HomeMy WebLinkAbout2025-04-24 - Board of Directors Meeting Agenda Packet Yorba Linda
Water District
AGENDA
YORBA LINDA WATER DISTRICT
BOARD OF DIRECTORS REGULAR MEETING
Thursday, April 24, 2025, 8:30 AM
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/m/87903499218
Telephone: (669)444-9171 or(669) 900-6833
Meeting ID: 879 0349 9218
2. CALL TO ORDER
3. PLEDGE OF ALLEGIANCE
4. ROLL CALL
5. ADDITIONS/DELETIONS TO THE AGENDA
Items may be added to the agenda upon determination by a two-thirds vote of the Board, or a
unanimous vote if only three Directors are present, that there is a need to take immediate action which
came to the District's attention subsequent to the agenda being posted. (GC 54954.2(b)(2))
6. AB 2449 TELECONFERENCE REQUESTS
7. 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)
8. SPECIAL RECOGNITION
8.1. Recognition of Honorable Phillip D. Hawkins for his Service on the Board of
Directors
9. 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.
9.1. Fiscal Year 2025-26 Budget Workshop #3
10. 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.
10.1. Conference with Labor Negotiators
Pursuant to Section 54957.6 of the California Government Code
Agency Designated Representatives: Mark Toy, General Manager, and Lori
Thompson, Human Resources and Risk Manager
Page 1 of 24
Employee Organization: Yorba Linda Water District Employees Association
10.2. Conference with Labor Negotiators
Pursuant to Section 54957.6 of the California Government Code
Agency Designated Representatives: Mark Toy, General Manager, and Lori
Thompson, Human Resources and Risk Manager
Unrepresented Employees: All Unrepresented Classifications
11. REPORT FROM CLOSED SESSION
12. ADJOURNMENT
12.1. The next regular Board meeting is scheduled Thursday, May 8, 2025 at 8:30
AM.
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
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 24
ITEM NO. 9.1.
Yorba Linda
Water District
AGENDA REPORT
MEETING DATE: April 24, 2025
TO: Board of Directors
FROM: Mark Toy, General Manager
STAFF CONTACTS: Christine Mcllrevey, Finance Manager
Sophia Phuong, Accounting Supervisor
SUBJECT: Fiscal Year 2025-26 Budget Workshop #3
Staff will present and discuss the proposed Fiscal Year 2025-26 budgets for non-operating revenue
and expenses, debt service, reserves, CIP and Capital Outlay, and other key updates.
ATTACHMENTS:
1. 2025.04.24 - FY26 Budget Workshop 3_Presentation
Page 3 of 24
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Budget
Workshop 3 - -
April 24, 2025
4/24/2025
Overview
• Summary of FY2025-26 Budget
• Non-operating Revenue and Expenses
• Debt Service
• Reserve Balances and Target Levels
• 5-Year CIP (updated) & Capital Outlay
• BOD Requests
• Commodity Rate - Variable & Fixed Costs
• Single Family Residential Customer Bill Impact
• Projected MET and OCWD Rates
• Dues and Memberships - Administration �
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Financial Summary - Consolidated
Revenue Prior Year Projections Budget
FY 2023-24 FY 2024-25 FY 2025-26
Revenue (Operating) $ 48,331,727 $ 56,172,319 $ 60,601,786
Revenue (Non-Operating) 6,682,203 4,925,973 4,855,924
Total Revenue $ 55,013,930 $ 61,098,292 $ 65,457,710
Rate Study Assumptions $ 50,709,492 $ 55,272,771 $ 59,720,886
Variance % 8% 11% 10%
Expenses
Expenses (Operating):
Variable Costs $ 16,900,164 $ 21,002,102 $ 21,321,363
Salary Related Expenses 13,352,318 14,841,830 16,620,917*
Supplies & Services 8,769,143 9,722,737 10,796,582
Expenses (Non-Operating) 4,441,005 2,533,024 2,471,832
Total Expenses $ 43,462,625 $ 48,099,693 $ 51,210,694
Rate Study Assumptions $ 39,023,867 $ 40,911,252 $ 42,919,614
Variance 11% 18% 19%
Net Revenues $ 11,551,305 $ 12,998,599 $ 14,393,502
(Before Capital Contributions & Depreciation)
Capital Contributions $ 948,660 $ 1,450,286 $ -
Depreciation 9,188,082 9,181,996 9,272,1 16
Total Change to Net Position $ 3,311,883 $ 5,266,889 $ 4,974,900
*Salary Related Expenses Budget for FY 2025-26 is a placeholder assuming the some percentage increase as prior year.
