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HomeMy WebLinkAboutAgenda Packet - EVWD Board of Directors - 06/28/2023BOARD OF DIRECTORS JUNE 28, 2023 East Valley Water District was formed in 1954 and provides water and wastewater services to 104,000 residents within the cities of San Bernardino and Highland, and portions of San Bernardino County. EVWD operates under the direction of a 5­member elected Board. GOVERNING BOARD EXECUTIVE MANAGEMENT Phillip R. Goodrich Chairman of the Board Michael Moore General Manager/CEO James Morales, Jr. Vice­Chairman Brian W. Tompkins Chief Financial Officer Chris Carrillo Governing Board Member Jeff Noelte Director of Engineering & Operations Ronald L. Coats Governing Board Member Kerrie Bryan Director of Administrative Services David E. Smith Governing Board Member Patrick Milroy  Operations Manager Rocky Welborn  Water Reclamation Manager Justine Hendricksen District Clerk Board of Directors Regular Meeting June 28, 2023 ­ 5:30 PM 31111 Greenspot Road, Highland, CA 92346 www.eastvalley.org PLEASE NOTE: Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for public inspection in the District’s office located at 31111 Greenspot Rd., Highland, during normal business hours. Also, such documents are available on the District’s website at eastvalley.org and are subject to staff’s ability to post the documents before the meeting. Pursuant to Government Code Section 54954.2(a), any request for a disability­related modification or accommodation, including auxiliary aids or services, that is sought in order to participate in the above agendized public meeting should be directed to the District Clerk at (909) 885­4900 at least 72 hours prior to said meeting. In order to comply with legal requirements for posting of agenda, only those items filed with the District Clerk by 12:00 p.m. on Wednesday prior to the following Wednesday meeting not requiring departmental investigation, will be considered by the Board of Directors. CALL TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL OF BOARD MEMBERS PUBLIC COMMENTS Any person wishing to speak to the Board of Directors is asked to complete a Speaker Card and submit it to the District Clerk prior to the start of the meeting. Each speaker is limited to three (3) minutes, unless waived by the Chairman of the Board. Under the State of California Brown Act, the Board of Directors is prohibited from discussing or taking action on any item not listed on the posted agenda. The matter will automatically be referred to staff for an appropriate response or action and may appear on the agenda at a future meeting. 1.AGENDA This agenda contains a brief general description of each item to be considered. Except as otherwise provided by law, no action shall be taken on any item not appearing on the following agenda unless the Board of Directors makes a determination that an emergency exists or that a need to take immediate action on the item came to the attention of the District subsequent to the posting of the agenda. a.Approval of Agenda 2.APPROVAL OF CONSENT CALENDAR All matters listed under the Consent Calendar are considered by the Board of Directors to be routine and will be enacted in one motion. There will be no discussion of these items prior to the time the board considers the motion unless members of the board, the administrative staff, or the public request specific items to be discussed and/or removed from the Consent Calendar. a.Approve the June 14, 2023 Regular Board Meeting Minutes b.Financial Statements for May 2023 c.Investment Transaction Report for Month Ended May 31, 2023 d.Consider approval of Revised Debt Management Policy 7.3 e.May 2023 Disbursements: Accounts payable disbursements for the period include check numbers 261168 through 261311, bank drafts, and ACH payments in the amount of $4,860,454.82 and $421,416.11 for payroll 3.INFORMATIONAL ITEMS a.Sterling Natural Resource Center Update b.Summer Readiness Plan for Water Production c.Government Finance Officers Association Presentation 4.DISCUSSION AND POSSIBLE ACTION ITEMS a.Consider Adoption of Resolution 2023.09 Approving the Fiscal Year 2023­24 Operating and Capital Budgets 5.REPORTS a.Board of Directors’ Reports b.General Manager/CEO Report c.Legal Counsel Report d.Board of Directors’ Comments ADJOURN BOARD OF DIRECTORSJUNE 28, 2023East Valley Water District was formed in 1954 and provides water and wastewater services to104,000 residents within the cities of San Bernardino and Highland, and portions of SanBernardino County.EVWD operates under the direction of a 5­member elected Board.GOVERNING BOARD EXECUTIVE MANAGEMENTPhillip R. GoodrichChairman of the Board Michael MooreGeneral Manager/CEOJames Morales, Jr.Vice­Chairman Brian W. TompkinsChief Financial OfficerChris CarrilloGoverning Board Member Jeff NoelteDirector of Engineering & OperationsRonald L. CoatsGoverning Board Member Kerrie BryanDirector of Administrative ServicesDavid E. SmithGoverning Board Member Patrick Milroy Operations ManagerRocky Welborn Water Reclamation ManagerJustine Hendricksen District Clerk Board of Directors Regular Meeting June 28, 2023 ­ 5:30 PM 31111 Greenspot Road, Highland, CA 92346 www.eastvalley.org PLEASE NOTE: Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for public inspection in the District’s office located at 31111 Greenspot Rd., Highland, during normal business hours. Also, such documents are available on the District’s website at eastvalley.org and are subject to staff’s ability to post the documents before the meeting. Pursuant to Government Code Section 54954.2(a), any request for a disability­related modification or accommodation, including auxiliary aids or services, that is sought in order to participate in the above agendized public meeting should be directed to the District Clerk at (909) 885­4900 at least 72 hours prior to said meeting. In order to comply with legal requirements for posting of agenda, only those items filed with the District Clerk by 12:00 p.m. on Wednesday prior to the following Wednesday meeting not requiring departmental investigation, will be considered by the Board of Directors. CALL TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL OF BOARD MEMBERS PUBLIC COMMENTS Any person wishing to speak to the Board of Directors is asked to complete a Speaker Card and submit it to the District Clerk prior to the start of the meeting. Each speaker is limited to three (3) minutes, unless waived by the Chairman of the Board. Under the State of California Brown Act, the Board of Directors is prohibited from discussing or taking action on any item not listed on the posted agenda. The matter will automatically be referred to staff for an appropriate response or action and may appear on the agenda at a future meeting. 1.AGENDA This agenda contains a brief general description of each item to be considered. Except as otherwise provided by law, no action shall be taken on any item not appearing on the following agenda unless the Board of Directors makes a determination that an emergency exists or that a need to take immediate action on the item came to the attention of the District subsequent to the posting of the agenda. a.Approval of Agenda 2.APPROVAL OF CONSENT CALENDAR All matters listed under the Consent Calendar are considered by the Board of Directors to be routine and will be enacted in one motion. There will be no discussion of these items prior to the time the board considers the motion unless members of the board, the administrative staff, or the public request specific items to be discussed and/or removed from the Consent Calendar. a.Approve the June 14, 2023 Regular Board Meeting Minutes b.Financial Statements for May 2023 c.Investment Transaction Report for Month Ended May 31, 2023 d.Consider approval of Revised Debt Management Policy 7.3 e.May 2023 Disbursements: Accounts payable disbursements for the period include check numbers 261168 through 261311, bank drafts, and ACH payments in the amount of $4,860,454.82 and $421,416.11 for payroll 3.INFORMATIONAL ITEMS a.Sterling Natural Resource Center Update b.Summer Readiness Plan for Water Production c.Government Finance Officers Association Presentation 4.DISCUSSION AND POSSIBLE ACTION ITEMS a.Consider Adoption of Resolution 2023.09 Approving the Fiscal Year 2023­24 Operating and Capital Budgets 5.REPORTS a.Board of Directors’ Reports b.General Manager/CEO Report c.Legal Counsel Report d.Board of Directors’ Comments ADJOURN BOARD OF DIRECTORSJUNE 28, 2023East Valley Water District was formed in 1954 and provides water and wastewater services to104,000 residents within the cities of San Bernardino and Highland, and portions of SanBernardino County.EVWD operates under the direction of a 5­member elected Board.GOVERNING BOARD EXECUTIVE MANAGEMENTPhillip R. GoodrichChairman of the Board Michael MooreGeneral Manager/CEOJames Morales, Jr.Vice­Chairman Brian W. TompkinsChief Financial OfficerChris CarrilloGoverning Board Member Jeff NoelteDirector of Engineering & OperationsRonald L. CoatsGoverning Board Member Kerrie BryanDirector of Administrative ServicesDavid E. SmithGoverning Board Member Patrick Milroy Operations ManagerRocky Welborn Water Reclamation ManagerJustine HendricksenDistrict ClerkBoard of Directors Regular MeetingJune 28, 2023 ­ 5:30 PM31111 Greenspot Road, Highland, CA 92346www.eastvalley.orgPLEASE NOTE:Materials related to an item on this agenda submitted to the Board after distribution of theagenda packet are available for public inspection in the District’s office located at 31111Greenspot Rd., Highland, during normal business hours. Also, such documents are availableon the District’s website at eastvalley.org and are subject to staff’s ability to post thedocuments before the meeting.Pursuant to Government Code Section 54954.2(a), any request for a disability­relatedmodification or accommodation, including auxiliary aids or services, that is sought in orderto participate in the above agendized public meeting should be directed to the District Clerkat (909) 885­4900 at least 72 hours prior to said meeting. In order to comply with legal requirements for posting of agenda, only those items filed with the District Clerk by 12:00 p.m. on Wednesday prior to the following Wednesday meeting not requiring departmental investigation, will be considered by the Board of Directors. CALL TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL OF BOARD MEMBERS PUBLIC COMMENTS Any person wishing to speak to the Board of Directors is asked to complete a Speaker Card and submit it to the District Clerk prior to the start of the meeting. Each speaker is limited to three (3) minutes, unless waived by the Chairman of the Board. Under the State of California Brown Act, the Board of Directors is prohibited from discussing or taking action on any item not listed on the posted agenda. The matter will automatically be referred to staff for an appropriate response or action and may appear on the agenda at a future meeting. 1.AGENDA This agenda contains a brief general description of each item to be considered. Except as otherwise provided by law, no action shall be taken on any item not appearing on the following agenda unless the Board of Directors makes a determination that an emergency exists or that a need to take immediate action on the item came to the attention of the District subsequent to the posting of the agenda. a.Approval of Agenda 2.APPROVAL OF CONSENT CALENDAR All matters listed under the Consent Calendar are considered by the Board of Directors to be routine and will be enacted in one motion. There will be no discussion of these items prior to the time the board considers the motion unless members of the board, the administrative staff, or the public request specific items to be discussed and/or removed from the Consent Calendar. a.Approve the June 14, 2023 Regular Board Meeting Minutes b.Financial Statements for May 2023 c.Investment Transaction Report for Month Ended May 31, 2023 d.Consider approval of Revised Debt Management Policy 7.3 e.May 2023 Disbursements: Accounts payable disbursements for the period include check numbers 261168 through 261311, bank drafts, and ACH payments in the amount of $4,860,454.82 and $421,416.11 for payroll 3.INFORMATIONAL ITEMS a.Sterling Natural Resource Center Update b.Summer Readiness Plan for Water Production c.Government Finance Officers Association Presentation 4.DISCUSSION AND POSSIBLE ACTION ITEMS a.Consider Adoption of Resolution 2023.09 Approving the Fiscal Year 2023­24 Operating and Capital Budgets 5.REPORTS a.Board of Directors’ Reports b.General Manager/CEO Report c.Legal Counsel Report d.Board of Directors’ Comments ADJOURN BOARD OF DIRECTORSJUNE 28, 2023East Valley Water District was formed in 1954 and provides water and wastewater services to104,000 residents within the cities of San Bernardino and Highland, and portions of SanBernardino County.EVWD operates under the direction of a 5­member elected Board.GOVERNING BOARD EXECUTIVE MANAGEMENTPhillip R. GoodrichChairman of the Board Michael MooreGeneral Manager/CEOJames Morales, Jr.Vice­Chairman Brian W. TompkinsChief Financial OfficerChris CarrilloGoverning Board Member Jeff NoelteDirector of Engineering & OperationsRonald L. CoatsGoverning Board Member Kerrie BryanDirector of Administrative ServicesDavid E. SmithGoverning Board Member Patrick Milroy Operations ManagerRocky Welborn Water Reclamation ManagerJustine HendricksenDistrict ClerkBoard of Directors Regular MeetingJune 28, 2023 ­ 5:30 PM31111 Greenspot Road, Highland, CA 92346www.eastvalley.orgPLEASE NOTE:Materials related to an item on this agenda submitted to the Board after distribution of theagenda packet are available for public inspection in the District’s office located at 31111Greenspot Rd., Highland, during normal business hours. Also, such documents are availableon the District’s website at eastvalley.org and are subject to staff’s ability to post thedocuments before the meeting.Pursuant to Government Code Section 54954.2(a), any request for a disability­relatedmodification or accommodation, including auxiliary aids or services, that is sought in orderto participate in the above agendized public meeting should be directed to the District Clerkat (909) 885­4900 at least 72 hours prior to said meeting.In order to comply with legal requirements for posting of agenda, only those items filedwith the District Clerk by 12:00 p.m. on Wednesday prior to the following Wednesdaymeeting not requiring departmental investigation, will be considered by the Board ofDirectors.CALL TO ORDERPLEDGE OF ALLEGIANCEROLL CALL OF BOARD MEMBERSPUBLIC COMMENTSAny person wishing to speak to the Board of Directors is asked to complete a SpeakerCard and submit it to the District Clerk prior to the start of the meeting. Each speaker islimited to three (3) minutes, unless waived by the Chairman of the Board. Under the Stateof California Brown Act, the Board of Directors is prohibited from discussing or takingaction on any item not listed on the posted agenda. The matter will automatically bereferred to staff for an appropriate response or action and may appear on the agenda at afuture meeting.1.AGENDAThis agenda contains a brief general description of each item to be considered.Except as otherwise provided by law, no action shall be taken on any item notappearing on the following agenda unless the Board of Directors makes adetermination that an emergency exists or that a need to take immediate action onthe item came to the attention of the District subsequent to the posting of theagenda.a.Approval of Agenda2.APPROVAL OF CONSENT CALENDARAll matters listed under the Consent Calendar are considered by the Board ofDirectors to be routine and will be enacted in one motion. There will be nodiscussion of these items prior to the time the board considers the motion unlessmembers of the board, the administrative staff, or the public request specific itemsto be discussed and/or removed from the Consent Calendar.a.Approve the June 14, 2023 Regular Board Meeting Minutesb.Financial Statements for May 2023c.Investment Transaction Report for Month Ended May 31, 2023d.Consider approval of Revised Debt Management Policy 7.3 e.May 2023 Disbursements: Accounts payable disbursements for the period include check numbers 261168 through 261311, bank drafts, and ACH payments in the amount of $4,860,454.82 and $421,416.11 for payroll 3.INFORMATIONAL ITEMS a.Sterling Natural Resource Center Update b.Summer Readiness Plan for Water Production c.Government Finance Officers Association Presentation 4.DISCUSSION AND POSSIBLE ACTION ITEMS a.Consider Adoption of Resolution 2023.09 Approving the Fiscal Year 2023­24 Operating and Capital Budgets 5.REPORTS a.Board of Directors’ Reports b.General Manager/CEO Report c.Legal Counsel Report d.Board of Directors’ Comments ADJOURN Agenda Item #2a June 28, 20231 Meeting Date: June 28, 2023 Agenda Item #2a Consent Item Regular Board Meeting TO: Governing Board Members FROM: General Manager/CEO SUBJECT: Approve the June 14, 2023 Regular Board Meeting Minutes RECOMMENDATION That the Board of Directors approve the June 14, 2023 regular Board meeting minutes as submitted. AGENCY GOALS AND OBJECTIVES II - Maintain a Commitment To Sustainability, Transparency, and Accountability B. Utilize Effective Communication Methods REVIEW BY OTHERS This agenda item has been reviewed by Administration. FISCAL IMPACT There is no fiscal impact associated with this agenda item. Recommended by: ________________ Michael Moore General Manager/CEO Respectfully submitted: ________________ Justine Hendricksen District Clerk ATTACHMENTS Draft June 14, 2023 Regular Board Meeting Minutes Regular Board Meeting Meeting Date: June 14, 2023 CALL TO ORDER The Chairman of the Board called the meeting to order at 5:30 p.m. PLEDGE OF ALLEGIANCE Director Carrillo led the flag salute. ROLL CALL OF BOARD MEMBERS PRESENT Directors: Carrillo, Coats, Goodrich, Morales, Smith ABSENT None STAFF Michael Moore, General Manager/CEO; Brian Tompkins, Chief Financial Officer; Kerrie Bryan, Director of Administrative Services; Rocky Welborn, Water Reclamation Manager; William Ringland, Public Affairs/Conservation Manager; Justine Hendricksen, District Clerk; Shayla Antrim, Administrative Specialist LEGAL COUNSEL Jean Cihigoyenetche GUESTS Members of the public PUBLIC COMMENTS Chairman Goodrich declared the public participation section of the meeting open at 5:32 p.m. Fred Yauger requested that his public comment be deferred until after agenda item #3 is presented. Draft pending approval 1 0 9 2 There being no further written or verbal comments, the public participation section was closed. 1.APPROVAL OF AGENDA a.Approval of Agenda A motion was made by Director Smith, seconded by Director Carrillo, that the Board approve the June 14, 2023 agenda as submitted. The motion carried by the following: Ayes: Carrillo, Coats, Goodrich, Morales, Smith Noes: None Absent: None 2.APPROVAL OF CONSENT CALENDAR a.Approve the April 26, 2023 Regular Board Meeting Minutes b.Approve the May 24, 2023 Regular Board Meeting Minutes c.Approval of Directors’ Fees and Expenses for May 2023 A motion was made by Director Coats, seconded by Vice Chairman Morales, that the Board approve the Consent Calendar items as submitted. The motion carried by the following: Ayes: Carrillo, Coats, Goodrich, Morales, Smith Noes: None Absent: None 3.INFORMATIONAL ITEMS a. Review Draft Budget for FY 2023-24 The Chief Financial Officer presented the proposed Operating and Capital Budget for FY 2023-24 to the Board. The General Manager/CEO stressed the importance of having a balanced budget. He stated that reductions were made to the budget due to increased inflation and those decreases will not impact service. Fred Yauger thanked the Chief Financial Officer for always being available to answer financial questions and made a request that the number of employees and the change in number of employees in each Program be provided in future Budget presentations. For information only. 1 0 9 2 4.REPORTS a.Board of Directors’ Reports Director Carrillo reported on the following: June 6 the Inland Action Group meeting was hosted at the Sterling Natural Resource Center where they were provided a tour of the SNRC; and June 12 he met with the General Manager/CEO to review the agenda and discuss District business. Director Coats reported on the following: June 1 he attended the California Special Districts Association’s (CSDA) Professional Development Committee meeting to discuss financials for 2023, award selections and 2023 conferences; June 1 he attended the Top Workplace celebration; June 2 he attended the San Bernardino Valley Municipal Water District’s groundbreaking event for the Santa Ana River Enhanced Recharge Phase 1B project; June 6 he attended CSDA’s live webinar The Spread of CVRA Challenges to At-Large Board Elections; June 9 he attended Employee Movie Night at District Headquarters; June 12 he met with the General Manager/CEO to review the agenda and to discuss District business; June 12 he attended the Association of San Bernardino County Special Districts Board meeting where they discussed Association business; June 13 he attended the City of San Bernardino Water Department Board meeting where they approved a Memorandum of Understanding with employees, contracts and Commissioner Tom Brickley was re-appointed for another 6 year term; and June 13 he attended the Finance & Human Resources Committee meeting where they reviewed the Debt Management Policy and the Safety and Risk Management Program. Director Smith reported on the following: June 3 he attended the City of Highland Trails Day; June 6 he attended San Bernardino Valley Water Conservation District’s Strategic Planning Workshop; June 13 he attended the Finance & Human Resources Committee meeting; and June 14 he attended the San Bernardino Valley Water Conservation District Board meeting with nothing to report. Vice Chairman Morales reported on the following: June 1 he attended San Bernardino Valley Municipal Water District’s (Valley District) Policy Workshop where they provided legislative updates and discussed strategic planning; June 2 he attended Valley District’s Santa Ana River Enhanced Recharge Groundbreaking event; June 2 he attended the Association of California Water Agencies State Legislative meeting; June 6 he attended Valley District’s Board meeting where they approved the Santa Ana Watershed Project Authority budget; June 7 he met with the General Manager/CEO to review the agenda and discussed District business; June 8 he attended the Legislative & Public Outreach Committee meeting where they provided legislative, outreach, and conservation updates and reviewed the Consumer Confidence Report; June 9 he attended the Inland Valley Association of Realtors meeting where he provided a drought conservation report; and June 13 he attended Valley District’s Engineering and Resources Workshop 1 0 9 2 where they discussed a watershed resiliency program, supporting a pathway program for students, and provided an update on the Sunrise Master Plan. Chairman Goodrich reported on the following: June 1 he attended the Top Workplace Celebration held at District Headquarters; June 2 he attended Valley District’s Santa Ana River Enhanced Recharge Groundbreaking event; June 8 he attended the Legislative & Public Outreach Committee meeting where they provided informative updates, reviewed the Consumer Confidence Report and discussed the District’s website redesign; and June 13 he attended the City of Highland City Council meeting where they voted to raise waste hauling rates. For information only. a.General Manager/CEO Report The General Manager/CEO announced the following: •June 19 - District offices will be closed in observance of Juneteenth. •June 24 - District staff will host a booth at the Highland Lowes to inform customers of rebate programs and District services. •June 25 - 12 to 4 p.m. a local organization will host a farmer’s market at the Sterling Natural Resource Center. •The Department of Water Resources has allocated all State Water Project Contractors their full allocation of Table A water for importers. In addition, they have additional supplies available if desired. The Valley District Board is considering taking some of the water and exporting it outside the Valley. Today BTAC met and voted to reject exporting water outside the basin at this time. •A Sterling Natural Resource Center update will be provided at the next regular Board meeting. •June 5 District staff provided a tour of the SNRC to the Inland Action group. •June 1 District staff and a few Board Members celebrated the District’s designation as a Top Workplace in the Inland Empire for 2022. For information only. b.Legal Counsel Report No report at this time. 1 0 9 2 c.Board of Directors’ Comments Director Carrillo commented that he had a nice time at Family Movie Night and that it’s a great way to utilize the facilities. Director Coats stated that he is pleased that the summer internship program is helping introduce high school seniors to the water world and hopes that in the future they will end up working for East Valley Water District or another water district. Vice Chairman Morales commented that the Top Workplace gathering was fantastic. He thanked Ms. Hendricksen and Mr. Ringland for reviewing his application to serve on the Association of California Water Agencies Region 9 Board. Chairman Goodrich commended staff for the Employee Movie Night event. He stated that it was incredible to see everyone together enjoying themselves. For information only. ADJOURN Chairman Goodrich adjourned the meeting at 6:49 p.m. Phillip R. Goodrich, Board President Michael Moore, Board Secretary Agenda Item #2b June 28, 20231 Meeting Date: June 28, 2023 Agenda Item #2b Consent Item 8 1 6 Regular Board Meeting TO: Governing Board Members FROM: General Manager/CEO SUBJECT: Financial Statements for May 2023 RECOMMENDATION That the Board of Directors accept and file the attached financial statements as of, and for the period ended, May 31, 2023. BACKGROUND / ANALYSIS The East Valley Water District adopted an annual budget on June 22, 2022 for fiscal year 2022-2023. In accordance with District Administrative Policy 7.7, the Chief Financial Officer provides regular budget updates to the Board of Directors (Board). Included herewith for the Board’s review is a summary of the District’s financial results, as of May 31, 2023. AGENCY GOALS AND OBJECTIVES II - Maintain a Commitment To Sustainability, Transparency, and Accountability A. Practice Transparent and Accountable Fiscal Management REVIEW BY OTHERS This agenda item has been reviewed by the Finance Department. FISCAL IMPACT There is no fiscal impact associated with this agenda item. Recommended by: ________________ Michael Moore General Manager/CEO Respectfully submitted: ________________ Brian Tompkins Chief Financial Officer Agenda Item #2b June 28, 20232 Meeting Date: June 28, 2023 Agenda Item #2b Consent Item 8 1 6 ATTACHMENTS 1. May 2023 Financial Statement Monthly Review 2. May 2023 Financial Statements FINANCIAL STATEMENTS MONTHLY REVIEW MONTH ENDING MAY 31, 2023   page | 1 The following is a highlight summary of the District’s financial results as of May 31, 2023. Please note all values presented are in millions (unless otherwise noted). Statement of Net Position Total assets at May 31, 2023 are $400.46 million. CLASSIFICATION WATER WASTEWATER RECLAMATION DISTRICT TOTAL Cash and Investments $ 18.76 $ 7.89 $ - $ 26.65 Utility Plant, Net 99.40 17.62 - 117.02 Other Assets 50.65 32.75 173.39 256.79 Current Liabilities 11.26 7.83 33.64 52.73 Long Term Liabilities 40.73 6.50 139.67 186.90 Beginning Net Position 103.31 40.93 - 144.24 Change in Equity 8.11 2.00 0.08 10.19 TOTAL NET $ 111.42 $ 42.93 $ 0.08 $ 154.43 Cash and Investments Cash and Investments are $26.65 million for the month of May, an increase of $4.23 million from the prior month. In May the District received $5.67 million reimbursement for construction of the recycled water pipeline through March 2023 and paid $2.13 million for construction costs incurred in February 2023. The District’s Due from Other Governments includes a receivable for work performed on the Recycled Water Pipeline from April through May bringing the ending balance as of May 31, 2023 to $6.83 million. $0 $5 $10 $15 $20 $25 $30 Mi l l i o n s CASH & INVESTMENTS Restricted Unrestricted FINANCIAL STATEMENTS MONTHLY REVIEW MONTH ENDING MAY 31, 2023   page | 2 Statement of Revenues & Expenses Total Revenues & Expenses through May 31, 2023 are summarized below (in millions): Column1 WATER WASTEWATER RECLAMATION DISTRICT TOTAL Revenue $ 26.72 $ 6.20 $ 9.22 $ 42.14 Expense 18.61 4.20 9.14 31.95 Water Sales by Tier Water Sales for the month ending May 31, 2023 were $1.11M; $208K under staff projections for the month and $622K under projections year-to-date. $- $0.5 $1.0 $1.5 $2.0 $2.5 Mi l l i o n s WATER SALES BY TIER Tier 1 Tier 2 Tier 3 FY 2022-23 Projection For a more detailed presentation, operating results are presented in three ways on pages 2 through 6 of the attached financial statements for the period ending May 31, 2023. First is a one-page summary with monthly and year-to-date totals for revenue and expenses, presented by Expense Category. Second is a one-page summary with monthly and year-to-date totals for Revenues and Expense by Program. Third is a Budget-to- Actual presentation of program expense detail. FINANCIAL STATEMENTS MONTHLY REVIEW MONTH ENDING MAY 31, 2023   page | 3 Water Sales by Customer Class The table below shows the District’s water sales for the month of May 2023 by customer class. The following icons are to compliment the graph below: positive change, no change, negative change when comparing actuals versus projections. CUSTOMER CLASS ACTUAL PROJECTION $ VARIANCE % VARIANCE Residential 652,957$ 799,000$ (146,043)$ -18% Multi-Family 242,255 299,000 (56,745) -19% Commercial 102,427 92,000 10,427 11% Irrigation 109,809 125,000 (15,191) -12% TOTAL $ 1,107,448 $ 1,315,000 $ (207,552)-16% The following table displays customer class by tier for the month of May 2023: CUSTOMER CLASS TIER ACTUAL PROJECTION $ VARIANCE % VARIANCE Residential Tier 1 331,750$ 424,000$ (92,250)$ -22% Residential Tier 2 268,888 314,000 (45,112) -14% Residential Tier 3 52,319 61,000 (8,681) -14% Multi-Family Tier 1 139,361 177,000 (37,639) -21% Multi-Family Tier 2 58,672 81,000 (22,328) -28% Multi-Family Tier 3 44,222 41,000 3,222 8% Commercial Tier 1 73,199 65,000 8,199 13% Commercial Tier 2 6,568 3,000 3,568 119% Commercial Tier 3 22,660 24,000 (1,340) -6% Irrigation Tier 2 69,993 97,000 (27,007) -28% Irrigation Tier 3 39,816 28,000 11,816 42% TOTAL $ 1,107,448 $ 1,315,000 $ (207,552) -16% Legend - Positive Change in Actuals - Neutral Change in Actuals - Negative Change in Actuals FINANCIAL STATEMENTS MONTHLY REVIEW MONTH ENDING MAY 31, 2023   page | 4 The chart below is a comparative illustration of Water Revenue year-to-date compared to last year’s Water Revenue year-to-date as of May. As noted in the graph, Water Revenue experienced a minor decrease over last year. Water consumption decreased 527.90 million gallons (706K HCF) compared to May of 2022. $- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 5/31/2022 5/31/2023 M i l l i o n s COMPARATIVE MONTHLY WATER REVENUE (WATER SALES & METER CHARGES) Meter Tier 1 Tier 2 Tier 3 Total - $25,746,981 Total - $24,413,772 FINANCIAL STATEMENTS MONTHLY REVIEW MONTH ENDING MAY 31, 2023   page | 5 Water Fund Activities by Cost Center The graph below provides a year-to-date comparison of the Water Fund operating cost centers for FY 2021-22 and FY 2022-23. FINANCIAL STATEMENTS MONTHLY REVIEW MONTH ENDING MAY 31, 2023   page | 6 Wastewater Fund Activities by Cost Center The graph below provides a year-to-date comparison of the Wastewater Fund operating cost centers for FY 2021-22 and FY 2022-23. FINANCIAL STATEMENTS MONTHLY REVIEW MONTH ENDING MAY 31, 2023   page | 7 Water Reclamation Fund Activities by Cost Center The graph below provides a year-to-date comparison of the Water Reclamation Fund operating cost centers for FY 2021-22 and FY 2022-23. In FY 2021-22 the Treatment costs were incurred entirely by the San Bernardino Municipal Water Department and billed to the District. Combining Schedule of Net Position As of May 31, 2023 Unaudited WATER WASTEWATER RECLAMATION DISTRICT TOTAL Assets: Current Assets: Cash and Cash Equivalents Investments Accounts Receivable, Net Interest Receivable Other Receivables Due from Sewer Fund Due from Reclamation Fund Due from Other Governments Inventory $9,585,603.67 $458,729.70 $- - - - - - $10,044,333.37 5,121,666.88 4,921,631.94 3,377.19 2,055,860.38 5,500,000.00 24,453,824.20 6,828,655.85 1,077,776.38 416,549.37 3,363,723.96 4,101,103.27 - 2,055,860.38 5,500,000.00 10,756,438.35 42,000.01 1,071,055.22 371,218.45 36,847,003.31 1,757,942.92 820,528.67 3,377.19 - - 13,697,385.85 - 6,721.16 43,610.42 16,788,295.91 - 6,786,655.84 - 1,720.50 6,788,376.34 Prepaid Expenses Total Current Assets:60,423,675.56 Non-Current Assets: Restricted Cash and Cash Equivalents Capital Assets not being Depreciated Capital Assets, Net 5,810,566.52 24,014,098.59 99,403,048.08 129,227,713.19 166,074,716.50 5,674,263.07 17,200,473.89 17,617,657.77 40,492,394.73 57,280,690.64 - 166,598,141.35 - 166,598,141.35 173,386,517.69 11,484,829.59 207,812,713.83 117,020,705.85 336,318,249.27 396,741,924.83 Total Non-Current Assets: Total Assets: Deferred Outflow Of Resources Deferred Charge on Refunding Deferred Outflows - Pensions 610,558.73 2,127,130.34 168,812,405.57 286,292.69 691,919.73 58,258,903.06 - - 896,851.42 2,819,050.07 400,457,826.32Total Assets and Deferred Outflows of Resources:173,386,517.69 Current Liabilities: Accounts Payable and Accrued Expenses Due to Water Fund Due to Sewer Fund Accrued Payroll and Benefits Customer Service Deposits Construction Advances and Retentions Accrued Interest Payable 7,627,959.00 - 27,441.76 5,500,000.00 -7,655,400.76 16,256,438.35 13,697,385.85 - 1,417,303.93 12,008,177.34 259,164.54 604,122.00 825,513.34 52,723,506.11 10,756,438.35 13,697,385.85- - - - - - -1,417,303.93 654,601.99 234,217.54 495,871.40 825,513.34 11,255,467.20 2,167,044.12 24,947.00 108,250.60 - 9,186,531.23 - - - Current Portion of Compensated Absences Current Portion of Long-Term Debt Total Current Liabilities:7,827,683.48 33,640,355.43 Non-Current Liabilities: Compensated Absences, less current portion Net Pension Liability 195,203.59 5,094,004.28 35,435,393.60 1,173.64 - 1,563,684.95 4,938,562.10 - -195,203.59 6,657,689.23 180,043,014.70 1,173.64 - 139,669,059.00 - Long Term Debt, Less Current Portion Other Liabilities Total Non-Current Liabilities: Total Liabilities: 40,725,775.11 51,981,242.31 6,502,247.05 14,329,930.53 139,669,059.00 173,309,414.43 186,897,081.16 239,620,587.27 Deferred Inflows Of Resources Deferred Inflows - Pensions 5,403,596.94 1,000,008.59 -6,403,605.53 Total Liabilities and Deferred Inflows of Resources:57,384,839.25 15,329,939.12 173,309,414.43 246,024,192.80 Equity: Equity 103,313,441.29 40,925,983.29 -144,239,424.58 Total Beginning Equity:103,313,441.29 40,925,983.29 -144,239,424.58 Total Revenue Total Expense 26,724,723.19 18,610,598.16 8,114,125.03 6,200,131.68 4,197,151.03 2,002,980.65 9,218,038.32 9,140,935.06 77,103.26 42,142,893.19 31,948,684.25 10,194,208.94Revenues Over/Under Expenses Total Equity and Current Surplus (Deficit): Total Liabilities, Equity and Current Surplus (Deficit): 111,427,566.32 168,812,405.57 42,928,963.94 58,258,903.06 77,103.26 154,433,633.52 400,457,826.32$$$173,386,517.69 $ Page 1 of 6 Revenue and Expense Budget-to-Actual by Category Month Ended May 31, 2023 Unaudited WATER YTD WASTEWATER RECLAMATION YTD DISTRICT WIDE AMENDED AMENDED BUDGET AMENDED BUDGET AMENDED REMAINING BUDGETMTDBUDGETMTDYTDMTDTOTAL BUDGET Revenue Water Sales $1,107,448.79 829,338.97 41,925.02 $15,430,611.35 8,983,732.26 526,117.09 $17,700,000.00 9,785,000.00 468,000.00 $- - $- - $- - $- - - - $- - - - $- - - - $17,700,000.00 9,785,000.00 528,000.00 5,621,000.00 9,851,000.00 542,000.00 125,000.00 - $2,269,388.65 Meter Charges Penalties 801,267.74 (54,138.01) 474,317.61 632,961.68 (1,791,597.02) (292,960.52) (30,133.32) - 5,365.20 480,633.73 56,020.92 5,146,682.39 60,000.00 5,621,000.00Wastewater System Charges Wastewater Treatment Charges Other Operating Revenue Non Operating Revenue Gain or Loss on Disposition Benefits - - -- -- 1,369,482.59 391,111.15 23,668.75 - -- 964,114.43 26,849.37 6,464.57 - -832,760.04 9,218,038.32 9,851,000.00 96,593.23 7,278.35 442,000.00 120,000.00 68,832.00 100,000.00 5,000.00 - - - - - - - - - - - - - - - - - - - - - - - - - - - -Depreciation ----- Revenue Total:2,082,584.36 26,724,723.19 28,515,000.00 554,830.93 6,200,131.68 5,786,000.00 832,760.04 9,218,038.32 9,851,000.00 44,152,000.00 2,009,106.81 Expense by Category Labor 387,839.85 4,573.95 131,185.15 431,091.59 15,029.59 40,134.12 154,059.48 207,890.37 4,573.95 32,677.49 2,391.64 - 4,671,829.19 36,576.43 5,554,900.00 21,000.00 116,668.79 1,960.27 38,848.46 85,397.73 5,858.18 4,255.45 9,029.28 7,744.96 1,960.27 14,004.64 104.00 1,298,700.75 15,675.64 588,083.36 1,224,080.87 68,255.18 42,954.66 96,465.00 158,304.76 15,675.64 372,367.19 1,619.92 1,602,200.00 9,000.00 808,200.00 1,700,000.00 96,600.00 26,200.00 110,000.00 70,100.00 9,000.00 288,700.00 2,000.00 - 52,971.63 463,960.78 530,900.00 7,688,000.00 30,000.00 1,253,509.28 (22,252.07) 685,045.77 2,456,330.72 99,052.83 (82,136.76) (33,949.06) 450,459.70 (22,252.07) (370,965.38) 255.44 Temporary Labor Benefits Contract Services Professional Development Overtime Materials and Supplies Utilities Temporary Labor Other Standby Water Supply Debt Service Capital Improvement Capital Outlay Accounting Income Add back Transfer to Reserves Transfer from Reserves --- 2,386,029.78 3,433,083.49 197,460.72 443,721.11 1,740,684.31 3,344,910.57 36,576.43 2,774,800.00 4,985,100.00 256,600.00 374,600.00 1,640,400.00 3,816,300.00 21,000.00 19,060.89 690,554.13 550.00 437.42 7,588.19 17,488.35 256,841.09 8,076,004.92 731.27 7,460.99 66,799.75 260,324.97 333,000.00 8,504,400.00 12,300.00 11,200.00 119,600.00 327,600.00 3,916,000.00 15,189,500.00 365,500.00 412,000.00 1,870,000.00 4,214,000.00 30,000.00- - - - - - - - -- 1,246,786.90 33,124.64 956,300.00 33,000.00 8,811.29 12,000.00 1,257,000.00 35,000.00- - - - - - - - - - - - - - - - 411,251.50 1,749,715.68 5,118,007.06 304,608.88 (6,543,768.53) - 486,000.00 3,080,000.00 5,075,000.00 640,000.00 - - - -486,000.00 3,354,000.00 5,390,000.00 1,115,000.00 - 74,748.50 -224,894.00 541,925.36 265,074.06 (716,925.36) - 274,000.00 315,000.00 475,000.00 - 1,379,390.32 (269,932.42) 545,317.06 7,260,693.89 - 520,404.82 6,708.47 (520,404.82) - 73,800.45 34,715.13 (73,800.45) --- - - - - --(1,200,000.00) 28,515,000.00 --(1,200,000.00) 44,152,000.00 (1,200,000.00) 12,203,315.75Expense Total:1,418,155.65 18,610,598.16 320,547.16 4,197,151.03 5,786,000.00 788,650.61 9,140,935.06 9,851,000.00 Total Surplus (Deficit):$664,428.71 $8,114,125.03 $-$234,283.77 $2,002,980.65 $-$44,109.43 $77,103.26 $-$-$(10,194,208.94) Page 2 of 6 Revenue and Expense Budget-to-Actual by Program Month Ended May 31, 2023 Unaudited WATER YTD WASTEWATER RECLAMATION YTD DISTRICT WIDE AMENDED AMENDED BUDGET AMENDED BUDGET AMENDED REMAINING BUDGETMTDBUDGETMTDYTDMTDTOTAL BUDGET Revenue Water Sales $1,107,448.79 829,338.97 41,925.02 - $15,430,611.35 8,983,732.26 526,117.09 - $17,700,000.00 9,785,000.00 468,000.00 - $- - $- - $- - $- - - - $- - - - $- - - - $17,700,000.00 9,785,000.00 528,000.00 5,621,000.00 9,851,000.00 542,000.00 $2,269,388.65 801,267.74 (54,138.01) 474,317.61 632,961.68 (1,791,597.02) (292,960.52) 2,009,106.81 Meter Charges Penalties Wastewater System Charges Wastewater Treatment Charges Other Operating Revenue Non Operating Revenue 5,365.20 480,633.73 - 68,832.00 - 56,020.92 5,146,682.39 - 964,114.43 26,849.37 6,200,131.68 60,000.00 5,621,000.00 - 100,000.00 5,000.00 ---832,760.04 9,218,038.32 9,851,000.00 96,593.23 7,278.35 2,082,584.36 1,369,482.59 391,111.15 26,724,723.19 442,000.00 120,000.00 28,515,000.00 - - - - - -125,000.00 44,152,000.00Revenue Total:554,830.93 5,786,000.00 832,760.04 9,218,038.32 9,851,000.00 1000 - Board of Directors 2000 - General Administration 2100 - Human Resources 2200 - Public Affairs 2300 - Conservation 3000 - Finance 3200 - Information Technology 3300 - Customer Service 3400 - Meter Service 23,049.13 62,710.65 60,390.24 51,913.23 46,940.78 42,543.76 102,922.11 90,080.71 16,622.02 38,887.75 341,114.60 85,700.20 33,346.42 23,648.63 232,952.20 - 211,882.92 762,609.79 1,669,572.04 829,791.73 417,709.59 616,915.24 761,188.73 1,152,105.16 214,485.84 480,753.53 4,625,076.21 962,515.84 378,353.44 326,160.96 3,035,688.99 - 275,800.00 905,800.00 1,418,900.00 1,104,600.00 862,000.00 819,700.00 940,800.00 1,048,000.00 270,000.00 841,300.00 5,657,000.00 1,090,000.00 507,000.00 392,700.00 3,017,000.00 - 9,878.18 25,973.53 25,831.83 23,273.25 - 18,232.82 44,109.42 38,605.98 - 88,915.40 315,957.19 553,946.39 440,152.28 - 263,974.48 329,620.78 491,676.18 747.25 118,200.00 388,200.00 486,100.00 473,400.00 - - - - - - - - - - - - - - - - - - - 394,000.00 1,294,000.00 1,917,000.00 1,578,000.00 862,000.00 1,271,000.00 1,344,000.00 1,746,500.00 270,000.00 1,224,000.00 5,657,000.00 1,090,000.00 507,000.00 441,000.00 3,017,000.00 880,000.00 9,111,000.00 2,138,500.00 751,000.00 8,659,000.00 44,152,000.00 93,201.68 215,433.02 (315,329.72) 308,055.99 444,290.41 390,110.28 253,190.49 102,718.66 54,766.91 529,080.46 1,031,923.79 127,484.16 128,646.56 76,626.65 8,811.29 12,000.00 - - - - - - - - - - - - - - - - - - - - - - - - - 451,300.00 403,200.00 698,500.00 - 4000 - Engineering 16,272.08 - 214,166.01 - 382,700.00 5000 - Water Production 5100 - Water Treatment 5200 - Water Quality 6000 - Field Maintenance Administration 6100 - Water Maintenance 6200 - Wastewater Maintenance 6300 - Water Reclamation 7000 - Facilities Maintenance 7100 - Fleet Maintenance 8000 - Capital - -- - - -- 48,300.00 - 880,000.00 - 322,000.00 70,100.00 1,064,000.00 5,786,000.00 - 2,562.98 - 55,761.46 - 20,984.93 4,345.57 34,715.13 320,547.16 234,283.77 38,212.39 - 761,415.17 - 299,544.94 83,854.51 314,968.06 4,197,151.03 2,002,980.65 (18,688.99) 118,584.83 664,539.93 237,130.75 46,081.04 - 725,108.38 63,542.23 - - 8,446,460.07 685,663.70 - - ---9,111,000.00 728,000.0083,095.10 75,529.65 6,708.47 916,160.61 621,064.45 628,563.09 18,610,598.16 8,114,125.03 1,088,500.00 680,900.00 7,595,000.00 28,515,000.00 - - --- 9,851,000.00 - 7,715,468.85 12,203,315.75 (10,194,208.94) Expense Total: Total Surplus (Deficit): 1,418,155.65 664,428.71 788,650.61 44,109.43 9,140,935.06 77,103.26$$$$$$$$$$-$ . Page 3 of 6 Program Expense Detail Budget-to-Actual Month Ended May 31, 2023 Unaudited WATER YTD WASTEWATER AMENDED RECLAMATION YTD DISTRICT WIDE AMENDED BUDGET AMENDED BUDGET AMENDED REMAINING BUDGETMTDMTDYTDBUDGETMTDTOTAL BUDGET Revenue Water Sales $1,107,448.79 829,338.97 41,925.02 $15,430,611.35 8,983,732.26 526,117.09 $17,700,000.00 9,785,000.00 468,000.00 $- - $- - $- - $- - - - $- - - - $- - - - $17,700,000.00 9,785,000.00 528,000.00 5,621,000.00 9,851,000.00 542,000.00 125,000.00 - $2,269,388.65 Meter Charges Penalties 801,267.74 (54,138.01) 474,317.61 632,961.68 (1,791,597.02) (292,960.52) (30,133.32) - 5,365.20 480,633.73 56,020.92 5,146,682.39 60,000.00 5,621,000.00Wastewater System Charges Wastewater Treatment Charges Other Operating Revenue Non Operating Revenue Gain or Loss on Disposition Benefits - - -- -- 1,369,482.59 391,111.15 23,668.75 - -- 964,114.43 26,849.37 6,464.57 - -832,760.04 9,218,038.32 9,851,000.00 96,593.23 7,278.35 442,000.00 120,000.00 68,832.00 100,000.00 5,000.00 - - - - - - - - - - - - - - - - - - - - - - - - - - - -Depreciation ----- Revenue Total:2,082,584.36 26,724,723.19 28,515,000.00 554,830.93 6,200,131.68 5,786,000.00 832,760.04 9,218,038.32 9,851,000.00 44,152,000.00 2,009,106.81 Program: 1000 - Board of Directors Labor $7,245.00 4,181.65 - 10,784.20 838.28 $71,505.00 45,802.49 - 80,784.20 13,791.23 211,882.92 $94,500.00 61,600.00 1,400.00 100,800.00 17,500.00 275,800.00 $3,105.00 1,792.12 - 4,621.80 359.26 $30,645.00 19,629.47 - 34,621.80 4,019.13 88,915.40 $40,500.00 26,400.00 600.00 43,200.00 7,500.00 $- - - - - $- - - - - $- - - - - $135,000.00 88,000.00 2,000.00 144,000.00 25,000.00 394,000.00 $32,850.00 22,568.04 2,000.00 28,594.00 7,189.64 Benefits Materials and Supplies Contract Services Professional Development Program: 1000 - Board of Directors Total:23,049.13 9,878.18 118,200.00 ---93,201.68 Program: 2000 - General Administration Labor Temporary Labor Overtime Benefits Materials and Supplies Contract Services Utilities 28,962.36 - 107.42 10,303.76 - 17,593.17 117.27 5,626.67 62,710.65 316,111.26 - 367,500.00 21,000.00 2,800.00 181,300.00 4,900.00 221,200.00 4,200.00 102,900.00 905,800.00 12,412.45 - 46.04 3,513.41 - 7,539.93 50.26 135,084.56 - 537.40 71,475.98 472.24 74,004.73 489.50 157,500.00 9,000.00 1,200.00 77,700.00 2,100.00 95,100.00 1,500.00 - - - - - - - - - - - - - - - - - - - - - - - - - - - 525,000.00 30,000.00 4,000.00 259,000.00 7,000.00 316,300.00 5,700.00 73,804.18 30,000.00 2,208.61 (3,715.58) 5,425.82 69,617.60 4,068.29 34,024.10 215,433.02 1,253.99 191,239.60 1,101.94 172,677.67 1,142.21 79,083.12 762,609.79 Professional Development Program: 2000 - General Administration Total: 2,411.44 25,973.53 33,892.78 315,957.19 44,100.00 388,200.00 147,000.00 1,294,000.00 Program: 2100 - Human Resources Labor Temporary Labor 15,756.72 - 174,660.42 - 214,900.00 - 6,752.88 - 74,576.85 - 92,100.00 - - - - - - - 307,000.00 - 57,762.73 - Overtime -1,265.14 2,100.00 -528.32 900.00 ---3,000.00 1,206.54 Benefits Materials and Supplies Contract Services Utilities Professional Development Other 4,552.73 76.80 4,292.57 40.97 2,992.96 32,677.49 60,390.24 128,927.78 1,338.64 82,867.24 444.02 39,971.36 1,240,097.44 1,669,572.04 123,900.00 4,900.00 77,000.00 700.00 42,700.00 952,700.00 1,418,900.00 1,951.14 32.91 1,839.68 17.56 1,233.02 14,004.64 25,831.83 54,897.01 573.68 33,826.00 190.30 17,037.96 372,316.27 553,946.39 53,100.00 2,100.00 33,300.00 - 18,300.00 286,300.00 486,100.00 - - - - - - - - - - - - - - - - - 177,000.00 7,000.00 110,300.00 700.00 61,000.00 1,251,000.00 1,917,000.00 (6,824.79) 5,087.68 (6,393.24) 65.68 3,990.68 (370,225.00) (315,329.72) 8,811.29 8,811.29 12,000.00 12,000.00Program: 2100 - Human Resources Total: Program: 2200 - Public Affairs Labor 25,117.13 - 954.59 9,081.10 4,250.61 10,419.94 165.41 1,924.45 51,913.23 382,320.33 - 6,631.37 152,354.37 80,151.34 182,704.95 12,192.71 13,436.66 829,791.73 412,300.00 - 10,764.48 - 409.11 3,766.36 1,821.69 5,615.95 70.89 163,851.51 - 176,700.00 - - - - - - - - - - - - - - - - - - - - - - - - - - - - 589,000.00 - 42,828.16 -Temporary Labor Overtime Benefits Materials and Supplies Contract Services Utilities 11,900.00 170,100.00 56,000.00 407,400.00 26,600.00 20,300.00 1,104,600.00 2,842.02 65,109.19 30,863.15 159,595.37 12,132.45 5,758.59 440,152.28 5,100.00 72,900.00 24,000.00 185,100.00 900.00 17,000.00 243,000.00 80,000.00 592,500.00 27,500.00 29,000.00 1,578,000.00 7,526.61 25,536.44 (31,014.49) 250,199.68 3,174.84 9,804.75 308,055.99 Professional Development Program: 2200 - Public Affairs Total: 824.77 23,273.25 8,700.00 473,400.00 Program: 2300 - Conservation Labor 7,921.62 - 92,666.32 - 107,000.00 - 7,000.00 40,000.00 223,000.00 442,000.00 26,000.00 17,000.00 862,000.00 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 107,000.00 - 7,000.00 40,000.00 223,000.00 442,000.00 26,000.00 17,000.00 862,000.00 14,333.68 -Temporary Labor Overtime Benefits Materials and Supplies Contract Services Utilities 1,336.77 2,824.87 18,306.28 16,261.92 32.02 5,235.69 30,141.70 92,667.37 173,089.01 15,955.76 7,953.74 417,709.59 1,764.31 9,858.30 130,332.63 268,910.99 10,044.24 9,046.26 444,290.41 Professional Development Program: 2300 - Conservation Total: 257.30 46,940.78 Program: 3000 - Finance Labor 31,786.20 370,514.39 - 490,000.00 - 13,622.60 158,661.29 - 210,000.00 - - - - - - - - - - - - - - - - - - - - - - - - - - - - 700,000.00 - 170,824.32 -Temporary Labor Overtime Benefits Materials and Supplies Contract Services Utilities Professional Development Other - 964.22 9,416.07 - 259.44 82.17 - 413.23 4,035.30 - 111.19 35.21 5,358.14 177,491.99 2,705.99 52,686.43 1,605.73 6,552.57 - 9,100.00 222,600.00 8,400.00 80,500.00 2,800.00 6,300.00 - 2,296.32 76,054.50 1,119.58 22,346.41 688.16 3,900.00 95,400.00 3,600.00 134,500.00 1,200.00 2,700.00 - 13,000.00 318,000.00 12,000.00 215,000.00 4,000.00 9,000.00 - 5,345.54 64,453.51 8,174.43 139,967.16 1,706.11 (360.79) - 35.66 - 15.29 - 2,808.22 - Program: 3000 - Finance Total:42,543.76 616,915.24 819,700.00 18,232.82 263,974.48 451,300.00 ---1,271,000.00 390,110.28 Page 4 of 6 Program Expense Detail Budget-to-Actual Month Ended May 31, 2023 Unaudited WATER YTD WASTEWATER AMENDED RECLAMATION YTD DISTRICT WIDE AMENDED BUDGET AMENDED BUDGET AMENDED REMAINING BUDGETMTD 20,280.96 MTD YTD BUDGET MTD TOTAL BUDGET -Program: 3200 - Information Technology ---- - - - - - - - - - - - - - - - - - Labor Temporary Labor Overtime Benefits Materials and Supplies Contract Services Utilities 230,169.38 - 301.39 136,294.25 45,901.70 330,153.68 15,684.94 2,683.39 266,000.00 - 8,691.84 - 101,619.90 - 129.17 114,000.00 - - - - - - - - - - 380,000.00 - 48,210.72 - (430.56) 16,684.04 (19,573.89) 219,540.63 (10,407.05) (833.40) - ----- 6,322.29 3,224.09 70,013.03 848.74 2,233.00 102,922.11 148,400.00 32,200.00 483,700.00 8,400.00 2,100.00 940,800.00 2,709.52 1,381.74 30,005.57 363.75 957.00 44,109.42 59,021.71 19,672.19 141,305.69 6,722.11 63,600.00 13,800.00 207,300.00 3,600.00 900.00 212,000.00 46,000.00 691,000.00 12,000.00 3,000.00 1,344,000.00 Professional Development Program: 3200 - Information Technology Total: 1,150.01 761,188.73 329,620.78 403,200.00 --253,190.49 Program: 3300 - Customer Service Labor Temporary Labor Overtime Benefits Materials and Supplies Contract Services Utilities Professional Development Other 27,067.71 4,573.95 1,620.71 10,216.78 171.56 37,051.65 9,346.81 31.54 304,509.59 36,576.43 10,356.57 154,591.89 3,554.43 516,548.56 117,786.32 1,491.91 319,800.00 - 4,200.00 184,200.00 4,200.00 459,600.00 66,000.00 6,400.00 11,600.45 1,960.27 694.58 4,378.57 73.52 15,879.30 4,005.78 13.51 131,313.62 15,675.64 4,515.27 66,452.49 1,523.30 221,025.72 50,479.84 639.38 213,200.00 - - - - - - - - - - - - - - - - - - - - - - - - - - - - 533,000.00 - 7,000.00 307,000.00 7,000.00 806,800.00 69,200.00 10,500.00 6,000.00 97,176.79 (52,252.07) (7,871.84) 85,955.62 1,922.27 69,225.72 (99,066.16) 8,368.71 2,800.00 122,800.00 2,800.00 347,200.00 3,200.00 4,100.00 2,400.00 698,500.00 -6,689.46 1,152,105.16 3,600.00 1,048,000.00 -50.92 491,676.18 (740.38) 102,718.66Program: 3300 - Customer Service Total:90,080.71 38,605.98 ---1,746,500.00 Program: 3400 - Meter Service Labor 12,061.82 138,828.91 2,289.16 70,998.56 - 1,182.61 1,186.60 - 164,000.00 6,000.00 96,000.00 1,000.00 2,000.00 1,000.00 - - - - - - - - - 447.84 - 299.41 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 164,000.00 6,000.00 96,000.00 1,000.00 2,000.00 1,000.00 - 24,723.25 3,710.84 24,702.03 1,000.00 817.39 (186.60) - 54,766.91 Overtime Benefits Materials and Supplies Contract Services Utilities - 4,320.30 - 124.26 115.64 -Professional Development Program: 3400 - Meter Service Total:16,622.02 214,485.84 270,000.00 747.25 --270,000.00 Program: 4000 - Engineering Labor 29,140.72 325,761.79 - 392,600.00 - 2,100.00 135,100.00 13,300.00 207,700.00 80,900.00 9,600.00 12,488.88 139,092.97 - 175,400.00 - 900.00 57,900.00 5,700.00 134,300.00 100.00 8,400.00 382,700.00 - - - - - - - - - - - - - - - - - - - - - - - - - 568,000.00 - 3,000.00 193,000.00 19,000.00 342,000.00 81,000.00 18,000.00 1,224,000.00 103,145.24 - 3,000.00 85,299.59 13,911.82 293,693.75 19,142.85 10,887.21 529,080.46 Temporary Labor Overtime Benefits Materials and Supplies Contract Services Utilities - - - --- 7,058.71 1,127.26 490.00 1,071.06 - 75,330.61 3,765.04 34,540.08 35,811.62 5,544.39 480,753.53 3,025.08 483.11 210.00 65.01 32,369.80 1,323.14 13,766.17 26,045.53 1,568.40 214,166.01 Professional Development Program: 4000 - Engineering Total: - 38,887.75 841,300.00 16,272.08 -- Program: 5000 - Water Production Labor Overtime Standby Benefits 46,230.25 1,703.58 1,160.00 13,026.49 - 7,889.22 112,333.87 158,547.24 223.95 654,542.54 28,048.85 12,562.00 329,354.53 411,251.50 226,128.97 279,956.78 2,667,646.75 15,584.29 731,000.00 50,000.00 15,000.00 404,000.00 486,000.00 335,000.00 561,000.00 3,064,000.00 11,000.00 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 731,000.00 50,000.00 15,000.00 404,000.00 486,000.00 335,000.00 561,000.00 3,064,000.00 11,000.00 76,457.46 21,951.15 2,438.00 74,645.47 74,748.50Water Supply Materials and Supplies Contract Services Utilities 108,871.03 281,043.22 396,353.25 (4,584.29) 1,031,923.79 Professional Development Program: 5000 - Water Production Total:341,114.60 4,625,076.21 5,657,000.00 ------5,657,000.00 Program: 5100 - Water Treatment Labor Overtime Benefits Materials and Supplies Contract Services 20,076.80 3,827.76 5,878.96 43,636.48 733.30 11,546.90 85,700.20 205,816.19 54,121.35 261,000.00 39,000.00 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 261,000.00 39,000.00 55,183.81 (15,121.35) 30,825.26 (10,526.44) 6,357.17 128,174.74 310,526.44 142,642.83 121,234.29 962,515.84 159,000.00 300,000.00 149,000.00 182,000.00 1,090,000.00 159,000.00 300,000.00 149,000.00 182,000.00 1,090,000.00 Utilities - - - - - - - - 60,765.71 127,484.16Program: 5100 - Water Treatment Total:-- Program: 5200 - Water Quality Labor 18,291.21 930.69 4,380.08 145.61 9,128.06 - 470.77 194,800.99 5,017.24 76,666.34 15,653.25 82,383.81 - 238,000.00 12,000.00 114,000.00 20,000.00 115,000.00 2,000.00 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 238,000.00 12,000.00 114,000.00 20,000.00 115,000.00 2,000.00 43,199.01 6,982.76 37,333.66 4,346.75 32,616.19 2,000.00 2,168.19 Overtime Benefits Materials and Supplies Contract Services Utilities Professional Development Program: 5200 - Water Quality Total: 3,831.81 378,353.44 6,000.00 507,000.00 6,000.00 507,000.0033,346.42 --128,646.56 Page 5 of 6 Program Expense Detail Budget-to-Actual Month Ended May 31, 2023 Unaudited WATER YTD WASTEWATER AMENDED RECLAMATION YTD DISTRICT WIDE AMENDED BUDGET AMENDED BUDGET AMENDED REMAINING BUDGETMTD 13,632.96 MTD YTD BUDGET MTD TOTAL BUDGET -Program: 6000 - Field Maintenance Administration ---- - - - - - - - - - - - - - - - - - - - Labor Temporary Labor Overtime Standby Benefits Materials and Supplies Contract Services Utilities 154,585.20 - 1,144.08 20,562.64 110,366.12 47.88 2,834.06 29,084.73 7,536.25 180,900.00 - 1,501.50 - 19,086.72 - 127.12 20,100.00 - 200.00 - - - - - - - - - 201,000.00 - 27,328.08 - 728.80 (2,182.56) 17,162.82 2,952.12 8,740.21 18,814.14 3,083.04 76,626.65 - -1,800.00 18,000.00 126,000.00 2,700.00 8,600.00 43,900.00 10,800.00 392,700.00 -2,000.00 20,000.00 140,000.00 3,000.00 12,000.00 51,000.00 12,000.00 441,000.00 1,231.64 6,075.85 - 311.30 2,001.87 395.01 23,648.63 104.00 656.58 - 1,619.92 12,471.06 - 2,000.00 14,000.00 300.00 34.58 222.43 43.89 2,562.98 425.73 3,400.00 7,100.00 1,200.00 48,300.00 3,101.13 1,380.71 38,212.39 Professional Development Program: 6000 - Field Maintenance Administration Total:326,160.96 --- Program: 6100 - Water Maintenance Labor Overtime Benefits Materials and Supplies Contract Services 76,784.34 28,524.44 30,255.07 48,475.32 45,722.83 3,190.20 944,427.01 312,830.75 496,581.49 791,368.47 483,646.07 6,835.20 1,153,000.00 219,000.00 502,000.00 501,000.00 637,000.00 5,000.00 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1,153,000.00 219,000.00 502,000.00 501,000.00 637,000.00 5,000.00 208,572.99 (93,830.75) 5,418.51 (290,368.47) 153,353.93 (1,835.20)Utilities ---- Program: 6100 - Water Maintenance Total:232,952.20 3,035,688.99 3,017,000.00 ------3,017,000.00 (18,688.99) Program: 6200 - Wastewater Maintenance Labor Overtime Benefits Materials and Supplies Wastewater Treatment Contract Services - - - - - - - - - - - - - - - 33,947.45 2,626.92 11,783.17 398.10 316,801.50 29,582.50 107,567.26 12,101.37 - 362,000.00 9,000.00 196,000.00 36,000.00 7,610,000.00 (7,333,000.00) 880,000.00 - - - - - - - - - - - - - - - - - 362,000.00 9,000.00 196,000.00 36,000.00 7,610,000.00 (7,333,000.00) 880,000.00 45,198.50 (20,582.50) 88,432.74 23,898.63 -7,610,000.00 (7,628,362.54) 118,584.83 - - - - - - 7,005.82 55,761.46 295,362.54 761,415.17 - -Program: 6200 - Wastewater Maintenance Total:-- Program: 6300 - Water Reclamation Labor Overtime - - - - - - - - - - - - 48,497.08 339.06 414,576.57 6,452.80 470,000.00 7,000.00 470,000.00 7,000.00 55,423.43 547.20 Standby ----------- Benefits Materials and Supplies Contract Services - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 17,416.41 31.12 644,785.92 13,488.79 550.00 231,845.79 6,370.49 7,621,634.27 164,848.88 731.27 300,000.00 107,000.00 8,136,000.00 79,000.00 12,000.00 9,111,000.00 300,000.00 107,000.00 8,136,000.00 79,000.00 12,000.00 9,111,000.00 68,154.21 100,629.51 514,365.73 (85,848.88) 11,268.73 664,539.93 Utilities Professional Development Program: 6300 - Water Reclamation Total:725,108.38 8,446,460.07 Program: 7000 - Facilities Maintenance Labor Overtime Benefits Materials and Supplies Contract Services 7,603.00 163.94 87,667.16 10,338.34 65,393.24 44,154.89 590,526.88 118,080.10 - 101,500.00 7,000.00 3,246.53 65.57 36,795.68 2,836.62 40,600.00 2,800.00 22,000.00 8,400.00 215,500.00 32,400.00 300.00 4,474.55 98.36 49,384.21 1,008.19 60,900.00 4,200.00 203,000.00 14,000.00 110,000.00 58,000.00 1,379,500.00 373,000.00 1,000.00 29,152.95 (183.15) (926.04) (57,061.34) 141,913.68 123,234.65 1,000.00 2,787.99 8,587.67 59,032.54 4,919.96 - 55,000.00 37,000.00 795,600.00 92,000.00 400.00 1,181.40 2,945.35 12,394.69 1,151.39 - 20,537.50 10,477.19 192,688.79 36,209.16 - 1,644.48 7,557.07 45,768.21 3,999.56 - 24,995.30 60,429.26 454,370.65 95,476.09 - 33,000.00 12,600.00 368,400.00 248,600.00 300.00 Utilities Professional Development Program: 7000 - Facilities Maintenance Total:83,095.10 916,160.61 1,088,500.00 20,984.93 299,544.94 322,000.00 63,542.23 685,663.70 728,000.00 2,138,500.00 237,130.75 Program: 7100 - Fleet Maintenance Labor Overtime 4,455.00 - 59,519.14 794.19 81,900.00 2,700.00 495.00 - 6,398.95 88.24 9,100.00 300.00 - - - - - - 91,000.00 3,000.00 25,081.91 2,117.57 Benefits Materials and Supplies Contract Services 502.45 15,054.94 121,617.96 223,858.63 200,219.59 - 49,500.00 95,400.00 237,000.00 210,800.00 3,600.00 55.81 1,669.66 18,339.16 35,111.92 22,246.58 - 5,500.00 10,600.00 24,100.00 20,100.00 400.00 - - - - - - - - - - - - - - - - - - - 55,000.00 106,000.00 261,100.00 230,900.00 4,000.00 38,275.40 (33,957.12) 2,129.45 8,433.83 4,000.00 18,168.58 36,539.51 15,864.11 - 1,892.86 139.22 1,762.68 - Utilities Professional Development Program: 7100 - Fleet Maintenance Total:75,529.65 621,064.45 680,900.00 4,345.57 83,854.51 70,100.00 - 751,000.00 - 46,081.04 Program: 8000 - Capital Debt Service - 520,404.82 6,708.47 (520,404.82) - 1,749,715.68 5,118,007.06 304,608.88 (6,543,768.53) - 3,080,000.00 5,075,000.00 640,000.00 - - 73,800.45 34,715.13 (73,800.45) - 224,894.00 541,925.36 265,074.06 (716,925.36) - 274,000.00 315,000.00 475,000.00 - - - - - - - - - - - - - - - 3,354,000.00 5,390,000.00 1,115,000.00 - 1,379,390.32 (269,932.42) 545,317.06 7,260,693.89 - Capital Improvement Capital Outlay Accounting Income Add back Transfer to Reserves - --- Transfer from Reserves Program: 8000 - Capital Total: --(1,200,000.00) 7,595,000.00 ---- - - - - - (1,200,000.00) 8,659,000.00 (1,200,000.00) 7,715,468.856,708.47 628,563.09 34,715.13 314,968.06 1,064,000.00 Total Surplus (Deficit):$664,428.71 $8,114,125.03 $-$234,283.77 $2,002,980.65 $-$44,109.43 $77,103.26 $-$-$(10,194,208.94) Page 6 of 6 Agenda Item #2c June 28, 20231 Meeting Date: June 28, 2023 Agenda Item #2c Consent Item 8 1 7 Regular Board Meeting TO: Governing Board Members FROM: General Manager/CEO SUBJECT: Investment Transaction Report for Month Ended May 31, 2023 RECOMMENDATION That the Board of Directors approve the attached Investment Transaction Report for the month ended May 31, 2023. BACKGROUND / ANALYSIS California Government Code §53607 requires the CFO/Treasurer of a public agency to submit a monthly investment transaction report to the Board of Directors (Board) when the Board has delegated to the CFO/Treasurer the authority to invest, reinvest, sell, or exchange securities held in the Agency’s investment portfolio. During May the District maintained a balance of $7,222,155 in funds invested with LAIF. There were no deposits or withdrawals. Investments with Citizens Business Bank Wealth Management (CBB) totaled $5,997,277 at the beginning of May. Earnings added $5,789 to the account, while fees reduced the balance by $698. A $300,000 Treasury Note matured giving the account a gain of $797, and the proceeds were reinvested in another US Treasury Note. Amortization of discounts on two different securities added $1,973 to the account, resulting in an account balance at the end of May of $6,005,138. This balance is split between a mutual fund ($600,127) and federal securities shown on the attached schedule with a total balance of $5,405,011. AGENCY GOALS AND OBJECTIVES II - Maintain a Commitment To Sustainability, Transparency, and Accountability A. Practice Transparent and Accountable Fiscal Management REVIEW BY OTHERS This agenda item has been reviewed by the Finance Department. Agenda Item #2c June 28, 20232 Meeting Date: June 28, 2023 Agenda Item #2c Consent Item 8 1 7 FISCAL IMPACT There is no fiscal impact associated with this agenda item. Recommended by: ________________ Michael Moore General Manager/CEO Respectfully submitted: ________________ Brian Tompkins Chief Financial Officer ATTACHMENTS 1. Investment Transaction Report for Month Ended May 31 2023 2. LAIF Statement for May 2023 EAST VALLEY WATER DISTRICT Investment Activity Month Ended May 31, 2023 Activity (Book Value) Amort CostPurch Date Units / Face Value Maturity Date Adjusted Cost 5/1/2023 Matured / Called Adjusted Cost 5/31/2023 Market ValueIssuerCUSIPYield5/1/2023 Adjustment Purchases Total Water Sewer 10/19/21 03/31/21 01/21/20 05/29/20 08/31/22 05/22/23 07/30/20 08/06/20 09/30/21 03/30/21 03/30/21 03/30/21 09/20/21 09/30/21 10/18/21 10/26/21 10/27/21 10/28/21 11/24/21 11/30/21 11/30/21 08/30/22 11/23/21 US Treasury Note US Treasury Note Tenn Valley Authority US Treasury Note US Treasury N/B US Treasury Note Federal Home Loan Bank Freddie Mac Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Home Loan Bank Federal Farm Credit Bank 91282CAZ4 9128CBT7 0.375% 0.750% 2.875% 0.125% 3.125% 3.875% 0.550% 0.625% 1.030% 1.000% 0.800% 0.750% 0.250% 1.020% 0.550% 1.250% 0.480% 0.850% 0.600% 1.000% 1.050% 3.700% 1.430% 500,000 11/30/25 03/31/26 09/15/24 05/15/23 08/31/24 04/30/25 07/30/24 08/19/25 09/30/26 03/30/26 05/30/25 06/30/25 12/28/23 09/30/26 10/29/25 10/26/26 09/01/23 10/28/24 11/24/23 02/28/25 11/25/24 02/28/24 11/23/26 490,502.19 495,703.13 306,915.11 299,203.13 299,740.76 - 1,548.53 492,050.72 495,703.13 306,915.11 299,203.13 299,740.76 - 492,050.72 495,703.13 306,915.11 - 492,050.72 495,703.13 306,915.11 - 299,740.76 297,937.50 249,937.50 100,000.00 457,365.00 458,985.00 292,788.00 299,484.00 294,996.00 236,590.00 236,590.00 92,046.00 180,056.00 273,618.00 278,529.00 185,256.00 111,310.80 359,988.00 182,786.00 271,680.00 98,390.00 500,000 300,000 300,000 300,000 300,000 250,000 100,000 200,000 300,000 300,000 200,000 115,000 400,000 200,000 300,000 100,000 100,000 200,000 200,000 100,000 250,000 200,000 880591ER9 912828ZP8 91282CFG1 91282CGX3 3130AJUN7 3134GWMY9 3030APAZ8 3130ALUF9 3130ALPB4 3130ALU93 3130AKL79 3130AP6M2 3130AKC95 3130APJ55 3130AJK24 3130APLB9 3130APWP6 3130APUY9 3130AQ2H5 3130AT2N6 3133ENEM8 299,203.13 299,740.76 297,937.50 249,937.50 100,000.00 200,000.00 300,000.00 300,000.00 200,000.00 114,902.25 400,000.00 197,836.14 299,997.00 100,005.46 100,000.00 200,000.00 200,000.00 99,985.00 250,000.00 200,000.00 297,937.50 249,937.50 100,000.00 200,000.00 300,000.00 300,000.00 200,000.00 114,902.25 400,000.00 197,411.64 299,997.00 100,005.46 100,000.00 200,000.00 200,000.00 99,985.00 250,000.00 200,000.00 249,937.50 100,000.00 200,000.00 300,000.00 300,000.00 200,000.00 114,902.25 400,000.00 197,836.14 299,997.00 100,005.46 100,000.00 200,000.00 200,000.00 99,985.00 250,000.00 200,000.00 200,000.00 300,000.00 300,000.00 200,000.00 114,902.25 400,000.00 424.50 197,836.14 299,997.00 100,005.46 100,000.00 200,000.00 200,000.00 99,985.00 94,369.00 195,208.00 187,328.00 94,481.00 246,825.00 181,308.00 250,000.00 200,000.00 5,715,000.00 5,404,303.17 1,973.03 5,406,276.20 297,937.50 299,203.13 5,405,010.57 3,557,186.97 1,847,823.60 5,309,976.80 Attachment A Agenda Item #2d June 28, 20231 Meeting Date: June 28, 2023 Agenda Item #2d Consent Item 8 1 8 Regular Board Meeting TO: Governing Board Members FROM: General Manager/CEO SUBJECT: Consider approval of Revised Debt Management Policy 7.3 RECOMMENDATION That the Board of Directors approve the attached Debt Management Policy 7.3 BACKGROUND / ANALYSIS The Finance and Human Resources Committee recommended, at their June 13, 2023 meeting, that the Board of Directors (Board) approve the attached Debt Management Policy. The District has a debt policy that defines the type and purpose of various debt that can be used by the District to fund capital improvements and other assets. The current policy does not include some provisions for Community Facility District bond financing. On December 8th, 2021 the Board of Directors approved the formation of East Valley Water District Community Facilities District (CFD) 2021-1 (Mediterra). Also on that date, the Board, acting as the legislative body of CFD 2021-1, passed Resolution 2021.01 of the CFD authorizing the issuance of CFD Bonds to finance certain public improvements within the Mediterra development. The District has received a Bond Issuance Request Letter from D.R. Horton Los Angeles Holding Company, Inc., the Mediterra developer, asking the District to commence the issuance of bonds for Mediterra Improvement Area 1A which consists of 149 residential lots in CFD 2021-1. A meeting of the consulting team involved in the formation of CFD 2021-1 was held to discuss the possibility of a bond issue, during which bond counsel asked to review the District’s Debt Management Policy. After his review he recommended revisions to the policy that would incorporate and allow CFD debt, which was not previously addressed by the policy. Attached is a copy of the District’s Debt Management Policy with proposed revisions. Agenda Item #2d June 28, 20232 Meeting Date: June 28, 2023 Agenda Item #2d Consent Item 8 1 8 AGENCY GOALS AND OBJECTIVES II - Maintain a Commitment To Sustainability, Transparency, and Accountability A. Practice Transparent and Accountable Fiscal Management REVIEW BY OTHERS This agenda item has been reviewed by Legal Bond Counsel and the Finance and Human Resources Committee. FISCAL IMPACT Revision of the District’s Debt Management Policy to incorporate Community Facilities District debt will have no fiscal impact. Recommended by: ________________ Michael Moore General Manager/CEO Respectfully submitted: ________________ Brian Tompkins Chief Financial Officer ATTACHMENTS Debt Management Policy 7.3 (redlined) EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Debt Management Policy Original Approval Date: August 10, 2010 Last Revised: August 26, 2020 Policy No: 7.3 Page 1 of 14 Purpose The purpose of this Debt Management Policy is to establish guidelines for the issuance and management of District debt of the District, each Community Facilities District established by the District and the East Valley Water District Financing Authority (each, a “related entity”), and to provide guidance for decision makers with respect to options available for financing infrastructure, and other capital projects, so that the most prudent, equitable, and cost effective financing can be chosen. This policy documents the objectives to be achieved by staff both prior to, and subsequent to, issuance of debt, and is designed to promote objectivity in the decision making process, and to facilitate the financing process by establishing important policy decisions in advance. Goals It is a goal of the District to provide for the infrastructure and capital project needs of its ratepayers, financing those capital project needs from a combination of current revenues, available reserves, and prudently issued debt. Debt is an equitable means of financing projects and represents an important means of providing for the infrastructure and project needs of the District's customers. Debt will be used to finance projects if: •Debt is issued and managed prudently; •Debt enables the District or related entity to maintain a sound fiscal position; •Issuing the debt will not negatively impact the District’s or any related entity’s credit rating; •The District's goal of equitable treatment of all customers, both current and future, would be met; •It is the most cost-effective means available to the District or related entity; and EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Debt Management Policy Original Approval Date: August 10, 2010 Last Revised: August 26, 2020 Policy No: 7.3 Page 2 of 14 •It is fiscally responsible under the prevailing economic conditions. Budget Integration Issuance of debt may only be utilized to finance a capital project(s). Debt proceeds are not to be used to fund operating expenses. The decision to incur new indebtedness should be integrated with the Board-adopted annual Operating Budget and Capital Improvement Program (CIP) Budget. Issuance of debt for a capital project will not be considered unless such project has been incorporated into the District’s CIP, or is otherwise approved by the Board of Directors (Board). Annual debt service payments shall be included in the Operating Budget. Standards for Use of Debt Financing When appropriate, the District and each related entity will use long-term debt financing to: •Achieve an equitable allocation of capital costs / charges between current and future system users •Provide more manageable rates in the near and medium term •Minimize rate volatility For growth-related projects, debt financing will be utilized, as needed, to better match the cost of anticipated facility needs with timing of expected new connections to the system and spread the costs evenly over time. Capacity / Connection Fees will be maintained at a level sufficient to finance a portion of growth-related capital costs and cover related annual debt service requirements. The District and each related entity shall not construct or acquire a facility if it is unable to adequately provide for the subsequent annual operation and maintenance costs of the facility throughout its expected life. Capital projects financed through debt issuance will not be financed for a term longer than the expected useful life of the project. EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Debt Management Policy Original Approval Date: August 10, 2010 Last Revised: August 26, 2020 Policy No: 7.3 Page 3 of 14 Methods of Financing The Finance Department will investigate all possible project financing alternatives including, but not limited to, annual operating revenue, reserves, bonds, loans, and grants. When applicable, capacity fees collected from developers will be used to pay for increased capital costs resulting from new development. The District and, if applicable, each related entity, may legally issue both short term and long-term financing using the debt instruments described below. 