HomeMy WebLinkAbout2017-06-08 - Board of Directors Meeting Agenda Packetra Linda
Water District
AGENDA
YORBA LINDA WATER DISTRICT
BOARD OF DIRECTORS WORKSHOP MEETING
Thursday, June 8, 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. 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.
5.1. Revenues and Reserves for FY 2018 (Materials to be provided at the meeting.)
6. ADJOURNMENT
6.1. The next Regular Board of Directors Meeting will be held Tuesday, June 13, 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.
Meeting Date
Subject:
ATTACHMENTS:
Name:
Budget Presentation.0
AGENDA REPORT
June 8, 2017
ITEM NO. 5.1
Revenues and Reserves for FY 2018 (Materials to be provided at the meeting.)
Description:
Backup Material
Type:
Backup Material
Draft Financial Reserves Policv.odf Backup Material Backup Material
Target Levels for Reserve Policv.odf Backup Material Backup Material
Yorba Linda
... z _ __ ,�_ _�___
waver vlisvrl ct
Budget Workshop #4
FY 2017/18
Presented By:
Marc Marcantonio, General Manager
Delia Lugo, Finance Manager
Cindy Botts, Management Analyst
J
Backup Material Distributed Less Than 72 Hours Prior to the Meeting
Presentation Overview
Revenue--�_t
\
b. CY & FY 18 Projections, by Category
2. Reserves
a. Purpose
b. Current Target Levels
c. Proposed Target Levels
d. Discussion for Drafting of Reserve Policy
Lmmmmmmfilik-
Backup Material Distributed Less Than 72 Hours Prior to the Meeting
Assumptions for Budgeted Revenue
• FY 17 Projected Year End -
!__. - Total Volu . Revenue: Increcfs_=�f 1_.0_ .5� -
,
�, • � � rte_ J � I ir.a J / �` \ - __ . L .�. . � �T R _ I ��'
T _
FYI 8 Budget
15% Bounce Back in Total Volumetric Revenue
- No Increase in Water Consumption Rate ($2.70/
- Increase of 8% in Sewer Rate
- No Change in Water Service Fees (Meter by
Backup Material Distributed Less Than 72 Hours Prior to the Meeting
Water Purchase/Demand Comparisons
AF
Demand
Recovery
FYI 6
16,534
15,743
17,696
12%
17,949
13.6%
Backup Material Distributed Less Than 72 Hours Prior to the Meeting
Yorba Linda Water District
Water & Sewer Enterprise
Draft of FY 2017/18 Operating.Budget
oh—`Y15 - FY16 Fi(T� FY17 r
Arc Actuals Budget-or- -
Revenue (Operating):
$
273,006
Water Revenue (Residential)
$
15,461,640
Water Revenue (Commercial & Fire Det.)
$
1,913,712
Water Revenue (Landscape/Irrigation)
$
4,058,308
Service Charges
$
5,012,958
Sewer Charge Revenue
$
1,582,061
Sewer Parcel Assessments
$
193,615
Other Operating Revenue *
$
1,461,103
Total Operating Revenue
$
29,683,397
Revenue (Non -Operating):
Interest
Property Tax
Other Non -Operating Revenue
Total Non -Operating Revenue
Total Revenue
$ 12,847,842
$ 1,711,104
$ 2,700,775
$ 10,560,917
$ 1,584,348
$ 201,500
$ 2,632,499
$ 32,238,985
$ 13,907,406
$ 1,874,818
$ 2,998,777
$ 10,036,923
$ 1,852,837
$ 198,400
$ 654,825
$ 31,523,986
$ 13,484,040
$ 1,799,872
$ 3,261,264
$ 10,116,996
$ 1,877,616
$ 216,785
$ 1,010,402
$ 31, 766, 976
$ 14,278,688
$ 2,071,031
$ 3,079,054
$ 10,106,238
$ 2,032,245
$ 223,000
$ 866,161
$ 32,656,417
$ 187,316
$
273,006
$
115,000
$
306,128
$
308,000
$ 1,496,489
$
1,615,454
$
1,450,000
$
1,675,275
$
1,600,000
$ 744,572
$
757,466
$
616,525
$
517,744
$
624,521
$ 2,428,377
$
2,645,926
$
2,181,525
$
2,499,148
$
2,532,521
$ 32,111,774 $ 34,884,911 $ 33,705,511 $ 34,266,124 $ 35,188,938
Backup Material Distributed Less Than 72 Hours Prior to the Meeting
Water Revenue (Residential)
Water Revenue (Commercial & Fire Det.)
