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Home My WebLink About2018-10-30 - Board of Directors Meeting Agenda Packet AGENDA YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS WORKSHOP MEETING Tuesday, October 30, 2018, 5:00 PM 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL Al Nederhood, President Brooke Jones, Vice President Andrew J. Hall, Director Phil Hawkins, Director J. Wayne Miller, 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. 5-Year Forecast of District's Operating Budget (Materials to be provided at the meeting.) 5.2. Historical Projected vs. Actual Revenue (Materials to be provided at the meeting.) 5.3. Rate Adjustment Methodology and Policy 5.4. Capital Improvement Plan Funding Policy (Pay-Go vs. Debt) 5.5. Implementation of 2-Year Budget Cycle 6. ADJOURNMENT 6.1. The next Regular Board of Directors Meeting is scheduled Tuesday, November 13, 2018 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. BACKUP MATERIALS DISTRIBUTED LESS THAN 72 HOURS PRIOR TO THE MEETING FY19 5 YEARBUDGET PROJECTION ITEM NO. 5.1. MATERIALS SUBMITTED BY: Brett Barbre MEETING DATE: October 30, 2018 2 Known knowns Fitch Ratings Surveillance (November 2017) 1.FY21 –increase growth for customer accounts 2.Service charges reflect projected revenue increases attributed to the monthly capacity charge of ~12% in FY19 and FY20 and revenue increases attributed to growth of ~1% in FY21 and FY22. 3.Variable water costs in FY18 account for additional in-lieu water purchased from MWDOC. FY19-FY22 reflects expenses of OCWD groundwater and MWDOC purchases. 4.District contribute ~$1.4 million annually starting FY19 to fund the Pension and OPEB Liability. 5.Total debt service includes Series 2012A and 2017A debt service payments. 3 •Absorptions •Efficiencies •Metrics •Process •Scenarios •Policies Needed 4 Absorptions •2 refunds August 2018: $1.1M December 2018: $1.1M •Pass-throughs (MWDOC/OCWD) FY17 to FY18: $895,514 (10¢/unit) FY16 to FY17: $1,736,867 (22¢/unit) FY15 to FY16: $444,348 (6¢/unit) •Energy costs FY18: $1,254,202 FY17: $1,320,943 FY16: $1,212,282 FY15: $1,482,604 •Annexation Fee from OCWD FY18: $369,257 FY17: $319,983 FY16: $350,092 FY15: $72,088 •Regulatory requirements Water Quality testing Legislative mandates •OPEB Liability $247,000 in FY18 $1.5M proposed in FY19 5 Efficiencies •Meet with SCE annually to determine best rate schedules No changes were identified this past year •Fairmont Booster Pump Station Operational savings opportunities •Increased BPP (OCWD Annexation) $1.18M (savings minus energy and treatment cost) •5-Year MOU with Employee Association Legal Fees: $42,000 Staff Time 6 Efficiencies •Leak detection program resulted in cost savings of more than $340,000 since 2015 •Not cleaning clean sewers •Utilize CCTV to identify condition of sewers •Conducting detailed analysis of Asset Management Plan •Minimized paving costs by actively coordinating with Authorities Having Jurisdiction (AHJ) •Reduced O&M cost by decommissioning several PRS facilities •Well 22 Drilling Project; saved $160,000 7 Reserve Policy Targets and Rating Agencies’ Metrics to Maintain AA 8 Rate Adjustment +/- AA/ AA+ 2.25 365 Days of Cash Debt Covenant Ratio 1.25 Contractual Rates must reflect cost of service. May lead to rate increase or decrease. Equivalent to $29 million each year in unrestricted reserves. Retain strong ratings from rating agencies. WATER MODEL: VariablesKnown Unknowns O&M Budget CIP & Capital Equipment POTENTIAL RATE ADJUSTMENT OPEB/PERS Unfunded Liability Pass-through 9 Pass -through Costs 10¢ for FY19 time 