1.Cash Funding – The District funds a significant portion ofand each Community Facilities District may fund capital improvements on a pay-as-you-go basis. Sources for pay-as-you-go may include appropriations from annual operating revenue, reserves, and grants. 2.Inter-fund Borrowing - The District may borrow internally from other funds with temporarily surplus cash to meet short term needs in lieu of issuing debt. Purposes for such could include short term cash flow imbalances due to grant terms (i.e., the need to incur costs prior to reimbursement) and interim financing pending the issuance of long-term debt. The District funds from which the money is borrowed shall be repaid with interest, accruing quarterly based upon the apportionment rate set by the State of California Local Agency Investment Fund (LAIF). To the extent any inter- fund borrowing is undertaken in anticipation of long-term financing, the District shall adopt a Resolution of its intention to repay such funds out of tax-exempt debt proceeds so as to meet the requirement of federal tax law for such borrowing. 3.Special Tax Bonds – Each Community Facilities District may issue bonds under the provisions of the Mello-Roos Community Facilities Act of 1982, as amended (Section 53311 et seq. of the Government Code of the State of California). Special tax bonds shall be issued in accordance with the District’s Goals and Policies for Community Facilities Districts dated January 8, 2020, which are incorporated herein. 4.3. Line of Credit – The District and each related entity may consider a line of credit as a short-term borrowing option. The Chief Financial Officer (CFO) shall determine when it is prudent to recommend that the District or a related entity enter into an EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Debt Management Policy Original Approval Date: August 10, 2010 Last Revised: August 26, 2020 Policy No: 7.3 Page 4 of 14 agreement with a commercial bank or other financial institution, for the purpose of acquiring a line of letter of credit. 5.4. Capital Lease Debt – A lease purchase obligation placed with a lender without the issuance of securities may be used to finance certain equipment purchases if the aggregate cost of the equipment exceeds $50,000 and the terms of financing are cost- effective. The term of a capital lease must be at least five years, and shall not exceed the useful life of the equipment or ten years, whichever is shorter. 6.5. State Revolving Fund Loans - The State Revolving Fund (SRF) is a low or zero interest loan program generally for the construction of water and wastewater infrastructure projects. The SRF loan interest rate is typically calculated by taking half of the True Interest Cost (TIC) of the most recent State of California General Obligation Bonds sale. The repayment term of the loans ranges from 20 to 30 years. 7.6. Certificates of Participation – The District may issue Certificates of Participation (COP) which provide financing through a lease, installment sale agreement, or contract of indebtedness and typically do not require voter approval. Board action is legally sufficient to authorize a COP issue, and District revenues are pledged for repayment of COPs under terms specified in the indenture. 8.7. JPA Revenue Bonds – The District may obtain financing through the issuance of debt under a joint exercise of powers agreement (East Valley Water District Financing Authority) with such debt payable from amounts paid by the District under a lease, installment sale agreement, or contract of indebtedness. 9.8. Refunding Revenue Bonds – The District and each related entity may issue refunding revenue bonds to refund District indebtedness pursuant to the State of California local agency refunding revenue bond law (Articles 9, 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code). Financing Team – Roles and Responsibilities The primary responsibility for developing debt financing recommendations rests with the CFO. In developing such recommendations, the CFO shall consider the need for debt EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Debt Management Policy Original Approval Date: August 10, 2010 Last Revised: August 26, 2020 Policy No: 7.3 Page 5 of 14 financing and assess progress on the current capital improvement program (CIP). The CFO will present all proposed debt financings to the Board, which has sole authority to approve the issuance of debt. 1.Bond Counsel - The District and each related entity will retain external bond counsel for all debt issues. Bond counsel will prepare the necessary authorizing resolutions, agreements and other documents necessary to execute the financing. All debt issued by the District and its related entities will include a written opinion by bond counsel affirming that the District or related entity is authorized to issue the debt, stating that the District or related entity has met all state constitutional and statutory requirements necessary for issuance, and determining the debt's federal income tax status. 2.Financial Advisors - The District and each related entity will utilize the services of independent financial advisors when deemed prudent by the CFO. Services and compensation caps shall be defined by contract. The primary responsibilities of the financial advisor are to advise and assist on bond document negotiations, transaction structuring including advising on call provision options and timing of issuance, running debt service cash flow analysis’, assistance in obtaining ratings on the proposed issuance, and generally acting as an independent financial consultant and economic market expert. 3.Underwriters - For negotiated sales, the District and each related entity will generally select or pre-qualify underwriters through a competitive process. This process may include a request for proposal or qualifications to firms considered appropriate for the underwriting of a particular issue or type of bonds. The Chief Financial Officer, with the concurrence of the General Manager/CEO, will determine the appropriate method to evaluate the underwriter submittals and then select or qualify firms on that basis. The District and its related entities will not be bound by the terms and conditions of any underwriting agreements; oral or written, to which it was not a party. Structure and Term 1.Term of Debt – Debt will be structured for the shortest period possible, consistent with a fair allocation of costs to current and future users. The standard term of long- EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Debt Management Policy Original Approval Date: August 10, 2010 Last Revised: August 26, 2020 Policy No: 7.3 Page 6 of 14 term debt borrowing is 10 to 30 years. Consistent with its philosophy of keeping capital facilities and infrastructure systems in good condition and maximizing a capital assets useful life, the District will budget to set aside operating revenue to finance ongoing maintenance and to provide reserves for rehabilitation and replacement. No debt will be issued for periods exceeding the useful life of projects to be financed. 2.Debt Repayment – In structuring a bond issue, the District and each related entity will manage the amortization of the debt and, to the extent possible, match its cash flow to the anticipated debt service payments. In addition, the District and each related entity will seek to structure debt with aggregate level debt service payment over the life of the debt. A non-level debt service structure will be considered if it is beneficial to the District’s or related entity’s overall debt payment schedule, or if such structuring will allow debt service to more closely match project revenues during the early years of a project’s operation. 3.Interest Rate Structure – The District and each related entity currently issues long- term debt on a fixed interest rate basis only. Fixed rate securities ensure budget certainty through the life of the issue and avoid the volatility of variable rates. 4.Credit Enhancement - The District and each related entity will consider the use of credit enhancement on a case-by-case basis. Types of credit enhancement include letters of credit, bond insurance, and surety policies. Only when clearly demonstrable savings can be realized shall credit enhancement be utilized. 5.Debt Service Reserve Funds – Debt service reserve funds are held by the Trustee to make principal and interest payments to bondholders in the event that pledged revenues are insufficient to do so. The District and each related entity will fund debt service reserve funds when it is in the District’s or such related entity’s overall best financial interest. In lieu of holding a cash funded reserve, the District and each related entity may substitute a surety bond or other credit instrument in its place. Additionally, the District and its related entities may decide not to utilize a reserve fund if the District’s EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Debt Management Policy Original Approval Date: August 10, 2010 Last Revised: August 26, 2020 Policy No: 7.3 Page 7 of 14 financing team determines there would be no adverse impact to the District or related entity credit rating or interest rates. 6.Call Provisions - In general, the District's and its related entities’ securities should include optional call provisions. The District and its related entities will avoid the sale of non-callable, long-term fixed rate bonds, absent careful evaluation of the value of the call option. 7.Debt Limits - There is no specific provision within the California Government Code that limits the amount of debt that may be issued by the District or its related entities. The District’s and its related entities’ borrowing capability is limited by the additional bonds test and debt coverage ratio required by the existing bond covenants. The District and its related entities will be mindful of its overall debt burden in the context of its revenues, expenses, reserves, and overall financial health. 8.Refunding - Current and advance refunding are important debt management tools for the District and its related entities. They are commonly used to achieve debt service (interest cost) savings, remove or change bond covenants, or restructure debt service obligations. With consideration of the Federal Tax Law, careful planning and timing must be used when reviewing an advance refunding. To the extent that debt having fixed interest rates originally structured with a long- term amortization structure (ten years or greater) is refunded with fixed rate debt, the District and its related entities will not generally issue refunding debt which extends beyond the final maturity of the refinanced debt. Extending the final maturity may occur when warranted, such as restructuring of debt to match debt amortization with the useful life of the financed assets. Method of Issuance and Sale The District and its related entities will select the method of sale, which best fits the type of bonds being sold, market conditions, and the desire to structure bond maturities to enhance the overall performance of the entire debt portfolio. Three general methods exist for the sale of municipal bonds: EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Debt Management Policy Original Approval Date: August 10, 2010 Last Revised: August 26, 2020 Policy No: 7.3 Page 8 of 14 1.Competitive Sale - Bonds will be marketed to a wide audience of investment banking (underwriting) firms. The underwriter is selected based on its best bid for its securities. The District and its related entities will award the sale of the competitively sold bonds on a true interest cost (TIC) basis. Pursuant to this policy, the General Manager/CEO, is hereby authorized to sign the bid form on behalf of the District and its related entities, fixing the interest rates on bonds sold on a competitive basis. 2.Negotiated Sale – In a negotiated sale, the underwriter or underwriting syndicate is selected through a Request for Proposal (RFP) process. The interest rate and the underwriter’s fee are negotiated prior to the sale, based on market conditions. The underwriter will actively assist the District and its related entities in structuring the financing and marketing of bonds including providing assistance in preparing the bond offering circular. 3.Private Placement - The District and its related entities may elect to issue debt on a private placement basis. Such method may be considered if it is demonstrated to result in cost savings or provide other advantages relative to other methods of debt issuance, or if it is determined that access to the public market is unavailable and timing considerations require that financing be completed. Creditworthiness Objectives Ratings are a reflection of the fiscal soundness of the District and its related entities and the capabilities of its management. Typically, the higher the credit ratings are, the lower the interest cost on the District’s and its related entities’ debt issues. To enhance creditworthiness, the District isand its related entities are committed to prudent financial management, systematic capital planning, and long-term financial planning. The District recognizesand its related entities recognize that external economic, natural, and other events may affect the creditworthiness of its debt. The District’s most recent bond issues have been assessed by the nationally recognized rating agencies Standard and Poor’s,S&P Global Ratings and Fitch Ratings. When issuing a credit rating, rating agencies consider various factors including but not limited to: •District’s or related entities’ fiscal status EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Debt Management Policy Original Approval Date: August 10, 2010 Last Revised: August 26, 2020 Policy No: 7.3 Page 9 of 14 •District management capabilities •Economic conditions that may impact the stability and reliability of debt repayment sources •District or related entity reserve levels •District or related entity debt history and current debt structure •Projects being financed Post Issuance Administration / Internal Control 1.Investment of Proceeds - The proceeds of bond sales will be invested until used for the intended project(s) in order to maximize utilization of the public funds. The investments will be made to obtain the highest level of 1) safety, 2) liquidity, and 3) yield, and may be held as cash. The District’s investment guidelines and bond indentures will govern objectives and criteria for investment of bond proceeds. The Finance Department will oversee the investment of bond proceeds in a manner to avoid, if possible, and minimize any potential negative arbitrage over the life of the bond issuance, while complying with arbitrage and tax provisions. 2.Use of Proceeds - Bond proceeds will be deposited and recorded in separate accounts to ensure funds are not comingled with other District or related entity funds. The District’sapplicable Trustee will administer the disbursement of bond proceeds pursuant to each certain Indenture of Trust or Fiscal Agent Agreement, respectively. To ensure proceeds from bond sales are used in accordance with legal and tax requirements, invoices are submitted by the Engineering Department and approved by the Finance Department and General Manager/CEO for payment. Requisition for the disbursement of bond funds will be approved by the District’s CFO. The Finance Department will be tasked with monitoring the expenditure of bond proceeds to ensure they are used only for the purpose and authority for which the bonds were issued and exercising best efforts to spend bond proceeds in such a manner that the District and its related entities will meet one of the spend-down exemptions from arbitrage rebate. Tax-exempt bonds will not be issued unless it can EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Debt Management Policy Original Approval Date: August 10, 2010 Last Revised: August 26, 2020 Policy No: 7.3 Page 10 of 14 be demonstrated that 85% of the proceeds can reasonably be expected to be expended within the three-year temporary period. 3.Arbitrage Compliance - The use of bond proceeds and their investments must be monitored to ensure compliance with all Internal Revenue Code Arbitrage Rebate Requirements. The CFO shall ensure that all bond proceeds and investments are tracked in a manner which facilitates accurate calculation; and, if a rebate payment is due, such payment is made in a timely manner. 4.Compliance with Bond Covenants – The District is responsible for verifying compliance with all undertakings, covenants, and agreements of each debt issue on an ongoing basis. This typically includes ensuring: •Annual appropriations of revenues to meet debt service payments •Timely transfer of debt service payments to the Trustee •Compliance with insurance requirements •Compliance with rate covenants The District and its related entities shall comply with all covenants and conditions contained in the governing law and any legal documents entered into at the time of the bond offering or signing of agreements. The CFO or designee will coordinate verification and monitoring of covenant compliance. 5.Rating Agency Communication - The CFO shall be responsible for maintaining the District's relationships with S&P Global Ratings, Fitch Ratings and/or Moody's Investment Service. In addition to general communication, the CFO shall meet with credit analysts prior to each competitive sale and offer conference calls with the District financing team in connection with the planned sale. 6.Board Communication - The CFO will report to the Board of Directors any feedback from rating agencies and/or investors regarding the District's or related entities’ financial strengths and weaknesses and recommendations for addressing any weaknesses. EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Debt Management Policy Original Approval Date: August 10, 2010 Last Revised: August 26, 2020 Policy No: 7.3 Page 11 of 14 7.Continuing Disclosure - The District and its related entities shall remain in compliance with Rule 15c2-12 by filing its annual financial statements and other financial and operating data for the benefit of its bondholders by December 31st of each year. The CFO will ensure the District's and its related entities’ timely filing with each Nationally Recognized Municipal Securities Information Repository. The CFO and/or the District’s general counsel, with the assistance of Bond Counsel, will provide written notice to the Board of any receipt by the District of any default, event of acceleration, termination event, modification of terms (only if material or may reflect financial difficulties), or other similar events (collectively, a “Potentially Reportable Event”) under any agreement or obligation to which the District or a related entity is a party and which may be a “financial obligation” as discussed below. Such written notice should be provided by the CFO and/or the District’s general counsel to the Board as soon as the CFO is placed on written notice by District staff, consultants, or external parties of such event or receives written notice of such event. The CFO, with the assistance of bond and disclosure counsel, will determine and notify the Board whether notice of such Potentially Reportable Event is required to be filed on EMMA pursuant to the disclosure requirements of SEC Rule 15c2-12 (the “Rule”). If filing on EMMA is required, the filing is due within 10 business days of such Potentially Reportable Event to comply with the continuing disclosure undertaking for the various debt obligations of the District and its related entities. The CFO and/or the District’s general counsel, with the assistance of Bond Counsel, will report to the Board regarding the execution by the District and its related entities of any agreement or other obligation which might constitute a “financial obligation” for purposes of Rule 15c2-12. Amendments to existing District or related entity agreements or obligations with “financial obligation” which relate to covenants, events of default, remedies, priority rights, or other similar terms should be reported to the Board as well as soon as the CFO is placed on written notice by District staff, consultants, or external parties of such event or receives a written notice of such amendment requests. The CFO will determine, with the assistance of bond and disclosure counsel, whether such agreement or other obligation constitutes a material “financial obligation” for purposes of Rule 15c2-12. If such agreement or other obligation is determined to be a material “financial obligation” or a material amendment EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Debt Management Policy Original Approval Date: August 10, 2010 Last Revised: August 26, 2020 Policy No: 7.3 Page 12 of 14 to a “financial obligation” described above, notice thereof would be required to be filed on EMMA within 10 business days of execution or incurrence. The types of agreements or other obligations which could constitute “financial obligations” and which could need to be reported on EMMA include: 1.Bank loans or other obligations which are privately placed; 2.State or federal loans; 3.Commercial paper or other short-term indebtedness for which no offering document has been filed on EMMA; 4.Letters of credit, surety policies or other credit enhancement with respect to the District’s or related entity’s publicly offered Debtdebt; 5.Letters of credit, including letters of credit which are provided to third parties to secure the District’s or related entity’s obligation to pay or perform (an example of this is a standby letter of credit delivered to secure the District’s or related entity’s obligations for performance under a mitigation agreement); 6.Capital leases for property, facilities, fleet or equipment; and 7.Agreements which guarantee the payment or performance obligations of a third party (regardless of whether the agreements constitute guarantees under California law); 8.License agreements. Types of agreements which could be a “financial obligation” under the Rule include: 1.Payment agreements which obligate the District or a related entity to pay a share of another public agency’s debt service (for example, an agreement with a joint powers agency whereby the District or a related entity agrees to pay a share of the joint powers agency’s bonds, notes or other obligations); and 2.Service contracts with a public agency or a private party pursuant to which the District or a related entity is obligated to pay a share of such public EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Debt Management Policy Original Approval Date: August 10, 2010 Last Revised: August 26, 2020 Policy No: 7.3 Page 13 of 14 agency or private party’s debt service obligation (for example, certain types of P3 arrangements). Types of agreements which may be a “financial obligation” subject to the Rule include: •Any agreement the payments under which are not characterized as an operation and maintenance expenses for accounting purposes if such agreement could be characterized as the borrowing of money. The CFO will continue to work with bond and disclosure counsel to refine the definition of financial obligation going forward based on future SEC guidance. 8.Record Retention - A copy of all debt-related records shall be retained at the District's offices. At minimum, these records shall include all official statements, bid documents, bond documents / transcripts, resolutions, trustee statements, leases, and title reports for each District financing (to the extent available). Electronic copies - preferably in pdf or CD-ROM format – shall also be retained. 9.State Reporting Requirements - Pursuant to Government Code section 8855(k), the District and its related entities will submit annual debt transparency reports for any debt for which it has submitted a report of final sale on or after January 21, 2017 every year until the later date on which the debt is no longer outstanding and the proceeds have been fully spent. The District and its related entities shall also comply with Government Code Section 5852.1 by disclosing specified good faith estimates in a public meeting prior to the authorization of the issuance of debt. Board Discretion This policy was drafted with the intent of providing East Valley Water District’s Board- approved guidelines to management and staff for decisions and recommendations related to capital financing by the District and its related entities, and to support the District’s and its related entities’ debt obligations to present and future generations of ratepayers. This policy is ultimately intended to serve as a guide and it in no way restricts the ability of the East Valley Water District Board to review proposed rate actions, debt issuances, or other EAST VALLEY WATER DISTRICT Administrative Policies & Programs Policy Title: Debt Management Policy Original Approval Date: August 10, 2010 Last Revised: August 26, 2020 Policy No: 7.3 Page 14 of 14 actions of substance to the District and its related entities. The Board maintains authorization to waive elements of the policy in connection with individual financings at its discretion. This policy shall be reviewed during the third quarter of each odd fiscal year. Revised: March 8, 2017 Agenda Item #2e June 28, 20231 Meeting Date: June 28, 2023 Agenda Item #2e Consent Item 8 1 9 Regular Board Meeting TO: Governing Board Members FROM: General Manager/CEO SUBJECT: May 2023 Disbursements: Accounts payable disbursements for the period include check numbers 261168 through 261311, bank drafts, and ACH payments in the amount of $4,860,454.82 and $421,416.11 for payroll RECOMMENDATION That the Board of Directors approve the District's expense disbursements for the period May 1, 2023 through May 31, 2023 in the amount of $5,281,870.93. BACKGROUND / ANALYSIS In the continued effort to be fiscally transparent, the payment register for supplies, materials, services, and payroll for May 2023 is attached for review and approval. This process provides the Board of Directors and the public with an opportunity to review the expenses of the District. Accounts Payable are processed weekly, while payroll is processed bi-weekly. Information to justify each expenditure is available through the Finance Department. Accounts payable disbursements for the period include check numbers 261168 through 261311, bank drafts, and ACH Payments in the amount of $4,860,454.82 and $421,416.11, for payroll. Significant expenses greater than or equal to $50,000 are further explained below: Agenda Item #2e June 28, 20232 Meeting Date: June 28, 2023 Agenda Item #2e Consent Item 8 1 9 AGENCY GOALS AND OBJECTIVES II - Maintain a Commitment To Sustainability, Transparency, and Accountability A. Practice Transparent and Accountable Fiscal Management REVIEW BY OTHERS This agenda item has been reviewed by the Finance Department. FISCAL IMPACT This item is funded in the current fiscal year budget. Recommended by: ________________ Michael Moore General Manager/CEO Respectfully submitted: ________________ Brian Tompkins Chief Financial Officer ATTACHMENTS May 2023 Payment Register PAYMENT REGISTER MAY 1, 2023 - MAY 31, 2023 PAYMENT DATE NUMBER VENDOR NAME AMOUNT 5/4/2023 261168 AMERICAN FIDELITY ASSURANCE COMPANY (FSA)1,126.22 5/4/2023 261169 APPLEONE EMPLOYMENT SERVICE 1,162.87 5/4/2023 261170 BALFOUR BEATTY INFRASTRUCTURE, INC 2,137,360.35 5/4/2023 261171 CHARLES W HIPPENSTIEL, CHR SERVICES 2,170.00 5/4/2023 261172 Consolidated Electrical Distributors, Inc.6,292.60 5/4/2023 261173 DENTAL HEALTH SERVICES 158.10 5/4/2023 261174 DIRECTV 284.23 5/4/2023 261175 EVERSOFT, INC 283.30 5/4/2023 261176 EXPERIAN 2,129.44 5/4/2023 261177 FIRST CHOICE SERVICES 1,190.85 5/4/2023 261178 HARPER & ASSOCIATES ENGINEERING, INC 12,642.00 5/4/2023 261179 HATFIELD BUICK 808.94 5/4/2023 261180 INLAND LIGHTING SUPPLIES, INC 378.20 5/4/2023 261181 INLAND WATER WORKS SUPPLY CO 9,093.59 5/4/2023 261182 KONICA MINOLTA 6.24 5/4/2023 261183 McPeak Corporation 2,100.00 5/4/2023 261184 SO CAL GAS 792.50 5/4/2023 261185 Solitude Lake Management LLC 1,225.00 5/4/2023 261186 ULINE, INC.4,708.01 5/4/2023 261187 UNIFIRST CORPORATION 1,575.65 5/4/2023 261190 UNITED REFRIGERATION INC 2,668.12 5/4/2023 261191 VALLEY OFFICE EQUIPMENT 3.62 5/11/2023 261192 AG WATER CHEMICAL 17,136.36 5/11/2023 261193 AMERICAN FIDELITY ASSURANCE COMPANY 3,073.43 5/11/2023 261194 APPLEONE EMPLOYMENT SERVICE 1,162.87 5/11/2023 261195 AUTOZONE PARTS 538.59 5/11/2023 261196 CHEM-TECH INTERNATIONAL INC 4,654.51 5/11/2023 261197 CROSNO CONSTRUCTION, INC.332,474.06 5/11/2023 261198 CULLIGAN OF ONTARIO 173.43 5/11/2023 261199 DAILY JOURNAL CORPORATION 247.32 5/11/2023 261200 ECOTECH SERVICES, INC 19,413.50 5/11/2023 261201 EYE MED VISION CARE 1,527.32 5/11/2023 261202 FIRST CHOICE SERVICES 45.00 5/11/2023 261203 HATFIELD BUICK 110.45 5/11/2023 261204 INLAND EMPIRE WATERKEEPER 1,601.80 5/11/2023 261205 INLAND WATER WORKS SUPPLY CO 7,498.83 5/11/2023 261206 K & L HARDWARE 92.54 5/11/2023 261207 KONICA MINOLTA 274.96 5/11/2023 261208 MARIA CORPORATION 60.09 5/11/2023 261209 PACIFIC HYDROTECH CORPORATION 12,195.00 5/11/2023 261210 PACIFIC TRUCK EQUIPMENT 280.32 5/11/2023 261211 PETTY CASH 273.88 5/11/2023 261212 SERGIO D. FIERRO 1,860.00 5/11/2023 261213 SOUTH COAST A Q M D 459.69 PAYMENT REGISTER MAY 1, 2023 - MAY 31, 2023 Page 1 of 6 PAYMENT DATE NUMBER VENDOR NAME AMOUNT 5/11/2023 261214 SPECTRUM 6,689.80 5/11/2023 261215 UNIFIRST CORPORATION 429.74 5/11/2023 261216 WATER SYSTEMS CONSULTING, INC 10,509.13 5/11/2023 261217 ACS SUPPORT 26.00 5/11/2023 261218 FRANCHISE TAX BOARD 33.92 5/12/2023 261219 RYAN SMITH 0.77 5/12/2023 261220 HOVSEP SHAGHOYAN 286.76 5/12/2023 261221 LIGHTSPEED INVESTMENTS 75.39 5/12/2023 261222 BRECKENRIDGE PROPERTY FUND 2015, LLC 64.03 5/12/2023 261223 EVERARDO TEJEDA ESQUIVEL 107.37 5/12/2023 261224 ROCIO ARMENDAREZ 110.43 5/12/2023 261225 TJ INVESTMENTS INC.84.85 5/12/2023 261226 ALEJANDRO JUAREZ 100.00 5/12/2023 261227 DORA MARES 150.00 5/12/2023 261228 EUN PAK 100.00 5/12/2023 261229 GARRY JOHNS 77.98 5/12/2023 261230 JAMES RISSMILLER 200.00 5/12/2023 261231 JANET ROBINSON 200.00 5/12/2023 261232 JEFFREY BOND 150.00 5/12/2023 261233 JORDAN WILLIAMS 200.00 5/12/2023 261234 LILY NGUYEN 150.00 5/12/2023 261235 MAN CHEUNG 150.00 5/12/2023 261236 MARTHA COBOS 100.00 5/12/2023 261237 NEREIRA CREW 240.00 5/12/2023 261238 ROBERT JOU 200.00 5/12/2023 261239 RUTH DEVRIES 150.00 5/12/2023 261240 TODD THOMAS 150.00 5/12/2023 261241 WALTER HORN 150.00 5/12/2023 261242 WILLIAM EATINGER 150.00 5/18/2023 261262 ALTERNATIVE HOSE INC 543.03 5/18/2023 261263 AMERICAN FIDELITY ASSURANCE COMPANY (FSA)1,126.22 5/18/2023 261264 APPLEONE EMPLOYMENT SERVICE 1,141.60 5/18/2023 261265 AUTOZONE PARTS 55.65 5/18/2023 261266 Avila Glass and Mirror 750.00 5/18/2023 261267 BURRTEC WASTE/ 5455 Industrial pkwy 722.16 5/18/2023 261268 BURRTEC WASTE/ E. 111 MILL ST 311.76 5/18/2023 261269 Chase Truck Mobile Service 3,533.97 5/18/2023 261270 DENTAL HEALTH SERVICES 158.10 5/18/2023 261271 EUCLID MANAGERS, INSURANCE SERVICES INC.360.00 5/18/2023 261272 EWING IRRIGATION PRODUCTS INC 304.85 5/18/2023 261273 HARPER & ASSOCIATES ENGINEERING, INC 4,318.00 5/18/2023 261274 INLAND DESERT SECURITY & COMMUNICATIONS, INC 829.90 5/18/2023 261275 INLAND WATER WORKS SUPPLY CO 1,737.42 5/18/2023 261276 K & L HARDWARE 75.24 5/18/2023 261277 SOUTHERN CALIFORNIA EDISON COMPANY 183,110.92 5/18/2023 261278 Texas Life Insurance Company 646.71 5/18/2023 261279 UNIFIRST CORPORATION 549.53 5/18/2023 261280 V.I.P. DOORS & GATES INC 1,650.00 5/25/2023 261281 ACS SUPPORT 26.00 5/25/2023 261282 ADOBE INC.719.90 5/25/2023 261283 APPLEONE EMPLOYMENT SERVICE 684.96 5/25/2023 261284 AT&T 2,428.86 PAYMENT REGISTER MAY 1, 2023 - MAY 31, 2023 Page 2 of 6 PAYMENT DATE NUMBER VENDOR NAME AMOUNT 5/25/2023 261285 AUTOZONE PARTS 533.18 5/25/2023 261286 CMUA, CALIFORNIA MUNICIPAL UTILITIES ASSO.4,884.00 5/25/2023 261287 Commercial Gate Co., Inc.594.00 5/25/2023 261288 COUNTY OF SAN BERNARDINO/TAX COLLECTOR 55.63 5/25/2023 261289 DAILY JOURNAL CORPORATION 320.60 5/25/2023 261290 DIRECTV 43.29 5/25/2023 261291 GNA FIRE ELECTRIC, INC.28,006.67 5/25/2023 261292 KONICA MINOLTA 256.56 5/25/2023 261293 LOGICALIS, INC 49,263.53 5/25/2023 261294 METLIFE SMALL BUSINESS CENTER (Dental)11,108.84 5/25/2023 261295 METROPOLITAN LIFE INS CO 93.30 5/25/2023 261296 PILAR ONATE 9,450.00 5/25/2023 261297 REVHS ENGINEERING CLUB 2,500.00 5/25/2023 261298 SAN BERNARDINO COUNTY FIRE PROTECTION DISTRICT 455.00 5/25/2023 261299 SAN BERNARDINO MUNICIPAL WATER DEPARTMENT 617,264.15 5/25/2023 261300 SO CAL GAS 31.83 5/25/2023 261301 SOUTH COAST AQMD 459.69 5/25/2023 261302 SOUTHERN CALIFORNIA EDISON COMPANY 2,674.68 5/25/2023 261303 ULINE, INC.2,134.48 5/25/2023 261304 VERIZON 1,119.70 5/25/2023 261305 JOSE PORTILLO 17.76 5/25/2023 261306 HUI LAN LOU 8.48 5/25/2023 261307 Gail Shaw 38,704.45 5/26/2023 261308 CHIPT HIGHLAND 210 L.P.75.83 5/26/2023 261309 LAURA CASTELLANOS 6.58 5/26/2023 261310 RIDGEWOOD PROPERTY INVESTMENTS LLC 90.59 5/26/2023 261311 BENJAMIN MENDOZA 101.22 BANK DRAFTS 5/2/2023 DFT0004901 GLOBAL PAYMENTS 16,257.75 5/3/2023 DFT0004902 MERCHANT BANKCD 554.09 5/9/2023 DFT0004903 PayNearMe, Inc.163.18 5/10/2023 DFT0004913 FORTE, ACH DIRECT INC, ACH FEES 4,998.39 5/12/2023 DFT0004904 CALPERS/ DEFERRED COMPENSATION 21,488.27 5/12/2023 DFT0004905 CALPERS/ RETIREMENT 50,066.52 5/12/2023 DFT0004906 Social Security 192.44 5/12/2023 DFT0004907 State Payroll Tax 12,980.95 5/12/2023 DFT0004908 CA SDI Tax 2,698.88 5/12/2023 DFT0004909 Medicare 8,706.58 5/12/2023 DFT0004910 Federal Payroll Tax 33,069.36 5/12/2023 DFT0004911 STATE DISBURSEMENT UNIT 908.77 5/12/2023 DFT0004912 CALPERS/ MEDICAL 108,223.41 5/19/2023 DFT0004914 PayNearMe, Inc.248.75 5/22/2023 DFT0004929 CBB 967.78 5/26/2023 DFT0004915 CA SDI Tax 2,723.19 5/26/2023 DFT0004916 CALPERS/ DEFERRED COMPENSATION 21,319.26 5/26/2023 DFT0004917 CALPERS/ MEDICAL 111,630.75 5/26/2023 DFT0004918 CALPERS/ RETIREMENT 50,123.28 5/26/2023 DFT0004919 Federal Payroll Tax 33,097.24 5/26/2023 DFT0004920 Medicare 8,785.04 5/26/2023 DFT0004921 Social Security 202.36 5/26/2023 DFT0004922 STATE DISBURSEMENT UNIT 908.77 PAYMENT REGISTER MAY 1, 2023 - MAY 31, 2023 Page 3 of 6 PAYMENT DATE NUMBER VENDOR NAME AMOUNT 5/26/2023 DFT0004923 State Payroll Tax 12,738.67 5/26/2023 DFT0004924 CA SDI Tax 90.66 5/26/2023 DFT0004925 Federal Payroll Tax 1,071.03 5/26/2023 DFT0004926 Medicare 298.24 5/26/2023 DFT0004927 Social Security 1,275.28 5/26/2023 DFT0004928 State Payroll Tax 69.63 5/31/2023 DFT0004930 PayNearMe, Inc.173.13 ACH PAYMENTS 5/4/2023 10012469 ALBERT A. WEBB ASSOCIATES 15,540.00 5/4/2023 10012470 AMAZON CAPITAL SERVICES, INC 887.21 5/4/2023 10012471 AMERICAN RENTALS, INC 580.63 5/4/2023 10012472 ASBCSD 84.00 5/4/2023 10012473 BARRY'S SECURITY SERVICES, INC 8,946.10 5/4/2023 10012474 CAROL CALES 555.99 5/4/2023 10012475 CINTAS CORPORATION (FIRST AID)733.80 5/4/2023 10012476 CLARK PEST CONTROL 395.00 5/4/2023 10012477 CLEARFLY COMMUNATIONS 943.38 5/4/2023 10012478 CLINICAL LAB OF S B 4,446.50 5/4/2023 10012479 COMPUTERIZED EMBROIDERY COMPANY, INC 289.42 5/4/2023 10012480 COUNTY OF SAN BERNARDINO, RECORDER- CLERK 240.00 5/4/2023 10012481 DANIEL DAVIS 663.92 5/4/2023 10012482 DAVID HERNANDEZ 505.94 5/4/2023 10012483 ED KING 850.00 5/4/2023 10012484 ELISEO OCHOA 562.73 5/4/2023 10012485 EXCEL LANDSCAPE, INC 21,207.50 5/4/2023 10012486 FRONTIER COMMUNICATIONS 80.35 5/4/2023 10012487 GERMAN VAZQUEZ/TSR PERFORMANCE 746.35 5/4/2023 10012488 GMC ELECTRICAL, INC 4,050.00 5/4/2023 10012489 GRAINGER 369.06 5/4/2023 10012490 HAAKER EQUIPMENT COMPANY & TOTAL CLEAN 30,954.89 5/4/2023 10012491 HARRINGTON INDUSTRIAL PLASTIC 11,505.52 5/4/2023 10012492 JOHN MURA 730.10 5/4/2023 10012493 KRIEGER & STEWART, INCORPORATED 83,418.62 5/4/2023 10012494 LEVERAGE INFORMATION SYSTEMS, INC.3,001.01 5/4/2023 10012495 LINCOLN NATIONAL LIFE INS CO.1,006.83 5/4/2023 10012496 MANAGED HEALTH NETWORK 228.48 5/4/2023 10012497 MANAGED MOBILE, INC.2,633.07 5/4/2023 10012498 MARTHA T DURAN 850.00 5/4/2023 10012499 MCCROMETER INC 885.23 5/4/2023 10012500 MICHAEL HENDERSON 737.18 5/4/2023 10012501 NATIONAL CONSTRUCTION RENTALS 178.49 5/4/2023 10012502 REBECCA KASTEN 639.46 5/4/2023 10012503 RESOLUTE 4,200.00 5/4/2023 10012504 RICHARD BECERRA 737.18 5/4/2023 10012505 SCN, SECURITY COMMUNICATION NETWORK, INC 105.00 5/4/2023 10012506 SSCI, INC. DBA-SAFETY COMPLIANCE COMPANY 200.00 5/4/2023 10012507 STERICYCLE, INC DBA SHRED-IT 161.98 5/4/2023 10012508 STUBBIES PROMOTIONS INC 595.81 5/4/2023 10012509 Troy A. Yergens 250.00 5/4/2023 10012510 UNDERGROUND SERVICE ALERT 311.00 5/4/2023 10012511 VULCAN MATERIALS CO/ CALMAT CO 1,459.77 PAYMENT REGISTER MAY 1, 2023 - MAY 31, 2023 Page 4 of 6 PAYMENT DATE NUMBER VENDOR NAME AMOUNT 5/4/2023 10012512 WAXIE SANITARY SUPPLY 146.44 5/11/2023 10012513 AMAZON CAPITAL SERVICES, INC 1,545.20 5/11/2023 10012515 BARRY'S SECURITY SERVICES, INC 9,179.70 5/11/2023 10012516 CINTAS CORPORATION (FIRST AID)180.35 5/11/2023 10012517 COMPUTERIZED EMBROIDERY COMPANY, INC 416.28 5/11/2023 10012518 CORELOGIC SOLUTIONS, LLC 392.04 5/11/2023 10012519 FERGUSON ENTERPRISES, INC.21,282.08 5/11/2023 10012520 FLEET SERVICES /COLTON TRUCK 155.70 5/11/2023 10012521 FRONTIER COMMUNICATIONS 46.57 5/11/2023 10012522 GENESIS INDUSTRIAL SUPPLY, INC 236.83 5/11/2023 10012523 GERMAN VAZQUEZ/TSR PERFORMANCE 1,584.97 5/11/2023 10012524 GOLDEN STATE LABOR COMPLIANCE, LLC 4,990.00 5/11/2023 10012525 INFOSEND, INC 326.40 5/11/2023 10012526 Jeffrey Ordaz 475.00 5/11/2023 10012527 LEGEND PUMP AND WELL SERVICES 14,527.00 5/11/2023 10012528 LINCOLN NATIONAL LIFE INS CO.1,296.00 5/11/2023 10012529 MCMASTER-CARR 1,038.12 5/11/2023 10012530 MICAH KENNEDY 90.00 5/11/2023 10012531 MIKE J. ROQUET CONSTRUCTION INC 23,349.26 5/11/2023 10012532 MINUTEMAN PRESS OF RANCHO CUCAMONGA 2,664.59 5/11/2023 10012533 PATTON'S SALES CORP 40.67 5/11/2023 10012534 PLUMBERS DEPOT INC.810.13 5/11/2023 10012535 POWERSTRIDE BATTERY CO.249.25 5/11/2023 10012536 RESOLUTE 4,200.00 5/11/2023 10012537 SCHNEIDER ELECTRIC SYSTEMS USA, INC 10,497.84 5/11/2023 10012538 SG CREATIVE, LLC 6,380.00 5/11/2023 10012539 SOLARWINDS, INC.9,795.00 5/11/2023 10012540 STAPLES BUSINESS ADVANTAGE 445.45 5/11/2023 10012541 STUBBIES PROMOTIONS INC 595.81 5/11/2023 10012542 THE GRANT FARM (MOMENTUM)774.00 5/11/2023 10012543 TYLER TECHNOLOGIES, INC 1,040.00 5/11/2023 10012544 EVWD EMPLOYEES EVENTS ASSOC 300.52 5/18/2023 10012545 ADCOMP SYSTEMS, INC 100.00 5/18/2023 10012546 ADVANCED TELEMETRY SYSTEMS INTERNATIONAL, INC.600.00 5/18/2023 10012547 ALLISON MECHANICAL, INC 1,082.00 5/18/2023 10012548 AMAZON CAPITAL SERVICES, INC 651.34 5/18/2023 10012549 ANTHESIS 10,511.00 5/18/2023 10012550 APPLIED MAINTENANCE SUPPLIES & SOLUTIONS 1,568.49 5/18/2023 10012551 AZTECA SYSTEMS, INC/ CITYWORKS 20,000.00 5/18/2023 10012552 BARRY'S SECURITY SERVICES, INC 9,203.13 5/18/2023 10012553 BOOT BARN, INC 2,817.42 5/18/2023 10012554 CLARK PEST CONTROL 150.00 5/18/2023 10012555 CORE & MAIN LP 38,430.40 5/18/2023 10012556 DANGELO CO INC 4,628.07 5/18/2023 10012557 E H WACKS COMPANY 1,259.88 5/18/2023 10012558 EXCEL LANDSCAPE, INC 112.90 5/18/2023 10012559 FERGUSON ENTERPRISES, INC.5,068.56 5/18/2023 10012560 GENESIS INDUSTRIAL SUPPLY, INC 2,749.59 5/18/2023 10012561 GERMAN VAZQUEZ/TSR PERFORMANCE 1,507.99 5/18/2023 10012562 GRAINGER 800.40 5/18/2023 10012563 HAAKER EQUIPMENT COMPANY & TOTAL CLEAN 1,169.44 5/18/2023 10012564 INFOSEND, INC 37,940.40 PAYMENT REGISTER MAY 1, 2023 - MAY 31, 2023 Page 5 of 6 PAYMENT DATE NUMBER VENDOR NAME AMOUNT 5/18/2023 10012565 JC LAW FIRM 1,992.50 5/18/2023 10012566 JONATHAN FLORES 100.00 5/18/2023 10012567 KRIEGER & STEWART, INCORPORATED 115,837.38 5/18/2023 10012568 LANDS END INC 684.12 5/18/2023 10012569 LEGEND PUMP AND WELL SERVICES 25,486.00 5/18/2023 10012570 MCMASTER-CARR 615.42 5/18/2023 10012571 PATTON'S SALES CORP 298.65 5/18/2023 10012572 PLUMBERS DEPOT INC.2,796.45 5/18/2023 10012573 POWERSTRIDE BATTERY CO.273.24 5/18/2023 10012574 STERICYCLE, INC DBA SHRED-IT 496.66 5/18/2023 10012575 USA BLUE BOOK, HD SUPPLY FACILITIES MAINT, LTD 485.08 5/18/2023 10012576 VALERO FLEET, WEX BANK 15,545.90 5/18/2023 10012577 VERIZON WIRELESS 6,630.13 5/18/2023 10012578 VULCAN MATERIALS CO/ CALMAT CO 2,172.18 5/18/2023 10012579 WAXIE SANITARY SUPPLY 2,015.96 5/25/2023 10012580 ACI PAYMENTS INC.46.90 5/25/2023 10012581 ADCOMP SYSTEMS, INC 319.29 5/25/2023 10012582 ALBERT A. WEBB ASSOCIATES 14,051.26 5/25/2023 10012583 AMAZON CAPITAL SERVICES, INC 5,163.75 5/25/2023 10012584 APPLIED MAINTENANCE SUPPLIES & SOLUTIONS 140.23 5/25/2023 10012585 ASPEN ENVIRONMENTAL GROUP 496.25 5/25/2023 10012586 BARRY'S SECURITY SERVICES, INC 9,576.59 5/25/2023 10012587 CLINICAL LAB OF S B 4,175.50 5/25/2023 10012588 EVWD EMPLOYEES EVENTS ASSOC 290.49 5/25/2023 10012589 FLEET SERVICES /COLTON TRUCK 398.16 5/25/2023 10012590 FRONTIER COMMUNICATIONS 1,854.28 5/25/2023 10012591 HAAKER EQUIPMENT COMPANY & TOTAL CLEAN 797.53 5/25/2023 10012592 JC LAW FIRM 11,187.50 5/25/2023 10012593 JOSE MILLAN 4,170.00 5/25/2023 10012594 KYLE VASQUEZ 138.08 5/25/2023 10012595 MANAGED HEALTH NETWORK 238.56 5/25/2023 10012596 MANAGED MOBILE, INC.1,418.26 5/25/2023 10012597 MIKE J. ROQUET CONSTRUCTION INC 19,739.22 5/25/2023 10012598 MINUTEMAN PRESS OF RANCHO CUCAMONGA 1,262.81 5/25/2023 10012599 MOBILE OCCUPATIONAL SERVICES, INC 234.00 5/25/2023 10012600 NATIONAL CONSTRUCTION RENTALS 178.49 5/25/2023 10012601 PLUMBERS DEPOT INC.2,448.14 5/25/2023 10012602 RESOLUTE 1,537.50 5/25/2023 10012603 STAPLES BUSINESS ADVANTAGE 567.22 5/25/2023 10012604 STEVE A. FILARSKY, ATTORNEY AT LAW 87.50 5/25/2023 10012605 TYLER TECHNOLOGIES, INC 1,040.00 5/25/2023 10012606 WAXIE SANITARY SUPPLY 77.06 5/25/2023 10012607 WOODARD & CURRAN INC.40,100.45 TOTAL 4,860,454.82$ PAYMENT REGISTER MAY 1, 2023 - MAY 31, 2023 Page 6 of 6 Agenda Item #3a June 28, 20231 Meeting Date: June 28, 2023 Agenda Item #3a Informational Item 5 6 5 Regular Board Meeting TO: Governing Board Members FROM: General Manager/CEO SUBJECT: Sterling Natural Resource Center Update RECOMMENDATION This agenda item is for informational purposes only, no action required. BACKGROUND / ANALYSIS Construction activities continue for the Sterling Natural Resource Center (SNRC). The project consists of a wastewater treatment facility, regional recharge basins, regional recycled water pipeline and an administrative center. The project will recycle wastewater from the East Valley Water District (District) service area and recharge approximately 6 million gallons per day (MGD) of water into the groundwater basin. The SNRC is scheduled to start producing the first phase of recycled water in Fall 2023 and be complete in December 2023. There are several tasks that are still to be completed before the plant can begin producing recycled water. The major tasks to still be completed before the plant can start producing recycled water to the Weaver Recharge Basins: •On-site piping at the Weaver Recharge Basins •Piping in 5th/Greenspot between City Creek and Lowes Shopping Center •SNRC Pump Station Check Valve Installation •SNRC Membrane Bioreactor Membranes Installation •System Validation Testing - 30-Day Clean Water Testing •Solids Section Equipment Commissioning In addition to completing the construction items below, the following permits must be obtained to start producing recycled water: •Air Quality Management District Permits •Regional Water Quality Control Board Waste Discharge Permit Staff continues to provide information through website content, social media posts, and bill inserts inviting customers to visit the SNRC facility. Several events, public meetings and workshops have been facilitated in the new SNRC building. District staff is coordinating with the City of San Bernardino staff to schedule the Agenda Item #3a June 28, 20232 Meeting Date: June 28, 2023 Agenda Item #3a Informational Item 5 6 5 transition of wastewater flows to the SNRC. This process has been described in a memorandum of understanding to ensure flows are transitioned to not disrupt either agency’s wastewater treatment systems. The project schedule is still dependent on several outside agency approvals. Environmental Impact Report Mitigation Measures are on-going. Some of these mitigation measures need to be completed prior to startup. Additionally, District staff will require some contract services to operate the plant. These contract services agreements will be brought to the board over the next several months. District staff will update the Board once the first wastewater transition begins. AGENCY GOALS AND OBJECTIVES I - Implement Effective Solutions Through Visionary Leadership A. Identify Opportunities to Optimize Natural Resources II - Maintain a Commitment to Sustainability, Transparency, and Accountability D. Provide Quality Information to Encourage Community Engagement REVIEW BY OTHERS This agenda item has been reviewed by Public Affairs and Administration. FISCAL IMPACT There is no fiscal impact associated with this agenda item. Recommended by: ________________ Michael Moore General Manager/CEO Respectfully submitted: ________________ Jeff Noelte Director of Engineering and Operations ATTACHMENTS Power-Point Presentation Board of Directors SNRC UPDATE June 28, 2023 TABLE OF CONTENTS •Overview •Schedule •Staffing •Budget •Next Steps 2 3 SNRC OVERVIEW •Treat and reclaim 8 million gallons of wastewater per day •Recharge the local groundwater basin •Convert food waste to energy •Partnership with regional water agencies 4 StartupConstructionDesignPermittingPlanning PLAN FOR PROJECT EXECUTION 6 SNRC STAFFING 7 CURRENT ACTIVITY: SNRC PUMP STATION 8 CURRENT ACTIVITY: MEMBRANE BIOREACTOR FABRICATION 9 CURRENT ACTIVITY: WEAVER BASIN PIPING 10 CURRENT ACTIVITY: REGIONAL RECYCLE PIPELINE SNRC Remaining Pipe Segment SR 210 Greenspot Rd 11 CURRENT ACTIVITY: CITY CREEK PIPELINE REMAINING PERMITS 12 City Planning City PWD ACOE Fish & Game County CalTrans SCE DDW RWQCB FAA AQMD Treatment Plant and Admin $150,000,000Digesters $32,000,000 Pipeline $22,000,000 Weaver Basin $25,000,000 Change Orders $11,000,000 13 CONSTRUCTION BUDGET Current Construction Budget: $240Mil EVWD: $198Mil SBVMWD: $42Mil 14 NEXT STEPS •Construction •Complete RRWP •Clean Water Test Plant •Startup Plant in Fall •Permitting •CEQA mitigation measures •AQMD •RWQCB DISCUSSION Agenda Item #3a June 28, 20231 Meeting Date: June 28, 2023 Agenda Item #3a Consent Item 8 0 9 Regular Meeting TO: Governing Board Members FROM: General Manager/CEO SUBJECT: Summer Readiness Plan for Water Production RECOMMENDATION This agenda item is for informational purposes only, no action is required. BACKGROUND / ANALYSIS The District has been working vigorously to reach the finish line and start up the new wastewater facility, the Sterling Natural Resource Center (SNRC). When SNRC comes online, it will treat approximately 6 million gallons of water per day and discharge into the Weaver Basins, replenishing the Bunker Hill groundwater basin. The District owns and operates four groundwater wells near the Weaver Basins. To comply with state regulations, wells 143, 146, 146A and 147 will need to be taken out of service due to their proximity to recharge activities involving recycled water. This will be a loss of approximately 15% of overall groundwater production. Operations staff is currently working on and plans to complete the following items before the summer months when water demand is at its highest. Increase production at Treatment Plant 134 o Replaced 3 Eaton strainer baskets with larger mesh to increase flows o Rebuild Eaton strainer control panel o Added GAC to have the ability to remove precursors to disinfection by- products which will in turn increase overall production Build pressure-reducing valve at Plant 129 to provide the ability to drop water from the Foothill Zone to the Upper Zone Prepare to run wells during Edison’s peak periods Staff believes the items listed above will make up for the 15% groundwater loss. The items listed below will be completed later in the year and contribute to overall water production. Bring the well at Plant 120 back into service o Rehab well for modified operation o Replace forebay-tank Operate City of San Bernardino interconnections (two possible locations) Agenda Item #3a June 28, 20232 Meeting Date: June 28, 2023 Agenda Item #3a Consent Item 8 0 9 Meeting maximum day demands during summer will be done with a combination of the summer readiness actions listed above. No demand curtailment or emergency actions are anticipated for this summer. The District is planning to begin replacing the lost well capacity immediately. Replacing the lost well capacity will take several years to complete, and these summer readiness actions will stay in place until the supply sources are completed. AGENCY GOALS AND OBJECTIVES IV - Promote Planning, Maintenance and Preservation of District Resources B. Enhance Planning Efforts that Respond to Future Demands FISCAL IMPACT This item is for information only. There is no fiscal impact. Recommended by: ________________ Michael Moore General Manager/CEO Respectfully submitted: ________________ Patrick Milroy Operations Manager ATTACHMENTS Presentation Patrick Milroy, Operations Manager SUMMER READINESS PLAN FOR WATER PRODUCTION June 28, 2023 2 SUMMER READINESS PLAN SNRC Impact to Water Production (Online Summer 2023) Wells in the Weaver Basin cannot run due to State Water Board Regulations Plants 143, 146 and 147 Will be Offline (These plants make up 15% of the overall groundwater production) Summer Production Demand is About 20 Million Gallons per day Staff is Working on a Plan to Ensure Water Reliability 3 PLANT 134 EATON STRAINERS •Basket Strainers Located at the Headworks of the Treatment Plant •Pre-membrane are used to remove fine debris have been replaced 4 SCREENS IN BASKETS Replaced screens in baskets to increase overall plant production 5Outside Control Panel Inside Control Panel •Eaton Panel Upgrade Required EATON STRAINER CONTROL PANEL AT PLANT 134 6 GRANULAR ACTIVATED CARBON (GAC) ADDED TO PLANT 134 7 PLANT 129 DROP VALVE •Installed 8 Inch Pressure Reducing Valve and Piping to Allow Water to Fill up Reservoirs at Plant 129 SCE’s Time of Use Billing Will Be Impacted as We Make Adjustments to Ensure Water Reliability 8 RUN WELLS DURING PEAK PERIOD •Daily “peak” period 4 – 9 p.m. •“Super off-peak” from 8 a.m. to 4 p.m. on all winter days •Summer: June-Sept; Winter: Oct-May 9 PLANT 120 •Well is Currently Under Construction For Rehabilitation •Capacity of 60,000 Gallons •Needs Replacement •Estimated Cost: $130,000 10 PLANT 120 FOREBAY TANK 11 CITY OF SAN BERNARDINO INTERTIES Plant 107 – South side of Citrus, East of Mountain Avenue. Evaluating Piping & Valves to receive water from City of San Bernardino. Plant 11 – South side of 6th St, West of Pedley Road. Evaluating Piping & Valves to receive water from City of San Bernardino. 