HomeMy WebLinkAbout2012-01-16 - Board of Directors Meeting Agenda Packet
Yorba Linda
Water District
AGENDA
YORBA LINDA WATER DISTRICT
BOARD OF DIRECTORS WORKSHOP MEETING
Monday, January 16, 2012, 3:00 PM
1717 E Miraloma Ave, Placentia CA 92870
1. PLEDGE OF ALLEGIANCE
2. ROLL CALL
Phil Hawkins, President
Gary T. Melton, Vice President
Michael J. Beverage
Ric Collett
Robert R. Kiley
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. PRESENTATIONS
4.1. Water Rate Study and Financial Planning Workshop (Presentations and Discussion)
. Cost of Service, Financial Model & Rate Alternatives (Presenter: Sanjay Gaur,
Raftelis)
. Revenue Needs and Options (Presenters: Cindy Botts and Stephen Parker)
5. ADJOURNMENT
5.1. The next regular meeting of the Board of Directors will be held January 26, 2012 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: January 16, 2012
To: Board of Directors
Subject: Water Rate Study and Financial Planning Workshop (Presentations and
Discussion)
. Cost of Service, Financial Model & Rate Alternatives (Presenter: Sanjay
Gaur, Raftelis)
. Revenue Needs and Options (Presenters: Cindy Botts and Stephen
Parker)
ATTACHMENTS:
Name: Description: Type:
YLWD Board Rate Workshop Final.pdf Raftelis Presentation Backup Material
Rate Study Financial Planning Workshop PPT.pdf Staff Presentation Backup Material
Resolution No. 08-01.pdf Reso 0801 Backup Material
Resolution No. 08-02.pdf Reso 08-02 Backup Material
Budget Calendar - FY 12.13.xlsx Budget Calendar Backup Material
El
Yorba Linda
Water District
C}
RATE DESIGN
C
BOARD WORKSHOP
Yorba Linda Water District
January 16, 2012
RF
rba Linda RAIFTFLIS FINANCIAL
Water District CONSULTANTS, INC.
RFC
RAMLIS FIF~1hNOAL
CONS€JLTANTS, INC.
El
Yorba Linda
Water District OVERVIEW
Water Financial Plan
Key Assumptions
Financial Plan Scenarios
• Scenario 1- Approved CIP, No Annex
• Scenario 2 - Modified CIP, No Annex
• Savings from Annexation
Recommendations
Water Rate Structure Options
Results of Pricing Objective Exercise
Proposed Rate Structure
Customer Impacts
Discussion
Sewer Overview
RFC
CONSUf NTS ~ Jan 16, 2012 YLWD - Rate Design Board Workshop 2
FINANCIAL PLAN
Jan 16, 2012 YLWD - Rate Design Board Workshop 3
El
WeerDtdriict FINANCIAL PLAN
KEY ASSUMPTIONS
Inflations
General costs: 3.0%
Personnel costs: 3.5%
Construction costs: 3.0%
Other revenues: 2.0%
Interest earnings: 0.8% (FY 2012 & FY 2013)
and 2.0% (after)
Pass-thru power and imported water costs
a
Rates effective July 1st
RFC
CONSUf NTs ~ Jan 16, 2012 YLWD - Rate Design Board Workshop 4
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WeerDtdriict FINANCIAL PLAN
KEY ASSUMPTIONS
Water sales & projected growth
Growth: 0.4% (estimated by the District)
FY 2012: 19,000 AF
Water supply
Annex
(stag, FY,2014)
OCWD 48% 65%
MWDOC 52% 35%
RFC
CONSUf NTs ~ Jan 16, 2012 YLWD - Rate Design Board Workshop 5
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Yorba Linda
Water ter District
APPROVED CIP
CIP (in million FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017
Highland BPS Upgrade $3.64
Ohio St/Oriente Dr Pipeline Repl $1.26
2010 Waterline Project $1.77
Well No. 20 $1.35
YL Blvd Booster Station $0.50 $4.25 $0.60
Elk Mountain Site Imp $0.87
Non-Pot Water Study for Irrig Use $0.04
S & W Well Project $1.00 $1.50 $2.00 $3.48
Computerized Maint & Mgmt. Syst. $_0.07
Fairmont Res., BPS & Site Imp $0.45 $2.00 $3.50
2012 Pipeline Project $1.34 $1.22
Lakeview Grade $0.16 $0.50
Lakeview Fencing $0.05
Press. Reg. Stations Upgrade $0.50 $0.50
Disinf. Bstr. Sta. at Hidden Hills Res $0.20
GIS - Phase II $0.08 $0.06
Annual Routine Capital R&R* $1.79 $1.17 $2.87
Total CIP $11.67 $10.39 $7.32 $5.27 $1.17 $2.87
~o5~f STS Jan 16, 2012 YLWD - Rate Design Board Workshop 6
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Water ter District
