HomeMy WebLinkAbout2010-03-08 - Board of Directors Meeting Agenda Packet
Yorba Linda
Water District
AGENDA
YORBA LINDA WATER DISTRICT
BOARD OF DIRECTORS WORKSHOP MEETING
Monday, March 8, 2010, 4:00 PM
1717 E Miraloma Ave, Placentia CA 92870
1. CALL TO ORDER
2. ROLL CALL
William R. Mills, President
Michael J. Beverage, Vice President
Ric Collett
Phil Hawkins
John W. Summerfield
3. 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.
4. 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.
4.1. Asset Management Plan - Draft Summary Report
4.2. Cost of Service and Water Rate Study
5. CONFERENCES AND SEMINARS
5.1. MWDOC Water Policy Forum & Dinner- March 10, 2010
6. ADJOURNMENT
6.1. The next regular meeting of the Board of Directors will be held March 11, 2010 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.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. 4.1
AGENDA REPORT
Meeting Date: March 8, 2010 Budgeted: Yes
Total Budget: $120,000
To: Board of Directors Cost Estimate: $112,000
Funding Source: All Water Funds
From: Ken Vecchiarelli, General
Manager
Presented By: Ken Vecchiarelli, General Dept: Engineering
Manager
Prepared By: Pat Grady, Assistant General CEQA Compliance: N/A
Manager
Subject: Asset Management Plan - Draft Summary Report
SUMMARY:
A presentation of the Draft Asset Management Plan will be provided by Carollo Engineers. Staff is
seeking comments from the Board to incorporate into the final document which will be considered at
a future meeting to receive and file.
DISCUSSION:
Attached for the Board's review is the Executive Summary of the Draft Asset Management Plan,
along with the slides that will be presented at the Workshop Meeting. The initial draft report in its
entirety is available for review in the office of the General Manager.
PRIOR RELEVANT BOARD ACTION(S):
At their regular meeting on August 13, 2009, the Board of Directors authorized execution of a
Professional Services Agreement with Carollo Engineers to prepare an Asset Management Plan for
planning water and sewer asset replacement and repairs.
ATTACHMENTS:
AMP_Exec _Summary Draft.pdf Executive Summary Backup Material
Carollo Presentation.pdf Carollo Presentation Backup Material
Mail
ML Yorba Linda Water District
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Yorba Linda Water District
ASSET MANAGEMENT PLAN
DRAFT SUMMARY REPORT
January 2010
FnOMM r 1-11 io Vi4xid ra M IMI
10540 TALBERT AVENUE • SUITE 200 EAST • FOUNTAIN VALLEY, CALIFORNIA 92708 • (714) 593-5100 • FAX (714) 593-5101
pw,//Carollo/Documents/Client/CA/YLWD/8343A00/Dellverabl es/AMP Summary Report TOC Draft (D)
Yorba Linda Water District
ASSET MANAGEMENT PLAN
DRAFT SUMMARY REPORT
TABLE OF CONTENTS
Page No.
CHAPTER 1 - EXECUTIVE SUMMARY
1.1 ASSET MANAGEMENT VISION 1-1
1.2 ASSET INVENTORY AND ASSESSMENT 1-2
1.3 ASSET REPLACEMENT COST 1-2
1.4 R&R RESERVE FUNDING PLAN 1-4
1.5 ASSET MANAGEMENT INFORMATION SYSTEMS 1-5
CHAPTER 2 - ASSET MANAGEMENT VISION
2.1 ASSET MANAGEMENT OVERVIEW 2-1
2.1.1 Purpose for Asset Management Plan 2-2
2.1.2 Asset management methodology 2-4
2.1.3 Expected asset management outcomes 2-4
2.2 YLWD ASSET MANAGEMENT VISION 2-5
2.2.1 Level of Service Goals 2-5
2.2.2 Asset Vulnerability and Criticality Factors 2-6
2.2.3 Proposed Performance Measures 2-7
CHAPTER 3 - ASSET INVENTORY AND ASSESSMENT
3.1 ABOVE-GROUND ASSET INVENTORY AND ASSESSMENT 3-1
3.1.1 Asset Inventory 3-1
3.1.2 Condition Assessment Methodology 3-1
3.1.3 Vulnerability 3-2
3.1.4 Condition Assessment Findings 3-4
3.1.5 Criticality 3-7
3.1.6 Risk Assessment 3-9
3.2 BELOW-GROUND ASSET INVENTORY AND ASSESSMENT 3-10
3.2.1 Asset Inventory 3-10
3.2.2 Condition Assessment 3-10
3.2.3 Vulnerability 3-17
3.2.4 Criticality 3-19
3.2.5 Risk Assessment 3-20
DRAFT -January 22, 2010 i
pw,//Carollo/Documents/Client/CAIYLWDI8343AOOIDeliverables/AMP Summary Report TOC Draft (D)
CHAPTER 4 - ASSET REPLACEMENT COST
4.1 GENERAL 4-1
4.2 ABOVE-GROUND ASSETS 4-2
4.2.1 Cost Basis and Assumptions 4-2
4.2.2 Cost Summary 4-2
4.2.3 Replacement Timing Summary 4-2
4.3 BELOW-GROUND ASSETS 4-2
4.3.1 Cost Basis and Assumptions 4-2
4.3.2 Cost Summary 4-7
4.3.3 Replacement Timing 4-9