This amount will be updated in a future budget workshop.
New Item to be presented at April 24, 2025 Board Meeting
Item was presented at Board Meeting on March 27, 2025
4/24/2025 Page 7 of 24
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4/24/2025
Non-Operating Revenue - Rate Study Comparison
Historic & Future
Prior Year Projected Budget
FY 2023-24 FY 2024-25 FY 2025-26
Property Taxes $ 2,423,322 $ 2,564,511 $ 2,602,978
Investment Income $ 3,302,499 $ 1,710,000 $ 1,590,000
Other Revenue $ 956,382 $ 651,462 $ 662,946
$ 6,682,203 $ 4,925,973 $ 4,855,924
2021 Rate Study Assumptions
FY 2023-24 FY 2024-25 FY 2025-26
Property Taxes $ 1,950,000 $ 1,950,000 $ 1,950,000
Investment Income 357,060 424,257 480,250
Other Revenue 639,658 646,055 652,515
$ 2,946,718 $ 3,020,312 $ 3,082,765
Variance from Assumptions
Rate Study Variance $ $ 3,735,485 $ 1,905,661 $ 1,773,159
Rate Study Variance % 127% 63% 58%
Page 9 of 24
Non-Operating Expenses - Rate Study Comparison
Historic & Future
Prior Year Projected Budget
FY 2023-24 FY 2024-25 FY 2025-26
Interest Expense $ 2,218,001 $ 2,513,494 $ 2,451,619
Other Expense $ 2,223,004 $ 19,530 $ 20,213
$ 4,441,005 $ 2,533,024 $ 2,471,832
2021 Rate Study Assumptions
FY 2023-24 FY 2024-25 FY 2025-26
Interest Expense $ 1,306,331 $ 1,233,581 $ 1,157,332
Other Expense 160,124 163,327 166,594
$ 1,466,455 $ 1,396,908 $ 1,323,926
Variance from Assumptions
Rate Study Variance $ $ 2,974,550 $ 1,136,1 16 $ 1,147,906
Rate Study Variance % 203% 81% 87%
4/24/2025 Pe Page 10 of 24
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Annual Debt Service Ratio
For Water Fund
FY24 FY25 FY26
Actual Projections Budget
Debt Service $ 4,134,219 $ 4,133,494 $ 4,126,619
Ratio 3.47 3.27 3.47
Per Policy 2.25 2.25 2.25
Debt Service Ratio Equation:
Total Revenue - Total Expenses (excluding interest expense)
Total Debt Service
774
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4/24/2025 EL
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4/24/2025
Reserve Types and Purpose
Operating Reserve - Over the course of the fiscal year, this reserve provides coverage
for temporary cash flow deficiencies that may occur due to timing differences and
unexpected expenditures occurring as a result of doing business.
Emergency Reserve - In the event of a disaster, this can be used to quickly repair
critical local infrastructure and bring core services back online.
Capital Replacement Reserve - Provides funding for capital projects and capital
repair and replacement of aging infrastructure.
Rate Stabilization Reserve - Can be used to smooth out water rate increase
adjustments during a year when revenues are not sufficient to meet the required Debt
Service Ratio.
Employee Liability Reserve (Restricted) - Provides funding of the liability associated
with employees' accrued vacation and other compensatory time if operating funds
do not meet these obligations in a year.
Conservation Reserve (Restricted) - Provides funding for District-wide conservation
efforts. Funds were established as a net result of administrative penalties assessed and
will be drawn down until zero, at which time this reserve will be removed.
4/24/2025 Page 14 of 24
Reserve Balances & Target Levels
Description: The following reflects the projected reserve target levels for FY 2025-26 utilizing the
current reserve policy to determine target levels. The FY 2024-25 Year End projected reserve
balances are also shown below.
FY26 Projected FY25 Year End
Reserve Fund Categories Target Levels* Projections Over/(Under)
Operating Reserve $ 30,714,289 $ 30,208,680 $ (505,609)
Emergency Reserve 7,907,652 8,276,738 369,086
Capital Replacement Reserve 52,419,855 20,479,625 (31,940,230)
Rate Stabilization Reserve 5,358,139 4,610,217 (747,922)
Employee Liability Reserve (Restricted) 594,418 732,242 137,824
Conservation Reserve (Restricted) - 49,566 49,566
Total $ 96,994,353 $ 64,357,068 $ (32,637,285)
* FY 2025-26 projected target levels are calculated based on the District's adopted reserve policy.