Yorba Linda MODIFIED CIP
CIP (in • IFY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017
Highland BPS Upgrade $_3.64
Ohio St/Oriente Dr Pipeline Repl $1.26
2010 Waterline Project $1.77
Well No. 20 $1.35
YL Blvd Booster Station $0.50 $3.25 $1.60
Elk Mountain Site Imp $0.17
Non-Pot Water Study for Irrig Use $0.04
Well No. 21 $0.25 $1.25 $1.50
Computerized Maint & Mgmt. Syst. $0.07
Fairmont Res., BPS & Site Imp $0.45 $2.00 $3.50
2012 Pipeline Project $1.34 $1.22
Lakeview Grade $0.16 $0.50
Lakeview Fencing $0.05
f Press. Reg. Stations Upgrade $0.50 $0.50
Disinf. Bstr. Sta. at Hidden Hills Res $0.20
Meter Replacement Program $0.58 $0.58 $0.58 $0.58 $0.58
GIS - Phase II $0.06 $0.04
Well No. 22 $0.75 $1.25 $1.00
Annual Routine Capital R&R* $1.79 $1.17 $2.87
Total CIP $10.14 $9.72 $9.18 $3.61 $2.74 $3.45
RFC
CONSUf NTS ~ Jan 16, 2012 YLWD - Rate Design Board Workshop 7
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WaterDtdriict STATUS QUO FINANCIAL PLAN
APPROVED CI P
Chart 1- Revenue Adjustments Coverage Chart Chart 1- Revenue Adjustments &
ID0.0°•;_ 2ur,
Coverage Chart
Chart 2 - Operating Financial Plan
-Blue bar - Proposed Revenue Adjustments
-Stacked bars - Projected Expenses (Water -Red line - Required Coverage Ratio 110%
Cost, YLWD O&M, Debt Service, Reserve -Green line - Projected Coverage Ratio
Funding & Non-Operating)
Chart 4 - CIP & Funding Sources Chart 3 - Reserve Chart
-Green bars - CIP to be funded by Paygo -Red bar - Projected Reserve Ending Balances
-Purple bars - CIP to be financed by new debt -Green line -Target Reserve Balances
,s.
Financial Plan Criteria
-Debt Coverage (Green line on Chart 1) Required Coverage 110% (Red line on Chart 1)
-Reserve Ending Balances (Red bar on Chart 3) Target Balances (Green line on Chart 3)
RFC RAMLIS CONSUf NTS ~ Jan 16, 2012 YLWD - Rate Design Board Workshop 8
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Yorba Linda
Water ter District
FINANCIAL PLAN
SCENARIO 1 - APPROVED CI P, NO ANNEX
Chart 1- Revenue Adjustments & Coverage Chart Chart 2 - Operating Financial Plan
15.095 7 T 40095 Ln X40
10.0°r6
10.0°5 300 - F -
200% $20
5:035 2.1516 2. % 100% $10
+ 0.095
0:09`4 0°f4 $0
RevAdi 2012 2013 2014 2015 2016 2017 Coverage 2012 2013 2014 2015 2016 2017
MVDO&M ~VVaterCost Debt Service Nor-Operatic-
~iRevAdj -0 Coverage Ratio -Required Coverage • AlertCove rage Res Furdir;; Current Rev -Proposed Rev
Millions Chart 3 - Total Reserve Chart Chart 4 - CIF" and Funding Sources
1 a $15 selectclP No-Annex CIP
S10
$10
$7 $6
$S $5
$0 $0
2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017
Ending Balances tTarget • Aler-Balances ■DehtFunding PayGo
RFC
CONSUf NTS IINC Jan 16, 2012 YLWD - Rate Design Board Workshop 9
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Yorba Linda
Water ter District
FINANCIAL PLAN
SCENARIO 2 - MODIFIED CIP, NO ANNEX
Chart I - Revenue Adjustments & Coverage Chart Chart 2 - Operating Financial Plan
10.0% 9.0% 9.0% 400°/5 U1 $40
0
8.0% - - 300% = $30
6.0%
200% $20
4.0%
2.096 2.0% 2:096
2.046 r 100% $10
0.0'.5
0.0°5 - 0% $0 7-1
2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017
Rev Adj Coverage
~YL'A"Dd&h4 ~46;aterCost de6tSen;^ice Nor-dFeratirg
~RevAdj 4 Coverage Ratio -Required Coverage + Alert Coverage i~ Res FLrcirg CLrrert Rey; - Prop eo Re-;
Millions Chart 3 - Total Reserve Chart Chart 4 - CIP and Funding Sources
$20 $15
FSelectCIP No-Annex CIP
$15
$10
$10 $6 $7
$ 5
$0 : $0
2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017
Ending Balances - Target + Alert Balances =d=6tFunding PayGo
RFC
CONSUf NUS IINC, Jan 16, 2012 YLWD - Rate Design Board Workshop 10
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Yorba Linda
Water ter District
FINANCIAL PLAN
SCENARIO 3 - MODIFIED CIP, ANNEX
Chart 1- Revenue Adjustments & Coverage Chart Chart 2 - Operating Financial Plan