7-12, 2016 1-6, 2017 7-12, 2017 1-6, 2018 WHOLESALE PASS THROUGHS OCWD 402$ 402$ 445$ 445$ CPTP CUP MWDOC 942$ 979$ 979$ 1,015$ Capacity Charge 103,590$ 103,590$ 53,502$ Readiness-to-Serve 275,970$ 226,518$ 185,094$ 194,766$ Meter Charge 10.50$ 10.95$ 11.90$ 11.90$ IN-Lieu 0 0 533$ 533$ PRODUCTION & RETAIL VOLUME (DEMAND) OCWD, AF 7884.1 6361.2 5261.8 6176.7 CPTP, AF MWDOC, AF 3379.2 2691.1 3379.2 2691.1 In-Lieu, AF 2622.3 184.5 # of meters 24904 25021 RETAIL CONSUMPTION, CCF 4,411,186 3,009,795 4,411,186 3,009,795 TOTAL OCWD 3,169,408.20$ 2,557,202.40$ 2,341,501$ 2,748,632$ CPTP MWDOC 3,183,206.40$ 2,634,586.90$ 3,308,237$ 2,731,467$ Capacity Charge 130,290.84$ 103,280$ 103,280$ 53,504$ Readiness-to-Serve 275,970$ 226,515$ 172,717$ 194,764$ Meter Charge 262,721$ 273,980$ 297,750$ 297,750$ IN-Lieu 1,397,686$ 98,339$ 7,021,596$ 5,795,564$ 7,621,171$ 6,124,455$ 928,465$ difference 8,849,475 total CCF (units) 0.10$ per CCF FY17 to FY18 FY17 FY18 12,817,160$ 13,745,625$ Pass -through must be calculated at the end of the fiscal year, based on actual expenditures. Does NOT include: •Energy increases •OCWD Annexation fee 10 Changes to Commodity Chargefrom Pass-through FISCAL YEAR IN EFFECT Pass-through Amount/ccf BASE CHARGE, effective JAN. 1st Percent Change Current --$2.70 -- FY19 $0.10 (actual)$2.80 3.70% FY20 $0.12 $2.92 4.29% FY21 $0.08 $3.00 2.74% FY22 $0.10 $3.10 3.33% FY23 $0.09 $3.19 2.90% FY19 pass-through is actual calculated water supply costs. FY20 and onward are projections. 11 NO Capital Improvements 12 NO Capital Improvements No pass-through OR base charge increases 13 NO Capital Improvements With pass-through only 14 NO Capital Improvements With pass-through AND base charge increases 15 June Workshop CIPs •Based on Asset Management Plan •Staff identified projects •FY19-23: $39,812,440 16 June Workshop CIPs 17 June Workshop CIPs No pass-through OR base charge increases 18 June Workshop CIPs With pass-through only 19 June Workshop CIPs With pass-through AND base charge increases 20 Revenue Needed $2,179,098 $7,174,214 $10,416,587 $11,204,158 $11,974,252 $- $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 FY19 FY20 FY21 FY22 FY23 JUNE CIP; YEARLY REVENUE NEEDED Base Increase Pass Through TOTAL 21 •The downward trend is not conducive to maintaining the strong credit ratings of the District. •Projected debt service coverage ratios are significantly lower than previously projected. •District will be in default of rate covenant (1.25x) FY22 without rate adjustments. •Without rate adjustments or pass through increases, the future does not look robust for the District. Absent a concrete plan in place to reverse the projected coverage ratio trend, the District could be subject to a potential downgrade of the current ratings and incur significantly higher interest expense for its next bond issue. Fieldman | Rolapp & AssociatesJune 21, 2018 22 Operations/Engineering: Minimum CIPs •OPEB/PERS Liability Pay Down [5 & 10 years] •Deferred CIPs (Year 6 and 11, additional funding available) •Balanced cashflows •FY19-23: $19,848,440 23 Draft Five-Year CIP Budget (WATER) June Workshop Scenario FY19 CIP Budget FY20 CIP Budget FY21 CIP Budget FY22 CIP Budget FY23 CIP Budget FY19-FY23 CIP Budget Capital and Rehabilitation and Replacement (R&R) Projects Fairmont Booster Pump Station Upgrade 400,000$ -$ -$ -$ -$ 400,000$ Well 22 300,000$ 1,100,000$ -$ -$ -$ 1,400,000$ PRS Rehabilitation Phase 2 500,000$ -$ -$ -$ -$ 500,000$ Tract 15199 Waterline Replacement 750,000$ -$ -$ -$ -$ 750,000$ Fairmont Reservoir Rehabilitation 250,000$ -$ -$ -$ -$ 