Water Revenue (Landscape/Irrigation)
Service Charges
Other Operating Revenue
Total Operating Revenue
Revenue (Non -Operating):
Interest
Property Taxes
Other Non -Operating Revenue
Total Non -Operating Revenue
Total Revenue
Yorba Linda Water District
Water Enterprise
t of FY 2017/18 QpeQWng cue
=a
ice` _ � � �=:�%w� � - `�\ �•.`r �,
FY165
Actual Actual Budget Forecast Budget
$ 15,461,640
$ 1,913,712
$ 4,058,308
$ 5,012,958
$ 1,312,232
$ 12,847,842
$ 1,711,104
$ 2,700,775
$ 10,560,917
$ 2,596,208
$ 13,907,406
$ 1,874,818
$ 2,998,777
$ 10,036,923
$ 617,654
$ 13,484,040
$ 1,799,872
$ 3,261,264
$ 10,116,996
$ 842,734
$ 14,278,688
$ 2,071,031
$ 3,079,054
$ 10,106,238
$ 769,106
$ 27,758,850
$
30,416,846
$
29,435,578
$
29,504,907
$
30,304,117 Mq
$ 168,872
$
265,006
$
100,000
$
271,749
$
275,000
$ 1,496,489
$
1,615,454
$
1,450,000
$
1,675,275
$
1,600,000
$ 715,022
$
745,541
$
604,600
$
404,200
$
604,646
$ 2,380,383 $ 2,626,001 $ 2,154, 600 $ 2,351,224 $
2,479,646 .4
$ 30,139,233 $ 33 042,847 $ 31,590,178 $ 31,856.131 $ 32.783.763
Backup Material Distributed Less Than 72 Hours Prior to the Meeting
Comparison of Total Water Revenues
$33,500,000
$31,500,000
32,091,004
$29,500,000
$30,139,233
$27,500,000
FYI Actual FYI Actual
J
$33,042,847
FYI Actual
$31,590,178
FYI Budget
M40
$32,294,666
FYI Forecast
Backup Material Distributed Less Than 72 Hours Prior to the Meeting
Current Trends in Water Usage
low of 10.41 units/mo to a high of 21.35
units mo
• Commercial Usage: Relatively flat, from a
low of 28.04 units/mo to 80.45 units/mo �
• Landscape Usage: Large swings based �
on weather, from a low of 17.64 units/mo
to 177.33 units/mo.
Backup Material Distributed Less Than 72 Hours Prior to the Meeting
Total Revenues: FYI 7 Forecast to FYI 8 Budget
FY 2016/17 Forecast Revenues (Water)
� Y
1%
1 3%
3% 5%
31%
■ Water Consumption
■ Service Charges
■ other operating
Revenue
■ Interest Income
■ Property Taxes
Total: $32,294,661
FY 2017/18 Budget Revenues (Water]
1%
■ Water Consumptioi
■ Service Charges
■ other operating
Revenue
■ Interest Income
Total: 32,783,763
Backup Material Distributed Less Than 72 Hours Prior to the Meeting
Composition of "Other Water Revenue" Category
$6,000,000
224 209 -. � _: - a„� •--. � _:�a.
