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Home My WebLink About2017-04-18 - Board of Directors Meeting Agenda Packetra Linda Water District AGENDA YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS SPECIAL MEETING Tuesday, April 18, 2017, 4:00 PM 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL J. Wayne Miller, President Al Nederhood, Vice President Andrew J. Hall, Director Phil Hawkins, Director Brooke Jones, Director 4. 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 three minutes. 5. ACTION CALENDAR This portion of the agenda is for items where staff presentations and Board discussions are needed prior to formal Board action. 5.1. Determination of Refunding Scenario for Revenue Bonds, Series 2017A Recommendation: That the Board of Directors consider pursuing the "Advanced" or "Current" scenario for refunding the District's Revenue Bonds, Series 2017A. 6. 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. 6.1. Budget for Salaries & Benefits, Supplies & Services, and Variable Costs for FY 2017/18 7. ADJOURNMENT 7.1. The next Regular Board of Directors Meeting will be held Tuesday, April 25, 2017. Closed Session (if necessary) will begin at 5:30 p.m. and regular business at 6:30 p.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. AGENDA REPORT Meeting Date: April 18, 2017 To: Board of Directors From: Marc Marcantonio, General Manager Presented By: Marc Marcantonio, General Manager Prepared By: Cindy Botts, Water Conservation Supervisor Dept: Reviewed by Legal: ITEM NO. 5.1 Finance N/A Subject: Determination of Refunding Scenario for Revenue Bonds, Series 2017A SUMMARY: After consideration of the presentation by Robert Porr, of the District's Financing Team, on April 11, 2017, describing the costs and benefits of both the "Advanced" and "Current" options for District's Revenue Bonds, Series 2017A, the Board will need to determine which option they would prefer. STAFF RECOMMENDATION: That the Board of Directors consider pursuing the "Advanced" or "Current" scenario for refunding the District's Revenue Bonds, Series 2017A. DISCUSSION: Due to timing factors with the release of the Official Statement to investors, the Board will need to consider which option they would like to pursue in relation to either the "Advanced" or "Current" option of the Refunding of the District's Revenue Bonds, Series 2017A. Should the Board wish to pursue the "Advanced" option, the Official Statement will be released to potential investors the week of April 17, 2017. This would allow for the April/May timeline of marketing and closing of the Bonds, as described in Mr. Robert Porr's presentation on April 11, 2017. Should the Board wish to pursue the "Current" option, the Official Statement will be released to potential investors closer to the July/August timeline of marketing and closing of the Bonds, as described in Mr. Porr's presentation on April 11, 2017. Once the Official Statement is released, the marketing of the bonds will soon follow. Due to this timing factor, should the Board wait for the April 25, 2017 regular meeting to determine which option they would like to consider, the "Advanced" option would have already been lost. ATTACHMENTS: Description: Pages from Feldman Presentation.pdf Backup Material Type: Backup Material Yorba Linda Mater District Base Case Scenario: Advance Refunding* ■ Advance Refunding