10.0' 8:0° 8.0'46 400% $40
300%
6.096 200% $20
4.0% 2.0% 2.0% 2.0%
10036 $10
2.0% - °
0.0?G
0.096 Dam $0
2012 2016 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017
Rev Adi Caverarge
YMDO&It4 'srylaxerCost r~DebtSenaice Non-Operating
lllllllllllllllllllllllllRevAdj 0 Coverage Ratio -Required Coverage + AlertCove rage t~Res Funding Current Rey; - Proposed Re,.-
Millions Chart 3 - Total Reserve Chart Chart 4 - CIP and Funding Sources
$20 0 $15 SeleCtCIP Annex CIP
$15 =
$10 '
$10 $6
$5 $5
$0 $0 _
2012 2016 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017
I Ending Balances 6 Target • .AlertOalances EDebtFunding PayGo
Estimated Cost Savings from Annexation: -$4.2M from FY 2014 - FY 2017 in
Water Supply Costs
RFC
CONSUf NTs ~ Jan 16, 2012 YLWD - Rate Design Board Workshop I I
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Wa`e~Dia`t RECOMMENDED FINANCIAL PLAN
Proceed with Scenario 2
Continue to lobby for Annexation
RFC
CONSUf NTs ~ Jan 16, 2012 YLWD - Rate Design Board Workshop 12
RATE DESIGN
Jan 16, 2012 YLWD - Rate Design Board Workshop 13
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WeerDtdriict RATE STRUCTURE RANKING
Scores
Status Quo & Modified
Revenue Stability Uniform meets these
12
• Impacts
requirements
Easy to Impleme r0
Affordability for 3-7
Funding Mechanism for Al
Easy to Administer 8
Promoting Conservation 7
Equitable in Allocating Capital Cost 6
Targeting Outdoor Water Use Water Budget meets these 5
Drought Management Tool requirements 5
Promoting Efficiency 5
RFC
CONSUf NTS ~ Jan 16, 2012 YLWD - Rate Design Board Workshop 14
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WeerDtdriict RATE STRUCTURE OPTIONS
Option 1-Status Quo
% Increase on the current rates
Option 2 - Modified Uniform
Uniform service charges & modified uniform commodity
rates
Enhance revenue stability while maintaining affordability
Option 3 - Modified Uniform & AWWA
Service Charges
AWWA ratio service charges & modified uniform
commodity rates
Enhance revenue stability while maintaining affordability
Address equity concerns on different meter capacity
RFC
CONSUf NTS ~ Jan 16, 2012 YLWD - Rate Design Board Workshop 15
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Wa`e~Dia`t ENHANCED REVENUE STABILITY
Current Rate Structure
(Option 1- Status Quo)
14% from Fixed Service Charges
86% from Commodity Rates
L
Proposed Rate Structure
(Option 2 or 3 - Modified Uniform or AWWA)
20% from Fixed Service Charges
80% from Commodity Rates
RFC
CONSUf NTS ~ Jan 16, 2012 YLWD - Rate Design Board Workshop 16
El
Yorba Linda
Water District PROPOSED RATESO, SCENARIO 2
• • Modified Uniform AWWA
Meter Size Current Status Rates FY 1 2014 FY 2013 FY 2014 FY 2013 FY 2014
5/8 $11.73 $12.79 $13.95 $18.95 $20.66 $10.94 $11.93
3/4 $11.73 $12.79 $13.95 $18.95 $20.66 $10.94 $11.93
1 $11.73 $12.79 $13.95 $18.95 $20.66 $18.23 $19.88
11/2 $11.73 $12.79 $13.95 $18.95 $20.66 $36.45 $39.74
2 $11.73 $12.79 $13.95 $18.95 $20.66 $58.31 $63.56
3 $11.73 $12.79 $13.95 $18.95 $20.66 $127.55 $139.03
4 $11.73 $12.79 $13.95 $18.95 $20.66 $229.58 $250.25
6 $11.73 $12.79 $13.95 $18.95 $20.66 $510.17 $556.09
8 $11.73 $12.79 $13.95 $18.95 $20.66 $874.57 $953.29
10 $11.73 $12.79 $13.95 $18.95 $20.66 $1,384.73 $1,509.36
Commodity 2013 FY 2014 FY 2013 FY 2014 FY 2013 FY 2014
Rates
Tier 1 $2.52 $2.75 $3.00 $2.22 $2.42 $2.22 $2.42
0-10 cd / dwelling unit
Tier 2 $2.52 $2.75 $3.00 $2.69 $2.94 $2.69 $2.94
Above Tier 1
Uniform $2.52 $2.75 $3.00 $2.55 $2.78 $2.55 $2.78
Applied to CII Rates
RFC
CONSUf NTS ~ Jan 16, 2012 YLWD - Rate Design Board Workshop 17
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Yorba Linda
Water ter District
CUSTOMER IMPACTS
OPTION 1 - STATUS QUO
%Bills Customer Impacts
Selected Rate Option- Status Quo
45%
40%
40%;.