$5,000,000
$745,541
$4,000,000
$3,718,708
$3,692,615w
$3,632,493
$1,615,454
$3,248,752
$715,022
$842,734
$3,000,000
$1,255,176
$2,772,254
$604,646
$265,006
$604,600
'
$1,496,489
$2,000,000
$1,675,275
'
$1,600,000
$1,394,722
$168,872
$2,596,208
$1,450,000
$1,000,000
$131,833
$271,749
$275,000
$1,312,232
$100,000
$936,977
$617,654
$842,734
$769,106
$0
FYI Actual
FYI Actual
FYI Actual
FYI Budget
FYI Forecast
FYI Budget
Other Operating Revenue - Interest Income Property Taxes Other Non -Operating
Backup Material Distributed Less Than 72 Hours Prior to the Meeting
Revenue (Operating):
Sewer Charge Revenue
Sewer Parcel Assessments
Other Operating Revenue
Total Operating Revenue
Revenue (Non -Operating):
Interest
Other Non -Operating Revenue
Total Non -Operating Revenue
Total Revenue
Yorba Linda Water District
Sewer Enterprise;- =�
0� E Operating
FY15 FY16 FY17 FY17 FY18
Actual Actual Budget Forecast Budget
$ 1,582,061
$ 1,669,370
$ 1,852,837
$ 1,877,616
$ 2,032,245
$ 193,615
$ 179,744
$ 198,400
$ 216,785
$ 223, 000
1 AQ A71
(� AQ AW
� 17 171
(� 1 F7 A97
(� Q7 0;;
$ 1,924,547
$ 1,9181741
$ 2,088,408
$ 2,262,068
$ 2,352,300
$ 18,444
$ 23,811
$ 15,000
$ 34,380
$ 33,000
$ 29,550
$ 126,879
$ 11,925
$ 113,545
$ 19,875
A7 QQd
� 1;n FQn
� W Q);
� 1 d7 QW
� ;9 R7F
$ 1,972,541 $ 2,069,431 $ 2,115,333 $ 2,409,993 $ 2,405,175
Backup Material Distributed Less Than 72 Hours Prior to the Meeting
12,500,000
$2,000,01
$1,500,01
$1,000,0
$500,000
Comparison of Total Sewer Revenues
1,960,974 $1,972,541
FY14 Actual
$2,069,431
$2,115,333
$2,409,993 $2,405,17
FY15 Actual FY 16 Actual FY 17 Budget FY17 Forecast
Backup Material Distributed Less Than 72 Hours Prior to the Meeting
FY 18 Budget
Total Revenues: FYI 7 Forecast to FYI 8 Budget
FY 2016/17 Revenues Forecast (Sewer)
19/.
5%
m Sewer Cfiarpe Revenue
■ Sewer Parcel Assessments
■ Other Operating revenue
■ Interest Income
■ Other Income
Total: $2,409,993
FY 2017/18 Budget Revenues (Sewer)
1%
Sewer Ciarge Revenue
Sewer Parcel Assessments
Other 03erating revenue
Interest Income
Other Income
Total: $2,405,175
Backup Material Distributed Less Than 72 Hours Prior to the Meeting
Composition of "Other Sewer Revenue" Category
$350,000
$250,000
$194,372
$200,000
L$710,509
$150,0003,215
$100,000
$50,000
$0
10,648
FY 14 Actual
$196,865
$29,550
$18,444
$220,317
$126,879
$35,592. ; =�
$113,545
$34,380
$148,871 $23,811 $64,096 $167,667
$11,925
$15,000
$69,627
$37,171
FYI Actual FY16 Actual FYI Budget FYI Forecast
Other Operating revenue Interest Income Other Income
in
Backup Material Distributed Less Than 72 Hours Prior to the Meeting
Reserve Pol*ic
Backup Material Distributed Less Than 72 Hours Prior to the Meeting
FY 18 Reserve Policy Timelir^
_
6/8/17: DiSiW*-n.,o.f--,-PtItC C Ithg es-',
r
o��
• 6/19/17: Results of the Policy Change
Budget Workshop #5
•
6/27/17: Presentation to the Board fo
Approval- Board meeting
Backup Material Distributed Less Than 72 Hours Prior to the Meeting
Overview
__�. • Reserves - A _- t offanning. -
exists to ens erfc Kase
_ g � _ -
currerit and future nee s by setting reserve target levels of funding.