250,000$ Field Headquarters Rehabilitation and ADA Upgrades 500,000$ -$ -$ -$ -$ 500,000$ Mickel and Camino Verde Waterline Replacement 500,000$ -$ -$ -$ -$ 500,000$ Grandview and Short Waterline Replacement 500,000$ -$ -$ -$ -$ 500,000$ Meter Conversion Project (AMI)1,000,000$ 2,000,000$ 2,000,000$ -$ -$ 5,000,000$ Well Equipment Rehabilitation 150,000$ 150,000$ 150,000$ -$ -$ 450,000$ Well 23 -$ -$ -$ 1,500,000$ 2,000,000$ 3,500,000$ Ductile Iron Pipe (DIP) Replacement -$ 500,000$ 1,000,000$ 1,000,000$ 1,000,000$ 3,500,000$ Water Supply Redundancy and Fire Flow Reliability (5 locations)-$ 500,000$ 500,000$ 500,000$ 500,000$ 2,000,000$ Box Canyon Pump 2 Replacement -$ 63,000$ -$ -$ -$ 63,000$ Lakeview Booster Piping -$ 154,000$ -$ -$ -$ 154,000$ Apple Creek and Del Rey PRS Rehabilitation -$ 450,000$ -$ -$ -$ 450,000$ Bryant Ranch Reservoir Erosion Control and Fencing -$ 90,000$ -$ -$ -$ 90,000$ Imperial Hwy Waterline Replacement -$ 1,025,000$ 1,000,000$ -$ -$ 2,025,000$ Timber Ridge BPS Rehabilitation -$ 150,000$ 1,352,000$ -$ -$ 1,502,000$ Eisenhower Waterline Replacement -$ 800,000$ 325,000$ -$ -$ 1,125,000$ Well 20 Chemical System Replacement -$ -$ 303,000$ -$ -$ 303,000$ New River Waterline Replacement -$ -$ 600,000$ 1,000,000$ -$ 1,600,000$ Hidden Hills BPS Rehabilitation -$ -$ -$ 500,000$ -$ 500,000$ Reservoir Rehabilitation -$ -$ -$ 200,000$ -$ 200,000$ Well 15 Chemical System Replacement -$ -$ -$ 146,000$ -$ 146,000$ Dominguez Hills and Paseo Del Prado PRS Rehabilitation -$ -$ -$ 553,000$ -$ 553,000$ Future Waterline Replacement -$ -$ -$ 2,000,000$ 2,500,000$ 4,500,000$ Rose Drive Waterline Replacement -$ -$ -$ -$ 1,000,000$ 1,000,000$ Santiago BPS Rehabilitation -$ -$ -$ -$ 868,000$ 868,000$ Springview BPS Rehabilitation -$ -$ -$ -$ 272,000$ 272,000$ Engineering Support and Project Management Services -$ -$ 300,000$ 600,000$ 600,000$ 1,500,000$ Capital and R&R Projects Subtotal = 4,850,000$ 6,982,000$ 7,530,000$ 7,999,000$ 8,740,000$ 36,101,000$ Vehicle and Capital Equipment Replacement SCADA Radio Communications System Enhancement 125,000$ 125,000$ -$ -$ -$ 250,000$ Emergency Vehicle Radio Communications System -$ 200,000$ 112,500$ 112,500$ -$ 425,000$ Capital Equipment Replacement 547,500$ 282,235$ 287,235$ 262,235$ 272,235$ 1,651,440$ Vehicle Replacement - Water 212,000$ 339,000$ 327,000$ 222,000$ 285,000$ 1,385,000$ Vehicle & Capital Equipment Subtotal = 884,500$ 946,235$ 726,735$ 596,735$ 557,235$ 3,711,440$ TOTAL = 5,734,500$ 7,928,235$ 8,256,735$ 8,595,735$ 9,297,235$ 39,812,440$ Draft Five-Year CIP Budget (WATER) Deferred CIP Scenario FY19 CIP Budget FY20 CIP Budget FY21 CIP Budget FY22 CIP Budget FY23 CIP Budget FY19-FY23 CIP Budget Capital and Rehabilitation and Replacement (R&R) Projects Fairmont Booster Pump Station Upgrade 400,000$ -$ -$ -$ -$ 400,000$ Well 22 300,000$ 1,100,000$ -$ -$ -$ 1,400,000$ PRS Rehabilitation Phase 2 500,000$ -$ -$ -$ -$ 500,000$ Tract 15199 Waterline Replacement 750,000$ -$ -$ -$ -$ 750,000$ Fairmont Reservoir Rehabilitation Field Headquarters Rehabilitation and ADA Upgrades -$ 500,000$ -$ -$ -$ 500,000$ Mickel and Camino Verde Waterline Replacement 500,000$ -$ -$ -$ -$ 500,000$ Grandview and Short Waterline Replacement -$ 500,000$ -$ -$ -$ 500,000$ Meter Conversion Project (AMI) Well Equipment Rehabilitation 150,000$ 150,000$ 150,000$ -$ -$ 450,000$ Well 23 Ductile Iron Pipe (DIP) Replacement Water Supply Redundancy and Fire Flow Reliability (5 locations) Box Canyon Pump 2 Replacement -$ -$ 63,000$ -$ -$ 63,000$ Lakeview Booster Piping -$ -$ 154,000$ -$ -$ 154,000$ Apple Creek and