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HomeMy WebLinkAbout2017-03-30 - Ad Hoc Citizens Advisory Committee Meeting Agenda Packetra Linda Water District AGENDA YORBA LINDA WATER DISTRICT CITIZENS ADVISORY COMMITTEE MEETING Thursday, March 30, 2017, 6:00 PM 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER 2. ROLL CALL 3. PUBLIC COMMENTS Any individual wishing to address the committee is requested to identify themselves and state the matter on which they wish to comment. If the matter is on this agenda, the committee Chair will recognize the individual for their comment when the item is considered. No action will be taken on matters not listed on this agenda. Comments are limited to matters of public interest and matters within the jurisdiction of the Water District. Comments are limited to three minutes. 4. DISCUSSION ITEMS This portion of the agenda is for matters such as technical presentations, drafts of proposed policies, or similar items for which staff is seeking the advice and counsel of the Committee members. This portion of the agenda may also include items for information only. 4.1. Irvine Ranch Water District Rate Structure 5. ACTION CALENDAR This portion of the agenda is for items where staff presentations and committee discussions are needed prior to formal committee action. 5.1. Continuation of Meeting Facilitation Services 5.2. Appointment of Committee Chair 6. DISCUSSION ITEMS CONTINUED 6.1. Overview of Proposition 218 6.2. 5 -Year Capital Improvement Plan and Financial Reserves Policy 6.3. Future Meeting Schedule and Agenda Items 7. ADJOURNMENT 7.1. The next Ad Hoc Citizens Advisory Committee meeting will be held Thursday, April 6, 2017 at 6:00 p.m. Items Distributed to the Committee 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 Committee 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 30, 2017 Subject: Irvine Ranch Water District Rate Structure ATTACHMENTS: Name: Description: IRWD Presentation. Of Backup Material Distributed Less Than 72 Hours Prior to the Meeting Type: Backup Material 6 Irvine Ranch Water District Budget Based Rate Structure Presentation to Yorba Linda Water Districts Citizen Advisory Committee March 30, 2017 Backup Material Distributed Less Than 72 Hours Prior to the Meeting Presentation Agenda • IRWD Background • Budget Based Rate Structure — Objectives — Water Budget Setting — Results • Rate Setting — Cost of Service Analysis Backup Material Distributed Less Than 72 Hours Prior to the Meeting LA - HAERA EACh FULL#lttOt* YOR 6A LINDA PLACENTA 9UENA - - PARK ANAHEIM County of CYPREG9 ANAH EIV �•+Orange L0.: &TANTON �P'I ane ALAN ff, F ORANGE � GARDEN GROVE SEAL V&STNINSTER _ BEACH SA147AANA • I • TDSTIN FOUNTAIN VALLEY IRVINE RANCH NATER DISTRICT HUNTINGTI6N COSTA I � • BEACH risk RANCHO &NTA NE'PP3R M18$IOR UAmWrrA BEACHA11I[iiK�t 41EJ0 VIE�O CHILLS UHINC4RP4RATE0 ' (I ' • • _ IJNA C0iNTY • • LAGUNA - @EACH �AGUNA . I I Pacific Ocean HICUEL BLAIN jum - I • CAPISTRAND SIT DANA POINT SAN CLEMENFE IRWD Services Drinking Water 5 water treatment plants 27 Wells and 36 reservoirs 1760 miles of water pipeline . Sewage Collection 1070 miles of collection pipeline l _ T ;�, : , Recycled Water I ' 2 recycled water plants 525 miles of recycled water pipeline Urban Runoff Treatment _ IRWD San Joaquin Marsh Aw -T - 27 wetland treatment sites Irvine Ranch Water District 4 Backup Material Distributed Less Than 72 Hours Prior to the Meeting Water Backup Material Distributed Less Than 72 Hours Prior to the Meeting Rate Design Balancing Objectives Rate Design • Encourage Conservation • Prop. 218 and Article X Compliance • Equity Across Customer Classes • Affordability at Low Usage Financial Stability • Economic Uncertainty • Reliable Projections • Sufficient Revenue Irvine Ranch Water Backup Material Distributed Less Than 72 Hours Prior to the Meeting 0 Conservation a • Drought Financial Impacts Revenue stability may suffer with sudden revenue changes during a drought: Water Conservation Sales Decline .0 10 Rates are Water Increased to Meet Revenues Revenue Needs Decline Demand Equals Supply Backup Material Distributed Less Than 72 Hours Prior to the Meeting IRWD's Rate Design Objectives -weir PolicyObjectives Financial Objectives • Promotes • Fund operation and Conservation maintenance • Minimize large rate • Fiscally sustainable changes • Legally compliant • Revenue stability by • Cost-of-service