4.4 COMBINED ASSETS 4-12
4.4.1 Combined Asset Ten Year R&R CIP Summary 4-12
4.4.2 Combined Asset Long-Term CIP Summary 4-12
CHAPTER 5 - R&R RESERVE FUNDING PLAN
5.1 R&R RESERVE FUNDING OVERVIEW 5-1
5.1.1 Current Reserve Funds 5-1
5.1.2 R&R Fund Assumptions 5-2
5.2 R&R RESERVE FUNDING SCENARIOS 5-2
5.2.1 Short-Term Planning Horizon 5-3
5.2.2 Medium-Term Planning Horizon 5-3
5.2.3 Long-Term Planning Horizon 5-6
5.3 R&R RESERVE FUNDING RECOMMENDATIONS 5-6
5.4 MINIMUM AND MAXIMUM R&R CASH BALANCES 5-11
5.5 ADDRESSING EXPENDITURE SPIKES .............................................................5-12
CHAPTER 6 - ASSET MANAGEMENT INFORMATION SYSTEMS
6.1 CURRENT SYSTEMS 6-1
6.1.1 Geographic Information System (GIS) 6-1
6.1.2 Financial Information System (FIS) 6-1
6.1.3 Computerized Maintenance Management System (CMMS) 6-2
6.2 ASSET MANAGEMENT SYSTEMS 6-2
6.2.1 Water/Wastewater Asset Manager (WAM) 6-2
6.2.2 Below-Ground Asset Manager (BAM) 6-3
6.2.3 Financial Planning Tool (FPT) 6-3
6.3 INFORMATION SYSTEMS ENHANCEMENT OPPORTUNITIES .........................6-3
6.3.1 Enhance Existing Information Systems 6-3
6.3.2 Integrate Information Systems 6-4
6.3.3 Implement Asset Management Decision Support System 6-4
LIST OF APPENDICES
A - Above-Ground Asset Inventory
B - Water R&R Fund Financial Worksheets
C - Sewer R&R Fund Financial Worksheets
DRAFT -January 22, 2010 ii
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LIST OF TABLES
Table ES1 Highest Risk Above-Ground Assets 1-2
Table ES2 Highest Risk Below-Ground Water Assets 1-3
Table ES3 Highest Risk Below-Ground Sewer Assets 1-3
Table ES4 Summary of Value for Above- and Below-Ground Assets 1-4
Table ES5 Water Funding Scenarios 1-4
Table ES6 Sewer Funding Scenarios 1-5
Table 2.1 Criticality Matrix 2-6
Table 2.2 Proposed Performance Measures 2-7
Table 3.1 Asset Condition Assessment Ranking 3-2
Table 3.2 Estimated Useful Life Based on Asset Category 3-3
Table 3.3 Asset Condition Fraction 3-3
Table 3.4 Condition Summary for Wells 3-4
Table 3.5 Condition Summary for Reservoirs 3-5
Table 3.6 Condition Summary for Booster Pump Stations 3-6
Table 3.7 Criticality Ranking Scale 3-8
Table 3.8 Highest Risk Above-Ground Assets 3-9
Table 3.9 Useful Life and Replacement Period for Water Mains 3-18
Table 3.10 Useful Life and Replacement Period for Sewer Mains 3-18
Table 3.11 Water Main Criticality Rankings 3-21
Table 3.12 Sewer Main Criticality Rankings 3-22
Table 3.13 Highest Risk Below-Ground Water Assets 3-23
Table 3.14 Highest Risk Below-Ground Sewer Assets 3-23
Table 4.1 Project Cost Factors 4-3
Table 4.2 Cost Summary for Above-Ground Water Assets 4-4
Table 4.3 Cost Summary for Above-Ground Sewer Assets 4-4
Table 4.4 Recommended R&R Projects for Above-Ground Water Assets for
Ten-Year CIP 4-5
Table 4.5 Direct Cost Factors for Below-Ground Assets 4-6
Table 4.6 Water Distribution System Unit Construction Costs For CML&C Pipe 4-7
Table 4.7 Water Distribution System Unit Construction Costs For PVC Pipe 4-8
Table 4.8 Sewer Collection System Unit Construction Costs for VCP Pipe 4-8
Table 4.9 Sewer Collection System Unit Construction Costs for PVC Pipe 4-9
Table 4.10 Water Main Replacement Costs by Diameter 4-10
Table 4.11 Sewer Main Replacement Costs by Diameter and Manhole
Replacement Costs 4-11
Table 4.12 Recommended R&R Projects for Below-Ground Water Assets for
Ten-Year CIP (2010-2019) 4-11
Table 4.13 Recommended R&R Projects for Below-Ground Sewer Assets for
Ten-Year CIP (2010-2019) 4-12
Table 4.14 Summary of Annual Expenditures for Recommended Ten-Year R&R
CIP for Above- and Below-Ground Water Assets 4-14
Table 4.15 Estimated R&R Expenditures for Above and Below-Ground Water and
Sewer Assets through 2100 4-15
Table 5.1 Maximum Reserve and Annual Contributions by Planning Horizon 5-6
DRAFT -January 22, 2010 iii
pw,//Carollo/Documents/Client/CAIYLWDI8343AOOIDeliverables/AMP Summary Report TOC Draft (D)
Chapter 1
EXECUTIVE SUMMARY
1.1 ASSET MANAGEMENT VISION
In the fall of 2009, the Yorba Linda Water District initiated its Asset Management Plan
(AMP) in order to validate the District's investments in its water and wastewater facilities.