Del Rey PRS Rehabilitation -$ -$ -$ 450,000$ -$ 450,000$ Bryant Ranch Reservoir Erosion Control and Fencing -$ 90,000$ -$ -$ -$ 90,000$ Imperial Hwy Waterline Replacement Timber Ridge BPS Rehabilitation -$ -$ 900,000$ 602,000$ -$ 1,502,000$ Eisenhower Waterline Replacement -$ -$ -$ -$ 1,125,000$ 1,125,000$ Well 20 Chemical System Replacement New River Waterline Replacement Hidden Hills BPS Rehabilitation -$ -$ -$ 500,000$ -$ 500,000$ Reservoir Rehabilitation -$ -$ -$ -$ 200,000$ 200,000$ Well 15 Chemical System Replacement Dominguez Hills and Paseo Del Prado PRS Rehabilitation -$ -$ -$ 553,000$ -$ 553,000$ Future Waterline Replacement -$ -$ 2,000,000$ 1,000,000$ 2,000,000$ 5,000,000$ Rose Drive Waterline Replacement Santiago BPS Rehabilitation Springview BPS Rehabilitation Engineering Support and Project Management Services -$ -$ 300,000$ 600,000$ 600,000$ 1,500,000$ Capital and R&R Projects Subtotal = 2,600,000$ 2,340,000$ 3,567,000$ 3,705,000$ 3,925,000$ 16,137,000$ Vehicle and Capital Equipment Replacement SCADA Radio Communications System Enhancement 125,000$ 125,000$ -$ -$ -$ 250,000$ Emergency Vehicle Radio Communications System -$ -$ -$ 200,000$ 225,000$ 425,000$ Capital Equipment Replacement 547,500$ 282,235$ 287,235$ 262,235$ 272,235$ 1,651,440$ Vehicle Replacement - Water 212,000$ 339,000$ 327,000$ 222,000$ 285,000$ 1,385,000$ Vehicle & Capital Equipment Subtotal = 884,500$ 746,235$ 614,235$ 684,235$ 782,235$ 3,711,440$ TOTAL = 3,484,500$ 3,086,235$ 4,181,235$ 4,389,235$ 4,707,235$ 19,848,440$ Deferred Deferred Deferred Deferred Deferred Deferred Deferred Deferred Deferred Deferred Deferred Deferred $39,812,440 -$19,848,440 ------------------ $19,964,000 24 Capital Improvements Asset Management PlanMinimal Plan 25 Minimum Capital Improvements No pass-through OR base charge increases 26 Minimum Capital Improvements With pass-through only 27 Minimum Capital Improvements With pass-through AND base charge increases 28 Revenue Needed $811,215 $2,687,323 $4,626,781 $6,440,998 $8,278,460 $- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 $9,000,000 FY19 FY20 FY21 FY22 FY23 MINIMUM CIP; YEARLY REVENUE NEEDED Base Increase Pass Through TOTAL 29 11 years from now… better off due to early payments of pension liabilities 30 1.Formula for Rate Increase Policy •Basic Service Charges •Commodity Charges •Energy Charges (requires new Prop. 218 process) 2.Pay -Go versus Debt-Funding Policy •Ratio or Type of Project 3.Implementation of 2-Year Budget cycles 31 •10¢ pass through to Commodity Charge for FY19 •5-Year CIP total: $19,848,440 •Minimum, 3% increase of Service (Base) Charge each year GFOA: 5 -Year Forecast Presentation 32 3% Base Charge Changes Fiscal Year in Effect FY19 FY20 FY21 FY22 FY23 Base Charge effective January 1st Dollar Difference ⅝” and ¾” $ 20.03 $ 0.58 $ 20.63 $ 0.60 $ 21.25 $ 0.62 $ 21.89 $ 0.64 $ 22.55 $ 0.66 Not-to- Exceed Prop. 218 Rate (1”) $ 51.76 $ 57.54 $ 63.81 Base Charge effective January 1st Dollar Difference 1” $ 33.47 $ 0.98 $ 34.48 $ 1.01 $ 35.52 $ 1.04 $ 36.59 $ 1.07 $ 37.69 $ 1.10 33 3-6% Base Charge Changes Charges are based on a 1” meter. Fiscal Year in Effect FY19 FY20 FY21 FY22 FY23 Base Charge effective January 1st Dollar Difference 3% $ 33.47 $ 0.98 $ 34.48 $ 1.01 $ 35.52 $ 1.04 $ 36.59 $ 1.07 $ 37.69 $ 1.10 Base Charge effective January 1st Dollar Difference 4% $ 33.79 $ 1.30 $ 35.15 $ 1.36 $ 36.56 $ 1.41 $ 38.03 $ 1.47 $ 39.56 $ 1.53 Not-to- Exceed Prop. 218 Rate $ 51.76 $ 57.54 $ 63.81 Base Charge effective January 1st Dollar Difference 5% $ 34.12 $ 1.63 $ 35.83 $ 1.71 $ 37.63 $ 1.80 $ 39.52 $ 1.89 $ 41.50 $ 1.98 Base Charge effective January 1st Dollar Difference 6% $ 34.44 $ 1.95 $ 36.51 $ 2.07 $ 38.71 $ 2.20 $ 41.04 $ 2.33 $ 43.51 $ 2.47 34 Changes to “Average” Customers FISCAL YEAR IN EFFECT Average MONTHLY Bill (18 units of water) Monthly Dollar Difference Monthly Percent Change Current $81.09 ---- FY19 $83.87 $2.78 3.43% FY20 $87.04 $3.17 3.78% FY21 $89.52 $2.48 2.85% FY22 $92.39 $2.87 3.21% FY23 $95.11 $2.72 2.94% Average customer is defined as using 18 units of water per month with a 1” meter. 