Page 15 of 24
Reserve Balances & Target Levels Graph
FY26 Projected Target ❑FY25 Year End Projection
$30,714,289
Operating $30,208,680
$7,907,652
Emergency $8,276,738
$52,419,855
Capital Replacement $20,479,625
$5,358,139
Rate Stabilization PP � $4,610,217
$594,418
Employee Liability (Restricted) $732,242
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Conservation (Restricted) $49,566
$0 $10 $20 $30 $40 $50 $60
Millions
Page 16 of 24
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4/24/2025 14
5-Year CIP and Capital Outlay E;
FUNDING "• TOTAL
P
Booster Pump Station Rehab $ 400,000 $ 2,100,000 $ 3,900,000
e Projects(See list below for breakdown) $ 1,130,000 $ 800,000 $ 870,000 $ 980,000 $ 1,140,000 ���
abilitation(Wells No.1 and 10) $ 420,000 $ 300,000 ���
of its
da Booster Pump Station Rehab.and Natural Gas Emergency Back Up Generator $ 150,000 $ 650,000 $ 500,000
of M
w Booster Pump Station Rehab.and Natural Gas Emergency Back Up Generator $ 150,000 $ 500,000 f i t s
rilling&Equipping $ 599,409 $ 2,880,344 $ 1,521,984 $ 5,769,668
Reservoir Rehabilitation $ 390,000 $ 650,000
Avenue Waterline $ 310,000
Sewer
Buena Vista Sewer Main Improvements $ 340,000 $ 1,380,000 $ 1,720,000
Kellogg Dr Sewer Main Upsize $ 700,000 $ 2,300,000 $ 3,000,000
Pay-Go Green Crest Sewer Lift Station $ 400,000 $ 400,000 $ 800,000
FY26-27 Sewer Cl PP Rehabilitation Project $ 400,000 $ 400,000
FY28-29 Sewer Cl PP Rehabilitation Project $ 400,000 $ 400,000
Sewer CIP Totall $ 1,100,000 1 $ 3,100,000 1 $ 740,000 1 $ 1,380,000 1 $ 6,320,000
Grant USEPA Community Grant Funding for Green Crest Sewer Lift Station($300,000,20%Match of$75,000) $ (150,000) $ (150,000) $ (300,000)
Sewer Pay-Go Total Excluding Grant Fundingil $ 950,000 1 $ 2,950,000 1 $ - $ 740,000 $ 1,380,000 $ 6,020,000
Capital Outlay Total
Vehicle Replacements $ 866,453 $ 890,000 $ 1,150,000 $ 635,000 $ 495,000 $ 4,036,453
Cl2 Generator for Lakeview $ 150,000 $ - $ - $ - $ - $ 150,000
Install Carpet in Building 4 $ 150,000 $ $ $ $ $ 150,000
Vehicle Lift for Mechanic Shop $ 65,000 $ $ $ $ $ 65,000
Replace Highland Reservoir PLC $ 35,000 $ $ $ $ $ 35,000
Replace Check Valve at Valley View $ 20,000 $ $ $ $ $ 20,000
Electric Gate for Lakeview $ 10,000 $ $ $ $ $ 10,000
Pay-Go Enterprise Resource Planning(ERP)System $ 250,000 $ 1,000,000 $ $ $ $ 1,250,000
Host Replacements(Miraloma&Las Vegas) $ - $ - $ 250,000 $ 150,000 $ $ 400,000
Switch Replacement Program $ 110,000 $ 110,000 $ - $ - $ $ 220,000
Server Room-UPS Replacement $ 140,000 $ - $ $ $ $ 140,000
Cisco Server Replacement $ - $ 80,000 $ $ $ $ 80,000
Firewall Replacements(6) $ - $ - $ $ $ 60,000 $ 60,000
Network Attached Storage(NAS)Replacement $ 35,000 $ $ $ $ - $ 35,000
Plotter Replacement I $ - $ $ $ 20,000 $ - $ 20,000
Capital Outlay Total 1 $ 1,831,453 $ 2,080,000 $ 1,400,000 $ 805,000 $ 555,000 $ 6,671,453
GRAND TOTAL-CAPITAL IMPROVEMENT&CAPITAL OUTLAYI $ 5,581,305 1 $ 9,750,086 1 $ 7,200,496 1 $ 4,617,417 1 $ 3,575,000 1 $ 30,724,304
Page 18 of 24
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4/24/2025
Commodity Rate - Variable & Fixed Costs
What makes up the commodity rate in the 2021 Rate Study?
The commodity rate is determined by three factors. Water supply, Power, and Delivery
(annual costs for operating and additional expenses needed to function).
"Delivery" is the essential costs to run the district such as O&M expenses, debt service
obligations, rate funded CIP (Pay-Go), and funding reserves.