Through an Asset Management Visioning Workshop, the District refined its risk-based
approach, criticality ranking, performance metrics, and determined expected outcomes of
the program. The objectives of the AMP are to:
• Evaluate and update the District's existing asset inventory.
• Identify capital assets in need of replacement funding and determine replacement
timing.
• Prioritize the rehabilitation and replacement (R&R) of assets through a risk-based
framework - assessment of the asset's vulnerability and criticality - for the water and
wastewater systems.
• Develop policy options for annual funding contributions to the District's capital
reserve accounts.
During the Visioning Workshop, the District decided to review and adopt performance
metrics developed by the American Water Works Association and the Water Environment
Federation. The District will review these performance metrics and select those that are
relevant for the District in the categories of employee efficiency and health, customer
service, financial management, technical/engineering, operations and maintenance, and
regulatory compliance.
The AMP methodology and work products developed throughout the visioning process can
be outlined in the following three steps:
1. Asset Inventory and Condition Assessment - Completion of an asset inventory
and asset condition assessment (including criticality, vulnerability, and prioritization
of repair/replacement based on risk).
2. Asset Valuation and Replacement Schedule - Determination of asset values and
renewal costs; development of Asset Replacement CIP for Ten-Year, Twenty-Five-
Year, and Fifty-Year planning periods
3. Financial Analysis - Calculation of annual R&R Fund contributions for each
planning period; identification of funding policy options
January 22, 2010 - DRAFT 1-1
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Following conclusion of the AMP, the District will budget the necessary capital dollars for
future R&R projects.
1.2 ASSET INVENTORY AND ASSESSMENT
A visual condition assessment was conducted for all of the facilities except the under-
ground assets, which were assessed using GIS data and available maintenance data. The
visual condition assessment included a field evaluation of key assets by a multi-discipline
engineering team licensed and experienced in various fields of engineering. The team
assessed the District's wells, reservoirs, booster pump stations, pressure reducing stations,
interties and interconnections, water and sewer mains, and manholes. The highest risk
above-ground assets are shown in Table ES1.
Table ES1 Highest Risk Above-Ground Assets
Asset Management Plan
Yorba Linda Water District
Facility Asset Vulnerability Criticality Risk
Well No. 5 Well Pump 0.5 4.2 2.1
Richfield Base Chlorine Generator 0.1 6.7 0.84
Well No. 11 Well 0.2 4.2 0.83
Richfield Base Chlorine Injection 0.1 5.4 0.59
Well No. 11 Hypo Feed System 0.1 4.9 0.54
Well No. 15 Hypo Tanks 0.1 4.9 0.54
Richfield Base Data Center Servers 0.1 7.8 0.52
Richfield Base Hypo Tanks 0.1 6.7 0.50
Well No. 15 Chlorine Feed System 0.1 4.5 0.49
Richfield Base Chemical Metering Pumps 0.1 5.8 0.43
The highest risk below-ground water and sewer assets are shown in Tables ES2 and ES3,
and illustrated in the maps contained in Chapter 3, Figures 3-8 and 3-11.
1.3 ASSET REPLACEMENT COST
The replacement values/costs presented within this report are estimates of the total project
cost to purchase and install similar assets in today's dollars. Replacement values are
comprised of both direct and indirect costs, which include the physical make-up of the
assets as well as contingency factors, respectively. The indirect costs consisting of
contingency factors, including demolition, general conditions, contractor overhead and
profit, sales tax, engineering/legal/administration, construction management, and ancillary
support, were applied to the direct cost to develop total project costs.