12 Future Summer Plans Identifying potential locations for new well drilling Analyzing Plant 134 for expansion opportunities Investigating possible interties with neighboring agencies SUMMER READINESS PLANS IN PROCESS QUESTIONS? Agenda Item #4a June 28, 20231 Meeting Date: June 28, 2023 Agenda Item #4a Discussion Item 8 1 4 Regular Board Meeting TO: Governing Board Members FROM: General Manager/CEO SUBJECT: Consider Adoption of Resolution 2023.09 Approving the Fiscal Year 2023-24 Operating and Capital Budgets RECOMMENDATION That the Board of Directors adopt Resolution 2023.09 approving the Operating and Capital Budgets for fiscal year 2023-24. BACKGROUND / ANALYSIS The FY 2023-24 Operating and Capital Budgets have been developed to continue to provide high quality water delivery, wastewater collection, and water reclamation services to District ratepayers. In developing the fiscal plan for next year, staff remained focused on key issues. At the same time, staff ensured that expenditures directly correlate to Agency Goals and Objectives. The Operating Budget is presented by Program, each having stated goals and objectives for the upcoming fiscal year that align with Agency Goals, and some accompanied by funding requests to support those objectives. The Capital Budget specifically identifies equipment scheduled for replacement or upgrade, and projects from the Capital Improvement Program (CIP) designated as high priority due to age and condition or having insufficient capacity to meet anticipated growth. Revenues: As discussed during the Board workshop on April 26, 2023, Total Revenue projected for FY 2023-24 is $47,424,000, a 7.4% increase over revenue projected for the prior year. Factors affecting revenue projections include: •Consumption based on historical trends and rate model assumptions; •Meter Charge and Tiered Rate increases, effective January 2024; •Change to Wastewater Collection and Treatment Rates, effective January 2024; •Rising interest rates; •Adjusted disconnection charges due to end of disconnection moratorium; and •SNRC Non-Rate Revenue – a phased in approach in this inaugural year. The FY 2023-24 Operating and Capital Budgets have been developed to continue to provide high quality water delivery, wastewater collection, and water reclamation services to District ratepayers. Agenda Item #4a June 28, 20232 Meeting Date: June 28, 2023 Agenda Item #4a Discussion Item 8 1 4 Projected revenues are summarized in the chart below: Expenses: The District accounts for all operating expenses at the program level. Each Program is evaluated on an annual basis to determine its effectiveness. As a result, some programs may be redefined or enhanced, to ensure that they run effectively and with a high level of accountability. FY 2023-24 program expenses are budgeted $37,678,000, a 6.2% increase compared to the prior fiscal year. Total program expenses are presented by cost type below: Water Sales $18,345,000 Meter Charges $9,996,000 Other $912,000 SNRC Non-Rate Revenue $1,924,000 Wastewater Treatment $10,279,000 Wastewater Collection $5,968,000 FY 2023-24 Projected Revenue $47,424,000 Agenda Item #4a June 28, 20233 Meeting Date: June 28, 2023 Agenda Item #4a Discussion Item 8 1 4 Capital Outlay: The Capital Outlay Budget is an effort to plan for the replacement of vehicles and equipment. The objective is to standardize the replacement process to create a managed system of purchasing and funding capital equipment, thereby allowing the District to accurately plan and budget for future needs. The cost of independent studies encompassing long-term infrastructure planning are also included in Capital Outlay. The FY 2023-24 Capital Outlay Budget totals $1,165,000 and includes a combination of equipment purchases and planning studies, as summarized in the table below: P R OP OSED CA PIT A L OUT LA Y A MOUNT Board Room A udio-V isual Enhancem ents 85,000$ Em ergency Plan U pdates 150,000 Website Redesign 150,000 Hardware Repl acem ents (PC s, Laptops, Desktop Phones, SNRC )35,000 Network Firewall Standardization 120,000 Water Master Plan U pdate 300,000 Salt Mitigation Feasibility Study 125,000 Light Duty T rucks (4) - SNRC/O perations 200,000 T OT A L CA PIT A L OUT LA Y 1,165,000$ Employment Services $13,354,000 Water Cost $768,000 Contracted Wastewater Treatment $3,700,000 Power Costs $5,165,000 Materials & Supplies $2,216,000 Contract Services $11,933,000 Other Operating Expenses $542,000 FY 2023-24 Program Expenses $37,678,000 Agenda Item #4a June 28, 20234 Meeting Date: June 28, 2023 Agenda Item #4a Discussion Item 8 1 4 Capital Improvement Program (CIP): This year’s proposed Capital Improvement Program Budget totals $8,025,000 and focuses on completing the Sterling Natural Resource Center (SNRC), completing rehabilitation of boosters and a hydro tank at Plant 101, rehabilitation of the 0.5 million gallon tank at Plant 56, and continuing rehabilitation of critical infrastructure to ensure system reliability in future years. The CIP Budget is fully funded utilizing $4,890,000 from Operating Revenue, approximately $4,000,000 from the State Revolving Fund loans, and $300,000 from capacity fees. A summary of the CIP Budget for 2023-24, by project type, is shown in the following table: P ROP OSED CA PIT A L IMP ROVEMENT PROJECT S A MOUNT A utom ated Metering Infrastructure (A MI) Enhancem ents 150,000$ Canal Zone Storage Reservoir - Design 300,000 Plant 134 Filter Replacem ent 250,000 T ank / Reservoir Rehabili tatio n - Plant 56 500,000 Plant 101 - Rehabilitati on System 1,500,000 Water Mai n Rehabilitation - El mwood Rd and V alaria Dr 350,000 Gate Valve Replacem ents 300,000 Facility Relocations 100,000 Facility Rehabilitations 275,000 SNRC - Pipel ine, Startup, and Com missioning 4,300,000 T OT A L CA P IT A L IMP ROVEMENT P ROJEC T S 8,025,000$ The Mid-Year Budget Review, usually conducted in February, will allow the District to measure actual revenue against revenue projections and determine whether excess revenue, if any, are sufficient to fund additional projects. Debt Service: The District will pay debt service on six debt instruments in FY 2023- 24. Both water and wastewater revenues are pledged as security for revenue bonds, while only water revenues are pledged for repayment of existing loans. A preliminary calculation based on budget numbers has resulted in FY 2023-24 debt service coverage of 289%, well in excess of the 120% required by bond documents. Debt service payments scheduled for FY 2023-24 are shown in the following table: Agenda Item #4a June 28, 20235 Meeting Date: June 28, 2023 Agenda Item #4a Discussion Item 8 1 4 DEBT ISSUE INT EREST RA T E FY 2023-24 DEBT SERVICE 2020A Refunding Revenue Bonds 3-5% $ 1,606,000 2020B Refunding Revenue Bonds 3-5% 602,000 SWRC B Loan - T reatm ent Plant 0.00% 234,000 SWRC B Loans - A ssessment Districts 0.00% 19,000 U S Bank Loan 2.38% 452,000 SBVMWD Loan 2.99% 463,000 T OT A L $ 3,376,000 Budget Funding: Current year water and wastewater rate revenue will pay for all FY 2023-24 operating expenses, debt service on District debt, and will contribute toward the current year Capital Budget, which includes Capital Outlay, and year one of the multi-year Capital Improvement Program. In addition to rate revenue, the Capital Budget will also be funded by grants and proceeds from low interest state loans. The table below displays expenditure types included in the FY 2023-24 Budget, and the funding sources available to pay those expenditures: EXPENDITURE TYPE WA TER FUND WA STEWA TER FUND RECLA MA TION FUND TOTA L Operating Expenses $ 21,735,000 $ 4,850,000 11,093,000$ 37,678,000$ Debt S ervice 3,103,000 273,000 -3,376,000 Capital Outlay 695,000 260,000 210,000 1,165,000 Capital Improvement Program 3,425,000 300,000 -3,725,000 Reserve Transfers 95,000 365,000 1,020,000 1,480,000 TOTA L $29,053,000 $ 6,048,000 $ 12,323,000 $ 47,424,000 Conclusion: The proposed FY 2023-24 budget balances the projected revenues and expenses while still contributing to a new Water Reclamation Reserve Fund. The proposed budget maintains the debt coverage and District reserve policies. Throughout the coming year, staff will closely monitor revenues versus Program spending, and propose adjustments as necessary to ensure the District’s fiscal sustainability. AGENCY GOALS AND OBJECTIVES II - Maintain a Commitment To Sustainability, Transparency, and Accountability Agenda Item #4a June 28, 20236 Meeting Date: June 28, 2023 Agenda Item #4a Discussion Item 8 1 4 A. Practice Transparent and Accountable Fiscal Management REVIEW BY OTHERS This agenda item has been reviewed by all Departments and was presented as an information only item at the June 14, 2023 Board Meeting. FISCAL IMPACT The FY 2023-24 Operating Budget is balanced, and the Capital Budget is fully funded. Recommended by: ________________ Michael Moore General Manager/CEO Respectfully submitted: ________________ Brian Tompkins Chief Financial Officer ATTACHMENTS •Presentation •FY 2023-24 Draft Budget •Resolution 2023.09 Brian Tompkins, Chief Financial Officer OPERATING & CAPITAL BUDGETS FY 2023-24 June 28, 2023 2 BUDGET SUMMARY - REVENUE REVENUE / SOURCES WATER FUND WASTEWATER FUND RECLAMATION FUND FY 2023-24 TOTAL Water Sales / Wastewater Collection Charges $ 18,345,000 $ 5,968,000 $ - $ 24,313,000 Wastewater Treatment Charges - - 10,279,000 10,279,000 Water System (Meter) Charges 9,996,000 - - 9,996,000 Other Operating Income 42,000 - 1,944,000 1,986,000 Other Charges and Income 670,000 80,000 100,000 850,000 TOTAL REVENUE / SOURCES $ 29,053,000 $ 6,048,000 $ 12,323,000 $ 47,424,000 3 BUDGET SUMMARY - EXPENSES OPERATING EXPENSES WATER FUND WASTEWATER FUND RECLAMATION FUND FY 2023-24 TOTAL Employment Expenses $ 9,227,500 $ 2,544,700 $ 1,581,800 $ 13,354,000 Water Costs 768,000 - - 768,000 Power Costs 3,165,000 - 2,000,000 5,165,000 Materials & Supplies 1,331,500 133,100 751,400 2,216,000 Contracted Treatment Costs - - 3,700,000 3,700,000 Contract Services 6,827,800 2,066,400 3,038,800 11,933,000 Other Operating Expenses 415,200 105,800 21,000 542,000 TOTAL OPERATING EXPENSES $ 21,735,000 $ 4,850,000 $ 11,093,000 $ 37,678,000 EXPENSES - OTHER Debt Service $ 3,103,000 $ 273,000 $ - $ 3,376,000 Capital Outlay 695,000 260,000 210,000 1,165,000 Capital Improvement Program 3,425,000 300,000 - 3,725,000 Reserve Transfers 95,000 365,000 1,020,000 1,480,000 TOTAL EXPENSES - OTHER $ 7,318,000 $ 1,198,000 $ 1,230,000 $ 9,746,000 TOTAL OPERATING / OTHER EXPENSES $ 29,053,000 $ 6,048,000 $ 12,323,000 $ 47,424,000 4 WATER FUND FISCAL YEAR 2023-24 TOTAL WATER BUDGET = $29,053,000 Water Sales $18,345,000 Meter Charges $9,996,000 Other Charges $712,000 SOURCE OF REVENUE Operations $21,735,000 Debt Service $3,103,000 Capital Expenditures $4,120,000 Reserve Transfers $95,000 EXPENDITURES / OTHER USES 5 WASTEWATER FUND FISCAL YEAR 2023-24 TOTAL WASTEWATER BUDGET = $6,048,000 Wastewater Collection $5,968,000 Other Charges $80,000 SOURCE OF REVENUE Operations $4,850,000 Debt Service $273,000 Capital Expenditures $560,000 EXPENDITURES / OTHER USES 6 WATER RECLAMATION FUND FISCAL YEAR 2023-24 TOTAL WATER RECLAMATION BUDGET = $12,323,000 Operations $11,093,000 Reserve Transfers $1,020,000 EXPENDITURES / OTHER USES Wastewater Treatment $10,279,000 SNRC Non-Rate Revenue $1,944,000 Other Charges $100,000 SOURCE OF REVENUE 7 BUDGET ALLOCATION BY PROGRAM DESCRIPTION WATER FUND WASTEWATER FUND RECLAMATION FUND TOTAL FY 2022-23 BUDGETED CHANGE 1000 - Governing Board $ 254,800 $ 109,200 $ - $ 364,000 $ 394,000 -8% 2000 - General Administration 959,000 411,000 $ - 1,370,000 1,294,000 6% 2100 - Human Resources 1,702,400 564,600 $ 590,000 2,857,000 1,917,000 49% 2200 - Public Affairs 904,400 387,600 $ - 1,292,000 1,578,000 -18% 2300 - Conservation 689,000 - $ - 689,000 862,000 -20% 3000 - Finance & Accounting 940,800 403,200 $ - 1,344,000 1,271,000 6% 3200 - Information Technology 1,205,400 516,600 $ - 1,722,000 1,344,000 28% 3300 - Customer Service 1,304,100 558,900 $ - 1,863,000 1,746,500 7% 3400 - Meter Services 292,000 - $ - 292,000 270,000 8% 4000 - Engineering 999,600 428,400 $ - 1,428,000 1,224,000 17% 5000 - Water Production 5,992,000 - $ - 5,992,000 5,657,000 6% 5100 - Water Treatment 1,082,000 - $ - 1,082,000 1,090,000 -1% 5200 - Water Quality 546,000 - $ - 546,000 507,000 8% 6000 - Maintenance Admin 418,500 46,500 $ - 465,000 441,000 5% 6100 - Water Maintenance 2,826,000 - $ - 2,826,000 3,017,000 -6% 6200 - Wastewater Collection - 867,000 $ - 867,000 880,000 -1% 6300 - Water Reclamation - - $ 9,896,000 9,896,000 9,111,000 9% 7000 - Facilities Maintenance 1,011,000 405,000 $ 607,000 2,023,000 2,138,500 -5% 7100 - Fleet Maintenance 608,000 152,000 $ - 760,000 751,000 1% TOTAL $21,735,000 $ 4,850,000 $ 11,093,000 $37,678,000 $35,493,000 6% 8 DEBT SERVICE •Debt Proceeds Used For: •Plant 134 Treatment Upgrade •Plant 134 Hydro Electric Plant •Administration / Operations Facility •Honeywell Energy Projects •4 Million Gallon Underground Tank 2020A Bonds $1,606,000 2020B Bonds $602,000 SRF Loans $253,000 US Bank Loan $452,000 SBVMWD Loan $463,000 FY 2023-24 PAYMENTS $3,376,000 9 CAPITAL BUDGET FUNDING SUMMARY DESCRIPTION WATER FUND WASTEWATER FUND RECLAMATION FUND TOTAL Capital Outlay $ 695,000 $ 260,000 $ 210,000 $ 1,165,000 Capital Improvement Program 3,725,000 4,300,000 - 8,025,000 TOTAL EXPENDITURES $ 4,420,000 $ 4,560,000 $ 210,000 $ 9,190,000 Operating Revenue 4,120,000 560,000 210,000 4,890,000 Capacity Fees 300,000 - - 300,000 Grants / Loans - 4,000,000 - 4,000,000 TOTAL SOURCES $ 4,420,000 $ 4,560,000 $ 210,000 $ 9,190,000 10 •Total Full-Time Positions: 73 •Part-Time Positions: 2 •Position Changes: -3 •Associate Engineer •Administrative Analyst •Facilities Maintenance Worker FULL-TIME STAFFING BY PROGRAM PROGRAM FY 2021-22 Actual FY 2022-23 Actual FY 2023-24 Proposed 2000 - General Administration 3 3 3 2100 - Human Resources 2 2 2 2200 - Public Affairs 4 4 4 2300 - Conservation 1 1 1 3000 - Finance & Accounting 6 6 6 3200 - Information Technology 3 3 3 3300 - Customer Service 7 7 7 3400 - Meter Services 3 2 2 4000 - Engineering 5 4 3 5000 - Water Production 7 7 7 5100 - Water Treatment 2 2 2 5200 - Water Quality 2 2 2 6100 - Water Maintenance 15 16 16 6200 - Wastewater Collection 4 4 4 6300 - Water Reclamation 9 9 8 7000 - Facilities Maintenance 2 3 2 7100 - Fleet Maintenance 1 1 1 TOTAL 76 76 73 DISCUSSION FISCALYEAR BUDGET Annual Publication of East Valley Water District Highland, California 2023-24 DRAFT T h e A n n u a l B u d g e t E A S T V A L L E Y W A T E R D I S T R I C T EXPERT SERVICE The combination of elected representatives and water professionals working together, provides the customers of East Valley Water District with efficient and reliable water and sewer operations. MICHAEL MOORE | GENERAL MANAGER/CEO Department Name Function Goals & ObjectivesEast Valley Water District’s Fiscal Year (FY) 2023-24 Operating and Capital Budgets provides customers, ratepayers, and members of the community with detailed information about the District’s programs and operations. The goal of the budget document is to provide transparency to the community regarding the services, programs, and operations of the District. The Operating and Capital Budgets include: 1. Transmittal Letter – A letter from Michael Moore, General Manager/CEO outlining the District’s approach and methodology in developing the budget. 2. Introduction – An overview of the District, the financial plan and operating guide. 3. Financial Summary – Methodology and principles to provide guidelines for the formulation and consideration of the comprehensive annual budget. 4. Water, Wastewater and Water Reclamation Funds – Financial projections, assumptions and considerations for revenue, expenses, and operations. 5. Consolidated Financial Summary – A snapshot of the District’s revenues and expenses. 6. Program Summaries – Descriptions highlighting the accomplishments, goals, and proposed Operating Budget for the specific program. 7. Capital Budget – Summary of Capital Budget and Proposed Capital Improvement Projects. 8. Glossary – Explanation of key terms, acronyms and chart of accounts used throughout the document. Program Summaries The Program Summaries section provides the structural overview, key goals and objectives, accomplishments for the previous year, and the budget details. Goals that directly support the District’s Five-Year Work Plan are noted in the various Program Summaries with the use of this icon. Accomplishments Program Budget Detail EAST VALLEY WATER DISTRICT | i HOW TO READ THE BUDGET FISCAL YEAR 2023-24 BUDGET [PAGE LEFT BLANK] Intentionally FY 2023-24 BUDGET | ii TABLE OF CONTENTS OVERVIEW OF THE BUDGET DOCUMENT STRUCTURE EAST VALLEY WATER DISTRICT | iii FY 2022-23 Accomplishments 8 District Management 9 Resolution 2023.09 10 Transmittal Letter 1 Budget Guide 13 Statistical/Supplemental Information 16 District Vision 19 District Goals and Objectives 20 Organizational Structure 22 Industry Benchmarks 29 Introduction 11 Financial Policies 37 Budget Process 42 Budget Cycle Calendar 44 Basis of Budgeting 45 Fund Structure 46 Fund/Program Relationship 48 Budget Summary 49 Revenue Summary 50 Expenditure Summary 57 Debt Overview 63 Fund Equity & Reserves 68 Long Range Financial Plan 75 Financial Summary 35 Water Fund 81 Wastewater Fund 93 Consolidated Financial Schedules 105 Program Descriptions 113 Position Summary Schedule 113 Governing Board 115 General Administration 121 Human Resources 127 Public Affairs 133 Conservation 139 Finance & Accounting 145 Information Technology 151 Customer Service 157 Meter Services 163 Engineering 169 Water Production 175 Water Treatment 183 Water Quality 189 Water Maintenance 195 Wastewater Collection 201 Water Reclamation 207 Facilities Maintenance 213 Fleet Maintenance 219 Program Summaries 111 Capital Budget Summary 227 Capital Outlay 228 CIP Five-Year Schedule 230 Capital Improvement Projects 233 Infrastructure Accomplishments 259 Capital Budget 225 Glossary 263 Water Reclamation Fund 99 Acronyms 269 Chart of Accounts 273 [PAGE LEFT BLANK] Intentionally FY 2023-24 BUDGET | iv T R A N S M I T T A L L E T T E R EAST VALLEY WATER DISTRICT | 1 TRANSMITTAL LETTERfy 2023-24 T h e A n n u a l B u d g e t E A S T V A L L E Y W A T E R D I S T R I C T The annual budget development provides an opportunity for cooperation and collaboration with the understanding that an efficient operation requires high degrees of teamwork and focus. FY 2023-24 BUDGET | 2 • FY 2023-24 Accomplishments • District Management • Resolution 2023.09 Transmittal Letter Contents EAST VALLEY WATER DISTRICT | 3 TRANSMITTAL LETTER Honorable Chairman, Governing Board, District Ratepayers, and Community Members, East Valley Water District (District) is proud to present the Fiscal Year (FY) 2023-24 Operating and Capital Budgets (Budget) serving as a foundational guide and tool for our employees, stakeholders, and community. This document has been designed to provide an insight and understanding into the District’s initiatives, operations, and goals. The development of the Budget is completed through a collaborative strategic planning process, which actively engages the District’s Governing Board, staff, and community members. The Budget presents a comprehensive financial plan that includes a forecast of operating and non-operating revenues and expenditures; financing of long-term capital improvement plans and funding for the repayment of long-term debt. After several years of development and construction, the Sterling Natural Resource Center (SNRC) will come online and begin treatment operations in FY 2023-24. With the additional service, the District has developed a comprehensive commissioning strategy and will work to implement the facility’s staffing plan to ensure a safe and functioning facility. BUDGET PROCESS Every January, the budget process begins with the Governing Board creating and adopting the Five-Year Work Plan, which serves as the District’s guiding strategy plan spanning over the course of multiple years. District staff will then develop the milestones and objectives needed to meet the Five-Year Work Plan goals within the District’s financial forecasts. The effort allows for a strategic planning process through goal setting and planning, while considering ongoing operational needs in the development of the program and capital expenses. Strategic Planning Efforts With a vision to become a world-class organization, the District is focused on providing safe and reliable drinking water and preserving the quality of life for our community. The Governing Board, staff, and community have developed the District’s Guiding Principles, including the District Vision that empowers the organization to take actions to be innovative, efficient, and effective. Carrying out this vision requires a commitment to being a performance-based organization valuing results. Also established in the Guiding Principles are the Core Values and Goals & Objectives. These three pillars of the District’s strategic planning process provide the framework for the Five-Year Work Plan and subsequently the Utility Success Indicators, Budget, and Individual Performance Goals. With the strategic foundation in place, staff uses the framework to develop the FY 2023-24 Budget outlining the financial steps needed to achieve the goals and maintain world-class operations. Given the high standards of the District, it is important to showcase the strategic value of key projects outlined in the Five-Year Work Plan, including the required planning steps, environmental awareness, and clear prioritization to allow staff to accomplish the set goals. As a performance and operations-based organization, the FY 2023-24 Budget also accounts for on-going daily operations, while maintaining the world-class standards set by the community. Programmatic Goals and Objectives All Program Goals have been designed to support the priorities outlined in the Five-Year Work Plan. FY 2023-24 BUDGET | 4 Revenue and Projections Anticipated rate and non-rate revenues are projected to estimate the financial resources available to fund the activities and infrastructure enhancements identified for the fiscal year. Given the significant potential impacts of external factors such as the economy, inflation, drought conditions, and demand, the District calculates these figures in a fiscally conservative manner. A process is in place to allow for adjustments to reflect actual revenue trends at quarterly intervals throughout the year and ultimately reported in the Comprehensive Annual Financial Report. Expenditure Projections Expenditure projections are cost estimates developed to achieve Program Goals and objectives along with daily operational needs. This information is presented from multiple levels, including the Districtwide perspective for each fund, and for individual programs. Once initial expenditures are developed, they are compared to the revenue projections. During the budget process, if expenditures were projected above available revenues, the organization could use the strategic nature of the budget to re-evaluate goals to ensure maintenance of consistent expectations with available financial resources. Budget Adoption To provide an opportunity for discussion and participation, the budget was presented to the Governing Board in phases at a series of three public meetings. In addition, the information was presented during one public meeting of the Community Advisory Commission. The Community Advisory Commission is a group of seven residents appointed by the Governing Board to provide input to support efforts of transparency and accountability. The annual budget must be adopted by June 30 in order to begin the new fiscal year on July 1. •District Vision •Core Values •Goals & Objectives Guiding Principles •Industry Benchmarks •FY 2023-24 Operating and Capital Budgets •Individual Performance Goals Performance Measures •Five-Year Work Plan Bridge Measures PROGRAM MONITORING AND BUDGET ADJUSTMENTS Given that the budget is developed based on projections, every program monitors monthly expenses. Each quarter, the budget-to-actuals are reviewed by staff to allow for an opportunity to take formal budget adjustments to the Governing Board for consideration. Consistent budget review eases the transition of programs from year-to-year. Every year staff presents a comprehensive update to the Governing Board midway through the fiscal year where this item is discussed at an open public meeting and provides a summary of budget activity along with updated forecasts for the remainder of the year. Budget Summary The budget for FY 2023-24 is balanced and reflects the District’s commitment to maximizing resources to meet or exceed the expectations of District stakeholders. Operating expenses incurred by the District’s programs are allocated to the Water, Wastewater and Water Reclamation Funds based on the assumed benefit of services to each fund. The Water, Wastewater, and Water Reclamation Funds are self-supporting based on rates received for services provided. Total projected revenues for FY 2023-24 are $47,424,000. Operating under the principles of transparency, the District takes steps to make financial reports reader-friendly and easily accessible to the public. EAST VALLEY WATER DISTRICT | 5 [TRANSMITTAL LETTER] WATER FUND The Water Fund has identified $29,053,000 in both revenue and expenses. Key considerations when developing the budget for this fund included the cost to supply, treat, and distribute drinking water and fire protection water throughout the District. Revenues are derived from three sources for the Water Fund. The Assumptions for this budget are 63% for water sales, 34% meter charges, and 3% other charges. The District reviews rates as needed and adjusts accordingly to balance operation and capital expenses. The District conducted a rate analysis in FY 2020-21 with the Governing Board adopting a water rate adjustment to take effect January 1, 2023. Projected expenditures have been developed through a comprehensive organizational budget process to achieve District goals, maintain operations, and balance budget with revenue projections. Expenses for the Water Fund consist of 75% program, 14% capital, and 11% debt service. WASTEWATER FUND The Wastewater Fund has identified $6,048,000 in both revenues and expenses. When developing the budget for this fund, key considerations included the maintenance and repair of the sewer collection system. Wastewater Fund revenue projections have been developed based on historical revenues with source projections including 99% system charges and 1% other charges. The District reviews rates on a periodic basis and adjusts accordingly to continue providing reliable services to the community. A complete rate analysis was conducted in FY 2020-21 and the Governing Board, with wastewater rate increases scheduled for January 1, 2023. Projected expenses have been developed through the budget process to support the Five-Year Work Plan, maintain operations, and remain within projected revenues. Expenditures for the Wastewater Fund consist of 80% program, 9% capital expenditures, 5% debt service, and 6% to reserves. WATER RECLAMATION FUND The new Water Reclamation Fund has been established to pay for all activities related to the SNRC facility operations. The Water Reclamation Fund has identified $12,323,000 in both revenues and expenses. FY 2021-22 Actuals FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget % Change  REVENUE Operating Revenue $ 45,829,279 $ 44,027,000 $ 46,153,859 $ 47,084,000 7% Non-Operating Revenue 936,644 125,000 318,513 340,000 172% TOTAL REVENUE $ 46,765,923 $ 44,152,000 $ 46,472,372 $ 47,424,000 179%  EXPENDITURES Operating & Maintenance $ 32,935,953 $ 35,493,000 $ 33,360,111 $ 37,678,000 6% Debt Service 3,071,890 3,354,000 3,354,000 3,376,000 1% Capital Expenditures 3,945,026 6,505,000 6,505,000 4,890,000 -25% Reserve Transfer To/(From) 6,331,490 (1,200,000) 3,253,261 1,480,000 -223% TOTAL EXPENDITURES $ 46,284,359 $ 44,152,000 $ 46,472,372 $ 47,424,000 -241% FY 2023-24 BUDGET | 6 Water Reclamation Fund revenue projections have been developed based on a comprehensive study with projections including 83% wastewater treatment, 16% SNRC non-rate revenue, and 1% other charges. The District reviews rates on a periodic basis and adjusts accordingly to continue providing reliable services to the community. Projected expenses have been developed through the budget process to support the commissioning and operations of the SNRC and remain within projected revenues. Additionally, the new Water Reclamation Fund will begin building a reserve balance to be used for asset replacement in the future. Expenditures for the Water Reclamation Fund consist of 90% program, 2% debt service, and 8% to reserves. PROGRAM HIGHLIGHTS As a results-oriented based organization, the District has identified 18 programs essential to operations. Program-based budgeting allows for costs to be clearly identified while easily measuring benefits as outlined in the Key Performance Indicators (KPI) and completion of Goals and Objectives. STAFFING The District continues to strategically evaluate the workforce needs to facilitate world-class service. The FY 2023-24 Budget has identified 73 authorized full-time positions along with two part-time positions. East Valley Water District will begin implementing the staffing plan developed with the staffing considerations for the SNRC and the increased District duties needed for daily operations. STERLING NATURAL RESOURCE CENTER The Sterling Natural Resource Center (SNRC) has presented a new opportunity for the District to begin recycling wastewater for the community. As staff begins working towards commissioning the facility operations, the startup of operations will be a fundamental shift in the District’s operational approach. Within the outlined budget, this shift will include the onboarding of new staff, start of operations and the implementation of the new Wastewater Reclamation program. • The Governing Board is the District’s legislative body responsible for serving as the organizational policy makers. • General Administration is responsible for overseeing the day-to-day District operations. • Human Resources is responsible for personnel related programs. • Public Affairs oversees internal and external communications programs. • Conservation encourages sustainable water use. • Finance & Accounting provides transparent and responsible oversight of District funds. • Information Technology is responsible for District technology and software programs. • Customer Service provides the community with world-class customer relations. • Meter Services maintains a network of Advanced Metering Infrastructure (AMI) meters. • Engineering implements infrastructure projects needed to provide safe and reliable services. • Water Production is responsible for monitoring and operating the entire water system. • Water Treatment is responsible for treating the three sources of supply. • Water Quality complies with all required drinking water regulations. • Water Reclamation is responsible for treating and disinfecting wastewater. • Water Maintenance maintains the District’s water transmission and distribution system. • Wastewater Collection repairs and safeguards the conveyance system. • Facilities Maintenance repairs and maintains all District sites. • Fleet Maintenance cares for vehicles and equipment. EXTERNAL CONSIDERATIONS In addition to the District’s daily operational needs, there are external factors that must be considered when developing the budget document. The current economic inflation rate is a consideration in the development of this document, both from an investment revenue perspective and when estimating operational costs such as construction, labor and materials. When calculating the Capital Budget, these factors were incorporated in project cost considerations. Inflation has been factored into operational cost with significant increases in power supply, labor, and contract services. After experiencing three years of extremely dry conditions, the State’s emergency drought declaration was lifted in March 2023. This allowed Californians to pivot from severe restrictions to standard conservation measures. As such, the District will reduce some outreach publications related to the drought emergency. Regulations regarding water conservation, water rights, climate change and Capital Project funding continue to be topics of discussion that could have potential operational impacts. Maintaining compliance with regulations is an essential component to District operations. The District is monitoring proposed water quality regulations for emerging contaminants and water efficiency standards that could affect District operations. CAPITAL IMPROVEMENT PROGRAM The District’s Capital Improvement Program (CIP) is a five-year planning schedule with each year approved in the correlating fiscal year’s budget based on findings of the Water and Wastewater Master Plans. Scheduled projects in FY 2023-24 total $8,025,000 for water, wastewater and water reclamation projects, and include: Future projects will be determined by completion of the Water and Wastewater Master Plan updates. DEBT The District utilizes debt funding to finance large capital projects. The District has outstanding debt which has been utilized for water treatment facilities, energy efficiency improvements, mutual water company consolidations, and infrastructure projects. Debt is not used to fund operating expenses. Debt service for FY 2023-24 on all outstanding debt is $3,376,000. The District will continue to use the State Revolving Fund (SRF) for the construction of the SNRC. EAST VALLEY WATER DISTRICT | 7 [TRANSMITTAL LETTER] • Meter Program • Canal Zone Storage Reservoir • Plant 134 Membrane Replacement • Tank/Reservoir Rehabilitation • Plant 101 – Hydro Tank Rehabilitation • Water Mains – Elmwood Road and Valaria Court • Gate Valve Replacement Program • Facility Relocations • Facility Rehabilitations • SNRC – Pipeline, Startup and Commissioning Capital planning involves identifying current and future needs and prioritizing them through an assessment process. FY 2023-24 BUDGET | 8 FY 2022-232022-23 ACCOMPLISHMENTS The District made significant progress on strategic projects and planning efforts throughout FY 2022-23. Optimize Infrastructure Capital Improvement Projects The District completed construction for the addition of Granular Activated Carbon (GAC) filtration system at Plant 134, a Seismic Study of the District’s reservoirs and water main replacement projects. The District completed a sewer pipeline replacement, reservoir tank rehabilitation and several upgrades across the system. Sterling Natural Resource Center In preparation of the SNRC becoming operational in 2023, the District adopted new wastewater treatment rates, and implemented several service agreements to support the operation of the new facility. The District worked in partnership with San Bernardino Valley Municipal Water District to construct the Weaver Basins for the regional recharge of the Bunker Hill Groundwater Basin. Financial Stability with Full Understanding of Operational Complexities Financial Reserves Increased cost of material and services has required the District to find creative solutions in replacing assets and still balancing the budget. The District has also experienced long delays in obtaining certain materials and information technology required for essential operations. The District has increased the inventory of critical items to ensure material and technology on-hand can provide reliable operations and maintenance. The District also keeps financial reserves available to replace unbudgeted assets if required due to an unforeseen emergency. Protect Organizational Investments Educational Programs The District once again partnered with Claremont McKenna College and local schools allowing students and staff to work together to develop data modeling for Water Production efforts. Seeking to foster student engagement and serve as an industry leader, the District established a Water and Wastewater Educational Pathway Program. Career development for employees is an investment in the organization to continue being a leader in the industry. The District has invested in continuing education for more than a dozen in FY 2022-23. This includes a range of education including college courses, trade schools and water certification courses. The District also launched a new leadership training program that builds skills for new supervisors and managers. Staffing Analyses As a performance-based organization, the District takes an active role maintaining staffing levels to performance-based objectives. Over this past year, staff developed performance-based objectives for the newly created SNRC positions and outlined specific duties required for these key positions. Yours in Service, Michael Moore, P.E. General Manager/CEO Board of Directors Phillip R. Goodrich Chairman of the Board James Morales, Jr. Vice Chairman of the Board David E. Smith Governing Board Member Chris Carrillo Governing Board Member Ronald L. Coats Governing Board Member Kerrie Bryan Director of Administrative Services Justine Hendricksen District Clerk Patrick Milroy Operations Manager Jeff Noelte Director of Engineering & Operations Brian Tompkins Chief Financial Officer Rocky Welborn Water Reclamation Manager District Management EAST VALLEY WATER DISTRICT | 9 Have Others See the District as a Premier Agency Regional and Industry Involvement The District continued to engage in regional activities and maintain active participation in industry groups. Staff provided informational presentations on topics including the SNRC, Educational Pathway Program, and general District activities. Additionally, the District received all three financial awards from the Governmental Finance Officers Association (GFOA) and was voted a Top Workplace in the Inland Empire- small business category. Awards Summary East Valley Water District staff have continued to move the District forward and provide safe and reliable service for our community. The team is proud to launch operations at the new Sterling Natural Resource Center and begin providing recycle water to recharge our groundwater basin. With staff taking an active role in embracing the District’s vision, we will continue to provide services vital to the health and growth within the community. [TRANSMITTAL LETTER] Government Finance Officers Association (GFOA) Award for FY 2022-23 Budget California Society of Municipal Finance Officers (CSMFO) Excellence Award for FY 2022-23 Budget Top Workplace Award by the Inland News Group in Small Company Category Special District Leadership Foundation’s (SDLF) District of Distinction Accreditation Gold Level and District Transparency Certificate of Excellence EAST VALLEY WATER DISTRICT | 11 INTRODUCTIONfy 2023-24 IN T R O D U C T I O N T h e A n n u a l B u d g e t E A S T V A L L E Y W A T E R D I S T R I C T The financial plan serves as a policy document, operations guide for programs, and as a means of transparent communication. FY 2023-24 BUDGET | 12 • Budget Guide • Statistical/Supplemental Information • District Vision • Organizational Structure • Industry Benchmarks Introduction Contents EAST VALLEY WATER DISTRICT | 13 BUDGET GUIDE The budget document is the District’s annual financial plan prepared by District staff and approved by the Governing Board. The financial plan serves as a policy document, operations guide for programs, and as a means of transparent communication. The intended audiences of the budget document are citizens, local businesses, creditors, governmental agencies, and other stakeholders. Budget Document Sections The budget document consists of seven sections, including: 1 TRANSMITTAL LETTER This section includes the District Officials, General Manager/CEO’s Budget Transmittal Letter, Strategic Plan, Capital Improvement Program, and FY 2022-23 accomplishments. 2 INTRODUCTION This section includes the Budget Guide, Statistical/Supplemental Information, Organizational Structure, and District Vision. 3 FINANCIAL SUMMARY This section presents an in-depth Districtwide overview of the FY 2023-24 Budget. 4 CONSOLIDATED FINANCIAL SCHEDULES This section is a comprehensive summary of the District’s Budget presented for the organization as a whole and for each of the District Funds. 5 PROGRAM SUMMARIES This section provides comprehensive information for each functional program within the District including their operational budget. The FY 2023-24 Budget is organized into the following summary programs: • Governing Board • General Administration • Human Resources • Public Affairs • Conservation • Finance & Accounting • Information Technology • Customer Service • Meter Services • Engineering • Water Production • Water Treatment • Water Quality • Water Maintenance • Wastewater Collection • Water Reclamation • Facilities Maintenance • Fleet Maintenance FY 2023-24 BUDGET | 14 Each program section includes: • Program Personnel: Explanation of authorized personnel allocated to each program including an organization chart. • Program Structure: Organization chart displaying the reporting for program personnel since supervisors may be allocated to different program funding. • Function: A basic description of the responsibilities of each program. • Goals & Objectives: Articulates the expectations for FY 2023-24 through specific goals and objectives. • Accomplishments: Highlights and milestones from FY 2022-23. • Significant Changes: Clarification of funding request differences compared to the previous year. • Levels of Service: Key Performance Indicators to measure program operations and achievement of the District’s Goals and Objectives. • Key Performance Indicators: These tables present measures that help the District define and evaluate a program’s performance. • Program Budget Detail: A detailed breakdown of the program expenditures by category or line item. 6 CAPITAL BUDGET This section presents the Capital Outlay expenditures and Capital Improvement Projects for the FY 2023-24 Budget. 7 GLOSSARY This section provides definitions for general terms, acronyms, and the Chart of Accounts used throughout the budget document. BUDGET AWARDS The Government Finance Officers Association of the United States and Canada presented a Distinguished Budget Presentation Award and the California Society of Municipal Finance Officers presented the Excellence Award to the District for its annual budget for the fiscal year beginning July 1, 2022. In order to receive these awards, a governmental unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan, and as a communication device. These awards are valid for a period of one year only. We believe our current budget continues to conform to program requirements, and we are submitting it to GFOA and CSMFO to determine its eligibility for another award. PRESENTED TO East Valley Water District California For the Fiscal Year Beginning July 01, 2022 Executive Director GOVERNMENT FINANCE OFFICERS ASSOCIATION Distinguished Budget Presentation Award Finance Department East Valley Water District, California March 27, 2023 The Government Finance Officers Association of the United States and Canada The Certificate of Recognition for Budget Preparation is presented by the Government Finance Officers Association to those individuals who have been instrumental in their government unit achieving a Distinguished Budget Presentation Award. The Distinguished Budget Presentation Award, which is the highest award in governmental budgeting, is presented to those government units whose budgets are judged to adhere to program standards presents this CERTIFICATE OF RECOGNITION FOR BUDGET PREPARATION to Date: Executive Director California Society of Municipal  Finance Officers  Certificate of Award Operating Budget Excellence Award Fiscal Year 2022-2023 Presented to the East Valley Water District For meeting the criteria established to achieve the CSMFO Excellence Award in Budgeting. February 10, 2023 Scott Catlett James Russell-Field, Chair 2022 CSMFO President Recognition Committee Dedicated Excellence in Municipal Financial Reporting In addition to receiving the GFOA Distinguished Budget Award, the District also received Special Capital Recognition and Special Long Range Financial Plans Recognition. Budget Financial Information The District operates on a fiscal year, or budget time period, that begins on July 1 and ends June 30. The columns typically presented are: FY 2021-222021-22 ACTUALS Actual financial information for FY 2021-22 as reported in the Comprehensive Annual Financial Report. The actual financial information is reported in the budget document on a budgetary basis. FY 2022-232022-23 BUDGET The FY 2022-23 Budget was adopted by the Governing Board on June 23, 2022 and may also include any adjustments approved by the Governing Board at the Mid-Year Budget Review. FY 2022-232022-23 PROJECTED The FY 2022-23 Projected column reflects the adopted budget in addition to any amendments approved by the Governing Board during the fiscal year. The FY 2022-23 Projected column is also adjusted to reflect management’s estimate of what revenues and expenditures will be at the end of the fiscal year. FY 2023-242023-24 BUDGET This column initially reflects the FY 2023-24 “Proposed” Budget submitted by the General Manager/CEO. After the Governing Board reviews and approves the FY 2023-24 Budget, the information in the FY 2023-24 column changes, if necessary, to reflect the Governing Board’s actions. AMOUNT CHANGED AND %% CHANGE These columns provide the amount changed/percent change from the previous year’s budget to the newly proposed budget. EAST VALLEY WATER DISTRICT | 15 [INTRODUCTION] FY 2021-22 Actuals FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget Amount Changed % Changed 210 210 santa a n a r i v e r sant a a n a r i v e r plun g e c r e e k plunge creek eld e r c r e e k cit y c r e e k city c r e e k sa n d c r e e k tw i n c r e e k tw i n c r e e k warm cr e e k cook creek mil l c r e e k FY 2023-24 BUDGET | 16 STATISTICAL/SUPPLEMENTAL INFORMATION The District provides water and wastewater services to residents within its 30.1 Square mile area. This includes over 104,000 people within the cities of Highland and San Bernardino, portions of the unincorporated County of San Bernardino, the San Manuel Band of Mission Indians, and Patton State Hospital. The District was formed through a local election of mostly citrus grove operators, to have water service provided by a public agency. The District is located in the foothills of the San Bernardino Mountains, 65 miles east of Los Angeles in the County of San Bernardino. District Boundary Map District Headquarters 31111 Greenspot Road Highland, CA 92346 Sterling Natural Resource Center (SNRC) 25318 5th Street Highland, CA 92410 Government The District is a California Special District established in 1954. The District has a five-member Governing Board elected by voters at-large to staggered four-year terms. The Governing Board represents the public’s interest as policy makers with regards to rate for service, policies, ordinances, and budget adoption. Appointed by the Governing Board, the General Manager/CEO is responsible for overseeing daily operations and managing staff resources. The District is a rate-based organization that receives no tax-related revenue and operates in accordance with Division 12 of the California Water Code. The District’s service area includes the City of Highland, San Manuel Band of Mission Indians, Patton State Hospital, and portions of both the City and County of San Bernardino. Additionally, the District is within the sphere of influence of the Inland Valley Development Authority, which oversees the reuse of the former Norton Air Force Base. Water Sources The District has three sources for water, the Santa Ana River (SAR), the Bunker Hill Groundwater Basin (Bunker Hill Basin), and the State Water Project (SWP). The SAR starts with natural springs and snow melt high in the San Bernardino Mountains. Groundwater is drawn from the Bunker Hill Basin, a natural underground storage area made up of soil, sand, and gravel. San Bernardino Highland Seven Oaks Dam N DistrictHeadquarters SNRC EAST VALLEY WATER DISTRICT | 17 [INTRODUCTION] A portion of the District’s water is imported from Northern California through the State Water Project. The District has access to this water through San Bernardino Valley Municipal Water District (Valley District). The District anticipates using the allocated North Fork Water Company (NFWC) shares for groundwater replenishment rather than treating for use in the water distribution system directly. Not only will this help to contribute to a healthy basin level, it will offset the District’s cost obligation toward the San Bernardino Basin Groundwater Council (GC). Wastewater Collection and Treatment The District is responsible for the collection and conveyance of wastewater within the service area. Currently, all wastewater is sent to the City of San Bernardino Municipal Water Department (SBMWD) facilities, where it is treated in accordance with a Joint Powers Agreement. In 2018, the District successfully received authorization for reorganization to include wastewater treatment authority by the Local Agency Formation Commission (LAFCO). This allows for the District to construct and ultimately operate facilities to treat wastewater collected from within its service area. The District is finalizing construction of the SNRC in the City of Highland that will treat up to eight million gallons of wastewater daily for recharge into the Bunker Hill Basin. This project will create a drought-proof recycled water supply, which will result in hundreds of millions of gallons of water stored for use in dry years for beneficial reuse higher in the Santa Ana River watershed. The project broke ground in late 2018 with operations beginning in FY 2023-24. Once the facility is commissioned, the District will be responsible for treating the wastewater generated within its service area. Population Growth Population growth projections vary within the District’s service area due to a number of proposed developments with unspecified timing for completion. There are a number of developments currently under construction and planned for the future within the District’s service area including: • Unit development offering a variety of housing opportunities. The development density identified by land use agencies allows for a minimum of 250 housing units and a maximum of 800 house units. The anticipated new construction will be located along Greenspot Road and the 210 Freeway. • Residential planned community of 316 housing units. The permitted land use types of this area focuses towards low to medium density residential units with additional inclusion of open space, agriculture, parks and recreation. 10%SurfaceWater 15% Surface Water (Imported StateWater Project)75 % Groundwater (Bunker Hill Basin) (SantaAna River) districtwatersources $79,99 8 California Average $48,959 City ofSan Bernardino $56,514 East ValleyWater District $68,105 City of Highland $68,711 County ofSan Bernardino average household income *Income information retrieved from census.gov. FY 2023-24 BUDGET | 18 Climate The climate in the cities of Highland and San Bernardino vary throughout the year, but overall is considered arid. On average, there are 283 days of sunshine per year. Temperatures average a daily high of 94 degrees in the summer and a daily low of 42 degrees during the winter. This area typically averages 13 inches of precipitation annually, mostly during the months of January through March. Education Residents within the District’s service area have access to award winning K-12 schools through the Redlands Unified School District (RUSD) and San Bernardino City Unified School District (SBCUSD). Higher education institutions located near the District’s service area include: California State University, San Bernardino; California Baptist University; Loma Linda University; University of California at Riverside; and University of Redlands. Community colleges within the region include: Crafton Hills College; Riverside City College; and San Bernardino Valley College. Hospital and Medical Facilities Hospital and medical facilities located in or near the District service area include Arrowhead Regional Medical Center, Loma Linda University Medical Center, Kaiser Foundation Hospital, Redlands Community Hospital, Community Hospital of San Bernardino, J. Pettis Veteran’s Administration Hospital, and St. Bernardine Medical Center. Additionally, there are a number of urgent care and outpatient facilities located throughout the region. Transportation Public transportation is available within the District service area through OmniTrans. With a variety of routes, OmniTrans provides busing services throughout the San Bernardino Valley, including cities of Highland and San Bernardino. Community members have access to the Metrolink commuter rail service, which provides long distance transportation to commuters from the San Bernardino area to major centers of employment including Los Angeles and Orange County. Interstate 210 and both State Route 18 and 330 traverse through the District’s boundaries. These roadways provide access to major transportation corridors including Interstates 215, 15, and 10; and State Routes 18, 38, 60, and 91. Public Safety The District serves members of the community within the cities of Highland and San Bernardino, unincorporated County of San Bernardino and San Manuel Band of Mission Indians. Within these communities, law enforcement is provided by the San Bernardino County Sheriff’s Department, City of San Bernardino Police Department, and San Manuel Department of Public Safety. Fire protection services are provided by the California Department of Forestry and Fire Protection (CalFire), San Bernardino County Fire Department, and the San Manuel Fire Department. EAST VALLEY WATER DISTRICT | 19 [INTRODUCTION] Major Employers Major employment industries within the cities of Highland and San Bernardino include education, mental health services, public administration, health care, public safety, casinos, transportation, and construction. Strategic Planning Workflow The District has set out to be a world-class organization, with a focus not only on providing safe and reliable drinking water but enhancing and preserving the quality of life for our community. Through a series of planning measures, the Governing Board, staff, and the community have developed a District Vision that empowers the organization to be innovative, efficient, and effective. A Five-Year Work Plan has been developed with an emphasis on the elements needed to clearly look to the future and account for daily operations of the District. This effort is designed to consider general policy direction and highlight priority projects that allow for the consideration of specific tasks necessary for implementation. The District now has a series of measurable guiding elements that have established varying degrees of direction for operational and planning decisions. The strategic planning workflow includes: the guiding principles, bridge measures, and performance measures. By setting clear expectations, all staff members are encouraged to be active participants in operations while looking for opportunities to make a positive impact on the community. District Vision Core Values guiding principles District Vision Core Values Goals & Objectives BRIDGE MEASURES Five-YearWork Plan PERFORMANCE MEASURES IndustryBenchmarks Budget IndividualPerformanceGoals Daily Operations ENHANCE & PRESERVE THE QUALITY OF LIFE FOR OUR COMMUNITY THROUGH INNOVATIVE LEADERSHIP AND WORLD-CLASS PUBLIC SERVICE. LEADERSHIP Motivating a group of people to act toward achieving a common goal or destination. PARTNERSHIP Developing relationships between a wide range of groups and individuals through collaboration and shared responsibility. STEWARDSHIP Embracing the responsibility of enhancing and protecting resources considered worth caring for and preserving. 490 Hydrants Repaired, Replaced, Inspected 5100 Manholes 344 Hydrants Flushed 28,977,000 Gallons of Water Storage 230 Miles of Wastewater Mains 6,000,000 Average Gallons of Wastewater Collected 15 Active Groundwater Wells 191 Miles ofWastewaterMain Cleaned61Miles of Wastewater Video 300 Miles of Water Mains 16,500,000 Average Gallons of Water Produced Daily 3,500 Water Samples Collected 344 Water Leaks Repaired 1,185 Feet of Water Main Replaced FY 2023-24 BUDGET | 20 Goals and Objectives District Spotlight I. Implement Effective Solutions Through Visionary Leadership • Identify Opportunities to Optimize Natural Resources • Maximize Internal Capabilities through Ongoing Professional Development • Strengthen Regional, State and National Partnerships • Encourage Performance Based Results Through Staff Empowerment II. Maintain a Commitment to Sustainability, Transparency, and Accountability • Practice Transparent and Accountable Fiscal Management • Utilize Effective Communication Methods • Pursue Alternative Funding Sources • Provide Quality Information to Encourage Community Engagement III. Deliver Public Service with Purpose While Embracing Continuous Growth • Advance Emergency Preparedness Efforts • Strive to Provide World-Class Customer Relations • Promote a Positive Organizational Culture • Embrace an Environment of Active Learning and Knowledge Sharing IV. Promote Planning, Maintenance and Preservation of District Resources • Develop Projects and Programs to Ensure Safe and Reliable Services • Enhance Planning Efforts that Respond to Future Demands • Dedicate Efforts Toward System Maintenance and Modernization • Enable Fact-Based Decision Making Through State-of-the-Art Data Management EAST VALLEY WATER DISTRICT | 21 [PAGE LEFT BLANK] Intentionally margin margin Ratepayers/Community Members ADMINISTRATIVE SPECIALIST DIRECTOR OF ADMINISTRATIVE SERVICES WATER QUALITY COORDINATOR SR. TREATMENT PLANT OPERATOR FACILITIES MAINTENANCE WORKER II SR. WATER PRODUCTION OPERATOR WATER PRODUCTION OPERATOR II WATER PRODUCTION OPERATOR I SR. FIELD SERVICE WORKER FLEET MAINTENANCE COORDINATOR STOREKEEPER/ BUYER WAREHOUSE FIELD SERVICE WORKER III FIELD SERVICE WORKER II FIELD SERVICE WORKER I METER TECHNICIAN II GENERAL MANAGER/CEO DISTRICT CLERK GOVERNING BOARD (5) (7) (2) (3) WATER QUALITY TECHNICIAN (6) (3) (2) DIRECTOR OF ENGINEERING & OPERATIONS HUMAN RESOURCES COORDINATOR DIRECTOR OF STRATEGIC SERVICES OPERATIONS MANAGER WATER PRODUCTION SUPERVISOR FIELD SERVICE SUPERVISOR SENIOR ENGINEER (2) PUBLIC AFFAIRS COORDINATOR PUBLIC AFFAIRS REPRESENTATIVE PT PUBLIC AFFAIRS SPECIALIST CONSERVATION COORDINATOR PUBLIC AFFAIRS/ CONSERVATION MANAGER ADMINISTRATIVE ASSISTANT FIELD SERVICE SUPERVISOR FACILITIES AND FLEET SUPERVISOR FY 2023-24 BUDGET | 22 ORGANIZATIONAL STRUCTURE margin margin CUSTOMER SERVICE REPRESENTATIVE I Legal Counsel CUSTOMER SERVICE REPRESENTATIVE III CUSTOMER SERVICE REPRESENTATIVE II CUSTOMER SERVICE REPRESENTATIVE I (2) (2) (2) (PT) Management General StaExecutive Management Elected Ocials LEGEND CHIEF FINANCIAL OFFICER ELECTRICAL & INSTRUMENTATION CONTROLS TECHNICIAN WASTEWATER TREATMENT PLANT OPERATOR IIII FINANCE SUPERVISOR INFORMATION TECHNOLOGY MANAGER ACCOUNTANT SR. ACCOUNTING TECHNICIAN ACCOUNTING TECHNICIAN BUSINESS SERVICES COORDINATOR CUSTOMER SERVICE SUPERVISOR NETWORK ADMINISTRATOR INFORMATION TECHNOLOGY ANALYST WASTEWATER TREATMENT PLANT MECHANIC III ADMINISTRATIVE ANALYST * All positions are full-time unless noted otherwise as part time (PT). WATER RECLAMATION MANAGER SR. WASTEWATER TREATMENT PLANT OPERATOR (4) EAST VALLEY WATER DISTRICT | 23 [INTRODUCTION] FY 2023-24 BUDGET | 24 Program Structure The District has built a world-class team of individuals committed to the Agency Vision and Core Values. The Organizational Chart reflects the current 73 authorized positions in relation to the chain of command structure. It is important to note that the District fosters a collaborative work environment which encourages communication and cooperation between different programs. A more detailed look at staffing can be viewed within each individual Program. The District currently has 18 programs, which are overseen by various members of the Executive Management Team. This chart reflects the organizational structure based on Program oversight. Program Level Operational Responsbilities Overview Ratepayers/Community Members Governing Board General Manager/CEO * This program is overseen by a Director position but managed by a member of the Executive Team. Public Aairs Conservation Director of Strategic Services District Clerk Administration Director of Engineering & Operations Engineering *Operations *Water Reclamation Director of Administrative Services Human Resources Chief Financial Ocer Finance Customer Service InformationTechnology Operations Manager Meter Services Water Production Water Treatment Water Quality Water Maintenance Wastewater Collection Facilities Maintenance Fleet Maintenance WastewaterTreatment Water Reclamation Manager Ratepayers/ Community The individuals, businesses and stakeholders receiving services from the District. Governing Board The Governing Board is the legislative body of the organization. Comprised of five members elected at-large to four-year staggered terms of office. DISTRICT CLERK General Administration General Administration is responsible for ensuring the District’s business and daily operations activities are performed following Federal, State, and Governing Board approved policies. The General Manager/CEO provides daily oversight for interagency relations for advancing the District’s initiatives. EAST VALLEY WATER DISTRICT | 25 [INTRODUCTION] DIRECTOR OF ADMINISTRATIVE SERVICES Human Resources Human Resources is responsible for administering programs to attract and retain a diverse and qualified workforce. This program also oversees the District safety program to ensure staff maintain a safe work environment. Additionally, this program is responsible for managing the District’s pathway and risk management programs. DIRECTOR OF STRATEGIC SERVICES Public Affairs Public Affairs oversees internal and external communication programs consistent with the District’s Vision and guiding principles. Through community and media relations, the Program provides effective and strategic communications to various stakeholders. The Program is also responsible for grant writing, emergency preparedness, and facility rental programs. Conservation Conservation is responsible for overseeing programs that facilitate and encourage sustainable water use throughout the District. Additionally, this program is responsible for communicating conservation benchmarks to various regulatory agencies, tracking and monitoring legislative affairs and advocating on behalf of the District’s legislative platform. CHIEF FINANCIAL OFFICER Finance & Accounting Finance and Accounting oversees the business operations of the District in order to provide accountability and adequate control over the use of District funds. Information Technology Information Technology oversees the District’s technology infrastructure to support essential business and operational functions. The functions utilize industry specific software programs required to meet agency needs. Customer Service Customer Service provides the community with prompt, courteous, and world- class customer relations. The budget reflects the commitment of allocating resources to meet the needs of District stakeholders. FY 2023-24 BUDGET | 26 DIRECTOR OF ENGINEERING & OPERATIONS Engineering The Engineering Program responsibilities include infrastructure planning, maintaining a safe and reliable water supply, and ensuring compliance with Federal and State regulations. The Program oversees water, wastewater and water reclamation capital projects. Water Reclamation The Water Reclamation Program is responsible for treating and disinfecting eight million gallons of wastewater per day (MGD). Reclamation of wastewater generated by District customers will transition from a service contracted with the SBMWD, to in-house operations at the newly completed SNRC during FY 2023-24. OPERATIONS MANAGER Meter Services The Meter Service program maintains a network of approximately 23,000 Advanced Metering Infrastructure meters. The Program conducts routine maintenance, testing and replacement of meters to ensure billing is accurate. Water Production Water Production is responsible for the daily monitoring and operations of the entire water production system to ensure preventative maintenance of all pumps, motors, wells, boosters, reservoirs, pressure regulating valves (PRVs), hydro-pneumatic plants, and the Supervisory Control and Data Acquisition (SCADA) system. Water Treatment Water Treatment is responsible for management of three different sources of supply used by the District. The Program is responsible for the operation of Plant 134, a Surface Water Treatment Plant, and two unique groundwater treatment facilities at Plant 28 and Plant 39. Water Quality Water Quality is responsible for ensuring District compliance with State and Federal Drinking Water Regulations. This program manages backflow prevention, water sampling, Fats, Oils, and Grease Program (FOG), and the fire hydrant flushing programs. Water Maintenance The Water Maintenance Program is responsible for the repair and replacement of the District’s 300 miles of water pipeline. Water Maintenance coordinates with Engineering and Water Production to install water service lines, fire hydrants, meters, valves, and all related equipment. Wastewater Collection The Program’s purpose is prevention of wastewater spillage and leaks. This is accomplished by routine inspections, cleaning, repairs, and replacements of the District’s 230 miles of collection pipelines. SEWER EAST VALLEY WATER DISTRICT | 27 [INTRODUCTION] Budget Summary by Program The sum of many pieces makes the whole, and through 18 programs the District is able to provide world-class services to the community it serves. The graphic below displays the budget allocation for each program within the FY 2023-24 Operating and Capital Budgets. Facilities Maintenance Facilities Maintenance is responsible for the maintenance of all District facilities. The Program oversees administration buildings, water facilities, District-Owned vacant properties, and easements. Fleet Maintenance Fleet Maintenance is responsible for the preventative maintenance program for all District vehicles and heavy equipment. This includes the procurement of fleet items and maintain compliance with State and Federal air quality rules and regulations. WaterReclamation 26% WaterMaintenance 9% Water Production 15% Human Resources 8% InformationTechnology 5% Engineering 4% Finance & Accounting 4% General Administration 4% Water Treatment 3% Public Aairs 3% Customer Service 5% Facilities 5% Board 1% Water Quality1% Meters 1% Conservation2% 2%Wastewater Maintenance 2%Fleet FY 2023-24 BUDGET | 28 [PAGE LEFT BLANK] Intentionally IN D U S T R Y BE N C H M A R K S INDUSTRY BENCHMARKS Introduction Section EAST VALLEY WATER DISTRICT | 29 T h e A n n u a l B u d g e t E A S T V A L L E Y W A T E R D I S T R I C T Industry Benchmarks allow East Valley Water District to examine itself in comparison with other utilities across the United States. FY 2023-24 BUDGET | 30 EAST VALLEY WATER DISTRICT | 31 [INTRODUCTION] INDUSTRY BENCHMARKS The District is committed to delivering world-class service to its community, customers, and stakeholders. As part of its continuous improvement efforts, the District has established Industry Benchmarks that offer valuable insights into its performance relative to others in the industry. The data presented in the following tables are sourced from the American Water Works Association’s (AWWA) 2022 Utility Benchmarking Program, neighboring water districts, and the U.S. Environmental Protection Agency (U.S. EPA). By leveraging these benchmarks, the District can enhance its operations, foster trust and transparency with stakeholders, and ensure that it continues to invest resources in building a safe and reliable public utility. Operating Fund Target Level The operating fund target level pertains to the desired amount of funds that the The District aims to have available in order to sustain day-to-day operations and ensure financial stability. The District’s Reserve Funds Policy No. 7.2 establishes both maximum and minimum levels, which serve the purpose of guaranteeing adequate liquidity and covering operational expenses. Capital Replacement Fund Balance The graph illustrates the restricted funds for capital replacement. The Capital Fund Target Balance is set based upon the District’s adopted Reserve Funds Policy No. 7.2 to ensure the District has an appropriate level of financial reserves, while allowing for investment in infrastructure projects and optimizing long-term rehabilitation opportunities. * Per District Policy No. 7.2 - Reserve Funds Policy * Per District Policy No. 7.2 - Reserve Funds Policy 20 40 60 80 100 120 140 160 FY 2019-20 FY 2020-21 FY 2021-22 Da y s o f O p e r a t i o n District-Wide Days of Operations * Target Level Minimun* Target Level Maximum 120 90 $2M $4M $6M $8M $10M $12M $14M Restricted for Future Capital Expansion Project at YE Capital Replacement Fund Target Balance FY 2019-20 FY 2020-21 FY 2021-22 10 FY 2023-24 BUDGET | 32 Miles of Sewer Cleaned The chart provides an overview of the number of miles of sewer lines cleaned over the last three fiscal years. The District aims to clean at least 50% of the system per fiscal year with the U.S. EPA setting a target of 30%. Main Leaks The chart displays the total number of main line leaks per 100 miles of water mains, over the past three fiscal years. The data includes AWWA’s 2022 benchmark information to compare water systems across the United States. * 230 Miles of Sewer Line in the District; Goal is to Do Close to Half per Fiscal Year 10% 20% 30% 40% 50% 60% 70% 80% 90% Pe r c e n t C l e a n e d % of System Cleaned per YearActual U.S. EPA % of System Cleaned per YearTarget FY 2019-20 FY 2020-21 FY 2021-22 30% FY 2019-20 FY 2020-21 FY 2021-22 5 10 15 20 25 30 Ma i n L e a k s P e r 1 0 0 M i l e s Leaks per 100 Miles of Pipe AWWA 2021 Combined UtilitiesWater Operations Leaks per 100mi. of PipeTarget 8.1 EAST VALLEY WATER DISTRICT | 33 [INDUSTRY BENCHMARKS] Water Affordability The chart presents the affordability of the District’s water by comparing it to the U.S. EPA 2.5% threshold, over the past three fiscal years. Staffing Levels The graph highlights the staffing levels of the District over the past three fiscal years in comparison to neighboring water districts. The data is presented in relation to the total number of accounts per employee, offering insights into the efficiency and workload distribution of the District’s workforce relative to its counterparts. % of Median Household Income (MHI) is utilized by U.S. EPA (at 2.5% threshold) for Assessing Affordability 0.50% 1.00% 1.50% 2.00% 2.50% Pe r c e n t a g e o f Ho u s e h o l d I n c o m e Water Service Aordability (% of MHI) U.S. EPA (% of MHI) Target FY 2019-20 FY 2020-21 FY 2021-22 2.50% 50 100 150 200 250 300 Ac c o u n t s P e r E m p l o y e e Customer Accounts per Employee Neighboring Agencies Average Accounts per Employee FY 2019-20 FY 2020-21 FY 2021-22 212 FY 2023-24 BUDGET | 34 Wait Time The chart illustrates the call wait time experienced by District customers when contacting customer service representatives, covering the past three fiscal years. It also includes a comparison with other utilities using the 2021 AWWA benchmarking data, offering insights into the District’s performance in terms of customer service responsiveness in relation to industry standards. 