35%
30%
s 25%
25%
20% 16%
15%
15%
u'r
10%
5%
0% 0%
0%
=50 $0-$1 $1-$3 $3-$5 $5-$10 $10-$20 $20-S40 a$40
$ Change in Monthly Bills
SFR 1-in meter Monthly Bill Comparisons at Various Usage Levels
Selected Rate Option - Status Quo
$6cba -
$5D13
$4D6
$30D
$200
$1a6
6 t~ . 1
5 ccf 10 ccf 15 ccf 25 ccf 50 ccf 100 ccf 200 ccf
Monthly Billed Usage
0 Current Bills $24,33 $35.93 $49.53 $74,73. $137.73 $26173 $515.73
~Proposed Inclining Bills $26.54 $40.29 $54.04 $51.54 $150.29 $287.79 $562.79
Irnpact $2 $3 $5 $7 $13 $24 $47
Impact 9% 9% 9% 9% 9% 9% 9%
RFC % CQ,1JS T_ WTS ~ Jan 16, 2012 YLWD - Rate Design Board Workshop 18
El
Yorba Linda CUSTOMER IMPACTS
Water District
OPTION 2 - MODIFIED UNIFORM
%Bills Customer Impacts
Selected Rate Option- Modified Uniform
70% 67',3
4045
30%
" 20% - 18%
12%
10%
0% 0% 0% ~ 2/ 1°.5
s$0 $0-$1 $1-$3 $3-$5 $5-$10 $10-$20 $20-$40 x$40
$ Change in Monthly Bills
SFR 1-'rn meter Monthly Bill Comparisons at Various Usage Levels
Selected Rate Option- Modified Uniform
r $600 -
$5oo
$4oo
E
$300
$200
$100
$0.
MonthhyBilled wage 5 ccf 10 ccf 15 ccf 25 ccf 50 ccf 100 ccf 200 ccf
M Current Bills $24.33 $36.93 $49.53 $74.73 $13733 $263.73 $515.73
Proposed Inclining Bills $30.05 $41.15 $54.60 $81,50 $148,75 $2.83.25 $552,25
Impact $6 $4 $5 $7 $11 $20 $37
%Impact 24% 11% 10% 9% 8% 7% 7% J
RFC I
Co~5~Sf WTS ~ Jan 16, 2012 YLWD - Rate Design Board Workshop 19
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Yorba Linda
Water ter District
CUSTOMER IMPACTS
OPTION 3 - MODIFIED UNIFORM Sc AWWA SERVICE CHARGES
Rew
Customer Impacts
Customers with
Selected Rate Option-AWWA
5/8 & 3/4 in. 40%
meter with low
consumption
23%
21%
15%
4%
10%
3%
J
5% 1 03c 2%
<_$0 $0-$1 $1-$3 $3-$5 $5-$10 $10-$20 $20-$40 >$40
$ Change in Monthly Bills
SFR 1-in meter Monthly Bill Comparisons at Various Usage Levels
Selected Rate Option -AWWA
$600
j:
$500
$400
$300_
$200
$100 _
$a V~I
Monthly Billed Usage 5 ccf 10 ccf 15 ccf 25 ccf 50 ccf 100 ccf 200 ccf
a Current Bills $24,33 $36.93 $49.53 $74,73 $137.73 $263.73 $515,73
Proposer! Inclining Bills $2933 $40.43 $53.88 $80.78 $148.03 $282.53 $551,53
Impact $5 $3 $4 $6 $10 $19 $36
% Impact 21% _
s 9/0 9% 8/ 7% 7% 7%
RFC
CQ,1JS T- WfS,1NC Jan 16, 2012 YLWD - Rate Design Board Workshop 20
DISCUSSION
Jan 16, 2012 YLWD - Rate Design Board Workshop 21
SEWER OVERVIEW
Jan 16, 2012 YLWD - Rate Design Board Workshop 22
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Yorba Linda
Water District SEWER OVERVIEW
ASSUMES CITY TRANSFERS OF MF & CII TO DISTRICT RATES IN FY 2016
6~--
Revenue Adjustments and Debt Coverage Operating Financial Plan CIP Funding Sources
100.00% 140% $2.0 $700;000 .$645,000._.