January 22, 2010 - DRAFT 1-2
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Table ES2 Highest Risk Below-Ground Water Assets
Asset Management Plan
Yorba Linda Water District
GIS ID Diameter Install Year Material Vulnerability Criticality Risk
5395 26 1928 SCP 1.00 7.15 7.15
5396 26 1928 SCP 1.00 7.15 7.15
5677 26 1928 SCP 1.00 7.15 7.15
5678 26 1928 SCP 1.00 7.15 7.15
5828 26 1928 SCP 1.00 7.15 7.15
5829 26 1928 SCP 1.00 7.15 7.15
5831 26 1928 SCP 1.00 7.15 7.15
5838 26 1928 SCP 1.00 7.15 7.15
5846 26 1928 SCP 1.00 7.15 7.15
5847 26 1928 SCP 1.00 7.15 7.15
5862 26 1928 SCP 1.00 7.15 7.15
6169 24 1924 SCP 1.00 7.15 7.15
6291 26 1928 SCP 1.00 7.15 7.15
6292 26 1925 SCP 1.00 7.15 7.15
16197 27 1924 GALV 1.00 7.15 7.15
16198 27 1924 GALV 1.00 7.15 7.15
Table ES3 Highest Risk Below-Ground Sewer Assets
Asset Management Plan
Yorba Linda Water District
GIS ID Diameter Install Year Material Vulnerability Criticality Risk
106 24 1962 VCP 0.023 7.6 0.177
107 24 1962 VCP 0.023 7.6 0.177
108 24 1962 VCP 0.023 7.6 0.177
109 24 1962 VCP 0.023 7.6 0.177
404 24 1962 VCP 0.023 7.6 0.177
951 24 1962 VCP 0.023 7.6 0.177
952 24 1962 VCP 0.023 7.6 0.177
1566 24 1962 VCP 0.023 7.6 0.177
1574 24 1962 VCP 0.023 7.6 0.177
January 22, 2010 - DRAFT 1-3
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Direct costs were developed from the recent bid data from reference projects, Carollo 3B
Pipeline Model estimates, and the RS Means Construction Cost Index. These costs were
adjusted and confirmed using recent construction bid data provided by the District. A
summary of the total value of the District's water and sewer systems in 2009 dollars are shown
in Table ES4 below.
Table ES4 Summary of Value for Above- and Below-Ground Assets
Yorba Linda Water District
Asset Management Plan
System Value
Water Above-Ground $121,575,000
Water Below-Ground $331,996,000
Subtotal $453,571,000
Sewer Above-Ground $250,000
Sewer Below-Ground $205,853,000
Subtotal $206,103,000
Total of All Assets $659,674,000
Notes:
(1) Cost disclaimer, same for all.
1.4 R&R RESERVE FUNDING PLAN
Carollo was asked to develop policy options for annual funding contributions to the District's
capital reserve accounts that would "assure the availability of funds for replacement and
refurbishment." Towards this effort, several reserve funding scenarios were developed,
with the goal of identifying the necessary annual funding contributions for the projects
identified in the AMP. Three planning horizons were developed for each reserve fund:
short-term, medium-term, and a long-term planning horizon. The years included in each
planning horizon varied between the water and sewer systems due to the variable useful
lives of each system. The results of the funding analysis are shown in Tables ES5 and ES6.
Table ES5 Water Funding Scenarios
Asset Management Plan
Yorba Linda Water District
Annual Funding Total Replacement Cost During
Planning Horizon Contribution Period
Short-Term (10 Years) $1.4 million $14.3 million
Medium-Term (25 Years) $1.5 million $30.9 million
Long-Term (50 Years) $6.1 million $308 million
January 22, 2010 - DRAFT 1-4
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Table ES6 Sewer Funding Scenarios
Asset Management Plan
Yorba Linda Water District
Annual Funding Total Replacement Cost During
Planning Horizon Contribution(') Period
Short-Term (10 Years) $0 $25,000
Medium-Term (30 Years) $64,000 $7.1 million
Long-Term (50 Years) $275,000 $13.8 million
Note:
1 Contribution shown is in addition to the $1 per month per customer fee.
1.5 ASSET MANAGEMENT INFORMATION SYSTEMS
As part of the AMP, a review of asset management information systems was conducted to
offer the District asset tracking and data management solutions. The District currently
employs a GIS database and Financial Information System (FIS) and is in the process of
developing a Computerized Maintenance Management System (CMMS). These systems
will continue to undergo continuous refinement and corrections made to the asset data as
errors are discovered.
Potential tools include the Water/Wastewater Asset Manager (WAM), Below-Ground Asset
Manager, (BAM) and the Financial Planning Tool (FPT). These tools, developed by Carollo
Engineers, capture data and processes information for the major steps involved in
implementing an Asset Management Plan. The FTP integrates WAM and BAM asset data
into an analytical tool for financial planning and reporting of asset rehabilitation and
replacement needs. An analytical tool is also included to run scenarios of R&R reserve
funding for various planning "windows", in order to determine adequate levels of annual
reserve fund contributions versus reserve fund balances.