35 Changes to “High” Customers FISCAL YEAR IN EFFECT Average MONTHLY Bill (50 units of water) Monthly Dollar Difference Monthly Percent Change Current $167.49 ---- FY19 $173.47 $5.98 3.57% FY20 $180.48 $7.01 4.04% FY21 $185.52 $5.04 2.79% FY22 $191.59 $6.07 3.27% FY23 $197.19 $5.60 2.92% High customer is defined as using 50 units of water per month with a 1” meter. 36 Future •Rolling 5-Year CIP projections •Revised annually •Imperial Highway vs Bixby Area •Sacramento •SB606 & AB1668 •Water Quality Regulatory Requirements •PFAS •Water & Sewer Rate Study •Required in FY20 37 Known Unknowns Weather •Drought, •Wildfires, •Atmospheric Rivers 38 Questions? 39 Retail Consumption; FY17-FY19, 1st Quarter 715,633 764,756 847,483695,308 1,019,616 738,682774,260 1,023,369 794,252 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 July August Septemberccf[units]Retail Consumption FY17 FY18 FY19 40 System Demand; FY17-FY19, 1st Quarter 2,011 2,039 1,8532,130 2,109 1,9112,277 2,284 2,010 0 500 1,000 1,500 2,000 2,500 July August Septemberacre-feetSystem Demand FY17 FY18 FY19 41 $10M Debt Funded: $30M Total CIP With pass-through only 42 $10M Debt Funded: $30M Total CIP With pass-through AND base charge increases 43 $20M CIP vs $30M CIP (w/ Debt Fund) Charges are based on a 1” meter. Fiscal Year in Effect $32.49 FY19 FY20 FY21 FY22 FY23 Rate Increase Base Charge effective January 1st Dollar Difference $20M 3%$ 33.47 $ 0.98 3%$ 34.47 $ 1.00 3%$ 35.50 $ 1.03 3%$ 36.57 $ 1.07 3%$ 37.66 $ 1.09 Rate Increase Base Charge effective January 1st Dollar Difference $30M ($10M Debt Funded) 5%$ 34.11 $ 1.62 4%$ 35.48 $ 1.37 2%$ 36.19 $ 0.71 1%$ 36.55 $ 0.36 0%$ 36.55 $ --- $20M vs $30M Not-to- Exceed Prop. 218 Rate $ 51.76 $ 0.64 $ 57.54 $ 1.01 $ 63.81 $ 0.69 -$ 0.02 -$ 1.11 44 Water Model: Rate Changes Category General Personnel Energy MWDOC OCWD Construction Other Revenue Property Tax Interest Rates FY20 FY21 FY22 FY23 FY24 3.0%3.0%3.0%3.0%3.0% 5.5%6.6%5.0%5.2%5.0% 3.0%3.0%3.0%3.0%3.0% 3.0%3.0%4.1%4.1%4.1% 9.3%7.3%4.2%4.2%4.2% 3.0%3.0%3.0%3.0%3.0% 1.5%1.5%1.5%1.5%1.5% 2.0%2.0%2.0%2.0%2.0% 0.3%0.3%0.3%0.3%0.3% 45 Water Revenues: Annual % Changes Water Revenue Operating Non-Operating TOTAL FY12 FY13 FY14 FY15 FY16 FY17 FY18 8.8%5.1%8.3%-5.3%9.6%-0.7%8.7% -7.9%-1.4%36.6%-14.4%10.6%-4.4%6.2% 7.4%4.6%10.3%-6.1%9.7%-1.0%8.5% 46 Parameters for Rate Increase TOTAL REVENUE ≥O&M Personnel Supplies & Services Debt Service Reserves Variable Cost MOU Contractual Services 2.25%365 Days of Cash CIP: Pay-GO Retirements Communications CIP: Debt Insurance Data Processing Annual Principal and Interest Benefits Vehicle Equipment Salaries Office Expense Training 47 1 ITEM NO. 5.2. MATERIALS SUBMITTED BY: Kaden Young MEETING DATE: October 30, 2018 Over 10 Years of Production Volume 0.000 500 1000 1500 2000 2500 3000 Jul-05Oct-05Jan-06Apr-06Jul-06Oct-06Jan-07Apr-07Jul-07Oct-07Jan-08Apr-08Jul-08Oct-08Jan-09Apr-09Jul-09Oct-09Jan-10Apr-10Jul-10Oct-10Jan-11Apr-11Jul-11Oct-11Jan-12Apr-12Jul-12Oct-12Jan-13Apr-13Jul-13Oct-13Jan-14Apr-14Jul-14Oct-14Jan-15Apr-15Jul-15Oct-15Jan-16Apr-16Jul-16Oct-16Jan-17Apr-17Jul-17Oct-17Jan-18Apr-18Rainfall, inchesProduction