based separating uummodity and fixed charges • Easy to understand Note — fixed service charges include amounts to fund replacement and enhancement expenses Irvine Ranch . - District Backup Material Distributed Less Than 72 Hours Prior to the Meeting 0 - Budget-Based . Conservation 10r7l Sends strong Reduces wasteful water use, commodity pricing signal encourages conservation rD " a a V 6 Lowers Separates fixed charges from incremental water cost variable water cost 25 Years of Improvements Backup Material Distributed Less Than 72 Hours Prior to the Meeting Residential Water Bill Calculation AL 2 Components of the Monthly Water Bill Cost of Water + service Charge 16 Calculation 6L A I • Based on actual • Infrastructure costs amount of water used Operation costs • Includes local and • Maintenance costs imported water costs Backup Material Distributed Less Than 72 Hours Prior to the Meeting quity . • Proportionality • Allocate Water Budgets : — To individual customers based upon land use and specific indoor uses and/or landscaping needs — Water budgets based on research — Defensible — Budget lets customer know how much water is efficient or wasteful • Encourage use within budget through a sharply tiered pricing system : — Economic incentive for efficient use — Communicates value of water over-use Water Budgets Have Equitable Budgets yf _F n ppC1 -� f y 4 `• � Single Family Residence Attached Home/Condo Apartment 1 ,300 Square Feet 435 Square Feet None of Landscaping of Landscaping • • • • - • • • - - - . - - - - • • • Irvine Ranch Water District 12 Backup Material Distributed Less Than 72 Hours Prior to the Meeting INMR Outdoor Water Use All • • • All outdoor use , regardless of customer class , allocated using formula . Based on : — Weather Conditions (ET) — Site Acreage — Plant type (warm-season turf and drought tolerant plants) — Irrigation Efficiency Irvine Ranch Water District 13 Backup Material Distributed Less Than 72 Hours Prior to the Meeting Mq Complies with Proposition • , A • Property requires reasonable amount of water — Reasonable use allocations — Variances to ensure property needs are met • Consistent application of allocations and tiers to customer classes • Above reasonable use Article X — Higher costs incurred for conservation and overuse — Pricing signals can be used as a strategy for demand management Irvine Ranch Water ' Backup Material Distributed Less Than 72 Hours Prior to the Meeting 0 IRWD Residential iBased Air Rate Tier Monthly Water Budget Use Rate/CCF L.Res 100M Low Volume* Up to 40% $1.21 Within Budget* Base Rate* From 41% to 100% $1.65 Inefficient 101% to 130% $4.01 Over Budget Wasteful 131% and over $12.01 Typical Residential Customer Bill Example: T F Monthly Water Customer Uses 12 CCF* Total Bill = $ 51. 10 11 Budget provides � � , , Customer Uses 20 CCF Total Bill = $115.28 of water needs • • • outdoor Backup Material Distributed Less Than 72 Hours Prior to the Meeting Ift &V 0 0 Monthly Water Budget vs Usage Monthly 18 , Water 1 Budget 16 Usage • • ' 14 Within LO Budget LL - U 12 ' Usage Over 10 Budget 8 cn cn 6 4 • • • 2 0 SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP 2015 2015 2015 2015 2016 2016 2016 2016 2016 2016 2016 2016 2016 Backup Material Distributed Less Than 72 Hours Prior to the Meeting Budget-Based Rate Structure Results Residential Rate Tiers Wasteful 9% Over-Budget Tier funds are reinvested into IRWD Inefficient 13/ o � Demand Management Programs Low Volume/Base 78% Rate Demand Management Programs: • Water Conservation/Efficiency Programs • On-site Conversions to Recycled Water • Urban Runoff Control Programs Irvine Ranch . - District - Backup Material Distributed Less Than 72 Hours Prior to the Meeting IRWD Budget Based Rate Structure Results -A, & j& .& - -J&Ak—, Residential Gallons Per Capita Per Day Trend (1988-2016) 130 TIERED RATE 120 STRUCTURE 1991 110 a 100 C� J 2011-2016 dC RECORD 2097 RECORD DROUGHT zLOW RAINFALL LU 0 \wl/000p .2„ 0) $Q LU RESIDENTIAL EL NINO VERY WET ACCOUNTS 50% 1997 2010 70 REDUCTION 60 50 � $ C� °'a °',�g •�°' �°' °' Z C?ti° °°°°�.