Concurrent with the development of other work products of the AMP, the District is
implementing enhancements to its asset management enhancement systems.
Enhancement opportunities include improvements to GIS to ensure that all required fields,
such as installation date, material, and diameters, are being captured as new assets are
added and existing assets are being retired, rehabilitated or replaced. Furthermore, for
above-ground facilities, the new CMMS should be implemented as quickly as possible to
capture a complete asset inventory and similar information as the below-ground assets.
A second phase of implementation could include the integration of data from GIS and the
new CMMS into WAM/BAM for both above- and below-ground assets. Once the required
asset data is being captured by the District's information systems, and the integration of this
data for analysis and decision-making has been automated, a third phase of improvement
would be to implement an Asset Management Decision Support System that combines the
January 22, 2010 - DRAFT 1-5
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capabilities of WAM and BAM into an enterprise-wide system that supports sound
management and financial decisions for all levels of District staff.
January 22, 2010 - DRAFT 1-6
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Engineers
Yorba Linda Water District
Asset Management Plan
Summary
Carollo Engineers
March 8, 2010
Engineers_.Working Wonders With Wow'
Current Infrastructure Situation and
Need for Asset Management
1. Aging Infrastructure- design life is 50 to 80 yrs
2. EPA Drinking Water Infrastructure Needs
Assessment: $335 B in next 20 years*
Tara) ?II-Year Need by Proper Type (in IAh-,
3. Medium-sized water utilities (3,300 to ~f,:m :ry Oh?dallars,
100,000 people) have greatest need (45%) 0
~mefi1
,
4. 240,000 water main breaks/year in USA
a$ ocoy w.
5. USGS estimates 1.7 trillion gallons of water R
lost in the US per year, at a cost of $2.6 B 3
EPA 816-F-09-003 Drinking Water Infrastructure Needs Survey N^ TM•m< m,r ^ ,•.i_I,.^ - °^c
& Assessment - 311 Report to Congress, February 2009
1
Current Infrastructure Situation and Need
for Asset Management
L
-3: y
-m S .fir ;4
40,
t
w:.
wow
Overall AMP Vision
Planning
Budgeting~
AAbj
Asset
Life-Cycle
rO ppe , ~te &
Rene Maintain
AMP needs to address complete asset life-cycle resulting in lowest total
cost of ownership
2
Summary of YLWD
Asset I nventory and
Risk Assessment
Above-Ground Assets - Number and
Type of Facilities
Sewer Lift
Stations
1
Booster Import Water
Wells Pump Stations Connections
9 12 4
Reservoirs
14
I nterconnections
10
Pressure
Regulating
Stations
37
Total Above-Ground Facilities = 87
3
Water Main Installed by Year (feet)
48,69320,218
253,323
313,447
165,173 ■<1950 or (blank)
61950-1959
1960-1969
430,654 -x1970-1979
1980-1989
604,106 1990-2000
> 2000
Total Water Main Installed = 1,836,000 feet (348 miles)
Sewer Main Installed by Year (feet)
2,512
144,907
309,515 is <1950 or (blank)
45,604 61950-1959
1960-1969
62,189
61970-1979
dm&bl - 1980-1989
1990-2000
>2000
257,208
a.1
Total Sewer Main Installed = 822,000 feet (156 miles)
4
Risk Assessment Determines Asset R& R
Priorities
1. Risk = Vulnerability x Criticality
2. Vulnerability: Likelihood of asset
failure
a. Criteria aligned with asset condition
and/or attributes (e.g. age)
b. Probability of failure
a~.