• Reserve Fund Types:
- General Operating - Funds that accumulate from day -to -da)
operations that have not otherwise been designated or
restricted.
- Designated Reserves - Established by action of the Board ani
designated for specific purposes. These funds are utilized to f
future such things as capital facilities, repair and replacemer
existing assets, economic uncertainties, local disasters and of
financial hardships in the local or state economy.
- Restricted Reserves - Restrictions on the use of the funds are
imposed by an outside source such as creditors, grantors, lav
regulations governing use.
Backup Material Distributed Less Than 72 Hours Prior to the Meeting
Purpose
• Provides a -mal f r d}y _- fat adj,u s- *.t---'
i-ng_pDRimal aha\
0
0
environments.
Establishes policy objectives that build
adequate reserves to provide sufficient
liquidity to withstand economic and
operational fluctuations.
Should not be seen as "surplus" funds, bt
necessary the short- and long-term
operation of an agency. (2005 ACWA Policy Prin
for Reserve Funds)
Backup Material Distributed Less Than 72 Hours Prior to the Meeting
Target Levels
Recornme edto
-tereib-ah
.-u-imum.-. C
1X -
h
reserve levels.
- Ensures an agency will meet the ReservE
requirements
- Assures the rating agencies there will be
adequate amount of savings for possiblE
emergencies or operational and capital
fluctuations
Backup Material Distributed Less Than 72 Hours Prior to the Meeting
Rating Agencies
• Credit rata =�qenciel---lvi�w " we tog eJ�'
C c e C
- Ls:��ae n "' Rrnark�:--
- Support current
service needs
operating, capital and
- Provide additional financial flexibility, esr
during emergency situations.
Backup Material Distributed Less Than 72 Hours Prior to the Meeting
Rating Agencies
•
During a "rajthe ...., ,
--agenc u o atiC)Q;--GPA4 4
finances and evaluate the reserve levels
- To determine if the active Reserve Policy
adhered to and that liquidity needs can be met.
• Adequate reserves directly affect an
bond rating, and ultimately its ability
money at affordable interest rates.
agency'
to borrow
- Ensures the ability to finance and construct
infrastructure necessary to improve existing
systems and expand
needs.
service levels to meet
Backup Material Distributed Less Than 72 Hours Prior to the Meeting
Reserves, 1 of 2
Fieldman Available as of
Reserves YLWD - Current Recommended May 31, 2017
Min Target Min T et
Board Designated Reserves:_ - _
� � ate+-- "` _ ahs •..� �
Operating Reserve _ �,.2�.�� - �` ♦_ Vit;,- �-'is -
�. $2,220,928 $4,719,472 $6,940,401 $13,880,801 $8,326,943
$122,951 $261,271 $384,223 $768,445 $412,012
Emergency Reserve
Water
Sewer
Capital Replacement Reserve
Water
Sewer
Maintenance Reserve
Water
Sewer
Administration Reserve
Water
Rate Stabilizatio Reserve
Water
Debt Service Reserve
Water
Employee Liability Reserve
Water
Sewer
Total Water Unrestricted Reserve Balance
Total Sewer Unrestricted Reserve Balance
Total Reserve Requirements (Unrestricted)
$1,000,000
$250,000
$4,000,000 $1,155,720 $3,467,160
$1,000,000 $382,043 $1,146,128
$1,820,000
$350,000
$200,000
$0
$0 $0
$0 $0
$2,723,509
$1,820,000 $7,950,845
$345,000 $345,000
$300,000
$200,000
$200,000 $200,000
$1,476,751 $5,907,002
$0 $0
$372,000 $465,000
$28,000 $35,000
$8,336,437 $13,834,981 $12,357,871 $32,170,808
$750,951 $1,639,271 $1,346,265 $2,494,573
$9,087,388 $15,474,253 $13,704,136 $34,665,381
AL
Backup Material Distributed Less Than 72 Hours Prior to the Meeting
$1,046,197
$1,002,124
$28,187,103
$4,456,851
1127 GA2 a[A
Reserves, 2 of 2
Restricted Reserves:
Conservation Reserve
Wate r
$1,323,294
$1,323,294
$1,323,294
2017A Acquisition Reserve
Fairmont BPS
$5,489,098