Volume, acre-feetProduction Volume Water Conservation Act of 2009 2 Drought Declaration Water Conservation Act of 2009 0.000 500 1000 1500 2000 2500 3000 Jul-05Oct-05Jan-06Apr-06Jul-06Oct-06Jan-07Apr-07Jul-07Oct-07Jan-08Apr-08Jul-08Oct-08Jan-09Apr-09Jul-09Oct-09Jan-10Apr-10Jul-10Oct-10Jan-11Apr-11Jul-11Oct-11Jan-12Apr-12Jul-12Oct-12Jan-13Apr-13Jul-13Oct-13Jan-14Apr-14Jul-14Oct-14Jan-15Apr-15Jul-15Oct-15Jan-16Apr-16Jul-16Oct-16Jan-17Apr-17Jul-17Oct-17Jan-18Apr-18Rainfall, inchesProduction Volume, acre-feetProduction Volume Drought Declaration 3 0.000 500 1000 1500 2000 2500 3000 Jul-05Oct-05Jan-06Apr-06Jul-06Oct-06Jan-07Apr-07Jul-07Oct-07Jan-08Apr-08Jul-08Oct-08Jan-09Apr-09Jul-09Oct-09Jan-10Apr-10Jul-10Oct-10Jan-11Apr-11Jul-11Oct-11Jan-12Apr-12Jul-12Oct-12Jan-13Apr-13Jul-13Oct-13Jan-14Apr-14Jul-14Oct-14Jan-15Apr-15Jul-15Oct-15Jan-16Apr-16Jul-16Oct-16Jan-17Apr-17Jul-17Oct-17Jan-18Apr-18Rainfall, inchesProduction Volume, acre-feetProduction Volume Drought Declaration Legislative Changes Water Conservation Act of 2009 ?? 4 Here comes the rain… 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 18.00 20.00 0 500 1000 1500 2000 2500 3000 Jul-05Oct-05Jan-06Apr-06Jul-06Oct-06Jan-07Apr-07Jul-07Oct-07Jan-08Apr-08Jul-08Oct-08Jan-09Apr-09Jul-09Oct-09Jan-10Apr-10Jul-10Oct-10Jan-11Apr-11Jul-11Oct-11Jan-12Apr-12Jul-12Oct-12Jan-13Apr-13Jul-13Oct-13Jan-14Apr-14Jul-14Oct-14Jan-15Apr-15Jul-15Oct-15Jan-16Apr-16Jul-16Oct-16Jan-17Apr-17Jul-17Oct-17Jan-18Apr-18Rainfall, inchesProduction Volume, acre-feetProduction Volume Drought Declaration Rainfall 5 Basis for FY19’s projection: 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 18.00 20.00 0 500 1000 1500 2000 2500 3000 Jul-05Oct-05Jan-06Apr-06Jul-06Oct-06Jan-07Apr-07Jul-07Oct-07Jan-08Apr-08Jul-08Oct-08Jan-09Apr-09Jul-09Oct-09Jan-10Apr-10Jul-10Oct-10Jan-11Apr-11Jul-11Oct-11Jan-12Apr-12Jul-12Oct-12Jan-13Apr-13Jul-13Oct-13Jan-14Apr-14Jul-14Oct-14Jan-15Apr-15Jul-15Oct-15Jan-16Apr-16Jul-16Oct-16Jan-17Apr-17Jul-17Oct-17Jan-18Apr-18Rainfall, inchesProduction Volume, acre-feetProjection Period Production Volume Drought Declaration Rainfall 6 Basis for FY19’s projection: 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 18.00 20.00 0 500 1000 1500 2000 2500 3000 Jul-05Nov-05Mar-06Jul-06Nov-06Mar-07Jul-07Nov-07Mar-08Jul-08Nov-08Mar-09Jul-09Nov-09Mar-10Jul-10Nov-10Mar-11Jul-11Nov-11Mar-12Jul-12Nov-12Mar-13Jul-13Nov-13Mar-14Jul-14Nov-14Mar-15Jul-15Nov-15Mar-16Jul-16Nov-16Mar-17Jul-17Nov-17Mar-18Jul-18Nov-18Mar-19Rainfall, inchesProduction Volume, acre-feetProjection Period FY19 Production Volume Drought Declaration Rainfall 7 Fiscal Year Cycles 500.0 1000.0 1500.0 2000.0 2500.0 3000.0 JUL AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY JUN Year to Year; Production Volume FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 8 Staff Projections -8.1%-8.3%-8.6% -6.8% 8.9% 7.6% -10.0% -4.8% 1.0% 12.2% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 -15.00 -10.00 -5.00 0.00 5.00 10.00 15.00 20.00 Budget to Actual DifferenceRainfall, inchesBudget to Actual Production Volume Difference vs Rainfall 9 Staff Projections -8.1%-8.3%-8.6% -6.8% 8.9% 7.6% -10.0% -4.8% 1.0% 12.2% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 -15.00 -10.00 -5.00 0.00 5.00 10.00 15.00 20.00 Budget to Actual DifferenceRainfall, inchesBudget to Actual Production Volume Difference vs Rainfall 10 Q1 Projection vs. Fiscal Year End -5.8%-14.6%-1.5%2.7%3.6%-2.1%-4.1%-48.8%22.5%4.0%0.8%-15.7%-28.3%16.1%4.0%10.3%-15.8%-14.8%6.5%20.4%-1.4%-31.1%9.9%16.1%-2.6%8.9%-5.8%-37.4%-15.3%31.2%-12.5%-10.4%-1.1%0.1%10.0%1.7%-36.6%-3.1%17.4%1.0%-5.3%-16.2%-4.5%7.4%4.4%3.8%-14.5%-25.6%12.0%12.3%FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Q1 PROJECTION VERSUS YEAR END Q1 Q2 Q3 Q4 YEAR 11 Over 10 Years of Retail Volume 0.000 200000 400000 600000 800000 1000000 1200000 1400000 Jul-05Oct-05Jan-06Apr-06Jul-06Oct-06Jan-07Apr-07Jul-07Oct-07Jan-08Apr-08Jul-08Oct-08Jan-09Apr-09Jul-09Oct-09Jan-10Apr-10Jul-10Oct-10Jan-11Apr-11Jul-11Oct-11Jan-12Apr-12Jul-12Oct-12Jan-13Apr-13Jul-13Oct-13Jan-14Apr-14Jul-14Oct-14Jan-15Apr-15Jul-15Oct-15Jan-16Apr-16Jul-16Oct-16Jan-17Apr-17Jul-17Oct-17Jan-18Apr-18Rainfall, inchesRetail Consumption, ccfRetail Volume 12 Drought Declaration Period 0.000 200000 400000 600000 800000 1000000 1200000 1400000 Jul-05Oct-05Jan-06Apr-06Jul-06Oct-06Jan-07Apr-07Jul-07Oct-07Jan-08Apr-08Jul-08Oct-08Jan-09Apr-09Jul-09Oct-09Jan-10Apr-10Jul-10Oct-10Jan-11Apr-11Jul-11Oct-11Jan-12Apr-12Jul-12Oct-12Jan-13Apr-13Jul-13Oct-13Jan-14Apr-14Jul-14Oct-14Jan-15Apr-15Jul-15Oct-15Jan-16Apr-16Jul-16Oct-16Jan-17Apr-17Jul-17Oct-17Jan-18Apr-18Rainfall, inchesRetail Consumption, ccfRetail Volume Drought Declaration Water Conservation Act of 2009 13 Here comes the rain… 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 18.00 20.00 0 200000 400000 600000 800000 1000000 1200000 1400000 Jul-05Oct-05Jan-06Apr-06Jul-06Oct-06Jan-07Apr-07Jul-07Oct-07Jan-08Apr-08Jul-08Oct-08Jan-09Apr-09Jul-09Oct-09Jan-10Apr-10Jul-10Oct-10Jan-11Apr-11Jul-11Oct-11Jan-12Apr-12Jul-12Oct-12Jan-13Apr-13Jul-13Oct-13Jan-14Apr-14Jul-14Oct-14Jan-15Apr-15Jul-15Oct-15Jan-16Apr-16Jul-16Oct-16Jan-17Apr-17Jul-17Oct-17Jan-18Apr-18Rainfall, inchesRetail Consumption, ccfRetail Volume Drought Declaration Rainfall 14 Basis for FY19’s projection: 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 18.00 20.00 0 200000 400000 600000 800000 1000000 1200000 1400000 Jul-05Oct-05Jan-06Apr-06Jul-06Oct-06Jan-07Apr-07Jul-07Oct-07Jan-08Apr-08Jul-08Oct-08Jan-09Apr-09Jul-09Oct-09Jan-10Apr-10Jul-10Oct-10Jan-11Apr-11Jul-11Oct-11Jan-12Apr-12Jul-12Oct-12Jan-13Apr-13Jul-13Oct-13Jan-14Apr-14Jul-14Oct-14Jan-15Apr-15Jul-15Oct-15Jan-16Apr-16Jul-16Oct-16Jan-17Apr-17Jul-17Oct-17Jan-18Apr-18Rainfall, inchesRetail Consumption, ccfProjection Period Retail Volume Drought Declaration Rainfall 15 Fiscal Year Cycles 500.0 1000.0 1500.0 2000.0 2500.0 3000.0 JUL AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY JUN Year to Year; Production Volume FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 16 Budget to Actuals: Residential -16.9%-10.0% 7.7%7.9% -9.9% 12.0%1.2%13.1% -20.00 -15.00 -10.00 -5.00 0.00 5.00 10.00 15.00 20.00 -20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Rainfall, inchesResidential 17 Budget to Actuals: Commercial 14.8%5.5%3.7% -1.8%-7.7% 23.5% -3.9%-8.4% -10.00 -5.00 0.00 5.00 10.00 15.00 20.00 25.00 30.00 -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Rainfall, inchesCommercial 18 Budget to Actuals: Landscape/Irrigation -7.1%-1.8% 3.1% -5.2%-15.3%-2.9% 10.9%30.9% -20.00 -15.00 -10.00 -5.00 0.00 5.00 10.00 15.00 20.00 25.00 30.00 -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Rainfall, inchesLandscape/Irrigation 19 Budget to Actuals: R+C+L -13.2%-7.5% 6.5%4.4% -10.8% 10.4%2.3%13.6% -15.00 -10.00 -5.00 0.00 5.00 10.00 15.00 20.00 -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Rainfall, inchesResidential + Commercial + Landscape 20 Budget to Actuals: Total Revenue -10.3% -6.2% 5.7% 4.0% -4.8% 1.3% 2.7% 8.4% -15.00 -10.00 -5.00 0.00 5.00 10.00 15.00 20.00 -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Rainfall, inchesTotal