Improvements to District Facilities (AWIA) Site and Security Upgrades at District Facilities (AWIA) Timber Ridge BPS Pump Replacement Waterline Replacement *Based on AMP & Leak History Well 22 Equipping Well 23 Drilling & Equipping Well Rehabilitation Project Total Water CIP Green Crest Lift Station Rehab Main Street Sewer Replacement Sewer System Rehabilitation and Replacement Project Total Sewer CIP CIP Total CAPITAL OUTLAY MWDSC & YLWD Heli -hydrant Vehicle Replacement Security Improvements/Modifications YE Projected FY2022-23 471,305 227,873 4,536 1,133,405 16,994 201,289 200,000 87,305 357,968 1,256,780 2,035,456 2,063 210,288 6,205,262 14,468 14,468 Budgeted FY2023-24 Presented on 4/20/23 $ 1,336,061 $ $ 6,219,730 $ YE Projected FY2022-23 1,164,874 Outlay Total$ 1,164,874 $ 305,498 208,638 2,938,333 598,938 300,000 4,209,634 2,600,000 5,000 396,000 12,898,102 400,000 552,530 508,875 1,461,405 14,359,507 $ Budgeted FY2023-24 200,000 480,000 50,000 730,000 Revised Budgeted FY2023-24 1,336,061 305,498 255,131 2,938,333 598,938 300,000 4,209,634 2,600,000 5,000 396,000 12,944,595 400,000 552,530 508,875 1,461,405 14,406,000 Budgeted FY2023-24 200,000 480,000 50,000 730,000 Grand Total $ 7,384,604 $ 15,089,507 $ 15,136,000 *Grant amount to be awarded. Green Crest Lift Station Rehab will be awarded $300,000 and MWDSC & YLWD Heli -hydrant will be awarded $500,000. Each project cost listed represents YLWD's portion of the cost. Page 20 of 20