3. Criticality: Consequence of asset
failure
a. Criteria aligned with level of service
goals _
b. Parameters of public health and
safety, effect on
customers, environment, & cost y
Example
Asset Management Analysis
5
Above-Ground AMP Analysis Example
Richfield Chlorine Generators
r
Ilk r >y
Olt
V I I
Above-Ground AMP Analysis Example
1. Richfield Chlorine Generators Fy
a. Installation Year - 2003 -
7iI S
b. Condition - 3
c. Original Useful Life - 10 years, ~l `yr' i it
d. Remaining Useful Life - 3 years z
e. Eval. Remaining Useful Life - 8 years
f. Vulnerability Rating - 1 / 8 years EVRUL = 0.125
g. Criticality Rating - 6.7
Health & Safety - 7 x 30%
Financial - 4 x 15%
Environmental - 4 x 25%
Service Delivery - 10 x 30%
h. Overall Risk Rating - 0.125 x 6.7 = 0.8375
i. Internal/ Simple/ Complex -Simple
j. 2009 Direct Replacement Cost - $50,000
k. 2009 Est. Total Replacement Project Cost - $88,000
6
Summary of Replacement Costs
and
R&R Reserve Analysis
Above-Ground (Vertical) Assets
Estimated Replacement Costs
Sewer Lift Import
Stations Connection
$255,000 $245 000 I nterconnection
$849,000
:7--,
BPS
Wells $10,762,000 low- PRS $3,219,000
$24,707,000
Reservoirs
MMEM
$81,793,000
Total Above-Ground 2009 Est. Replacement Value = $121,830,000
7
Below-Ground (Horizontal) Assets
Estimated Replacement Costs
Sewer Manholes
$30,582,000
c
Sewer Mains
$143,842,000
Water Mains
$288,738,000
Total Below-Ground 2009 Est. Replacement Value = $463,162,000
Total Estimated Replacement Costs by Year
$70,000,000
$60,000,000
$50,000,000 - -
$40,000,000 - -Above Ground Water
-Above Ground Sewer
$30,000,000 - - Below Ground Water
-Below Ground Sewer
$20,000,000
$10,000,000
$o
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8
R&R Reserves Financial Analysis
Assumptions
1. Cost estimates are asset replacement only -
does not consider repair/ rehabilitation options
2. Cost estimates are in 2009 dollars -
no cost inflation or investment interest
3. Debt versus cash financing options have not
been evaluated
4. Sewer R&R reserves include current $1 per
connection/ month fee
5. 3 scenarios were evaluated - short, medium,
and long-term for water and sewer
Water R&R Reserves - Short Term 10 Yrs.
$3,500,000
1 Annual R&R Funding Contribution . $1,500,000
$3,000,000
$2,500,000 -
$2,000,000 -
$1,500,000 -
$1,000,000
$500,000
.16 ,C1
tiP,' 'e P_ 'IP
-Recommended Expenditures -Annual Funding Contribution Ending Fund Balance
9
Sewer R&R Reserves - Mid Term 30 Yrs.
$7,000,000
1 Annual R&R Funding Contribution = $75,000
$6,000,000 - - -
9
$5,000,000 I---
I
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$0
,y0 'Y'b 'yb ,yb ,y~ ,y0 ,y'1. ,yb ,y(o ,yg ,y0 ,dry 'fib ~6 ,fig
Recommended Expenditures -Annual Funding Contribution Ending Fund Balance
Summary of Reserve Recommendations
1. Recommended Water Reserves
a. AM Planning Horizon - 10 Years; Annual R&R Contribution $1,500,000
b. Annual Non-R&R Contribution - $320,000
2. Recommended Sewer Reserves
a. AM Planning Horizon - 30 Years; Annual R&R Contribution $75,000
(in addition to current sewer charge $160,000/year)
b. Annual Non-R&R Contribution $90,000
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Annual R&R Funding Contribution . $1,500,000 Annual R&R Funding Contribution = $]5,000
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10
Discussion - Comments and Questions?
11
ITEM NO. 4.2
AGENDA REPORT
Meeting Date: March 8, 2010
To: Board of Directors
From: Ken Vecchiarelli, General
Manager
Presented By: Ken Vecchiarelli, General
Manager
Prepared By: Pat Grady, Assistant General
Manager
Subject: Cost of Service and Water Rate Study
SUMMARY:
Raftelis will be making a presentation to the Board regarding the process for developing a Cost of
Service/Water Rate Study.
DISCUSSION:
Two rate structures will be evaluated during this process: Inclining Block Tiered Rates and a Budget
Based Water Rate. The Board has previously expressed interest in the Budget Based structure.
At the March 11, 2010 regular meeting, the Board will consider a proposal from Raftelis to conduct
the Cost of Service/Rate Study for the District. Staff is also seeking firm direction from the Board
regarding the rate structure preference as additional preparations and planning is required to
properly implement and support a Budget Based rate structure.
Attached for the Board's review are the slides that will be presented at the workshop.
ATTACHMENTS:
Nare: Description: Type:
Raftelis Presentation.pdf Raftelis Presentation Backup Material
3/5/2010
-M-M-N-0- Q-,;
Yorba Linda Water District
Cost of Service and Water Rate
Study
Board Workshop
March 8, 2010
® RFC
Project Objectives
Develop a Water Rate Structure that:
• Promotes conservation
• Ensures financial sufficiency and revenue stability
• Complies with California regulatory requirements
• Addresses equity concerns
• Provides affordability for essential needs
• Is easy to administer and communicate
• Provides flexibility
Water Budget Rate Structure - Policy Issues RFC
March 8, 2010 2
1
3/5/2010
Who Are We?