...............5535;362.....
80.00% 120% 9 $1.5 $600,000 ....$551,668
100%
r2 $500.000
60.0095 80'% $1.0
$400,000 ..................$3x27..8.1.8.................
40.00% 60% $267,890
40% S0.5 $300.000
20.00%
OiOfl% - - 0% FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 $100,000
FY 2012 FY 2013 FY 2014 Fl' 2015 FY 2016
ti Revenue Adjustments Debt Coverage Ratio O&M Expenses OebtService FY 2012 FY 2013 FY 2014 FY 2015 FY 2016
Other Expenses Reserves Funding
Required Debt Coverage • Debt Coverage Warning Total Revenue at currentrates -Total Revenue at proposed rates ■Bondsj Debt Funded ' Rates Funded •i• Annual CIP
WW Operating Reserve WW Capital Reserve WW Emergency Reserve
$0.30 $1.5
5a6 _
$0.20 m $0.5 .2
e S1.0
G .2 $0.4 _
$0.10
t $0.2 $0.3 $0.3
$$0.00 0.3 $0.5 _..t $O
A1 ~ $0.1 -
-$0.10 $0A _
FY 2012 FY 2013 FY 2014 FY 2015 PYZOI~ $0.0 _
FY 2012 F'f 2013 FY 2014 FY 2015 FY 2+716
FY 2012 FY 2013 FY 2014 FY 2015 FY 2016
WW Operating Reserve Ending Balance t WW Emergency Reserve Ending Balance
-WW Operating Reserve Minimum NW Capital Reserve Ending Balance -W W Erne rgency Re 5e rve Minimum
WIN Operating Reserve Maximum- _WW Capital Reserve Minirrurr -WW Emergency Reserve Maximum
W'oVOpe rating Reserve Target'Warning 4 Yo Vo Capital Reserve Target Warning • WW Emergency Reserve Target Warning
00
04
RFC
RAM CONSUf NTS IINC Jan 16, 2012 YLWD - Rate Design Board Workshop 23
El
Yorba is
Water er District SEWER OVERVIEW
ASSUMES CITY TRANSFERS OF MF & CII TO DISTRICT RATES IN FY 2014
Revenue Adjustments and Debt Coverage Operating Financial Plan CIP Funding Sources
100.00% 140% .62.0 $700.000 $645.1300
80.0095 120% Q $1.5 $600.000 t $551.668
80% $5
00.000 8.....