$5,489,098
$5,489,098
2008 COP Reserve
Wate r
$0
$0
$0
Total Water Restricted Reserve Balance
$6,812,392 $6,812,392
$6,812,392 $6,812,392
$6,812,392
Total Sewer Restricted Reserve Balance
$0 $0
$0 $0
$0
Total Reserve Requirements (Restricted)
$6,812,392 $6,812,392
$6,812,392 $6,812,392
$6,812,392
Total Reserve Requirements
$15,899,780 $22,286,645
$20,516,528 $41,477,773
$39,456,346
Backup Material Distributed Less Than 72 Hours Prior to the Meeting
RESERVE POLICY
A. GENERAL POLICY:
Maintaining adequate reserves is an essential part of sound financial management. The Yorba
Linda Water District Board of Directors realizes the importance of reserves in providing reliable
service to its customers, financing of long-term capital projects and funding availability for
emergencies should the need arise. Interest derived from reserve balances shall be credited to the
reserve account from which it was earned.
B. CATEGORIES:
Yorba Linda Water District (YLWD or District) shall accumulate, maintain and segregate its
reserve funds into the following categories:
1. Board Designated Reserves; and
2. Contractually Restricted Reserves.
C. SCOPE:
This policy will assist the Board of Directors in establishing:
1. Target levels for reserve funds;
2. Requirements for the use of reserve funds; and
3. Periodic review requirements for each reserve.
D. PERIODIC REVIEW:
Staff and the YLWD Board shall review the reserve balances and targets annually as a part of the
annual budget process. The Finance Staff will continue to review all reserve and investment
balances monthly, with a quarterly report going to the full Board.
E. RESTRICTED AND DESIGNATED RESERVES:
1. Board Designated Reserves:
These are reserve funds earmarked for the purpose of funding such items as new capital facilities,
repair or replacement of existing facilities and general operating reserves designated for a specific
purpose and use by the Board of Directors.
1.0 Operating Reserve
A. Definition and Purpose — Established to cover temporary cash flow deficiencies that
occur as a result of timing differences between the receipt of operating revenue and
expenditure requirements and unexpected expenditures occurring as a result of doing
business.
, 2017 Page 1 of 5
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B. Target Level — The District's current target will be a minimum of 25% and a maximum
of 50% of the annual operating budget, including interest expense, for both the water
and sewer funds. In the event this fund falls below its minimum funding level, the
Board will act to restore the balance above the minimum funding level within twelve
(12) months from the date that the fund fell below the minimum level.
C. Events or Conditions Prompting the Use of the Operating Reserve — This reserve may
be utilized as needed to pay outstanding operating expenditures prior to the receipt of
anticipated operating revenues.
1.1 Emergency Reserve
A. Definition and Purpose — Established to provide protection recovery to the District and
its customers for losses arising from an unplanned event or circumstance (i.e. fires,
earthquakes or financial emergencies). The reserve level combined with YLWD's
existing insurance policies should adequately protect YLWD and its customers in the
event of a loss.
B. Target Level — Established at a minimum level equal to 1 % and a maximum level equal
to 2% of the net capital assets for both the District's water and sewer funds. In the event
this fund falls below its minimum funding level, the Board will act to restore the
balance above the minimum funding level within twelve (12) months from the date that
the fund fell below the minimum level.