Raftelis Financial Consultants (RFC)
• National full service water and wastewater financial consulting firm
" One of the largest utility
consulting firms
. Our staff has served over
400 utilities and conducted a ' -
thousands of studies,
• Over 250 years of combined
experience
Staff has assisted in writing
the grant for MWDOC &
participated in meetings
® Water Budget Rate Structure - Policy Issues RFC
March 8, 2010 3
Project Team
P sEECT 1 AfiAtaEVENT
•30 years experience in Zip
financial studies and
engineering -Member of AWWA-
Finance. Accounting and
Management Control Pn0JFCT5TAFF WATER BU13GET EVERT
Committee
Khanh Phan, MBA
•
-Co-Author of WEF's SeniorCorambn
Financing and Charges for
Wastewater Systems Steve WOW, -Harvard University Graduate
-Speaker at conferences ° ° r . 15 years consulting experience
Hannah Phan, MBA Member of AWWA-Rates & Charges
Committee
•Co-author of AWWA M1 Manual
-Speaker at conferences and UCSB
Water Budget Rate Structure - Policy Issues 11FIC
March 8, 2010
2
3/5/2010
What Are Your Pricing Objectives?
I
~inancial Stability
ministrative Ease
Defensibility Customer
inderstanding
e RFC
r.,;+febou ry 2010 Water Budget Rate Structure - Policy Issues 5
Rate Structure Comparison
Uniform * *
Seasonal r * * *
Inclining
1',cter Budg?t * * * * *
RFC
Water Budget Rate Structure - Policy Issues 6
3
3/5/2010
Rate Design Process
x Workshop
f .s.
Firtancial Plan
L ,
® Water Budget Rate Structure - Policy Issues INC
March 8, 2010 7
Policy Development Workshop
JA Structud
tives
Con5crva
-tion
Water Budget Rate Structure - Policy Issues RFC
March 8, 2010
4
3/5/2010
. R ^ V,
Long-Range a
Financial Plan
Revenue Adjustment Schedule
5-yr jinonciol plan
® Water Budget Rate Structure - Policy Issues 11F`
March 8, 2010 9
Cost of Service
Rates should reflect the "cost of service" for a
particular parcel owner or water user
• Cost of service = proportionality
• The individuals / customers that cause additional cost
should pay accordingly (i.e. commercial services,
irrigation, etc.)
• Rate structure should be reflected
• Meet the requirements of Proposition 218
Water Budget Rate Structure - Policy Issues RFC
March 8, 2010
5
3/5/2010
-m-m-m-m- Q-,;
Tiered and Budget Base
Rates
® Water Budget Rate Structure - Policy Issues 11F`
March 8, 2010 11 mrm-MM
Conservation Vs. Efficiency
WATER CONSERVATION WATER EFFICIENCY
(INCLINING BLOCK) (WATER BUDGET)
Change in lifestyle No change in lifestyle
Reducing water usage Reducing water waste
Restricting water use Not restricting water use
Reducing use frequency of the Replacing with efficient
inefficient water fixtures water fixtures
km Water Budget Rate Structure - Policy Issues RFC
March 8, 2010
6
3/5/2010
Conservation Rate Structures
INCLINING BLOCK WATER BUDGET
+ Sends water efficiency signal to
+Easy to administer all customers
+ Sends clear conservation signal Addresses equity concerns for
large families / lots
+ Address affordability for basic + Properly allocates drought
needs penalty rates
+ Addresses affordability for basic
-Does not address water efficiency, needs
only target large water users
- Equity concerns -Higher administrative cost
• Public outreach
• Penalizes large families / lots Billing system update
• Exacerbated during drought Increase staff for customer
pricing service (implementation phase)
- Potential revenue instabilit Policy options need to be
y determined
® Water Budget Rate Structure - Policy Issues RFC
~,~•March 8, 2010 13
Major Policy Issues
Who should get a water budget allocation?
How do you determine efficient usage?
• Defining Indoor / Outdoor use
How do you define the tiers?
How many tiers should you have?
Nexus between costs and the individualized
tier prices
Water Budget Rate Structure - Policy Issues RFC
March 8, 2010
7
3/5/2010
Who Should Get a Water Budget?