60.0[]% _ 80% $1A
40.0095 60% 267.800
40% $0.5 $300,009 20.00% 20% $200.000 $0.0
0:00% 0°k F 2012 FY 2013 FY 2014 FY 2015 FY 2016
$100:000 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 1__
IIIIIIIIIIIt Revenue Adjustments Debt Coverage Ratio -O&M Expenses Oebt Service FY 2012 FY 2013 FY 2014 FY 2015 FY 2016
Other Expenses Reserves Funding
-Required Debt Coverage • Oeht Coverage Warning Total Revenue at currentrates Total Revenue at proposed rates ■Bondsj0elat Funded QRates . Funded Annual CIP
WW Operating Reserve WW Capital Reserve WW Emergency Reserve
$025 _ $0.6 $15
$0.20 - - _ Q
u $as ~ _
$l.a
Q . . $0$0.10 .3 $015 Q $0.4
•
$005 $0.2 $0.3
$0-1 `
$0.00 ~ $0.0
FY 21312 FY 21]13 FY 2014 FY 2015 FY 2016 $'0-0 - FY 2012 FY 2013 FY 2014 FY 2015 FY 2016
FY 2012 FY 2013 FY 2014 FY 2015 FY 2016
1111111111111111W W Operating Reserve Ending Balance WW Emergency Reserve Ending Balance
_WW Operating Reserve Minimum 11111111111111W W Capital Reserve Ending Balance _WW Emergency Reserve Minimum
WV, Operating Reserve Maximum -WW Capital R.ese rve Minimum, °WV'd Emergency Reserve Maximum
+ WWOperating Reserve Target Warning • WWCapital Reserve Target Warning + 'r V,Em:ergency Reserve Target Warning
RFC
CONSUf NTS IINC Jan 16, 2012 YLWD - Rate Design Board Workshop 24
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Yorba Linda
Water District DISCUSSION
T ~
V
■ ■ ■ ■ ■ ■ ■ ■
RFC
CONSUf NTs ~ Jan 16, 2012 YLWD - Rate Design Board Workshop 25
Yorba Lin
Water RESERVE TARGETS FOR FY 2012
Operating Reserve - 8% of O&M
Emergency Reserve - $1.00 million
Capital Replacement Reserve - $1.82
million
COP Reserves - $2.15 million
Employee Benefit Liability (EBL) Reserves
- $0.18 million
RFC
Co~.,o.rs,a+c. Jan 16, 2012 YLWD -Rate Design Board Workshop 26
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Wa`e~Dia`t PRICING OBJECTIVE RESULTS
Important Count of:
Criteria Least Important Very Most
Important Important
Customer Understanding 0 0 2 3
Revenue Stability 0 1 1 3
Minimization of Customer Impacts 0 1 1 3
Easy to Implement 0 1 3 1
Affordability for Essential use 0 2 2 1
Funding Mechanism for Alternative Water Supply &
Conservation Programs 1 1 2 1
Easy to Administer 1 1 2 1
Promoting Conservation 1 1 3 0
Equitable in Allocating Capital Cost 3 0 0 2
Targeting Outdoor Water Use 2 1 2 0
Drought Management Tool 2 1 2 0
Promoting Efficiency 1 3 1 0
RFC
CONSUf NTS ~ Jan 16, 2012 YLWD - Rate Design Board Workshop 27
Now
(7) -
Yorba Linda
Water District
Rate Study & Financial Planning Workshop
Presented by: Stephen Parker & Cindy Botts
January 16, 2012
Now
Commodity Rate Breakdown
$2m52 Reserves
7°%
per unit `$19'
(748 gallons) Supplies and services
15%
($.38)
Variable water costs
Salary-related expenses 57%
21%
($.52) ($1.44)
Now
• Comparison
$3.00 (YLWD vs. , - $900.00
$800.00
$2.50
$ 700.00
$2.00 $ 600.00
$ 500.00
$1.50
$400.00
$1.00 $ 300.00
$ 200.00
$0.50
$100.00
Jan 03 Jan 04 Jan 05 Jul 05 Jan 06 Jan 07 Aug 08 Jan 09 Sep 09 Aug 10 Jan 11 Jan 12
®YLWD Commodity Charge -11- MWD $/Acre-foot
Now
(7) -
Projected Future Water Costs
(OCWD vs. MWD)
$1,200 80%
$1,002
$1,000 75%
$892
$800 $794 70%
65%
$600 64% 65%
$400 ~ - ~ 60%
$286 $328
$255
$200 55%
I
$ - 50%
FY 11-12 FY 12-13 FY 13-14 FY 14-15 FY 15-16
MWD Projected Future Water Rates ®OCWD Projected Future Water Rates OCWD Projected Future BPP
Note: Expected pass-through increases of 2%-3% over the next 3 years
Now
(7) -
• Overall - Comparison
Fixed Commodity $ Total Cost
(I II meter) (25 units)
Golden State WC 37.80 83.27 121.07
Laguna Beach CWD 30.05 89.00 119.05
Mesa Water 21.25 67.50 88.75
Moulton Niguel WD 10.36 36.90 47.26
South Coast WD 49.16 79.04 128.20
YLWD 11.73 63.00 74.73
Note: YLWD is the only OC agency with a static fixed charge across all meter sizes
U&
r,
y.
W- I.
I°..--.~,~.~~~ ~ ~x$'. I 'v. iIS~i ~In~1 Yt YPCFT-A~ ~.,Va..+ I 1.-• _I- ~ r _
e
Financial • * Does not include Variable Water
Cost Pass-throughs
1• meet all Strategic Plan
Goals
L A FY 14/15- 30~
20
- • i i -
.
• ' ' • •
BE
3 '
r,
y.
W- I.