C. Events or Conditions Prompting the Use of the Emergency Reserve — This reserve shall
be utilized to cover unexpected losses experienced by the District as a result of a
disaster or other unexpected loss. Any reimbursement received by the District from
insurance companies as a result of a submitted claim shall be deposited back into the
reserve as replenishment for the loss.
1.2 Capital Replacement Reserve
A. Definition and Purpose — Established to provide funding for general use on capital
projects as well as capital repair and replacement funding as the District's infrastructure
deteriorates over its expected useful life.
B. Target Level — The Board -approved 2010 Asset Management Plan recommended that
the minimum level equal $1,820,000 for the water fund and $345,000 for the sewer
fund. The target level for each reserve fund is at least 100% of the current Fiscal Year
capital budget plus 100% of the subsequent Fiscal Year capital budget. The target levels
in these reserve funds will fluctuate depending on the capital improvement plan and
timing of the projects. Therefore, no maximum level will be established. In the event
these fund falls below the minimum funding level, the Board will act to restore the
balance above the minimum funding level within twelve (12) months from the date that
the fund fell below the minimum level.
C. Events or Conditions Prompting the Use of the Capital Replacement Reserve —
Through the annual budget process, staff shall recommend anticipated asset
2017 Page 2 of 5
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replacement and capital improvement projects. The Board of Directors shall take action
to approve recommended project appropriations from the capital replacement reserve.
Should unplanned replacement be necessary during any fiscal year, the Board of
Directors may take action to amend the budget and appropriate needed funds as
required.
Q
1.3 Maintenance Reserve
A. Definition and Purpose — Established to provide funding for non-scheduled capital asset
repair and replacement.
B. Target Level — Established at a minimum level of $200,000 for the water fund and
$100,000 for the sewer fund. In the event this fund falls below its minimum funding
level, the Board will act to restore the balance above the minimum funding level within
twelve (12) months from the date that the fund fell below the minimum level. The
maximum target levels for this reserve fund is $300,000 for the water fund and
$200,000 for the sewer fund.
C. Events or Conditions Prompting the Use of the Maintenance Reserve — Unplanned
failure of assets including but not limited to pumps, motors and major facility repairs.
1.4 Administrative Reserve
A. Definition and Purpose — Established to provide funding to partially or fully fund
certain general and administrative projects on a pay-as-you-go basis.
B. Target Level — $200,000 subject to an annual review. In the event this fund falls below
its minimum funding level, the Board will act to restore the balance above the minimum
funding level within twelve (12) months from the date that the fund fell below the
minimum level.
C. Events or Conditions Prompting the Use of the Administrative Reserve — Planned or
unplanned replacement of short-term assets including but not limited to software,
computers and office furniture.
1.5 Rate Stabilization Reserve
A. Definition and Purpose — Established to assist in smoothing out water rate increases.
This reserve is governed by the District's bond covenants and funds deposited into this
reserve are treated as operating revenues in the fiscal year designated by the District
and will be treated as such in fiscal years of such designation for the purposes of
computing the District's debt service coverage ratio.
B. Target Level — Established at a maximum level of 20% of budgeted water sales for the
current fiscal year. The District has the option of not funding the Rate Stabilization
Reserve if such is deemed appropriate by the Board based upon a recommendation
from Staff.
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Backup Material Distributed Less Than 72 Hours Prior to the Meeting
Page 3 of 5
C. Events or Conditions Prompting the Use of the Rate Stabilization Reserve — The reserve
can be used during any year where other revenues are not sufficient to meet the required
debt service coverage ratio or when the maximum level in the reserve is reached.
1.6 Employee Liabilities Reserve
A. Definition and Purpose — The purpose is to cover employees' accrued vacation and
other compensatory time and to ensure the complete funding associated with the
liability incurred for employees whom have met the requirements necessary for district
paid health benefits at retirement.