Water Usage
Rate Water Supply Power Delivery Proposed Rate
(Variable/Fixed) . • •
Uniform Rate $2.77 $0.26 $0.71 $3.74
Percentage Allocation 74% 7% 19% 100%
Water Supply Detail:
SupplyWater Y Allocation
Fixed Costs $ 0.28 10%
Variable Costs $ 2.49 90%
Total Water Supply Cost $ 2.77 100%
Conclusion: Total Fixed Costs are $ 0.99 or 26% of the Commodity Rate. Total Variable
Costs are $2.72 or 74% of the Commodity Rate.
4/24/2025 Page 20 of 24
Effect on Customer Bill
Current Assumptions
qqw/9%Wtr& 15% Swr Adj w/9%Wtr&9.3% Swr Adj
2025-26
(Pass-Through $0.34) (Pass-Through $0.37)
Monthly Water Related Charges $119.97 $130.48
Monthly Sewer Related Charges $13.77 $15.05
(ExcludesAvg Monthly Bill(17 units) Alm,
. . •-
Average monthly bill increase of $11 .79/month
Percentage increase of 8.8%
*Capital Finance Charge (CFC) $12.27 monthly $13.38 monthly
(billed annually on property taxes) ($147.24 annually) ($160.56 annually)
Total Avg All-in Cost Per Month
(Includes Capital Finance Charge)
Total average cost increase of $12.90/month
Percentage increase of 8.8%
The CFC is an annual fee that is reflected on the property tax bill of the customer.
Page 21 of 24
Projected OCWD and MET Rates
OCWD 5-Year Replenishment Assessment Projection
85% BPP
:0
711
$620
MET Overall Rate Increase
14.0%
12.0% 11.5% 11.5%
10.0% 8.5% 8.5%
U)
8.0%
6.0% 5.0% 5.0%
4.0%
2.0%
0.0% 10
MET Approved Rates: 2025 2026 2027 2028 2029 2030
Effective January 1st 2025 % Incr 2026 % Incr Calendar Year
Treated ($/AF) $ 1,395 1 1% $ 1,528 10%
Untreated ($/AF) $ 912 1% $ 984 8%
RTS Charge ($M) $ 181 8% $ 188 4%
Capacity Charge ($/cfs) $ 13,000 16% $ 14,500 12%
Page 22 of 24
Dues and Memberships - Administration
(slide 1 of 2)
Estimated
11W Cost Services Provided
Regulatory alerts and advisories;discounted access to AWWA standards and employee technical training;includes six(6)employee
American Water Works Association(AWWA) $ 4,950 memberships and agency regional membership with CA-NV AWWA. BOD posted on website;established in 1881;develops and publishes
indistry standards;strategic plan posted on website.Thousands of members.
Association of California Cities-Orange County Partner with key leaders in public and private sectors;develop public policy goals and improve delivery of public services;opportunity
(ACC-OC) $ 5,000 to sponsor and speaker at event;discounted registration for events.Established 2011;BOD posted on website. Membership disclosed on
website including 26 OC cities and 13 special districts.
Legislative and regulatory representation on state and federal levels;access to benefits and insurance programs through ACWA-JPIA;
educational resources and employee training;discounted registration for events Incorporated 1970;largest statewide coalition of public
Association of California Water Agencies(ACWA) $ 27,800 water agencies in the country,approximately 470 public agency members=90%of the water delivered in California;BOD disclosed on
website
California Association of Sanitation Agencies $ 6,900 Legislative advocacy on local,state,and federal levels;information on regulatory issues;discounted registration for events. Established
(CASA) 1953;Bylaws/BOD posted on website; 130+ member agencies
California Chamber of Commerce(CalChamber) Resources for labor law compliance and legislative advocacy.Used by YLWD as an HR resource;forms available at less cost than
$ 500 through other sources.
Legislative advocacy on state level;educational resources and employee training;discounted registration for events.Established 1969;
California Special Districts Association(CSDA) $ 10,000 over 1,300 member agencies;Transparency section on website includes BOD/Policies/staffing.
Legislative advocacy on local and state levels;facilitate operational and education resources to ensure effective operation and
Community Water Systems Alliance(CWSA) $ 5,000 governance of mutual water companies and small water systems in CA. 17 members listed on website.YLWD not currently a member
according to the website. BOD/bylaws etc not disclosed on website.
Orange County Local Area Formation Commission Mandatory recovery fee for oversight,studies,and engagement associated with the delivery of effective and efficient public services
(OC LAFCO) $ 36,500 such as water,sewer,and public safety,etc.;County of Orange,all 34 cities,and all special districts in OC are required to pay these fees.