10 20 30 40 50 60 70 80 Av e r a g e Q u e u e T i m e Avg Queue Time AWWA 2022 Combined UtilitiesWait Time Target FY 2019-20 FY 2020-21 FY 2021-22 78 EAST VALLEY WATER DISTRICT | 35 FINANCIAL SUMMARYfy 2023-24 FI N A N C I A L S U M M A R Y T h e A n n u a l B u d g e t E A S T V A L L E Y W A T E R D I S T R I C T The annual budget is an opportunity to establish priorities for the fiscal year, identify means to evaluate results, and ensure that the planned operations and capital projects responsibly use District resources. FY 2023-24 BUDGET | 36 • Financial Policies • Budget Process • Current & Proposed Budget Cycle Calendar • Basis of Budgeting • Fund Structure • Fund/Program Relationship • Budget Summary • Revenue Summary • Expenditure Summary • Debt Overview • Net Position/Fund Equity • Long-Range Financial Plan Financial Summary Contents EAST VALLEY WATER DISTRICT | 37 FINANCIAL POLICIES The East Valley Water District financial management policies provide a basic framework for the overall fiscal management of the District. The policies represent a foundation for addressing changing circumstances and conditions, and assist in the decision- making process. Financial policies represent guidelines for evaluating both current activities and proposals for future programs. They also reflect long-standing principles and practices, which have enabled the District to maintain its financial stability. Policies are reviewed annually to ensure the guidelines represent a realistic, current framework for policy decisions. Operating and Capital Budget Policy PURPOSE AND SCOPE The purpose of this policy is to provide guidelines to assist in the formulation and consideration of a comprehensive annual budget, one of the most important financial activities the District undertakes each year. Those guidelines include a Strategic Plan and Capital improvement Plan (CIP), which assist in completing financial planning cycles that deliver efficient and effective public services. This policy applies to all funds under the budgetary and fiscal control of the Governing Board. BALANCED BUDGET The District will adopt a balanced budget for each fund this policy covers, where the sum of estimated revenues and use of reserves is equal to or greater than current expenditures. Expenditures will include operating expenses, debt service, and the Budget’s contribution to the CIP. Short-term operating deficits will be mitigated either by raising rates and fees or cutting costs. The use of one-time revenues and development fees for the funding of operating costs is not permitted, and reserves may only be used for the purpose for which they were intended in accordance with the District’s Designated Funds Policy. The budget development process is outlined on pages 46-48. Investment Policy PURPOSE AND SCOPE The purpose of this policy is to establish guidelines for the prudent investment of District funds in conformance with California Government Code (CGC) requirements. The policy applies to all funds under direct authority of the District, which does not include funds held in trust for the District’s retirement plans and post-employment health benefits. FY 2023-24 BUDGET | 38 OBJECTIVES CGC §53600.5 states that, when investing and managing public funds, the primary objectives, in priority order, of the District’s investment activities shall be: • Safety — Safety of principal is foremost, therefore, investments shall be undertaken in a manner that seeks to preserve capital, while mitigating risks such as interest rate risk and credit risk. • Liquidity — The investment portfolio shall remain sufficiently liquid to enable the District to meet all operating requirements that can reasonably be anticipated. • Return on Investment — The investment portfolio shall be designed for attaining the best yield while keeping in mind that return is secondary to the objectives of safety and liquidity. DELEGATION OF AUTHORITY The authority of the District’s Governing Board to invest District funds is derived from CGC § 53601. CGC § 53607, allowing the Governing Board to delegate that authority to a Treasurer. The District’s Chief Financial Officer has historically been selected to serve as this delegated authority. This delegation expires and may be renewed annually, by Board resolution, in conjunction with the annual review of the investment policy. AUTHORIZED INVESTMENTS The District is empowered by CGC §53600 et. seq. to invest in certain types of investments. The District policy is more restrictive than the CGC regarding allowable investments due to the size of the District’s investment portfolio and limited staff resources available to manage invested funds. SAFEKEEPING AND INTERNAL CONTROL To protect against potential losses caused by the collapse of a security dealer, all book-entry securities are kept in safekeeping by a third-party bank trust department, acting as agent for the District under the terms of a custody agreement. Internal controls have been established to help ensure assets are protected from loss, theft or misuse. Controls include separation of transaction authority from record-accounting, and confirmation of telephone transactions for investments and wire transfers. REPORTING In accordance with CGC §53646, the Chief Financial Officer will prepare, and render to the Governing Board, a quarterly investment report within 30 days of the end of each quarter. The report shall list types of investments, maturity, par and market values of each investment, transactions occurring during the quarter, and identification of funds managed by a third-party. Reserve Policy PURPOSE The District recognizes that fiscal responsibility requires anticipating, and preparing for, unforeseen events, in addition to ensuring sufficient funding is available for current operating, capital, and debt service needs. To that end, the District has adopted a Designated Funds (Reserve) Policy as part of prudent financial planning and to ensure sufficient funding for current and future needs. GENERAL PROVISIONS The following provisions and principles are established for building and utilizing reserve funds: Interest: Interest income will be credited to reserve funds until maximum target levels have been reached. Once a fund reaches the established maximum, interest will be allocated to other funds. Funding Priority: Fund balances are reviewed annually to determine whether maximum target levels have been reached. Operating reserves will be funded first. When Operating reserves are at their target levels, Capital reserves will be funded. The Governing Board will determine how excess monies will be allocated after reserves are at their maximum levels. Pay Go Versus Debt: For funding of capital acquisitions and improvements, the District will analyze the use of reserves and/or issuing debt to determine the optimal funding strategy. Current and future liquidity positions will also be considered. TYPES OF RESERVES The District has established and will strive to maintain the following funds. OPERATING RESERVE FUND The Operating Reserve is used for unanticipated operating expenses. This fund is designated by the Governing Board to maintain working capital for current operations and to meet routine cash flow needs. 1. Target Level – Funding shall be targeted at a minimum amount equal to 90 days of the District’s budgeted total operating expenses, and the maximum amount shall not exceed 120 days of the budgeted total operating expenses. 2. Events or Conditions Prompting the Use of the Fund – Upon Governing Board authorization, this fund may be routinely utilized by staff to cover temporary cash flow deficiencies caused by timing differences between revenue and expenses and extraordinary decreases in revenues and unexpected increases in expenses. 3. Periodic Review Dates for Balances – Fund balances and target level will be reviewed by staff and the Governing Board during the preparation and approval of the annual budget. EAST VALLEY WATER DISTRICT | 39 [FINANCIAL SUMMARY] Operating Reserve Fund CapitalReplacementReserve Restricted Reserve (Includes debt proceeds, customer deposits and developer fees.) FY 2023-24 BUDGET | 40 CAPITAL REPLACEMENT RESERVE All Funds will maintain a reserve for the replacement of capitalized assets when they reach the end of their useful lives. The source of reserves will be user fee revenue from the respective fund. 1. Target Level – The minimum target level should be equal to one year of depreciation as determined by depreciation recorded for the previous fiscal year. The maximum balance shall not exceed the projected needs for five years according to the District’s Capital Improvement Plan. 2. Events or Conditions Prompting the Use of the Fund – Staff will recommend assets to be replaced during the Capital Improvement Plan/Capital Budget presentation. As projects are approved, funds will be appropriated from undesignated funds or available revenues. 3. Periodic Review Dates for Balances – Fund balances and projected improvement projects will be reviewed by staff and the Governing Board during the preparation and approval of the annual budget. RESTRICTED RESERVE Restricted reserves shall be segregated and limited in use to specific and designated purposes as defined by law or adopted ordinance, contractual agreement, or as a condition or covenant of borrowing. 1. Bond Proceeds – Typically consist of construction fund monies, and a debt service reserve. a. Target Level – The debt service reserve requirement, if applicable, is established at the time of issue. b. Events or Conditions Prompting the Use of the Fund – Construction fund monies must be spent on applicable projects, while the debt service reserve can only be used in the event of a shortfall of pledged revenues. 2. Development Fees – Consists of capacity fees paid by developers to buy into the infrastructure system paid for by the investment of existing customers. a. Target Level – Capacity fees are collected to pay for facility additions or improvements to support demands on the system by new delopment. b. Events or Conditions Prompting the Use of the Fund – Capacity fees may be used for Capital Improvement Projects necessitated wholly, or in part, by new development. Debt Policy The purpose of this policy is to establish guidelines for the issuance and management of District Debt, and to provide guidance for decision makers with respect to options available for financing infrastructure, and other capital projects, so that the most prudent, equitable, and cost effective financing can be chosen. STANDARDS FOR USE OF DEBT FINANCING When appropriate, the District will use long-term financing to: • Achieve an equitable allocation of capital costs/charges between current and future system users; • Provide more manageable rates in the near and medium term; and • Maintain minimum rate volatility. The District will not construct or acquire a facility if it is unable to adequately provide for the subsequent annual operation and maintenance costs of the facility throughout its expected life. In addition, capital projects financed through debt will not be financed for a term longer than the expected useful life of the project. METHODS OF FINANCING The Finance Program will investigate all possible project financing alternatives including, but not limited to: annual operating revenue, reserves, bonds, loans, and grants. When applicable, development fees will be used to pay for increased capital costs resulting from new development. The District may legally issue short and long-term financing using the following debt instruments: COMPLIANCE The use of bond proceeds must be monitored to ensure compliance with all Internal Revenue Code arbitrage rebate requirements, and requirement under California Government Code §8855. The District is also responsible for verifying compliance with all undertakings, covenants, and agreements of each debt issue, typically including: • Annual appropriations of revenue to meet debt service payments; • Timely transfer of debt service payments to the Trustee; • Compliance with insurance requirements; and • Compliance with rate covenants. GOVERNING BOARD DISCRETION This policy is intended to serve as a guide and in no way restricts the ability of the District Governing Board to review proposed rate actions, debt issuances, or other actions of substance to the District. EAST VALLEY WATER DISTRICT | 41 Inter-Fund Borrowing Safety of principal is foremost, therefore, investments shall be undertaken in a manner that seeks to preserve capital while mitigating risks such as interest rate risk and credit risk. Lines of Credit May be considered as short-term borrowing. The Chief Financial Officer shall determine when it is prudent to recommend that the District enter into an agreement with a commercial bank or other financial institution for the purpose of acquiring a line or letter of credit. Capital Lease Debt May be used for equipment purchases where cost exceeds $50,000 and financing terms are cost effective. State Revolving Fund (SRF) Loans Based on availability, loans are low or zero interest for water and wastewater infrastructure projects with a term of 20 to 30 years. Joint Powers Agency Revenue Bonds Financing may be obtained through the issuance of debt under a joint exercise of powers agreement with such debt payable from amounts paid by the District under a lease, installment sale agreement, or contract of indebtedness. Refunding Revenue Bonds The District may issue refunding revenue bonds to refund District indebtedness pursuant to the State of California local agency refunding revenue bond law (Title 5 of the California Government Code). [FINANCIAL SUMMARY] FY 2023-24 BUDGET | 42 BUDGET PROCESS The Budget reflects direction from the Governing Board as established by the District Vision and communicated to District staff through various meetings and workshops. The purpose of this budget document is to communicate the District’s financial priorities with citizens, local businesses, creditors, rating agencies, local agencies, stakeholders, and District staff. The FY 2023-24 Budget represents guidelines established to address the District’s short-term and long-term goals and objectives. This document also demonstrates the District’s ability to use financial resources for completing critical capital projects for current and future customers as well as the District’s commitment to meet its financial obligations. Staff is confident that the financial framework outlined in the FY 2023-24 Budget will allow the District to deliver reliable, high-quality water, wastewater collection, and water reclamation services to its customers in a prudent and sustainable manner. Each year, administrative and operational program managers establish Goals and Objectives in support of the District’s Five-Year Work Plan which, upon adoption by the Governing Board, provide clear direction to staff regarding District priorities. Progress toward accomplishing established goals is measured throughout the fiscal year and reported to the Governing Board. Moreover, in developing the budget, staff utilized the District Vision for prioritizing District resources for operational and capital activities. Stakeholder Input The District has established a Community Advisory Commission (CAC) which meets regularly at publicly noticed meetings and Governing Board workshops, to discuss significant activities of the District, including development of the goals and objectives and Five-Year Work Plan. Members of the CAC are community leaders who donate their time to provide input to staff on agenda items. District Vision To help ensure consistent purpose, the District has adopted a comprehensive statement that serves as a guide for the decision making process throughout the organization. This element of the Strategic Plan remains consistent year-to- year. The District Vision includes the District’s Vision statement, Core Values, and Agency Goals and Objectives. District Vision Five-YearWork Plan DevelopProgram Goalsand Objectives Adopt Budget Monitor Programs andAdjust asNecessary Establish KeyPerformance Indicators and Estimate Costs Five-Year Work Plan The District has adopted a Five-Year Work Plan identifying a series of long-term objectives that link management and staff work efforts to the District’s Strategic Plan. Objectives in the Five-Year Work Plan have estimated completion dates ranging from 3 to 20 years and present the core work efforts to which District financial and human resources will be dedicated. The Five-Year Work Plan will be revised annually to reflect progress made on complex objectives, status of long-range or cyclical planning measures, and external considerations that require a significant response or operational adjustment. The Five-Year Work Plan was presented to the Governing Board in February, then adopted as Program Goals in relevant Programs and Capital Budgets. Develop Program Goals and Objectives Each program manager is tasked with developing achievable and measurable goals and objectives to be implemented in a single fiscal year. This endeavor clearly identifies the planned efforts of the program for the given period, links the program’s efforts to the Five-Year Work Plan when possible, and allows program employees to propose/establish individual goals that support the District’s long-term goals and vision. Program Goals and Objectives were presented by program managers to the Governing Board and public at a public workshop in April 2023. Establish Key Performance Indicators and Estimate Costs To assess the organization’s productivity and effectiveness, unique key performance indicators were utilized as a quantitative measure. Cost estimates reflect the anticipated expenses for accomplishing each program’s day-to-day operational tasks, special projects and overall Program Goals. Once this effort has been completed, expenses can be compared to revenue projections. In situations where expenses are projected to exceed revenues, staff works collaboratively to reevaluate activities to fit within available funding. Adopt Budget The final budget document is assembled, including projected revenues, expenditures, and funding of all Goals and Objectives proposed by Program Managers if possible. The document is presented to the District Governing Board at the first regular meeting in June for discussion. Barring any revisions or corrections, the budget is agendized at the second Board meeting in June for adoption. A hard copy version of the final budget document is available to the public on request or can be viewed in its entirety digitally on the District website. Program Monitoring and Budget Adjustments In January of each year, District management meets to analyze revenues and spending to determine whether realized revenue has exceeded revenue projections to the extent that additional program services or capital projects can be proposed, and to determine whether transfers between budget line items are necessary to ensure that budget limitations are not exceeded. Requests for budget adjustments are submitted by Program Managers to Executive Management for review, who then forward the requested adjustments to Finance for incorporation into proposed budget amendments to be presented to the Governing Board at a Mid-Year Budget Review in February. EAST VALLEY WATER DISTRICT | 43 Scan this QR code to view a copy of the 2023-24 Five-Year Work Plan. [FINANCIAL SUMMARY] FY 2023-24 BUDGET | 44 When possible, adjustments have no net effect on the original budget balance unless additional revenue is available. However, if revenue shortfalls or unanticipated costs are realized, and transfers between line items cannot meet the projected deficit, a recommendation to defer capital projects or draw on reserves is usually required to meet the shortfall. All proposed changes are presented to the Governing Board at a Mid-Year Budget Review. Budget Cycle Calendar June 28, 2023 FY 2023-24 Budget Adoption November 8, 2023 First Quarter FY 2023-24 Budget Review at Public Board Meeting January 25, 2024 Budget Meeting to Distribute FY 2024-25 Worksheets to Program Managers February 14, 2024 FY 2023-24 Mid-Year Budget Review at Public Board Meeting February 26 - March 15, 2024 Discuss FY 2024-25 Goals & Objectives with Program Managers March 5 & 12, 2024 FY 2024-25 Capital Outlay and Capital Improvement Program Planning Meeting March 28, 2024 FY 2024-25 New Position Requests, Program Goals & Objectives and Budget Requests, Capital Outlay, and CIP Requests April 10, 2024 FY 2024-25 Proposed Goals and Objectives Workshop at Public Board Meeting April 22-25, 2024 FY 2024-25 Budget Review with Executive Managers and General Manager/CEO April 24, 2024 FY 2024-25 Revenue Projection Workshop at Public Board Meeting May 28, 2024 CAC FY 2024-25 Budget Review May 31, 2024 FY 2024-25 Budget Complete with all Revisions June 12, 2024 FY 2024-25 Budget Presentation at Public Board Meeting June 26, 2024 FY 2024-25 Budget Adoption at Public Board Meeting BASIS OF BUDGETING The District’s financial records are kept in accordance with Generally Accepted Accounting Principles (GAAP) for governmental enterprise funds, which are business-type funds used to report an activity for which a fee is charged to external users for goods or services. Therefore, the District follows the GAAP requirement that enterprise funds use the full accrual basis of accounting. However, there are exceptions where the accrual basis is not conducive to effective presentation of the District’s budget because it does not allow discrete presentation of some significant uses of current financial resources. In these cases, GAAP is not followed, and instead those uses of current resources are shown as expenditures rather than as a reduction to a previously recorded liability, or a capitalized cost. Exceptions to GAAP used for the District’s budget presentation are as follows: • Compensated absence expense reflects the change in related accrued liabilities during the accounting period on the GAAP basis, but for budget purposes expense includes anticipated leave time to be used and/or cashed by employees during the fiscal year. • Principal payments on Long-Term Debt are applied to reduce the outstanding liability on a GAAP basis; shown as a current expenditure on a Budget basis. • Capital Outlay and Construction costs are capitalized and expensed over the useful life of the asset on a GAAP basis; shown as a current expenditure on a Budget basis. • Depreciation is recorded annually to expense the cost of a capital asset over its useful life on a GAAP basis but is not contemplated on the Budget basis. • Pension expense is budgeted based on employer contribution rates assigned by the California Public Employee’s Retirement System (CalPERS). For financial statement reporting, pension expense is recorded based on the change to the net pension liability in accordance with Governmental Accounting Standards Board Statement No. 68. • Other Post Employment Benefits (OPEB) expense (retiree health insurance) is budgeted based on stipulated reimbursements to retirees toward the cost of health insurance until they reach medicare age. For financial statement reporting, OPEB expense is recorded based on the change to net OPEB liability in accordance with Governmental Accounting Standards Board Statement No. 75. • Interest payments related to financing of the cost of a capital asset during construction are capitalized on the GAAP basis; shown as a current expenditure on a Budget basis. EAST VALLEY WATER DISTRICT | 45 The District follows the GAAP requirement that enterprise funds use the full accrual basis of accounting. [FINANCIAL SUMMARY] FY 2023-24 BUDGET | 46 FUND STRUCTURE GAAP requires that the District, a California Special District, account for its activities as a single, governmental Enterprise Fund. The activities of enterprise funds closely resemble those of ongoing businesses, in that rates and fees charged for services are intended to cover the cost of operations and capital needs. Though it is a single Enterprise Fund, the District engages in three separate and distinct business-type activities including the distributions of potable water, the collection of wastewater, and the reclamation and recycling of wastewater. Accordingly, the District’s budget is organized based on these activities, or sub-funds, hereafter referred to as the Water Fund, Wastewater Fund, and the Water Reclamation Fund. The Water Fund accounts for the costs of acquiring raw water, treating the water, and then pumping and distributing the treated water to District customers. The Wastewater Fund accounts for the cost of maintaining a system of pipelines responsible for collecting wastewater from residential and commercial customers and delivering the wastewater to the treatment facility. The Water Reclamation Fund treats wastewater to standards of Title 22 of the California Code of Regulations and conveys recycled water for groundwater replenishment. Currently, wastewater flows are collected by a large interceptor line and sent to the SBMWD Treatment Plant where the wastewater is treated and released into the Santa Ana River. However, beginning in FY 2023-24, the District will begin operating its own reclamation facility known as the Sterling Natural Resource Center. Recycled water will be sent to the Weaver Basins, owned by the San Bernardino Valley Municipal Water District, for recharge into the Bunker Hill Basin. RAW WATER SOURCES WATER PRODUCTION PLANTS DISTRIBUTION & STORAGE COLLECTION & CONVEYANCE WATER FUND WATER RECLAMATION WASTEWATER FUND RECYCLED WATER DISCHARGE CITY OF SAN BERNARDINO SEWER TREATMENT AND WATER RECLAMATION FACILITIES Future Present COLLECTION & CONVEYANCEWASTEWATER TREATMENT STERLING NATURAL RESOURCE CENTER CITY OF SAN BERNARDINO CUSTOMER USE OFF ON RECYCLED WATER RECHARGE SNRC FY 202324 Each of the Funds’ operations rely on a significant amount of planning and infrastructure. Accordingly, each fund contributes to the maintenance, replacement, and improvement of that infrastructure. When the issuance of debt is appropriate to fund major capital projects, each fund has the authority to issue debt. To support these costs, each fund adopts its own user rates, fees and charges, and has its own self-balancing set of accounts. Budgets for each fund are adopted to support the associated capital, and debt service costs, to make reasonable contributions to reserves, and to pay for direct, and allocated, operating and maintenance program expenses. Flow of Funds Additional details about the activities and budgets of each fund are included at the Water Fund, Wastewater Fund, and Water Reclamation Fund tabs in this document. EAST VALLEY WATER DISTRICT | 47 Water Sales System Charges Water Fund Wastewater Fund Investment/Other Income Water Operations, Capital Expendituresand Debt Service Collection Charges Investment/Other Income Investment/Other Income WastewaterTreatment Charges City of San BernardinoWastewaterTreatment Expense Wastewater Operations,Capital Expendituresand Debt Service SharedAdministrationPrograms Reclamation Operations,Capital Expendituresand Debt Service Reclamation Fund [FINANCIAL SUMMARY] FY 2023-24 BUDGET | 48 FUND/PROGRAM RELATIONSHIP District operating and maintenance expenses are all budgeted and accounted for by Program. Expenses incurred by Program are then allocated to the water, wastewater and water reclamation funds based on the assessed benefit of Program services to each fund. The benefit assessment entails the evaluation of each program and the services provided through activity based costing. Programs with activities fully aligned with the purpose of one fund or the other, are charged fully to the appropriate fund, while programs with general and administrative type functions are allocated proportionally. In the upcoming year, all funds will share in the cost of facilities maintenance functions, while the remaining centralized function costs (Administration, Engineering, etc.) are allocated between the Water and Wastewater funds, usually by a 70% - 30% split. The Water Reclamation fund will also share in the future costs of these functions once fund reserves have been established and operating costs for the Water Reclamation Fund are better known and predictable. The percentage allocation can be adjusted for unique circumstances. For example, with the implementation of water budget-based rates, allocated costs for Customer Service were shifted from the Wastewater Fund to the Water Fund due to the increased cost of administering the new rates. Below is a table illustrating the Fund/Program relationship for FY 2023-24: Program Water Fund Wastewater Fund Reclamation Fund Total 1000 Governing Board $ 254,800 $ 109,200 $ - $ 364,000 2000 General Administration 959,000 411,000 - 1,370,000 2100 Human Resources 1,702,400 564,600 590,000 2,857,000 2200 Public Affairs 904,400 387,600 - 1,292,000 2300 Conservation 689,000 - - 689,000 3000 Finance & Accounting 940,800 403,200 - 1,344,000 3200 Information Technology 1,205,400 516,600 - 1,722,000 3300 Customer Service 1,304,100 558,900 - 1,863,000 3400 Meter Services 292,000 - - 292,000 4000 Engineering 999,600 428,400 - 1,428,000 5000 Water Production Administration 620,000 - - 620,000 5000-51 Wells 3,918,000 - - 3,918,000 5000-52 Boosters 1,026,000 - - 1,026,000 5000-54 Reservoirs 428,000 - - 428,000 5100 Water Treatment 1,082,000 - - 1,082,000 5200 Water Quality 546,000 - - 546,000 6000 Maintenance Administration 418,500 46,500 - 465,000 6100 Water Maintenance 2,826,000 - - 2,826,000 6200 Wastewater Collection - 867,000 - 867,000 6300 Water Reclamation - - 9,896,000 9,896,000 7000 Facilities Maintenance 1,011,000 405,000 607,000 2,023,000 7100 Fleet Maintenance 608,000 152,000 - 760,000 TOTAL OPERATING EXPENSES $ 21,735,000 $ 4,850,000 $ 11,093,000 $ 37,678,000 BUDGET SUMMARY The budget for FY 2023-24 is balanced and reflects East Valley Water District’s commitment to allocating anticipated resources to meeting the expectations of District ratepayers, creditors, and stakeholders. The District projects that it will receive $47,424,000 in revenue during FY 2023-24 and has developed a budget plan to allocate $37,678,000 toward funding of program operations, $3,376,000 toward the amortization of outstanding debt, and $4,890,000 toward capital asset improvement and replacement. In addition, a $1,480,000 transfer to Reserves will help build a reserve required by funding agreements with the State Water Resource Control Board. The table below presents a summary of revenue by type, and expenditures by cost category, and is followed by a discussion of revenue and expenditures. EAST VALLEY WATER DISTRICT | 49 Water Fund Wastewater Fund Reclamation Fund FY 2023-24 Total REVENUE / SOURCES Water Sales $ 18,345,000 $ - $ - $ 18,345,000 Meter Charges 9,996,000 - - 9,996,000 Penalties 450,000 60,000 - 510,000 Wastewater System Charges - 5,968,000 - 5,968,000 Wastewater Treatment Charges - - 10,279,000 10,279,000 Other Operating Revenue 42,000 - 1,944,000 1,294,000 Miscellaneous Revenue 220,000 20,000 100,000 340,000 Gain on Disposal of Assets - - - - TOTAL REVENUE / SOURCES $ 29,053,000 $ 6,048,000 $ 12,323,000 $ 47,424,000 OPERATING EXPENSES Employment Expenses $ 9,227,500 $ 2,544,700 $ 1,581,800 $ 13,354,000 Water Costs 768,000 - - 768,000 Contracted Treatment Costs --3,700,000 3,700,000 Power Costs 3,165,000 - 2,000,000 5,165,000 Materials & Supplies 1,331,500 133,100 751,400 2,216,000 Contract Services 6,827,800 2,066,400 3,038,800 11,933,000 Other Operating Expenses 415,200 105,800 21,000 542,000 TOTAL OPERATING EXPENSES $ 21,735,000 $ 4,850,000 $ 11,093,000 $ 37,678,000 OTHER EXPENSES Debt Principal $ 2,217,000 $ 175,000 $ - $ 2,392,000 Debt Interest Expense 886,000 98,000 - 984,000 Other Non-Operating Expense - - - - Capital Outlay 695,000 260,000 210,000 1,165,000 Capital Improvement Program 3,425,000 300,000 - 3,725,000 Transfer to (from) Reserves 95,000 365,000 1,020,000 1,480,000 TOTAL OTHER EXPENSES $ 7,318,000 $ 1,198,000 $ 1,230,000 $ 9,746,000 TOTAL OPERATING/ OTHER EXPENSES $ 29,053,000 $ 6,048,000 $ 12,323,000 $ 47,424,000 NET SURPLUS (DEFICIT) $ - $ - $ - $ - [FINANCIAL SUMMARY] FY 2023-24 BUDGET | 50 REVENUE SUMMARY Revenue projections are key to determining the extent of financial resources available to support District programs and other obligations. Therefore, projections are developed early in the budget process and then presented to the District’s Governing Board in May. East Valley Water District receives 94% of its revenue from user rates and fees; the District receives no increment from property or sales taxes. Utility rates and miscellaneous charges are reviewed on three to five year cycles and adjusted as necessary to cover the costs of providing services to ratepayers. The District derives its authority for setting rates from California Water Code §31000 and rate adjustments are adopted at public hearings conducted in accordance with requirements established by California Propositions 26 and/or 218. User fees, which is the term used to refer to SNRC Non-Rate Revenue, are negotiated with third-party contractors. The District has six revenue categories based on established rates, fees and charges. The six categories and the fund which recognizes the revenue, are: Revenue History and Forecast (In Millions) 1 Water Sales Water Fund 2 Meter Charges Water Fund 3 Wastewater Collection Wastewater Fund 4 Wastewater Treatment Reclamation Fund 5 SNRC Non-Rate Revenue Reclamation Fund 6 Other Charges All Funds fy 2023-24projectedrevenue 39 % WaterSales 2% Other Charges21%MeterCharges 4% SNRC Non-RateRevenue 22% WastewaterTreatment 12% WastewaterReclamation FY 2020-21 Actual FY 2021-22 Actual FY 2022-23 Estimated FY 2023-24 Projected FY 2024-25Projected FY 2025-26Projected Reclamation RevenueWastewater RevenueWater Revenue $28.5 $27.7 $27.7 $28.3 $29.2 $30.0 $4.7 $4.8 $5.6 $6.0 $6.3 $6.5 $8.5 $9.8 $10.0 $12.2 $14.5 $15.0 $5M $10M $15M $20M $25M $30M Forecasting revenue projections requires consideration of external factors that could impact the demand for water services. Elements factored into the FY 2023-24 forecasts included potential drought declaration, construction activity within the service area, and the opening of the Sterling Natural Resource Center. In addition, water and wastewater rate revenues are highly reliant on new development and rate increases for sustained growth. Water sales are also reliant on consumer demand, which increases, or decreases based on weather, water rates, and drought conditions. Since 2015, two multi-year droughts have forced the District, and like agencies, to promote conservation and reduce water usage as part of a State-wide effort. However, an unusually wet winter and record snowpack in 2023 has refilled state reservoirs allowed the State Water Project to announce that they can deliver 100% allocation of requested water supplies from state water contracting agencies. In addition, the California Governor issued Executive Order N-5-23 rolling back drought emergency provisions and allowing the District to move from level 2 to level 1 of the District Water Shortage Contingency Plan, which only obligates the District to conduct outreach and education about efficient water use. Construction within the region has been picking up over the last three years. Multiple moderate sized developments of between 200 and 300 units have requested District assistance with the formation of Community Facilities Districts (CFD), and one of the CFDs has new homes under construction, which contributed to the increase of 101 new dwelling units during FY 2023-24. However, rising interest rates could slow market absorption of new homes and in turn, slow new development plans. The most significant factor affecting District revenue in FY 2023-24 will be the opening of the SNRC Water Reclamation facility. With this plant online, the District will no longer send wastewater to the SBMWD for treatment but will treat and recycle wastewater for groundwater recharge. Anaerobic digesters at the SNRC will also allow the District to produce energy from wastewater sludge and other high grade food waste accepted from third-party haulers. As a result, new revenue sources associated with the SNRC include: • Payment from the Valley District Local Resource Investment Program for recycled water used for recharge; • Tipping fees from liquid waste haulers; and • Energy produced by digesters will offset the facility’s power operating costs. There is a potential to sell excess power produced by the digesters to the Southern California Edison (SCE) power grid. A more detailed description of the District’s major revenue sources, and related trends, is provided in the following sections, including a discussion of new revenue streams under Other SNRC Income. In addition, the Water Fund, Wastewater Fund, and Water Reclamation Fund sections of this document include a detailed discussion of the rates used to calculate FY 2023-24 revenue projections. WATER SALES The District produces potable water for sale to four customer classes: single-family residential, multi-family residential, commercial and irrigation. All customers are billed on a monthly cycle based on their amount of water usage, which is metered and measured in hundred cubic feet (HCF) where 1 HCF is equal to 748 gallons. The District bills for water consumption in three ascending ‘Water Budget’ rate tiers. Therefore, as customer water usage exceeds established tier widths or thresholds, water becomes more expensive. Water Budget tiers are unique in that tier width, or the number of units (HCF) billed at each tier, is determined based on the individual customer’s characteristics. For single and multi-family customers, the Tier 1 width is determined based on the number of occupants in a dwelling and is intended to allocate the customer with sufficient water for indoor health and safety needs. Tier 2 width is based on a customer’s landscaped square footage, and the measured evapotranspiration, or the rate at which plants and soil lose moisture during the month being billed. The Tier 2 budget is intended to allocate sufficient water for efficient irrigation of the landscaped square footage. Tier 3 is billed for water use in excess of the Tier 1 and 2 budgets and is deemed to be inefficient use. EAST VALLEY WATER DISTRICT | 51 [FINANCIAL SUMMARY] FY 2023-24 BUDGET | 52 Irrigation customers receive only a Tier 2 budget as described above, with usage in excess of the budget billed at the Tier 3 rate. Finally, commercial customers, having neither occupants or landscaped area associated with their domestic meter, receive Tier 1 and 2 water budgets based on the business’ historical water usage, with excess usage billed at the Tier 3 rate. The table below summarizes water sales volume (HCF) by billing tier for the last three years, and also includes conservative projections for FY 2023-24. CUSTOMER CONSUMPTION IN HUNDRED CUBIC FEET Water consumption during FY 2023-24 is expected to remain the same as FY 2022-23. Although the rate adjustment mentioned above has one remaining phase, taking effect on January 1, 2024, between evolving State guidelines that will require water agencies, such as East Valley Water District, to enforce stricter water conservation measures and the rate adjustments, we anticipate consumption to remain similar to prior year. Based on the projection of water sales in volume, and the tier rates that will be effective throughout the year, the District has projected water sales of $18.35 million for FY 2023-24. The graph below shows water sales trends for four years and the current year projection. Additional information about water rates is available in the Water Fund section of this document. WATER SALES TRENDS FY 2020-21 Actual FY 2021-22 Actual FY 2022-23 Estimated FY 2023-24 Budget Tier 1 $ 3,696,721 $ 3,578,209 $ 3,522,058 $ 3,671,000 Tier 2 2,659,770 2,672,552 2,212,894 2,342,000 Tier 3 1,237,088 1,258,585 1,163,158 1,108,000 TOTAL $ 7,593,579 $ 7,509,346 $ 6,898,110 $ 7,121,000 $16,902,370 $19,305,631 $18,472,875 $17,600,000 $18,345,000 $2M $6M $10M $14M $18M FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 Estimated FY 2023-24 Budget Tier 1 Tier 2 Tier 3 EAST VALLEY WATER DISTRICT | 53 Water System Charges Also referred to as Meter Charges, water system charge rate revenue consists of a fixed monthly rate assessed to customers based on the size of the meter serving their property. The District sets its meter charge rates to generate between 35% and 40% of annual water operating revenue. In doing so, the District is able to shift some of the burden for revenue stability from unpredictable water sales, such as during times of severe drought and water restrictions, to a more reliable fixed charge. Meter charges were included in a Cost of Service Analysis and Rate Study completed in January 2021. Adjustments proposed by the January study were adopted by the District in May 2021 and the second of three adjustments became effective in January of 2023. The remaining adjustment becomes effective in January of 2024. Revenues have been slightly impacted by development activity in the last two years as there have been approximately 120 new residential connections added to the District system. Development could potentially add 50 new residential customers consistently over the next ten years, but those new customers have not been counted and factored into projections. Only rate adjustments scheduled for January 2024 have been included in Meter Charge projections which are $9,996,000 for FY 2023-24. METER CHARGES Wastewater Collection (System) Charges Wastewater Collection charges are assessed to District customers to fund the maintenance and replacement of wastewater collection pipelines, make wastewater debt service payments, and fund program services associated with the Wastewater Fund. Wastewater collection rates were included in the Cost of Service Analysis and Rate Study completed in January 2021, and then were adopted at a public hearing in May 2021. The study proposed a change in how multi-family residential accounts are billed, changing from a method based predominantly on water usage of the master account, to a fixed charge per dwelling unit. This change brings billing for multi-family residential accounts into alignment with the methodology in place for single-family residential accounts. For District wastewater services, there are currently 19,325 single-family units and 10,654 multi-family units, and these unit counts multiplied by the fixed charges were used to project revenue. There are 620 commercial accounts that will continue to be billed a monthly flat rate plus a volumetric charge based on water usage (measured in HCF). The volumetric rate varies according to the strength of the wastewater a customer type typically discharges into the collection system. [FINANCIAL SUMMARY] $9,023,267 $9,217,003 $9,192,297 $9,766,193 $9,996,000 $8.6M $8.8M $9M $9.2M $9.4M $9.6M $9.8M $10M FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 Estimated FY 2023-24 Budget FY 2023-24 BUDGET | 54 Phase two of adopted collection charge adjustments was implemented in January 2023 and will be followed by an adjustment in 2024. Projected wastewater collection revenue for FY 2023-24 is $5,968,000. A more thorough discussion of the calculation of projected wastewater collection revenue can be found in the Wastewater Fund section of this document. WASTEWATER COLLECTION CHARGES Wastewater Treatment Revenue Wastewater generated by District customers is currently delivered to and treated by SBMWD facilities in accordance with a Joint Powers Agreement (JPA). Under the JPA, the SBMWD establishes wastewater treatment rates to be paid for services provided to District customers. However, the District is nearing completion on construction of its own water reclamation facility known as the Sterling Natural Resource Center (SNRC) that, when operational, will allow the District to treat its own wastewater and no longer contract with the SBMWD. The SNRC is scheduled for completion in December 2023. In anticipation of SNRC operations, the District adopted its own wastewater treatment rates which became effective in May 2022. Phase two of rate adjustments were implemented in January 2023 and will be followed by an adjustment in January 2024. Accordingly, FY 2023-24 treatment revenue projections are based on rates established by the District. SNRC treatment rates include a monthly fixed charge, assessed based on the number of dwelling units, for both single- family and multifamily residential accounts. Commercial customers are billed both a monthly fixed charge, and then a volumetric charge based on water consumption. The volumetric rate is assessed for every hundred cubic feet (HCF) of water used, and the rate varies based on the ‘strength’ of the wastewater a customer discharges into the District wastewater system. Strength is categorized as low strength, medium strength, or high strength. Wastewater Treatment Charges are a revenue of the new Water Reclamation Fund, and total charges projected for FY 2023-24 are $10,279,000. FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 Estimated FY 2023-24 Budget Single-Family Multi-Family Commercial $4,647,347 $4,705,683 $4,828,525 $5,582,882 $5,968,000 $1M $2M $3M $4M $5M $6M EAST VALLEY WATER DISTRICT | 55 WASTEWATER TREATMENT REVENUE SNRC Non-Rate Revenue Commencement of operations at the Sterling Natural Resource Center in Fall 2023 will not only mean that the District will assess and collect its own wastewater treatment revenue, but other revenue streams associated with the anaerobic digesters and recycled water will begin to be realized. Explanations of those revenues and projections for FY 2023-24 are presented below. LOCAL RESOURCE INVESTMENT PROGRAM (LRIP) In October 2018, the District signed an agreement to sell up to 11,000 acre-feet annually of recycled water produced by the SNRC to the San Bernardino Valley Municipal Water District (Valley District). Valley District will initially pay $173 per acre-foot for recycled water made available to recharge the local groundwater basin. The District estimates that the SNRC will produce and recharge 6,000 acre feet annually when the plant is in full operation, but with Fall 2023 as the target for the SNRC to be in full operation, the District estimates that a reduced yield of 4,000 acre feet of recycled water will be produced and recharged for which it will receive an LRIP Contribution from Valley District of $692,000. WASTE HAULER TIPPING FEES In order to maximize the power generation capacity of the SNRC digesters, activated wastewater sludge from the SNRC will be supplemented by soliciting disposal of high grade food waste at the SNRC. The District anticipates that up to 130,000 gallons of liquid waste per day will be discharged by haulers at the SNRC for a fee of $0.08 per gallon. The District projects that during six months of operation in FY 2023-24, approximately 15.40 million gallons of liquid waste will be accepted at the SNRC generating tipping fees of approximately $1,232,000. ELECTRICAL POWER GENERATION Gases released and burned by the anaerobic digesters will be used to generate electrical power to help offset the cost of supplying the SNRC with power. The District has also installed a two-way electric meter for situations where the digesters are generating surplus power, which can be sold to the power grid at $0.13 per kilowatt hour. The District does not anticipate any net revenue from power sales during the SNRC’s startup year. [FINANCIAL SUMMARY] FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 Estimated FY 2023-24 Budget Single-Family Multi-Family Commercial $8,496,012 $8,456,508 $9,764,357 $10,083,076 $10,279,000 $2M $4M $6M $8M $10M FY 2023-24 BUDGET | 56 The table below provides a summary of all projected non rate revenue from the SNRC for FY 2023-24. Other Charges and Income Other charges are assessed according to an adopted fee schedule, but are only charged to users who request, or require, use of District resources beyond the scope of delivering water, wastewater and water reclamation services. Charges include initiation of service fees, and charges related to collection of customer payments, including delinquent fees, final notice fees, and disconnect/reconnect fees. In prior years, revenue from charges related to collection of delinquent customer payments (delinquent fees, notice charges, disconnect/reconnect fees) have been significant, so the District was successfully implemented procedures to work closely with customers to reduce the number of service disconnections for non-payment. Revenue related to fees charges for collection efforts have been projected at $504,000 in the upcoming year. Other Income included in FY 2023-24 projections are facilities rentals, interest, and miscellaneous revenue. Projections for interest revenue have decreased as yields are expected to decline, and the amount of investible funds held by the District will be depressed as the District continues to pay the construction costs of the SNRC and then must wait 30 to 60 days for reimbursement from the State Water Resources Control Board. In total, the FY 2023-24 projection for Other Charges and Income is $912,000, which is calculated using adopted fees and an estimate of the number of occurrences for each type of fee based on historical trends. Revenue Type Unit of Measure Volume FY 2022-23 Fee Per Unit Non-Rate Revenue Total LRIP Contribution Acre Foot (AF) 4,000 AF $ 173.00 $ 692,000 Tipping Fees Gallon 15.40 MG 0.08 1,232,000 Power Sales kWh - 0.13 - $ 1,924,000 other charges $320,000Investment Income $252,000Disconnect Notice Charge $180,000Delinquent Fees $72,000Reconnect Fees $46,000Misc. and Other $42,000Initiation of Service The District has successfully implemented procedures to reduce the number of service disconnections. EAST VALLEY WATER DISTRICT | 57 EXPENDITURE SUMMARY The District prepares its annual budget and financial plan based on operating expenses proposed by program managers, debt service payments scheduled in accordance with covenants and contractual obligations to bondholders and other creditors, and capital expenditures prioritized in the District’s Capital Improvement Program and equipment replacement schedules. Resources required for these expenditures are then appropriated from the District’s Water, Wastewater and Water Reclamation funds. Operating expenses are addressed on the following pages by broad cost category as listed on the Budget Summary on page 53. Expenses are presented in more detail, by account type, in the Water, Wastewater and Water Reclamation Fund Sections, and again, by Program in the Program Summaries. Employment Expenses Budgeted Employment Expenses include salaries and benefits paid for 73 full-time employees (FTEs) and 2 part-time employees, and also includes District contributions toward health insurance for current retirees. Two of the budgeted FTE positions are new positions related to the Sterling Natural Resource Center and will not be filled until mid-year of FY 2023-24, after the District has commenced operations at the plant. Employees are represented by two in-house bargaining units, or employee partnerships, which have negotiated a three-year Memorandum of Understanding (MOU) regarding wage and benefit adjustments through FY 2025-26. Salaries include regular wages, overtime and on-call pay, paid leave time, incentives, and differential payments which are awarded upon attainment of designated certifications. Per an agreement with employees at adoption of the current MOU, a 5% COLA will also take effect in FY 2023-24 in addition to pay scale step increases of 2.5% available for employees who have not reached the top step in their pay range, subject to annual performance evaluations. With the new SNRC positions, and the terms of the new MOU, projected salaries expense for FY 2023-24 is $9,141,000. Benefit programs include a retirement plan with the California Public Employee Retirement System (CalPERS), a cafeteria health insurance plan, a deferred compensation plan with employer matching, and worker’s comp and Medicare insurance. The District also contributes up to $850 per month toward retiree health insurance. The most significant employee benefit is the CalPERS retirement plan. Funding requirements for the plan are determined through actuarial valuations conducted by CalPERS and include contributions from both the District and the employees. Contributions from the District are made toward the plan’s annual normal cost, at a rate of 15.46 % of payroll, and as a lump sum against the plan’s unfunded liability. In recent years, unfunded pension liabilities have risen significantly as the plan struggles to meet the expectation administrators have set to earn a 7% return on plan assets each year. The rise of unfunded liabilities has led plan administrators to adopt 25 year amortization schedules, requiring increasing annual contributions to the plan, in an attempt to ensure that the plan is ultimately fully funded. However, instead of [FINANCIAL SUMMARY] expenditures by category $15,343,000Contract Services $13,354,000Employment Expenses $5,455,000Power Costs $4,890,000Capital Expenditures $3,376,000Debt Service $422,000Other Operating $768,000Water Costs $2,336,000Materials & Supplies $1,480,000Transfer to Reserves FY 2023-24 BUDGET | 58 relying on the administrator plans for funding, the District has implemented an aggressive 15 year level-pay plan to amortize unfunded pension liabilities in order to reduce the cost of this liability. While the 15-year plan requires higher initial annual contributions of $1,165,981, the shorter amortization period is projected to save the District $3.5 million. For fiscal year 2023-24, District paid costs related to the retirement plan are projected to increase 2.3%. Healthcare costs are also split between the District and employees as the District pays 90% to 95% of premiums equal to the designated ‘benchmark’ insurance plan, with employees paying the balance. Premiums for the benchmark plan decreased 5.33% between 2022 and 2023, therefore a similar decrease for the cost of healthcare benefits is expected. Contributions toward retiree health insurance premiums are capped at $850 per month for FY 2023-24. Payments continue until the retiree reaches the age of 65, or Medicare age, provided they meet all eligibility requirements for this benefit. Worker’s compensation and life insurance premiums, cell phone allowances, and auto allowances for managers make up the remaining benefits. Total District paid benefits are expected to increase 2.5% to $4,162,000 for FY 2023-24, while contributions toward retiree health insurance were determined by an actuary to be $351,000. SALARIES AND BENEFITS FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 Estimated FY 2023-24 Budget Salaries Benefits Retiree Health Benefit $2M $4M $6M $8M $10M $12M $10,665,117 $11,673,338 $12,303,074 $11,110,404 $13,654,000 EAST VALLEY WATER DISTRICT | 59 Water Costs The District anticipates customer demand for approximately 16,346 acre-feet, or 5.33 billion gallons, of water during the 2023-24 Fiscal Year. This is the same demand used for projections in FY 2022-23, but actual demand will fall short of projection in the prior due to the very wet and cold winter season experienced throughout California in early 2023. To the contrary, a very hot ‘El Niño’ summer and fall is expected in 2023 which should push customer demand higher in FY 2023-24. The District meets customer demand by procuring water from three different raw water sources – groundwater, surface water, and the purchase of imported water. Each of these sources have associated rates, fees or assessments charged by other agencies/companies as explained below: Total water costs associated with these three sources are projected to be $768,000 for FY 2023-24. WATER COSTS Groundwater The District obtains approximately 75% of its water supply through its wells by pumping water from the Bunker Hill Groundwater Basin. The fee associated with pumping groundwater is paid to the Groundwater Council (GC). This is a collaborative effort formed in January 2018 for the purpose of purchasing imported water to restore and maintain sustainable groundwater levels. The GC has two components – a water cost assessment that is based on historical pumping levels by each of the signers to the GC Framework Agreement, and an Operations and Maintenance component to fund the operations of the GC. The District’s total assessment for FY 2023-24 is projected to be $351,000. Surface Water Stockholder assessments paid to the North Fork Water Company (NFWC) on company shares owned by the District. Annual assessments are set to cover the costs of operating NFWC and includes delivery of Santa Ana River surface water, also based on the number of shares owned. The District owns approximately 7,140 shares and projects that the assessment will be $10 per share and has budgeted $71,400 accordingly. Purchased Water Paid to Valley District to buy State Water Project at $126 per acre foot (AF) when available. Due to the high volume of rainfall and snow pack in Northern California last winter, 100% of the normal allocation of water is available from the State Water Project. The District has budgeted $300,000 for up to 2,400 acre feet of water from the State Water Project in 2023-24. [FINANCIAL SUMMARY] FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 Estimated FY 2023-24 Budget Purchased Water GW Council Assessment Surface Water $100K $200K $300K $400K $500K $534,180 $506,879 $373,096 $548,336 $768,000 FY 2023-24 BUDGET | 60 Contracted Wastewater Treatment As outlined in the discussion about wastewater treatment revenue, the District will transition from contracting with the SBMWD, to commencing its own wastewater treatment operations at the new Sterling Natural Resource Center in Fall 2023. The transition of wastewater flows will begin in the Fall by diverting approximately a quarter of wastewater flows to the new plant. Every two weeks another quarter of the flows will be diverted until full flows are received at the SNRC in December 2023. While this phased approach to diverting flows is taking place, some flows will continue going to the SBMWD’s treatment facilities and the District will be charged for those scaled down treatment services. Projected payments to the SBMWD in FY 2023-24 for approximately 4 months of treatment services are $3,700,000. CONTRACTED WASTEWATER TREATMENT COSTS WASTEWATER TREATMENT COSTS Annual payments to the SBMWD for wastewater treatment services has represented approximately 22% of the District’s annual budget in past years. Going forward, however, contracted treatment payments will be replaced by new debt service payments, SNRC treatment staff salaries, and other operating costs displayed in other sections of this budget, and also summarized in the Water Reclamation Fund. In this year of transition, the SNRC will only be operational for approximately ten months, ‘in-house’ costs are expected to include contract services, power, salaries and benefits, and materials and supplies. Power Costs Power costs include the electrical power for extracting groundwater through wells, treating imported water, surface water, and groundwater when necessary, and distributing water throughout nine pressure zones within the District. Significant power costs will also be incurred for the SNRC in FY 2023-24 as the new plant commences operations in Fall 2023, gradually increasing capacity until all wastewater generated by District customers is being converted to recycled water. Rates for electrical power have been steadily increasing over the past three years, resulting in significant budget pressure, despite the fact that the District has implemented various energy conservation measures including the installation of high efficiency pumps at several plants, and construction of a hydroelectric generation facility at the District’s surface water treatment plant (Plant 134), to help mitigate rising costs. In addition, District operations staff works closely with representatives from Southern California Edison (SCE) to try to ensure that water production facilities are assigned Time-of-Use (TOU) rates wherever possible, encouraging staff to operate facilities to take advantage of the off-peak rates. In spite of these efforts to control costs, electricity rate pressures have resulted in steadily increasing power costs. FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 Estimated FY 2023-24 Budget $8,536,014 $8,456,508 $9,084,061 $8,307,804 $3,700,000 $3M $5M $7M $9M FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 Estimated FY 2023-24 Budget Wells Boosters $1M $2M $3M $4M $5M Water Treatment Wastewater Treatment $1,588,178 $2,267,909 $2,565,150 $3,336,380 $5,165,000 EAST VALLEY WATER DISTRICT | 61 The addition of the SNRC had the potential to more than double the District’s power demand. This increased the District’s decision to add anaerobic digesters to the SNRC project in order to convert wastewater sludge, supplemented with imported liquid food waste, into energy. The District contracted with SCE to install a two way meter at the plant, so any excess energy produced by the digesters in the future can be sold on the power grid. During startup, and at least for the FY 2023-24, the District expects to use all power generated to run the plant and that the SNRC will be a net user of power. A budget of $2,000,000 has been established for net power costs at the SNRC for FY 2023-24. Power costs for water production were approximately $3.0 million in FY 2022-23. These costs were higher than projected due to Edison rate increases, and unexpected ‘catch-up’ bills submitted by Edison that resulted from billing issues they encountered when migrating to a new billing system. For FY 2023-24 the District is projecting higher demand for water than in FY 2022-23, which was an unusually wet year as explained under Water Costs. The increased demand, exacerbated by the loss of multiple wells that are too close to the new regional recycled water recharge, will make it difficult to avoid peak time-of-use power rates until replacement wells can be placed in service. Based on the above, the proposed FY 2023-24 budget for power costs has been adjusted higher to $3,165,000. POWER COSTS Materials and Supplies Materials and Supplies are purchased to assist staff with the performance of their daily tasks. For administrative programs, materials ordinarily consist of office supplies, informational/ educational printed materials for the public, books and reference materials for staff, and small office equipment. For operating and maintenance programs, materials also include some office supplies, but