Scenario Closing in Early May ■ Weighted average term of borrowing for refunding portion: 12.1 years ■ Blended borrowing rate: 2.75% (arbitrage yield) ■ Annual savings of $264,000 per year, excluding first and final year ■ Net Present Value savings -$4.1 million (14.1% of refunded amount) *Based on market conditions as of April 7, 2017 2 MExisting Debt Service assumes forgone earnings on prior debt service reserve fund earn at a rate of 2.00%. FIELDMAN i ROLAPP & ASSOCIATES Existing 2008 Period Ending Cops Debt Refunding Debt Service Annual Savings Present Value Annual Savings 6/30/2018 2,082,965 1,915,291 167,674 164,983 6/30/2019 2,084,265 1,816,000 268,265 257,239 6/30/2020 2,084,165 1,815,625 268,540 250,570 6/30/2021 2,082,665 1,818,375 264,290 239,951 6/30/2022 2,084,665 1,819,125 265,540 234,591 6/30/2023 2,080,165 1,813,000 267,165 229,668 6/30/2024 2,079,165 1,810,000 269,165 225,151 6/30/2025 2,080,783 1,814,750 266,033 216,527 6/30/2026 2,079,183 1,812,125 267,058 211,511 6/30/2027 2,074,695 1,807,250 267,445 206,116 6/30/2028 2,072,418 1,805,000 267,418 200,550 6/30/2029 2,072,403 1,805,125 267,278 195,049 6/30/2030 2,069,143 1,802,500 266,643 189,354 6/30/2031 2,067,493 1,802,000 265,493 183,466 6/30/2032 2,068,031 1,803,375 264,656 177,967 6/30/2033 2,065,643 1,801,500 264,143 172,842 6/30/2034 2,061,218 1,801,250 259,968 165,559 6/30/2035 2,059,218 1,797,500 261,718 162,226 6/30/2036 2,058,093 1,795,125 262,968 158,653 6/30/2037 2,057,593 1,793,875 263,718 154,862 6/30/2038 2,052,593 1,788,625 263,968 150,876 6/30/2039 -82,096 -82,096 -45,730 2 MExisting Debt Service assumes forgone earnings on prior debt service reserve fund earn at a rate of 2.00%. FIELDMAN i ROLAPP & ASSOCIATES Yorba Linda Mater District Alternate Scenario: Current Refunding* ■ Represents closing the transaction within 3 months of call date; 7/6/2017 ■ Weighted average term of borrowing for refunding portion: 11.8 years ■ Blended borrowing rate: 2.75% (arbitrage yield) ■ Annual savings of $270,000 per year, excluding first and final year ■ Net Present Value savings -$4.2 million (14.5% of refunded amount) *Based on market conditions as of April 7, 2017 6/30/2018 2,082,965 1,967,455 115,510 114,063 6/30/2019 2,084,265 1,810,000 274,265 264,463 6/30/2020 2,084,165 1,809,625 274,540 257,583 6/30/2021 2,082,665 1,807,500 275,165 251,201 6/30/2022 2,084,665 1,808,500 276,165 245,307 6/30/2023 2,080,165 1,802,625 277,540 239,871 6/30/2024 2,079,165 1,799,875 279,290 234,864 6/30/2025 2,080,783 1,804,875 275,908 225,746 6/30/2026 2,079,183 1,802,500 276,683 220,273 6/30/2027 2,074,695 1,797,875 276,820 214,436 6/30/2028 2,072,418 1,795,875 276,543 208,445 6/30/2029 2,072,403 1,796,250 276,153 202,535 6/30/2030 2,069,143 1,793,875 275,268 196,445 6/30/2031 2,067,493 1,793,625 273,868 190,176 6/30/2032 2,068,031 1,790,375 277,656 187,617 6/30/2033 2,065,643 1,789,000 276,643 181,891 6/30/2034 2,061,218 1,789,250 271,968 174,022 6/30/2035 2,059,218 1,786,000 273,218 170,146 6/30/2036 2,058,093 1,784,125 273,968 166,050 6/30/2037 2,057,593 1,788,250 269,343 158,876 6/30/2038 2,052,593 1,778,375 274,218 157,434 6/30/2039 -82,096 -82,096 -45,928 3 MExisting Debt Service assumes forgone earnings on prior debt service reserve fund earn at a rate of 2.00%. FIELDMAN i ROLAPP & ASSOCIATES Yorba Linda Mater District Sensitivity Analysis ■ The District has the option