BOD/strategic plan disclosed on website.
National coalition dedicated to improving the Endangered Species Act;legislative advocacy for proposals being considered by
National Endangered Species Act Reform Coalition $ 1,000 Congress and federal agencies.Established 1991;Washington DC law/lobby firm"all of NESARC's management and administrative
(NESARC) services,legal and legislative drafting services,strategic counsel,and lobbying expertise"per website.YLWD not cureentlky listed as a
member.
Staff recommends further Board discussion,input and direction on the highlighted items. Non-highlighted items are longstanding memberships
where there is frequent participation, education, engagement, and/or conference attendance by Board and YLWD staff.
Dues and Memberships - Administration
(slide 2 of 2)
Cost
Partner with key leaders in business,local government,and non-profit sectors;promote economic development and quality of life.
Orange County Business Council(OCBC) $ 5,000 Established in 1995 when several simialr pre-existing groups datingback to 1893 merged.BOD/Mission disclosed on website;YLWD has
been a member in the past but is not currently a member.
Orange County Water Association(OCWA) $ 250 Unlimited Director/employee membership for flat price;discounted registration for in-person events.Numerous educational
opportunities/events/seminars for board and staff. Established 1960; BOD/bylaws disclosed on website.
Establish and maintain positive relationships with local businesses,residents,and government agencies to encourage community
Placentia Chamber of Commerce $ 950 involvement and economic growth;discounted registration for events.YLWD is alongstanding member and is represented on the Board
of Directors by Joanna Gonzalez;Established 1924;membership and BOD disclosed on website.
Represents regional water interests and stakeholders in public and private sectors;promotes public education on critical water issues.
Southern California Water Coalition(SCWC) $ 1,000 Established 1984;membership/BOD disclosed on website.
Promote public education on water economics,water policy,and water resource management;discounted registration for events.
Urban Water Institute(UWI) $ 5,000 Conferneces for Board and staff with relevant current events and education.Established 1993 by Orange Countian Wayne Clark;
Membership and BOD disclosed on website.
Address wildfire risk and related issues by raising awareness and advocating for federal government solutions.Established January 2025;
Wildfire Alliance*NEW $ 5,000 no lisitng of members/blows/BOD;hosted by Washington lobbyist/lawfirm. Per Executive Director,just 6 members nationwide,and is a
FOR PROFIT limited liability company that is"wholly owned by Nick Crockett and Ryan Leavitt"who are Washington DC lobbyists.
Establish and maintain positive relationships with local businesses,residents,and government agencies;encourage economic,civic,
Yorba Linda Chamber of Commerce $ 850 and industrial success of local community,discounted registration for events.YLWD is a longtime member;represented on BOD by Mark
Toy,Establised 1923;BOD and membership disclosed on website.
Miscellaneous $ 1,000
TOTAL $116,700
Staff recommends further Board discussion,input and direction on the highlighted items. Non-highlighted items are longstanding memberships
where there is frequent participation, education, engagement, and/or conference attendance by Board and YLWD staff.
REVISED - ITEM NO. 9.1
Reserve Balances & Target Levels
Description: The following reflects the projected reserve target levels for FY 2025-26 utilizing the
current reserve policy to determine target levels. The FY 2024-25 Year End projected reserve
balances are also shown below.
FY26 Projected FY25 Year End
Reserve Fund Categories Target Levels* ' Projections Over/(Under)
Operating Reserve $ 30,714,289 $ 30,208,680 $ (505,609)
Emergency Reserve 7,907,652 8,276,738 369,086
Capital Replacement Reserve 33,875,623 20,479,625 (13,395,998)
Rate Stabilization Reserve 5,358,139 4,610,217 (747,922)
Employee Liability Reserve (Restricted) 594,418 732,242 137,824
Conservation Reserve (Restricted) - 49,566 49,566
Total $ 78,450,121 $ 64,357,068 $ (14,093,053)
* FY 2025-26 projected target levels are calculated based on the District's adopted reserve policy.
REVISED - ITEM NO. 9.1
Reserve Balances & Target Levels Graph
IFY26 Projected Target ❑FY25 Year End Projection
Operating $30,208,680
57,907,652
Emergency $8,276,738
533,875,6)3
Capital Replacement I $20,479,625 I
358,1 39
Rate Stabilization I $4,610,217
Employee Liability (Restricted) $732,242
So
Conservation (Restricted) 1 $49,566
$0 $5 $10 $15 $20 $25 $30 $35 $40
Millions