also include items such as chemicals for water treatment, small tools and parts for distribution system repairs, fuel and lubricants, and fill materials for backfilling trenches, among other items. Materials costs are budgeted to increase 19% to $2,216,000 for FY 2023-24. Significant variances between prior year Contract Services costs and projections for the upcoming year is due to Water Reclamation’s budget of $650,000 for chemicals, a new program expense. [FINANCIAL SUMMARY] materials& supplies $1,030,000Chemicals $769,000Plant Repair Materials $277,000Printed Materials $51,000Oce Supplies $89,000Small Tools FY 2023-24 BUDGET | 62 Contract Services (Other Than Contracted Treatment) Contract services are proposed by program managers to fund ongoing needs for outside services, and periodic technical expertise to help meet Program Goals and Objectives. For administrative programs outside services include, but are not limited to, legal services, banking and payment processing, printing, and insurance, while technical services would include rate consultants, engineering consultants, and legislative advocates. Operating and maintenance programs primarily use ongoing outside services such as paving, electrical repair, landscape maintenance, and equipment maintenance. The budget for contract services is expected to increase 34% to $11,933,000 for FY 2023- 24. Significant variances between prior year contract services costs and projections for the upcoming year include: •Information Technology has added $235,000 to its contract services budget to account for the cost of maintenance and support of new IT infrastructure and upgrades at the SNRC and Headquarters campuses, and to implement Cybersecurity initiatives. •Startup of operations at the new SNRC water reclamation facility will add over $1.7 million in additional contract services, including solids hauling and disposal, SCADA support, and new laboratory services. Other Operating Expenses Other Operating Expenses budgeted for FY 2023-24 total $542,000 and includes conservation rebates, professional development, memberships and dues, licensing, meeting expenses, employee recognition, and education assistance. The District emphasizes professional growth and leadership, encouraging employees to utilize resources made available by the District to continue learning through formal education, certifications, and collaboration with other agencies responsible for delivering similar service to its ratepayers. other operating expenses $147,000ProfessionalDevelopment $9,000Other $49,000Meetings $120,000Conservation Rebates $41,000EmployeeRecognition $176,000Memberships & Dues contractservices $7,210,000Professional &Support Services $2,385,000Utilities & Other $1,755,000Insurance $202,000Printing &Mailing $381,000Building &LandscapeMaintenance EAST VALLEY WATER DISTRICT | 63 DEBT OVERVIEW The District’s debt service payments in FY 2023-24 will be $3,376,000 on total outstanding debt of $35,274,000 as of June 30, 2023. Not included in this amount is $143,231,000 in loan funding borrowed from the State Water Resources Control Board for the ongoing construction of the SNRC water reclamation plant. This project will be complete in December 2023, with debt service of approximately $7.5 million annually due to begin one year after filing of a Notice of Completion. The District issues debt for the purpose of building and improving capital assets, and to refund/refinance previously issued debt when interest rates and other circumstances make it financially prudent. In September 2020, the District refunded its outstanding 2010 and 2013 Revenue bonds with 2020 Series A & B Refunding Revenue bonds in order to achieve annual interest savings of approximately $400,000. The District’s Debt Management Policy states that debt may only be issued to finance capital projects that have been incorporated into the District’s Capital Improvement Program. Additionally, debt will only be used to finance projects if it is the most cost-effective means of doing so and the District’s credit rating will not be negatively impacted. District policy prohibits the issuance of long-term debt to fund operating activities. Types of Debt REVENUE BONDS Revenue bonds are issued to finance the construction or upgrade of water and wastewater facilities. Debt service is payable out of water and wastewater system net revenue. •2020A Refunding Revenue Bonds: Issued to refund outstanding 2010 Revenue bonds and save $380,000 annually on interest. The 2010 bonds had been issued to finance pipelines and other infrastructure projects. The 2020A bonds outstanding total $15,050,000, and bear (tax-exempt) 3.0% to 5.0% interest. •2020B Refunding Revenue Bonds: Issued to refund outstanding 2013 Revenue bonds, which had been issued to finance the construction of a new administration and operations headquarters. The 2020B bonds outstanding total $13,060,000, and bear (taxable) interest of 0.42% to 2.93%. STATE WATER RESOURCES CONTROL BOARD (SWRCB) LOANS SWRCB loans are utilized to finance the construction or upgrade to clean drinking water or recycled water projects. Debt service is payable out of water and wastewater system net revenue. •Treatment Plant 134: Borrowed to finance upgrades to treatment technology at the District’s Plant 134. The total loan outstanding is $5,135,000 bearing interest at 0%. •SNRC: Borrowed as primary funding for the Water Reclamation Plant known as the SNRC. The total loan amount approved is $168.3 million. Through June 2023, approximately $143.2 million has been drawn down. Interest on the loan is 1.8% and annual debt service on the full loan will be approximately $7.5 million annually. The debt service on this loan is not included in the tables on the following pages since the facility is still under construction. The District has also signed two SWRCB loan agreements in support of the State’s consolidation of mutual water companies with failing water infrastructure within the District’s service area. The District is responsible for ensuring payment on the State loans, which is payable from assessments on property formerly served by the water companies. Assessment Districts •Arroyo Verde & Eastwood Farms: Borrowed to fund installation of new water distribution system connected to the District’s water supply facilities. Loans outstanding total is $311,000 and bear interest at 0%. [FINANCIAL SUMMARY] FY 2023-24 BUDGET | 64 OTHER LOANS — SUBORDINATE Financing agreements signed with equipment vendors, installers, or construction project managers for the purchase or installation of equipment with useful lives of 20 years or less. Repayment periods are 10 years and debt service payments are paid out of energy cost savings. •U.S. Bank Loans: Borrowed to finance construction and implementation of several energy conservation measures. The total loan outstanding is $444,000 at an interest rate of 2.3%. This loan will be paid off in March 2024. •Valley District Loan: Borrowed from the San Bernardino Valley Municipal Water District (Valley District), the region’s State Water Project (SWP) contractor, for the construction of an SWP turnout and hydro-electric generation facility leading to the District’s treatment plant - Plant 134. Loan principal outstanding of $1,275,000 bears interest at the Local Agency Investment Fund (LAIF) apportionment rate, currently 2.74%. Debt service is payable annually through February 2026 out of water net revenue and energy cost savings. Impact of Current Debt Levels A schedule of FY 2023-24 debt service payments, by debt issue, is shown in the following schedule. DEBT SERVICE PAYMENTS As detailed above, debt service for FY 2023-24 on all outstanding District debt is $3,376,000. This amount represents 7.1% of the District’s total budget for FY 2023-24. This level of debt service does not affect utility services provided to District ratepayers but does directly impact the number of Capital Projects that can be funded by operating revenues. WATER FUND WASTEWATER FUND Debt Issue Principal Interest Principal Interest Total 2020A Refunding Revenue Bonds $ 990,000 $ 616,000 $ -$-$ 1,606,000 2020B Refunding Revenue Bonds 105,000 224,000 175,000 98,000 602,000 SWRCB Loan Treatment Plant 134 234,000 - - - 234,000 SWRCB Loans Assessment Districts 19,000 - - - 19,000 US Bank Loans 444,000 8,000 - - 452,000 Valley District Loan 425,000 38,000 - - 463,000 TOTAL $ 2,217,000 $ 886,000 $ 175,000 $ 98,000 $ 3,376,000 The District’s Debt Management Policy stipulates that debt may only be issued to finance capital projects. The following table presents District debt level ratios compared to 2015 Southwest Regional medians reported by Fitch ratings. District debt used for the calculations includes loan funds borrowed for the SNRC through June 2023, but for which debt service is not yet being paid. DEBT SERVICE THROUGH MATURITY Future Debt Levels The addition of the SWRCB Loan for the SNRC will substantially increase the District’s annual debt service requirement. Contractual payments on this loan will begin one year after completion of construction, which will be approximately December 2023. As noted in other discussions about the fiscal impact of the SNRC in this document, wastewater treatment services are currently provided by the SBMWD and payments under that contract are shown as Wastewater Treatment operating expense. When the SNRC is operational, wastewater treatment payments to the SBMWD will be replaced with labor, materials, and other direct treatment costs, and debt service. The graph below presents total debt service on existing debt, and future SNRC loan payments, through maturity. DEBT SERVICE EAST VALLEY WATER DISTRICT | 65 WATER FUND WASTEWATER FUND Fiscal Year Principal Interest Principal Interest Total 2023-24 $ 2,217,000 $ 886,000 $ 175,000 $ 98,000 $ 3,376,000 2024-25 1,808,000 813,000 175,000 97,000 2,893,000 2025-26 1,453,000 759,000 175,000 96,000 2,483,000 2026-27 1,063,000 715,000 180,000 94,000 2,052,000 2027-28 1,098,000 682,000 180,000 91,000 2,051,000 2029-33 6,029,000 2,832,000 945,000 406,000 10,212,000 2034-38 7,002,000 1,840,000 1,065,000 292,000 10,199,000 2039-43 8,032,000 809,000 1,215,000 131,000 10,187,000 2044-48 2,192,000 25,000 270,000 4,000 2,491,000 2049-53 - - - - - TOTAL $ 30,894,000 $ 9,361,000 $ 4,380,000 $ 1,309,000 $ 45,944,000 - $2M $4M $6M $8M $10M Water Fund Wastewater Fund Reclamation Fund 20 2 3 - 2 4 20 2 4 - 2 5 20 2 5 - 2 6 20 2 6 - 2 7 20 2 7 - 2 8 20 2 8 - 2 9 20 2 9 - 3 0 20 3 0 - 3 1 20 3 1 - 3 2 20 3 2 - 3 3 20 3 3 - 3 4 20 3 4 - 3 5 20 3 5 - 3 6 20 3 6 - 3 7 20 3 7 - 3 8 20 3 8 - 3 9 20 3 9 - 4 0 20 4 0 - 4 1 20 4 1 - 4 2 20 4 2 - 4 3 20 4 3 - 4 4 20 4 4 - 4 5 20 4 5 - 4 6 20 4 6 - 4 7 20 4 7 - 4 8 20 4 8 - 4 9 20 4 9 - 5 0 20 5 0 - 5 1 20 5 1 - 5 2 [FINANCIAL SUMMARY] FY 2023-24 BUDGET | 66 Bond Ratings Credit risk is the potential that creditors will suffer financial loss if the District fails to fulfill its obligation to make timely payments to holders of District debt. This risk is measured by the assignment of a rating to the District’s bonds by a nationally recognized credit rating organization. Strong credit ratings provide benefits to District ratepayers in the form of reduced debt service costs. Prudent financial management policies resulted in a bond rating of AA- from both Standard & Poor’s and Fitch ratings when the District issued 2020 A & B series revenue bonds in September 2020. Fitch affirmed this rating as the result of a review conducted in June 2022. The AA- rating is considered a high quality, investment grade rating. Debt Capacity and Debt Service Coverage The District has no policy limitation, and there is no statutory limitation, on the amount of debt that may be issued by the District, however, bond covenants for the District’s 2020 Revenue Bonds require an additional bonds test prior to issuing additional obligations payable from Net Operating Revenue. The test determines the amount of additional debt that may be issued by calculating the amount of net revenue available for additional debt service payments. The Revenue Bond documents, as well as loan agreements with the SWRCB and US Bank, require that the District maintain a debt service coverage ratio equal to 1.2 or 120 percent of annual debt service or greater. The FY 2023-24 proposed Budget provides the net revenue to debt ratios shown in the table below. DEBT SERVICE COVERAGE Water Fund Wastewater Fund Reclamation Fund Total REVENUE Sales and Services $ 28,341,000 $ 5,968,000 $ 10,279,000 $ 44,588,000 Other Charges 492,000 60,000 1,944,000 2,496,000 Interest & Miscellaneous Revenue 220,000 20,000 100,000 340,000 TOTAL REVENUES $ 29,053,000 $ 6,048,000 $ 12,323,000 $ 47,424,000 OPERATING EXPENSES Programs $ 21,735,000 $ 4,850,000 $ 11,093,000 $ 37,678,000 TOTAL OPERATING EXPENSES $ 21,735,000 $ 4,850,000 $ 11,093,000 $ 37,678,000 NET REVENUE $ 7,318,000 $ 1,198,000 $ 1,230,000 $ 9,746,000 ANNUAL DEBT SERVICE $ 3,103,000 $ 273,000 $ -$ 3,376,000 DEBT COVERAGE RATIO 2.36 4.39 0.00 2.89 EAST VALLEY WATER DISTRICT | 67 [PAGE LEFT BLANK] Intentionally FY 2023-24 BUDGET | 68 FUND EQUITY & RESERVES As previously discussed, the District operates water, wastewater collection, and water reclamation enterprise activities; the District does not have governmental or non-major enterprise activities as part of its operational structure. For financial reporting purposes, each of the District’s activities report Equity, the excess of Assets and Deferred Outflows over Liabilities and Deferred Inflows, as Net Position. Also for financial reporting purposes, Net Position is reported in three distinct classifications: For budgeting purposes, and for purposes of this discussion, the three classifications above will be referred to as designations of the District’s equity, rather than of Net Position. Restricted and unrestricted equity are spendable reserves, Equity Invested in Capital Assets is not. Equity Invested in Capital Assets maintains a running balance of resources previously spent on the acquisition and construction of capital assets, less outstanding long-term debt, and net of depreciation of those capital assets over time. It does not include spendable funds that are available for appropriation and is therefore not considered as part of the budget process. Restricted Net Position includes unspent proceeds from issuance of long-term debt and developer paid capacity fees. These funds are available for appropriation for capital projects, but only as defined by contractual agreement with bondholders and other creditors, or by studies adopted by the District that state the purpose and amount of capacity fees to be collected from developers. Debt proceeds are used only for projects specifically stated in debt agreements, and capacity fees are used only for construction of projects that expand the capacity of the District’s infrastructure. Accordingly, appropriations from Restricted funds will appear in the District’s capital budget when appropriate. Unrestricted fund equity is the residual after the balances in the other two classifications of equity have been determined. The District has the most flexibility in determining how unrestricted equity may be appropriated, and the Governing Board has done so by establishing a Reserve Policy, which is summarized on pages 79-84. The policy establishes three designations for unrestricted equity, and has defined their purpose, order of priority for funding, target levels, and uses. Those unrestricted designations are the: The Operating Reserve has the highest priority and is funded first out of any excess of revenue over expenditures at the end of each fiscal year. When the Operating Reserve has reached its target level of 120 days operating expenses, excess funds are applied to the Capital Replacement Reserve up to a target level of $10 million. Finally, a Rate Stabilization Reserve has been created to offset unexpected revenue shortfalls at a target level of 45 days of budgeted operating expenses. If all funds have been fully funded, the remainder reverts to the Operating Reserve. Expenditure of funds out of any of the Unrestricted Reserve categories will be replenished with excess Operating Reserves, and then by transfer from reserves with lower priority. The District’s Governing Board may take action to transfer balances between the Unrestricted Reserve designations at any time. Invested in Capital Assets Restricted Unrestricted Operating Reserve Capital Replacement Reserve Rate Stabilization Reserve Enterprise Reserves Water Fund Reserves The Water Fund is projected to have $7,696,149 in Operating Reserves, $10,338,648 in Capital Replacement, and $4,314,140 in Restricted Reserves. The Water Reserves table presents changes to the Water Fund unrestricted and restricted equity, broken down by reserve designation, over a five year period, and includes beginning balances, annual activity, and ending balances. Target levels for each of the reserve designations, in accordance with the District’s reserve policy, are also shown. UNRESTRICTED RESERVES Funding for unrestricted reserves is built into rates when the District conducts a Cost-of-Service Analysis; this occurs approximately every five years. Rate adjustments were adopted in May 2021 and become effective in three phases on January 1st of each year, 2022 and 2023, and on January 1, 2024, in the upcoming fiscal year. Modeling for the new rates continued to focus on collecting at least 35% of revenue from the fixed system (meter) charges as California continues living with droughts and mandatory conservation, which results in reduced water sales. Both Unrestricted Reserves, Capital Replacement and Operating Reserves continue to stay around target levels and the budget for FY 2023-24 projects a small surplus of $95,000 which can be added to these reserves. RESTRICTED RESERVES Restricted Reserves are from the collection of water capacity fees from new development. Although the receipt of capacity fees is not included in revenue projections and budgeted, accumulated fees are available for appropriation for certain capital improvement projects. Restricted reserve balances are budgeted to remain at $4,314,140. Changes in this fund during the year will be reported at the mid-year budget review. EAST VALLEY WATER DISTRICT | 69 Operating Reserve Water Enterprise Capital Replacement Reserve Capital Replacement Reserve Rate Stabilization Reserve Operating Reserve Wastewater Enterprise Rate Stabilization Reserve Capacity Fees Capacity Fees Capital Replacement Reserve Operating Reserve Water Reclamation Enterprise Rate Stabilization Reserve Capacity Fees Water Unrestricted Reserves Wastewater Unrestricted Reserves Water Reclamation Unrestricted Reserves Restricted Reserves [FINANCIAL SUMMARY] FY 2023-24 BUDGET | 70 UNRESTRICTED AND RESTRICTED EQUITY — WATER WATER RESERVES FY 2019-20 Actual FY 2020-21 Actual FY 2021-22 Actual FY 2022-23 Projected FY 2023-24 Budget WATER OPERATING RESERVE Maximum Target Level 120 Days Operations $ 5,850,000 $ 6,025,000 $ 6,365,000 $ 6,645,000 $ 7,455,000 Beginning Fund Balance 6,484,818 6,489,732 6,031,622 8,066,773 7,601,149 Revenue 27,179,063 29,145,482 29,273,276 27,272,000 29,053,000 Operating/Non-Operating Expenditures (18,717,810) (20,132,623) (22,435,689) (20,630,931) (22,621,000) Capital Expenditures (4,132,028) (4,179,287) (5,131,241) (4,945,000) (4,120,000) Debt Principal Payments (2,564,311) (2,393,628) (2,120,011) (2,161,693) (2,217,000) Land Sale / Transfer CIP From Wastewater - (6,298,054) 2,448,816 - - Transfer to Other Reserves (1,760,000) 3,400,000 - - - ENDING WATER OPERATING RESERVE $ 6,489,732 $ 6,031,622 $ 8,066,773 $ 7,601,149 $ 7,696,149 WATER CAPITAL REPLACEMENT RESERVE Minimum Target Level $ 10,000,000 $ 10,000,000 $ 10,000,000 $ 10,000,000 $ 10,000,000 Beginning Fund Balance 14,595,000 13,738,648 10,338,648 10,338,648 10,338,648 Transfer from Operating Fund 1,760,000 (3,400,000) - - - Capital Expenditures (2,616,352) - - - - ENDING WATER CAPITAL REPLACEMENT RESERVE $ 13,738,648 $ 10,338,648 $ 10,338,648 $ 10,338,648 $ 10,338,648 TOTAL UNRESTRICTED RESERVES - WATER $ 20,228,380 $ 16,370,270 $ 18,405,421 $ 17,939,797 $ 18,034,797 $20,228,380 $16,370,270 $18,405,421 $17,939,797 $18,034,797 $2,284,023 $2,576,874 $3,560,177 $4,314,140 $4,314,140 $5M $10M $15M $20M FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 Estimated FY 2023-24 Budget Unrestricted Restricted Wastewater Fund Reserves The Wastewater Fund is projected to have $2,144,956 in Operating Reserves, and $3,107,335 in Restricted Reserves. The following table presents changes to the Wastewater Fund unrestricted and restricted equity, broken down by reserve designation, over a five year period, and includes beginning balances, annual activity, and ending balances– only the operating reserve currently has a balance. The target levels established for each reserve designation, in accordance with the District’s reserve policy, are also shown. UNRESTRICTED AND RESTRICTED EQUITY — WASTEWATER EAST VALLEY WATER DISTRICT | 71 FY 2019-20 Actual FY 2020-21 Actual FY 2021-22 Actual FY 2022-23 Projected FY 2023-24 Budget WATER CAPACITY FEES No Target Level $ -$-$-$-$- Beginning Fund Balance 1,996,379 2,284,023 2,576,874 3,560,177 4,314,140 Fees Collected 287,644 292,851 983,303 753,963 - Capital Expenditures - - - - - ENDING WATER CAPACITY FEES $ 2,284,023 $ 2,576,874 $ 3,560,177 $ 4,314,140 $ 4,314,140 TOTAL RESTRICTED RESERVES - WATER $ 2,284,023 $ 2,576,874 $ 3,560,177 $ 4,314,140 $ 4,314,140 FY 2019-20 Actual FY 2020-21 Actual FY 2021-22 Actual FY 2022-23 Projected FY 2023-24 Budget WASTEWATER OPERATING RESERVE Maximum Target Level 120 Days Operations $ 1,250,000 $ 1,250,000 $ 1,980,000 $ 1,550,000 $ 1,615,000 Beginning Fund Balance 3,306,271 2,311,575 2,540,325 538,315 1,779,956 Revenue 4,784,495 4,846,067 5,189,870 6,679,728 6,048,000 Operating/Non-Operating Expenditures (4,698,424) (4,920,069) (4,070,081) (4,489,720) (4,948,000) Capital Expenditures (980,767) (5,885,302) (2,951,799) (773,367) (560,000) Debt Principal Payments (100,000) (110,000) (170,000) (175,000) (175,000) Transfer CIP to Water -6,298,054 - - - Transfer to Other Reserves - - - - - ENDING WASTEWATER OPERATING RESERVE $ 2,311,575 $ 2,540,325 $ 538,315 $ 1,779,956 $ 2,144,956 TOTAL UNRESTRICTED RESERVES - WASTEWATER $ 2,311,575 $ 2,540,325 $ 538,315 $ 1,779,956 $ 2,144,956 [FINANCIAL SUMMARY] FY 2023-24 BUDGET | 72 UNRESTRICTED RESERVES The accumulation of wastewater Operating and Capital Replacement reserves have been limited due to the investment in construction of the SNRC, a water reclamation facility for which the Water Reclamation Fund has been established beginning in FY 2022-23. Prior to establishing the Water Reclamation Fund, the Wastewater Fund financed costs not covered by a grant/loan agreement provided by the State Water Resources Control Board. These costs included preliminary studies and design and defending litigation. New rate adjustments were adopted in May 2021, including rates for the new water reclamation plant nearing completion, and became effective in May 2022. The new rates, which include three phases, should allow for building towards reserve targets over the next three years. The FY 2023-24 budget projects a small surplus of $365,000 will be added to the operating reserve by the end of the fiscal year. RESTRICTED RESERVES Restricted Reserves are primarily from the collection of wastewater capacity fees from new development. The table also includes balances and activity for restricted Wastewater capacity fees. Although the receipt of capacity fees is not included in revenue projections and budgeted, accumulated fees are available for appropriation for certain capital improvement projects. The restricted reserve balance is projected to remain at $3,107,335 in fiscal year 2023-24 but could possibly increase due to construction activity within the District. WASTEWATER RESERVES FY 2019-20 Actual FY 2020-21 Actual FY 2021-22 Actual FY 2022-23 Projected FY 2023-24 Budget WASTEWATER CAPACITY FEES No Target Level $ -$-$-$-$- Beginning Fund Balance 636,995 1,696,736 1,837,888 2,701,500 3,107,335 Fees Collected 1,059,741 141,152 863,612 405,835 - Debt Issued - - - - - Capital Expenditures - - - - - ENDING WASTEWATER CAPACITY FEES $ 1,696,736 $ 1,837,888 $ 2,701,500 $ 3,107,335 $ 3,107,335 TOTAL RESTRICTED RESERVES - WASTEWATER $ 1,696,736 $ 1,837,888 $ 2,701,500 $ 3,107,335 $ 3,107,335 $2,311,575 $2,540,325 $2,701,500 $3,107,335 $3,107,335 $500K $1M $1.5M $2M $2.5M $3M Unrestricted Restricted FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 Estimated FY 2023-24 Budget $1,696,739 $1,837,888 $538,315 $1,779,956 $2,144,956 EAST VALLEY WATER DISTRICT | 73 Water Reclamation Fund Reserves The Water Reclamation Fund is a new fund established to account for the revenues and expenditures related to the Sterling Natural Resource Center water reclamation plant which will begin operation in Fall 2023. Target levels will be established as they are for other funds, in accordance with the District’s Reserve Policy. UNRESTRICTED AND RESTRICTED RESERVES — RECLAMATION FY 2019-20 Actual FY 2020-21 Actual FY 2021-22 Actual FY 2022-23 Projected FY 2023-24 Budget RECLAMATION OPERATING RESERVE Maximum Target Level 120 Days Operations $ -$-$-$ 4,200,000 $ 4,200,000 Beginning Fund Balance - - - - 50,132 Revenue 8,496,012 8,456,508 9,764,357 10,062,300 12,323,000 Operating/Non Operating Expenditures (8,496,012) (8,456,508) (9,764,357) (10,012,168) (11,133,000) Capital Expenditures - - - - (190,000) Debt Principal Payments - - - - - Transfer to Debt Service Reserve - - - - (1,000,000) ENDING RECLAMATION OPERATING RESERVE $ -$-$-$50,132 $ 50,132 TOTAL UNRESTRICTED RESERVES - RECLAMATION $ -$-$-$50,132 $ 50,132 RECLAMATION DEBT SERVICE RESERVE Target - One Years Annual Debt Service $ -$-$-$-$ 7,500,000 Beginning Fund Balance - - - - - Transfer From Operating Reserve - - - - 1,000,000 Debt Service Expenditures - - - - - ENDING RECLAMATION DEBT SERVICE RESERVE $ -$-$-$-$ 1,000,000 RECLAMATION CAPACITY FEES No Target Level $ -$-$-$-$- Beginning Balance 646,583 2,518,595 1,860,609 2,736,642 3,148,465 Capacity Fees Received 1,872,012 143,182 876,033 411,823 - Expenditures -(801,168) - - - ENDING RECLAMATION CAPACITY FEES $ 2,518,595 $ 1,860,609 $ 2,736,642 $ 3,148,465 $ 3,148,465 TOTAL RESTRICTED RESERVES - RECLAMATION $ 2,518,595 $ 1,860,609 $ 2,736,642 $ 3,148,465 $ 4,148,465 [FINANCIAL SUMMARY] FY 2023-24 BUDGET | 74 UNRESTRICTED RESERVES Prior to the SNRC, the District contracted with the SBMWD for Wastewater Treatment, and all revenue billed and received was remitted to the SBMWD. Given this agreement, there was no opportunity or reason to build a reserve for wastewater treatment operations. The Water Reclamation Fund will establish unrestricted operating and capital replacement reserves, but unlike other funds, the Water Reclamation Fund must first establish a Debt Service reserve. As with other reserve funds, there is a clear prioritization and target for all types. The FY 2023-24 activity shown in the previous table is based on budget and projections. RESTRICTED RESERVES The table includes balances and activity for restricted Wastewater Treatment capacity fees, which belong to the Water Reclamation Fund and the accumulation of a Debt Service reserve. The District began collecting wastewater treatment capacity fees when construction began on the SNRC, for this reason the accumulation of restricted funds began occurring prior to the creation of the Water Reclamation Fund. The debt service reserve, which is required by section 3.7(a) of the SNRC loan funding agreement with the State Water Resources Control Board, must have a balance equal to one year’s debt service on the loan from the SWRCB (the Target Level). For this reason, funding of the Debt Service reserve will take priority over funding of the Operating Reserve until the required target level is reached. RECLAMATION RESERVES Unrestricted Restricted $50,132 $50,132 $2,518,595 $1,860,609 $2,736,642 $3,148,465 $4,148,465 $500K $1M $1.5M $2M $2.5M $3M $3.5 $4M FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 Estimated FY 2023-24 Budget Setting aside reserve funding enhances organizational flexibility to prioritize and respond to capital needs. EAST VALLEY WATER DISTRICT | 75 LONG-RANGE FINANCIAL PLAN The Long-Range Financial Plan provides a forward-looking view of the District’s three different funds, allowing leadership, along with other stakeholders, to evaluate whether financial resources will be available to achieve the District’s long- term goals and objectives included in the Five-Year Work Plan. The Five-Year Work Plan and long range financial planning serve conjunctively as tools for future decision making regarding the District’s spending and projected revenues. As a multi-beneficial organization that provides water, wastewater, and water reclamation services, the District’s long- term planning efforts considers factors such as the age, condition, and efficiency of infrastructure used to deliver world- class services to District customers and maintaining compliance with changing regulations. Over the last decade, the cyclical droughts in California has raised water supply reliability, operational flexibility, and water quality, as prominent issues in strategic planning. Based on these identified priorities, the District has developed goals that will have a significant impact on the District’s financial planning and Budget over the next few years, including: • Cost recovery through user rates and development fees, as applicable. • Construction of a water recycling plant (SNRC). • Identify alternative water supplies. • Access and utilize alternative energy supplies. • Meet all water quality standards; and • Replace aging pipelines and increase water storage capacity. The achievement of these goals is subject to certain assumptions but will remain a priority as they support the District Vision and Five-Year Work Plan. [FINANCIAL SUMMARY] COST DRIVER ASSUMPTION LINK TO DISTRICT GOALS AND OBJECTIVES Utility User Rates Support Reasonable Costs Related to Existing Customers; Development Fees Pay for New Infrastructure • Water Usage Per capita will not increase due to Conservation efforts • Development will add 50 customers annually to District service area • Conduct Cost of Service Analysis for Rates • Pursue Alternative Funding Sources Construct SNRC for Recycled Water Supply • Digesters at SNRC will provide non-rate revenue streams (energy sales, tipping fees) that will help ensure fiscal sustainability • Identify Opportunities to Optimize Natural Resources • Enhance Planning Efforts that Respond to Future Demand • Pursue Alternative Funding Sources Find/Utilize Additional Water Supply • Recycled water from SNRC will provide sustainable supply for recharge • Complete construction of SNRC • Strengthen Regional, State and National Partnerships FY 2023-24 BUDGET | 76 User Rates & Development Fees From Reserves The District has updated all water and wastewater user rates, development capacity fees, and miscellaneous fees and charges within the last three fiscal years. Capacity Fees were updated in December 2019 and are based on an independent capacity fee study. The adopted fees include a provision for annual adjustment each July based on the prior calendar year’s Construction Cost Index. Water and wastewater utility rates, and miscellaneous fees and charges, were adopted in May 2021. The utility rates were based on a five year Cost of Service Analysis and financial model, that considered the capital improvement projects including the construction of a new surface water treatment plant at the east end of the District. Remaining rate adjustments will occur in two phases on January 1 of each year 2023 and 2024. Utility rates established in May 2021 should support District operations for a five year period with updates to be presented to the Governing Board for consideration in 2025. Updated miscellaneous fees and charges are primarily fees related to the collection of delinquents accounts, and charges for Engineering services. The amount of each of the fees and charges was established by determining the average amount of staff and equipment time required for a single occurrence, and then multiplying the time required by labor rates and equipment rental rates. Construction of the SNRC Construction on the SNRC will be completed during FY 2023-24, including anaerobic digesters capable of generating three megawatts of electrical power. In order to generate this amount of electricity, sludge resulting from wastewater treatment will be supplemented by high grade food waste accepted from waste haulers, for which the District expects to receive tipping fees. Power cost offsets, tipping fees, and revenue from the sale of recycled water for recharge to the Groundwater Basin Watermaster are projected to total $7.2 million when the SNRC reaches full capacity. When combined with wastewater treatment fees of approximately $9.5 million, total projected ‘revenue’ for the SNRC should be sufficient to cover SNRC operating and debt service costs over the next 10 years. Find/Utilize Additional Water Supply The District built a State Water Project turnout at its Surface Water Treatment Plant in order to utilize as much imported water as feasible. This strategy would preserve water in the groundwater basin and allow the District to take delivery of, and treat, water at a high elevation, using gravity to assist with water distribution to customers. The alternative is to incur significant pumping costs by extracting water with wells and then pumping it uphill for distribution. COST DRIVER ASSUMPTION LINK TO DISTRICT GOALS AND OBJECTIVES Replace Aging Pipelines • District’s rate structure will provide revenue stability and adequate funding for pipeline replacement program • Develop Projects and Programs to Ensure Safe and Reliable Services • Dedicate Effort Toward System Maintenance and Modernization Water Quality Standards • Existing treatment processes will ensure product water meets standards • Conduct Source Water Assessment • Plant 134 Solids Processing Evaluation EAST VALLEY WATER DISTRICT | 77 Unfortunately, California, continues to experience cyclical droughts, in which State Water Project deliveries are unreliable. For FY 2023-24, State Water Project contractor agencies, the source for the District’s imported water, have been told their annual allocation of imported water will be 100%. Whereas, in the previous fiscal year, the supply provided was 5% of requested. As a result, the District will experience fluctuating power costs to pump groundwater over the next five years to offset the unreliability of available imported water. Pipeline Replacement As mentioned under User Rates, adopted rates included funding for the Capital Improvement Program including water main replacements. Having the funding available to proactively replace pipelines, rather than reacting to reports of system leaks will save on labor and water losses. FY 2024-28 Forecast REVENUE FORECAST Water and wastewater rates are expected to slightly increase over the next five years due to modest building development and approved rate adjustments. Rate adjustments were adopted in May 2021 and implemented in May of 2022. Additional approved rate adjustments become effective in January 2024. Water Revenue projections include approved rate adjustments as well as a modest growth rate of 2% annually. Sales per capita is expected to remain flat as water budget based tiered rates implemented by the District incentivize consumers to use water efficiently. Wastewater revenue projections also include rate adjustments in January 2024, for both collection and treatment charges, of about 7.0%. For years subsequent to 2024, a 3.0% escalation factor was used to account for potential future rate increases and/or growth related to new development. Other operating revenues, such as LRIP contributions from Valley District for releasing recycled water for recharge, and tipping fees from waste haulers, will increase while the SNRC is scaling up to reach full capacity. At full capacity the SNRC is expected to produce 6,000 acre feet of recycled water and receive $173 per acre foot for a total annual contribution from Valley District of $1,038,000. In addition, food waste haulers are projected to pay $.08 per gallon to offload their waste at the SNRC digesters and haulers could deliver as much as 130,000 gallons per day for estimated revenue of $2,704,000 annually. OPERATING COST FORECAST Operating costs for the District include salaries and benefits, maintenance and operation of the water distribution, wastewater collection systems, water reclamation, contract services and materials and supplies. Costs also include monthly payments to the SBMWD for wastewater treatment services through December 2023. Toward the end of calendar year 2023 the SNRC will begin operations and contract payments to SBMWD will be phased out as the District gradually diverts wastewater flows to the SNRC, and those payments will be replaced by staff and direct operating costs related to the new Water Reclamation Fund. EMPLOYMENT EXPENSES Labor and Benefits are the largest costs in the District’s Budget and are adjusted in accordance with a memorandum of understanding (MOU) with employees – the current three-year MOU became effective in July 2023 and remains in effect through FY 2025-26 and the average increase for the three years was 5% due to the results of a salary survey. Retirement plan contributions make up two-thirds of total benefit costs and are expected to increase 1% per year, and other benefit costs including medical are projected to increase 5% per year. Staffing levels will decrease to 73 full-time positions in FY 2023-24 due to deferring three previously funded but vacant positions as the District will focus on filling operator and maintenance positions at the new SNRC in the upcoming year. [FINANCIAL SUMMARY] FY 2023-24 BUDGET | 78 Over the next five years the three positions currently being deferred, and likely two other new positions, will be filled taking the FTE count to 78. Those five positions include: WASTEWATER TREATMENT Due to supply chain delays, FY 2023-24 will be the final year in which the District contracts with the SBMWD for the treatment of all its wastewater flows. While commissioning is underway, the District will continue to pay for these contract services until the SNRC is fully permitted for operation. The phased transition will take place over three months in late 2023, systematically diverting wastewater to the SNRC until it is handling all of the District’s flows in January 2024. Thereafter, monthly contract payments to the SBMWD averaging more than $650,000 per month, or $8.6 million annually, will cease and be replaced by operating costs associated with the SNRC. POWER COSTS The District has taken steps to insulate ratepayers from significant increases in the cost of electricity by implementing energy conservation measures, installing a hydro-electric generation facility, and constructing digesters at the SNRC generate electricity. With all of these measures in place the District continues to experience increased power costs at plants without alternative energy sources or generation capabilities. Although the existing measures mitigate the extent of price increases, the District projects that energy costs will still increase between 3% and 5% annually for the next five years. MATERIALS AND SUPPLIES Materials and supplies are projected to increase by 19% in FY 2023-24 as the SNRC completes commissioning transitioning the facility to regularly purchase chemicals and other supplies. In the following years cost increases are based on inflation projections of 3% for FY 2024-25 through 2027-28. These significant inflation percentages are supported by notification from vendors stating that supply chain interruptions are creating shortages and increasing costs. OTHER CONTRACTED SERVICES Other Contracted Services such as facilities maintenance, professional consulting, security, customer bill generation and printing are increasing 34% to $11.9 million for FY 2023-24, due to the commencement of SNRC operations in late 2023. Thereafter an inflation adjustment factor of 3% has been used to project costs for future as vendors are expected to realize, and pass through, the increased cost of materials for the reasons explained above in the Material and Supplies Section. DEBT SERVICE FORECAST Debt service costs include principal and interest on Revenue Bonds and Loans issued to finance system improvements. Future debt service cost projections include an additional loan from the State Revolving Fund issued to finance the construction of the SNRC. The final loan amount will not be determined until the project is complete, however, the additional debt related to this project is expected to increase annual debt service from $3.4 million in FY 2023-24, to $10.8 million in FY 2024-25. Associate Engineer Administrative Analyst Facilities Maintenance Worker GIS Technician SCADA Technician EAST VALLEY WATER DISTRICT | 79 FY 2023-24 will be the year in which the first of ten annual installments of $700,000 will be made to the SBMWD to help offset the loss of revenue from the District treatment facility. Termination payments will continue for 10 years. A schedule of future debt service, including the State Revolving Fund loan from the SWRCB, is shown on page 69 of this document. REVENUE FUNDED CAPITAL EXPENDITURES FORECAST Revenue funded capital project spending is projected to average $4.2 million over the next five years. Projects included in the forecast are discussed in the five-year Capital Improvement Program section of this budget. Five Year Forecast – FY 2023-24 Through FY 2027-28 The following financial forecast is presented to provide a general understanding of how long-term goals will affect operating revenue and expenditures over the next five years. [FINANCIAL SUMMARY] FORECAST FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 REVENUE Water Sales / Wastewater Collect $ 24,313,000 $ 24,800,000 $ 25,297,000 $ 25,804,000 $ 26,321,000 Wastewater Treatment 10,279,000 11,628,000 12,338,000 12,968,000 13,630,000 Meter Fees 9,996,000 10,096,000 10,197,000 10,299,000 10,402,000 LRIP Revenue 692,000 1,038,000 1,038,000 1,038,000 1,038,000 GW Assessment Offset - 396,000 396,000 396,000 396,000 Other Operating Charges 1,784,000 3,351,000 3,554,000 3,549,000 3,544,000 Investment Income 320,000 732,040 682,009 667,047 739,168 Capacity Fees - - - - - Other Income 40,000 70,000 70,000 70,000 70,000 TOTAL REVENUE $ 47,424,000 $ 52,111,040 $ 53,572,009 $ 54,791,047 $ 56,140,168 EXPENDITURES Labor & Benefits $ 13,354,000 $ 13,821,848 $ 14,210,638 $ 14,610,932 $ 15,022,795 Water Costs 768,000 1,164,000 1,164,000 1,164,000 1,164,000 Contracted Wastewater Treatment 3,700,000 700,000 700,000 700,000 700,000 Power Costs 5,165,000 5,060,000 4,958,000 4,959,000 4,963,000 Contract Services 11,933,000 12,291,598 12,660,476 13,040,500 13,431,945 Materials 2,216,000 2,296,970 2,381,419 2,468,839 2,559,331 Other Operating Expenses 422,000 425,055 428,173 431,355 434,606 Debt Service 3,376,000 10,962,500 10,486,500 10,088,500 9,649,500 Capital Outlay 1,165,000 1,200,000 1,200,000 1,200,000 1,200,000 Capital Improvement Program 3,725,000 5,730,000 5,745,000 3,625,000 5,125,000 TOTAL EXPENDITURES $ 45,944,000 $ 53,771,971 $ 54,054,204 $ 52,408,126 $ 54,370,178 CHANGE IN EQUITY $ 1,480,000 $ (1,660,931) $ (482,195) $ 2,382,921 $ 1,769,990 BEGINNING UNRESTRICTED EQUITY $ 22,868,000 $ 24,348,000 $ 22,687,069 $ 22,204,874 $ 24,587,795 ENDING UNRESTRICTED EQUITY $ 24,348,000 $ 22,687,069 $ 22,204,874 $ 24,587,795 $ 26,357,785 FY 2023-24 BUDGET | 80 [PAGE LEFT BLANK] Intentionally EAST VALLEY WATER DISTRICT | 81 WATER FUNDfy 2023-24 WA T E R F U N D T h e A n n u a l B u d g e t E A S T V A L L E Y W A T E R D I S T R I C T Budget based rates promote water efficiency and are based on the cost of service while remaining equitable and fair. FY 2023-24 BUDGET | 82 EAST VALLEY WATER DISTRICT | 83 WATER FUND Rates The District has taken many steps to encourage water use efficiency and water supply reliability, and accordingly has adopted water-budget based rates for use in billing for water usage. The water budget-based rates promote water efficiency and are based on the cost of service; they are equitable and fair; and support sustainable behavior change. The State Water Resources Control Board approves of the water budget-based rate structure for its ability to produce superior water savings, and this alternative approach is compliant with the California Drought Conservation Regulations. The District also collects a monthly fixed charge based on meter size serving the property. This fixed charge helps ensure the water fund’s long-term financial sustainability. In May 2021, a public hearing was held in accordance with Proposition 218, at the hearing the Governing Board adopted rates that would adjust over a three-year period beginning January 1, 2022. COMMODITY CHARGES MONTHLY METER CHARGES Rates FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 Tier 1 $ 1.83 $ 1.98 $ 2.04 $ 2.11 Tier 2 2.61 2.54 2.62 2.70 Tier 3 3.64 3.93 4.05 4.18 Meter Size FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 5/8 inch $ 23.06 $ 24.01 $ 24.74 $ 25.49 3/4 inch 29.27 30.85 31.78 32.74 1 inch 41.71 44.52 45.86 47.24 1 1/2 inch 72.81 78.69 81.06 83.50 2 inch 110.13 119.70 123.30 127.00 3 inch 228.30 229.05 235.93 243.01 4 inch 402.44 352.07 362.64 373.52 6 inch 819.14 693.79 714.61 736.05 8 inch 1,503.25 1,923.98 1,981.70 2,041.16 FY 2023-24 BUDGET | 84 MONTHLY FIRE LINE SERVICE CHARGES PROJECTED TIER REVENUE BY CUSTOMER CLASS WATER SALES The table below projects the amount of water to be produced for FY 2023-24. The amount of water produced is more than the amount of water sold to account for unanticipated water demand and regular system water losses. WATER PRODUCTION (ACRE FEET) Meter Size FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 1 inch $ 8.78 $ 8.78 $ 8.78 $ 8.78 1.5 inch 13.18 13.18 13.18 13.18 2 inch 17.57 17.57 17.57 17.57 3 inch 26.35 26.35 26.35 26.35 4 inch 35.14 35.14 35.14 35.14 6 inch 52.7 52.7 52.7 52.7 8 inch 70.27 70.27 70.27 70.27 10 inch 87.84 87.84 87.84 87.84 Customer Class Tier 1 Tier 2 Tier 3 Total Residential $ 4,488,000 $ 3,833,000 $ 2,136,000 $ 10,457,000 Multi-Family 2,063,000 1,024,000 950,000 4,037,000 Commercial 1,063,000 109,000 387,000 1,559,000 Irrigation / Construction - 1,230,000 1,062,000 2,292,000 TOTAL $ 7,614,000 $ 6,196,000 $ 4,535,000 $ 18,345,000 Class No. Of Accounts Tier 1 (Acre Feet) Tier 2 (Acre Feet) Tier 3 (Acre Feet) Total (Acre Feet)Total Sales Residential 19,966 4,965 3,326 1,198 9,489 $ 10,457,000 Multi-Family 479 2,282 888 533 3,703 4,037,000 Commercial 710 1,180 94 216 1,490 1,559,000 Irrigation / Construction 360 - 1,067 597 1,664 2,292,000 TOTALS 21,515 8,427 5,375 2,544 16,346 $ 18,345,000 Source of Supply FY 2019-20 Actual FY 2020-21 Actual FY 2021-22 Actual FY 2022-23 Projected FY 2023-24 Budget Ground Water 12,549 12,800 12,826 14,590 11,543 Surface Water 3,647 3,574 3,581 2,575 3,950 Purchased Water 800 800 800 - 1,800 TOTAL 16,996 17,174 17,207 17,165 17,293 Assumptions and Trends The development of the revenue projections for FY 2023-24 requires management to estimate customer consumption for the next year. The District will provide water services through approximately 21,503 domestic and irrigation connections in FY 2023-24. In addition, 265 commercial fire services and 12 temporary hydrant meters are connected to the District’s system. Water demand is estimated at 7,121,000 hundred cubic feet of water (HCF = 748 gallons). The estimate is based on the baseline year consumption established for rate modeling, and actual consumption history for the last five years. Staff is confident projections will allow adequate funding for Program Goals and objectives without considerable risk of overstatement. The District considers multiple factors in calculating each customer’s monthly water budget: Since the adoption of water budget-based rates, the District has experienced success in reducing water consumption and stabilizing revenues to ensure operating and capital needs of the District are adequately funded. How Water Bills are Calculated — Residential Indoor Water Budgets are unique to each customer and are based on the number of occupants residing in the house. Each occupant is budgeted 55 gallons of water per day (gpd) for efficient indoor use, which is then multiplied by the number of days in the billing period. TIER 11 INDOOR BUDGET EXAMPLE OUTDOOR WATER BUDGETS are unique to customer property, and are based on the landscape area. Landscape area represents the square footage of the property’s landscape requiring irrigation (e.g., grass, parkways, trees, bushes, and various plants). EAST VALLEY WATER DISTRICT | 85 [WATER FUND] • Number of Occupants • Number of Dwelling Units • Medical Needs • Horses/Livestock • Business Needs • Agricultural Needs • Irrigable Landscape • Weather • Meter Size 55 Gal 748 Persons Per Household Per Person, Per Day Days in Billing Cycle Number of Gallons In One Unit Tier 1 Budget 55 Gal 74835Days 7,700 Gallons or 10 Units of Water for Tier 1 Budget Example:Tier 1 budget calculation for a home with 4 occupants during a 35 day billing cycle. FY 2023-24 BUDGET | 86 TIER 22 FACTORS In determining the customer’s outdoor budget, the following factors and conversions are made during each billing cycle. Square Footage of Landscape Area (Irrigable Landscape): When the District restructured its uniform rates to budget- based rates in FY 2014-15, the District hired a consultant that provided property information for each customer’s parcel located within the District’s service area. The consultant used an advanced camera that was attached to an airplane flown over the District boundary capturing each parcel’s unique landscape area square footage. Evapotranspiration (ETo): The process by which water is transferred from the land to the atmosphere by evaporation from the soil and other surfaces and by transpiration from plants. ETo is measured in inches, which is captured and recorded by a State-Certified weather station. The District received ETo data from the California Irrigation Management Information System (CIMIS) Station ID 251 in Highland, California. The sum of daily ETo measurement during the billing period is used in the calculation for efficient outdoor water usage. Crop Coefficient (Kc): The properties of plants used in predicting evapotranspiration (ETo). Below is a table listing the values used in each month. The District has elected to use the Cool-Season Crop Coefficient. Square Footage to Gallons Conversion: The District provides water in the measurement of HCF (1 unit = 748 gallons), but the ETo rate is measured in inches. Additionally, the measurement of landscape area is square foot which must be converted to gallons to determine the outdoor budget. One square foot equals 0.62 gallons. The sum of the billing periods ETo is multiplied by 0.62 gallons to develop the efficient outdoor water budget. Month JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Annual Average Cool Season Plant Factor 0.61 0.64 0.75 1.04 0.95 0.88 0.94 0.86 0.74 0.75 0.69 0.60 0.79 Warm Season Plant Factor 0.55 0.54 0.76 0.72 0.79 0.68 0.71 0.71 0.62 0.54 0.58 0.55 0.65 One Foot On e F o o t WATER One Cubic Foot = 7.48 Gallons One F o o t One Foot WATER 1 Inch of Water perSquare Foot = 0.62 Gallons 1” TIER 22 OUTDOOR BUDGET EXAMPLE TIER 33 INEFFICIENT USE When a customer exceeds their Tier 1 and Tier 2 budgets, the excess units of water used are billed at the Tier 3 rate. The District has developed its rates in accordance with Proposition 218, allowing the District and like agencies to charge customers the highest rate due to the additional cost incurred by the District for delivering inefficient water, including but not limited to, imported water cost, electricity expenses for pumping and boosting water throughout the system, and chemicals needed for the treatment process. How Water Bills are Calculated — Non-Residential Non-Residential water budget is calculated differently from residential to ensure water budgets for this customer class are equitable and cover the cost of supplying water to these establishments. TIER 11 AND TIER 2 2 WATER BUDGETS The indoor (Tier 1) and outdoor water (Tier 2) budget are calculated by taking the average of the last two years actual HCF consumption for each Tier, then multiplying by 90%. Calculating non-residential customers in this manner encourages conservation and shares the cost of operating the District. TIER 33 INEFFICIENT USE When a customer exceeds their Tier 1 and Tier 2 budgets, the excess units of water are billed at the Tier 3 rate. EAST VALLEY WATER DISTRICT | 87 [WATER FUND] 7480.620.95 Landscape Area in Square Feet Monthly Evapotranspiration Rate Note: This rate varies per day and month Monthly Plant Factor Note: Plant factor changes each month Number of Gallons In One Unit Sq. Ft. to Gallons Conversion Factor for Irrigation 748 15,885 Gallons or 22 Units of Waterfor Tier 2 Usage Tier 2 Usage 0.620.953,000 8.99 Landscape Area in Square Feet Evapotranspiration Rate Plant Factor Sq. Ft. to Gallons Conversion Factor for Irrigation Number of Gallons In One Unit Example: Tier 2 budget calculation for a home with 3,000 sq. ft. of irrigable area. 1,500 Sq. Ft. 1,500 Sq. Ft. 0.95 8.99 May Plant Factor Evapotranspiration Rate Sq. Ft. = Square Feet HCF = Hundred Cubic Feet or 1 Billing Unit FY 2023-24 BUDGET | 88 Meter Charge Revenue METER CHARGE REVENUE BY METER SIZE The District’s Operating Revenue includes fixed charges, which are based on the size of the meter serving the customer’s property. The rates meet the compliance requirements of Proposition 218. Meter Charges have been established based on a comprehensive third-party cost of services analysis, and the rates provide funding for operating and capital needs. Other Charges and Other Revenue Sources Other charges and other revenue include fees related to the collection of delinquent accounts, investment revenue, reimbursements from other agencies, facility rentals, and other miscellaneous revenue. ASSUMPTIONS AND CONSIDERATIONS • Delinquent fees, final notice charges, and disconnect/reconnect fees will increase as the State moratorium on service disconnections for non-payment has expired and collection efforts will resume. • The LAIF interest rate, which is paid on District funds invested with LAIF, lags behind adjustments to the federal rate but should trend upward over the next year, and investment earnings with it. Expenses The Water Fund is one of three enterprise funds the District operates. Water Fund resources pay for operations and maintenance of the water distribution system, repair and replacement of water infrastructure, a portion of District customer account and administration costs, and debt service. Water Fund debt is incurred to provide full or partial funding for multiple CIP projects. Meter Size No. of Services Rate July–Dec Rate Jan–June Total 5/8 in. 3,373 $ 24.74 $ 25.49 $ 1,016,000 3/4 in. 13,237 31.78 32.74 5,124,000 1 in. 4,212 45.86 47.24 2,353,000 1 1/2 in. 268 81.06 83.50 265,000 2 in. 303 123.30 127.00 455,000 3 in. 77 235.93 243.01 221,000 4 in. 22 363.64 373.52 97,000 6 in. 17 714.61 736.05 148,000 8 in. 6 1,981.70 2,041.16 145,000 Fire Service 1 1/2 in. 6 13.18 13.18 1,000 Fire Service 4 in. 50 35.14 35.14 22,000 Fire Service 6 in. 140 52.70 52.70 87,000 Fire Service 8 in. 57 70.27 70.27 49,000 Fire Service 10 in. 12 87.84 87.84 13,000 TOTALS 21,780 $ 9,996,000 ASSUMPTIONS AND CONSIDERATIONS FOR OPERATING EXPENSES Expenses are based on the cost of providing water to meet customer demands. Primary cost considerations and assumptions include: • Electricity Expense for operating wells, pumps and boosters, treatment plants and other facilities. • Chemical Expense purchased for the treatment of source water before it enters the distribution system for consumption. The cost trends for chemicals are stable, with no foreseeable significant increases. • Contract Services are expenses incurred for services provided by third parties. Many District programs utilize consultants or vendors who offer quality and economical services. Since these services are unique to the program, it is difficult to list them all. Program Managers are responsible for researching or pre-bidding services in developing their program’s budget. • Materials and Supplies are needed to support field operations and general administration related to operating the District. • The District is continuing to focus effort on the Conservation Program, which is committed to assisting customers with conservation efforts through the continuance of the rebate programs and instructor-led seminars and demonstrations. The following costs are allocated to all Funds, including the Water Fund: • Customer Account costs are related to reading meters, billing and payment collection, and responding to customer inquiries. • Administration costs are incurred in various programs, including, but not limited to Human Resources, Public Affairs, Engineering and Finance. DEBT SERVICES AND CAPITAL EXPENSES The District has issued debt to pay for capital expenditures for replacing, improving, and adding infrastructure. In addition to debt financing, the District also budgets a portion of operating revenue each year to cash finance certain capital projects. Conclusions The proposed budget for the Water Fund is balanced, including contributions to reserves. District staff will continue to monitor the revenues and expenses and present the progress to the Governing Board on a periodic basis. EAST VALLEY WATER DISTRICT | 89 [WATER FUND] 31.6% water fund expenses by cost center Administration 10.7 % Debt Service 13.7% Transmission &Distribution 14.2% CapitalExpenditures 16.5% Sourceof Supply 0.3 % ReserveTransfer 3.6 % Pumps &Boosters3.9 % Treatment 5.5%CustomerAccounts FY 2023-24 BUDGET | 90 FY 2023-24 Proposed Water Fund Budget FY 2020-21 Actual FY 2021-22 Actual FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget REVENUE/SOURCES Water Sales $ 19,305,632 $ 18,472,875 $ 17,700,000 $ 17,600,000 $ 18,345,000 Meter Charges 9,217,003 9,192,297 9,785,000 9,766,193 9,996,000 Penalties 172,918 298,362 468,000 584,224 450,000 Other Operating Revenue 540,578 1,420,752 442,000 1,476,438 42,000 Miscellaneous Revenue 409,618 (28,131) 120,000 282,714 220,000 Gain on Disposal of Assets (1,234,309) 807,425 - - - TOTAL REVENUE/SOURCES $ 28,411,440 $ 30,163,580 $ 28,515,000 $ 29,709,569 $ 29,053,000 OPERATING EXPENSES Employment Expenses $ 9,255,428 $ 9,781,129 $ 9,025,000 $ 8,120,500 $ 9,227,500 Water Costs 587,879 373,096 486,000 548,336 768,000 Power Costs 2,355,477 2,705,890 3,185,000 3,233,084 3,165,000 Materials & Supplies 1,096,265 1,830,103 1,640,400 1,875,321 1,331,500 Contract Services 3,682,286 4,907,175 6,323,400 5,068,927 6,827,800 Other Operating Expenses 153,931 282,449 260,200 243,196 415,200 TOTAL OPERATING EXPENSES $ 17,131,266 $ 19,879,842 $ 20,920,000 $ 19,089,364 $ 21,735,000 OTHER EXPENSES Debt Principal $ - $ 2,088,231 $ 2,163,000 $ 2,163,000 $ 2,217,000 Debt Interest Expense 981,067 697,862 917,000 917,000 886,000 Other Non-Operating Expense 233,393 322,574 - - - Capital Outlay 1,243,894 541,195 640,000 640,000 695,000 Capital Improvement Program 2,540,849 2,724,603 5,075,000 5,075,000 3,425,000 Transfer to (from) Reserves 6,280,971 3,909,273 (1,200,000) 1,825,205 95,000 TOTAL OTHER EXPENSES $ 11,280,174 $ 10,283,738 $ 7,595,000 $ 10,620,205 $ 7,318,000 TOTAL OPERATING/OTHER EXPENSES $ 28,411,440 $ 30,163,580 $ 28,515,000 $ 29,709,569 $29,053,000 NET SURPLUS $ - $ - $ - $ - $ - EAST VALLEY WATER DISTRICT | 91 [WATER FUND] WATER FUND REVENUES VS. EXPENSES $17,487,000 $17,131,266 $19,879,842 $19,089,364 $21,735,000 $5M $10M $15M $20M $25M $30M FY 2018-19 Actual FY 2019-20 Actual FY 2020-21 Actual FY 2021-22 Actual FY 2022-23 Estimated FY 2023-24 Proposed Operating Expenses Revenues $16,062,000 $26,583,000 $28,411,440 $30,163,580 $29,709,569 $29,053,000 $26,504,000 FY 2023-24 BUDGET | 92 [PAGE LEFT BLANK] Intentionally EAST VALLEY WATER DISTRICT | 93 WASTEWATER FUNDfy 2023-24 WA S T E W A T E R F U N D T h e A n n u a l B u d g e t E A S T V A L L E Y W A T E R D I S T R I C T The activities of enterprise funds closely resemble those of ongoing businesses in which the purpose is to conserve and add to resources while funding operating expenses from current revenues. FY 2023-24 BUDGET | 94 EAST VALLEY WATER DISTRICT | 95 WASTEWATER FUND The Wastewater Fund pays for all activities related to the operations and maintenance of the District’s wastewater collection system. In FY 2021-22 and prior, the wastewater fund also reported all activities related to wastewater treatment; which consisted primarily of billing and collection of wastewater treatment revenue on behalf of the San Bernardino Municipal Water Department, and remittance of those revenues to SBMWD on a monthly basis. However, as the District nears completion of the Sterling Natural Resource Center, reporting of past and current wastewater treatment activity is now shown in the District’s Water Reclamation Fund. Revenues The Wastewater Fund relies primarily on revenue from Wastewater Collection System charges. Wastewater Collection rate adjustments are adopted at a public hearing that occurs every three to five years, and the adjustments are supported by an independent cost of service analysis. The most recent analysis was completed in January of 2021 and the final adjustment to Collection rates proposed by that analysis will become effective January 1, 2024. As this effective date is at the midpoint of FY 2023-24, the detailed calculation of projected wastewater collection revenue shown later in this section is presented in two steps, one for each six month period prior to, and after, the effective date. RESIDENTIAL Residential collection system rates were recently restructured to charge customers in a manner more consistent with the nature of their customer class. The new multi-family rates add equitability because they consider the number of dwelling units associated with an account and then assess a monthly fixed charge for each dwelling unit, very similar to charges to single-family accounts. Both residential account types, Single-Family and Multi-Family, are considered residential accounts as they have similar impacts to the collection system, whereas Multi-Family accounts were previously billed similar to non-residential (commercial) accounts. NON-RESIDENTIAL The District also bills non-residential customers on a monthly basis using a different calculation. The non-residential charge consists of two components—a flat rate and a consumption based rate. The flat rate is assessed once per billing cycle, while the consumption based rate is assessed for every hundred cubic feet (HCF), of water consumption in the billing period. Additionally, the consumption based rate varies depending on the strength of wastewater discharged into the collection system. There are four strength categories: low strength, medium strength, high strength, and Patton – a rate developed specifically for Patton State Hospital. Shown on the following page are the calculations for projected wastewater system charge revenue from all customer classes for FY 2023-24. FY 2023-24 BUDGET | 96 OTHER REVENUE Other revenue posted to the Wastewater fund include: • Investment Income — Allocated based on the balance of the funds invested reserves. • Penalties — Fees related to the collection of delinquent utility accounts. These revenues are projected based on an estimated number of occurrences during the fiscal year and they are shared with the Water fund. • Miscellaneous Revenue Expenses Operating expenses have remained consistent in the Wastewater Fund. The District utilizes a crew of four field staff plus a Supervisor to conduct preventative maintenance programs on the wastewater pipelines. This includes video monitoring and cleaning the lines on a regular schedule. Also, the fund’s budget includes contracting for spot repairs of the conveyance system when video monitoring reveals minor deficiencies or faults in the wastewater