of waiting to execute the 2017 refunding within 90 days of the 2008 COP optional call date (October 1, 2017) in July ■ This would preserve the District's "advance refunding" option for the future under IRS rules ■ Introduces interest rate risk (2-3 months), but allows for a shorter period refunding bond proceeds are held in escrow (refunding execution date to the COP call date) ■ If interest rates remain unchanged, the District can potentially generate an additional $113,000* in NPV savings by waiting 2 months to close the transaction ■ Interest rate sensitivity of waiting until July: District has a cushion of only 4 - 5 basis points to offset the higher savings of waiting until a current refunding ■ The ability to preserve the District's advance refunding option is an important non -quantitative benefit of waiting s FIELDMAN I ROLAPP 4 *Based on market conditions as of April 7, 2017 — &ASSOCIATES Yorba Linda Mater District Sensitivity Analysis* cont. ■ Assuming the 2017 Revenue Bonds close in July a possible advance 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% refunding in 2022 could possibly generate $413,000 NPV savings (assuming no change in interest rates), or about 2.1% ■ If interest rates were to increase -28 basis points in the next 5 years, these potential additional savings would be lost Yield Comparison* Current 2017 Yields Potential 2022 Yields (Advance Refunding Opportunity) otic otic otic otic otic otic otic otic otic otic otic otic otic otic otic otic otic otic otic otic otic otic tion tion tion tion tion tion tion tion tion tion tion tion tion tion tion tion tion tion tion tion tion tion 5 *Based on market conditions as of April 7, 2017 s FIELDMAN I ROLAPP & ASSOCIATES Yorba Linda Water District Sensitivity Analysis* cont. ■ Assuming the 2017 Revenue Bonds close in July a possible advance refunding in 2025 could possibly generate -$1.3 NPV savings (assuming no change in interest rates), or about 7.6% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% ■ If interest rates were to increase —118 basis points in the next 8 years, these potential additional savings would be lost Yield Comparison* Current 2017 Yields Potential 2025 Yields (Advance Refunding Opportunity) Potential Advance Refunding Opportunity 0% 0.49% y1 ycb y0 LO 1'1 1�1 1�1 ftD 11� # 1�1 110 ti0 1�1 11�1 3V 3�1 Off\ Off\ Off\ Off\ Off\ Oti\ Off\ Off\ Off\ Off\ Off\ Oti\ Oti\ Off\ Off\ Off\ Off\ Off\ Oti\ Oti\ Off\ Off\ 6 *Based on market conditions as of April 7, 2017 FIELDMAN ROLAPP R ASSOC LA I fS Meeting Date Subject: ATTACHMENTS: Budget Presentation.pdf AGENDA REPORT April 18, 2017 ITEM NO. 6.1 Budget for Salaries & Benefits, Supplies & Services, and Variable Costs for FY 2017/18 Description: 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 Yorba Linda ... z _ __ ,�_ _�___ waver vlisvrl ct "-�'.�..+[r � : ; >,+ + - arm • -r �-...�_� Budget Workshop FY 2018 Presented By: Marc Marcantonio, Generc Gina Knight, HR & Risk Man( Kelly McCann, Senior Acco Cindy Botts, Management OL. General Terms & Where to Find Them ' ms's 0�t -e L I�� Operating Budget (month iy/Quarteriy Bui Actual Statements, Annual Budget Document) + Debt Service (Annual caFR) + CSP (Listed in Annual Budget Document) + Reserve Requirements (Annual Reser May/June) -� y�s�`�!� �. � �: �, � arm_ • --. +--� � 1� s Salaries & Benef Personnel Costs (Water & Sewer) 7 *.