I°..--.~,~.~~~ ~ ~x$'. I 'v. iIS~i ~In~1 Yt YPCFT-A~ ~.,Va..+ I 1.-• _I- ~ r _
e
rr` ( ` -
Discussion- Financial Decision Tree
* Does not include Variable Water
Cost Pass-throughs
.
Meet all Strategic Plan'
1.
Goals
L A FY 14/15: 3~0
20
- • i i -
.
30 BE
'
r,
y.
W- I.
I°..--.~,~.~~~ ~ ~x$'. I 'v. iIS~i In~1 Yt YPCFT-A~ ~.,Va..+ I 1.-• _I- ~ r _
e
Rate Structure Decision Tree
L
2 .
• i •
YLWD Rate i
Structure jdITA MA
1
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Discussion- Rate Structure Decision Tree
YLWD Rate 20
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Housekeeping Items
Now
Policy on Refunds from Outside Agencies
• Resolution 08-01: All variable water cost
refunds received credited to current customer
accounts
• Staff's proposed method: Refunds used to
fund system improvements, benefitting the
same customer base
Now
Policy on Determining the Monthly Service Charge
Component of the Water Rate
• Resolution 08-02: 21% of fixed supplies,
services and personnel costs
• Did not use this method for Sept 2009 &
August 2010 rate increase ($10.20 to $11.73)-
Finance unaware of resolution
• Raftelis' proposed method: 20% of total
revenue collected on the fixed charge
Questions?
i
RESOLUTION NO.08-01
RESOLUTION OF THE BOARD OF DIRECTORS
OF THE YORBA LINDA WATER DISTRICT
ADOPTING A POLICY ON THE DISPOSITION OF
REFUNDS FROM OUTSIDE AGENCIES
WHEREAS, the Board of Directors of the Yorba Linda Water District has, from time
to time, received refunds from water agencies such as the Metropolitan
Water District of Southern California and the Municipal Water District of
Orange County; and
WHEREAS, the Board of Directors of the Yorba Linda Water District has considered
many options on the disposition of the check(s) including: 1) an
immediate return to District customers in the form of a refund; 2) a one-
time refund to each currently active account; 3) a reduction in the water
rate for the next twelve months; 4) a reduction in the water rate for just
the summer months; 5) a return of the funds to the issuing agency with a
request that those funds be applied to offset future invoices; and 6)
deposit of the funds directly into the water operating fund account, and
WHEREAS, the Board of Directors has decided in the past that the fairest, quickest
and least expensive method was to issue a one-time refund credit to
each active account excluding fire detector check accounts at the time
of the refund, and
WHEREAS, on December 13, 2007, the Board of Directors adopted Resolution No.
07-17 approving the pass through of future rate increases from the
Metropolitan Water District of Southern California, the Municipal Water
District of Orange County; the Orange County Water District, Southern
California Edison Company or The Gas Company to the District's
customers at the time of the increase, and
WHEREAS, the Board of Directors desires to also pass through to the District's
customers refunds received from these same agencies.
NOW THEREFORE BE IT RESOLVED by the Board of Directors of the Yorba Linda
Water District that when the District receives a refund from the Metropolitan Water
District of Southern California, the Municipal Water District of Orange County; the
Orange County Water District, Southern California Edison Company or The Gas
Company the refund shall be passed through to the customers in the following method.
Section 1. By taking the total amount of the refund divided by the total number of
active water accounts, excluding the fire detector check accounts, and
applying the refund as a one time credit on a date to be determined by the
General Manager.
i
Section . Resolution No. 08-01 becomes effective from this date forward.
PASSED AND ADOPTED this 27th dad of March, 2008, by .the following called. vote;
AYES: Armstrong, Beverage, Go Lt, mime, Summerfielc
& one
s
N on 0-
ENT..