Typically recommended to start with Irrigation,
Single Family and Multi Family accounts
• Scientific method in determining efficient water use
• In aggregate, this group of customers use the largest amount of water
and has the largest potential saving
Designing water budget for Commercial, Industry
and Institution (CII) accounts is challenging
• Due to the heterogeneous nature of this customer class
• Economic engine of the local economy and sensitive to reduce cost
® Water Budget Rate Structure - Policy Issues INC
March 8, 2010 15
Indoor Water Budget
Defining Indoor Allocation
Household size - Assume a certain household size
gallons per capita per day (gpcd)
4 persons per household x 6o gpcd x days of service
GPCD: 50 - 75 gallons of water per person per day
GPCD = 6o from Residential Water Use Summary in the Study completed by
Aquacraft, Inc. and AWWA Research Foundation
Default household size
Census or State annual demographic data
Balance between variance program and equitable allocation
Water Budget Rate Structure - Policy Issues RFC
March 8, 2010
8
3/5/2010
Outdoor Water Budget
Estimated Landscape area
• Fixed amount per meter size/ zip code
• Percentage of lot size
• Percentage of (lot size - footprint of the house)
• GIS analysis
EvapoTranspiration (ET.)- sum of evaporation and
plant transpiration from the land surface to
atmosphere
• CIMIS vs. other providers
• Historical Average vs. Actual
ET Adjustment Factor (ETAF) - Combination of Plant
Factor and Irrigation Efficiency
e Water Budget Rate Structure - Policy Issues RFC
March 8, 2010 17
Defining Tiers
Tiers
• Number of tiers
• Tier widths
Water budget for each customer class
• SFR - indoor & outdoor
• MFR - indoor & outdoor
• IRR - outdoor only
• CII & Other - rolling average, fixture, meter size
Water Budget Rate Structure - Policy Issues RFC
March 8, 2010 18 ~.p•~.~
9
3/5/2010
Water Budget Tiered Rate
Rates
P3
Excessive
Use
P2
Outdoor
Water
Budget
P1 Essential (OWB)
Water
Budget
Tier 1 Tier 2 Tier 3 Quantity
® Water Budget Rate Structure - Policy Issues 11F`
1.11 March 8, 2010 19
Variance Policies
Adjustments to default values
,/Size - Actual number of persons per household
,/Landscape area
Possible Exceptions
Indoor Outdoor
v/Elderly Care Refilling the Pool
,/Child Care Large Animals
,Medical Needs 'Right Of Ways
Hobbies Establishing Landscape Area
Holidays -Hobbies
Home Businesses xHome Businesses
Water Budget Rate Structure - Policy Issues RFC
March 8, 2010
10
3/5/2010
Implementation
Public Outreach
Costs and Additional Resources
• Billing System
• Public Outreach
• Customer Service / Variance Program
• Conservation Program
® Water Budget Rate Structure - Policy Issues 11F`
March 8, 2010 21
Public Outreach
Shadow Billings
Prop 218 notice
Public presentation
Publication / Newsletter
Coordination with other Governmental Agencies
Op Ed news article in local newspaper
Website information
Water Budget Rate Structure - Policy Issues RFC
March 8, 2010
11
3/5/2010
Public Outreach
® Water Budget Rate Structure - Policy Issues INC
March 8, 2010 23
Schedule
Project Components March April May June July August September
1. Board Approval of Contract
2. Policy Development
3. Data Requirement Provided to RFC
4. Model Development
5. Board Workshop I fl
R
6. Final Report
7. Public Outreach
Represents Board Approval of Contract
I Represents Submittal of Final Report
Represents Board Workshop
Water Budget Rate Structure - Policy Issues RFC
March 8, 2010
12
ITEM NO. 5.1
AGENDA REPORT
Meeting Date: March 8, 2010
Subject: MWDOC Water Policy Forum & Dinner - March 10, 2010
ATTACHMENTS:
Nan)--
Registration Fo rm.pdf Event Flyer Backup Material
Approved by the Board of Directors of the
Yorba Linda Water District
3/8/2010
MB/RC 5-0
MUNICIPAL
u:'µ OFTR;°T Water Policy Forum & Dinner
ORANGE
COUNTY
featuring
Mark Cowin,
Director of the Department of Water Resources
March 10, 2010
The Municipal Water District of Orange County invites you and your colleagues to attend our next Water
Policy Forum & Dinner on Wednesday, March 10, 2010, from 6:00 - 8:30 p.m. The event will be held at the
Fairmont Hotel, located at 4500 MacArthur Blvd., Newport Beach.
We are pleased to welcome as our guest speaker Mark Cowin, recently appointed Director of the California
Department of Water Resources. Mr. Cowin will discuss DWR's current and long-range priorities and
initiatives, including implementation of the water reform legislative package that was signed into law last
fall.
This is an outstanding opportunity for Orange County policy makers, community and business leaders,
water industry professionals, and others to hear directly from Mr. Cowin on some of the major water issues
being addressed by DWR today.
Registration for this event is $60 per person, which includes: three course dinner (choice of entrees); valet
parking; program materials; and no-host reception.
For additional information about this event, please contact Tiffany Baca at (714) 593-5013 or
tbaca@mwdoc.com.
- - - - - - - - - - - - - - - - - - - -
Please complete and return a reservation form for each guest by Friday, March 5, 2010.
Fax or email completed form to Tiffany Baca at tbacaCaa nwdoc. com or (714) 964-5930.
Guest name: Title:
Agency/ Company:
Phone number: Fax:
Email address:
Meal selection: Chicken Salmon: Vegetarian:
Method of payment: Credit Card Check: Pay at door:
Please make checks payable to: Municipal Water District of Orange County
P.O. Box 20895, Fountain Valley CA92728
All cancellations after March 5, 2010, and "no-shows" will be billed the full amount.