- t � • 1 Budget FY18 vs. Budget FY171 Budget FY18 vs. Forecast FY17 9 FY 2017 FY 2017 FY 2018 Increase/ % Increase/ % Total Wages Budget Forecast Variance Budget (Decrease) Variance (Decrease) Varianceg Regular 6,594,293 6,210,169 (384,124) 6,790,209 195,916 2.89% 580,040 8.54% Overtime 189,278 195,862 6,584 212,279 23,001 10.84% 16,417 7.73% Standby Day Pay 32,100 32,100 0 32,100 0 0.00% 0 0.00% Mandatory Benefits 0 CalPERS/SS/Medicare 643,768 636,400 (7,368) 657,731 13,963 2.12% 21,331 3.24% Unfunded Accrued Liability 251,948 251,948 0 319,813 67,865 21.22% 67,865 21.22% Workers Compensation 123,308 129,806 6,498 149,702 26,394 17.63% 19,896 13.29% Fringe Benefits 0 Medical/Dental/Vision 1,081,070 1,011,539 (69,531) 1,140,109 59,039 5.18% 128,570 11.28% Certification/Class A Pay 19,950 18,543 (1,407) 19,788 (162) -0.82% 1,245 6.29% Tuition Reimbursement 6,324 5,466 (857) 6,074 (250) -4.11% 608 10.00% Other Insurances/Benefits 145,103 125,599 (19,503) 198,790 53,687 27.01% 73,190 36.82% Retiree Benefits 148,114 117,354 (30,760) 145,244 (2,871) -1.98% 27,890 19.20% OPEB Annual Required Contribution 211,867 217,396 5,529 223,680 11,813 5.28% 6,284 2.81% 1959 Cal PERS Survivor Benefit 3,000 5,025 2,025 4,000 1,000 25.00% (1,025) -25.62% Replacement Benefit Plan 1,800 957 (843) 1,800 0 0.00% 843 46.86% Unemployment Insurance 11,700 5,961 (5,739) 11,700 0 0.00% 5,739 49.05% 449,395 948,892 Total = 9,463,623 8,964,125 (499,497) 9,913,017 9 -� y�s�`�!� �. � �: �, � arm_ • --. +--� � 1� s Sur)r)l*ies & Servic L Y 2018 Supplies and Services Key Factors $377,000 —plies &te �t intree�. j'F-�oc��as-s—.FY 7bi,-8- BU U gI I - $50,000 in Communications- Website Update - ($130,000) in Election Expenses- No Election fi - $30,000 in Insurance- Increase in Liability/Prot Insurance Premiums - $15,000 in District Activities/Events- Employee Communication & Service Recognition - $40,000 in Non -Capital Equipment- Delay in C Program Computers, Delay in IT Switch Chan( FY 2018 Supplies and Services Key Factors,, Continued — $220,000 in Professional Services • $100,000 Asset Management Plan Update • $50,000 Legal Costs- Employment Law • $50,000 Public Affairs Consultant $75,000 in Professional Development/Training- able to attend due to workload, Additional BC conferences, etc. $30,000 in Utilities- Delay in Installation Access Line Internet FY 2018 Supplies and Services Detail $4,969,229 $4,365,962 $(603,267) $4,743,295 $ 377,333 9 FY 2017 FY, 2017 ^� F 018 Increase/ _ et = Decrease,, 1✓1ri e Commu`nic ��" 4L6,0 5 $ 175, 272 $ (37, 5 $ � Contractual Services $ 551,165 $ 463,868 $ (87,297) $ 477,490 $ 13,622 3% Data Processing $ 263,709 $ 252,927 $ (10,782) $ 248,500 $ (4,427) -2% Dues & Memberships $ 91,285 $ 88,360 $ (2,925) $ 86,545 $ (1,815) -2% Fees & Permits $ 251,425 $ 264,553 $ 13,128 $ 282,115 $ 17,562 7% Board Election Expenses $ 246,000 $ 129,971 $(116,029) $ - $ (129,971) -100% Insurance $ 286,340 $ 256,298 $ (30,042) $ 286,340 $ 30,042 12% Materials $ 817,200 $ 866,084 $ 48,884 $ 849,000 $ (17,084) -2% District Activities & Events $ 28,450 $ 9,606 $ (18,844) $ 24,200 $ 14,594 152% Maintenance $ 564,830 $ 509,261 $ (55,569) $ 509,900 $ 639 0% Non -Capital Equipment $ 193,050 $ 139,095 $ (53,955) $ 180,825 $ 41,730 30% Office Expense $ 41,600 $ 37,439 $ (4,161) $ 42,625 $ 5,186 14% Professional Services $ 598,000 $ 571,020 $ (26,980) $ 