B. Target Level — The annual contribution will be $100,000 ($93,000 for water and $7,000
for sewer) to be evaluated and/or adjusted annually thereafter based on an analysis of
current employees' vacation and sick time accrued and actuarial determinations of
future retiree costs. As of July 1, 2015, an actuary determined that the District's Other
Post Employment Benefit (OPEB) liability was $2,136,644. When combined with a
liability on the District's books for vacation, compensatory and sick time of $1,204,595
at June 30, 2016, the target is projected to be approximately $3,341,239 for the
combined water and sewer enterprises.
C. Events or Conditions Prompting the Use of the Employee Liabilities Reserve — This
reserve may be used in the event that operating funds are not adequate to meet vacation,
compensatory and sick time paid out or retiree medical cost obligations within the
current year.
2. Contractually Restricted Reserves:
These are funds held to satisfy limitations set by external requirements established by creditors,
grant agencies or law. Examples include stipulated bond covenants and reserves held with a fiscal
agent.
2.0 US Bank 2008 COP Reserve
A. Definition and Purpose — Established to cover reserve requirements held with a
designated fiscal agent (US Bank) for the 2008 Certificates of Participation.
B. Target Level — Funding shall be held in an amount equal to $2,147,096.
C. Events or Conditions Prompting the Use of the Contractually Restricted Reserve — This
reserve may be utilized as needed by the fiscal agent to pay any outstanding debt service
payments not covered by the District within the specified billing and due dates.
2.1 Conservation Reserve
A. Definition and Purpose — Established to provide funding for District -wide conservation
efforts.
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B. Target Level — Funding shall be established as the net result of administrative penalties
assessed less allowed expenditures of each fiscal year.
C. Events or Conditions Prompting the Use of the Conservation Reserve — This reserve
may be used to fund district -wide conservation efforts in relation to, but not limited to,
salary and related, maintenance, and material expenses for leak detection,
conservation efforts, and other allowable expenses outside the normal cost of service
for each fiscal year.
End of Policy Document
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Current and Recommended Reserve Target Levels
Unrestricted Reserves
YLWD - Current
RFC Recommended
Fieldman Recommended
Min Target
Target
Min
Target
$1,323,295
Operating Reserve
$1,323,295
2008 COP Debt Service Reserve
Water
$2,147,096
$2,147,096
Water
8% of O&M 17% of O&M
25% of O&M
25% of O&M+ DS Int
50% of O&M+DS Int
Sewer
8% of O&M 17% of O&M
25% of O&M
25% of O&M
50% of O&M
Emergency Reserve
1% Net Position of
3% Net Positon of
Water
$1,000,000 $4,000,000
$10,000,000
capital costs - CAFR
capital costs - CAFR
1% Net Position of
3% Net Positon of
Sewer
$250,000 $1,000,000
$3,000,000
capital costs - CAFR
capital costs - CAFR
Capital Replacement Reserve
2% asset value at
At least 2 years of
Water
$1,820,000
Replacement Costs
$1,820,000
CIP Budget
2% asset value at
At least 2 years of
Sewer
$350,000
Replacement Costs
$345,000
CIP Budget
Maintenance Reserve
Water
$200,000
$200,000
$200,000
$300,000
Sewer
$0
$0
$100,000
$300,000
Administration Reserve
Water
$0
$0
$200,000
Rate Stabilization Reserve
Water
$0
15% Commodity Revenues
20% of Budgeted Water Sales
Debt Service Reserve
Water
$2,723,509
$2,723,509
$0
Employee Liability Reserve- Annual
Contribution of
Water
$93,000
$93,000
$93,000
Sewer
$7,000
$7,000
$7,000
Restricted Reserves
YLWD - Current
RFC Recommended
Fieldman Recommended
Min Target
Target
Min Target
Conservation Reserve
Water
$1,323,295
$0
$1,323,295
2008 COP Debt Service Reserve
Water
$2,147,096
$2,147,096
$0
2017A Acquisition Reserve
Water
$0
$0
$5,489,098
Backup Material Distributed Less Than 72 Hours Prior to the Meeting