collection lines. Customer Type Units Monthly Fixed Charge Usage (HCF)Charge per HCF Total JULY 2023 THROUGH DECEMBER 2023 Single-Family Residential 19,325 $ 15.25 $ 1,768,000 Multi-Family Residential 10,654 14.41 921,000 Commercial Low Strength 463 11.06 175,000 $ 0.38 97,000 Commercial Medium Strength 70 11.06 34,000 0.50 22,000 Commercial High Strength 86 11.06 73,000 0.50 42,000 Commercial - Patton 1 11.06 90,000 0.61 55,000 TOTAL 30,599 $ 2,905,000 JANUARY 2024 / JUNE 2024 Single-Family Residential 19,325 $ 16.32 $ 1,892,000 Multi-Family Residential 10,654 15.42 986,000 Commercial Low Strength 463 11.84 120,000 $ 0.41 82,000 Commercial Medium Strength 70 11.84 25,000 0.54 18,500 Commercial High Strength 86 11.84 60,000 0.54 38,500 Commercial - Patton 1 11.84 70,000 0.66 46,000 TOTAL 30,599 $ 3,063,000 TOTAL WASTEWATER COLLECTION REVENUE $ 5,968,000 The Wastewater Fund also continues to share in allocated costs from internal service or administrative type programs within the District usually at a 30% allocation. Conclusions The Wastewater Fund is balanced and, after several years, is building the financial capacity to begin a pipeline replacement program and/or establish a Capital Replacement reserve. District staff will continue to monitor the revenues and expenses and, if appropriate, recommend funding new projects during the budget review(s) with the Governing Board. EAST VALLEY WATER DISTRICT | 97 [WASTEWATER FUND] Cost Center Amount Transmission & Distribution $ 1,470,500 Customer Service 558,900 Administration 2,820,600 Debt Service 273,000 Transfer to Reserves 365,000 Capital Expenditures 560,000 TOTAL $ 6,048,000 wastewater fund expenses by cost center 47 % Administration 5% DebtService 6% ReserveTransfer 24% Collection &Transmission 9% CapitalExpenditures 9% CustomerAccounts FY 2023-24 BUDGET | 98 FY 2023-24 Proposed Wastewater Fund Budget FY 2020-21 Actual FY 2021-22 Actual FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget REVENUE/SOURCES Penalties $ 74,419 $ 106,560 $ 60,000 $ 61,736 $ 60,000 Wastewater System Charges 4,705,683 4,828,525 5,621,000 5,582,882 5,968,000 Wastewater Treatment Charges 8,456,508 9,764,357 - - - Other Operating Revenue 354,302 1,745,551 100,000 999,310 - Miscellaneous Revenue (4,002) (77,787) 5,000 35,799 20,000 Gain on Disposal of Assets (2,291) 235,137 - - - TOTAL REVENUE/SOURCES $ 13,584,619 $ 16,602,343 $ 5,786,000 $ 6,679,727 $ 6,048,000 OPERATING EXPENSES Employment Expenses $ 2,417,909 $ 2,546,698 $ 2,561,900 $ 2,168,217 $ 2,544,700 Power Costs 25,414 27,288 22,000 30,913 - Materials & Supplies 94,680 157,881 110,000 105,114 133,100 Contract Services 9,636,426 10,231,784 1,929,100 1,802,335 2,066,400 Other Operating Expenses 44,676 92,460 99,000 81,092 105,800 TOTAL OPERATING EXPENSES $ 12,219,105 $ 13,056,111 $ 4,722,000 $ 4,187,671 $ 4,850,000 OTHER EXPENSES Debt Principal $ - $ 170,000 $ 175,000 $ 175,000 $ 175,000 Debt Interest Expense 132,667 115,797 99,000 99,000 98,000 Other Non-Operating Expense 39,985 158,990 - - - Capital Outlay 451,274 - 475,000 475,000 260,000 Capital Improvement Program 621,938 679,228 315,000 315,000 300,000 Transfer to (from) Reserves 119,650 2,422,217 - 1,428,056 365,000 TOTAL OTHER EXPENSES $ 1,365,514 $ 3,546,232 $ 1,064,000 $ 2,492,056 $ 1,198,000 TOTAL OPERATING/OTHER EXPENSES $ 13,584,619 $ 16,602,343 $ 5,786,000 $ 6,679,727 $ 6,048,000 NET SURPLUS $ - $ - $ - $ - $ - EAST VALLEY WATER DISTRICT | 99 WATER RECLAMATION FUNDfy 2023-24 WA T E R R E C L A M A T I O N F U N D T h e A n n u a l B u d g e t E A S T V A L L E Y W A T E R D I S T R I C T World class public service requires a constant commitment to creative solutions and innovation. FY 2023-24 BUDGET | 100 EAST VALLEY WATER DISTRICT | 101 WATER RECLAMATION FUND The Water Reclamation Fund pays for all activities related to the operation of the SNRC and the treatment of the District’s wastewater. The District has established wastewater treatment rates to cover treatment costs, however, a portion of charges collected from customers will continue to be remitted to the San Bernardino Municipal Water Department until 100% of wastewater flows have been diverted from the SBMWD’s treatment facilities and to the SNRC. Flows will be diverted in phases beginning in Fall 2023, with 100% diversion expected by the end of December 2023. Revenues The Water Reclamation Fund relies primarily on revenue from Wastewater Treatment charges. These are supplemented by Non-Rate operating revenue generated from third parties, miscellaneous revenue, interest income, and capacity charges for new services. Wastewater Treatment rate adjustments are adopted at a public hearing that occurs every three to five years, and the adjustments are supported by an independent cost of service analysis. The most recent analysis was completed in January of 2021 and the final adjustment to Treatment rates proposed by that analysis will become effective January 1, 2024. As this adjustment does become effective at the midpoint of FY 2023-24, the detailed calculation of projected wastewater treatment revenue shown later in this section is presented in two steps, one for each six month period. RESIDENTIAL Residential treatment rates are structured to charge customers in a manner consistent with the nature of their customer class. Redesigned multi-family rates add equitability because they consider the number of dwelling units associated with an account and then assess a fixed charge for each dwelling unit, very similar to charges to single-family accounts. Both account types, Single-Family and Multi-Family, are considered residential accounts as they have similar requirements for treatment, whereas Multi-Family accounts were previously billed similar to non-residential (commercial) accounts. NON-RESIDENTIAL The District bills non-residential customers on a monthly basis for wastewater using a different calculation. The non- residential charge consists of two components—a flat rate and a consumption based rate. The flat rate is assessed once per billing cycle, while the consumption based rate is assessed for every hundred cubic feet (HCF), of water consumption in the billing period. Additionally, the consumption based rate varies significantly depending on the strength of a customer’s wastewater discharged for treatment. There are four strength categories: low strength, medium strength, high strength, and Patton– a rate developed specifically for Patton State Hospital. Shown on the following page are the calculations for projected wastewater treatment revenue from all customer classes for FY 2023-24. FY 2023-24 BUDGET | 102 OTHER REVENUE Other revenues posted to the Reclamation fund include: • Other Operating Income — Consists of fees charged to, or earned from, third parties. Currently these include tipping fees charged to liquid waste haulers who unload at the SNRC digesters, and Local Resource Investment Program (LRIP) revenue earned from the regional groundwater basin master for recharging recycled water into the local groundwater basin. • Investment Income — Allocated based on the balance of the funds invested reserves. • Miscellaneous Revenue Customer Type Units Monthly Fixed Charge Usage (HCF)Charge per HCF Total JULY 2023 THROUGH DECEMBER 2023 Single-Family Residential 19,325 $ 25.01 2,900,000 Multi-Family Residential 10,654 22.33 1,427,000 Commercial Low Strength 463 11.59 175,000 $ 1.03 212,000 Commercial Medium Strength 70 11.59 34,000 1.64 60,000 Commercial High Strength 86 11.59 73,000 3.66 273,000 Commercial - Patton 1 11.59 90,000 1.92 173,000 TOTAL 30,599 $ 5,045,000 JANUARY 2024 / JUNE 2024 Single-Family Residential 19,325 $ 26.77 $ 3,104,000 Multi-Family Residential 10,654 23.90 1,527,000 Commercial Low Strength 463 12.41 120,000 1.11 168,000 Commercial Medium Strength 70 12.41 25,000 1.76 49,000 Commercial High Strength 86 12.41 60,000 3.92 242,000 Commercial - Patton 1 12.41 70,000 2.06 $ 144,000 TOTAL 30,599 $ 5,234,000 TOTAL WASTEWATER TREATMENT REVENUE $ 10,279,000 Expenses With the startup of operations at the SNRC, this fund has seen an anticipated increase in expenses as commissioning and treatment of operations nears. During FY 2023-24 the District will transition from treatment services provided by the SBMWD to full operation of the Sterling Natural Resource Center. The District will utilize a field staff of eight for plant operations and maintenance. The District has forecasted these types of expenses and planned for these operations through the District’s wastewater rates. Conclusion The new Water Reclamation Fund is balanced, however, with the start of new operations, there will be future adjustments in this fund as the District becomes more efficient in the treatment process. District staff will continue to monitor the revenues and expenses and present the progress to the Governing Board on a quarterly basis. EAST VALLEY WATER DISTRICT | 103 [WATER RECLAMATION FUND] water reclamation fund expenses by cost center 8% ReserveTransfer 30% Treatment Services 47 % Reclamation 2% CapitalExpenditures A balanced budget allows the District to avoid budget deficits. FY 2023-24 BUDGET | 104 FY 2020-21 Actual FY 2021-22 Actual FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget REVENUE/SOURCES Water Sales $ - $ - $ - $ - $ - Wastewater Treatment Charges - - 9,851,000 10,083,076 10,279,000 Other Operating Revenue - - - - 1,944,000 Miscellaneous Revenue - - - - 100,000 Gain on Disposal of Assets - - - - - TOTAL REVENUE/SOURCES $ - $ - $ 9,851,000 $ 10,083,076 $ 12,323,000 OPERATING EXPENSES Employment Expenses $ - $ - $ 875,100 $ 742,993 $ 1,581,800 Water Costs - - 7,900,000 8,307,804 3,700,000 Power Costs - - 273,000 271,062 2,000,000 Materials & Supplies - - 119,600 77,191 751,400 Contract Services - - 671,000 683,093 3,038,800 Other Operating Expenses - - 12,300 933 21,000 TOTAL OPERATING EXPENSES $ - $ - $ 9,851,000 $ 10,083,076 $ 11,093,000 OTHER EXPENSES Debt Principal $ - $ - $ - $ - $ - Debt Interest Expense - - - - - Other Non-Operating Expense - - - - - Capital Outlay - - - - 210,000 Capital Improvement Program - - - - - Transfer to (from) Reserves - - - - 1,020,000 TOTAL OTHER EXPENSES $ - $ - $ - $ - $ 1,230,000 TOTAL OPERATING/OTHER EXPENSES $ - $ - $ 9,851,000 $ 10,083,076 $ 12,323,000 NET SURPLUS $ - $ - $ - $ - $ - FY 2023-24 Proposed Water Reclamation Fund Budget EAST VALLEY WATER DISTRICT | 105 CONSOLIDATED FINANCIAL SCHEDULES fy 2023-24 C O N S O L I D A T E D FI N A N C I A L S C H E D U L E S T h e A n n u a l B u d g e t E A S T V A L L E Y W A T E R D I S T R I C T The District conducts an extensive process gathering input from internal staff and the community throughout the budget development and review process. FY 2023-24 BUDGET | 106 EAST VALLEY WATER DISTRICT | 107 CONSOLIDATED FINANCIAL SUMMARY Overview of revenues and other financing sources and expenditures. Districtwide Summary FY 2021-22 Actuals FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget Amount Changed % Changed REVENUES 4100 Water Sales $ 18,472,875 $ 17,700,000 $ 17,600,000 $ 18,345,000 $ 1,337,000 8% 4200 Meter Charges 9,192,297 9,785,000 9,766,193 9,996,000 211,000 2% 4301 Penalties 404,922 528,000 645,960 510,000 (18,000)-3% 4400 Wastewater Collection Charges 4,828,525 5,621,000 5,582,882 5,968,000 347,000 6% 4500 Wastewater Treatment Charges 9,764,357 9,851,000 10,083,076 10,279,000 428,000 4% 4605 Other Operating Charges 3,166,303 542,000 2,475,748 1,986,000 752,000 139% 4700 Miscellaneous Revenue (105,918) 125,000 318,513 340,000 215,000 172% 4801 Gain on Disposal of Assets 1,042,562 - - - - 0% TOTAL REVENUES $ 46,765,923 $ 44,152,000 $ 46,472,372 $ 47,424,000 $ 3,272,000 7% EXPENSES – OPERATING BY PROGRAM 1000 Governing Board $228,477 $394,000 $335,015 $364,000 $(30,000)-8% 2000 General Administration 1,289,090 1,294,000 1,164,467 1,370,000 76,000 6% 2100 HR/Risk Management 1,854,930 1,917,000 2,382,709 2,857,000 940,000 49% 2200 Public Affairs 1,745,957 1,578,000 1,433,964 1,292,000 (286,000)-18% 2300 Conservation 570,652 862,000 448,718 689,000 (173,000)-20% 3000 Finance 1,230,080 1,271,000 930,991 1,344,000 73,000 6% 3200 Information Technology 1,357,779 1,344,000 1,097,192 1,722,000 378,000 28% 3300 Customer Service 1,445,777 1,746,500 1,728,496 1,863,000 116,500 7% 3400 Meter Services 274,173 270,000 220,522 292,000 22,000 8% FY 2023-24 BUDGET | 108 FY 2021-22 Actuals FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget Amount Changed % Changed 4000 Engineering $ 1,672,509 $ 1,224,000 $ 722,489 $ 1,428,000 $ 204,000 17% 5000 Water Production 4,655,222 5,657,000 5,240,446 5,992,000 335,000 6% 5100 Water Treatment 977,362 1,090,000 1,080,577 1,082,000 (8,000)-1% 5200 Water Quality 501,441 507,000 402,204 546,000 39,000 8% 6000 Water Maintenance Adminstration 494,379 441,000 389,181 465,000 24,000 5% 6100 Water Maintenance 2,928,684 3,017,000 3,291,193 2,826,000 (191,000)-6% 6200 Wastewater Collection 9,671,187 880,000 806,985 867,000 (13,000)-1% 6300 Water Reclamation - 9,111,000 8,799,782 9,896,000 785,000 9% 7000 Facilities Maintenance 1,307,009 2,138,500 2,133,837 2,023,000 (115,500)-5% 7100 Fleet Maintenance 731,245 751,000 751,343 760,000 9,000 1% TOTAL OPERATING EXPENSES $ 32,935,953 $ 35,493,000 $ 33,360,111 $ 37,678,000 $ 2,185,000 6% EXPENSES - OTHER Debt Principal $ 2,258,231 $ 2,338,000 $ 2,338,000 $ 2,392,000 $ 54,000 2% Debt Interest Expense 813,659 1,016,000 1,016,000 984,000 (32,000)-3% Other Non-Operating Expense 481,564 - - - - 0% Capital Outlay 541,195 1,115,000 1,115,000 1,165,000 50,000 4% Capital Improvement 3,403,831 5,390,000 5,390,000 3,725,000 (1,665,000)-31% Transfer To (From) Reserves 6,331,490 (1,200,000)3,253,261 1,480,000 2,680,000 -223% TOTAL OPERATING EXPENSES $ 13,829,970 $ 8,659,000 $ 13,112,261 $ 9,746,000 $ 1,087,000 13% TOTAL OPERATING/ OTHER EXPENSES $ 46,765,923 $ 44,152,000 $ 46,472,372 $ 47,424,000 $ 3,272,000 7% NET SURPLUS (DEFICIT) $ - $ - $ - $ - $ - - Itemized Operating Expense Summary EAST VALLEY WATER DISTRICT | 109 [CONSOLIDATED FINANCIAL SUMMARY] FY 2021-22 Actuals FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget Amount Changed % Changed PERSONNEL EXPENSES 5101 Regular Labor $ 7,798,066 $ 7,718,000 $ 6,006,537 $ 8,275,000 $ 557,000 7% 5102 Temporary Labor 5,719 30,000 56,395 47,000 17,000 57% 5103 Overtime 459,408 415,000 543,809 429,000 14,000 3% 5104 Standby 37,550 35,000 39,319 90,000 55,000 157% 5200 Benefits 3,561,924 3,913,000 3,803,556 4,162,000 249,000 6% TOTAL PERSONNEL $11,862,667 $ 12,111,000 $ 10,665,682 $ 13,003,000 $ 892,000 7% WATER SUPPLY 6101 Purchased Water $ 206,142 $ 302,000 $ 400,000 $ 300,000 $ (2,000)-1% 6102 Replenishment 95,341 110,000 146,175 351,000 241,000 219% 6103 Water Assessment 71,613 74,000 2,161 117,000 43,000 58% TOTAL WATER SUPPLY $ 373,096 $ 486,000 $ 548,336 $ 768,000 $ 282,000 58% OPERATING EXPENSES 6201 Materials & Supplies $ 1,382,654 $ 1,193,000 $ 1,546,573 $ 1,046,000 $ (147,000)-12% 6202 Tools 65,760 63,000 84,386 89,000 26,000 41% 6203 Office Supplies 26,245 49,000 27,630 51,000 2,000 4% 6204 Chemicals 288,019 400,000 337,775 1,030,000 630,000 158% 6205 Conservation Rebates 225,308 165,000 61,261 120,000 (45,000)-27% 6301 Contract Services 3,270,573 5,144,700 3,509,349 6,984,000 1,839,300 36% 6302 Banking Services 235,120 247,000 294,380 232,000 (15,000)-6% 6303 Printing & Publishing 186,318 331,500 265,143 202,000 (129,500)-39% 6304 Legal Services 200,549 202,300 213,132 201,000 (1,300)-1% 6305 Treatment Services 9,084,061 7,900,000 8,307,804 3,700,000 (4,200,000)-53% 6306 Rents & Leases 17,994 20,000 20,277 20,000 - 0% 6307 Uniforms 77,014 113,000 80,764 102,000 (11,000)-10% 6308 Billing Services 49,803 60,000 71,002 52,000 (8,000)-13% 6309 Shut Off Notice Services - 225,000 235,317 225,000 - 0% FY 2023-24 BUDGET | 110 FY 2021-22 Actuals FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget Amount Changed % Changed 6310 Street Services $ 265,113 $ 525,000 $ 453,915 $ 525,000 $ - 0% 6311 Landscape Services 169,819 233,000 274,335 233,000 - 0% 6312 Janitorial Services 138,743 148,000 154,181 148,000 - 0% 6314 Litigation Services 4,928 40,000 10,603 25,000 (15,000)-38% 6401 Utilities 51,673 58,000 48,935 48,000 (10,000)-17% 6402 Telephone 131,963 133,000 151,887 122,000 (11,000)-8% 6403 Electricity 2,733,178 3,480,000 3,535,059 5,455,000 1,975,000 57% 6404 Fuel 175,812 244,900 245,700 256,000 11,100 5% 6405 Permits 158,563 183,000 184,913 284,000 101,000 55% 6406 Postage 153,383 115,100 210,073 229,000 113,900 99% 6501 Memberships & Dues 126,402 165,000 145,358 176,000 11,000 7% 6502 Professional Development 160,830 101,500 87,909 147,000 45,500 45% 6503 Education Assistance 75 6,000 - 3,000 (3,000)-50% 6504 Meetings 27,919 47,000 36,451 49,000 2,000 4% 6505 Employee Recognition 21,432 46,000 46,551 41,000 (5,000)-11% 6701 General Insurance 754,048 890,000 1,130,081 1,745,000 855,000 96% 6702 Insurance Claims 13,482 10,000 367 10,000 - 0% 6703 Cash Over/Short 64 1,000 1,868 1,000 - 0% 6704 Bad Debt 38,187 5,000 7,084 5,000 - 0% 6705 OPEB Retirees 465,158 351,000 582,096 351,000 - 0% SUBTOTAL OPERATING EXPENSES $ 20,700,190 $ 22,896,000 $ 22,362,159 $ 23,907,000 $ 1,011,000 4% TOTAL OPERATING EXPENSES $ 32,935,953 $ 35,493,000 $ 33,360,111 $ 37,678,000 $ 2,185,000 6% EAST VALLEY WATER DISTRICT | 111 PROGRAM SUMMARIESfy 2023-24 PR O G R A M S U M M A R I E S T h e A n n u a l B u d g e t E A S T V A L L E Y W A T E R D I S T R I C T Program-based budgeting allows for costs to be clearly identified while easily measuring benefits as outlined in the Key Performance Indicators and completion of Goals and Objectives. FY 2023-24 BUDGET | 112 • Program Descriptions • Position Summary Schedule • Program Summaries Program Summaries Contents EAST VALLEY WATER DISTRICT | 113 PROGRAM DESCRIPTIONS Comprehensive information for each functional program within the District provides a higher degree of operational detail. The District utilizes program-based budgeting. Requested funds are associated with the expected results and performance is measured by indicators and reviewed on a quarterly basis with the Governing Board. This results- oriented strategy provides the ability to monitor expenses related to a particular program or activity and track measurable benefits. Program-based budgeting results can be used in cost-benefit analysis, just as it would be in a business environment to determine the value of decisions and enhance transparency. Program Goals and Objectives have been designed to correlate directly with the District’s adopted Vision and Five- Year Work Plan for the upcoming fiscal year. Key Performance Indicators (KPI) monitor progress towards meeting program objectives. Each KPI has a target that provides users of the budget the ability to assess the Program’s performance over time. Program-based budgeting also increases accountability and transparency as community members and Governing Board can more easily see where dollars are invested and monitor program effectiveness. The FY 2023-24 Budget is organized into the following summary programs: • Governing Board • General Administration • Human Resources • Public Affairs • Conservation • Finance & Accounting • Information Technology • Customer Service • Meter Services • Engineering • Water Production • Water Treatment • Water Quality • Water Maintenance • Wastewater Collection • Water Reclamation • Facilities Maintenance • Fleet Maintenance Position Summary Schedule The District continues to evaluate staffing needs to ensure all services are addressed by a high-quality workforce. This process is supported by the strategic direction and succession planning efforts previously approved by the Governing Board. The table below summarizes the number of full-time personnel by Program. All authorized positions are funded in the proposed budget for FY 2023-24. Part-time positions are included in the program descriptions and not shown below. Full-Time Staffing Summary by Program Total Authorized Positions Program FY 2021-22 Actual FY 2022-23 Actual FY 2023-24 Proposed 2000 General Administration 3 3 3 2100 Human Resources 2 2 2 2200 Public Affairs 4 4 4 2300 Conservation 1 1 1 3000 Finance & Accounting 6 6 6 3200 Information Technology 3 3 3 3300 Customer Service 7 7 7 3400 Meter Services 3 2 2 4000 Engineering 5 4 3 5000 Water Production 7 7 7 5100 Water Treatment 2 2 2 5200 Water Quality 2 2 2 6100 Water Maintenance 13 14 16 6200 Wastewater Collection 4 4 4 6300 Water Reclamation 9 9 8 7000 Facilities Maintenance 2 3 2 7100 Fleet Maintenance 1 1 1 TOTAL 76 76 73 FY 2023-24 BUDGET | 114 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 73 Nu m b e r o f P o s i t i o n s 76 6667 76 68 68 EAST VALLEY WATER DISTRICT | 115 G O V E R N I N G BO A R D GOVERNING BOARD Program Summaries Section The Governing Board is the District's legislative body responsible for serving as the organizational policy makers. FY 2023-24 BUDGET | 116 • Governing Board • General Administration • Human Resources • Public Affairs • Conservation • Finance & Accounting • Information Technology • Customer Service • Meter Services • Engineering • Water Production • Water Treatment • Water Quality • Water Maintenance • Wastewater Collection • Water Reclamation • Facilities Maintenance • Fleet Maintenance Program Summaries Contents Governing Board Members 5 Elected Officials 5 PROGRAM PERSONNEL PROGRAM STRUCTURE GOVERNING BOARD VICE CHAIRMAN GOVERNING BOARD CHAIRMAN GOVERNING BOARD MEMBERS RATEPAYERS/ COMMUNITY MEMBERS The Governing Board is the legislative body of the organization. Comprised of five members elected at-large to four- year staggered terms of office. Governing Board members are responsible for providing leadership, direction and serving as the organizational policy makers. EAST VALLEY WATER DISTRICT | 117 GOVERNING BOARD PROGRAM SUMMARIES Goals Objectives 1 Provide Organizational Direction and Set Expectations through Policy Decisions Consistent with the Five-Year Work Plan 1. Consider actions to acquire outstanding shares of the North Fork Water Company. 2. Consider City Creek Mutual Water Company dissolution. 3. Convene a City Creek Mutual Water Company Board Meeting to update officers. 4. Conduct General Manager/CEO annual evaluation. 5. Engage in a strategic planning session to establish District goals and objectives. 2 Address Policy Decisions Related to the SNRC 1. Consider agenda items related to project completion and commencement of the SNRC. 2. Participate in activities that encourage community engagement for the SNRC. 3 Engage Elected Officials and Community on the District’s Strategic Priorities and Legislative Priorities 1. Evaluate and develop a legislative platform. 2. Engage with legislators to promote the legislative platform. 3. Engage community in strategic plan, goals and objectives. Directly Supports the Five-Year Work Plan FY 2023-24 BUDGET | 118 FY 2022-232022-23 ACCOMPLISHMENTS Goal One Provided Organizational Direction and Set Expectations through Policy Decisions Consistent with the Five-Year Work Plan • Completed a professional recruitment campaign for a new General Manager/CEO. • Approved Administrative Policy 2.4 – Telework Policy. • Conducted the General Manager/CEO annual evaluation, including establishment of FY 2023-24 Goals. Goal Two Addressed Policy Decisions Related to the SNRC • Approved the Balfour Beatty contract amendment. • Participated in the soft opening for the SNRC Administrative building and Weaver Basin groundbreaking ceremony. Goal Three Conducted All Activities Required for the Board of Directors Election • Coordinated with the San Bernardino County Registrar of Voters to hold the 2022 elections. • Updated and posted electoral information on the District’s website, in accordance with statutory requirements. • Reviewed and updated the Candidate Orientation Program. LEVELS OF SERVICE The Governing Board has four KPI metrics that are associated with the District’s Goals and Objectives of: • Identify Opportunities to Optimize Natural Resources (I-A) • Maximize Internal Capabilities Through Ongoing Professional Development (I-B) • Provide Quality Information to Encourage Community Engagement (II-D) • Strengthen Regional, State and National Partnerships (I-C) The program’s performance related to these metrics are included in the following table. KEY PERFORMANCE INDICATORS CHANGES Agency Goal Key Performance Indicator Target FY 2020-21 FY 2021-22 FY 2022-23 I-A Act on project related agenda items presented by staff 100%100%100%100% I-B Average number of professional development hours per Governing Board Member 6 10 6 15 II-D Submit all documentation by deadlines pursuant to transparency policies 100%100%100%100% I-C Attend Regional and State meetings as representatives of the District 160 205 236 258 PROGRAM BUDGET DETAIL FY 2021-22 Actuals FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget Amount Changed % Changed PERSONNEL EXPENSES 5101 Regular Labor $ 97,475 $ 135,000 $ 109,200 $ 140,000 $ 5,000 4% 5200 Benefits 77,377 88,000 71,358 90,000 2,000 2% OPERATING EXPENSES 6201 Materials & Supplies 1,620 2,000 - 3,000 1,000 50% 6301 Contract Services 7,815 143,000 133,333 110,000 (33,000)-23% 6307 Uniforms 860 1,000 - 1,000 - 0% 6502 Professional Development 43,330 25,000 21,124 20,000 (5,000)-20% GOVERNING BOARD TOTAL $ 228,477 $ 394,000 $ 335,015 $ 364,000 $ (30,000)-8% SIGNIFICANT CHANGES IN PROGRAM BUDGET • No elections and associated costs will be incurred in FY 2023-24. EAST VALLEY WATER DISTRICT | 119 [GOVERNING BOARD] 1% [$364,000] Program Budget Allocation [PAGE LEFT BLANK] Intentionally FY 2023-24 BUDGET | 120 EAST VALLEY WATER DISTRICT | 121 GENERAL ADMINISTRATION Program Summaries Section G E N E R A L A D M I N I S T R A T I O N General Administration is responsible for implementing the District's Vision, maintaining official records, promoting public trust, and ensuring transparency compliance. FY 2023-24 BUDGET | 122 • Governing Board • General Administration • Human Resources • Public Affairs • Conservation • Finance & Accounting • Information Technology • Customer Service • Meter Services • Engineering • Water Production • Water Treatment • Water Quality • Water Maintenance • Wastewater Collection • Water Reclamation • Facilities Maintenance • Fleet Maintenance Program Summaries Contents General Manager/CEO 1 District Clerk 1 Administrative Specialist 1 Total Full-Time 3 PROGRAM PERSONNEL PROGRAM STRUCTURE DISTRICT CLERK GENERAL MANAGER/CEO ADMINISTRATIVE SPECIALIST GOVERNING BOARD CHAIRMAN General Administration is responsible for ensuring the District’s business and daily activities are performed following Federal, State, and Governing Board approved policies. The General Manager/CEO provides daily oversight for interagency relations for advancing the District’s initiatives. Additionally, the General Manager/CEO implement’s strategic planning for future operations and capital improvement funding requirements and resource allocation. EAST VALLEY WATER DISTRICT | 123 GENERAL ADMINISTRATION PROGRAM SUMMARIES Goals Objectives 1 Complete Consolidation / Dissolution of Mutual Water Companies 1. Continue with eminent domain proceedings until court ruling is issued. 2. Perform annual review of prior NFWC shareholders’ water allocation agreement with the District. 3. Consult with legal counsel to determine how the NFWC will operate in the future. 4. Work with legal counsel toward dissolution of City Creek Mutual Water Company, and schedule Board Meeting if required. 2 Implement Document Management Process 1. Continue to scan vital documents and incorporate them into the electronic document repository. 2. Coordinate and train remaining District staff to ensure the document repository system is used consistently. 3. Continue destruction of documents in compliance with the Records Retention Policy. 3 Document / Update Organizational Priorities and Philosophies 1. Review and revise overall District Strategic Plan. 2. Complete District Clerk Handbook and present to the Finance and Human Resources Committee. 3. Continue working with Community Heritage and Education Foundation (CHEF) Board and Committee members to finalize scope of (historical agricultural educational) project. Directly Supports the Five-Year Work Plan FY 2023-24 BUDGET | 124 FY 2022-232022-23 ACCOMPLISHMENTS Goal One Completed Consolidation/ Dissolution of North Fork Water Company (NFWC) • Entered eminent domain proceedings to acquire the remaining nine shares of NFWC, not owned by the District. • Maintained NFWC annual compliance review. Goal Two Developed Document Management Process • Developed a naming convention for efficient document retrieval. • Began the process for scanning vital documents and incorporating them into the electronic document repository. • Completed training for the Customer Service and Finance departments on document repository systems. • Initiated destruction of 800 boxes in compliance with the Records Retention Policy. Goal Three Developed District Clerk Handbook • Evaluated and identified best practices to be included in the new Handbook. • Coordinated with relevant staff and incorporated comments and suggestions into the Handbook. • Prepared a draft Handbook. Goal Four Community Heritage Education Foundation (CHEF) • Held a Committee Meeting to discuss long-term action priorities. • General Manager/CEO held an annual Board Meeting to discuss operations, financials, and a donation policy. LEVELS OF SERVICE The General Administration Program has four KPI metrics that are associated with the District’s Goals and Objectives of: • Practice Transparent and Accountable Fiscal Management (II-A) • Provide Quality Information to Encourage Community Engagement (II-D) • Dedicated Efforts Toward System Maintenance and modernization (IV-C) • Maximize Internal Capabilities through Ongoing Professional Development (I-B) The program’s performance related to these metrics are included in the following table. KEY PERFORMANCE INDICATORS CHANGES Agency Goal Key Performance Indicator Target FY 2020-21 FY 2021-22 FY 2022-23 II-A Make administrative documents available online 50 51 53 57 II-D Publish Open Meeting/Public Notices on or before statutory requirement 100%100%100%100% IV-C Reduce number of boxes held in off-site storage 2,000 2,770*2,770*1,970 I-B Participate in Professional Development Opportunities 6 20 9 11 *Not able to reduce boxes due to COVID-19 restrictions. PROGRAM BUDGET DETAIL FY 2021-22 Actuals FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget Amount Changed % Changed PERSONNEL EXPENSES 5101 Regular Labor $ 574,774 $ 525,000 $ 430,595 $ 597,000 $ 72,000 14% 5102 Temporary Labor - 30,000 - 30,000 - 0% 5103 Overtime 4,521 4,000 1,911 4,000 - 0% 5200 Benefits 313,539 259,000 312,441 264,000 5,000 2% OPERATING EXPENSES 6201 Materials & Supplies 1,419 4,000 454 4,000 - 0% 6203 Office Supplies 2,199 3,000 1,462 3,000 - 0% 6301 Contract Services 116,436 152,000 113,535 161,000 9,000 6% 6303 Printing & Publishing 1,000 3,000 2,077 3,000 - 0% 6304 Legal Services 134,298 120,300 149,112 120,000 (300)0% 6307 Uniforms - 1,000 632 1,000 - 0% 6314 Litigation Services 4,928 40,000 10,603 25,000 (15,000)-38% 6402 Telephone 3,136 5,000 1,730 3,000 (2,000)-40% 6406 Postage 291 700 - 1,000 300 43% 6501 Memberships & Dues 87,506 116,000 117,554 104,000 (12,000)-10% 6502 Professional Development 34,313 16,000 11,976 35,000 19,000 119% 6504 Meetings 10,730 15,000 10,385 15,000 - 0% GENERAL ADMIN TOTAL $ 1,289,090 $ 1,294,000 $ 1,164,467 $ 1,370,000 $ 76,000 6% SIGNIFICANT CHANGES IN PROGRAM BUDGET • Increased Contract Services budget for off-site records destruction. EAST VALLEY WATER DISTRICT | 125 [GENERAL ADMINISTRATION] 4% [$1,370,000] Program Budget Allocation [PAGE LEFT BLANK] Intentionally FY 2023-24 BUDGET | 126 EAST VALLEY WATER DISTRICT | 127 HUMAN RESOURCES Program Summaries Section HU M A N R E S O U R C E S Human Resources focuses on the management and development of employees in an organization. FY 2023-24 BUDGET | 128 • Governing Board • General Administration • Human Resources • Public Affairs • Conservation • Finance & Accounting • Information Technology • Customer Service • Meter Services • Engineering • Water Production • Water Treatment • Water Quality • Water Maintenance • Wastewater Collection • Water Reclamation • Facilities Maintenance • Fleet Maintenance Program Summaries Contents Director of Administrative Services 1 Human Resources Coordinator 1 Total Full-Time 2 PROGRAM PERSONNEL GENERAL MANAGER/CEO HUMAN RESOURCES COORDINATOR DIRECTOR OF ADMINISTRATIVE SERVICES PROGRAM STRUCTURE Human Resources is responsible for administering programs to attract and retain a diverse and qualified workforce. To remain an industry leader, the program analyzes the compensation and benefits packages against the market and implements new initiatives based upon market demands. Acknowledging the need to build a work-life balance to support a successful workforce, Human Resources creates programs focused on the health and wellness of all employees. Additionally, HR administers the Risk Management Program to mitigate personnel injuries, property damage and financial loss for the District, and the Pathway Program. EAST VALLEY WATER DISTRICT | 129 HUMAN RESOURCES PROGRAM SUMMARIES Goals Objectives 1 Implement Workforce Programs in Support of the SNRC 1. Continue to recruit and onboard quality candidates to join the SNRC team. 2. Create administrative policies regarding work schedules and standby responsibilities for SNRC maintenance and operations. 3. Identify opportunities to ensure collaboration between staff located at District Headquarters and the SNRC. 2 Promote a Positive Organizational Culture that Maintains a Supportive and Encouraging Work Environment 1. Update the District’s Succession Plan to identify organizational growth, prepare for future retirements, and continue to provide training and development opportunities for staff. 2. Ensure salaries, benefits, and related programs are executed as adopted in the Memorandum of Understanding (MOU) effective July 1, 2023 – June 30, 2026. 3. Implement the Onboarding module of our current NeoGov Recruitment Suite to enhance the new-hire onboarding and transition process. 3 Promote Regional Involvement and Provide Workforce Experience and Educational Opportunities 1. Actively engage schools within the District’s service area to promote participation in water industry workforce experiences. 2. Monitor progress of summer internship program and report on program’s success to the Board. 3. Develop educational and interactive tours of the SNRC with hands on lab experiments for students to understand wastewater physical and biological processes. Directly Supports the Five-Year Work Plan FY 2023-24 BUDGET | 130 FY 2022-232022-23 ACCOMPLISHMENTS Goal One Implemented Workforce Programs in Support of the SNRC • Recruited and onboarded Wastewater Treatment Operators for the SNRC team. • Facilitated a transition plan to relocate staff to the SNRC site. Goal Two Promoted a Positive Organizational Culture that Maintained a Supportive and Encouraging Work Environment • Implemented training and development programs for staff at all levels throughout the organization. • Ensured connection between the new General Manager/CEO with staff by continuing the Breakfast with the Boss program, conducting annual staff focus group meetings, and prioritizing interactions with individual departments. • Implemented Telework Policy that maintains District work expectations while allowing scheduling flexibility. • Negotiated a three-year MOU that considered both long-term financial commitments and employee morale. Goal Three Promoted Regional Involvement and Provided Workforce Experience and Educational Opportunities • Enhanced the District’s Water and Pathway Program to be more accessible to students within their current class structure. • Modified current internship program for local youth to a summer internship program that provides more convenient work experience opportunities. • Created a marketing campaign to recruit and onboard Customer Service and administrative volunteers. LEVELS OF SERVICE The Human Resources Program has four KPI metrics that are associated with the District’s Goals and Objectives of: • Encourage Performance Based Results through Staff Empowerment (I-D) • Promote a Positive Organizational Culture (III-C) • Embrace an Environment of Active Learning and Knowledge Sharing (III-D) The program’s performance related to these metrics are included in the following table. KEY PERFORMANCE INDICATORS CHANGES Agency Goal Key Performance Indicator Target FY 2020-21 FY 2021-22 FY 2022-23 I-D Percentage of annual non-retirement employee turnover <7%3%1 1 I-D Annual performance appraisals completed in a timely manner 95%100%100%100% III-C Maintain high level of employee participation in annual employee engagement survey 90%100%100%95.5% III-D Utilization rate of District’s Employee Assistance Program >10%19%13.43%11.76% PROGRAM BUDGET DETAIL FY 2021-22 Actuals FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget Amount Changed % Changed PERSONNEL EXPENSES 5101 Regular Labor $ 314,448 $ 307,000 $ 233,744 $ 329,000 $ 22,000 7% 5103 Overtime 1,686 3,000 2,276 3,000 - 0% 5200 Benefits 144,601 177,000 227,724 199,000 22,000 12% OPERATING EXPENSES 6201 Materials & Supplies 5,521 6,000 921 6,000 - 0% 6203 Office Supplies 385 1,000 1,403 1,000 - 0% 6301 Contract Services 105,072 94,300 104,603 140,000 45,700 48% 6303 Printing & Publishing 330 1,000 758 1,000 - 0% 6304 Legal Services 15,841 15,000 34,718 15,000 - 0% 6307 Uniforms - - 57 - - 0% 6402 Telephone 772 - 626 - - 0% 6406 Postage 37 700 65 1,000 300 43% 6501 Memberships & Dues 5,102 5,000 6,443 4,000 (1,000)-20% 6502 Professional Development 5,458 8,000 5,180 9,000 1,000 13% 6504 Meetings 1,557 3,000 5,096 3,000 - 0% 6505 Employee Recognition 21,432 45,000 46,551 40,000 (5,000)-11% 6701 General Insurance 754,048 890,000 1,130,181 1,745,000 855,000 96% 6702 Insurance Claims 13,482 10,000 367 10,000 - 0% 6705 Retiree Benefits 465,158 351,000 582,096 351,000 - 0% HUMAN RESOURCES TOTAL $ 1,854,930 $ 1,917,000 $ 2,382,709 $ 2,857,000 $ 940,000 49% SIGNIFICANT CHANGES IN PROGRAM BUDGET • Increased Contract Services budget for Consultant for the Leadership Academy. • Increased Professional Development budget for staff to attend various conferences. • Increased General Insurance budget due to onboarding new staff at the SNRC. EAST VALLEY WATER DISTRICT | 131 [HUMAN RESOURCES] 8% [$2,857,000] Program Budget Allocation [PAGE LEFT BLANK] Intentionally FY 2023-24 BUDGET | 132 PUBLIC AFFAIRS Program Summaries Section EAST VALLEY WATER DISTRICT | 133 PU B L I C AF F A I R S Public Affairs establishes solid public relationships built on a foundation of trust. FY 2023-24 BUDGET | 134 • Governing Board • General Administration • Human Resources • Public Affairs • Conservation • Finance & Accounting • Information Technology • Customer Service • Meter Services • Engineering • Water Production • Water Treatment • Water Quality • Water Maintenance • Wastewater Collection • Water Reclamation • Facilities Maintenance • Fleet Maintenance Program Summaries Contents Director of Strategic Services 1 Public Affairs/Conservation Manager 1 Public Affairs Specialist 1 Public Affairs Coordinator 1 Total Full-Time 4 Part-Time Public Affairs Representative 1 Total Part-Time 1 PROGRAM PERSONNEL PUBLIC AFFAIRS COORDINATOR GENERAL MANAGER/CEO PUBLIC AFFAIRS SPECIALIST PUBLIC AFFAIRS REPRESENTATIVE PT DIRECTOR OF STRATEGIC SERVICES PUBLIC AFFAIRS/ CONSERVATION MANAGER PROGRAM STRUCTURE Public Affairs oversees internal and external communication programs consistent with the District’s Vision and guiding principles. Through community and media relations, the Program provides effective and strategic communications to various stakeholders. The Program is also responsible for grant writing, emergency preparedness, and facility rental programs. EAST VALLEY WATER DISTRICT | 135 PUBLIC AFFAIRS PROGRAM SUMMARIES Goals Objectives 1 Implement Community Based Activities at the SNRC 1. Host a ribbon cutting event for SNRC operations. 2. Partner with third parties to offer community activities to maximize the SNRC public space. 2 Utilize Communication Methods that Enhance the District’s Priorities 1. Engage with community members and organizations through pop-ups, presentations, and local events. 2. Enhance the District’s digital presence through a website redesign and continue to increase social media engagement. 3. Facilitate and update the District’s Strategic Plan. 3 Advance the District’s Emergency Preparedness Program 1. Conduct formal update of the Emergency Response and Hazard Mitigation Plans. 2. Partner with local and regional agencies for advanced emergency response trainings. 3. Continue monitoring grant funding opportunities to construct mitigation measures identified in the District’s emergency plans and critical infrastructure projects. Directly Supports the Five-Year Work Plan FY 2023-24 BUDGET | 136 FY 2022-232022-23 ACCOMPLISHMENTS Goal One Advanced Construction of the SNRC and Implemented Facility Operations • Hosted community activities to maximize the SNRC public space including facility rentals and hosted events. • Implemented the Wildlife Management Plan training and monitoring program. • Identified and engaged community stakeholders regarding SNRC construction and commissioning. Goal Two Utilized Communication Methods that Enhanced the District’s Brand • Re-engaged with community members and organizations as post COVID-19 activities resumed in-person. • Highlighted the District’s premier agency standards through presentations / engagements with national and regional organizations such as ACWA, CMUA, WateReuse, CSDA, and PRSA . • Enhanced digital outreach tools to increase customer engagement and online presence of the District. Goal Three Advanced the District’s Emergency Preparedness Program • Held annual review of the Emergency Response and Hazard Mitigation Plans. • Implemented the updated emergency response training program following plans established by the District and participated in a tabletop exercise. • Monitored grant funding opportunities to construct mitigation measures identified in the District’s emergency plans. LEVELS OF SERVICE The Public Affairs Program has five KPI metrics that are associated with the District’s Goals and Objectives of: • Advance Emergency Preparedness Efforts (III-A) • Provide Quality Information to Encourage Community Engagement (II-D) • Strengthen Regional, State and National Partnerships (I-C) • Utilize Effective Communication Methods (II-B) The program’s performance related to these metrics are included in the following table. KEY PERFORMANCE INDICATORS CHANGES Agency Goal Key Performance Indicator Target FY 2020-21 FY 2021-22 FY 2022-23 III-A Update Emergency Response Plan 100%100%100%100% III-A Number of Emergency Response training hours per FTE 16 15 14 23 II-D Number of community event presentations 15 0*11 41 I-C Number of Community Advisory Commission meetings conducted 6 6 5 6 II-B Number of followers on social media 3,000 1,638 2,062 2,700 *Not able to complete due to COVID-19 restrictions. PROGRAM BUDGET DETAIL FY 2021-22 Actuals FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget Amount Changed % Changed PERSONNEL EXPENSES 5101 Regular Labor $ 649,962 $ 589,000 $ 541,445 $ 429,000 $ (160,000)-27% 5103 Overtime 6,976 17,000 10,246 17,000 - 0% 5200 Benefits 209,528 243,000 254,619 127,000 (116,000)-48% OPERATING EXPENSES 6201 Materials & Supplies 221,928 78,000 109,391 82,000 4,000 5% 6203 Office Supplies 4,754 2,000 6,340 2,000 - 0% 6301 Contract Services 449,404 377,000 258,674 413,000 36,000 10% 6303 Printing & Publishing 135,188 203,500 164,070 127,000 (76,500)-38% 6304 Legal Services 2,070 5,000 3,267 5,000 - 0% 6307 Uniforms 1,281 2,000 5,923 1,000 (1,000)-50% 6402 Telephone 2,968 3,000 3,137 3,000 - 0% 6406 Postage 19,040 24,500 27,644 45,000 20,500 84% 6501 Memberships & Dues 17,262 9,000 8,743 21,000 12,000 133% 6502 Professional Development 18,750 7,000 6,906 3,000 (4,000)-57% 6503 Education Assistance - 3,000 - - (3,000)-100% 6504 Meetings 4,339 10,000 6,280 12,000 2,000 20% FACILITIES RENTAL EXPENSES 6201 Materials & Supplies 259 - 24,193 - - 0% 6301 Contract Services 1,068 3,000 446 3,000 - 0% 6312 Janitorial Services 1,180 2,000 2,640 2,000 - 0% PUBLIC AFFAIRS TOTAL $ 1,745,957 $ 1,578,000 $ 1,433,964 $ 1,292,000 $ (286,000)-18% SIGNIFICANT CHANGES IN PROGRAM BUDGET • The District is preparing to host a community event for the commissioning of the SNRC. • Printing and Publishing accounted for distribution of the Prop 218 notice. • Enhancement to the District’s website to ease accessibility and provide an end-user, friendly experience. EAST VALLEY WATER DISTRICT | 137 [PUBLIC AFFAIRS] 3% [$1,292,000] Program Budget Allocation [PAGE LEFT BLANK] Intentionally FY 2023-24 BUDGET | 138 CONSERVATION Program Summaries Section EAST VALLEY WATER DISTRICT | 139 CO N S E R V A T I O N Conservation programs help educate customers on how to use water efficiently. FY 2023-24 BUDGET | 140 • Governing Board • General Administration • Human Resources • Public Affairs • Conservation • Finance & Accounting • Information Technology • Customer Service • Meter Services • Engineering • Water Production • Water Treatment • Water Quality • Water Maintenance • Wastewater Collection • Water Reclamation • Facilities Maintenance • Fleet Maintenance Program Summaries Contents Conservation Coordinator 1 Total Full-Time 1 PROGRAM PERSONNEL PROGRAM STRUCTURE GENERAL MANAGER/CEO CONSERVATION COORDINATOR DIRECTOR OF STRATEGIC SERVICES PUBLIC AFFAIRS/ CONSERVATION MANAGER Conservation is responsible for overseeing programs that facilitate and encourage sustainable water use throughout the District. Additionally, this program is responsible for communicating conservation benchmarks to various regulatory agencies, preparing regulatory compliance documents, and monitoring legislative affairs. EAST VALLEY WATER DISTRICT | 141 CONSERVATION PROGRAM SUMMARIES Goals Objectives 1 Coordinate Necessary Program Working Groups to Complete Conservation Reports 1. Maintain working group meetings for the purpose of tracking informational data requests for State mandated reports and identifying data inputs for new reporting requirements. 2. Prepare and submit required water use efficiency reports such as the Drought Contingency Plan, Drought Risk Assessment, Urban Water Use Objectives, and Commercial, Industrial, Institutional (CII) classifications. 2 Evaluate Rebate Program Success and Implement Program Modifications 1. Streamline rebate programs to maximize customer water savings in line with new State objectives. 2. Analyze water consumption data to better understand historical conservation responses to forecast trends. 3 Engage and Educate Students on Water Resources Consistent with State Curriculum 1. Assess industry standards on educational programming and current tactics used by peer agencies. 2. Participate in quarterly educational activities with schools located within the District’s service area. 3. Develop digital material and other educational elements to provide customers with conservation resources, free community events, and four workshops. Directly Supports the Five-Year Work Plan FY 2023-24 BUDGET | 142 FY 2022-232022-23 ACCOMPLISHMENTS Goal One Coordinated Necessary Program Working Groups to Complete Conservation Reports • Facilitated working group meetings for the purpose of tracking informational data requests for State mandated reports. • Prepared and submitted required regulatory reports such as the Supply and Demand Assessment and the Drought Risk Assessment. Goal Two Evaluated Rebate Program Success and Implemented Program Enhancements • Enhanced the rebate program to assist customers increase outdoor efficiency with the implementation of the Parkway Transformation and Irrigation Retrofit Program (Parkway and irrigation retrofit). • Developed digital material and other educational elements to provide customers with conservation resources, free community events (Earth Day festival), and four workshops. Goal Three Participated in the Legislative Process as it Related to Changes in Conservation Regulations • Actively participated in the legislative and regulatory process, (AB 2449, SB 1157, SB 222, etc.) and updated District stakeholders on relevant impacts to District programs. • Monitored legislation related to low-income rate assistance, residential water use standards, and communicated changes affecting District operations. • Completed semi-annual Conservation and legislative updates to staff, the Governing Board, and quarterly updates to the Legislative and Public Outreach Committee and Community Advisory Commission. • Following the Governor’s Executive Order, implemented Stage 2 of the District’s Water Shortage Contingency Plan. LEVELS OF SERVICE The Conservation Program has four KPI metrics that are associated with the District’s Goals and Objectives of: • Identify Opportunities to Optimize Natural Resources (I-A) • Provide Quality Information to Encourage Community Engagement (II-D) • Pursue Alternative Funding Sources (II-C) The program’s performance related to these metrics are included in the following table. KEY PERFORMANCE INDICATORS CHANGES Agency Goal Key Performance Indicator Target FY 2020-21 FY 2021-22 FY 2022-23 I-A Meet SWRCB conservation goal Yes Yes Yes Yes I-A Maintain significant level of participation in annual conservation rebate programs 200 430 200 350 II-D Number of educational materials created 100 100 78 125 II-C External conservation funding received $25,000 $32,000 $15,000 $200,000 PROGRAM BUDGET DETAIL FY 2021-22 Actuals FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget Amount Changed % Changed PERSONNEL EXPENSES 5101 Regular Labor $ 147,074 $ 107,000 $ 89,024 $ 107,000 $ - 0% 5103 Overtime 2,949 7,000 3,763 7,000 - 0% 5200 Benefits 39,920 40,000 32,661 42,000 2,000 5% OPERATING EXPENSES 6201 Materials & Supplies 4,366 56,000 21,132 25,000 (31,000)-55% 6203 Office Supplies 3,916 2,000 323 1,000 (1,000)-50% 6205 Conservation Rebates 225,308 165,000 61,261 120,000 (45,000)-27% 6301 Contract Services 71,931 331,000 127,956 294,000 (37,000)-11% 6303 Printing & Publishing 47,202 109,000 80,944 50,000 (59,000)-54% 6304 Legal Services 150 1,000 - 1,000 - 0% 6307 Uniforms - 1,000 203 1,000 - 0% 6402 Telephone 487 2,000 1,120 2,000 - 0% 6406 Postage 15,058 24,000 20,069 24,000 - 0% 6501 Memberships & Dues 7,479 11,000 5,338 12,000 1,000 9% 6502 Professional Development 4,812 5,000 2,939 2,000 (3,000)-60% 6504 Meetings - 1,000 1,985 1,000 - 0% CONSERVATION TOTAL $ 570,652 $ 862,000 $ 448,718 $ 689,000 $ (173,000)-20% SIGNIFICANT CHANGES IN PROGRAM BUDGET • Drought Contingency Plan is underway with costs 50% completed. • Assessing rebate program due to market saturation for the Weather Based Irrigation Controller direct installation. EAST VALLEY WATER DISTRICT | 143 [CONSERVATION] 2% [$689,000] Program Budget Allocation [PAGE LEFT BLANK] Intentionally FY 2023-24 BUDGET | 144 FINANCE & ACCOUNTING Program Summaries Section EAST VALLEY WATER DISTRICT | 145 F I N A N C E & AC C O U N T I N G Finance and Accounting manage, plan, and direct financial resources. FY 2023-24 BUDGET | 146 • Governing Board • General Administration • Human Resources • Public Affairs • Conservation • Finance & Accounting • Information Technology • Customer Service • Meter Services • Engineering • Water Production • Water Treatment • Water Quality • Water Maintenance • Wastewater Collection • Water Reclamation • Facilities Maintenance • Fleet Maintenance Program Summaries Contents Chief Financial Officer 1 Finance Supervisor 1 Accountant 1 Sr. Accounting Technician 1 Accounting Technician 1 Business Services Coordinator 1 Total Full-Time 6 PROGRAM PERSONNEL BUSINESS SERVICES COORDINATOR GENERAL MANAGER/CEO ACCOUNTANT SR. ACCOUNTING TECHNICIAN ACCOUNTING TECHNICIAN CHIEF FINANCIAL OFFICER FINANCE SUPERVISOR PROGRAM STRUCTURE Finance and Accounting oversees the business operations of the District in order to provide accountability and adequate control over the use of District funds. Staff maintains the financial systems and records in accordance with GAAP as well as applicable laws, regulations, and District policies. EAST VALLEY WATER DISTRICT | 147 FINANCE & ACCOUNTING PROGRAM SUMMARIES Goals Objectives 1 Ensure Financial Stability with Full Understanding of Operational Complexities 1. Establish SNRC debt service and other reserves required to comply with agreements and ensure fiscal sustainability. 2. Complete Rate Study and schedule Public Hearing to consider rate adjustments if necessary. 3. Work with CalPERS staff to determine if the current “level pay” amount is adequate to pay down Unfunded Actuarial Liability (UAL) in 15 years as planned. 4. Work with consultant to complete pension Unfunded Accrued Liability Policy and present policy to the Board. 2 Fully Understand the Cost and Accounting Associated with Placing the SNRC in Service 1. Determine placed-in-service date and finalize total project costs. 2. Closeout State Revolving Fund (SRF) funding including payment of retention. 3. Allocate total project costs to physical plant components in sufficient detail to facilitate recording in the accounting system, future replacements and reasonable depreciation estimates. 3 Maximize the Utility and Security of Financial Software and Data 1. Develop standard procedures for linking capital improvements in the District’s accounting software to the GIS mapping software. 2. Conduct informal review of financial software being used by other water agencies; schedule product demonstrations if potential replacements for Tyler are identified. 3. Identify pros and cons for moving Tyler (or new ERP) to a hosted environment. Directly Supports the Five-Year Work Plan FY 2023-24 BUDGET | 148 FY 2022-232022-23 ACCOMPLISHMENTS Goal One Ensured Financial Stability with Full Understanding of Operational Complexities • Completed final billing for City of Highland and Urban Greening Grant external funding for the SNRC. • Met with Water Reclamation staff and the General Manager/CEO to update cost estimates in the SNRC financial model. • Completed selection of a rate consultant for updating cost of service estimates as a result of inflation and construction delays. Goal Two Fully Understood the Cost and Accounting Complexities Associated with New Funds • Completed setup of the Water Reclamation Fund in the District’s financial accounting software. • Completed setup of CFD 2021-1 (Mediterra) in the Tyler software. • Worked with consultant to place property assessments on tax rolls for the Mediterra development. Goal Three Maximized the Utility and Security of Financial Software and Data • Considered moving the Tyler Enterprise Resource Planning (ERP) software to a hosted environment but determined to keep systems in- house at least through FY 2023-24. • Worked with IT to develop / identify link between Tyler and Geographic Information System (GIS) for projects closed in FY 2022-23. LEVELS OF SERVICE The Finance & Accounting Program has six KPI metrics that are associated with the District’s Goals and Objectives of: • Practice Transparent and Accountable Fiscal Management (II-A) The program’s performance related to these metrics are included in the following table. KEY PERFORMANCE INDICATORS CHANGES Agency Goal Key Performance Indicator Target FY 2020-21 FY 2021-22 FY 2022-23 II-A Days to prepare and present Annual Report after fiscal year end 135 days 160 167 103 II-A Enhance District bond rating through strong reserves and fiscal policies AA AA-AA-AA- II-A Number of fiscal policies updated / enhanced and reviewed with the Governing Board 4 3 2 3 II-A Provide program managers monthly budget variance reports 12 12 12 12 II-A Consecutive years Certificate of Achievement for Excellence in Financial Reporting received for Annual Report 11 9 10 11 II-A Consecutive years Certificate of Achievement for Excellence in Financial Reporting received for PAFR 6 4 5 6 PROGRAM BUDGET DETAIL FY 2021-22 Actuals FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget Amount Changed % Changed PERSONNEL EXPENSES 5101 Regular Labor $ 707,850 $ 700,000 $ 503,267 $ 775,000 $ 75,000 11% 5103 Overtime 28,066 13,000 6,118 13,000 - 0% 5200 Benefits 360,574 318,000 302,055 374,000 56,000 18% OPERATING EXPENSES 6203 Office Supplies 7,922 12,000 4,900 7,000 (5,000)-42% 6301 Contract Services 77,017 184,000 69,645 90,000 (94,000)-51% 6302 Banking Services 17,633 18,000 19,819 32,000 14,000 78% 6303 Printing & Publishing 755 1,000 2,692 7,000 6,000 600% 6304 Legal Services 6,450 10,000 5,720 10,000 - 0% 6307 Uniforms 167 2,000 1,614 2,000 - 0% 6402 Telephone 2,283 3,000 2,345 3,000 - 0% 6406 Postage 347 1,000 402 1,000 - 0% 6501 Memberships & Dues 3,459 5,000 2,847 5,000 - 0% 6502 Professional Development 15,184 - 6,311 20,000 20,000 100% 6504 Meetings 2,373 4,000 3,256 5,000 1,000 25% FINANCE & ACCT. TOTAL $ 1,230,080 $ 1,271,000 $ 930,991 $ 1,344,000 $ 73,000 6% SIGNIFICANT CHANGES IN PROGRAM BUDGET • Decreased Contract Services budget due to completion of the Cost of Service Analysis/Rate Study during FY 2022-23. • Increased Professional Services budget for staff to attend various conferences. EAST VALLEY WATER DISTRICT | 149 [FINANCE & ACCOUNTING] 4% [$1,344,000] Program Budget Allocation [PAGE LEFT BLANK] Intentionally FY 2023-24 BUDGET | 150 EAST VALLEY WATER DISTRICT | 151 IN F O R M A T I O N T E C H N O L O G Y INFORMATION TECHNOLOGY Program Summaries Section Information Technology coordinates and implements agency-wide technology by facilitating vendor access and support for technology focused projects. FY 2023-24 BUDGET | 152 • Governing Board • General Administration • Human Resources • Public Affairs • Conservation • Finance & Accounting • Information Technology • Customer Service • Meter Services • Engineering • Water Production • Water Treatment • Water Quality • Water Maintenance • Wastewater Collection • Water Reclamation • Facilities Maintenance • Fleet Maintenance Program Summaries Contents PROGRAM PERSONNEL Information Technology Manager 1 Network Administrator 1 Information Technology Analyst 1 Total Full-Time 3 PROGRAM STRUCTURE GENERAL MANAGER/CEO NETWORK ADMINISTRATOR INFORMATION TECHNOLOGY ANALYST CHIEF FINANCIAL OFFICER INFORMATION TECHNOLOGY MANAGER The Information Technology (IT) Program oversees the District’s technology infrastructure to support essential business and operational functions. The functions utilize industry specific software programs required to meet agency needs. The Program implements routine cybersecurity training campaigns to mitigate financial and data loss. In addition to software management the Program proactively schedules hardware replacements from the point of procurement to installation. EAST VALLEY WATER DISTRICT | 153 INFORMATION TECHNOLOGY PROGRAM SUMMARIES Goals Objectives 1 Ensure Reliability of Technology Infrastructure for Primary Business and Operation Requirements 1. Upgrade all server operating systems to comply with Microsoft server life cycle. 2. Begin working on updating active directory and group policy cleanup. 3. Install hardware and software for the SNRC solids, headworks, and main electrical building. 4. Upgrade District firewalls to comply with standardization best-practice. 2 Improve Systems and Cybersecurity Measures for Response Functions 1. Continue monthly email phishing campaign to reduce click rate and educate staff on security risk. 2. Implement multi-factor authentication software. 3. Replace current email security with email cloud security. 4. Contract for network penetration test. 3 Analyze Current Systems to Enhance Reporting and Automate Processes 1. Work with General Manager/CEO and Department heads to identify data-based decisions and source of supporting data. 2. Work with Administration, Customer Service, and Finance staff to implement naming conventions for the District’s electronic document repository. 3. Work with Tyler and Customer Service to: • Revise and streamline the utility billing packet processing workflow process. • Reconfigure payment contract, conservation reports, disconnection door hangers, and arrearage report. Directly Supports the Five-Year Work Plan FY 2023-24 BUDGET | 154 FY 2022-232022-23 ACCOMPLISHMENTS Goal One Ensured Reliability of Technology Infrastructure for Primary Business and Operation Requirements • Upgraded software and servers and SCADA radios at Plants 25, 39, 99, 131, and 132. • Replaced remaining end-of-life servers and switches at the SNRC and District Headquarters. • Installed new SCADA virtual host servers and updated virtual software licensing at District Headquarters and Plant 134. • Ordered valve exercise equipment. Goal Two Improved Systems and Cybersecurity Measures for Response Functions • Continued monthly email phishing campaign and reduced click rate and educated staff on security risk. • Established and equipped an Emergency Operations Center (EOC) at the SNRC. • Implemented CISCO umbrella Domain Name System (DNS) security to add a layer of security to the District network. • Refreshed backup batteries in server room to comply with Emergency Preparedness Plan. Goal Three Analyzed Current Systems to Enhance Reporting and Automate Processes • Implemented Tyler’s EnerGov Asset Management System. • Finalized the transition from Cityworks to a new software solution. • Assisted Administration with implementing a new naming convention within Laserfiche. • Reviewed the pros and cons for transitioning Tyler Incode from On- Premise to their hosted solution. Other Accomplishments • Replaced backup batteries at District Headquarters to align with the Emergency Response Plan. LEVELS OF SERVICE The Information Technology Program has six KPI metrics that are associated with the District’s Goals and Objectives of: • Develop Projects and Programs to Ensure Safe and Reliable Service (IV-A) • Strive to Provide World-Class Customer Relations (III-B) The program’s performance related to these metrics are included in the following table. KEY PERFORMANCE INDICATORS CHANGES Agency Goal Key Performance Indicator Target FY 2020-21 FY 2021-22 FY 2022-23 IV-A Elevate Cybersecurity awareness by sending out test ‘phishing’ emails 800 1,019 1,080 1,139 IV-A Maximize system availability 99%99%99%99% IV-A Cybersecurity awareness results for phishing email click rate <7%6%7.8%7.9% Agency Goal Key Performance Indicator Target FY 2020-21 FY 2021-22 FY 2022-23 IV-A Complete disaster recovery drill (system restoration, power outages, emergency notifications) 2 2 4 4 III-B Receive ‘Excellent’ scores on IT satisfaction surveys submitted by staff >95%96%100%100% III-B Minimize resolution time for help desk issues submitted by staff 24 Hrs.24 17.2 4.4 PROGRAM BUDGET DETAIL FY 2021-22 Actuals FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget Amount Changed % Changed PERSONNEL EXPENSES 5101 Regular Labor $ 426,103 $ 380,000 $ 328,602 $ 433,000 $ 53,000 14% 5102 Temporary Labor - - - 17,000 17,000 100% 5103 Overtime - - 574 - - 0% 5200 Benefits 119,573 212,000 236,401 259,000 47,000 22% OPERATING EXPENSES 6201 Materials & Supplies 67,911 45,000 47,408 65,000 20,000 44% 6203 Office Supplies 352 1,000 1,294 5,000 4,000 400% 6301 Contract Services 722,579 690,000 454,062 925,000 235,000 34% 6307 Uniforms 611 1,000 1,349 1,000 - 0% 6402 Telephone 15,170 12,000 26,644 12,000 -0% 6501 Memberships & Dues 654 1,000 173 4,000 3,000 300% 6502 Professional Development 4,740 1,000 507 1,000 - 0% 6504 Meetings 86 1,000 178 - (1,000) -100% IT TOTAL $ 1,357,779 $ 1,344,000 $ 1,097,192 $ 1,722,000 $ 378,000 28% SIGNIFICANT CHANGES IN PROGRAM BUDGET • Increased Contract Services budget due to fiber implementation at Plant 134. • Increased Contract Services budget due to coaxial phone lines. • Moved Emergency Notification renewal from Public Affairs to IT. • Installed CISCO Umbrella DNS Security. EAST VALLEY WATER DISTRICT | 155 [INFORMATION TECHNOLOGY] 5% [$1,722,000] Program Budget Allocation [PAGE LEFT BLANK] Intentionally FY 2023-24 BUDGET | 156 EAST VALLEY WATER DISTRICT | 157 CUSTOMER SERVICE Program Summaries Section CU S T O M E R SE R V I C E Customer Service downloads meter read data, audits data, and submits data files to a third-party vendor for bill printing and mailing. FY 2023-24 BUDGET | 158 • Governing Board • General Administration • Human Resources • Public Affairs • Conservation • Finance & Accounting • Information Technology • Customer Service • Meter Services • Engineering • Water Production • Water Treatment • Water Quality • Water Maintenance • Wastewater Collection • Water Reclamation • Facilities Maintenance • Fleet Maintenance Program Summaries Contents PROGRAM PERSONNEL Customer Service Supervisor 1 Customer Service Representative III 2 Customer Service Representative II 2 Customer Service Representative I 2 Total Full-Time 7 Part-Time Customer Service Representative I 1 Total Part-Time 1 PROGRAM STRUCTURE GENERAL MANAGER/CEO CUSTOMER SERVICE REPRESENTATIVE III CUSTOMER SERVICE REPRESENTATIVE II CUSTOMER SERVICE REPRESENTATIVE I CUSTOMER SERVICE REPRESENTATIVE I PT CHIEF FINANCIAL OFFICER CUSTOMER SERVICE SUPERVISOR (2) (2) (2) Customer Service provides the community with prompt, courteous, and world-class customer relations. As the primary contact point with residents, this program explores opportunities to provide thorough/accurate responses to billing inquiries; provide convenient locations and methods for payment; and to resolve customer concerns about service delivery by requesting assistance from water maintenance personnel, and then following up with customers regarding the resolution to their concern. EAST VALLEY WATER DISTRICT | 159 CUSTOMER SERVICE PROGRAM SUMMARIES Goals Objectives 1 Develop Strategies to Address Organizational Service Needs 1. Implement new payment options for District customers that are already supported by the District’s billing software. 