°°ti° °° A ° ,°� ~°��►° ry� �►°�`� Residential GPCD CALENDAR YEAR Irvine Ranch Water IRWD Rate Structure and The Drought Potable + Untreated 70,000 Water e m a nTrend ilk 5F 57,608 AF 60,62A A • - - . - • - 60,000 �r- 444 AC 50,000 - • • - - • - • c 40,000 nue $1 — Charge Reve Commod'ty • - - - L 30,000 — • • • • c� 0 20,000 10,000 Fixed Service rvice Charge Revenue ($� 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 Estimate • Fiscal Year Irvine Ranch Water District ~�- I�'" 19 Backup Material Distributed Less Than 72 Hours Prior to the Meeting Backup Material Distributed Less Than 72 Hours Prior to the Meeting The Process for Setting Water Rates Revenue Needs Cost of Service Rate Design Analysis Analysis For each customer Evaluate revenue class, determine the Assign rates and needs for: proportionate share charges: of the revenue requirements: • Operations • Financial sufficiency • Maintenance • Sources of Water • Equitable • Capital Investments • Treatment & • Proportional • Debt Service Distribution • Easy to understand • Adequate Reserves • Conservation • Results in stability Document the Process. Document the Process. Document the Process. Irvine Ranch Water Backup Material Distributed Less Than 72 Hours Prior to the Meeting Dyer Road Well Field (DRWF) • - - • ' • - • — Groundwater from • • Orange County Basin Treated Groundwater — Deep Aquifer Treatment System (DAIS) — Irvine Desalter Plant (IDP) — Wells 21 and 22 , — Orange Park Acres (OPA) and Lake Forest (LF) wells Baker Water Treatment Plant — Regional treatment facility — Native and untreated imported water sources - - - • - - Imported Treated Water : . . • Backup Material Distributed Less Than 72 Hours Prior to the Meeting urces of Supply a-- 4W L am • Proposed Source Water Potable Source of Supply 65,000 - 52,000 - - L 39,000 - 26,000 13,000 11-12 12-13 13-14 14-15 15-16 16-17 16-17 17-18 Actual Actual Actual Actual Actual Budget Forecast Budget ■ DRWF Treated Groundwater ■ Imported Baker - IRWD Irvine Ranch Water Backup Material Distributed Less Than 72 Hours • • the Meeting Determine Costs for Sources of Supply Source Cost per Acre Foot Imported - MWD & MWDOC � charges — Cost per additional • acre foot. $1,450 0 Baker - SAC water cost plus fully loaded treatment. •0., $1,120 Process Wells - Loaded cost includes: labor, chemicals, 0,. $790 energy, disposal, and RA. DRWF - Loaded cost includes: •% $5$0 labor, chemicals, energy, disposal, and RA. •% Cost per Imported Baker Process Wells m DRWF Backup Material Distributed Less Than 72 Hours Prior to the Meeting Align Water Sales and Sources of Supply with Tiers Irvine Ranch Rate Area Potable Sources Low Base (in Acre Feet) Volume Rate Inefficient Wasteful Total DRWF 16,510 10,200 26,710 DATS 71448 71448 IDP 51281 51281 Wells 21 & 22 11938 11938 0 PA & LF 11097 11097 Baker 51867 11364 71231 Import 882 11929 21811 Total Sales by 16,510 31,831 2 246 1929 52,516 So u rce ' Backup Material Distributed Less Than 72 Hours Prior to the Meeting Aliqn . • Rates Costs Proposed FY 2017- 18 Rates Low Base Tiers Volume Rate Inefficient Wasteful Lowest Cost Source of Water $1.32 Melded Cost of Water $1.66 Blended Cost of Baker and Potable Import $2.95 Loaded Cost of Imported Water $3.40 District Wide Conservation $0.04 $0.04 $0.04 $0.04 Conservation and NTS $1.10 $8.62 Total Cost per Tier (July 1) $1.36 $1.70 $4.09 $12.06 Irvine Ranch . - District Backup Material Distributed Less Than 72 Hours Prior to the Meeting Comparison of the IRWD Proposed Rates : 16- 17 • i r'-;.-- . - ,A L" Proposed Rates: Typical Residential Customer • Proposed FY 16-17 FY 17-18 Rate Change % Change Water Service Charge * $ 10.30 $ 10.30 $ 0.00 Commodity Charge ** 17.60 18.70 1.10 Total Water Charge $ 27.90 $ 29.00 $ 1.10 Sewer Service Charge * $ 23.20 $ 23.20 $ 0.00 Total Typical Residential Monthly Bill $ 51.10 $ 52.20 $ 1.10 2.2% * Treated water service charge assumes a 5/8" x 3 /4" meter. Both the water and sewer service charges include components for enhancement and replacement capital. No additions have been included for either fund. ** Commodity charges for a typical residential customer are based on 12 ccf (District average). Current Rates: Low Volume $1 .21 Base $1 .65 Proposed Rates: Low Volume $1 .36 12% (OCWD 11 %) Base $1 .70 3% (MWD 4%) Backup Material Distributed Less Than 72 Hours Prior to the Meeting NE&EW I Rate Increase Histor J---MIM 166- Average Monthly Rate Increase-Irvine Ranch Rate Area 10.7 6.7 4.7 Proposed 12o .5/ 2.3% 2.2% 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 Irvine Ranch Water Backup Material Distributed Less Than 72 Hours Prior to the Meeting IRWD Rate Structure Summary a- A JO&A • Effective rate design provides : — Revenue stability — Limits need to develop/purchase most expensive sources of supply — Results in lower rates to customers than otherwise would be the case — Promotes sustainable long-term water efficiency — Provides flexibility to achieve additional demand reductions in a water shortage — Complies with legal requirements Irvine Ranch Water District • 6 IRWD Contact Information Christopher Smithson Fiona Sanchez Manager of Strategic Planning Director of Water Resources and Analysis 949 453-5325 949 453-5411 sanchezf@irwd.com smithson@irwd.com ITEM NO. 6.1 AGENDA REPORT Meeting Date: March 30, 2017 Subject: Overview of Proposition 218 ATTACHMENTS: Name: Description: Prop 218 Presentation.pdf Backup Material Distributed Less Than 72 Hours Prior to the Meeting Type: Backup Material Backup Material Distributed Less Than 72 Hours Prior to the Meeting Proposition 218 Proposition 26 SanJuan Capistrano Case PRESENTED BY: Dennis Anderson MEETING DATE: March 30,2017 Backup Material Distributed Less Than 72 Hours Prior to the Meeting Proposition 218 w Initiative Constitutional Amendment enacted by voters in 1996 w Added Article XIIIC and XIIID to the California Constitution w Created procedural requirements for local government to raise revenues Proposition 26 w Initiative Constitutional Amendment enacted by voters in 2010 w Amended Article XIIIC of the California Constitution w Created a definition of "tax" and provided exceptions Backup Material Distributed Less Than 72 Hours Prior to the Meeting Proposition 218 - Property Related Fees w Revenues derived from the fee or charge shall not exceed the funds required to provide the property related service. w Revenues derived from the fee or charge shall not be used for any purpose other than that for which the fee or charge was imposed. w The amount of a fee or charge imposed upon any parcel or person as an incident of property ownership shall not exceed the proportional cost of the service attributable to the parcel. w No fee or charge may be imposed for a service unless that service is actually used by, or immediately available to, the owner of the property in question. Fees or charges based on potential or future use of a service are not permitted. w No fee or charge may be imposed for general governmental services including, but not limited to, police, fire, ambulance or library services, where the service is available to the public at large in substantially the same manner as it is to property owners. Backup Material Distributed Less Than 72 Hours Prior to the Meeting Proposition 26 - What is a Tax? W "Tax" means any levy, charge, or exaction of any kind imposed by a local government, except the following: w A charge imposed for a specific benefit conferred or privilege granted directly to the payer that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege. w A charge imposed for a specific government service or product provided directly to the payer that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product. w A charge imposed for the reasonable regulatory costs to a local government for Al issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof. Backup Material Distributed Less Than 72 Hours Prior to the Meeting Proposition 26 - What is a Tax? w Exceptions continued: w A charge imposed for entrance to or use of local government property, or the purchase, rental, or lease of local government property. w A fine, penalty, or other monetary charge imposed by the judicial branch of government or a local government, as a result of a violation of law. w A charge imposed as a condition of property development. w Assessments and property-related fees imposed in accordance with the provisions of Article XIII D. Backup Material Distributed Less Than 72 Hours Prior to the Meeting San Juan Capistrano Water Rate Case w San Juan Capistrano created an allocation-based tiered water rate structure w Property owners filed suit claiming the water rates were not based on the cost of service w The Court of Appeal found the rates were not proportional to the cost of service and the City did not calculate the cost of providing water at each tier. w The Court stated "If the phrase `proportional cost of service attributable to the parcel' is to mean anything, it has to be that [Proposition 218] assumes that there really is an ascertainable cost of service that can be attributed ! !f to a specific - hence that little word the - parcel.