790,525 $ 219,505 38% Professional Development $ 77,085 $ 44,480 $ (32,605) $ 67,210 $ 22,730 51% Travel & Conferences $ 121,565 $ 61,761 $ (59,804) $ 113,745 $ 51,984 84% Uncollectible Accounts $ 35,000 $ 18,243 $ (16,757) $ 25,000 $ 6,757 37% Utilities $ 227,500 $ 139,314 $ (88,186) $ 176,700 $ 37,386 27% Vehicle Expenses $ 362,200 $ 338,410 $ (23,790) $ 356,000 $ 17,590 5% $4,969,229 $4,365,962 $(603,267) $4,743,295 $ 377,333 9 $6,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 Supplies &Services Actuals to Forecast/Budget 10 Years of Actuals, Comparej to F01 10 caj� FY *- ?, FY 2007 Actual ■ FY 2008 Actual ■ FY 2009 Actual ■ FY 2010 Actual ■ FY 2011 Actual ■ FY 2012 Actual FY 2018 Budget -� y�s�`�!� �. _ � �: �, � arm_ • --. ,�-+--� � 1� s �''� �'d" _ -- - - t -r . �`�' _ �� "y=• : �`~ etc_ =�� . _ �/ .�yy+� Variable Costs (ey Budget Assumptions for FY 2018 Total Volume of Water Purchased OCWD RA Blended Rate MWDOC Blended Rate Water Supply Fixed Costs Basin Production Percentage (BPP) for OCWD ffe"SKIRM $474/) $1,11' $1.4M 75% Water Purchase- Related Changes for FY 2018 • Operating Plan: 70% W.* 079-�Irport Water -A L _. FY 201 Z� B c 0 5�0�11�/, p� ,y�ct_ a c��i'e_� �i, 1 • OCWD- Rate Increasing ($412 to $445) • GWRS Phase 2/ Purchase of 65,000 AF of MWD water to Replenish Basin • MWD- annual increase of 417o for FY 17/18, 4.5% annual increase for next 8 FYs i Historical/Future Water Costs (Groundwater) Historical 110 $294 $267 $276 412 IW $479 $446 Future $585 $509 FY FY FY FY FY FY FY FY FY 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/2 OCWD $435 $385 $335 $285 $235 Historical/Future Water Costs (Import Water) Historical $946 $925 $979 1,015 1,061 $1,250 Fut re P ;200 1,158 1,108 FY FY FY FY FY FY FY FY FY FY 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 RMAI'ViN� i $1,100 $1,050 $1,000 $9501 $900 $850 $800 Change in Total Water Purchases (AF) 25,000.0 �- 20,000.0 15,000.0 66 10,000.0 5,000.0 11/12 m 12/13 13/14 Water Purchases Anticipat( Budgeted Pur& Change in Total Water Purchases 9 Years of Actuals, Compared to FY 2017,Forecast and FY 2018 Budget, _ with Groundw_ at r otal . _ �_ *2n 1 �� /% 20,831.9 LI 19,786.4 15,743.1 17,595.6 6 0% 6 2% L5 -A M 6 , _A M FY 2010 Actual FY 2011 Actual FY 2012 Actual FY 2013 Actual FY 2014 Actual FY 2015 Actual FY 2016 Actual ■ Groundwater ■ Import water CUP ■ In -Lieu * Groundwater % includes In -Lieu water FY 2017 Forecast G Conservation Recovery 3,000.0 His ical Purchaq&j AAvA- 2,500.0 2,000.0 1,500.0 1,000.0 500.0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun �5 Yr Avg '%--FY 15/16 f 18 Yr Avg — FY 2017 Forecast FY 2018 Budget lit E FY 2018 Import Water Costs Import Water Costs Water Purchases July -Dec 2017 $ Water Purchases Jan -Jun 2018 $ Readiness to Serve Charge $ Capacity Charge $ Retail Connection Charge $ Tota I 219311889.03 21635,524.70 558,186.51 254,124.92 281,043.75 $ 6,660,768.92 FY 2018 Groundwater Costs Groundwater Costs %c Water Purchases July -Dec 2017 $ 3,116,567.10 Water Purchases Jan -Jun 2018 $ 2,556,106.90 OCWD Annual Annexation Fee $ 350,000.00 Total $ 6,022,674.00 Operating Expenses FY 13-14 FYI 4-15 Actual Actual Salaries & Benefits FYI 5-16 FYI 6-17 FYI 6-17 Actual Budget Projected Supplies & Services Variab Percent of Operating Budget (FY 2018 Budget) �.� �� - - - - ,gyp' j��►Z-+. - � LIA 350 Variable Costs Supplies Services