ABSTAIN None
ht, Sum it
EET:
I gel A Payne, Secret
RESOLUTION NO. 08-02
RESOLUTION OF THE BOARD OF DIRECTORS
OF THE YORBA LINDA WATER DISTRICT
ON SETTING FORTH THE POLICY ON THE
CRITERIA USED FOR DETERMINING THE BASIC SERVICE CHARGE
COMPONENT OF THE WATER RATE
WHEREAS, the Board of Directors of the Yorba Linda Water District is responsible
for setting and adjusting the rate charged for water sold by the District;
and
WHEREAS, the Board of Directors has adopted Rules and Regulations for the
District which set water rates and related categories; and
WHEREAS, pursuant to Water Code Section 31007, the Board of Directors is
required to set water rates at a level which will pay for the provision of
water services including depreciation and other overhead; and
WHEREAS, a notice was mailed to each account identifying the property receiving
water service, explaining the maximum rate proposed; explaining the
reason for the increase and the way in which it was calculated (including
but not limited to the pass through of rates from the five energy and
water providers) and giving notice of a public hearing on such increase;
and
WHEREAS, as explained in the notice, the District prepared and made available at
the District office a report entitled "Water Rate Report for Fiscal Years
2007-08 and 2008-09, which explained the rate structure and proposed
increase in greater detail; and
WHEREAS, the water rate report presented to the Board of Directors on December
13, 2007 was subject to the substantive and procedural requirements of
Proposition 218 (California Constitution Art. XIII D) and the water rate
report and the reporting guidelines met all such requirements; and
WHEREAS, the Board of Directors has from time to time, with the latest rate hearing
on December 13, 2007, determined that a basic service charge
component of the water rate structure should be maintained to insure
District customers have water available to their residence or business at
all times; and
WHEREAS, the Board of Directors has from time to time determined customers
should be responsible to pay for a readiness to serve charge better
known as the basic service charge component of the water rate to pay
for a percentage of fixed supplies, services, and personnel costs; and
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
, staff prepared report entitled "Water Rate Report for Fiscal Years
2007-08 and 2008-09," that determined t basic service charge
component used for determining the water rte should be set at 21% of
fixed supplies, services, and personnel costs,
THEREFORE NOW T RESOLVED by the Board of Directors of the "'or Linda
ter District that the adoption of this Resolution hereby sets forth the formula for
setting the basic service charge component of future water rate adjustments in the
fallowing preson e manner.
Section 1. The basic service charge component of the water rate hali be
calculate based on 21 % of the fixed supplies, services, salaries and
benefits of personnel oasts,
Section . The basic service charge component of the rate shall regain
unchanged if the proposed water rate increase is rude for the sole
purpose of funding capital improvement projects,
Section .Resolution No. 08- becomes effective from this date forward.
ADOPTED PASSED AND this 28th day of February, 2008, by the following called vote:
AYES: Armstrong, Beverage, Collett, Summerfield
NOES: None
ABSENT, Y l
ABSTAIN None
iohn urn rfield, Rr ide t
ATTEST:
Secretary, Michael .
Ydrba Linda istri
BUDGET CALENDAR FOR FISCAL YEAR 2012/13
DATE BOARD/COMMITTEE SCHEDULE
JANUARY
January 23, 2012 Finance-Accounting Committee Approval of the Budget Calendar
January 24, 2012 Manager's Meeting Discuss Budget Calendar and Process
Personnel & Capital budget discussion
FEBRUARY
February 27, 2012 Finance-Accounting Committee Finance budget (v 1.0), Operating revenues (v 1.0)
Reserve policy analysis (v 1.0)
MARCH
March 1, 2012 Planning-Engineering-Operations Committee Capital improvement & replacement projects budget (v 1.0)
Engineering and Operations budget (v 1.0)
March 5, 2012 Public Affairs-Communications-Tech Committed T & Public Affairs budget (v 1.0)
March 13, 2012 Personnel-Risk Mgmt Committee Labor and benefits (v 1.0), HR budget (v 1.0)
March 20, 2012 Exec-Admin-Organizational Committee Board of Directors and Administration budget (v 1.0)
March 26, 2012 Finance-Accounting Committee Finance budget (v 2.0) (if needed), Reserve policy analysis (v 2.0)
* March 29, 2012 Planning-Engineering-Operations Committee Capital improvement & replacement projects budget (v 2.0)
Engineering and Operations budget (v 2.0) (if needed)
APRIL
April 2, 2012 Public Affairs-Communications-Tech Committed T & Public Affairs budget (v 2.0) (if needed)
* April 5, 2012 Board Workshop - Budget Budget presented to Board for review and discussion
Reserve policy discussion
April 10, 2012 Personnel-Risk Mgmt Committee HR budget (v 2.0) (if needed), Labor and Benefits (v 2.0)
April 12, 2012 Board of Directors Possible Prop 218 decision
April 17, 2012 Exec-Admin-Organizational Committee Board of Directors and Administration budget (v 2.0) (if needed)
MAY
May 24, 2012 Board of Directors Draft Budget (Full Board)
May 28, 2012 Finance-Accounting Committee Possible reserve policy recommendation
Draft reserve policy
* May 31, 2012 Board of Directors Prop 218 Public Hearing
JUNE
June 14, 2012 Board of Directors Budget review and possible adoption (Full Board)
Reserve policy possible adoption
June 28, 2012 Board of Directors Budget review and possible adoption (Full Board)
* Tentative date