2. Work with Public Affairs to address Customer Service needs for the District’s new web portal. 2 Work with other Departments to Recover Costs That Are Not Currently Captured by the District Fee Schedule 1. Develop and propose a fee for recovery of costs associated with clearing obstructions preventing access to District meters. 2. Develop and propose penalties or fees to discourage defaults on payment plan contracts. 3. Research costs associated with credit card charges and propose a fee/ charge for cost recovery. 4. Prepare revisions to ordinance and fee schedule and incorporate them into Public Hearing process for rates. 3 Identify and Implement Software Adjustments Needed Due to SB 998 and other Legislation 1. Work with Tyler and IT to: • Reconfigure Tyler revenue codes to accommodate new time requirements under SB 998. • Revise and streamline utility billing packet processing workflow process. • Reconfigure payment contract, conservation reports, disconnection door hangers, and arrearage report. Directly Supports the Five-Year Work Plan FY 2023-24 BUDGET | 160 FY 2022-232022-23 ACCOMPLISHMENTS Goal One Developed Strategies to Address Organizational Service Needs • Worked with IT to implement Tyler’s mobile work order application in EnerGov Asset Management. • Reviewed new vendor contracts with potential expansion of capabilities and determined existing processes are more efficient. • Provided Customer Service Supervisor administrative permissions to grant staff access to transaction processing tools. Goal Two Modified Processes to Comply with Changes in Legislation and Agreements While Maintaining Financial Stability • Met quarterly with Conservation to assist with changing drought regulations mandated by the State of California. • Researched collection procedure options (in place at other agencies) to avoid service disconnection as a tool for collection of delinquent account balances and determined not a suitable option for the District. • Continued to process wastewater billing under both SNRC and SBMWD rates, pending transition of all wastewater flows to the SNRC. Goal Three Fully Understood and Utilized Smart Meter Capabilities • Coordinated with Public Affairs to increase the use of AMI data to support conservation efforts. • Reviewed routes and billing dates for possible changes to accommodate timing of bills for customers on fixed income, and determined that enhancements will need to be made to the billing software. LEVELS OF SERVICE The Customer Service Program has six KPI metrics that are associated with the District’s Goals and Objectives of: • Strive to Provide World-Class Customer Relations (III-B) • Maximize internal Capabilities through Ongoing Professional Development (I-B) • Dedicate Efforts Toward System Maintenance and Modernization (IV-C) The program’s performance related to these metrics are included in the following table. KEY PERFORMANCE INDICATORS CHANGES Agency Goal Key Performance Indicator Target FY 2020-21 FY 2021-22 FY 2022-23 III-B Reduce number of customers disconnected for non-payment each year 1,800 0*0*1,661 III-B Number of customer payments received through convenient off-site locations 10,000 5,346 4,323 3,886 I-B Number of customer service training hours per employee 16 13 4 4 IV-C Customers enrolled in paperless billing 2,000 2,049 1,411 1,506 IV-C Customers enrolled in the Pre-Authorized Payment Plan (auto-debit)2,000 2,762 3,663 3,001 *Due to California Governor Executive Order N-42-20 and the COVID-19 Pandemic, customer disconnections were prohibited. PROGRAM BUDGET DETAIL FY 2021-22 Actuals FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget Amount Changed % Changed PERSONNEL EXPENSES 5101 Regular Labor $ 431,702 $ 533,000 $ 401,451 $ 619,000 $ 86,000 16% 5102 Temporary Labor 5,719 - 56,395 - - 0% 5103 Overtime 20,363 7,000 15,703 7,000 - 0% 5200 Benefits 270,237 307,000 255,733 310,000 3,000 1% OPERATING EXPENSES 6201 Materials & Supplies 1,237 - - - - 0% 6203 Office Supplies 1,032 7,000 5,962 7,000 - 0% 6301 Contract Services 258,641 277,800 204,496 240,000 (37,800)-14% 6302 Banking Services 217,487 229,000 274,561 200,000 (29,000)-13% 6303 Printing & Publishing 1,843 7,000 13,578 10,000 3,000 43% 6304 Legal Services - 5,000 8,047 5,000 - 0% 6307 Uniforms 2,039 3,000 3,843 4,000 1,000 33% 6308 Billing Services 49,803 60,000 71,002 52,000 (8,000)-13% 6309 Shut Off Notice Services - 225,000 235,317 225,000 - 0% 6402 Telephone 11,432 8,000 8,834 8,000 - 0% 6406 Postage 118,588 61,200 161,840 153,000 91,800 150% 6501 Memberships & Dues - 1,000 - 1,000 - 0% 6502 Professional Development 16,679 6,500 - 13,000 6,500 100% 6504 Meetings 724 3,000 2,782 3,000 - 0% 6703 Cash Over/Short 64 1,000 1,868 1,000 - 0% 6704 Bad Debt 38,187 5,000 7,084 5,000 - 0% CUSTOMER SERVICE TOTAL $ 1,445,777 $ 1,746,500 $ 1,728,496 $ 1,863,000 $ 116,500 7% SIGNIFICANT CHANGES IN PROGRAM BUDGET • Increased Professional Services budget for staff to attend various conferences. EAST VALLEY WATER DISTRICT | 161 [CUSTOMER SERVICE] 5% [$1,863,000] Program Budget Allocation [PAGE LEFT BLANK] Intentionally FY 2023-24 BUDGET | 162 EAST VALLEY WATER DISTRICT | 163 METER SERVICES Program Summaries Section M E T E R SE R V I C E S Meter Services is responsible for maintaining the District's smart meter network, on-site customer meter-related requests, and customer service assistance. FY 2023-24 BUDGET | 164 • Governing Board • General Administration • Human Resources • Public Affairs • Conservation • Finance & Accounting • Information Technology • Customer Service • Meter Services • Engineering • Water Production • Water Treatment • Water Quality • Water Maintenance • Wastewater Collection • Water Reclamation • Facilities Maintenance • Fleet Maintenance Program Summaries Contents Meter Technician II 2 Total Full-Time 2 PROGRAM PERSONNEL PROGRAM STRUCTURE GENERAL MANAGER/CEO OPERATIONS MANAGER FIELD SERVICE SUPERVISOR METER TECHNICIAN II DIRECTOR OF ENGINEERING & OPERATIONS (2) The Meter Services program maintains a network of approximately 23,000 Advanced Metering Infrastructure (AMI) meters. The AMI meter program provides the District and its customers with near real-time consumption information. The Program conducts routine maintenance, testing and replacement of meters to ensure billing is accurate. EAST VALLEY WATER DISTRICT | 165 METER SERVICES PROGRAM SUMMARIES Goals Objectives 1 Implement Inspection Program for AMI Meters 1. Identify additional necessary vaults in need of lid replacements by utilizing replacement schedule. 2. Visually inspect necessary meter boxes in routes where read problems are occurring. 2 Work with Customer Service to Address Coverage Issues with the AMI Network 1. Confirm and correct MIU (meter interface unit) and meter numbers on meters that are not transmitting reliable read data. 2. Install additional data collector near Plant 132 to address unreliable transmission of reads in routes 8, 155, 92, and 101. 3 Continue Meter Testing Programs in Compliance with State Water Audits Best Practices 1. Conduct an audit of 10% of large meters for accuracy to ensure compliance with AWWA standards. 2. Replace large meters that do not meet AWWA standards. Directly Supports the Five-Year Work Plan FY 2023-24 BUDGET | 166 FY 2022-232022-23 ACCOMPLISHMENTS Goal One Implemented Inspection Program for AMI Meters • Identified the need of five vault lid replacements and created replacement schedule. • Visually inspected meter boxes where read problems occurred and responded to 1,000 units monthly and made 70 repairs on average per month. Goal Two Worked with Customer Service to Address Coverage Issues with the AMI Network • Confirmed accuracy of two MIUs and meter reads per month. • Decided not to install additional registers on meters in routes 44 and 123, that utilize cell towers for data transmission. Goal Three Continued Meter Testing Programs in Compliance with State Water Audits Best Practices • Conducted an audit of 10% of large meters for accuracy to ensure compliance with AWWA standards. LEVELS OF SERVICE The Meter Services Program has three KPI metrics that are associated with the District’s Goals and Objectives of: • Identify Opportunities to Optimize Natural Resources (I-A) • Strive to Provide World-Class Customer Relations (III-B) • Dedicate Efforts towards System Maintenance and Modernization (IV-C) The program’s performance related to these metrics are included in the following table. KEY PERFORMANCE INDICATORS CHANGES Agency Goal Key Performance Indicator Target FY 2020-21 FY 2021-22 FY 2022-23 I-A Number of large meters tested for accuracy 11 11 11 11 III-B Respond to customer requests for assistance within two hours 100%100%100%100% IV-C Number of employees trained on the Mobile Data Collector and access Neptune 360 4 3 3 3 PROGRAM BUDGET DETAIL FY 2021-22 Actuals FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget Amount Changed % Changed PERSONNEL EXPENSES 5101 Regular Labor $ 172,271 $ 164,000 $ 132,187 $ 173,000 $ 9,000 5% 5103 Overtime 653 6,000 2,976 6,000 - 0% 5200 Benefits 83,176 96,000 82,694 101,000 5,000 5% OPERATING EXPENSES 6201 Materials & Supplies 7,888 1,000 - 1,000 - 0% 6202 Tools 3,052 - - 3,000 3,000 100% 6301 Contract Services 3,291 - - 5,000 5,000 100% 6307 Uniforms 1,759 2,000 1,384 2,000 - 0% 6402 Telephone 2,083 1,000 1,281 1,000 - 0% METER SERVICES TOTAL $ 274,173 $ 270,000 $ 220,522 $ 292,000 $ 22,000 8% SIGNIFICANT CHANGES IN PROGRAM BUDGET • None. EAST VALLEY WATER DISTRICT | 167 [METER SERVICES] 1% [$292,000] Program Budget Allocation [PAGE LEFT BLANK] Intentionally FY 2023-24 BUDGET | 168 ENGINEERING Program Summaries Section EAST VALLEY WATER DISTRICT | 169 E N G I N E E R I N G Engineering coordinates and supports new development within the District's service area by streamlining plan checking and inspection efforts. FY 2023-24 BUDGET | 170 • Governing Board • General Administration • Human Resources • Public Affairs • Conservation • Finance & Accounting • Information Technology • Customer Service • Meter Services • Engineering • Water Production • Water Treatment • Water Quality • Water Maintenance • Wastewater Collection • Water Reclamation • Facilities Maintenance • Fleet Maintenance Program Summaries Contents PROGRAM PERSONNEL Director of Engineering & Operations 1 Senior Engineer 2 Total Full-Time 3 PROGRAM STRUCTURE GENERAL MANAGER/CEO DIRECTOR OF ENGINEERING & OPERATIONS SENIOR ENGINEER (2) The Engineering Program responsibilities include infrastructure planning, maintaining a safe and reliable water supply, and ensuring compliance with Federal and State regulations. This Program also oversees wastewater collection and reclamation capital projects. EAST VALLEY WATER DISTRICT | 171 ENGINEERING PROGRAM SUMMARIES Goals Objectives 1 Develop and Implement the District’s Capital Improvement Program to Address Rehabilitation and Maintenance Needs While Preparing for New Development 1. Complete construction work for rehabilitation of reservoir at Plant 56. 2. Complete construction work for rehabilitation of booster pump system at Plant 101. 3. Complete preliminary design of Canal 3 Zone reservoir at the Applewood site. 4. Complete design and start replacement of 6.5 miles of District water mains. 5. Monitor the Baseline Bridge replacement project and associated water main relocation. 6. Design a Plunge Creek under-crossing for the North Fork Water Company Pipeline. 2 Develop Plans to Optimize District Water and Energy Resources 1. Complete a study to evaluate alternatives to optimize surface water treatment capacity within the District. 2. Complete groundwater master planning efforts to consider short-term and long-term actions related to groundwater production capacity. 3. Conduct analysis of alternative energy sources. 4. Complete design of new groundwater well at Plant 129. 3 Complete Construction and Commissioning of the SNRC 1. Complete construction of the regional recycled water pipeline and Weaver Basins. 2. Participate in the feasibility study for salt mitigation, related to recharging groundwater with recycled water. Directly Supports the Five-Year Work Plan FY 2023-24 BUDGET | 172 FY 2022-232022-23 ACCOMPLISHMENTS Goal One Developed and Implemented the District’s Capital Improvement Program to Address Rehabilitation and Maintenance Needs While Preparing for New Development • Completed construction work for rehabilitation of the reservoir at Plant 108. • Completed design and construction of the grant-funded stationary generator at Plant 101. • Completed design work for rehabilitation of the booster pump system at Plant 101. • Initiated preliminary design of a Canal 3 Zone reservoir at the Applewood site. Goal Two Developed Plans to Optimize District Utilization of Surface Water and Groundwater Sources • Completed construction of process improvements related to Granular Activated Carbon at Plant 134. • Initiated groundwater master planning efforts to consider short-term and long-term actions related to groundwater production capacity. Goal Three Completed Construction and Commissioning of the SNRC • Completed construction of the emergency storage basin at the Weaver Basins Recharge Facility site. LEVELS OF SERVICE The Engineering Program has three KPI metrics that are associated with the District’s Goals and Objectives of: • Develop Projects and Programs to Ensure Safe and Reliable Services (IV-A) • Strive to Provide World-Class Customer Relations (III-B) The program’s performance related to these metrics are included in the following table. KEY PERFORMANCE INDICATORS CHANGES Agency Goal Key Performance Indicator Target FY 2020-21 FY 2021-22 FY 2022-23 IV-A Initiate fully funded projects included in the current year CIP 100%90%100%100% III-B Complete development infrastructure plan reviews in < 14 days 100%100%100%100% III-B Issue development impact fee costs estimates in < 2 days 100%100%100%100% PROGRAM BUDGET DETAIL FY 2021-22 Actuals FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget Amount Changed % Changed PERSONNEL EXPENSES 5101 Regular Labor $ 937,099 $ 568,000 $ 448,354 $ 627,000 $ 59,000 10% 5103 Overtime 3,481 3,000 - 3,000 - 0% 5200 Benefits 317,528 193,000 116,710 153,000 (40,000)-21% OPERATING EXPENSES 6201 Materials & Supplies 56,692 9,000 924 9,000 - 0% 6202 Tools 6,946 7,000 3,003 7,000 - 0% 6203 Office Supplies 266 3,000 407 3,000 - 0% 6301 Contract Services 211,082 293,000 50,390 377,000 84,000 29% 6303 Printing & Publishing - 6,000 - 3,000 (3,000)-50% 6304 Legal Services 41,740 40,000 11,055 40,000 - 0% 6307 Uniforms 2,785 3,000 1,563 3,000 - 0% 6402 Telephone 2,957 2,000 3,639 3,000 1,000 50% 6405 Permits 82,183 78,000 76,987 184,000 106,000 136% 6406 Postage 22 1,000 53 1,000 - 0% 6501 Memberships & Dues 2,330 5,000 1,803 5,000 - 0% 6502 Professional Development 6,867 10,000 7,014 7,000 (3,000)-30% 6504 Meetings 531 3,000 587 3,000 - 0% ENGINEERING TOTAL $ 1,672,509 $ 1,224,000 $ 722,489 $ 1,428,000 $ 204,000 17% SIGNIFICANT CHANGES IN PROGRAM BUDGET • Increased Contract Services for cost share of $125,000 for a Feasibility Study. EAST VALLEY WATER DISTRICT | 173 [ENGINEERING] 4% [$1,428,000] Program Budget Allocation [PAGE LEFT BLANK] Intentionally FY 2023-24 BUDGET | 174 WATER PRODUCTION Program Summaries Section EAST VALLEY WATER DISTRICT | 175 WA T E R P R O D U C T I O N Water Production specializes in managing the overall water distribution system. FY 2023-24 BUDGET | 176 • Governing Board • General Administration • Human Resources • Public Affairs • Conservation • Finance & Accounting • Information Technology • Customer Service • Meter Services • Engineering • Water Production • Water Treatment • Water Quality • Water Maintenance • Wastewater Collection • Water Reclamation • Facilities Maintenance • Fleet Maintenance Program Summaries Contents PROGRAM PERSONNEL Operations Manager 1 Sr. Water Production Operator 1 Water Production Operator II 3 Water Production Operator I 1 Administrative Assistant 1 Total Full-Time 7 ADMINISTRATIVE ASSISTANT GENERAL MANAGER/CEO OPERATIONS MANAGER WATER PRODUCTION SUPERVISOR SR. WATER PRODUCTION OPERATOR WATER PRODUCTION OPERATOR I DIRECTOR OF ENGINEERING & OPERATIONS WATER PRODUCTION OPERATOR II (3) PROGRAM STRUCTURE Water Production is responsible for the daily monitoring and operations of the entire water production system to ensure preventative maintenance of all pumps, motors, wells, boosters, reservoirs, pressure regulating valves (PRVs), hydro- pneumatic plants, and the SCADA system. This Program is also responsible for the delivery of Santa Ana River water through the North Fork Water Company canal/pipeline. EAST VALLEY WATER DISTRICT | 177 WATER PRODUCTION PROGRAM SUMMARIES Goals Objectives 1 Implement a Plan to Identify and Enhance Water Sources’ Requirements Due to the SNRC Discharge Location 1. Install pressure regulating valve (PRV) at Plant 129 to connect plant to the upper zone distribution system. 2. Contract for repairs and upgrades to Well 120 to ensure its operational readiness for summer 2023 production. 3. Support work of contractor to complete rehabilitation of Plant 101. 2 Enhance the SCADA System to Achieve Water Production Requirements 1. Work with IT to install SCADA tower to improve radio communications at District Headquarters or alternative site. 2. Work with contractor to inspect and enhance communication and telemetry. 3 Rehabilitate Plant Components to Ensure Water Production 1. Coordinate with Water Maintenance for replacement of isolation valves to repair critical PRV (Baseline/Sterling). 2. Work with Engineering for rehabilitation of reservoir at Plant 56. 3. Solicit proposals and finalize new master agreements for pump and motor maintenance. Directly Supports the Five-Year Work Plan FY 2023-24 BUDGET | 178 FY 2022-232022-23 ACCOMPLISHMENTS Goal One Implemented a Plan to Identify and Enhance Water Sources’ Requirements Due to the SNRC Discharge Location • Completed coordination with contractor to rehabilitate booster at Plant 125 to accommodate increased well capacity. • Worked with Engineering to determine best utilization of water produced by Well 120. • Identified and prioritized making Well 120 operational with electrical, SCADA, and required permitting. Goal Two Enhanced the SCADA System to Achieve Water Production Requirements • Investigated and temporarily deferred installation of SCADA tower to improve radio communications at District Headquarters or alternate sites. • Worked with IT to complete ClearScada software update. • Completed SCADA radio updates at Plants 25, 33, 37, and 38. Goal Three Rehabilitated Plant Components to Ensure Water Production • Completed replacement of isolation valves to repair critical PRV (Baseline/Sterling, N Church, and Central/Mansfield) Stations 309, 305, and 325. • Completed Plant 108 rehabilitation project. LEVELS OF SERVICE The Water Production Program has four KPI metrics that are associated with the District’s Goals and Objectives of: • Develop Projects and Programs to Ensure Safe and Reliable Services (IV-A) • Dedicate Effort towards System Maintenance and Modernization (IV-C) • Enable Fact-Based Decision Making through State-of-the-Art Data Management (IV-D) The program’s performance related to these metrics are included in the following table. KEY PERFORMANCE INDICATORS CHANGES Agency Goal Key Performance Indicator Target FY 2020-21 FY 2021-22 FY 2022-23 IV-A Perform upgrades to SCADA radios as recommended by consultant 5/Yr 6 5 3 IV-C Perform or schedule repairs recommended by reservoir inspection report 1/Yr 1 0 1 IV-D Implement available SCADA software updates 100%100%100%100% IV-A Perform repairs recommended from the electrical inspection report 100%100%100%100% PROGRAM BUDGET DETAIL Administration FY 2021-22 Actuals FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget Amount Changed % Changed PERSONNEL EXPENSES 5101 Regular Labor $ 268,571 $ 212,000 $ 222,295 $ 271,000 $ 59,000 28% 5103 Overtime - 1,000 500 1,000 - 0% 5104 Standby 14,947 15,000 13,683 15,000 - 0% 5200 Benefits 155,062 158,000 166,026 180,000 22,000 14% OPERATING EXPENSES 6201 Materials & Supplies 478 - 2,105 - - 0% 6202 Tools 639 6,000 137 6,000 - 0% 6203 Office Supplies 3,970 4,000 5,404 4,000 - 0% 6301 Contract Services 71,083 101,000 87,347 103,000 2,000 2% 6307 Uniforms 11,677 15,000 9,762 15,000 - 0% 6402 Telephone 8,908 14,000 12,262 14,000 - 0% 6501 Memberships & Dues 1,091 3,000 980 3,000 - 0% 6502 Professional Development 7,843 7,000 16,265 7,000 - 0% 6504 Meetings 4,125 1,000 1,637 1,000 - 0% ADMINISTRATION TOTAL $ 548,394 $ 537,000 $ 538,403 $ 620,000 $ 83,000 15% EAST VALLEY WATER DISTRICT | 179 [WATER PRODUCTION] FY 2023-24 BUDGET | 180 Source of Supply/Wells FY 2021-22 Actuals FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget Amount Changed % Changed PERSONNEL EXPENSES 5101 Regular Labor $ 428,612 $ 200,000 $ 124,545 $ 215,000 $ 15,000 8% 5103 Overtime 33,327 17,000 9,735 17,000 - 0% 5200 Benefits 126,184 73,000 64,518 83,000 10,000 14% OPERATING EXPENSES 6101 Purchased Water 206,142 302,000 400,000 300,000 (2,000)-1% 6102 Groundwater Replenishment 95,341 110,000 146,175 351,000 241,000 219% 6103 Water Assessment 71,613 74,000 2,161 117,000 43,000 58% 6201 Materials & Supplies 20,655 45,000 36,842 45,000 - 0% 6204 Chemicals 109,440 150,000 146,246 150,000 - 0% 6301 Contract Services 96,088 300,000 39,129 265,000 (35,000)-12% 6403 Electricity 1,740,440 2,275,000 2,302,845 2,275,000 - 0% 6405 Permits 70,710 100,000 103,066 100,000 - 0% SOURCE OF SUPPLY/WELLS TOTAL $ 2,998,552 $ 3,646,000 $ 3,375,262 $ 3,918,000 $ 272,000 7% Boosting and Pumping FY 2021-22 Actuals FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget Amount Changed % Changed PERSONNEL EXPENSES 5101 Regular Labor $ - $ 114,000 $ 91,315 $ 119,000 $ 5,000 4% 5103 Overtime 10,432 14,000 11,125 14,000 - 0% 5200 Benefits 24,625 63,000 57,008 63,000 - 0% OPERATING EXPENSES 6201 Materials & Supplies 13,474 20,000 26,226 20,000 - 0% 6301 Contract Services 25,197 100,000 70,222 100,000 - 0% 6403 Electricity 646,029 675,000 715,082 710,000 35,000 5% BOOSTING & PUMPING TOTAL $ 719,757 $ 986,000 $ 970,978 $ 1,026,000 $ 40,000 4% Transmission and Distribution FY 2021-22 Actuals FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget Amount Changed % Changed PERSONNEL EXPENSES 5101 Regular Labor $ 193,470 $ 205,000 $ 203,892 $ 185,000 $ (20,000)-10% 5103 Overtime 14,326 18,000 10,114 14,000 (4,000)-22% 5200 Benefits 95,002 110,000 110,632 74,000 (36,000)-33% OPERATING EXPENSES 6201 Materials & Supplies 51,744 60,000 20,727 60,000 - 0% 6204 Chemicals 729 50,000 9,638 50,000 - 0% 6301 Contract Services 33,248 45,000 800 45,000 - 0% TRANSMISSION & DISTRIBUTION TOTAL $ 388,519 $ 488,000 $ 355,803 $ 428,000 $ (60,000)-12% TOTAL WATER PRODUCTION $ 4,655,222 $ 5,657,000 $ 5,240,446 $5,992,000 $ 335,000 6% SIGNIFICANT CHANGES IN PROGRAM BUDGET • Discontinued production wells at Abbey Way, 143, 146, and 147 due to release of recycled water for recharge. • The credit previously received for North Fork water provided for recharge, is no longer in effect. EAST VALLEY WATER DISTRICT | 181 [WATER PRODUCTION] 15% [$5,992,000] Program Budget Allocation [PAGE LEFT BLANK] Intentionally FY 2023-24 BUDGET | 182 WATER TREATMENT Program Summaries Section EAST VALLEY WATER DISTRICT | 183 WA T E R TR E A T M E N T Water Treatment manages three sources of water, including surface water, groundwater, and State Water Project imported water. FY 2023-24 BUDGET | 184 • Governing Board • General Administration • Human Resources • Public Affairs • Conservation • Finance & Accounting • Information Technology • Customer Service • Meter Services • Engineering • Water Production • Water Treatment • Water Quality • Water Maintenance • Wastewater Collection • Water Reclamation • Facilities Maintenance • Fleet Maintenance Program Summaries Contents PROGRAM PERSONNEL Water Production Supervisor 1 Sr. Treatment Plant Operator 1 Total Full-Time 2 PROGRAM STRUCTURE GENERAL MANAGER/CEO OPERATIONS MANAGER WATER PRODUCTION SUPERVISOR SR. TREATMENT PLANT OPERATOR DIRECTOR OF ENGINEERING & OPERATIONS Water Treatment is responsible for management of three different sources of supply used by the District. The District operates Plant 134, Surface Water Treatment Plant, which can treat two water sources Santa Ana River water and imported water from the State Water Project. Staff also operate two unique groundwater treatment facilities: Plant 28 uses GAC and Plant 39 is a blending facility. EAST VALLEY WATER DISTRICT | 185 WATER TREATMENT PROGRAM SUMMARIES Goals Objectives 1 Maximize Plant 134 Water Production While Utilizing GAC Facilities 1. Develop flow standards to meet water quality objectives. 2. Determine frequency of carbon filtration media changeouts to maintain water quality. 3. Implement data collection requirements identified in the permit amendment. 2 Complete Plant 134 Membrane Replacements Using a Five-Phase Replacement Schedule 1. Procure the necessary membrane modules from the manufacturer in accordance with the District’s Purchasing Policy. 2. Coordinate and schedule in-house installation of new membranes in the fifth and final train. 3 Evaluate and Rehabilitate Existing Clean-in- Place Equipment at Plant 134 1. Inspect existing equipment and establish prioritized replacement schedule. 2. Purchase and install necessary parts and materials to complete the clean-in-place equipment project. Directly Supports the Five-Year Work Plan FY 2023-24 BUDGET | 186 FY 2022-232022-23 ACCOMPLISHMENTS Goal One Supported Construction of GAC Facilities at Plant 134 • Developed an operating plan for Plant 134 construction. • Amended Permit with the State Water Resources Control Board (SWRCB). • Provided final performance data to the SWRCB and closed-out the compliance order. Goal Two Completed Plant 134 Membrane Replacements Using a Five-Phase Replacement Schedule • Deferred to allow use of funds for other projects and rolled forward to FY 2023-24 objectives. Goal Three Evaluated and Rehabilitated Existing Clean-in-Place Equipment at Plant 134 • Replaced primary pump and scheduled remaining pumps for replacement next fiscal year. LEVELS OF SERVICE The Water Treatment Program has four KPI metrics that are associated with the District’s Goals and Objectives of: • Develop Projects and Programs to Ensure Safe and Reliable Service (IV-A) • Dedicate Effort towards System Maintenance and Modernization (IV-C) • Maximize Staff Capabilities through Ongoing Professional Development (I-B) The program’s performance related to these metrics are included in the following table. KEY PERFORMANCE INDICATORS CHANGES Agency Goal Key Performance Indicator Target FY 2020-21 FY 2021-22 FY 2022-23 IV-A Meet all regulatory requirements 100%100%100%100% IV-A Maximize utilization of plant capacity subject to source water availability 7.5 MGD 3.5 3.5 4.0 IV-C Percentage of plant equipment and motors on preventative maintenance schedules 100%100%100%100% I-B Number of Production staff with T-4 certification or higher 4 5 5 4 PROGRAM BUDGET DETAIL FY 2021-22 Actuals FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget Amount Changed % Changed PERSONNEL EXPENSES 5101 Regular Labor $ 263,382 $ 261,000 $ 186,573 $ 273,000 $ 12,000 5% 5103 Overtime 41,009 39,000 63,351 39,000 - 0% 5200 Benefits 149,889 159,000 155,205 164,000 5,000 3% OPERATING EXPENSES 6201 Materials & Supplies 35,200 150,000 150,002 20,000 (130,000)-87% 6204 Chemicals 177,850 150,000 181,891 180,000 30,000 20% 6301 Contract Services 127,137 147,000 204,209 222,000 75,000 51% 6307 Uniforms 1,552 2,000 614 2,000 - 0% 6402 Telephone 2,662 2,000 3,997 2,000 - 0% 6403 Electricity 178,681 180,000 134,735 180,000 - 0% WATER PRODUCTION TOTAL $ 977,362 $ 1,090,000 $ 1,080,577 $ 1,082,000 $ (8,000)-1% SIGNIFICANT CHANGES IN PROGRAM BUDGET • Increased Contract Services budget due to Plant 134 GAC expansion. EAST VALLEY WATER DISTRICT | 187 [WATER TREATMENT] 3% [$1,082,000] Program Budget Allocation [PAGE LEFT BLANK] Intentionally FY 2023-24 BUDGET | 188 EAST VALLEY WATER DISTRICT | 189 WA T E R QU A L I T Y WATER QUALITY Program Summaries Section Water Quality has dedicated, state certified team members to test water quality and ensure all members of the community receive safe drinking water. FY 2023-24 BUDGET | 190 • Governing Board • General Administration • Human Resources • Public Affairs • Conservation • Finance & Accounting • Information Technology • Customer Service • Meter Services • Engineering • Water Production • Water Treatment • Water Quality • Water Maintenance • Wastewater Collection • Water Reclamation • Facilities Maintenance • Fleet Maintenance Program Summaries Contents PROGRAM PERSONNEL Water Quality Coordinator 1 Water Quality Technician 1 Total Full-Time 2 PROGRAM STRUCTURE GENERAL MANAGER/CEO OPERATIONS MANAGER WATER PRODUCTION SUPERVISOR WATER QUALITY COORDINATOR WATER QUALITY TECHNICIAN DIRECTOR OF ENGINEERING & OPERATIONS Water Quality is responsible for ensuring District compliance with State and Federal Drinking Water Regulations. This program manages Backflow Prevention, Water Sampling, and the Fire Hydrant Flushing Programs. Water Quality is also assisting in the development and launch of the Fats, Oils, and Grease (FOG) program for SNRC pre-treatment. EAST VALLEY WATER DISTRICT | 191 WATER QUALITY PROGRAM SUMMARIES Goals Objectives 1 Evaluate Water Quality Regulations and Improve Process Efficiencies to Enhance Water Quality Compliance 1. Implement Updated Sampling Requirements outlined in the District’s latest Permit amendment. 2. Complete EPA registration for Unregulated Contaminant Monitoring Rule (UCMR5) sample schedule. 3. Identify sample requirements for U.S. EPA’s Revised Lead and Copper Rule, effective summer 2024. 2 Implement Backflow Program Enhancement Modifications 1. Complete backflow software migration and implementation for cloud- based service. 2. Provide customer and private tester training for accessing and updating customer device information via cloud-based software. 3. Work with customers to replace outdated and unapproved backflow devices. 3 Implement Customer / Vendor FOG Program Requirements and Training Campaign 1. Conduct customer outreach and vendor training for cloud-based compliance reporting. 2. Create customer Best Management Practices campaign to maintain program standards. 3. Assist Water Reclamation with procurement and management of contract for FOG compliance inspection. Directly Supports the Five-Year Work Plan FY 2023-24 BUDGET | 192 FY 2022-232022-23 ACCOMPLISHMENTS Goal One Evaluated Water Quality Regulations and Improved Process Efficiencies to Enhance Water Quality Compliance • Implemented sampling programs to maximize surface water treatment process efficiencies. • Monitored EPA requirements for Unregulated Contaminant Monitoring Rule 5 (UCMR5) sampling. Goal Two Re-Routed Outdated Fire Service Backflows to Aboveground • Replaced outdated Fire Service backflows at Stater Bros, Safety Kleen, and two apartment complexes. Goal Three Assisted in Launching FOG Program Transition and Software Procurement • Worked with Engineering and IT during software implementation. • Assisted with FOG program transition and compliance. LEVELS OF SERVICE The Water Quality Program has four KPI metrics that are associated with the District’s Goals and Objectives of: • Develop Projects and Programs to Ensure Safe and Reliable Service (IV-A) • Strive to Provide World-Class Customer Relations (III-B) The program’s performance related to these metrics are included in the following table. KEY PERFORMANCE INDICATORS CHANGES Agency Goal Key Performance Indicator Target FY 2020-21 FY 2021-22 FY 2022-23 IV-A Conduct all water quality sampling required by SWRCB and EPA 100%100%100%100% IV-A Complete annual Hazmat site-handling permits*100%100%100%100% III-B Response time to water quality complaints by customers (avg)2.0 Hrs 1.5 1.5 1.5 IV-A Number of underground fire services to be re- routed aboveground annually 3 N/A 3 4 *New KPI for FY 2022-23. PROGRAM BUDGET DETAIL FY 2021-22 Actuals FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget Amount Changed % Changed PERSONNEL EXPENSES 5101 Regular Labor $ 110,779 $ 119,000 $ 93,790 $ 98,000 $ (21,000)-18% 5103 Overtime 1,079 6,000 2,270 6,000 - 0% 5200 Benefits 55,186 57,000 26,250 41,000 (16,000)-28% WELLS OPERATING EXPENSES 6201 Materials & Supplies 22,865 13,000 15,946 14,000 1,000 8% 6301 Contract Services 63,100 75,000 47,194 66,000 (9,000)-12% 6307 Uniforms 1,624 4,000 1,401 4,000 - 0% 6504 Meetings 684 1,000 217 1,000 - 0% RESERVOIR PERSONNEL EXPENSES 5101 Regular Labor 104,443 119,000 93,891 125,000 6,000 5% 5103 Overtime 1,079 6,000 2,270 6,000 - 0% 5200 Benefits 70,346 57,000 64,332 66,000 9,000 16% RESERVOIR OPERATING EXPENSES 6201 Materials & Supplies 3,851 2,000 768 2,000 - 0% 6202 Tools 5,491 5,000 3,806 9,000 4,000 80% 6301 Contract Services 59,987 36,000 46,008 100,000 64,000 178% 6406 Postage - 2,000 - 2,000 - 0% 6502 Professional Development 852 2,000 4,061 3,000 1,000 50% 6503 Education Assistance 75 3,000 - 3,000 - 0% WATER QUALITY TOTAL $ 501,441 $ 507,000 $ 402,204 $ 546,000 $ 39,000 8% SIGNIFICANT CHANGES IN PROGRAM BUDGET • Hired a Part-Time Water Quality Worker. • Increased Tools and Contract Services budgets due to FOG program-related costs. EAST VALLEY WATER DISTRICT | 193 [WATER QUALITY] 1% [$546,000] Program Budget Allocation [PAGE LEFT BLANK] Intentionally FY 2023-24 BUDGET | 194 EAST VALLEY WATER DISTRICT | 195 WATER MAINTENANCE Program Summaries Section WA T E R M A I N T E N A N C E Water Maintenance maintains the District's water transmission and distribution system. FY 2023-24 BUDGET | 196 • Governing Board • General Administration • Human Resources • Public Affairs • Conservation • Finance & Accounting • Information Technology • Customer Service • Meter Services • Engineering • Water Production • Water Treatment • Water Quality • Water Maintenance • Wastewater Collection • Water Reclamation • Facilities Maintenance • Fleet Maintenance Program Summaries Contents PROGRAM PERSONNEL Field Service Supervisor 1 Sr. Field Service Worker 1 Field Service Worker III 6 Field Service Worker II 4 Field Service Worker I 3 Storekeeper/Buyer (Warehouse)1 Total Full-Time 16 PROGRAM STRUCTURE GENERAL MANAGER/CEO OPERATIONS MANAGER FIELD SERVICE SUPERVISOR SR. FIELD SERVICE WORKER FIELD SERVICE WORKER III FIELD SERVICE WORKER II FIELD SERVICE WORKER I DIRECTOR OF ENGINEERING & OPERATIONS (6) (4) (3) STOREKEEPER/ BUYER WAREHOUSE The Water Maintenance Program is responsible for the repair and replacement of the District’s 300 miles of water pipeline. Water Maintenance coordinates with Engineering and Water Production to install water service lines, fire hydrants, meters, valves, and all related equipment. Crew members remain on standby during non-business hours to respond to customer afterhours requests and emergencies. EAST VALLEY WATER DISTRICT | 197 WATER MAINTENANCE PROGRAM SUMMARIES Goals Objectives 1 Prioritize Preventative Maintenance Schedules to Ensure Equipment Readiness for Emergency Response 1. Replace 40 identified inoperable gate valves on the west side of the District. Conduct at least 20 in-house and supplement efforts to replace up to 20 more using outside contractors. 2. Coordinate with Production to perform valve replacements to isolate crucial PRV stations in Baseline/Sterling, North Church, and Central/ Mansfield. 3. Inspect, maintain, and replace (as needed) 3,000 hydrants on a three- year cycle. 4. Solicit proposals and finalize new master agreement for pipeline repair services. 2 Assess Operation of Tyler’s EnerGov Asset Management Software 1. Continue training all staff on use of new software. 2. Enhance tracking of all labor, equipment, and materials for water maintenance activities. 3 Continue Replacement Program for Mains and Inground Fire Service Devices 1. Replace 1,500 feet of water main in both Elmwood Drive north of Lynwood and Valaria Court east of Valaria Drive. 2. Coordinate with Water Quality to replace identified outdated fire services. Directly Supports the Five-Year Work Plan FY 2023-24 BUDGET | 198 FY 2022-232022-23 ACCOMPLISHMENTS Goal One Prioritized Preventative Maintenance Schedules to Ensure Equipment Readiness for Emergency Response • Ordered valve exercise equipment and software. • Inspected, maintained, and replaced 900 of 3,025 hydrants on a three- year cycle. Goal Two Completed Evaluation of Service Order / Asset Management Software • Worked with IT to hold product demonstrations. • Incorporated feedback from staff to finalize decision and procure Tyler’s Asset Management software. • Provided training for staff on use of new software. Goal Three Continued Replacement Program for Mains and Inground Fire Service Devices • Replaced undersized main in Pleasant Hill Drive west of Palm Avenue. • Coordinated with Water Quality to develop a replacement schedule for outdated fire services; and replaced three inground fire services with new “N’’ shaped aboveground devices. LEVELS OF SERVICE The Water Maintenance Program has six KPI metrics that are associated with the District’s Goals and Objectives of: • Maximize Internal Capabilities through Ongoing Professional Development (I-B) • Advance Emergency Preparedness Efforts (III-A) • Develop Projects and Programs to Ensure Safe and Reliable Service (IV-A) • Dedicate Effort towards System Maintenance and Modernization (IV-C) The program’s performance related to these metrics are included in the following table. KEY PERFORMANCE INDICATORS CHANGES Agency Goal Key Performance Indicator Target FY 2020-21 FY 2021-22 FY 2022-23 I-B Number of Water Maintenance staff with D-3 certification or higher 5 5 5 5 III-A Annual equipment and safety training hours per staff member 16 16 16 16 IV-A Number of gate valves exercised 1,200 570 643 755 IV-C Respond to, and assess, customer leak concerns within reasonable time frame 98%100%100%100% IV-C Number of main leaks repaired <70 78 92 88 IV-C Estimate of water losses from main leaks (MG)<10 MG 0.54 MG 0.54 MG 0.54 MG PROGRAM BUDGET DETAIL Administration FY 2021-22 Actuals FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget Amount Changed % Changed PERSONNEL EXPENSES 5101 Regular Labor $ 215,628 $ 201,000 $ 164,273 $ 217,000 $ 16,000 8% 5103 Overtime - 2,000 1,695 2,000 - 0% 5104 Standby 22,603 20,000 25,636 20,000 - 0% 5200 Benefits 211,325 140,000 145,730 158,000 18,000 13% OPERATING EXPENSES 6203 Office Supplies 1,422 3,000 - 3,000 - 0% 6307 Uniforms 3,261 12,000 3,873 1,000 (11,000)-92% 6402 Telephone 33,849 51,000 36,854 41,000 (10,000)-20% 6501 Memberships & Dues 1,519 2,000 1,477 2,000 - 0% 6502 Professional Development 2,002 7,000 5,626 18,000 11,000 157% 6504 Meetings 2,770 3,000 3,953 3,000 - 0% 6706 Inventory Over/Short - - 64 - - 0% ADMINISTRATION TOTAL $ 494,379 $ 441,000 $ 389,181 $ 465,000 $ 24,000 5% Pipeline Maintenance FY 2021-22 Actuals FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget Amount Changed % Changed PERSONNEL EXPENSES 5101 Regular Labor $ 1,192,393 $ 1,153,000 $ 918,957 $ 914,000 $ (239,000)-21% 5103 Overtime 267,011 219,000 341,911 219,000 - 0% 5200 Benefits 436,851 502,000 581,909 620,000 118,000 24% OPERATING EXPENSES 6201 Materials & Supplies 643,711 480,000 814,252 450,000 (30,000)-6% 6202 Tools 26,536 21,000 55,217 21,000 - 0% 6301 Contract Services 54,403 72,000 83,657 37,000 (35,000)-49% 6307 Uniforms 36,996 40,000 36,515 40,000 - 0% 6310 Street Services 265,113 525,000 453,915 525,000 - 0% 6405 Permits 5,670 5,000 4,860 - (5,000)-100% PIPELINE MAINTENANCE TOTAL $ 2,928,684 $ 3,017,000 $ 3,291,193 $2,826,000 $ (191,000)-6% TOTAL WATER MAINTENANCE $ 3,423,063 $ 3,458,000 $ 3,680,374 $ 3,291,000 $ (167,000)-5% EAST VALLEY WATER DISTRICT | 199 [WATER MAINTENANCE] FY 2023-24 BUDGET | 200 SIGNIFICANT CHANGES IN PROGRAM BUDGET • Increased Professional Development budget for Class A or B Driver’s License renewals for staff. • Increased Materials & Supplies and Tools budgets for staff who will provide in-house labor for a Water Main Replacement CIP Project. 9% [$3,291,000] Program Budget Allocation EAST VALLEY WATER DISTRICT | 201 WASTEWATER COLLECTION Program Summaries Section WA S T E W A T E R CO L L E C T I O N Wastewater Maintenance prevents wastewater spillage and leaks by monitoring and maintaining wastewater pipelines. FY 2023-24 BUDGET | 202 • Governing Board • General Administration • Human Resources • Public Affairs • Conservation • Finance & Accounting • Information Technology • Customer Service • Meter Services • Engineering • Water Production • Water Treatment • Water Quality • Water Maintenance • Wastewater Collection • Water Reclamation • Facilities Maintenance • Fleet Maintenance Program Summaries Contents PROGRAM PERSONNEL Sr. Field Service Worker 1 Field Service Worker III 1 Field Service Worker II 2 Total Full-Time 4 PROGRAM STRUCTURE GENERAL MANAGER/CEO OPERATIONS MANAGER FIELD SERVICE SUPERVISOR FIELD SERVICE WORKER III FIELD SERVICE WORKER II DIRECTOR OF ENGINEERING & OPERATIONS (1) (2) SR. FIELD SERVICE WORKER The Wastewater Collection program performs routine inspections, cleaning, repairs, and replacement of the District’s 230 miles of collection pipelines. The District’s collection system has been engineered to use best practice gravity flow conveyance prior to treatment. California public health code mandates the District is responsible for inspection of wastewater collection systems. The pipeline inspection program uses a sewer inspection camera/transporter and closed-circuit television (CCTV) technology. The videoing software allows the operator to document pipeline condition attributes and location data for maintenance or replacement consideration. Along with videoing the collection pipeline, the Program conducts a weekly sewer cleaning program using specialized equipment. The jetting program ensures the whole system is cleaned within 24 months, and high maintenance areas are cleaned more regularly. EAST VALLEY WATER DISTRICT | 203 WASTEWATER COLLECTION PROGRAM SUMMARIES Goals Objectives 1 Continue Wastewater Collection System Maintenance and Management 1. Video inspect and assess 75 miles of District sewer mains between the northern and southern District boundaries, and east of Victoria. 2. Clean 230 miles of sewer main. 3. Develop communication protocols for Collection staff to notify SNRC staff of specialized maintenance activities (tree root chemicals, insects, etc). 2 Provide Support for New Fats, Oils, and Grease (FOG) Program 1. Identify high maintenance areas within the collection system for the new contracted FOG inspector. 2. Assist FOG inspector in prioritizing correction efforts. 3 Keep Sewer Mains Clear of Pests and Obstructions 1. Video sewer mains to identify root intrusions. 2. Schedule foam blasting of identified areas to control roots. 3. Schedule spraying of 2,500 manholes for insect control. SEWER Directly Supports the Five-Year Work Plan FY 2023-24 BUDGET | 204 FY 2022-232022-23 ACCOMPLISHMENTS Goal One Continued Wastewater Collection System Maintenance and Management • Video inspected and assessed all District sewer mains between the northern and southern District boundaries, and west of Victoria (75 miles). • Cleaned 230 miles of sewer main. Goal Two Provided Support for New Fats, Oils, and Grease (FOG) Program • FOG program is on hold until the SNRC is operational, and a FOG inspector is contracted. Goal Three Assisted with Updating the Sewer System Management Plan (SSMP) • Provided collection data for the SSMP. • Updated collection system assets listed in the next SSMP. LEVELS OF SERVICE The Wastewater Collection Program has five KPI metrics that are associated with the District’s Goals and Objectives of: • Maximize Internal Capabilities through Ongoing Professional Development (I-B) • Develop Projects and Programs to Ensure Safe and Reliable Service (IV-A) • Dedicate Effort towards System Maintenance and Modernization (IV-C) The program’s performance related to these metrics are included in the following table. KEY PERFORMANCE INDICATORS CHANGES Agency Goal Key Performance Indicator Target FY 2020-21 FY 2021-22 FY 2022-23 I-B Number of staff holding CWEA certifications 4 6 6 5 IV-A Miles of wastewater mains inspected by video 55 52 71 75 IV-A Category 1 Sanitary System Overflows reportable to SWRCB 0 0 0 0 IV-C Miles of wastewater mains jetted / cleaned 230 93 211 230 IV-C Spot repairs identified and completed 100%100%100%100% PROGRAM BUDGET DETAIL FY 2021-22 Actuals FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget Amount Changed % Changed PERSONNEL EXPENSES 5101 Regular Labor $ 273,897 $ 362,000 $ 289,201 $ 371,000 $ 9,000 2% 5103 Overtime 5,687 9,000 31,664 9,000 - 0% 5200 Benefits 153,921 196,000 112,553 174,000 (22,000)-11% OPERATING EXPENSES 6201 Materials & Supplies 10,558 31,000 6,118 31,000 - 0% 6202 Tools 4,490 5,000 9,487 5,000 - 0% 6301 Contract Services 136,263 273,000 193,670 273,000 - 0% 6305 Treatment Services 9,084,061 - 162,879 - - 0% 6307 Uniforms 2,310 4,000 1,413 4,000 - 0% WASTEWATER COLLECTION TOTAL $ 9,671,187 $ 880,000 $ 806,985 $ 867,000 $ (13,000)-1% SIGNIFICANT CHANGES IN PROGRAM BUDGET • Due to commissioning of the SNRC, this Program’s name changed from Wastewater Maintenance to Wastewater Collection. EAST VALLEY WATER DISTRICT | 205 [WASTEWATER COLLECTION] 2% [$867,000] Program Budget Allocation [PAGE LEFT BLANK] Intentionally FY 2023-24 BUDGET | 206 WATER RECLAMATION Program Summaries Section EAST VALLEY WATER DISTRICT | 207 WA T E R RE C L A M A T I O N Water Reclamation oversees and manages all operations related to the SNRC to ensure compliance with strict State water quality standards. FY 2023-24 BUDGET | 208 • Governing Board • General Administration • Human Resources • Public Affairs • Conservation • Finance & Accounting • Information Technology • Customer Service • Meter Services • Engineering • Water Production • Water Treatment • Water Quality • Water Maintenance • Wastewater Collection • Water Reclamation • Facilities Maintenance • Fleet Maintenance Program Summaries Contents PROGRAM PERSONNEL Water Reclamation Manager 1 Sr. Wastewater Treatment Plant Operator 1 Wastewater Treatment Plant Operator III 4 Wastewater Treatment Plant Mechanic I-II 1 Electrical & Instrumentation Controls Technician 1 Total Full-Time 8 GENERAL MANAGER/CEO WATER RECLAMATION MANAGER SR. WASTEWATER TREATMENT PLANT OPERATOR WASTEWATER TREATMENT PLANT OPERATOR III WASTEWATER TREATMENT PLANT MECHANIC III DIRECTOR OF ENGINEERING & OPERATIONS (4) ELECTRICAL & INSTRUMENTATION CONTROLS TECHNICIAN PROGRAM STRUCTURE The Water Reclamation Program is responsible for treating and disinfecting eight million gallons of wastewater per day (MGD). Reclamation of wastewater generated by District customers will transition from a service contracted with the SBMWD, to in-house operations at the newly completed SNRC during FY 2023-24. The SNRC operations include anaerobic digestion for energy generation in order to offset the cost of power needed to operate the plant. EAST VALLEY WATER DISTRICT | 209 WATER RECLAMATION PROGRAM SUMMARIES Goals Objectives 1 Complete Staffing and Training for New Wastewater Treatment Operations 1. Continue to hire staff in accordance with staffing plan finalized by Human Resources. 2. Ensure new employees are trained for operations and maintenance for the SNRC. 3. Work with Water Quality to procure a contract for the FOG program compliance inspector. 2 Meet and Exceed Compliance Requirements for the SNRC 1. Implement and manage pre-treatment program. 2. Comply with Air Quality Management District (AQMD) emissions requirements. 3. Comply with recycled water quality requirements. 3 Commence Operations at the SNRC 1. Complete transition: • of wastewater flows to the SNRC over a three-month period, • to discharge water to Weaver Basins, • to generate on-site renewable energy, and • to dispose residual solids. 2. Perform optimization of the Aeration system. 3. Manage new preventative maintenance program. Directly Supports the Five-Year Work Plan FY 2023-24 BUDGET | 210 FY 2022-232022-23 ACCOMPLISHMENTS Goal One Completed Staffing and Training for New Wastewater Treatment Operations • Hired Wastewater Treatment Plant Operator III. • Solicited for three more staff. • Updated staffing plan to hire remaining staff next year. • Staff participated in several training events by different vendors. Goal Two Met and Exceeded Compliance Requirements for the SNRC • Implemented HachWIMS compliance software. • Negotiated all AQMD and water quality permits. • Held Title 22 hearing for Effluent permit. • Updated Sewer Ordinance to establish legal authority to enforce pre- treatment program; includes FOG. Goal Three Commenced Operations at the SNRC • Completed seed sludge investigations. • Finalized agreement with Anaergia for biosolid residual disposal. • Implemented a preventative maintenance schedule within Tyler Energov Asset Management software. LEVELS OF SERVICE The Water Reclamation Program has five KPI metrics that are associated with the District’s Goals and Objectives of: • Maximize Internal Capabilities through Ongoing Professional Development (I-B) • Develop Projects and Programs to Ensure Safe and Reliable Service (IV-A) • Dedicate Effort towards System Maintenance and Modernization (IV-C) The program’s performance related to these metrics are included in the following table. KEY PERFORMANCE INDICATORS CHANGES Agency Goal Key Performance Indicator Target FY 2020-21 FY 2021-22 FY 2022-23 I-B Number of staff holding Wastewater Treatment certifications 6 2 2*6* IV-A Exceed NPDES Requirements (85%) for Removal of BOD and TSS at the SNRC 95%N/A N/A N/A IV-A Deliver recycled water to SBVMWD for groundwater recharge 98%N/A N/A N/A IV-C Tipping Fees collected from outside haulers $3.2M N/A N/A N/A IV-C Complaints about noise / odor / congestion by surrounding neighbors 0 5 N/A N/A *Pursuant to Division 7, Chapter 9, Section 13627 of the Water Code an Operator with a water treatment certification may operate a wastewater treatment plant of the appropriate grade, the District has hired two Water Treatment certified operators for SNRC Operator positions. PROGRAM BUDGET DETAIL FY 2021-22 Actuals FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget Amount Changed % Changed PERSONNEL EXPENSES 5101 Regular Labor $ - $ 470,000 $ 171,388 $ 939,000 $ 469,000 100% 5103 Overtime - 7,000 8,152 25,000 18,000 257% 5104 Standby - - - 55,000 55,000 100% 5200 Benefits - 300,000 272,536 456,000 156,000 52% OPERATING EXPENSES 6201 Materials & Supplies - 35,000 6,380 53,000 18,000 51% 6202 Tools - 12,000 2,008 21,000 9,000 75% 6203 Office Supplies - 10,000 65 10,000 - 0% 6204 Chemicals - 50,000 - 650,000 600,000 1200% 6301 Contract Services - 221,000 7,800 1,932,000 1,711,000 774% 6303 Printing & Publishing - 1,000 1,024 1,000 - 0% 6304 Legal Services - 6,000 1,213 5,000 (1,000)-17% 6305 Treatment Services - 7,900,000 8,144,925 3,700,000 (4,200,000)-53% 6307 Uniforms - 8,000 458 8,000 - 0% 6401 Utilities - 1,000 20 1,000 - 0% 6402 Telephone - 3,000 - 3,000 - 0% 6403 Electricity - 60,000 183,718 2,000,000 1,940,000 3233% 6404 Fuel - 15,000 - 16,000 1,000 7% 6406 Postage - - - 1,000 1,000 100% 6501 Membership & Dues - 4,000 - 12,000 8,000 200% 6502 Professional Development - 5,000 - 5,000 - 0% 6504 Meetings - 2,000 95 2,000 - 0% 6505 Employee Recognition - 1,000 - 1,000 - 0% WATER RECLAMATION TOTAL $ - $ 9,111,000 $ 8,799,782 $ 9,896,000 $ 785,000 9% SIGNIFICANT CHANGES IN PROGRAM BUDGET • Transitioning treatment from the SBMWD to the SNRC will result in increased Chemicals, Electricity, and Contract Services budgets. • Treatment Services budget moved from the Wastewater Collection program. • Onboarding new positions at the SNRC will result in budget increases in Materials & Supplies, Tools, and Uniforms. EAST VALLEY WATER DISTRICT | 211 [WATER RECLAMATION] 26 % [$9,896,000] Program Budget Allocation [PAGE LEFT BLANK] Intentionally FY 2023-24 BUDGET | 212 FACILITIES MAINTENANCE Program Summaries Section EAST VALLEY WATER DISTRICT | 213 FA C I L I T I E S M A I N T E N A N C E Facilities Maintenance ensures District facilities meet standards for aesthetics, functionality, and operation. FY 2023-24 BUDGET | 214 • Governing Board • General Administration • Human Resources • Public Affairs • Conservation • Finance & Accounting • Information Technology • Customer Service • Meter Services • Engineering • Water Production • Water Treatment • Water Quality • Water Maintenance • Wastewater Collection • Water Reclamation • Facilities Maintenance • Fleet Maintenance Program Summaries Contents PROGRAM PERSONNEL Facilities and Fleet Supervisor 1 Facilities Maintenance Worker 1 Total Full-Time 2 PROGRAM STRUCTURE GENERAL MANAGER/CEO OPERATIONS MANAGER FACILITIES AND FLEET SUPERVISOR FACILITIES MAINTENANCE WORKER II DIRECTOR OF ENGINEERING & OPERATIONS Facilities Maintenance is responsible for the maintenance of all District facilities. The District has several locations throughout the 30.1 square mile service area for operating the utility systems. The Program’s oversight includes administration buildings, water facilities, water reclamation facility (SNRC), District-owned vacant properties, and easements. The purpose of the program is to mitigate expenses by maintaining a complex facilities management system to achieve Program Goals. EAST VALLEY WATER DISTRICT | 215 FACILITIES MAINTENANCE PROGRAM SUMMARIES Goals Objectives 1 Complete Site Improvements at the Del Rosa Facility 1. Upgrade the facility’s exterior fence to enhance site security. 2. Remove former office trailers located at the site to provide more facility space. 3. Renovate existing restrooms and/or install new portable restrooms. 4. Enhance site security by upgrading doors and locks on the existing warehouse. 2 Continue Phased Upgrades and Rehabilitation of District Facilities 1. Develop a comprehensive site improvement project list. 2. Contract for painting the building at Plant 33. 3. Insulate Plant 59 building. 4. Complete HVAC project by removing swamp coolers and sealing wall openings at Plants 39, 142, and 149. 5. Continue to improve energy efficiency of pump houses and other Plant buildings through lighting upgrades, insulation, and weatherstripping. 3 Assess Security Needs at SNRC, District Headquarters, and Plant 134 1. Determine the most cost-effective solution for physical security at all three sites. 2. Enhance alarm system for building on Administration side of the SNRC. Directly Supports the Five-Year Work Plan FY 2023-24 BUDGET | 216 FY 2022-232022-23 ACCOMPLISHMENTS Goal One Completed Long-Term Site Improvements at Plant 39 • Upgraded asphalt roads around storage tanks. • Deferred construction of restroom for staff-use at Plant 39 due to increased scope of improvements. • Painted pump house exterior. Goal Two Continued Phased Upgrades and Rehabilitation of District Facilities • Deferred scheduled rehabilitation projects at various Plants due to unanticipated expenditures for SNRC. • Installed fire suppression system at SNRC. Goal Three Tracked Inventory at Del Rosa Location • Deferred inventory tracking at Del Rosa location due to pending relocation of inventory storage. Goal Four Implemented New Facilities Maintenance Tracking Software • Worked with IT to select Tyler’s Energov Asset Management program. • Transferred existing Facilities’ data into new software. • Worked with IT to develop custom fields for service order requests. LEVELS OF SERVICE The Facilities Maintenance Program has four KPI metrics that are associated with the District’s Goals and Objectives of: • Dedicate Efforts Toward System Maintenance and Modernization (IV-C) • Identify Opportunities to Optimize Natural Resources (I-A) The program’s performance related to these metrics are included in the following table. KEY PERFORMANCE INDICATORS CHANGES Agency Goal Key Performance Indicator Target FY 2020-21 FY 2021-22 FY 2022-23 IV-C Close all service work orders timely <30 Days <30 Days <30 Days <30 Days IV-C Systematically rehabilitate buildings at Plant sites (paint, roof, general repairs)*2 N/A 3 2 IV-C Complete security fencing upgrades at Plant sites*1 N/A 1 1 I-A Identify and conduct energy efficiency measures at Plant facilities*2 N/A 1 1 *New KPI metric beginning in FY 2021-22. PROGRAM BUDGET DETAIL FY 2021-22 Actuals FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget Amount Changed % Changed PERSONNEL EXPENSES 5101 Regular Labor $ 197,409 $ 203,000 $ 158,185 $ 219,000 $ 16,000 8% 5103 Overtime 16,547 14,000 16,278 14,000 - 0% 5200 Benefits 98,922 110,000 132,906 123,000 13,000 12% ADMINISTRATION OPERATING EXPENSES 6201 Materials & Supplies 58,242 40,000 112,525 40,000 - 0% 6202 Tools 1,805 2,000 2,214 2,000 - 0% 6301 Contract Services 280,548 823,500 887,778 772,000 (51,500)-6% 6306 Rents & Leases 17,994 20,000 20,277 20,000 - 0% 6307 Uniforms 8,521 11,000 8,833 11,000 - 0% 6311 Landscape Services 53,183 131,000 111,720 131,000 - 0% 6312 Janitorial Services 136,213 144,000 149,741 144,000 - 0% 6401 Utilities 49,936 47,000 47,644 37,000 (10,000)-21% 6402 Telephone 23,554 25,000 22,733 25,000 - 0% 6403 Electricity 168,028 290,000 198,679 290,000 - 0% 6403 Professional Development - 1,000 - 3,000 2,000 200% SOURCE OF SUPPLY/WELLS OPERATING EXPENSES 6201 Materials & Supplies 540 3,000 1,085 3,000 - 0% 6301 Contract Services 27,776 34,000 20,287 34,000 - 0% 6311 Landscape Services 64,586 40,000 86,363 40,000 - 0% 6402 Telephone 701 1,000 916 1,000 - 0% PUMPS AND BOOSTERS OPERATING EXPENSES 6201 Materials & Supplies 690 3,000 287 3,000 - 0% 6301 Contract Services 8,050 5,000 10,869 5,000 - 0% 6311 Landscape Services 25,395 35,000 35,216 35,000 - 0% TREATMENT OPERATING EXPENSES 6201 Materials & Supplies 3,542 10,000 6,971 10,000 - 0% 6301 Contract Services 14,653 107,000 32,758 22,000 (85,000)-79% 6311 Landscape Services 26,655 27,000 41,036 27,000 - 0% 6312 Janitorial Services 1,350 2,000 1,800 2,000 - 0% 6401 Utilities 1,737 10,000 1,271 10,000 - 0% 6402 Telephone 20,432 - 25,465 - - 0% FACILITIES MAINTENANCE TOTAL $ 1,307,009 $ 2,138,500 $ 2,133,837 $ 2,023,000 $ (115,500)-5% EAST VALLEY WATER DISTRICT | 217 [FACILITIES MAINTENANCE] FY 2023-24 BUDGET | 218 SIGNIFICANT CHANGES IN PROGRAM BUDGET • Increased Contract Services budget due for physical security costs. • Labor rates and energy costs continue to rise.5% [$2,023,000] Program Budget Allocation FLEET MAINTENANCE Program Summaries Section EAST VALLEY WATER DISTRICT | 219 FL E E T M A I N T E N A N C E Fleet Maintenance ensures the proper function of vehicles and equipment used in the maintenance of the water and wastewater system. FY 2023-24 BUDGET | 220 • Governing Board • General Administration • Human Resources • Public Affairs • Conservation • Finance & Accounting • Information Technology • Customer Service • Meter Services • Engineering • Water Production • Water Treatment • Water Quality • Water Maintenance • Wastewater Collection • Water Reclamation • Facilities Maintenance • Fleet Maintenance Program Summaries Contents PROGRAM PERSONNEL Fleet Maintenance Coordinator 1 Total Full-Time 1 PROGRAM STRUCTURE GENERAL MANAGER/CEO OPERATIONS MANAGER FACILITIES AND FLEET SUPERVISOR FLEET MAINTENANCE COORDINATOR DIRECTOR OF ENGINEERING & OPERATIONS Fleet Maintenance is responsible for the preventative maintenance program for all District vehicles and heavy equipment. This includes the procurement of fleet items and maintaining compliance with State and Federal air quality rules and regulations. This program includes partnership with local charitable organizations in need of a vehicle to help continue their mission. The District fleet is comprised of light and heavy-duty utility trucks for water and wastewater crew members to maintain District infrastructure. The heavy equipment category of the fleet includes large, specialized equipment for routine maintenance and inspection of the water distribution or wastewater collection systems. EAST VALLEY WATER DISTRICT | 221 FLEET MAINTENANCE PROGRAM SUMMARIES Goals Objectives 1 Assess Future Operations of Fleet Management 1. Train new Fleet Maintenance Coordinator. 2. Enhance service orders in the Fleet Maintenance Module within Tyler’s Energov Asset Management (EAM) software. 3. Complete and distribute a Request for Proposal (RFP) for fuel delivery. 4. Continue installation of EV charging stations. 2 Continue to Implement the Air Quality Management Program 1. Manage all air quality regulations for AQMD and California Air Resources Board (CARB). 2. Transmit emissions data to the Bureau of Automotive Repair (BAR) using new Network Fleet devices. 3 Enhance the Vendor-Managed Fleet Maintenance Program 1. Complete an RFP for mobile maintenance. 