Revenue 21 Q1 Projection vs. Fiscal Year End -5.0%-4.7%-11.0%7.8%-5.2%8.7%-10.0%-43.8%15.0%8.0%-2.0%-41.8%-14.0%-4.4%17.5%1.7%-10.7%-26.3%17.3%10.4%3.1%-46.3%6.5%26.9%-21.7%21.3%-16.3%-35.9%-27.3%42.6%1.9%-9.3%-5.7%9.9%13.6%7.8%-39.0%-16.6%15.9%1.6%-1.2%-21.2%-7.5%9.7%2.8%9.3%-18.1%-30.9%10.3%13.8%FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Q1 PROJECTION VERSUS YEAR END Q1 Q2 Q3 Q4 YEAR 22 5-Year Look Back FY12 FY13 FY14 FY15 FY16 FY17 Total for Selection Total w/o FY16 Budgeted NI w/o Depreciation or CC 3,515,839 2,730,661 1,892,717 3,623,335 2,254,384 4,558,298 18,575,234 16,320,850 Actuals as reported in CAFR 5,188,121 3,955,652 6,236,793 5,992,785 10,511,399 6,331,570 38,216,320 27,704,921 Variance to Actuals 1,672,282 1,224,991 4,344,076 2,369,450 8,257,015 1,773,272 19,641,086 11,384,071 % Variance 47.56%44.86%229.52%65.39%366.26%38.90%105.74%69.75% FY12 FY13 FY14 FY15 FY16 FY17 Total for Selection Total w/o FY16 Budgeted NI w/o Depreciation or CC 3,515,839 2,730,661 4,040,680 3,623,335 2,254,384 4,558,298 20,723,197 18,468,813 Actuals as reported 5,188,121 3,955,652 6,236,793 5,992,785 10,511,399 6,331,570 38,216,320 27,704,921 Variance to Actuals 1,672,282 1,224,991 2,196,113 2,369,450 8,257,015 1,773,272 17,493,123 9,236,108 % Variance 47.56%44.86%54.35%65.39%366.26%38.90%84.41%50.01% 23 Detail and Support of Positive Net Position FY12 FY13 FY14 FY15 FY16 FY17 Budgeted NI w/o Depreciation or CC 3,515,839 2,730,661 4,040,680 3,623,335 2,254,384 4,558,298 Actuals as reported 5,188,121 3,955,652 6,236,793 5,992,785 10,511,399 6,331,570 Variance to Actuals 1,672,282 1,224,991 2,196,113 2,369,450 8,257,015 1,773,272 % Variance 47.56%44.86%54.35%65.39%366.26%38.90% Annual Debt Service Principal Payment - September 2003 COP 235,000 245,000 2008 COP 655,000 680,000 705,000 735,000 765,000 795,000 2012A Bonds 260,000 275,000 280,000 285,000 Total - Annual Debt Service Payments 890,000 925,000 965,000 1,010,000 1,045,000 1,080,000 Adjusted Variance Between Budget and Actual 782,282 299,991 1,231,113 1,359,450 7,212,015 693,272 22.25%10.99%30.47%37.52%319.91%15.21% FY Capital Improvement Projects & Capital Outlay 2008 COP Acquisition Funded 5,646,802 LOC Funded 1,171,131 3,471,525 1,351,443 881,621 124,280 Water/Sewer Capital Reserve Funded - Pay-GO 2,824,890 4,690,437 349,794 535,055 1,265,264 12,676,539 Total Annual CIP Expended 8,471,692 5,861,568 3,821,319 1,886,498 2,146,885 12,800,819 24 Coefficient of Variation, by Month 0.00 0.50 1.00 1.50 2.00 2.50 3.00 0% 5% 10% 15% 20% 25% 30% 35% 40% JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Rainfall, inchesCoefficient of VariationPRODUCTION RETAIL 25 Coefficient of Variation, by Month 0.00 0.50 1.00 1.50 2.00 2.50 3.00 0% 5% 10% 15% 20% 25% 30% 35% 40% JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Rainfall, inchesCoefficient of VariationPRODUCTION RETAIL RAIN, AVG. SOMEWHAT PREDICTABLE HIGHLY VARIABLE; UNPREDICTABLE 26 Coefficient of Variation, by Fiscal Year 00% 5% 10% 15% 20% 25% 30% 35% 40% FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Rainfall, inchesCoefficient of VariationPRODUCTION RETAIL 27 Coefficient of Variation, by Fiscal Year 0 5 10 15 20 25 0% 5% 10% 15% 20% 25% 30% 35% 40% FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Rainfall, inchesCoefficient of VariationPRODUCTION RETAIL RAIN, Total SOMEWHAT PREDICTABLE HIGHLY VARIABLE; UNPREDICTABLE 28 29 Conclusions •HIGHLY dependent on RAIN, not weather (temperature) •New legislations will lead to new trends •Utilize historic data to predict future needs 30