2. Provide a list of pre-approved safety repairs and replacements for the RFP. 3. Contract with a vendor to provide detailing for specialized equipment. Directly Supports the Five-Year Work Plan FY 2023-24 BUDGET | 222 FY 2022-232022-23 ACCOMPLISHMENTS Goal One Assessed Future Operations of Fleet Management • Transferred Fleet Maintenance reporting to the new Facilities and Fleet Supervisor. • Created a new Fleet Maintenance Coordinator position upon retirement of the Equipment Mechanic III. • Fulfilled the Fleet Maintenance Coordinator position with assistance from Human Resources. Goal Two Continued to Implement the Air Quality Management Program • Hired a consultant to manage all air quality regulations for AQMD and the California Air Resources Board (CARB). • Transmitted emissions data to the Bureau of Automotive Repair (BAR), using new Network Fleet devices. Goal Three Enhanced the Vendor-Managed Fleet Maintenance Program • Deferred enhancement of the Vendor-Managed Fleet Maintenance Program due to pending fulfilment of Fleet Maintenance Coordinator position. LEVELS OF SERVICE The Fleet Maintenance Program has three KPI metrics that are associated with the District’s Goals and Objectives of: • Develop Projects and Programs to Ensure Safe and Reliable Services (IV-A) • Dedicate Efforts toward System Maintenance and Modernization (IV-C) The program’s performance related to these metrics are included in the following table. KEY PERFORMANCE INDICATORS CHANGES Agency Goal Key Performance Indicator Target FY 2020-21 FY 2021-22 FY 2022-23 IV-A Ensure vehicles and equipment are evaluated and replaced on schedule 80% of Net Asset Value 100%100%100% IV-C Percent of vehicles pass annual D.O.T. inspection 100%100%100% 100% IV-A Number of vehicle/equipment units replaced 4 4 2 2 PROGRAM BUDGET DETAIL FY 2021-22 Actuals FY 2022-23 Budget FY 2022-23 Projected FY 2023-24 Budget Amount Changed % Changed PERSONNEL EXPENSES 5101 Regular Labor $ 90,728 $ 91,000 $ 70,298 $ 100,000 $ 9,000 10% 5103 Overtime 216 3,000 1,177 3,000 - 0% 5200 Benefits 48,558 55,000 21,555 41,000 (14,000)-25% OPERATING EXPENSES 6201 Materials & Supplies 148,259 100,000 141,917 100,000 - 0% 6202 Tools 16,801 5,000 8,514 15,000 10,000 200% 6203 Office Supplies 27 1,000 70 5,000 4,000 400% 6301 Contract Services 248,704 260,100 260,481 250,000 (10,100)-4% 6307 Uniforms 1,571 1,000 1,327 1,000 - 0% 6402 Telephone 569 1,000 304 1,000 - 0% 6404 Fuel 175,812 229,900 245,700 240,000 10,100 4% 6501 Memberships & Dues - 3,000 - 3,000 - 0% 6502 Professional Development - 1,000 - 1,000 - 0% FLEET MAINTENANCE TOTAL $ 731,245 $ 751,000 $ 751,343 $ 760,000 $ 9,000 1% SIGNIFICANT CHANGES IN PROGRAM BUDGET • Created a new Fleet Maintenance Coordinator position upon retirement of the Equipment Mechanic III. EAST VALLEY WATER DISTRICT | 223 [FLEET MAINTENANCE] 2% [$760,000] Program Budget Allocation FY 2023-24 BUDGET | 224 [PAGE LEFT BLANK] Intentionally EAST VALLEY WATER DISTRICT | 225 CAPITAL BUDGETfy 2023-24 CA P I T A L B U D G E T T h e A n n u a l B u d g e t E A S T V A L L E Y W A T E R D I S T R I C T The District's long-term planning efforts includes consideration of the age, condition, and efficiency of infrastructure used to deliver services to its customers. FY 2023-24 BUDGET | 226 • Capital Budget Overview • Capital Improvement Projects • Infrastructure Accomplishments Capital Budget Contents EAST VALLEY WATER DISTRICT | 227 CAPITAL BUDGET The District includes two types of capital expenditures in its Capital Budget. The two types are, 1) routine purchases and replacement of assets, referred to as Capital Outlay, and 2) non-routine construction project expenditures that are part of the District’s Capital Improvement Program. The District’s FY 2023-24 Capital Budget contains $9,190,000 in total capital expenditures. Of this amount, $1,165,000 are Capital Outlay, which typically include requests to replace vehicles, computer and office equipment, and to contract for infrastructure planning studies. The remaining proposed capital expenditures of $8,025,000 are current year (Year 1) costs pertaining to projects shown in the District’s Capital Improvement Program, presented in greater detail in the remainder of this section. As the District prepares to commence operations at the new SNRC water reclamation plant in Fall 2023, care has been taken to not overextend financial and human resources by committing to starting multiple new projects in the upcoming Fiscal Year. Projects with external funding or regulatory requirements, or that are ‘shovel ready’, are moving forward, but the successful startup of the SNRC is a top priority. A summary of the proposed FY 2023-24 Capital Budget is shown below. CAPITAL BUDGET SUMMARY Capital Outlay The District defines Capital Outlay expenditures as an individually significant acquisition of capital assets (not involving construction) that have expected useful lives of more than two years and have a cost of $5,000 or more. This threshold is applied at the individual asset level. Each year as part of the budget process, Program Managers and Supervisors compile and submit a list of Capital Outlay requests for consideration. The requests are reviewed and prioritized by the management based on the assessment of need and the amount of funding available. Funding for Capital Outlay is paid out of the operating revenue from the fund (water, wastewater or water reclamation) that will benefit from use of the capital item. Items that benefit all funds are allocated accordingly. Capital Outlay (Routine) Capital Improvement Program Computer Hardware / Software $ 155,000 Automated Metering Enhancements $ 150,000 Board Room Technology Upgrades 85,000 Storage Tank / Reservoir Design 800,000 Infrastructure & Emergency Planning Studies 575,000 Plant 101 - Rehab Hydro System 1,500,000 Service Trucks 200,000 Water Main & Gate Valve Replacements 650,000 Website Redesign 150,000 Plant 134 Membrane Replacements 250,000 General Facilities Rehab / Relocation 375,000 SNRC Water Reclamation Plant 4,300,000 TOTAL CAPITAL OUTLAY $ 1,165,000 TOTAL CIP EXPENDITURES $8,025,000 FY 2023-24 BUDGET | 228 FY 2023-242023-24 CAPITAL OUTLAY Capital Improvement Program (CIP) and Prioritization The District’s Capital Improvement Program (CIP) is a five-year planning schedule with the first year (Year 1) adopted as part of the Capital Budget for the upcoming fiscal year. A project included in the District’s CIP is an individually significant construction project with a cost of more than $25,000, and either creates a new capital asset, improves an existing asset (increases its service capacity, etc.), or significantly extends an asset’s expected useful life. The Engineering Program is responsible for maintaining the District’s Capital Improvement Program and consults various sources for project planning. The primary sources for these planning efforts are the District’s Water Master Plan and Wastewater Collection System Master Plan — both were updated during FY 2018-19. The Master Plans identify the infrastructure improvements needed to serve a growing population. In addition, each project being considered must meet one or more of the following criteria: • Preservation of public health and water quality. • Improvements required as a result of local, State or Federal legislation/mandates. • Reduction of current maintenance expenditures and avoidance of costly future rehabilitation. • Preservation of existing facilities/infrastructure. • Positive impacts on customers. • External funding (grant/debt proceeds) has been secured for specific project. For FY 2023-24, the District has proposed the use of operating revenue, reserves, and a loan from the California Department of Water Resources to fund current year phases of Capital Improvement Program projects for $8,025,000– total project costs for the projects in process are approximately $31.1 million over the next five years. The names of the projects funded, and the reasons for their prioritization this year include: Water Wastewater Water Reclamation Total FUNDED BY OPERATING REVENUE Boardroom Enhancements $ 60,000 $ 25,000 - $ 85,000 Emergency Plan Updates 100,000 50,000 - 150,000 Website Redesign 100,000 50,000 - 150,000 Hardware Replace (PCs, Laptops, phones) 35,000 -- 35,000 Firewall Standardization 50,000 35,000 35,000 120,000 Water Master Plan Update 300,000 - - 300,000 Salt Mitigation Feasibility Study -- 125,000 125,000 Pickup Trucks (4) 50,000 100,000 50,000 200,000 TOTAL CAPITAL OUTLAY $ 695,000 $ 260,000 $ 210,000 $ 1,165,000 Automated Metering Infrastructure (AMI) Enhancements The District completed installation of remote-read meters for all customer accounts in 2021. Some read captures have been inconsistent, so staff is proposing an additional data collector tower and a new mobile collector, as well as the addition of remote read meters on commercial fire services to detect unauthorized usage through these connections. Total cost for the 2023- 24 fiscal year is proposed at $150,000. This project is prioritized to mitigate the need for staff to manually confirm/take reads when an AMI system has been installed. EAST VALLEY WATER DISTRICT | 229 [CAPITAL BUDGET] This project is to design and build additional water storage in the District’s Canal Pressure Zone. If approved, the District will complete 100% design work on two 1.5 million gallon storage reservoirs which were recommended in the District’s Water System Master Plan. Proposed expenditures for FY 2023-24 are $300,000 to be paid from capacity fees collected from developers. This project is a priority as it will help ensure system capacity for new development currently being built or planned. This project will complete the changeout of original treatment membrane cartridges installed during the plant’s upgrade / expansion in 2010. Four other trains of membrane cartridges had previously been replaced, leaving just this one to be addressed. Replacement of the fifth and final train has been included in the FY 2023-24 budget at an estimated cost of $250,000. This project has been deferred for three years and has now become a priority in order to reinstate a replacement schedule for the filter cartridges used at this critical water supply facility. Plant 134 Membrane Replacement Canal Zone Storage Reservoir The District has created a priority list for the systematic rehabilitation of existing tanks to ensure their dependability and years of future service. A 0.5 million gallon storage tank at the District’s Plant 56 is proposed for rehabilitation in FY 2023-24 at an estimated cost of $500,000 to be funded by water operating revenue. This project is a priority as it proactively addresses potential public health and safety concerns. Storage Tank Rehabilitation A hydropneumatic tank and booster station, that serves residents living at an elevation where water cannot be delivered by gravity, needs to be replaced. The design for the work has been completed so construction work is being proposed for FY 2023-24 at an estimated cost of $1,500,000. This project is a priority as it solves a potential health and safety issue for the residents it serves. Plant 101 The District has scheduled the replacement of two water main pipelines to be completed by District maintenance crews. Estimated cost for these projects is $350,000. The projects are designated as priority as they will reduce future responses for leak calls and increase fire flows which are directly related to public health and safety. The District has identified approximately 80 gate valves that are frozen or broken and therefore cannot be used for emergency shutdowns. This project proposes to replace between 20 and 40 of the defective valves during FY 2023-24 at an estimated cost of $300,000 and has been given priority status due to public health and safety concerns in the event of an emergency situation. Gate Valve Replacements Water Main Replacements These line items involve various projects such as security upgrades and improving the aesthetics of buildings at plant sites; it also provides a budget for relocating facilities in conjunction with City street or storm drain improvement projects. Planned expenditures for FY 2023-24 are $375,000 to be funded by water operating revenue. These funds are kept available in the event of a notification by another agency. General Facilities Rehabilitation/Relocation This major wastewater treatment project has experienced delays due to supply chain disruptions but is expected to be completed in fiscal year 2023- 24. Remaining costs to complete are approximately $4,300,000 and are shown in the proposed capital budget for FY 2023-24. This project is a priority due to the period of availability for state funds and the lost opportunity of storing recycled water. SNRC Water Recycling Facility FY 2023-24 BUDGET | 230 The following Capital Improvement Projects section includes further detail for each of the projects that have been proposed for funding in FY 2023-24. Impact of Capital Improvement Program Project Investments on Operating Budgets The capital projects described in this section will have varying impacts on future operating expenses, both in increased costs and cost savings. The SNRC will have both operational costs and new revenue streams. Proposed treatment processes at the District’s Surface Water Treatment Plant (Plant 134) will allow the District to run the plant at higher capacity and more fully utilize hydroelectric generation equipment and offset power costs. The SNRC will result in a major shift of costs, from contracted treatment services to costs associated with owning and operating a District facility such as labor, materials, contract services, and other operating costs. At the same time, the inclusion of solid waste digesters at the facility will allow the District to tap into other revenue streams such as solid waste carrier tipping fees and recycled water revenue. Not included here, but discussed in the Debt section of this document, is a significant increase in debt service related to the SNRC. The following schedule provides an estimate of the effect of capital expenditures on future operations: CAPITAL EXPENDITURE IMPACT OVERVIEW CIP FIVE-YEAR PROGRAM SCHEDULE (FY 2024-282024-28) Annual Impact on Operations Nature of Impact AMI Metering Upgrades $ (30,000) Reduced Staffing Commitments (Overtime) SNRC Water Recycling Plant (5,080,000) New Revenue Sources (Tipping Fees, Power Sales, Recycled Water) SNRC Water Recycling Plant (8,650,000) Decrease Contracted Treatment SNRC Water Recycling Plant 1,200,000 Increased Labor Costs SNRC Water Recycling Plant 1,010,000 Increased Materials & Consumables SNRC Water Recycling Plant 2,450,000 Increased Contract Services SNRC Water Recycling Plant 520,000 Increased Other Costs TOTAL CIP EXPENDITURES $ (8,580,000) Year 1 FY 2023-24 Year 2 FY 2024-25 Year 3 FY 2025-26 Year 4 FY 2026-27 Year 5 FY 2027-28 5-Year Project Total WATER Meters - AMI Enhancements $ 150,000 $ - $ 200,000 $ 200,000 $ 200,000 $ 750,000 Canal Zone Storage Reservoir 300,000 - 2,200,000 2,200,000 - 4,700,000 Plant 134 - Membranes Replacement 250,000 - - 250,000 250,000 750,000 Plant 134 Turbidity Meters and Clean-in-Place Equipment - 130,000 - - - 130,000 Tank/Reservoir Rehabilitation 500,000 650,000 650,000 650,000 650,000 3,100,000 Plant 101 - Rehabilitation Hydro System 1,500,000 - - - - 1,500,000 Year 1 FY 2023-24 Year 2 FY 2024-25 Year 3 FY 2025-26 Year 4 FY 2026-27 Year 5 FY 2027-28 5-Year Project Total East Surface Water Treatment Plant - - - - 1,000,000 1,000,000 Water Main Replacements - Seismic Mitigation - 1,000,000 1,000,000 1,000,000 - 3,000,000 New Wells - 2,700,000 1,300,000 - - 4,000,000 Water Main Rehabilitation - Elmwood Road 200,000 - - - - 200,000 Water Main Rehabilitation - Valaria Court 150,000 - - - 3,600,000 3,750,000 Gate Valve Replacement Program 300,000 300,000 - - - 600,000 Facility Relocations 100,000 100,000 100,000 100,000 100,000 500,000 Facility Relocation - Baseline Bridge Water Main - 730,000 - - - 730,000 Facility Rehabilitations 275,000 75,000 75,000 75,000 75,000 575,000 Transmission Main - Plant 134 to Upper Zone - - - 500,000 - 500,000 WATER SUBTOTAL $ 3,725,000 $ 5,685,000 $ 5,525,000 $ 4,975,000 $ 5,875,000 $ 25,785,000 WASTEWATER Wastewater Main Rehab $ - $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 400,000 SNRC - Inspections, Project Mgt, and Compliance Mgt 300,000 - - - - 300,000 SNRC - Construction 4,000,000 - - - - 4,000,000 WASTEWATER SUBTOTAL $ 4,300,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 4,700,000 RECLAMATION Replace Diffusers and UV Lamps $ - $ - $ - $ - $ 650,000 650,000 RECLAMATION SUBTOTAL $ - $ - $ - $ - $ 650,000 $ 650,000 TOTAL $ 8,025,000 $ 5,785,000 $ 5,625,000 $ 5,075,000 $ 6,625,000 $ 31,135,000 EAST VALLEY WATER DISTRICT | 231 [CAPITAL BUDGET] FY 2023-24 BUDGET | 232 CIP FIVE-YEAR FUNDING SCHEDULE (FY 2024-28) 2024-28) CIP FY 2023-24 2023-24 PROPOSED FUNDING Year 1 FY 2023-24 Year 2 FY 2024-25 Year 3 FY 2025-26 Year 4 FY 2026-27 Year 5 FY 2027-28 5-Year Project Total Water Operating Revenue $ 3,425,000 $ 5,185,000 $ 5,025,000 $ 4,975,000 $ 5,875,000 $ 24,485,000 Water Replacement Reserve - - - - - - Water Capacity Fees 300,000 500,000 500,000 - - 1,300,000 New SRF Funding - - - - - - Wastewater Operating Revenue 300,000 100,000 100,000 100,000 100,000 700,000 Reclamation Replacement Reserve - - - - 650,000 650,000 Existing Grants / Loans 4,000,000 - - - - 4,000,000 TOTAL $ 8,025,000 $ 5,785,000 $ 5,625,000 $ 5,075,000 $ 6,625,000 $ 31,135,000 Water Fund Operating Revenue Wastewater Fund Operating Revenue Grants/ Loans Other Fund Project Total WATER Meters - AMI Enhancements $ 150,000 $ - $ - $ 150,000 Canal Zone Storage Reservoir - - 300,000 300,000 Plant 134 - Membranes Replacement 250,000 - - 250,000 Tank/Reservoir Rehabilitation 500,000 - - 500,000 Plant 101 - Rehabilitation Hydro System 1,500,000 - - 1,500,000 Water Main Rehabilitation - Elmwood Rd 200,000 - - 200,000 Water Main Rehabilitation - Valaria Ct 150,000 - - 150,000 Gate Valve Replacement Program 300,000 - - 300,000 Facility Relocations 100,000 - - 100,000 Facility Rehabilitations 275,000 - - 275,000 WATER SUBTOTAL $ 3,425,000 $ - $ 300,000 $ 3,725,000 WASTEWATER SNRC - Inspections, Project Mgt, Compliance Mgt $ - $ 300,000 $ - $ 300,000 SNRC - Construction - - 4,000,000 4,000,000 WASTEWATER SUBTOTAL $ - $ 300,000 $ 4,000,000 $ 4,300,000 TOTAL $ 3,425,000 $ 300,000 $ 4,300,000 $ 8,025,000 C I P P R O J E C T S CAPITALIMPROVEMENT PROJECTS Capital Budget Section EAST VALLEY WATER DISTRICT | 233 T h e A n n u a l B u d g e t E A S T V A L L E Y W A T E R D I S T R I C T Projects included in the CIP are individually significant construction projects with a cost of more than $25,000, and either creates a new capital asset, improves an existing asset (increases its service capacity, etc.), or significantly extends an asset's expected useful life. FY 2023-24 BUDGET | 234 • Meter Replacement Program • Canal Zone Storage Reservoir • Plant 134 Treatment Membrane Replacement • Tank/Reservoir Rehabilitation • Plant 101 Hydro Tank Rehabilitation • Water Main Replacement - Elmwood Road • Water Main Replacement - Valaria Court • Facility Relocations • Facility Rehabilitations • Gate Valve Replacement Program • Sterling Natural Resource Center Capital Improvement Projects EAST VALLEY WATER DISTRICT | 235 [PAGE LEFT BLANK] Intentionally FY 2023-24 BUDGET | 236 Project Description The installation of Advanced Metering Infrastructure (AMI) hardware, software, and meters throughout the entire District was completed in April 2021. Since that time District staff has been troubleshooting and monitoring performance of the AMI system, and in doing so has determined that data capture and communication could be enhanced by the installation of an additional data collector tower in the central west area of the District. In addition, staff proposes to install AMI meters on all commercial fire services and to replace a mobile meter data collector used by staff to collect reads when communications from fixed data collectors is unreliable. $150,000 has been included in the capital budget for this work in FY 2023-24. OPERATING BUDGET IMPACT Additional Staff Salaries The installation of an additional collector should reduce the amount of staff time required to collect manual reads of meters that cannot be picked up by the automated metering infrastructure-estimated at 30 hours per month. The addition of automated meters on hydrants will help to explain water losses, whether use of water through the hydrants, intentional misuse, or use for fire suppression. Debt Service N/A Maintenance/Utilities Minimal increase in annual telecommunication costs of $5,400. METER REPLACEMENT PROGRAM CAPITAL IMPROVEMENT PROGRAM Start Date: July 2023 Estimated Completion: June 2024 Project Type: Water Location: All Service Connections throughout the District Project Manager: Meter Services/Operations Total Project Cost: $150,000 Prior Years Budget: N/A Capital Requests: Previously Programmed Project EAST VALLEY WATER DISTRICT | 237 [METER REPLACEMENT PROGRAM] PROJECT COST Year 1 FY 2023-24 Year 2 FY 2024-25 Year 3 FY 2025-26 Year 4 FY 2026-27 Year 5 FY 2027-28 5-Year Project Total ESTIMATED COST ITEMIZATION Planning and Design $ - $ - $ - $ - $ - $ - Land and Land Preparation - - - - - - Construction (Contract) - - - - - - Project Mgmt/Inspection - - - - - - Equipment/Furnishings - - - - - - Materials 150,000 - 200,000 200,000 200,000 750,000 District Labor - - - - - - Other (Legal) - - - - - - ANNUAL TOTAL $ 150,000 $ - $ 200,000 $ 200,000 $ 200,000 $ 750,000 PROJECT FUNDING Year 1 FY 2023-24 Year 2 FY 2024-25 Year 3 FY 2025-26 Year 4 FY 2026-27 Year 5 FY 2027-28 5-Year Project Total FINANCING SOURCES Operating Revenue $ 150,000 $ - $ 200,000 $ 200,000 $ 200,000 $ 750,000 Replacement Reserve - - - - - - Grants/Loans - - - - - - Bond Proceeds - - - - - - Development Fees - - - - - - Other - - - - - - ANNUAL TOTAL $ 150,000 $ - $ 200,000 $ 200,000 $ 200,000 $ 750,000 Benefits to the Community Help identify water leaks and losses sooner. Provide customers with reliable meter information. Enhance operations by digitizing consumption information. FY 2023-24 BUDGET | 238 Project Description The purpose of this project is to design and build additional water storage in the District’s Canal Pressure Zone. The District purchased a property for this purpose in 2019 that is anticipated to accommodate two 1.5-million-gallon storage reservoirs. The District’s Water System Master Plan determined that the Canal Zone does not have excess capacity for new development to buy into. Consequently, one 1.5-million-gallon storage reservoir will be constructed to provide the 0.8 million gallons of additional storage that is expected to be needed in the Canal Zone in the next 5 years, and 0.7 million gallons of storage for development beyond 5 years. $300,000 has been included in the FY 2023-24 budget for completion of the design of this reservoir site. OPERATING BUDGET IMPACT Additional Staff Salaries N/A Debt Service N/A Maintenance/Utilities The annualized maintenance cost is estimated to be $60,000. CANAL ZONE STORAGE RESERVOIR CAPITAL IMPROVEMENT PROGRAM Start Date: July 2022 Estimated Completion: June 2025 Project Type: Water Location: Applewood Street, Highland Project Manager: Engineering Total Project Cost: $4,600,000 to be Funded by Development Over Time Prior Years Budget: $455,000 Capital Requests: Ongoing Project EAST VALLEY WATER DISTRICT | 239 [CANAL ZONE STORAGE RESERVOIR] PROJECT COST Year 1 FY 2023-24 Year 2 FY 2024-25 Year 3 FY 2025-26 Year 4 FY 2026-27 Year 5 FY 2027-28 5-Year Project Total ESTIMATED COST ITEMIZATION Planning and Design $ 300,000 $ - $ - $ - $ - $ 300,000 Land and Land Preparation - - - - - - Construction (Contract) - - 2,000,000 2,000,000 - 4,000,000 Project Mgmt/Inspection - - 200,000 200,000 - 400,000 Equipment/Furnishings - - - - - - Materials - - - - - - District Labor - - - - - - Other (Legal) - - - - - - ANNUAL TOTAL $ 300,000 $ - $ 2,200,000 $ 2,200,000 $ - $ 4,700,000 PROJECT FUNDING Year 1 FY 2023-24 Year 2 FY 2024-25 Year 3 FY 2025-26 Year 4 FY 2026-27 Year 5 FY 2027-28 5-Year Project Total FINANCING SOURCES Operating Revenue $ - $ - $ 1,700,000 $ 1,700,000 $ - $ 3,400,000 Replacement Reserve - - - - - - Grants/Loans - - - - - - Bond Proceeds - - - - - - Development Fees - - - - - - Other 300,000 - 500,000 500,000 - 1,300,000 ANNUAL TOTAL $ 300,000 $ - $2,200,000 $ 2,200,000 $ - $ 4,700,000 Benefits to the Community Enhance plant operations to maintain a reliable service. Provide additional water storage capacity. Allow the District to continue to meet the community’s water needs. FY 2023-24 BUDGET | 240 Project Description Plant 134, the District’s surface water treatment plant, has five water filtration trains that consist of 180 membrane filters each. The manufacturer of the filters recommends replacing the filter every 5 to 7 years. In FY 2017-18 staff replaced one full train with new filters which drastically reduced staff time in making membrane repairs. Three more full trains of membranes were replaced in each of the three succeeding years. Replacement of the membranes in the fifth and final train has been deferred due to funding requirements by other key projects, and the staff’s increased ability to make effective repairs to the existing membranes. In FY 2023-24, staff plans to complete the replacement of filters in the fifth train and get the District back on a replacement schedule as the filters in train one have now been in service for five years. $250,000 has been included in the FY 2023-24 budget for filter replacements. OPERATING BUDGET IMPACT Additional Staff Salaries N/A Debt Service N/A Maintenance/Utilities N/A PLANT 134134 TREATMENT MEMBRANE REPLACEMENT CAPITAL IMPROVEMENT PROGRAM Start Date: October 2023 Estimated Completion: February 2024 Project Type: Water Location: 4588 Highland Avenue, Highland Project Manager: Water Treatment Total Project Cost: $1,243,578 Prior Years Budget: $993,000 Capital Requests: Ongoing Project EAST VALLEY WATER DISTRICT | 241 [PLANT 134 TREATMENT MEMBRANE REPLACEMENT, PHASE 5] PROJECT COST Year 1 FY 2023-24 Year 2 FY 2024-25 Year 3 FY 2025-26 Year 4 FY 2026-27 Year 5 FY 2027-28 5-Year Project Total ESTIMATED COST ITEMIZATION Planning and Design $ - $ - $ - $ - $ - $ - Land and Land Preparation - - - - - - Construction (Contract) - - - - - - Project Mgmt/Inspection - - - - - - Equipment/Furnishings - - - - - - Materials 250,000 - - 250,000 250,000 750,000 District Labor - - - - - - Other (Legal) - - - - - - ANNUAL TOTAL $ 250,000 $ - $ - $ 250,000 $ 250,000 $ 750,000 PROJECT FUNDING Year 1 FY 2023-24 Year 2 FY 2024-25 Year 3 FY 2025-26 Year 4 FY 2026-27 Year 5 FY 2027-28 5-Year Project Total FINANCING SOURCES Operating Revenue $ 250,000 $ - $ - $ 250,000 $ 250,000 $ 750,000 Replacement Reserve - - - - - - Grants/Loans - - - - - - Bond Proceeds - - - - - - Development Fees - - - - - - Other - - - - - - ANNUAL TOTAL $ 250,000 $ - $ - $ 250,000 $ 250,000 $ 750,000 Benefits to the Community Maintain the quality and safety of water provided to the community. Allows the District to continue to meet local, State, and Federal water quality requirements. Enhance the surface water treatment process. FY 2023-24 BUDGET | 242 Project Description The District has completed a comprehensive, multi-year water tank inspection program and received an engineering report identifying and prioritizing tank rehabilitation projects. Many of the projects present significant challenges where there is no redundant storage capacity, limiting projects to certain times of year when demand for water is low, and requiring alternate methods for distributions of water to sections of the affected service area. The District has pre-qualified a list of three contractors to provide bids as the reservoir/plant to be rehabilitated in the upcoming year has been identified. In FY 2023-24 the District will contract for the rehabilitation of the tank at Plant 56; a 500,000 gallon, welded steel storage tank serving the District’s Foothill zone. The inspection program had noted moderate corrosion to the tank’s ceiling rafters and flanges, and the interior and exterior coatings are now 25 years old, typically the maximum life expectancy for tank coatings. The estimated cost for making any structural repairs and recoating the tank’s interior and exterior surfaces is $500,000. OPERATING BUDGET IMPACT Additional Staff Salaries N/A Debt Service N/A Maintenance/Utilities N/A TANK / RESERVOIR REHABILITATION CAPITAL IMPROVEMENT PROGRAM Start Date: October 2023 Estimated Completion: June 2024 Project Type: Water Location: End of Shasta Drive near Hemlock Drive, Highland Project Manager: Engineering Total Project Cost: $500,000 Prior Years Budget: Costs from Previous Tank Rehabilitations Do Not Accumulate Capital Requests: New Project EAST VALLEY WATER DISTRICT | 243 [TANK/RESERVOIR REHABILITATION] PROJECT COST Year 1 FY 2023-24 Year 2 FY 2024-25 Year 3 FY 2025-26 Year 4 FY 2026-27 Year 5 FY 2027-28 5-Year Project Total ESTIMATED COST ITEMIZATION Planning and Design $ 50,000 $ 65,000 $ 65,000 $ 65,000 $ 65,000 $ 310,000 Land and Land Preparation - - - - - - Construction (Contract) 450,000 585,000 585,000 585,000 585,000 2,790,000 Project Mgmt/Inspection - - - - - - Equipment/Furnishings - - - - - - Materials - - - - - - District Labor - - - - - - Other (Legal) - - - - - - ANNUAL TOTAL $ 500,000 $ 650,000 $ 650,000 $ 650,000 $ 650,000 $ 3,100,000 PROJECT FUNDING Year 1 FY 2023-24 Year 2 FY 2024-25 Year 3 FY 2025-26 Year 4 FY 2026-27 Year 5 FY 2027-28 5-Year Project Total FINANCING SOURCES Operating Revenue $ 500,000 $ 650,000 $ 650,000 $ 650,000 $ 650,000 $ 3,100,000 Replacement Reserve - - - - - - Grants/Loans - - - - - - Bond Proceeds - - - - - - Development Fees - - - - - - Other - - - - - - ANNUAL TOTAL $ 500,000 $ 650,000 $ 650,000 $ 650,000 $ 650,000 $ 3,100,000 Benefits to the Community Help prolong the tank’s life to continue serving the community. Install anti-corrosion system and make repairs to maintain tank reliability. Identify and assess structural concerns to protect the Plant during an earthquake. FY 2023-24 BUDGET | 244 Project Description The Hydro-pneumatic tank and booster pumps at Plant 101 increase water pressure to 37 homes that are situated at elevations too high to be gravity fed by the plant’s 1.4-million-gallon reservoir; the Hydro tank is the only means of serving these customers with sufficient water pressure. An inspection of Plant 101 revealed that the Hydro Tank and booster pumps need to be replaced, but those tasks were deferred until an on- site emergency generator could be installed. With the generator now in place, and design for the tank and boosters complete, replacement of the tank and boosters can be scheduled. Staff proposes to bid and complete these replacements during FY 2023-24. An estimated cost of $1,500,000 has been included in the FY 2023-24 budget for this project. OPERATING BUDGET IMPACT Additional Staff Salaries N/A Debt Service N/A Maintenance/Utilities N/A PLANT 101101 HYDRO TANK REHABILITATION CAPITAL IMPROVEMENT PROGRAM Start Date: July 2021 Estimated Completion: June 2024 Project Type: Water Location: 3045 N. Mountain Top Drive, Highland Project Manager: Engineering Total Project Cost: $1,896,000 Prior Years Budget: $396,000 Capital Requests: New Project EAST VALLEY WATER DISTRICT | 245 [PLANT 101 HYDRO TANK REHABILITATION] PROJECT COST Year 1 FY 2023-24 Year 2 FY 2024-25 Year 3 FY 2025-26 Year 4 FY 2026-27 Year 5 FY 2027-28 5-Year Project Total ESTIMATED COST ITEMIZATION Planning and Design $ - $ - $ - $ - $ - $ - Land and Land Preparation - - - - - - Construction (Contract) 1,500,000 - - - - 1,500,000 Project Mgmt/Inspection - - - - - - Equipment/Furnishings - - - - - - Materials - - - - - - District Labor - - - - - - Other (Legal) - - - - - - ANNUAL TOTAL $ 1,500,000 $ - $ - $ - $ - $ 1,500,000 PROJECT FUNDING Year 1 FY 2023-24 Year 2 FY 2024-25 Year 3 FY 2025-26 Year 4 FY 2026-27 Year 5 FY 2027-28 5-Year Project Total FINANCING SOURCES Operating Revenue $ 1,500,000 $ - $ - $ - $ - $ 1,500,000 Replacement Reserve - - - - - - Grants/Loans - - - - - - Bond Proceeds - - - - - - Development Fees - - - - - - Other - - - - - - ANNUAL TOTAL $ 1,500,000 $ - $ - $ - $ - $ 1,500,000 Benefits to the Community Enhance plant operations to maintain service reliability. Facility allows the District to continue meeting the community’s water needs Allows the District to continue to meet local, State, and Federal system requirements. FY 2023-24 BUDGET | 246 Project Description This project will replace 1,127 feet of 4” wrapped steel water main in Elmwood Road, starting north from Lynwood Drive and then turning east to connect to the main in Dogwood Street. The new main will consist of 6” ductile iron pipe and will provide two benefits: enhanced fire flow capacity, and access to the pipeline in public right of ways rather than in private property where many sections of the existing main are aligned. Work will be performed in-house by District water maintenance crews and will take approximately three weeks to complete. OPERATING BUDGET IMPACT Additional Staff Salaries No additional salaries are required to install or maintain this new main. Debt Service N/A Maintenance/Utilities N/A WATER MAIN REPLACEMENT – ELMWOOD ROAD CAPITAL IMPROVEMENT PROGRAM Start Date: September 2023 Estimated Completion: June 2024 Project Type: Water Location: North of Lynwood Drive and West of Dogwood Street, Highland Project Manager: Operations Total Project Cost: $200,000 Prior Years Budget: N/A Capital Requests: New Project EAST VALLEY WATER DISTRICT | 247 [WATER MAIN REPLACEMENT – ELMWOOD ROAD] PROJECT COST Year 1 FY 2023-24 Year 2 FY 2024-25 Year 3 FY 2025-26 Year 4 FY 2026-27 Year 5 FY 2027-28 5-Year Project Total ESTIMATED COST ITEMIZATION Planning and Design $ 20,000 $ - $ - $ - $ - $ 20,000 Land and Land Preparation - - - - - - Construction (Contract) - - - - - - Project Mgmt/Inspection - - - - - - Equipment/Furnishings - - - - - - Materials 60,000 - - - - 60,000 District Labor 120,000 - - - - 120,000 Other (Legal) - - - - - - ANNUAL TOTAL $ 200,000 $ - $ - $ - $ - $ 200,000 PROJECT FUNDING Year 1 FY 2023-24 Year 2 FY 2024-25 Year 3 FY 2025-26 Year 4 FY 2026-27 Year 5 FY 2027-28 5-Year Project Total FINANCING SOURCES Operating Revenue $ 200,000 $ - $ - $ - $ - $ 200,000 Replacement Reserve - - - - - - Grants/Loans - - - - - - Bond Proceeds - - - - - - Development Fees - - - - - - Other - - - - - - ANNUAL TOTAL $ 200,000 $ - $ - $ - $ - $ 200,000 Benefits to the Community Protects community health and safety of the community. Replaces water main to prevent a future break. Allows the District to continue to meet the community’s water needs. FY 2023-24 BUDGET | 248 Project Description This project will replace 224 feet of undersized 3-inch polyvinyl chloride (PVC) water main in Valaria Court, a six home cul-de-sac extending east off of Valaria Drive. Replacing the existing main with new 6” ductile iron pipe will enhance fire flow capacity and allow the District to install a fire hydrant at the pipes terminus. Work will be performed in-house by District water maintenance crews and will take approximately three weeks to complete. OPERATING BUDGET IMPACT Additional Staff Salaries No additional salaries are required to install or maintain this new main. Debt Service N/A Maintenance/Utilities N/A WATER MAIN REPLACEMENT – VALARIA COURT CAPITAL IMPROVEMENT PROGRAM Start Date: September 2023 Estimated Completion: June 2024 Project Type: Water Location: East of Valaria Drive, Between Avalon and Holly Vista Drives, Highland Project Manager: Operations Total Project Cost: $150,000 Prior Years Budget: N/A Capital Requests: New Project EAST VALLEY WATER DISTRICT | 249 [WATER MAIN REPLACEMENT – VALARIA COURT] PROJECT COST Year 1 FY 2023-24 Year 2 FY 2024-25 Year 3 FY 2025-26 Year 4 FY 2026-27 Year 5 FY 2027-28 5-Year Project Total ESTIMATED COST ITEMIZATION Planning and Design $ 15,000 $ - $ - $ - $ 360,000 $ 375,000 Land and Land Preparation - - - - - - Construction (Contract) - - - - - - Project Mgmt/Inspection - - - - - - Equipment/Furnishings - - - - - - Materials 45,000 - - - 1,080,000 1,125,000 District Labor 90,000 - - - 2,160,000 2,250,000 Other (Legal) - - - - - - ANNUAL TOTAL $ 150,000 $ - $ - $ - $ 3,600,000 $ 3,750,000 PROJECT FUNDING Year 1 FY 2023-24 Year 2 FY 2024-25 Year 3 FY 2025-26 Year 4 FY 2026-27 Year 5 FY 2027-28 5-Year Project Total FINANCING SOURCES Operating Revenue $ 150,000 $ - $ - $ - $ 3,600,000 $ 3,750,000 Replacement Reserve - - - - - - Grants/Loans - - - - - - Bond Proceeds - - - - - - Development Fees - - - - - - Other - - - - - - ANNUAL TOTAL $ 150,000 $ - $ - $ - $3,600,000 $ 3,750,000 Benefits to the Community Protects community health and safety of the community. Replaces water main to prevent a future break. Allows the District to continue to meet the community’s water needs. FY 2023-24 BUDGET | 250 Project Description The District’s water distribution pipeline system has approximately 8,000 gate valves which allow damaged / leaking water mains to be isolated while repair work is being performed. These valves must be routinely exercised in order to prevent them from corroding and seizing, rendering them unable to serve their purpose. Even with routine exercising, some valves eventually seize and need to be replaced. There are approximately 105 inoperable or broken valves in the District’s distribution system which the District plans to replace using a combination of in-house and contracted labor. Working from a prioritized list, 40 valves will be selected for replacement in each of the next two years. OPERATING BUDGET IMPACT Additional Staff Salaries N/A Debt Service N/A Maintenance/Utilities There will be no significant change in maintenance costs associated with this replacement program. GATE VALVE REPLACEMENT PROGRAM CAPITAL IMPROVEMENT PROGRAM Start Date: July 2023 Estimated Completion: June 2025 Project Type: Water Location: Districtwide Project Manager: Operations Total Project Cost: $300,000 Per Year for Two Years Prior Years Budget: N/A Capital Requests: New Project EAST VALLEY WATER DISTRICT | 251 [GATE VALVE REPLACEMENT PROGRAM] PROJECT COST Year 1 FY 2023-24 Year 2 FY 2024-25 Year 3 FY 2025-26 Year 4 FY 2026-27 Year 5 FY 2027-28 5-Year Project Total ESTIMATED COST ITEMIZATION Planning and Design $ - $ - $ - $ - $ - $ - Land and Land Preparation - - - - - - Construction (Contract) 185,000 185,000 - - - 370,000 Project Mgmt/Inspection - - - - - - Equipment/Furnishings - - - - - - Materials 25,000 25,000 - - - 50,000 District Labor 90,000 90,000 - - - 180,000 Other (Legal) - - - - - - ANNUAL TOTAL $ 300,000 $ 300,000 $ - $ - $ - $ 600,000 PROJECT FUNDING Year 1 FY 2023-24 Year 2 FY 2024-25 Year 3 FY 2025-26 Year 4 FY 2026-27 Year 5 FY 2027-28 5-Year Project Total FINANCING SOURCES Operating Revenue $ 300,000 $ 300,000 $ - $ - $ - $ 600,000 Replacement Reserve - - - - - - Grants/Loans - - - - - - Bond Proceeds - - - - - - Development Fees - - - - - - Other - - - - - - ANNUAL TOTAL $ 300,000 $ 300,000 $ - $ - $ - $ 600,000 Benefits to the Community Reduce service interruptions during water main leaks or repairs. Enhance the water distribution system to continue providing a reliable service. Repair and extend the useful life of the distribution system. FY 2023-24 BUDGET | 252 Project Description The District’s service area covers all of the City of Highland, parts of the City of San Bernardino and parts of San Bernardino County. When these agencies plan and construct improvements within their jurisdiction, there are occasionally alignment or location conflicts with existing District facilities. When this occurs, the District is frequently obliged to relocate its facilities. This project budget serves to fund relocation costs as they arise. OPERATING BUDGET IMPACT Additional Staff Salaries N/A Debt Service N/A Maintenance/Utilities N/A FACILITY RELOCATIONS CAPITAL IMPROVEMENT PROGRAM Start Date: July 2023 Estimated Completion: June 2024 Project Type: Water Location: Districtwide Project Manager: Engineering Total Project Cost: $100,000 for FY 2023-24 Budgeted Annually Prior Years Budget: $100,000 Capital Requests: Annual Budget Request EAST VALLEY WATER DISTRICT | 253 [FACILITY RELOCATIONS] PROJECT COST Year 1 FY 2023-24 Year 2 FY 2024-25 Year 3 FY 2025-26 Year 4 FY 2026-27 Year 5 FY 2027-28 5-Year Project Total ESTIMATED COST ITEMIZATION Planning and Design $ - $ - $ - $ - $ - $ - Land and Land Preparation - - - - - - Construction (Contract) 100,000 100,000 100,000 100,000 100,000 500,000 Project Mgmt/Inspection - - - - - - Equipment/Furnishings - - - - - - Materials - - - - - - District Labor - - - - - - Other (Legal) - - - - - - ANNUAL TOTAL $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 500,000 PROJECT FUNDING Year 1 FY 2023-24 Year 2 FY 2024-25 Year 3 FY 2025-26 Year 4 FY 2026-27 Year 5 FY 2027-28 5-Year Project Total FINANCING SOURCES Operating Revenue $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 500,000 Replacement Reserve - - - - - - Grants/Loans - - - - - - Bond Proceeds - - - - - - Development Fees - - - - - - Other - - - - - - ANNUAL TOTAL $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 500,000 Benefits to the Community Relocate system facilities to maintain service reliability. Work with local agencies to ensure a smooth transition with minimal service interruptions. Extend the useful life of the distribution system. FY 2023-24 BUDGET | 254 Project Description This project involves scheduled capital improvements to District facilities that can be performed within a single fiscal year. Improvements planned for FY 2023-24 include upgrade to wrought iron security fencing at District Plants 28 and 33 and at the District Headquarters. OPERATING BUDGET IMPACT Additional Staff Salaries N/A Debt Service N/A Maintenance/Utilities Improved security fencing will help deter intrusion onto District property and vandalism. FACILITY REHABILITATIONS CAPITAL IMPROVEMENT PROGRAM Start Date: July 2023 Estimated Completion: June 2024 Project Type: Water Location: Districtwide Project Manager: Operations Total Project Cost: $275,000 for FY 2023-24 Budgeted Annually Prior Years Budget: $275,000 for FY 2022-23 Capital Requests: Annual Budget Request EAST VALLEY WATER DISTRICT | 255 [FACILITY REHABILITATIONS] PROJECT COST Year 1 FY 2023-24 Year 2 FY 2024-25 Year 3 FY 2025-26 Year 4 FY 2026-27 Year 5 FY 2027-28 5-Year Project Total ESTIMATED COST ITEMIZATION Planning and Design $ 15,000 $ - $ - $ - $ - $ 15,000 Land and Land Preparation - - - - - - Construction (Contract) 260,000 75,000 75,000 75,000 75,000 560,000 Project Mgmt/Inspection - - - - - - Equipment/Furnishings - - - - - - Materials - - - - - - District Labor - - - - - - Other (Legal) - - - - - - ANNUAL TOTAL $ 275,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 575,000 PROJECT FUNDING Year 1 FY 2023-24 Year 2 FY 2024-25 Year 3 FY 2025-26 Year 4 FY 2026-27 Year 5 FY 2027-28 5-Year Project Total FINANCING SOURCES Operating Revenue $ 275,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 575,000 Replacement Reserve - - - - - - Grants/Loans - - - - - - Bond Proceeds - - - - - - Development Fees - - - - - - Other - - - - - - ANNUAL TOTAL $ 275,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 575,000 Benefits to the Community Enhance the security of water facilities. Prevent unauthorized access. Extend the useful life of water facilities. FY 2023-24 BUDGET | 256 Project Description The District is building a wastewater reclamation facility known as the Sterling Natural Resource Center. The plant will have the capability to treat all wastewater flows currently generated by District customers. The facility will allow the District to treat wastewater to a point where it can be recharged back into the groundwater basin and reused for domestic purposes. Plant construction is being funded by grants and low interest State Revolving Fund (SRF) loans from the State Water Resources Control Board. Through June 2023, the District has issued contracts totaling $238.2 million and incurred approximately $226.3 million of those contract costs. The District expects to transition all wastewater flows generated by District customers to the SNRC by December of 2023. SRF loan proceeds for $1.3 million will be used to complete construction on the reclamation plant, while approximately $8 million in costs remaining on a recycled water pipeline and recharge basins will be paid under a reimbursement agreement with Valley District. Approximately $300,000 in engineering, permitting, and labor compliance costs will be paid by District operating revenue. OPERATING BUDGET IMPACT Additional Staff Salaries $1,800,000 Debt Service $6,820,000 annually on 1.8% interest, State Revolving Fund Loan Maintenance/Utilities $3,220,000 (estimated for contract services and supplies, Contracted wastewater treatment currently paid to a third party agency of $8,600,000 annually, would be eliminated. Anaerobic digesters at the plant will convert wastewater solids, along with high grade food waste offloaded by waste haulers, to produce enough energy to power SNRC operation. STERLING NATURAL RESOURCE CENTER (SNRC) CAPITAL IMPROVEMENT PROGRAM Start Date: January 2014 Estimated Completion: December 2023 Project Type: Water Location: 25318 and 25376 5th Street, Highland Project Manager: Engineering Total Project Cost: $238,198,000 Prior Years Budget: $198,425,000 Capital Requests: Previously Programmed Project EAST VALLEY WATER DISTRICT | 257 [STERLING NATURAL RESOURCE CENTER] PROJECT COST Year 1 FY 2023-24 Year 2 FY 2024-25 Year 3 FY 2025-26 Year 4 FY 2026-27 Year 5 FY 2027-28 5-Year Project Total ESTIMATED COST ITEMIZATION Planning and Design $ - $ - $ - $ - - $ - Land and Land Preparation - - - - - - Construction (Contract) 4,300,000 - - - - 4,300,000 Project Mgmt/Inspection - - - - - - Equipment/Furnishings - - - - - - Materials - - - - - - District Labor - - - - - - Other (Legal) - - - - - - ANNUAL TOTAL $ 4,300,000 $ - $ - $ - $ - $ 4,300,000 PROJECT FUNDING Year 1 FY 2023-24 Year 2 FY 2024-25 Year 3 FY 2025-26 Year 4 FY 2026-27 Year 5 FY 2027-28 5-Year Project Total FINANCING SOURCES Operating Revenue $ 300,000 $ - $ - $ - $ - $ 300,000 Replacement Reserve - - - - - - Grants/Loans 4,000,000 - - - - 4,000,000 Bond Proceeds - - - - - - Development Fees - - - - - - Other - - - - - - ANNUAL TOTAL $4,300,000 $ - $ - $ - $ - $ 4,300,000 Benefits to the Community Water treated at the SNRC will recharge the local Bunker Hill Groundwater Basin. Picnic area, demonstration garden, walking paths, workshop space, and special events area. Hands-on training and career experiences in wastewater treatment available to students and residents. [PAGE LEFT BLANK] Intentionally FY 2023-24 BUDGET | 258 EAST VALLEY WATER DISTRICT | 259 INFRASTRUCTURE ACCOMPLISHMENTS Capital Budget Section IN F R A S T R U C T U R E AC C O M P L I S H M E N T S The budget reflects the District's commitment to allocating resources to meet the needs of its stakeholders. FY 2023-24 BUDGET | 260 EAST VALLEY WATER DISTRICT | 261 [CAPITAL BUDGET] INFRASTRUCTURE ACCOMPLISHMENTS Infrastructure improvements represent a significant investment in maintaining a reliable system for the community served by the District. Several Capital Improvement Projects were completed under budget in FY 2022-23 that focused on system improvements for both water and wastewater systems. Plant 134 Granular Activated Carbon (GAC) Process Improvements Project Budget: $3,846,000 Actual Cost: $3,736,000 Completed: April 2023 Plant 108 Storage Tank Rehabilitation Project Budget: $1,271,000 Actual Cost: $1,134,115 Completed: June 2023 Pleasant Hill Drive Water Main Replacement Project Budget: $200,000 Actual Cost: $196,605 Completed: October 2022 [PAGE LEFT BLANK] Intentionally FY 2023-24 BUDGET | 262 EAST VALLEY WATER DISTRICT | 263 GLOSSARYfy 2023-24 G L O S S A R Y T h e A n n u a l B u d g e t E A S T V A L L E Y W A T E R D I S T R I C T The budget is formally reviewed each quarter, allowing for an opportunity to take formal budget adjustments to the Governing Board for consideration. FY 2023-24 BUDGET | 264 • Definitions • Acronyms • Chart of Accounts Glossary Contents EAST VALLEY WATER DISTRICT | 265 GLOSSARY Definitions Technical terms found in the budget document. A • Acre Foot: A water measurement equal to 325,851 gallons. - pg. 60 • Advanced Metering Infrastructure: The technology of collecting meter reads via a network. - pg. 10 • Air Quality Management District or South Coast Air Quality Management District: The air pollution agency responsible for regulating stationary sources of air pollution in the South Coast Air Basin, in Southern California. - pg. 215 • American Water Works Association: Established in 1881 and is the largest nonprofit, scientific, and educational association dedicated to managing and treating water. - pg. 35 • Annual Report: A set of U.S. government financial statements comprising of the financial report of a state, municipal, or other governmental entity that complies with the accounting requirements promulgated by the Governmental Accounting Standards Board. - pg. 154 C • California Public Employees’ Retirement System: An agency in the California executive branch that manages pension and health benefits for more than 1.6 million California public employees, retirees, and their families. - pg. 49 • California Special Districts Association: A 501c(6) not-for-profit association that promotes good governance and improved core local services through professional development, advocacy, and other services for independent special districts. - pg. 20 • Capital Outlay and Construction Costs: Capitalized and expenses over the useful life of the asset on a Generally Accepted Accounting Principle basis; shown as a current expenditure on a budget basis. - pg. 49 • Cityworks: This platform is designed to help local governments and utilities manage public assets and their associated data, work activities, and business processes. - pg. 160 • Closed Circuit TV: The use of video cameras to transmit a signal to a limited set of monitors. - pg. 209 • Compensated Absence: An expense that reflects the change in related accrued liabilities during the accounting period on the Generally Accepted Accounting Principle basis, but for budget purposes, expense includes anticipated leave time to be used and/or cashed by employees during the fiscal year. - pg. 45 • Cool-Season Turfgrass: Grass species which require 80% replenishment of evapotranspiration. Species do not go dormant during winter months and include tall fescue, ryegrass, bentgrass, and Kentucky bluegrass. - pg. 86 D • Depreciation: Recorded annually to expense the cost of a capital asset over its useful life on a General Accepted Accounting Principle basis but is not contemplated on the budget basis. - pg. 40 E • Enterprise Fund: Business-type funds used to report an activity for which a fee is charged to external users for goods or services - pg. 45 FY 2023-24 BUDGET | 266 F • Fees: Charges for service that are based upon the cost of providing the service. - pg. 37 • Fiscal Year: The time frame in which the budget applies. This period is from July 1 through June 30.- pg. i • Full-Time Employee: A measure of effective authorized positions, indicating the percentage of time a position or group of positions is funded. It is calculated by equating 2,080 hours of work per year with the full-time equivalent of one position. - pg. 57 • Fund: An independent fiscal and accounting entity with a self-balancing set of accounts recording cash and/or other resources together with all related liabilities, obligations, reserves, and equities, which are segregated for the purpose of carrying on specific activities or attaining certain objectives. - pg. i • Fund Equity: The excess of an entity’s assets over its liabilities; a negative Fund Equity is sometimes called a deficit. - pg. 68 G  • Generally Accepted Accounting Principles: Uniform minimum standards of, and guidelines for external financial accounting and reporting. They govern the form and content of the basic financial statements of an entity. Generally Accepted Accounting Principles (GAAP) encompasses the conventions, rules and procedures necessary to define accepted accounting practices at a particular time. They include not only broad guidelines of general application, but also detailed practices and procedures. The primary authoritative statements on the application of GAAP to state and local governments are Government Accounting Standards Board pronouncements. GAAP provides a standard by which to measure financial presentations. - pg. 53 • Geographic Information System: An organized collection of computer hardware, software and geographic data designed to efficiently capture, store, update, manipulate, analyze, and display all forms of geographically referenced information. - pg. 78 • Governmental Accounting Standards Board: A private, non-governmental organization who is the source of generally accepted accounting principles used by State and Local governments in the U.S. - pg. 45 • Governmental Accounting Standards Board 68: A state or local government employer will report the Net Pension Liability associated with its defined benefit pension plan(s) that is administered through a trust or equivalent arrangement. - pg. 45 • Government Finance Officers Association: Represents public finance officials throughout the United States and Canada. - pg. 9 • Granular Activated Carbon: A highly porous adsorbent material used during the water treatment process. It is used to remove tetrachloroethylene, also known as perchloroethylene (PCE). - pg. 8 • Groundwater: Water that occurs below the surface of Earth. - pg. 8 H • Hundred Cubic Feet: Water billing measurement equal to 748 gallons. - pg. 51 K • Key Performance Indicator: Monitors progress towards meeting program objectives. - pg. 6 L • Laserfiche: A digital content management software. - pg. 156 • Local Agency Investment Fund: A program administered by the California State Treasurers office to give local agencies and special districts the opportunity to participate in a major portfolio using the investment expertise of the Treasurer’s Office Investment staff. - pg. 64 N • North Fork Water Company: A mutual water company that secures surface water from the Santa Ana River and other available sources for delivery to its shareholders. - pg. 17 EAST VALLEY WATER DISTRICT | 267 [GLOSSARY] P • Pension Expense: Budgeted based on employer contribution rates assigned by the California Public Employees’ Retirement System. For financial statement reportion, pension expense is recorded based on the change to the net pension liability in accordance with Governmental Accounting Standards Board Statement No. 68. - pg. 45 • Principal Payments: Payments on long-term debt are applied to reduce the outstanding liability on a Generally Accepted Accounting Principle basis; shown as a current expenditure on a budget basis. - pg. 45 • Purchased Water: Imported water purchased from the California State Water Project. - pg. 59 R • Revenue: Income generated by assessments, investments, connection fees, stand-by fees, and user charges. - pg. i • Reserve: An account set aside to meet unexpected costs. - pg. 5 S • San Bernardino Valley Municipal Water District: Formed in 1954 as a regional agency to plan a long- range water supply for the San Bernardino Valley. - pg. 8 • Section Sign (§): Typographical glyph for referencing numbered sections of a document. - pg. 38 • Single-Family Residential: A stand-alone residential building. - pg. 51 • Sterling Natural Resource Center: The District is planning and constructing a water recycling center called the Sterling Natural Resource Center. - pg. 3 • Supervisory Control and Data Acquisition: Generally refers to an industrial computer system that monitors and controls a process. - pg. 26 • Surface Water: Found in large bodies like the oceans or lakes or which flows overland in streams. - pg. 59 T • Tyler Accounting System: The District’s enterprise resource planning software that integrates across all business processes and activities. - pg. 149 W • Wastewater Collection Sytem Master Plan: Outlines existing deficiencies and facility requirements to meet increasing demands. It provides a general assessment to creat a comprehensive CIP for the wastewater collection system. - pg. 7 • Water Master Plan: Provides information on proposed CIP for the water system, including phasing of the necessary projects and capital requirements taking existing deficiencies and facility requirements to meet both current and future demand in consideration. - pg. 7 FY 2023-24 BUDGET | 268 [PAGE LEFT BLANK] Intentionally AC R O N Y M S ACRONYMS Glossary Section EAST VALLEY WATER DISTRICT | 269 T h e A n n u a l B u d g e t E A S T V A L L E Y W A T E R D I S T R I C T The District is committed to sound stewardship and transparent operations, through its presentation of the capital and operating budget to the community. FY 2023-24 BUDGET | 270 EAST VALLEY WATER DISTRICT | 271 ACRONYMS Technical acronyms found in the budget document. A • ACWA: Association of California Water Agencies - pg. 140 • AF: Acre Foot - pg. 60 • AMI: Advanced Metering Infrastructure - pg. 10 • AQMD or SCAQMD: Air Quality Management District or South Coast Air Quality Management District - pg. 215 • AWWA: American Water Works Association - pg. 35 B • BAR: Bureau of Automotive Repair - pg. 227 C • CalFire: California Department of Forestry and Fire and Protection - pg. 22 • CalPERS: California Public Employees’ Retirement System - pg. 49 • CARB: California Air Resources Board - pg. 227 • CCTV: Closed-Circuit Television - pg. 209 • CEO: Chief Executive Officer - pg. i • CFD: Community Facilities District - pg. 51 • CGC: California Government Code - pg. 37 • CHEF: Community Heritage Education Foundation - pg. 123 • CIP: Capital Improvement Program - pg. 7 • CISCO: Computer Information System Company - pg. 156 • CMUA: California Municipal Utilities Assocation - pg. 136 • COLA: Cost of Living Adjustment - pg. 57 • CSDA: California Special Districts Association - pg. 20 • CSMFO: California Society of Municipal Officers - pg. 9 • CWEA: California Water Environment Association - pg. 206 D • DNS: Domain Name System - pg. 156 • DWR: Department of Water Resources - pg. 230 E • EAM: Enterprise Asset Management - pg. 223 • EOC: Emergency Operations Center - pg. 156 • EPA: Environmental Protection Agency - pg. 32 • ERP: Enterprise Resource Planning - pg. 150 F • FY: Fiscal Year - pg. i • FOG: Fats, Oils, and Grease - pg. 26 G  • GAC: Granular Activated Carbon - pg. 8 • GASB: Governmental Accounting Standards Board - pg. 45 • GAAP: Generally Accepted Accounting Principles - pg. 45 • GC: San Bernardino Basin Area Groundwater Council - pg. 17 • GIS: Geographic Information System - pg. 78 • GFOA: The Government Finance Officers Association - pg. 9 FY 2023-24 BUDGET | 272 H • HCF: Hundred Cubic Feet - pg. 51 • HVAC: Heating, Ventilation, and Air Conditioning - pg. 217 K • KPI: Key Performance Indicator - pg. 6 L • LAFCO: Local Agency Formation Commission - pg. 17 • LAIF: Local Agency Investment Fund - pg. 64 • LRIP: Local Resource Investment Program - pg. 55 M • MG: Million Gallon - pg. 17 • MGD: Million Gallons Per Day - pg. 26 • MOU: Memorandum of Understanding - pg. 57 N • NFWC: North Fork Water Company - pg. 17 • NPDES: National Pollutant Discharge Elimination System - pg. 212 O • OPEB: Other Post Employment Benefits - pg. 45 • OT: Overtime - pg. 57 P • PAFR: Popular Annual Financial Report - pg. 150 • PRSA: Public Relations Society of America - pg. 136 • PRV: Pressure Regulating Valve - pg. 26 • PVC: Polyvinyl Chloride - pg. 250 R • RFP: Request for Proposal - pg. 223 • RUSD: Redlands Unified School District - pg. 18 S • SAR: Santa Ana River - pg. 16 • SBCUSD: San Bernardino City Unified School District - pg. 18 • SBMWD: City of San Bernardino Municipal Water Department - pg. 17 • SCADA: Supervisory Control and Data Acquisition - pg. 26 • SCE: Southern California Edison - pg. 51 • SFR: Single-Family Residential - pg. 51 • SNRC: Sterling Natural Resource Center - pg. 3 • SRF: State Revolving Fund - pg. 7 • SSMP: Sewer System Management Plan - pg. 206 • SWP: State Water Project - pg. 16 • SWRCB: State Water Resources Control Board - pg. 63 T • TSS: Total Suspended Solids - pg. 212 • Tyler Accounting System: - pg. 149 U • UAL: Unfunded Actuarial Liability - pg. 149 • UCMR5: Unregulated Contaminant Monitoring Rule 5 - pg. 193 • U.S. EPA: United States Environmental Protection Agency - pg. 31 EAST VALLEY WATER DISTRICT | 273 CHART OF ACCOUNTS Glossary Section C H A R T O F AC C O U N T S The District actively enhances communication methods to reach a variety of stakeholders. FY 2023-24 BUDGET | 274 EAST VALLEY WATER DISTRICT | 275 CHART OF ACCOUNTS In order to maintain consistency across programs and ease the ability to compare expenses, each program budget detail has allocated District resources within a specific list of revenue and expense accounts. This budget includes specific accounts that will be used throughout the current fiscal year. Below is a listing of the District’s Chart of Accounts with a brief description of each account. • 5101 - Regular Labor: Regular salaries and wages for permanent full-time and part-time employees • 5102 - Temporary Labor: Costs for labor not permanently employed by the District • 5103 - Overtime: Employees that work more than their regular 40 hours per week • 5104 - Standby: Employees that are on call for emergencies during non-business hours, weekends, and holidays • 5200 - Benefits: Medical, dental, vision, retirement, and related benefits offered by the District • 6101 - Purchased Water: Cost to purchase imported water • 6102 - Groundwater Replenishment: Cost to pump groundwater from the basin • 6103 - Water Assessment: Cost of water shares directly related to North Fork Water Company • 6201 - Materials & Supplies: Items used in daily operations, repair, and maintenance • 6202 - Tools: Items used to perform repair and maintenance activities • 6203 - Office Supplies: Items such as pens, paper, and other related desk accessories • 6204 - Chemicals: Used for the treatment of water and cleaning equipment and tools • 6205 - Conservation Rebates: Costs to reimburse customers for eligible conservation efforts • 6301 - Contract Services: Services rendered by consultants and contractors; software subscriptions and licensing • 6302 - Banking Services: Service fees charged by financial institutions, merchant banks, and payment processors • 6303 - Printing & Publishing: Costs for printing and producing District publications • 6304 - Legal Services: Costs for legal advice, consultation, contract review, and litigation • 6305 - Treatment Services: Outside treatment services for wastewater • 6306 - Rents & Leases: Rental and lease costs for buildings and equipment that are not owned by the District • 6307 - Uniforms: Costs for the purchase, rental and laundering of uniforms, and other sundries for employees • 6308 - Billing Services: Costs associated with printing and mailing customer utility bills • 6309 - Shut Off Notice Services: Costs associated with the printing and delivery of 48 Hour Notices; these costs are charged back to customers through a fee • 6310 - Street Services: Costs associated with street restoration after District performs repairs and maintenance to existing infrastructure • 6311 - Landscape Services: Costs to maintain landscape, sprinklers, and weed abatement throughout the District • 6312 - Janitorial Services: Costs to clean and maintain District facilities • 6313 - Facilities Repair: Tracking of minor repairs for District facilities • 6314 - Litigation Expense: Costs associated with legal proceedings, legal action, lawsuits, legal disputes, or legal cases. • 6401 - Utilities: Cable, gas, and other utilities not including telephone and electricity • 6402 - Telephone: Land lines, cellular phones, and internet services FY 2023-24 BUDGET | 276 [PAGE LEFT BLANK] Intentionally En h a n c e a n d p r e s e r v e t h e q u a l i t y o f l i f e f o r o u r c o m m u n i t y th r o u g h i n n o v a t i v e l e a d e r s h i p a n d w o r l d c l a s s p u b l i c s e r v i c e . @eastvalleywater District Headquarters 31111 Greenspot Road Highland, California 92346 Sterling Natural Resource Center 25318 5th Street Highland, California 92410 eastvalley.org District Board Meetings Second and Fourth Wednesday of Each Month at 5:30pm District Headquarters Board Room 31111 Greenspot Road Highland, CA 92346 East Valley Water District Resolution 2023.09 Page 1 of 2 RESOLUTION 2023.09 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE EAST VALLEY WATER DISTRICT APPROVING THE OPERATING AND CAPITAL BUDGETS FOR FISCAL YEAR 2023-24 WHEREAS, East Valley Water District (“District”) is a county water district organized and operating pursuant to California Water Code Section 30000 et seq.; and WHEREAS, the Board of Directors has reviewed and considered the Budget as presented for fiscal year 2023-24, hereinafter referred to as the “Budget;” and WHERES, the Budget provides a comprehensive plan of financial operations for the District including an estimate of revenues and the anticipated requirements for expenditures, appropriations, and reserves for the forthcoming fiscal year; and WHEREAS, the Budget establishes the basis for incurring liability and making expenditures on behalf of the District; and NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the East Valley Water District as follows: Section 1. The Budget, and each and every part thereof, is hereby approved and adopted for the fiscal year 2023-24; and Section 2. The provisions of this Resolution shall take effect on July 1, 2023. ADOPTED this 28th day of June 2023. ROLL CALL VOTE: Ayes: Directors: Noes: Abstain: Absent: Phillip R. Goodrich Board President East Valley Water District Resolution 2023.09 Page 2 of 2 ATTEST: _____________________________ Michael Moore Secretary, Board of Directors June 28, 2023 I HEREBY CERTIFY that the foregoing is a full, true and correct copy of Resolution 2023.09 adopted by the Board of Directors of East Valley Water District at its Regular Meeting held June 28, 2023. _____________________________ Michael Moore Secretary, Board of Directors